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, 2001
                                                 -------------

                                       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 July 31, 2001  1,425,496
                                   ---------

                                       1

<PAGE>

<TABLE>
<CAPTION>
                             SALISBURY BANCORP, INC.

                                TABLE OF CONTENTS
<S>                                                                                                   <C>
 Part I. FINANCIAL INFORMATION                                                                        Page

Item 1.  Condensed Consolidated Financial Statements:

         Condensed Consolidated Balance Sheets -June 30, 2001 (unaudited)
                                            and December 31, 2000                                       4
         Condensed Consolidated Statements of Income -six months and three months ended
                                            June 30, 2001 and 2000                                      5
                                            (unaudited)
         Condensed Consolidated Statements of Cash Flows -six months ended June 30, 2001 and 2000       6
                                            (unaudited)

         Notes to Condensed 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 Consolidated Financial Statements



                                       3

<PAGE>



                             SALISBURY BANCORP, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (amounts in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                      JUNE 30,       DECEMBER 31,
                                                                        2001            2000
                                                                        ----            ----
                                                                    (unaudited)
<S>                                                                  <C>             <C>
ASSETS
   Cash & due from banks:
      Non-Interest Bearing                                           $   5,812       $   7,300
      Interest Bearing                                                     126             673
   Federal funds sold                                                    1,375           5,125
   Money market mutual funds                                               527             661
                                                                     ---------       ---------
               Cash and cash equivalents                                 7,840          13,759
   Investment Securities:
      Held to maturity securities at amortized cost                        406             410
      Available-for-sale securities at market value                     84,026          88,583
   Federal Home Loan Bank stock, at cost                                 2,945           2,930
   Loans:
      Commercial, financial and agricultural                            10,945           8,592
      Real estate-construction and land development                      3,980           6,275
      Real estate-residential                                          104,755          98,312
      Real estate-commercial                                            16,892          15,463
      Consumer                                                          10,120          10,673
      Other                                                                394             247
      Allowance for loan losses                                         (1,410)         (1,292)
                                                                     ---------       ---------
               Net loans                                               145,676         138,270
   Bank premises & equipment                                             2,543           2,522
   Investment in real estate                                                75              75
   Accrued interest receivable                                           1,758           1,790
   Other assets                                                            858             715
                                                                     ---------       ---------
Total Assets                                                         $ 246,127       $ 249,054
                                                                     =========       =========
LIABILITIES AND SHAREHOLDERS' EQUITY
   Deposits:
      Demand                                                         $  30,696       $  32,098
      Savings & NOW                                                     33,945          33,083
      Money Market                                                      48,092          47,442
      Time                                                              52,297          53,813
                                                                     ---------       ---------
               Total Deposits                                          165,030         166,436
   Federal Home Loan Bank advances                                      56,646          47,357
   Other liabilities                                                     1,521          12,801
                                                                     ---------       ---------
               Total Liabilities                                       223,197         226,594
                                                                     ---------       ---------
Shareholders' equity:
   Common stock, par value $.10 per share;
      Authorized 3,000,000 shares
      Issued and outstanding shares: 1,426,296 at June 30, 2001
      and 1,458,366 at December 31, 2000                                   143             146
   Additional paid-in capital                                            2,361           2,969
   Retained earnings                                                    20,291          19,516
   Accumulated other comprehensive income(loss)                            135            (171)
                                                                     ---------       ---------
               Total Shareholders' Equity                               22,930          22,460
                                                                     ---------       ---------
Total Liabilities and Shareholders' Equity                           $ 246,127       $ 249,054
                                                                     =========       =========
</TABLE>

