<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended   APRIL 30, 1999

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________________

Commission file number:  0-13649

                             BERKSHIRE BANCORP INC.
                             ----------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                               <C>
DELAWARE                                              94-2563513
-------------------------------                  -----------------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

160 BROADWAY, NEW YORK, NEW YORK                    10038
---------------------------------------          ---------------------
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code: (212) 791-5362

                           COOPER LIFE SCIENCES, INC.
          -------------------------------------------------------------
                   (Former name if changed since last report.)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X   No
                                              ____    ____

         As of June 14, 1999, there were 2,126,265 outstanding shares of the
issuers Common Stock, $.10 par value.






<PAGE>




                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                          QUARTERLY REPORT ON FORM 10-Q

                                      INDEX


</TABLE>
<TABLE>
<CAPTION>
                                                                          PAGE NO.
                                                                          --------
<S>               <C>                                                    <C>

         PART I.           FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Consolidated Balance Sheets as of
                  April 30, 1999 and October 31, 1998                      3

                  Consolidated Statements of Income
                  For The Three and Six Months Ended
                  April 30, 1999 and 1998                                  4

                  Consolidated Statements of Cash Flows
                  For The Six Months Ended
                  April 30, 1999 and 1998                                  5

                  Notes to Consolidated Financial Statements               6

Item 2.           Management's Discussion and Analysis
                  of Financial Condition and Results
                  of Operations                                           11

         PART II           OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K                        25

Signature                                                                 26

Index of Exhibits                                                         27

</TABLE>



                                        2





<PAGE>




                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                   April 30,         October 31,
                                                                                     1999                1998
                                                                              ---------------------------------------
<S>                                                                                <C>                 <C>
ASSETS
Cash and due from banks                                                            $   3,138           $      58
Interest bearing deposits                                                              5,333              65,200
Federal funds sold                                                                    25,000                  --
                                                                                   ---------           ---------
Total cash and cash equivalents                                                       33,471              65,258
Investment Securities:
 Available-for-sale                                                                   96,017                  --
 Held-to-maturity                                                                      4,203                  --
                                                                                   ---------           ---------
Total investment securities                                                          100,220                  --
Loans, net of unearned income                                                         43,068                  --
Loans held for sale                                                                      817                  --
 Less: allowance for loan losses                                                        (855)                 --
                                                                                   ---------           ---------
Net loans                                                                             43,030                  --
Accrued interest receivable                                                            1,262                  --
Premises and equipment, net                                                              391                  --
Deferred taxes                                                                           350                 925
Prepaid expenses and other                                                               811                 647
Goodwill, net of amortization of $243                                                 14,373                  --
                                                                                   ---------           ---------
Total assets                                                                       $ 193,908           $  66,830
                                                                                   =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
 Non-interest bearing                                                              $  14,163           $      --
 Interest bearing                                                                     81,686                  --
                                                                                   ---------           ---------
Total deposits                                                                        95,849                  --
Securities sold under agreements to repurchase                                         1,500                  --
Accrued interest payable                                                                 253                  --
Accrued expenses and accounts payable                                                  1,646               1,185
Income taxes payable                                                                   1,296                  --
Deferred taxes payable                                                                 8,795                 179
                                                                                   ---------           ---------
Total liabilities                                                                    109,339               1,364
                                                                                   ---------           ---------
Stockholders' equity
 Preferred stock - $.10 Par value:                                                        --                  --
  2,000,000 shares authorized - none issued
 Common stock -- $.10 par value
  Authorized  -- 10,000,000 shares
  Issued      --  2,566,095 shares
  Outstanding --
   April 30, 1999, 2,126,265 shares
   October 31, 1998, 2,126,265 shares                                                    256                 256
Additional paid-in capital                                                            78,546              78,546
Accumulated other comprehensive income, net                                           17,650                  --
Accumulated deficit                                                                   (9,110)            (10,563)
Less: Common stock in treasury - at cost:
 April 30, 1999, 439,830 shares
 October 31, 1998, 439,830 shares

                                                                                      (2,773)             (2,773)
                                                                                   ---------           ---------
Total stockholders' equity                                                            84,569              65,466
                                                                                   ---------           ---------
                                                                                   $ 193,908           $  66,830
                                                                                   =========           =========

</TABLE>



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                        3






<PAGE>




                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    (IN THOUSANDS, EXCEPT PER SHARE FIGURES)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                    For the                       For the
                                                              Three Months Ended              Six Months Ended
                                                                   April 30,                     April 30,
                                                          ------------------------         ---------------------
                                                            1999            1998             1999           1998
                                                          --------        --------         --------       ------

<S>                                                       <C>             <C>              <C>            <C>
Interest income                                           $  2,312        $    934         $  3,608       $  1,544
Interest expense                                               794              --            1,056             --
                                                          --------        --------         --------       --------
Net interest income                                          1,518             934            2,552          1,544
Provision for loan losses                                       15              --               20             --
                                                          --------        --------         --------       --------
Net interest income after
 provision for loan losses                                   1,503             934            2,532          1,544
                                                          --------        --------         --------       --------
Other income:
 Investment securities (losses) gains                        1,653             (17)           1,641         38,909
 Other income                                                   98              --              333             --
                                                          --------        --------         --------       --------
Total other income                                           1,751             (17)           1,974         38,909
                                                          --------        --------         --------       --------
Other expense:
 General and administrative                                    527             444              804            586
 Amortization of goodwill                                      182              --              243             --
 Other                                                         310              --              415             --
                                                          --------        --------         --------       --------
Total non-interest expense                                   1,019             444            1,462            586
                                                          --------        --------         --------       --------
Income before provision for taxes                            2,235             473            3,044         39,867
Provision (benefit) for income taxes                         1,000             (90)           1,378          3,230
                                                          --------        --------         --------       --------
Net income                                                $  1,235        $    563         $  1,666       $ 36,637
                                                          ========        ========         ========       ========
Net income per share:

 Basic                                                    $    .58        $    .26         $    .78       $  17.23
                                                          ========        ========         ========       ========
 Diluted                                                  $    .55        $    .25         $    .74       $  16.23
                                                          ========        ========         ========       ========
Weighted average number of
 shares outstanding

  Basic                                                      2,126           2,126            2,126          2,126
                                                          ========        ========         ========       ========

  Diluted                                                    2,260           2,261            2,259          2,257
                                                          ========        ========         ========       ========

</TABLE>



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                        4






<PAGE>



                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                                For The Six Months Ended
                                                                                                     April 30, 1999
                                                                                               ----------------------------
                                                                                                 1999               1998
                                                                                                ------             -----

<S>                                                                                            <C>                <C>
  Cash flows from operating activities:
Net income                                                                                     $  1,666           $ 36,637
Adjustments to reconcile net income to net
 cash provided by (used in) operating activities:
Loss (gain) on investment securities                                                             (1,641)           (38,909)
(Increase) in deferred taxes                                                                       (350)              (925)
Depreciation and amortization                                                                       275                 --
Provision for loan losses                                                                            20                 --

  Changes in assets and liabilities:
 (Increase) in accrued interest receivable                                                         (512)                --
 Decrease in prepaid expenses and other                                                             129                 53
 Increase (decrease) in accounts payable, other accrued
  expenses, liabilities and income taxes payable                                                  3,018               (352)
                                                                                               --------           --------
 Net cash provided by (used in) operating activities                                              2,605             (3,496)
                                                                                               --------           --------

