SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                                    
                               FORM 10 - Q

_X_ Quarterly report pursuant to Section 13 or 15 (d) of the Securities 
    Exchange Act of 1934

For the quarter ended        March  31, 1999
                             _______________
                                   or      
___ Transition report pursuant to Section 13 or 15 (d) of the Securities 
    Exchange Act of 1934

For the transition period from ____________ to ____________

Commission File Number   1 - 14588
                         _________

                              Northeast Bancorp
____________________________________________________________________________
          (Exact name of registrant as specified in its charter)            
                                                                            
                Maine                                 01 - 0425066             
____________________________________    _______________________________________
  (State or other jurisdiction of        (I.R.S. Employer Identification No.)  
   incorporation or organization)                                              
                                                                               
  232 Center Street, Auburn, Maine                      04210                  
____________________________________     ______________________________________
  (Address of principal executive                     (Zip Code)               
  offices)                                                                     
                                                                               
                               (207) 777 - 6411                                
_______________________________________________________________________________
              Registrant's telephone number, including area code             
                                                                           
                                Not Applicable                               
_______________________________________________________________________________
Former name, former address and former fiscal year,if changed since last report

<PAGE> 2

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.    Yes _X_    No ___

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.  
  Shares outstanding as of May 13, 1999: 2,768,294 of common stock, $1.00 par  
   value per share.
_______________________________________________________________________________


                            NORTHEAST BANCORP 
                            Table of Contents
                                    
Part I.   Financial Information
          
          Item 1.   Financial Statements (unaudited)
               
                    Consolidated Balance Sheets
                     March 31, 1999 and June 30, 1998
                    
                    Consolidated Statements of Income
                     Three Months ended March 31, 1999 and 1998   
                     
                    Consolidated Statements of Income
                     Nine Months ended March 31, 1999 and 1998   
                         
                    Consolidated Statements of Changes in Shareholders' Equity
                     Nine Months ended March 31, 1999 and 1998 
                    
                    Consolidated Statements of Cash Flows
                     Nine Months ended March 31, 1999 and 1998
                    
                    Notes to Consolidated Financial Statements
                    
          Item 2.   Management's Discussion and Analysis of Financial Condition
                     and Results of Operation
               
          Item 3.   Quantitative and Qualitative Disclosure about Market Risk

Part II.  Other Information

          Item 1.   Legal Proceedings   
     
          Item 2.   Changes in Securities    

          Item 3.   Defaults Upon Senior Securities
          
          Item 4.   Submission of Matters to a Vote of Security Holders

          Item 5.   Other Information
 
          Item 6.   Exhibits and Reports on Form 8-K   

<PAGE>3


PART I - FINANCIAL INFORMATION
                                    
Item 1.  Financial Statements
                                    
NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
                                    
<TABLE>
<CAPTION>
                             
                                                 March 31,         June 30,    
                                                   1999              1998
                                              _______________   _______________
<S>                                           <C>               <C>            
                        Assets                                                 
Cash and due from bank                        $   5,340,718     $   6,821,574  
Interest bearing deposits in other banks            605,461           421,392
Federal Home Loan Bank overnight deposits         6,701,000         4,909,000
Trading account securities at market                   -               50,000
Available for sale securities                    18,912,995        13,608,823
Federal Home Loan Bank stock                      5,680,500         5,680,500
Loans held for sale                                 696,243           369,500
                                                                              
Loans                                           306,779,441       282,030,950 
  Less allowance for loan losses                  2,929,000         2,978,000
                                              _______________   _______________
    Net loans                                   303,850,441       279,052,950  
                                                                               
Bank premises and equipment, net                  4,914,695         4,473,885 
Assets acquired through foreclosure                 197,754           381,288  
Goodwill (net of accumulated amortization                                     
 of $1,755,089 at 03/31/99 and $1,532,808                                      
 at 6/30/98)                                      1,701,634         1,923,915  
Other assets                                      5,353,845         4,839,767  
                                              _______________   _______________
    Total Assets                                353,955,286       322,532,594  
                                              ===============   ===============
                                                                               
    Liabilities and Shareholders' Equity                                       
Liabilities                                                                    
Deposits                                      $ 212,710,281     $ 184,024,097  
Repurchase Agreements                             9,491,701         5,205,594
Advances from Federal Home Loan Bank            102,111,489       104,439,952
Notes payable                                       763,889           993,055 
Other Liabilities                                 2,166,630         2,730,369
                                              _______________   _______________
  Total Liabilities                             327,243,990       297,393,067  
                                                                               
Shareholders' Equity                                                           
Preferred stock, Series A                                 0           999,988  
Common stock, par value $1, 2,765,983 and                                     
 2,614,285 shares issued and outstanding                                      
 at 03/31/99 and 6/30/98, respectively            2,765,983         2,614,285
Additional paid in capital                       10,189,906         9,258,107  
Retained earnings                                13,962,099        12,331,595  
<PAGE> 4

                                              _______________   _______________
                                                 26,917,988        25,203,975  
Accumulated other comprehensive income (loss)      (206,692)          (64,448) 
                                              _______________   _______________
  Total Shareholders' Equity                     26,711,296        25,139,527  
                                              _______________   _______________
   Total Liabilities and Shareholders' Equity $ 353,955,286     $ 322,532,594  
                                              ===============   ===============

</TABLE>

NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
                                    
<TABLE>
<CAPTION>
                                                     Three Months Ended        
                                                          March 31,       
                                                   1999              1998
                                              _______________   _______________
<S>                                           <C>               <C>            
Interest and Dividend Income                                                   
Interest on FHLB overnight deposits           $      89,478     $     188,201  
Interest on loans & loans held for sale           6,140,300         5,323,547
Interest on available for sale securities           283,269           281,251
Dividends on Federal Home Loan Bank stock            89,643            70,591
Other Interest Income                                 6,588             5,384
                                              _______________   _______________
  Total Interest Income                           6,609,278         5,868,974  
                                                                               
Interest Expense                                                               
Deposits                                          2,143,909         1,845,499  
Repurchase agreements                                95,483            51,244
Other borrowings                                  1,340,474         1,172,303
                                              _______________   _______________
  Total Interest Expense                          3,579,866         3,069,046  
                                              _______________   _______________
                                                                               
Net Interest Income                               3,029,412         2,799,928  
Provision for loan losses                           120,007           156,304  
                                              _______________   _______________
  Net Interest Income after Provision for                                      
   Loan Losses                                    2,909,405         2,643,624  
                                                                               
Other Income                                                                   
Service charges                                     253,507           227,757  
Net securities gains                                 11,035            37,439
Net gain on trading securities                         -                    0
Other                                               468,666           330,163
                                              _______________   _______________
  Total Other Income                                733,208           595,359  
                                                                               
Other Expenses                                                                 
Salaries and employee benefits                    1,121,727         1,069,548
Net occupancy expense                               290,583           232,617
Equipment expense                                   213,462           198,337
<PAGE> 5

