SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
(Mark One)

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

                  For the quarterly period ended September 30, 2000

                                      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 Identification No.)
  Incorporation or Organization)


     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  [_]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 Indicate  by check mark  whether the  registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

       Yes  [_]          No  [_]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer"s  classes
of common stock, as of October 31, 2000
                                    1,463,509
                                    ---------

<PAGE>


                             SALISBURY BANCORP, INC.

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>      <C>                                                                                      <C>
 Part I. FINANCIAL INFORMATION                                                                    Page

Item 1.  Financial Statements:

         Consolidated Balance Sheets -September 30, 2000 and December 31, 1999                      4
                                           (unaudited)
         Consolidated Statements of Income -nine months and three months ended
                                           September 30, 2000 and 1999                              5
                                           (unaudited)
         Consolidated Statements of Cash Flows -nine months ended
                                           September 30, 2000 and 1999                              6
                                            (unaudited)

         Notes to Consolidated Financial Statements                                                 8

Item 2.  Management"s Discussion and Analysis of Financial Condition and Results of Operations      10

Item 3. Quantitative and Qualitative Disclosures About Market Risk                                  16

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                                          17

Item 2.  Changes in Securities and Use of Proceeds                                                  17

Item 3.  Defaults Upon Senior Securities                                                            17

Item 4.  Submission of Matters to a Vote of Security Holders                                        17

Item 5.  Other Information                                                                          17

Item 6.  Exhibits and Reports on Form 8-K                                                           17

Signatures                                                                                          18

</TABLE>

                                       2

<PAGE>


                                           Part I--FINANCIAL INFORMATION

                                           Item 1. Financial Statements




                                       3


<PAGE>

                             SALISBURY BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS
                  (amounts in thousands, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                           SEPTEMBER 30     DECEMBER 31
                                                                               2000            1999
                                                                               ----            ----
<S>                                                                        <C>              <C>
ASSETS Cash & due from banks:
      Non-Interest Bearing                                                 $   5,589        $   6,478
      Interest Bearing                                                           135              268
   Federal funds sold                                                          7,280                0
   Money Market Mutual Funds                                                     278              970
                                                                           ---------        ---------
               Cash and cash equivalents                                      13,282            7,716
   Investment Securities:
      Held to maturity securities at amortized cost                              481              489
      Available-for-sale securities at market value                           77,998           75,153
   Federal Home Loan Bank stock, at cost                                       2,930            2,102
   Loans:
      Commercial, financial and agricultural                                   7,974            9,025
      Real estate-construction and land development                            4,070            3,382
      Real estate-residential                                                 96,479           86,680
      Real estate-commercial                                                  15,408           15,324
      Consumer                                                                10,166           10,698
      Other                                                                      513              364
      Allowance for loan losses                                               (1,218)          (1,160)
                                                                           ---------        ---------
               Net loans                                                     133,392          124,313
   Bank premises & equipment                                                   2,447            2,249
   Other real estate owned                                                        75               75
   Accrued interest receivable                                                 1,403            1,576
   Other assets                                                                1,240            1,712
                                                                           ---------        ---------
Total Assets                                                               $ 233,248        $ 215,385
                                                                           =========        =========
LIABILITIES AND SHAREHOLDERS' EQUITY
   Deposits:
      Demand                                                               $  33,191        $  28,318
      Savings & NOW                                                           31,374           32,735
      Money Market                                                            43,762           36,954
      Time                                                                    54,727           56,351
                                                                           ---------        ---------
               Total Deposits                                                163,054          154,358
   Federal Home Loan Bank advances                                            47,705           39,712
   Other liabilities                                                           1,245            1,420
                                                                           ---------        ---------
               Total Liabilities                                             212,004          195,490
                                                                           ---------        ---------
Shareholders' equity:
   Common stock, par value $.10 per share;
      Authorized 3,000,000 shares
      Issued and outstanding shares: 1,467,929 at September 30, 2000             147              150
      and 1,504,171 at December 31, 1999
   Additional paid-in capital                                                  3,141            3,781
   Retained earnings                                                          19,225           17,799
   Accumulated other comprehensive income(loss)                               (1,269)          (1,835)
                                                                           ---------        ---------
               Total Shareholders' Equity                                     21,244           19,895
                                                                           ---------        ---------
Total Liabilities and Shareholders' Equity                                 $ 233,248        $ 215,385
                                                                           =========        =========
</TABLE>

