U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C. 20549

                                 FORM 10-KSB

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

                  For the Fiscal Year Ended: March 31, 1999

                        Commission File No.: 0-18096

                           MID-COAST BANCORP, INC.
            (Exact name of small business issuer in its charter)

              Delaware                               01-0454232
              --------                               ----------
       State of Incorporation                     IRS Employer No.

                            1768 Atlantic Highway
                                P. O. Box 589
                           Waldoboro, Maine 04572
                  (Address of Principal Executive Offices)

Registrant's telephone number, including area code:  (207) 832-7521

Securities registered pursuant to Section 12(g) of the Act:

                       Common Stock ($1.00 par value)
                       ------------------------------
                              (Title of Class)

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

      Indicate by check mark if there is no disclosure of delinquent filers
pursuant to Item 405 of Regulation S-B contained herein, and no disclosure
will be contained, to the best of issuer's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.   [  ]

      The Net Income for the issuer's fiscal year ended March 31, 1999 was
$257,786.

      Revenues for the issuer's fiscal year ended March 31, 1999 were
$5,690,403.

      The number of shares outstanding as of March 31, 1999 is 715,457.

      Aggregate market value of common stock held by non-affiliates, based
on the last reported sale price on June 22, 1999:  $4,347,089.


                     DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the definitive proxy statement pursuant to Regulation
14A, which was delivered to the Commission for filing on June 18, 1999, and
the Annual Report for the fiscal year ended March 31, 1999, are
incorporated by reference into Part II and III of this report.


                              TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                               Page
                                                                               ----

<S>                                                                             <C>
PART I                                                                           1
      Item 1.  Description of Business                                           1
      Item 2.  Description of Property                                          27
      Item 3.  Legal Proceedings                                                28
      Item 4.  Submission of Matters to a Vote of Security Holders              28
PART II                                                                         29
      Item 5.  Market for Common Equity and Related Stockholder Matters         29
      Item 6.  Management's Discussion and Analysis.                            30
      Item 7.  Financial Statements.                                            30
      Item 8.  Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.                                                       30
PART III                                                                        30
      Item 9.  Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.                     30
      Item 10. Executive Compensation.                                          30
      Item 11. Security Ownership of Certain Beneficial Owners and
Management.                                                                     30
      Item 12. Certain Relationships and Related Transactions.                  30
      Item 13. Exhibits and Reports on Form 8-K.                                31


      SIGNATURES                                                                33
</TABLE>


PART I
Item 1.  Description of Business

                     Business of Mid-Coast Bancorp, Inc.

      Mid-Coast Bancorp, Inc. ("Bancorp" or the "Holding Company") was
organized in 1989 for the purpose of becoming a holding company and owner
of all of the outstanding capital stock of The Waldoboro Bank, F.S.B.
("Waldoboro" or the "Bank"). The Holding Company is engaged primarily in
the business of directing, planning and coordinating the business
activities of the Bank. In the future, Bancorp may acquire or organize
other operating subsidiaries, including other financial institutions,
although it presently has no definitive plans for any specific acquisitions
or new subsidiaries. Bancorp does not currently own any real estate.
Instead, Bancorp uses the premises, equipment and furniture of the Bank
without the payment of any rental fees. At the present time, Bancorp does
not employ any persons other than its officers, but utilizes the support
staff of the Bank from time to time without the payment of any fees.
Additional employees may be hired as appropriate to the extent Bancorp
expands its business.

                   Business of The Waldoboro Bank, F.S.B.

General

      The Bank was formed as a Maine building and loan association, the
Waldoboro Building and Loan Association, on March 18, 1891 and received a
federal charter on August 9, 1983. The Bank's operations are headquartered
in Waldoboro, Maine. The deposits of the Bank are insured by the Savings
Association Insurance Fund (the "SAIF"), which is administered by the
Federal Deposit Insurance Corporation ("FDIC"). The Bank has a strong
community orientation, with most of its customers located in Waldoboro,
Rockland and surrounding communities in Knox and Lincoln counties, Maine.
As of March 31, 1999, the Bank had total assets of $70,770,863, total
deposits of $52,414,873, total borrowings of $12,715,000 and stockholders'
equity of $5,373,620.   As of March 31, 1999, the Bank had full service
branch facilities in Waldoboro, Rockland, Belfast and Jefferson, Maine. The
Bank's executive offices are located at 1768 Atlantic Highway, Waldoboro,
Maine and its telephone number is (207) 832-7521.

      The Bank's expansion during fiscal year 1999 included offices in
Belfast and Jefferson.  We are confident that our people and products will
make this move successful. While we anticipate these branches will increase
operating costs and as a result impact earnings in fiscal 2000, we feel
that expansion into these market areas is an important step in maintaining
the growth and long term profitability of the Bank.

      The principal business of the Bank is to attract deposits from the
general public and to make loans secured by residential and commercial real
estate, enabling borrowers to purchase, refinance, construct or improve
property. In addition, the Bank makes various types of secured and
unsecured consumer and passbook loans, such as home equity, commercial and
automobile loans, and holds investment securities. See "Lending Activities"
and "Investments."

Market Area

      The Bank's market area is Knox and Lincoln counties, and parts of
Waldo county, Maine, which includes the towns of Waldoboro, Damariscotta,
Jefferson, Friendship, Warren, Nobleboro, Thomaston, Rockland, Belfast,
Camden and Lincolnville, as well as other communities in Maine's mid-coast
region. The Bank's market area is located on the coast of Maine,
approximately 60 miles northeast of Portland and 78 miles southwest of
Bangor.

      The economic base of the Bank's market area is diverse, with
manufacturing, services and commercial fishing as the most significant
categories of business activity. The mid-coast region of Maine has also
long been popular as a summer resort area, thus leading to a substantial
amount of seasonal business activity.

Lending Activities

      The Bank's net loan portfolio totaled $55,964,548 at March 31, 1999,
representing approximately 79.1% of its total assets. At that date,
approximately 63.7% of the Bank's loan portfolio consisted of permanent
mortgage loans secured by residential properties. In addition,
approximately 17.2% of the Bank's loan portfolio consisted of permanent
mortgage loans secured by commercial real estate, while secured and
unsecured consumer, commercial and passbook loans represented 14.1% of the
Bank's loan portfolio. Finally, construction loans represented 5.0% of the
Bank's loan portfolio. Substantially all of the residential and commercial
properties securing the Bank's loans are located within its market area as
discussed above.

      The following table sets forth detailed information concerning the
composition of the Bank's loan portfolio by type of loan at the dates
indicated.

<TABLE>
<CAPTION>
                                              At March 31,
                            -------------------------------------------------
                                     1999                       1998
                            ----------------------     ----------------------
                              Amount          %          Amount          %
                              ------          -          ------          -

<S>                         <C>             <C>        <C>             <C>
Mortgage loans:
  Residential               $35,973,168      63.7%     $33,971,535      67.1%
  Commercial                  9,699,298      17.2        7,464,541      14.7
  Construction, net
   of undisbursed funds       2,824,413       5.0        2,189,613       4.3
                            ------------------------------------------------
  Total mortgage loans       48,496,879      85.9      $43,625,689      86.1
                            ------------------------------------------------
Other loans:
  Home equity                 1,467,125       2.6        1,092,794       2.2
  Commercial                  2,618,523       4.6        2,071,625       4.1
  Passbook loans                317,548       0.6          261,888       0.5
  Installment and other       3,529,447       6.3        3,572,543       7.1
                            ------------------------------------------------
    Total other loans         7,932,643      14.1        6,998,850      13.9
                            ------------------------------------------------
      Total loans           $56,429,522     100.0%     $50,624,539     100.0%
                            ================================================
</TABLE>


      Residential Mortgage Loans.  A substantial portion of the Bank's
lending activity is comprised of residential mortgage loans, which, at
March 31, 1999, represented 63.7% of the Bank's loan portfolio. Residential
mortgage loan originations are derived from a number of sources, including
the existing customers of the Bank, realtors, referrals, advertising and
"walk-in" customers. The Bank's active solicitation of residential mortgage
loans through real estate brokers has historically been its primary source
of residential mortgage loan originations.

      The main focus of the Bank's residential lending activity is the
origination of conventional mortgage loans on one- to four-family
dwellings. Generally, these loans are conventional first mortgage loans of
80% of value or less that are neither insured, nor partially guaranteed by
government agencies. The Bank also makes residential loans up to 95% of the
appraised value, with the top 15% of the loan covered by private mortgage
insurance, and Maine state housing, FHA and VA guaranteed loans ranging
from 95% to 100% of appraised value.

      Currently, the Bank offers a variety of adjustable-rate mortgage
loans with terms of up to 30 years. These mortgages have rates which are
generally 3.0% above the U.S. Treasury Index and have adjustment periods of
up to 7 years based on changes in the interest rate on U.S. Treasury
obligations. Typically, such loans have a 2% maximum rate change in any one
adjustment period and a maximum possible rate change of 3% during the term
of the loan. Most of the adjustable-rate mortgage loans originated by the
Bank are held in the Bank's portfolio. The primary reason for the Bank to
retain these loans is to manage the interest rate sensitivity of the Bank's
loan portfolio. See "Asset/Liability Management" located in the
Management's Discussion and Analysis portion of the Annual Report,
commencing on page 4, which report is incorporated herein by reference.

