SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended            March 31, 2008
                               -------------------------------

                                       OR

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

For the transition period from __________ to ________

                         Commission file number 0-24751
                                                -------

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

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

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

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

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

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in rule 12b-2 of
the Exchange Act. (Check one):

<TABLE>
<S>                           <C>                 <C>                             <C>
Large accelerated filer [ ]   Accelerated filer   [ ] Non-accelerated filer  [ ]  Smaller reporting company   [X]
</TABLE>

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         The Company had 1,685,021 shares outstanding as of May 9, 2008.

<PAGE>

                     SALISBURY BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

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

Item 1.    Financial Statements:                                                                              3

           Condensed Consolidated Balance Sheets -March 31, 2008 (unaudited)
                                and December 31, 2007                                                         4

           Condensed Consolidated Statements of Income -three months ended March 31, 2008
                                and 2007 (unaudited)                                                          5

           Condensed Consolidated Statements of Cash Flows -three months ended March 31, 2008
                                and 2007 (unaudited)                                                          6

           Notes to Condensed Consolidated Financial Statements (unaudited)                                   7

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

Item 3.    Quantitative and Qualitative Disclosures about Market Risk- Not Applicable                        16

Item 4.    Controls and Procedures                                                                           17

Part II.   OTHER INFORMATION

Item 1.    Legal Proceedings                                                                                 17

Item 1A.   Risk Factors- Not Applicable

Item 2.    Unregistered Sales of Equity 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                                                                                          17

Signatures                                                                                                   17
</TABLE>

                                      - 2 -

<PAGE>

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

                                      - 3 -

<PAGE>

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

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                  (amounts in thousands, except per share data)
                      March 31, 2008 and December 31, 2007

<TABLE>
<CAPTION>
                                                                                        March 31    December 31
                                                                                          2008          2007
                                                                                          ----          ----
ASSETS                                                                                (unaudited)
------
<S>                                                                                   <C>           <C>
Cash and due from banks                                                               $     6,423   $    12,811
Interest-bearing demand deposits with other banks                                           2,559           726
Money market mutual funds                                                                   1,361         1,341
Federal funds sold                                                                          6,615           300
                                                                                      -----------   -----------
      Cash and cash equivalents                                                            16,958        15,178
Investments in available-for-sale securities (at fair value)                              148,234       147,377
Investments in held-to-maturity securities (fair values of $70 and $71 as of
   March 31, 2008 and December 31, 2007, respectively)                                         70            71
Federal Home Loan Bank stock, at cost                                                       5,176         5,176
Loans held-for-sale                                                                           146           120
Loans, less allowance for loan losses of $2,535 as of March 31, 2008
   and $2,475 as of December 31, 2007, respectively                                       276,075       268,191
Investment in real estate                                                                      75            75
Premises and equipment                                                                      6,944         6,803
Goodwill                                                                                    9,829         9,829
Core deposit intangible                                                                     1,288         1,329
Accrued interest receivable                                                                 2,267         2,539
Cash surrender value of life insurance policies                                             3,718         3,688
Other assets                                                                                2,015         1,584
                                                                                      -----------   -----------
      Total assets                                                                    $   472,795   $   461,960
                                                                                      ===========   ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Deposits:
   Noninterest-bearing                                                                $    65,246   $    69,215
   Interest-bearing                                                                       271,349       248,526
                                                                                      -----------   -----------
      Total deposits                                                                      336,595       317,741
Federal Home Loan Bank advances                                                            86,166        95,011
Due to broker                                                                               1,045             0
Other liabilities                                                                           4,045         3,645
                                                                                      -----------   -----------
      Total liabilities                                                                   427,851       416,397
                                                                                      -----------   -----------
Shareholders' equity:
   Common stock, par value $.10 per share; authorized 3,000,000 shares; issued
     and outstanding, 1,685,021 shares at March 31, 2008 and December 31, 2007                169           169
   Paid-in capital                                                                         13,130        13,130
   Retained earnings                                                                       35,910        35,583
   Accumulated other comprehensive loss                                                    (4,265)       (3,319)
                                                                                      -----------   -----------
      Total shareholders' equity                                                           44,944        45,563
                                                                                      -----------   -----------
      Total liabilities and shareholders' equity                                      $   472,795   $   461,960
                                                                                      ===========   ===========
</TABLE>

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

                                      - 4 -

<PAGE>

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

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

                  (amounts in thousands, except per share data)
                             March 31, 2008 and 2007
                                   (unaudited)

