SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended       March 31, 2009
                              ----------------------------

                                       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 0-24751

                             Salisbury Bancorp, Inc.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

         Connecticut                                        06-1514263
-------------------------------                  -------------------------------
(State or Other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                          Identification No.)

      5 Bissell Street       Lakeville      Connecticut       06039
--------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)


Registrants Telephone Number, Including Area Code   (860) 435-9801
                                                   ---------------


              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)


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 whether the registrant is a large  accelerated  filer, an
accelerated  filer or a non-accelerated  filer or a smaller  reporting  company.
(See the definitions of large accelerated  filer,  accelerated Filer and smaller
reporting company in Rule 12b-2 of the Exchange Act). (Check one):

Large  Accelerated  Filer [_] Accelerated  Filer [_]  Non-Accelerated  Filer [_]
Smaller reporting company [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                Yes [_]     No [X]



                      APPLICABLE ONLY TO CORPORATE ISSUERS:

  Indicate the number of shares outstanding of each of the issuer's classes of
 common stock, as of the latest practicable date: As of May 1, 2009, there were
                         1,685,861 shares outstanding.

<PAGE>

                     SALISBURY BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS



Part I.  FINANCIAL INFORMATION                                              Page



Item 1.  Financial Statements:                                                 3

         Condensed Consolidated Balance Sheets -March 31, 2009
         (unaudited) and December 31, 2008                                     4

         Condensed Consolidated Statements of Income -three months
         ended March 31, 2009 and 2008 (unaudited)                             5

         Condensed Consolidated Statements of Cash Flows -three months
         ended March 31, 2009 and 2008 (unaudited)                             6

         Notes to Condensed Consolidated Financial Statements
         (unaudited)                                                           8

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

Item 4T. Controls and Procedures                                              19


Part II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                    20

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds          20

Item 3.  Defaults Upon Senior Securities                                      20

Item 4.  Submission of Matters to a Vote of Security Holders                  20

Item 5.  Other Information                                                    20

Item 6.  Exhibits                                                             20

Signatures                                                                    21


                                       2
<PAGE>



                         Part I-- FINANCIAL INFORMATION
                          Item 1. Financial Statements





                                       3
<PAGE>

                     SALISBURY BANCORP, INC. AND SUBSIDIARY
                     --------------------------------------

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                      March 31, 2009 and December 31, 2008
                      ------------------------------------

<TABLE>
<CAPTION>

                                                                                  March 31,       December 31,
                                                                                    2009              2008
                                                                                    ----              ----
<S>                                                                                 <C>                <C>
ASSETS                                                                           (unaudited)
------
Cash and due from banks                                                         $   5,836,264    $   7,082,317
Interest bearing demand deposits with other banks                                   1,764,606          900,487
Money market mutual funds                                                          10,267,027        1,476,999
Federal funds sold                                                                          0          200,000
                                                                                -------------    -------------
              Cash and cash equivalents                                            17,867,897        9,659,803
Investments in available-for-sale securities (at fair value)                      149,620,391      150,526,964
Investments in held-to-maturity securities (fair values of $65,443 as of
   March 31, 2009 and $66,502 as of December 31, 2008)                                 65,273           66,443
Federal Home Loan Bank stock, at cost                                               5,323,000        5,323,000
Loans held-for-sale                                                                   807,000        2,314,250
Loans, less allowance for loan losses of $3,005,139 as of March 31, 2009
   and $2,724,024 as of December 31, 2008                                         298,333,242      297,367,434
Investment in real estate                                                              75,000           75,000
Other real estate owned                                                               418,024          204,534
Premises and equipment                                                              8,275,831        7,123,671
Goodwill                                                                            9,828,712        9,828,712
Core deposit intangible                                                             1,124,014        1,165,068
Accrued interest receivable                                                         2,445,102        2,704,385
Cash surrender value of life insurance policies                                     3,949,827        3,824,653
Deferred taxes                                                                      5,283,496        4,196,819
Due from broker                                                                     1,314,582                0
Other assets                                                                        1,408,589        1,373,424
                                                                                -------------    -------------
           Total assets                                                         $ 506,139,980    $ 495,754,160
                                                                                =============    =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
   Noninterest-bearing                                                          $  63,448,689    $  65,479,271
   Interest-bearing                                                               303,314,838      279,445,961
                                                                                -------------    -------------
           Total deposits                                                         366,763,527      344,925,232
Securities sold under agreements to repurchase                                      9,081,236       11,203,289
Federal Home Loan Bank advances                                                    78,598,166       87,913,667
Due to broker                                                                               0        7,631,919
Other liabilities                                                                   5,439,507        5,140,721
                                                                                -------------    -------------
           Total liabilities                                                      459,882,436      456,814,828
                                                                                -------------    -------------
Shareholders' equity:
   Preferred stock, par value$.01 per share, authorized 25,000 shares; issued
    and outstanding 8,816 shares at March 31, 2009 and 0 shares at
    December 31, 2008.                                                                     88                0
   Common stock, par value $.10 per share; authorized 3,000,000 shares;
    issued and outstanding, 1,685,861 shares at March 31, 2009 and
    December 31, 2008                                                                 168,586          168,586
   Unused common stock warrants outstanding                                           111,998                0
     Paid-in capital                                                               21,861,797       13,157,883
     Retained earnings                                                             35,127,465       34,518,331
     Accumulated other comprehensive loss                                         (11,012,390)      (8,905,468)
                                                                                -------------    -------------
           Total shareholders' equity                                              46,257,544       38,939,332
                                                                                -------------    -------------
           Total liabilities and shareholders' equity                           $ 506,139,980    $ 495,754,160
                                                                                =============    =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       4
<PAGE>

                     SALISBURY BANCORP, INC. AND SUBSIDIARY
                     --------------------------------------

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   -------------------------------------------
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                    Three Months Ended
                                                                         March 31,
                                                                     2009         2008
                                                                     ----         ----
<S>                                                                        <C>     <C>
Interest and dividend income:
     Interest and fees on loans                                   $4,509,670   $4,631,588
   Interest on debt securities:
     Taxable                                                       1,331,810    1,286,915
     Tax-exempt                                                      643,630      574,462
   Dividends on equity securities                                          0       78,248
   Other interest                                                      1,847       96,684
                                                                  ----------   ----------
           Total interest and dividend income                      6,486,957    6,667,897
                                                                  ----------   ----------
Interest expense:
   Interest on deposits                                            1,483,582    1,973,229
   Interest on securities sold under agreements to repurchase         39,027            0
   Interest on Federal Home Loan Bank advances                       761,517    1,035,161
                                                                  ----------   ----------
           Total interest expense                                  2,284,126    3,008,390
                                                                  ----------   ----------
           Net interest and dividend income                        4,202,831    3,659,507
Provision for loan losses                                            430,000       60,000
                                                                  ----------   ----------
           Net interest and dividend income after provision for
             loan losses                                           3,772,831    3,599,507
                                                                  ----------   ----------
Noninterest income:
   Trust department income                                           540,000      600,000
   Loan commissions                                                    1,548            0
   Service charges on deposit accounts                               208,246      198,160
   Gains on available-for-sale securities, net                       427,338      317,970
   Gain on sales of loans held-for-sale                              114,555       72,833
   Other income                                                      413,697      243,688
                                                                  ----------   ----------
           Total noninterest income                                1,705,384    1,432,651
                                                                  ----------   ----------
Noninterest expense:
   Salaries and employee benefits                                  2,265,103    2,076,173
   Occupancy expense                                                 257,119      230,527
   Equipment expense                                                 226,717      211,086
   Data processing                                                   383,436      318,640
   Insurance                                                         136,952       43,900
   Printing and stationery                                            65,969       59,508
   Professional fees                                                 261,341      234,210
   Legal expense                                                      95,358       61,427
   Amortization of core deposit intangible                            41,054       41,054
   Other expense                                                     400,740      373,471
                                                                  ----------   ----------
           Total noninterest expense                               4,133,789    3,649,996
                                                                  ----------   ----------
           Income before income taxes                              1,344,426    1,382,162
Income taxes                                                         263,251      301,228
                                                                  ----------   ----------
           Net income                                             $1,081,175   $1,080,934
                                                                  ==========   ==========

