UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM 10-K

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

Commission file number 000-23904
                       ---------


                            SLADE'S FERRY BANCORP
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)


             MASSACHUSETTS                              04-3061936
    -------------------------------               ----------------------
    (State or other jurisdiction of                  (I.R.S. Employer
    incorporation or organization)                Identification Number)


        100 Slade's Ferry Avenue
        Somerset, Massachusetts                           02726
----------------------------------------               ----------
(Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code: (508) 675-2121

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock,
$.01 par value

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 and (2) has been subject to such filing
requirements for the past 90 days.

                           Yes    X      No
                                -----        -----

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-K contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K.    [ ]

The aggregate market value of the voting stock of Slade's Ferry Bancorp, held
by nonaffiliates of the registrant as of February 29, 2000 was approximately
$29,008,125. On that date, there were 3,718,020.5 shares of Slade's Ferry
Bancorp Common Stock, $.01 par value outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

ANNUAL REPORT to security holders for fiscal year ended December 31, 1999
incorporated by reference into Parts I and II. Proxy Statement for Annual
Meeting of Stockholders April 10, 2000 incorporated by reference into Part
III.


                                   PART I

                                   ITEM 1

                                  BUSINESS


Description of Business

Business of Slade's Ferry Bancorp
---------------------------------

      Slade's Ferry Bancorp ("the Company") is a business corporation that was
organized under the laws of the Commonwealth of Massachusetts on June 13, 1989
as Weetamoe Bancorp. The name Weetamoe Bancorp was changed to Slade's Ferry
Bancorp effective January 1, 1997. The office of Slade's Ferry Bancorp is
located at the office of the Bank at 100 Slade's Ferry Avenue, Somerset,
Massachusetts, 02726, and its telephone number is the same as the Bank's:
(508)675-2121.

      The Company was organized for the purpose of becoming the holding
company of the Bank. The Company's acquisition of the Bank was completed on
April 1, 1990. The Bank (Slade's Ferry Trust Company) is a wholly-owned
subsidiary of Slade's Ferry Bancorp.

Competition
-----------

      The primary business of Slade's Ferry Bancorp is the ongoing business of
the Bank. The competitive conditions to be faced by Slade's Ferry Bancorp will
be the same as those faced by the Bank. It is likely that, as a holding
company, it may compete with other holding companies engaged in bank-related
activities. Thus, the Company will face competition in undertaking to acquire
other banks, financial institutions or companies engaged in bank-related
activities, and in operating subsequent to any such acquisitions.

      While the Company investigates opportunities to acquire other banks or
bank facilities when they occur and may in the future acquire other banks,
financial institutions, or bank facilities, it is not currently engaged in any
such acquisition.

Employees
---------

      At present there are four employees of the Bank and the Company whose
compensation is paid by the Company. Although the Company has no current plans
to do so, if the Company should acquire other financial institutions or pursue
other lines of business, it may at such time hire additional employees.

Business of Slade's Ferry Trust Company
---------------------------------------

      On September 30, 1959, the Slade's Ferry Trust Company opened for
business as a state chartered trust company incorporated under the laws of the
Commonwealth of Massachusetts and as a member of the Federal Deposit Insurance
Corporation (FDIC). The founders were a group of individuals from Somerset,
Swansea, Fall River and Seekonk, Massachusetts who recognized the need for a
local bank committed to personalized services.

      During the past three years, assets of the Bank increased by $66.8
Million. In January 1999, the Bank opened a branch banking facility at 1601
South Main Street, Fall River, and in March 1999, a branch banking facility
was opened at 833 Ashley Boulevard, New Bedford, Massachusetts. The Bank
currently has twelve banking facilities extending east from Seekonk,
Massachusetts to Fairhaven, Massachusetts. The Bank also provides limited
banking services at the Somerset High School. In addition, the Bank in 1999
received regulatory approval to establish a loan production office in Rhode
Island. The office is named the Slade's Ferry Loan Company and is a subsidiary
of Slade's Ferry Trust Company. The purpose for the loan production office is
to solicit commercial and consumer borrowers in the Rhode Island area.  The
office is prohibited from accepting deposits and payments.

      In June 1999, the Bank implemented certain state tax planning strategies
by establishing a Real Estate Investment Trust (REIT) as a subsidiary of
Slade's Ferry Trust Company. The REIT, named the Slade's Ferry Preferred
Capital Corporation, provides the means for the Bank to invest into the REIT
certain designated, bank-owned real estate mortgage loans. The income derived
on these loans is taxed at a reduced state tax rate.

      The Bank currently services numerous communities in Southeastern
Massachusetts and contiguous areas of Rhode Island through its twelve
facilities in Fall River, Somerset, Swansea, Seekonk, New Bedford and
Fairhaven, and its loan production office in Warwick, Rhode Island.

      The Bank's major customer base consists of almost 31,000 personal
savings, checking and money market accounts and 8,481 personal certificates of
deposit and individual retirement accounts. Its commercial base consists of
over 3,485 checking, money market, corporate, and certificate of deposit
accounts.

      The Bank does not have any major target accounts, nor does it derive a
material portion of its deposits from any single depositor. It is a retail
bank that services the needs of the local communities, and its loans are not
concentrated within any single industry or group of related industries that
would have any possible adverse effect on the business of the Bank. The Bank's
business is not seasonal and its loan demand is well diversified. As of
December 31, 1999, commitments under standby letters of credit aggregate
approximately $2,050,559.

Services
--------

      The Bank engages actively in a broad range of banking activities,
including demand, savings, time deposits, related personal and commercial
checking account services, real estate mortgages, commercial and installment
lending, payroll services, money orders, travelers checks, Visa, Mastercard,
safe deposit rentals, automatic teller machines and cash management services.
The Bank offers a full range of commercial, installment, student, and real
estate loans. The service area of the Bank is approximately 300 square miles,
including the southern geographic area of Bristol County, Massachusetts and
extends over to the towns of Tiverton, Warren, Bristol and Barrington in the
state of Rhode Island.

Competition
-----------

      The banking business in the market area served by the Bank is highly
competitive. The Bank actively competes with other banks, financial
institutions, and credit unions, including major banks and bank holding
companies which have numerous offices and affiliates operating over wide
geographic areas. The Bank competes for deposits, loans, and other business
with these institutions.

      Many of the major commercial banks, or other affiliates in the service
areas of the Bank, offer services such as international banking, and
investment and trust services which are not offered directly by the Bank.

Supervision and Regulation

Holding Company Regulation
--------------------------

      Under the Federal Bank Holding Company Act ("BHCA"), the prior approval
of the Federal Reserve Board ("FRB") is required before a corporation may
acquire control of a bank. FRB approval must also be obtained before a bank
holding company acquires all or substantially all of the assets of a bank, or
merges or consolidates with another bank holding company. In considering any
applications for approval of an acquisition or merger, the FRB is required to
consider the financial and managerial resources of the companies and banks
concerned, and the convenience and needs of the communities to be served.

      As a registered bank holding company, the Company is required to file
with the FRB annual and periodic reports and such other additional information
as the Board may require. The Company and its subsidiaries are also subject to
continuing regulation, supervision and examinations by the FRB.