                                                             Three Months Ended
                                                                 March 31,
                                                              2008        2007
                                                            --------   ---------
Interest and dividend income:
   Interest and fees on loans                               $  4,632   $   4,388
   Interest on debt securities:
      Taxable                                                  1,287       1,431
      Tax-exempt                                                 574         526
   Dividends on equity securities                                 78          78
   Other interest                                                 97          14
                                                            --------   ---------
       Total interest and dividend income                      6,668       6,437
                                                            --------   ---------
Interest expense:
   Interest on deposits                                        1,973       2,030
   Interest on Federal Home Loan Bank advances                 1,035       1,041
                                                            --------   ---------
       Total interest expense                                  3,008       3,071
                                                            --------   ---------
       Net interest and dividend income                        3,660       3,366
   Provision for loan losses                                      60           0
                                                            --------   ---------
       Net interest and dividend income after provision
         for loan losses                                       3,600       3,366
                                                            --------   ---------
Noninterest income:
   Trust and Wealth Advisory Services income                     600         530
   Service charges on deposit accounts                           198         180
   Gain on sales of available-for-sale securities, net           318         117
   Gain on sales of loans held-for-sale                           73          65
   Other income                                                  244         232
                                                            --------   ---------
       Total noninterest income                                1,433       1,124
                                                            --------   ---------
Noninterest expense:
   Salaries and employee benefits                              2,076       1,952
   Occupancy expense                                             231         191
   Equipment expense                                             211         191
   Data processing                                               319         337
   Insurance                                                      44          38
   Printing and stationery                                        60          64
   Professional fees                                             234         165
   Legal expense                                                  61          55
   Amortization of core deposit intangible                        41          41
   Other expense                                                 374         285
                                                            --------   ---------
       Total noninterest expense                               3,651       3,319
                                                            --------   ---------
       Income before income taxes                              1,382       1,171
Income taxes                                                     301         237
                                                            --------   ---------
       Net income                                           $  1,081   $     934
                                                            ========   =========

Earnings per common share                                   $    .64   $     .55
                                                            ========   =========

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

                                      - 5 -

<PAGE>

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

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                             (amounts in thousands)
                   Three months ended March 31, 2008 and 2007
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                           2008         2007
                                                                                           ----         ----
<S>                                                                                     <C>          <C>
Cash flows from operating activities:
   Net income                                                                           $    1,081   $      934
Adjustments to reconcile net income to net cash provided by operating
   activities:
     Amortization of securities, net                                                            24           17
     Gain on sales of available-for-sale securities, net                                      (318)        (117)
     Provision for loan losses                                                                 (60)           0
     Change in loans held-for-sale                                                             (26)         304
     Change in deferred loan costs, net                                                        (20)         (35)
     Net decrease in mortgage servicing rights                                                  18           28
     Depreciation and amortization                                                             162          540
     Amortization of core deposit intangible                                                    41           41
     Accretion of fair value adjustment on deposits/borrowings                                 (33)         (36)
     Amortization of fair value adjustment on loans                                             12           24
     Decrease in interest receivable                                                           274          189
     Deferred tax benefit                                                                        2         (414)
     Decrease in taxes receivable                                                                0          317
     Increase in prepaid expenses                                                              (37)         (50)
     Increase in cash surrender value of insurance policies                                    (30)         (30)
     Increase in income taxes payable                                                          253          323
     Increase in other assets                                                                 (173)          (7)
     (Decrease)/ increase in accrued expenses                                                  (65)          41
     Increase in interest payable                                                               46           42
     Increase/ (decrease) in other liabilities                                                 386          (57)
     Decrease in unearned income on loans                                                        6            1
                                                                                        ----------   ----------

Net cash provided by operating activities                                                    1,543        2,055
                                                                                        ----------   ----------
Cash flows from investing activities:
   Purchases of Federal Home Loan Bank stock                                                     0         (282)
   Purchases of available-for-sale securities                                              (64,317)     (16,738)
   Proceeds from sales of available-for-sale securities                                     63,349       25,219
   Proceeds from maturities of held-to-maturity securities                                       1            1
   Loan originations and principal collections, net                                        (12,314)       7,229
   Purchases of loans                                                                        4,483         (839)
   Recoveries of loans previously charged-off                                                   10           33
   Capital expenditures                                                                       (278)        (690)
                                                                                        ----------   ----------

Net cash provided by investing activities                                                   (9,066)      13,933
                                                                                        ----------   ----------

Cash flows from financing activities:
   Net increase/(decrease) in demand deposits, NOW and savings accounts                     15,567       (2,371)
   Net increase/(decrease) in time deposits                                                  3,287       (6,194)
   Federal Home Loan Bank advances                                                               0        5,000
   Principal payments on advances from Federal Home Loan Bank                                 (176)     (10,198)
   Net change in short term advances from Federal Home Loan Bank                            (8,637)      (5,000)
   Dividends paid                                                                             (738)        (438)
                                                                                        ----------   ----------

Net cash provided by (used in) financing activities                                          9,303      (19,201)
                                                                                        ----------   ----------

Net increase (decrease) in cash and cash equivalents                                         1,780       (3,213)
Cash and cash equivalents at beginning of period                                            15,178       11,757
                                                                                        ----------   ----------
Cash and cash equivalents at end of period                                              $   16,958   $    8,544
                                                                                        ==========   ==========
Supplemental disclosures:
   Interest paid                                                                        $    2,962   $    3,029
   Income taxes paid                                                                            46           11
</TABLE>

