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, 2006
                              ----------------------------

                                       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 Identification No.)
  Incorporation or Organization)

  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. See definition of "accelerated
filer and large  accelerated  filer" in rule 12b-2 of the Exchange  Act.  (Check
one):
Large accelerated filer [ ]    Accelerated filer [ ]   Non-accelerated filer [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 April 20, 2006, there
                       were 1,683,341 shares outstanding.

<PAGE>
<TABLE>
<CAPTION>

                                 SALISBURY BANCORP, INC. AND SUBSIDIARY

                                            TABLE OF CONTENTS

Part I.  FINANCIAL INFORMATION                                                                      Page

<S>                                                                                                 <C>
Item 1.  Financial Statements:                                                                        3

         Condensed Consolidated Balance Sheets -March 31, 2006 (unaudited)
                           and December 31, 2005                                                      4
         Condensed Consolidated Statements of Income -three months ended March 31, 2006
                           and 2005 (unaudited)                                                       5
         Condensed Consolidated Statements of Cash Flows -three months ended March 31, 2006
                            and 2005 (unaudited)                                                      6
         Notes to Condensed Consolidated Financial Statements  (unaudited)                            7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations        9

Item 3.  Quantitative and Qualitative Disclosures about Market Risk                                  15

Item 4.  Controls and Procedures                                                                     16


Part II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                                           16

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                 16

Item 3.  Defaults Upon Senior Securities                                                             16

Item 4.  Submission of Matters to a Vote of Security Holders                                         16

Item 5.  Other Information                                                                           16

Item 6.  Exhibits                                                                                    16

Signatures                                                                                           16
</TABLE>

                                                  -2-
<PAGE>

                         Part I-- FINANCIAL INFORMATION
                          Item 1. Financial Statements.




                                       -3-
<PAGE>
<TABLE>
<CAPTION>

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

                               CONDENSED CONSOLIDATED BALANCE SHEETS
                               -------------------------------------
                           (amounts in thousands, except per share data)
                               March 31, 2006 and December 31, 2005

                                                                           March 31    December 31
                                                                             2006         2005
                                                                             ----         ----
<S>                                                                            <C>              <C>
ASSETS                                                                    (unaudited)
------
Cash and due from banks                                                    $   7,009    $   8,432
Interest bearing demand deposits with other banks                                935          652
Money market mutual funds                                                        706        1,120
Federal funds sold                                                             4,981            0
                                                                           ---------    ---------
         Cash and cash equivalents                                            13,631       10,204
Investments in available-for-sale securities (at fair value)                 142,400      145,608
Investments in held-to-maturity securities (fair values of $78,000 as of
   March 31, 2006 and $147,000 as of December 31, 2005)                           78          147
Federal Home Loan Bank stock, at cost                                          5,413        5,413
Loans held-for-sale                                                              444            0
Loans, less allowance for loan losses of $2,592,000 as of March 31, 2006
   and $2,626,000 as of December 31, 2005                                    218,065      215,989
Investment in real estate                                                         75           75
Premises and equipment                                                         6,345        6,452
Goodwill                                                                       9,509        9,509
Core deposit intangible                                                        1,617        1,658
Accrued interest receivable                                                    2,075        2,363
Cash surrender value of life insurance policies                                3,454        3,424
Other assets                                                                   2,127        2,080
                                                                           ---------    ---------
         Total assets                                                      $ 405,233    $ 402,922
                                                                           =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits:
   Noninterest-bearing                                                     $  63,066    $  63,996
   Interest-bearing                                                          226,616      223,275
                                                                           ---------    ---------
         Total deposits                                                      289,682      287,271
Federal Home Loan Bank advances                                               70,854       71,016
Other liabilities                                                              1,795        3,193
                                                                           ---------    ---------
         Total liabilities                                                   362,331      361,480
                                                                           ---------    ---------
Stockholders' equity:
   Common stock, par value $.10 per share; authorized
    3,000,000 shares; issued and outstanding, 1,683,341 shares
     at March 31, 2006 and December 31, 2005                                     168          168
   Paid-in capital                                                            13,068       13,068
   Retained earnings                                                          32,248       31,101
   Accumulated other comprehensive loss                                       (2,582)      (2,895)
                                                                           ---------    ---------
         Total stockholders' equity                                           42,902       41,442
                                                                           ---------    ---------
         Total liabilities and stockholders' equity                        $ 405,233    $ 402,922
                                                                           =========    =========


