SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark One)

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

                  For the quarterly period ended June 30, 2002

                                       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 1-14854

                               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)


       Registrant"s 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 [  ]

Transitional Small Business Disclosure Format:  Yes [   ]  No   [ X ]
Documents Incorporated by Reference:  None

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer"s  classes of
common stock, as of August 1, 2002

                                   1,423,238
                                   ---------

                                       1

<PAGE>

<TABLE>
<CAPTION>

                                          SALISBURY BANCORP, INC.

                                             TABLE OF CONTENTS

 Part I. FINANCIAL INFORMATION                                                                            Page
                                                                                                          ----
<S>                                                                                                       <C>
Item 1.  Condensed Financial Statements:

         Condensed Consolidated Balance Sheets -June 30, 2002 (unaudited)
                                     and December 31, 2001                                                 4
         Condensed Consolidated Statements of Income -three and six months ended
                                     June 30, 2002 and 2001                                                5
                                     (unaudited)
         Condensed Consolidated Statements of Cash Flows -six months ended June 30, 2002 and 2001          6
                                     (unaudited)

         Notes to Consolidated Financial Statements                                                        8

Item 2.  Management"s Discussion and Analysis                                                             11

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                                                19

Item 2.  Changes in Securities and Use of Proceeds                                                        19

Item 3.  Defaults Upon Senior Securities                                                                  19

Item 4.  Submission of Matters to a Vote of Security Holders                                              19

Item 5.  Other Information                                                                                21

Item 6.  Exhibits and Reports on Form 8-K                                                                 21

Signatures                                                                                                22

</TABLE>


                                       2
<PAGE>



                          Part I--FINANCIAL INFORMATION

                     Item 1. Condensed Financial Statements





                                       3
<PAGE>

<TABLE>
<CAPTION>

                             SALISBURY BANCORP, INC.
                             -----------------------
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                  (amounts in thousands, except per share data)


                                                                       JUNE 30,       DECEMBER 31,
                                                                         2002            2001
                                                                         ----            ----
                                                                     (unaudited)
<S>                                                                  <C>             <C>
ASSETS
   Cash & due from banks:
      Non-Interest Bearing                                           $   7,415       $   7,184
      Interest Bearing                                                     244             258
   Federal funds sold                                                    8,275          18,150
   Money market mutual funds                                               514             618
                                                                     ---------       ---------
           Cash and cash equivalents                                    16,448          26,210
   Investment Securities:
      Held to maturity securities at amortized cost                        327             400
      Available-for-sale securities at market value                    120,278         102,248
   Federal Home Loan Bank stock, at cost                                 2,945           2,945
   Loans:
      Commercial, financial and agricultural                            10,068          10,797
      Real estate-construction and land development                      4,786           3,935
      Real estate-residential                                           97,932         102,201
      Real estate-commercial                                            17,323          17,423
      Consumer                                                           8,725          10,030
      Other                                                                169             125
      Allowance for loan losses                                         (1,473)         (1,445)
                                                                     ---------       ---------
           Net loans                                                   137,530         143,066
   Bank premises & equipment                                             2,729           2,683
   Investment in real estate                                                75              75
   Accrued interest receivable                                           1,844           1,681
   Intangible assets on branch acquisition                               3,145           3,227
   Other assets                                                            805           1,067
                                                                     ---------       ---------
Total Assets                                                         $ 286,126       $ 283,602
                                                                     =========       =========
LIABILITIES AND SHAREHOLDERS' EQUITY
   Deposits:
      Demand                                                         $  36,441       $  37,702
      Savings & NOW                                                     61,961          48,435
      Money Market                                                      43,044          48,897
      Time                                                              64,322          66,317
                                                                     ---------       ---------
           Total Deposits                                              205,768         201,351
   Federal Home Loan Bank advances                                      52,397          53,004
   Due to broker                                                           653           4,204
   Other liabilities                                                     1,982           1,680
                                                                     ---------       ---------
           Total Liabilities                                           260,800         260,239
                                                                     ---------       ---------

Shareholders' equity:
   Common stock, par value $.10 per share;
      Authorized 3,000,000 shares
      Issued and outstanding shares: 1,423,238 at June 30, 2002            142             142
      and 1,422,358 at December 31, 2001
   Additional paid-in capital                                            2,304           2,281
   Retained earnings                                                    22,064          21,219
   Accumulated other comprehensive income (loss)                           816            (279)
                                                                     ---------       ---------
           Total Shareholders' Equity                                   25,326          23,363
                                                                     ---------       ---------
Total Liabilities and Shareholders' Equity                           $ 286,126       $ 283,602
                                                                     =========       =========
</TABLE>


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


                                       4


<PAGE>

<TABLE>
<CAPTION>

                                    SALISBURY BANCORP, INC.
                                    -----------------------
                          CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                          -------------------------------------------
                         (amounts in thousands, except per share data)
                                    June 30, 2002 and 2001
                                          (unaudited)