  Cash flows from investing activities:
Investment in The Berkshire Bank                                                                (25,217)                --
Proceeds from sales of The Cooper Companies,
 Inc. and Executone Information Systems, Inc.
 common stock                                                                                     1,653             44,617
Net (increase) in federal funds sold                                                             (2,561)                --
Investment securities available for sale
 Purchases                                                                                      (18,715)                --
Net increase in loans                                                                            (3,280)                --
Net increase in loans held for sale                                                                (689)                --
Acquisition of premises and equipment                                                              (117)                --
                                                                                               --------           --------
Net cash provided by (used in) investing activities                                             (48,926)            44,617
                                                                                               --------           --------

  Cash flows from financing activities:
Net (decrease) in non interest bearing deposits                                                  (6,874)                --
Net (decrease) in interest bearing deposits                                                      (3,379)                --
Dividends paid                                                                                     (213)                --
                                                                                               --------           --------
Net cash (used in) financing activities                                                         (10,466)                --
                                                                                               --------           --------

  Net increase (decrease) in cash                                                               (56,787)            41,121
  Cash - beginning of period                                                                     65,258             25,887
                                                                                               --------           --------
  Cash - end of period                                                                         $  8,471           $ 67,008
                                                                                               ========           ========
Supplemental cash flow information:

  Cash used to pay interest                                                                    $  1,056           $     --

  Cash used to pay taxes                                                                       $    276           $  2,858

</TABLE>



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                        5






<PAGE>


                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 1999 AND 1998

FORWARD-LOOKING STATEMENTS.

         Statements in this Quarterly Report on Form 10-Q that are not based on
historical fact may be "forward-looking statements" as defined by the Private
Securities Litigation Reform Act of 1995. They include words like "may", "will",
"expect", "estimate", "anticipate", "continue" or similar terms and reflect the
Company's current analysis of existing trends. Actual results could differ
materially from those expressed or implied due to: major changes in business
conditions and the economy, or the development of an adverse interest rate
environment that adversely affects the interest rate spread or other income
anticipated from the Company's operations and investments, loss of key senior
management, major disruptions in the operations of the Company's banking
facilities, new competitors or technologies, significant disruptions caused by
the failure of third parties to address the Year 2000 issue, acquisition
integration costs, dilution to earnings per share from stock issuance or
acquisitions, regulatory issues, litigation costs, and other items discussed
throughout this Quarterly Report on Form 10-Q.

         Certain information customarily disclosed by financial institutions,
such as estimates of interest rate sensitivity and the adequacy of the loan loss
allowance, are inherently forward-looking statements because, by their nature,
they represent attempts to estimate what will occur in the future.

         A wide variety of factors could cause the Company's actual results and
experiences to differ materially from the anticipated results or other
expectations expressed or implied in the Company's forward-looking statements.
Some of the risks and uncertainties that may affect operations, performance,
results of the Company's business, the interest rate sensitivity of its assets
and liabilities, and the adequacy of its loan loss allowance, include but are
not limited to: (i) deterioration in local, regional, national or global
economic conditions which could result, among other things, in an increase in
loan delinquencies, a decrease in property values, or a change in the housing
turnover rate; (ii) changes in market interest rates or changes in the speed at
which market interest rates change; (iii) changes in laws and regulations
affecting the financial services industry; (iv) changes in competition; and (v)
changes in consumer preferences.

         For these reasons, the Company cautions readers not to place undue
reliance upon any forward-looking statements. Forward-looking statements speak
only as of the date made and the Company assumes no obligation to update or
revise any such statements upon any change in applicable circumstances.

                                        6






<PAGE>



                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 1999 AND 1998

NOTE 1. GENERAL

         Berkshire Bancorp Inc. (formerly Cooper Life Sciences, Inc.), a
Delaware corporation (the "Company"), was not engaged in any business operations
during the fiscal year ended October 31, 1998. On August 6, 1998, the Company,
through its wholly-owned subsidiary, Greater American Finance Group, Inc.
("GAFG"), made a cash tender offer for any and all of the outstanding shares of
common stock of The Berkshire Bank (the "Berkshire Bank" or the "Bank"), a New
York state-chartered commercial bank. (See Note 2 of Notes to Consolidated
Financial Statements).

         The Company's and GAFG's obligation to purchase shares pursuant to the
tender offer was subject to various conditions including, among others, the
receipt of required regulatory approvals from the New York State Banking Board
and the Board of Governors of the Federal Reserve System (the "Federal
Reserve"). The approvals were received in December 1998 and on January 4, 1999,
after the close of the Company's fiscal year ended October 31, 1998, the Company
acquired approximately 99% of the outstanding common stock of the Bank. As a
result of the acquisition, the Company and GAFG became bank holding companies
under the Bank Holding Company Act.

         As bank holding companies, the Company and GAFG are subject to
extensive regulation by the Federal Reserve and The Berkshire Bank remains
subject to extensive regulation by the Federal Deposit Insurance Corporation
(the "FDIC") and the Superintendent of Banks of the State of New York.

         During interim periods, the Company follows the accounting policies set
forth in its Annual Report on Form 10-K filed with the Securities and Exchange
Commission. Readers are encouraged to refer to the Company's Form 10-K for the
fiscal year ended October 31, 1998 when reviewing this Form 10-Q. Quarterly
results reported herein are not necessarily indicative of results to be expected
for other quarters.

         The Company utilizes a fiscal year which ends on October 31 for
reporting purposes, whereas the Bank utilizes a fiscal year which ends on
December 31 for such purposes. The financial information presented herein
combines the Company and the Bank with the Bank's results presented to coincide
with the reporting period of the Company.

         In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of normal recurring
adjustments) considered necessary to present fairly the Company's consolidated
financial position as of April 30, 1999 and October 31, 1998 and the
consolidated results of its operations for the three and six month periods ended
April 30, 1999 and 1998, and its consolidated cash flows for the six month
periods ended April 30, 1999 and 1998.

NOTE 2. -  ACQUISITION OF THE BERKSHIRE BANK

         On January 4, 1999, the Company, through its wholly owned subsidiary,
Greater American Finance Group, Inc. ("GAFG"), purchased 2,396,600 shares, or
approximately 99%, of the outstanding shares of Common Stock (the "Shares") of
the Bank, a privately-owned New York State chartered commercial bank. The Shares
were acquired for a purchase price of $10.50 per share, net to the seller in
cash, upon the terms and conditions set forth in an Offer to Purchase dated
August 6, 1998, and in the related Letter of Transmittal (collectively, the
"Offer"). The total amount of funds required by GAFG to purchase the Shares was
approximately $25.2 million. On March 31, 1999, GAFG purchased an additional



                                        7






<PAGE>




                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 1999 AND 1998

5,000 shares for a cash purchase price of $10.50 per share, or approximately
$53,000. All such funds were obtained by GAFG from the Company's cash on hand.
The purchase of the Shares pursuant to the Offer was subject to receipt of the
approval of the New York State Banking Board and the approval of the Federal
Reserve Board. Said approvals have been received by CLS and GAFG. The
acquisition was accounted for as a purchase and, accordingly, the results of
operations of the Berkshire Bank have been included in the consolidated
statements of income from the date of acquisition. In connection with the
acquisition, the Company acquired assets with an aggregated fair value of
$119,429,000 and assumed deposits and other liabilities of $108,760,000.