      In addition to adjustable-rate residential mortgage loans, the Bank
also offers fixed-rate residential mortgage loans with terms typically
ranging from 15 to 30 years, which generally written to secondary market
standards. During the fiscal year ended March 31, 1999, the Bank originated
$13,084,300 in fixed rate loans, of which 40% were sold to the secondary
market.  The remaining 60% of fixed rate loans were added to the Bank's
portfolio. These loans were underwritten using secondary market guidelines.

      Borrowers may prepay loans at their option or refinance their loans
with the Bank on terms agreeable to the Bank. The terms of conventional
residential mortgage loans granted by the Bank contain a "due-on-sale"
clause, which permits the Bank to accelerate the indebtedness of a loan
upon the sale or other disposition of the mortgaged property. Due-on-sale
clauses are an important means of increasing the turnover of real estate
loans in the Bank's portfolio. Waldoboro's management believes that due to
prepayments in connection with refinancings and sales of property, the
average length of the Bank's long-term residential loans is substantially
shorter than the weighted average contractual maturity.

      The Bank also makes construction loans to fund the construction of
new buildings or the renovation of existing buildings and finances the
construction of individual, owner-occupied houses by professional
contractors and by individual owners only on the basis of stringent
underwriting and construction loan management guidelines.  Net construction
loans comprised $2,824,413, or 5.0% of the Bank's loan portfolio at March
31, 1999.

      Commercial Real Estate and Other Commercial Loans.  In addition to
residential real estate loans, the Bank also originates loans secured by
commercial real estate. At March 31, 1999, $9,699,298 or 17.2% of the
Bank's loan portfolio was secured by commercial properties. The majority of
the Bank's commercial real estate loans are secured by improved commercial
property such as retail outlets and service establishments. Substantially
all of the Bank's entire commercial real estate loan portfolio is secured
by properties located in the Bank's primary market area.

      For a variety of reasons, loans secured by commercial properties
generally involve greater credit risks than one- to four-family residential
real estate loans. Repayment of such loans generally depends on the cash
flow generated by the security property. Because the payment experience on
loans secured by such property is often dependent on successful operation
or management of the security property, repayment of the loan may be more
subject to adverse conditions in the real estate market or the economy
generally than is the case with one- to four-family residential real estate
loans. The commercial real estate business is cyclical and subject to
downturns, overbuilding and local economic conditions. Although commercial
real estate loans generally involve a higher risk of credit loss than loans
secured by residential real estate, Waldoboro has not experienced any
significant problems with its commercial mortgage loans.

      In addition, the Bank has begun to increase its commercial business
loan portfolio. At March 31, 1999, such loans amounted to $2,618,523 or
4.6% of the Bank's loan portfolio. Commercial business loans are generally
secured by equipment, machinery or other corporate assets. The Bank either
requires principals of corporate borrowers to become co-borrowers or the
Bank obtains personal guarantees from the principals of the borrower with
respect to all commercial business loans.

      Commercial business lending generally entails significantly greater
credit risk than residential real estate lending. The repayment of
commercial business loans typically is dependent on the successful
operation and income of the borrower. Such risks can be significantly
affected by economic conditions. In addition, commercial business lending
generally requires substantially greater oversight efforts by the Bank than
does residential real estate lending.

      Consumer Loans. At March 31, 1999, Waldoboro had secured and
unsecured consumer loans, which includes loans on deposit accounts, and
home equity loans of approximately $5.3 million or 9.5% of the Bank's loan
portfolio. The Bank's consumer loans have interest rates that are generally
higher than residential mortgage rates. The average life of the Bank's
consumer loans is typically less than five years. By maintaining its
consumer lending, Waldoboro enhances its ability to maintain a profitable
spread between its average loan yield and its cost of funds while at the
same time managing its sensitivity to interest rates.

      Loans to One Borrower. Regulations promulgated by the Office of
Thrift Supervision (the "OTS") generally limit the permissible amount of
loans to one borrower to the greater of 15% of unimpaired capital and
surplus or $500,000. The maximum amount which the Bank could have loaned to
one borrower and the borrower's related entities at March 31, 1999, was
$790,500. At March 31, 1999, the three largest outstanding balances of
loans to any one borrower and related entities were $749,000, $611,687 and
$568,904.

Scheduled Loan Maturities

      The following table presents information regarding contractual
maturities of portions of Waldoboro's loan portfolio at March 31, 1999.
Demand loans are reported as due in one year or less. No prepayment
assumptions are utilized for purposes of this table.

<TABLE>
<CAPTION>
                                           Payment Due in year Ended March 31,
                            Balance at     ------------------------------------
                            March 31,                     2001-
                               1999          2000         2004         2005+
                            ----------       ----         -----        -----

<S>                         <C>            <C>          <C>          <C>
Mortgages- construction     $2,824,413     $434,338     $377,061     $2,013,014
Commercial loans - non
 real estate                 2,618,523      990,331      996,628        631,564
</TABLE>


      The following table shows information concerning the type and amount
of fixed-rate and adjustable-rate loans in the above portfolio that come
due after one year.

<TABLE>
<CAPTION>
                                    Loans Due After March 31, 2000
                                --------------------------------------
                                  With          With
                                 Fixed       Adjustable
                                 Rates         Rates          Total
                                 -----       ----------       -----

<S>                             <C>          <C>            <C>
Mortgages- construction         $644,102     $1,745,973     $2,390,075
Commercial loans - non real
 estate                          173,208      1,454,984      1,628,192
</TABLE>

      Also, see Asset/Liability Management on page 16.

Origination, Purchase and Sale of Loans

      The primary lending activity of Waldoboro is the origination of
conventional loans secured by first mortgage liens on residential
properties, principally single family residences, substantially all of
which are located in Lincoln, Knox and Waldo counties, Maine.  At fiscal
year end, substantially all of the real estate loans originated were
secured by properties in Lincoln, Knox and Waldo counties.

      Waldoboro appraises the security for each new loan.  Such appraisals
are performed for the Bank by qualified appraisers in accordance with
standards set by the OTS.  The appraisal of the real property upon which
Waldoboro makes a real estate loan is of particular significance to the
Bank in the event that the loan must be foreclosed.  An improper appraisal
may contribute to a loss or other financial detriment to the Bank upon the
disposition of foreclosed property.

      The Bank's underwriting standards are guided by a formal written loan
policy that is reviewed and approved annually by the board of directors of
the Bank (the "Board"). This policy provides that the Loan Committee ratify
or approve all loans, depending on loan size.  Subsequently, the loan must
be ratified or approved by the Board depending on loan size.  In the case
of a loan made to an officer of the Bank or the Holding Company, the loan
must be approved by the Board as well as the Loan Committee and the
Security Committee. Waldoboro requires title certification on all first
mortgage liens, and the borrower is required to maintain hazard insurance
on the security property.

      Waldoboro has purchased loans in previous years and will continue to
consider participations from third parties provided the terms are favorable
and the loans meet Waldoboro's underwriting standards. The Bank routinely
sells certain fixed-rate real estate loans in the secondary market as a
means to better match its interest-sensitive assets and liabilities. For
the year ended March 31, 1999, the Bank received $6,130,644 in proceeds
from the sale of loans. Waldoboro will continue to consider additional
sales of its loans in the future, depending on its needs, and the terms
available in the market for such transactions.

      Fee Income.  In addition to interest earned on loans, Waldoboro
realizes fee income from its lending activities, including origination and
collection fees for residential loans. Waldoboro also receives loan fees
and charges related to existing loans, which include late charges and
servicing fees. At March 31, 1999, net origination fees deferred to future
periods were $60,589.

Classified Assets and Delinquencies

      If a borrower fails to make a required payment on a loan, the loan is
classified as delinquent. In this event, Waldoboro will make contact with
the borrower at prescribed intervals in an effort to bring the loan
current. In most cases, delinquencies are cured promptly, but if a mortgage
loan delinquency is not cured within 60 days, Waldoboro will generally
initiate foreclosure proceedings under applicable state law. If the loan
remains delinquent, the mortgaged property typically will be sold through a
foreclosure sale.

      The remedies available to a lender in the event of a default or
delinquency, and the procedures by which such remedies may be exercised,
are generally subject to laws and regulations of the jurisdiction where the
property is located in the case of mortgage loans, or of the jurisdiction
where the lender and/or borrower is situated in the case of unsecured
loans. Federal and Maine law generally require notice of default and right
to cure and notice of the availability of credit counseling and potential
state-provided financial assistance prior to the time a lender commences a
legal action or takes possession of Maine residential real estate securing
a loan. Management attempts to secure payment with regard to consumer and
commercial business loans that become delinquent. Ultimately, if such
efforts are unsuccessful, foreclosure and sale of collateral are
considered. In the case of unsecured installment and commercial business
loans, rather than proceeding to collect by legal action, Waldoboro may
attempt to negotiate a "workout" payment schedule with the borrower over a
period that may exceed the original term of the loan.