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

</TABLE>
                                               -4-
<PAGE>

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

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   -------------------------------------------

                  (amounts in thousands, except per share data)
                             March 31, 2006 and 2005
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                      March 31, 2006
                                                                       2006    2005
                                                                      ------   ------
<S>                                                                   <C>      <C>
Interest and dividend income:
     Interest and fees on loans                                       $3,628   $3,210
     Interest on debt securities:
          Taxable                                                      1,268    1,102
          Tax-exempt                                                     495      656
     Dividends on equity securities                                       60       48
     Other interest                                                        9       18
                                                                      ------   ------
                   Total interest and dividend income                  5,460    5,034
                                                                      ------   ------
Interest expense:
     Interest on deposits                                              1,338      908
     Interest on Federal Home Loan Bank advances                         829      737
                                                                      ------   ------
               Total interest expense                                  2,167    1,645
                                                                      ------   ------
               Net interest and dividend income                        3,293    3,389
Provision for loan losses                                                  0       90
                                                                      ------   ------
               Net interest and dividend income after provision for
                    loan losses                                        3,293    3,299
                                                                      ------   ------
Noninterest income:
     Trust department income                                             485      388
     Loan commissions                                                     14       72
     Service charges on deposit accounts                                 177      144
     Gain on sales of available-for-sale securities, net                  74      486
     Gain on sales of loans held-for-sale                                 62       94
     Other income                                                        214      205
                                                                      ------   ------
               Total noninterest income                                1,026    1,389
                                                                      ------   ------
Noninterest expense:
     Salaries and employee benefits                                    1,703    1,808
     Occupancy expense                                                   176      186
     Equipment expense                                                   187      187
     Data processing                                                     283      197
     Insurance                                                            31       40
     Printing and stationery                                              53       59
     Professional fees                                                    90       74
     Legal expense                                                        25       26
     Amortization of core deposit intangible                              41       41
     Other expense                                                       248      408
                                                                      ------   ------
               Total noninterest expense                               2,837    3,026
                                                                      ------   ------
               Income before income taxes                              1,482    1,662
Income taxes                                                             335      333
                                                                      ------   ------
               Net income                                             $1,147   $1,329
                                                                      ======   ======

Earnings per common share                                             $  .68   $  .79
                                                                      ======   ======

</TABLE>

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

                                      -5-
<PAGE>
<TABLE>
<CAPTION>

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

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                             (amounts in thousands)
                   Three months ended March 31, 2006 and 2005
                                   (unaudited)

                                                                       2006        2005
                                                                     --------    --------
<S>                                                                         <C>        <C>
Cash flows from operating activities:
   Net income                                                        $  1,147    $  1,329
Adjustments to reconcile net income to net cash provided by
       operating activities:
         Amortization of securities, net                                   44          79
         Gain on sales of available-for-sale securities, net              (74)       (486)
         Provision for loan losses                                          0          90
         Change in loans held-for-sale                                   (444)        375
         Net decrease in mortgage servicing rights                         30           0
         Depreciation and amortization                                    138         126
         Amortization of core deposit intangible                           41          41
         Accretion of fair value adjustment on deposits/borrowings        (37)        (34)
         Amortization of fair value adjustment on loans                    38          47
         Decrease in interest receivable                                 (178)          0
         Deferred tax benefit
         Decrease in taxes receivable                                       0         509
         Increase in prepaid expenses                                    (571)       (101)
         Increase in cash surrender value of insurance policies           (30)        (30)
         Increase in income taxes payable                                   0
                                                                                      217
         Increase in other assets                                        (818)
         Decrease in accrued expenses                                    (486)       (374)
         Increase (decrease) in interest payable                           19         (31)
         (Decrease) increase in other liabilities                         (72)        790
         Decrease in unearned income on loans                             (16)          0
                                                                     --------    --------

Net cash provided by operating activities                                 346       1,577
                                                                     --------    --------

Cash flows from investing activities:
  Purchases of available-for-sale securities                          (21,573)    (25,750)
  Proceeds from sales of available-for-sale securities                 22,169      25,877
  Proceeds from maturities of available-for-sale securities             2,671      22,975
  Proceeds from maturities of held-to-maturity securities                  69           4
  Loan originations and principal collections, net                     (2,105)     (1,106)
  Recoveries of loans previously charged-off                                7           5
  Capital expenditures                                                    (22)       (615)
                                                                     --------    --------