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

                                       4

<PAGE>

                             SALISBURY BANCORP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  (amounts in thousands, except per share data)
                           September 30, 2000 and 1999
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                        Nine Months Ended            Three Months Ended
                                                                            September 30                September 30
                                                                       2000             1999        2000            1999
                                                                       ----             ----        ----            ----
<S>                                                                   <C>           <C>           <C>           <C>
Interest and dividend income:
   Interest and fees on loans                                         $ 7,665       $ 7,164       $ 2,666       $ 2,433
Interest and dividends on securities:
   Taxable                                                              3,504         2,808         1,089         1,001
   Tax-exempt                                                             489           409           163           152
Dividends on equity securities
                                                                          141            90            56            34
Other interest                                                            416           290           227           106
                                                                      -------       -------       -------       -------
Total interest and dividend income                                     12,215        10,761         4,201         3,726
                                                                      -------       -------       -------       -------
 Interest expense:
   Interest on deposits                                                 3,947         3,636         1,451         1,210
   Interest on Federal Home Loan Bank advances                          2,147         1,314           737           490
                                                                      -------       -------       -------       -------
               Total interest expense                                   6,094         4,950         2,188         1,700
                                                                      -------       -------       -------       -------
               Net interest and dividend income                         6,121         5,811         2,013         2,026
Provision for loan losses                                                 100            90            40            30
                                                                      -------       -------       -------       -------
               Net interest and dividend income after provision
               for loan losses                                          6,021         5,721         1,973         1,996
                                                                      -------       -------       -------       -------
Other income:
   Trust department income                                                747           803           240           242
   Service charges on deposit accounts                                    249           242            82            77
     Other income                                                         416           365           150           140
                                                                      -------       -------       -------       -------
               Total other income                                       1,412         1,410           472           459
                                                                      -------       -------       -------       -------
Other expense:
   Salaries and employee benefits                                       2,495         2,047           828           696
   Occupancy expense                                                      179           184            56            60
   Equipment expense                                                      312           334           102           109
   Data processing                                                        188           224            75            72
   Other expense                                                        1,126         1,144           332           373
                                                                      -------       -------       -------       -------
               Total other expense                                      4,300         3,933         1,393         1,310
                                                                      -------       -------       -------       -------
               Income before income taxes                               3,133         3,198         1,052         1,145
Income taxes                                                            1,129         1,260           394           466
                                                                      -------       -------       -------       -------
               Net income                                             $ 2,004       $ 1,938       $   658       $   679
                                                                      =======       =======       =======       =======
Earnings per common share outstanding                                 $  1.35       $  1.28       $   .45       $   .45
                                                                      =======       =======       =======       =======
Earnings per common share outstanding,
 assuming dilution                                                    $  1.35       $  1.28       $   .45       $   .45
                                                                      =======       =======       =======       =======

Dividends per share                                                   $   .39       $   .36       $   .13       $   .12
                                                                      =======       =======       =======       =======
</TABLE>


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

                                       5

<PAGE>

                             SALISBURY BANCORP, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                             (amounts in thousands)
                  Nine months ended September 30, 2000 and 1999
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                      2000            1999
                                                                      ----            ----
<S>                                                                <C>             <C>
Cash flows from operating activities:
   Net income                                                      $  2,004        $  1,938
Adjustments to reconcile net income to net
cash provided by operating activities:
         Loss on sales of available-for-sale securities, net             61
         Provision for loan losses                                      100              90
         Depreciation and amortization                                  243             264
         (Accretion) amortization of securities, net                    (50)            (35)
         (Increase) decrease in interest receivable                     172             (41)
         Increase in interest payable                                    89              34
         Decrease in prepaid expenses                                    28              42
         Increase (decrease) in accrued expenses                         56             (26)
         Decrease in other assets                                         0               3
         Decrease in other liabilities                                  (20)           (325)
         Increase in taxes payable                                       84             113
                                                                   --------        --------

