On December 22, 2003 Northeast Bancorp (the "Company") issued $6.0 million trust preferred securities through Credit Suisse First Boston LLC as placement agent. The offering consisted of two separate $3.0 million offerings which closed simultaneously. The initial pricing for $3.0 million of the trust preferred securities calls for a variable rate coupon beginning at 3.97%. The rate will be reset quarterly to a rate equal to LIBOR plus 2.80%. The remaining million of the trust preferred securities calls for a fixed rate coupon of 6.50% through March 2009, and LIBOR plus 2.80% thereafter.

The Company will use the net proceeds for general corporate purposes and to redeem a portion of earlier issued trust preferred securities which carry a higher coupon rate. Under the terms of its previously issued trust preferred securities, the Company is not to redeem securities until December 31, 2004. Accordingly, the Company anticipates investing the net proceeds in investment securities prior to any such redemption.