                                                                  Six Months Ended       Three Months Ended
                                                                       June 30                June 30
                                                                  2002         2001       2002        2001
                                                                  ----         ----       ----        ----
<S>                                                              <C>         <C>         <C>         <C>
Interest and dividend income:
   Interest and fees on loans                                    $5,007      $5,748      $2,438      $2,862
Interest and dividends on securities:
   Taxable                                                        2,008       2,104       1,028       1,001
   Tax-exempt                                                       965         433         531         252
Dividends on equity securities                                       72         114          37          54
Other interest                                                       72         115          29          46
                                                                 ------      ------      ------      ------
Total interest and dividend income                                8,124       8,514       4,063       4,215
                                                                 ------      ------      ------      ------
 Interest expense:
   Interest on deposits                                           2,138       2,777       1,050       1,327
   Interest on Federal Home Loan Bank advances                    1,423       1,503         713         749
                                                                 ------      ------      ------      ------
           Total interest expense                                 3,561       4,280       1,763       2,076
                                                                 ------      ------      ------      ------
           Net interest and dividend income                       4,563       4,234       2,300       2,139
Provision for loan losses                                            75          75          38          38
                                                                 ------      ------      ------      ------

           Net interest and dividend income after provision
               for loan losses                                    4,488       4,159       2,262       2,101
                                                                 ------      ------      ------      ------

Other income:
   Trust department income                                          511         511         258         265
   Service charges on deposit accounts                              235         245         121         140
   Gain on sale of available-for-sale securities                    206          43         191          22
   Other income                                                     394         336         212         183
                                                                 ------      ------      ------      ------
           Total other income                                     1,346       1,135         782         610
                                                                 ------      ------      ------      ------
Other expense:
   Salaries and employee benefits                                 2,112       1,864       1,060         935
   Occupancy expense                                                148         115          75          52
   Equipment expense                                                241         246         118         122
   Data processing                                                  253         253         119         118
   Other expense                                                  1,045         756         612         395
                                                                 ------      ------      ------      ------
           Total other expense                                    3,799       3,234       1,984       1,622
                                                                 ------      ------      ------      ------
           Income before income taxes                             2,035       2,060       1,060       1,089
Income taxes                                                        563         683         310         354
                                                                 ------      ------      ------      ------
           Net income                                            $1,472      $1,377      $  750      $  735
                                                                 ======      ======      ======      ======

Earnings per common share outstanding                            $ 1.03      $  .96      $  .53      $  .51
                                                                 ======      ======      ======      ======
Earnings per common share outstanding,
 assuming dilution                                               $ 1.03      $  .96      $  .53      $  .51
                                                                 ======      ======      ======      ======

Dividends per share                                              $  .44      $  .42      $  .22      $  .21
                                                                 ======      ======      ======      ======
</TABLE>




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


                                       5
<PAGE>

<TABLE>
<CAPTION>

                                  SALISBURY BANCORP, INC.
                                  -----------------------
                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -----------------------------------------------
                                  (amounts in thousands)
                          Six months ended June 30, 2002 and 2001
                                        (unaudited)


                                                                           2002           2001
                                                                           ----           ----
<S>                                                                     <C>            <C>
Cash flows from operating activities:
   Net income                                                           $  1,472       $  1,377
                                                                        --------       --------
   Adjustments to reconcile net income to net cash provided by
       operating activities:
         Accretion of securities, net                                        331            (69)
         Gain on sales of available-for-sale securities, net                (206)           (43)
         Provision for loan losses                                            75             75
         Depreciation and amortization                                       118            152
         Amortization of intangible assets from branch acquisition            82              0
         Accretion of fair value adjustment on deposits                      (80)             0
         (Increase) decrease in interest receivable                         (163)            32
         Increase in prepaid expenses                                        (63)           (41)
         Increase in other assets                                             22            (97)
         Increase in taxes payable                                           (45)          (201)
         Decrease in accrued expenses                                       (115)           (20)
         Increase (decrease) in interest payable                             (25)             8
Increase (decrease) in other liabilities                                      20             (8)
                                                                        --------       --------

Net cash provided by operating activities                                  1,423          1,165
                                                                        --------       --------
Cash flows from investing activities:
  Purchase of Federal Home Loan Bank stock                                    (0)           (15)
  Purchases of available-for-sale securities                             (53,960)       (55,537)
  Proceeds from sales of available-for-sale securities                    24,381         38,372
  Proceeds from maturities of available-for-sale securities                9,733         11,330
  Proceeds from maturities of held-to-maturity securities                     65              5
  Net (increase) decrease  in loans                                        5,452         (7,579)
  Recoveries of loans previously charged-off                                   8             98
  Capital expenditures                                                      (164)          (173)
                                                                        --------       --------

Net cash used in investing activities                                    (14,485)       (13,499)
                                                                        --------       --------
</TABLE>

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


                                       6
<PAGE>

<TABLE>
<CAPTION>

                                     SALISBURY BANCORP, INC.
                                     -----------------------
                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         -----------------------------------------------
                                     (amounts in thousands)
                             Six months ended June 30, 2002 and 2001
                                           (unaudited)
                                           (continued)
                                                                      2002            2001
                                                                      ----            ----
<S>                                                                <C>            <C>
Cash flows from financing activities:
   Net increase in demand deposits, NOW and
       savings accounts                                               6,412            110
   Net decrease in time deposits                                     (1,915)        (1,516)
   Advances from Federal Home Loan Bank                                   0         10,000
   Principal payments on advances from Federal Home Loan Bank          (607)          (711)
   Dividends paid                                                      (612)          (857)
   Net repurchase of common stock                                        22           (611)
                                                                   --------       --------