Earnings per common share                                         $      .63   $      .64
                                                                  ----------   ----------
Dividends per common share                                        $      .28   $      .28
                                                                  ----------   ----------
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       5
<PAGE>

                      SALISBURY BANCORP INC. AND SUBSIDIARY
                      -------------------------------------

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------

                   Three months ended March 31, 2009 and 2008
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                            2009            2008
                                                                                            ----            ----
<S>                                                                                     <C>             <C>
Cash flows from operating activities:
Net income                                                                          $  1,081,175    $  1,080,934
Adjustments to reconcile net income to net cash provided by operating activities:
          Amortization of securities, net                                                100,768          23,901
          Gain on sales of available-for-sale securities, net                           (427,338)       (317,970)
          Provision for loan losses                                                     (430,000)        (60,000)
          Change in loans held-for-sale                                                1,507,250         (26,000)
          Change in deferred loan costs, net                                              (7,093)        (20,469)
          Increase in unearned income on loans                                             6,251           6,059
          Net (increase) decrease in mortgage servicing rights                           (69,329)         18,235
          Depreciation and amortization                                                  174,551         161,910
          Amortization of core deposit intangible                                         41,054          41,054
          Accretion of fair value adjustment on deposits & borrowings                    (32,551)        (32,551)
          Amortization of fair value adjustment on loans                                  11,905          11,905
          Decrease in interest receivable                                                228,670         274,322
          Deferred tax benefit                                                            (1,293)          1,676
          Decrease in taxes receivable                                                   154,588         253,895
          Increase in prepaid expenses                                                   (63,121)        (37,157)
          Increase in cash surrender value of insurance policies                        (125,174)        (30,190)
          Increase in other assets                                                       (80,826)       (173,321)
          Increase (decrease) in accrued expenses                                        376,878         (64,811)
          Increase in interest payable                                                    21,556          45,791
          (Decrease) increase in other liabilities                                       (67,236)        385,919
                                                                                    ------------    ------------

Net cash provided by operating activities                                              2,400,685       1,543,132
                                                                                    ------------    ------------

Cash flows from investing activities
    Purchases of available-for-sale securities                                       (53,864,056)    (64,317,145)
    Proceeds from sales of available-for-sale securities                              24,956,599      63,348,683
    Proceeds from maturities of available-for-sale securities                         18,000,000               0
    Proceeds from maturities of held-to-maturity securities                                1,163           1,028
    Loan originations and principal collections, net                                    (694,637)     (3,348,061)
    Purchase of loans                                                                    (76,266)     (4,483,208)
    Recoveries of loans previously charged-off                                            10,542          10,210
    Capital expenditures                                                              (1,303,187)       (277,889)
                                                                                    ------------    ------------

Net cash used in investing activities                                                (12,969,842)     (9,066,382)
                                                                                    ------------    ------------
</TABLE>

                                       6
<PAGE>

                      SALISBURY BANCORP INC. AND SUBSIDIARY
                      -------------------------------------

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------

                   Three months ended March 31, 2009 and 2008
                                   (unaudited)
                                   (continued)
<TABLE>
<CAPTION>
                                                                          2009            2008
                                                                          ----            ----
<S>                                                                 <C>              <C>
Cash flows from financing activities:
  Net increase in demand deposits, NOW and savings accounts          7,986,641      15,567,164
  Net increase in time deposits                                     13,851,654       3,286,912
  Federal Home Loan Bank advances                                   12,000,000               0
  Principal payments on advances from Federal Home Loan Bank          (404,950)       (175,774)
  Net change in short term advances from Federal Home Loan Bank    (20,878,000)     (8,637,000)
  Decrease in other borrowed funds-Repo's                           (2,122,053)              0
  Proceeds from issuance of preferred stock                          8,816,000               0
  Dividends paid                                                      (472,041)       (738,021)
                                                                  ------------    ------------

  Net cash provided by financing activities                         18,777,251       9,303,281
                                                                  ------------    ------------

Net increase in cash and cash equivalents                            8,208,094       1,780,031
Cash and cash equivalents at beginning of period                     9,659,803      15,178,195
                                                                  ------------    ------------
Cash and cash equivalents at end of period                        $ 17,867,897    $ 16,958,226
                                                                  ============    ============

Supplemental disclosures:
  Interest paid                                                   $  2,295,121    $  3,029,000
  Income taxes paid                                                    109,956          11,000

</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.


                                       7
<PAGE>

                     SALISBURY BANCORP, INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

NOTE 1 - BASIS OF PRESENTATION
------------------------------

The  accompanying   condensed  consolidated  interim  financial  statements  are
unaudited and include the accounts of Salisbury  Bancorp,  Inc. (the "Company"),
its wholly owned subsidiary  Salisbury Bank and Trust Company (the "Bank"),  and
the  Bank's   subsidiaries,   S.B.T.  Realty,  Inc.  and  SBT  Mortgage  Service
Corporation  (the  "PIC").  The  consolidated  financial  statements  have  been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America (GAAP) for interim  financial  information and with the
instructions  to the SEC's Form 10-Q.  Accordingly,  they do not include all the
information and footnotes  required by GAAP for complete  financial  statements.
All significant  intercompany  accounts and transactions have been eliminated in
the  consolidation.  These  financial  statements  reflect,  in the  opinion  of
Management,  all adjustments,  consisting of only normal recurring  adjustments,
necessary for a fair  presentation of the Company's  financial  position and the
results  of its  operations  and  its  cash  flows  for the  periods  presented.
Operating  results for the three months ended March 31, 2009 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2009.  These  financial  statements  should  be read  in  conjunction  with  the
financial  statements  and notes thereto  included in the Company's  2008 Annual
Report on Form 10-K.

The  year-end  condensed  balance  sheet data  derived  from  audited  financial
statements does not include all disclosures required by GAAP.

NOTE 2 - COMPREHENSIVE (LOSS) INCOME
------------------------------------

Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income,"  establishes  standards for disclosure of  comprehensive
income  which  includes  net income and any  changes  in equity  from  non-owner
sources  that are not recorded in the income  statement  (such as changes in the
net  unrealized  gains  (losses)  on  securities).   The  purpose  of  reporting
comprehensive (loss) income is to report a measure of all changes in equity that
result from  recognized  transactions  and other  economic  events of the period
other than transactions  with owners in their capacity as owners.  The Company's
sources of other  comprehensive  (loss) income are the net changes in unrealized
holding  (losses)  or gains on  securities  and the net  change in  unrecognized
pension plan expense.