      A bank holding company, with certain exceptions, may not acquire more
than 5% of the voting shares of any company that is not a bank and may not
engage, directly or through subsidiaries, in any activity other than banking,
managing or controlling banks, or furnishing services to or performing
services for its subsidiaries, without prior approval of the FRB. The FRB is
authorized to approve the ownership by a bank holding company of voting shares
of any company whose activities the FRB determines to be so closely related to
banking or managing or controlling banks as to be a proper incident thereof.
Under the FRB's current regulations, and subject to certain restrictions and
limitations specified therein, bank holding companies and their subsidiaries
may be permitted by the FRB to engage in such non-banking activities as: (1)
making, acquiring, or servicing loans or other extensions of credit such as
would be made by a mortgage, finance, credit card, or factoring company; (2)
operating an industrial bank or industrial loan company; (3) performing the
functions of a trust company; (4) acting as an investment or financial
advisor; (5) leasing real or personal property or acting as an agent or broker
in leasing such property or acting as an agent or broker in leasing property
in certain situations; (6) making investments to promote community welfare;
(7) providing certain data processing and transmission services; (8) acting as
principal, agent, or broker with respect to insurance directly related to
extensions of credit by the bank holding company or its subsidiaries, and
engaging in certain other insurance activities subject to specified conditions
and limitations; (9) providing courier services for checks and certain other
instrument exchanges among banks, and for audit and accounting media of a
banking or financial nature; (10) providing management consulting advice under
specified conditions to banks not affiliated with the bank holding company;
(11) issuing and selling retail money orders having a face value of not more
than $1,000 and travelers checks and selling U.S. Savings Bonds; (12)
performing appraisals of real and personal property; (13) arranging commercial
real estate equity financing under certain circumstances; (14) providing
securities brokerage services as agent for the accounts of customers; (15)
underwriting and dealing in certain government obligations and money market
instruments; (16) providing foreign exchange advisory and transactional
services; (17) acting as a futures commission merchant in specified capacities
or providing investment advice as a futures commission merchant or commodity
trading advisor with respect to certain financial futures contracts and
options; (18) providing consumer financial counseling services; (19) providing
tax planning and preparation services; (20) providing check guaranty services
to subscribing merchants; (21) operating a collection agency; and (22)
operating a credit bureau. In addition, a bank holding company may file an
application for FRB approval to engage, directly or through subsidiaries, in
other nonbank activities that the holding company reasonably believes are so
closely related to banking as to be a proper incident thereto.

      In addition, pursuant to the Bank Export Services Act of 1982, a bank
holding company may invest up to 5% of its consolidated capital and surplus in
shares of an export trading company unless such investment is disapproved by
the FRB after notice as provided in that Act.

      As a bank holding company, the Company will be required to give the FRB
prior written notice of any purchase or redemption of its outstanding equity
securities if the gross consideration for the purchase or redemption, when
combined with the net consideration paid for all such purchases or redemptions
during the preceding 12 months, is equal to 10% or more of Bancorp's
consolidated net worth. The FRB may disapprove such a purchase or redemption
if it determines that the proposal would violate any law, regulation, FRB
order, directive, or any condition imposed by, or written agreement with, the
FRB.

      The status of the Company as a registered bank holding company under the
BHCA does not exempt it from certain federal and state laws and regulations
applicable to corporations generally, including, without limitation, certain
provisions of the federal securities laws.

      Under Massachusetts law, Board of Bank Incorporation approval is
required before any company may become a bank holding company by directly or
indirectly owning, controlling or holding the power to vote 25% or more of the
voting stock of two or more banks. Further, such approval is required prior to
a bank holding company's (i) acquiring voting stock of another bank
institution if, as a result of the acquisition, such acquirer would, directly
or indirectly, own or control more than 5% of the voting stock of such
institution, or (ii) engaging in certain other transactions. The Company is
not considered a bank holding company under Massachusetts law since it does
not control two or more banks. The activities of the Company, however, will be
limited under Massachusetts law to activities described above which would be
permissible for a bank holding company registered under the BHCA. In addition,
the acquisition by the Company of 25% or more of the voting stock or the power
to elect a majority of the directors of another commercial bank, savings bank,
cooperative bank, or savings and loan association would subject the Company to
regulation as a bank holding company under applicable Massachusetts law and
would require the approval of the Massachusetts Board of Bank Incorporation.

Bank Regulation
---------------

      As a Massachusetts-chartered, FDIC-insured trust company, the Bank is
subject to regulation and supervision by the Commissioner of Banks, the FDIC
and the FRB.

      The Massachusetts statutes and regulations govern, among other things,
investment powers, deposit activities, borrowings, maintenance of surplus and
reserve accounts, distribution of earnings, and payment of dividends. The Bank
is also subject to state regulatory provisions covering such matters as
issuance of capital stock, branching, and mergers and acquisitions.

      Deposit accounts at the Bank are insured by the FDIC, generally up to a
maximum of $100,000 per insured depositor. As an insurer of deposits of
certain thrift institutions and commercial banks, the FDIC issues regulations,
conducts examinations, requires the filing of reports, and generally
supervises the operations of institutions to which it provides deposit
insurance. The approval of the FDIC is required prior to any merger or
consolidation with another financial institution, or the establishment or
relocation of an office facility. This supervision is intended primarily for
the protection of depositors.

      As an FDIC-insured bank, the Bank is subject to certain FDIC
requirements designed to maintain the safety and soundness of individual banks
and the banking system. The FDIC periodically conducts examinations of insured
institutions and, based upon appraisals, may revalue assets of an insured
institution and require establishment of specific reserves in amounts equal to
the difference between such revaluation and the book value of the assets. In
addition, the FDIC has a regulation which defines and sets minimum
requirements for capital adequacy.

      Bank regulators have implemented risk based capital guidelines that
require a bank to maintain certain minimum capital as a percent of such bank's
assets and certain off-balance sheet items adjusted for predefined credit risk
factors (risk adjusted assets). Under the requirements a minimum level of
capital will vary among banks on safety and soundness of operation. At
December 31, 1999 the minimum regulatory capital level of Risk Based Capital
was 4% for Tier 1 Capital, 8% for Total Capital and Leverage Capital was 4%.

      The Company, the Bank, the Slade's Ferry Realty Trust, the Slade's Ferry
Securities Corporation, the Slade's Ferry Preferred Capital Corporation, and
the Slade's Ferry Loan Company are "affiliates" within the meaning of the
Federal Reserve Act. Certain provisions of the Federal Reserve Act, made
applicable to the Bank by Section 18(j) of the Federal Deposit Insurance Act
and administered with respect to the Bank by the FDIC, limit the amounts of
and establish collateral requirements with respect to the Bank's loans or
extensions of credit to and investments in affiliates. In addition, related
provisions of the Federal Reserve Act and FRB regulations also administered
with respect to the Bank by the FDIC limit the amounts of and establish
required procedures and credit standards with respect to loans and other
extensions of credit to officers, directors and principal stockholders of the
Bank, of the Company, and of any subsidiaries of the Company, and to related
interests of such persons.

Recent Regulatory Examinations
------------------------------

      During the most recent regulatory examinations of the Company and the
Bank, encompassing year end 1998 and three months ending March 31, 1999, no
major or consequential violations were found.

Statistical Information
-----------------------

      The following supplementary information required under Guide 3
(Statistical Disclosure by Bank Holding Companies) should be read in
conjunction with the related financial statements and notes thereto, which are
a part of this report.

DISTRIBUTION OF ASSETS, LIABILITIES, AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL

      The following table sets forth the Company's average assets,
liabilities, and stockholders' equity, interest income earned and interest
paid, average rates earned and paid, and the net interest margin for the
periods ending December 31, 1999, December 31, 1998, and December 31, 1997.
Averages are daily averages.

