UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549



                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995

                           COMMISSION FILE NO. 0-11786



                              VILLAGE BANCORP, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


         CONNECTICUT                                         06-1076844
-------------------------------                     ----------------------------
(State or other jurisdiction of                            (IRS Employer
incorporation or organization)                         Identification Number)


             25 PROSPECT STREET    RIDGEFIELD, CONNECTICUT   06877
--------------------------------------------------------------------------------
              (Address of principal executive offices and Zip Code)


Registrant's telephone number, including area code    (203) 438-9551
                                                   -----------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                          YES   X        NO
                              -----         -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.



            CLASS                               OUTSTANDING AT OCTOBER 31, 1995
------------------------------                  --------------------------------
 COMMON STOCK, $3.33 PAR VALUE                           946,633 SHARES



<PAGE>



                              VILLAGE BANCORP, INC.

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------

PART  I.  FINANCIAL INFORMATION:


  ITEM 1.  Financial Statements

    Condensed Consolidated Balance Sheets
      September 30, 1995 and December 31, 1994 (unaudited) .................   1

    Condensed Consolidated Statements of Income For The
      Three Months Ended September 30, 1995 and 1994 (unaudited)
      Nine Months Ended September 30, 1995 and 1994 (unaudited) ............   2

    Condensed Consolidated Statements of Cash Flows For The
      Nine Months Ended September 30, 1995 and 1994 (unaudited) ............   3

    Notes to Condensed Consolidated Financial Statements
      (unaudited) ..........................................................   4


  ITEM 2.  Management's Discussion and Analysis of Financial
      Condition  and Results of  Operations ................................   7



PART II.  OTHER INFORMATION:


  ITEM 1.  Legal Proceedings ...............................................  11

  ITEM 2.  Changes in Securities ...........................................  11

  ITEM 3.  Defaults Upon Senior Securities .................................  11

  ITEM 4.  Results of votes of Security Holders ............................  11

  ITEM 5.  Other Information ...............................................  11

  ITEM 6.  (a).  Exhibits ..................................................  11

           (b).  Reports on Form 8-K .......................................  11


SIGNATURES .................................................................  12



<PAGE>



VILLAGE BANCORP, INC.

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


PART  I. - FINANCIAL INFORMATION



<PAGE>



VILLAGE BANCORP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
--------------------------------------------------------------------------------

ASSETS                                          Sept. 30, 1995     Dec. 31, 1994
                                                --------------     -------------
                                               (In thousands, except share data)

Cash and due from banks                            $   8,042        $   9,643
Federal funds sold                                     4,600            3,250
                                                   ---------        ---------
Total cash and cash equivalents                       12,642           12,893
                                                                
Securities:                                                     
  Available-for-sale (at fair value)                  14,898           11,509
  Held-to-maturity (market value of                             
  $14,555 at Sept. 30, 1995 and $23,645 at                      
  December 31, 1994)                                  14,499           24,308
                                                                
Loans, net of deferred loan fees - Note C            120,272          106,325
Allowance for loan losses                             (1,275)          (1,551)
                                                   ---------        ---------
Loans - net                                          118,997          104,774
                                                                
Loans held for sale                                      125             --
Bank premises and equipment - net                      1,596            1,636
Accrued interest and other assets                      1,928            2,121
                                                   ---------        ---------
                                                                
TOTAL ASSETS                                       $ 164,685        $ 157,241
                                                   =========        =========
                                                                
                                                                
LIABILITIES AND STOCKHOLDERS' EQUITY                            
                                                                
Deposits:                                                       
   Noninterest bearing                             $  15,595        $  16,023
   Interest bearing                                  133,714          127,398
                                                   ---------        ---------
   Total deposits                                    149,309          143,421
                                                                
Accrued interest payable                               1,076              339
Other liabilities                                        498              427
                                                   ---------        ---------
                                                                
   Total liabilities                                 150,883          144,187
                                                   ---------        ---------
                                                                