Net cash provided by investing activities                               1,216      21,390
                                                                     --------    --------
Cash flows from financing activities:
   Net decrease in demand deposits, NOW and
       savings accounts                                                (8,881)     (1,828)
   Net increase (decrease) in time deposits                            11,296      (2,204)
   Federal Home Loan Bank advances                                     10,000
   Principal payments on advances from Federal Home Loan Bank            (295)    (20,442)
   Net change in short term advances from Federal Home Loan Bank       (9,834)
   Dividends paid                                                        (421)       (404)
                                                                     --------    --------

Net cash provided by (used in) financing activities                     1,865     (24,878)
                                                                     --------    --------

Net increase (decrease) in cash and cash equivalents                    3,427      (1,911)
Cash and cash equivalents at beginning of period                       10,204      11,678
                                                                     --------    --------
Cash and cash equivalents at end of period                           $ 13,631    $  9,767
                                                                     ========    ========

Supplemental disclosures:
   Interest paid                                                     $  2,203    $  1,676
   Income taxes paid                                                        5         116
</TABLE>

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

                                      -6-
<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") formed in April 2004. The condensed consolidated interim
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 SEC 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, 2006
are not necessarily  indicative of the results that may be expected for the year
ending  December  31,  2006.  These  financial  statements  should  be  read  in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's 2005 Annual Report on Form 10-K

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

NOTE 2 - COMPREHENSIVE 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 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 one source
of other  comprehensive  income is the net  unrealized  holding  gain  (loss) on
securities.

Comprehensive Income
                                                  Three months ended
                                                       March 31,
                                                    2006       2005
                                                   -------   -------
                                                 (amounts in thousands)

Net income                                         $ 1,147   $ 1,329
Net change in unrealized holding gains or losses
 on securities during period                           313    (1,295)
                                                   -------   -------
Comprehensive income                               $ 1,460   $    34
                                                   =======   =======

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

In  January  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"),
in an effort to expand upon and  strengthen  existing  accounting  guidance that
addresses when a company should include in its financial  statements the assets,
liabilities and activities of another entity. In December 2003, the FASB revised
Interpretation  No. 46, also referred to as Interpretation 46 (R) ("FIN 46(R)").
The  objective  of this  interpretation  is not to restrict  the use of variable
interest entities but to improve financial  reporting by companies involved with
variable  interest  entities.  Until now,  one company  generally  has  included
another entity in its  consolidated  financial  statements only if it controlled
the entity  through  voting  interests.  This  interpretation  changes  that, by
requiring a variable  interest  entity to be  consolidated  by a company only if
that  company is subject  to a  majority  of the risk of loss from the  variable
interest  entity's  activities or entitled to receive a majority of the entity's
residual  returns or both. The Company was required to apply FIN 46, as revised,
to all  entities  subject  to it no later  than the end of the  first  reporting
period ending after March 15, 2004. The adoption of this  interpretation did not
have an impact on the Company's consolidated financial statements as the Company
did not have any financial  interests in variable  interest entities at December
31, 2005 or March 31, 2006.

                                      -7-
<PAGE>

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment"  ("SFAS  123R").   This  Statement  revises  FASB  Statement  No.  123,
"Accounting  for Stock Based  Compensation"  and  supersedes APB Opinion No. 25,
"Accounting  for Stock  Issued to  Employees,"  and its  related  implementation
guidance.  SFAS  123R  requires  that the cost  resulting  from all  share-based
payment transactions be recognized in the consolidated financial statements.  It
establishes   fair  value  as  the  measurement   objective  in  accounting  for
share-based payment arrangements and requires all entities to apply a fair-value
based measurement method in accounting for share-based payment transactions with
employees except for equity  instruments held by employee share ownership plans.
This  Statement  is effective  for the Company as of the  beginning of the first
annual  reporting  period that begins after  December 15, 2005.  The adoption of
this  Statement  did not have an impact on the Company's  financial  position or
results of  operations as there are no  share-based  payment  arrangements  with
employees and the  compensation  expense related to the Directors Stock Retainer
Plan is not anticipated to be material.