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

                                       4

<PAGE>

                             SALISBURY BANCORP, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (amounts in thousands, except per share data)
                             June 30, 2001 and 2000
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                     Six Months Ended        Three Months Ended
                                                                          June 30                 June 30
                                                                      2001        2000        2001        2000
                                                                      ----        ----        ----        ----
<S>                                                                  <C>         <C>         <C>         <C>
Interest and dividend income:
   Interest and fees on loans                                        $5,748      $4,999      $2,862      $2,557
Interest and dividends on securities:
   Taxable                                                            2,104       2,415      $1,001       1,177
   Tax-exempt                                                           433         326         252         163
Dividends on equity
securities                                                              114          85          54          49
Other interest                                                          115         189          46          88
                                                                     ------      ------      ------      ------
Total interest and dividend income                                    8,514       8,014       4,215       4,034
                                                                     ------      ------      ------      ------
 Interest expense:
   Interest on deposits                                               2,777       2,496       1,327       1,273
   Interest on Federal Home Loan Bank advances                        1,503       1,410         749         694
                                                                     ------      ------      ------      ------
               Total interest expense                                 4,280       3,906       2,076       1,967
                                                                     ------      ------      ------      ------
               Net interest and dividend income                       4,234       4,108       2,139       2,067
Provision for loan losses                                                75          60          38          30
                                                                     ------      ------      ------      ------
               Net interest and dividend income after provision
               for loan losses                                        4,159       4,048       2,101       2,037
                                                                     ------      ------      ------      ------
Other income:
   Trust department income                                              511         507         265         264
   Service charges on deposit accounts                                  218         167         105          84
   Gain on sale of available-for-sale securities                         43           0          43           0
     Other income                                                       363         266         218         152
                                                                     ------      ------      ------      ------
               Total other income                                     1,135         940         631         500
                                                                     ------      ------      ------      ------
Other expense:
   Salaries and employee benefits                                     1,864       1,667         935         879
   Occupancy expense                                                    115         123          52          60
   Equipment expense                                                    246         210         122         101
   Data processing                                                      139         113          61          66
   Other expense                                                        870         794         473         468
                                                                     ------      ------      ------      ------
               Total other expense                                    3,234       2,907       1,643       1,574
                                                                     ------      ------      ------      ------
               Income before income taxes                             2,060       2,081       1,089         963
Income taxes                                                            683         735         354         330
                                                                     ------      ------      ------      ------
               Net income                                            $1,377      $1,346      $  735      $  633
                                                                     ======      ======      ======      ======
Earnings per common share outstanding                                $  .96      $  .90      $  .52      $  .42
                                                                     ======      ======      ======      ======
Earnings per common share outstanding,
 assuming dilution                                                   $  .96      $  .90      $  .52      $  .42
                                                                     ======      ======      ======      ======

Dividends per share                                                  $  .42      $  .26      $  .21      $  .13
                                                                     ======      ======      ======      ======
</TABLE>

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

                                       5

<PAGE>

                             SALISBURY BANCORP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (amounts in thousands)
                     Six months ended June 30, 2001 and 2000
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                             2001        2000
                                                                             ----        ----
<S>                                                                      <C>            <C>
Cash flows from operating activities:
   Net income                                                            $  1,377       $  1,346
   Adjustments to reconcile net income to net cash provided by
       operating activities:
         Provision for loan losses                                             75             60
         Depreciation and amortization                                        152            141
         Accretion of securities, net                                         (69)           (55)
         (Increase) decrease in interest receivable                            32           (269)
         Increase in interest payable                                           8             62
(Increase) decrease in prepaid expenses                                       (41)            22
         Increase (decrease) in accrued expenses                              (20)           (60)
         (Increase) decrease in other assets                                  (97)             4
         Decrease in other liabilities                                         (8)           (13)
         Increase (decrease) in taxes payable                                (201)            16
         (Gain) loss on sales of available-for-sale securities, net           (43)            61
                                                                         --------       --------

Net cash provided by operating activities                                   1,165          1,315
                                                                         --------       --------