Comprehensive (Loss) Income

                                                    Three months ended
                                                        March 31,
                                                   2009           2008
                                                   ----           ----

Net income                                     $ 1,081,175    $ 1,080,934
Net change in unrealized holding (losses) or
 gains on securities and net change in
 unrecognized pension plan expense,
 net of tax during period                       (2,106,922)      (946,411)
                                               -----------    -----------
Comprehensive (loss) income                    $(1,025,747)   $   134,523
                                               ===========    ===========

NOTE 3 - IMPACT OF NEW ACCOUNTING STANDARDS
-------------------------------------------

In  September  2006,  the FASB  ratified the  consensus  reached by the Emerging
Issues Task Force (EITF) on Issue No. 06-4 "Accounting for Deferred Compensation
and  Postretirement  Benefit Aspects of Endorsement  Split-Dollar Life Insurance
Arrangements,"   (EITF  Issue  06-4).  EITF  06-4  requires  companies  with  an
endorsement split-dollar life insurance arrangement to recognize a liability for
future  postretirement  benefits.  The  effective  date  was  for  fiscal  years
beginning  after  December 15, 2007,  with earlier  application  permitted.  The
Company should recognize the effects of applying this Issue through either (a) a
change  in  accounting  principle  through a  cumulative  effect  adjustment  to
retained earnings or (b) a change in accounting principle through  retrospective
application to all periods.  The Company  adopted this Issue in 2008, and it did
not have a significant impact on its financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157).  SFAS No. 157 defines fair value,  establishes  a framework  for measuring
fair value under generally  accepted  accounting  principles  (GAAP) and expands
disclosures about fair value measurements.  The FASB's FSP FAS 157-2, "Effective
Date of

                                       8
<PAGE>

FASB Statement No. 157",  defers until January 1, 2009, the  application of SFAS
157 to  nonfinancial  assets and  nonfinancial  liabilities  not  recognized  or
disclosed at least annually at fair value. This includes nonfinancial assets and
nonfinancial  liabilities  initially  measured  at  fair  value  in  a  business
combination  or  other  new  basis  event,  but not  measured  at fair  value in
subsequent periods. The Company adopted this statement on January 1, 2008 and it
did not have a significant impact on its financial statements.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and  Financial  Liabilities  - Including  an amendment of FASB
Statement No. 115" (SFAS 159). SFAS 159 permits entities,  at specified election
dates, to choose to measure certain financial instruments at fair value that are
not  currently  required to be measured at fair value.  The fair value option is
applied on an  instrument-by-instrument  basis,  is irrevocable  and can only be
applied to an entire instrument and not to specified risks, specific cash flows,
or portions of that  instrument.  Unrealized gains and losses on items for which
the fair value  option has been  elected  will be  reported  in earnings at each
subsequent reporting date and upfront fees and costs related to those items will
be  recognized  in earnings as incurred  and not  deferred.  SFAS No. 159 became
effective in fiscal years beginning after November 15, 2007. The Company adopted
SFAS 159 effective  January 1, 2008 and it did not have a significant  impact on
its financial statements.

In December  2007,  the FASB issued SFAS No. 160,  "Noncontrolling  Interests in
Consolidated  Financial Statements and Amendment of ARB No. 51 ("SFAS No. 160").
The  pronouncement  requires  all entities to report  noncontrolling  (minority)
interests in subsidiaries as a component of shareholders'  equity.  SFAS No. 160
is effective for fiscal years beginning after December 15, 2008.  Early adoption
is  prohibited.  Management  anticipates  that  this  statement  will not have a
material impact on the Company's financial condition and results of operations.

In  December  2007,  the FASB  issued  SFAS No. 141  (Revised  2007),  "Business
Combinations" (SFAS 141(R)).  SFAS 141(R)  significantly  changes the accounting
for business combinations. Under SFAS 141(R), an acquiring entity is required to
recognize all the assets  acquired and  liabilities  assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  It also amends the
accounting treatment for certain specific items including  acquisition costs and
non  controlling  minority  interests and includes a  substantial  number of new
disclosure   requirements.   SFAS  141(R)  applies   prospectively  to  business
combinations  for which the acquisition date is on or after January 1, 2009. The
Company does not expect the adoption of this statement to have a material impact
on its financial condition and results of operations.

In February  2008, the FASB issued FSP FAS 140-3,  "Accounting  for Transfers of
Financial  Assets and  Repurchase  Financing  Transactions."  This FSP  provides
guidance on how the transferor and transferee  should  separately  account for a
transfer  of a financial  asset and a related  repurchase  financing  if certain
criteria are met. This guidance became  effective  January 1, 2009. The adoption
of this new FSP is not  expected  to have a  material  effect  on the  Company's
results of operations or financial position.

In March  2008,  the FASB issued SFAS No.  161,  "Disclosures  about  Derivative
Instruments and Hedging Activities-an amendment of FASB Statement No. 133" (SFAS
161). SFAS 161 changes the disclosure  requirements  for derivative  instruments
and hedging  activities.  Entities are required to provide enhanced  disclosures
about (a) how and why an entity uses derivative instruments,  (b) how derivative
instruments  and related hedged items are accounted for under  Statement 133 and
its related  interpretations,  and (c) how  derivative  instruments  and related
hedged items affect an entity's financial position,  financial performance,  and
cash flows.  The  guidance in SFAS 161 is  effective  for  financial  statements
issued for fiscal years and interim  periods  beginning after November 15, 2008,
with early  application  encouraged.  This  statement  encourages,  but does not
require,  comparative  disclosures for earlier periods at initial adoption.  The
Company does not expect the adoption of this statement to have a material impact
on its financial condition and results of operations.

In April 2008, the FASB issued FSP FAS 142-3,  "Determination of the Useful Life
of Intangible  Assets." This FSP provides  guidance as to factors  considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized  intangible  asset under SFAS 142,  "Goodwill and Other  Intangible
Assets." This guidance  became  effective  January 1, 2009.  The adoption is not
expected to have a material  effect on the  Company's  results of  operations or
financial position.

                                       9
<PAGE>

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally  Accepted
Accounting  Principles." This standard  formalizes minor changes in prioritizing
accounting  principles used in the preparation of financial  statements that are
presented in conformity with GAAP. This standard became  effective  November 15,
2008.

In April 2009,  the FASB issued FASB Staff  Position  157-4,  "Determining  Fair
Value When the  Volume and Level of  Activity  for the Asset or  Liability  Have
Significantly Decreased and Identifying  Transactions That Are Not Orderly" (FSP
FAS 157-4). FSP FAS 157-4 provides additional guidance for estimating fair value
measurements   in  accordance   with  FASB   Statement  No.  157,   "Fair  Value
Measurements,"  when the volume and level of activity for the asset or liability
have significantly  decreased. FSP FAS 157-4 is effective for interim and annual
reporting  periods ending after June 15, 2009 with early adoption  permitted for
periods ending after March 15, 2009. The  Company/Bank/Corporation  is currently
evaluating the impact of the adoption of this FSP on its financial condition and
results of operations.

In April  2009,  the FASB  issued  FASB  Staff  Position  107-1  and  Accounting
Principles  Board  Opinion  28-1,  "Interim  Disclosures  About  Fair  Value  of
Financial  Instruments"  (FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 amends FASB
Statement No. 107,  "Disclosures About Fair Value of Financial  Instruments," to
require  entities to disclose the methods and  significant  assumptions  used to
estimate  the fair value of  financial  instruments  in both  interim and annual
financial  statements.  APB 28-1 amends APB Opinion No. 28,  "Interim  Financial
Reporting" to require those disclosures in summarized  financial  information at
interim reporting periods.  FSP FAS 107-1 and APB 28-1 are effective for interim
and annual periods ending after June 15, 2009 with early adoption  permitted for
periods  ending after March 15, 2009. An entity may early adopt this FSP only if
it also elects to early  adopt FSP FAS 157-4.  The  Company/Bank/Corporation  is
currently  evaluating  the impact of the  adoption of this FSP on its  financial
condition and results of operations.

In April 2009, the FASB issued FASB Staff Position 115-2 and 124-2, "Recognition
and  Presentation of  Other-Than-Temporary  Impairments"  (FSP FAS 115-2 and FAS
124-2). FSP FAS 115-2 and FAS 124-2 amends the  other-than-temporary  impairment
(OTTI) guidance for debt securities to make the guidance more operational and to
improve the presentation and disclosure of OTTI on debt and equity securities in
the  financial  statements.  This FSP does not amend  existing  recognition  and
measurement guidance related to OTTI of equity securities. FSP FAS 115-2 and FAS
124-2 are effective for interim and annual reporting periods after June 15, 2009
with early  adoption  permitted  for periods  ending after March 15,  2009.  The
Company/Bank/Corporation  is currently  evaluating the impact of the adoption of
this FSP on its financial condition and results of operations.