NOTE 3. -  COMPREHENSIVE INCOME

         On January 1, 1998, the Company adopted SFAS No. 130 "Comprehensive
Income." SFAS No. 130 establishes new standards for reporting comprehensive
income, which includes net income as well as certain other items which result in
a change to equity during the period. Accumulated other comprehensive income was
approximately $17,650,000, net of deferred taxes, at April 30, 1999.
Comprehensive income for the six months ended April 30, 1998 was $18,331,000
which includes reclassification adjustments of $985,000, net of income tax
expense of $656,000. There were no transactions for the six months months ended
April 30, 1998 which would generate other comprehensive income.

NOTE 4. -  LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

         The following table summarizes loan balances (including loans held for
sale) by category as of April 30, 1999 (in thousands):

<TABLE>
<CAPTION>

                                                                     April 30, 1999
                                                        --------------------------------------
                                                              Amount            % of Total
                                                        ------------------  ------------------

<S>                                                              <C>                      <C>
Commercial and professional loans                                $  2,117                 4.8%
Secured by real estate                                             37,676                85.9
Personal                                                            2,408                 5.5
Other                                                               1,684                 3.8
                                                        ------------------  ------------------
Total loans                                                      $ 43,885               100.0%
                                                                            ==================
Less:

 Allowance for loan losses                                           (855)

                                                        ------------------
Loans, net                                                       $ 43,030
                                                        ==================

</TABLE>



         The Company accounts for its impaired loans in accordance with SFAS No.
114, Accounting by Creditors for Impairment of a Loan, as amended by SFAS No.
118, Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures. This standard requires that a creditor measure impairment based on
the present value of expected future cash flows discounted at the loan's
effective interest rate, except that as a practical expedient, a creditor may
measure impairment based on a loan's observable market price, or the fair value
of the collateral if the loan is collateral dependent. Regardless of the
measurement method, a creditor must measure impairment based on the fair value
of the collateral when the creditor determines that foreclosure is probable. As
of April 30, 1999, the Company did not have any non accrual or impaired loans.


                                        8






<PAGE>




                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 1999 AND 1998

NOTE 5. - SECURITIES

         The following table summarizes the Company's available-for-sale and
held-to-maturity securities at April 30, 1999 (dollars in thousands):

<TABLE>
<CAPTION>

                                  WEIGHTED                       GROSS             GROSS
                                   AVERAGE                     UNREALIZED        UNREALIZED       FAIR
                                    YIELD       COST             GAINS             LOSSES         VALUE
                                  ---------   --------         ----------        -----------    ---------

<S>                               <C>         <C>              <C>               <C>            <C>
AVAILABLE-FOR-SALE
 U.S. Government
  Agency Obligations
Due within one year                  --%      $     --         $     --          $ --           $     --
Due after one year                   5.5        36,536               --             (78)          36,458
 through five years
Due after five years                 5.5        19,435               14            --             19,449
 through ten years
Due after ten years                  5.8        11,069              131            --             11,200
                                              --------         --------        --------         --------
                                                67,040              145             (78)          67,107
                                              --------         --------        --------         --------
 Corporate Notes
Due within one year                  5.8           250             --              --                250
Due after one year                   6.1           786                9            --                795
 through five years
Due after five years                 9.9           212             --              --                212
 through ten years
Due after ten years                               --               --              --               --
                                              --------         --------        --------         --------
                                                 1,248                9            --              1,257
                                              --------         --------        --------         --------

 Executone Information                            --             27,118            --             27,118
  Systems, Inc. Common
  Stock
 Federal Home Loan                   6.6           535             --              --                535
  Bank Stock
                                              --------         --------        --------         --------
                                                   535           27,118            --             27,653
                                              --------         --------        --------         --------
                                                68,823           27,272             (78)          96,017
                                              ========         ========        ========         ========
HELD-TO-MATURITY
 U.S. Government
  Agency Obligations
Due within one year                  4.5      $  1,000             --                (5)             995
Due after one year                   6.1           216             --              --                216
 through five years
Due after five years                 6.1           152             --              --                152
 through ten years
Due after ten years                  6.2           360                1            --                361
                                              --------         --------        --------         --------
                                                 1,728                1              (5)           1,724
                                              --------         --------        --------         --------
   Corporate Notes
Due within one year                               --               --              --               --
Due after one year                   5.8           975             --              (124)             851
 through five years
Due after five years                 5.8         1,500             --               (47)           1,453
 through ten years
Due after ten years                               --               --              --               --
                                              --------         --------        --------         --------
                                                 2,475             --              (171)           2,304
                                              --------         --------        --------         --------
                                                 4,203                1            (176)           4,028
                                              ========         ========        ========         ========

</TABLE>




                                        9






<PAGE>



                     BERKSHIRE BANCORP INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 1999 AND 1998

NOTE 6. - COMMON STOCK OF EXECUTONE INFORMATION SYSTEMS, INC.

         As more fully discussed in the Company's 1998 10-K, in December 1995,
the Company sold its minority equity interest in Unistar Gaming Corp. ("UGC") to
Executone Information Systems, Inc., a Virginia corporation whose common stock
trades on the NASDAQ National Market System, ("Executone") (the "Executone
Common Stock"). The Company's investment in UGC was approximately $5.2 million.

         In exchange for its interest in UGC, the Company received shares of
Executone Common Stock, all of which were sold in open market transactions
during 1998, and shares of Executone Series A and Series B Preferred Stock (the
"Executone Preferred Stock"). In 1997, the Company fully reserved the carrying
value, approximately $2.1 million, of its shares of Executone Preferred Stock
and recorded a deferred tax asset of $925,000.

         In March 1999, Executone exercised its right to redeem and convert the
Executone Preferred Stock into Executone Common Stock and on April 6, 1999, in
exchange for its shares of Executone Preferred Stock, the Company received
4,193,204 shares of Executone Common Stock with a market value of approximately
$17.7 million.

         At April 30, 1999, the Company owned 4,017,504 shares of Executone
Common Stock which have been classified as available-for-sale securities. The
unrealized gain of approximately $18.3 million, net of deferred taxes of
approximately $8.8 million, has been recorded as a component of other
accumulated comprehensive income.




                                       10






<PAGE>




ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

         The following discussion and analysis is intended to provide a better
understanding of the consolidated financial condition and results of operations
of Berkshire Bancorp Inc. and subsidiaries (the "Company") for the three and six
months ended April 30, 1999 and 1998. References to the Company herein shall be
deemed to refer to the Company and its consolidated subsidiaries unless the
context otherwise requires. References to Notes herein are references to the
"Notes to Consolidated Financial Statements" of the Company located in Item 1
herein. Historical discussion and analysis is not presented because it is not
meaningful.

         The unaudited proforma combined consolidated financial information set
forth in the following tables is presented for informational purposes only and
is not necessarily indicative of the combined financial position or results of
operations that would have occurred had the acquisition of The Berkshire Bank
been consummated on October 31, 1998 or at the beginning of the periods
indicated. The Company utilizes a fiscal year which ends on October 31 for
reporting purposes, whereas the Bank utilizes a fiscal year which ends on
December 31 for such purposes. The consolidated financial information presented
herein combines the financial information of the Company as of its fiscal year
end and the Bank as of the twelve months ending September 30. For the period
April 30, 1999 and 1998, the Bank's financial information was prepared as of and
for the six months ended March 31, 1999 and 1998 and combined with the Company's
financial information as of and for the six months ended April 30, 1999 and
1998.