Stockholders' Equity:                                           
   Common stock, par value $3.33 per share;                     
     authorized - 2,000,000 shares, issued                      
     and outstanding, 946,633 at Sept. 30,                      
     1995 and 946,949 at December 31, 1994             3,152            3,153
   Additional paid-in capital                          7,963            7,959
   Retained earnings                                   2,705            2,099
   Net unrealized losses on available-                          
     for-sale securities                                 (18)            (157)
                                                   ---------        ---------
                                                                
   Total stockholders' equity                         13,802           13,054
                                                   ---------        ---------
                                                                
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 164,685        $ 157,241
                                                   =========        =========
                                                              

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                               - 1 -



<PAGE>



VILLAGE BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED    NINE MONTHS ENDED
                                                    SEPT. 30,            SEPT. 30,
                                                1995       1994       1995       1994
                                                ----       ----       ----       ----
                                                (In thousands, except per share data)

<S>                                            <C>        <C>        <C>        <C>   
INTEREST INCOME:
   Loans, including fees                       $2,665     $1,973     $7,512     $5,569
   Investment securities:
     Taxable                                      386        462      1,229      1,346
     Tax-exempt                                    28         26         84         74
   Federal funds sold                             140         50        300        173
                                               ------     ------     ------     ------

   Total interest income                        3,219      2,511      9,125      7,162

INTEREST EXPENSE ON DEPOSITS                    1,282        717      3,370      2,115
                                               ------     ------     ------     ------

NET INTEREST INCOME                             1,937      1,794      5,755      5,047

PROVISION FOR LOAN LOSSES                          75         34        180        137
                                               ------     ------     ------     ------

NET INTEREST INCOME AFTER PROVISION
   FOR LOAN LOSSES                              1,862      1,760      5,575      4,910
                                               ------     ------     ------     ------

OTHER INCOME:
   Security gains/(losses) - net                   (8)        --         (2)        --
   Other operating income                         118        149        383        571
                                               ------     ------     ------     ------
   Total other income                             110        149        381        571
                                               ------     ------     ------     ------
OTHER EXPENSES:
   Salaries and employee benefits                 714        691      2,261      2,157
   Net occupancy                                  137        130        406        393
   Furniture and equipment                         69         71        211        222
   Data processing services                       129        110        358        318
   Regulatory assessments                          (5)        87        129        253
   Printing, stationery and supplies               56         51        157        120
   Other operating expenses                       299        341        830        964
                                               ------     ------     ------     ------
   Total other expenses                         1,399      1,481      4,352      4,427
                                               ------     ------     ------     ------

INCOME BEFORE PROVISION FOR INCOME TAXES          573        428      1,604      1,054
PROVISION FOR INCOME TAXES                        255        232        685        525
                                               ------     ------     ------     ------

NET INCOME                                     $  318     $  196     $  919     $  529
                                               ======     ======     ======     ======

PER SHARE DATA - Note E:
Cash dividends declared                        $  .11     $  .11     $  .33     $  .52
Net income                                     $  .34     $  .21     $  .97     $  .56
Number of shares outstanding                   946,633    942,609    946,633    942,609
</TABLE>


SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.





                               - 2 -



<PAGE>



VILLAGE BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
--------------------------------------------------------------------------------
                                                                 Nine Months
                                                              Ended Sept. 30,
                                                              1995       1994
                                                              ----       ----
OPERATING ACTIVITIES:                                          (In thousands)

Net income                                                 $    919    $    529
Adjustments to reconcile net income to net cash
 provided by operating activities:
   Provision for loan losses                                    180         137
   Provision for depreciation and amortization                  194         185
   Accretion of investment security
     premiums/discounts - net                                  (118)        (79)
   Net (decrease) increase in deferred loan fees                (51)        155
   Increase in interest payable                                 737          25
   Decrease in accrued income and other assets                  193         333
   Increase in other liabilities                                 71          48
   Origination of loans for sale                             (2,016)     (6,933)
   Proceeds from sales of loans                               1,891       7,921
                                                           --------    --------

