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, 1998

                                     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.
           (Exact name of registrant as specified in its charter)

DELAWARE                                               04-3401049
--------                                               ----------
(State or other jurisdiction                           (I.R.S. Employer
of incorporation or organization)                      Identification No.)

60 HIGH STREET
MEDFORD, MASSACHUSETTS                                 02155
----------------------                                 -----
(Address of principal executive offices)               (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 8, 1998, 2,711,125 shares of the registrant's common stock were 
outstanding (See Note 3 to Unaudited Consolidated Financial Statements).


                    MYSTIC FINANCIAL, INC. AND SUBSIDIARY

                                    INDEX

PART I     FINANCIAL INFORMATION                                   Page
           ---------------------                                   ----

Item 1     Financial Statements:

           Consolidated Balance Sheets - March 31, 1998
            and June 30, 1997                                        1

           Consolidated Statements of Income - Three and Nine
            Months Ended March 31, 1998 and 1997                     2

           Consolidated Statement of Changes in Stockholders'
            Equity-Nine Months Ended March 31, 1998                  3

           Consolidated Statements of Cash Flows - Nine Months
            Ended March 31, 1998 and 1997                            4

           Notes to Consolidated Financial Statements -
            March 31, 1998                                           5

Item 2     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                     10

Item 3     Quantitative and Qualitative Disclosures About
            Market Risk                                             22

PART II    OTHER INFORMATION
           -----------------

Item 2     Changes in Securities and Use of Proceeds                22

Item 6     Exhibits and Reports on Form 8-K                         23

           SIGNATURES                                               23
           ----------


                    Mystic Financial, Inc. and Subsidiary
                       Part I - Financial Information
                        Item 1 - Financial Statements
                         Consolidated Balance Sheets
                               (In Thousands)

<TABLE>
<CAPTION>
                                                                      March 31, 1998    June 30, 1997
                                                                      --------------    -------------
                                                                                (Unaudited)

<S>                                                                      <C>              <C>
Assets
  Cash and due from banks                                                $  4,284         $  3,953
  Federal funds sold                                                       16,061            2,075
  Short-term investments                                                    3,102              197
                                                                         -------------------------
      Total cash and cash equivalents                                      23,447            6,225

  Securities available for sale, at fair value                             12,127            3,819
  Securities held to maturity, at amortized cost                           14,006           17,504
  Federal Home Loan Bank stock, at cost                                       997              858
  Loans, net of allowance for loan losses of $1,204 and $977,
   respectively                                                           130,640          114,568
  Mortgage loans held for sale, net                                           260              210
  Bank premises and equipment, net                                          2,597            2,697
  Real estate held for investment, net                                      1,799            1,840
  Accrued interest receivable                                               1,029              870
  Due from Co-operative Central Bank                                          669              669
  Other assets                                                                217              393
                                                                         -------------------------
                                                                         $187,788         $149,653
                                                                         =========================

Liabilities and Stockholders' Equity
  Deposits                                                               $137,228         $129,303
  Federal Home Loan Bank borrowings                                        13,511            7,532
  Mortgagors' escrow accounts                                                 532              386
  Accrued interest payable                                                    280              249
  Accrued expenses and other liabilities                                      440              243
                                                                         -------------------------
      Total liabilities                                                   151,991          137,713
                                                                         -------------------------
  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 shares issued at March 31, 1998                                 27                -
    Additional paid-in capital                                             25,733                -
    Retained earnings                                                      12,819           11,761
                                                                         -------------------------
                                                                           38,579           11,761

    Net unrealized gain on securities available for sale, net 
     of tax effects                                                           412              179

    Loan due from ESOP                                                     (3,194)               -
                                                                         -------------------------
      Total stockholders' equity                                           35,797           11,940
                                                                         -------------------------
                                                                         $187,788         $149,653
                                                                         =========================
</TABLE>


   See accompanying notes to unaudited consolidated financial statements.


                    Mystic Financial, Inc. and Subsidiary
                       Part I - Financial Information
                        Item 1 - Financial Statements
                      Consolidated Statements of Income
                               (In Thousands)

<TABLE>
<CAPTION>
                                                                   Three Months Ended                  Nine Months Ended
                                                            --------------------------------    --------------------------------
                                                            March 31, 1998    March 31, 1997    March 31, 1998    March 31, 1997
                                                            --------------    --------------    --------------    --------------
                                                                                        (Unaudited)

<S>                                                             <C>               <C>               <C>               <C>
Interest and dividend income:
  Interest and fees on loans                                    $2,574            $2,103            $7,460            $6,128
  Interest and dividends on investment securities                  288               293               858               854
  Other interest                                                   309                85               575               268
                                                                ------------------------------------------------------------
      Total interest and dividend income                         3,171             2,481             8,893             7,250
                                                                ------------------------------------------------------------

Interest expense:
  Deposits                                                       1,223             1,169             3,711             3,486
  Federal Home Loan Bank borrowings                                167                61               502               108
                                                                ------------------------------------------------------------
      Total interest expense                                     1,390             1,230             4,213             3,594
                                                                ------------------------------------------------------------

Net interest income                                              1,781             1,251             4,680             3,656
Provision for loan losses                                           65                37               215               122
                                                                ------------------------------------------------------------

Net interest income, after provision for loan losses             1,716             1,214             4,465             3,534
                                                                ------------------------------------------------------------