                                       11






<PAGE>



    BERKSHIRE BANCORP INC. AND SUBSIDIARIES - PROFORMA SELECTED CONSOLIDATED
                                 FINANCIAL DATA

         The following sets forth a comparison of selected financial data which
reflects the balances and results of operations on an unaudited proforma
consolidated basis as if the acquisition of The Berkshire Bank had become
effective on October 31, 1998, 1997 and 1996, in the case of balance sheet
information presented, and at the beginning of the periods indicated, in the
case of operations information presented. Period end amounts have been utilized
to calculate performance ratios (dollars in thousands, except per share
amounts):

<TABLE>
<CAPTION>

                                                                 Six Months Ended                 Twelve Months Ended
                                                                      April 30,                        October 31,
                                                               ----------------------    ------------------------------------
                                                                  1999        1998         1998           1997         1996
                                                               ---------    ---------    ---------     ---------    ---------

<S>                                                            <C>          <C>          <C>           <C>          <C>
EARNINGS SUMMARY:
Interest income                                                $   4,658    $   5,084    $   9,392     $   6,076    $   4,617
Interest expense                                                   1,506        1,778        3,642         3,836        4,292
                                                               ---------    ---------    ---------     ---------    ---------
Net interest income                                                3,152        3,306        5,750         2,240          325
Provision for possible loan losses                                    30           30           60            60          455
                                                               ---------    ---------    ---------     ---------    ---------
Net interest income after provision for possible loan losses       3,122        3,276        5,690         2,180         (130)
Other income (loss)                                                2,026       39,047       39,311        17,336       (1,023)
Other expenses                                                     1,970        1,935        4,474         4,214        4,195
                                                               ---------    ---------    ---------     ---------    ---------
Income (loss) before income taxes and extraordinary items          3,178       40,388       40,527        15,302       (5,348)
Income taxes                                                         675        3,030        3,258           145           14
                                                               ---------    ---------    ---------     ---------    ---------
Income (loss) before extraordinary items                           2,503       37,358       37,269        15,157       (5,362)
Extraordinary items                                                 --           --            150          --           --
                                                               ---------    ---------    ---------     ---------    ---------
Net income (loss)                                              $   2,503    $  37,358    $  37,119     $  15,157    $  (5,362)
                                                               =========    =========    =========     =========    =========
PER SHARE DATA:
Weighted average common shares outstanding-basic                   2,126        2,126        2,126         2,147        2,149
Weighted average common shares outstanding-diluted                 2,259        2,257        2,258         2,244        2,149
Net income per common share- basic                             $    1.18    $   17.57    $   17.46     $    7.06    $   (2.50)
Net income per common share- diluted                           $    1.11    $   16.55    $   16.44     $    6.75    $   (2.43)
Dividends paid per common share                                $     .10    $    --      $     .72          --           --
BALANCE SHEET SUMMARY:
Investment securities                                          $  97,408    $  62,082    $  50,785     $  75,696    $  70,000
Cash and cash equivalents                                          8,416       69,570       47,472        18,816        8,800
Loans, net                                                        41,784       38,316       38,994        36,992       24,380
Allowance for loan losses                                           (848)        (761)        (803)         (723)        (824)
Total assets                                                     218,830      173,798      155,388       152,961      118,953
Deposits                                                          96,131       93,583       86,232        89,469       61,581
Stockholder's equity                                           $ 120,217    $  76,085    $  64,958     $  60,176    $  30,064
PERFORMANCE RATIOS:
Return on average assets                                            3.00%       50.13%       23.89%         9.91%       (4.51)%
Return on average equity                                            5.81       150.16        57.14         25.19       (17.84)
Average equity to average assets                                   51.70        33.39        41.80         39.34        25.27
Net Interest Margin                                                 4.09        51.63         3.95          2.34          .45

</TABLE>




                                       12






<PAGE>




RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 1999 COMPARED
TO THE THREE AND SIX MONTHS ENDED APRIL 30, 1998.

GENERAL

         On January 4, 1999, the Company, through its wholly owned subsidiary,
Greater American Finance Group, Inc. ("GAFG"), acquired approximately 99% of the
outstanding shares of the common stock of The Berkshire Bank (the "Berkshire
Bank" or the "Bank") for $25.2 million (see Note 2). At the date of the
acquisition, the Bank had total assets of $119.4 million. The acquisition was
accounted for as a purchase and, accordingly, the actual results of operations
for the three and six months ended April 30, 1999 only include operations of the
Berkshire Bank from the date of acquisition.

         Prior to the acquisition of the Bank, the Company was not engaged in
any business operations. Therefore, the results of operations for the three and
six months ended April 30, 1999 and the results of operations for the three and
six months ended April 30, 1998 (a period when the Company was not engaged in
any business operations) are not directly comparable.

NET INCOME. Net income for the three months ended April 30, 1999 was $1.23
million, or $.55 per diluted share, as compared to $563,000, or $.25 per diluted
share, for the three months ended April 30, 1998, an increase of approximately
54%. Net income for the six months ended April 30, 1999 was $1.66 million, or
$.74 per diluted share, as compared to $36.6 million, or $16.23 per diluted
share, for the six months ended April 30, 1998. Net income in the 1998 period
included a pre-tax gain of $38.9 million, or $17.23 per diluted share, on sales
of marketable securities.

NET INTEREST INCOME AND AVERAGE BALANCES. Net interest income for the three
months ended April 30, 1999 was $1.51 million as compared to $934,000 for the
three months ended April 30, 1998, an increase of 38%. Net interest income for
the six months ended April 30, 1999 was $2.55 million as compared to $1.54
million for the six months ended April 30, 1998, an increase of 39%. Yields on
interest earning assets decreased to 6.05% in 1999 from 6.28% in 1998 due to
lower loan and investment yields and the cost of interest bearing liabilities
increased to 5.20% in 1999 from 4.36% in 1998. However, the Company's net
interest margin on interest earning assets increased to 4.09% in 1999 from 3.82%
in 1998 due to the growth in non-interest earning demand deposits.

         Average balances for non-interest bearing demand deposits increased by
26.5% to $19.2 million in 1999 from $14.1 million in 1998. Average balances for
interest bearing deposits and other borrowings decreased by 28.9% to $57.9
million in 1999 from $81.5 million in 1998.

         Average interest earning assets totaled $154 million for or the six
months ended April 30, 1999 as compared to $144.7 million in the comparable 1998
period, an increase of $9.3 million or 6%. The increase in average interest
earning assets was due to the $2.6 million increase in average loans to $40.2
million, the increase of $40 million in investment securities to $80.8 million,
offset by the decrease of $33.2 million in other interest earning assets.

NON-INTEREST INCOME. Non-interest income consists primarily of realized gains on
sales of marketable securities and service fee income. For the three months
ended April 30, 1999, total non-interst income was $1.75 million. Total
non-interest income for the six months ended April 30, 1999 was $1.97 million as
compared to $38.9 million in the prior year period.



                                       13






<PAGE>



NON-INTEREST EXPENSE. Non-interest expense includes salaries and employee
benefits, occupancy and equipment expenses, legal and professional fees and
other operating expenses associated with the day-to-day operations of the
Company. Total non-interest expense for the three months ended April 30, 1999
increased by $556,000, or 56%, to $1.0 million from $444,000 for the three
months ended April 30, 1998. Total non-interest expense for the six months ended
April 30, 1999 increased by $876,000, or 60%, to $1.46 million from $586,000 for
the six months ended April 30, 1998. The increase in 1999 includes $938,000 of
operating expenses of the Bank from January 4, 1999, the date of the
acquisition, $243,000 for the amortization of goodwill, which were offset by a
decrease in the parent company legal and professional fees.

