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

FORM 10-Q

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

For the quarter ended March 31, 2000

OR

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

For the transition period from ___________ To ___________

Commission file number 0-23533

MYSTIC FINANCIAL, INC.

|DELAWARE(State or other jurisdictionof incorporation or organization)        | 04-3401049(I.R.S. EmployerIdentification No.)
|---------------------------------------------------------------------------- | ---------------------------------------------
|60 HIGH STREETMEDFORD, MASSACHUSETTS(Address of principal executive offices) | 02155(Zip Code)                              

Registrant's telephone number, including area code                     (781) 395-2800

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

YES   [X]            NO   [   ]

As of May 11, 2000, 2,060,898 shares of the registrant's common stock were outstanding.

MYSTIC FINANCIAL, INC. AND SUBSIDIARY

INDEX

|PART I  | FINANCIAL INFORMATION                                                                                    | Page
|------- | -------------------------------------------------------------------------------------------------------- | ----
|Item 1  | Financial Statements:                                                                                    |     
|        | Consolidated Balance Sheets - March 31, 2000 and June 30, 1999                                           | 3   
|        | Consolidated Statements of Income - Three and Nine Months
  Months Ended March 31, 2000 and 1999         | 4   
|        | Consolidated Statements of Changes in Stockholders'
  Equity - Nine Months Ended March 31, 2000 and 1999 | 5   
|        | Consolidated Statements of Cash Flows - Nine Months
  Ended March 31, 2000 and 1999                      | 6   
|        | Notes to Unaudited Consolidated Financial Statements -
  March 31, 2000                                  | 7   
|Item 2  | Management's Discussion and Analysis of Financial
  Condition and Results of Operations                  | 10  
|Item 3  | Quantitative and Qualitative Disclosures About Market Risk                                               | 24  
|PART II | OTHER INFORMATION                                                                                        |     
|Item 6  | Exhibits and Reports on Form 8-K                                                                         | 24  
|        | SIGNATURES                                                                                               | 24  

Mystic Financial, Inc. and Subsidiary



|                                                                                                              | March 31,2000 | June 30,1999
|------------------------------------------------------------------------------------------------------------- | ------------- | ------------
|                                                                                                              | (Unaudited)  
|Assets                                                                                                        |               |             
|Cash and due from banks                                                                                       | $    5,651    | $    6,442  
|Federal funds sold                                                                                            | 15,267        | 11,674      
|Short-term investments                                                                                        | 7,565         | 605         
|                                                                                                              |               |             
|Total cash and cash equivalents                                                                               | 28,483        | 18,721      
|                                                                                                              |               |             
|Securities available for sale, at fair value                                                                  | 25,127        | 31,772      
|Securities held to maturity, at amortized cost                                                                | -             | 1,500       
|Federal Home Loan Bank stock, at cost                                                                         | 2,048         | 1,080       
|Loans, net of allowance for loan losses of $1,488 and $1,348, respectively                                    | 182,527       | 154,689     
|Mortgage loans held for sale, net                                                                             | 509           | 406         
|Bank premises and equipment, net                                                                              | 2,657         | 2,657       
|Real estate held for investment, net                                                                          | 1,687         | 1,730       
|Accrued interest receivable                                                                                   | 1,220         | 1,265       
|Due from Co-operative Central Bank                                                                            | 929           | 929         
|Other assets                                                                                                  | 1,149         | 465         
|                                                                                                              | $246,336      | $215,214    
|Liabilities and Stockholders' Equity                                                                          |               |             
|Deposits                                                                                                      | $176,978      | $160,867    
|Federal Home Loan Bank borrowings                                                                             | 37,857        | 18,978      
|Mortgagors' escrow accounts                                                                                   | 717           | 547         
|Accrued interest payable                                                                                      | 461           | 334         
|Accrued expenses and other liabilities                                                                        | 551           | 436         
|Total liabilities                                                                                             | 216,564       | 181,162     
|                                                                                                              |               |             
|Stockholders' equity                                                                                          |               |             
|Preferred stock, $.01 par value, 1,000,000 shares authorized; none issued                                     | -             | -           
|Common stock, $.01 par value, 5,000,000 shares authorized, 2,711,125 issued                                   | 27            | 27          
|Additional paid-in capital                                                                                    | 25,627        | 25,688      
|Retained earnings                                                                                             | 15,003        | 14,128      
|Treasury stock, at cost - 615,227 and 266,247 shares at 
      March 31, 2000 and June 30, 1999, respectively | (7,471)       | (3,485)     
|Accumulated other comprehensive income (loss)                                                                 | (6)           | 394         
|Unearned ESOP shares                                                                                          | (2,416)       | (2,700)     
|Unearned RRP stock                                                                                            | (992)         | -           
|Total stockholders' equity                                                                                    | 29,772        | 34,052      
|                                                                                                              | $246,336      | $215,214    

See accompanying notes to unaudited consolidated financial statements.

Mystic Financial, Inc. and SubsidiaryPart I - Financial Information
Item 1 - Financial Statements
Consolidated Statements of Income
(In Thousands, Except Per Share Data)



|                                                                      | Three Months Ended | Nine Months Ended
|--------------------------------------------------------------------- | ------------------ | -----------------
|                                                                      | March 31,2000      | March 31,1999    
|                                                                      | (Unaudited)       
|Interest and dividend income:                                         |                    |                  
|Interest and fees on loans                                            | $3,496             | $2,845           
|Interest and dividends on securities                                  | 414                | 332              
|Other interest                                                        | 160                | 333              
|Total interest and dividend income                                    | 4,070              | 3,510            
|                                                                      |                    |                  
|Interest expense                                                      |                    |                  
|Deposits                                                              | 1,376              | 1,317            
|Federal Home Loan Bank borrowings                                     | 561                | 292              
|Total interest expense                                                | 1,937              | 1,609            
|Net interest income                                                   | 2,133              | 1,901            
|Provision for loan losses                                             | 35                 | -                
|Net interest income, after provision for loan losses                  | 2,098              | 1,901            
|                                                                      |                    |                  
|Other income:                                                         |                    |                  
|Customer service fees                                                 | 143                | 127              
|Gain on sales of mortgage loans                                       | -                  | 9                
|Gain on sales of securities available for sale, net                   | 32                 | 39               
|Co-operative Central Bank Share Insurance Fund
      Special Dividend | -                  | -                
|Miscellaneous                                                         | 51                 | 59               
|Total other income                                                    | 226                | 234              
|Operating expenses:                                                   |                    |                  
|Salaries and employee benefits                                        | 1,053              | 861              
|Occupancy and equipment expenses                                      | 208                | 194              
|Data processing expenses                                              | 73                 | 91               
|Other general and administrative expenses                             | 375                | 358              
|Total operating expenses                                              | 1,709              | 1,504            
|                                                                      |                    |                  
|Income before income taxes                                            | 615                | 631              
|Provision for income taxes                                            | 229                | 237              
|Net income                                                            | $   386            | $   394          
|                                                                      |                    |                  
|Earnings per share - basic and diluted                                | $  0.20            | $  0.17          
|                                                                      |                    |                  
|Weighted average shares outstanding - basic                           | 1,949              | 2,380            
|                                                                      |                    |                  
|Weighted average shares outstanding - diluted                         | 1,949              | 2,380            