Goodwill amortization                                74,094            74,094
Other                                               788,973           549,040
                                              _______________   _______________
  Total Other Expenses                            2,488,839         2,123,636  
                                              _______________   _______________
                                                                               
Income Before Income Taxes                        1,153,774         1,115,347
Income tax expense                                  410,268           382,986
                                              _______________   _______________
Net Income                                    $     743,506     $     732,361  
                                              ===============   ===============
                                                                               
Earnings Per Share                                                            
  Basic                                       $         0.27    $         0.31
  Diluted                                     $         0.27    $         0.26

</TABLE>

NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)

<TABLE>
<CAPTION>
                                                     Nine Months Ended         
                                                         March 31,
                                                   1999              1998      
                                              _______________   _______________
<S>                                           <C>               <C>            
Interest and Dividend Income                                                   
Interest on FHLB overnight deposits           $     279,571     $     451,878  
Interest on loans & loans held for sale          18,629,287        15,752,172
Interest on available for sale securities           654,708         1,207,686
Dividends on Federal Home Loan Bank stock           271,481           212,331
Other Interest Income                                17,103            14,762
                                              _______________   _______________
  Total Interest Income                          19,852,150        17,638,829  
                                                                               
Interest Expense                                                               
Deposits                                          6,431,561         5,630,592
Repurchase agreements                               234,758           154,300
Other borrowings                                  4,157,492         3,481,186
                                              _______________   _______________
  Total Interest Expense                         10,823,811         9,266,078  
                                              _______________   _______________
                                                                               
Net Interest Income                               9,028,339         8,372,751  
Provision for loan losses                           489,428           546,467
                                              _______________   _______________
  Net Interest Income after Provision                                          
   for Loan Losses                                8,538,911         7,826,284
                                                                               
Other Income                                                                   
Service charges                                     776,427           741,397
Net securities gains                                 69,525           245,131
Net gain on trading securities                       10,732             1,797
Other                                             1,224,521           904,206
<PAGE> 6

                                              _______________   _______________
  Total Other Income                              2,081,205         1,892,531  
                                                                               
Other Expenses                                                                 
Salaries and employee benefits                    3,509,956         3,506,114
Net occupancy expense                               729,749           675,151
Equipment expense                                   606,425           652,433
Goodwill amortization                               222,280           222,281
Other                                             2,308,172         2,110,501
                                              _______________   _______________
  Total Other Expenses                            7,376,582         7,166,480  
                                              _______________   _______________
                                                                               
Income Before Income Taxes                        3,243,534         2,552,335
Income tax expense                                1,163,423           893,343
                                              _______________   _______________
Net Income                                    $   2,080,111     $   1,658,992  
                                              ===============   ===============
                                                                               
Earnings Per Share                                                             
  Basic                                       $         0.76    $         0.70 
  Diluted                                     $         0.74    $         0.62

</TABLE>

NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Changes in Shareholders' Equity
Nine Months Ended March 31, 1999 and 1998
(Unaudited)

<TABLE>
<CAPTION>
                                                                                 Accumulated
                                                                                    Other
                                            Common     Additional               Comprehensive
                              Preferred    Stock at     Paid in     Retained       Income       Treasury
                                Stock      $1.00 Par    Capital     Earnings       (Loss)         Stock         Total
                            _____________ ___________ ___________ _____________ _____________ _____________ _____________
<S>                         <C>           <C>         <C>         <C>           <C>           <C>           <C>
Balance at June 30, 1997       1,999,980   1,462,909   7,699,883    11,266,984      (334,175)         --      22,095,581
Net income for nine months                                              
 ended March 31, 1998               --          --          --       1,658,992          --            --       1,658,992
Other comprehensive income,                                            
 net of tax: Adjustment of                                                 
 valuation reserve for                                                        
 securities available for                                                 
  sale                              --          --          --            --         233,422          --         233,422
<PAGE> 7

Comprehensive income                --          --          --            --            --            --       1,892,414
Cash dividends declared on                                                  
 common stock                       --          --          --        (341,003)         --            --        (341,003)
Cash dividends declared on                                               
 preferred stock                    --          --          --        (104,998)         --            --        (104,998)
Stock Split in the form of a                                              
 dividend                           --       740,807        --        (741,902)         --            --          (1,095)
Common stock issued in                                                     
 connection with employee                                                  
 benefit and stock option                                                  
 plans                              --        32,952     171,064          --            --         (44,988)      159,028
Treasury Stock Purchased            --          --          --            --            --          44,988        44,988
                            _____________ ___________ ___________ _____________ _____________ _____________ _____________
Balance March 31, 1998      $  1,999,980  $2,236,668  $7,870,947  $ 11,738,073  $   (100,753) $          0  $ 23,744,915
                            ============= =========== =========== ============= ============= ============= =============
                                                                         
Balance at June 30, 1998         999,988   2,614,285   9,258,107    12,331,595       (64,448)         --      25,139,527
Net income for nine months                                                
  ended March 31, 1999              --          --          --       2,080,111          --            --       2,080,111 
Other comprehensive income,                                                 
 net of tax: Adjustment of                                                  
 valuation reserve for                                                     
 securities available for                                                 
 sale                               --          --          --            --        (142,244)         --        (142,244)
Comprehensive income                --          --          --            --            --            --       1,937,867
Cash dividends declared                                                      
 on common stock                    --          --          --        (423,940)         --            --        (423,940)
Cash dividends declared                                                    
 on preferred stock                 --          --          --         (25,667)         --            --         (25,667)
Preferred Stock Converted                                                  
 to Common Stock                (999,988)    136,362     863,626          --            --            --               0
Common stock issued in                                                      
 connection with employee                                                    
 benefit and stock option                                                     
 plans                              --        15,336      68,173          --            --            --          83,509
                            _____________ ___________ ___________ _____________ _____________ _____________ _____________
Balance March 31, 1999      $          0  $2,765,983  $10,189,906 $ 13,962,099  $   (206,692) $          0  $ 26,711,296
                            ============= =========== =========== ============= ============= ============= =============
<PAGE> 8

</TABLE>

NORTHEAST BANCORP AND SUBSIDIARY
Consolidated Statements of Cash Flow
(Unaudited)

<TABLE>
<CAPTION>
                                                      Nine Months Ended        
                                                          March 31, 
                                                   1999              1998
                                              _______________   _______________
<S>                                           <C>               <C>            
Cash provided by operating activities         $     950,817     $   1,650,521  
                                                                               
Cash flows from investing activities:                                          
 FHLB stock purchased                                  --          (1,134,700) 
 Available for sale securities purchased        (15,307,160)      (15,331,083)
 Available for sale securities matured            3,169,943         2,265,304
 Available for sale securities sold               6,618,573        26,018,323
 New loans, net of repayments & charge offs     (24,476,252)      (47,512,954)
 Net capital expenditures                          (982,014)         (174,369)
 Assets acquired through foreclosure sold           422,742           161,896
 Real estate held for investment sold                50,000            68,743
                                              _______________   _______________
  Net cash used in investing activities         (30,504,168)      (35,638,840) 
                                                                               
