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

                                 FORM 10-KSB

  X  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

Commission file number   33-47248


                            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-B 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-KSB or any amendment to this form 10-KSB.      [X]

Registrant's revenues for fiscal year ended December 31, 1997:  $24,712,716.

The aggregate market value of the voting stock of Slade's Ferry Bancorp,
held by nonaffiliates of the registrant as of December 31, 1997 was
approximately $41,551,766.09.  On that date, there were 3,236,712.658 shares
of Slade's Ferry Bancorp Common Stock, $.01 par value $.01, outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

ANNUAL REPORT to security holders for fiscal year ended December 31, 1997
incorporated by reference into Part II.  Proxy Statement for Annual Meeting
of Stockholders April 13, 1998 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 three 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 $108
Million of which $50 Million is attributed to overall growth and $58 Million
attributed to the acquisition of the National Bank of Fairhaven, which
occurred in August 1996.  The Bank currently has 10 banking facilities
extending east from Seekonk, Massachusetts to Fairhaven, Massachusetts.  The
Bank also provides limited banking services at the Somerset High School.
The Bank employs 129 full-time employees and 56 part-time employees.

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

      The Bank's major customer base consists of over 30,000 personal
savings, checking and money market accounts and 7,200 personal certificates
of deposit and individual retirement accounts.  Its commercial base consists
of over 3,200 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, 1997, commitments under standby letters of credit aggregate
approximately $2,356,380.

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, 1997 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, and the Slade's
Ferry Securities Corporation 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 1995 and nine months ending September 30, 1996,
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.

I.  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, 1997, December 31, 1996, and December 31, 1995.
Averages are daily averages.

<TABLE>
<CAPTION>
                                             1997                             1996                             1995
                                 --------------------------------  -------------------------------  -------------------------------
                                 Average   Interest(1)  Avg. Int.  Average  Interest(1)  Avg. Int.  Average  Interest(1)  Avg. Int.
(Dollars in Thousands)           Balance   Rate         Rate       Balance  Rate         Rate       Balance  Rate         Rate
-----------------------------------------------------------------------------------------------------------------------------------

<S>                              <C>       <C>          <C>        <C>      <C>          <C>        <C>      <C>          <C>
ASSETS:

Earning Assets(1)
  Commercial Loans               $ 36,195  $ 3,466       9.58%     $ 23,440 $ 2,191       9.35%     $ 17,478 $ 1,705       9.75%
  Commercial Real Estate          110,093   10,740       9.76        90,576   9,035       9.98        70,060   6,703       9.57
  Residential Real Estate          52,894    4,116       7.78        50,486   3,788       7.50        48,901   3,706       7.58
  Consumer Loans                    6,503      659      10.13         6,094     613      10.06         5,630     628      11.15
-------------------------------------------------------------------------------------------------------------------------------
  Total Loans                     205,685   18,981       9.23       170,596  15,627       9.16       142,069  12,742       8.97
  Federal Funds Sold               11,309      607       5.37        14,994     783       5.22        10,361     598       5.77
  U.S. Treas/Govt Agencies         49,682    3,099       6.24        43,871   2,715       6.19        45,300   2,924       6.45
  States & Political
   Subdivisions                     6,948      477       6.87         5,959     400       6.71         4,753     339       7.13
  Mutual Funds                        301       15       4.98           241      13       5.39           170       8       4.71
  Marketable Equity Securities      2,518      120       4.77         1,946      75       3.85         1,098      39       3.55
  Other Investments                   126        8       6.35           197      15       7.61            55       4       7.27
-------------------------------------------------------------------------------------------------------------------------------
  Total Earning Assets            276,569  $23,307       8.43%      237,804 $19,628       8.25%      203,806 $16,654       8.17%
-------------------------------------------------------------------------------------------------------------------------------
  Allowance for Possible Loan
   Losses                          (3,474)                           (2,958)                          (2,450)
  Unearned Income                    (665)                             (597)                            (434)
  Cash and Due From Banks          11,366                             9,565                            8,387
  Other Assets                     14,022                             9,489                            9,016
-------------------------------------------------------------------------------------------------------------------------------
  Total Assets                   $297,818                          $253,303                         $218,325
===============================================================================================================================

