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, 2003

                                     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  [ ]

Indicate by check mark if the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

                            YES  [ ]      NO  [X]

As of May 13, 2003, 1,468,443 shares of the registrant's common stock were
outstanding.

<PAGE>


                   MYSTIC FINANCIAL, INC. AND SUBSIDIARIES

                                    INDEX

PART I   FINANCIAL INFORMATION                                           Page
         ---------------------                                           ----
Item 1   Financial Statements:

         Consolidated Balance Sheets - March 31, 2003
          and June 30, 2002                                                3

         Consolidated Statements of Income - Three and Nine Months
          Ended March 31, 2003 and 2002                                    4

         Consolidated Statements of Changes in Stockholders' Equity -
          Nine Months Ended March 31, 2003 and 2002                        5

         Consolidated Statements of Cash Flows - Nine Months
          Ended March 31, 2003 and 2002                                    6

         Notes to Unaudited Consolidated Financial Statements -
          March 31, 2003                                                   7

Item 2   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                             12

Item 3   Quantitative and Qualitative Disclosures About
          Market Risk                                                     25

Item 4   Controls and Procedures                                          25


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

Item 5   Other Information                                                25

Item 6    Exhibits and Reports on Form 8-K                                25

SIGNATURES                                                                26
----------

<PAGE>  2


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

<TABLE>
<CAPTION>

                                                      March 31,    June 30,
                                                         2003        2002
                                                      ---------    --------
                                                           (Unaudited)


                                                   <c>          <c>
Assets
  Cash and due from banks                             $  9,857     $ 18,155
  Federal funds sold                                     5,762       10,653
  Short-term investments                                23,600        5,804
                                                      --------     --------
      Total cash and cash equivalents                   39,219       34,612
  Securities available for sale, at fair value         104,273       65,900
  Federal Home Loan Bank stock, at cost                  2,932        2,932
  Loans, net of allowance for loan losses of
   $2,244 and $2,063, respectively                     257,750      243,743
  Mortgage loans held for sale                               -        1,231
  Bank premises and equipment, net                       3,053        2,885
  Real estate held for investment, net                   1,560        1,586
  Accrued interest receivable                            1,902        1,784
  Due from Co-operative Central Bank                       929          929
  Other assets                                           6,063        1,131
                                                      --------     --------
                                                      $417,681     $356,733
                                                      ========     ========

Liabilities and Stockholders' Equity
  Deposits                                            $326,433     $267,438
  Federal Home Loan Bank borrowings                     51,259       58,135
  Subordinated Debt                                     12,000        5,000
  Mortgagors' escrow accounts                              912          792
  Accrued expenses and other liabilities                 1,518        1,445
                                                      --------     --------
      Total liabilities                                392,122      332,810
                                                      --------     --------

Stockholders' equity
  Preferred stock, $.01 par value, 1,000,000
   shares authorized; none issued                            -            -
  Common stock, $.01 par value, 5,000,000 shares
   authorized; 2,722,125 and 2,719,125 issued,
   respectively                                             27           27
  Additional paid-in capital                            25,779       25,699
  Retained earnings                                     18,007       17,099
  Treasury stock, at cost, 1,253,682 and 1,253,322
   shares, respectively                                (17,130)     (17,124)
  Accumulated other comprehensive income                   585          350
  Unearned ESOP shares                                  (1,372)      (1,622)
  Unearned RRP stock                                      (337)        (506)
                                                      --------     --------
      Total stockholders' equity                        25,559       23,923
                                                      --------     --------
                                                      $417,681     $356,733
                                                      ========     ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

<PAGE>  3


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

<TABLE>
<CAPTION>

                                                       Three Months Ended        Nine Months Ended
                                                     ----------------------    ----------------------
                                                     March 31,    March 31,    March 31,    March 31,
                                                        2003         2002         2003         2002
                                                     ---------    ---------    ---------    ---------
                                                                       (Unaudited)


                                                    <c>          <c>         <c>          <c>
Interest and dividend income:
  Interest and fees on loans                           $4,394       $4,185      $13,187      $12,674
  Interest and dividends on securities                    934          634        2,506        1,696
  Other interest                                           70           94          307          425
                                                       ------       ------      -------      -------
      Total interest and dividend income                5,398        4,913       16,000       14,795
                                                       ------       ------      -------      -------

Interest expense:
  Deposits                                              1,772        1,780        5,461        5,597
  Federal Home Loan Bank borrowings                       692          721        2,193        2,053
  Subordinated debt                                       107            -          254            -
                                                       ------       ------      -------      -------
      Total interest expense                            2,571        2,501        7,908        7,650
                                                       ------       ------      -------      -------
Net interest income                                     2,827        2,412        8,092        7,145
Provision for loan losses                                  75          100          200          255
                                                       ------       ------      -------      -------
Net interest income, after provision for
 loan losses                                            2,752        2,312        7,892        6,890

Other income:
  Customer service fees                                   238          219          746          665
  Gain (loss) on sales of securities
   available for sale, net                                 65            -          (63)          10
  Gain on sale of loans                                   244           51          588           78
  Miscellaneous                                             2           15           56           82
                                                       ------       ------      -------      -------
      Total other income                                  549          285        1,327          835
                                                       ------       ------      -------      -------
Operating expenses:
  Salaries and employee benefits                        1,427        1,153        4,247        3,394
  Occupancy and equipment expenses                        342          257          955          715
  Data processing expenses                                 95           81          267          245
  Other general and administrative expenses               623          408        1,701        1,336
                                                       ------       ------      -------      -------
      Total operating expenses                          2,487        1,899        7,170        5,690
                                                       ------       ------      -------      -------
Income before income taxes                                814          698        2,049        2,035
Provision for income taxes                                298          265          785          790
                                                       ------       ------      -------      -------
Net income                                             $  516       $  433      $ 1,264      $ 1,245
                                                       ======       ======      =======      =======

Earnings per share - basic                             $ 0.38       $ 0.30      $  0.95      $  0.83
                                                       ======       ======      =======      =======

Weighted average shares outstanding - basic             1,342        1,443        1,326        1,506
                                                       ======       ======      =======      =======

Earnings per share - diluted                           $ 0.37       $ 0.29      $  0.92      $  0.81
                                                       ======       ======      =======      =======