      Under the OTS classification system, problem assets of insured
institutions are classified as "special mention, " "substandard, "
"doubtful" or "loss, " depending on the presence of certain characteristics
discussed below.

      An asset is considered "special mention" if the asset displays
potential weaknesses that deserve close attention by a bank's management
and that if uncorrected might result in deterioration either of the asset's
repayment prospects or in the future credit condition of the borrower.
Special mention assets do not expose a bank to sufficient risk to warrant
adverse classification under the classifications discussed below.

      An asset is considered "substandard" if inadequately protected by the
current sound worth and paying capacity of the obligor or of the collateral
pledged, if any. "Substandard" assets include those characterized by the
"distinct possibility" that the insured institution will sustain "some
loss" if the deficiencies are not corrected. Assets classified "doubtful"
possess the added characteristic that the weaknesses present make
"collection or liquidation in full," on the basis of currently existing
facts, conditions and values, "highly questionable and improbable." Assets
classified "loss" are those considered "uncollectible" and of such little
value that their continuance as assets without the establishment of a
specific loss reserve is not warranted. When an insured institution
classifies problem assets as "loss", it is required either to establish a
specific allowance for losses equal to 100% of the amount of the asset so
classified or to charge off such amount.

      The accrual of interest income is discontinued when a loan becomes
delinquent and in management's opinion is deemed uncollectible in whole or
in part as to principal and/ or interest. In these cases, interest on such
loans is recognized only when received.  It is the policy of the Holding
Company to generally place all loans that are 90 days or more past due on
nonaccrual status, unless in management's judgement the loan is well
secured and in the process of collection.

      At March 31, 1999, the Holding Company had $69,580 of accruing loans
that were 90 days or more delinquent as compared to $69,570 at March 31,
1998.  Unrecognized interest income on all loans on non-accrual status at
March 31, 1999 totaled $7,253.

Nonperforming Assets

<TABLE>
<CAPTION>
                                                                     At March 31,
                                                          ----------------------------------
                                                            1999         1998         1997
                                                            ----         ----         ----

<S>                                                       <C>          <C>          <C>
Nonperforming loans:
  Mortgage loans in process of foreclosure                $   ----     $   ----     $   ----
  Loans more than 90 days past due and still accruing       69,580       69,570         ----
  Nonaccrual loans                                          73,551      225,056      145,466
                                                          ----------------------------------

Total nonperforming loans                                  143,131      294,626      145,466

Real estate owned, net                                    $   ----       70,383       91,823
                                                          ----------------------------------

Total nonperforming assets                                $143,131     $365,009     $237,289
                                                          ==================================

Ratio of nonperforming loans to total loans                   0.25%        0.58%        0.29%
Ratio of nonperforming assets to total assets                 0.20%        0.58%        0.40%
</TABLE>

      Allowance for Loan Losses. The allowance for loan losses (ALL) is
maintained by a provision charged against income at a level that management
considers adequate to provide for potential losses. The amount of the
provision is based upon management's evaluation of individual loans, past
loss experience, current economic conditions, the inherent risk in the loan
portfolio and other relevant factors.  While management believes the
current level is adequate, there can be no assurance that the Bank will not
have to increase its provision for loans losses in the future as a result
of changing conditions, such as a deterioration in the local economy or an
increase in problem loans. In addition, the Bank's primary regulator, The
OTS reviews the ALL as part of its routine examinations.  The OTS can
require additions to the ALL based on its examination findings.  At the
last OTS examination on November 12, 1997 the examiners deemed the ALL to
be adequate.

      An analysis of activity in the allowance for loan losses for the
years ended March 31, 1999 and 1998 is provided below.

<TABLE>

         <S>                                    <C>
         Balance, March 31, 1997                $295,457
           Charge-offs - Primarily Consumer      (22,429)
           Recoveries                                868
                                                --------
           Net charge-offs                       (21,561)
           Provision for loan losses              73,000
                                                --------

         Balance, March 31, 1998                $346,896
           Charge-offs - Primarily Consumer      (11,657)
           Recoveries                              1,146
                                                --------
           Net charge-offs                       (10,511)
           Provision for loan losses              68,000
                                                --------

         Balance, March 31, 1999                $404,385
                                                ========


         Net charge-offs to average loans outstanding:

           <S>                             <C>
           Year ended March 31, 1998       0.04%
           Year ended March 31, 1999       0.02%
</TABLE>


      A breakdown of the allowance for loan losses at March 31, 1999 and
1998 is shown below:

<TABLE>
<CAPTION>
                                                            1999                         1998
                                                  ------------------------     ------------------------
                                                               Percent of                   Percent of
                                                                Loans to                     Loans to
                                                   Amount      Total Loans      Amount      Total Loans
                                                   ------      -----------      ------      -----------

<S>                                               <C>            <C>           <C>            <C>
Mortgage loans - residential and construction     $ 60,000        68.7%        $ 65,560        71.4%
Mortgage loans - commercial                        100,000        17.2          127,810        14.7
Other commercial                                   100,000         4.6           30,718         4.1
Consumer and other loans                            45,000         9.5           45,912         9.8
General allocation                                  99,385        ----           76,896        ----
                                                  -------------------------------------------------
                                                  $404,385       100.0%        $346,896       100.0%
                                                  =================================================
</TABLE>

Investments

      Federally chartered thrift institutions have authority to invest in
various types of liquid assets, including U.S. Treasury obligations,
securities of various federal agencies, certain certificates of deposit of
insured banks and thrift institutions, certain bankers' acceptances and
federal funds. Subject to various restrictions, federally chartered thrift
institutions may also invest a portion of their assets in commercial paper
and corporate debt securities and in mutual funds whose assets conform to
the investments that a federally chartered thrift institution is otherwise
authorized to make directly. At March 31, 1999, 8.75% of the total assets
of the Holding Company were investment securities. See Note 2 of the
Holding Company's Consolidated Financial Statements included herein by
reference.

      Currently, the Bank's debt securities are classified as "held-to-
maturity" or "available for sale" in accordance with Financial Accounting
Standards No. 115, "Accounting For Certain Investments in Debt and Equity
Securities." The investment securities classified as "held-to-maturity" are
reported in the Bank's financial statements at amortized cost.  Investments
in a mutual fund (Asset Management Fund-Adjustable Rate Mortgage Portfolio)
of $655,854 and debt securities classified as "available for sale" are
carried at market value. The following table sets forth the composition of
the Bank's portfolio of investment securities at the dates indicated.

<TABLE>
<CAPTION>
                                                              At March 31,
                                   -------------------------------------------------------------------
                                                1999                                1998
                                   -------------------------------     -------------------------------
                                   Amortized Cost     Market Value     Amortized Cost     Market Value
                                   --------------     ------------     --------------     ------------

<S>                                  <C>               <C>               <C>               <C>
Held to maturity:
Investment securities
  Federal Home Loan Bank
   Bonds                             $        0        $        0        $  400,000        $  373,734
  U.S. Treasury Obligations                   0                 0           299,672           298,617
  Federal National Mortgage
   Association Bonds                          0                 0           250,000           250,000
  U.S. Agency Obligations               200,000           186,415                 0                 0
                                     ----------------------------------------------------------------
      Total Investment
       securities                    $  200,000        $  186,415        $  949,672        $  922,351
                                     ================================================================

Available for sale:
Investment securities:
  U.S. Treasury Obligations          $        0        $        0        $  499,329        $  500,467
  U.S. Agency Obligations             3,099,567         3,073,472         1,048,980         1,049,680
  Mortgage-backed securities          1,498,574         1,487,355                 0                 0
                                     ----------------------------------------------------------------
                                     $4,598,141        $4,560,827        $1,548,309        $1,550,147

Mutual Fund                             657,177           655,854           595,732           593,894
                                     ----------------------------------------------------------------
                                     $5,255,318        $5,216,681        $2,144,041        $2,144,041
                                     ================================================================

Required investment in Federal
 Home Loan Bank Stock                $  734,500        $  734,500        $  622,000        $  622,000
                                     ================================================================
</TABLE>


      The following table shows the maturities of the Bank's bonds at March
31, 1999 and the weighted average yield on such securities.  Mortgage-
backed securities are shown at final maturity dates.

<TABLE>
<CAPTION>
                                                    After 1        After 5
                                                    Year but      Years but
                                                     Within         Within
                                 Within 1 Year      5 Years       10 Years      After 10 Years       Total
                                 -------------      --------      ---------     --------------       -----

<S>                                 <C>            <C>             <C>            <C>              <C>
Held to maturity:

Federal Home Loan Bank Bonds
  Book Value                        $ ----         $  200,000      $ ----         $     ----       $  200,000
  Yield                               ----               3.93%       ----               ----             3.93%
                                    -------------------------------------------------------------------------
Held to Maturity Total              $ ----         $  200,000      $ ----         $     ----       $  200,000
                                    =========================================================================

Available for Sale:
U.S. Agency Obligations:
  Book Value                        $ ----         $3,073,472      $ ----         $     ----       $3,073,472
Yield                                 ----               5.77%       ----               ----             5.77%

Mortgage-backed securities:
  Book Value                        $ ----         $     ----      $ ----         $1,487,355       $1,487,355
  Yield                               ----               ----        ----               6.52%            6.52%
                                    -------------------------------------------------------------------------

Available for Sale Total            $ ----         $3,073,472      $ ----         $1,487,355       $4,560,827
                                    =========================================================================
</TABLE>

Sources of Funds

      General. The Bank's primary sources of funds are deposits, borrowings
and regular payments of loan principal and interest and prepayments of loan
principal. Deposit inflows and outflows are influenced by general interest
rate conditions. The Bank has been able to respond to market rate changes
by borrowing from the Federal Home Loan Bank (the "FHLB") of Boston in the
form of fixed-rate loans with a variety of maturities.