See accompanying notes to unaudited consolidated financial statements.

Mystic Financial, Inc. and SubsidiaryPart I - Financial Information
Item 1 - Financial Statements
Consolidated Statements of Changes in Stockholders' Equity
Nine Months Ended March 31, 2000 and 1999
(In Thousands)



|                                                                                                        | CommonStock | Additional
Paid-InCapital | RetainedEarnings | TreasuryStock | Accumulated
Other
Comprehensive Income (Loss) | UnearnedESOP Shares | Unearned 
RRPStock | Total 
Stockholders'Equity
|------------------------------------------------------------------------------------------------------- | ----------- | ------------------------- | ---------------- | ------------- | --------------------------------------------- | ------------------- | ------------------ | --------------------------
|                                                                                                        | (Unaudited)
|Balance at June 30, 1999                                                                                | $27         | $25,688                   | $14,128          | $(3,485)      | $ 394                                         | $(2,700)            | $        -         | $34,052                   
|Comprehensive income:                                                                                   |             |                           |                  |               |                                               |                     |                    |                           
|Net income                                                                                              | -           | -                         | 1,270            | -             | -                                             | -                   | -                  | 1,270                     
|Change in net unrealized gain (loss) 
      on securities available for sale, net 
      of tax effects | -           | -                         | -                | -             | (400)                                         | -                   | -                  | (400)                     
|Total comprehensive income                                                                              |             |                           |                  |               |                                               |                     |                    | 870                       
|Dividend paid ($0.19 per share)                                                                         | -           | -                         | (395)            | -             | -                                             | -                   | -                  | (395)                     
|Decrease in unearned ESOP shares                                                                        | -           | (61)                      | -                | -             | -                                             | 284                 | -                  | 223                       
|Purchase of RRP stock                                                                                   | -           | -                         | -                | -             | -                                             | -                   | (1,295)            | (1,295)                   
|Purchase of treasury stock                                                                              | -           | -                         | -                | (3,986)       | -                                             | -                   | -                  | (3,986)                   
|Decrease in unearned RRP stock                                                                          | -           | -                         | -                | -             | -                                             | -                   | 303                | 303                       
|Balance at March 31, 2000                                                                               | $27         | $25,627                   | $15,003          | $(7,471)      | $    (6)                                      | $(2,416)            | $   (992)          | $29,772                   
|                                                                                                        |             |                           |                  |               |                                               |                     |                    |                           
|Balance at June 30, 1998                                                                                | $27         | $25,710                   | $13,173          | $(21)         | $ 432                                         | $(3,194)            | $        -         | $36,127                   
|Comprehensive income:                                                                                   |             |                           |                  |               | -                                             |                     | -                  | -                         
|Net income                                                                                              | -           | -                         | 1,218            | -             | -                                             | -                   | -                  | 1,218                     
|Change in net unrealized gain on 
      securities available for sale, net of 
      tax effects        | -           | -                         | -                | -             | 196                                           | -                   | -                  | 196                       
|Total comprehensive income                                                                              |             |                           |                  |               |                                               |                     |                    | 1,414                     
|Dividend paid ($.15 per share)                                                                          | -           | -                         | (393)            | -             | -                                             | -                   | -                  | (393)                     
|Purchase of treasury stock                                                                              | -           | -                         | -                | (1,967)       | -                                             | -                   | -                  | (1,967)                   
|Decrease in unearned ESOP shares                                                                        | -           | -                         | -                | -             | -                                             | 399                 | -                  | 399                       
|Balance at March 31, 1999                                                                               | $27         | $25,710                   | $13,998          | $(1,988)      | $ 628                                         | $(2,795)            | $        -         | $35,580                   

See accompanying notes to unaudited consolidated financial statements.

Mystic Financial, Inc. and SubsidiaryPart I - Financial Information
Item 1 - Financial Statements
Consolidated Statements of Cash Flows
(In Thousands)



|                                                                                  | Nine Months Ended
|--------------------------------------------------------------------------------- | -----------------
|                                                                                  | March 31,2000    
|                                                                                  | (Unaudited)      
|Cash flows from operating activities:                                             |                  
|Net income                                                                        | $   1,270        
|Adjustments to reconcile net income to net cash provided by operating activities: |                  
|Provision for loan losses                                                         | 150              
|Net amortization (accretion) of securities                                        | 32               
|Gain on sales of securities available for sale                                    | (99)             
|Gain on sale of loans                                                             | -                
|Amortization of unearned ESOP shares                                              | 223              
|Amortization of unearned RRP stock                                                | 303              
|Depreciation expense                                                              | 277              
|Net change in mortgage loans held for sale                                        | (103)            
|Increase (decrease) in accrued interest receivable                                | 45               
|Increase (decrease) in other assets                                               | (538)            
|Increase in accrued interest payable                                              | 127              
|Increase (decrease) in accrued expenses and other liabilities                     | 115              
|Net cash provided by operating activities                                         | 1,802            
|Cash flows from investing activities:                                             |                  
|Maturities of securities held to maturity                                         | 1,500            
|Sales of securities available for sale                                            | 9,420            
|Principal pay downs on mortgage-backed securities                                 | 161              
|Maturity of securities available for sale                                         | -                
|Purchase of securities available for sale                                         | (3,415)          
|Purchase of Federal Home Loan Bank stock                                          | (968)            
|Loans originated, net of payments received                                        | (27,988)         
|Proceeds from sale of loans                                                       | -                
|Purchases of banking premises and equipment                                       | (234)            
|Net cash used by investing activities                                             | (21,524)         
|Cash flows from financing activities:                                             |                  
|Net increase in deposits                                                          | 16,111           
|Proceeds from borrowings                                                          | 31,702           
|Repayment of borrowings                                                           | (12,823)         
|Net increase in mortgagors' escrow accounts                                       | 170              
|Dividends paid                                                                    | (395)            
|Purchase of treasury stock                                                        | (3,986)          
|Purchase of RRP stock                                                             | (1,295)          
|Net cash provided by financing activities                                         | 29,484           
|Net change in cash and cash equivalents                                           | 9,762            
|Cash and cash equivalents at beginning of period                                  | 18,721           
|Cash and cash equivalents at end of period                                        | $ 28,483         
|Supplemental cash flow information:                                               |                  
|Interest paid                                                                     | $   5,189        
|Income taxes paid                                                                 | 962              

