UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                  FORM 10Q - QUARTERLY REPORT UNDER SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

{X}      Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934

         For the quarterly period ended September 30, 2000.

{ }      Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 For the transition period from to

                       Commission File Number: (0-26663)

                            IPSWICH BANCSHARES, INC.
                             -----------------------
             (Exact name of Registrant as specified in its charter)

Massachusetts                                                  04-3459169
--------------------------------------------------------------------------------
(State or other jurisdiction of                             I.R.S. Employer
incorporation or organization)                             Identification No.)


23 Market Street, Ipswich, Massachusetts                         01938
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)


Registrant's  telephone number,  including area code: (978) 356-7777  Securities
registered  pursuant to Section  12(b) of the Act:  None  Securities  registered
pursuant to Section 12(g) of the Act:

Title of each class:                  Name of each exchange on which registered:
Common Stock, $0.10 par value                    NASDAQ National Market

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

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by court. Yes___ No ___

The number of shares outstanding of the Registrant's common stock as of November
8, 2000 was 2,137,352.

<PAGE>

                        IPSWICH BANCSHARES, INC. AND SUBSIDIARY

                              Consolidated Balance Sheets
                     (Dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                September 30,                   December 31,
                                                                                   2000                            1999
                                                                           ---------------------          ----------------------
                                                                               ((unaudited)                     (unaudited)

                                         Assets

<S>                                                                         <C>                             <C>
Cash and due from banks                                                                  $8,547                          $6,552
Interest-bearing deposits and federal funds sold                                              0                           1,707
Investment and mortgage-backed securities available for sale                             39,669                          39,502
Investment and mortgage-backed securities held to maturity                               27,325                          28,069
Loans held for sale                                                                       2,358                               0

Loans:
     Residential fixed rate                                                              70,554                          77,490
     Residential adjustable rate                                                         98,837                          86,519
     Home equity                                                                         28,296                          23,385
     Commercial                                                                           5,461                           4,873
     Consumer                                                                             1,057                           1,060
                                                                           ---------------------          ----------------------
          Total gross loans                                                             204,205                         193,327

Allowance for possible loan losses                                                       -1,823                          -1,798
                                                                           ---------------------          ----------------------

      Net loans                                                                         202,382                         191,529

Stock in FHLB of Boston                                                                   3,000                           3,977
Savings Bank Life Insurance Company stock                                                   253                             253
Banking premises and equipment, net                                                       3,046                           3,168
Other real estate owned                                                                       0                             111
Accrued interest receivable                                                               1,615                           1,248
Other assets                                                                                356                             182
                                                                           ---------------------          ----------------------

      Total assets                                                                     $288,551                        $276,298
                                                                           =====================          ======================


                          Liabilities and Stockholders' Equity

Liabilities:
  Deposits:
     Non-interest-bearing checking accounts                                             $20,464                         $15,209
     Interest-bearing checking accounts                                                  31,711                          27,481
     Savings accounts                                                                    36,989                          37,704
     Money market accounts                                                               62,563                          62,859
     Certificates of deposit                                                             73,549                          66,829
                                                                           ---------------------          ----------------------
          Total deposits                                                                225,276                         210,082


  Borrowed funds                                                                         42,584                          45,000
  Mortgagors' escrow accounts                                                               972                             993
  Deferred income tax liability, accrued expenses and other liabilities                   3,433                           3,248
                                                                           ---------------------          ----------------------

      Total liabilities                                                                 272,265                         259,323


Equity capital                                                                           18,278                          16,965
Treasury stock   (262,400 shares)                                                        -2,295                               0
Unrealized gain on investment securities available for sale                                 303                              10
                                                                           ---------------------          ----------------------
      Total stockholders' equity                                                         16,286                          16,975
                                                                           ---------------------          ----------------------

      Total liabilities and stockholders' equity                                       $288,551                        $276,298
                                                                           =====================          ======================

Shares outstanding                                                                    2,263,027                       2,525,427

Selected data (end of period):

---------------------------------------------------------

  Equity to assets  (in %)                                                                 5.64                            6.14
  Total equity to risk-weighted assets  (in %)                                            12.67                           14.38
  Total non-performing assets, net                                                          $27                            $142
  Book value per share                                                                    $7.20                           $6.72
</TABLE>