Net cash provided by operating activities                     2,000       2,321
                                                           --------    --------

INVESTING ACTIVITIES:

Proceeds from sales of available-for-sale securities          5,335        --
Proceeds from maturities of available-for-sale securities     2,483       7,266
Proceeds from maturities of held-to-maturity securities       9,819      17,059
Purchases of available-for-sale securities                  (10,614)     (2,886)
Purchases of held-to-maturity securities                       (347)    (10,671)
Net increase in loans                                       (14,352)     (8,797)
Purchases of premises and equipment                            (154)        (66)
                                                           --------    --------

Net cash (used)/provided by investing activities             (7,830)      1,905
                                                           --------    --------

FINANCING ACTIVITIES:

Net increase (decrease) in deposits                           5,888      (6,428)
Cash dividends                                                 (312)       (449)
Net proceeds from issuance of common stock                        3          11
                                                           --------    --------
Net cash provided/(used) by financing activities              5,579      (6,866)
                                                           --------    --------

DECREASE IN CASH AND CASH EQUIVALENTS                          (251)     (2,640)
                                                           --------    --------

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                 12,893      13,911
                                                           --------    --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                   $ 12,642    $ 11,271
                                                           ========    ========

SUPPLEMENTAL CASH FLOW DISCLOSURES:
   Interest paid on deposits                                 $2,633      $2,090
   Income tax payments                                          615         453
   Net unrealized loss on securities held-for-sale              139          90


SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                               - 3 -



<PAGE>



VILLAGE BANCORP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
--------------------------------------------------------------------------------


NOTE A - BASIS OF PRESENTATION

In the opinion of management,  the accompanying unaudited condensed consolidated
financial  statements  reflect all  adjustments  necessary,  consisting  only of
normal recurring accruals, to present fairly the financial position, the results
of  operations,  cash flows and the  changes in  financial  position  of Village
Bancorp, Inc. ("Company") for the periods presented.

Prior to November 18, 1994,  Village Bancorp was a one bank holding company with
The Village Bank & Trust  Company  ("Village")  being it's sole  subsidiary.  On
November 18, 1994, the Company acquired Liberty National Bank  ("Liberty").  The
transaction  was  accounted  for  using  the  pooling-of-interests   method  and
accordingly, all historical financial data was restated to include both entities
for the  appropriate  periods  presented.  On June 20, 1995,  the Company merged
Liberty into Village and now operates Liberty's former office as a branch office
of  Village.  As of  September  30,  1995,  the Company is once again a one bank
holding company.

While management believes that the disclosures  presented are adequate so as not
to make  the  information  misleading,  it is  suggested  that  these  financial
statements be read in conjunction with the consolidated financial statements and
notes included in the Company's 1994 annual report.

Statement of Financial  Accounting  Standards  (SFAS) No. 114,  "Accounting  for
Impairment of a Loan," as amended by SFAS No. 118  "Accounting  by Creditors for
Impairment of a Loan - Income  Recognition and  Disclosures," was adopted by the
Company as of January 1, 1995 and requires  recognition  of an  impairment  of a
loan when it is  probable  that either the  principal  and/or  interest  are not
collectible in accordance with the terms of the loan  agreement.  Measurement of
the  impairment is based on the present value of expected cash flows  discounted
at the  loan's  effective  rate or,  as a  practical  expedient,  at the  loan's
observable  market  price or the fair  value  of the  collateral  if the loan is
collateral-dependent.  The  impact  on the  Company's  books as a result  of the
implementation  of SFAS No. 114 was not material.  Prior to 1995,  the allowance
for credit losses related to impaired loans was based on undiscounted cash flows
or the fair value of the collateral  for  collateral-dependent  loans.  Prior to
adoption,  the bank  generally  has  applied  payments  on  impaired  loans as a
reduction of principal and will continue to do so.