Other income:
  Customer service fees                                            128               112               390               369
  Gain (loss) on sales of mortgage loans                            12                 2                35               (35)
  Gain on sales of securities available for sale, net               46                41               184               118
  Co-operative Central Bank Share Insurance Fund Special
   Dividend                                                          -                 -                49                44
  Miscellaneous                                                     66                53               142               131
                                                                ------------------------------------------------------------
      Total other income                                           252               208               800               627
                                                                ------------------------------------------------------------

Operating expenses:
  Salaries and employee benefits                                   743               646             2,165             2,050
  Occupancy and equipment expenses                                 120               114               366               301
  Data processing expenses                                          66                57               190               164
  Other general and administrative expenses                        264               185               775               669
                                                                ------------------------------------------------------------
      Total operating expenses                                   1,193             1,002             3,496             3,184
                                                                ------------------------------------------------------------
Income before income taxes                                         775               420             1,769               977
Provision for income taxes                                         308               170               711               395
                                                                ------------------------------------------------------------
Net income                                                      $  467            $  250            $1,058            $  582
                                                                ============================================================
</TABLE>


   See accompanying notes to unaudited consolidated financial statements.


                    Mystic Financial, Inc. and Subsidiary
                       Part I - Financial Information
                        Item 1 - Financial Statements
          Consolidated Statement of Changes in Stockholders' Equity
                               (In Thousands)


<TABLE>
<CAPTION>
                                           Additional                  Net Unrealized                       Total
                                 Common     Paid in      Retained    Gain on Securities    Loan Due     Stockholders'
                                 Stock      Capital      Earnings    Available for Sale    From ESOP       Equity
                                 ------    ----------    --------    ------------------    ---------    -------------

<S>                               <C>       <C>          <C>                <C>             <C>            <C>
Balance at June 30, 1997          $ -       $     -      $11,761            $179            $     -        $11,940
Net proceeds from sale of
 common stock                      27        25,733            -               -                  -         25,760
Loan to ESOP                        -             -            -               -             (3,194)        (3,194)
Net income                          -             -        1,058               -                  -          1,058
Change in net unrealized 
 gain on securities available
 for sale, net of tax effects       -             -            -             233                  -            233
                                  --------------------------------------------------------------------------------

Balance at March 31, 1998         $27       $25,733      $12,819            $412            $(3,194)       $35,797
                                  ================================================================================
</TABLE>


    See accompanying notes to unaudited consolidated financial statements


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


<TABLE>
<CAPTION>
                                                          Nine months ended    Nine months ended
                                                           March 31, 1998       March 31, 1997
                                                          -----------------    -----------------
                                                                       (Unaudited)

<S>                                                           <C>                  <C>
Cash flows from operating activities:
  Net income                                                  $  1,058             $    582
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Provision for loan losses                                      215                  122
    Loss on sales of loans                                           -                   18
    Gain on sales of securities available for sale                (184)                (118)
    Depreciation expense                                           251                  244
    Mortgage loans originated for sale                          (5,396)                (959)
    Principal balance of mortgage loans sold                     5,346                1,926
    Increase in accrued interest receivable                       (159)                 (19)
    Decrease in other assets                                        50                   91
    Increase in accrued interest payable                            31                   48
    Increase (decrease) in accrued expenses and
     other liabilities                                             197                  (79)
                                                              -----------------------------
      Net cash provided by operating activities                  1,409                1,856
                                                              -----------------------------

Cash flows from investing activities:
  Proceeds from certificates of deposit                              -                1,000
  Loan to ESOP                                                  (3,194)                   -
  Proceeds from maturities of securities held to
   maturity                                                      5,001               11,947
  Purchase of securities held to maturity                       (1,503)             (12,513)
  Purchase of securities available for sale                    (13,155)              (3,003)
  Proceeds from sales of securities available for sale           5,390                2,327
  Loans originated, net of payments received                   (16,287)             (16,448)
  Proceeds from sale of loans                                        -                5,343
  Purchase of FHLB stock                                          (139)                 (70)
  Purchases of banking premises and equipment                     (110)                (129)
                                                              -----------------------------
      Net cash used by investing activities                    (23,997)             (11,546)
                                                              -----------------------------

Cash flows from financing activities:
  Net increase in deposits                                       7,925                5,654
  Proceeds from borrowings                                      27,055                8,010
  Repayment of borrowings                                      (21,076)              (3,669)
  Proceeds from sale of common stock                            25,760                    -
  Net increase in mortgagors' escrow accounts                      146                   84
                                                              -----------------------------
      Net cash provided by financing activities                 39,810               10,079
                                                              -----------------------------

Net change in cash and cash equivalents                         17,222                  389

Cash and cash equivalents at beginning of period                 6,225                8,771
                                                              -----------------------------

Cash and cash equivalents at end of period                    $ 23,447             $  9,160
                                                              =============================

Supplemental cash flow information:
  Interest paid on deposits                                   $  3,680             $  3,438
  Interest paid on Federal Home Loan Bank
   borrowings                                                 $    502             $    108
  Income taxes paid                                           $    659             $    541
</TABLE>


   See accompanying notes to unaudited consolidated financial statements.