Cash flows from investing activities:
  Purchase of Federal Home Loan Bank stock                                    (15)          (828)
  Purchases of available-for-sale securities                              (55,537)       (21,430)
  Proceeds from sales of available-for-sale securities                     38,372          4,787
  Proceeds from maturities
  of available-for-sale securities                                         11,330         13,483
  Proceeds from maturities of held-to-maturity securities                       5              6
  Net increase in loans                                                    (7,579)        (4,922)
  Capital expenditures                                                       (173)          (156)
  Recoveries of loans previously charged-off                                   98             16
                                                                         --------       --------
Net cash used in investing activities                                     (13,499)        (9,044)
                                                                         --------       --------
</TABLE>


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

                                       6

<PAGE>


                             SALISBURY BANCORP, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (amounts in thousands)
                     Six months ended June 30, 2001 and 2000
                                   (unaudited)
                                   (continued)
<TABLE>
<CAPTION>
                                                                       2001          2000
                                                                       ----          ----
<S>                                                                <C>            <C>
Cash flows from financing activities:
   Net increase in demand deposits, NOW and
       savings accounts                                                 110          7,835
   Decrease in time deposits                                         (1,516)        (6,284)
   Advances from Federal Home Loan Bank                              10,000         19,000
   Principal payments on advances from Federal Home Loan Bank          (711)       (10,667)
   Dividends paid                                                      (857)          (706)
   Net repurchase of common stock                                      (611)          (471)
                                                                   --------       --------

   Net cash provided by financing activities                          6,415          8,707
                                                                   --------       --------

Net increase (decrease) in cash and cash equivalents                 (5,919)           978
 Cash and cash equivalents at beginning of period                    13,759          7,716
                                                                   --------       --------
Cash and cash equivalents at end of period                         $  7,840       $  8,694
                                                                   ========       ========


Supplemental disclosures:
   Interest paid                                                   $  4,272       $  3,844
   Income taxes paid                                                    863            706

</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 consolidated 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 condensed
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 generally accepted accounting
principles 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, 2001 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2001. These condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's 2000 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 generally accepted
accounting principles.

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,
                                     2001         2000        2001        2000
                                     ----         ----        ----        ----

Net income                         $  735       $  633       $1,377      $1,346
Net unrealized (losses) gains
 on securities during period         (338)         (28)         306         (77)
                                   ------       ------       ------      ------
Comprehensive income               $  397       $  605       $1,683      $1,269
                                   ======       ======       ======      ======


                                       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, 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
                                                                    ======         ======

Six months ended June 30, 2000
   Basic EPS
      Net income and income available to common stockholders        $1,346          1,496          $   .90
      Effect of dilutive securities, options                                            0
                                                                    ------         ------
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                                $1,346          1,496          $   .90
                                                                    ======         ======
</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, 2001
   Basic EPS
      Net income and income available to common stockholders          $735          1,435             $.52
      Effect of dilutive securities, options                                            0
                                                                    ------         ------
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                                  $735          1,435             $.52
                                                                    ======         ======

Three months ended June 30, 2000
   Basic EPS
      Net income and income available to common stockholders          $633          1,491             $.42
      Effect of dilutive securities, options                                            0
                                                                    ------         ------
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                                  $633          1,491             $.42
                                                                    ======         ======
</TABLE>


                                       9

<PAGE>



NOTE 4 - IMPACT OF NEW ACCOUNTING STANDARDS

In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities". Statement No. 133, as amended by SFAS No.
138, establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. The Statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. The Company adopted this statement as of
January 1, 2001. In management's opinion, the adoption of SFAS No. 133 did not
have a material effect on the Company's consolidated financial statements.

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 June 30, 2001; however, the disclosure provisions
are effective for fiscal years ending after December 15, 2000. The Company has
not yet quantified the remaining provisions effective in 2001; however, the
Company does not expect that the adoption of this statement will have a material
impact on its financial position or results of operations.

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. Management is currently evaluating the impact of
adopting this Statement on the consolidated financial statements, but does not
anticipate that it will have a material impact.

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, will be January 1, 2002. Management is currently evaluating the
impact of adopting this Statement on the consolidated financial statements, but
does not anticipate that it will have a material impact.