At September  30, 1995,  the recorded  investment in loans  considered  impaired
under SFAS No. 114 was approximately  $221,000.  Each impaired loan, as defined,
has been evaluated to measure the impairment in accordance  with this statement.
Accordingly, reserves have been established where necessary resulting in a total
allowance for credit losses related to impaired loans of $33,000 as of September
30,  1995.  For the period  ending  September  30,  1995,  the  interest  income
recognized by the Company on impaired loans was not material.



                               - 4 -



<PAGE>



VILLAGE BANCORP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
--------------------------------------------------------------------------------


NOTE B - SECURITIES


The amortized cost and the approximate fair values of securities were as follows
(in thousands):
                                                     September 30. 1995
                                             -----------------------------------
                                             Amortized   Unrealized       Fair
                                                Cost     Gain/(Loss)      Value
                                             ---------   -----------     -------
SECURITIES HELD-TO-MATURITY
U.S. Treasury Securities                      $ 6,572      $    73       $ 6,645
U.S. Government Agency                          5,535          (45)        5,490
Mortgage-backed securities of
  U.S. Government agencies                         74            3            77
Obligations of states and
  political subdivision                         2,318           25         2,343
                                              -------      -------       -------
TOTAL                                         $14,499      $    56       $14,555
                                              =======      =======       =======

SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury Securities                      $10,700      $     3       $10,703
U.S. Government Agency                          3,016           31         3,047
Mortgage-backed securities of
  U.S. Government agencies                      1,088          (49)        1,039
Corporate securities                               50           --            50
Other                                              62           (3)           59
                                              -------      -------       -------
TOTAL                                         $14,916      $   (18)      $14,898
                                              =======      =======       =======

                                                      December 31, 1994
                                             -----------------------------------
                                             Amortized   Unrealized       Fair
                                                Cost     Gain/(Loss)      Value
                                             ---------   -----------     -------

SECURITIES HELD-TO-MATURITY
U.S. Treasury Securities                      $15,340      $  (176)      $15,164
U.S. Government Agency                            249           --           249
Mortgage-backed securities of
  U.S. Government agencies                      6,396         (391)        6,005
Obligations of states and
  political subdivision                         2,323          (96)        2,227
                                              -------      -------       -------
TOTAL                                         $24,308      $  (663)      $23,645
                                              =======      =======       =======

SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury Securities                      $ 6,749      $   (17)      $ 6,732
Mortgage-backed securities of
  U.S. Government agencies                      4,641         (136)        4,505
Corporate securities                              176           --           176
Other                                             100           (4)           96
                                              -------      -------       -------
TOTAL                                         $11,666      $  (157)      $11,509
                                              =======      =======       =======



                               - 5 -



<PAGE>



VILLAGE BANCORP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
(Continued)
--------------------------------------------------------------------------------

At  September  30, 1995 and December  31, 1994  securities  with a book value of
$100,000 and $351,000,  respectively, were pledged to secure public deposits and
for other purposes as required or permitted by law and banking regulation.


NOTE C - LOANS
                                                 Sept. 30, 1995    Dec. 31, 1994
                                                 --------------    -------------
                                                         (In thousands)

Real estate                                        $  98,070        $  89,910
Commercial and financial                              12,234            8,657
Installment and consumer credit                       10,298            8,139
Deferred loan fees                                      (330)            (381)
                                                   ---------        ---------

TOTAL                                              $ 120,272        $ 106,325
                                                   =========        =========


NOTE D - STANDBY LETTERS OF CREDIT

On September 30, 1995, standby letters of credit totaled $2,181,000.