See accompanying notes to unaudited consolidated financial statements.

Mystic Financial, Inc. and SubsidiaryPart I - Financial Information
Item 1 - Financial Statements
Notes to Unaudited Consolidated Financial Statements
March 31, 2000

1)  Basis of Presentation and ConsolidationThe unaudited consolidated interim financial statements of Mystic Financial, Inc. and subsidiary ("Mystic" or the "Company") presented herein should be read in conjunction with the consolidated financial statements for the year ended June 30,
1999, included in the annual report on Form 10-K of Mystic Financial, Inc., the holding company for Medford Co-operative Bank (the "Bank").

The unaudited consolidated interim financial statements herein have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the consolidated financial statements reflect all adjustments (consisting solely of normal recurring accruals) necessary for a fair presentation of such information. Interim results are not necessarily indicative of
results to be expected for the entire year.

2)  Commitments and ContingenciesAt March 31, 2000, the Bank had outstanding commitments to originate loans amounting to approximately $14.7 million, and unadvanced funds on construction loans and lines of credit amounting to approximately $11.4 million and $4.9 million,
respectively.

3)  Earnings Per ShareEarnings per share for the three and nine months ended March 31, 2000 were $0.20 and $0.61, respectively, on a basic and diluted basis compared to $0.17 and $0.51 on a basic and diluted basis for the three and nine months ended March 31, 1999,
respectively.

Basic earnings per share represents income available to common stock divided by the weighted-average number of common shares outstanding during the period. In calculating basic earnings per share, the number of shares of common stock outstanding is
reduced by the number of shares held by Mystic's Employee Stock Ownership Plan (the "ESOP") that have not been allocated or are not committed for release to participants' individual accounts. Diluted earnings per share reflects additional common shares
that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. Potential common shares that may be issued by the Company relate solely to outstanding
stock options and unearned RRP shares and are determined using the treasury stock method.

4)  Book Value Per ShareBook value per share of common stock was $16.07 as of March 31, 2000. In calculating book value per share, the number of shares of common stock outstanding is reduced by the number of shares held by the ESOP that have not been allocated or are not
committed to be released to participants' individual accounts, unearned RRP shares and treasury stock. There were 1,853,270 shares of common stock outstanding as of March 31, 2000 for purposes of calculating the Company's book value per share.

5)  1999 Recognition and Retention PlanOn March 24, 1999, the Company's stockholders approved the Company's adoption of the 1999 Recognition and Retention Plan (the "RRP"), which allows the Company to grant restricted stock awards ("Awards") to certain officers, employees and outside
directors. As of September 30, 1999 the Company's RRP Trust had completed the purchase of the authorized 102,942 shares in the open market at a cost of $1.3 million. Shares vest at a rate of 20% per year with the first vesting period beginning on December
31, 1999. At December 31, 1999, Awards were granted with respect to 96,342 shares, of which 19,268 have vested. The aggregate purchase price of all shares acquired by the RRP will be reflected as a reduction of stockholders' equity and amortized to
compensation expense as the Company's employees and directors become vested in their stock awards.

6)  Stock RepurchasesOn November 16, 1999, the Company completed a repurchase program acquiring 122,243 shares of its common stock at a cost of approximately $1.5 million. On January 28, 2000, the Company completed another repurchase program acquiring 116,131 shares
of its common stock at a cost of approximately $1.3 million. On February 28, 2000, the Company completed a repurchase program acquiring an additional 110,325 shares of its common stock at a cost of approximately $1.2 million. In addition, 281 shares of
common stock were transferred into treasury stock as a result of a forfeiture from the RRP. On April 19, 2000, the Company announced another repurchase program to acquire up to 104,794 shares of its common stock.

7)  SecuritiesThe following table sets forth the Company's securities at the dates indicated.



|                               | March 31, 2000 |  | June 30, 1999
|------------------------------ | -------------- |  | -------------
|                               | AmortizedCost  |  | FairValue    
|                               | (In Thousands)
|Securities available for sale: |                |  |              
|U.S. Government & federal      |                |  |              
|agency obligations             | $17,830        |  | $17,293      
|Mortgage-backed securities     | 2,098          |  | 2,078        
|Other bonds & obligations      | 2,553          |  | 2,420        
|Marketable equity securities   | 2,656          |  | 3,336        
|Total                          | $25,137        |  | $25,127      
|                               |                |  |              
|Securities held to maturity:   |                |  |              
|U.S. Government & federal      |                |  |              
|agency obligations             | $         -    |  | $         -  
|Other bonds & obligations      | -              |  | -            
|Total                          | $         -    |  | $         -  



8)  LoansThe following table presents selected data relating to the composition of the Company's loan portfolio by type of loan on the dates indicated.



|                               | March 31, 2000         |  | June 30, 1999
|------------------------------ | ---------------------- |  | -------------
|                               | Amount                 |  | Percent      
|                               | (Dollars in Thousands)
|Residential mortgage loans     | $122,486               |  | 67.1%        
|Commercial real estate loans   | 43,931                 |  | 24.1%        
|Commercial loans               | 9,484                  |  | 5.2%         
|Consumer loans                 | 1,432                  |  | 0.8%         
|Home equity loans              | 3,026                  |  | 1.6%         
|Construction loans             | 8,809                  |  | 4.8%         
|Total loans                    | 189,168                |  | 103.6%       
|                               |                        |  |              
|Less:                          |                        |  |              
|Deferred loan origination fees | 9                      |  | 0.0%         
|Unadvanced principal           | 5,144                  |  | 2.8%         
|Allowance for loan losses      | 1,488                  |  | 0.8%         
|Loans, net                     | $182,527               |  | 100.0%       