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

The following  summarizes the net periodic benefit cost of the Company's defined
benefit pension plan for the periods indicated:

                                              Three Months Ended
                                                  March 31,
                                              2006         2005
                                           ----------------------

Components of net periodic benefit cost:
   Service cost                            $ 121,433    $  83,542
   Interest cost                              81,748       60,930
   Expected return on plan assets            (71,417)     (50,228)
   Amortization of:
      Prior service costs                        223          223
      Transition obligation                        0          693
      Actuarial loss                          24,132       17,412
                                           ---------    ---------
   Net periodic benefit cost               $ 156,119    $ 112,572
                                           =========    =========

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*
   Return on plan assets                             7.25%            7.25%

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

                                      -8-
<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  which is the holding  company for Salisbury  Bank and Trust Company
(the "Bank").  The Company's sole subsidiary is the Bank, which has six (6) full
service offices  including a Trust and Investment  Services  Division located in
the towns of Canaan, Lakeville,  Salisbury and Sharon, Connecticut and Sheffield
and South Egremont,  Massachusetts. 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 Salisbury  Bancorp,  Inc.'s
Annual Report on Form 10-K for the year ended December 31, 2005.

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

Overview
--------

The  Company's  net  income  for the  three  months  ended  March  31,  2006 was
$1,147,000. This compares to earnings of $1,329,000 for the same period in 2005.
Earnings  per share for the three  months  ended March 31, 2006 totaled $.68 per
share,  compared to earnings per share of $.79 for the  corresponding  period in
2005.  The  decrease  in  earnings is  primarily  attributable  to a decrease in
noninterest  income  specifically,   reduced  income  from  gains  on  sales  of
securities when comparing the two periods.  Increasing short-term interest rates
and  unchanging  long-term  interest  rates  have  created a flat and  sometimes
inverted yield curve during the first quarter of 2006. This environment  impacts
market  opportunities  to increase  portfolio  yields and enhance  duration  for
improving  portfolio  performance.  In addition,  this  environment of generally
increasing  interest  rates has slowed the  activity in the  secondary  mortgage
market,  which has resulted in a decrease in income from sales of mortgage loans
in the secondary market. Total noninterest expense for the first quarter of 2006
decreased 6.2% when comparing the corresponding period in 2005. This decrease is
primarily  the result of  managements  continuing  efforts to control  operating
expenses.

The Company's  assets at March 31, 2006 totaled  $405,233,000  compared to total
assets of  $402,922,000  at December 31, 2005.  During the first three months of
2006 net loans outstanding  increased $2,076,000 to $218,065,000.  This compares
to  total  net  loans   outstanding  of   $215,989,000  at  December  31,  2005.
Non-performing  loans  totaled  $832,000  at  March  31,  2006  as  compared  to
non-performing  loans totaling $773,000 at December 31, 2005. This represents an
increase of $59,000 or 7.6%.  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.  Deposits  at March 31,  2006
totaled  $289,682,000  as compared to total deposits of $287,271,000 at December
31, 2005. The increase at quarter end is primarily attributable to seasonal cash
flows.

As of March 31,  2006,  the most recent  notification  from the Federal  Deposit
Insurance  Corporation  categorized  the Bank as "well  capitalized"  under  the
regulatory  framework for prompt corrective  action. The Bank's total risk based
capital  ratio was 16.15%;  the Tier 1 capital ratio was 14.92% and the leverage
ratio  was  8.68%.  As  a  result  of  the  Company's  first  quarter  financial
performance,  the Board of Directors  declared a first  quarter cash dividend of
$.26 per  common  share,  which was paid on April 28,  2006 to  shareholders  of
record as of March 31, 2006. This compared to a cash dividend of $.25 per common
share that was paid for the first quarter of 2005.

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 future  credit  losses in the loan  portfolio.  Many factors
influence  the  amount of future  loan  losses,  relating  to both the  specific
characteristics of the loan portfolio and general economic conditions nationally
and locally.  While management  carefully considers these

                                      -9-
<PAGE>

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, 2006
                AS COMPARED TO THREE MONTHS ENDED MARCH 31, 2005

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

The Company's  earnings are primarily  dependent  upon net interest and dividend
income,  and to a lesser  extent  its  noninterest  income,  from its  community
banking  operations.  Net interest and dividend income is the difference between
interest and dividends earned on the loan and securities  portfolio and interest
paid on  deposits  and  advances  from the Federal  Home Loan Bank.  Noninterest
income is primarily derived from the Trust Department, service charges and other
fees related to deposit and loan accounts and from gains  recognized on the sale
of available-for-sale securities. 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.