Net cash provided by operating activities                             2,767           2,057
                                                                   --------        --------

Cash flows from investing activities:
  Purchase of Federal Home Loan Bank stock                             (828)
  Purchases of available-for-sale securities                        (21,432)        (47,435)
  Proceeds from sales of available-for-sale securities                6,537          13,192
  Proceeds from maturities of available-for-sale securities          12,985          31,348
  Proceeds from maturities of held-to-maturity securities                 9              67
  Net increase in loans                                              (9,198)         (4,619)
  Capital expenditures                                                 (441)           (155)
  Recoveries of loans previously charged-off                             19              21
                                                                   --------        --------

Net cash used in  investing activities                              (12,349)         (7,581)
                                                                   --------        --------
</TABLE>



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

                                       6

<PAGE>



                             SALISBURY BANCORP, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                             (amounts in thousands)
                  Nine months ended September 30, 2000 and 1999
                                   (unaudited)
                                   (continued)
<TABLE>
<CAPTION>


                                                                      2000             1999
                                                                      ----             ----
<S>                                                                 <C>             <C>
Cash flows from financing activities:
   Net increase in demand deposits, NOW and
       savings accounts                                               10,320           4,966
   Net decrease in time deposits                                      (1,624)         (2,987)
   Advances from Federal Home Loan Bank                               29,000          12,000
   Principal payments on advances from Federal Home Loan Bank        (21,007)        (11,082)
   Dividends paid                                                       (898)           (543)
   Net repurchase of common stock                                       (643)         (1,068)
                                                                    --------        --------

   Net cash  provided by financing activities                         15,148           1,286
                                                                    --------        --------

Net increase (decrease) in cash and cash equivalents                   5,566          (4,238)
Cash and cash equivalents at beginning of period                       7,716          12,134
                                                                    --------        --------
Cash and cash equivalents at end of period                          $ 13,282        $  7,896
                                                                    ========        ========


Supplemental disclosures:
   Interest paid                                                    $  6,005        $  4,984
   Income taxes paid                                                   1,053             929
   Transfer of loans to other real estate owned                            0               0

</TABLE>



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

                                       7

<PAGE>



                             SALISBURY BANCORP, INC.

                   NOTES TO 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-Q.
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 nine months ended September 30, 2000 are not  necessarily  indicative of the
results  that may be  expected  for the year ending  December  31,  2000.  These
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's 1999 Annual Report on Form 10-K.

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 loss (gain) on securities.

Comprehensive Income

<TABLE>
<CAPTION>

                                                         Three months ended         Nine months ended
                                                           September 30,              September 30,
                                                        2000           1999         2000           1999
                                                        ----           ----         ----           ----
<S>                                                   <C>           <C>            <C>           <C>
Net income                                            $   658       $   679        $ 2,004       $ 1,938
Net change in unrealized holding (losses) gains
 on securities during period                              643          (468)           566        (1,675)
                                                      -------       -------        -------       -------
Comprehensive income                                  $ 1,301       $   211        $ 2,570       $   263
                                                      =======       =======        =======       =======
</TABLE>

                                       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>
Nine months ended September 30, 2000
   Basic EPS
      Net income and income available to common stockholders       $2,004        1,488       $ 1.35
      Effect of dilutive securities, options                                         0
                                                                   ------       ------
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                               $2,004        1,488       $ 1.35
                                                                   ======       ======

Nine months ended September 30, 1999
   Basic EPS
      Net income and income available to common stockholders       $1,938        1,515       $ 1.28
      Effect of dilutive securities, options                                        0
                                                                   ======       ======
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                               $1,938        1,515       $ 1.28
                                                                   ======       ======
</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 September 30, 2000
   Basic EPS
      Net income and income available to common stockholders       $  658        1,471       $  .45
      Effect of dilutive securities, options                                         0
                                                                   ------       ------

   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                               $  658        1,471       $  .45
                                                                   ======       ======

Three months ended September 30, 1999
   Basic EPS
      Net income and income available to common stockholders       $  679        1,508        $  .45
      Effect of dilutive securities, options                                         0
                                                                   ------       ------
   Diluted EPS
      Income available to common stockholders and assumed
         conversions                                               $  679        1,508        $  .45
                                                                   ======        =====
</TABLE>


NOTE 4 - IMPACT OF NEW ACCOUNTING STANDARD

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. In management's opinion, SFAS No. 133 when
adopted will not have a material effect on the Company's consolidated financial
statements.


