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December 15, 2008

Northeast Bank taps fed stimulus funds

By The Mainebiz News Staff

Northeast Bancorp in Lewiston has received $4.2 million from the U.S. Treasury's Capital Purchase Program, part of the $700 billion economic stimulus package Congress approved in October.

In return for the federal stimulus funds, the parent company of Northeast Bank has issued the U.S. Treasury shares of Northeast Bancorp preferred stock and warrants to purchase its common stock, according to a press release from the company. Jim Delamater, the bank's president and CEO, said the bank's capital position is stronger than ever, but that participation in the program further bolsters that position and will improve the flow of capital to area businesses. Northeast Bancorp has $605 million in assets. "The Treasury is encouraging all healthy banks to take part, in order to help support our economy and restore confidence in the credit and financial markets," Delamater said in a press release.

The Capital Purchase Program was created under the Emergency Economic Stabilization Act and is intended to stimulate the economy by providing healthy financial institutions, which are willing to sell preferred stock directly to the government, additional capital at favorable terms.

The First Bancorp in Damariscotta and Bar Harbor Bank & Trust have also announced that they are seeking funds from the Capital Purchase Program.

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