NOTE E - STOCKHOLDERS' EQUITY

A $.11  per  share  cash  dividend  was  distributed  on  February  4,  1994  to
stockholders  of record on January 19, 1994. A $.19 per share cash  dividend was
distributed  February 28, 1994 to stockholders of record on February 15, 1994. A
$.11 per share cash  dividend was  distributed  May 6, 1994 to  stockholders  of
record on April 22, 1994. A $.11 per share cash dividend was distributed  August
5, 1994 to stockholders of record on July 22, 1994.

A $.11 per share cash dividend was distributed  February 3, 1995 to stockholders
of record on January 23,  1995. A $.11 per share cash  dividend was  distributed
May 5, 1995 to  stockholders  of record on April 26, 1995. A $.11 per share cash
dividend was  distributed  August 4, 1995 to  stockholders of record on July 25,
1995.


NOTE F - NEW OFFICE

The Village Bank & Trust  Company has  announced  plans to build a 17,000 square
foot building on Parcel 3 of the Danbury  Redevelopment  Area on National Place,
in Danbury,  Connecticut.  The Bank's  intent is to open a ground  floor  branch
office and to move the Bank's back office  operations to the second floor of the
building. Applications have been submitted to the State of Connecticut, the FDIC
and the City of Danbury. All necessary approvals are expected by year end.



                               - 6 -



<PAGE>



VILLAGE BANCORP, INC.

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

GENERAL

Village  Bancorp,  Inc.  ("Company"),  prior to November 18, 1994 was a one bank
holding  company,  with The Village Bank & Trust Company  ("Village")  being its
sole  subsidiary.  On November 18, 1994, the Company  acquired  Liberty National
Bank    ("Liberty").    The    transaction   was   accounted   for   using   the
pooling-of-interests  method and accordingly,  all historical financial data was
restated to include both entities for the appropriate periods presented. On June
20, 1995, the Company merged LNB into Village and now operates  Liberty's former
office as a branch office of Village.  As of September 30, 1995,  the Company is
once again a one bank holding company.

The Company had total assets of $164,685,000 on September 30, 1995 in comparison
to total assets of  $157,241,000  on December  31, 1994.  This is an increase of
$7,444,000 or 4.7%.

For the three month periods ended September 30, 1994 and 1995, the Company's net
income  increased  from  $196,000  for the 1994 period to $318,000  for the 1995
period.  Net interest income  increased  $143,000 (8.0%) from $1,794,000 for the
1994 period to $1,937,000 for the 1995 period.

For the nine month periods ended  September 30, 1994 and 1995, the Company's net
income  increased  from  $529,000  for the 1994 period to $919,000  for the 1995
period.  Net interest income increased  $708,000 (14.0%) from $5,047,000 for the
1994 period to $5,755,000 for the 1995 period.

The  increase in net  interest  income is  primarily  due to an increase in loan
income, which increased from $5,569,000 during the 1994 period to $7,512,000 for
the 1995 period.


ASSETS AND RELATED INCOME ANALYSIS  (Nine Month Comparison)

Loans  outstanding  on  September  30,  1995  totaled  $120,272,000  which is an
increase of $13,947,000  (13.1%) from the  $106,325,000  outstanding at December
31, 1994.  The majority of the increase in the loan  portfolio is in the area of
real estate loans and is primarily due to the Bank originating mostly adjustable
rate mortgage loans. The Bank normally holds adjustable rate loans it originates
in portfolio  while normally  selling fixed rate loans in the secondary  market.
Loan income increased  $1,943,000  (34.9%) from $5,569,000 at September 30, 1994
to $7,512,000 at September 30, 1995.  This increase is due to an increase in the
average rate earned from 7.63% in the



                               - 7 -



<PAGE>



VILLAGE BANCORP, INC.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS (Continued)
--------------------------------------------------------------------------------

1994  period to 8.65% in the 1995  period,  coupled  with an increase in average
outstanding  loans from  $97,330,000 in the 1994 period to  $115,822,000  in the
1995 period.