Cash flows from financing activities:                                          
 Net change in deposits                          28,686,185         1,049,815
 Net change in repurchase agreements              4,286,107          (657,643)
 Dividends paid                                    (449,607)         (446,001)
 Proceeds from stock issuance                        83,509           215,166
 Net (decrease) increase in advances from                                     
  Federal Home Loan Bank of Boston               (2,328,463)       24,619,182
 Net change in notes payable                       (229,167)         (229,167)
                                              _______________   _______________
  Net cash provided by financing activities      30,048,564        24,551,352  
                                              _______________   _______________
  Net increase (decrease) in cash and                                          
   cash equivalents                                 495,213        (9,436,967) 
                                                                               
Cash and cash equivalents, beginning of                                        
 period                                          12,151,966        18,774,344  
                                              _______________   _______________
Cash and cash equivalents, end of period      $  12,647,179     $   9,337,377  
                                              ===============   ===============
                                                                              
Cash and cash equivalents include cash on                                 
 hand, amounts due from banks, interest                                     
 bearing deposits and federal funds sold                                   
                                                                            
Supplemental schedule of noncash investing                                   
 activities:                                                                 
                                                                       
Net change in valuation for unrealized market                                
 value adjustments on available for sale                                    
<PAGE> 9

 securities                                        (142,244)          233,422  
Net transfer (to) from Loans to Other Real 
 Estate Owned                                        97,332            56,325
                                                           
Supplemental disclosure of cash paid during                    
 the period for:                                                           
Income taxes paid, net of refunds                 1,105,000           434,000 
Interest paid                                    10,801,119         9,209,376

</TABLE>


                     NORTHEAST BANCORP AND SUBSIDIARY
               Notes to Consolidated Financial Statements
                             March 31, 1999

1.   Basis of Presentation
     _____________________
The accompanying unaudited condensed and consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for 
interim financial information and with the instructions to Form 10-Q and 
Article 10 of Regulation S-X.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting principles 
for complete financial statements.  In the opinion of management, all 
adjustments (consisting of normal recurring accruals) considered necessary for 
a fair presentation have been included.  Operating results for the nine month 
period ended March 31, 1999 are not necessarily indicative of the results that 
may be expected for the fiscal year ending June 30, 1999.  For further 
information, refer to the audited consolidated financial statements and 
footnotes thereto for the fiscal year ended June 30, 1998 included in the 
Company's Annual Report on Form 10-K.

2.   Reporting Comprehensive Income
     ______________________________
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."  
SFAS No. 130 establishes standards for reporting and displaying comprehensive 
income, which is defined as all changes to equity except investments by and 
distributions to stockholders.  Net income is a component of comprehensive 
income, with all other components referred to in the aggregate as other  
comprehensive income.  Such components of total comprehensive income for the 
Company are net income and net unrealized gains (losses) on securities 
available for sale, net of tax.  The Company has adopted SFAS No. 130 effective
for the quarter ended September 30, 1998.

3.   Securities
     __________
Securities available for sale at cost and approximate market values are 
summarized below.

<TABLE>
<CAPTION>
                                 March 31, 1999             June 30, 1998      
                           _________________________  _________________________
                                           Market                     Market   
                               Cost        Value          Cost        Value    
                           ____________ ____________  ____________ ____________
<S>                        <C>          <C>           <C>          <C>         
<PAGE> 10

Debt securities issued by                                                      
 the U.S. Treasury and                                                         
 other U.S. Government                                                         
 corporations and agencies $   597,080  $   598,955   $ 4,696,659  $ 4,698,266 
Corporate bonds                202,174      203,949       202,952      203,484
Mortgage-backed securities  17,075,798   16,924,258     7,723,843    7,714,332 
Equity securities            1,351,112    1,185,833     1,083,018      992,741
                           ____________ ____________  ____________ ____________
                           $19,226,164  $18,912,995   $13,706,472  $13,608,823 
                           ============ ============  ============ ============
                                                                               
                                 March 31, 1999             June 30, 1998
                           _________________________  _________________________
                                           Market                     Market   
                               Cost        Value          Cost        Value    
                           ____________ ____________  ____________ ____________
Due in one year or less    $   497,080  $   497,080   $   347,253  $   347,253 
Due after one year through                                                     
 five years                    202,174      203,949       452,952      450,984 
Due after five years                                                           
 through ten years             100,000      101,875     1,100,000    1,103,200 
Due after ten years               -            -        2,999,406    3,000,313 
Mortgage-backed securities                                                     
 (including securities with                                                    
 interest rates ranging                                                        
 from 5.15% to 9.0%                                                            
 maturing September 2003 to                                                    
 March 2029)                17,075,798   16,924,258     7,723,843    7,714,332 
Equity securities            1,351,112    1,185,833     1,083,018      992,741 
                           ____________ ____________  ____________ ____________
                           $19,226,164  $18,912,995   $13,706,472  $13,608,823 
                           ============ ============  ============ ============
</TABLE>

4.   Allowance for Loan Losses
     _________________________
The following is an analysis of transactions in the allowance for loan losses:

<TABLE>
<CAPTION>
                                                          Nine Months Ended
                                                              March 31,     
                                                         1999          1998    
                                                     ____________  ____________
<S>                                                  <C>           <C>         
Balance at beginning of year                         $ 2,978,000   $ 2,741,809  
Add provision charged to operations                      489,428       546,467 
Recoveries on loans previously charged off               136,296       249,202 
                                                     ____________  ____________
                                                       3,603,724     3,537,478 
  Less loans charged off                                 674,724       449,478 
                                                     ____________  ____________
  Balance at end of period                           $ 2,929,000   $ 3,088,000 
                                                     ============  ============
</TABLE>

<PAGE> 11

5.   Advances from Federal Home Loan Bank
     ____________________________________
A summary of borrowings from the Federal Home Loan Bank is as follows:

<TABLE>
<CAPTION>        
                                    March 31, 1999               
                     _____________________________________________
                        Principal        Interest       Maturity  
                         Amounts          Rates          Dates    
                     ______________  _______________  ____________
                     <C>             <C>              <C>         
                     $  37,000,000    4.64% - 5.09%       2000
                         8,000,000    4.85% - 6.27%       2001
                         3,063,078    5.38% - 6.49%       2002
                         5,326,599    5.71% - 6.64%       2003
                         5,721,812    5.69% - 6.67%       2004
                         5,000,000        5.25%           2005
                         4,000,000    5.25% - 6.65%       2006
                        29,000,000    4.89% - 5.68%       2008
                         5,000,000    4.99% - 5.40%       2009
                     ______________                                  
                     $ 102,111,489                                    
                     ==============                                  
                                                                   