   Net cash provided by financing activities                          3,300          6,415
                                                                   --------       --------

Net decrease in cash and cash equivalents                            (9,762)        (5,919)
Cash and cash equivalents at beginning of period                     26,210         13,759
                                                                   --------       --------
Cash and cash equivalents at end of period                         $ 16,448       $  7,840
                                                                   ========       ========
Supplemental disclosures:
   Interest paid                                                   $  3,586       $  4,272
   Income taxes paid                                                    596            863

</TABLE>




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


                                       7
<PAGE>

                             SALISBURY BANCORP, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

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

The  accompanying  condensed  interim  financial  statements  are  unaudited and
include the  accounts of  Salisbury  Bancorp,  Inc.  (the  "Company"),  those of
Salisbury Bank and Trust Company (the "Bank"),  its wholly-owned  subsidiary and
the Bank"s subsidiary, S.B.T. Realty, Inc. The consolidated financial statements
have been prepared in accordance with generally accepted  accounting  principles
for interim financial  information and with the instructions to SEC Form 10-QSB.
Accordingly,  they do not include all the information and footnotes  required by
accounting  principles generally accepted in the United States of America (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 six months ended June
30, 2002 are not necessarily  indicative of the results that may be expected for
the year ending December 31, 2002. These financial  statements should be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's 2001 Annual Report on Form 10-KSB.

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 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 gain (loss) on securities.

Comprehensive Income
                                   Three months ended        Six months ended
                                         June 30,                June 30,
                                    2002         2001        2002        2001
                                    ----         ----        ----        ----
Net income                         $  750      $  735       $1,472      $1,377
Net unrealized (losses) gains
 on securities during period        1,231        (338)       1,095         306
                                   ------      ------       ------      ------
Comprehensive income               $1,981      $  397       $2,567      $1,683
                                   ======      ======       ======      ======




                                       8
<PAGE>

NOTE 3 - COMPUTATION OF EARNINGS PER SHARE
------------------------------------------

The Company has computed and presented  earnings per share ("EPS") in accordance
with Statement of Financial Accounting Standards No. 128.  Reconciliation of the
numerators and the  denominators of the basic and diluted per share  computation
for net income are as follows:

<TABLE>
<CAPTION>

                                                                (amounts in thousands, except per share data)
                                                                                (unaudited)

                                                                     Income         Shares        Per-Share
                                                                   (Numerator)   (Denominator)     Amount
                                                                   -----------   -------------     ------
<S>                                                                  <C>            <C>          <C>

Six months ended June 30, 2002
   Basic EPS
      Net income and income available to common stockholders         $1,472         1,423        $   1.03
      Effect of dilutive securities, options                             --             0
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                                 $1,472         1,423        $   1.03

Six months ended June 30, 2001
   Basic EPS
      Net income and income available to common stockholders         $1,377         1,441        $    .96
      Effect of dilutive securities, options                             --             0
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                                 $1,377         1,441        $    .96

</TABLE>

<TABLE>
<CAPTION>


                                                                (amounts in thousands, except per share data)
                                                                                (unaudited)

                                                                     Income         Shares       Per-Share
                                                                   (Numerator)   (Denominator)    Amount
                                                                   -----------   -------------     ------
<S>                                                                  <C>            <C>          <C>
Three months ended June 30, 2002
   Basic EPS
      Net income and income available to common stockholders         $  750         1,423        $   .53
      Effect of dilutive securities, options                              0
   Diluted EPS
      Income available to common stockholders and assumed
         conversions
                                                                     $  750         1,423        $   .53
Three months ended June 30, 2001
   Basic EPS
      Net income and income available to common stockholders         $  735         1,435        $   .51
      Effect of dilutive securities, options                             --             0
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                                 $  735         1,435        $   .51

</TABLE>


                                       9
<PAGE>

NOTE 4 - IMPACT OF NEW ACCOUNTING STANDARDS
-------------------------------------------

FASB has  issued  SFAS No.  140,  Accounting  for  Transfers  and  Servicing  of
Financial Assets and  Extinguishments  of Liabilities.  This Statement  replaces
SFAS No. 125,  Accounting  for Transfers  and Servicing of Financial  Assets and
Extinguishments  of Liabilities,  and rescinds SFAS Statement No. 127, "Deferral
of the Effective Date of Certain Provisions of FASB Statement No. 125". SFAS No.
140 provides  accounting and reporting  standards for transfers and servicing of
financial assets and  extinguishments  of liabilities.  This statement  provides
consistent  standards for distinguishing  transfers of financial assets that are
sales from  transfers that are secured  borrowings.  This statement is effective
for  transfers  and  servicing  of  financial  assets  and   extinguishments  of
liabilities  occurring after March 31, 2001; however, the disclosure  provisions
are effective for fiscal years ending after  December 15, 2000. In  management's
opinion,  the  adoption  of SFAS No. 140 did not have a  material  effect on the
Company's consolidated financial statements.

Statement of Financial  Accounting Standards No. 141 improves the consistency of
the  accounting  and reporting for business  combinations  by requiring that all
business  combinations  be  accounted  for under a single  method - the purchase
method. Use of the pooling-of-interests method is no longer permitted. Statement
No. 141  requires  that the purchase  method be used for  business  combinations
initiated  after June 30,  2001.  The impact of adopting  this  Statement on the
consolidated financial statements was not material.