(amounts in thousands)
Three Months ended March 31,            2006     2005
                                       ------   ------
Total interest and dividend income     $5,460   $5,034
(financial statements)
Tax equivalent adjustment                 255      338
                                       ------   ------
Total interest and dividend income
      (on an FTE basis)                 5,715    5,372
Total interest expense                  2,167    1,645
                                       ------   ------
Net interest and dividend income-FTE   $3,548   $3,727
                                       ======   ======

Total  interest and  dividend  income on an FTE basis for the three months ended
March 31, 2006, when compared to the same period in 2005,  increased $343,000 or
approximately  6.4%. The increase was primarily  attributable  to an increase in
earning assets as well as an economic environment of increased interest rates.

Interest  expense  on  deposits  for the  first  three  months  of 2006  totaled
$1,338,000,  an increase of $430,000 or 47.4% which compared to $908,000 for the
same  period in 2005.  This  increase  is  primarily  the result of an  economic
environment of generally higher interest rates.  Although Federal Home Loan Bank
advances  have  decreased  during the three month  period  ended March 31, 2006,
interest expense on these advances increased 12.5% to $829,000. This increase in
interest  expense is also  attributable to an economic  environment of increased
interest rates. Total interest expense for the three months ended March 31, 2006
was  $2,167,000,  an increase  of  $522,000  or 31.7% when  compared to the same
period in 2005.

Overall,  net interest and dividend income (on an FTE basis) decreased  $179,000
or 4.8% to  $3,548,000  for the period ended March 31, 2006 when compared to the
same period in 2005.

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

Noninterest income totaled $1,026,000 for the three months ended March 31, 2006,
a decrease of $363,000 or 26.1% compared to noninterest income of $1,389,000 for
the three months ended March 31, 2005. Continuing growth of the Trust Department
has  resulted in an increase in trust income of $97,000 or 25.0% to $485,000 for
the first three months of 2006. Gains on sales of available-for-sale  securities
decreased  84.8% to $74,000 for the first three  months of 2006  compared to the
corresponding  period in 2005.  This  decrease  is  primarily  the result of the
active movement of market rates during the quarter. The yield curve continued to
flatten  and was  inverted  at times  during  the first  quarter  which  made it
difficult to take advantage of opportunities  presented by the positive slope of
yields during that time. Other income consists primarily of fees associated with
transactions  accounts and in  addition,  fees  related to the  origination  and
servicing  of mortgage  loans and gains  related to the sale of mortgage  loans.
Other income for the first three months of 2006 totaled $214,000 and compares to
$205,000 for the same period in 2005.

                                      -10-
<PAGE>

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

Noninterest  expense  decreased  6.2%  for the  first  three  months  of 2006 as
compared to the same period in 2005. The decreases in the  noninterest  expenses
listed  in the  table  below  are all  primarily  attributable  to  management's
continuing efforts to control operating expenses.  The components of noninterest
expense and the changes in the period were as follows (amounts in thousands):
                                              2006     2005    Change   % Change
--------------------------------------------------------------------------------
   Salaries and employee benefits            $1,703   $1,808   $ (105)    (5.81)
   Occupancy expense                            176      186      (10)    (5.38)
   Equipment expense                            187      187        0         0
   Data processing                              283      197       86      43.7
   Insurance                                     31       40       (9)    (22.5)
   Printing and stationery                       53       59       (6)    (10.2)
   Professional fees                             90       74       16      21.6
   Legal expense                                 25       26       (1)      3.9
   Amortization of core deposit intangible       41       41        0         0
   Other expense                                248      408     (160)    (39.2)
                                             ------   ------   ------    ------
Total noninterest expense                    $2,837   $3,026   $ (189)     (6.2)
                                             ======   ======    ======

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

The income tax provision for the first three months of 2006 totaled  $335,000 in
comparison to $333,000 for the same three month period in 2005. Pretax income in
2006 was $1,482,000  and included tax exempt income  totaling  $495,000.  Pretax
income in 2005 was $1,662,000 and included tax exempt income totaling  $656,000.
Taxable  income for both  periods  being  compared  was  approximately  the same
resulting in a tax provision that also was approximately the same.

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

Overall, net income totaled $1,147,000 for the three months ended March 31, 2006
and  represents  earnings  of $.68 per  share.  This  compares  to net income of
$1,329,000 or $.79 per share for the same period in 2005.