                                     June 30, 1998              
                     _____________________________________________
                        Principal        Interest       Maturity  
                         Amounts          Rates          Dates     
                     ______________  _______________  ____________
                     $  43,745,440    5.55% - 6.00%       1999     
                         4,000,000    5.88% - 6.27%       2000     
                         1,212,676    5.56% - 6.40%       2001     
                         1,138,627    6.21% - 6.49%       2002     
                         9,631,854    5.69% - 6.64%       2003     
                         1,711,355    6.36% - 6.67%       2004    
                         9,000,000    5.25% - 6.65%       2005    
                        34,000,000    4.89% - 5.68%       2008     
                     ______________ 
                     $ 104,439,952  
</TABLE>

  
Item 2.  Management's Discussion and Analysis of Financial Condition and 
         _______________________________________________________________
         Results of Operation
         ____________________

General
_______

This Management's Discussion and Analysis of Financial Condition and Results of
Operations presents a review of the material changes in the financial condition
of the Company from June 30, 1998 to March 31,1999, and the results of 
operations for the three and nine months periods ended March 31, 1999 and 1998.
This discussion and analysis is intended to assist in understanding the 
financial condition and results of operations of the Company.  Accordingly, 
<PAGE> 12

this section should be read in conjunction with the condensed consolidated 
financial statements and the related notes contained herein.

Certain statements contained herein are not based on historical facts and are 
"forward-looking statements" within the meaning of the Private Securities 
Litigation Reform Act of 1995, such as statements relating to financial 
condition and future prospects, loan loss reserve adequacy, year 2000 
readiness, simulation of changes in interest rates, prospective results of 
operations, capital spending and financing sources, and revenue sources.  
Forward-looking statements, which are based on various assumptions (some of 
which are beyond the Company's control), may be identified by reference to a 
future period or periods, or by the use of forward-looking terminology; such as
"may", "will", "believe", "expect", "estimate", "anticipate", "continue", or 
similar terms or variations on those terms, or the negative of those terms.  
Such forward-looking statements reflect the current view of management and are 
based on information currently available to them, and upon current 
expectations, estimates, and projections regarding the Company and its 
industry, management's belief with respect there to, and certain assumptions 
made by management.  These forward-looking statements are not guarantees of 
future performance and are subject to risks, uncertainties, and other factors. 
Accordingly, actual results could differ materially from those set forth in 
forward-looking statements due to a variety of factors, including, but not 
limited to, those related to the economic environment, particularly in the 
market areas in which the Company operates, competitive products and pricing, 
fiscal and monetary policies of the U.S. Government, changes in government 
regulations affecting financial institutions, including regulatory fees and 
capital requirements, changes in prevailing interest rates, acquisitions and 
the integration of acquired businesses, credit risk management, asset/liability
management, changes in technology, changes in the securities markets, and the 
availability of and the costs associated with sources of liquidity.

Description of Operations
_________________________

Northeast Bancorp (the "Company"), is a unitary savings and loan holding 
company and is primarily regulated by the Office of Thrift Supervision ("OTS").
The Company has one wholly-owned subsidiary, Northeast Bank, FSB (the "Bank"), 
which has branches located in Auburn, Lewiston, Augusta, Bethel, Harrison, 
South Paris, Buckfield, Mechanic Falls, Brunswick, Richmond and Lisbon Falls, 
Maine.

Financial Condition 
___________________

Total consolidated assets were $353,955,286 on March 31, 1999, which represents
an increase of $31,422,693 from June 30, 1998.  Total net loans increased by  
$24,797,491, from June 30, 1998 to March 31, 1999.  Cash equivalents and 
securities increased by $495,213 and $5,254,172, respectively, during the same 
period.  Total deposits and repurchase agreements increased by $32,972,291, 
while Federal Home Loan Bank ("FHLB") borrowings decreased by $2,328,463 from 
June 30, 1998 to March 31, 1999.

The funds available from the increase in deposits and repurchase agreements 
were utilized to support the increase in securities and total net loans as well
as repay FHLB borrowings from June 30, 1998 to March 31, 1999.

At March 31, 1999, the carrying value of securities available for sale by the 
<PAGE> 13

Bank was $18,912,995, which is $313,169 less than the cost of the underlying 
securities.  The difference between the carrying value and the cost of the 
securities was primarily attributable to the decline in the market value of 
mortgage-backed and equity securities from the prices at the time of purchase. 
The Bank's available for sale securities increased by $5,304,172 from June 30, 
1998 to March 31, 1999.  The increase was primarily due to purchases of 
mortgage-backed securities as collateral for the growth in repurchase 
agreements.  The net unrealized loss on mortgage-backed securities was $151,540
at March 31, 1999.  Substantially all of the mortgage-backed securities are 
high grade government backed securities.  As in any long term earning asset in 
which the earning rate is fixed, the market value of mortgage-backed securities
will fluctuate based on changes in market interest rates from the time of 
purchase.  Since these mortgage-backed securities are backed by the U.S. 
Government, there is virtually no risk of loss of principal.  Management 
believes that the yields currently received on this portfolio are satisfactory 
and intends to hold these securities for the foreseeable future.  Management
attributes the reduction of $165,279 in the market value of equity securities 
to the decline on the market value of the Company's investments in small cap 
technology stocks.  Management reviews the portfolio of investments on an 
ongoing basis to determine if there has been an other-than-temporary decline in
value.  Some of the considerations management makes in the determination are 
market valuations of particular securities and economic analysis of the 
securities' sustainable market values based on the underlying companies' 
profitability.

Total loans increased by $24,748,491 for the nine months ended March 31, 1999.
The loan portfolio growth was in 1-4 family residential and commercial loans.  
The Bank sold approximately $6,700,000 and $3,000,000 of indirect auto loans in
the December 1998 and March 1999 quarters, respectively.  The Bank anticipates 
holding approximately $15,000,000 to $20,000,000 of indirect auto loans in its 
portfolio and currently holds approximately $12,500,000 as of March 31, 1999. 
As the Bank continues to grow the indirect auto portfolio, it is the Bank's 
intent to build relationships with other institutions for future sales of 
indirect auto loans.  The Bank purchased approximately $5,900,000 and 
$22,000,000 of 1-4 family mortgages in the September 1998 and March 1999 
quarters, respectively.  The purchase consisted of 1-4 family fixed rate 
mortgages secured by property located primarily in the State of North Carolina 
and New York.  The continued expansion into new markets diversifies the credit 
risk and the potential economic risks of the credits held in the Bank's 
purchased loan portfolio, such that the portfolio is not effected solely by the
local State of Maine economy.  The Bank's local market, as well as the 
secondary market, continues to be very competitive for loan origination volume.
The local competitive environment and customer response to favorable secondary 
market rates have affected the Bank's ability to increase the loan portfolio.  
In an effort to increase loan volume, the Bank's offering rates for its loan 
products have been reduced to compete in the various markets.  The Bank will 
experience some margin compression due to decreased loan rates.