Statement of Financial  Accounting  Standards  No. 142 requires that goodwill no
longer be  amortized to earnings,  but instead be reviewed for  impairment.  The
amortization of goodwill  ceases upon adoption of the Statement,  which for most
companies,  was January 1, 2002.  The impact of adopting  this  Statement on the
consolidated financial statements was not material.



                                       10
<PAGE>



                         Part I - FINANCIAL INFORMATION


                  Item 2. Management's Discussion and Analysis






                                       11
<PAGE>


Overview
--------

Salisbury  Bancorp,  Inc. (the  "Company"),  a Connecticut  corporation,  is the
holding  company for  Salisbury  Bank and Trust  Company,  (the "Bank") which is
headquartered  in Lakeville,  Connecticut.  The Company's sole subsidiary is the
Bank,  which has a full service Trust Department and offers  commercial  banking
products and services  through four full service offices in the towns of Canaan,
Lakeville, Salisbury and Sharon, Connecticut.

The following is Management's  discussion of the financial condition and results
of operations on a consolidated basis of Salisbury Bancorp,  Inc. which includes
the accounts of Salisbury Bank and Trust Company. Management's discussion should
be read in  conjunction  with  Salisbury  Bancorp,  Inc.'s Annual Report on Form
10-KSB for the year ended December 31, 2001.

In order to  provide a strong  foundation  for  building  shareholder  value and
serving its  customers,  the  Company  remains  committed  to  investing  in the
technological  and human  resources  necessary  to  implement  new  personalized
financial products and to deliver them with the highest quality of service.  The
Bank's  internet  product called "SBTNET" which is now just over a year old, has
over 1100 customers who utilize this product.  As reported in the first quarter,
the Bank's home page of the website was remodeled to  accommodate  the expansion
of its "free" online services "SBT V-CARD" and "SBT PAL". These additions to our
online  services have already proven  popular with our  customers.  The Bank has
plans to continue enhancing its Internet banking products for customers.

The Company's  net income for the six months ended June 30, 2002 was  $1,472,000
as  compared  to  $1,377,000  for the same  period  ended  June 30,  2001.  This
represents an increase of $95,000 or 6.9%.  Earnings per diluted share increased
7.29% for the first six months of 2002 and  amounted to $1.03 per diluted  share
as compared to $.96  earnings per diluted  share for the same period a year ago.
The  improvement  in net income is  primarily  the result of an  increase in net
interest and  dividend  income,  reductions  in interest  expense,  as well as a
reduction in income taxes that  resulted from  increased  income from tax exempt
securities.

The  Company's  assets at June 30, 2002 totaled  $286,126,000  which  represents
growth of $2,524,000  since December 31, 2001 when assets totaled  $283,602,000.
The moderate growth is primarily the result of continuing efforts to develop new
business. As reported previously,  the asset mix continues to change as the cash
received  from the  acquisition  of the Canaan  branch,  which was  invested  in
Federal  Funds at  December  31,  2001,  has  been  invested  in the  securities
portfolio.  The securities portfolio has also increased as a continuing economic
environment of generally lower interest rates that promote refinancing to longer
term fixed rate  products and  continued  aggressive  competition  in the Bank's
market  area have  resulted  in a  decrease  in total net loans  outstanding  to
$137,530,000 at June 30, 2002.  This compares to total net loans  outstanding of
$143,066,000  at December 31, 2001 and  represents a decrease of 3.87%.  Overall
however,  the increase in the Company's aggregate base of earning assets coupled
with the change in asset mix has resulted in an increase in net interest income.
The Company continues to carefully monitor the quality of its assets. During the
first  six  months of 2002,  nonperforming  loans  increased  to  $793,000  from
$587,000  at  December  31,  2001.  During the second  quarter of 2002  however,
nonperforming loans decreased to $793,000 from $1,022,000 at March 31, 2002. The
net increase of $206,000  since  December 31, 2001  continues to represent  less
than  one  percent  of  total  loans  outstanding  and is not  considered  to be
significant or indicative of any trend. Currently, the Company does not have any
assets  classified as Other Real Estate Owned;  therefore,  total  nonperforming
loans represent total nonperfoming assets as well. Traditionally,  seasonal cash
flows  result in a slight  decrease in  deposits  during  this  period,  however
continuing  efforts to develop  new  business  have  resulted  in an increase in
deposits of $4,417,000 or 2.19% to  $205,768,000 at June 30, 2002. This compares
to total deposits of $201,351,000 at December 31, 2001.

As a result of the Company's second quarter financial performance,  the Board of
Directors declared a second quarter cash dividend of $.22 per common share. This
compares  to a cash  dividend  of $.21 per  common  share  that was paid for the
second quarter of 2001.  This dividend was paid on July 26, 2002 to shareholders
of record as of June 29, 2002.  Year-to-date  dividends for the first six months
of 2002 total $.44 per common share.  This  compares to total  dividends of $.42
per common share for the same period in 2001.