                                    Page -2-

<PAGE>

                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

                        Consolidated Statements of Income
                  (Dollars in thousands, except per share data)


<TABLE>
<CAPTION>

                                                                     Three Months Ended                  Nine Months Ended
                                                                       September 30,                       September 30,
                                                                2000                1999               2000               1999
                                                          ----------------     --------------     --------------    --------------
                                                             (unaudited)         (unaudited)        (unaudited)       (unaudited)

Interest and dividend income:
<S>                                                                <C>                <C>               <C>               <C>
   Loans                                                           $3,854             $3,586            $10,993           $10,815
   Investment securities available for sale                           719                539              2,089             1,612
   Investment securities held to maturity                             467                344              1,410               803
   Federal funds and interest bearing deposits                         74                 65                266               137
                                                          ----------------     --------------     --------------    --------------

      Total interest and dividend income                            5,114              4,534             14,758            13,367

Interest expense:
   Deposits                                                         2,076              1,623              5,876             4,844
   Borrowed funds                                                     790                633              2,230             2,081
                                                          ----------------     --------------     --------------    --------------

      Total interest expense                                        2,866              2,256              8,106             6,925
                                                          ----------------     --------------     --------------    --------------

      Net interest and dividend income                              2,248              2,278              6,652             6,442

Provision for possible loan losses                                     15                 10                 45               100
                                                          ----------------     --------------     --------------    --------------

      Net interest and dividend income after
        provision for possible loan losses                          2,233              2,268              6,607             6,342

Non-interest income:
   Mortgage banking revenues, net                                     -78                436                 14             1,195
   Retail banking fees                                                449                380              1,250             1,106
   Net gain/(loss) on sales of securities                               0                  0                  2                65
   Other                                                               -1                  4                 10                11
                                                          ----------------     --------------     --------------    --------------

      Total non-interest income                                       370                820              1,276             2,377
                                                          ----------------     --------------     --------------    --------------

      Net interest, dividend and non-interest income                2,603              3,088              7,883             8,719

Non-interest expenses:
   Salaries and employee benefits                                     834                834              2,483             2,396
   Occupancy and equipment expenses                                   229                226                681               676
   Data processing services                                           211                205                655               564
   Marketing expense                                                  103                102                407               368
   Professional fees                                                   82                 71                260               611
   Office expense                                                      92                100                276               294
   Other                                                              103                 80                323               409
                                                          ----------------     --------------     --------------    --------------

      Total non-interest expenses                                   1,654              1,618              5,085             5,318
                                                          ----------------     --------------     --------------    --------------
Income before income taxes                                            949              1,470              2,798             3,401

Income tax expense                                                    332                442                789             1,021
                                                          ----------------     --------------     --------------    --------------

      Net income                                                     $617             $1,028             $2,009            $2,380
                                                          ================     ==============     ==============    ==============

Basic earnings per share                                            $0.26              $0.41              $0.82             $0.97
Diluted earnings per share                                          $0.26              $0.40              $0.81             $0.94

Dividends per share                                                 $0.10              $0.05              $0.30             $0.15

Weighted average common shares outstanding (basic)              2,369,795          2,525,227          2,454,597         2,460,572
Weighted average common shares outstanding (diluted)            2,395,805          2,550,388          2,478,903         2,539,217

Selected performance data:
---------------------------------------------------
  (Expense ratios exclude one time charges)
   Return on average equity  (in %)                                 14.58              25.74              15.53             20.78
   Return on average assets  (in %)                                  0.85               1.52               0.94              1.18
   Net interest margin  (in %)                                       3.18               3.51               3.20              3.27
   Expenses to average assets  (in %)                                2.26               2.40               2.38              2.44
   Efficiency ratio  (in %)                                         60.09              53.35              63.33             56.84
   Mortgage and equity loan production                            $20,145            $23,076            $50,711           $96,189
</TABLE>