      Deposits. The Bank offers a variety of deposit products ranging in
maturity from deposits withdrawable upon demand to certificates with
maturities of up to 5 years. Deposits are attracted principally from within
the Bank's market area. Waldoboro relies primarily upon customer service,
advertising and competitive pricing policies to attract and retain
deposits.

      During the fiscal year ended March 31, 1999, money market accounts
decreased $422,778 or 8.2%, while certificates of deposit increased
$4,670,205 or 16.7%, NOW accounts increased $1,290,804 or 32.1%, savings
accounts increased $895,893 or 15.8% and demand deposits increased $809,333
or 35.2%.

      As a member of the FHLB System, the Bank is required to maintain
liquid assets at minimum levels that vary from time to time. The Bank's
investment portfolio, cash and deposits in other institutions provide not
only a source of income but also a source of liquidity to meet lending
demands, fluctuations in deposit flows and required liquidity levels. The
Bank has periodically used excess liquidity to meet heavy loan demand. The
relative mix of investments and loans in the Bank's portfolio is dependent
upon the Bank's judgment, from time to time, as to the attractiveness of
yields available on loans as compared to available investment yield. The
Bank also considers the relative safety of the investment and loans and the
liquidity needs of Waldoboro. The Bank's investment portfolio is managed in
compliance with the investment policy established by the Board.

      The Bank offers certificate of deposit "specials" and other deposit
alternatives that are more responsive to market conditions than the Bank's
savings deposits and the longer maturity fixed-rate certificates that have
traditionally served as the Bank's primary sources of deposits. Waldoboro's
overall variety of deposits has enabled the Bank to be competitive in
obtaining funds when necessary.

      Historically, the Bank has obtained deposits primarily from the areas
in Maine immediately surrounding its offices. Management expects to
continue obtaining substantially all of its deposits from Knox, Lincoln and
Waldo county market areas. It is the Bank's policy not to accept brokered
deposits.

      The following table sets forth the average balances of deposits of
the Bank in dollar amounts and as a percent of total deposits, the interest
expense and the weighted average rate for each type of deposit account for
the periods indicated.

<TABLE>
<CAPTION>
                                         Year Ended March 31, 1999
                            ---------------------------------------------------
                                             % of
                              Average       Average       Interest      Average
                              Balance       Deposits      Expense        Rate
                              -------       --------      --------      -------

<S>                         <C>             <C>          <C>             <C>
Demand deposits             $ 3,142,831       6.31%      $     ----      ----%
NOW Accounts                  4,999,798      10.04           75,973      1.52
Savings                       6,676,381      13.41          179,002      2.68
Money Market
 deposit accounts             4,784,736       9.60          168,879      3.53
Certificates of deposit      30,216,858      60.64        1,670,643      5.53
                            -------------------------------------------------
                            $49,820,604     100.00%      $2,094,497      4.20%
                            =================================================

<CAPTION>
                                         Year Ended March 31, 1998
                            ---------------------------------------------------
                                             % of
                              Average       Average       Interest      Average
                              Balance       Deposits      Expense        Rate
                              -------       --------      --------      -------

<S>                         <C>             <C>          <C>             <C>
Demand deposits             $ 2,187,357       4.95%      $     ----      ----%
NOW Accounts                  3,977,843       9.01           63,365      1.59
Savings                       5,625,718      12.74          164,437      2.92
Money Market
 deposit accounts             5,022,940      11.37          191,859      3.82
Certificates of deposit      27,352,018      61.93        1,544,788      5.65
                            -------------------------------------------------
                            $44,165,876     100.00%      $1,964,449      4.45%
                            =================================================
</TABLE>


      The maturities of certificates of deposit in amounts greater than or
equal to $100,000 at March 31, 1999 are set forth in the following table.

<TABLE>
<CAPTION>
                      Maturity           Amount

                   <S>                 <C>
                   0 - 3 months        $  840,321
                   3 - 6 months         1,323,917
                   6-12 months          1,205,421
                   After 12 months      1,049,833
                                       ----------
                                       $4,419,492
                                       ==========
</TABLE>


      The Bank offers a number of investment alternatives to depositors.
Interest rates paid and minimum balance requirements for deposits may vary
from time to time as determined by the Bank's management, based on
prevailing market conditions. Waldoboro's deposit accounts are obtained
primarily from the areas immediately surrounding its offices.

      The Bank has offered IRA accounts and intends to continue to do so in
the future. At March 31, 1999, $2,996,000 of IRA accounts were on deposit
with the Bank.

      Borrowings. Deposits are Waldoboro's primary source of funds for
lending activities and other general business purposes. During periods when
the supply of lendable funds cannot meet the demand for such activities and
purposes, the FHLB system seeks to provide a portion of the funds necessary
through advances to its members. Historically, Waldoboro has relied on
advances from the FHLB of Boston rather than other sources. Waldoboro has
used such advances from the FHLB of Boston as an alternative to deposits
when rates are favorable as a means to enhance the Bank's interest rate
spread and as a source of lendable funds. At March 31, 1999, Waldoboro had
$12,715,000 in outstanding advances from the FHLB at a weighted average
stated rate of 5.33%.

      Waldoboro has access to a line of credit approximating $1,157,000 at
March 31, 1999, with the FHLB of Boston for short-term borrowing purposes.
The Bank did not have any outstanding borrowings under this line of credit
at March 31, 1999.

      The Bank intends to continue to fund its mortgage loan commitments
with borrowed funds from the FHLB of Boston when the supply of other
lendable funds is insufficient or more costly and/or when such borrowings
would enhance the Bank's ability to manage its mix of assets and
liabilities.

Asset/Liability Management

      The following table sets forth the scheduled repricing or maturity of
the Holding Company's financial assets and liabilities at March 31, 1999.

      For purposes of this table no portfolio loans are assumed to prepay
before their scheduled maturity date. Mortgage-backed securities reflect
contractual amortization.  Also, all NOW, Savings, and Money Market deposit
accounts are assumed to reprice or mature in one year. FHLB callable
advances are slotted based on their first call date. These assumptions may
not be indicative of actual future events.

<TABLE>
<CAPTION>
                                        1 Year       >1 to 2      >2 to 3      >3 to 5     >5 to 10       Over
                                        or Less       Years        Years        Years        Years      10 Years       Total
                                        -------      -------      -------      -------     --------     --------       -----

<S>                                   <C>          <C>          <C>          <C>          <C>          <C>          <C>
Financial Assets(1):
  Mortgage loans & mortgage
   backed securities:
Residential real estate 1-4 family
  Balloon & adjustable rate           $ 8,160,860  $ 4,554,886  $ 5,901,688  $ 4,167,411  $   632,697  $    84,388  $23,501,930
  Fixed rate                                  605      124,615      506,641       80,512      594,188    9,412,272   10,718,833
Mortgage-backed securities                 27,571       29,569       31,714       70,501      230,764    1,108,455    1,498,574
Consumer & other loans                  8,617,663    2,402,354    2,661,279    2,034,990    2,252,101    4,240,372   22,208,759

Investments & other
 interest-earning assets (includes
 loans held for sale)                   5,128,272            0      250,000    3,009,433            0        1,497    8,389,202
                                      -----------------------------------------------------------------------------------------
Total financial assets                $21,934,971  $ 7,111,424  $ 9,351,322  $ 9,362,847  $ 3,709,750  $14,846,984  $66,317,298
                                      =========================================================================================

Financial Liabilities(1):
  Deposits:
    NOW accounts, Savings and
    Money Market Accounts              16,602,857  $         0  $         0  $         0  $         0  $         0  $16,602,857
  Certificates of deposit              28,225,483    3,465,243      905,223      109,090            0            0   32,705,039
FHLB borrowings                         4,000,000    2,500,000    2,500,000    2,000,000    1,500,000      215,000   12,715,000
                                      -----------------------------------------------------------------------------------------

Total financial liabilities           $48,828,340  $ 5,965,243  $ 3,405,223  $ 2,109,090  $ 1,500,000  $   215,000  $62,022,896
                                      =========================================================================================

GAP                                   -26,893,369    1,146,181    5,946,099    7,253,757    2,209,750   14,631,984
GAP to total assets                        -38.00%        1.62%        8.40%       10.25%        3.12%       20.68%
Cumulative GAP                        -26,893,369  -25,747,188  -19,801,089  -12,547,332  -10,337,582    4,294,402
Cumulative GAP to total assets             -38.00%      -36.38%      -27.98%      -17.73%      -14.61%        6.07%

<FN>
--------------------
<F1>  For purposes of this table, financial assets are defined as all
      interest earning assets other than FHLB stock. Financial liabilities
      consist of all interest-bearing liabilities.
</FN>
</TABLE>


Employees

      At March 31, 1999, the Bank had a total of 25 full-time employees and
8 part-time employees, none of whom were represented by collective
bargaining units. The Bank offers its employees a variety of training
programs designed to enhance their skills. The Bank also provides its full-
time employees with a benefits package that includes life, long-term
disability and medical insurance, a 401(k) plan and a pension plan.
Management of Waldoboro believes that good relations are maintained with
its employees.