The loan portfolio contains elements of credit and interest rate risk.  The 
Bank primarily lends within its local market areas, which management believes 
helps them to better evaluate credit risk.  As the Bank expands its purchase of
loans in other states, management researches the strength of the economy in the
respective state and underwrites every loan before purchase.  These steps are 
taken to better evaluate and minimize the credit risk of out-of-state 
purchases.  The Bank also maintains a well collateralized position in real 
estate mortgages.

<PAGE> 14

At March 31, 1999, residential real estate mortgages made up 61% of the total 
loan portfolio, of which 42% of the residential loans are variable rate 
products, as compared to 65% and 63%, respectively, at March 31, 1998.  
Although the Bank has purchased fixed rate loans, it is management's intent, 
where market opportunities arise, to increase the volume in variable rate 
residential loans to reduce the interest rate risk in this area. 

At March 31, 1999, 18% of the Bank's total loan portfolio balance is commercial
real estate mortgages.  Commercial real estate loans have minimal interest rate
risk as 84% of the portfolio consists of variable rate products.  At March 31, 
1998, commercial real estate mortgages made up 18% of the total loan portfolio,
of which 88% of the commercial real estate loans were variable rate products. 
The Bank tries to mitigate credit risk by lending in its local market area as 
well as maintaining a well collateralized position in real estate.

Commercial loans make up 10% of the total loan portfolio, of which 46% are 
variable rate instruments at March 31, 1999.  At March 31, 1998 commercial 
loans made up 9% of the total loan portfolio, of which 66% were variable rate 
instruments.  The credit loss exposure on commercial loans is highly dependent 
on the cash flow of the customer's business.  The Bank mitigates losses by 
strictly adhering to the Company's underwriting and credit policies.

Consumer and other loans make up 11% of the loan portfolio as of March 31, 1999
as compared to 8% at March 31, 1998.  Since these loans are primarily fixed 
rate products, they have interest rate risk when market rates increase.  These 
loans also have credit risk with minimal security.  The increase in consumer 
loans was primarily due to the volume generated from the automobile dealer 
finance department.  This department underwrites all the automobile dealer 
finance loans to protect credit quality.  The Bank primarily pays a nominal one
time origination fee on the loans.  The fees are deferred and amortized over 
the life of the loans as a yield adjustment.  Management attempts to mitigate 
credit and interest rate risk by keeping the products offered short-term, 
receiving a rate of return commensurate with the risk, and lending to 
individuals in the Bank's known market areas.

As discussed above, there has been a shift in the mix of the loan portfolio 
where the Bank is seeing an increase in fixed rate loans.  The change in mix is
primarily due to market demand, products offered by local competitors and 
current low economic rates.

The Bank's allowance for loan losses was $2,929,000 as of March 31, 1999 versus
$2,978,000 as of June 30, 1998, representing 0.95% and 1.06% of total loans, 
respectively.  The Bank had non-performing loans totaling $1,659,000 at March 
31, 1999 compared to $2,248,000 at June 30, 1998.  Non-performing loans 
represented 0.47% and 0.70% of total assets at March 31, 1999 and June 30, 
1998, respectively.  The Bank's allowance for loan losses was equal to 177% and
132% of the total non-performing loans at March 31, 1999 and June 30, 1998, 
respectively.  At March 31, 1999, the Bank had approximately $646,000 of loans 
classified substandard, exclusive of the non-performing loans stated above, 
that could potentially become non-performing due to delinquencies or marginal 
cash flows.  These substandard loans increased by $546,000 when compared to the
$100,000 at June 30, 1998.  The increase was attributed to management 
downgrading certain loans during its internal review process.

The following table represents the Bank's non-performing loans as of March 31, 
1999 and June 30, 1998, respectively:                                     

<PAGE> 15

<TABLE>
<CAPTION>
                                          March 31,       June 30,
                   Description              1999            1998
            _________________________   _____________   _____________          
            <S>                         <C>             <C>          
            1-4 Family Mortgages        $   464,000     $   783,000  
            Commercial Mortgages          1,033,000         956,000  
            Commercial Loans                      0         509,000  
            Consumer Installment            162,000               0  
                                        _____________   _____________
             Total non-performing       $ 1,659,000     $ 2,248,000
                                        =============   =============

</TABLE>

The following table reflects the quarterly trend of total delinquencies 30 days
or more past due, including non-performing loans, for the Bank as a percentage 
of total loans: 

<TABLE>
<CAPTION>

              06-30-98      09-30-98      12-31-98      03-31-99
             ___________   ___________   ___________   ___________             
             <C>           <C>           <C>           <C>       
                1.09%         0.89%         1.27%         1.09%   

</TABLE>

At March 31, 1999, loans classified as non-performing included approximately 
$578,000 of loan balances that are current and paying as agreed, but which the 
Bank maintains as non-performing until the borrower has demonstrated a 
sustainable period of performance.  Excluding these loans, the Bank's total 
delinquencies 30 days or more past due, as a percentage of total loans, would 
be 0.90% as of March 31, 1999.  Based on reviewing the credit risk and 
collateral of delinquent, non-performing and classified loans, management 
considers the allowance for loan losses to be adequate.

On a regular and ongoing basis, management evaluates the adequacy of the 
allowance for loan losses.  The process to evaluate the allowance involves a 
high degree of management judgement.  The methods employed to evaluate the 
allowance for loan losses are quantitative in nature and consider such factors 
as the loan mix, the level of non-performing loans, delinquency trends, past 
charge-off history, loan reviews and classifications, collateral, and the 
current economic climate.

While management uses its best judgement in recognizing loan losses in light of
available information, there can be no assurance that the Company will not have
to increase its provision for loan losses in the future as a result of changing
economic conditions, adverse markets for real estate or other factors.  In 
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses.  Such 
agencies may require the Bank to recognize additions to the allowance for loan 
losses based on their judgements about information available to them at the 
time of their examination.  The Bank's most recent examination by the OTS was 
on November 30, 1998.  At the time of the exam the regulators proposed no 
<PAGE> 16

additions to the allowance for loan losses.

In March of 1999 the Bank opened a new branch located on Lisbon Street in 
Lewiston, Maine as well as a facility on Fundy Road in Falmouth, Maine, which 
accepts loan applications and offers investment, insurance and financial 
planning products.

The bank's premises and equipment increased by $440,810 from June 30, 1998 to 
March 31, 1999.  The increase was due to the purchase and replacement of the 
Bank's mainframe and software as well as the opening of the new Lewiston branch
and Falmouth facility.

Other assets increased by $514,078 from June 30, 1998 to March 31, 1999.  The 
increase was primarily due to the increase in capitalized loan servicing 
rights, accounts receivable and non-marketable investments.

Other liabilities was $2,166,630 as of March 31, 1999, which was a decrease of 
$563,739 when compared to June 30, 1998.  The decrease was primarily due to the
reduction in the Bank's escrow account for certified checks and a payable 
account resulting from the settlement of a loan sale transaction in June of 
1998.