9)  Allowance for Loan LossesThe following table analyzes activity in the Company's allowance for loan losses for the periods indicated.



|                                                  | Nine Months EndedMarch 31, 2000 |              | Nine Months EndedMarch 31, 1999
|------------------------------------------------- | ------------------------------- | ------------ | -------------------------------
|                                                  | (Dollars in Thousands)         
|Average loans, net                                |                                 | $169,475     |                                
|Period-end net loans                              |                                 | $182,527     |                                
|                                                  |                                 |              |                                
|Allowance for loan losses at beginning of period  |                                 | $    1,348   |                                
|Provision for loan losses                         |                                 | 150          |                                
|Plus recoveries                                   |                                 | 4            |                                
|Loans charged-off                                 |                                 | (14)         |                                
|Allowance for loan losses at end of period        |                                 | $    1,488   |                                
|                                                  |                                 |              |                                
|Non-performing loans                              |                                 | $         30 |                                
|Ratios:                                           |                                 |              |                                
|Allowance for loan losses to period-end net loans |                                 | 0.82%        |                                
|Net charge-offs to average loans, net             |                                 | 0.01%        |                                



10)  Deposits and Borrowed FundsThe following tables set forth the various types of deposit accounts at the Company and the balances in these accounts as well as the borrowings of the Company at the dates indicated.



|                                                | March 31, 2000         |  | June 30, 1999
|----------------------------------------------- | ---------------------- |  | -------------
|                                                | Amount                 |  | Percent      
|                                                | (Dollars in Thousands)
|Deposits:                                       |                        |  |              
|Savings deposits                                | $  42,422              |  | 24.0%        
|NOW accounts                                    | 32,614                 |  | 18.4%        
|Money market deposits                           | 7,617                  |  | 4.3%         
|Demand deposits                                 | 12,463                 |  | 7.0%         
|Certificates of deposit                         | 81,862                 |  | 46.3%        
|Total deposits                                  | $176,978               |  | 100.0%       
|                                                |                        |  |              
|Borrowed funds:                                 |                        |  |              
|Advances from Federal Home Loan Bank of Boston: |                        |  |              
|Maturities less than one year                   | $  12,100              |  | 32.0%        
|Maturities greater than one year                | 25,757                 |  | 68.0%        
|Total borrowed funds                            | $  37,857              |  | 100.0%       

Mystic Financial, Inc. and Subsidiary

Item 2 - Management's Discussion and Analysis of Financial Condition

The following discussion compares the financial condition of Mystic Financial, Inc. ("Mystic" or the "Company") and its wholly owned subsidiary, Medford Co-operative Bank (the "Bank"), at March 31, 2000 to June 30, 1999, and the results of
operations for the three and nine months ended March 31, 2000, compared to the same periods in 1999. This discussion and analysis should be read in conjunction with the consolidated financial statements and related notes thereto included within this report.

Forward-looking StatementsThe Company and the Bank may from time to time make written or oral "forward-looking statements." These forward-looking statements may be contained in this quarterly filing with the Securities and Exchange Commission (the "SEC"), the Annual Report to
Shareholders, other filings with the SEC, and in other communications by the Company and the Bank, which are made in good faith pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The words "may," "could,"
"should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.

Forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties. The following factors, many
of which are subject to change based on various other factors beyond the Company's control, and other factors discussed in this Form 10-Q, as well as other factors identified in the Company's filings with the SEC and those presented elsewhere by
management from time to time, could cause its financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements:

|* | the strength of the United States economy in general and the strength of the local economies in which the Company and the Bank conduct operations;                                                                                        
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board;                                                                                              
|* | inflation, interest rate, market and monetary fluctuations;                                                                                                                                                                               
|* | the timely development of and acceptance of new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services;
|* | the willingness of users to substitute competitors' products and services for the Company's and the Bank's products and services;                                                                                                         
|* | the Company's and the Bank's success in gaining regulatory approval of their products and services, when required;                                                                                                                        
|* | the impact of changes in financial services' laws and regulations (including laws concerning taxes, banking, securities and insurance);                                                                                                   
|* | the impact of technological changes;                                                                                                                                                                                                      
|* | acquisitions;                                                                                                                                                                                                                             
|* | changes in consumer spending and saving habits; and                                                                                                                                                                                       
|* | the Company's and the Bank's success at managing the risks involved in their business.                                                                                                                                                    

This list of important factors is not exclusive. The Company or the Bank does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company or the Bank.

GeneralMedford Co-operative Bank (the "Bank") completed its conversion from a mutual to a stock institution and was simultaneously acquired by Mystic Financial, Inc. ("Mystic" or the "Company") on January 8, 1998. The Company's principal business activity
consists of the ownership of the Bank. The Company also invests in short-term investment grade marketable securities and other liquid investments.

The Bank is a Massachusetts chartered stock co-operative bank founded in 1886 with three full-service offices and one educational branch office in Medford, Massachusetts and other full-service offices in Lexington and Arlington, Massachusetts. The
business of the Bank consists of attracting deposits from the general public and using these funds to originate various types of loans primarily in eastern Middlesex County, Massachusetts, including mortgage loans secured by one- to four-family
residences, commercial loans secured by general business assets and commercial real estate loans secured by commercial property, and to invest in U.S. Government and Federal Agency and other securities. To a lesser extent, the Bank engages in various
forums of consumer and home equity lending.

The Bank has once active subsidiary, Mystic Securities Corporation, which was established for the sole purpose of acquiring and holding investment securities. All securities held by Mystic Securities Corporation are investments which are permissible
for banks to hold under Massachusetts's law.

The Company's profitability depends primarily on its net interest income, which is the difference between the interest income it earns on its loans and investment portfolio and its cost of funds, which consists mainly of interest paid on deposits and
on borrowings from the Federal Home Loan Bank of Boston. Net interest income is affected by the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on these balances. When interest-earning
assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income.