Weighted average shares outstanding - diluted          1,4021        1,478        1,379        1,540
                                                       ======       ======      =======      =======
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

<PAGE>  4


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
                        Item 1 - Financial Statements
         Consolidated Statements of Changes in Stockholders' Equity
                  Nine Months Ended March 31, 2003 and 2002
                               (In Thousands)
                                 (Unaudited)

<TABLE>
<CAPTION>

                                                                                   Accumulated
                                                 Additional                           Other      Unearned  Unearned      Total
                                         Common   Paid-In    Retained  Treasury   Comprehensive    ESOP      RRP     Stockholders'
                                         Stock    Capital    Earnings   Stock        Income       Shares    Stock       Equity
                                         ------  ----------  --------  --------   -------------  --------  --------  -------------


                                       <c>     <c>        <c>       <c>            <c>        <c>        <c>         <c>
Balance at June 30, 2002                  $27     $25,699    $17,099   $(17,124)      $ 350      $(1,622)   $(506)      $23,923
                                                                                                                        -------
Comprehensive income:
  Net income                                -           -      1,264          -           -            -        -         1,264
  Change in net unrealized
   gain on securities
   available for sale, net of
   tax effects                              -           -          -          -         235            -        -           235
                                                                                                                        -------
    Total comprehensive income              -           -          -          -           -            -        -         1,499
                                                                                                                        -------
Dividend paid ($0.27 per share)             -           -       (356)         -           -            -        -          (356)
Purchase of treasury stock                  -           -          -         (6)          -            -        -            (6)
Stock options exercised (3,000 shares)      -          36          -          -           -            -        -            36
Decrease in unearned ESOP shares            -          44          -          -           -          250        -           294
Decrease in unearned RRP stock              -           -          -          -           -            -      169           169
                                          ---     -------    -------   --------       -----      -------    -----       -------
Balance at March 31, 2003                 $27     $25,779    $18,007   $(17,130)      $ 585      $(1,372)   $(337)      $25,559
                                          ===     =======    =======   ========       =====      =======    =====       =======

Balance at June 30, 2001                  $27     $25,643    $15,956   $(10,055)      $ 118      $(1,967)   $(707)      $29,015
                                                                                                                        -------

Comprehensive income:
  Net income                                -           -      1,245          -           -            -        -         1,245
  Change in net unrealized
   gain on securities
   available for sale, net
   of tax effects                           -           -          -          -        (111)           -        -          (111)
                                                                                                                        -------
    Total comprehensive income              -           -          -          -           -            -        -         1,134
Dividend paid ($0.24 per share)             -           -       (363)         -           -            -        -          (363)
Purchase of treasury stock                  -           -          -     (6,190)          -            -        -        (6,190)
Decrease in unearned ESOP shares            -           2          -          -           -          262        -           264
Decrease in unearned RRP stock              -           -          -          -           -            -      150           150
                                          ---     -------    -------   --------       -----      -------    -----       -------
Balance at March 31, 2002                 $27     $25,645    $16,838   $(16,245)      $   7      $(1,705)   $(557)      $24,010
                                          ===     =======    =======   ========       =====      =======    =====       =======
</TABLE>

See accompanying notes to unaudited consolidated financial statements

<PAGE>  5


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

<TABLE>
<CAPTION>

                                                                         Nine Months Ended
                                                                      March 31,     March 31,
                                                                        2003          2002
                                                                      ---------     ---------
                                                                            (Unaudited)


                                                                   <c>           <c>
Cash flows from operating activities:
  Net income                                                          $  1,264      $  1,245
  Adjustments to reconcile net income to net
   cash provided by operating activities
    Provision for loan losses                                              200           255
    Net amortization of securities                                         328           109
    (Gain) loss on sales of securities available for sale                  (63)          (10)
    Amortization of unearned ESOP shares                                   294           264
    Amortization of unearned RRP stock                                     169           150
    Depreciation expense                                                   395           282
    Net change in mortgage loans held for sale                           1,231            56
    Increase in accrued interest receivable                               (118)         (169)
    (Increase) in other assets                                           2,028            29
    Increase (decrease) in accrued expenses and other liabilities           73           (87)
                                                                      --------      --------
      Net cash provided by operating activities                          5,801         2,124
                                                                      --------      --------
Cash flows from investing activities:
  Activity in available for sale securities
    Sales                                                               11,869         1,452
    Maturities, prepayment and calls                                    18,596        10,766
    Purchases                                                          (68,828)      (40,252)
  Purchase of Federal Home Loan Bank Stock                                   -          (348)
  Loans originated, net of payments received                           (14,207)      (17,580)
  Purchases of banking premises and equipment                             (537)         (406)
                                                                      --------      --------
      Net cash used by investing activities                            (53,107)      (46,368)
                                                                      --------      --------
Cash flows from financing activities:
  Net increase in deposits                                              58,995        21,202
  Proceeds from borrowings                                                   -        15,000
  Repayment of borrowings                                               (6,876)       (5,974)
  Net increase in mortgagors' escrow accounts                              120            58
  Proceeds from exercise of stock options                                   36             -
  Dividends paid                                                          (356)         (363)
  Purchase of treasury stock                                                (6)       (6,190)
                                                                      --------      --------
      Net cash provided by financing activities                         51,913        23,733
                                                                      --------      --------
Net change in cash and cash equivalents                                  4,607       (20,511)
Cash and cash equivalents at beginning of period                        34,612        46,129
                                                                      --------      --------
Cash and cash equivalents at end of period                            $ 39,219      $ 25,618
                                                                      ========      ========
Supplemental cash flow information:
  Interest paid                                                       $  7,799      $  7,625
  Income taxes paid                                                        875           785
</TABLE>

<PAGE>  6


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
                        Item 1 - Financial Statements
            Notes to Unaudited Consolidated Financial Statements
                               March 31, 2003

1)    Basis of Presentation and Consolidation
The unaudited consolidated interim financial statements of Mystic
Financial, Inc. and subsidiaries ("Mystic" or the "Company") presented
herein should be read in conjunction with the consolidated financial
statements for the year ended June 30, 2002, included in the Annual Report
on Form 10-K of Mystic Financial, Inc., the holding company for Medford Co-
operative Bank (the "Bank").