                                       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 three full service offices in the towns of
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, 2000.

In order to provide a strong foundation for building shareholder value and to
serve its customers, the Company remains committed to investing in the
technological and human resources necessary to implement new personalized
financial products and services.. As reported in the first quarter, the Bank
installed a new core account processing system that was purchased to enhance the
abilities of the Bank to better serve the financial needs of its customers.
During the second quarter of 2001 the Bank launched its new Internet banking
product called "SBTNET", which can be accessed at the Company's
website:www.salisburybank.com. It was also reported during the first quarter
that the Company announced the signing of a definitive agreement to purchase
People's Bank Canaan, Connecticut branch office. Approval has been given by the
appropriate banking regulatory agencies and the transaction is expected to be
completed during the third quarter of this year.

The Company's net income for the six months ended June 30, 2001 was $1,377,000
as compared to $1,346,000 for the same time period ended June 30, 2000. This
represents an increase of $31,000 or 2.3%. Earnings per diluted share increased
6.67% for the first six months of 2001 and amounted to $.96 per diluted share as
compared to $.90 earnings per diluted share for the same period a year ago. The
increase in earnings is primarily the result of growth in interest income from
earning assets and reflects repurchases of common stock by the Company.

Total outstanding net loans increased to an all time high of $145,676,000 at
June 30, 2001. This compares to total net loans outstanding at December 31, 2000
of $138,270,000 which represents an increase of $7,406,000 or 5.36%. Total
assets at June 30, 2001 were $246,127,000 compared to $249,054,000 at December
31, 2000. This decrease is not considered to be indicative of any trend. While
the Company's aggregate base of earning assets has not changed significantly
during the first six months of 2001, the asset mix has changed resulting in an
increase in interest income. The Company continues to carefully monitor the
quality of its assets. During this period, nonperforming loans increased
slightly from $493,000 at December 31, 2000 to $509,000 at June 30, 2001 and
nonperforming assets increased to $509,000 at June 30, 2001 which compares to
$493,000 at December 31, 2000. These increases are not considered to be
significant or indicative of any trend. However, they could be consistent with a
softening of the local economy. Deposits decreased slightly from $166,436,000 at
December 31, 2000 to $165,030,000 at June 30, 2001. This decrease represents
traditional seasonal cash flows of the Company's deposit customers. Federal Home
Loan Bank advances totaled $56,646,000 at June 30, 2001 compared to advances of
$47,357,000 at December 31, 2000. The increase is the result of a strategy
designed to increase net interest income.

During the year 2000, Salisbury Bancorp, Inc. declared a cash dividend each
quarter of $.13 per share and a year end special dividend of $.25 per share.
During the first quarter of 2001, the Board of Directors decided to increase the
Company's regular quarterly dividends in lieu of the declaration of a special
dividend and as a result voted to increase the regular quarterly dividend to
$.21 per share for the first quarter of 2001. The Company's Board of Directors
also declared a second quarter cash dividend of $.21 per common share, which was
paid on July 30, 2001 to shareholders of record as of June 29, 2001. While the
Board anticipates continuing the $.21 per share quarterly dividend and
eliminating any annual special dividends for 2001, shareholders should be aware
that the declaration and payment of all dividends are dependent upon the
condition and earnings of the Company.

                                       12
<PAGE>



                         SIX MONTHS ENDED JUNE 30, 2001
                  AS COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

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                            2001           2000
                                                    ----           ----

 Interest and Dividend Income                      $ 8,514       $ 8,014
(financial statements)
Tax Equivalent Adjustment                              223           168
                                                   -------       -------
       Total Interest Income (on an FTE basis        8,737         8,182
Interest Expense                                    (4,280)       (3,906)
                                                   -------       -------
Net Interest Income-FTE                            $ 4,457       $ 4,276
                                                   =======       =======

Interest and dividend income on an FTE basis for the six months ended June 30,
2001 totaled $8,737,000 as to $8,182,000 for the same time period in 2000. This
is an increase of $555,000 or 6.78%. The increase is primarily the result of a
growth in average earning assets of $12,824,000 or 5.77% when the six month
period ended June 20, 2001 is compared to the six month period ended June 30,
2000. Overall the yield on earning assets was 7.43% compared to 7.37% a year
ago.