                                       12
<PAGE>


The Company's  risk-based  capital  ratios at June 30, 2002,  which included the
risk weighted  assets and capital of the  Salisbury  Bank and Trust Company were
15.38% for tier 1 capital and 16.48% for total capital.  The Company's  leverage
ratio was 7.68% at June 30, 2002.

                          SIX MONTHS ENDED JUNE 30,2002
                  AS COMPARED TO SIX MONTHS ENDED JUNE 30, 2001

Net Interest Income
-------------------

The Company's  earnings are  primarily  dependent  upon net interest  income and
noninterest  income from its  community  banking  operations  with net  interest
income being the largest component of the Company's  revenues.  Net interest and
dividend income is the difference  between  interest and dividends earned on the
loan and  securities  portfolios and interest paid on deposits and advances from
the Federal Home Loan Bank.  Noninterest  income is  primarily  derived from the
Trust  Department and from service charges and other fees related to deposit and
loan accounts.  For the following discussion,  interest income is presented on a
fully  taxable-equivalent  ("FTE") basis. FTE interest income restates  reported
interest  income on tax exempt loans and  securities  as if such  interest  were
taxed at the Company's federal tax rate of 34% for all periods presented.


(amounts in thousands)(unaudited)
Six months ended June 30                             2002        2001
                                                     ----        ----
Interest and Dividend Income                        $8,124      $8,514
(financial statements)
Tax Equivalent Adjustment                              497         223
                                                    ------      ------
       Total Interest Income (on an FTE basis)       8,621       8,737
Interest Expense                                     3,561       4,280
                                                    ------      ------
Net Interest Income-FTE                             $5,060      $4,457
                                                    ======      ======


Interest and  dividend  income on an FTE basis for the six months ended June 30,
2002 totaled  $8,621,000 as compared to  $8,737,000  for the same time period in
2001. This is a decrease of $116,000 or 1.33%.  Although there is an increase in
earning  assets,  this decrease in interest and dividend income is primarily the
result  of  an  economic  environment  of  generally  lower  interest  rates.  A
continuing change in the mix of earning assets which reflects an increase in tax
exempt  securities has resulted in a significant  increase in the tax equivalent
adjustment  to $497,000 for the first six months of 2002 as compared to $223,000
for the same period in 2001. This is an increase of $274,000 or 123%.

Interest expense on deposits for the first six months of 2002 totaled $2,138,000
compared to $2,777,000 for the same period in 2001.  This  represents a decrease
of $639,000 or 23.01%.  Although deposits increased,  primarily as the result of
the Canaan Branch acquisition during the fourth quarter of 2001, generally lower
interest rates resulted in the decrease in interest expense. Interest on Federal
Home Loan Bank advances decreased $80,000 or 5.32% for the same six month period
being  compared.  This  is  the  result  of a  decrease  in  funds  borrowed  to
$52,397,000 in 2002 from $53,004,000 in 2001.

Overall, net interest and dividend income (on an "FTE" basis) increased $603,000
or 13.53% to  $5,060,000  for the first six  months of 2002.  This  compares  to
$4,457,000 for the same period in 2001.

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

Noninterest  income totaled $1,346,000 for the six months ended June 30, 2002 as
compared to $1,135,000 for the six months ended June 30, 2001.  Trust Department
income remained  consistent at $511,000 for each year. Service charges decreased
$10,000 or 4.1% to $235,000  at June 30,  2002  compared to $245,000 at June 30,
2001.  The  first  six  months  of


                                       13
<PAGE>

year 2002 produced a gain on the sale of  Available-for  Sale  securities in the
amount of $206,000,  as movement in the markets presented  opportunities for the
Company to enhance the return from the securities portfolio and at the same time
produce gains on the sale of certain Available-for-Sale securities. Other income
increased  $58,000  or 17.26%  to  $394,000  for the  first  six  months of 2002
compared to $336,000  for the  corresponding  period in 2001.  This  increase is
primarily the result of increased fees generated from the increased  refinancing
activity in the secondary mortgage market.

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

Noninterest  expense  totaled  $3,799,000  for the first  six  months of 2002 as
compared  to  $3,234,000  for the same  period in 2001.  This is an  increase of
$565,000 or 17.47%.  Salary and employee benefit expenses  increased $248,000 or
13.30%.  This is  primarily  the result of the  addition of staff for the Canaan
Branch that was opened in September of 2001.  Additional staff was also hired to
service the increase in new business at the Bank's other facilities.  Annual pay
raises and the increasing  costs of employee  benefits have also  contributed to
the increased  expense.  Occupancy and equipment  expenses  increased $28,000 or
7.76% to $389,000  when  comparing  the first six months of 2002 to the same six
months  expense of $361,000 in 2001.  This is  primarily  the result of some one
time maintenance expenses on the facilities.  Data processing costs remained the
same when comparing  June 30, 2002 to June 30, 2001.  Other  operating  expenses
totaled  $1,045,000  at June 30, 2002 and compares to other  operating  expenses
that  totaled  $756,000  at June 30,  2001.  This is an  increase of $289,000 or
38.23%.  This is primarily the result of the  amortization of intangible  assets
from the Canaan Branch acquisition that occurred during the last quarter of 2001
in  addition  to other  operating  costs  associated  with having the new branch
operational.   The  balance  of  the  increase  represents   increases  normally
associated with the operations of the Company.

