Press Release January 10, 2011

Goodwin Procter Advises FHB On Unique Merger With Northeast Bancorp

On December 29, 2010, Goodwin Procter client FHB Formation LLC – whose members included several hedge fund and private equity firms – completed a merger with, and into, Northeast Bancorp.  Northeast Bancorp is the holding company of Northeast Bank, a Maine-chartered bank with approximately $629 million in assets.  This transaction – which presented a unique configuration of control and other “first impression” bank regulatory issues – was approved after 12 months of effort by Goodwin’s banking team, who worked closely with the staffs of the Federal Reserve Board and Federal Reserve Bank of Boston. 

In the merger, Northeast Bancorp shareholders were permitted to elect to receive cash or to retain stock of Northeast Bancorp, provided that, following a capital contribution by FHB members, the existing Northeast Bancorp shareholders retained approximately 40% of Northeast Bancorp’s outstanding common stock, while the FHB members received approximately 60% of Northeast Bancorp’s outstanding common stock.

Shareholders of Northeast overwhelmingly voted to approve the merger in July and Federal Reserve approval was received on December 13.  The merger closed on December 29, following the Federal Reserve’s 15-day waiting period.

FHB’s executive team became the executive team of Northeast Bancorp and Northeast Bank.  The team includes Richard Wayne, president & CEO, Claire S. Bean, CFO & COO and Heather P. Campion, Chief Administrative Office.  Northeast Bancorp’s former management became the executive team of the newly-created Northeast Community Banking Division.

The Goodwin team was headed by partners Laura Hodges Taylor, Bill Mayer and Jim Matarese, corporate and banking; Bill Stern, banking; Scott Webster, ERISA; Carl Metzger, litigation; and Bob Kester, tax.