                    Mystic Financial, Inc. and Subsidiary
                       Part I - Financial Information
                        Item 1 - Financial Statements
            Notes to Unaudited Consolidated Financial Statements
                               March 31, 1998


1)    Basis of Presentation and Consolidation

The 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 of Medford 
Co-operative Bank (the "Bank") for the year ended June 30, 1997, included in 
the registration statement on Form S-1 of Mystic Financial, Inc., the 
holding company for Medford Co-operative Bank.   The operating results for 
the period ended March 31, 1998 are those of the Bank and Company.  Mystic 
had not issued any stock and had not conducted any business other than that 
of an organizational nature until January 8, 1998 when Mystic became the 
Bank's holding company in connection with the Bank's conversion from mutual 
to stock form.  Operating results prior to January 8, 1998 include only the 
Bank and not the Company.

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 accurals) 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 Contingencies

At March 31, 1998, the Bank had outstanding commitments to originate loans 
amounting to approximately $8.9 million, and unadvanced funds on 
construction loans and lines of credit amounting to approximately $246,000 
and $3.1 million, respectively.

3)    Stock Conversion

The Bank is a Massachusetts chartered stock co-operative bank founded in 
1886.  The Bank converted from a mutual institution on January 8, 1998.  
Mystic Financial, Inc. ("Mystic" or the "Company") has been organized at the 
direction of the Board of Directors of the Bank and has acquired all of the 
capital stock of the Bank.  The simultaneous conversion of the Bank to stock 
form, the issuance of the Bank's stock to the Company and the offer and sale 
of the common stock by the Company are herein referred to as the 
"Conversion."

The Company issued 2,711,125 shares at an initial offering price of $10.00 
per share on January 8, 1998 raising gross proceeds of  $27,111,250 and 
began trading on the Nasdaq National Market under the symbol "MYST" on 
January 9, 1998.  Net proceeds of the initial offering were approximately 
$25.8 million.  On January 8, 1998, the Company loaned approximately $3.2 
million to the Company's Employee Stock Ownership Plan to fund its purchase 
of 216,890 shares of common stock of the Company in open-market purchases 
following completion of the Conversion.

4)    Earnings Per Share

Earnings per share data is not presented for the three and nine months ended 
March 31, 1998 since there were no outstanding shares of common stock until 
the Conversion on January 8, 1998.

5)    Investment Securities

The following table sets forth the Company's investment securities at the 
dates indicated.

<TABLE>
<CAPTION>
                                         March 31, 1998          June 30, 1997
                                      --------------------    --------------------
                                      Amortized     Fair      Amortized     Fair
                                        Cost        Value       Cost        Value
                                      ---------     -----     ---------     -----
                                                     (In Thousands)

<S>                                    <C>         <C>         <C>         <C>
Securities Available for Sale:
  U.S. Government & Federal Agency
   Obligations                         $ 9,049     $ 9,019     $     -     $     -
  Marketable equity securities           2,443       3,108       3,543       3,819
                                       -------------------------------------------
      Total                            $11,492     $12,127     $ 3,543     $ 3,819
                                       ===========================================

Securities held to maturity:
  U.S. Government & Federal
   Agency Obligations                  $11,496     $11,517     $14,976     $14,908
  Other bonds & obligations              2,510       2,519       2,528       2,523
                                       -------------------------------------------
      Total                            $14,006     $14,036     $17,504     $17,431
                                       ===========================================
</TABLE>


6)    Loans

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

<TABLE>
<CAPTION>
                                    March 31, 1998          June 30, 1997
                                  -------------------    -------------------
                                   Amount     Percent     Amount     Percent
                                  --------    -------    --------    -------
                                            (Dollars in Thousands)

<S>                               <C>         <C>        <C>         <C>
Residential mortgage loans        $ 99,682     76.3%     $ 90,203     78.7%
Commercial real estate loans        23,231     17.8        17,847     15.6
Commercial loans                     4,695      3.6         3,677      3.2
Consumer loans                       1,832      1.4         1,655      1.4
Home equity loans                    1,616      1.2         1,564      1.4
Construction loans                   1,050      0.8           976      0.9
                                  ----------------------------------------
Total loans                        132,106    101.1       115,922    101.2

Less:
Deferred loan origination fees          16        -            37        -
Unadvanced principal                   246      0.2           340      0.3
Allowance for loan
 losses                              1,204      0.9           977      0.9
                                  ----------------------------------------
                                  $130,640    100.0%     $114,568    100.0%
                                  ========================================
</TABLE>


7)    Allowance for Loan Losses

The following table analyzes activity in the Company's allowance for loan 
losses for the periods indicated.

<TABLE>
<CAPTION>
                                                             Nine              Nine
                                                         Months Ended      Months Ended
                                                        March 31, 1998    March 31, 1997
                                                        --------------    --------------
                                                             (Dollars in Thousands)

<S>                                                        <C>               <C>
Average loans, net                                         $121,752          $100,930
                                                           ==========================
Period-end net loans                                       $130,640          $105,847
                                                           ==========================

Allowance for loan losses at beginning of period           $    977          $    742
Provision for loan losses                                       215               122
Plus recoveries                                                  14                18
Loans charged-off                                                (2)              (25)
                                                           --------------------------
Allowance for loan losses at end of period                 $  1,204          $    857
                                                           ==========================

Non-performing loans                                       $    473          $    513
                                                           ==========================

Ratios:
  Allowance for loan losses to period end net loans            0.91%             0.81%

  Allowance for loan losses to non-performing loans          254.55%           167.06%

  Net charge-offs (recoveries) to average loans, net          (0.01)%            0.01%
</TABLE>



8)    Deposits and Borrowed Funds

The 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.