Service Corporation

      The Bank has one service corporation, First Waldoboro Corporation
("First Waldoboro"). First Waldoboro was originally formed for the purpose
of offering certain securities brokerage services. However, management of
the Bank subsequently determined not to use First Waldoboro for that
purpose, and the service corporation is presently inactive.

      Federal regulations permit the Bank to invest an amount up to 2% of
its assets in the capital stock, obligations and other securities of its
service corporations. This amount is increased to 3 % if the additional 1%
is used primarily for community, inner city or community development
purposes. At March 31, 1999, the Bank's direct investment in First
Waldoboro was $10,000.

Competition

      Waldoboro faces strong price-oriented competition in the attraction
of deposits. Its most direct competition for deposits comes from the other
thrifts and commercial banks located in its primary market area of Knox,
Lincoln and Waldo Counties. The Bank also faces additional significant
competition for investors' funds from short-term money market funds and
other corporate and government securities. The Bank is the fifth in asset
size of the 11 SAIF-insured institutions in the state.

      The Bank competes for deposits principally by offering depositors a
high level of customer service, combined with a wide variety of savings
programs, a market rate of return, tax-deferred retirement programs and
other related services. The Bank does not rely upon any individual, group
or entity for a material portion of its deposits.

      The Bank's competition for real estate loans comes from mortgage
banking companies, other thrift institutions and commercial banks. The Bank
competes for loan originations primarily through the interest rates and
loan fees it charges and the efficiency and quality of services it provides
borrowers, real estate brokers and builders. The Bank's competition for
loans varies from time to time depending upon the general availability of
lendable funds and credit, general and local economic conditions, current
interest rate levels, volatility in the mortgage markets and other factors
which are not readily predictable.

                 Regulation of Federal Savings Associations

General

      As a federal savings bank chartered by the OTS, the Bank is subject
to extensive regulation, examination and supervision by the OTS. The Bank
is also a member of the FHLB System, and its deposit accounts are insured
by the SAIF, which is administered by the FDIC. By virtue of federal
insurance of its deposits, the Bank is also subject to regulation and
supervision by the FDIC, which supervision and regulation is intended
primarily to protect depositors and the SAIF. Certain of these regulatory
requirements are described below or elsewhere herein.

      Business Activities.  The Bank derives its lending and investment
powers from the Home Owners' Loan Act, as amended (the "HOLA"), and the
regulations of the OTS thereunder.  Under these laws and regulations, the
Bank may invest in mortgage loans secured by residential and commercial
real estate, commercial and consumer loans, certain types of debt
securities and certain other assets.  The Bank may also establish service
corporations that may engage in activities not otherwise permissible for
the Bank, including certain real estate equity investments and securities
and insurance brokerage.  These investment powers are subject to various
limitations, including (a) a prohibition against the acquisition of any
corporate debt security that is not rated in one of the four highest rating
categories; (b) a limit of 400% of an association's assets on the aggregate
amount of loans secured by non-residential real estate property; (c) a
limit of 20% of an association's assets on the aggregate amount of
commercial loans, with the amount of commercial loans in excess of 10% of
assets being limited to small business loans; (d) a limit of 35% of an
association's assets on the aggregate amount of consumer loans and
acquisitions of certain debt securities; (e) a limit of 5% of assets on
non-conforming loans (loans in excess of the specific limitations of the
HOLA); and (f) a limit of the greater of 5% of assets or an association's
capital on certain construction loans made for the purpose of financing
what is or is expected to become residential property.

      Loans to One Borrower.  Under the HOLA, savings associations are
generally subject to the same limits on loans to one borrower as are
imposed on national banks.  Generally, under these limits, a savings
association may not make a loan or extend credit to a single or related
group of borrowers in excess of 15% of the association's unimpaired capital
and surplus.  Additional amounts may be lent, not in excess of 10% of
unimpaired capital and surplus, if such loans or extensions of credit are
fully secured by readily-marketable collateral.  Such collateral is defined
to include certain debt and equity securities and bullion, but generally
does not include real estate.

      QTL Test.  The HOLA requires a savings association to meet a
qualified thrift lender, or "QTL" test.  Under the QTL test, a savings
association is required to maintain at least 65% of its "portfolio assets"
in certain "qualified thrift investments" in at least nine months of the
most recent 12-month period.  "Portfolio assets" means, in general, an
association's total assets less the sum of (a) specified liquid assets up
to 20% of total assets, (b) goodwill and other intangible assets, and (c)
the value of property used to conduct the association's business.
"Qualified thrift investments" includes various types of loans made for
residential and housing purposes, investments related to such purposes,
including certain mortgage-backed and related securities, and loans for
personal, family, household and certain other purposes up to a limit of 20%
of an association's portfolio assets.  Additionally, the association may
include 100% of its credit card loans, education loans and small business
loans as "qualified thrift investments."  A savings association may also
satisfy the QTL test by qualifying as a "domestic building and loan
association" as defined in the Internal Revenue Code of 1986.  As of March
31, 1999, the Bank had met the Qualified Thrift Lender test in the
requisite months and expects to continue to operate as a Qualified Thrift
Lender in the future.

      A savings association that fails the QTL test must either operate
under certain restrictions on its activities or convert to a bank charter.
The initial restrictions include prohibitions against (a) engaging in any
new activity not permissible for a national bank, (b) paying dividends not
permissible under national bank regulations, (c) obtaining new advances
from any Federal Home Loan Bank and (d) establishing any new branch office
in a location not permissible for a national bank in the association's home
state.  In addition, within one year of the date that a savings association
ceases to meet the QTL test, any company controlling the association would
have to register under, and become subject to the requirements of, the Bank
Holding Company Act of 1956, as amended (the "BHC Act").  If the savings
association does not requalify under the QTL test within the three-year
period after it failed the QTL test, it would be required to terminate any
activity and to dispose of any investment not permissible for a national
bank and would have to repay as promptly as possible any outstanding
advances from a Federal Home Loan Bank.  A savings association that has
failed the QTL test may requalify under the QTL test and be free of such
limitations, but it may do so only once.

      Enforcement. The OTS, as the primary regulator of savings
institutions, is primarily responsible for the initiation and prosecution
of any enforcement action it may deem to be required, but the FDIC also has
authority to impose enforcement action independently after following
certain procedures. Under FIRREA, civil penalties are classified into three
levels, with amounts increasing with the severity of the violation.

      The OTS has the authority to impose enforcement action on a savings
institution that fails to comply with its regulatory requirements,
particularly with respect to its capital requirements. Possible enforcement
actions include the imposition of a capital plan and termination of deposit
insurance. The FDIC also may recommend that the Director of OTS take
enforcement action. If action is not taken by the Director, the FDIC would
have authority to compel such action under certain circumstances.

      Capital Requirements. Each of the three capital standards applicable
to savings institutions is discussed separately below.

      Tangible Capital Requirement. Each savings institution is required to
maintain tangible capital equal to at least 1.5% of its adjusted total
assets. Tangible capital includes common stockholders' equity (including
retained earnings), certain noncumulative perpetual preferred stock and
related surplus, and minority interests in the equity accounts of fully
consolidated subsidiaries. In computing tangible capital, intangible assets
must, in general, be deducted from an institution's assets and capital, and
mortgage servicing rights may be included within certain limitation on
amount if the rights satisfy certain requirements. In determining
compliance with capital requirements, equity and debt investments in
subsidiaries that are not "includable subsidiaries," which term includes
subsidiaries engaged solely in activities permissible for a national bank,
in activities only as an agent for its customers, or in mortgage-banking
activities, are excluded from an institution's assets and capital. At March
31, 1999, the Bank had no investments in or extensions of credit to
nonincludable subsidiaries, and its tangible capital amounted to
approximately $5,270,000 or 7.40% of its adjusted total assets.

      Core Capital Requirements. Capital requirements also require core
capital equal to at least 4% of an institution's adjusted total assets.
Core capital is defined similarity to tangible capital, but core capital
also includes certain qualifying supervisory goodwill and certain purchased
credit card relationships. At March 31, 1999, the Bank had no supervisory
goodwill and the Bank's core capital amounted to approximately $5,270,000
or 7.40% of its adjusted total assets.

      Risk-Based Capital Requirement.  Each savings institution is also
required to maintain total capital equal to at least 8 % of its risk-
weighted assets. Total capital consists of the sum of core capital and
supplementary capital, provided that supplementary capital cannot exceed
core capital, as previously defined.