INTEREST RATE RISK

         Fluctuations in market interest rates can have a material effect on the
Bank's net interest income because the yields earned on loans and investments
may not adjust to market rates of interest with the same frequency, or with the
same speed, as the rates paid by the Bank on its deposits.

         Most of the Bank's deposits are either interest-bearing demand deposits
or short term certificates of deposit and other interest-bearing deposits with
interest rates that fluctuate as market rates change. Management of the Bank
seeks to reduce the risk of interest rate fluctuations by concentrating on loans
and securities investments with either short terms to maturity or with
adjustable rates or other features that cause yields to adjust based upon
interest rate fluctuations. In addition, to cushion itself against the potential
adverse effects of a substantial and sustained increase in market interest
rates, the Bank has purchased off balance sheet interest rate cap contracts
which generally provide that the Bank will be entitled to receive payments from
the other party to the contract if interest rates exceed specified levels. These
contracts are entered into with major financial institutions.

         The Company seeks to maximize its net interest margin within an
acceptable level of interest rate risk. Interest rate risk can be defined as the
amount of the forecasted net interest income that may be gained or lost due to
favorable or unfavorable movements in interest rates. Interest rate risk, or
sensitivity, arises when the maturity or repricing characteristics of assets
differ significantly from the maturity or repricing characteristics of
liabilities.




                                       14






<PAGE>




         In the banking industry, a traditional measure of interest rate
sensitivity is known as "gap" analysis, which measures the cumulative
differences between the amounts of assets and liabilities maturing or repricing
at various time intervals. The following table sets forth the Company's proforma
interest rate repricing gaps for selected maturity periods:

<TABLE>
<CAPTION>

                                               PROFORMA INTEREST RATE SENSITIVITY GAP AT APRIL 30, 1999
                                                        (IN THOUSANDS, EXCEPT FOR PERCENTAGES)
                                 -------------------------------------------------------------------------------------
                                    3 MONTHS         3 THROUGH        1 THROUGH           OVER
                                     OR LESS         12 MONTHS         3 YEARS           3 YEARS           TOTAL
                                 ----------------  ---------------  ---------------  ---------------- ----------------

<S>                              <C>              <C>              <C>               <C>             <C>
Federal funds sold                  $   27,000        $      --        $      --         $      --       $   27,000
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Interest bearing deposits in banks       6,661              298               --                --            6,959
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Loans (1)(2)
  Adjustable rate loans                  9,856            8,194            3,213             3,252           24,515
  Fixed rate loans                       1,262              294            1,073            15,488           18,117
  Other loans                               --               --               --                --               --
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Total loans                             11,118            8,488            4,286            18,740           42,632
Investments (3)(4)                       2,679            2,175           12,931            52,505           70,290
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Total rate-sensitive assets             47,458           10,961           17,217            71,245          146,881
                                 ----------------  ---------------  ---------------  ---------------- ----------------

Deposits accounts (5)
  Savings and NOW                        8,914               --               --                --            8,914
  Money market                          41,540               --               --                --           41,540
  Time deposits                         20,579            7,170              287             1,577           29,613
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Total deposit accounts                  71,033            7,170              287             1,577           80,067
Other borrowings                            --               --               --             1,500            1,500
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Total rate sensitive liabilities        71,033            7,170              287             3,077           81,567
                                 ----------------  ---------------  ---------------  ---------------- ----------------
Gap (repricing differences)            (23,575)           3,791           16,930            68,168           65,314
                                 ================  ===============  ===============  ================ ================
Cumulative Gap                         (23,575)         (19,784)          (2,854)           65,314
                                 ================  ===============  ===============  ================
Cumulative Gap to Total Rate

 Sensitive Assets                       (16.05)%         (13.47)%          (1.94)%           44.47%
                                 ================  ===============  ===============  ================

</TABLE>

--------------------
(1)  Adjustable-rate loans are included in the period in which the interest
     rates are next scheduled to adjust rather than in the period in which the
     loans mature. Fixed-rate loans are scheduled according to their maturity
     dates.
(2)  Includes nonaccrual loans.
(3)  Investments are scheduled according to their respective repricing (variable
     rate loans) and maturity (fixed rate securities) dates.
(4)  Investments are stated at book value.
(5)  NOW accounts and savings accounts are regarded as readily accessible
     withdrawal accounts. The balances in such accounts have been allocated
     amongst maturity/repricing periods based upon The Berkshire Bank's
     historical experience. All other time accounts are scheduled according to
     their respective maturity dates.




                                       15






<PAGE>




PROVISION FOR LOAN LOSSES

         The allowance for loan losses is established through a provision for
loan losses based on management's evaluation of the risks inherent in the Bank's
loan portfolio and the general economy. The allowance for loan losses is
maintained at an amount management considers adequate to cover loan losses which
are deemed probable and can be estimated. The allowance is based upon a number
of factors, including the size of the loan portfolio, asset classifications,
economic trends, industry experience and trends, industry and geographic
concentrations, estimated collateral values, management's assessment of the
credit risk inherent in the portfolio, historical loan loss experience and the
Bank's underwriting policies. In general, it is the Bank's policy to maintain a
minimum allowance equal to 1% of outstanding loans plus outstanding commitments
and letters of credit. In addition, the Bank evaluates all loans identified as
problem loans and augments the allowance based upon the perceived risks
associated with such problem loans.

         Management believes it uses a reasonable and prudent methodology to
project potential future losses in the loan portfolio, and hence assess the
adequacy of the allowance for loan losses. However, any such assessment is
speculative and future adjustments may be necessary if economic conditions or
the Bank's actual experience differ substantially from the assumptions upon
which the evaluation of the allowance was based. Furthermore, state and federal
regulators, in reviewing the Bank's loan portfolio as part of a future
regulatory examination, may request the Bank to increase its allowance for loan
losses, thereby negatively affecting the Bank's financial condition and earnings
at that time. Moreover, future additions to the allowance may be necessary based
on changes in economic and real estate market conditions, new information
regarding existing loans, identification of additional problem loans and other
factors, both within and outside of management's control.

         The following table sets forth information with respect to activity in
the Bank's allowance for loan losses during the periods indicated (dollars in
thousands):

<TABLE>
<CAPTION>

                                                                                PROFORMA
                                                                       SIX MONTHS ENDED APRIL 30,
                                                            --------------------------------------------------------
                                                                       1999                        1998
                                                                ------------------          -------------------
<S>                                                                     <C>                          <C>
Average loans outstanding                                               $ 41,784                     $ 38,316
                                                                ==================          ===================
Allowance at beginning of period                                             803                          723
Charge-offs:
 Real Estate Loans                                                            36                           --
                                                                ------------------          -------------------
  Total loans charged-off                                                     36                           --
                                                                ------------------          -------------------
Recoveries:
 Commercial and Other Loans                                                   51                            8
                                                                ------------------          -------------------
  Total loans recovered                                                       51                            8
                                                                ------------------          -------------------
Net (charge-offs) recoveries                                                  15                            8
Provision for loan losses charged to
 operating expenses                                                           30                           30

                                                                ------------------          -------------------
Allowance at end of period                                                   848                          761
                                                                ==================          ===================

Ratio of net recoveries (charge-offs)
 to average loans outstanding                                                .03%                         .02%
                                                                ==================          ===================

Allowance as a percent of total loans                                       2.11%                        2.02%
                                                                ==================          ===================

Total loans at end of period                                            $ 40,198                     $ 37,627
                                                                ==================          ===================