NOTE 4 - DEFINED BENEFIT PENSION PLAN
-------------------------------------

The  following  summarizes  the net  periodic  benefit cost for the three months
ended March 31:

                                              Three Months Ended
                                                  March 31,
                                              2009             2008
                                           --------------------------
Components of net periodic benefit cost:
   Service cost                            $ 107,000        $ 113,750
   Interest cost                             100,750           95,000
   Expected return on plan assets            (89,750)        (105,750)
   Amortization of:
      Prior service cost                           0              223
      Actuarial loss                          32,500           15,750
                                           ---------        ---------
   Net periodic benefit cost               $ 150,500        $ 118,973
                                           =========        =========


The following  actuarial  weighted average  assumptions were used in calculating
net periodic benefit cost:
   Discount rate                               6.00%            6.00%
   Average wage increase               Graded table*    Graded table*
   Expected return on plan assets              7.50%            7.50%

*5% at age 20  grading  down  to 3% at age  60  and  beyond  (roughly  3.25%  on
average).

                                       10
<PAGE>

NOTE 5 - ASSETS MEASURED AT FAIR VALUE ON A RECURRING BASIS
-----------------------------------------------------------

The fair value hierarchy  established by SFAS No. 157 is based on observable and
unobservable  inputs  participants use to price an asset or liability.  SFAS No.
157 has prioritized these inputs into the following value hierarchy:

      Level 1 Inputs - Unadjusted  quoted prices in active markets for identical
      assets or liabilities that are available at the measurement date.

      Level 2 Inputs - Inputs other than quoted prices  included  within Level 1
      that  are  observable  for the  asset or  liability,  either  directly  or
      indirectly.  These  might  include  quoted  prices for  similar  assets or
      liabilities  in active  markets,  quoted  prices for  identical or similar
      assets or  liabilities  in markets that are not active,  inputs other than
      quoted  prices that are  observable  for the asset or  liability  (such as
      interest rates,  volatilities,  prepayment speeds,  credit risks, etc.) or
      inputs that are derived  principally from a corroborated by market data by
      correlation or other means.

      Level 3 Inputs - Unobservable inputs for determining the fair value of the
      asset or liability and are based on the entity's own assumption  about the
      assumptions  that  market  participants  would  use to price  the asset or
      liability.

A description of the valuation  methodologies  used for instruments  measured at
fair value, as well as the general clarification of such instruments pursuant to
the valuation  hierarchy is set forth below. These valuation  methodologies were
applied to all of the Company's financial assets and liabilities carried at fair
value effective January 1, 2008.

<TABLE>
<CAPTION>
                                                   Fair Value Measurements at Reporting Date using
                                              Quoted Prices
                                                in Active                                 Significant
                                               Markets for        Significant Other    Unobservable Inputs
                                            Identical Assets      Observable Inputs
Description                03/31/09             (Level 1)             (Level 2)            (Level 3)
                           --------             ---------             ---------             ---------
<S>                            <C>                   <C>           <C>                           <C>
Securities
available-for sale   $       149,620,391   $            25,228   $      149,181 ,731   $           413,432
                     -------------------   -------------------   -------------------   -------------------
Impaired loans                 8,471,996                     0             8,471,996                     0
                     -------------------   -------------------   -------------------   -------------------
  Total              $       158,092,387   $            25,228   $       157,653,727   $           413,432
                     ===================   ===================   ===================   ===================

<CAPTION>
                                                                       Fair Value Measurements
                                                                Using Significant Unobservable Inputs
                                                                               Level 3
                                                               ----------------------------------------
                                                                Available-for-Sale
                                                                    Securities           Total
                                                                   -------------     -------------
<S>                                                                        <C>               <C>
Beginning balance January 1, 2009                                  $   2,172,737     $   2,172,737
   Total gains or losses (realized/unrealized)
     Included in earnings (or changes in net assets)
     Included in other comprehensive income                              775,311)       (1,775,311)
   Amortization of securities, net                                         2,444             2,444
   Transfers in and/or out of Level 3                                     13,562            13,562
                                                                   -------------     -------------
   Ending balance, March 31, 2009                                  $     413,432     $     413,432
                                                                   =============     =============


The amount of total gains or losses for the period included
   in earnings (or changes in net assets) attributable to the
   change in unrealized gains or losses relating to assets still
   held at the reporting date                                      $           0     $           0
                                                                   =============     =============
</TABLE>

                                       11
<PAGE>

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

Business
--------

The following  provides  Management's  comments on the  financial  condition and
results of operations of Salisbury Bancorp, Inc. (the "Company"),  a Connecticut
corporation  that is the holding  company for  Salisbury  Bank and Trust Company
(the "Bank").  The Company's  sole  subsidiary is the Bank,  which has seven (7)
full service offices  including a Trust Wealth Services  Division.  Such offices
are  located  in  the  towns  of  Canaan,   Lakeville,   Salisbury  and  Sharon,
Connecticut,  Sheffield and South Egremont, Massachusetts, and Dover Plains, New
York.  In  addition,  the  bank  has  received  regulatory  approvals  to open a
full-service branch in Millerton,  New York. The Company and Bank were formed in
1998 and  1848,  respectively.  In  order to  provide  a strong  foundation  for
building  shareholder  value  and  servicing  customers,   the  Company  remains
committed to investing in the  technological  and human  resources  necessary to
developing new personalized financial products and services to meet the needs of
customers.  This  discussion  should be read in  conjunction  with the Company's
Annual Report on Form 10-K for the year ended December 31, 2008.

RESULTS OF OPERATIONS
---------------------

Overview
--------

The Company's  assets at March 31, 2009 totaled  $506,139,980  compared to total
assets of  $495,754,160  at December 31, 2008.  During the first three months of
2009,  net loans  outstanding,  not  including  loans  held-for-sale,  increased
$965,808 or 0.33% to $298,333,242. This compares to total net loans outstanding,
not including  loans  held-for-sale,  of $297,367,434 at December 31, 2008. This
small increase is primarily  attributable to strategic  efforts  directed at new
business  development  as loan demand has decreased due to the current  economic
recession.  Non-performing  assets  totaled  $6,693,269  at March 31, 2009 which
included  one  OREO   property  at  a  value  of  $418,024.   This  compares  to
non-performing  assets  totaling  $5,379,135 at December 31, 2008 which included
one OREO property valued at $204,534.  The Bank continues to monitor the quality
of the loan  portfolio to ensure that loan quality  will not be  sacrificed  for
growth or otherwise compromise the Company's objectives.  Strong risk management
policies  and  procedures  relating  to the  loan  portfolio  have  always  been
maintained by the Bank.  However,  the economy is in a deep  recession  which is
significantly  impacting  the Bank's  market  area.  Deposits  at March 31, 2009
totaled  $366,763,527  as compared to total deposits of $344,925,232 at December
31, 2008. This increase is attributable to new business development efforts that
are being  implemented  and the  desire of  consumers  to use the safety of FDIC
insured Bank funds to protect assets.

The Company's  earnings for the three months ended March 31, 2009 was $1,081,175
or $.64 per average share outstanding. This is virtually unchanged from earnings
of $1,080,934 or $.64 per share for the same period in 2008.