The significant accounting policies followed by the Company for interim
financial reporting are consistent with the accounting policies followed
for annual financial reporting. The unaudited consolidated interim
financial statements herein have been prepared in accordance with
accounting principles generally accepted in the United States of America
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 accounting principles generally
accepted in the United States of America for complete consolidated
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 Contingencies
At March 31, 2003, the Bank had outstanding commitments to originate loans
amounting to approximately $17.9 million, and unadvanced funds on
construction loans, lines of credit and equity loans amounting to
approximately $14.3 million, $10.6 million and $7.3 million, respectively.
The Bank has sold loans with recourse in the amount of $2.4 million. In
connection with these loans, there is an off-balance sheet contingent
liability in the amount of $37,000 at March 31, 2003.

3)    Earnings Per Share
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 earnings per share, the number of shares of
common stock outstanding is reduced by the number of shares held by the
Company's Employee Stock Ownership Plan (the "ESOP") and the Company's 1999
Recognition and Retention Plan (the "RRP") 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.

<PAGE>  7


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
                        Item 1 - Financial Statements
            Notes to Unaudited Consolidated Financial Statements
                               March 31, 2003

4)    Book Value Per Share
Book value per share was $18.54 as of March 31, 2003 and $17.20 as of March
31, 2002. 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 1,378,306 and 1,395,713 shares of common stock outstanding as of
March 31, 2003 and 2002, respectively, for purposes of calculating the
Company's book value per share.

5)    Securities
The following table sets forth the Company's securities at the dates
indicated.

<TABLE>
<CAPTION>

                                       March 31, 2003             June 30, 2002
                                   ----------------------     ---------------------
                                   Amortized      Fair        Amortized      Fair
                                     Cost         Value         Cost         Value
                                   ---------      -----       ---------      -----
                                                    (In Thousands)


                                <c>           <c>           <c>          <c>
Securities available for sale:
  U.S. Government & federal
   agency obligations              $ 51,370      $ 51,882      $25,198      $25,517
  Mortgage-backed securities         39,110        39,922       28,759       29,112
  Other bonds & obligations           9,626         9,649        8,668        8,685
  Marketable equity securities        3,190         2,820        2,698        2,586
                                   --------      --------      -------      -------
      Total                        $103,296      $104,273      $65,323      $65,900
                                   ========      ========      =======      =======
</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, 2003           June 30, 2002
                                   --------------------     --------------------
                                    Amount      Percent      Amount      Percent
                                    ------      -------      ------      -------
                                              (Dollars in Thousands)


                                <c>          <c>         <c>          <c>
Residential mortgage loans         $151,878      58.9%      $153,915      63.1%
Commercial real estate loans         64,067      24.9%        58,889      24.2%
Commercial loans                     18,457       7.2%        16,215       6.7%
Consumer loans                          764       0.3%         1,004       0.4%
Home equity loans                     8,345       3.2%         4,965       2.0%
Construction loans                   30,939      12.0%        20,991       8.6%
                                   --------     -----       --------     -----
      Total loans                   274,450     106.5%       255,979     105.0%

Less:
Deferred loan origination fees          152       0.1%           197       0.1%
Unadvanced principal                 14,304       5.5%         9,976       4.1%
Allowance for loan losses             2,244       0.9%         2,063       0.8%
                                   --------     -----       --------     -----
      Loans, net                   $257,750      100.0%     $243,743     100.0%
                                   ========     =====       ========     =====
</TABLE>

<PAGE>  8


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
                        Item 1 - Financial Statements
            Notes to Unaudited Consolidated Financial Statements
                               March 31, 2003

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 Months Ended     Nine Months Ended
                                                         March 31, 2003        March 31, 2002
                                                        -----------------     -----------------
                                                                (Dollars in Thousands)


                                                         <c>                   <c>
  Average loans, net                                        $254,397              $222,768
                                                            ========              ========
  Period-end net loans                                      $257,750              $232,360
                                                            ========              ========

  Allowance for loan losses at beginning of period          $  2,063              $  1,784
  Provision for loan losses                                      200                   255
  Plus recoveries                                                 22                     4
  Loans charged-off                                              (41)                  (24)
                                                            --------              --------
  Allowance for loan losses at end of period                $  2,244              $  2,019
                                                            ========              ========

  Non-performing loans                                      $    694              $    296
                                                            ========              ========

Ratios:
  Allowance for loan losses to period-end net loans             0.87%                 0.87%
  Net charge-offs 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, 2003           June 30, 2002
                                                    --------------------     -------------------
                                                     Amount      Percent      Amount     Percent
                                                     ------      -------      ------     -------
                                                               (Dollars in Thousands)


                                                 <c>          <c>         <c>         <c>
Deposits:
Savings deposits                                    $ 66,108      20.2%      $ 52,762     19.7%
NOW accounts                                          26,077       8.0%        26,971     10.1%
IOLTA accounts                                        18,794       5.8%        22,397      8.4%
Money market deposits                                 56,237      17.2%        21,466      8.0%
Demand deposits                                       22,544       6.9%        19,856      7.4%
Certificates of deposit                              136,673      41.9%       123,986     46.4%
                                                    --------     -----       --------    -----
      Total deposits                                $326,433     100.0%      $267,438    100.0%
                                                    ========     =====       ========    =====

Borrowed funds:
Advances from Federal Home Loan Bank of Boston:
  Maturities less than one year                     $ 15,250      29.8%      $ 11,532     19.8%
  Maturities greater than one year                    36,009      70.2%        46,603     80.2%
                                                    --------     -----       --------    -----
      Total borrowed funds                          $ 51,259     100.0%      $ 58,135    100.0%
                                                    ========     =====       ========    =====
</TABLE>

<PAGE>  9


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
                        Item 1 - Financial Statements
            Notes to Unaudited Consolidated Financial Statements
                               March 31, 2003

9)    Trust Preferred Securities
On February 14, 2003, Mystic Financial Trust II (the "Trust"), a Delaware
statutory trust formed by the Company, completed the sale of $7.0 million
of Floating Rate Preferred Securities (liquidation amount of $1,000 per
security) (the "Trust Preferred Securities") in a private placement as part
of a pooled capital securities transaction. The Trust also issued Common
Securities to the Company and used the net proceeds from the offering to
purchase a like amount of Floating Rate Junior Subordinated Deferrable
Interest Notes (the "Subordinated Notes") of the Company. The Subordinated
Notes are the sole assets of the Trust and are eliminated, along with the
related income statement effects, in the consolidated financial statements
of the Company. The Company has contributed $6.0 million of the proceeds
from the sale of the Subordinated Notes to the Bank as Tier I Capital to
support the Bank's growth. Total expenses associated with the offering
approximating $244,000 were included in other assets and are being
amortized on a straight-line basis over the life of the Subordinated Notes.