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

                                      - 6 -

<PAGE>

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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (unaudited)

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

The  accompanying   condensed  consolidated  interim  financial  statements  are
unaudited and include the accounts of Salisbury  Bancorp,  Inc. (the "Company"),
its wholly owned subsidiary  Salisbury Bank and Trust Company (the "Bank"),  and
the  Bank's   subsidiaries,   S.B.T.  Realty,  Inc.  and  SBT  Mortgage  Service
Corporation (the "PIC") formed in April 2004. The condensed consolidated interim
financial statements have been prepared in accordance with accounting principles
generally  accepted in the United States of America (GAAP) for interim financial
information and with the instructions to SEC Form 10-Q. Accordingly, they do not
include  all  the  information  and  footnotes  required  by GAAP  for  complete
financial  statements.  All significant  intercompany  accounts and transactions
have been eliminated in the consolidation.  These financial  statements reflect,
in the  opinion  of  Management,  all  adjustments,  consisting  of only  normal
recurring  adjustments,  necessary  for a fair  presentation  of  the  Company's
financial  position and the results of its operations and its cash flows for the
periods  presented.  Operating results for the three months ended March 31, 2008
are not necessarily  indicative of the results that may be expected for the year
ending  December  31,  2008.  These  financial  statements  should  be  read  in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's 2007 Annual Report on Form 10-K.

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

NOTE 2 - COMPREHENSIVE INCOME
-----------------------------

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

Comprehensive Income
                                                            Three months ended
                                                                 March 31,
                                                          2008              2007
                                                          ----              ----
                                                          (amounts in thousands)

Net income                                                $ 1,081         $ 934
Net change in unrealized holding gains or losses on
   securities and minimum pension liability adjustment,
   net of tax during period                                  (946)         (386)
                                                          -------         -----
Comprehensive income                                      $   135         $ 548
                                                          =======         =====

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

In February 2006, the Financial  Accounting  Standards  Board (FASB) issued SFAS
No. 155,  "Accounting for Certain Hybrid Instruments" (SFAS 155), which permits,
but does not require,  fair value accounting for any hybrid financial instrument
that contains an embedded derivative that would otherwise require bifurcation in
accordance  with SFAS 133. The  statement  also  subjects  beneficial  interests
issued by  securitization  vehicles to the  requirements  of SFAS No.  133.  The
statement is  effective as of January 1, 2007.  The adoption of SFAS 155 did not
have an impact on the Company's financial condition and results of operations.

In March  2006,  the FASB  issued  SFAS No. 156,  Accounting  for  Servicing  of
Financial  Assets- an amendment of FASB Statement No. 140 ("SFAS No. 156"). SFAS
156 requires any entity to  recognize a servicing  asset or servicing  liability
each time it undertakes  an obligation to service a financial  asset by entering
into a servicing contract in specific  situations.  Additionally,  the servicing
asset or servicing liability shall be initially measured at fair value; however,
an  entity  may elect the  "amortization  method"  or "fair  value  method"  for
subsequent balance sheet reporting  periods.  The adoption of this statement did
not have a material  impact on the  Company's  financial  condition,  results of
operations or cash flows.

                                      - 7 -

<PAGE>

In June 2006 the FASB issued  Interpretation No. 48, "Accounting for Uncertainty
in Income  Taxes - an  interpretation  of FASB  Statement  109" (FIN 48). FIN 48
prescribes a recognition  threshold and measurement  attribute for the financial
statement recognition and measurement of a tax position taken, or expected to be
taken, in a tax return and provides guidance on  derecognition,  classification,
interest  and  penalties,   accounting  in  interim   periods,   disclosure  and
transition.  FIN 48 is effective for fiscal years  beginning  after December 15,
2006.  The  adoption of FIN 48 did not have a material  impact on the  Company's
financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
157).  SFAS 157 defines fair value,  establishes a framework for measuring  fair
value  under  generally  accepted  accounting  principles  (GAAP)  and  enhances
disclosures about fair value  measurements.  SFAS 157 retains the exchange price
notion and clarifies that the exchange price is the price that would be received
for an asset or paid to  transfer  a  liability  (an exit  price) in an  orderly
transaction  between market  participants on the  measurement  date. SFAS 157 is
effective  for the  Company's  consolidated  financial  statements  for the year
beginning on January 1, 2008, with earlier adoption  permitted.  The adoption of
this  statement did not have a material  impact on its  financial  condition and
results of operations.