Securities,   which  consist  of  securities   held-to-maturity  and  securities
available-for-sale,  decreased  $6,420,000  (17.9%) from $35,817,000 at December
31, 1994 to  $29,397,000  at  September  30,  1995.  Security  income  decreased
$107,000  (7.5%) from  $1,420,000  in the period  ending  September  30, 1994 to
$1,313,000  in the 1995  period.  This  decrease  was due to a  decrease  in the
average dollar amount of securities held, from $35,575,000 in the 1994 period to
$28,220,000 in the 1995 period, offset by an increase in the average rate earned
from 5.32% in the 1994 period to 6.20% in the 1995  period.  The  Company  holds
securities  held-to-maturity  until maturity and does not trade them. Securities
classified  as   available-for-sale   are  used  to  compensate   for  liquidity
forecasting deviations.

Federal funds sold increased  $1,350,000 (41.5%) from $3,250,000 at December 31,
1994 to $4,600,000 at September  30, 1995.  Federal funds sold income  increased
$127,000  (73.4%)  from  $173,000  for the 1994 period to $300,000  for the 1995
period,  primarily  due to an increase in the average  rate earned from 3.87% in
the 1994 period to 5.88% for the 1995  period,  coupled  with an increase in the
average  dollar  amount  outstanding  from  $5,956,000  in the  1994  period  to
$6,803,000 in the 1995 period.


LIABILITIES AND RELATED EXPENSE ANALYSIS  (Nine Month Comparison)

Deposits  increased  $5,888,000 (4.1%) from $143,421,000 at December 31, 1994 to
$149,309,000 at September 30, 1995.  Interest on deposits  increased  $1,255,000
(59.3%) from  $2,115,000  for the 1994 period to $3,370,000 for the 1995 period.
This increase was primarily attributable to an increase in the average rate paid
from  2.10% in the 1994  period  to 3.10% in the 1995  period,  coupled  with an
increase in the average  outstandings  from  $134,413,000 for the 1994 period to
$144,730,000 for the 1995 period.

Data  processing  expense  increased  $40,000  (12.6%) from $318,000 in the 1994
period to  $358,000 in the 1995  period,  as a result of  increased  use of data
processing services along with general price increases.

Printing,  stationery  and  supplies  expense  increased  $37,000  (30.8%)  from
$120,000 in the 1994 period to $157,000 in the 1995 period mainly as a result of
charges associated with the merger.



                               - 8 -



<PAGE>



VILLAGE BANCORP, INC.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS (Continued)
--------------------------------------------------------------------------------

ASSETS AND RELATED INCOME ANALYSIS (Three Month Comparison)

Loans  outstanding  increased  $46,000  during  the  three  month  period  ended
September 30, 1995. This compares to the $4,580,000  (4.7%) increase in the 1994
period.  Loan income  increased  $692,000  (35.1%) from  $1,973,000 for the 1994
period to $2,665,000 for the 1995 period. This increase is due to an increase in
the  average  rate  earned  from 7.90% for the 1994 period to 8.86% for the 1995
period and an increase in average  outstanding  loans from  $99,924,000  for the
1994 period to $120,320,000 for the 1995 period.

Securities,   which  consist  of  securities   held-to-maturity  and  securities
available-for-sale,  increased  $7,181,000  (32.3%)  during  the 1995  period as
compared  to a decrease of  $6,413,000  (17.3%)  for the 1994  period.  Security
income  decreased  from  $488,000  for the 1994 period to $414,000  for the 1995
period,  primarily  as a result of a decrease  in the average  dollar  amount of
securities held from $35,179,000 for the 1994 period to $26,748,000 for the 1995
period, offset by an increase in the average rate earned from 5.55% for the 1994
period to 6.19% for the 1995 period.