LIABILITIES & STOCKHOLDERS' EQUITY:
  Savings                        $ 42,642  $ 1,067       2.50%     $ 40,246 $ 1,006       2.50%     $ 37,790 $   955       2.53%
  NOW's                            37,739    1,202       3.19        28,788     858       2.98        21,568     757       3.51
  Money Market Accounts            14,116      281       1.99        13,326     272       2.04        16,355     332       2.03
  CD's > $100M                     23,162    1,256       5.42        18,813   1,104       5.87        15,403     856       5.56
  Other Time Deposits             109,278    6,460       5.91        97,957   5,754       5.87        82,290   4,801       5.83
  Other Borrowings                  2,114      146       6.91         1,374      86       6.26         1,179      63       5.34
-------------------------------------------------------------------------------------------------------------------------------
  Total Interest-bearing
   Liabilities                    229,051  $10,412       4.55%      200,504 $ 9,080       4.53%      174,585 $ 7,764       4.45%
-------------------------------------------------------------------------------------------------------------------------------
  Demand Deposits                  43,724                            33,572                           26,674
  Other Liabilities                 1,847                               493                               91
-------------------------------------------------------------------------------------------------------------------------------
  Total Liabilities               274,622                           234,569                          201,850
-------------------------------------------------------------------------------------------------------------------------------
  Common Stock                         30                                28                               26
  Paid-in Capital                  16,899                            14,393                           12,871
  Retained Earnings                 6,308                             4,486                            4,227
  Net Unrealized Loss on
   Available-for-Sale
   Securities                         (41)                             (173)                            (649)
-------------------------------------------------------------------------------------------------------------------------------
  Total Stockholders' Equity       23,196                            18,734                           16,475
-------------------------------------------------------------------------------------------------------------------------------
  Total Liabilities &
   Stockholders' Equity          $297,818                          $253,303                         $218,325
===============================================================================================================================
  Net Interest Income                      $12,895                            $10,548                        $ 8,890
===============================================================================================================================
  Net Interest Spread                                    3.88%                            3.72%                            3.72%
===============================================================================================================================
  Net Yield on Earning Assets                            4.66%                            4.44%                            4.36%
===============================================================================================================================

<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 $157,000 in 1997, $133,000 in 1996, and
      $113,000 in 1995.
<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.
</TABLE>


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

<TABLE>
<CAPTION>
                                              1997 vs 1996                          1996 vs 1995
                                                Increase                              Increase
                                               (Decrease)                            (Decrease)
                                    --------------------------------      --------------------------------
                                    Total        Due to       Due to      Total        Due to       Due to
(Dollars in Thousands)              Change(1)    Volume       Rate        Change(1)    Volume       Rate
----------------------------------------------------------------------------------------------------------

<S>                                 <C>          <C>          <C>         <C>          <C>          <C>
Interest Income:
  Federal Funds Sold                $ (176)      $ (195)      $  19       $  185       $  255       $  (70)
  US Treas/Govt Agencies               384          361          23         (209)         (90)        (119)
  States & Political Subdivisions       77           67          10           61           83          (22)
  Mutual Funds                           2            3          (1)           5            4            1
  Marketable Securities                 45           24          21           36           11           (3)
  Other Investments                     (7)          (5)         (2)          11           33            6
  Commercial Loans                   1,275        1,207          68          486          569          (83)
  Commercial Real Estate             1,705        1,926        (221)       2,332        2,005          327
  Residential Real Estate              328          184         144           82          119          (37)
  Consumer Loans                        46           41           5          (15)          50          (65)
----------------------------------------------------------------------------------------------------------
  Total Interest Income              3,679        3,613          66        2,974        3,039          (65)
----------------------------------------------------------------------------------------------------------

Interest Expense:
  Savings Accounts                      61           61         -0-           51           62          (11)
  NOW Accounts                         344          275          69          101          234         (133)
  Money Market Accounts                  9           16          (7)         (60)         (62)           2
  CD's > 100 M                         152          246         (94)         248          195           53
  Other Time Deposits                  706          667          39          953          917           36
  Other Borrowings                      60           49          11           23           11           12
----------------------------------------------------------------------------------------------------------
  Total Interest Expense             1,332        1,314          18        1,316        1,357          (41)
----------------------------------------------------------------------------------------------------------
Net Interest Income                 $2,347       $2,299       $  48       $1,658       $1,682       $  (24)
==========================================================================================================

<F1>  Changes in interest income and interest expense attributable to changes
      in both volume and rate have been allocated equally to changes due to
      volume and changes due to rate.
<F2>  The change in interest on investments and not interest income includes
      interest on a fully taxable equivalent basis based on a tax rate of 34$.
</TABLE>

Interest Rate Sensitivity

      A formal measurement that is incorporated in the Asset/Liability
management process is the monthly analysis of the interest rate (Gap) table.
The table for the period ending December 31, 1997 is set forth below.  This
measurement provides a static analysis of repricing opportunities of the
balance sheet.  It is prepared by categorizing assets and liabilities into
time periods based on the next repricing opportunity.  The analysis determines
the net dollar amount of assets less liabilities that are repricing at various
time periods.