                                       9


<PAGE>


                         Part I - FINANCIAL INFORMATION


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


                                       10

<PAGE>



Overview:

Salisbury  Bancorp,  Inc. (the  "Company"),  a Connecticut  corporation,  is the
holding  company for  Salisbury  Bank and Trust  Company (the  "Bank")  which is
located in  Lakeville,  Connecticut.  The  Company's  sole business is the Bank,
which has three full service offices  including a Trust  Department 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-K
for the year ended December 31, 1999.

Net income for the nine  months  ended  September  30,  2000  increased  3.4% to
$2,004,000  or $ 1.35 per diluted  share as compared to net income of $1,938,000
or $ 1.28 per diluted share for the nine months ended  September 30, 1999.  This
5.5% increase in earnings per diluted share is attributable to the growth in the
Company's  base of earning  assets  and to  repurchases  of common  stock by the
Company.  The  annualized  return  on equity  for the nine  month  period  ended
September  30, 2000  increased  to 13.01% as compared to 12.5% for the same nine
month period in 1999.

Total assets at September 30, 2000 were $233,248,000 compared to $215,385,000 at
December 31, 1999.  Although Management is pleased that the Company's asset size
has grown 8.3% during the first nine months of the year 2000, Management is ever
more pleased that it is achieving  growth  without  compromising  asset quality.
During this nine month period,  nonperforming  loans  decreased to $284,000 from
$1,090,000.  This is a  73.9%  decrease.  Nonperforming  assets  similarly  were
reduced  $911,000  or  71.7%  to  $359,000  from  the  previous  year  total  of
$1,270,000.  As a result, at September 30, 2000 nonperforming assets represented
0.2% of total assets as compared with 0.6% at September  30, 1999.  The increase
in quality earning assets in combination with management's continuing efforts to
control  operating  expenses have  resulted in the overall  increase in earnings
when comparing the first nine months of 2000 to the same period in 1999.

As a result of the Company's  financial  performance  during the year 2000,  the
Board of Directors  increased the Company's quarterly dividend from $.12 to $.13
per common share.  Year to date cash dividends  total $.39 per common share,  an
increase of 8.3% over the 1999 year to date dividend of $.36 per common share at
September 30, 1999.

                      NINE MONTHS ENDED SEPTEMBER 30, 2000
               AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1999

Results of Operations
Net Interest Income

For the  following  discussion,  net  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)
Nine months ended September 30,                             2000         1999
                                                            ----         ----

Interest and Dividend Income                              $ 12,215     $ 10,761
(financial statements)
Tax Equivalent Adjustment                                      252          211
                                                          --------     --------
    Total Interest and Dividend Income (on an FTE basis)    12,467       10,972
Interest Expense                                            (6,094)      (4,950)
                                                          --------     --------
Net Interest and Dividend Income-FTE                      $  6,373     $  6,022
                                                          ========     ========

                                       11

<PAGE>



Net interest and dividend  income  (interest  and dividend  income less interest
expense)  on an FTE basis  before  the  provision  for loan  losses for the nine
months ended September 30, 2000 increased by $351,000 or 5.8% when comparing the
same period in 1999.  This  increase is  primarily  the result of an increase in
earning assets,  particularly loans outstanding,  which have increased to an all
time high of  $133,392,000  at September  30, 2000.  This  compares to total net
loans  outstanding  at September 30, 1999 of  $123,651,000.  The increase in new
business  is the result of the  expansion  of the  Company's  "Mortgage  Makers"
program which began earlier in the year.