<TABLE>
<CAPTION>
                                                       March 31, 1998         June 30, 1997
                                                     -------------------    -------------------
Deposits:                                             Amount     Percent     Amount     Percent
                                                     --------    -------    --------    -------
                                                               (Dollars in Thousands)

<S>                                                  <C>         <C>        <C>         <C>
Savings deposits                                     $ 39,412     28.7%     $ 40,794     31.6%
NOW accounts                                           27,549     20.1        17,975     13.9
Money market deposits                                   6,506      4.7         6,489      5.0
Demand deposits                                         6,427      4.7         4,910      3.8
Certificates of deposits                               57,334     41.8        59,135     45.7
                                                     ----------------------------------------
Total deposits                                       $137,228    100.0%     $129,303    100.0%
                                                     ========================================

Borrowed Funds:
  Advances from Federal Home Loan Bank of Boston:
    Maturities less than one year                    $  4,100     30.3%        2,100     27.9%
    Maturities greater than one year                    9,411     69.7%        5,432     72.1%
                                                     ----------------------------------------
    Total borrowed funds                             $ 13,511    100.0%     $  7,532    100.0%
                                                     ========================================
</TABLE>


                    Mystic Financial, Inc. and Subsidiary
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 1998


General

      Medford 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 
following discussion and analysis should be read in conjunction with the 
consolidated financial statements and related notes thereto included within 
this report.

      The Private Securities Litigation Reform Act of 1995 contains safe 
harbor provisions regarding forward-looking statements.  When used in this 
discussion, the words "believes", "anticipates", "contemplates", "expects", 
and similar expressions are intended to identify forward-looking statements.  
Such statements are subject to certain risks and uncertainties which could 
cause actual results to differ materially from those projected.  Those risks 
and uncertainties include changes in interest rates generally and changes in 
real estate values and other economic conditions in eastern Massachusetts, 
the Bank's principal market area.  The Company undertakes no obligation to 
publicly release the results of any revisions to those forward-looking 
statements which may be made to reflect events or circumstances after the 
date hereof or to reflect the occurrence of unanticipated events.  
Additional information on potential factors which could affect the Company's 
financial results are included in the registration statement on Form S-1 of 
Mystic.

      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 Company's profitability is also affected by the level of other 
income and operating expenses.  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.

      The operations of the Company, and banking institutions in general, 
are significantly influenced by general economic conditions and related 
monetary and fiscal policies of the financial institution's regulatory 
agencies.  Deposit flows and the cost of funds are influenced by interest 
rates on competing investments and general market rates of interest.  
Lending activities are affected by the demand for real estate financing and 
other types of loans, which in turn are affected by the interest rates at 
which such financing may be offered and other factors affecting loan demand 
and the availability of funds.

      In addition to those factors previously disclosed by the Company and 
Bank and those factors identified elsewhere herein, the following factors 
could cause actual results to differ materially from such forward-looking 
statements:  continued pricing pressures on loan and deposit products, 
actions of competitors, changes in economic conditions, the extent and 
timing of actions of the Federal Reserve Board, customer disintermediation, 
customers' acceptance of the Bank's products and services, the extent and 
timing of legislative and regulatory actions and reforms, and the ability of 
the Company and Bank to effectively deploy the capital it raised in its 
initial offering.

Average Balances, Interest and Average Yields

      The 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, 1998  

<TABLE>
<CAPTION>
                                                        Three Months Ended March 31, 1998     Three Months Ended March 31, 1997
                                                        ----------------------------------    ----------------------------------
                                                        Average       Interest      Yield/    Average       Interest      Yield/
                                                        Balance    Income/Expense    Rate     Balance    Income/Expense    Rate
                                                        --------   --------------   ------    --------   --------------   ------
                                                                                 (Dollars in Thousands)

<S>                                                     <C>            <C>          <C>       <C>            <C>          <C>
INTEREST-EARNING ASSETS:
  Total loans, net                                      $126,501       $2,574       8.14%     $103,605       $2,103       8.12%
  Investments                                             21,114          288       5.46%       21,162          293       5.54%
  Other earning assets                                    24,703          309       5.00%        6,283           85       5.41%
                                                        ---------------------                 ---------------------
    Total interest-earning assets                        172,318        3,171       7.36%      131,050        2,481       7.57%
                                                                       ------                                ------
  Cash and due from banks                                  2,492                                 1,987
  Other assets                                             6,421                                 5,748
                                                        --------                              --------
    Total assets                                        $181,231                              $138,785
                                                        ========                              ========

INTEREST-BEARING LIABILITIES:
  Regular and other deposits                            $ 44,669          310       2.78%     $ 39,845          270       2.71%
  Now accounts                                            22,968           89       1.55%       13,545           64       1.89%
  Money market deposits                                    6,795           45       2.65%        6,017           38       2.53%
  Certificates of deposit                                 57,381          779       5.43%       58,462          797       5.45%
                                                        ---------------------                 ---------------------

    Total interest-bearing deposits                      131,813        1,223       3.71%      117,869        1,169       3.97%
FHLB borrowings                                           10,969          167       6.09%        3,967           61       6.15%
                                                        ---------------------                 ---------------------
    Total interest-bearing liabilities                   142,782        1,390       3.89%      121,836        1,230       4.04%
                                                                       ------                                ------
Demand deposit accounts                                    5,711                                 4,698
Other liabilities                                          2,841                                   741
                                                        --------                              --------
    Total liabilities                                    151,334                               127,275
Stockholders' equity                                      29,897                                11,510
                                                        --------                              --------
    Total liabilities and stockholders' equity          $181,231                              $138,785
                                                        ========                              ========
Net interest income                                                    $1,781                                $1,251
                                                                       ======                                ======
Interest rate spread                                                                3.47%                                 3.53%
Net interest margin                                                                 4.13%                                 3.82%
Interest earning assets/interest-bearing liabilities                                1.21x                                 1.08x
</TABLE>