      The Company has an Asset/Liability Committee that reports to the Board
of Directors.  Its objective is to monitor the exposure of planned net
interest margins to unexpected changes due to interest rate fluctuations.
These efforts also affect loan pricing, deposit interest rate strategies,
asset mix and volume guidelines, liquidity and capital planning.

      At December 31, 1997, the analysis indicates the Company's interest rate
risk to have a reliance on short term liabilities.  This position would have
an adverse effect on the Company's earnings in a rising rate environment and
conversely a positive effect on earnings in a decreasing rate environment.

<TABLE>
<CAPTION>
Repricing period at December 31, 1997
-------------------------------------
                                       3 Months      4 Months       1 Year to      2 Year to      5 Years
(Dollars in Thousands)                 or Less       to 1 Year      2 Years        5 Years        & Over         Total
----------------------------------------------------------------------------------------------------------------------

<S>                                    <C>           <C>            <C>            <C>            <C>            <C>
INTEREST-EARNING ASSETS
  Loans                                $ 65,735      $ 75,467       $ 24,415       $ 30,265       $ 13,214       $209,096
  Investments                             3,527        11,689          6,308         19,299         17,062         57,885
  Federal Funds Sold                      7,000             0              0              0              0          7,000
-------------------------------------------------------------------------------------------------------------------------
  Total Interest-Earning Assets        $ 76,262      $ 87,156       $ 30,723       $ 49,564       $ 30,276       $273,981
=========================================================================================================================
  Cumulative RSA                       $ 76,262      $163,418       $194,141       $243,705       $273,981
=========================================================================================================================

INTEREST-BEARING LIABILITIES
  Regular Savings                      $ 41,909           ---            ---            ---            ---       $ 41,909
  NOW Accounts                           39,194           ---            ---            ---            ---         39,194
  Money Market Accounts                  13,940           ---            ---            ---            ---         13,940
  Time Deposits $100,000 & Over           5,897        14,140          3,074            ---            ---         23,111
  Other Time Deposits                    35,127        56,579          9,142          8,092            ---        108,940
-------------------------------------------------------------------------------------------------------------------------
  Total Deposits                        136,067        70,719         12,216          8,092            ---        227,094
  Federal Funds Purchased                   ---           ---            ---            ---            ---            ---
  Other Interest-Bearing Liabilities      1,200           ---            945            ---            430          2,575
-------------------------------------------------------------------------------------------------------------------------
  Total Interest-Bearing Liabilities   $137,267      $ 70,719       $ 13,161       $  8,092       $    430       $229,669
=========================================================================================================================
  Cumulative RSL                       $137,267      $207,986       $221,147       $229,239       $229,669
=========================================================================================================================
  Gap                                   (61,005)       16,437         17,562         41,472         29,846         44,312
  Cumulative Gap                        (61,005)      (44,568)       (27,006)        14,466         44,312
  RSA/RSL                                  (.56)         1.23           2.33           6.13          70.41
  Cumulative RSA/RSL                       (.56)         (.79)          (.88)          1.06           1.19
</TABLE>

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)               1997         1996         1995
----------------------------------------------------------------------

<S>                                  <C>          <C>          <C>
US Treasury Securities and
  Obligations of US Government
  Corporations and Agencies          $ 9,415      $13,193      $15,690

Obligations of States and
  Political Subdivisions               7,976        6,131        6,024

Mortgage-backed securities               209          257           17

Other Debt Securities                      1            6          105
----------------------------------------------------------------------

Total                                $17,601      $19,587      $21,836
======================================================================
</TABLE>

      In the following table, the carrying value of Held-to-Maturity securities
maturing within stated periods as of December 31, 1997, 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                    $4,567          $  689              $   11            $    1         $ 5,268
  Yield                       5.82%           5.97%               8.00%             7.50%           5.84%

Due in 1 to 5 years:
  Amount                    $4,098          $3,192              $  198            $  ---         $ 7,488
  Yield                       6.38%           6.84%               6.97%              ---            6.59%

Due in 5 to 10 years:
  Amount                    $  750          $3,964              $  ---               ---         $ 4,714
  Yield                       7.19%           6.95%                ---               ---            6.99%

Due after 10 years:
  Amount                       ---          $  131                 ---               ---         $   131
  Yield                        ---            6.11%                ---               ---            6.11%
--------------------------------------------------------------------------------------------------------