                                    Page -3-

<PAGE>

                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

           Consolidated Statements of Changes in Stockholders' Equity
                 Nine Months Ended September 30, 2000 and 1999
                  (Dollars in thousands, except for share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                      Accumulated
                                                                    Additional                           other          Total
                                               Shares      Common    paid-in    Retained   Treasury  comprehensive  stockholders'
                                            outstanding    stock     capital    earnings    stock       income         equity
                                            ------------  -------   --------    --------   --------    ---------    -----------
<S>                                          <C>           <C>       <C>        <C>         <C>          <C>         <C>
Balance at December 31, 1998                 2,392,286     $ 239     $ 2,009    $ 11,790    $     0      $  185      $14,223

Stock options exercised                        133,141        14         226                                             240
Issuance of stock rights                                                  19                                              19
Cash dividends ($.15 per share)                                                     -372                                -372
Comprehensive income:
                                                                                   2,380                               2,380
  Net income Other comprehensive income:

    Unrealized holding gains on                                                                                         -129
      securities, net of taxes of $86
    Reclassification adjustment
      for amounts included in net                                                                                         78
      income, net of taxes of $52                                                                                   ---------

                                                                                                            -51          -51
  Other comprehensive income                                                                                        ---------

Total comprehensive income                                                                                             2,329

                                             ----------   -------  ----------   ---------   --------     -------    ---------

Balance at September 30, 1999                2,525,427       253       2,254      13,798          0         134       16,439

Issuance of stock rights                                                   8                                               8
Cash dividends ($.10 per share)                                                     -257                                -257
Comprehensive income:
  Net income Other comprehensive income:                                             909                                 909

    Unrealized holding gains on
      securities, net of taxes of $64                                                                                    -94
    Reclassification adjustment
      for amounts included in net
      income, net of taxes of ($19)                                                                                      -30
                                                                                                                    ---------

  Other comprehensive income                                                                               -124         -124
                                                                                                                    ---------
Total comprehensive income
                                                                                                                         785
                                             ----------   -------  ----------   ---------   --------     -------    ---------

Balance at December 31, 1999                 2,525,427       253       2,262      14,450          0          10       16,975

Issuance of stock rights                                                  27                                              27
Purchase of treasury stock                    -262,400                                       -2,295                   -2,295
Cash dividends ($.30 per share)                                                     -723                                -723
Comprehensive income:

  Net income Other comprehensive income:                                           2,009                               2,009

    Unrealized holding gains on
      securities, net of taxes of $178                                                                                   267
    Reclassification adjustment
      for amounts included in net
      income, net of taxes of $10                                                                                         26
                                                                                                                    ---------

  Other comprehensive income                                                                                293          293
                                                                                                                    ---------
Total comprehensive income
                                                                                                                       2,302
                                             ----------   -------  ----------   ---------   --------     -------    ---------

Balance at September 30, 2000                2,263,027     $ 253    $  2,289    $ 15,736    $-2,295      $  303      $16,286
                                             ==========   =======  ==========   =========   ========     =======    =========
</TABLE>


                                    Page -4-

<PAGE>

                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 2000 and 1999
                             (Dollars in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                             2000                    1999
                                                                                      -------------------      ------------------

Net cash flows from operating activities:
<S>                                                                                               <C>                     <C>
  Net income                                                                                      $2,009                  $2,380

  Adjustments  to reconcile net income to net cash provided  (used) by operating
activities:

       Provision for possible loan losses                                                             45                     100
       Depreciation expense                                                                          259                     252
       Amortization of premiums on investment securities, net                                         41                     129
       (Gain) Loss on sale of loans, net                                                              78                    -977
       Loss on sale of real estate acquired by foreclosure                                             1                       0
       (Gain) on sale of investment securities available for sale, net                                -2                     -65
       Origination of loans held for sale                                                        -16,014                 -72,592
       Proceeds from sale of loans                                                                 3,459                  11,544
       Proceeds from sale of securitized loans                                                     9,544                  76,954
       (Increase) in loan origination fees                                                          -275                    -170
       (Decrease) in loan discounts                                                                   -4                      -2
       (Increase) in deferred premium on loans sold and mortgage servicing rights                    -97                  -1,097
       (Increase) in accrued interest receivable                                                    -367                    -248
       (Increase)decrease in other assets, net                                                       -77                      33
       Increase (decrease) in accrued expenses and other liabilities                                  -5                     489
                                                                                      -------------------      ------------------