Interest expense for the first nine months of 2000 totaled  $6,094,000  compared
to $4,950,000 for the comparable  period in 1999.  Interest expense for deposits
has increased $311,000.  This is a combination of the result of generally higher
interest  rates as well as an increase in interest  bearing  deposits.  Interest
paid on  borrowings  from the  Federal  Home Loan Bank had the most  significant
impact as total interest expense increased  $833,000 to $2,147,000 for the first
nine months of 2000 compared to $1,314,000 for the same period in 1999.  This is
the  result  of  increased  borrowings  as well as  higher  rates at the time of
repricing borrowings during the year.

Although  interest margins  continue to be pressured by aggressive  competition,
increased volumes of deposits and borrowings have resulted in an increase in net
interest and dividend income on a fully taxable  equivalent  basis to $6,373,000
in 2000 compared to $6,022,000 for the same nine month period in 1999.

Noninterest Income

Noninterest  income totaled  $1,412,000 for the nine months ended  September 30,
2000 as compared to  $1,410,000  for the nine months  ended  September  30, 1999
despite a  decrease  in Trust  Department  income of  $56,000.  This  difference
reflects the timing of estate  settlement fees and is difficult to predict.  The
first nine months of 2000 differs from 1999 when there were more estates settled
earlier in the year.  However this difference is not considered by management to
be indicative of any trend in the volume of estate  settlement work performed by
the Trust  Department.  Service  charges and other income in the aggregate  have
increased  $58,000 to $665,000  from  $607,000  which  represents an increase of
9.6%. This is primarily due to increasing transactions from deposit accounts and
fees  generated  from the  sale of  mortgages  to the  secondary  market,  a new
business  activity  that is part of the  Company's  expanded  "Mortgage  Makers"
program that began early in 2000.

Noninterest Expense

Noninterest  expense  increased  9.3% to  $4,300,000  for the nine months  ended
September 30, 2000 compared to $3,933,000 for the corresponding  period in 1999.
Salaries  and employee  benefits  totaled  $2,495,000  for the nine month period
ended  September 30, 2000  compared to  $2,047,000  for the same period in 1999.
Earlier  this year the  Company  expanded  its  "Mortgage  Makers"  program.  As
mentioned previously,  this program has been instrumental in increasing the loan
portfolio to its current level of $133,392,000. This has resulted in the need to
increase  staff to process and service  the  increase in volume of new  mortgage
loans.  This coupled with annual staff pay  increases  and  increasing  costs of
employee benefits,  has resulted in the increase of $448,000 or 21.9%. Occupancy
and  equipment  expenses  decreased  5.2%  to  $491,000  from  $  518,000.  Data
processing expenses have decreased $36,000 to $188,000. This is partially due to
the timing of invoice  payments as well as  negotiations of data processing fees
with service providers. Other operating expenses decreased $18,000 to $1,126,000
for the nine month period ended  September 30, 2000 from $1,144,000 for the same
period in 1999.  This decrease  represents  management's  continuing  efforts to
control operating expenses.

Income Taxes

The income tax  provision  for the nine months ended  September 30, 2000 totaled
$1,129,000 in comparison to $1,260,000 for the same period in 1999. The decrease
reflects a decrease in taxable income.

                                       12

<PAGE>



                      THREE MONTHS ENDED SEPTEMBER 30, 2000
              AS COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1999

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 September 30,                             2000        1999
                                                             ----        ----

Interest and Dividend Income                                $ 4,201    $ 3,726
(financial statements)
Tax Equivalent Adjustment                                        84         78
                                                            -------    -------
     Total Interest and Dividend Income (on an FTE basis)     4,285      3,804
Interest Expense                                             (2,188)    (1,700)
                                                            -------    -------
Net Interest and Dividend Income-FTE                        $ 2,097    $ 2,104
                                                            =======    =======