</TABLE>



                                       16






<PAGE>


<TABLE>
<CAPTION>

                                                                                       PROFORMA
                                                                             TWELVE MONTHS ENDED OCTOBER 31,
                                                            ---------------------------------------------------------------
                                                              1998                      1997                         1996
                                                    ------------------------     -------------------       ------------------------

<S>                                                               <C>                     <C>                            <C>
Average loans outstanding                                         $ 39,085                $ 31,081                       $ 24,199
                                                    ========================     ===================       ========================
Allowance at beginning
 of period                                                             723                     824                            893
Charge-offs:
 Commercial and Other Loans                                             --                      --                            314
 Real Estate Loans                                                      --                     196                            232
                                                    ------------------------     -------------------       ------------------------
  Total loans charged-off                                               --                     196                            546
                                                    ------------------------     -------------------       ------------------------

Recoveries:
 Commercial and Other Loans                                             20                      28                             22
 Real Estate Loans                                                      --                       7                             --
                                                    ------------------------     -------------------       ------------------------
  Total loans recovered                                                 20                      35                             22
                                                    ------------------------     -------------------       ------------------------
Net (charge-offs) recoveries                                           (20)                    161                            524
Provision for loan losses
charged to operating expenses                                           60                      60                            455
                                                    ------------------------     -------------------       ------------------------
Allowance at end of period                                             803                     723                            824
                                                    ========================     ===================       ========================
Ratio of net recoveries
 (charge-offs) to average
 loans outstanding                                                   (.15)%                    .19%                          2.17%
                                                    ========================     ===================       ========================
Allowance as a percent of
total loans                                                           2.02%                   1.92%                          3.27%
                                                    ========================     ===================       ========================
Total loans at end of period                                      $ 39,797                $ 37,715                       $ 25,204
                                                    ========================     ===================       ========================

</TABLE>

LOAN PORTFOLIO

         Loan Portfolio Composition. The Bank's loans consist primarily of
mortgage loans secured by residential and non-residential properties as well as
commercial loans which are either unsecured or secured by personal property
collateral. Most of the Bank's loans are either made to individuals or
personally guaranteed by the principals of the business to which the loan is
made. At April 30, 1999, the Bank had total loans of $42.6 million and an
allowance for loan losses of approximately $848,000. From time to time, the Bank
may originate residential mortgage loans and then sell them on the secondary
market, normally recognizing fee income in connection with the sale.

         The following tables set forth information concerning the Bank's loan
portfolio by type of loan at the dates indicated (dollars in thousands):

<TABLE>
<CAPTION>

                                                                 Proforma
                                                                 April 30,
                                                     ----------------------------------
                                                           1999              1998
                                                     ----------------  ----------------

                                                            Amount            Amount
                                                     ----------------  ----------------

<S>                                                         <C>               <C>
Commercial and professional loans                           $  3,172          $  5,468
Secured by real estate                                        35,555            29,748
Personal                                                       2,159             2,589
Other                                                          1,746             1,272
                                                     ----------------  ----------------
Total loans                                                   42,632            39,077
Less:
 Allowance for loan losses                                       848               761
                                                     ----------------  ----------------
Loans, net                                                  $ 41,784          $ 38,316
                                                     ================  ================


</TABLE>




                                       17







<PAGE>




<TABLE>
<CAPTION>

                                                                          Proforma
                                                                         October 31,
                                                     -----------------------------------------------------
                                                           1998             1997               1996
                                                     ---------------- -----------------  -----------------

                                                              Amount            Amount             Amount
                                                     ---------------- -----------------  -----------------

<S>                                                         <C>               <C>                <C>
Commercial and professional loans                           $  3,548          $  7,011           $  5,646
Secured by real estate                                        33,015            27,164             16,152
Personal                                                       1,970             2,275              2,447
Other                                                          1,264             1,265                959
                                                     ---------------- -----------------  -----------------
Total loans                                                   39,797            37,715             25,204
Less:
 Allowance for loan losses                                       803               723                824
                                                     ---------------- -----------------  -----------------
Loans, net                                                  $ 38,994          $ 36,992           $ 24,380
                                                     ================ =================  =================

</TABLE>


         It is the Bank's policy to discontinue accruing interest on a loan when
it is 90 days past due or if management believes that continued interest
accruals are unjustified. The Bank may continue interest accruals if a loan is
more than 90 days past due if the Bank determines that the nature of the
delinquency and the collateral are such that collection of the principal and
interest on the loan in full is reasonably assured. When the accrual of interest
is discontinued, all accrued but unpaid interest is charged against current
period income. Once the accrual of interest is discontinued, the Bank records
interest as and when received until the loan is restored to accruing status. If
the Bank determines that collection of the loan in full is in reasonable doubt,
then amounts received are recorded as a reduction of principal until the loan is
returned to accruing status.




                                       18






<PAGE>




IMPAIRED LOAN BALANCE NON ACCRUAL LOANS AND LOANS GREATER THAN 90 DAYS STILL
ACCRUING

         The following table sets forth certain information regarding nonaccrual
loans, including the ratio of such loans to total assets as of the dates
indicated, and certain other related information. The Bank had no foreclosed
real estate during these periods (dollars in thousands).

<TABLE>
<CAPTION>

                                                                                  PROFORMA
                                                                                  APRIL 30,
                                                                    ------------------------------------
                                                                         1999                  1998
                                                                    --------------        --------------

<S>                                                                 <C>                   <C>
Nonaccrual loans:
Secured by real estate                                                        --                    30
                                                                    --------------        --------------
Total nonaccrual loans                                                        --                    30
                                                                    --------------        --------------

Total nonperforming loans                                                     --                    30
                                                                    ==============        ==============

Total nonperforming loans to total assets                                     --%                  .03%
                                                                    ==============        ==============

</TABLE>


<TABLE>
<CAPTION>

                                                                                PROFORMA
                                                                               OCTOBER 31,
                                                 -----------------------------------------------------------------------
                                                       1998                       1997                       1996
                                                 ----------------           -----------------          -----------------


<S>                                              <C>                        <C>                        <C>
Nonaccrual loans:
Commercial and Other Loans                              $    --                     $    --                    $   114
Secured by real estate                                       30                         237                        555
                                                 ----------------           -----------------          -----------------

Total nonaccrual loans                                       30                         237                        669
                                                 ----------------           -----------------          -----------------

Total nonperforming loans                               $    30                     $   237                    $   669
                                                 ================           =================          =================

Total nonperforming loans to                                .08%                        .63%                      2.65%
total assets
                                                 ================           =================          =================

</TABLE>


INVESTMENT ACTIVITIES

         GENERAL. The investment policy of the Bank, which is approved by the
Board of Directors, is designed primarily to provide satisfactory yields while
maintaining adequate liquidity, a balance of high quality, diversified
investments, and minimal risk. The Bank does not invest in equity securities.
The largest component of the Bank's securities investments, representing more
than 50% of total securities investments, are debt securities issued by the
Federal Home Loan Mortgage Corporation (Freddy Mac), the Federal National
Mortgage Association (Fanny Mae) or the Government National Mortgage Association
(Ginny Mae). The remainder of the Bank's debt securities investments are
primarily short term debt securities issued by the United States or its
agencies. The Bank maintains a small portfolio of less than $2 million of
high-yield corporate debt securities. Recognizing the higher credit risks of
these securities, the Bank underwrites these securities in a manner similar to
its loan underwriting procedures.

