Investor group to merge with Lewiston bank
Lewiston-based Northeast Bancorp yesterday announced a merger with an investor entity through the sale of more than $29 million in common stock.
The company, parent to Northeast Bank, is selling $16.2 million in new shares to several investors through FHB Formation, a Delaware entity created for the transaction, according to a press release from the company. The investors will also purchase 40% of Northeast's outstanding common shares for $12.9 million. FHB will merge with Northeast and then be dissolved, and the investors will own approximately 60% of Northeast's common stock.
Richard Wayne, previously president and co-CEO of Capital Crossing Bank in Boston until 2007, will assume the position of CEO of Northeast Bancorp. Jim Delamater, current CEO of the bank holding company, will become president and CEO of the company's community banking division, according to an agreement and plan of merger filed with the U.S. Securities and Exchange Commission. The company's headquarters will remain in Lewiston, and its retail locations will not change, according to the release. Seven of nine board director positions will be designated by the investors.
In the release, Delamater said the move would allow Northeast to "diversify revenue, explore new lines of business and ultimately create jobs." The company plans to create a loan acquisition and servicing group to add commercial loans to its portfolio and generate additional fee income through managing the loans, according to the merger agreement.
The deal, which still needs shareholder and regulatory approval, is expected to close in the second half of 2010.
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