<TABLE>
<CAPTION>

                                           1999                             1998                             1997
--------------------------------------------------------------------------------------------------------------------------------
                               Average  Interest(1)  Avg. Int.  Average  Interest(1)  Avg. Int.  Average  Interest(1)  Avg. Int.
(Dollars in Thousands)         Balance    Inc/Exp      Rate     Balance    Inc/Exp      Rate     Balance    Inc/Exp      Rate
--------------------------------------------------------------------------------------------------------------------------------

<S>                            <C>        <C>          <C>      <C>        <C>          <C>      <C>        <C>          <C>
ASSETS:
Earning Assets (2)
  Commercial Loans             $ 47,386   $ 4,218      8.90%    $ 42,244   $ 3,953      9.36%    $ 36,195    $ 3,466      9.58%
  Commercial Real Estate        136,648    12,876      9.42      118,939    11,630      9.78      110,093     10,740      9.76
  Residential Real Estate        37,523     2,778      7.40       45,781     3,520      7.69       52,894      4,116      7.78
  Consumer Loans                  7,678       657      8.56        6,767       652      9.63        6,503        659     10.13
--------------------------------------------------------------------------------------------------------------------------------
  Total Loans                   229,235    20,529      8.96      213,731    19,755      9.24      205,685     18,981      9.23
  Federal Funds Sold              5,563       259      4.66       12,214       630      5.16       11,309        607      5.37
  U.S. Treas/Govt Agencies       68,523     4,114      6.00       54,842     3,366      6.14       49,682      3,099      6.24
  States & Political
   Subdivisions                  11,505       748      6.50        9,763       649      6.65        6,948        477      6.87
  Mutual Funds                       71         3      4.23          209        14      6.70          301         15      4.98
  Marketable Equity
   Securities                     3,470        78      2.25        2,761       105      3.80        2,518        120      4.77
  Other Investments               1,102        71      6.44            6         0      0.00          126          8      6.35
--------------------------------------------------------------------------------------------------------------------------------
  Total Earning Assets          319,469   $25,802      8.08%     293,526   $24,519      8.35%     276,569    $23,307      8.43%
--------------------------------------------------------------------------------------------------------------------------------
  Allowance for Loan Losses      (3,814)                          (3,602)                          (3,474)
  Unearned Income                  (640)                            (715)                            (665)
  Cash and Due From Banks        14,320                           12,186                           11,366
  Other Assets                   17,371                           15,376                           14,022
--------------------------------------------------------------------------------------------------------------------------------
Total Assets                   $346,706                         $316,771                         $297,818
================================================================================================================================

LIABILITIES & STOCKHOLDERS' EQUITY:
  Savings                      $ 48,442   $ 1,022      2.11%    $ 43,885   $ 1,075      2.45%    $ 42,642    $ 1,067      2.50%
  NOW's                          38,404       994      2.59       38,764     1,196      3.09       37,739      1,202      3.19
  Money Market Accounts          12,188       215      1.76       13,777       273      1.98       14,116        281      1.99
  CD's > $100M                   26,857     1,325      4.93       22,945     1,266      5.52       23,162      1,256      5.42
  Other Time Deposits           130,393     6,778      5.20      119,118     6,700      5.62      109,278      6,460      5.91
  Other Borrowings                6,413       420      6.55        2,933       201      6.85        2,114        146      6.91
--------------------------------------------------------------------------------------------------------------------------------
  Total Interest-bearing
   Liabilities                  262,697   $10,754      4.09%     241,422   $10,711      4.44%     229,051    $10,412      4.55%
--------------------------------------------------------------------------------------------------------------------------------
  Demand Deposits                52,261                           46,217                           43,724
  Other Liabilities               1,057                            1,063                            1,847
--------------------------------------------------------------------------------------------------------------------------------
  Total Liabilities             316,015                          288,702                          274,622
--------------------------------------------------------------------------------------------------------------------------------
  Common Stock                       35                               34                               30
  Paid-in Capital                22,646                           21,448                           16,899
  Retained Earnings               8,492                            6,395                            6,308
  Net Unrealized Gain (Loss)
   on Available-for-Sale
   Securities                      (482)                             192                              (41)
--------------------------------------------------------------------------------------------------------------------------------
  Total Stockholders' Equity     30,691                           28,069                           23,196
--------------------------------------------------------------------------------------------------------------------------------
Total Liabilities &
 Stockholders' Equity          $346,706                         $316,771                         $297,818
================================================================================================================================
Net Interest Income                       $15,048                          $13,808                           $12,895
================================================================================================================================
Net Interest Spread                                    3.99%                            3.91%                             3.88%
================================================================================================================================
Net Yield on Earning Assets                            4.71%                            4.70%                             4.66%
================================================================================================================================

<FN>
<F1>  On a fully taxable equivalent basis based on tax rate of 34%. Interest
      income on investments and net interest income includes a fully taxable
      equivalent adjustment of $249,000 in 1999, $212,000 in 1998, and
      $157,000 in 1997.
<F2>  Average balance includes non-accruing loans. The effect of including
      such loans is to reduce the average rate earned on the Company's loans.
</FN>
</TABLE>

          NET INTEREST INCOME - CHANGES DUE TO VOLUME AND RATE (1)

<TABLE>
<CAPTION>

                                                1999 vs 1998                         1998 vs 1997
                                                  Increase                             Increase
                                                 (Decrease)                           (Decrease)
---------------------------------------------------------------------------------------------------------
                                       Total       Due to     Due to        Total       Due to     Due to
(Dollars in Thousands)               Change(2)     Volume      Rate       Change(2)     Volume      Rate
---------------------------------------------------------------------------------------------------------

<S>                                  <C>          <C>         <C>          <C>         <C>        <C>
Interest Income:
  Federal Funds Sold                 $  (371)     $  (326)    $   (45)     $    23     $    48    $   (25)
  US Treas/Govt Agencies                 748          830         (82)         267         320        (53)
  States & Political Subdivisions         99          115         (16)         172         190        (18)
  Mutual Funds                           (11)          (8)         (3)          (1)         (5)         4
  Marketable Securities                  (27)          21         (48)         (15)         10        (25)
  Other Investments                       71           71         -0-           (8)         (4)        (4)
  Commercial Loans                       265          469        (204)         487         574        (87)
  Commercial Real Estate               1,246        1,700        (454)         890         864         26
  Residential Real Estate               (742)        (623)       (119)        (596)       (550)       (46)
  Consumer Loans                           5           83         (78)          (7)         26        (33)
---------------------------------------------------------------------------------------------------------
  Total Interest Income                1,283        2,332      (1,049)       1,212       1,473       (261)
---------------------------------------------------------------------------------------------------------

Interest Expense:
  Savings Accounts                       (53)         104        (157)           8          31        (23)
  NOW Accounts                          (202)         (10)       (192)          (6)         32        (38)
  Money Market Accounts                  (58)         (30)        (28)          (8)         (7)        (1)
  CD's > 100 M                            59          204        (145)          10         (12)        22
  Other Time Deposits                     78          610        (532)         240         568       (328)
  Other Borrowings                       219          233         (14)          55          56         (1)
---------------------------------------------------------------------------------------------------------
  Total Interest Expense                  43        1,111      (1,068)         299         668       (369)
---------------------------------------------------------------------------------------------------------
Net Interest Income                   $1,240       $1,221     $    19      $   913     $   805    $   108
=========================================================================================================

<FN>
<F1>  Changes in interest income and interest expense attributable to change
      in both volume and rate have been allocated equally to changes due to
      volume and changes due to rate.
<F2>  The change in interest income on investments and net interest income
      includes interest on a fully taxable equivalent basis based on a tax
      rate of 34%.
</FN>
</TABLE>

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

      The Company considers interest rate risk to be a significant market risk
as it could potentially have an effect on the Company's financial condition
and results of operation. The definition of interest rate risk is the exposure
of the Company's earnings to adverse movements in interest rates. Volatility
in interest rates requires the Company to manage interest rate risk which
arises from the differences in the timing of repricing of assets and
liabilities.

      The Company's Asset-Liability Management Committee, comprised of the
Bank's Executive Management team, has the responsibility of managing interest
rate risk, and monitoring and evaluating the difference between interest-
sensitive assets and interest-sensitive liabilities within various time
periods.

      The Company's objective is to reduce and control the volatility of its
net interest income by managing the relationship of interest-earning assets
and interest-bearing liabilities. In order to manage this relationship, the
Committee utilizes a monthly GAP report. This report for the period ending
December 31, 1999 is set forth below.

      The GAP report provides a static analysis of repricing opportunities of
rate-sensitive assets and rate-sensitive liabilities. It is prepared by
categorizing these assets and liabilities into time periods based upon either
their contractual or anticipated maturity or repricing. The analysis
determines the net dollar amount of assets less liabilities that are repricing
in various time frames. This, in conjunction with certain assumptions and
other related factors, such as anticipated changes in interest rates,
projected cash flows from loans, investments and deposits, provides a means of
evaluating interest rate risk. Management also takes into consideration that
certain assets and liabilities react differently to changes in interest rates.

