Fed approves Northeast Bancorp merger
Northeast Bancorp's $30 million merger with a Boston-based investor group has won all the necessary regulatory approvals and will likely close before the end of the year.
The Federal Reserve Bank of Boston on Monday approved the merger, which received shareholder backing in July and approval from the state's Bureau of Financial Institutions last month, according to a press release from the company and documents filed with the U.S. Securities and Exchange Commission. FHB Formation LLC will purchase $16.2 million in new Northeast Bancorp shares and 40% of the company's outstanding common stock for $12.9 million.
FHB twice sought 60-day extensions to give federal regulators more time to review the deal, which will give FHB ownership of approximately 60% of Northeast's common stock. The merger is subject to conditions by state and federal regulators, including that the bank maintain a total risk-based capital ratio of at least 15%, limit purchased and commercial real estate loans to certain percentages and seek prior approval from the state for two years before deviating from the business plan, according to SEC documents.
Northeast Bancorp, parent of Northeast Bank, will remain the surviving entity and retain its headquarters in Lewiston. The transaction is expected to close on or before Dec. 31.
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