  Amount                    $9,415          $7,976              $  209            $    1         $17,601
========================================================================================================

  Yield                       6.17%           6.81%               7.02%             7.50%           6.47%
========================================================================================================
</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)                  1997         1996         1995
-------------------------------------------------------------------------

<S>                                     <C>          <C>          <C>
US Treasury Securities and
  Obligations of US Government
  Corporations and Agencies             $30,402      $32,793      $31,678

Mortgage-backed Securities                7,747        2,469        3,618

Asset-backed Securities                     234          246          -0-

Marketable Equity Securities (net)        1,565        1,775        1,397
-------------------------------------------------------------------------

Total                                   $39,948      $37,283      $36,693
=========================================================================
</TABLE>

      In the following table, the amortized cost basis of Available-for-Sale
securities maturing within stated periods as of December 31, 1997, is shown
with the weighted average interest yield from securities falling within the
range of maturities:

<TABLE>
<CAPTION>
                            US Treasury
                            & Government     Mortgage-        Asset-
                            Corporations     Backed           Backed
(Dollars in Thousands)      Agencies         Securities(1)    Securities      Total
-----------------------------------------------------------------------------------

<S>                         <C>              <C>              <C>             <C>
Due in 1 year or less:
  Amount                    $ 5,049          $  654           $---            $ 5,703
  Yield                        5.10%           6.03%           ---               5.21%

Due in 1 to 5 years:
  Amount                     18,057           5,487            ---             23,544
  Yield                        6.37%           6.71%           ---               6.45%

Due in 5 to 10 years:
  Amount                      7,296           1,606            ---              8,902
  Yield                        6.84%           7.17%           ---               6.90%

Due after 10 years:
  Amount                                                       234                234
  Yield                                                       6.67%              6.67%
-------------------------------------------------------------------------------------

  Amount                    $30,402          $7,747           $234            $38,383
=====================================================================================

  Yield                        6.27%           6.75%          6.67%              6.37%
=====================================================================================
</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, 1997:

<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       $ 9,415        $ 56               $ 4           $ 9,467

Debt securities issued by
 states of the United States
 and political subdivisions of
 the states                                   7,976         106                13             8,069

Mortgage-backed securities                      209           3                 0               212

Other debt securities                             1           0                 0                 1
---------------------------------------------------------------------------------------------------

Total                                       $17,601        $165               $17           $17,749
===================================================================================================
</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, 1997.

<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               $30,402         $ 84               $ 91           $30,395

Marketable Equity                          1,565          302                 71             1,796

Mortgage-backed securities                 7,747           24                 20             7,751

Asset-backed securities                      234            0                  0               234
--------------------------------------------------------------------------------------------------

Total                                    $39,948         $410               $182           $40,176
==================================================================================================
</TABLE>

<TABLE>
<S>                                             <C>
Increase in Stockholder's Equity:
  (In Whole Dollars)

  Net unrealized gain on
   Available-for-Sale Securities                $227,807
  Less tax effect                                 78,520
                                                --------
                                                $149,287
                                                ========
</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)                             1997           1996           1995           1994           1993
-----------------------------------------------------------------------------------------------------------------------

<S>                                                <C>            <C>            <C>            <C>            <C>
Commercial, financial and agricultural             $ 36,641       $ 31,244       $ 16,744       $ 17,123       $ 16,309
Real estate - construction and land development       6,678          6,891          6,865          2,290          4,651
Real estate - residential                            55,477         59,500         50,472         50,938         48,088
Real estate - commercial                            108,008         94,545         70,749         59,625         50,310
Consumer                                              6,747          6,681          6,149          6,097          6,550
Obligations of states and political subdivisions          9             16             23             29            136
Other                                                   176            109             85             89             34
-----------------------------------------------------------------------------------------------------------------------
                                                   $213,736       $198,986       $151,087       $136,191       $126,078

Allowance for Possible Loan Losses                   (3,694)        (3,354)        (2,498)        (2,306)        (1,954)
Unamortized adjustment to fair value                    (42)           (54)             0              0              0
Unearned Income                                        (690)          (643)          (520)          (403)          (313)
-----------------------------------------------------------------------------------------------------------------------
Net Loans                                          $209,310       $194,935       $148,069       $133,482       $123,811
=======================================================================================================================
</TABLE>

      The following table shows the maturity distributions and interest rate
sensitivity of selected loan categories at December 31, 1997.

