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

                                    FORM 8-K
                                     ------

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported): September 10, 2008


                             SALISBURY BANCORP, INC.
               (Exact name of registrant as specified in charter)



         Connecticut                    000-24751               06-1514263
(State or other jurisdiction    (Commission File Number)       (IRS Employer
      of incorporation)                                     Identification No.)


    5 Bissell Street, Lakeville, Connecticut          06039-1868
    (Address of principal executive offices)          (zip code)

       Registrant's telephone number, including area code: (860) 435-9801

                                       N/A
          (Former Name or Former Address, if Changed Since Last Report)

                              --------------------

Check the  appropriate  box below if the Form 8-K is intended to  simultaneously
satisfy the filing  obligations  of the  registrant  under any of the  following
provisions (see General Instructions A.2. below):

|_|   Written  communications  pursuant to Rule 425 under the Securities Act (17
      C.F.R. 230.425)
|_|   Soliciting  material  pursuant  to Rule 14a-2 under the  Exchange  Act (17
      C.F.R. 240.14a-12)
|_|   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 C.F.R. 240.14d-2(b))
|_|   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 C.F.R. 240.13e-4(c))

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Form 8-K, Current Report
Salisbury Bancorp, Inc.

Section 8.     Other Events

      Item 8.01.     Other Events
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      Salisbury Bancorp, Inc. ("Salisbury" or the "Company") (AMEX: SAL), parent
company of Salisbury Bank and Trust Company  ("Bank"),  announced today that the
U.S.  Government's  actions  with  respect to Fannie Mae and  Freddie  Mac would
adversely impact the value of Salisbury's  preferred stock investments in Fannie
Mae.

      On September  7, the U.S.  Treasury,  the Federal  Reserve and the Federal
Housing Finance Agency (FHFA) announced that the FHFA was putting Fannie Mae and
Freddie  Mac  under  conservatorship  and  giving  management  control  to their
regulator,  the FHFA. Key provisions of the U.S.  Government's Plan announced to
date were as follows:

      o     Dividends on Fannie Mae and Freddie Mac common and  preferred  stock
            were eliminated.
      o     Fannie Mae and Freddie Mac will be required to reduce their mortgage
            portfolios over time.
      o     The U.S.  Government  agreed  to  provide  equity  capital  to cover
            mortgage defaults in return for $1 billion of senior preferred stock
            in Fannie Mae and Freddie Mac and warrants for the purchase of 79.9%
            of the common stock of Fannie Mae and Freddie Mac.
      o     The U.S.  Government  also  announced  that the U.S.  Treasury would
            provide  secured loans to Fannie Mae and Freddie Mac as needed until
            the end of 2009  and  that  the  U.S.  Treasury  plans  to  purchase
            mortgage  backed  securities  from Fannie Mae and Freddie Mac in the
            open market.

      As of  September  9, 2008,  Salisbury  Bancorp  owned  preferred  stock in
Federal Home Loan Mortgage Corporation ("FHLMC") with an amortized cost basis of
$2,975,000.  This represents  approximately  1.8% of the Bank's total Investment
portfolio of $166,372,708 and is approximately  7.1% of the Bank's total capital
position of $41,853,459.

      The impact of the Government's actions described above and concerns in the
market place about the future value of the perpetual  preferred  stock of Fannie
Mae and  Freddie  Mac have  caused  values  for these  investments  to  decrease
materially.  It is unclear when and if the value of the investments will improve
in the  future.  Given the above  developments,  Salisbury  expects  to record a
non-cash  other-than-temporary  impairment on these  investments for the quarter
ending September 30, 2008.

      Management has evaluated the capital condition of both Salisbury  Bancorp,
Inc. and its banking subsidiary, Salisbury Bank and Trust Company, and concluded
both  will  remain  above  the  highest   regulatory   capital  level  of  "well
capitalized"  under any valuation  scenario  involving the FHLMC preferred stock
holdings.  Management  continues to evaluate all of its options related to these
securities.

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                                   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 hereto duly authorized.


Dated: September 10, 2008             SALISBURY BANCORP, INC.


                                      By:  /s/ John F. Perotti
                                           ------------------------------------
                                           John F. Perotti
                                           Chairman and Chief Executive Officer