MYSTIC FINANCIAL, INC. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS
NINE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
                                                         Nine Months Ended March 31, 1998      Nine Months Ended March 31, 1997
                                                        ----------------------------------    ----------------------------------
                                                        Average       Interest      Yield/    Average       Interest      Yield/
                                                        Balance    Income/Expense    Rate     Balance    Income/Expense    Rate
                                                        --------   --------------   ------    --------   --------------   ------
                                                                                 (Dollars in Thousands)

<S>                                                     <C>            <C>          <C>       <C>            <C>          <C>
INTEREST-EARNING ASSETS:
  Total loans, net                                      $121,752       $7,460       8.17%     $100,930       $6,128       8.10%
  Investments                                             20,554          858       5.57%       19,825          854       5.74%
  Other earning assets                                    14,708          575       5.21%        6,602          268       5.41%
                                                        ---------------------                 ---------------------
    Total interest-earning assets                        157,014        8,893       7.55%      127,357        7,250       7.59%
                                                                       ------                                ------
  Cash and due from banks                                  2,780                                 1,940
  Other assets                                             6,135                                 5,716
                                                        --------                              --------
    Total assets                                        $165,929                              $135,013
                                                        ========                              ========

INTEREST-BEARING LIABILITIES:
  Regular and other deposits                            $ 44,100          847       2.56%     $ 39,983          838       2.79%
  Now accounts                                            20,920          259       1.65%       13,759          207       2.01%
  Money market deposits                                    6,661          132       2.97%        6,003          117       2.60%
  Certificates of deposit                                 58,249        2,473       5.66%       56,466        2,324       5.49%
                                                        ---------------------                 ---------------------
    Total interest-bearing deposits                      129,930        3,711       3.81%      116,211        3,486       4.00%

FHLB borrowings                                           10,797          502       6.20%        2,306          108       6.24%
                                                        ---------------------                 ---------------------
    Total interest-bearing liabilities                   140,727        4,213       3.99%      118,517        3,594       4.04%

Demand deposit accounts                                    5,592                                 4,394
Other liabilities                                            398                                   768
                                                        --------                              --------
    Total liabilities                                    146,717                               123,679
Stockholders' equity                                      19,212                                11,334
                                                        --------                              --------
    Total liabilities and stockholders' equity          $165,929                              $135,013
                                                        ========                              ========
Net interest income                                                    $4,680                                $3,656
                                                                       ======                                ======
Interest rate spread                                                                3.56%                                 3.55%
Net interest margin                                                                 3.97%                                 3.83%
Interest earning assets/interest-bearing liabilities                                1.12x                                 1.07x
</TABLE>



Rate/Volume Analysis

      The 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.

<TABLE>
<CAPTION>
                                 Nine Months Ended March 31,    Three Months Ended March 31,
                                        1998 vs. 1997                   1998 vs 1997
                                     Increase (decrease)            Increase (decrease)
                                 ---------------------------    ----------------------------
                                      Due to                         Due to
                                 ----------------                ---------------
                                 Rate      Volume     Total      Rate     Volume     Total
                                 -----     ------     ------     ----     ------     -----
                                                       (In Thousands)

<S>                              <C>       <C>        <C>        <C>       <C>       <C>
Interest and dividend income:
  Loans, net                     $  53     $1,279     $1,332     $  5      $466      $471
  Investments                      (36)        40          4       (4)       (1)       (5)
  Other earning assets             (10)       317        307       (6)      230       224
                                 --------------------------------------------------------
      Total                          7      1,636      1,643       (5)      695       690
                                 --------------------------------------------------------

Interest expense:
  Deposits                        (169)       394        225      (79)      133        54
  Borrowed funds                    (1)       395        394       (2)      108       106
                                 --------------------------------------------------------
      Total                       (170)       789        619      (81)      241       160
                                 --------------------------------------------------------

Change in net interest income    $ 177     $  847     $1,024     $ 76      $454      $530
                                 ========================================================
</TABLE>



Financial Condition and Results of Operations

Comparison of Financial Condition at March 31, 1998 and June 30, 1997

      The Bank's total assets amounted to $187.8 million at March 31, 1998 
compared to $149.7 million at June 30, 1997, an increase of $38.1 million or 
25.5%.  The increase in total assets is primarily attributable to a $14.0 
million increase in federal funds sold, a $2.9 million increase in short-
term investments, and an increase in net loans of $16.1 million.  

      Federal funds sold were $16.1 million at March 31, 1998 compared to 
$2.1 million at June 30, 1997.  Short-term investments were $3.1 million at 
March 31, 1998 compared to $197,000 at June 30, 1997.   Federal funds sold 
and short-term investments increased at March 31, 1998 due to the Bank's 
need to maintain liquidity for a large deposit relationship with a law firm 
which maintains short-term deposits in real estate conveyancing accounts and 
has significant fluctuations in its deposit account balances.

