Northeast Bancorp Insurance Division Acquired by Maine Agency, and Local Management

Northeast Bancorp (NASDAQ: NBN) announced today that its insurance division – Northeast Bank Insurance Group – has been acquired by local agencies in two separate transactions, effective September 1, 2011. The Varney Agency, of Bangor, Maine, will purchase the assets of nine Northeast Bank insurance offices which cover southern, central, and western Maine. Brad Scott, currently a member of the Northeast Bank Insurance Group's senior management team, will acquire the assets of Spence and Mathews Insurance, which operates one insurance office in Berwick, Maine, and serves customers in Southern Maine and Seacoast New Hampshire. Total sale proceeds of $9.7 million will add approximately $8.4 million to the Company's tangible equity.

“This is a very good transaction for our customers, employees, and for our company” said Rick Wayne, President and Chief Executive Officer of Northeast Bancorp. “It further strengthens our balance sheet, while retaining jobs and services in Maine. We are pleased that both the Varney Agency and Spence and Mathews, two well established, local agencies, will be acquiring our insurance business. We will work closely with them to ensure that this transition is a smooth one.”