|FOR IMMEDIATE RELEASE | Contact: | Jim Delamater    
|--------------------- | -------- | -----------------
|                      |          | President  & CEO 
|                      |          | Northeast Bancorp

Northeast Bancorp Announces 1st Quarter Earnings & Dividend,
Increase Over Same Period Last Year

Auburn, Me 10/23/03-Northeast Bancorp (AMEX "NBN") announced that earnings for the first quarter ended September 30, 2003 were $916,381, or $0.35 per diluted share. Earnings for the same period last year were $906,939, or $0.34 per diluted share. Management noted that the results were in line with expectations. In addition, the company announced that the Board of Directors had declared the regular quarterly dividend of $0.09 per share, payable on November 22, 2003 to shareholders of record as of the close of business on October 31, 2003.  As previously announced, this dividend represents an increase of $0.01 per share, or 12.5%. Annually, the dividend paid increased to $0.36 per share.  Northeast Bancorp trades on the American Stock Exchange with approximately 2.5 million shares outstanding and a book value per share of $14.32 as of September 30, 2003. The Company continues to be well capitalized and has expressed a desire to increase or maintain a sufficient amount of capital that will allow it to pay a fair dividend return, to continue the regular repurchase of its shares, and to support the overall asset growth of the franchise.

For the quarter ended September 30, 2003, Northeast had total loans of $381 million, total assets of $472 million, total deposits of $313 million, and shareholders' equity of $37 million.  Northeast derives its revenue from a combination of traditional banking services such as loans, deposits and trust services, as well as fee based services from investment brokerage, insurance, and personal and business planning services.  Northeast continues to increase the number of products sold per household and believes that the combination of income diversity and increased revenue per household will lead to an increase in the value of the franchise and the ongoing development of long-term,  mutually profitable relationships with customers.

Northeast remains dedicated to its mission of becoming a "one stop" source for virtually all of their customer's financial needs, and remains committed to expanding its customer base throughout its market area through the delivery of services focused on individual customer's needs.

Jim Delamater, President & CEO commented, "We are pleased with the overall growth and development of our organization.  We are also proud of our ongoing commitment toward the development of additional sources of revenue and product offerings, as well as the enhancement of our technology and infrastructure. Although our  investment in additional human and physical resources, our dedication to an asset sensitive interest rate risk position, and the maintenance of quality credit standards has and will continue to have an adverse impact our short term earnings, we believe that this strategy will enhance shareholder value in the long-term.  In particular, we expect that our ability to offer a vast array of financial products and services to new and existing customers will result in the long-term growth of our revenues."

Northeast Bancorp is the holding company for Maine-based Northeast Bank, founded in 1872, which operates from 13 locations throughout western, central, southern and mid-coastal Maine. Northeast Bank, together with its wholly owned subsidiary, Northeast Financial Services, and other affiliations provides its consumer and business customers with a comprehensive array of financial services. We believe Northeast Bank is unique in its marketplace because it does not limit its product offerings to its own proprietary products; but, instead focuses on the customer and delivers quality "needs-based" advice that seeks to match the client's personal goals and objectives with the actual product delivered.

The headquarters for Northeast Bancorp is located at 158 Court Street, in Auburn, Maine. Northeast management encourages present and prospective shareholders to contact Jim Delamater, President & CEO, if they wish to discuss the Company and its products in general, services or ongoing efforts to promote and develop shareholder value.  Management also suggests that any person interested in utilizing the services of Northeast Bancorp and its subsidiaries, or in learning more about the Company should access its web site at www.northeastbank.com.



|                                                          | NORTHEAST
      BANCORP                                                   
|--------------------------------------------------------- | --------------------------------------------------------------------------
|                                                          | (Dollars in
      Thousands, Except Per Share and Shares Outstanding Data)
|                                                          |                                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|Selected financial
      information                      |                                                                           
|                                                          |                                                                           
|Income statement
      data:                              |                                                                           
|                                                          |                                                                           
|Interest income                                           | $  
      6,631                                                           
|Interest expense                                          | 3,023                                                                     
|Net interest income                                       | 3,608                                                                     
|Provision for loan
      losses                           | 240                                                                       
|Net interest income
      after provision for loan losses | 3,368                                                                     
|Gain on sale of
      loans                               | 431                                                                       
|Gain on securities                                        | 51                                                                        
|Other noninterest
      income                            | 1,016                                                                     
|Noninterest expense                                       | 3,528                                                                     
|Operating income
      before income tax                  | 1,338                                                                     
|Income tax expense                                        | 422                                                                       
|Net income                                                | $    
      916                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|Per share data:                                           |                                                                           
|Basic earning per
      common share                      | $   
      0.36                                                           
|Diluted earnings per
      common share                   | $   
      0.35                                                           
|Weighted average
      shares outstanding:                |                                                                           
|                                                          | Basic                                                                     
|                                                          | Diluted                                                                   
|                                                          |                                                                           
|Book value per share                                      | 14.32                                                                     
|Tangible book value
      per share                       | 13.96                                                                     
|                                                          |                                                                           
|Net interest margin                                       | 3.28%                                                                     
|Net interest spread                                       | 2.97%                                                                     
|Return on average
      assets (annualized)               | 0.78%                                                                     
|Return on equity
      (annualized)                       | 9.98%                                                                     
|Tier I leverage
      ratio (Bank)                        | 8.79%                                                                     
|Tier I risk-based
      capital ratio (Bank)              | 10.68%                                                                    
|Total risk-based
      capital ratio (Bank)               | 10.99%                                                                    
|Efficiency ratio                                          | 69%                                                                       
|Nonperforming loans                                       | 2,015                                                                     
|Total nonperforming
      assets                          | 2,146                                                                     
|Nonperforming loans
      as a % of total loans           | 0.53%                                                                     
|Nonperforming assets
      as a % of total assets         | 0.45%                                                                     
|                                                          |                                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|                                                          |                                                                           
|Balance sheet
      highlights:                           |                                                                           
|                                                          |                                                                           
|Investment
      securities                               | $ 
      47,117                                                           
|Loans                                                     | 381,421                                                                   
|Total assets                                              | 472,335                                                                   
|                                                          |                                                                           
|Deposits:                                                 |                                                                           
|                                                          | NOW and money market                                                      
|                                                          | Savings                                                                   
|                                                          | Certificates of deposits                                                  
|                                                          | Brokered time deposits                                                    
|                                                          | Noninterest-bearing deposits                                              
|                                                          | Total deposits                                                            
|                                                          |                                                                           
|Borrowings                                                | 90,068                                                                    
|Shareholders' equity                                      | 37,009                                                                    
|                                                          |                                                                           
|Shares outstanding                                        | 2,584,577