<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      $19,311        $11,961         $5,369        $36,641

Real Estate - construction                     1,671            479          4,528          6,678
-------------------------------------------------------------------------------------------------

Total                                        $20,982        $12,440         $9,897        $43,319
=================================================================================================
</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      $4,762          $12,568              $17,330

Real Estate - construction                      273            4,734                5,007
-----------------------------------------------------------------------------------------

Total                                        $5,035          $17,302              $22,337
=========================================================================================
</TABLE>

NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

<TABLE>
<CAPTION>
                                                                December 31
                                           ----------------------------------------------------
(Dollars in Thousands)                     1997        1996        1995        1994        1993
-----------------------------------------------------------------------------------------------

<S>                                        <C>         <C>         <C>         <C>         <C>
Nonaccrual loans                           $4,597      $4,352      $2,695      $3,238      $4,084

Loans 90 days or more past due
 and still accruing                           147         112          23         204         427

Real estate acquired by foreclosure
   or substantively repossessed               159         308         633         888       2,160
-------------------------------------------------------------------------------------------------

Total nonperforming assets                 $4,903      $4,772      $3,351      $4,330      $6,671
=================================================================================================
Percentage of nonaccrual loans to total
 loans                                       2.15%      2.19%        1.78%       2.38%       3.24%

Percentage of nonaccrual loans,
 restructured loans and real estate
 acquired by foreclosure or
 substantively repossessed to total
 assets                                      2.00%      1.88%        1.62%       2.20%       3.18%

Percentage of Allowance for Possible
 Loan Losses to Nonaccrual Loans            80.36%      77.07%      92.69%      71.22%      47.85%
</TABLE>

      Nonaccrual loans include restructured loans of $263,000 at December
31, 1997; $398,000 at December 31, 1996; $425,000 at December 31, 1995; and
$286,000 at December 31, 1994.

      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)                          1997        1996        1995        1994        1993
----------------------------------------------------------------------------------------------------

<S>                                             <C>         <C>         <C>         <C>         <C>
Nonaccrual loans                                $4,597      $4,352      $2,695      $3,238      $4,084

Interest income that would have been
  recorded under original terms                 $  394      $  361      $  243      $  242      $  443

Interest income recorded during the period      $   58      $   62      $   21      $   19      $  115
</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 increased to $4.9 Million at year end 1997,
from $4.8 Million reported at year end 1996.  Nonaccrual loans at December
31, 1997 were up by $0.2 Million to $4.6 Million from $4.4 Million reported
on December 31, 1996.  Included in the $4.6 Million of nonaccrual loans is a
$1.5 Million commercial real estate loan that was classified as nonaccrual
in March 1997.  The real estate collateralizing this loan was appraised in
December 1997 at $2.7 Million.  Due to the excess collateral value, the Bank
does not anticipate any loss on this loan.  Loans that became nonaccrual
during the current year, amounted to $2,534,304 including the aforementioned
$1.5 Million commercial real estate loan.  Offsetting this increase were
receipts of loan payments of $1,137,278 and loans of $51,571 that were
deemed uncollectible and charged off to the Allowance for Possible Loan
Losses.  There was a transfer to Other Real Estate Owned of $519,403,
property sold at auction of $57,049 and a transfer to accrual status of
loans totaling $524,619.

      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.  The nonaccrual category is
comprised of $1,125,452 of residential real estate loans, $3,234,861 of
commercial real estate loans, $211,111 of commercial loans and $25,108 of
other types of loans.

      Other Real Estate Owned, which are properties acquired through
foreclosure, consists of 2 parcels totaling $159,373 at year end 1997.
Annual appraisals are performed on these properties and if the appraisal 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.

      The Company has $500,000 of potential problem loans for which payments
are presently current but are identified as a possible risk.  This
assessment is based on an objective review of the borrower's financial
statements.  In addition, the past experience with the borrower, the
borrower's background, and the applicable value of the assets
collateralizing these loans provide a degree of assurance that the loan will
continue to be paid as per the loan agreement.  These issues are monitored
carefully to determine if there is any change in status that would cause
management to reclassify the loan from the accrual category to nonaccrual.