The level of other income and operating expenses also affects the Company's profitability. Other income consists primarily of service fees, loan servicing and other loan fees, and gains on sales of investment securities available for sale. Operating
expenses consist of salaries and benefits, occupancy related expenses, and other general operating expenses.

Average Balances, Interest and Average YieldsThe following tables set forth certain information relating to the Company's average balance sheet and reflect the interest earned on assets and interest cost of liabilities for the periods indicated and the average yields earned and rates paid for
the periods indicated. Such yields and costs are derived by dividing income or expense by the average monthly balances of assets and liabilities, respectively, for the periods presented. Average balances are derived from daily balances. Loans on
nonaccrual status are included in the average balances of loans shown in the tables. The investment securities in the following tables are presented at amortized cost.

MYSTIC FINANCIAL, INC. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999



|                                                        | Three Months Ending March 31, 2000 |  | Three Months Ending March 31, 1999
|------------------------------------------------------- | ---------------------------------- |  | ----------------------------------
|                                                        | AverageBalance                     |  | InterestIncome/Expense            
|INTEREST-EARNING ASSETS:                                | (Dollars in Thousands)            
|Total loans, net                                        | $177,973                           |  |                                   
|Investments                                             | 29,223                             |  |                                   
|Other earning assets                                    | 11,732                             |  |                                   
|Total interest-earning assets                           | 218,928                            |  |                                   
|Cash and due from banks                                 | 4,806                              |  |                                   
|Other assets                                            | 6,615                              |  |                                   
|Total assets                                            | $230,349                           |  |                                   
|                                                        |                                    |  |                                   
|INTEREST-BEARING LIABILITES:                            |                                    |  |                                   
|Regular and other deposits                              | $  41,176                          |  |                                   
|NOW accounts                                            | 22,355                             |  |                                   
|Money market deposits                                   | 6,541                              |  |                                   
|Certificates of deposit                                 | 79,924                             |  |                                   
|Total interest-bearing deposits                         | 149,996                            |  |                                   
|FHLB borrowings                                         | 37,896                             |  |                                   
|Total interest-bearing liabilities                      | 187,892                            |  |                                   
|Demand deposit accounts                                 | 10,382                             |  |                                   
|Other liabilities                                       | 1,618                              |  |                                   
|Total liabilities                                       | 199,892                            |  |                                   
|Stockholders' equity                                    | 30,457                             |  |                                   
|Total liabilities and stockholders' equity              | $230,349                           |  |                                   
|Net interest income                                     |                                    |  |                                   
|Interest rate spread                                    |                                    |  |                                   
|Net interest margin                                     |                                    |  |                                   
|Interest-earning assets/interest-bearing 
  liabilities |                                    |  |                                   

MYSTIC FINANCIAL, INC. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS
NINE MONTHS ENDED MARCH 31, 2000 AND 1999



|                                                        | Nine Months Ending March 31, 2000 |  | Nine Months Ending March 31, 1999
|------------------------------------------------------- | --------------------------------- |  | ---------------------------------
|                                                        | AverageBalance                    |  | InterestIncome/Expense           
|INTEREST-EARNING ASSETS:                                | (Dollars in Thousands)           
|Total loans, net                                        | $169,475                          |  |                                  
|Investments                                             | 31,249                            |  |                                  
|Other earning assets                                    | 9,611                             |  |                                  
|Total interest-earning assets                           | 210,335                           |  |                                  
|Cash and due from banks                                 | 4,717                             |  |                                  
|Other assets                                            | 6,568                             |  |                                  
|Total assets                                            | $221,620                          |  |                                  
|                                                        |                                   |  |                                  
|INTEREST-BEARING LIABILITES:                            |                                   |  |                                  
|Regular and other deposits                              | $  41,059                         |  |                                  
|NOW accounts                                            | 23,129                            |  |                                  
|Money market deposits                                   | 6,609                             |  |                                  
|Certificates of deposit                                 | 77,334                            |  |                                  
|Total interest-bearing deposits                         | 148,131                           |  |                                  
|FHLB borrowings                                         | 29,438                            |  |                                  
|Total interest-bearing liabilities                      | 177,569                           |  |                                  
|Demand deposit accounts                                 | 10,487                            |  |                                  
|Other liabilities                                       | 1,507                             |  |                                  
|Total liabilities                                       | 189,563                           |  |                                  
|Stockholders' equity                                    | 32,057                            |  |                                  
|Total liabilities and stockholders' equity              | $221,620                          |  |                                  
|Net interest income                                     |                                   |  |                                  
|Interest rate spread                                    |                                   |  |                                  
|Net interest margin                                     |                                   |  |                                  
|Interest-earning assets/interest-bearing 
  liabilities |                                   |  |                                  



Rate/Volume AnalysisThe following table sets forth certain information regarding changes in interest income and interest expense of the Company for the periods indicated. For each category of interest-earning asset and interest-bearing liability, information is provided
on changes attributable to: (i) changes in volume (changes in volume multiplied by old rate); and (ii) changes in rates (change in rate multiplied by old volume). Changes in rate-volume (changes in rate multiplied by the changes in volume) are allocated
between changes in rate and changes in volume.



|                              | Three Months Ended March 31,
2000 vs 1999Increase (decrease)
|----------------------------- | ------------------------------------------------------------
|                              | Due To                                                      
|                              | Rate                                                        
|                              | (In Thousands)                                              
|Interest and dividend income: |                                                             
|Loans, net                    | $   18                                                      
|Investments                   | 3                                                           
|Other earning assets          | 44                                                          
|Total                         | 65                                                          
|Interest expense:             |                                                             
|Deposits                      | 4                                                           
|Borrowed funds                | 5                                                           
|Total                         | 9                                                           
|Change in net interest income | $   56                                                      





|                              | Nine Months Ended March 31,
2000 vs 1999Increase (decrease)
|----------------------------- | -----------------------------------------------------------
|                              | Due To                                                     
|                              | Rate                                                       
|                              | (In Thousands)                                             
|Interest and dividend income: |                                                            
|Loans, net                    | $  (19)                                                    
|Investments                   | 42                                                         
|Other earning assets          | 52                                                         
|Total                         | 75                                                         
|Interest expense:             |                                                            
|Deposits                      | (100)                                                      
|Borrowed funds                | (6)                                                        
|Total                         | (106)                                                      
|Change in net interest income | $ 181                                                      



Financial Condition and Results of Operations

Comparison of Financial Condition at March 31, 2000 and at June 30, 1999Total assets increased to $246.3 million at March 31, 2000 from $215.2 million at June 30, 1999, an increase of $31.1 million or 14.5%. The increase in total assets is principally due to continued loan growth.