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

The income tax  provision  for the first six months of 2002 totaled  $563,000 in
comparison  to  $683,000  for the first  six  months of 2001.  The  decrease  is
primarily the result of the impact of an increase in tax exempt  interest income
earned from the securities portfolio.

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

Overall,  net income totaled  $1,472,000 for the six months ended June 30, 2002.
This compares to net income of $1,377,000 for the corresponding  period in 2001.
This is an  increase  of $95,000 or 6.90% and  represents  earnings of $1.03 per
diluted share.  This compares to earnings per diluted share of $.96 for the same
period in 2001.  The  improvement  in net income is primarily a reflection of an
increase in interest earning assets,  which has resulted in an increase in total
net interest income.

                        THREE MONTHS ENDED JUNE 30, 2002
                 AS COMPARED TO THREE MONTHS ENDED JUNE 30, 2001

For the following  discussion,  interest  income is presented on a fully taxable
equivalent  ("FTE") basis.  FTE interest  restates  reported  interest income on
tax-exempt  loans and securities as if such interest were taxed at the Company's
federal income tax rate of 34% for all periods presented.

(amounts in thousands)(unaudited)
Three months ended June 30,                                    2002        2001
                                                               ----        ----

Interest and Dividend Income                                  $4,063     $4,215
(financial statements)
Tax Equivalent Adjustment                                        274        130
        Total interest and dividend income(on an FTE basis)    4,337      4,345
Interest Expense                                               1,763      2,076
Net Interest and Dividend Income-FTE                          $2,574     $2,269

                                       14
<PAGE>

Net Interest Income
-------------------

Total  interest and dividend  income on a FTE basis equaled  $4,337,000  for the
three months ended June 30, 2002 as compared to  $4,345,000  for the same period
in 2001.  Although  there is an increase  in earning  assets,  this  decrease in
interest and dividend income is primarily the result of an economic  environment
of generally lower interest rates. As mentioned previously,  a change in the mix
of  earning  assets  has  resulted  in an  increased  portfolio  of  tax  exempt
securities  which in turn has  resulted  in a  significant  increase  in the tax
equivalent  adjustment  to  $274,000 in 2002 from  $130,000 in 2001.  This is an
increase of $144,000 or 111%.

Interest expense on deposits  decreased  $277,000 for the quarter to $1,050,000,
compared to  $1,327,000  for the same quarter in 2001.  Although  deposits  have
increased,  this  decrease is primarily the result of generally  lower  interest
rates.  Interest expense on Federal Home Loan Bank advances decreased $36,000 or
4.81% in 2002 to $713,000. This compares to interest expense of $749,000 for the
corresponding  period in 2001.  The  decrease is primarily  attributable  to the
reduced volume of FHLB borrowings during the first six months of 2002.

As a result,  net  interest  and  dividend  income on an FTE basis for the three
months ended June 30, 2002 totaled  $2,574,000 as compared to $2,269,000 for the
same period in 2001. The increase was $305,000 or 13.44%.

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

Noninterest income totaled $782,000 for the three months ended June 30, 2002, as
compared to $610,000 for the three months ended June 30, 2001.  This increase is
primarily  the  result  of  an  increase  of  $169,000  in  gains  on  sales  of
Available-For Sale securities during 2002.

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

Noninterest  expense totaled $1,984,000 for the three months ended June 30, 2002
as  compared  to  $1,622,000  for the same period in 2001.  This  represents  an
increase of $362,000 or 22.32%.  Salaries  and  benefits  increased  $125,000 or
13.37% to $1,060,000 for the three months ended June 30, 2002.  This compares to
expenditures  of $935,000  for the  corresponding  period in 2001.  As mentioned
previously, additional staff was hired for the Canaan Branch which opened during
the fourth quarter of 2001 and the expenses  associated with the new branch will
continue to reflect  increases for each quarter when  comparing the year 2002 to
the year 2001.  Additionally,  annual salary  increases  and increased  costs of
employee benefits also contribute to the increase in salary and employee benefit
expenses.  Occupancy and equipment expenses increased to $193,000 from $174,000.
This is an  increase  of  $19,000  or 10.92%.  This is  primarily  the result of
maintaining the Canaan Branch which opened in the fall of 2001.  Other operating
expenses  totaled $612,000 for the three months period ended June 30, 2002. This
is an increase of $217,000 or 54.94% when  comparing the three months ended June
30, 2001 other  operating  expenses of $395,000.  This increase is primarily the
result of the operating costs of the additional branch, as mentioned previously,
however, the Company incurred additional costs relating to Trust operations that
also influenced the increase.  Data processing expenses remained consistent when
comparing the second quarter of 2002 to the second quarter of 2001.

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

The income tax  provision  for the three  months  ended  June 30,  2002  totaled
$310,000 in  comparison  to an income tax  provision  of  $354,000  for the same
period in 2001.  The  decrease  is  primarily  the  result  of the  impact of an
increase in tax exempt interest income earned from the securities portfolio.

                                       15
<PAGE>

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

Overall,  net income totaled $750,000 for the second quarter of 2002 compared to
$735,000 for the comparable  period of 2001.  This is an increase of $15,000 and
represents  earnings  per share of $.53 per  diluted  share.  This  compares  to
earnings per diluted  share of $.51 for the same six month  period of 2001.  The
improvement  in net income is primarily a reflection  of an increase in interest
earning assets, which has resulted in an increase in total net interest income.