The capital levels of the Company as well as the Bank,  remain above the highest
regulatory  capital level  requirements as measured by the Regulatory  Agencies.
Capital  levels at March 31, 2009 compared to Regulatory  Capital  Ratios are as
follows:

                             Salisbury Bank    Consolidated    Well Capitalized
                             --------------    ------------    ----------------

Total risk based capital        11.72%             14.55%          > 10.00%
                                                                   -
Tier 1 risk based capital       10.82%             13.66%          >  6.00%
                                                                   -
Leverage ratio                   7.52%              9.54%          >  5.00%
                                                                   -

As previously  disclosed,  on March 27, 2009, the Board of Directors  declared a
first quarter cash  dividend of $.28 per common  share,  which was paid on April
30, 2009 to shareholders of record as of April 16, 2009. This compared to a cash
dividend of $.28 per common share that was paid for the first quarter of 2008.

                                       12
<PAGE>

Critical Accounting Estimates
-----------------------------

In preparing the Company's financial statements,  Management selects and applies
numerous accounting policies.  In applying these policies,  Management must make
estimates and  assumptions.  The accounting  policy that is most  susceptible to
critical  estimates  and  assumptions  is the  allowance  for loan  losses.  The
determination  of an  appropriate  provision  is based on an  estimation  of the
probable amount of credit losses in the loan portfolio.  Many factors  influence
the  amount  of   estimated   loan   losses,   relating  to  both  the  specific
characteristics of the loan portfolio and general economic conditions nationally
and locally.  While Management  carefully considers these factors in determining
the amount of the allowance for loan losses, future adjustments may be necessary
due to  changed  conditions,  which  could have an  adverse  impact on  reported
earnings in the future. See "Provisions and Allowance for Loan Losses."

                        THREE MONTHS ENDED MARCH 31, 2009
                AS COMPARED TO THREE MONTHS ENDED MARCH 31, 2008

Net Interest and Dividend Income
--------------------------------

The Company's  earnings are primarily  dependent  upon net interest and dividend
income,  and to a lesser extent  noninterest  income.  Net interest and dividend
income is the difference  between interest and dividends earned primarily on the
loan and securities  portfolios and interest paid on deposits,  securities  sold
under  agreements  to  repurchase  and advances from the Federal Home Loan Bank.
Noninterest  income is primarily derived from the Trust Wealth Advisory Services
Division,  service  charges and other fees related to deposit and loan  accounts
and income from gains in securities transactions.  For the following discussion,
net  interest and  dividend  income is  presented on a fully  taxable-equivalent
("FTE") basis.  FTE interest  income  restates  reported  interest income on tax
exempt  securities as if such  interest were taxed at the Company's  federal tax
rate of 34% for all periods presented.

Three Months Ended March 31,              2009         2008
                                          ----         ----
Total Interest and Dividend Income
(financial statements)                 $6,486,957   $6,667,897
Tax Equivalent Adjustment                 331,567      295,935
                                       ----------   ----------

Total Interest and Dividend Income
      (on a FTE basis)                  6,818,524    6,963,832
Total Interest Expense                  2,284,126    3,008,390
                                       ----------   ----------
Net Interest and Dividend Income-FTE   $4,534,398   $3,955,442
                                       ==========   ==========

Total  interest  and  dividend  income on a FTE basis for the three months ended
March 31, 2009, when compared to the same period in 2008,  decreased $145,308 or
2.09%.  The decrease was primarily  attributable  to an economic  environment of
lower interest rates.

Interest  expense  on  deposits  for the  first  three  months  of 2009  totaled
$1,483,582, a decrease of $489,647 or 24.81% when compared to $1,973,229 for the
same period in 2008. This decrease reflects an economic environment of generally
lower  interest  rates.  The Bank's  volume of Federal  Home Loan Bank  ("FHLB")
advances  outstanding at March 31, 2009 decreased  10.60% when compared to total
advances outstanding at December 31, 2008. This decrease in borrowings,  coupled
with a restructuring of the FHLB advances strategy implemented during the fourth
quarter of 2008,  which  included a prepayment  of a high interest rate advance,
that has resulted in a decrease in  borrowing  expense of $273,644 or 26.43% for
the first  quarter of 2009.  In addition,  the Bank  recorded  interest  expense
totaling $39,027 for interest on securities sold under agreements to repurchase,
which was a new product that was introduced  during 2008. Total interest expense
for the three months ended March 31, 2009 was $2,284,126, a decrease of $724,264
or 24.08% when compared to the same period in 2008.

Overall, net interest and dividend income (on a FTE basis) increased $578,956 or
14.64% to  $4,534,398  for the period ended March 31, 2009 when  compared to the
same period in 2008.

                                       13
<PAGE>

Noninterest Income
------------------

Noninterest  income,  not  including  net  gains on sales of  available-for-sale
securities,  totaled  $1,278,046 for the three months ended March 31, 2009. This
is an  increase  of  $163,365 or 14.66%  compared  to  noninterest  income,  not
including gains on available-for-sale securities transactions, of $1,114,681 for
the three  months  ended March 31, 2008.  The  increase  reflected  the combined
impact of a $39,122 gain on the sale of an OREO property,  a $69,329 gain in the
value of the  servicing  rights of the FHLB  mortgage  loans  sold and a $87,269
increase in BOLI revenue  resulting from a tax-free exchange pursuant to Section
1035  of  the  Internal  Revenue  Code  to a new  insurance  carrier.  Gains  on
securities sales increased $109,368 when comparing the first quarter to the same
period in 2008.  First quarter  income from the Trust Wealth  Advisory  Services
Division decreased $60,000 or 10% to $540,000. This is primarily due to movement
in the markets.

Noninterest Expense
-------------------

Noninterest  expense increased  $483,793 or 13.26% for the first three months of
2009 as compared to the same period in 2008. Of this increase,  $188,930 was the
result of an increase in employee  salaries  and  benefits.  Additionally,  FDIC
insurance expense increased $93,052,  primarily reflecting the loss of one- time
assessment credit and new premium  schedules.  Data processing expense increased
$64,796.  This  increase is primarily  attributable  to  increased  transactions
resulting  from growth and costs related to enhancing  the delivery  channels of
products to our customers. Professional fees and legal expense increased $27,131
and  $33,931,  respectively;  primarily  the  result  of  participation  in  the
Treasury's  TARP Capital  Purchase  Program  ("CPP").  The increase in the other
noninterest  expenses in the table below are  attributable  to normal volumes of
business.

The  components  of  noninterest  expense  and the changes in the period were as
follows:

<TABLE>
<CAPTION>
                                             2009         2008        Change    %Change
---------------------------------------------------------------------------------------
<S>                                       <C>          <C>          <C>            <C>
Salaries and employee benefits            $2,265,103   $2,076,173   $  188,930     9.10%
Occupancy expense                            257,119      230,527       26,592    11.54
Equipment expense                            226,717      211,086       15,631     7.41
Data processing                              383,436      318,640       64,796    20.34
Insurance                                    136,952       43,900       93,052   211.96
Printing and stationery                       65,969       59,508        6,461    10.86
Professional fees                            261,341      234,210       27,131    11.58
Legal expense                                 95,358       61,427       33,931    55.24
Amortization of core deposit intangible       41,054       41,054            0        0
Other expense                                400,740      373,471       27,269     7.30
                                          ----------   ----------   ----------
      Total noninterest expense           $4,133,789   $3,649,996   $  483,793    13.25
                                          ==========   ==========   ==========
</TABLE>

Income Taxes
------------

The income tax provision for the first three months of 2009 totaled  $263,251 in
comparison  to $301,228 for the same three month period in 2008.  Pretax  income
and overall tax  effective  rate are  consistent  between the two periods  being
compared.

Net Income
----------

Net income was  $1,081,175 or $.64 per average share  outstanding  for the three
months ended March 31,  2009.  Net income for the  corresponding  period in 2008
totaled $1,080,934 or $.64 per average share outstanding.