Net Interest Income

Net interest  and dividend  income on an FTE basis  equaled  $2,097,000  for the
three  months ended  September  30,2000 as compared to  $2,104,000  for the same
period in 1999.  Loan growth during the third quarter of 2000 was  approximately
$4,000,000  while there was very  little  growth in loans for the same period in
1999. The securities  portfolio increased  approximately  $11,000,000 during the
third quarter of 1999 as a result of the Company's strategy to increase interest
income by  leveraging  additional  borrowings  from the Federal  Home Loan Bank.
There was no additional  arbitrage activity during this period in 2000. However,
interest  expense  for the  third  quarter  of 2000  increased  as a  result  of
increased  borrowing costs.  Deposits during the third quarter of 2000 increased
approximately  $7,000,000  from the same  period in 1999.  This  resulted  in an
increase in interest expense in 2000. Overall however, net interest and dividend
income  remained  consistent for the three month period ended September 30, 2000
when comparing it to the same period in 1999.

Noninterest Income

Noninterest  income  totaled  $472,000 for the three months ended  September 30,
2000 as compared to $459,000 for the three months ended September 30, 1999. This
increase of $13,000 was primarily the result of fees  associated  with increased
transaction volume from deposit accounts.

Noninterest Expense

Noninterest  expense totaled $1,393,000 for the three months ended September 30,
2000 as compared to $1,310,000 for the same period in 1999.  This is an increase
of $ 83,000 or 6.3%. Salaries and benefits increased $132,000 to $828,000. While
some of this increase  resulted from the addition of staff, the primary increase
was the result of salary increases and increased cost of benefits. For the three
months ended September 30, 2000,  occupancy,  equipment,  data  processing,  and
other  operating  expenses  decreased in the aggregate to $565,000 from $614,000
for the calendar  quarter ended  September 30, 1999. This decrease was primarily
the result of management's continuing efforts to control operating expenses.

Income Taxes

The income tax provision  for the three months ended  September 30, 2000 totaled
$394,000 in  comparison  to an income tax  provision  of  $466,000  for the same
period in 1999. The decrease reflects a decrease in taxable income.

                                       13

<PAGE>


Net Income

While income for the three months ended  September 30, 2000 totaled $ 658,000 as
compared  with  $679,000  for the same period in 1999,  on a per share basis net
income was unchanged.

                               FINANCIAL CONDITION

Total assets increased from $215,385,000 at December 31, 1999 to $233,248,000 at
September 30, 2000. This is an increase of $17,863,000 or 8.3%. During this nine
month period net loans increased $9,079,000 or 7.3% and the securities portfolio
increased  $3,665,000  or 4.7%.  This  increase  in  earning  assets  was funded
primarily by growth in deposits which totaled $163,054,000 at September 30, 2000
compared to $154,358,000 at December 31, 1999 and by an increase in Federal Home
Loan advances.  This compares to total assets of  $218,458,000  at September 30,
1999. This growth in earning assets has enhanced the earnings  opportunities for
the Company.

Securities

As of September 30, 2000, the Company's total securities  portfolio  amounted to
$81,409,000  for an increase of $3,665,000  from December 31, 1999. At September
30, 2000 securities  classified as  held-to-maturity  totaled  $481,000 with the
balance  of  the  portfolio,  excluding  Federal  Home  Loan  Bank  stock  being
classified  as  available-for-sale.   The  net  unrealized  loss  on  securities
available-for-sale, net of tax effect totaled ($1,269,000) at September 30, 2000
compared to  ($1,835,000)  at December 31, 1999. The decrease is attributable to
movement  in interest  rates and the  activity in the  securities  markets.  The
following  table  presents the carrying  value of the portfolio at September 30,
2000 and December 31, 1999.