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

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and  Financial  Liabilities  including  an  amendment  of FASB
Statement  No. 115" (SFAS 159).  SFAS 159 permits  entities to choose to measure
many  financial  instruments  and certain other items at fair value that are not
currently  required to be measured at fair value.  The  objective  is to improve
financial  reporting  by providing  entities  with the  opportunity  to mitigate
volatility  in  reported   earnings  caused  by  measuring  related  assets  and
liabilities  differently  without  having  to  apply  complex  hedge  accounting
provisions.   This  Statement  also  establishes   presentation  and  disclosure
requirements  designed to facilitate  comparisons  between  entities that choose
different  measurement  attributes for similar types of assets and  liabilities.
The new  standard is effective at the  beginning  of the  Company's  fiscal year
beginning  January  1,  2008,  and early  application  may be elected in certain
circumstances.  The adoption of this statement did not have a material impact on
its financial condition and results of operations.

In  December  2007,  the FASB  issued  SFAS No. 141  (Revised  2008),  "Business
Combinations"  (SFAS  141(R)).   SFAS  141(R)  will  significantly   change  the
accounting for business  combinations.  Under SFAS 141(R),  an acquiring  entity
will be required to recognize all the assets acquired and liabilities assumed in
a transaction at the  acquisition-date  fair value with limited  exceptions.  It
also amends the  accounting  treatment  for  certain  specific  items  including
acquisition  costs  and  non  controlling  minority  interests  and  includes  a
substantial  number  of  new  disclosure   requirements.   SFAS  141(R)  applies
prospectively to business combinations for which acquisition date is on or after
January 1, 2009.  The Company does not expect the adoption of this  statement to
have a material impact on it's financial condition and results of operations.

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

                                      - 8 -

<PAGE>

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

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

                                                            Three Months Ended
                                                                March 31,
                                                             2008        2007
                                                          ---------------------

Components of net periodic benefit cost:
   Service cost                                           $ 113,750   $ 114,090
   Interest cost                                             95,000      88,977
   Expected return on plan assets                          (105,750)    (77,164)
   Amortization of:
     Prior service costs                                        223         223
     Actuarial loss                                          15,750      21,173
                                                          ---------   ---------
   Net periodic benefit cost                              $ 118,973   $ 147,299
                                                          =========   =========

The following  actuarial  weighted average  assumptions were used in calculating
net periodic benefit cost:

   Discount rate                                          6.00%          6.00%
   Average wage increase                           Graded table*   Graded table*
   Return on plan assets                                  7.50%          7.50%

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

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

<TABLE>
<CAPTION>
($ in 000s)                          Fair Value Measurements at Reporting using:
                                   Quoted Prices
                                     in Active                           Significant
                                    Markets for     Significant Other   Unobservable
                                 Identical Assets   Observable Inputs      Inputs

Description           3/31/08        (Level 1)          (Level 2)         (Level 3)
-----------           -------        ---------          ---------         ---------
<S>                   <C>        <C>                <C>                 <C>
   Available-for-
   sale securities    148,234         148,234               0                 0
                     ---------   ----------------   -----------------   ------------
   Total              148,234         148,234               0                 0
                     =========   ================   =================   ============
</TABLE>

                                      - 9 -

<PAGE>

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

Business
--------

The following  provides  Management's  comments on the  financial  condition and
results of operations of Salisbury Bancorp, Inc. (the "Company"),  a Connecticut
corporation  which is the holding  company for Salisbury  Bank and Trust Company
(the "Bank").  The Company's  sole  subsidiary is the Bank,  which has seven (7)
full service offices located in the towns of North Canaan, Lakeville,  Salisbury
and Sharon, Connecticut,  Sheffield and South Egremont,  Massachusetts and Dover
Plains,  New York. A full Trust and Wealth  Advisory  Services  Division is also
located in Lakeville  Connecticut.  The Company and Bank were formed in 1998 and
1848,  respectively.  In  order to  provide  a strong  foundation  for  building
shareholder  value and servicing  customers,  the Company  remains  committed to
investing in the technological  and human resources  necessary to developing new
personalized  financial  products  and  services  in order to better  serve both
current and future  customers in the Tri-State area.  This discussion  should be
read in conjunction  with the Company's  Annual Report on Form 10-K for the year
ended December 31, 2007.

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

Overview
--------

The  Company's  net  income  for the  three  months  ended  March  31,  2008 was
$1,081,000. This compares to net income of $934,000 for the same period in 2007.
Earnings  per share for the three  months  ended March 31, 2008 totaled $.64 per
share,  compared to earnings per share of $.55 for the  corresponding  period in
2007.  The  increase  in earnings is  primarily  attributable  to an increase in
earning  assets,  which has  resulted in an increase  in  interest  income,  and
movement in the markets,  which has created  opportunities  to generate gains in
securities  transactions during the period, which contributed to the increase in
noninterest income.