      The interest sensitivity gap is determined by subtracting the amount of
liabilities from the amount of assets that reprice in a particular time
period. When more liabilities than assets reprice or mature within a given
time frame, a liability sensitive position results (negative gap). A negative
gap position would tend to increase net interest income when interest rates
are falling, and decrease net interest income when rates are rising.
Conversely, an asset sensitive position (positive gap) results when more
assets than liabilities reprice within a given period. In this scenario, net
interest income would increase when interest rates rise and decrease when
rates fall.

      At December 31, 1999, the GAP report shown below indicates the Company's
interest rate risk to have a reliance on short term liabilities. This position
would have an adverse effect on earnings in a rising rate environment and a
positive effect on earnings in a decreasing rate environment.

INTEREST RATE - SENSITIVITY GAPS
--------------------------------

Repricing Period at December 31, 1999
-------------------------------------

<TABLE>
<CAPTION>

                                   Within        1-2          2-3         3-5       Over 5
(Dollars in Thousands)             1 Year       Years        Years       Years       Years        Total
--------------------------------------------------------------------------------------------------------

<S>                               <C>          <C>          <C>         <C>         <C>         <C>
Interest-Earning Assets:(1)
  Federal Funds Sold              $  5,000     $    ---     $   ---     $   ---     $   ---     $  5,000
  Investment Securities             10,797        7,726       4,679      21,327      39,194       83,723
  Residential Mortgages             21,345        8,135       6,476       1,418      14,221       51,595
  Commercial Mortgages              76,841       12,075      19,127       9,566      14,807      132,416
  Other Loans                       46,202        3,358       4,132       2,477          92       56,261
--------------------------------------------------------------------------------------------------------
    Total Earning Assets          $160,185     $ 31,294     $34,414     $34,788     $68,314     $328,995
--------------------------------------------------------------------------------------------------------

Interest Bearing Liabilities:
  NOW Checking and Savings
    Deposits                      $ 35,253     $  9,922     $ 9,922     $26,455     $   ---     $ 81,552
  Money Market Deposits              3,415        2,042       2,042       5,443         ---       12,942
  Term Deposits                    141,262       23,499       4,961         ---         ---      169,722
  Borrowed Funds                       ---          ---         ---         ---       6,757        6,757
  Other Interest-bearing
   Liabilities                       1,248          ---         ---         ---         ---        1,248
--------------------------------------------------------------------------------------------------------
    Total Interest-bearing
     Liabilities                  $181,178     $ 35,463     $16,925     $31,898     $ 6,757     $272,221
--------------------------------------------------------------------------------------------------------
Net Interest Sensitivity Gap      $(20,993)    $ (4,169)    $17,489     $ 2,890     $61,557     $ 56,774
Cumulative Gap                    $(20,993)    $(25,162)    $(7,673)    $(4,783)    $56,774     $    ---
Cumulative Gap as a Percent of
Total Assets                          5.86%        7.03%       2.14%       1.34%      15.85%         ---
========================================================================================================

<FN>
<F1>  Nonaccrual loans amounting to $1.8 Million have been eliminated from the
      loan balances.
</FN>
</TABLE>

      In addition to the GAP report, the Company also uses an analysis to
measure the exposure of net interest income to changes in interest rates over
a relatively short time period (i.e. 12 months). This analysis involves
projecting future interest income and expenses from the Company's earning
assets and interest-bearing liabilities. Depending on the GAP position, the
Company's policy limit on interest rate risk specifies that if interest rates
were to change immediately up or down 200 basis points, the effect on
estimated net interest income for the next 12 months that would be tolerated
would be not more than a ten percent (10%) decrease. The following table
reflects the Company's estimated exposure as a percentage of estimated net
interest income for the next 12 months, assuming an immediate change in
interest rates:

<TABLE>
<CAPTION>
      Rate Change            Estimated Exposure as a
     (Basis Points)    Percentage of Net Interest Income    Dollar Impact
-------------------------------------------------------------------------

          <S>                       <C>                      <C>
          +200                      (1.90%)                  $(280,000)
          -200                        .52%                   $  77,000
</TABLE>

      The model used to monitor earnings-at-risk provides management a
measurement tool to assess the effect of changes in interest rates on the
Company's current and future earnings. The Company's 10% limit establishes an
internal tolerance level to control the Company's interest rate risk exposure
and is monitored on a quarterly basis.

II.   INVESTMENT PORTFOLIO

      The following table shows the book value of the major categories of
investment securities Held-to-Maturity for the years indicated:

<TABLE>
<CAPTION>

                                        At December 31,
--------------------------------------------------------------
(Dollars in Thousands)            1999       1998       1997
--------------------------------------------------------------

<S>                              <C>        <C>        <C>
US Treasury Securities and
 Obligations of US Government
 Corporations and Agencies       $ 7,975    $ 8,810    $ 9,415
Obligations of States and
 Political Subdivisions           11,439     11,997      7,976
Mortgage-backed securities            74        114        209
Other Debt Securities                  1        -0-          1
--------------------------------------------------------------
Total                            $19,489    $20,921    $17,601
==============================================================
</TABLE>

      In the following table, the carrying value of Held-to-Maturity
securities maturing within stated periods as of December 31, 1999, is shown
with the weighted average interest yield from securities falling within the
range of maturities:

<TABLE>
<CAPTION>

                          US Treasury      Obligations
                          & Government      of States &        Mortgage-        Other
                          Corporations       Political          Backed           Debt
(Dollars in Thousands)      Agencies      Subdivisions(1)    Securities(1)    Securities     Total
---------------------------------------------------------------------------------------------------

<S>                          <C>              <C>               <C>              <C>        <C>
Due in 1 year or less:
  Amount                     $4,230           $   863              ---           $   1      $ 5,094
  Yield                        5.43%             6.40%             ---            7.50%        5.59%

Due in 1 to 5 years:
  Amount                      3,495           $ 5,182           $   74             ---      $ 8,751
  Yield                        5.97%             6.62%            6.80%            ---         6.36%

Due in 5 to 10 years:
  Amount                        250           $ 4,690              ---             ---      $ 4,940
  Yield                        7.00%             6.58%             ---             ---         6.60%

Due after 10 years:

  Amount                        ---           $   704              ---             ---      $   704
  Yield                         ---              7.57%             ---             ---         7.57%
---------------------------------------------------------------------------------------------------
  Amount                     $7,975           $11,439           $   74           $   1      $19,489
===================================================================================================
  Yield                        5.72%             6.65%            6.80%           7.50%        6.27%
===================================================================================================

<FN>
<F1>  Rates of tax exempt securities are shown assuming a 34% tax rate.
<F2>  Mortgage-backed securities stated using average life.
</FN>
</TABLE>

      The following table shows the amortized cost basis of the major
categories of Available-for-Sale securities for the years indicated:

<TABLE>
<CAPTION>

                                             At December 31,
-------------------------------------------------------------------
(Dollars in Thousands)                 1999       1998       1997
-------------------------------------------------------------------

<S>                                   <C>        <C>        <C>
US Treasury Securities and
 Obligations of US Government
 Corporations and Agencies            $41,801    $42,944    $30,402

Mortgage-backed Securities             16,939     12,538      7,747
Asset-backed Securities                   ---        222        234
Corporate Debt Securities                 720        ---        ---
Marketable Equity Securities (net)      3,808      1,918      1,565
-------------------------------------------------------------------
Total                                 $63,268    $57,622    $39,948
===================================================================
</TABLE>

      In the following table, the amortized cost basis of Available-for-Sale
securities (other than equity securities) maturing within stated periods as of
December 31, 1999, is shown with the weighted average interest yield from
securities falling within the range of maturities:

<TABLE>
<CAPTION>

                          US Treasury
                          & Government      Mortgage-      Corporate
                          Corporations       Backed           Debt
(Dollars in Thousands)      Agencies      Securities(1)    Securities      Total
---------------------------------------------------------------------------------

<S>                         <C>              <C>             <C>          <C>
Due in 1 year or less:
  Amount                    $   500          $ 1,331         $  ---       $ 1,831
  Yield                        4.50%            6.10%           ---          5.66%