      Supplementary capital includes (i) permanent capital instruments such
as cumulative perpetual preferred stock, perpetual subordinated debt, and
mandatory convertible subordinated debt, (ii) maturing capital instruments
such as subordinated debt, intermediate-term preferred stock and mandatory
redeemable preferred stock, subject to an amortization schedule, and (iii)
general valuation loan and lease loss allowances up to 1.25% of risk-
weighted assets.

      In computing both assets and total capital for purposes of the risk-
based capital ratio, the portion of land loans and nonresidential
construction loans in excess of an 80 % loan-to-value ratio and non-
qualifying equity investments are each deducted. At March 31, 1999, the
Bank had no non-qualifying equity investments, excess land loans or
nonresidential construction loans.

      The risk-based capital regulation assigns each balance sheet asset
held by a savings institution to one of four risk categories, which are
based on the amount of credit risk associated with that particular class of
assets. Assets excluded for purposes of calculating capital are excluded in
calculating risk-weighted assets. The risk categories range from 0% for
assets such as cash and securities issued by or backed by the full faith
and credit of, the U.S. Government to 100% for assets such as consumer
loans, repossessed assets or assets more than 90 days past due, and certain
equity investments that have the same risk characteristics as foreclosed as
determined by the OTS. Qualifying residential mortgage loans and qualifying
residential construction loans are assigned a 50% risk weight, while non-
qualifying residential mortgage loans and that portion of land loans and
nonresidential construction loans that do not exceed an 80% loan-to-value
ratio are assigned 100% risk weight.

      The book value of assets in each risk category is multiplied by the
weighing factor (from 0% to 100%) assigned to that category. These products
are then totaled to arrive at total risk-weighted assets. Off-balance sheet
items are included in risk-weighted assets by converting them to an
approximate balance sheet "credit equivalent amount" based on a conversion
schedule. The credit equivalent amounts are then assigned to risk
categories in the same manner as balance sheet assets and included in risk-
weighted assets.

      At March 31, 1999, the Bank's total capital amounted to approximately
$5,674,000 or 13.50% of its total risk-weighted assets.

      When determining its compliance with the risk-based capital
requirement, a savings institution with "above normal" interest rate risk
is required to deduct a portion of its total capital to account for any
"above normal" interest rate risk. An institution's interest rate risk is a
measure of the potential percentage decline in the economic value of its
portfolio equity resulting from a hypothetical 200 basis point increase or
decrease in interest rates (whichever change results in the greater
decline). A savings association whose measured interest rate risk exceeds
2% would be considered to have "above normal" risk. The amount to be
deducted from capital is an amount equal to 50% of its "excess" interest
rate risk exposure (the percentage in excess of 2%) multiplied by the
estimated economic value of its total assets. While the effective date of
the interest rate risk requirement was January 1, 1994, the OTS has
indefinitely deferred implementation of the interest rate risk deduction.
The OTS continues to monitor the interest rate risk of individual
institutions and retains the right to impose additional capital
requirements on individual institutions. The Bank remains in compliance
with its risk-based capital requirements as would be adjusted by the
interest-rate risk component.

      The following table sets forth the various components of the
regulatory capital for the Bank at March 31, 1999.

<TABLE>
<CAPTION>
                               Minimum
                               Required                 Actual              Excess
                          ------------------     --------------------       ------

<S>                       <C>     <C>            <C>       <C>            <C>
Tangible Capital          1.5%    $1,064,000      7.40%    $5,270,000     $4,206,000
Tier 1 (Core) Capital     4.0%    $2,838,000      7.40%    $5,270,000     $2,432,000
Risk-based Capital        8.0%    $3,361,000     13.50%    $5,674,000     $2,313,000
</TABLE>


      Limitation on Capital Distribution.  Effective April 1, 1999, the OTS
amended its capital distribution regulations to reduce regulatory burdens
on savings associations.  The regulations being replaced, which were
effective throughout 1998, established limitations upon capital
distributions by savings associations, such as cash dividends, payments to
repurchase or otherwise acquire its shares, payments to shareholders of
another institution in a cashout merger, and other distributions charged
against capital.  At least 30-days written notice to the OTS was required
for a proposed capital distribution by a savings association, and capital
distributions in excess of specified earnings or by certain institutions
were subject to approval by the OTS.  An association that had capital in
excess of all fully phased in regulatory capital requirements before and
after a proposed capital distribution and that was not otherwise restricted
in making capital distributions, could, after prior notice but without the
approval of the OTS, make capital distributions during a calendar year
equal to the greater of (a) 100% of its net earnings to date during the
calendar year plus the amount that would reduce by half its "surplus
capital ratio" (excess capital over its fully phased in capital
requirements) at the beginning of the calendar year, or (b) 75% of its net
earnings for the previous four quarters.  Any additional capital
distributions would require prior OTS approval.  Under the amendments
adopted by the OTS, certain savings associations will be permitted to pay
capital distributions during a calendar year that do not exceed the
association's net income for that year plus its retained net income for the
prior two years, without notice to, or the approval of the OTS.  However, a
savings association subsidiary of a savings and loan holding company, such
as the Bank, will continue to have to file a notice unless the specific
capital distribution requires an application. In addition, the OTS can
prohibit a proposed capital distribution, otherwise permissible under the
regulation, if the OTS has determined that the association is in need of
more that normal supervision or if it determines that a proposed
distribution by an association would constitute an unsafe or unsound
practice.  Furthermore, under the OTS prompt corrective action regulations,
the Bank would be prohibited from making any capital distribution if, after
the distribution, the Bank failed to meet its minimum capital requirements,
as described above.

      Insurance of Deposits.  The Bank is a member of the SAIF, and the Bank
pays its deposit insurance assessments to the SAIF.  The FDIC also maintains
another insurance fund, the Bank Insurance Fund (the "BIF"), which primarily
insures the deposits of banks and state chartered savings banks.

      Pursuant to FDIC Improvement Act, the FDIC has established a risk-based
assessment system for determining the deposit insurance assessments to be
paid by insured depository institutions.  Under the assessment system, the
FDIC assigns an institution to one of three capital categories based on the
institution's financial information as of the reporting period ending seven
months before the assessment period.  The three capital categories consist of
(a) well capitalized, (b) adequately capitalized, or (c) undercapitalized.
The FDIC also assigns an institution to one of three supervisory
subcategories within each capital group.  The supervisory subgroup to which
an institution is assigned is based on a supervisory evaluation provided to
the FDIC by the institution's primary federal regulator and information that
the FDIC determines to be relevant to the institution's financial condition
and the risk posed to the deposit insurance funds.  An institution's
assessment rate depends on the capital category and supervisory category to
which it is assigned.  Under the regulation, there are nine assessment risk
classifications (i.e., combinations of capital groups and supervisory
subgroups) to which different assessment rates are applied. Assessment  rates
currently range from 0.0% of deposits for an institution in the highest
category (i.e., well-capitalized and financially sound, with no more than a
few minor weaknesses) to 0.27% of deposits for an institution in the lowest
category (i.e., undercapitalized and substantial supervisory concern).  The
FDIC is authorized to raise the assessment rates as necessary to maintain the
required reserve ratio of 1.25%.  As a result of the Deposit Insurance Funds
Act of 1996 (the "Funds Act"), both the BIF and the SAIF currently satisfy
the reserve ratio requirement.  If the FDIC determines that assessment rates
should be increased, institutions in all risk categories could be affected.
The FDIC has exercised this authority several  times in the  past and could
raise insurance assessment rates in the future.  If such action is taken by
the FDIC, it could have an adverse effect on the earnings of the Bank.

      The Funds Act also amended the FDIA to expand the assessment base for
the payments on the FICO bonds.  Beginning January 1, 1997, the assessment
base for the FICO bonds included the deposits of both BIF- and SAIF- insured
institutions.  Until December 31, 1999, or such earlier date on which the
last savings association ceases to exist, the rate of assessment for BIF-
assessable deposits shall be one-fifth of the rate imposed on SAIF-assessable
deposits. The annual rate of assessment on SAIF-assessable deposits for the
payments on FICO bonds for the first, second, third and forth quarters of
fiscal 1999 were 0.0622%, 0.0610%, 0.0582% and 0.0640%, respectively.

      Under the FDI Act, insurance of deposits may be terminated by the FDIC
upon a finding that the institution has engaged in unsafe or unsound
practices, is in an unsafe or unsound condition to continue operations or has
violated any applicable law, regulation, rule, order or condition imposed by
the FDIC or the OTS.   The management of the Bank does not know of any
practice, condition or violation that might lead to termination of deposit
insurance.

      An insured institution is subject to periodic examination, and
regulators may revalue the assets of an institution, based upon appraisals,
and require establishment of specific reserves in amounts equal to the
difference between such revaluation and the book value of the assets.  SAIF
insurance of deposits may be terminated by the FDIC, after notice and
hearing, upon a finding by the FDIC that a savings institution has engaged in
an unsafe or unsound practice, or is in unsafe or unsound condition to
continue operations, or has violated any applicable law, regulation, rule,
order or condition imposed by the OTS or the FDIC.  Management of the Bank is
not aware of any practice, condition or violation that might lead to
termination of its deposit insurance.