The Company's  assets at March 31, 2008 totaled  $472,795,000  compared to total
assets of  $461,960,000  at December 31, 2007.  During the first three months of
2008,  net  loans  outstanding,  not  including  loans  held-for-sale  increased
$7,884,000 to  $276,075,000.  This compares to total net loans  outstanding  not
including loans held-for-sale of $268,191,000 at December 31, 2007. The increase
is  primarily   attributable   to  increased  loan  demand  during  the  period.
Non-performing  loans  totaled  $1,030,000  at March  31,  2008 as  compared  to
non-performing  loans totaling  $1,008,000 at December 31, 2007. This represents
an increase of $22,000 or 2.18%.  The Bank  continues  to monitor the quality of
the loan portfolio to ensure that loan quality will not be sacrificed for growth
or otherwise  compromise  the Company's  objectives.  Deposits at March 31, 2008
totaled  $336,595,000  as compared to total deposits of $317,741,000 at December
31, 2007.

As of March 31,  2008,  the most recent  notification  from the Federal  Deposit
Insurance  Corporation  categorized  the Bank as "well  capitalized"  under  the
regulatory  framework for prompt corrective  action. The Bank's total risk based
capital ratio was 14.47%;  the Tier 1 capital ratio was 13.55%; and the leverage
ratio was 8.17%.  The Board of Directors  declared a first quarter cash dividend
of $.28 per common share,  which was paid on April 28, 2008 to  shareholders  of
record as of March 28, 2008. This compared to a cash dividend of $.27 per common
share that was paid for the first quarter of 2007.

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

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

                                     - 10 -

<PAGE>

                        THREE MONTHS ENDED MARCH 31, 2008
                AS COMPARED TO THREE MONTHS ENDED MARCH 31, 2007

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

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

(amounts in thousands)
Three Months ended March 31,                         2008     2007
                                                    ------   ------
Total interest and dividend income                  $6,668   $6,437
(financial statements)
Tax equivalent adjustment                              296      271
                                                    ------   ------
Total interest and dividend income
   (on an FTE basis)                                 6,964    6,708
Total interest expense                               3,008    3,071
                                                    ------   ------
Net interest and dividend income-FTE                $3,956   $3,637
                                                    ======   ======

Total  interest and  dividend  income on an FTE basis for the three months ended
March 31, 2008, when compared to the same period in 2007,  increased $256,000 or
approximately  3.82%. The increase was primarily  attributable to an increase of
earning assets.

Interest  expense  on  deposits  for the  first  three  months  of 2008  totaled
$1,973,000,  a decrease of $57,000 or 2.8% that compared to  $2,030,000  for the
same period in 2007.  This decrease is primarily the result of an environment of
generally  lower  interest  rates.  Interest  expense on Federal  Home Loan Bank
advances  decreased $6,000 during the three-month period ended March 31, 2008 to
$1,035,000. Total interest expense for the three months ended March 31, 2008 was
$3,008,000,  a decrease  of $63,000 or 2% when  compared  to the same  period in
2007.

Overall,  net interest and dividend income (on an FTE basis) increased  $319,000
or 8.8% to  $3,956,000  for the period ended March 31, 2008 when compared to the
same period in 2007.

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

Noninterest income totaled $1,433,000 for the three months ended March 31, 2008,
an increase of $309,000 or 27.4%  compared to  noninterest  income of $1,124,000
for the three months ended March 31,  2007.  Continuing  growth of the Trust and
Wealth Advisory Services Division has resulted in an increase in trust income of
$70,000 or 13.2% to $600,000 for the first three months of 2008.  Gains on sales
of available-for-sale securities, net increased 171.8% to $318,000 for the first
three months of 2008 compared to the corresponding period in 2007. This increase
is primarily  the result of the movement of market rates during the year,  which
made it possible to take advantage of opportunities presented during the period.
Other income consists  primarily of fees associated with  transaction  accounts,
fees  related to the  origination  and  servicing  of  mortgage  loans and gains
related to the sale of mortgage  loans.  Other income for the first three months
of 2008 totaled $515,000  compared to $477,000 for the same period in 2007. This
is an increase of $38,000 or 7.9%.

                                     - 11 -

<PAGE>

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

Noninterest  expense  increased  10.00%  for the first  three  months of 2008 as
compared  to the  corresponding  period  in 2007.  Professional  fees  which are
included in noninterest  expenses increased $69,000 or 41.82%.  This increase is
primarily  attributable  to the  Company's  Trust and Wealth  Advisory  Services
division's working with Bradley Foster and Sargent, Inc., an investment advisory
firm  that  assists  in  providing  a  broader  scope  of  highly   personalized
professional investment services to clients. In addition, internal audit expense
increased.  Although some increases in the described noninterest expenses in the
table below are  attributable  to normal volumes of business,  the increase also
reflects the additional  costs  associated  with the daily  operation of our new
Dover Plains, New York branch, which opened in August of 2007.