         As required by the Statement of Financial Accounting Standard No. 115
("SFAS No. 115"), securities are classified into three categories: trading,
held-to-maturity and available-for-sale.  Securities that are bought and held
principally for the purpose of selling them in the near term are classified as
trading securities and are reported at fair value with unrealized gains and



                                       19






<PAGE>



losses included in trading account activities in the statement of income.
Securities that the Bank has the positive intent and ability to hold to maturity
are classified as held-to-maturity and reported at amortized cost. All other
securities are classified as available-for-sale. Available-for-sale securities
are reported at fair value with unrealized gains and losses included, on an
after-tax basis, as a separate component of net worth. The Bank does not have a
trading securities portfolio and has no current plans to maintain such a
portfolio in the future. The Bank generally classifies all newly purchased debts
securities as available for sale in order to maintain the flexibility to sell
those securities if the needs arises. The Bank has a limited portfolio of
securities classified as held to maturity, represented principally by securities
purchased a number of years ago. In addition, the Company owns shares of
Executone Information Systems, Inc. (see Note 6) which are included in
available- for-sale securities at April 30, 1999.

         The following table sets forth the cost and estimated fair value of
available-for-sale and held-to-maturity securities as of the dates indicated (in
thousands):

<TABLE>
<CAPTION>

                                                                 COST                          FAIR VALUE
                                                     -----------------------------       ----------------------

<S>                                                  <C>                                 <C>
        Proforma
     April 30, 1999
   Available-For-Sale
US Government Agencies                                                  $ 65,195                     $ 65,375
Corporate Common Equities                                                     --                       27,118
Corporate Notes                                                            1,758                        1,882
Federal Home Loan Bank Stock                                                 535                          535
                                                     -----------------------------       ----------------------
Total                                                                   $ 67,488                     $ 94,910
                                                     =============================       ======================
   Held-To-Maturity

US Government Agencies                                                  $  1,253                     $  1,252
Corporate Notes                                                            1,245                        1,244
                                                     -----------------------------       ----------------------
Total                                                                   $  2,498                     $  2,496
                                                     =============================       ======================

<CAPTION>

                                                                 COST                          FAIR VALUE
                                                     -----------------------------       ----------------------
<S>                                                  <C>                                 <C>
        Proforma
    October 31, 1998
   Available-For-Sale
US Government Agencies                                                  $ 33,586                     $ 33,687
Corporate Notes                                                            1,893                        1,815
Federal Home Loan Bank Stock                                                 535                          535
                                                     -----------------------------       ----------------------
Total                                                                   $ 36,014                     $ 36,037
                                                     =============================       ======================
   Held-To-Maturity
US Government Agencies                                                  $ 12,504                     $ 12,468
Corporate Notes                                                            2,244                        2,242
                                                     -----------------------------       ----------------------
Total                                                                   $ 14,748                     $ 14,710
                                                     =============================       ======================

</TABLE>





                                       20







<PAGE>


<TABLE>
<CAPTION>

                                                                 COST                          FAIR VALUE
                                                     -----------------------------       ----------------------

<S>                                                  <C>                                 <C>
        Proforma
    October 31, 1997
   Available-For-Sale
Marketable Securities                                                   $  4,007                     $ 38,067
US Government Agencies                                                    15,542                       15,445
Corporate Notes                                                            2,276                        2,320
Federal Home Loan Bank Stock                                                 535                          535
                                                     -----------------------------       ----------------------
Total                                                                   $ 22,360                     $ 56,367
                                                     =============================       ======================
   Held-To-Maturity
US Government Agencies                                                  $ 17,088                     $ 16,985
Corporate Notes                                                            2,241                        2,247
                                                     -----------------------------       ----------------------
Total                                                                   $ 19,329                     $ 19,232
                                                     =============================       ======================

</TABLE>




REGULATORY RESTRICTIONS AND CAPITAL ADEQUACY

         Quantitative measures established by regulation to ensure capital
adequacy require the Company and The Berkshire Bank to maintain minimum amounts
and ratios of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and Tier I capital (as defined) to average
assets (as defined). As of April 30, 1999, the most recent notification from the
FDIC categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Bank must
maintain certain Total risk-based, Tier I risk-based, and Tier I leverage
ratios. There are no conditions or events since the notification that management
believes have changed the Bank's category.




                                       21






<PAGE>

          The following table sets forth the actual and required regulatory
capital amounts and ratios of the Berkshire Bank as of April 30, 1999 and 1998
and October 31, 1998, 1997 and 1996 (dollars in thousands):

                               THE BERKSHIRE BANK

                                    Proforma


<TABLE>
<CAPTION>

                                                                                                    TO BE WELL
                                                                                                CAPITALIZED UNDER
                                                                    FOR CAPITAL                 PROMPT CORRECTIVE
                                                   ACTUAL         ADEQUACY PURPOSES             ACTION PROVISIONS
                                               ---------------    -------------------        ---------------------
                                               AMOUNT    RATIO    AMOUNT     RATIO           AMOUNT        RATIO
                                               ------    -----    ------     -----           ------        -----

<S>                                           <C>        <C>      <C>        <C>             <C>          <C>
APRIL 30, 1999
Total Capital (to Risk-Weighted Assets)       $12,068    21.2%    $ 4,547    >=8.0%           $ 5,684     >=10.0%
Tier I Capital (to Risk-Weighted Assets)       11,356    20.0%      2,273    >=4.0%             3,410      >=6.0%
Tier I Capital (to Average Assets)             11,356     8.5%      5,361    >=4.0%             6,701      >=5.0%

APRIL 30, 1998
Total Capital (to Risk-Weighted Assets)         9,918    21.1%      3,752    >=8.0%             4,690     >=10.0%
Tier I Capital (to Risk-Weighted Assets)        9,330    19.9%      1,876    >=4.0%             2,814      >=6.0%
Tier I Capital (to Average Assets)              9,330     8.7%      4,295    >=4.0%             5,368      >=5.0%

OCTOBER 31, 1998
Total Capital (to Risk-Weighted Assets)        10,573    22.2%      3,817    >=8.0%             4,771     >=10.0%
Tier I Capital (to Risk-Weighted Assets)        9,974    20.9%      1,909    >=4.0%             2,863      >=6.0%
Tier I Capital (to Average Assets)              9,974     9.1%      4,397    >=4.0%             5,497      >=5.0%

OCTOBER 31, 1997
Total Capital (to Risk-Weighted Assets)         9,180    19.8%      3,714    >=8.0%             4,642     >=10.0%
Tier I Capital (to Risk-Weighted Assets)        8,598    18.5%      1,857    >=4.0%             2,785      >=6.0%
Tier I Capital (to Average Assets)              8,598     8.8%      3,899    >=4.0%             4,874      >=5.0%

OCTOBER 31, 1996
Total Capital (to Risk-Weighted Assets)         8,427    27.6%      2,445    >=8.0%             3,056     >=10.0%
Tier I Capital (to Risk-Weighted Assets)        8,040    26.3%      1,222    >=4.0%             1,834      >=6.0%
Tier I Capital (to Average Assets)              8,040    11.4%      2,811    >=4.0%             3,514      >=5.0%
</TABLE>




                                       22






<PAGE>





          The following table sets forth the actual and required regulatory
capital amounts and ratios of the Company as of April 30, 1999 and 1998 and
October 31, 1998, 1997 and 1996 (dollars in thousands):