Interest expense for the first six months of 2001 totaled $4,280,000 compared to
$3,906,000 for the same period in 2000. Deposits totaled $165,030,000 at June
30, 2001 which compared to total deposits of $155,909,000 at June 30, 2000. This
increase of $9,121,000 or 5.85% resulted in an increase of $281,000 in interest
expense on deposits when comparing the two periods. Increased borrowings from
the Federal Home Loan Bank also had an impact as total interest expense
increased $93,000 or 6.60% for the first six months of 2001 compared to the
corresponding period in 2000. Overall total interest expense increased $374,000
or 9.58%. The result is an increase in cost of funds of 11 basis points to 4.53%
compared to 4.42 % a year ago. Although interest margins continue to be
pressured by aggressive competition, net interest income (on an FTE basis)
increased $181,000 or 4.23% and totaled $4,457,000 at June 30 2001, compared to
$4,276,000 at June 30, 2000.

Noninterest Income

Noninterest income totaled $1,135,000 for the six months ended June 30, 2001 as
compared to $940,000 for the six months ended June 30, 2000. Trust Department
income increased slightly to $511,000 from $507,000. In addition, service
charges increased $51,000 or 30.54% to $218,000 at June 30, 2001 compared to
$167,000 at June 30, 2000. This increase is primarily the result of an increase
in transactions from deposit accounts. The first six months of year 2001
produced a gain on sale of Available-for Sale securities in the amount of
$43,000, 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 $97,000 to $363,000 for the first six months of

                                       13
<PAGE>

2001, as compared to $266,000 for the corresponding period in 2000. This
increase is primarily the result of increased fees generated from activity in
the secondary mortgage market as well as an increase of deposit account
transactions.

Noninterest Expense

Noninterest expense totaled $3,234,000 for the first six months of 2001 as
compared to $2,907,000 for the same period in 2000. This is an increase of
$327,000 or 11.25%. Additional staff to service the increase in new business
coupled with annual pay increases and increasing costs of employee benefits have
resulted in an increase in salaries and employee benefits of $197,000 or 11.82%
and totaled $1,864,000 for the six month period ended June 30, 2001 compared to
$1,667,000 for the corresponding period in 2000. Occupancy and equipment expense
totaled $361,000 at June 30, 2001 which compares to total expense of $ 333,000
at June 30, 2000. The increase of 8.41% totaled $28,000. Data processing expense
increased $26,000 or 23.01% to $139,000 at June 30, 2001. This compares to
$113,000 at June 30, 2000. This is primarily the result of the Company's
continuing commitment to investing in the technology that is necessary to meet
the financial needs of customers. Other operating expenses totaled $870,000 at
June 30, 2001 and compares to other operating expenses that totaled $794,000 at
June 30, 2000. This increase of $76,000 or 9.57% represents increases normally
associated with the operations of the Company.

Income Taxes

The income tax provision for the six months ended June 30, 2001 totaled $683,000
in comparison to $735,000 a year ago. The decrease reflects a small decrease in
net income before taxes as well as an increase in tax exempt interest income
earned from the securities portfolio.

Net Income

Overall, net income totaled $1,377,000 for the six months ended June 30, 2001 as
compared to net income of $1,346,000 for the same period in 2000. This is an
increase of $31,000 or 2.30% and represents earnings of $.96 per diluted share.
This compares to earnings per diluted share of $.90 for the same period in 2000.
This increase reflects management's continuing efforts to control operating
expenses.


                        THREE MONTHS ENDED JUNE 30, 2001
                 AS COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

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 income tax rate of 34% for all periods presented.