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

Total assets at March 31, 2006 were  $405,233,000,  compared to  $402,922,000 at
December 31, 2005,  an increase of  approximately  1%. The increase is primarily
the result of an increase in earning  assets during the quarter made possible by
an increase in deposits.

Securities
----------

During  the  three  months  ended  March 31,  2006,  the  securities  portfolio,
including  Federal  Home  Loan  Bank  stock,  decreased  $3,277,000  or 2.17% to
$147,891,000 from $151,168,000 at December 31, 2005. The decrease is primarily a
reflection of portfolio  securities being sold and called during the period with
the proceeds being used primarily to fund loan growth.

The make up of the  securities  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.

Securities   are   classified   in   the   portfolio   as   either    securities
available-for-sale  or securities  held-to-maturity.  Almost all  securities 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, 2006, the unrealized loss net of tax was $2,582,000. This
compares to an  unrealized  loss net of tax of  $2,895,000 at December 31, 2005.
The unrealized  losses in these securities are attributable to changes in market
interest  rates.  Management  deems  the  securities  that are  currently  in an
unrealized loss position as not other than temporarily impaired.  The securities
reported as securities held-to-maturity are stated at amortized cost.

                                      -11-
<PAGE>

Lending
-------

New  business  development  during the first three months of 2006 coupled with a
small increase in loan demand resulted in an increase in total loans outstanding
to $220,664,000  at March 31, 2006. This compares to total loans  outstanding of
$218,623,000  at December 31, 2005.  This is an increase of  $2,041,000 or 1.0%.
Competition for loans remains  aggressive in the Bank's market area,  especially
in the residential mortgage loan market.

The following  table  represents the  composition of the loan portfolio at March
31, 2006 and December 31, 2005:

                                          March 31, 2006     December 31, 2005
                                          --------------     -----------------

(amounts in thousands)
Commercial, financial and agricultural       $  15,657          $  15,354
Real Estate-construction and land
     development                                20,348             18,814
Real Estate-residential                        135,342            135,619
Real Estate-commercial                          41,989             40,889
Consumer                                         7,267              7,900
Other                                               61                 47
                                             ---------          ---------
                                               220,664            218,623
Unearned income                                     (7)                (8)
Allowance for loan losses                       (2,592)            (2,626)
                                             ---------          ---------
Net Loans                                    $ 218,065          $ 215,989
                                             =========          =========

Net loans at March 31, 2006 increased 1.0% to $218,065,000  when compared to net
loans of  $215,989,000  at December 31, 2005. At March 31, 2006 and December 31,
2005  approximately  90% of the Bank's loan portfolio was related to real estate
products.

Provisions and Allowance for Loan Losses
----------------------------------------

Credit risk is inherent in the business of extending  loans.  The Bank  monitors
the loan 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  on a  monthly  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, 2006. 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 accordingly.  There was no provision expense
for allowances  for loan losses for the first three months period of 2006.  This
compares  to a  loan  loss  provision  of  $90,000  that  was  made  during  the
corresponding period in 2005.

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,  on the  basis  of
          currently existing facts, conditions,  and values, highly questionable
          and improbable.

                                      -12-
<PAGE>

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.

The credit card delinquency and loss history is separately evaluated and given a
special loan loss factor because management  recognizes the higher risk involved
in such  loans.  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 of
time 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 non-accrual  status
along  with  loans  that are 90 days or more  past due and still  accruing,  are
closely monitored by management.  At March 31, 2006, nonperforming loans totaled
$832,000 or 0.38% of total loans outstanding of $220,664,000.  The allowance for
loan losses totaled $2,592,000,  representing 311.54% of nonperforming loans and
1.18% of total loans outstanding at March 31, 2006.  Nonperforming loans totaled
$773,000 or .35% of total loans  outstanding  of  $218,623,000  at December  31,
2005. The allowance for loan losses totaled  $2,626,000 at December 31, 2005 and
represented  339.72% of nonperforming loans and 1.2% of total loans outstanding.
A total of $41,000 of loans was charged off by the Bank during the three  months
ended March 31, 2006. These charged-off loans consisted  primarily of commercial
loans.  This  compares to loans charged off during the three months period ended
March  31,  2005  which  totaled  $15,000.  A  total  of  $7,000  of  previously
charged-off  loans was  recovered  during the three month period ended March 31,
2006.  Recoveries for the same period in 2005 totaled $5,000.  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.