Due in 1 to 5 years:
  Amount                    $22,648          $ 8,627         $  720       $31,995
  Yield                        5.77%            6.01%          5.96%         5.84%

Due in 5 to 10 years:
  Amount                    $18,653          $ 6,617            ---       $25,270
  Yield                        6.15%            6.03%           ---          6.12%

Due after 10 years:
  Amount                        ---          $   364            ---       $   364
  Yield                         ---             7.28%           ---          7.28%
---------------------------------------------------------------------------------
  Amount                    $41,801          $16,939         $  720       $59,460
=================================================================================
  Yield                        5.92%            6.05%          5.96%         5.96%
=================================================================================

<FN>
<F1>  Mortgage backed securities stated using average life.
</FN>
</TABLE>

      The following table shows the amortized cost basis and fair value of the
major categories of Held-to-Maturity securities as of December 31, 1999:

<TABLE>
<CAPTION>

                                                                        Gross
                                                        Gross         Unrealized
                                       Amortized      Unrealized       Holding
(Dollars in Thousands)                 Cost Basis    Holding Gains      Losses      Fair Value
----------------------------------------------------------------------------------------------

<S>                                      <C>              <C>            <C>         <C>
Debt securities issued by the U.S.
 Treasury and other U.S. Government
 corporations and agencies               $ 7,975          $ 10           $ 28        $ 7,957

Debt securities issued by states of
 the United States and political
 subdivisions of the states               11,439             9            220         11,228

Mortgage-backed securities                    74           ---            ---             74

Other debt securities                          1           ---            ---              1
--------------------------------------------------------------------------------------------

Total                                    $19,489          $ 19           $248        $19,260
============================================================================================
</TABLE>

      Investments in Available-for-Sale securities are carried at fair value
on the balance sheet and are summarized as follows as of December 31, 1999.

<TABLE>
<CAPTION>

                                                                        Gross
                                                        Gross         Unrealized
                                       Amortized      Unrealized       Holding
(Dollars in Thousands)                 Cost Basis    Holding Gains      Losses      Fair Value
----------------------------------------------------------------------------------------------

<S>                                      <C>              <C>           <C>          <C>
Debt securities issued by the U.S.
 Treasury and other U.S. Government
 corporations and agencies               $41,801          $---          $1,482       $40,319

Marketable Equity                          3,808           505             392         3,921

Mortgage-backed securities                16,939           ---             521        16,418

Corporate debt securities                    720           ---              27           693
--------------------------------------------------------------------------------------------

Total                                    $63,268          $505          $2,422       $61,351
============================================================================================
</TABLE>

Decrease in Stockholder's Equity:
  (In Whole Dollars)

<TABLE>
<S>                                                     <C>
Net unrealized loss on Available-for-Sale Securities    $1,917,311
Less tax effect                                            766,717
                                                        ----------
                                                        $1,150,594
                                                        ==========

</TABLE>

III.  LOAN PORTFOLIO

      The following table shows the Company's amount of loans by category at
the end of each of the last five years.

<TABLE>
<CAPTION>

                                                                         At December 31
------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)                                1999       1998        1997        1996        1995

<S>                                                 <C>         <C>         <C>         <C>         <C>
Commercial, financial and agricultural              $ 47,258    $ 43,777    $ 36,641    $ 31,244    $ 16,744
Real estate - construction and land development     $  5,014       3,773       6,678       6,891       6,865
Real estate - residential                            52,330       51,220      55,477      59,500      50,472
Real estate - commercial                            127,938      112,913     108,008      94,545      70,749
Consumer                                              9,393        6,477       6,747       6,681       6,149
Obligations of states and political subdivisions                       3           9          16          23
Other                                                   116           67         176         109          85
------------------------------------------------------------------------------------------------------------
                                                    242,049      218,230     213,736     198,986     151,087

Allowance for Loan Losses                            (3,766)      (3,569)     (3,694)     (3,354)     (2,498)

Unamortized adjustment to fair value                    (20)         (32)        (42)        (54)          0

Unearned Income                                        (594)        (691)       (690)       (643)       (520)
------------------------------------------------------------------------------------------------------------
Net Loans                                          $237,669     $213,938    $209,310    $194,935    $148,069
============================================================================================================
</TABLE>

      The following table shows the maturity distributions and interest rate
sensitivity of selected loan categories at December 31, 1999.

<TABLE>
<CAPTION>

                                           Within One    One to Five    After Five
(Dollars in Thousands)                        Year          Years          Years       Total
---------------------------------------------------------------------------------------------

<S>                                         <C>            <C>           <C>          <C>
Commercial, financial, and agricultural     $28,947        $11,255       $ 7,056      $47,258
Real Estate - construction                      140            571         4,303        5,014
---------------------------------------------------------------------------------------------
Total                                       $29,087        $11,826       $11,359      $52,272
=============================================================================================
</TABLE>

      The following table shows the amounts, included in the table above,
which are due after one year and which have fixed interest rates and
adjustable rates:

<TABLE>
<CAPTION>

                                                   Total Due After One Year
-----------------------------------------------------------------------------------
(Dollars in Thousands)                     Fixed Rate    Adjustable Rate     Total

<S>                                          <C>             <C>            <C>
Commercial, financial, and agricultural      $4,515          $13,796        $18,311
Real Estate - construction                      291            4,583          4,874
-----------------------------------------------------------------------------------
Total                                        $4,806          $18,379        $23,185
===================================================================================
</TABLE>

                 NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

<TABLE>
<CAPTION>

                                                         December 31
-------------------------------------------------------------------------------------
(Dollars in Thousands)                  1999      1998      1997      1996      1995
-------------------------------------------------------------------------------------

<S>                                    <C>       <C>       <C>       <C>       <C>
Nonaccrual loans                       $1,777    $3,331    $4,597    $4,352    $2,695

Loans 90 days or more past due
 and still accruing                       248       317       147       112        23

Real estate acquired by foreclosure
 or substantively repossessed             353     1,026       159       308       633
-------------------------------------------------------------------------------------

Total nonperforming assets             $2,378    $4,674    $4,903    $4,772    $3,351
=====================================================================================
Percentage of nonaccrual loans
 to total loans                          0.73%     1.53%     2.15%     2.19%     1.78%

Percentage of nonaccrual loans,
 restructured loans and real estate
 acquired by foreclosure
 or substantively repossessed to
 total assets                            0.74%     1.54%     2.00%     1.88%     1.62%

Percentage of Allowance for Loan
 Losses to Nonaccrual Loans            211.92%   107.15%    80.36%    77.07%    92.69%

</TABLE>

      Nonaccrual loans include restructured loans of $0 at December 31, 1999;
$0 at December 31, 1998; $263,000 at December 31, 1997; $398,000 at December
31, 1996; and $425,000 at December 31, 1995.

      Information with respect to nonaccrual and restructured loans for the
past five years ending December 31 is as follows:

<TABLE>
<CAPTION>

                                                         December 31
--------------------------------------------------------------------------------------
(Dollars in Thousands)                   1999      1998      1997      1996      1995
--------------------------------------------------------------------------------------

<S>                                     <C>       <C>       <C>       <C>       <C>
Nonaccrual loans                        $1,777    $3,331    $4,597    $4,352    $2,695

Interest income that would have been
 recorded under original terms          $  146    $  318    $  394    $  361    $  243

Interest income recorded during
 the period                             $   37    $   37    $   58    $   62    $   21
</TABLE>

      Nonperforming assets include nonaccrual loans, loans past due 90 days or
more and still accruing, restructured loans not performing in accordance with
amended terms, and other real estate acquired through foreclosure.
Nonperforming assets as a total decreased to $2.4 Million at year end 1999,
from $4.7 Million reported at year end 1998.

      Nonaccrual loans is the largest component of nonperforming assets, and
at December 31, 1999, this category decreased to $1.8 Million. The decrease is
attributed to the Bank's collection efforts and the overall strengthening of
the economy. There are no loans greater than $250,000 in this category, which
is comprised of $735,000 of residential mortgages, $536,000 of commercial real
estate loans, and $506,000 of other types of loans.

