State OKs Northeast Bancorp merger
State financial regulators have approved a nearly $30 million merger of Northeast Bancorp and a Boston-based investor group.
The Bureau of Financial Institutions last week approved FHB Formation LLC's application to purchase $16.2 million in new Northeast Bancorp shares and 40% of the bank's outstanding common stock for $12.9 million, according to an order signed by Superintendent Lloyd LaFountain III. Conditions of the bureau's approval included that Northeast Bancorp, parent of Northeast Bank in Lewiston, inject a minimum of $9 million equity into the bank, that both the bank's parent company and the bank maintain certain capital ratios, and that any senior executives or directors be reviewed and approved by the bureau. The order is effective as of Dec. 17.
Announced in April, the merger was twice delayed as FHB Formation sought two 60-day extensions to give federal regulators more time for review. Shareholders approved the deal in August, but it still needs federal approval. The deal would give investors, operating through FHB Formation, ownership of approximately 60% of Northeast's common stock.
For more on the merger, see "Taking stock."
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