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, 2006 and December 31, 2005:

                             March 31, 2006      December 31, 2005
                             --------------      -----------------
                                   (amounts in thousands)

Demand                          $ 63,066            $ 63,996
NOW                               24,758              25,900
Money Market                      52,200              57,401
Savings                           49,958              51,567
Time                              99,700              88,407
                                --------            --------
Total Deposits                  $289,682            $287,271
                                ========            ========

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,  2006,  the  Company  had  $70,854,000  in
outstanding  advances from the Federal Home Loan Bank compared to $71,016,000 at
December 31, 2005.  Management  expects that it will  continue  this strategy of
supplementing deposit growth with advances from the Federal Home Loan Bank.

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

                                      -13-
<PAGE>

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 and developments and trends in interest rates,
liquidity  and capital.  One of the primary  financial  objectives  is to manage
interest  rate risk and  control  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 period
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,
2006, the Company  maintains a slight asset  sensitive  (positive gap) position.
This would suggest that during a period of rising  interest  rates,  the Company
would be in a better position to invest in higher  yielding assets  resulting in
growth in interest income. To the contrary,  during a period of falling interest
rates, a positive gap would result in a decrease in interest  income.  The level
of  interest  rate risk at March 31,  2006 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, 2006 the Company had
approximately  $53,332,000 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, 2006,  the Company had  $42,902,000  in  stockholders'  equity,  an
increase  of 3.5 % when  compared  to December  31,  2005  stockholders'  equity
totaling $41,442,000. Net income for the three-month period ended March 31, 2006
totaled  $1,147,000.  Market  conditions  resulted in a decrease in  accumulated
other comprehensive loss to $2,582,000 from $2,895,000 at December 31, 2005.

A review and analysis of securities has determined that there has been no credit
deterioration and that the unrealized loss on securities  available-for-sale  is
due to the current interest rate environment and management deems the securities
to be not other than temporarily impaired. 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 the  lowest  federal  deposit
insurance deposit premiums possible. 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,  2006,  the  Company had a total  consolidated  risk based
capital  ratio of  16.15%,  a tier 1 risk  based  capital  ratio of 14.92% and a
leverage  ratio of 8.68%.  This  compares  to a total  consolidated  risk  based
capital  ratio of  15.76%,  a tier 1 risk  based  capital  ratio of 14.58% and a
leverage  ratio of 8.27% at December 31,  2005.  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

                                      -14-
<PAGE>

shareholders  while  maintaining  appropriate  levels of capital to fund growth,
meet regulatory  requirements and be consistent with prudent industry practices.
Management believes that the capital levels of the Company and Bank are adequate
to continue to meet the foreseeable capital needs of the institutions.

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

The Company's  consolidated financial statements are prepared in conformity with
generally  accepted  accounting  principles  which  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 an influence 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
         impact 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 3. Quantitative and Qualitative Disclosures About Market Risk.

The main  components  of market risk for the Company are interest  rate risk and
liquidity  risk.  The Company  manages  interest  rate risk and  liquidity  risk
through an ALCO Committee  comprised of outside Directors and senior management.
The Committee monitors compliance with the Bank's  Asset/Liability  Policy which
provides  guidelines  to analyze and manage the interest rate  sensitivity  gap,
which is the  difference  between  the  amount  of  assets  and the  amounts  of
liabilities  which  mature  or  reprice  during  specific  time  frames.   Model
simulation is used

                                      -15-
<PAGE>

to measure  earnings  volatility  under both rising and falling rate  scenarios.
Please refer to Interest  Rate Risk and  Liquidity  under Item 2. The  Company's
interest rate risk and  liquidity  position has not  significantly  changed from
year end 2005.

                        Item 4. Controls and Procedures.

The Company's Chief  Executive  Officer and Chief  Financial  Officer  concluded
that,  based upon an evaluation as of March 31, 2006,  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 three
month  period  ended  March 31,  2006,  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.

                           Part II - OTHER INFORMATION

Item 1. - Legal Proceedings.  Not applicable

Item 1A. - Risk Factors.  Not applicable

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.

                                   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.


                                                  SALISBURY BANCORP, INC.

         Date: May 10, 2006                       by: /s/ John F. Perotti
              -------------                           -------------------
                                                      John F. Perotti
                                                      Chief Executive Officer

         Date: May 10, 2006                       by: /s/ John F. Foley
              -------------                           -----------------
                                                      John F. Foley
                                                      Chief Financial Officer

                                      -16-