      Net loans increased by $16.1 million or 14.0% to $130.6 million or 
69.6% of total assets at March 31, 1998 as compared to $114.6 million or 
76.6% of total assets at June 30, 1997 as  the Bank continued its emphasis 
on originating and retaining residential mortgage loans and commercial and 
commercial real estate loans.  Investment securities held by the Bank 
increased by $4.8 million or 22.6% to $26.1 million at March 31, 1998 from 
$21.3 million at June 30, 1997.

      Total deposits increased by $7.9 million or 6.1% to $137.2 million at 
March 31, 1998 from $129.3 million at June 30, 1997 as a result of a general 
increase in deposit balances.   Total borrowings increased by $6.0 million 
to $13.5 million at March 31, 1998 from $7.5 million at June 30, 1997.  The 
Bank's continued use of borrowed funds reflects additional funding needed to 
support its growth in net loans.  Net loan growth exceeded the increase in 
total deposits by $8.1 million from June 30, 1997 through March 31, 1998.  
Stockholders' equity increased by $23.9 million to $35.8 million at March 
31, 1998 from $11.9 million at June 30, 1997 as a result of net proceeds 
from the issuance of common stock of $25.8 million, net income of $1,058,000 
and an increase in the net unrealized gain on securities available for sale 
of $233,000.  These increases were offset by the Company's $3.2 million loan 
to the Employee Stock Ownership Plan ("ESOP").

Comparison of the Operating Results for the Three and Nine Months Ended 
March 31, 1998 and 1997

      Net Income.  Net income was $467,000 and $1,058,000 for the three and 
nine months ended March 31, 1998, respectively, compared to $250,000 and 
$582,000 for the corresponding periods a year ago.  Return on average assets 
was 1.03% and .85% for the three and nine months ended March 31, 1998, 
respectively, compared to .72% and .57% for the corresponding periods a year 
ago.  Return on average equity was 6.25% and 7.34% for the three and nine 
months ended March 31, 1998, respectively, compared to 8.69% and 6.85% for 
the corresponding periods a year ago.

      The increase in net income for the three months ended March 31, 1998 
compared to the three months ended March 31, 1997 was attributable to an 
increase in net interest income of $530,000 and an increase of $44,000 in 
other income, which were offset by an increase in provision for loan losses 
of $28,000 and an increase in operating expenses of $191,000.  The increase 
in net income for the nine months ended March 31, 1998 compared to the nine 
months ended March 31, 1997 was attributable to an increase of $1.0 million 
in net interest income and an increase of $173,000 in other income, offset 
by an increase of $93,000 in provision for loan losses, and an increase of 
$312,000 in operating expenses.

      Interest Income.  Total interest and dividend income increased by 
$690,000 or 27.8% to $3.2 million for the three months ended March 31, 1998 
from $2.5 million for the three months ended March 31, 1997.  The increase 
in interest income was a result of a higher level of loans and a greater mix 
of higher yielding commercial and commercial real estate loans funded by 
maturing lower yield investment securities and other earning assets.  The 
average balance of net loans for the three months ended March 31, 1998 was 
$126.5 million compared to $103.6 million for the three months ended March 
31, 1997.  The average yield on net loans was 8.14% for the three months 
ended March 31, 1998 compared to 8.12% for the three months ended March 31, 
1997.

      Total interest and dividend income increased by $1.6 million or 22.7% 
to $8.9 million for the nine months ended March 31, 1998 from $7.3 million 
for the nine months ended March 31, 1997.  The increase in interest income 
was a result of a higher level of loans and a greater mix of higher yielding 
commercial and commercial real estate loans funded by maturing lower yield 
investment securities and other earning assets.  The average balance of net 
loans for the nine months ended March 31, 1998 was $121.8 million compared 
to $100.9 million for the nine months ended March 31, 1997.  The average 
yield on net loans was 8.17% for the nine months ended March 31, 1998 
compared to 8.10% for the nine months ended March 31, 1997.

      Interest Expense.  Total interest expense increased by $160,000 or 
13.0% to $1.4 million for the three months ended March 31, 1998 from $1.2 
million for the three months ended March 31, 1997.  The reason for the 
increase in interest expense was the increase in the overall deposit 
balances as well as an increase in Federal Home Loan Bank of Boston 
borrowings.  Average interest-bearing deposits increased by $13.9 million or 
11.8% to $131.8 million for the three months ended March 31, 1998.  Average 
borrowings increased by $7.0 million to $11.0 million for the three months 
ended March 31, 1998 from $4.0 million for the three months ended March 31, 
1997.

      Total interest expense increased by $619,000 or 17.2% to $4.2 million 
for the nine months ended March 31, 1998 from $3.6 million for the nine 
months ended March 31, 1997.  The primary reasons for the increase in 
interest expense were the increase in the overall deposit balances and an 
increase in Federal Home Loan Bank of Boston borrowings.  Average interest-
bearing deposits increased by $13.7 million or 11.8% to $129.9 million for 
the nine months ended March 31, 1998.  Average borrowings increased by $8.5 
million to $10.8 million for the nine months ended March 31, 1998 from $2.3 
million for the nine months ended March 31, 1997.