Provisions and Allowances for Loan Losses
-----------------------------------------

Total loans at June 30, 2002 were $139,003,000  which compares to total loans of
$144,511,000 at December 31, 2001. This is a decrease of $5,508,000 or 3.81%. At
June 30, 2002 approximately 86% of the Bank's loan portfolio was related to real
estate loans and although the portfolio  decreased  during the second quarter of
2002,  the  concentration  remained  consistent  as  approximately  86%  of  the
portfolio  was  related  to real  estate at  December  31,  2001.  There were no
material changes in the composition of the loan portfolio during this period.

Credit  risk is  inherent  in the  business  of  extending  loans.  The  Company
maintains an allowance or reserve for credit losses through charges to earnings.
The loan loss  provision  for the period ended June 30, 2002 was $75,000 and was
the same as the corresponding period of 2001.

The Bank formally  determines  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 June 30,
2002.  This  determination  is based on  assessment  of credit  quality or "risk
rating"  of loans by  senior  management,  which is  submitted  to the  Board of
Directors for approval. Loans are initially risk rated when originated. If there
is deterioration in the credit, the risk rating is adjusted accordingly.

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  ("SFAS114").  Impaired  loans
receive  individual  evaluation of the allowance  necessary on a monthly  basis.
Impaired loans are defined in the Bank's Loan Policy as residential  real estate
mortgages with balances of $300,000 or more and commercial  loans of $100,000 or
more 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. Such  commercial  loans and
residential  mortgages  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; or
  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.

The individual  allowance for each 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 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.
There have been no  reallocations  within


                                       16
<PAGE>

the allowance during the period ended June 30, 2002.

At June 30, 2002, the allowance for loan losses totaled $1,473,000  representing
185.75% of nonperforming loans, which totaled $793,000, and 1.06% of total loans
outstanding of $139,003,000. This compared to $1,445,000 representing 246.17% of
nonperforming  loans,  which  totaled  $587,000  and  1.00%  of  total  loans of
$144,511,000  at  December  31,  2001.  Management  does not  believe  that this
increase  of  $206,000  in  nonperforming  loans  represents  any trend  towards
increased  delinquency of loans,  which would be likely to have an effect on the
level of the  allowance  for loan losses.  A total of $55,000 loans were charged
off by the Bank  during  each of the six month  periods  ended June 30, 2002 and
June 30, 2001,  respectively.  These  charged off loans  consisted  primarily of
loans to  individuals.  A total of $8,000 of  previously  charged  off loans was
recovered  during the six month period ended June 30, 2002.  Recoveries  for the
corresponding  period in 2001 totaled  $98,000.  When comparing the two periods,
and excluding the one large recovery in 2001 of $82,000,  net  charge-offs  were
$47,000  for the period  ended June 30,  2002 and $39,000 for the same period in
2001,  neither of which  significantly  impacted the level of the  allowance for
loan losses. Management believes that the allowance for loan losses is adequate.
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  and  other  factors,  both  within  and  outside  of
management's  control.  Additionally,  with expectations of the Bank to grow its
existing  portfolio,  future  additions  to the  allowance  may be  necessary to
maintain adequate coverage ratios.

Capital
-------

At June 30, 2002, the Company had $25,326,000 in shareholder  equity compared to
$23,363,000 at December 31, 2001.  This  represents an increase of $1,963,000 or
8.40%. Several components contributed to the change since December 2001. At June
30, 2002,  earnings  year to date totaled  $1,472,000.  Market  conditions  have
resulted  in  a  positive  adjustment  to  unrealized  comprehensive  income  of
$1,095,000. The Company issued 880 new shares of common stock under the terms of
the  Director  Stock  Retainer  Plan  during the second  quarter of 2002,  which
resulted in an increase in capital of $23,000.  The Company  also  declared  two
quarterly cash dividends in 2002 resulting in a decrease in capital of $626,000.
Under  current  regulatory  definitions,  the  Bank is "well  capitalized",  the
highest  rating  defined  under  the  Federal  Deposit   Insurance   Corporation
Improvement  Act.  As a  result,  the Bank  pays  the  lowest  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 June 30, 2002,
the  Company  had a  risk-based  capital  ratio of 16.32%  compared to 16.21% at
December 31, 2001.  The leverage ratio at June 30, 2002 was 7.61% which compares
to 7.87% at December 31, 2001.  These capital  ratios  substantially  exceed all
applicable  requirements for "well  capitalized"  institutions as established by
Federal Bank supervisory standards.

Maintaining  strong  capital is  essential to bank safety and  soundness  and to
maintaining the confidence of investors, customers and regulators.  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  maintaining
consistency  with  prudent  industry  practices.  Management  believes  that the
capital  ratios of the  Company  and Bank are  adequate  to continue to meet the
current and foreseeable future capital needs of the institution.