IV.  SUMMARY OF LOAN LOSS EXPERIENCE

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

<TABLE>
<CAPTION>
                                                                 December 31
                                          --------------------------------------------------------
(Dollars in Thousands)                    1997         1996         1995         1994         1993
--------------------------------------------------------------------------------------------------

<S>                                       <C>          <C>          <C>          <C>          <C>
Balance at January 1                      $3,354       $2,498       $2,306       $1,954       $1,967

Charge-offs:
  Commercial                                 (40)        (276)        (184)         (22)        (963)
  Real estate-construction                    (0)          (0)          (0)          (0)          (0)
  Real estate-mortgage                      (147)          (4)         (79)        (246)        (451)
  Installment/Consumer                       (68)        (159)        (134)         (93)         (85)
----------------------------------------------------------------------------------------------------
                                            (255)        (439)        (397)        (361)      (1,499)
----------------------------------------------------------------------------------------------------

Recoveries:
  Commercial                                  41          332            1           51            0
  Real estate-construction                     0            0            0            0            0
  Real estate-mortgage                        16            0           16            2            2
  Installment/Consumer                        38          107           22           15           29
----------------------------------------------------------------------------------------------------
                                              95          439           39           68           31
----------------------------------------------------------------------------------------------------

Net Charge-offs                             (160)           0         (358)        (293)      (1,468)
----------------------------------------------------------------------------------------------------

Additions charged to operations              500          400          550          645        1,455
Allowance attributable to acquisition          0          456            0            0            0
----------------------------------------------------------------------------------------------------
Balance at December 31:                   $3,694       $3,354       $2,498       $2,306       $1,954
====================================================================================================

Allowance for Loan Losses as a
 percent of year end loans                  1.73%      1.69%      1.65%      1.70%      1.55%

Ratio of net charge-offs to average
 loans outstanding                          0.08%      0.00%      0.25%      0.23%      1.18%
</TABLE>

      The Allowance for Possible Loan Losses at year end December 31, 1997
was $3,693,865; and $3,354,311, $2,497,774, $2,305,860 and $1,953,863, for
years ending 1996, 1995, 1994 and 1993 respectively. The Allowance for
Possible Loan Losses as a percent of year end loans was 1.73% in 1997, 1.69%
in 1996, 1.65% in 1995, 1.70% in 1994 and 1.55% in 1993.

      The level of the Allowance for Possible 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, current economic
conditions in the market area and various other external and internal
factors.  Management's assessment of the adequacy of the Allowance for
Possible 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 1997 was $500,000.  Prior years' provisions were $400,000,
$550,000, $645,000 and $1,455,000 for years ending 1996, 1995, 1994 and 1993
respectively.  In 1997, the Company realized recoveries of previously
charged-off loans of $95,000.  Recoveries recorded in previous years were
$439,000, $39,000, $68,000 and $31,000 in 1996, 1995, 1994 and 1993
respectively.

      Although nonaccrual loans increased in 1997, the amount provided to
the Allowance for Possible Loan Losses was deemed appropriate by management
after full consideration of the value of the assets securing these loans.

      This table 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, 1997     December 31, 1996     December 31, 1995      December 31, 1994      December 31, 1993
                    --------------------  --------------------  ---------------------  ---------------------  ---------------------
                               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              Category              Category               Category               Category
                               to Total	             to Total	           to Total		  to Total	         to Total
                    Amount     Loans      Amount     Loans      Amount     Loans       Amount     Loans       Amount     Loans
-----------------------------------------------------------------------------------------------------------------------------------
                                                                 (Dollars in Thousands)

<S>                 <C>         <C>       <C>         <C>       <C>           <C>      <C>         <C>        <C>         <C>
Commercial          $  984(1)   17.14%    $  789(1)   15.70%    $  597(1)     11.35%   $  588      12.82%     $  317      13.51%

Real estate
 Construction           44       3.12         41       3.46         40         4.55        14       1.68          29       3.69

Real estate
 Mortgage            2,311(2)   76.50      2,150(2)   77.42      1,581(2)     80.04     1,374      81.03       1,320      77.66

Consumer(3)            355(4)    3.24        374(4)    3.42        280         4.06       330       4.47         288       5.14
-------------------------------------------------------------------------------------------------------------------------------

                    $3,694     100.00%    $3,354     100.00%    $2,498       100.00%   $2,306     100.00%     $1,954     100.00%
===============================================================================================================================

<F1>  Includes amounts specifically reserved for impaired loans of $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 $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 the following amounts specifically reserved for impaired loans:
      $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.
</TABLE>

      The loan portfolio's largest segment of loans is commercial real
estate loans, which represent 50.5% of gross loans.  Residential real
estate, which is the second largest segment of the loan portfolio,
represents 26% 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 17.1% of the loan
portfolio.

      Consumer loans are generally unsecured borrowings and represent 3.2%
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.

      Charge-offs in 1997 amounted to $255,000, down by $184,000 when
compared to losses incurred in 1996 of $439,000.  The Company had charge-
offs of $397,000 in 1995, $361,000 in 1994 and $1,499,000 in 1993.  The
commercial loan category incurred losses of $40,000 in 1997 compared to
$144,000 in 1996, $184,000 in 1995, $22,000 in 1994 and $963,000 in 1993.
The loss in 1993 was mostly attributable to one unusually large loan that
resulted in a $932,000 loss.