FINANCIAL CONDITION
-------------------

Total assets at March 31, 2009 were  $506,139,980,  compared to  $495,754,160 at
December 31, 2008, an increase of 2.10%. The increase is primarily the result of
participation in the Treasury TARP CPP program.  The Company closed the TARP CPP
transaction  on  March  13,  2009  in the  amount  of  $8,816,000.  For  further
discussion regarding the Company's  participation in the TARP CPP, see "Capital"
below.

                                       14
<PAGE>

Securities Portfolio
--------------------

The Company  manages the securities  portfolio in accordance with the investment
policy  adopted  by the  Board  of  Directors.  The  make  up of the  investment
portfolio   is   diversified   among   U.S.   Government   sponsored   agencies,
mortgage-backed  securities and securities issued by states of the United States
and  political  subdivisions  of the  states.  The  portfolio  does not  include
securities   collateralized  by  pools  of  sub-prime  mortgages.   The  primary
objectives of the portfolio  are to earn interest and dividend  income,  provide
liquidity to meet cash flows and to manage interest rate risk and  asset-quality
diversifications of the Company's assets. The securities  portfolio also acts as
collateral  for deposits of public  agencies and advances  from the Federal Home
Loan Bank of  Boston.  During  the  three  months  ended  March  31,  2009,  the
securities portfolio, including Federal Home Loan Bank stock, decreased $907,743
to $155,008,664 from $155,916,407 at December 31, 2008.

Securities   are   classified   in   the   portfolio   as   either    securities
available-for-sale or securities held-to-maturity.  Almost all securities in the
portfolio  are  classified as  available-for-sale.  The  securities  reported as
available-for-sale  are stated at fair value in the financial  statements of the
Company.  Unrealized holding gains and losses on  available-for-sale  securities
(accumulated other comprehensive  income/loss) are not included in earnings, but
are  reported as a net amount  (less  expected  tax) in a separate  component of
capital until  realized.  At March 31, 2009, the unrealized  loss net of tax was
$9,096,020.  This  compares to an  unrealized  loss net of tax of  $6,967,705 at
December 31, 2008.  The Company  monitors the market value  fluctuations  of its
securities  portfolio on a monthly basis as well as associated credit ratings to
determine potential impairment of a security.

Lending
-------

Net loans  outstanding (not including loans held for sale) totaled  $298,333,242
at March 31, 2009 compared to net loans  outstanding  (not including  loans held
for sale) of  $297,367,434  at December 31, 2008.  Competition for loans remains
aggressive in the Bank's market area; however,  new business development coupled
with an increase in loan demand resulted in the increase.

The following table  represents the composition of the loan portfolio  comparing
March 31, 2009 to December 31, 2008:

                                         March 31, 2009   December 31, 2008

Commercial, financial and agricultural   $  21,768,445      $  20,784,842
Real estate-construction and land
     development                            34,038,066         33,342,610
Real estate-residential                    175,987,002        177,048,233
Real estate-commercial                      63,644,191         62,796,469
Consumer                                     5,244,132          5,551,172
Other                                          256,249            174,965
                                         -------------      -------------
                                           300,938,085        299,698,291
Deferred costs, net                            400,321            393,228
Unearned income                                    (25)               (61)
Allowance for loan losses                   (3,005,139)        (2,724,024)
                                         -------------      -------------
Net Loans                                $ 298,333,242      $ 297,367,434
                                         =============      =============


Provision and Allowance for Loan Losses
---------------------------------------

Credit risk is inherent in the business of extending  loans.  The Bank  monitors
the quality of the  portfolio to ensure that loan quality will not be sacrificed
for growth or otherwise  compromise the Bank's objectives.  Because of this risk
associated with extending  loans, the Bank maintains an allowance or reserve for
loan and lease  losses  through  charges to  earnings.  The Bank  evaluates  the
adequacy of the  allowance  no less  frequently  than on a quarterly  basis.  No
material  changes have been made in the estimation  methods or assumptions  that
the Bank uses in making  this  determination  during the period  ended March 31,
2009.  Such  evaluations  are based on  assessments  of credit quality and "risk
rating" of loans by senior  management,  which is  reviewed  by the Bank's  Loan
Committee on a regular basis. Loans are initially risk rated when originated. If
there is deterioration in the credit,  the risk rating is adjusted

                                       15
<PAGE>

accordingly.  As a  result,  for the  first  three-month  period  of  2009,  the
provision  for loan losses was  $430,000.  This compares to a provision for loan
losses of $60,000 for the corresponding period in 2008.

The allowance also includes a component  resulting  from the  application of the
measurement  criteria of Statements of Financial  Accounting  Standards No. 114,
Accounting by Creditors for  Impairment of a Loan ("SFAS 114").  Impaired  loans
receive  individual  evaluation of the allowance  necessary on a monthly  basis.
Loans to be considered  for  impairment are defined in the Bank's Loan Policy as
commercial  loans with balances  outstanding of $100,000 or more and residential
real  estate  mortgages  with  balances  of  $300,000  or more.  Such  loans are
considered  impaired  when it is  probable  that  the  Bank  will not be able to
collect all principal and interest due according to the terms of the note.

Any such commercial loan and/or residential mortgage will be considered impaired
under any of the following circumstances:

1.      Non-accrual status;
2.      Loans over 90 days delinquent;
3.      Troubled debt restructures consummated after December 31, 1994;
4.      Loans classified as "doubtful", meaning that they have weaknesses, which
        make  collection or  liquidation  in full,  based on currently  existing
        facts, conditions, and values, highly questionable and improbable.

The  individual  allowance for any impaired loan is based upon the present value
of expected future cash flows discounted at the loan's  effective  interest rate
or the  fair  value  of the  collateral  if the  loan is  collateral  dependent.
Specifically  identifiable and quantifiable  losses are immediately  charged off
against the allowance.

In addition, a risk of loss factor is applied in evaluating  categories of loans
generally as part of the  periodic  analysis of the  Allowance  for Loan Losses.
This  analysis  reviews the  allocations  of the  different  categories of loans
within the portfolio  and it considers  historical  loan losses and  delinquency
figures as well as any recent delinquency trends.

Concentrations  of credit and local  economic  factors are also  evaluated  on a
periodic basis.  Historical average net losses by loan type are examined as well
as trends by type. The Bank's loan mix over the same period is also analyzed.  A
loan loss  allocation  is made for each type of loan  multiplied by the loan mix
percentage for each loan type to produce a weighted average factor.

Nonperforming  loans,  which  include all loans that are on a nonaccrual  status
along  with  loans  that are 90 days or more  past due and still  accruing,  are
closely monitored by management.  At March 31, 2009, nonperforming loans totaled
$6,275,245 or 2.09% of total loans  outstanding of  $300,938,085  which does not
include loans held for sale.  The allowance for loan losses  totaled  $3,005,139
representing  47.89%  of  nonperforming   loans.   Nonperforming  loans  totaled
$5,174,601  or 1.73% of total loans  outstanding,  (which does not include loans
held for sale) of  $299,698,291  at December 31, 2008.  The  allowance  for loan
losses  totaled  $2,724,024  at  December  31,  2008 and  represented  52.64% of
nonperforming  loans.  A total of  $159,428 of loans was charged off by the Bank
during the three months ended March 31, 2009. These  charged-off loans consisted
primarily of consumer loans. This compares to loans charged off during the three
month  period ended March 31, 2008 that  totaled  $9,695.  A total of $10,543 of
previously  charged-off  loans was recovered during the three month period ended
March 31, 2009.  Recoveries for the same period in 2008 totaled  $10,210.  While
management  estimates  loan  losses  using the best  available  information,  no
assurances  can be given that  future  additions  to the  allowance  will not be
necessary  based on changes  in  economic  and real  estate  market  conditions,
further  information   obtained  regarding  problem  loans,   identification  of
additional problem loans or other factors. Additionally, future additions to the
allowance may be necessary to maintain  adequate  coverage ratios.  At March 31,
2009,  the Bank had other real estate owned  ("OREO") in the amount of $418,024,
which is one commercial property.