The Trust Preferred Securities accrue and pay distributions quarterly on
February 15th, May 15th, August 15th and November 15th of each year,
commencing on May 15, 2003 at a variable rate equal to LIBOR plus 3.25% of
the stated liquidation amount of $1,000 per Trust Preferred Security. At
March 31, 2003, this rate was 4.59%. The Company has fully and
unconditionally guaranteed all of the obligations of the Trust, including
the semi-annual distributions and payments on liquidation or redemption of
the Trust Preferred Securities.

The Trust Preferred Securities are mandatorily redeemable upon the maturing
of the Subordinated Notes on February 15, 2033 or upon earlier redemption
as provided in the Indenture. The Company has the right to redeem the
Subordinated Notes, in whole or in part, on any February 15th, May 15th,
August 15th, and November 15th on or after February 15, 2008 at the
liquidation amount, plus any accrued but unpaid interest to the redemption
date.

During the fourth quarter of 2002, Mystic Financial Capital Trust I was
formed for the purpose of issuing Trust Preferred Securities and investing
the proceeds of the sale of these securities in subordinated debentures
issued by the Company. A total of $5 million of floating rate Trust
Preferred Securities were issued and are scheduled to mature in 2032,
callable at the option of the Company on April 22, 2007, with the prior
approval of the Federal Reserve Board. The floating rate as of March 31,
2003 was 5.32%. Distributions on these securities are payable semi-annually
in arrears on April 22nd and October 22nd.

The Trust Preferred Securities are presented in the accompanying
consolidated financial statements of the Company as subordinated debt. The
Company records distributions payable on the Trust Preferred Securities as
interest on subordinated debt in its consolidated statements of income.

<PAGE>  10


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
                        Item 1 - Financial Statements
            Notes to Unaudited Consolidated Financial Statements
                               March 31, 2003

10)   Stock Option Plan
On March 24, 1999, the Company's stockholders approved the 1999 Stock
Option Plan (the "Stock Option Plan"). Under the Stock Option Plan, the
Company may grant options to its directors, officers and employees for up
to 257,355 shares of common stock Both incentive stock options and non-
qualified stock options may be granted under the Stock Option Plan. The
exercise price of each option equals the market price of the Company's
stock on the date of grant and an option's maximum term is ten years.
Options generally vest over a five year period.

The Company applies APB Opinion 25 and related Interpretations in
accounting for the Stock Option Plan. Accordingly, no compensation cost has
been recognized. Had compensation cost for the Company's Stock Option Plan
been determined based on the fair value at the grant dates for awards under
the plan consistent with the method prescribed by SFAS No. 123, the
Company's net income and earnings per share would have been adjusted to the
pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                 Three Months Ended           Nine Months Ended
                               -----------------------     -----------------------
                               March 31,     March 31,     March 31,     March 31,
                                 2003          2002          2003          2002
                               ---------     ---------     ---------     ---------
                                      (In Thousands, except per share data)


                              <c>           <c>          <c>           <c>
Net income
  As reported                    $ 516         $ 433        $1,264        $1,245
  Pro forma                      $ 502         $ 420        $1,219        $1,207
Basic earnings per share
  As reported                    $0.38         $0.30        $ 0.95        $ 0.83
  Pro forma                      $0.37         $0.29        $ 0.92        $ 0.80
Diluted earnings per share
  As reported                    $0.37         $0.29        $ 0.92        $ 0.81
  Pro forma                      $0.36         $0.28        $ 0.88        $ 0.78
</TABLE>

<PAGE>  11


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
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, 2003 to
June 30, 2002, and the results of operations for the three and nine months
ended March 31, 2003, compared to the same periods in 2002. This discussion
and analysis should be read in conjunction with the consolidated financial
statements and related notes thereto included within this report.

Forward-looking Statements
The 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);

<PAGE>  12


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

*     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.

General
The Bank completed its conversion from a mutual to a stock institution and
was simultaneously acquired by 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 in Medford, Massachusetts and three
other full-service offices located in Lexington, Arlington and Bedford,
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 forms
of consumer and home equity lending.

The Bank has one 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
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. Operating expenses consist of salaries and
benefits, occupancy related expenses, and other general operating expenses.

<PAGE>  13


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

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 non-
accrual status are included in the average balances of loans shown in the
tables. The securities in the following tables are presented at amortized
cost.

<PAGE>  14


MYSTIC FINANCIAL, INC. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS
THREE MONTHS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>

                                                       Three Months Ending March 31, 2003     Three Months Ending March 31, 2002
                                                      ------------------------------------    ----------------------------------
                                                      Average        Interest       Yield/    Average       Interest      Yield/
                                                      Balance     Income/Expense     Rate     Balance    Income/Expense    Rate
                                                      -------     --------------    ------    -------    --------------   ------
                                                                                (Dollars in thousands)


                                                   <c>             <c>           <c>       <c>            <c>          <c>
INTEREST-EARNING ASSETS:
Total loans, net                                      $260,919        $4,394        6.74%     $228,017       $4,185       7.34%
Securities available for sale                          104,226           934        3.58%       56,095          634       4.52%
Other earning assets                                    21,055            70        1.33%       17,191           94       2.19%
                                                      --------        ------                  --------       ------
      Total interest-earning assets                    386,200         5,398        5.59%      301,303        4,913       6.52%
                                                                      ------                                 ------
Cash and due from banks                                  9,082                                   7,699
Other assets                                             8,592                                   6,881
                                                      --------                                --------
      Total assets                                    $403,874                                $315,883
                                                      ========                                ========