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>
                                 1997                     1996                     1995
                        ----------------------   ----------------------   -----------------------
                        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        $ 43,724       0.00%     $ 33,572       0.00%     $ 26,674        0.00%

Interest-bearing
 Demand Deposits          37,739       3.19        28,788       2.98        21,568        3.51

Savings Deposits          42,642       2.50        40,246       2.50        37,790        2.53

Money Market Deposits     14,116       1.99        13,326       2.04        16,355        2.03

Time Deposits
 $100,000 or More         23,162       5.42        18,813       5.87        15,403        5.56

Other Time Deposits      109,278       5.91        97,957       5.87        82,290        5.83
----------------------------------------------------------------------------------------------

Totals                  $270,661       3.79%      $232,702       3.87%      $200,080      3.85%
==============================================================================================
</TABLE>

      As of December 31, 1997, 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                                $ 5,898
      Over three months through six months                  8,998
      Over six months through twelve months                 5,142
      Twelve months and over                                3,073
                                                          -------
                                                          $23,111
                                                          =======
</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,
                                     -----------------------------
                                     1997        1996        1995
------------------------------------------------------------------

<S>                                   <C>         <C>         <C>
Return on Assets                      0.96%       0.94%       0.75%
Return on Equity                     12.27%      12.69%       9.99%
Dividend Payout Ratio                27.57%      27.95%      29.03%
Equity to Assets Ratio                7.79%       7.40%       7.55%
</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 along with the maximum amount of
borrowings and average amounts outstanding as well as weighted average
interest rates for the last three years.

<TABLE>
<CAPTION>
(Dollars in Thousands)                              1997        1996        1995
---------------------------------------------------------------------------------

<S>                                                <C>         <C>         <C>
Balance at December 31                             $1,200      $1,200      $  742

Maximum Amount Outstanding at Any Month's End      $1,725      $2,141      $3,700

Average Amount Outstanding During the Year         $1,067      $  987      $1,179

Weighted Average Interest Rate During the Year       4.91%       5.71%       5.34%
</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.  The Company did
not borrow during 1997 and 1996. 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 has notes payable of $950,000 due
to Fleet Bank with a final maturity 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.  There is also a $430,000
borrowing from the Federal Home Loan Bank.

Accounting for Deferred Income Taxes

      The net deferred tax asset at year end 1997 was $1,733,148.  The
amount of taxable income required to be generated to fully realize such net
deferred tax asset will be approximately $4.3 Million.  The taxable income
earned by the Company in 1997 was $4,766,731.

                                   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 nine additional branches located in Fairhaven, Fall River, New
Bedford, Seekonk, Somerset and Swansea, Massachusetts.  As of December 31,
1997, 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 Ave.      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 Ave.        Seekonk, MA         2,300

Fairhaven           75 Huttleston Ave.          Fairhaven, MA      13,000
</TABLE>

      Offices listed below are leased properties which indicate the
applicable lease expiration date.

<TABLE>
<C>                       <C>                   <C>                 <C>
Swansea Mall
(expires 2003)            Rt 118                Swansea, MA         2,250

Brayton Avenue
Drive Up Complex
(expires 2000)            16 Stevens St.        Fall River, MA        549

Walgreens Drug Store      838 Pleasant St.      New Bedford, MA       835
(expires 2004)
</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 Bank is involved in a civil suit brought in Plymouth Superior
Court by a former employee of the National Bank of Fairhaven, which
primarily alleged a breach of contract.  The demand by the plaintiff was
$550,000 to settle the case.  However, a partial summary judgement was
granted on defendant's motion dismissing all claims except the basic claim
for breach of contract.  The case is still in the pretrial phase and a
motion is pending to amend the complaint to add a new count of intentional
infliction of emotional distress.  The Company believes there are
meritorious defenses to the remaining claim and to the motion to amend, and
it intends to vigorously defend the suit.  The Company believes that the
suit will not have a material adverse effect on the Company's financial
condition, results of operation or liquidity, and no reserves have been
accrued to cover the potential liability.

                                   ITEM 4

             SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      During the fourth quarter of 1997, 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 Company's Annual Report to Stockholders
for the year ended December 31, 1997, attached as an exhibit hereto.  The
information set forth on page 10 of such Annual Report with respect to the
Market for the Registrant's Common Stock and Related Stockholder Matters is
incorporated herein by reference.