(amounts in thousands)(unaudited)
Three months ended June 30,                         2001        2000
                                                    ----        ----

Interest and Dividend Income                       $4,215      $4,034
(financial statements)
Tax Equivalent Adjustment                             130          84
                                                   ------      ------
       Total interest income(on an FTE basis)       4,345       4,118
Interest Expense                                    2,076       1,967
                                                   ------      ------
Net Interest Income-FTE                            $2,269      $2,151
                                                   ======      ======

Net Interest Income

Total interest and dividend income in a FTE basis equaled $4,345,000 for the
three months ended June 30, 2001 as compared to $4,118,000 for the same period
in 2000. Although a declining rate environment generally has influenced interest

                                       14
<PAGE>

income, this represents an increase of $227,000 or 5.51%. This is primarily the
result of the growth from the loan portfolio which increased $7,524,000 or 5.39%
during the first six months of 2001 to $147,086,000 compared to an increase of
$4,860,000 or 3.87% during the first six months of 2000 to $130,333,000.
Interest and dividend income from the securities portfolio decreased slightly
during this same period in 2001when comparing the same period in 2000. This is
primarily the result of an economy with lower interest rates.

Interest expense on deposits increased $54,000 for the quarter to $1,327,000,
compared to $1,273,000 for the same quarter in 2000. This increase is primarily
the result of an increase in deposits which totaled $165,030,000 at June 30,
2001, compared to $155,909,000 at June 30, 2000. Interest expense on Federal
Home Loan Bank advances increased $55,000 or 7.93% to $749,000 in 2001, as
compared to $694,000 for the same period in 2000 as borrowings increased
$8,601,000 or 17.90% to $56,646,000 at June 30, 2001 compared to $48,045,000 at
June 30, 2000. This is a reflection of the Company's utilization of these
borrowings as a component of its funding strategy.

As a result, net interest income and dividend income on an FTE basis for the
three months ended June 30, 2001 totaled $2,269,000 as compared to $2,151,000
for the same period in 2000. The increase was $118,000 or 5.49%.

Noninterest Income

Noninterest income totaled $631,000 for the three months ended June 30, 2001, as
compared to $500,000 for the three months ended June 30, 2000. This increase is
primarily the result of increased transaction volume from deposit accounts as
well as an increase of $43,000 in gains on sales of Available-For-Sale
securities during 2001.

Noninterest Expense

Noninterest expense totaled $1,643,000 for the three months ended June 30, 2001,
as compared to $1,574,000 for the same period in 2000. This represents an
increase of $69,000 or 4.38%. Salaries and benefits increased $56,000 to
$935,000. There is some increase caused by the addition of staff. Primarily,
however, the increase is the result of salary increases and increased cost of
employee benefits. In the aggregate, occupancy, equipment, data processing and
other expenses increased $13,000 to $708,000 from $695,000 a year ago.

Income Taxes

The income tax provision for the three months ended June 30, 2001 totaled
$354,000 in comparison to an income tax provision of $330,000 for the same
period in 2000. This increase is primarily the reflection of an increase in
taxable income.

Net Income

Overall net income totaled $735,000 for the second quarter of 2001 compared to
$633,000 for the comparable period of 2000. This increase of $102,000 can be
attributed primarily to an increase in earning assets coupled with an increase
in noninterest income as well as management's continuing efforts to control
operating expenses.

Provisions and Allowance for Loan Losses

Total loans at June 30, 2001 were $147,086,000 which compares to total loans of
$139,562,000 at December 31, 2000. This is an increase of $7,524,000 or 5.39%.
While the Bank's loan portfolio continues to grow, the Bank monitors the quality
of the portfolio to ensure that loan quality will not be sacrificed for growth
or otherwise compromise the Company's objectives. At December 31, 2000
approximately 86% of the Bank's loan portfolio was related to real estate
products and although the portfolio increased during the first six months of
2001 the concentration remained consistent

                                       15
<PAGE>

as 85% of the portfolio was related to real estate at June 30, 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 and to that end the
Bank maintains an allowance or reserve for credit losses through charges to
earnings. The loan loss provision for the six months ended June 30, 2001 was
$75,000 as compared to $60,000 for the same period in 2000. The increase is
primarily the result of the growth in the loan portfolio. Specifically
identifiable and quantifiable losses are immediately charged off against the
allowance.