      Loans that became nonaccrual during the current year amounted to
$1,390,000. Offsetting this increase were receipts of loan payments of
$969,000 and loans of $258,000 that were deemed uncollectible and charged off
to the Allowance for Loan Losses. There was a transfer to accrual status of
loans totaling $1,520,000 and a transfer to Other Real Estate Owned of
$197,000.

      The Company places a loan on nonaccrual status when, in the opinion of
management, the collectibility of the principal and interest becomes doubtful.
Generally, when a commercial loan, commercial real estate loan or a
residential real estate loan becomes past due 90 days or more, the Company
discontinues the accrual of interest and reverses previously accrued interest.
The loan remains in the nonaccrual status until the loan is current and six
consecutive months of payments are made, then it is reclassified as an
accruing loan. When it is determined that the collectibility of the loan no
longer exists, it is charged off to the Allowance for Loan Losses or, if
applicable, any real estate that is collateralizing the loan is acquired
through foreclosure, at which time it is categorized as Other Real Estate
Owned.

      Real Estate acquired by foreclosure decreased to $353,095 at December
31, 1999 compared to $1,026,095 reported at year end 1998. This amount
consists of two separate parcels of property. Annual appraisals are performed
on these properties and if the appraised value is less than the carrying value
of the property, the carrying value is written down by a charge to the
Writedown on Other Real Estate Owned expense account. As of March 2, 2000,
both properties have been sold resulting in a net gain on sale of $49,758.

IV.   SUMMARY OF LOAN LOSS EXPERIENCE

      The table below illustrates the changes in the Allowance for Loan Losses
for the periods indicated.

<TABLE>
<CAPTION>

(Dollars in Thousands)                    1999      1998      1997      1996      1995
---------------------------------------------------------------------------------------


<S>                                      <C>       <C>       <C>       <C>       <C>
Balance at January 1                     $3,569    $3,694    $3,354    $2,498    $2,306
---------------------------------------------------------------------------------------

Charge-offs:
  Commercial                               (221)       (0)      (40)     (144)     (184)
  Real estate-construction                   (0)       (0)       (0)       (0)       (0)
  Real estate-mortgage                      (23)     (716)     (147)     (136)      (79)
  Installment/Consumer                     (158)      (76)      (68)     (159)     (134)
---------------------------------------------------------------------------------------
                                           (402)     (792)     (255)     (439)     (397)
---------------------------------------------------------------------------------------

Recoveries:
  Commercial                                 11         8        41        59         1
  Real estate-construction                    0         0         0         0         0
  Real estate-mortgage                       24        43        16       333        16
  Installment/Consumer                       14        16        38        47        22
---------------------------------------------------------------------------------------
                                             49        67        95       439        39
---------------------------------------------------------------------------------------

Net Charge-offs                            (353)     (725)     (160)        0      (358)
---------------------------------------------------------------------------------------

Additions charged to operations             550       600       500       400       550

Allowance attributable to acquisition         0         0         0       456         0
---------------------------------------------------------------------------------------

Balance at December 31:                  $3,766    $3,569    $3,694    $3,354    $2,498
=======================================================================================
Allowance for Loan Losses as a
 percent of year end loans                 1.56%     1.64%     1.73%     1.69%     1.65%

Ratio of net charge-offs to
 average loans outstanding                 0.15%     0.34%     0.08%     0.00%     0.25%
</TABLE>

      The Allowance for Loan Losses at year end December 31, 1999 was
$3,765,872; and $3,569,282, $3,693,865, $3,354,311, and $2,497,774 for years
ending 1998, 1997, 1996, and 1995 respectively. The Allowance for Loan Losses
as a percent of year end loans was 1.56% in 1999, 1.64% in 1998, 1.73% in
1997, 1.69% in 1996, and 1.65% in 1995.

      The level of the Allowance for Loan Losses is evaluated by management
and encompasses several factors. These factors include but are not limited to
recent trends in the nonperforming loans, the adequacy of the assets which
collateralize the nonperforming loans, the level of nonaccrual loans, current
economic conditions in the market area and various other external and internal
factors. Management's assessment of the adequacy of the Allowance for Loan
Losses is reviewed by regulators and by the Company's independent accountants.

      The Company's provision for loan losses, which is a deduction from
earnings, in 1999 was $550,000. Prior years' provisions were $600,000,
$500,000, $400,000, and $550,000 for years ending 1998, 1997, 1996, and 1995
respectively. In 1999, the Company realized recoveries of previously charged-
off loans of $49,000. Recoveries recorded in previous years were $67,000,
$95,000, $439,000, and $39,000 in 1998, 1997, 1996, and 1995 respectively.

      The amount provided to the Allowance for Loan Losses was deemed
appropriate by management after full consideration of the value of the assets
securing the nonaccrual loans.

      The table below shows an allocation of the allowance for loan losses as
of the end of each of the last five years.

                 ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>

                  December 31, 1999     December 31, 1998     December 31, 1997     December 31, 1996     December 31, 1995
----------------------------------------------------------------------------------------------------------------------------
                         Percent of            Percent of            Percent of            Percent of            Percent of
                          Loans in              Loans in              Loans in              Loans in              Loans in
                            Each                  Each                  Each                  Each                  Each
                         Category to           Category to           Category to           Category to           Category to
                 Amount  Total Loans   Amount  Total Loans   Amount  Total Loans   Amount  Total Loans   Amount  Total Loans
----------------------------------------------------------------------------------------------------------------------------
                                                           (Dollars in Thousands)

<S>             <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
Commercial      $1,356(1)    19.52%   $1,249(1)    20.06%   $  984(1)    17.14%   $  789(1)    15.70%   $  597(1)    11.08%
Real estate
 Construction      34         2.07%       27        1.73        44        3.12        41        3.46        40        4.55
Real estate
 Mortgage       1,924(2)     74.48%    1,964(2)    75.21     2,311(2)    76.50     2,150(2)    77.42     1,581(2)    80.23
Consumer(3)       452(4)      3.93%      329(4)     3.00       355(4)     3.24       374(4)     3.42       280(4)     4.14
--------------------------------------------------------------------------------------------------------------------------
               $3,766       100.00%   $3,569      100.00%   $3,694      100.00%   $3,354      100.00%   $2,498      100.00%
==========================================================================================================================

<FN>
<F1>  Includes amounts specifically reserved for impaired loans of $234,205 as
      of December 31, 1999, $128,207 as of December 31, 1998, $42,937 as of
      December 31, 1997, $0.00 as of December 31, 1996 and $214,542 as of
      December 31, 1995, as required by Financial Accounting Standard No. 114,
      Accounting for Impairment of Loans.
<F2>  Includes amounts specifically reserved for impaired loans of $147,884 as
      of December 31, 1999, $187,554 as of December 31, 1998, $566,220 as of
      December 31, 1997, $838,290 as of December 31, 1996, and $240,500 as of
      December 31, 1995, as required by Financial Accounting Standard No. 114,
      Accounting for Impairment of Loans.
<F3>  Includes consumer, obligations of states and political subdivisions and
      other.
<F4>  Includes amounts specifically reserved for impaired loans of $39,241 as
      of December 31, 1999, $9,126 as of December 31, 1998, $14,413 as of
      December 31, 1997, $0.00 as of December 31, 1996 and $0.00 as of
      December 31, 1995 as required by Financial Accounting Standard No. 114,
      Accounting for Impairment of Loans.
</FN>
</TABLE>

      The loan portfolio's largest segment of loans is commercial real estate
loans, which represent 52.86% of gross loans. Residential real estate, which
is the second largest segment of the loan portfolio, represents 21.62% of
gross loans. The Company requires a loan to value ratio of 80% in both
commercial and residential mortgages. These mortgages are secured by real
properties which have a readily ascertainable value.

      Generally, commercial real estate loans have a higher degree of credit
risk than residential real estate loans because they depend primarily on the
success of the business. When granting these loans, the Company evaluates the
financial statements of the borrower(s), the location of the real estate, the
quality of management, and general economic and competitive conditions. When
granting a residential mortgage, the Company reviews the borrower(s) repayment
history on past debts, and assesses the borrower(s) ability to meet existing
obligations and payments on the proposed loans.