INTEREST-BEARING LIABILITIES:
Regular and other deposits                            $ 63,730           178        1.13%      $49,071          247       2.04%
NOW and IOLTA accounts                                  39,187            60        0.62%       34,708           82       0.96%
Money market deposits                                   56,601           342        2.45%       19,783           99       2.03%
Certificates of deposit                                135,024         1,192        3.58%      113,161        1,352       4.85%
                                                      --------        ------                  --------       ------
      Total interest-bearing deposits                  294,542         1,772        2.44%      216,723        1,780       3.33%
FHLB borrowings                                         51,562           692        5.44%       54,850          721       5.33%
Subordinated debt                                        8,578           107        4.99%            -            -          -
                                                      --------        ------                  --------       ------
      Total interest-bearing liabilities               354,682         2,571        2.94%      271,573        2,501       3.73%
                                                                      ------                                 ------
Demand deposit accounts                                 22,167                                  17,001
Other liabilities                                        1,755                                   1,860
                                                      --------                                --------
      Total liabilities                                378,604                                 290,434
Stockholders' equity                                    25,270                                  25,449
                                                      --------                                --------
Total liabilities and stockholders' equity            $403,874                                $315,883
                                                      ========                                ========
Net interest income                                                   $2,827                                 $2,412
                                                                      ======                                 ======
Interest rate spread                                                                2.65%                                 2.79%
Net interest margin                                                                 2.93%                                 3.20%
Interest earning assets/interest-bearing liabilities                                1.09x                                 1.11x
</TABLE>

<PAGE>  15


MYSTIC FINANCIAL, INC. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST AND AVERAGE YIELDS
NINE MONTHS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>

                                                       Nine Months Ending March 31, 2003      Nine Months Ending March 31, 2002
                                                      ------------------------------------    ----------------------------------
                                                      Average        Interest       Yield/    Average       Interest      Yield/
                                                      Balance     Income/Expense     Rate     Balance    Income/Expense    Rate
                                                      -------     --------------    ------    -------    --------------   ------
                                                                                (Dollars in thousands)


                                                   <c>            <c>            <c>       <c>           <c>           <c>
INTEREST-EARNING ASSETS:
Total loans, net                                      $254,397       $13,187        6.91%     $222,768      $12,674       7.59%
Securities available for sale                           84,033         2,506        3.98%       47,168        1,696       4.79%
Other earning assets                                    26,110           307        1.57%       19,269          425       2.94%
                                                      --------       -------                  --------      -------
      Total interest-earning assets                    364,540        16,000        5.85%      289,205       14,795       6.82%
                                                                     -------                                -------
Cash and due from banks                                  9,061                                   7,569

Other assets                                             8,048                                   6,862
                                                      --------                                --------
      Total assets                                    $381,649                                $303,636
                                                      ========                                ========

INTEREST-BEARING LIABILITIES:
Regular and other deposits                            $ 58,320           684        1.56%     $ 46,376          730       2.10%
NOW and IOLTA accounts                                  38,651           236        0.81%       34,228          260       1.01%
Money market deposits                                   42,509           780        2.44%       19,700          363       2.45%
Certificates of deposit                                132,656         3,761        3.78%      109,238        4,244       5.18%
                                                      --------       -------                  --------      -------
      Total interest-bearing deposits                  272,136         5,461        2.67%      209,542        5,597       3.56%
FHLB borrowings                                         55,322         2,193        5.28%       47,953        2,053       5.70%
Subordinated debt                                        6,175           254        5.40%            -            -          -
                                                      --------       -------                  --------      -------
      Total interest-bearing liabilities               333,633         7,908        3.16%      257,495        7,650       3.96%
                                                                     -------                                -------
Demand deposit accounts                                 21,372                                  17,995
Other liabilities                                        1,924                                   1,607
                                                      --------                                --------
      Total liabilities                                356,929                                 277,097
Stockholders' equity                                    24,720                                  26,539
                                                      --------                                --------
Total liabilities and stockholders' equity            $381,649                                $303,636
                                                      ========                                ========
Net interest income                                                  $ 8,092                                $ 7,145
                                                                     =======                                =======
Interest rate spread                                                                2.69%                                 2.86%
Net interest margin                                                                 2.96%                                 3.29%
Interest earning assets/interest-bearing liabilities                                1.09x                                 1.12x
</TABLE>

<PAGE>  16


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

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>

                                 Three Months Ended March 31,
                                         2003 vs 2002
                                      Increase (decrease)
                                 ----------------------------
                                       Due To
                                 -----------------
                                  Rate      Volume      Total
                                  ----      ------      -----
                                        (In thousands)


                              <c>        <c>        <c>
Interest and dividend income:
Loans, net                       $(363)     $  572     $ 209
Securities available for sale     (153)        453       300
Other earning assets               (42)         18       (24)
                                 -----      ------     -----
      Total                       (558)      1,043       485
                                 -----      ------     -----

Interest expense:
Savings deposits                  (130)         61       (69)
NOW and IOLTA accounts             (32)         10       (22)
Money market deposits               24         219       243
Certificates of deposits          (392)        232      (160)
                                 -----      ------     -----
Total deposits                    (530)        522        (8)
Borrowed funds and debt             70           8        78
                                 -----      ------     -----
      Total                       (460)        530        70
                                 -----      ------     -----
Change in net interest income    $ (98)     $  513     $ 415
                                 =====      ======     =====
</TABLE>

<PAGE>  17


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

<TABLE>
<CAPTION>

                                 Nine Months Ended March 31,
                                         2003 vs 2002
                                     Increase (decrease)
                                 ----------------------------
t                                      Due To
                                 ------------------
                                   Rate      Volume     Total
                                   ----      ------     -----
                                        (In thousands)


                              <c>         <c>       <c>
Interest and dividend income:
Loans, net                       $(1,188)    $1,701    $  513
Securities available for sale       (329)     1,139       810
Other earning assets                (238)       120      (118)
                                 -------     ------    ------
      Total                       (1,755)     2,960     1,205
                                 -------     ------    ------

Interest expense:
Savings deposits                    (210)       164       (46)
NOW and IOLTA accounts               (55)        31       (24)
Money market deposits                 (2)       419       417
Certificates of deposits          (1,284)       801      (483)
                                 -------     ------    ------
Total deposits                    (1,551)     1,415      (136)
Borrowed funds and debt             (153)       547       394
                                 -------     ------    ------
      Total                       (1,704)     1,962       258
                                 -------     ------    ------
Change in net interest income    $   (51)    $  998    $  947
                                 =======     ======    ======
</TABLE>

Financial Condition and Results of Operations

Comparison of Financial Condition at March 31, 2003 and June 30, 2002
The Company's total assets amounted to $417.7 million at March 31, 2003
compared to $356.7 million at June 30, 2002, an increase of $60.9 million
or 17.1%. The increase in total assets is primarily a result of continued
loan growth and increases in securities available for sale funded by
deposit growth and proceeds from loan sales.