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 six month period of 2001
that is being reported. 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
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 on 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.

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 for the last three years 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. Average net losses for the last three years by loan type are
examined as well as trends by type for the last three years. The Bank's loan mix
over the same period of time is also analyzed. An 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 the allowance
during the six month period ended June 30, 2001.

At June 30, 2001, the allowance for loan losses totaled $1,410,000 representing
225.96% of nonperforming loans, which totaled $624,000, and .96% of total loans
of $147,086,000. This compared to $1,292,000 representing 247.99% of
nonperforming loans which totaled $521,000 and .93% of total loans of
$139,562,000 at December 31,2000. Management does not believes that this
increase of $103,000 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 Company during the first six months of 2001, as compared to $61,000
charged off during the corresponding period in 2000. These charged off loans
consisted primarily of loans to individuals. A total of $98,000 of previously
charged off loans was recovered during the six month period ended June 30, 2001.
This

                                       16
<PAGE>

includes an unanticipated recovery of $82,000. Recoveries for the
corresponding period in 2000 totaled $16,000. When comparing the two periods,
and excluding the one large recovery in 2001, net charge-offs were $39,000 for
the first six months of 2001 and $45,000 for the same period in 2000, 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 Company to grow its
existing portfolio, future additions to the allowance may be necessary to
maintain adequate coverage ratios.

Capital

At June 30, 2001, the Company had $22,930,000 in shareholders' equity compared
to $22,460,000 at December 31, 2000 which represents an increase of $470,000 or
2.09%. The change in capital accounts resulted from year to date earnings of
$1,377,000, an increase of $306,000 in the adjustment for net unrealized holding
gains/losses on securities (net of taxes), quarterly dividends declared of
$602,000 and a decrease in equity of $611,000 resulting from the stock buy back
program. The program has repurchased 132,890 shares since its inception in
November of 1998, which represents approximately 9.32% of shares issued and
outstanding. The Company expects that it will continue to repurchase stock
through private and open market transactions from time to time when the Company
believes it may do so on terms and at prices which are consistent with the best
interest of the Company and its shareholders, while maintaining a capital
cushion consistent with the standards established by the Federal Bank
supervisory agencies for "well capitalized" institutions.

The various ratios of the Company at June 30, 2001 and 2000 were:

<TABLE>
<CAPTION>
                                                                       To Be "Well Capitalized"
                          June 30, 2001  June 30, 2000  For Capital                             Under Prompt Corrective
                                                        Adequacy Purposes:                      Action Provisions:
<S>                           <C>           <C>           <C>                        <C>          <C>                        <C>
Total Risk-Based Capital      18.83%        21.02%        [greater than or equal to] 8.00%        [greater than or equal to] 10.00%
Tier 1 Risk-Based Capital     17.67%        19.93%        [greater than or equal to] 4.00%        [greater than or equal to]  6.00%
Leverage Ratio                 9.25%         9.72%        [greater than or equal to] 4.00%        [greater than or equal to]  5.00%
</TABLE>


The capital ratios of the Company and Bank are considered by management to be
adequate to continue to meet the foreseeable capital needs of the institution.
Prudent and effective utilization of capital resources is likely to involve
growth of the Company's base earning assets and additional repurchases of common
stock designed to improve returns on equity and per share earnings performance.

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 the Company's interest rate
risk and control the sensitivity of earnings to changes in interest 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, 2001 the Company's interest rate position was asset sensitive. However, the
level of the interest rate risk was 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, 2001, the Company had approximately $30,770,000 in loan
commitments and unadvanced




                                       17
<PAGE>

funds outstanding. The Company maintains ample liquidity to meet its present and
foreseeable needs.