      Net Interest Income.  Net interest income for the three months ended 
March 31, 1998 was $1.8 million as compared to $1.3 million for the three 
months ended March 31, 1997.  The $530,000 or 42.4% increase can be 
attributed to a combination of the $690,000 increase in interest and 
dividend income and the $160,000 increase in interest expense on deposits 
and borrowed funds.  The average yield on interest earning assets decreased 
21 basis points to 7.36% for the three months ended March 31, 1998 from 
7.57% for the three months ended March 31, 1997, while the average cost on 
interest-bearing liabilities decreased by 15 basis points to 3.89% for the 
three months ended  March 31, 1998 from 4.04% for the three months ended 
March 31, 1997.  As a result, the interest rate spread decreased to 3.47% 
for the three months ended March 31, 1998 from 3.53% for the three months 
ended March 31, 1997.  The interest rate spread also declined due to the 
receipt of net conversion proceeds which have been invested in federal funds 
sold, short-term investments and investment securities at interest rates 
lower than the Company's average yield on loans.  The Company's net loan to 
total assets ratio also declined to 69.6% at March 31, 1998 from 76.6% at 
June 30, 1997 as a result of the conversion proceeds being invested in 
federal funds sold, short-term investments and investment securities.

      Net interest income for the nine months ended March 31, 1998 was $4.7 
million as compared to $3.7 million for the nine months ended March 31, 
1997.  The $1.0 million or 28.0% increase can be attributed to a combination 
of the $1.6 million increase in interest and dividend income and the 
$619,000 increase in interest expense on deposits and borrowed funds.  The 
average yield on interest earning assets decreased 4 basis points to 7.55% 
for the nine months ended March 31, 1998 from 7.59% for the nine months 
ended March 31, 1997, while the average cost on interest-bearing liabilities 
decreased by 5 basis points to 3.99% for the nine months ended March 31, 
1998 from 4.04% for the nine months ended March 31, 1997.  As a result, the 
interest rate spread was 3.56% for the nine months ended March 31, 1998 and 
3.55% for the nine months ended  March 31, 1997.

      Provision for Loan Losses.  The provision for loan losses for the 
three and nine months ended March 31, 1998 was $65,000 and $215,000, 
respectively, compared to $37,000 and $122,000 for the same periods a year 
ago.  These increases reflect the increased volume in commercial and 
commercial real estate loans.  At March 31, 1998, the balance of the 
allowance for loan losses was $1,204,000 or .91% of total loans.  During the 
nine months ended March 31, 1998, $2,000 was charged against allowance for 
loan losses while $14,000 in recoveries was credited to the allowance for 
loan losses.  At June 30, 1997, the balance of the allowance for loan losses 
was $977,000 or .85% of total loans.  During the nine months ended March 31, 
1997, $25,000 was charged against allowance for loan losses while $18,000 in 
recoveries was credited to the allowance for loan losses.  Non-performing 
loans at March 31, 1998 and 1997 were $473,000 and $513,000, respectively.

      Other Income.  Other income was $252,000 for the three months ended 
March 31, 1998 compared to $208,000 for the three months ended March 31, 
1997.  The $44,000 or 21.2% increase was primarily the result of an increase 
in the gain on the sale of mortgage loans of $10,000, and an increase in 
miscellaneous income of $13,000.

      Other income was $800,000 for the nine months ended March 31, 1998 
compared to $627,000 for the nine months ended March 31, 1997.  The $173,000 
or 27.6% increase was primarily the result of a $66,000 increase in gain on 
sales of investment securities and a $70,000 increase in gain on sales of 
mortgage loans.

      Operating Expenses.  Operating expenses increased to $1.2 million for 
the three months ended March 31, 1998 from $1.0 million for the three months 
ended March 31, 1997.  The increase of $191,000 or 19.1% mainly resulted 
from an increase in salaries and employee benefits of $97,000 attributable 
to the Company's adoption of an Employee Stock Ownership Plan ("ESOP") and 
an increase in other general and administrative expenses of $79,000 caused 
by higher professional fees and liability insurance costs from operating as 
a public company.  Operating expense increased to $3.5 million for the nine 
months ended March 31, 1998 from $3.2 million for the nine months ended 
March 31, 1997.  The increase of $312,000 or 9.8% mainly resulted from an 
increase in salaries and employee benefits attributable to the Company's 
adoption of an Employee Stock Ownership Plan and an increase in other 
general and administrative expenses caused by higher professional fees and 
liability insurance costs from operating as a public company. Annual 
operating expenses are also expected to increase in future periods due to 
the increased cost of operating as a publicly held stock institution.

Asset/Liability Management

      A principal operating objective of the Bank is to produce stable 
earnings by achieving a favorable interest rate spread that can be sustained 
during fluctuations in prevailing interest rates.  Since the Bank'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 Bank'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 Bank's Board of 
Directors has established an Asset/Liability Management Committee ("ALCO") 
made up of members of management to monitor the difference between the 
Bank'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 Bank's 
asset/liability mix, recommend strategies to the Board that will enhance 
income while managing the Bank'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 attempts to sell fixed rate loans with terms 
in excess of 15 years.  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 Bank has used borrowings from the Federal Home Loan Bank of 
Boston to match-fund the maturity or repricing interval of several larger 
commercial real estate mortgages.

      In the future, in managing its interest rate sensitivity, the Bank 
intends to continue to stress the origination of adjustable-rate mortgages 
and loans with shorter maturities and the maintenance of a consistent level 
of short-term securities.

Liquidity and Capital Resources

      The Bank'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 Bank 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 Bank 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 Bank has historically maintained a level of liquid assets 
in excess of regulatory requirements.  The Bank's liquidity ratio at March 
31, 1998 was 32.7%.