                                       16
<PAGE>

Deposits
--------

The Company offers a variety of deposit  accounts with a range of interest rates
and terms.  The following  table  illustrates  the  composition of the Company's
deposits at March 31, 2009 and December 31, 2008:

                      March 31, 2009   December 31, 2008

Demand                 $ 63,448,689       $ 65,479,271
NOW                      22,937,738         26,097,175
Money Market             67,741,014         57,648,106
Savings                  73,264,594         70,180,841
Time                    139,371,492        125,519,839
                       ------------       ------------
  Total Deposits       $366,763,527       $344,925,232
                       ============       ============

Deposits constitute the principal funding source of the Company's assets.

Borrowings
----------

The Company  utilizes  advances  from the Federal  Home Loan Bank as part of its
operating  strategy to supplement  deposit  growth and fund its asset growth,  a
strategy that is designed to increase  interest income.  These advances are made
pursuant to various credit programs, each of which has its own interest rate and
range of  maturities.  At  March  31,  2009,  the  Company  had  $78,598,166  in
outstanding  advances from the Federal Home Loan Bank compared to $87,913,667 at
December 31, 2008. In addition,  the Company sold securities under agreements to
repurchase  as part of its  operating  strategy.  At March 31, 2009 they totaled
$9,081,236 compared to $11,203,289 at December 31, 2008.

Off-Balance Sheet Arrangements
------------------------------

In the normal course of business,  the Company enters into certain relationships
characterized as lending related off-balance sheet  arrangements.  These lending
commitments  have various  terms and are designed to  accommodate  the financial
needs  of  consumers,   businesses  and  other  entities.  Many  of  these  loan
commitments  have fixed expiration  dates or other  termination  clauses and may
require payment of a fee. Since many of these commitments are expected to expire
without being funded, the total commitment amounts do not necessarily  represent
future liquidity requirements.

Loan  commitments  have credit  risk  essentially  the same as that  involved in
extending  loans to  customers.  They are  subject  to  normal  credit  approval
procedures and policies. Collateral is obtained based on management's assessment
of the customer's  credit.  The accompanying  table summarizes the Company's off
balance sheet  lending-related  financial  instruments by remaining  maturity at
March 31, 2009:

<TABLE>
<CAPTION>
By remaining maturity               Less than 1 year    1-3 years       4-5 years     After 5 years        Total
<S>                                         <C>           <C>             <C>             <C>            <C>
Off balance sheet lending-related
Financial Instruments
    Residential real estate related   $   4,290,401   $          --   $          --   $  29,934,680   $  34,225,081
    Commercial related                      267,669       2,760,120       1,725,461       8,057,127      12,810,377
    Consumer related                                                                      1,896,810       1,896,810
    Standby letters of credit                 2,800                                                           2,800
                                      -----------------------------------------------------------------------------
    Total                             $   4,560,870   $   2,760,120   $   1,725,461   $  39,888,617   $  48,935,068
                                      =============================================================================
</TABLE>

Interest Rate Risk
------------------

Interest rate risk is the most  significant  market risk  affecting the Company.
Interest  rate risk is defined as an exposure  to a movement  in interest  rates
that could have an adverse effect on net interest income. Net interest income is
sensitive to interest rate risk to the degree that interest-bearing  liabilities
mature or reprice on a different  basis than  earning  assets.  In an attempt to
manage its  exposure  to  changes  in  interest  rates,  the  Bank's  assets and
liabilities are managed in accordance with policies  established and reviewed by
the Bank's Board of Directors.  The Bank's Asset/Liability  Management Committee
monitors asset and deposit  levels,  developments  and trends in interest rates,
liquidity  and capital.  One of the primary  financial  objectives  is to manage
interest rate risk and control

                                       17
<PAGE>

the  sensitivity  of earnings to changes in interest rates in order to prudently
improve  net  interest  income and  manage  the  maturities  and  interest  rate
sensitivities of assets and liabilities.

To  quantify  the extent of these  risks,  both in its current  position  and in
actions it might take in the future,  interest rate risk is monitored  using gap
analysis which identifies the differences  between assets and liabilities  which
mature or reprice during specific time frames and model simulation which is used
to "rate shock" the Company's assets and liability  balances to measure how much
of the Company's net interest income is "at risk" from sudden rate changes.
An interest rate sensitivity gap is defined as the difference between the amount
of interest-earning  assets maturing or repricing within a specific time and the
amount of  interest-bearing  liabilities  maturing or repricing within that same
period. A gap is considered  positive when the amount of interest rate sensitive
assets  exceeds  the amount of interest  rate  sensitive  liabilities.  A gap is
considered  negative  when the amount of  interest  rate  sensitive  liabilities
exceeds the amount of interest rate  sensitive  assets.  At March 31, 2009,  the
Company  maintains a slight liability  sensitive  (negative gap) position.  This
would  suggest that during a period of  declining  interest  rates,  the Company
would be in a better position to increase net interest income.  To the contrary,
during a period of rising  interest  rates,  a  negative  gap would  result in a
decrease in interest  income.  The level of interest rate risk at March 31, 2009
is within the limits approved by the Board of Directors.

Liquidity
---------

Liquidity is the ability to raise funds on a timely basis at an acceptable  cost
in  order  to meet  cash  needs.  Adequate  liquidity  is  necessary  to  handle
fluctuations in deposit levels,  to provide for customers'  credit needs, and to
take advantage of investment  opportunities  as they are presented.  The Company
manages  liquidity  primarily  with readily  marketable  investment  securities,
deposits and loan repayments. The Company's subsidiary, the Bank, is a member of
the Federal Home Loan Bank of Boston.  This enhances the  liquidity  position by
providing a source of available  borrowings.  At March 31, 2009, the Company had
approximately  $48,935,068 in loan commitments outstanding.  Management believes
that the current  level of  liquidity is ample to meet the  Company's  needs for
both the present and foreseeable future.

Capital
-------

At March 31, 2009,  the Company had  $46,257,544  in  shareholders'  equity,  an
increase of 18.79%  when  compared to  December  31, 2008  shareholders'  equity
totaling  $38,939,332.  Several  components  contributed  to  the  change  since
December 31,  2008.  Earnings  for the  three-month  period ended March 31, 2009
totaled  $1,081,175  or $.64 per average  share  outstanding.  Securities in the
investment portfolio that are classified as  available-for-sale  are adjusted to
fair  value  monthly  and the  unrealized  losses or gains are not  included  in
earnings,  but are  reported as a net amount (less  expected  tax) as a separate
component of capital until  realized.  Market  fluctuations of fair value of the
securities  portfolio  for the period ending March 31, 2009 resulted in a change
in accumulated other comprehensive loss net of tax totaling $2,128,315.  Changes
in unrecognized  pension plan expense per SFAS No. 158,  resulted in accumulated
other  comprehensive  income net of tax of $21,393  for the three  month  period
ended March 31, 2009. The Company has declared a first quarter  dividend of $.28
per common  share out  standing  that has  resulted  in a decrease in capital of
$472,041.  Following the October 14, 2008 announcement by the Treasury regarding
the TARP CPP, the Company  applied for and was approved to be a  participant  in
such program under the Emergency  Stabilization Act of 2008. The Company decided
to participate  in the CPP and closed the  transaction on March 13, 2009 for the
maximum amount of the preliminary approval which totaled $8,816,000. The Company
issued to the Treasury 8,816 shares of Preferred Stock with a par value of $0.01
together with related  warrants to purchase  approximately  57,671 shares of the
Company  common stock at $22.93 per share (based on an estimated  exercise price
of $22.93  determined at the preliminary  approval  date.) The senior  preferred
stock  will  pay a  cumulative  dividend  rate of 5% per  annum.  Under  current
regulatory  definitions,  the  Company and the Bank are  considered  to be "well
capitalized" for capital  adequacy  purposes.  As a result,  the Bank pays lower
federal  deposit  insurance  premiums  than  those  banks  that  are  not  "well
capitalized." One primary measure of capital adequacy for regulatory purposes is
based on the ratio of risk-based capital to risk-weighted assets. This method of
measuring capital adequacy helps to establish capital requirements that are more
sensitive to the differences in risk  associated  with various assets.  It takes
into account  off-balance  sheet exposure in assessing  capital  adequacy and it
minimizes  disincentives to holding liquid,  low-risk assets. At March 31, 2009,
the Company had a total risk based capital ratio of 14.55% compared to 11.59% at
December 31, 2008.  Maintaining  strong  capital is essential to Bank safety and
soundness.  However,  the  effective  management of capital  resources  requires
generating  attractive  returns on equity to build value for shareholders  while
maintaining  appropriate  levels of  capital  to fund  growth,  meet  regulatory
requirements and be consistent with prudent industry practices.