Federal  funds sold  decreased  $7,800,000  (62.9%)  during  the 1995  period as
compared to a decrease of $3,650,000 (52.5%) for the 1994 period.  Federal funds
sold  income  increased  $90,000  (180.0%)  from  $50,000 in the 1994  period to
$140,000 in the 1995 period  primarily as a result of an increase in the average
rate  earned of 4.42%  for the 1994  period  as  compared  to 5.67% for the 1995
period,  coupled with an increase in the average dollar amount  outstanding from
$4,530,000 for the 1994 period as compared to $9,869,000 for the 1995 period.


LIABILITIES AND RELATED EXPENSE ANALYSIS (Three Month Comparison)

Deposits  decreased  $2,818,000  (1.8%)  during the 1995 period as compared to a
decrease  of  $5,986,000  (4.3%)  for the  1994  period.  Interest  on  deposits
increased  $565,000  (78.8%) from $717,000 for the 1994 period to $1,282,000 for
the 1995  period.  This  increase is mainly  attributable  to an increase in the
average  rate paid  from  2.13% in the 1994  period to 3.38% in the 1995  period
along  with  an  increase  in  the  average  dollar  amount   outstanding   from
$134,520,000 for the 1994 period to $151,933,000 for the 1995 period.


LIQUIDITY

Liquidity is the ability to provide funds for loan requests,  unexpected deposit
outflows and meeting other recurring financial



                               - 9 -



<PAGE>



VILLAGE BANCORP, INC.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS (Continued)
--------------------------------------------------------------------------------

obligations. Cash and cash equivalents at September 30, 1995 were $12,642,000 or
7.7% of total  assets as  compared  to  $12,893,000  or 8.2% of total  assets at
December 31, 1994. The Bank also maintains excess stored  liquidity  reserves to
compensate for liquidity forecasting deviations. These reserves are comprised of
investment grade securities that are highly  marketable and liquid.  The primary
source of  liquidity,  cash and due from  banks and  federal  funds  sold,  have
historically  surpassed the liquidity needs of the Company.  Management  closely
monitors the Bank's  liquidity/cash  flow position and does not  anticipate  any
liquidity problems in the future.


PROVISION FOR LOAN LOSSES

The provision  for loan losses is closely  monitored by management to maintain a
provision and an allowance  that is considered  adequate.  There is no assurance
that the Bank will not be required to make future  adjustments  to the allowance
in response to changing economic conditions or regulatory examinations.


CAPITAL RESOURCES

The table  below lists the minimum  capital  requirements  along with the Bank's
capital position at September 30, 1995:


  Capital                     Minimum  Capital           Bank's Capital
 Standard                        Requirement              Position at
----------                    ----------------         -----------------

Total capital to risk
 weighted assets                    8.00%                    14.32%
                             
Stockholders' equity to      
 risk weighted assets               4.00%                    13.50%
                             
Leverage ratio                   3.0 - 5.0%                   8.63%
                          



                               - 10 -



<PAGE>



VILLAGE BANCORP, INC.
--------------------------------------------------------------------------------



PART II.  -  OTHER INFORMATION



Item 1.  Legal Proceedings                       Not Applicable

Item 2.  Changes in Securities                   Not Applicable

Item 3.  Defaults Upon Senior Securities         Not Applicable

Item 4.  Results of Votes of Security Holders    Not Applicable

Item 5.  Other Information                       Not Applicable

Item 6.  Exhibits and Reports on Form 8-K

  (a)    Exhibits - None

  (b)    Reports on Form 8-K - There were no reports on Form 8-K filed for the
           three months ended September 30, 1995.



                               - 11 -



<PAGE>



                                   SIGNATURES



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



                                            Village Bancorp, Inc.
                                                (Registrant)






Date:   Nov. 13, 1995                 /s/ James R. Umbarger
      ------------------     ----------------------------------------
                                James R. Umbarger, Executive Vice
                              President and Chief Operating Office





Date:   Nov. 13, 1995                 /s/ Gerard P. Shpunt
      ------------------     ----------------------------------------
                             Gerard P. Shpunt - Senior Vice President
                                         and Controller



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