Cash and cash equivalents increased to $39.2 million at March 31, 2003 from
$34.6 million at June 30, 2002, an increase of $4.6 million or 13.3%. The
increase in cash and cash equivalents was primarily due to an increase in
short term investments. Securities available for sale increased to $104.3
million at March 31, 2003 from $65.9 million at June 30, 2002, an increase
of $38.4 million or 58.2%.

Net loans increased by $14.0 million or 5.7% to $257.7 million or 61.7% of
total assets at March 31, 2003 as compared to $243.7 million or 68.3% of
total assets at June 30, 2002. Growth in

<PAGE>  18


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

commercial real estate loans, commercial loans, home equity loans and
construction loans accounted for the increase due to the Company's
continued emphasis on loan originations and the low interest rate
environment.

Total deposits increased by $59.0 million to $326.4 million at March 31,
2003 from $267.4 million at June 30, 2002 reflecting increases in nearly
all deposit categories. Certificates of deposit increased by $12.7 million
or 10.2% to $136.7 million at March 31, 2003 from $124.0 million at June
30, 2002. Money market accounts increased by $34.8 million or 162.0% to
$56.2 million at March 31, 2003 from $21.5 million at June 30, 2002.
Savings accounts increased by $13.3 million or 25.3% to $66.1 million at
March 31, 2003 from $52.8 million at June 30, 2002. The increase in
deposits resulted from increased market share resulting from the sale of
Medford Bank to Citizens Bank and the success of the Bedford branch that
opened in June 2002.

Stockholders' equity increased by $1.6 million to $25.6 million at March
31, 2003 from $23.9 million at June 30, 2002 as a result of an increase in
accumulated other comprehensive income of $235,000, net income of $1.3
million, stock options exercised of $36,000, a reduction in unearned RRP
stock of $169,000, and a reduction in unearned ESOP shares of $294,000,
offset by dividends paid of $356,000.

Comparison of the Operating Results for the Three and Nine Months Ended
March 31, 2003 and 2002
Net Income. Net income was $516,000 and $1.3 million for the three and nine
months ended March 31, 2003, compared to $433,000 and $1.2 million for the
three and nine months ended March 31, 2002. Return on average assets was
..51% and .44% for the three and nine months ended March 31, 2003, compared
to .55% and .55% for the three and nine months ended March 31, 2002. Return
on average equity was 8.16% and 6.82% for the three and nine months ended
March 31, 2003, compared to 6.80% and 6.25% for the three and nine months
ended March 31, 2002.

The increase in income before income taxes of $83,000 for the three months
ended March 31, 2003 compared to the three months ended March 31, 2002 was
attributable to an increase in total interest and dividend income of
$485,000 and an increase in other income of $264,000, offset by an increase
in total interest expense of $70,000 and an increase in operating expenses
of $588,000.

The increase in income before income taxes of $19,000 for the nine months
ended March 31, 2003 compared to the nine months ended March 31, 2002 was
attributable to an increase in total interest and dividend income of $1.2
million, an increase in other income of $492,000 and a decrease in
provision for loan losses of $55,000, offset by an increase in total
interest expense of $258,000 and an increase in operating expenses of $1.5
million.

<PAGE>  19


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

Interest and Dividend Income. Total interest and dividend income increased
by $485,000 or 9.9% to $5.4 million for the three months ended March 31,
2003 from $4.9 million for the three months ended March 31, 2002. The
increase in interest income was a result of a higher level of loans and
securities available for sale resulting from general asset growth,
partially offset by a decrease in the average yield on interest-earning
assets caused by generally declining interest rates. The average balance of
net loans for the three months ended March 31, 2003 was $260.9 million
compared to $228.0 million for the three months ended March 31, 2002. The
average yield on net loans was 6.74% for the three months ended March 31,
2003 compared to 7.34% for the three months ended March 31, 2002.

The average balance of securities available for sale for the three months
ended March 31, 2003 was $104.2 million compared to $56.1 million for the
three months ended March 31, 2002. This increase was funded by a higher
volume of loan sales and refinances and deposit growth. The average yield
on securities available for sale was 3.58% for the three months ended March
31, 2003 compared to 4.52% for the three months ended March 31, 2002. The
average balance of other earning assets for the three months ended March
31, 2003 was $21.1 million compared to $17.2 million for the three months
ended March 31, 2002. The average yield on other earning assets was 1.33%
for the three months ended March 31, 2003 compared to 2.19% for the three
months ended March 31, 2002. The average yield on other earning assets
declined because of the short-term repricing intervals of these assets
combined with several decreases in short-term interest rates made by the
Federal Reserve Bank.

Total interest and dividend income increased by $1.2 million or 8.1% to
$16.0 million for the nine months ended March 31, 2003 from $14.8 million
for the nine months ended March 31, 2002. The increase in interest income
was a result of a higher level of loans and securities available for sale
resulting from general asset growth, partially offset by a decrease in the
average yield on interest-earning assets caused by generally declining
interest rates. The average balance of net loans for the nine months ended
March 31, 2003 was $254.4 million compared to $222.8 million for the nine
months ended March 31, 2002. The average yield on net loans was 6.91% for
the nine months ended March 31, 2003 compared to 7.59% for the nine months
ended March 31, 2002.

The average balance of securities available for sale for the nine months
ended March 31, 2003 was $84.0 million compared to $47.2 million for the
nine months ended March 31, 2002. This increase was funded by a higher
volume of loan sales and refinances and deposit growth. The average yield
on securities available for sale was 3.98% for the nine months ended March
31, 2003 compared to 4.79% for the nine months ended March 31, 2002. The
average balance of other earning assets for the nine months ended March 31,
2003 was $26.1 million compared to $19.3 million for the nine months ended
March 31, 2002. The average yield on other earning assets was 1.57% for the
nine months ended March 31, 2003 compared to 2.94% for the nine months
ended March 31, 2002. The average yield on other earning assets declined
because of the short- term repricing intervals of these

<PAGE>  20


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

assets combined with several decreases in short-term interest rates made by
the Federal Reserve Bank.