  Net cash provided (used) by operating activities                                                -1,405                  16,730

Net cash flows from investing activities:

  Purchase of investment securities available for sale                                           -13,329                 -13,380
  Principal paydowns on mortgage-backed investment securities available for sale                   7,197                  10,674
  Proceeds from the sale of investment securities available for sale                               6,985                   4,860
  Purchase of investment securities held to maturity                                                   0                 -13,926
  Principal paydowns on mortgage-backed investment securities held to maturity                       743                     736
  Principal from the call of investment securities held to maturity                                    0                   2,000
  Redemption (purchase) of stock in FHLB of Boston                                                   977                  -1,072
  Net (increase) in loans                                                                        -10,619                  -2,047
  Proceeds from sale of real estate acquired by foreclosure                                          110                       0
  Purchases of equipment, net                                                                       -137                    -155
                                                                                      -------------------      ------------------
  Net cash (used) by investing activities                                                         -8,073                 -12,310

Cash flows from financing activities:

  Net proceeds from the issuance of common stock                                                      27                     259
  Purchase of treasury stock                                                                      -2,295                       0
  Cash dividends                                                                                    -723                    -372
  Net increase in deposits                                                                        15,194                   3,266
  Proceeds from Federal Home Loan Bank advances                                                   53,454                  69,500
  Repayment of Federal Home Loan Bank advances                                                   -55,870                 -74,500
  (Decrease) increase in mortgagors' escrow accounts                                                 -21                       4
                                                                                      -------------------      ------------------

  Net cash (used) provided by financing activities                                                 9,766                  -1,843
                                                                                      -------------------      ------------------

Net increase in cash and cash equivalents                                                            288                   2,577

Cash and cash equivalents at beginning of period                                                   8,259                  12,095
                                                                                      -------------------      ------------------

Cash and cash equivalents at end of period                                                        $8,547                 $14,672
                                                                                      ===================      ==================

Supplemental disclosure of cash flow information:
  Cash paid for:
       Interest on deposit accounts                                                               $5,876                  $4,844
       Interest on borrowed funds                                                                  2,230                   2,081
       Income tax expense, net                                                                       789                   1,021
Supplemental schedule of non-cash investing and financing activities:
  Net change required by Statement of Financial Accounting Standards No. 115:
       Investment securities                                                                         483                     -91
       Deferred income tax liability                                                                -190                      40
       Net unrealized gain (loss) on investment securities available for sale                        293                     -51
Conversion of residential real estate
  loans to mortgage-backed securities                                                              5,008                  67,100
Transfer of securitized mortgage loans to
    mortgage-backed securities available for sale                                                    575                   8,996

</TABLE>

                                    Page -5-

<PAGE>

                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                           September 30, 2000 and 1999

Basis of Presentation

The  consolidated   financial   statements   include  the  accounts  of  Ipswich
Bancshares,  Inc. and its wholly  owned  subsidiary,  Ipswich  Savings Bank (the
Bank)  and the  Bank's  subsidiaries,  Ipswich  Preferred  Capital  Corporation,
Ipswich  Securities  Corporation  and  North  Shore  Financial  Services,   Inc.
(collectively herein referred to as the Company).  All significant  intercompany
accounts and transactions have been eliminated in consolidation.

Ipswich  Preferred  Capital   Corporation   (IPCC)  was  formed  in  1999  as  a
Massachusetts  business  corporation  which elected to be taxed as a real estate
investment trust for Federal and Massachusetts  tax purposes.  IPCC is 99% owned
by  Ipswich  Savings  Bank.  IPCC holds  mortgage  loans  which were  previously
originated  by  the  Company.  Ipswich  Securities  Corporation  was  formed  to
exclusively  transact  in  securities  on  its  own  behalf  as  a  wholly-owned
subsidiary of the Bank.  North Shore Financial  Services,  Inc. was incorporated
for the purpose of holding direct investments in real estate and foreclosed real
estate.

The  consolidated  financial  statements  have been prepared in conformity  with
generally accepted accounting principles. In preparing the financial statements,
management  is  required  to make  estimates  and  assumptions  that  affect the
reported  amounts of assets and  liabilities as of the date of the balance sheet
and  revenues  and  expenses  for  the  period.   Actual  results  could  differ
significantly from those estimates.