The  components  of  noninterest  expense  and the changes in the period were as
follows (amounts in thousands):

                                            2008      2007    Change   % Change
--------------------------------------------------------------------------------
Salaries and employee benefits            $ 2,076   $ 1,952   $  124       6.35
Occupancy expense                             231       191       40      20.94
Equipment expense                             211       191       20      10.47
Data processing                               319       337      (18)     (5.34)
Insurance                                      44        38        6      15.78
Printing and stationery                        60        64       (4)     (6.25)
Professional fees                             234       165       69      41.82
Legal expense                                  61        55        6      10.90
Amortization of core deposit intangible        41        41        0          0
Other expense                                 374       285       89      31.23
                                          -------   -------   ------   ---------
      Total noninterest expense           $ 3,651   $ 3,319   $  332      10.00
                                          =======   =======   ======

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

The income tax provision for the first three months of 2008 totaled  $301,000 in
comparison to $237,000 for the same three-month period in 2007, due to increased
taxable income.

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

Overall, net income totaled $1,081,000 for the three months ended March 31, 2008
and  represents  earnings  of $.64 per  share.  This  compares  to net income of
$934,000 or $.55 per share for the same period in 2007.

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

Total assets at March 31, 2008 were  $472,795,000,  compared to  $461,960,000 at
December 31, 2007, an increase of approximately  2.3%. The increase is primarily
the result of an increase  in earning  assets that were funded by an increase in
deposits during the quarter.

Securities
----------

During the three months ended March 31, 2008,  the securities  portfolio,  which
includes Federal Home Loan Bank stock, increased slightly by $856,000 or .56% to
$153,480,000 from $152,624,000 at December 31, 2007. The securities portfolio is
diversified among U.S. Government sponsored agencies, mortgage-backed securities
and securities issued by states of the United States and political  subdivisions
of the states.

Securities   are   classified   in   the   portfolio   as   either    securities
available-for-sale  or securities  held-to-maturity.  Almost all  securities are
classified as available-for-sale.  The securities reported as available-for-sale
are stated at fair value in the financial statements of the Company.  Unrealized
holding gains and losses on  available-for-sale  securities  (accumulated  other
comprehensive  loss) are not  included in  earnings,  but are  reported as a net
amount (less expected tax) in a separate component of capital until realized. At
March 31, 2008, the unrealized loss net of tax was $3,229,000.  This compares to
an unrealized  loss net of tax of  $2,273,000  at December 31, 2007.  Management
monitors the market value fluctuations of its securities  portfolio on a monthly
basis as well as associated credit

                                     - 12 -

<PAGE>

ratings to determine potential  impairment of a security.  The unrealized losses
in these securities are mainly attributable to changes in market interest rates.
Management  deems  the  securities  that are  currently  in an  unrealized  loss
position as not other than  temporarily  impaired.  The  securities  reported as
securities held-to-maturity are stated at amortized cost.

Lending
-------

Total loans outstanding of $278,284,000 at March 31, 2008 increased  compared to
total loans  outstanding  of  $270,361,000  at  December  31,  2007.  This is an
increase of $7,923,000 or 2.9%. New business  development during the first three
months of 2008 coupled with an increase in loan demand resulted in the increase,
which was  primarily  with respect to real estate loans.  Competition  for loans
remains aggressive in the Bank's market area.

The following  table  represents the  composition of the loan portfolio at March
31, 2008 and December 31, 2007:

                                              March 31, 2008   December 31, 2007
                                              --------------   -----------------
                                                    (amounts in thousands)
Commercial, financial and agricultural           $  18,073         $  20,629
Real Estate-construction and land
   development                                      30,341            28,928
Real Estate-residential                            164,838           158,600
Real Estate-commercial                              56,749            53,823
Consumer                                             7,978             8,005
Other                                                  305               376
                                                 ---------         ---------
                                                   278,284           270,361
Deferred costs, net                                    326               306
Unearned income                                          0                (1)
Allowance for loan losses                           (2,535)           (2,475)
                                                 ---------         ---------
Net Loans                                        $ 276,075         $ 268,191
                                                 =========         =========

At March 31, 2008 and December 31,  2007,  approximately  90% of the Bank's loan
portfolio was related to real estate products.

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

Credit risk is inherent in the business of extending  loans.  The Bank  monitors
the loan portfolio to ensure that loan quality will not be sacrificed for growth
or otherwise  compromise the Bank's  objectives.  Because of the risk associated
with extending  loans, the Bank maintains an Allowance for Loan and Lease Losses
("ALLL")  through  charges to earnings.  The Bank determined that a provision of
$60,000 was  warranted  for the first three months of 2008 to keep pace with the
growth of the loan portfolio. No provision for loan losses was warranted for the
first three month period of 2007.

The Bank  evaluates the adequacy of the allowance no less  frequently  than on a
quarterly basis. No material changes have been made in the estimation methods or
assumptions  that the Bank uses in making this  determination  during the period
ended  March 31,  2008.  Such  evaluations  are based on  assessments  of credit
quality and "risk  rating" of loans by senior  management,  which is reviewed by
the Bank's Loan  Committee on a regular  basis.  Loans are initially  risk rated
when originated.  If there is  deterioration  in the credit,  the risk rating is
adjusted accordingly

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

                                     - 13 -

<PAGE>

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

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

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

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

The credit card delinquency and loss history is separately evaluated and given a
special loan loss factor because management  recognizes the higher risk involved
in such  loans.  Concentrations  of credit and local  economic  factors are also
evaluated on a periodic  basis.  Historical  average net losses by loan type are
examined as well as trends by type.  The Bank's loan mix over the same period is
also analyzed.  A loan loss  allocation is made for each type of loan multiplied
by the loan mix  percentage  for each loan type to  produce a  weighted  average
factor.