Year 2000

      The Holding Company has conducted a review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue and
has developed a plan to resolve the issue.  The Year 2000 issue is the
result of computer programs being written using two digits rather than four
to define the applicable year.  Any of the Holding Company's programs that
have time-sensitive software may recognize a date using "00" as year 1900
rather than the year 2000. This could result in a major system failure or
miscalculations.  The Holding Company has adopted the regulatory plan to
address this issue which has five phases.  The Company has substantially
completed the first four phases and is currently working on the
implementation phase.  The following is a brief synopsis of each phase:

1)    Awareness Phase - This phase consists of defining the Year 2000
      problem and developing a strategy that encompasses all of the Bank's
      and Holding Company's vendor systems.  This phase has been completed
      by the institution.

2)    Assessment Phase - This phase consists of assessing the Year 2000
      problem and detailing the steps necessary to address the issue.  This
      phase must identify all software, hardware, other miscellaneous
      items, and customer and vendor interdependencies affected by the Year
      2000 issue.  While this phase is complete, management recognizes that
      other issues could arise that would need to be assessed.

3)    Renovation Phase - This phase includes upgrades to hardware and
      software, system upgrades, vendor certifications, and other
      associated changes.  For those applications handled by an outside
      vendor, management  has had ongoing discussions about how they are
      addressing this issue, and we will continue to monitor their
      progress.

4)    Validation Phase - This phase consists of testing all hardware and
      software to ensure that it is compatible with our system.  In
      addition to testing components, connections with other systems must
      be verified, and all changes should be accepted by internal and
      external users. Management has established controls to assure the
      effective and timely completion of all hardware and software testing
      prior to final implementation.

      As with the renovation phase, the Company will be in ongoing
      discussions with its vendors on the success of their validation
      efforts.  The Company has completed the testing all of its critical
      systems and has completed this phase.

5)    Implementation Phase - During the final phase, all systems should be
      certified as Year 2000 compliant.  Any systems that fail
      certification must be addressed and contingency plans must be
      implemented to ensure continuity.  In addition, all new systems and
      changes to existing systems must be verified as Year 2000 compliant.
      The Holding Company anticipates completion of this phase by June 30,
      1999.

      The Holding Company presently believes that because of the conversion
to new software in fiscal 1997, the Year 2000 will not pose significant
operational problems for the Holding Company's and the Bank's computer
system and it does not anticipate any further material costs to be
incurred.  Also, the Bank's loan portfolio is not significantly
concentrated with any single borrower (at March 31, 1999, the largest
commercial loan relationship approximated $749,000) and consists largely of
loans secured by real estate.  These factors help mitigate Year 2000 risks
pertaining to the valuation of the loan portfolio; however, the Bank is
currently contacting its significant loan customers regarding their Year
2000 efforts.  In addition, the Company has developed a contingency plan in
case any systems or key vendors are not operational after the year 2000.
This plan will be continually reviewed and revised to address all critical
systems.  It should also be noted that the Bank's regulatory agency, the
Office of Thrift Supervision, has been monitoring, and plans to continue
monitoring, the Bank's progress in addressing Year 2000 matters.  To date
the Bank has spent approximately $27,000 on the Year 2000 issue primarily
due to the purchase of computer hardware, related installation cost and
overtime for key employees and anticipates that it may spend an additional
$15,000 in the future.


                                  TAXATION

Federal Taxation

      General. The Holding Company and the Bank will report their income on
the basis of a taxable year ending March 31 using the accrual method of
accounting and will be subject to federal income taxation in the same
manner as other corporations with some exceptions. The following discussion
of tax matters is intended only as a summary and does not purport to be a
comprehensive description of the tax rules applicable to the Bank or the
Holding Company.

      Tax Legislation Regarding Tax Bad Debt Reserves. Prior to the
enactment, on August 20, 1996, of the Small Business Job Protection Act of
1996 (the "Small Business Act"), for federal income tax purposes, thrift
institutions such as the Bank, which met certain definitional tests
primarily relating to their assets and the nature of their business, were
permitted to establish tax reserves for bad debts and to make annual
additions thereto, which additions could, within specified limitations, be
deducted in arriving at their taxable income. The Bank's deduction with
respect to "qualifying loans," which are generally loans secured by certain
interests in real property, could be computed using an amount based on a
six-year moving average of the Bank's actual loss experience (the
"Experience Method"), or a percentage equal to 8.0% of the Bank's taxable
income (the "PTI Method"), computed without regard to this deduction and
with additional modifications and reduced by the amount of any permitted
addition to the non-qualifying reserve.

      Under the Small Business Act, the PTI Method was repealed and the
Bank, as a "small bank" (one with assets having an adjusted basis of $500
million or less), is required to use the Experience Method of computing
additions to its bad debt reserve for taxable years beginning with the
Bank's taxable year beginning April 1, 1996. In addition, the Bank will be
required to recapture (i.e., take into taxable income) over a six-year
period, beginning with the Bank's taxable year beginning April 1, 1996, the
excess of the balance of its bad debt reserves (other than the supplemental
reserve) as of March 31, 1996 over the greater of (a) the balance of its
"base year reserve," i.e., its reserves as of March 31, 1988 or (b) an
amount that would have been the balance of such reserves as of March 31,
1996 had the Bank always computed the additions to its reserves using the
Experience Method. However, such recapture requirements were suspended for
each of the two successive taxable years beginning April 1, 1996 in which
the Bank originates a minimum amount of certain residential loans during
such years that is not less than the average of the principal amounts of
such loans made by the Bank during its six taxable years preceding April 1,
1996. Since the Bank has already provided a deferred income tax liability
related to this for financial reporting purposes, there will be no adverse
impact to the Bank's financial condition or results of operations from the
enactment of this legislation.

      Distributions. To the extent that the Bank makes "nondividend
distributions" to shareholders, such distributions will be considered to
result in distributions from the Bank's base year reserve and then from its
supplemental reserve for losses on loans, and an amount based on the amount
distributed will be included in the Bank's taxable income. Nondividend
distributions include distributions in excess of the Bank's current and
accumulated earnings and profits, distributions in redemption of stock and
distributions in partial or complete liquidation.  However, dividends paid
out of the Bank's current or accumulated earnings and profits, as
calculated for federal income tax purposes, will not constitute nondividend
distributions and, therefore, will not be included in the Bank's income.

      The amount of additional taxable income created from a nondividend
distribution is an amount that, when reduced by the tax attributable to the
income, is equal to the amount of the distribution. Thus, approximately one
and one-half times the nondividend distribution would be includable in
gross income for federal income tax purposes, assuming a 34% federal
corporate income tax rate. The Bank does not intend to pay dividends that
would result in a recapture of any portion of its tax bad debt reserve.

      Corporate Alternative Maximum Tax. The Internal Revenue Code (the
"Code") imposes a tax on alternative minimum taxable income ("AMTI") at a
rate of 20% . AMTI is increased by certain preference items.  Only 90% of
AMTI can be offset by net operating losses. AMTI is also adjusted by
determining the tax treatment of certain items in a manner that negates the
deferral of income resulting from the regular tax treatment of those items.
Thus, the Bank's AMTI is increased by an amount equal to 75% of the amount
by which the Bank's adjusted current earnings exceeds its AMTI (determined
without regard to this adjustment and prior to reduction for net operating
losses).   The Bank does not expect to be subject to the AMT.

      Dividends-Received Deduction and Other Matters. The Holding Company
may exclude from its income 100% of dividends received from the Bank as a
member of the same affiliated group of corporations. The corporate
dividends-received deduction is generally 70% in the case of dividends
received from unaffiliated corporations with which the Holding Company and
the Bank will not file a consolidated tax return, except that if the
Holding Company or the Bank owns more than 20% of the stock of a
corporation distributing a dividend, then 80% of any dividends received may
be deducted.

      The Bank's federal income tax returns were audited by the IRS for the
years ended March 31, 1992 and 1993.

Maine State Taxation

      The State of Maine imposes a franchise tax on banks, such as
Waldoboro, doing business in Maine. The tax is comprised of two components.
The first component is a 1% tax on Maine net income as reported on such
bank's federal income tax return. The amount represents net book income
after reduction for federal and state income and franchise taxes. The
second component is a tax of $.08 per $1,000 of assets at the end of the
year as reported on Schedule L of the Bank's federal income tax return.

Forward Looking Statements

      Certain statements contained herein are not based on historical facts
and are "forward-looking statements" within the meaning of Section 21A of
the Securities Exchange Act of 1934.  Forward-looking statements which are
based on various assumptions (some of which are beyond the Company's
control), may be identified by reference to a future period or periods, or
by the use of forward-looking terminology, such as "may," "will,"
"believe," "expect," "estimate," "anticipate,"  "continue," or similar
terms or variations on those terms, or the negative of these terms.  Actual
results could differ materially from those set forth in forward looking
statements due to a variety of factors, including, but not limited to,
those related to the economic environment, particularly in the market areas
in which the company operates, competitive products and pricing, fiscal and
monetary policies of the U.S. Government, changes in government regulations
affecting financial institutions, including regulatory fees and capital
requirements, changes in prevailing interest rates, acquisitions and the
integration of acquired businesses, credit risk management, asset-liability
management, the financial and securities markets and the availability of
and costs associated with sources of liquidity.