      Commercial loans consist of loans predominantly collateralized by
inventory, furniture and fixtures, and accounts receivable. In assessing the
collateral for this type of loan, management applies a 40% liquidation value
to inventories; 25% to furniture, fixtures and equipment; and 60% to accounts
receivable. Commercial loans represent 19.5% of the loan portfolio.

      Consumer loans are generally unsecured borrowings and represent 3.9% of
the total loan portfolio. These loans have a higher degree of risk than
residential mortgage loans. The underlying collateral of a secured consumer
loan tends to depreciate in value. Consumer loans are typically made based on
the borrower's ability to repay the loan through continued financial
stability. The Company endeavors to minimize risk by reviewing the borrower's
repayment history on past debts, and assessing the borrower's ability to meet
existing obligations on the proposed loans.

      Total losses in 1999 amounted to $402,000, when compared to losses of
$792,000 in 1998, $255,000 in 1997, $439,000 in 1996, and $397,000 in 1995.
The real estate-mortgage category incurred losses of $23,000 compared to
$716,000 in 1998, $147,000 in 1997, $136,000 in 1996, and $79,000 in 1995.

V.    DEPOSITS

      Deposits are obtained from individuals and from small and medium sized
businesses in the local market area. The Bank also attracts deposits from
municipalities and other government agencies. The Bank does not solicit or
accept brokered deposits.

      The following table sets forth the average amount and the average rate
paid on deposits for the periods indicated.

<TABLE>
<CAPTION>

                                              1999                   1998                   1997
--------------------------------------------------------------------------------------------------------
                                       Average     Average    Average     Average    Average     Average
(Dollars in Thousands)                 Balance      Rate      Balance      Rate      Balance      Rate
--------------------------------------------------------------------------------------------------------

<S>                                    <C>          <C>       <C>          <C>       <C>          <C>
Noninterest-bearing Demand Deposits    $ 52,261     0.00%     $ 46,217     0.00%     $ 43,724     0.00%
Interest-bearing Demand Deposits         38,404     2.59        38,764     3.09        37,739     3.19
Savings Deposits                         48,442     2.11        43,885     2.45        42,642     2.50
Money Market Deposits                    12,188     1.76        13,777     1.98        14,116     1.99
Time Deposits $100,000 or More           26,857     4.93        22,945     5.52        23,162     5.42
Other Time Deposits                     130,393     5.20       119,118     5.62       109,278     5.91
------------------------------------------------------------------------------------------------------
Totals                                 $308,545     3.35%     $284,706     3.69%     $270,661     3.79%
======================================================================================================
</TABLE>

      As of December 31, 1999, time certificates of deposit in amounts of
$100,000 or more had the following maturities:

<TABLE>
<CAPTION>

                                         (Dollars in Thousands)

<S>                                             <C>
Three months or less                            $ 7,481
Over three months through six months              7,167
Over six months through twelve months            10,349
Twelve months and over                            3,535
                                                -------
                                                $28,532
                                                =======
</TABLE>

VI.   RETURNS ON EQUITY AND ASSETS

      The following table shows consolidated operating and capital ratios of
the Company for each of the last three years:

<TABLE>
<CAPTION>

                                  Year Ended December 31,
                                --------------------------
                                 1999      1998      1997
                                --------------------------

      <S>                       <C>       <C>       <C>
      Return on Assets           1.11%     1.06%     0.96%
      Return on Equity          12.56%    11.98%    12.27%
      Dividend Payout Ratio     34.36%    28.54%    27.57%
      Equity to Assets Ratio     8.85%     8.86%     7.79%
</TABLE>

VII.  SHORT TERM BORROWINGS

      The following table shows the Company's short-term borrowings at the end
of each of the last three years, the maximum amount of borrowings and the
average amounts outstanding as well as weighted average interest rates for the
last three years.

<TABLE>
<CAPTION>

(Dollars in Thousands)         1999      1998      1997
--------------------------------------------------------

<S>                           <C>       <C>       <C>
Balance at December 31        $1,248    $   42    $1,200
Maximum Amount Outstanding
 at Any Month's End           $4,000    $1,365    $1,725
Average Amount Outstanding
 During the Year              $  889    $  813    $1,067
Weighted Average Interest
 Rate During the Year           5.93%     5.65%     4.91%
</TABLE>

      The Bank has the ability to borrow funds from correspondent banks and
the Federal Home Loan Bank, as well as the Federal Reserve Bank of Boston, by
pledging various investment securities as collateral. During 1999, there were
thirty-five various days when the Company borrowed to meet short term
liquidity needs. The Company did not borrow during 1998 and 1997. Tax payments
made by our customers, which are owed to the Federal Reserve Bank Treasury Tax
and Loan account, are classified as borrowed funds. The Company had a note
payable of $847,990 due to Fleet Bank which was paid in full in November 1999.
This note was assumed from Fairbank, Inc. at the time of the acquisition.
Because of the term of the note, including applicable prepayment fees,
management determined it advantageous for the Bank not to pay off the note
until its final maturity date of November 25, 1999. There is also $6,756,767
in borrowings from the Federal Home Loan Bank which represent the match
funding program that is available to qualified borrowers.

Accounting for Deferred Income Taxes
------------------------------------

      The net deferred tax at year end 1999 was $2,428,729. The amount of
taxable income required to be generated to fully realize such net deferred tax
asset will be approximately $7.3 Million. The taxable income earned by the
Company in 1999 was $5,779,245.

                                   ITEM 2

                                 PROPERTIES

      The main office of the Bank is located at 100 Slade's Ferry Avenue,
Somerset, Massachusetts at the junctions of U.S. Routes 6, 138, and 103. The
Bank has twelve additional branches located in Fairhaven, Fall River, New
Bedford, Seekonk, Somerset and Swansea, Massachusetts. As of December 31,
1999, the following Bank properties are owned either directly by the Bank or
through its subsidiary, the Slade's Ferry Realty Trust:

<TABLE>
<CAPTION>

                          Location                                 Sq. Footage
------------------------------------------------------------------------------

<S>                       <C>                         <C>              <C>
Main Office               100 Slade's Ferry Avenue    Somerset, MA      37,000
North Somerset            2722 County Street          Somerset, MA       3,025
Linden Street             244-253 Linden Street       Fall River, MA     1,750
Brayton Avenue            855 Brayton Avenue          Fall River, MA     3,325
North Swansea             2388 G.A.R. Highway         Swansea, MA        2,960
Seekonk                   1400 Fall River Avenue      Seekonk, MA        2,300
Fairhaven                 75 Huttleston Avenue        Fairhaven, MA     13,000
South Main Street         1601 South Main Street      Fall River, MA     6,604
Ashley Boulevard          833 Ashley Boulevard        New Bedford, MA    2,655

Offices listed below are leased properties with the indicated lease expiration
dates.

Swansea Mall
 (expires 2003)           Rt 118                      Swansea, MA        2,250
Brayton Avenue
 Drive Up Complex         16 Stevens St.              Fall River, MA
 (expires 2000)
Walgreens Drug Store      838 Pleasant St.            New Bedford, MA      835
 (expires 2004)

Loan Production Office    188 Airport Road            Warwick, RI          600
 (Expires 2002)
</TABLE>

      The main office building contains approximately 42,000 square feet of
usable space, of which the Bank occupies approximately 37,000 square feet and
the remainder is rented to local businesses as warehouse and office space. The
Bank also has a school banking facility located in the Somerset High School,
Grandview Avenue, Somerset, Massachusetts that consists of 200 square feet
which provides basic banking services to students and school staff. The
Seekonk office is an 8,800 square foot building of which the Bank is utilizing
2,300 square feet and leasing out the remainder.

                                   ITEM 3

                              LEGAL PROCEEDINGS

      The Company is not a party to any pending legal proceedings. The civil
suit brought in Plymouth Superior Court by a former employee of the National
Bank of Fairhaven was settled.