Non-performing  loans,  which include all loans that are on a non-accrual status
along  with  loans  that are 90 days or more  past due and still  accruing,  are
closely monitored by management.  At March 31, 2008, nonperforming loans totaled
$1,030,000 or 0.37% of total loans  outstanding of  $278,284,000.  The allowance
for loan losses totaled $2,535,000,  representing 246.12% of nonperforming loans
and .91% of total  loans  outstanding  at March 31,  2008.  Nonperforming  loans
totaled  $1,008,000  or .37% of  total  loans  outstanding  of  $270,361,000  at
December 31, 2007. The allowance for loan losses totaled  $2,475,000 at December
31, 2007 and represented  245.53% of nonperforming loans and .92% of total loans
outstanding  net of term  federal  funds  sold.  A total of $10,000 of loans was
charged off by the Bank during the three  months  ended  March 31,  2008.  These
charged-off loans consisted  primarily of deposit  overdrafts.  This compares to
loans  charged  off during the three  month  period  ended  March 31,  2007 that
totaled  $39,000.  A total  of  $10,000  of  previously  charged-off  loans  was
recovered during the three month period ended March 31, 2008. Recoveries for the
same period in 2007 totaled  $34,000.  While  management  estimates  loan losses
using the best  available  information,  no assurances  can be given that future
additions to the  allowance  will not be necessary  based on changes in economic
and real  estate  market  conditions,  further  information  obtained  regarding
problem  loans,  identification  of additional  problem loans or other  factors.
Additionally,  future  additions to the  allowance  may be necessary to maintain
adequate coverage ratios.

Deposits
--------

The Company offers a variety of deposit  accounts with a range of interest rates
and terms.  The following  table  illustrates  the  composition of the Company's
deposits at March 31, 2008 and December 31, 2007:

                                March 31, 2008   December 31, 2007
                                --------------   -----------------
                                      (amounts in thousands)

Demand                           $   65,246         $   69,215
NOW                                  22,679             23,652
Money Market                         72,053             56,210
Savings                              57,282             52,616
Time                                119,335            116,048
                                 ----------         ----------
Total Deposits                   $  336,595         $  317,741
                                 ==========         ==========

Deposits  constitute the principal funding source of the Company's assets. A key
strategic  objective is to grow the core deposit base.  New product  development
initiatives,  added  convenience,  quality service and  competitive  pricing are
strategies  focused  on  growing  our  financial   relationships  with  existing
customers and establishing and building

                                     - 14 -

<PAGE>

relationships with new customers.  Brokered deposits are also used as a means of
funds  generation.  Funding needs are considered and relative costs are analyzed
in determining the suitability of brokered deposits. At March 31, 2008, brokered
deposits  totaled  $22,325,000.  This  compares  to brokered  deposits  totaling
$15,526,000 at December 31, 2007.

Borrowings
----------

The Company  utilizes  advances  from the Federal  Home Loan Bank as part of its
operating  strategy to supplement  deposit  growth and fund its asset growth,  a
strategy that is designed to increase  interest income.  These advances are made
pursuant to various credit programs, each of which has its own interest rate and
range of  maturities.  At  March  31,  2008,  the  Company  had  $86,166,000  in
outstanding  advances from the Federal Home Loan Bank compared to $95,011,000 at
December 31, 2007. While the volume of FHLB advances  decreased by $9,845,000 or
10.36% from year-end,  management  expects that it will continue its strategy of
supplementing deposit growth with advances from the Federal Home Loan Bank.

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

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

To  quantify  the extent of these  risks,  both in its current  position  and in
actions it might  take in the  future,  interest  rate risk is  monitored  using
various  analyses which identify the differences  between assets and liabilities
that  mature  or  reprice  during  specific  time  frames.  In  addition,  model
simulation  is used to develop  scenario  analyses of the  Company's  assets and
liability  balances  to measure how much net  interest  income is "at risk" from
sudden  rate  movements  of 100,  200 and 300  basis  points  either  upward  or
downward. As interest rates rise or fall, these simulations incorporate expected
future lending rates,  current and expected funding sources and cost, changes in
prepayment  rates,  and other factors which may be important in determining  the
future growth of net interest  income.  The level of interest rate risk at March
31, 2008 is within the limits approved by the Board of Directors.

