Northeast Bancorp, which is based in Lewiston, has received $4.2 million as part of the Bush administration plan to buy stock in banks, the company announced today.

In exchange, the parent company of Northeast Bank issued the U.S. Treasury an undisclosed number of non-voting senior preferred shares, which pay a
dividend of 5 percent annually for the first five years and 9 percent annually after the fifth year. Northeast also issued the Treasury warrants to purchase common stock.

The government program to take partial ownership in banks is meant to provide the institutions with an injection of capital, and is part of a larger $700 billion rescue package for the banking system.

President Jim Delamater said the bank had taken a conservative approach to lending in recent years and was in good fiscal shape.

"Our current capital position is stronger than ever, though we felt that it is important to participate in the program," Delamater said. "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."

The $4.2 million represents approximately 1 percent of Northeast's risk-based assets, the minimum level for participation in the program. Northeast Bank, together with its wholly owned subsidiary, Northeast Bank
Insurance Group Inc., has $605 million in assets.