                                   ITEM 4

             SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      During the fourth quarter of 1999, no matters were submitted to a vote
of stockholders of the Company.

                                   PART II

                                   ITEM 5

           MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

      Reference is hereby made to the Company's Annual Report to Stockholders
for the year ended December 31, 1999, attached as an exhibit hereto. The
information set forth on page 5 of such Annual Report under the heading
"Market for Registrant's Common Equity and Related Stockholder Matters" is
incorporated herein by reference.

                                   ITEM 6

                           SELECTED FINANCIAL DATA

      Reference is hereby made to the Company's Annual Report to Stockholders
for the year ended December 31, 1999, attached as an exhibit hereto. The
information set forth on page 6 of such Annual Report under this heading is
incorporated herein by reference.

                                   ITEM 7

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS

      Reference is hereby made to the Company's Annual Report to Stockholders
for the year ended December 31, 1999, attached as an exhibit hereto. The
information under the heading "Management's Discussion and Analysis" and set
forth on pages 7 through 16 of such Annual Report is incorporated herein by
reference.

                                   ITEM 7A

         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The most significant market risk factor affecting the financial
condition and operating results of Slade's Ferry Bancorp is interest rate
risk. Reference is hereby made to this Form 10-K, pages 10 & 11, under the
headings "Interest Rate Risk" and "Interest Sensitivity GAP Report" for a
discussion of market risk.

                                   ITEM 8

                 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Reference is hereby made to the Company's Annual Report to Stockholders
for the year ended December 31, 1999, attached as an exhibit hereto. The
consolidated balance sheets at December 31, 1999 and 1998, and the
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1999
and the related notes with the report of Shatswell, MacLeod and Company, P.C.,
independent auditors, which appear on pages 17 through 39 of such Annual
Report to Stockholders, are incorporated herein by reference.

                                   ITEM 9

                CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                   ON ACCOUNTING AND FINANCIAL DISCLOSURE

      The Company had no disagreements with its independent accountants on
accounting and financial disclosure matters.

                                  PART III

                                   ITEM 10

             DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Reference is hereby made to the Company's definitive Proxy Statement for
the Annual Meeting of Stockholders April 10, 2000. The information set forth
under the heading "Directors and Executive Officers" on pages 11 through 14
and under the heading "Section 16(a) Beneficial Ownership Reporting
Compliance" on page 16 of such Proxy Statement is incorporated herein by
reference.

                                   ITEM 11

                           EXECUTIVE COMPENSATION

      Reference is hereby made to the Company's definitive Proxy Statement for
the Annual Meeting of Stockholders April 10, 2000. The information set forth
under the heading "Executive Compensation Tables and Information" on pages 18
through 22 of such Proxy Statement is incorporated herein by reference.

                                   ITEM 12

       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Reference is hereby made to the Company's definitive Proxy Statement for
the Annual Meeting of Stockholders April 10, 2000. The information set forth
under this heading on pages 14 through 16 of such Proxy Statement is
incorporated herein by reference.

                                   ITEM 13

               CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Reference is hereby made to the Company's definitive Proxy Statement for
the Annual Meeting of Stockholders April 10, 2000. The information set forth
under this heading on page 24 of such Proxy Statement is incorporated herein
by reference.

                                   ITEM 14

      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)   The following documents are filed as part of the Company's Annual Report
to stockholders for the year ended December 31, 1999, attached as an exhibit
hereto.

      (1)    Consolidated Financial Statements
                                                           Page
             Report of Independent Auditors                 17
             Consolidated Balance Sheets                    18
             Consolidated Statements of Income              19
             Consolidated Statements of Changes in
              Stockholders' Equity                          20
             Consolidated Statements of Cash Flows          21
             Notes to Consolidated Financial Statements     23

      (2)    Financial Statement Schedules
             All financial statement schedules required by Item 14(a)(2) have
             been omitted because they are inapplicable or because the
             required information has been included in the Consolidated
             Financial Statements or Notes thereto.

      (3)    Exhibits: see attached Exhibits Index

(b)   Reports on Form 8-K: None


                                 SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on March 20, 2000.

                                       Slade's Ferry Bancorp

                                       By /s/ Kenneth R. Rezendes
                                          Kenneth R. Rezendes, President/
                                          Chief Executive Officer and Director

In accordance with the requirements of the Exchange Act, this report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

<TABLE>

<S>                              <C>        <C>                                   <C>
/s/ Thomas B. Almy               3/20/00    /s/ Ralph S. Borges                   3/20/00
Thomas B. Almy                              Ralph S. Borges
Director                                    Treasurer/Chief Financial Officer/
                                            Chief Accounting Officer

/s/ James D. Carey               3/20/00    /s/ Peter G. Collias                  3/20/00
James D. Carey                              Peter G. Collias
Executive Vice President and Director       Director


/s/ Donald T. Corrigan           3/20/00    /s/ Melvyn A. Holland                 3/20/00
Donald T. Corrigan                          Melvyn A. Holland
Chairman of the Board and Director          Director


/s/ William Q. MacLean Jr.       3/20/00    /s/ Francis A. Macomber               3/20/00
William Q. MacLean Jr.                      Francis A. Macomber
Director                                    Director


/s/ Majed Mouded, MD             3/20/00    /s/ Shaun O'Hearn Sr.                 3/20/00
Majed Mouded, MD                            Shaun O'Hearn Sr.
Director                                    Director


/s/ Lawrence J. Oliveira, DDS    3/20/00    /s/ Peter Paskowski                   3/20/00
Lawrence J. Oliveira, DDS                   Peter Paskowski
Director                                    Director


/s/ Kenneth R. Rezendes          3/20/00    /s/ William J. Sullivan               3/20/00
Kenneth R. Rezendes                         William J. Sullivan
President and Chief Executive Officer       Director


/s/ Charles Veloza               3/20/00    /s/ David F. Westgate                 3/20/00
Charles Veloza                              David F. Westgate
Director                                    Director
</TABLE>

                                Exhibit Index

<TABLE>
<CAPTION>
Exhibit
  No.                     Description                       Page
-------                   -----------                       ----

<S>        <C>                                               <C>
 3.1       Articles of Incorporation of Slade's Ferry        (1)
           Bancorp as amended

 3.2       By-laws of Slade's Ferry Bancorp as amended       (2)

10.1       Agreement and Plan of Merger by and between       (3)
           Slade's Ferry (formerly Weetamoe) Bancorp and
           Fairbank, Inc.

10.2       Slade's Ferry (formerly Weetamoe) Bancorp
           1996 Stock Option Plan                            (3)

10.3       Noncompetition Agreement between Slade's          (4)
           Ferry Trust Company and Edward S.
           Machado (A substantially identical contract
           exists with Peter Paskowski)

10.4       Supplemental Executive Retirement Agreement       (5)
           between Slade's Ferry (formerly Weetamoe)
           Bancorp and Donald T. Corrigan

10.5       Supplemental Executive Retirement Agreement       (2)
           between Slade's Ferry (formerly Weetamoe)
           Bancorp and James D. Carey

10.6       Supplemental Executive Retirement Agreement       (2)
           between Slade's Ferry (formerly Weetamoe)
           Bancorp and Manuel J. Tavares

10.7       Swansea Mall Lease                                (4)

13         Annual report to security-holders for fiscal
           year ended December 31, 1999

21         List of subsidiaries of Slade's Ferry Bancorp.

23         Consent of Independent Public Accountants

27         Financial Data Schedule

<FN>
<F1>  Incorporated by reference to the Registrant's Registration Statement on
      Form SB-2 filed with the Commission on April 14, 1997.
<F2>  Incorporated by reference to the Registrant's Form 10-KSB for the fiscal
      year ended December 31, 1996.
<F3>  Incorporated by reference to the Registrant's Form 10-QSB for the
      quarter ended March 31, 1996.
<F4>  Incorporated by reference to the Registrant's Registration Statement on
      Form S-4 File No. 33-32131.
<F5>  Incorporated by reference to the Registrant's Form 10-KSB for the fiscal
      year ended December 31, 1994.
</FN>
</TABLE>