Cash and cash equivalents increased to $28.5 million at March 31, 2000 from $18.7 million at June 30, 1999, an increase of $9.8 million or 52.1%. Investment securities decreased by $7.2 million or 20.9% to $27.2 million at March 31, 2000 from $34.4
million at June 30, 1999. The increase in cash and cash equivalents and decrease in investment securities reflects the Company's decision to increase liquidity and shorter-term investments in a period of generally rising interest rates.

Net loans increased by $27.8 million or 18.0% to $182.5 million or 74.1% of total assets at March 31, 2000 as compared to $154.7 million or 71.9% of total assets at June 30, 1999 as the Company continued its emphasis on originating and retaining
residential mortgage loans and commercial and commercial real estate loans.

Total deposits increased by $16.1 million or 10.0% to $177.0 million at March 31, 2000 from $160.9 million at June 30, 1999. The increase in deposits is principally due to a general increase in each deposit category.

Total borrowings increased by $18.9 million to $37.9 million at March 31, 2000 from $19.0 million at June 30, 1999. The Company's continued use of borrowed funds reflects additional funding used to fund larger commercial real estate loans, generally
those exceeding $1.0 million, with matching funds from the Federal Home Loan Bank of Boston ("FHLBB") to reduce interest rate risk. In addition, the Company has match-funded 30-year fixed-rate residential mortgage loans held for portfolio and
mortgage-backed securities held for investment. The retention of these loans and mortgage-backed securities is helping the Company leverage the capital it raised in the conversion.

Stockholders' equity decreased by $4.3 million to $29.8 million at March 31, 2000 from $34.1 million at June 30, 1999 as a result of the repurchase of 348,980 shares of common stock held in treasury at a cost of $4.0 million, the repurchase of 102,942
shares of common stock at a cost of $1.3 million to fund the RRP, dividends paid of $395,000 and a decrease in the net unrealized gain on securities available for sale of $400,000, offset by net income of $1.3 million and decreases in unearned ESOP shares
of $284,000 and unearned RRP stock of $303,000.

Comparison of the Operating Results for the Three and 
  Nine Months Ended March 31, 2000 and 1999Net Income. Net income was $386,000 and $1.3 million for the three and nine months ended March 31, 2000, respectively, compared to $394,000 and $1.2 million for the three and nine months ended March 31, 1999, respectively. Return on average
assets was .67% and .76% for the three and nine months ended March 31, 2000, respectively, compared to .76% and .82% for the three and nine months ended March 31, 1999, respectively. Return on average equity was 5.07% and 5.28% for the three and nine
months ended March 31, 2000, respectively, compared to 4.45% and 4.62% for the three and nine months ended March 31, 1999, respectively. The decrease in the return on average assets is due to higher operating expenses while the increase in the return on
average equity resulted from achieving net income on a smaller average balance of stockholders' equity, principally caused by repurchases of common stock by the Company.

The decrease in net income for the three months ended March 31, 2000 compared to the three months ended March 31, 1999 was attributable to an increase in net interest income of $232,000 and a decrease in the provision for income taxes of $8,000 offset
by a decrease in other income of $8,000, an increase of $35,000 in provision for loan losses, and an increase in operating expenses of $205,000. The increase in net income for the nine months ended March 31, 2000 compared to the nine months ended March
31, 1999 was attributable to an increase in net interest income of $820,000 offset by a decrease in other income of $84,000, an increase of $60,000 in provision for loan losses, an increase in operating expenses of $602,000 and an increase in the
provision for income taxes of $22,000.

Interest and Dividend Income. Total interest and dividend income increased by $560,000 or 16.0% to $4.1 million for the three months ended March 31, 2000 from $3.5 million for the three months ended March 31, 1999. The increase in interest
income was a result of an increase in the average balance of loans and investment securities, partially offset by a decrease in the average balance of other earning assets. The average balance of net loans for the three months ended March 31, 2000 was
$178.0 million compared to $145.8 million for the three months ended March 31, 1999. The average yield on net loans was 7.86% for the three months ended March 31, 2000 compared to 7.81% for the three months ended March 31, 1999. The increase in the yield
on net loans reflects the general increase in market interest rates since the prior period.

The average balance of investment securities for the three months ended March 31, 2000 was $29.2 million compared to $23.7 million for the three months ended March 31, 1999. The average yield on investment securities was 5.67% for the three months
ended March 31, 2000 compared to 5.61% for the three months ended March 31, 1999. The average balance of other earning assets for the three months ended March 31, 2000 was $11.7 million compared to $28.1 million for the three months ended March 31, 1999.
The average yield on other earning assets was 5.46% for the three months ended March 31, 2000 compared to 4.74% for the three months ended March 31, 1999. The increase in the average yield on investment securities and other earning assets reflects the
general increase in market interest rates since the prior period.

Total interest and dividend income increased by $1.5 million or 15.2% to $11.7 million for the nine months ended March 31, 2000 from $10.2 million for the nine months ended March 31, 1999. The increase in interest income was a result of an increase in
the average balance of loans and investment securities, partially offset by a decrease in the average balance of other earning assets. The average balance of net loans for the nine months ended March 31, 2000 was $169.5 million compared to $142.5 million
for the nine months ended March 31, 1999. The average yield on net loans was 7.87% for the nine months ended March 31, 2000 compared to 7.89% for the nine months ended March 31, 1999.

The average balance of investment securities for the nine months ended March 31, 2000 was $31.2 million compared to $23.5 million for the nine months ended March 31, 1999. The average yield on investment securities was 5.76% for the nine months ended
March 31, 2000 compared to 5.53% for the nine months ended March 31, 1999. The average balance of other earning assets for the nine months ended March 31, 2000 was $9.6 million compared to $21.2 million for the nine months ended March 31, 1999. The
average yield on other earning assets was 5.27% for the nine months ended March 31, 2000 compared to 4.92% for the nine months ended March 31, 1999. The increase in the average yield on investment securities and other earning assets reflects the general
increase in market interest rates since the prior period.