Capital Resources and Liquidity
_______________________________

Cash provided by operating activities in the consolidated statements of cash 
flow decreased by $699,704 from March 31, 1998 to March 31, 1999 as a result of
an increase in assets held for sale and a reduction in other liabilities due to
transaction timing differences.

The Bank continues to attract new local deposit relationships.  The Bank 
utilizes, as alternative sources of funds, brokered certificate of deposits
("C.D.s") when national deposit interest rates are less than the interest rates
on local market deposits.  Brokered C.D.s are also used to supplement the 
growth in earning assets.  Brokered C.D.s carry the same risk as local deposit 
C.D.s, in that both are interest rate sensitive with respect to the Bank's 
ability to retain the funds.  The Bank also utilizes FHLB advances, as 
alternative sources of funds, when the interest rates of the advances are less 
than market deposit interest rates.  FHLB advances are also used to fund short-
term liquidity demands.

Total deposits were $212,710,281 and securities sold under repurchase 
agreements were $9,491,701 as of March 31, 1999.  These amounts represent an 
increase of $28,686,184 and $4,286,107, respectively, compared to June 30, 
1998.  The increase in deposits was primarily due to the $9,700,000 increase in
NOW demand deposits and a $17,000,000 increase in time deposits.  The increase 
in NOW deposits was attributable to the development of a demand account where 
the interest rate increases as deposit balances increase.  The increase in time
deposits was primarily due to the offering of rate specials in local Bank 
markets and increased broker deposits.  Brokered deposits represented 
$12,468,111 of the total deposits at March 31, 1999, which increased by 
$4,893,401 compared to the $7,574,710 balance as of June 30, 1998.  Cross 
selling strategies are employed by the Bank to develop deposit growth.  Even 
though deposit interest rates have remained competitive, the rates of return
are much higher with other financial instruments such as mutual funds and 
annuities.  Like other companies in the banking industry, the Bank will be 
challenged to maintain and or increase its core deposits.
<PAGE> 17


Total advances from the FHLB were $102,111,489 as of March 31, 1999, a decrease
of $2,328,463 compared to June 30, 1998.  The cash received from the increase 
in the Bank's deposits was utilized to repay FHLB advances.  The Bank has 
unused borrowing capacity from the FHLB through its advances program.  The 
Bank's current advance availability, subject to the satisfaction of certain 
conditions, is approximately $32,000,000 over and above the March 31, 1999 
advances.  Mortgages, free of liens, pledges and encumbrances are required to 
be pledged to secure FHLB advances.  The Bank's ability to access principal 
sources of funds is immediate and with the borrowing capacity at the Federal
Home Loan Bank, the normal growth in bank deposits and repurchase agreements 
and the immediate availability of the Bank's cash equivalents as well as 
securities available for sale, management believes that the Company's available
liquidity resources are sufficient to support the Company's needs.

Total equity of the Company was $26,711,296 as of March 31, 1999 versus 
$25,139,527 at June 30, 1998.  Book value per common share was $9.66 as of 
March 31, 1999 versus $9.23 at June 30, 1998.  The total equity to total assets
ratio of the Company was 7.55% as of March 31, 1999 and 7.79% as of June 30, 
1998.

In November of 1998 Square Lake Holding Corporation converted its Series A 
preferred stock into 136,362 shares of common stock.  Square Lake Holding 
Corporation is a Maine corporation and a subsidiary of a Canadian corporation 
of which Ronald Goguen is a 95% shareholder and director.  Mr. Goguen, also is 
a director, and, through the ownership of his affiliates, a principal 
shareholder of the Company.

The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), 
contains various provisions intended to capitalize the Bank Insurance Fund 
("BIF") and also affects a number of regulatory reforms that impact all insured
depository institutions, regardless of the insurance fund in which they 
participate.  Among other things, FDICIA grants the OTS broader regulatory 
authority to take prompt corrective action against insured institutions that do
not meet capital requirements, including placing undercapitalized institutions 
into conservatorship or receivership.  FDICIA also grants the OTS broader 
regulatory authority to take corrective action against insured institutions 
that are otherwise operating in an unsafe and unsound manner.

FDICIA defines specific capital categories based on an institution's capital 
ratios.  The OTS has issued regulations requiring a minimum regulatory tangible
capital equal to 1.5% of adjusted total assets, core capital of 3.0%, leverage 
capital of 4.0% and a risk-based capital standard of 8.0%.  The prompt 
corrective action regulations define specific capital categories based on an 
institution's capital ratios.  The capital categories, in declining order, are 
"well capitalized", "adequately capitalized", "undercapitalized", 
"significantly undercapitalized", and "critically undercapitalized".  As of 
March 31, 1999, the most recent notification from the OTS categorized the Bank 
as well capitalized.  There are no conditions or events since that notification
that management believes has changed the institution's category.

At March 31, 1999, the Bank's regulatory capital was in compliance with 
regulatory capital requirements as follows:

<TABLE>
<CAPTION>
                                                                To Be "Well    
<PAGE> 18

                                                             Capitalized" Under
                                              For Capital    Prompt Corrective 
                               Actual      Adequacy Purposes Action Provisions 
                          Amount    Ratio    Amount   Ratio   Amount    Ratio  
                         _________ _______ _________ _______ _________ ________
<S>                      <C>       <C>     <C>       <C>     <C>       <C>     
(Dollars in Thousands)                                                         
As of March 31, 1999:                                                         
Tier 1 (Core) capital                                                          
 (to risk weighted                                                             
  assets)                $ 25,037  10.60%  $  9,447   4.00%  $ 14,170    6.00% 
Tier 1 (Core) capital 
 (to total assets)       $ 25,037   7.11%  $ 14,094   4.00%  $ 17,617    5.00%
Total Capital (to risk
 weighted assets)        $ 26,803  11.35%  $ 18,893   8.00%  $ 23,616   10.00%

</TABLE>

Results of Operations
_____________________

Net income for the quarter ended March 31, 1999 was $743,506 or basic earnings 
per share and diluted earnings per share of $0.27.  This compares to earnings 
of $732,361 or basic earnings per share of $0.31 and diluted earnings per share
of $0.26 for the quarter ended March 31, 1998.  Net income for the nine months 
ended March 31, 1999 was $2,080,111 versus $1,658,992 for the period ended 
March 31, 1998.  Basic earnings per share were $.76 and diluted earnings per 
share were $.74 for the nine months ended March 31, 1999 versus basic earnings 
per share of $.70 and diluted earnings per share of $.62 for the period ended 
March 31, 1998. 

The Company completed the acquisition of Cushnoc during the nine months ended 
March 31, 1998.  The one-time costs associated with the acquisition totaled 
approximately $283,000 after tax during the nine months ended March 31, 1998. 
The Company's net operating income, before the aforementioned one-time charge, 
was $1,941,469, basic earnings per share were $.82 and diluted earnings per 
share were $.72, for the nine months ended March 31, 1998.  