Material  estimates that are particularly  susceptible to significant  change in
the  near-term  relate to the  determination  of the allowance for possible loan
losses, the valuation of real estate acquired by foreclosure,  and the valuation
of originated mortgage servicing rights.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the three and nine month  periods  ended
September  30, 2000 are not  necessarily  indicative  of the results that may be
expected for the fiscal year ending December 31, 2000. For further  information,
refer to the audited consolidated financial statements and footnotes thereto for
the fiscal year ended December 31, 1999 included in the Company's  Annual Report
on Form 10-K.

A substantial portion of the Company's loans are secured by real estate in Essex
County in Massachusetts. In addition, other real estate owned is located in that
market. Accordingly, the ultimate collectibility of a substantial portion of the
Company's loan  portfolio and the recovery of the carrying  amount of other real
estate owned are  susceptible to changes in market  conditions in its geographic
area.

                                    Page -6-

<PAGE>

Earnings Per Share

The  computation  of basic  earnings per share is based on the weighted  average
number of shares of common stock outstanding during each period. The computation
of diluted  earnings per share is based on the weighted average number of shares
of common stock  outstanding  and dilutive  potential  common stock  equivalents
outstanding during each period. Stock option grants are included only in periods
when the results are dilutive.

                                            Nine Months Ended September 30,

         2000                       Income           Shares            Per-Share
                                    (Numerator)      (Denominator)     Amount
                                    --------------------------------------------
Basic EPS                             $2,009           2,455            $0.82
Effect of stock options                 --                24             (.01)
                                    --------------------------------------------
Diluted EPS                           $2,009           2,479            $0.81
                                    ============================================

         1999

Basic EPS                             $2,380           2,461            $0.97
Effect of stock options                 --                78             (.03)
                                    --------------------------------------------
Diluted EPS                           $2,380           2,539            $0.94
                                    ============================================


                                            Three Months Ended September 30,

         2000                       Income           Shares            Per-Share
                                    (Numerator)      (Denominator)     Amount
                                    --------------------------------------------
Basic EPS                             $617             2,370            $0.26
Effect of stock options                 --                26              --
                                    --------------------------------------------
Diluted EPS                           $617             2,396            $0.26
                                    ============================================


         1999

Basic EPS                             $1,028           2,525            $0.41
Effect of stock options                 --                25             (.01)
                                    --------------------------------------------
Diluted EPS                           $1,028           2,550            $0.40
                                    ============================================


Other Comprehensive Income

Accumulated   other   comprehensive   income   consists   solely  of  unrealized
appreciation on investment securities available for sale, net of taxes.

                                    Page -7-

<PAGE>

ITEM 2

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

Certain statements in this Form 10-Q constitute "forward looking statements", as
that term is defined under the Private Securities Litigation Reform Act of 1995.
The words "believe",  "expect",  "anticipate",  "intend",  "plan", "assume", and
other similar expressions which are predictions of or indicate future events and
trends and which do not relate to historical  matters  identify  forward looking
statements.  Reliance should not be placed on forward looking statements because
they involve known and unknown risks, uncertainties and other factors, which are
in some  cases  beyond  the  control  of the  Company  and may cause the  actual
results,  performance,  or achievements of the Company to differ materially from
anticipated future results,  performance or achievements expressed or implied by
such forward looking statements.

Certain factors that may cause such differences  include, but are not limited to
the following:  interest rates may increase,  adversely affecting the ability of
borrowers to repay  adjustable rate loans and the Company's  earnings and income
which derive in significant  part from loans to borrowers;  unemployment  in the
Company's  market  area  may  increase,   adversely  affecting  the  ability  of
individual  borrowers to re-pay loans;  property  values may decline,  adversely
affecting  the ability of borrowers to re-pay loans and the value of real estate
securing  repayment  of loans;  general  economic and market  conditions  in the
Company's market area may decline,  adversely affecting the ability of borrowers
to re-pay  loans,  the value of real  estate  securing  payment of loans and the
Company's  ability to make profitable loans;  adverse  legislation or regulatory
requirements  may  be  adopted;   and  competitive   pressure  among  depository
institutions  may increase.  Any of the above may also result in lower  interest
income, increased loan losses, additional charge-offs and write-downs and higher
operating  expenses.  The Company  disclaims  any intent or obligation to update
publicly any of the forward looking  statements  herein,  whether in response to
new information, future events or otherwise.