Interest Expense. Total interest expense increased by $70,000 or 2.8% to
$2.6 million for the three months ended March 31, 2003 from $2.5 million
for the three months ended March 31, 2002. Average interest-bearing
deposits increased by $77.8 million or 35.9% to $294.5 million for the
three months ended March 31, 2003 from $216.7 million for the three months
ended March 31, 2002. Average borrowings decreased by $3.3 million to $51.6
million for the three months ended March 31, 2003 from $54.9 million for
the three months ended March 31, 2002. The average rate on interest-bearing
deposits decreased 89 basis points to 2.44% for the three months ended
March 31, 2003 from 3.33% for the three months ended March 31, 2002, while
the average rate on borrowed funds increased 11 basis points to 5.44% from
5.33% during the same period. Interest expense on subordinated debt for the
three months ended March 31, 2003 was $108,000 as compared to $0 for the
three months ended March 31, 2002. Average subordinated debt for the three
months ended March 31, 2003 was $8.6 million with an average rate of 4.99%.
The Company did not have any subordinated debt during the comparable 2002
period.

Total interest expense increased by $258,000 or 3.4% to $7.9 million for
the nine months ended March 31, 2003 from $7.6 million for the nine months
ended March 31, 2002. Average interest-bearing deposits increased by $62.6
million or 29.9% to $272.1 million for the nine months ended March 31, 2003
from $209.5 million for the nine months ended March 31, 2002. Average
borrowings increased by $7.4 million to $55.3 million for the nine months
ended March 31, 2003 from $48.0 million for the nine months ended March 31,
2002. The average rate on interest-bearing deposits decreased 89 basis
points to 2.67% for the nine months ended March 31, 2003 from 3.56% for the
nine months ended March 31, 2002, while the average rate on borrowed funds
decreased 42 basis points to 5.28% from 5.70% during the same period.
Interest expense on subordinated debt for the nine months ended March 31,
2003 was $254,000 as compared to $0 for the nine months ended March 31,
2002. Average subordinated debt for the nine months ended March 31, 2003
was $6.2 million with an average rate of 5.40%. The Company did not have
any subordinated debt during the comparable 2002 period.

Net Interest Income. Net interest income for the three months ended March
31, 2003 was $2.8 million as compared to $2.4 million for the three months
ended March 31, 2002. The $415,000 increase can be attributed to a
combination of the $485,000 increase in interest and dividend income,
offset by the $70,000 increase in interest expense on deposits, borrowed
funds and subordinated debt. The average yield on interest earning assets
decreased 93 basis points to 5.59% for the three months ended March 31,
2003 from 6.52% for the three months ended March 31, 2002, while the
average cost on interest-bearing liabilities decreased by 79 basis points
to 2.94% for the three months ended March 31, 2003 from 3.73% for the three
months ended March 31, 2002. As a result,

<PAGE>  21


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

the interest rate spread decreased to 2.65% for the three months ended
March 31, 2003 from 2.79% for the three months ended March 31, 2002.

Net interest income for the nine months ended March 31, 2003 was $8.1
million as compared to $7.1 million for the nine months ended March 31,
2002. The $947,000 increase can be attributed to a combination of the $1.2
million increase in interest and dividend income, offset by the $258,000
increase in interest expense on deposits, borrowed funds and subordinated
debt. The average yield on interest earning assets decreased 97 basis
points to 5.85% for the nine months ended March 31, 2003 from 6.82% for the
nine months ended March 31, 2002, while the average cost on interest-
bearing liabilities decreased by 80 basis points to 3.16% for the nine
months ended March 31, 2003 from 3.96% for the nine months ended March 31,
2002. As a result, the interest rate spread decreased to 2.69% for the nine
months ended March 31, 2003 from 2.86% for the nine months ended March 31,
2002.

Provision for Loan Losses. The provision for loan losses for the three and
nine months ended March 31, 2003 was $75,000 and $200,000, respectively,
compared to $100,000 and $255,000 for the three and nine months ended March
31, 2002. The Company maintained a low level of risk assets and had minimal
delinquencies at March 31, 2003. This resulted in a lower provision for
loan losses for the three and nine months ended March 31, 2003 as compared
to the comparable 2002 period. At March 31, 2003, the balance of the
allowance for loan losses was $2.2 million or .87% of net loans. At March
31, 2002, the balance of the allowance for loan losses was $2.0 million or
..87% of net loans. Management believes that the allowance for loan losses
is adequate to cover any probable losses in the loan portfolio.

Other Income. Other income was $549,000 for the three months ended March
31, 2003 compared to $285,000 for the three months ended March 31, 2002.
Other income increased $264,000, or 92.6%, primarily as a result of an
increase of $193,000 in gains on the sale of loans into the secondary
market and $65,000 in the gain on sales of investment securities. Other
income was $1.3 million for the nine months ended March 31, 2003 compared
to $835,000 for the nine months ended March 31, 2002. The $492,000 increase
was primarily the result of an increase of $510,000 in gains on the sale of
loans into the secondary market and $81,000 in service fees, offset by an
increase in net loss on the sale of investment securities of $73,000. The
increased gains on loan sales reflects increased originations of fixed-rate
residential mortgage loans as borrowers refinanced these loans in order to
take advantage of low interest rates. The Company has sold substantially
all of its 30 year fixed-rate residential real estate loans at rates below
6.25% into the secondary market in order to reduce interest rate risk.

Operating Expenses. Operating expenses increased by $588,000 or 31.0% to
$2.5 million for the three months ended March 31, 2003 from $1.9 million
for the three months ended March 31, 2002. Salaries and employee benefits
increased by $274,000, occupancy and equipment expenses increased

<PAGE>  22


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

by $85,000 and advertising expenses increased by $12,000. This increase was
caused by higher personnel costs associated with the asset growth of the
Bank, marketing expenses incurred to capture deposit market share and
expenses to operate the branch office opened in Bedford, Massachusetts in
June 2002.

Operating expenses increased by $1.5 million or 26.0% to $7.2 million for
the nine months ended March 31, 2003 from $5.7 million for the nine months
ended March 31, 2002. Salaries and employee benefits increased by $853,000,
occupancy and equipment expenses increased by $240,000 and advertising
expenses increased by $109,000. This increase was caused by higher
personnel costs associated with the asset growth of the Bank, marketing
expenses incurred to capture deposit market share and expenses to operate
the branch office opened in Bedford, Massachusetts in June 2002.