                                   ITEM 6

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

      Reference is hereby made to Company's Annual Report to Stockholders
for the year ended December 31, 1997, attached as an exhibit hereto.  The
information entitled "Management's Discussion and Analysis" and set forth on
pages 12 through 19 of such Annual Report is incorporated herein by
reference.

                                   ITEM 7

                            FINANCIAL STATEMENTS

      Reference is hereby made to Company's Annual Report to Stockholders
for the year ended December 31, 1997, attached as an exhibit hereto.  The
consolidated balance sheets at December 31, 1997 and 1996, 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, 1997
and the related notes with the report of Shatswell, MacLeod and Company,
independent auditors, which appear on pages 20 through 39 of such Annual
Report to Stockholders, are incorporated herein by reference.

                                   ITEM 8

               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 9

        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
        COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

      Reference is hereby made to the Company's definitive Proxy Statement
for the Annual Meeting of Stockholders April 13, 1998.  The information set
forth under the heading "Directors and Executive Officer" on pages 8
through 10 and under the heading "Section 16(a) Beneficial Ownership
Reporting Compliance" on page 13 of such Proxy Statement is incorporated
herein by reference.

                                   ITEM 10

                           EXECUTIVE COMPENSATION

      Reference is hereby made to the Company's definitive Proxy Statement
for the Annual Meeting of Stockholders April 13, 1998.  The information set
forth under this heading on pages 15 through 17 of such Proxy Statement is
incorporated herein by reference.

                                   ITEM 11

        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 13, 1998.  The information set
forth under this heading on pages 11 through 13 of such Proxy Statement is
incorporated herein by reference.

                                   ITEM 12

               CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Reference is hereby made to the Company's definitive Proxy Statement
for the Annual Meeting of Stockholders April 13, 1998.  The information set
forth under this heading on page 18 of such Proxy Statement is incorporated
herein by reference.

                                   ITEM 13

EXHIBITS, LIST, AND REPORTS ON FORM 8-K

(a)  Exhibits.

     See 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 31, 1998.

                                       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/s Thomas B. Almy               3/31/98    s/s Ralph S. Borges                   3/31/98
-----------------------------    -------    ----------------------------------    -------
Thomas B. Almy                              Ralph S. Borges
Director                                    Treasurer/Chief Financial Officer/
                                            Chief Accounting Officer

s/s James D. Carey               3/31/98    s/s Peter G. Collias                  3/31/98
-----------------------------    -------    ----------------------------------    -------
James D. Carey                              Peter G. Collias
Executive Vice President and                Director
Director

s/s Donald T. Corrigan           3/31/98    s/s Melvyn A. Holland                 3/31/98
-----------------------------    -------    ----------------------------------    -------
Donald T. Corrigan                          Melvyn A. Holland
Chairman of the Board and                   Director
 Director

s/s William Q. MacLean Jr.       3/31/98    s/s Francis A. Macomber               3/31/98
-----------------------------    -------    ----------------------------------    -------
William Q. MacLean Jr.                      Francis A. Macomber
Director                                    Director

s/s Majed Mouded, MD             3/31/98    s/s Shaun O'Hearn Sr.                 3/31/98
-----------------------------    -------    ----------------------------------    -------
Majed Mouded, MD                            Shaun O'Hearn Sr.
Director                                    Director

s/s Lawrence J. Oliveira, DDS    3/31/98    s/s Peter Paskowski                   3/31/98
-----------------------------    -------    ----------------------------------    -------
Lawrence J. Oliveira, DDS                   Peter Paskowski
Director                                    Director

s/s Kenneth R. Rezendes          3/31/98    s/s William J. Sullivan               3/31/98
-----------------------------    -------    ----------------------------------    -------
Kenneth R. Rezendes                         William J. Sullivan
President and Chief Executive               Director
Officer

s/s Charles Veloza               3/31/98    s/s David F. Westgate                 3/31/98
-----------------------------    -------    ----------------------------------    -------
Charles Veloza                              David F. Westgate
Director                                    Director
</TABLE>


                                Exhibit Index

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

<C>              <S>
 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     (3)
                 Stock Option Plan

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, 1997

21               List of subsidiaries of Slade's Ferry Bancorp.     (2)

23               Consent of Independent Public Accountants

27.1             Financial Data Schedule for the year ended 12/31/97

27.2             Financial Data Schedule for the years ended 12/31/96 and
                 12/31/95 and quarters ended 9/30, 6/30 and 3/31/96

27.3             Financial Data Schedule for the quarters ended 9/30, 6/30
                 and 3/31/97

-------------------
<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.
</TABLE>