Liquidity
---------

The Bank's  Asset/Liability  Management  Committee  which operates in accordance
with  policies  established  and  reviewed  by the  Bank's  Board of  Directors,
implements  and monitors  compliance  with these  policies  regarding the Bank's
asset/liability   management  practices  with  regard  to  interest  rate  risk,
liquidity  and  capital.  Interest  rate risk  measures the  sensitivity  of the
Company's  income to short and long term changes in interest  rates.  One of the
primary  objectives of the Committee is to manage interest rate risk and control
the sensitivity of earnings to changes in interest



                                       17
<PAGE>

rates in order to improve net interest income and interest rate margins and to
manage the maturities and interest rate sensitivities of assets and liabilities.
At June 30, 2002, the Bank's interest rate position was asset sensitive.
However, the level of interest rate risk is within the limits approved by the
Board of Directors. Management of liquidity is designed to provide for the
Bank's cash needs at a reasonable cost. These needs include the withdrawal of
deposits on demand or at maturity, the repayment of borrowings as they mature
and lending opportunities. The Company's subsidiary, Salisbury Bank and Trust
Company is a member of the Federal Home Loan Bank system which provides credit
to its members. This enhances the liquidity position by providing a source of
available borrowings. At June 30, 2002, the Company had approximately
$24,706,000 in loan commitments and unadvanced funds outstanding. The Company
maintains ample liquidity to meet its present and foreseeable needs.

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

This Form 10-QSB 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 increased revenues and earnings for the Company and Bank
     through growth resulting from acquisitions, attraction of new deposit and
     loan customers and the introduction of new products and services.

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 an 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.



                                       18
<PAGE>


                           Part II - OTHER INFORMATION

Item 1. - Legal Proceedings-Not applicable

Item 2. - Changes in 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


     The Annual Meeting of Shareholders of Salisbury Bancorp, Inc. (the
"Company"), the holding company for Salisbury Bank and Trust Company (the
"Bank") was held on Saturday, April 27, 2002. Shareholders voted on the election
of directors and the ratification of the appointment of independent auditors.

     The results of the votes of shareholders regarding each proposal are set
forth below:

                                   PROPOSAL 1
                              ELECTION OF DIRECTORS

     Each of the three  nominees  received in excess of a plurality of the votes
cast at the meeting and were  elected to serve until their term expires or their
successors are elected and qualified.

           The vote for electing nominees as directors was as follows:

                                                                   Withholding
                                                     For            Authority

John R. H. Blum           Number of Shares:          1,050,301      31,461
(three (3) year term)     Percentage of
                          Shares Voted:              97.1%          2.9%
                          Percentage of Shares
                          Entitled to Vote:          73.8%          2.2%


                                                                   Withholding
                                                     For            Authority

Louise F. Brown           Number of Shares:          1,050,301      31,461
(three (3) year term)     Percentage of
                          Shares Voted:              97.1%          2.9%
                          Percentage of Shares
                          Entitled to Vote:          73.8%          2.2%

                                                                   Withholding
                                                     For            Authority

Nancy F. Humphreys        Number of Shares:          1,050,301      31,461
(three (3) year term)     Percentage of
                          Shares Voted:              97.1%          2.9%
                          Percentage of Shares
                          Entitled to Vote:          73.8%          2.2%


                                       19
<PAGE>


The three (3)  individuals  elected at the 2002  Annual  Meeting  along with the
following  individuals whose terms did not expire at such meeting constitute the
Board of Directors of the Company:

           Gordon C. Johnson
           Holly J. Nelson
           Walter C. Shannon, Jr.
           John F. Perotti
           Craig E. Toensing
           Michael A. Varet






                                       20
<PAGE>


                                   PROPOSAL 2
             RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS


     The  appointment  of  Shatswell,  MacLeod & Company,  P.C.  as  independent
auditors  for the  Company for the year ending  December  31, 2002 was  approved
because  the  votes  for  such  appointment  exceeded  the  votes  against  such
appointment.

          The vote to  ratify  the  appointment  by the  Board of  Directors  of
          Shatswell,  MacLeod & Company,  P.C. as  independent  auditors for the
          year ending December 31, 2002 was as follows:

                                                For        Against      Abstain

           Number of Votes:                  1,070,566      5,574        5,622
           Percentage of Shares Voted:       98%            .5%          .5%
           Percentage of Shares
           Entitled to Vote:                 75.3%          .4%          .9%


Item 5. - Other Information - Not applicable

Item 6. - Exhibits and Reports on Form 8-K

          a.   Exhibits - 99.1 Certification of Chief Executive Officer pursuant
                               to Section 906 of the Sarbanes-Oxley Act of 2002

                          99.2 Certification  of Chief Financial  Officer
                               pursuant to Section 906 of the Sarbanes-Oxley
                               Act of 2002

          b.   Reports on Form 8-K:

          The  Company  filed a Form 8-K on May 1, 2002 to report the events and
          results of the Company's Annual Meeting of Shareholders  that was held
          on Saturday, April 27, 2002.

          The  Company  filed a Form  8-K on May 29,  2002 to  report  that  the
          Company's  Board of Directors  declared a quarterly  cash  dividend of
          $.22 per share to be paid on July 26, 2002 to  shareholders  of record
          as of June 29, 2002.


                                       21
<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: August 9, 2002              by:  /s/ John F. Perotti
                                            ---------------------------------
                                            John F. Perotti
                                            President/Chief Executive Officer

     Date: August 9, 2002              by:   /s/ John F. Foley
                                             --------------------------------
                                             John F. Foley
                                             Chief Financial Officer




                                       22