      A major portion of the Bank'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 Bank'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 Bank requires funds beyond its ability to generate them 
internally, the Bank believes it could borrow additional funds form the 
Federal Home Loan Bank of Boston.  At March 31, 1998, the Bank had 
borrowings of $13.5 million from the FHLB of Boston.

      At March 31, 1998, the Bank had $8.9 million in outstanding 
commitments to originate loans.  The Bank 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 $45.8 million at March 31, 1998.  Based upon historical experience, 
management believes that a significant portion of such deposits will remain 
with the Bank.

      At March 31, 1998, the Bank exceeded all of its regulatory capital 
requirements.

Year 2000

      The Company and the Bank are aware of the issues associated with the 
programing code in existing computer systems as the millennium (year 2000) 
approaches.  The "year 2000" problem is pervasive and complex as virtually 
every computer operation will be affected in some way by the rollover of the 
two digit year value to 00.  The issue is whether computer systems will 
properly recognize date sensitive information when the year changes to 2000.  
Systems that do not properly recognize such information could generate 
erroneous data or cause a system to fail.

      The Company and the Bank are utilizing both internal and external 
resources to identify, correct or reprogram, and test the systems for the 
year 2000 compliance.  It is anticipated that all reprogramming efforts will 
be completed by December 31, 1998, allowing adequate time for testing.  To 
date, confirmations have been received from the Company's and the Bank's 
primary data processing vendors that plans are being developed to address 
processing of transactions in the year 2000.  Although the Company cannot 
currently estimate the extent to which any failure to process date 
information correctly could have a material adverse effect on the Company's 
business, operations or financial condition, management believes that, if 
not adequately addressed, such delays, errors or failures could have a 
significant adverse impact on the financial condition and results of 
operation of the Company.

      In addition, monitoring and managing the year 2000 project will result 
in additional direct and indirect costs to the Bank.  Direct costs include 
potential charges by third party software vendors for product enhancements, 
costs involved in testing software products for year 2000 compliance, and 
any resulting costs for developing and implementing contingency plans for 
critical software products which are not enhanced.  Indirect costs will 
principally consist of the time devoted by existing employees in monitoring 
software vendor progress, testing enhanced software products and 
implementing any necessary contingency plans.  Management has not yet 
assessed the year 2000 compliance expense and related potential affect on 
the Company's or the Bank's earnings.  Actual costs will be charged to 
earnings as incurred.  Such costs have not been material to date.

      The Bank has contacted its significant vendors and requested their 
year 2000 compliance plans.  The Bank has reviewed vendor plans that have 
been received and has notified such vendors of its reliance upon their 
representations.  Where possible, the Bank has begun testing core mission 
critical systems.  The Federal Deposit Insurance Corporation ("FDIC") has 
conducted a review to determine the Bank's progress in achieving year 2000 
compliance for automated systems and determined that the Bank's program is 
proceeding satisfactorily.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

       There has been no material change in market risk since June 30, 1997.

PART II.    OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

      (d)   Use of Proceeds

      The Company's Registration Statement on Form S-1 (File No. 333-34447) 
(the "Registration Statement") was declared effective by the United States 
Securities and Exchange Commission (the "SEC") on November 14, 1998.  All 
2,711,125 shares of common stock, par value of $.01 per share (the "Common 
Stock"), registered in the Registration Statement and offered in the 
Company's Subscription Offering (the "Offering") were sold at a price of 
$10.00 per share.  The Offering closed on January 8, 1998 and raised gross
proceeds of $27,111,250 for the Company.  Trident Securities, Inc. of Raleigh,
North Carolina served as Sales Agent for the Offering. 

      No Offering expenses were paid, either directly or indirectly,  to 
directors or officers of the Company or their associates, to persons owning 
ten percent or more of the Company's Common Stock or to any other affiliates 
of the Company. 

      The net proceeds of the Offering for the Company, after deducting the 
expenses of the Offering (including sales agency commissions and expenses) 
were $25,760,000.  Of such proceeds, $12,904,000 were distributed to the 
Bank, which used the proceeds for purchases of U.S. Treasury Notes and Federal
Agency obligations of varying maturities with final maturities all within five
years and funding of adjustable and fixed rate residential loans, consumer
loans, and commercial and commercial real estate loans. Of the proceeds 
retained by the Company, $3,194,000 was loaned to the Company's Employee 
Stock Ownership Plan to fund its purchase of 216,890 shares of Common Stock 
in open-market purchases.  Proceeds were also invested in U.S. Treasury 
Notes maturing within two years and Federal Agency obligations of varying 
maturities with final maturities all within five years.   No Offering 
proceeds were paid, either directly or indirectly,  to directors or officers 
of the Company or their associates, to persons owning ten percent or more of 
the Company's Common Stock or to any other affiliates of the Company.  The 
use of proceeds does not represent a material change from the use of 
proceeds described in the Company's prospectus.

Item 6.     Exhibits and Reports on Form 8-K

      (a)   Exhibits

            27.1 Financial Data Schedule

      (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 13, 1998                   By:  /s/ Robert H. Surabian
      -----------------------------       ---------------------------------
                                          Robert H. Surabian
                                          President and Chief Executive Officer


Date:   May 13, 1998                   By:  /s/ Ralph W. Dunham
      -----------------------------       ---------------------------------
                                          Ralph W. Dunham
                                          Executive Vice-President, Chief
                                          Financial Officer, and Treasurer