<TABLE>
<CAPTION>

                                                             September 30, 2000    December 31, 1999
                                                                    (amounts in thousands)
<S>                                                              <C>                    <C>
Available-for-sale securities:                                   $   173                $   137
     Equity securities
     Debt securities issued by the U.S. Treasury and
       Other U.S. government corporations and agencies            38,132                 33,290
     Debt securities issued by states of the United States
       And political subdivisions of the states                   12,807                 12,379
     Mortgage-backed securities                                   26,886                 29,347

Held-to-maturity securities:
     Mortgage-backed securities                                      481                    489

Federal Home Loan Bank stock                                       2,930                  2,102
                                                                 -------                -------

Total Securities                                                 $81,409                $77,744
                                                                 =======                =======
</TABLE>


Loans

During the first quarter of 2000 the Company expanded its "Mortgage Makers" menu
of  products.  This  program  has  been  instrumental  in  increasing  the  loan
portfolio.   At  September   30,  2000  net  loans   outstanding   increased  to
$133,392,000.  This is an increase of  $9,079,000  or 7.3% when  compared to net
loans  outstanding of  $124,313,000  at December 31, 1999. The most  significant
increase is in residential mortgages, which totaled $96,479,000 at September 30,
2000.  This  represents an increase of  $9,799,000  or 11.3% when  comparing the
residential  mortgage  portfolio  to that of  December  31,  1999 which  totaled
$86,680,000. Company efforts continue to develop new lending business.

                                       14

<PAGE>



Provision and Allowance for Loan Losses

The provision  for loan losses for the nine months ended  September 30, 2000 was
$100,000,  which compares to a provision of $90,000 for the same period in 1999.
Management  continually  assesses the  adequacy of the  allowance in response to
current and anticipated economic conditions,  specific problem loans, historical
net charge offs and the overall risk profile of the loan portfolio. The increase
in the  provision  is  attributable  to the  increase  in the  size of the  loan
portfolio.  At September 30, 2000,  the allowance for loan losses was $1,218,000
representing  .9% of total loans as compared to $1,160,000 at December 31, 1999,
which also  represented  .9% of total loans.  Nonaccrual  loans were $244,000 at
September  30, 2000  compared to $473,000 at December 31, 1999.  Accruing  loans
past  due 90 days or more  totaled  $236,000  at June 30,  2000  and  management
reported  this as being an isolated  situation.  At September  30, 2000 accruing
loans past due 90 days or more  totaled  $28,000.  Restructured  loans  remained
unchanged at $12,000.  At September 30, 2000,  the allowance for loan losses was
$1,218,000 or 428.9% of nonperforming loans, which totaled $284,000. At December
31,  1999,   the  allowance  for  loan  losses  was   $1,160,000  or  106.4%  of
nonperforming loans, which totaled $1,090,000.

During the first nine months of 2000,  a total of $61,000 of loans were  charged
off compared to $262,000  charged off during the  corresponding  period in 1999.
Recoveries  of previously  charged off loans totaled  $19,000 for the first nine
months of 2000 compared to $21,000 for the same period in 1999.

Deposits

Deposits constitute the principal funding source of the Company's assets.  Total
deposits increased $8,696,000 or 5.6% to $163,054,000 at September 30, 2000 from
$154,358,000  at December 31,  1999.  The most  significant  increase was in the
Company's  money  market  product,   which  increased  $6,808,000  or  18.4%  to
$43,762,000  at September  30, 2000 from  $36,954,000  at year end 1999.  Demand
deposits  also  increased  $4,873,000  or 17.2% to $ 33,191,000 at September 30,
2000 when comparing  demand deposits of $28,318,000 at December 31, 1999.  While
there may be fluctuations in average  deposits from one quarter to the next, the
overall trend reflects a strategy of controlled  growth.  By adjusting the rates
of interest paid on deposits  management can influence  such growth.  Borrowings
from the Federal Home Loan Bank provide the Bank with alternative funding.

Borrowings

At September 30, 2000, Federal Home Loan Bank borrowings were at $47,705,000. In
order to enhance  earnings  opportunities,  the Company  funded  growth in total
assets by  increasing  Federal Home Loan Bank  borrowings  from  $39,712,000  at
December  31,  1999.  This is the  result of a  strategy  designed  to  increase
interest income.