Liquidity
---------

Liquidity is the ability to raise funds on a timely basis at an acceptable  cost
in  order  to meet  cash  needs.  Adequate  liquidity  is  necessary  to  handle
fluctuations in deposit levels,  to provide for customers'  credit needs, and to
take advantage of investment  opportunities  as they are presented.  The Company
manages  liquidity  primarily  with readily  marketable  investment  securities,
deposits and loan repayments. The Company's subsidiary, the Bank, is a member of
the Federal Home Loan Bank of Boston.  This enhances the  liquidity  position by
providing a source of available  borrowings.  At March 31, 2008, the Company had
approximately  $58,109,000 in loan commitments outstanding.  Management believes
that the current  level of  liquidity is ample to meet the  Company's  needs for
both the present and foreseeable future.

Capital
-------

At March 31,  2008,  the Company had  $44,944,000  in  shareholders'  equity,  a
decrease of $619,000 or 1.4 % when  compared to December 31, 2007  shareholders'
equity totaling  $45,563,000.  The majority of the Company's  investments are as
classified as  available-for-sale  and  therefore are marked to market  monthly.
Movement in the market during the quarter resulted in an increase in accumulated
other  comprehensive  loss to  $4,265,000  at March 31, 2008 from  $3,319,000 at
December 31, 2007.  This  reflects the decrease in capital as net income for the
three-month period ended March 31, 2008 totaled $1,081,000.

A review and analysis of securities has determined that there has been no credit
deterioration and that the unrealized

                                     - 15 -

<PAGE>

loss  on  securities  available-for-sale  is due to the  current  interest  rate
environment,   and  management  deems  the  securities  to  be  not  other  than
temporarily  impaired.  Under  current  regulatory  definitions,   the  Bank  is
considered to be "well capitalized" for capital adequacy purposes.  As a result,
the Bank pays the lowest federal deposit  insurance  deposit premiums  possible.
One primary measure of capital adequacy for regulatory  purposes is based on the
ratio of risk-based  capital to risk-weighted  assets.  This method of measuring
capital adequacy helps to establish capital requirements that are more sensitive
to the differences in risk associated with various assets. It takes into account
off-balance  sheet  exposure in  assessing  capital  adequacy  and it  minimizes
disincentives to holding liquid, low-risk assets. At March 31, 2008, the Company
had a total consolidated risk based capital ratio of 14.47%, a Tier 1 risk based
capital ratio of 13.55% and a leverage ratio of 8.17%.  This compares to a total
consolidated  risk based  capital  ratio of 15.00%,  a Tier 1 risk based capital
ratio of 14.06% and a leverage ratio of 8.24% at December 31, 2007.  Maintaining
strong capital is essential to bank safety and soundness. However, the effective
management of capital resources requires generating attractive returns on equity
to build value for shareholders while maintaining  appropriate levels of capital
to fund growth,  meet  regulatory  requirements  and be consistent  with prudent
industry  practices.  Management believes that the capital levels of the Company
and Bank are adequate to continue to meet the  foreseeable  capital needs of the
institutions.

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

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

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

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

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

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

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

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

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

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

                                     - 16 -

<PAGE>

    Item 3. Quantitative and Qualitative Disclosures about Market Risk - Not
                                   Applicable

                        Item 4. Controls and Procedures.

The Company's Chief  Executive  Officer and Chief  Financial  Officer  concluded
that,  based upon an  evaluation  as of March 31,  2008,  as  required  by Rules
13a-15(b) of the  Securities  Exchange  Act of 1934 (the  "Exchange  Act"),  the
Company's disclosure controls and procedures as defined in Rule 13a-15(e) of the
Exchange Act are effective to ensure that  information  required to be disclosed
by the Company in reports  that it files or submits  under the  Exchange  Act is
recorded,  processed,  summarized and reported within the time periods specified
in the SEC's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  is  accumulated  and  communicated  to the  Company's
Management,  including its Chief Executive Officer and Chief Financial  Officer,
as  appropriate,  to allow timely  discussions  regarding  required  disclosure.
During the three month period ended March 31, 2008, there were no changes in the
Company's internal control over financial reporting that materially affected, or
are reasonably likely to materially  affect, the Company's internal control over
financial reporting.

                           Part II - OTHER INFORMATION

Item 1. - Legal Proceedings. None.

Item 1A. - Risk Factors. Not applicable

Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds. None.

Item 3. - Defaults Upon Senior Securities. None.

Item 4. - Submission of Matters to a Vote of Security Holders. None.

Item 5. - Other Information. None.

Item 6. - Exhibits.

            11 -Computation of Earnings per Share.

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

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

            32 -Section 1350 Certifications.

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
      registrant  has duly  caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.

                                                SALISBURY BANCORP, INC.

         Date: May 12, 2008                     by: /s/ John F. Perotti
               ------------                         -------------------
                                                    John F. Perotti
                                                    Chief Executive Officer

         Date: May 12, 2008                     by: /s/ John F. Foley
               ------------                         -----------------
                                                    John F. Foley
                                                    Chief Financial Officer

                                     - 17 -