                                       18
<PAGE>

Impact of Inflation and Changing Prices
---------------------------------------

The Company's  consolidated financial statements are prepared in conformity with
generally  accepted  accounting  principles  that  require  the  measurement  of
financial condition and operating results in terms of historical dollars without
considering changes in the relative purchasing power of money, over time, due to
inflation.  Unlike most  industrial  companies,  virtually all of the assets and
liabilities  of the Company are monetary and as a result,  interest rates have a
greater  impact on the  Company's  performance  than do the  effects  of general
levels of inflation, although interest rates do not necessarily move in the same
direction  or with the same  magnitude  as the  prices  of goods  and  services.
Although not a material factor in recent years,  inflation could impact earnings
in future periods.

Forward Looking Statements
--------------------------

This Form 10-Q and future  filings made by the Company with the  Securities  and
Exchange Commission,  as well as other filings,  reports and press releases made
or issued by the Company and the Bank,  and oral  statements  made by  executive
officers  of the Company and the Bank,  may include  forward-looking  statements
relating to such matters as:

(a)      assumptions  concerning  future  economic and business  conditions  and
         their  effect on the economy in general and on the markets in which the
         Company and the Bank do business; and

(b)      expectations for revenues and earnings for the Company and Bank.

Such forward-looking  statements are based on assumptions rather than historical
or current facts and, therefore,  are inherently  uncertain and subject to risk.
For those  statements,  the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Act of
1995.

The Company  notes that a variety of factors  could cause the actual  results or
experience  to  differ   materially  from  the  anticipated   results  or  other
expectations described or implied by such forward-looking  statements. The risks
and uncertainties  that may effect the operation,  performance,  development and
results of the Company's and Bank's business include the following:

(a)      the risk of  adverse  changes in  business  conditions  in the  banking
         industry  generally  and in the  specific  markets  in  which  the Bank
         operates;
(b)      changes in the legislative and regulatory  environment  that negatively
         impacts the Company and Bank through increased operating expenses;
(c)      increased   competition   from  other   financial   and   non-financial
         institutions;
(d)      the impact of technological advances; and
(e)      other risks  detailed from time to time in the  Company's  filings with
         the Securities and Exchange Commission.

Such  developments  could have an adverse impact on the Company's and the Bank's
financial position and results of operations.

                        Item 4T. Controls and Procedures.

The Company's Chief  Executive  Officer and Chief  Financial  Officer  concluded
that,  based upon an evaluation as of March 31, 2009,  the Company's  disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by the  Company  in  reports  that it  files  or  submits  under  the
Securities Exchange Act of 1934 is recorded, processed,  summarized and reported
within the time periods specified in the SEC rules and forms. During the quarter
ended March 31,  2009 there were no changes in the  Company's  internal  control
over financial reporting that materially  affected,  or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

                                       19
<PAGE>

                           Part II - OTHER INFORMATION

Item 1. - Legal Proceedings.

         The Bank is a party  defendant,  both in its capacity as Salisbury Bank
         and Trust  Company and in its  capacity as the Trustee of the Erling C.
         Christophersen  Revocable Trust, in litigation currently pending in the
         Connecticut  Superior Court within the Judicial District of Bridgeport,
         John R.  Christophersen  v Erling  C.  Christophersen  et.  al.,  which
         commenced  May 29, 2008.  The other parties to the  litigation  are the
         Plaintiff,  John R.  Christophersen  of  Norwalk,  Connecticut  and the
         Defendants, Erling C. Christophersen,  of Westport, Connecticut; Bonnie
         Christophersen  of  Westport,  Connecticut,  Elena  Dreiske of Wanetka,
         Illinois, and People's United Bank with its principal place of business
         in Bridgeport, Connecticut.

         The litigation  involves the ownership of certain real property located
         within  Westport,  Connecticut,  which was  conveyed by the  Defendant,
         Erling Christophersen, to the Erling Christophersen Trust, of which the
         Bank is a co-Trustee.  Subsequent to this  conveyance,  the Bank loaned
         $3,386,609, to the Erling Christophersen Trust, which was secured by an
         open-end  commercial mortgage in favor of the Bank on the Westport real
         estate referenced above.

         The claim of the  Plaintiff  John R.  Christophersen  is that he had an
         interest in the real property of which he was wrongfully  divested.  He
         has brought this action seeking  restoration of his allegedly  divested
         interest as well as money damages.

         In addition to his efforts to restore his alleged  interest in the real
         property,  the Plaintiff has made two additional claims directed at the
         Bank.  The  Plaintiff  has  alleged  that the Bank  failed  to  utilize
         reasonable  diligence  in  extending  financing  to  the  Co-Defendant,
         Erling,  and that had it engaged in reasonable  diligence it would have
         discovered  that the Plaintiff had an interest in the  above-referenced
         property.  He has  also  alleged  an  implied  trust  against  the Bank
         alleging  that  it  acquired  title  to  the  property  adverse  to the
         Plaintiff's   interest  and  in   contravention   of  the   Plaintiff's
         entitlements,   and,  therefore,   holds  the  property  in  trust  for
         Plaintiff.

         The Bank  disputes the claims made by the  Plaintiff  and is vigorously
         defending the case. At the inception of this loan,  the Bank obtained a
         Lenders  Title  insurance  policy from the Chicago  Title and Insurance
         Company.  Additionally,  at the time of this  financing,  the appraised
         value of the aforementioned  real estate was significantly in excess of
         the loan amount. Given current economic conditions,  the Bank continues
         to monitor the value of its collateral position,  which remains well in
         excess of the  outstanding  loan balance.  While the underlying loan is
         currently performing,  until the litigation is resolved,  the liquidity
         of the real estate collateral that secures the loan is diminished.

Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds. Not
          applicable

Item 3. - Defaults Upon Senior Securities.  Not applicable

Item 4. - Submission of Matters to a Vote of Security Holders. Not applicable

Item 5. - Other Information.  Not applicable

Item 6. - Exhibits

              11-  Computation of Earnings per Share.

              31.1-Rule 13a-14(a)/15d-14(a) Certification.

              31.2-Rule 13a-14(a)/15d-14(a) Certification.

              32-  Section 1350 Certifications


                                       20
<PAGE>

                             SALISBURY BANCORP, INC.

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.

                                                  Salisbury Bancorp, Inc.

    Date: May 14, 2009                            by:  /s/ John F. Perotti
         --------------                                --------------------
                                                       John F. Perotti
                                                       Chief Executive Officer

    Date: May 14, 2009                            by:  /s/ John F. Foley
         --------------                                --------------------
                                                       John F. Foley
                                                       Chief Financial Officer



                                       21