Capital

At  September  30,  2000,  the Company had  $21,244,000  in  shareholder  equity
compared to  $19,895,000  at December 31, 1999.  This  represents an increase of
$1,349,000 or 6.8%.  Several  components made up the change since December 1999.
Year- to- date earnings of $2,004,000 have increased capital.  Market conditions
have resulted in a positive  adjustment to  unrealized  comprehensive  income of
$566,000.  The Company has  declared  three  quarterly  cash  dividends in 2000,
resulting  in a decrease in capital of  $578,000.  In November  1998 the Company
announced  a stock  repurchase  plan to acquire up to  approximately  10% of the
outstanding  common  stock of the  Company.  On  October  24,  2000 the Board of
Directors  announced the continuation such repurchase  program which to date has
resulted  in the  repurchase  of 91,257  shares of stock.  During the first nine
months of 2000 this  program has  resulted in a decrease in capital of $643,000.
Prudent and effective  utilization  of capital  resources is likely to result in
continued  growth  of the  Company's  base  of  earning  assets  and  result  in
additional repurchases of common stock designed to improve returns on equity and
per share performance.



                                       15
<PAGE>




The capital  ratios of the Company and Bank are adequate to continue to meet the
foreseeable  capital  needs  of the  institution.  The  following  reflects  the
Company's capital ratios at September 30, 2000 and 1999: (unaudited)


                                   Actual                  Actual
                                   September 2000          September 1999
                                   --------------          --------------

Total Risk-Based Capital           20.97%                  21.38%
Tier 1 Risk-Based Capital          19.83%                  20.28%
Leverage Ratio                     9.52%                    9.80%

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 is defined as the  sensitivity of the
Company's  income to short and long term changes in interest  rates.  One of the
primary financial  objectives of the Company is to manage its interest rate risk
and control the  sensitivity  of the  Company's  earnings to changes in interest
rates in order to  prudently  improve  net  interest  income  and the  Company's
interest rate margins and manage the maturities and interest rate  sensitivities
of assets and  liabilities.  At September 30, 2000 the  Company's  interest rate
position was slightly asset sensitive.  The extent of the position is consistent
with  parameters  established  by the  Asset  Liability  Policy.  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.  Asset
liquidity is achieved  through the  management of investment  securities,  asset
maturities  as well as  pricing  of loan and  deposit  products.  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 September
30,  2000  the  Bank  had  approximately  $25,987,000  in loan  commitments  and
unadvanced  funds  outstanding.  It is expected that these  commitments  will be
funded  primarily by deposits,  loan  repayments and maturing  investments.  The
Company and Bank maintain ample  liquidity to meet their present and foreseeable
needs.

                           FORWARD LOOKING STATEMENTS

Certain statements contained in this quarterly report, including those contained
in  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations and elsewhere,  are forward looking  statements within the meaning of
the Private  Securities  Litigation Reform Act of 1995 and thus are 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, regulation, competition and the local
and regional economy.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The main  components  of market  risk for the  Company  are equity  price  risk,
interest risk and liquidity  risk. The Company's stock is traded on the American
Stock  Exchange  and as a result the market price of its common stock may change
with market movements. The Company manages interest rate risk and liquidity risk
through an ALCO Committee  comprised of outside Directors and senior management.
The committee monitors compliance with the Bank's Asset/Liability  Policy, which
provides  guidelines to analyze and manage gap, which is the difference  between
the amount of assets and the  amounts of  liabilities,  which  mature or reprice
during  specific  time  frames.  Model  simulation  is used to measure  earnings
volatility under both rising and falling rate scenarios.  The Company's interest
rate risk and  liquidity  position has not  significantly  changed from year end
1999.

                                       16
<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-Not applicable

Item 5. - Other Information - Not applicable

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

               A.  Exhibits:
                   Exhibit 27 - Financial Data Schedule

               B.  Reports on Form 8-K:

               The Company  filed a Form 8-K on September 5, 2000 to report that
               the  Company's  Board of  Directors  declared  a  quarterly  cash
               dividend  of $.13 per  share to be paid on  October  27,  2000 to
               shareholders of record as of September 29, 2000.






                                       17
<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: November 9, 2000                    by: /s/ John F. Perotti
       -----------------                      ------------------------
                                              John F. Perotti
                                              President/Chief Executive Officer

 Date: November 9, 2000                    by: /s/ John F. Foley
       -----------------                      ------------------------
                                              John F. Foley
                                              Chief Financial Officer