      The Company does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions that may be
made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.

Item 2.  Description of Property

      The Holding Company neither owns nor leases any real property. It
presently uses the premises, equipment and furniture of Waldoboro without
direct payment of any rental fees to the Bank. The Bank conducts its
business out of its offices in Waldoboro, Rockland, Belfast and Jefferson.
The office buildings in Waldoboro and Rockland are owned by the Bank and
provide full-service banking with ample parking and are conveniently
located on Route One. The Belfast office is leased space, offering full
service and is conveniently located on U.S. Route Three.  The Jefferson
office is leased space located in the village of Jefferson on Route 32.

      The following table sets forth certain information with respect to
the Bank's offices in Waldoboro and Rockland.

<TABLE>
<CAPTION>
Location                        Year Occupied/Opened     Owned(1)
-----------------------------------------------------------------

<S>                                     <C>              <C>
Principal Executive Offices             1988             $783,028
1768 Atlantic Highway
P.O. Box 589
Waldoboro, Maine

Rockland Branch Office                  1995             $440,776
73 Camden Street
P.O. Box 669
Rockland, Maine

<FN>
<F1>  Includes the building and land net of depreciation.
</FN>
</TABLE>


Item 3.  Legal Proceedings

      From time to time, the Holding Company and the Bank are involved in
routine litigation stemming from the operations of the Bank. During the
fiscal year ended March 31, 1999, however, there was no material litigation
pending to which the Holding Company or the Bank was a party or of which
the property of the Holding Company or the Bank was the subject.

Item 4.  Submission of Matters to a Vote of Security Holders

      During the fourth quarter of fiscal year ended March 31, 1999, there
was no matter that was submitted to a vote of the stockholders.

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

      On March 31, 1999, there were 715,457 shares of the Holding Company's
Common Stock outstanding held by approximately 395 holders of record.  Also
at such date, the Holding Company had granted options to purchase 8,749
shares of the Holding Company's Common Stock.

      The following table shows market price information for the Holding
Company's Common Stock.  The prices set forth below represent the high and
low bid prices of the Holding Company's stock during the periods indicated.
Such over the counter market quotations reflect inter-dealer prices,
without retail markup, mark-down or commission and may not necessarily
represent actual transactions.  The Holding Company's common stock is
traded on the Nasdaq SmallCap Market under the symbol "MCBN."

<TABLE>
<CAPTION>
                                                Cash
                                              Dividends
                                              Paid per
Quarter Ended          High(1)     Low(1)     Share(1)
-------------------------------------------------------

<S>                    <C>         <C>         <C>
March 31, 1997         $ 6.33      $ 6.33      $  ---
June 30, 1997            6.50        6.17       0.086
September 30, 1997       9.33        7.00         ---
December 31, 1996       10.83        8.83       0.086

March 31, 1998         $14.00      $12.83         ---
June 30, 1998           12.25       11.50        0.10
September 30, 1998       9.75        8.50         ---
December 31, 1998        9.75        7.00        0.10

March 31, 1999         $10.00      $ 7.00      $  ---


<FN>
<F1>  All figures adjusted to reflect 3 for 1 stock split that took effect
      in 1998.
</FN>
</TABLE>

      On April 14, 1999 the Holding Company declared a dividend of $.10 per
share to Stockholders of record on June 1, 1999 and payable June 30, 1999.
See "Regulation - Dividends" for information about the Holding Company's
ability to pay dividends.

Item 6.  Management's Discussion and Analysis.

      Management's Discussion and Analysis, on Pages 2 through 14 of the
1999 Annual Report to Shareholders for the year ended March 31, 1999, is
incorporated herein by reference.

Item 7.  Financial Statements.

      See Item 13 for index to Financial Statements which are incorporated
by reference from pages F-1 through F-30 of the 1999 Annual Report to
Shareholders.

Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

      Not applicable.

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.

      The following information included on pages 4, 5, 7 and 8 of the
Holding Company's Proxy Statement for the 1999 Annual Meeting of
Shareholders (the "Proxy Statement") is incorporated herein by reference:
"Proposal 1- Election of Directors," "Directors Who Will Continue in Office
After the Meeting," "Executive Officers Who Are Not Directors" and
"Compliance with Section 16(a) of the Act."

Item 10. Executive Compensation.

      The following information included on pages 6 through 12 of the Proxy
Statement is incorporated herein by reference:  "The Board of Directors and
Its Committees," "Executive Compensation," "Employment Agreement," "Pension
Plan," "Stock Option Plan" and "Recognition and Retention Plan."

Item 11. Security Ownership of Certain Beneficial Owners and Management.

      Information regarding security ownership of certain beneficial owners
and management on Pages 2 and 3 of the Proxy Statement dated June 18, 1999
is incorporated herein by reference.

Item 12. Certain Relationships and Related Transactions.

      Information regarding certain relationships and related transactions
on Page 9 of the Proxy Statement dated June 18, 1999 is incorporated herein
by reference.

Item 13. Exhibits and Reports on Form 8-K.

      A)    1)    The following financial statements, the report thereon
                  and notes thereto, which follow, are incorporated by
                  reference in Item 7 and are incorporated by reference
                  herein from the Holding Company's 1999 Annual Report to
                  Stockholders:

                                                            Pages in Annual
                                                                     Report

      Report of Independent Auditors                                    F-1

      Consolidated Balance Sheets,
      March 31, 1999 and 1998                                   F-2 to F -3

      Consolidated Statements of Income, Years Ended
       March 31, 1999, 1998 and 1997                                  F - 4

      Consolidated Statements of Changes in Stockholders'
       Equity, Years Ended March 31, 1999, 1998 and 1997              F - 5

      Consolidated Statements of Cash Flows, Years Ended
       March 31, 1999, 1998 and 1997                            F-6 to F -7

      Notes to Consolidated Financial Statements             F- 8 to F - 30


            2)    The Holding Company did not file any reports on Form 8-K
                  during the last quarter of the period covered by this
                  report.


      Exhibit No.

      3(i)   Certificate of Incorporation (previously filed on June 26,
             1996 as an exhibit to the Holding Company's Form 10-KSB for
             the year ended March 31, 1996, and incorporated herein by
             reference).

      3(ii)  Bylaws (previously filed on June 26, 1996 as an exhibit to the
             Holding Company's Form 10-KSB for the year ended March 31,
             1996, and incorporated herein by reference).

      10.1   Employment Agreement dated May 18, 1993 between Wesley E.
             Richardson, the Holding Company and the Bank (previously filed
             on June 26, 1996 as an exhibit to the Holding Company's Form
             10-KSB for the year ended March 31, 1996, and incorporated
             herein by reference).

      10.2   Regulation and Retention Plan of Mid-Coast Bancorp, Inc.
             (previously filed on June 7, 1997, as Appendix A with the
             Company's Proxy Statement and incorporated herein by
             reference).

      13     Annual Report to the Shareholders for the year ended March 31,
             1999.

      21     Subsidiaries of Issuer (previously filed on June 26, 1996 as
             an exhibit to the Holding Company's Form 10-KSB for the year
             ended March 31, 1996 and incorporated herein by reference).

      23     Consent of Baker Newman & Noyes, LLC.

      27     Financial Data Schedules.


                                 SIGNATURES
                                 ----------

      In accordance with the requirements of The Exchange Act, the
registrant has caused this report to be signed on its behalf by the
undersigned, there unto duly authorized..

                                       MID-COAST BANCORP, INC.


      June 25, 1999                    By: /s/ WESLEY E. RICHARDSON
                                           ------------------------
                                         Wesley E. Richardson, President,
                                         Chief Executive Officer and Treasurer

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
         Signatures                           Title                      Date
         ----------                           -----                      ----

<S>                              <C>                                 <C>
By: /s/ WESLEY E. RICHARDSON     President, Chief Executive          June 25, 1999
    ------------------------     Officer, Treasurer and Director     -------------
    Wesley E. Richardson

By: /s/ WAITE W. WESTON          Director and Chairman               June 25, 1999
    ------------------------                                         -------------
    Waite W. Weston

By: /s/ ROBERT W. SPEAR          Director and Vice Chairman          June 25, 1999
    ------------------------                                         -------------
    Robert W. Spear

By:                              Director                            June 25, 1999
    ------------------------                                         -------------
    Sharon Crowe

By: /s/ RONALD DOLLOFF           Director                            June 25, 1999
    ------------------------                                         -------------
    Ronald Dolloff

By: /s/ SAMUEL COHEN             Director                            June 25, 1999
    ------------------------                                         -------------
    Samuel Cohen

By:                              Director                            June 25, 1999
    ------------------------                                         -------------
    Lincoln Orff

By:                              Director                            June 25, 1999
    ------------------------                                         -------------
    Peter Van Alstine

By:                              Director                            June 25, 1999
    ------------------------                                         -------------
    George Seaver
</TABLE>