Asset/Liability Management
A 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.

<PAGE>  23


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
    Item 2 - Management's Discussion and Analysis of Financial Condition
                          and Results of Operations
                               March 31, 2003

Liquidity and Capital Resources
The Company's primary sources of funds consist of deposits, borrowings,
repayment and prepayment of loans, sales and participations of loans,
maturities of securities and interest-bearing deposits, and funds provided
from operations. While scheduled repayments of loans and maturities of
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. In addition, in April of 2002 and
February of 2003, the Company issued $5.0 million and $7.0 million,
respectively, of Trust Preferred Securities to increase the Company's
capital position and enhance liquidity in order to support continued loan
growth. 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
requirement, 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, 2003 was 93.0%, 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
FHLB. At March 31, 2003, the Company had outstanding borrowings of $51.3
million and an available line of credit of $3.5 million from the FHLB.

At March 31, 2003, the Company had $17.9 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 $97.4 million at March 31, 2003. Based upon historical experience,
management believes that a significant portion of such deposits will remain
with the Bank.

At March 31, 2003, the Company and the Bank exceeded all of their
regulatory capital requirements.

<PAGE>  24


                   Mystic Financial, Inc. and Subsidiaries
                       Part I - Financial Information
     Item 3 - Quantitative and Qualitative Disclosures About Market Risk
                               March 31, 2003

Item 3. Quantitative and Qualitative Disclosures About Market Risk
In management's opinion, there has been no material change in market risk
since disclosed in Item 7A of the Company's Annual Report on Form 10-K for
the year ended June 30, 2002. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Asset Liability
Management."

Item 4. Controls and Procedures
During the 90-day period prior to the filing date of this report,
management, including the Company's President and Chief Executive Officer
and Senior Vice President and Chief Financial Officer, evaluated the
effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based upon, and as of the date of that evaluation,
the President and Chief Executive Officer and Senior Vice President and
Chief Financial Officer concluded that the disclosure controls and
procedures were effective, in all material respects, to ensure that
information required to be disclosed in the reports the Company files and
submits under the Exchange Act is recorded, processed, summarized and
reported as and when required.

There have been no significant changes in the Company's internal controls
or in other factors which could significantly affect internal controls
subsequent to the date the Company carried out its evaluation. There were
no significant deficiencies or material weaknesses identified in the
evaluation and therefore, no corrective actions were taken.

PART II.    OTHER INFORMATION

Items 1-4.  Not applicable

Item 5.     Other Information
The Company's Chief Executive Officer and Chief Financial Officer have
furnished statements relating to the Company's Form 10-Q for the quarter
ended March 31, 2003 pursuant to 18 U.S.C. section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley Act of 2002. These statements
are attached hereto as Exhibit 99.1.

Item 6.     Exhibits and Reports on Form 8-K
(a)   Exhibits
      99.1  Certifications of President and CEO and Senior Vice President
            and CFO pursuant to Section 906 of the Sarbanes-Oxley Act.

(b)   Reports on Form 8-K
      None

<PAGE>  25


                   Mystic Financial, Inc. and Subsidiaries
                         Part II - Other Information
                                 Signatures
                               March 31, 2003

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

                                       MYSTIC FINANCIAL, INC.
                                       (Registrant)

Date:  May 13, 2003                    By: /s/ Ralph W. Dunham
       ------------                        -------------------------------
                                           Ralph W. Dunham
                                           President and Chief Executive
                                           Officer

Date:  May 13, 2003                    By: /s/ Anthony J. Patti
       ------------                        -------------------------------
                                           Anthony J. Patti
                                           Senior Vice President, Chief
                                           Financial Officer and Treasurer

<PAGE>  26


                               CERTIFICATIONS


      I, Ralph W. Dunham, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Mystic
      Financial, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect to
      the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and
      cash flows of the registrant as of, and for, the periods presented in
      this quarterly report;

4.    The registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
      and we have:

      (a)   designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      (b)   evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to
            the filing date of this quarterly report (the "Evaluation
            Date"); and

      (c)   presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based
            on our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officer and I have disclosed, based
      on our most recent evaluation, to the registrant's auditors and the
      audit committee of the registrant's board of directors (or persons
      performing the equivalent function):

      (a)   all significant deficiencies in the design or operation of
            internal controls which could adversely affect the registrant's
            ability to record, process, summarize and report financial data
            and have identified for the registrant's auditors any material
            weaknesses in internal controls; and

      (b)   any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

<PAGE>  27


6.    The registrant's other certifying officer and I have indicated in
      this quarterly report whether or not there were significant changes
      in internal controls or in other factors that could significantly
      affect internal controls subsequent to the date of our most recent
      evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.


Date: May 13, 2003                     /s/Ralph W. Dunham
                                       ------------------------------------
                                       Ralph W. Dunham
                                       President and Chief Executive Officer

<PAGE>  28


I, Anthony J. Patti, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Mystic
      Financial, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances
      under which such statements were made, not misleading with respect to
      the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and
      cash flows of the registrant as of, and for, the periods presented in
      this quarterly report;

4.    The registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
      and we have:

      (a)   designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      (b)   evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to
            the filing date of this quarterly report (the "Evaluation
            Date"); and

      (c)   presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based
            on our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officer and I have disclosed, based
      on our most recent evaluation, to the registrant's auditors and the
      audit committee of the registrant's board of directors (or persons
      performing the equivalent function):

      (a)   all significant deficiencies in the design or operation of
            internal controls which could adversely affect the registrant's
            ability to record, process, summarize and report financial data
            and have identified for the registrant's auditors any material
            weaknesses in internal controls; and

      (b)   any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

<PAGE>  29


6.    The registrant's other certifying officer and I have indicated in
      this quarterly report whether or not there were significant changes
      in internal controls or in other factors that could significantly
      affect internal controls subsequent to the date of our most recent
      evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.


Date: May 13, 2003                     /s/Anthony J. Patti
                                       -------------------------
                                       Anthony J. Patti
                                       Senior Vice President and
                                       Chief Financial Officer

<PAGE>  30