Interest Expense. Total interest expense increased by $328,000 or 20.4% to $1.9 million for the three months ended March 31, 2000 from $1.6 million for the three months ended March 31, 1999. Interest expense increased primarily due to the
increase in certificates of deposit balances and the increase in FHLBB borrowings. The Company's continued use of borrowed funds reflects additional funding used to fund larger commercial real estate loans, generally those exceeding $1.0 million, with
matching funds from the FHLBB to reduce interest rate risk. In addition, the Company has match-funded 30-year fixed-rate residential mortgage loans held for portfolio and mortgage-backed securities for investment with borrowings of various maturities.

Average interest-bearing deposits increased by $5.9 million or 4.1% to $150.0 million while the average rate increased one basis point to 3.67% from 3.66% for the three months ended March 31, 2000. Average borrowings increased by $17.8 million to $37.9
million for the three months ended March 31, 2000 from $20.1 million while the average rate increased 11 basis points to 5.92% from 5.81% for the three months ended March 31, 1999.

Total interest expense increased by $729,000 or 15.9% to $5.3 million for the nine months ended March 31, 2000 from $4.6 million for the nine months ended March 31, 1999. Interest expense increased primarily due to the increase in certificates of
deposit and the increase in FHLBB borrowings. The Company's continued use of borrowed funds reflects additional funding used to fund larger commercial real estate loans, generally those exceeding $1.0 million, with matching funds from the FHLBB to reduce
interest rate risk. In addition, the Company has match-funded 30-year fixed-rate residential mortgage loans held for portfolio and mortgage-backed securities for investment with borrowings of various maturities.

Average interest-bearing deposits increased by $12.8 million or 9.4% to $148.1 million while the average rate decreased ten basis points to 3.61% from 3.71% for the nine months ended March 31, 2000. Average borrowings increased by $11.0 million or
59.7% to $29.4 million for the nine months ended March 31, 2000 from $18.4 million for the nine months ended March 31, 1999 while the average rate decreased four basis points to 5.90% from 5.94% for the nine months ended March 31, 1999.

Net Interest Income. Net interest income before provision for loan loss for the three months ended March 31, 2000 was $2.1 million as compared to $1.9 million for the three months ended March 31, 1999. The $232,000 or 12.2% increase can be
attributed to a combination of the $560,000 increase in interest and dividend income and the $328,000 increase in interest expense on deposits and borrowed funds. The average yield on interest earning assets increased 33 basis points to 7.44% for the
three months ended March 31, 2000 from 7.11% for the three months ended March 31, 1999, while the average cost on interest-bearing liabilities increased by 20 basis points to 4.12% for the three months ended March 31, 2000 from 3.92% for the three months
ended March 31, 1999. As a result, the interest rate spread increased 13 basis points to 3.32% for the three months ended March 31, 2000 from 3.19% for the three months ended March 31, 1999.

Net interest income for the nine months ended March 31, 2000 was $6.4 million as compared to $5.6 million for the nine months ended March 31, 1999. The $820,000 or 14.7% increase can be attributed to a combination of the $1.5 million increase in
interest and dividend income and the $729,000 increase in interest expense on deposits and borrowed funds. The average yield on interest earning assets increased 19 basis points to 7.44% for the nine months ended March 31, 2000 from 7.25% for the nine
months ended March 31, 1999, while the average cost on interest-bearing liabilities increased by one basis point to 3.99% for the nine months ended March 31, 2000 from 3.98% for the nine months ended March 31, 1999. As a result, the interest rate spread
increased 18 basis points to 3.45% for the nine months ended March 31, 2000 from 3.27% for the nine months ended March 31, 1999.

Provision for Loan Losses. The provision for loan losses for the three and nine months ended March 31, 2000 was $35,000 and $150,000, respectively, compared to $0 and $90,000 for the three and nine months ended March 31, 1999, respectively. The
increases reflect the increase in net loans and the Company's continuing emphasis on small business lending.

At March 31, 2000, the balance of the allowance for loan losses was $1.5 million or .82% of net loans. Management believes that the allowance for loan losses is adequate to cover any known losses and any losses reasonably expected in the loan
portfolio. While management estimates loan losses using the best available information, no assurance can be made that future additions to the allowance will not be necessary. During the nine months ended March 31, 2000, $14,000 was charged against the
allowance for loan losses while $4,000 in recoveries was credited to the allowance for loan losses. At March 31, 1999, the balance of the allowance for loan losses was $1.3 million or .87% of net loans. During the nine months ended March 31, 1999, $20,000
was charged against the allowance for loan losses while $2,000 in recoveries was credited to the allowance for loan losses.

Other Income. Other income was $226,000 for the three months ended March 31, 2000 compared to $234,000 for the three months ended March 31, 1999. The $8,000 decrease was primarily the result of a $9,000 decrease in the gain on the sales of
mortgage loans and a decrease in the gain on sales of securities available for sale of $7,000, partially offset by a $16,000 increase in customer service fees. Other income was $713,000 for the nine months ended March 31, 2000 compared to $797,000 for the
nine months ended March 31, 1999. The $84,000 decrease for the nine months ended March 31, 2000 was primarily the result of a $96,000 decrease in the gain on the sales of mortgage loans, partially offset by a $36,000 increase in customer service fees.

Operating Expenses. Operating expenses increased by $205,000 or 13.6% to $1.7 million for the three months ended March 31, 2000 from $1.5 million for the three months ended March 31, 1999. Salaries and employee benefits increased by $192,000.
This increase was caused primarily by the adoption of the Company's RRP and general salary increases.

Operating expenses increased by $602,000 or 14.0% to $4.9 million for the nine months ended March 31, 2000 from $4.3 million for the nine months ended March 31, 1999. Salaries and employee benefits increased by $517,000. The increase was caused in part
by the opening of a branch office in Lexington, Massachusetts, in late November 1998, the adoption of the Company's RRP, and general salary increases. The opening of the Lexington office also resulted in an increase of $109,000 in occupancy and equipment
expenses for the nine months ended March 31, 2000 as compared to the same period last year. Annual operating expenses are also expected to increase in future periods due to the increased cost of operating as a publicly held stock institution, the ongoing
operating costs of the Lexington office, and the opening of a new branch office located at 856 Massachusetts Avenue in Arlington, Massachusetts on May 1, 2000.