                                  THE COMPANY
                                    PROFORMA

<TABLE>
<CAPTION>
                                                                                                    TO BE WELL
                                                                                                CAPITALIZED UNDER
                                                                    FOR CAPITAL                 PROMPT CORRECTIVE
                                                   ACTUAL         ADEQUACY PURPOSES             ACTION PROVISIONS
                                               ---------------    -------------------        ---------------------
                                               AMOUNT    RATIO    AMOUNT     RATIO           AMOUNT        RATIO
                                               ------    -----    ------     -----           ------        -----

<S>                                           <C>        <C>      <C>        <C>             <C>          <C>

APRIL 30, 1999
Total Capital (to Risk-Weighted Assets)        53,394     62.2%       6,866   >=8.0%           8,583      >=10.0%
Tier I Capital (to Risk-Weighted Assets)       52,546     61.2%       3,433   >=4.0%           5,150       >=6.0%
Tier I Capital (to Average Assets)             52,546     39.2%       5,361   >=4.0%           6,701       >=5.0%

APRIL 30, 1998
Total Capital (to Risk-Weighted Assets)        52,613    108.6%       3,867   >=8.0%           4,834      >=10.0%
Tier I Capital (to Risk-Weighted Assets)       52,007    107.4%       1,933   >=4.0%           2,900       >=6.0%
Tier I Capital (to Average Assets)             52,007     40.5%       5,135   >=4.0%           6,418       >=5.0%

OCTOBER 31, 1998
Total Capital (to Risk-Weighted Assets)        51,563    108.5%       3,801   >=8.0%           4,751      >=10.0%
Tier I Capital (to Risk-Weighted Assets)       50,964    107.3%       1,900   >=4.0%           2,851       >=6.0%
Tier I Capital (to Average Assets)             50,964     34.1%       5,975   >=4.0%           7,468       >=5.0%

OCTOBER 31, 1997
Total Capital (to Risk-Weighted Assets)        15,450     18.3%       6,747   >=8.0%           8,435      >=10.0%
Tier I Capital (to Risk-Weighted Assets)       14,868     17.6%       3,371   >=4.0%           5,061       >=6.0%
Tier I Capital (to Average Assets)             14,868     11.6%       5,141   >=4.0%           6,426       >=5.0%

OCTOBER 31, 1996
Total Capital (to Risk-Weighted Assets)        13,334     20.9%       5,096   >=8.0%           6,370      >=10.0%
Tier I Capital (to Risk-Weighted Assets)       12,947     20.3%       2,548   >=4.0%           3,822       >=6.0%
Tier I Capital (to Average Assets)             12,947     12.4%       4,173   >=4.0%           5,216       >=5.0%
</TABLE>







                                       23






<PAGE>




LIQUIDITY

         Liquidity management in banking involves the ability to generate funds
to support asset growth and meet the cash flow requirements of customers and
other obligations. The Berkshire Bank's primary source of funds has
traditionally been deposits. In addition, the Bank derives funds from loan and
security repayments and prepayments and revenues from operations. The Bank has
borrowing facilities available to it through the Federal Home Loan Bank of New
York (the "FHLBNY") for use in the event of unanticipated funding needs which
cannot be satisfied from other sources. The Bank has also engaged, to a limited
extent, in borrowings with the FHLBNY on a longer term basis when the Bank is
able to match the term of a borrowing with the term of a loan and lock in a
satisfactory spread, subject to credit and prepayment risks.

         For the parent company, Berkshire Bancorp Inc., liquidity means having
cash available to, among other things, fund operating expenses, support asset
growth at the Bank, acquire new business operations, and pay shareholder
dividends. At April 30, 1999, Berkshire Bancorp Inc. had approximately $40
million of cash and $27 million of marketable securities and is not dependent
upon the receipt of dividends from the Bank to fund its obligations.

IMPACT OF INFLATION AND CHANGING PRICES

         The Bank prepares its financial reports according to Generally Accepted
Accounting Principles, which generally require the measurement of financial
condition and operating results in terms of historical dollar amounts without
considering the changes in the relative purchasing power of money over time due
to inflation. Unlike industrial companies, nearly all of the assets and
liabilities of the Bank are monetary in nature. As a result, interest rates have
a greater impact on the Bank's performance than do the effects of general levels
of inflation. Interest rates do not necessarily move in the same direction or to
the same extent as the price of goods and services. However, interest rates
generally increase during periods when the rate of inflation is increasing and
decrease during periods of decreasing inflation. Periods of high inflation are
ordinarily accompanied by high interest rates. Changes in the rate of inflation
could also result in changing market interest rates, which could adversely
affect the Bank as discussed above under the caption "Interest Rate Risk."

IMPACT OF THE YEAR 2000

         The Company has reviewed its financial and other systems and estimates
that the total cost of the Year 2000 preparedness program will not be material.
The Company will modify and/or replace those systems which may be impacted by
the arrival of the year 2000.

         The Bank has an ongoing program to ensure that its operational and
financial systems will not be adversely affected by year 2000 software failures.
The Bank has purchased, installed and converted to new hardware and banking
software, and has successfully completed a series of tests to ensure Year 2000
compliance. The cost of such conversion and other Year 2000 preparations is
estimated to be approximately $200,000. The Bank has developed a contingency
plan which should allow it to continue operations while unforeseen software
problems are corrected. The contingency plan calls for the creation of complete
system backups of critical data on critical dates, the creation of duplicate
account balances and transaction files, and the downloading of account balances
and transaction files to personal computer spreadsheets. In the event that any
software problems are encountered during processing, either at century roll over
or leap year, the Bank expects that it will be able to manage its operations by
using the files noted above, along with manual reports. Given the size of the
Bank, the number of accounts, and the number of daily transactions, management
believes that the Bank could continue operations while such software problems
are corrected.



                                       24






<PAGE>




         While the Bank believes it is taking all appropriate steps to assure
year 2000 compliance, it is dependent on vendor compliance to some extent. The
Bank is requiring its systems and software vendors to represent that the
services and products provided are, or will be, year 2000 compliant. The Bank
estimates that the cost to redevelop, replace or repair its technology will not
have a material impact on its financial results.

         In addition to possible expenses related to the Bank's systems and
those of its service providers, the Bank could incur losses if Year 2000
problems affect any of the Bank's depositors or borrowers. Such problems could
include, among other things, delayed loan payments. Due to the diversity of the
loan portfolio and the fact that the Bank's market area is not dependent on one
employer or industry, the Bank does not expect any such Year 2000 related
difficulties that may affect its depositors and borrowers to significantly
affect net earnings or cash flow.

PART II.  OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a.       Exhibits

<TABLE>
<CAPTION>
         Exhibit
         Number            Description
         ------            -----------
<S>                        <C>
         27                Financial Data Schedule.

</TABLE>

b. There were no reports filed by Company on Form 8-K during the quarter for
which this report on Form 10-Q is filed.





                                       25






<PAGE>





                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       BERKSHIRE BANCORP INC.
                                       ----------------------
                                            (REGISTRANT)




Date:   June 17, 1999                  By:  /s/ Steven Rosenberg
       --------------                     ______________________________________
                                          STEVEN ROSENBERG
                                          PRESIDENT AND CHIEF
                                          FINANCIAL OFFICER







                                       26



<PAGE>




                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit                                                     Sequential
Number            Description                               Page Number
------            -----------                               -----------
<S>               <C>                                       <C>
27                Financial Data Schedules                     28

</TABLE>





                            STATEMENT OF DIFFERENCES

The greater-than or equal-to sign shall be expressed as .............>=







                                       27