On September 30, 1998, the Company adopted FASB Statement No. 130, "Reporting 
Comprehensive Income".  Comparative financial information in the Statements of 
Changes in Shareholders' Equity for earlier periods have been reclassified in 
accordance with the requirement of Statement No. 130.

The Company's net interest income was $9,028,339 for the nine months ended 
March 31, 1999, versus $8,372,751 for the nine months ended March 31, 1998, an 
increase of $655,588.  Total interest income increased $2,213,321 during the 
nine months ended March 31, 1999 compared to the nine months ended March 31, 
1998, resulting primarily from an increase in the volume of loans offset in 
part by a decrease in rates.  The increase in total interest expense of 
$1,557,733 for the nine months ended March 31, 1999 resulted primarily from the
increased volume of deposits and borrowings.

The changes in net interest income are presented in the schedule below.

Northeast Bancorp
Rate/Volume Analysis for the Nine months ended
March 31, 1999 versus March 31, 1998
<PAGE> 19


<TABLE>
<CAPTION>

                                     Difference Due to
                                  Volume            Rate             Total     
                              _______________  _______________  _______________
<S>                           <C>              <C>              <C>            
Investments                   $    (382,918)   $    (110,425)   $    (493,343) 
Loans                             4,124,310       (1,247,195)       2,877,115
FHLB & Other Deposits              (145,220)         (25,231)        (170,451)
                              _________________________________________________
 Total                            3,596,172       (1,382,851)       2,213,321  
                                                                               
Deposits                            725,835           75,134          800,969
Repurchase Agreements                81,851           (1,393)          80,458
Borrowings                          844,249         (167,943)         676,306
                              _________________________________________________
 Total                            1,651,935          (94,202)       1,557,733
                              _________________________________________________
  Net Interest Income         $   1,944,237    $  (1,288,649)   $     655,588
                              =================================================
</TABLE>

          Rate/Volume amounts spread proportionately between volume and rate.

The majority of the Company's income is generated from the Bank.  Management 
believes that the Bank is slightly asset sensitive based on its own internal 
analysis which categorizes its core deposits as long term liabilities which are
then matched to long term assets.  As a result, the Bank will generally 
experience a contraction in its net interest margins during a period of falling
rates.  Management believes that the maintenance of a slight asset sensitive 
position is appropriate since historically interest rates tend to rise faster 
than they decline.

Approximately 20% of the Bank's loan portfolio is comprised of floating rate 
loans based on a prime rate index.  Interest income on these existing loans 
will increase as the prime rate increases, as well as on approximately 26% of 
other loans in the Bank's portfolio that are based on short-term rate indices 
such as the one-year treasury bill.  An increase in short-term interest rates 
will also increase deposit and FHLB advance rates, increasing the Bank's 
interest expense.  Although the Bank has experienced some net interest margin 
compression, the impact on net interest income will depend on, among other 
things, actual rates charged on the Bank's loan portfolio, deposit and advance 
rates paid by the Bank and loan volume.  The net interest margin compression at
the Bank has been primarily due to the decrease in loan rates.  Loan yields 
have decreased due to the effect of the Federal Reserve easing the prime 
lending rate in September and October of 1998 as well as loans within the Bank
refinancing to lower current market rates.  As of March 31, 1999 the Bank's net
loan yields have decreased by 24 basis points when compared to net loan yields 
at September 30,1998.

Total non-interest income was $733,208 and $2,081,205 for the three and nine 
months ended March 31, 1999 versus $595,359 and $1,892,531 for the three and 
nine months ended March 31, 1998.  Service fee income was $253,507 and $776,427
for the three and nine months ended March 31, 1999 versus $227,757 and $741,397
for the three and nine months ended March 31, 1998.  The $25,750 and $35,030 
<PAGE> 20

service fee increase for the three and nine months ended March 31, 1999, 
respectively, was primarily due to an increase in loan servicing and deposit 
fee income.  Gains from available for sale securities were $11,035 and $69,525 
for the three and nine months ended March 31, 1999 versus $37,439 and $245,131 
for the three and nine months ended March 31, 1998.  The Bank sold a larger 
volume of its available for sale securities during the three and six month 
period ended March 31, 1998, taking advantage of the fluctuation in market 
prices in the mortgage-backed security portfolio.

Other income was $468,666 and $1,224,521 for the three and nine months ended 
March 31, 1999, which was an increase of $138,503 and $320,315 when compared to
other income of $330,163 and $904,206 for the three and nine months ended March
31, 1998, respectively.  The increase in other income in the three and nine 
months ended March 31, 1999, was primarily due to gains from 1-4 family 
mortgage and indirect auto loan sales.

Total non-interest expense for the Company was $2,488,839 and $7,376,582 for 
the three and nine months ended March 31, 1999, which was an increase of 
$365,203 and $210,102, respectively, when compared to total non-interest 
expense of $2,123,636 and $7,166,480 for the three and nine months ended March 
31, 1998.  The increase in compensation expense for the three month period 
ended March 31, 1999 was primarily due to the additional staffing for the new 
branch opened in Lewiston, Maine and increased costs associated with the 
Company's health insurance plan.  The increase in occupancy expense for the 
three and nine months ended March 31, 1999 was due to the additional lease 
expense in opening the new Lewiston branch as well as the Company relocating 
its benefit administration department and in doing so paid a one time lease 
penalty to terminate the existing lease contract for that location.

Other expenses increased by $239,933 and $197,671 for the three and nine months
ended March 31, 1999, respectively when compared to the three and nine months 
ended March 31, 1998.  The increase in the March 31, 1999 quarter was primarily
due to the following:  an increase in advertising of $19,000 and an increase in
supplies expense of $12,000 due to the opening of the new Lewiston branch; an 
increase in loan servicing fees of $26,000 due to the fees paid for servicing 
loans purchased; an increase in professional fees of $90,000 due to increased 
legal services, courier services, trust consulting services and data operations
services; an increase in check item and data processing of $49,000 due to the 
Company's growth; and an increase of $36,000 in postage, education and other 
general expenses.

Impact of Inflation
___________________

The consolidated financial statements and related notes herein have been 
presented in terms of historic dollars without considering changes in the 
relative purchasing power of money over time due to inflation.  Unlike 
industrial companies, substantially all of the assets and virtually all of the 
liabilities of the Company are monetary in nature.  As a result, interest rates
have a more significant impact on the Company's performance than the general 
level of inflation.  Over short periods of time, interest rates may not 
necessarily move in the same direction or in the same magnitude as inflation.