Asset/Liability ManagementA principal operating objective of the Company is to produce stable earnings by achieving a favorable interest rate spread that can be sustained during fluctuations in prevailing interest rates. Since the Company's principal interest-earning assets
have longer terms to maturity than its primary source of funds, (i.e. deposit liabilities), increases in general interest rates will generally result in an increase in the Company's cost of funds before the yield on its asset portfolio adjusts upward. Banking institutions have generally sought to reduce their
exposure to adverse changes in interest rates by attempting to achieve a closer match between the periods in which their interest-bearing liabilities and interest-earning assets can be expected to reprice through the origination of adjustable-rate
mortgages and loans with shorter terms and the purchase of other shorter term interest-earning assets.

The term "interest rate sensitivity" refers to those assets and liabilities, which mature and reprice periodically in response to fluctuations in market rates and yields. Thrift institutions have historically operated in a mismatched position with
interest-sensitive liabilities exceeding interest-sensitive assets in the short-term time periods. As noted above, one of the principal goals of the Bank's asset/liability program is to more closely match the interest rate sensitivity characteristics of
the asset and liability portfolios.

In order to properly manage interest rate risk, the Board of Directors has established an Asset/Liability Management Committee ("ALCO") made up of members of management to monitor the difference between the Company's maturing and repricing assets and
liabilities and to develop and implement strategies to decrease the "negative gap" between the two. The primary responsibilities of the committee are to assess the Company's asset/liability mix, recommend strategies to the Board that will enhance income
while managing the Company's vulnerability to changes in interest rates and report to the Board the results of the strategies used.

Since the early 1980s, the Bank has stressed the origination of adjustable-rate residential mortgage loans and adjustable-rate home equity loans. Historically, the Bank has attempted to sell fixed-rate loans with terms in excess of 15 years. However,
following the conversion, the Bank has retained a greater portion of its fixed rate loans. A substantial portion of the fixed-rate loans retained in portfolio has been funded with borrowings from the FHLBB.

Since 1995, the Bank has also emphasized commercial loans with short-term maturities or repricing intervals as well as commercial real estate mortgages with short-term repricing intervals. In addition, the Company has used borrowings from the FHLBB to
match-fund the maturity or repricing interval of several larger commercial real estate mortgages.

Liquidity and Capital ResourcesThe Company's primary sources of funds consist of deposits, borrowings, repayment and prepayment of loans, sales and participations of loans, maturities of investments and interest-bearing deposits, and funds provided from operations. While scheduled
repayments of loans and maturities of investment securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by the general level of interest rates, economic conditions, and competition. The Company uses its
liquidity resources primarily to fund existing and future loan commitments, to fund net deposit outflows, to invest in other interest-earning assets, to maintain liquidity, and to meet operating expenses.

The Company is required to maintain adequate levels of liquid assets. This guideline, which may be varied depending upon economic conditions and deposit flows, is based upon a percentage of deposits and short-term borrowings. The Company has
historically maintained a level of liquid assets in excess of regulatory requirements. The Company's liquidity ratio at March 31, 2000 was 55.9%, using the short-term assets to short-term liabilities formula defined under the Federal Deposit Insurance
Corporation's Uniform Bank Performance Reports.

A major portion of the Company's liquidity consists of cash and cash equivalents, short-term U.S. Government and federal agency obligations, and corporate bonds. The level of these assets is dependent upon the Company's operating, investing, lending
and financing activities during any given period.

Liquidity management is both a daily and long-term function of management. If the Company requires funds beyond its ability to generate them internally, the Company believes it could borrow additional funds from the FHLBB. At March 31, 2000, the
Company had borrowings of $37.9 million from the FHLBB.

At March 31, 2000, the Company had $14.7 million in outstanding commitments to originate loans. The Company anticipates that it will have sufficient funds available to meet its current loan origination commitments. Certificates of deposit, which are
scheduled to mature in one year or less totaled $66.2 million at March 31, 2000. Based upon historical experience, management believes that a significant portion of such deposits will remain with the Bank.

At March 31, 2000, the Company and the Bank exceeded all of their regulatory capital requirements.

Financial Services Modernization BillOn November 12, 1999 President Clinton signed the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, federal legislation intended to modernize the financial services industry by establishing a comprehensive framework to permit
affiliations among commercial banks, insurance companies, securities firms and other financial service providers. Generally, the Act (i) repeals the historical restrictions and eliminates many federal and state law barriers to affiliations among banks,
securities firms, insurance companies and other financial service providers, (ii) provides a uniform framework for the functional regulation of the activities of banks, savings institutions and their holding companies, (iii) broadens the activities that
may be conducted by national banks, banking subsidiaries of bank holding companies and their financial subsidiaries, (iv) provides an enhanced framework for protecting the privacy of consumer information, (v) adopts a number of provisions related to the
capitalization, membership, corporate governance and other measures designed to modernize the Federal Home Loan Bank system, (vi) modifies the laws governing the implementation of the Community Reinvestment Act and (vii) addresses a variety of other legal
and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions.

Bank holding companies will be permitted to engage in a wider variety of financial activities than permitted under prior law, particularly with respect to insurance and securities activities. In addition, in a change from prior law, bank holding
companies will be in a position to be owned, controlled or acquired by any company engaged in financially-related activities.

The Company does not believe that the Act will have a material adverse effect on the Company's operations in the near term. However, to the extent that the Act permits banks, securities firms and insurance companies to affiliate, the financial services
industry may experience further consolidation. This could result in a growing number of larger financial institutions that offer a wider variety of financial services than the Company currently offers and that can aggressively compete in the markets
currently served by the Company.

Mystic Financial, Inc. and Subsidiary

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in market risk since that disclosed in Item 7A of the Company's Annual Report on Form 10K for the year ended June 30, 1999.

PART II.    OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K(a)  Exhibits
            27.1 Financial Data Schedule (for electronic filing only)

(b)  Reports on Form 8-K
            None

SIGNATURES

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

|                    | MYSTIC FINANCIAL INC.                                                                                    
|------------------- | ---------------------------------------------------------------------------------------------------------
|Date:  May 11, 2000 | By:    /s/ Robert H. SurabianRobert H. SurabianPresident and Chief Executive Officer                     
|Date:  May 11, 2000 | By:    /s/ Ralph W. DunhamRalph W. DunhamExecutive Vice-President, Chief Financial
Officer, and Treasurer