Forward Looking Statements

Certain statements contained in this quarterly report, including those contained
in Management's Discussion and Analysis and elsewhere, are "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and are thus, prospective. Such forward looking statements are subject
to risks, uncertainties and other factors which could cause actual results to
differ materially from future results expressed or implied by such statements.
Such factors include, but are not limited to, changes in interest rates,
competition and local and regional economic conditions.



                                       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 the Company was held on Saturday,
April 28, 2001. Shareholders voted on the election of directors, the
ratification of the appointment of independent auditors and approval of the
Directors' Stock Retainer Plan.

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

                                   PROPOSAL 1
                              ELECTION OF DIRECTORS

         Each of the four 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 F. Perotti            Number of Shares:         1,141,928         8,170
(three (3) year term)      Percentage of
                           Shares Voted:             99.3%                .7%
                           Percentage of Shares
                           Entitled to Vote:         79.1%                .6%


                                                                   Withholding
                                                     For           Authority
Craig E. Toensing          Number of Shares:         1,141,140         9,958
(three (3) year term)      Percentage of
                           Shares Voted:             99.2%                .8%
                           Percentage of Shares
                           Entitled to Vote:         79.0%                .7%

                                                                   Withholding
                                                     For           Authority
Michael A. Varet           Number of Shares:         1,147,616         2,482
(three (3) year term)      Percentage of
                           Shares Voted:             99.8%                .2%
                           Percentage of Shares
                           Entitled to Vote:         79.5%                .2%




                                       19
<PAGE>

                                                                   Withholding
                                                     For           Authority
Nancy F. Humphreys         Number of Shares:         1,147,616         2,482
(one (1) year term)        Percentage of
                           Shares Voted:             99.8%                .2%
                           Percentage of Shares
                           Entitled to Vote:         79.5%                .2%


The four individuals elected at the 2001 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; John E. Rogers;
and Walter C. Shannon, Jr.

                                   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, 2001 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, 2001 was as follows:


                                                For        Against     Abstain

            Number of Votes:                 1,134,402       1,836      13,860
            Percentage of Shares Voted:           98.7%         .2%        1.1%
            Percentage of Shares
            Entitled to Vote:                     78.6%         .2%         .9%


                                PROPOSAL 3
              APPROVAL OF THE DIRECTORS' STOCK RETAINER PLAN

The Directors' Stock Retainer Plan was approved as votes for the Plan exceeded
the votes against the Plan.

                             The vote to approve the Directors' Stock Retainer
Plan was as follows:

                                                For         Against    Abstain

            Number of Votes:                 1,134,402       1,836      13,860

            Percentage of Shares Voted:           98.7%         .2%        1.1%
            Percentage of Shares
            Entitled to Vote:                     78.6%         .2%         .9%



                                       20
<PAGE>


Item 5. - Other Information - Not applicable

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

               A. Exhibits - None

               B. Reports on Form 8-K:

               The Company filed a Form 8-K on April 27, 2001 to report first
               quarter earnings of 2001 as well as an outline of remarks of John
               F. Perotti, President of Salisbury Bancorp, Inc. to the Annual
               Meeting of Shareholders, April 28, 2001.

               The Company filed a Form 8-K on May 2, 2001 to report the events
               and results of the Company's Annual Meeting of Shareholders that
               was held on Saturday, April 28, 2001.

               The Company filed a Form 8-K on May 30, 2001 to report that the
               Company's Board of Directors declared a quarterly cash dividend
               of $.21 per share to be paid on July 30, 2001 to shareholders of
               record as of June 29, 2001.



                                       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 10, 2001             by: /s/ John F. Perotti
      ---------------                 ------------------------------
                                      John F. Perotti
                                      President/Chief Executive Officer


Date: August 10, 2001             by: /s/ John F. Foley
      --------------                  ------------------------------
                                      John F. Foley
                                      Chief Financial Officer


                                       22