Year 2000
_________

The Company is currently addressing the Year 2000 issue. Many existing computer
<PAGE> 21

programs and hardware configurations use only two digits to identify a year in 
the date field.  Since these programs did not take into consideration the 
upcoming change in the century, many computer applications could create 
erroneous results by the year 2000 if not corrected.  The Year 2000 issue will 
affect this Company and it will affect virtually all companies and 
organizations, including the Company's borrowers.  The Company has organized a 
Year 2000 committee to research, develop and implement a plan that will correct
this issue before the year 2000.  The OTS, which primarily regulates thrifts, 
savings and loan associations, and savings and loan holding companies, has 
issued a formal regulation and comprehensive plan concerning the Year 2000 
issue for such financial institutions.  The Company has adopted the regulatory 
comprehensive plan which has the following phases:

Awareness Phase
---------------
This phase consists of defining the Year 2000 problem; developing the resources
necessary to perform compliance work, establishing a Year 2000 program 
committee and developing an overall strategy that encompasses in-house systems,
service bureaus for systems that are outsourced, vendors, auditors, customers, 
and suppliers (including correspondents).  This phase has been completed by the
Company's committee.

Assessment Phase
----------------
This phase consists of assessing the size and complexity of the problem and 
detailing the magnitude of the effort necessary to address the Year 2000 issue.
This phase must identify all hardware, software, networks, automated teller 
machines, other various processing platforms, and customer and vendor 
interdependencies affected by the Year 2000 date change.  The assessment must 
go beyond information systems and include environmental systems that are 
dependent on embedded microchips, such as security systems, elevators and 
vaults.  During this phase management also must evaluate the Year 2000 effect 
on other strategic business initiatives.  The assessment should consider the 
potential effect that mergers and acquisitions, major system development, 
corporate alliances, and system interdependencies will have on existing systems
and/or the potential Year 2000 issues that may arise from acquired systems.  
The financial institution or vendor should also identify resource needs,
establish time frames and sequencing of Year 2000 efforts.  Resource needs 
include appropriately skilled personnel, contractors, vendor support, budget 
allocations, and hardware capacity.  This phase should clearly identify 
corporate accountability throughout the project, and policies should define 
reporting, monitoring, and notification requirements.  Finally, contingency 
plans should be developed to cover unforeseen obstacles during the renovation 
and validation phases and include plans to deal with lesser priority systems 
that would be fixed later in the renovation phase.

The assessment phase has been materially completed, but is considered an 
ongoing phase for the Company.  The Company is in the process of developing its
contingency plan and anticipates its completion by June 30, 1999.  The Company 
has instituted a comprehensive plan to communicate with all its borrowers that 
the Company considers to be at risk concerning the Year 2000 issue.  The 
Company considers this plan necessary to mitigate the risk associated with 
borrowers not having the ability to make loan payments due to a Year 2000 
issue.  The company has estimated the following costs associated with the Year 
2000 issue, (i) computer hardware replacement $40,000, (ii) software 
replacement $42,000, (iii) testing and administrative costs $94,000, and (iv) 
potential contingency costs $15,000.  As of March 31, 1999, the Company has
<PAGE> 22

incurred approximately $37,333 of capitalized purchases and $88,200 of 
cumulative Year 2000 expenses.  These costs are under continuous review and 
will be revised as needed.  There can be no assurance that actual costs will 
not exceed the Company's estimates.  As of March 31, 1999, the Company has 
replaced its computer mainframe, software and data communication systems as 
planned to accommodate the growth of the Company through merger and 
acquisitions.  The previous mainframe and software had been fully depreciated 
through the normal course of its depreciable life and the costs associated with
the replacement of these items was in the Company's general business plan for 
fiscal 1999.  The anticipated Year 2000 hardware and software costs indicated 
above are in addition to the Company's costs associated with the replacement of
the mainframe, software and data communication system.

Renovation Phase
----------------
This phase includes code enhancements, hardware and software upgrades, system 
replacements, vendor certification, and other associated changes.  Work should 
be prioritized based on information gathered during the assessment phase.  For 
institutions relying on outside services or third-party software providers, 
ongoing discussions and monitoring of vendor progress are necessary.  The 
Company has limited out-side services and vendors.  Each servicer and vendor 
has been contacted and has or will provide information to the Company 
concerning their efforts to comply with the Year 2000 issue.  The Company has 
completed this phase.  However, there can be no assurance that these services 
or vendors will become Year 2000 compliant in a timely manner.

Validation Phase
----------------
Testing is a multifaceted process that is critical to the Year 2000 project and
inherent in each phase of the project management plan.  This process includes 
the testing of incremental changes to hardware and software components.  In 
addition to testing upgraded components, connections with other systems must be
verified, and all changes should be accepted by internal and external users. 
Management will establish controls to assure the effective and timely 
completion of all hardware and software testing prior to final implementation. 
As with the renovation phase, the Company will be in ongoing discussions with 
their vendors on the success of their validation efforts.  The Company has 
completed the testing all of its critical systems and has completed this phase.

Implementation Phase
--------------------
In this phase, systems should be certified as Year 2000 compliant and be 
accepted by the business users.  For any system failing certification, the 
business effect must be assessed clearly and the organization's Year 2000 
contingency plans should be implemented. Any potentially non-compliant mission-
critical system should be brought to the attention of executive management
immediately for resolution.  In addition, this phase must ensure that any new 
systems or subsequent changes to verified systems are compliant with Year 2000 
requirements.  The Company anticipates completion of this phase by June 30, 
1999.

In summary, the Company recognizes the Year 2000 as a global issue with 
potentially catastrophic results if not addressed.  The Company has and will 
continue to undertake all the necessary steps to protect itself and its 
customers concerning the Year 2000 issue.  Management is confident that all the
instituted phases will be completed and in place prior to the year 2000.  
However, failure to meet the Year 2000 deadlines could have a material adverse 
<PAGE> 23

effect on the Company.

Item 3.  Quantitative and Qualitative Disclosure about Market Risk
         _________________________________________________________
   
There have been no material changes in the Company's market risk from June 30, 
1998.  For information regarding the Company's market risk, refer to the 
Company's Annual Report on Form 10-K dated as of June 30, 1998.


Part II -      OTHER INFORMATION

Item 1.   Legal Proceedings
          _________________
          None.

Item 2.   Changes in Securities
          _____________________
          None.

Item 3.   Defaults Upon Senior Securities
          _______________________________
          None.

Item 4.   Submission of Matters to a Vote of Security Holders
          ___________________________________________________
          None.

Item 5.   Other Information
          _________________
          None.

Item 6.   Exhibits and Reports on Form 8 - K
          __________________________________
(a)       Exhibits
          ________
          11  Statement regarding computation of per share earnings.

          27  Financial data schedule

(b)       Reports on Form 8 - K
          _____________________
          No reports on Form 8-K have been filed during the quarter ended March
          31, 1999. 


                                    SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has 
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

Date: May 13, 1999                                    NORTHEAST BANCORP      


                                          By:      /s/  James D. Delamater  
                                               _______________________________
                                                      James D. Delamater      
<PAGE> 24

                                                      President and CEO
                                              
                                             
                                          By :        /s/  Richard Wyman   
                                                ______________________________
                                                         Richard Wyman        
                                                    Chief Financial Officer   


NORTHEAST BANCORP
Index to Exhibits
                                    
EXHIBIT NUMBER                            DESCRIPTION                        

      11         Statement regarding computation of per share earnings 

      27         Financial data schedule