GENERAL

Ipswich  Bancshares,  Inc. (the Company) is a  Massachusetts  corporation  whose
primary business is serving as the holding company for Ipswich Savings Bank (the
Bank).  On July 1, 1999, in connection  with the formation of the Company as the
holding company for the Bank,  each share of the Bank's common stock  previously
outstanding  was converted  automatically  into one share of common stock of the
Company,  and the Bank became a wholly  owned  subsidiary  of the  Company.  The
reorganization had no impact on the consolidated financial statements.

The Company's  operating  results for the three and nine months ended  September
30, 2000  reflect  the  operations  of the  Company and its direct and  indirect
subsidiaries,  Ipswich  Savings Bank,  Ipswich  Preferred  Capital  Corporation,
Ipswich Securities  Corporation and North Shore Financial Services.  The Company
is in the  business  of making  residential  mortgage  loans,  while  attracting
deposits from the general public to fund those loans.  The Company  operates out
of  its  main  office  located  at 23  Market  Street,  Ipswich,  Essex  County,
Massachusetts,  and its seven  full-service  retail branch  offices,  located in
Beverly,  Essex,   Marblehead,   North  Andover,   Rowley,  Reading  and  Salem,
Massachusetts. The Company operates Automatic Teller Machines at its Main Office
and each of its full-service  retail branch offices.  As a bank holding company,
the Company is subject to regulation,  supervision  and examination by the Board
of  Governors  of the Federal  Reserve  (the  Federal  Reserve)  and the Bank is
subject to regulation, supervision and examination by the Federal

                                    Page -8-

<PAGE>

Deposit Insurance  Corporation (the FDIC) and the Massachusetts  Commissioner of
Banks (the Commissioner).

ASSET / LIABILITY MANAGEMENT

The Company does not use static GAP  analysis to manage its interest  rate risk.
It believes that simulation  modeling more accurately  encompasses the impact of
changes in interest rates on the earnings of the Company over time. However, the
Company prepares a GAP schedule to measure its static position.

Assets and  liabilities are classified as interest rate sensitive if they have a
remaining  term to maturity  of 0-12  months,  or are  subject to interest  rate
adjustment  in those time  periods.  Adjustable  rate loans and mortgage  backed
securities are shown as if the entire  balance comes due on the repricing  date.
Estimates of fixed rate loan  amortization  prepayments  are included  with rate
sensitive  assets.  Because  regular  savings,  demand  deposits,  money  market
accounts  and NOW  accounts  may be  withdrawn  at any time and are  subject  to
interest rate  adjustments  at any time,  they are presented  based upon assumed
maturity  structures.  As a result of this analysis,  the static GAP position in
the 0 to 12 months range is a negative $13.1 million at September 30, 2000.

Interest rate sensitivity statistics are static measures that do not necessarily
take into  consideration  external  factors which may affect the  sensitivity of
assets and  liabilities,  and  consequently can not be used alone to predict the
operating results of a financial institution in a changing environment.

LIQUIDITY

The Company seeks to ensure that sufficient  liquidity is available to meet cash
requirements  while  earning a return on liquid  assets.  The  Company  uses its
liquidity  primarily to fund loans and  investment  commitments,  to  supplement
deposit  outflows,  to fund its share  repurchase  program and to meet operating
expenses.   The  primary   sources  of  liquidity  are  interest  and  principal
amortization from loans,  mortgage backed securities and investments,  the sales
and maturities of investments,  loan sales, deposits, and Federal Home Loan Bank
of Boston (the FHLBB) advances,  which includes a $3.2 million overnight line of
credit.  The Company also uses longer term borrowed  facilities within its total
available credit line with the FHLBB. Advances from the FHLBB were $42.6 million
at September 30, 2000.

During 2000 the primary  sources of liquidity  were $13.0 million in loan sales,
principal amortization from mortgage backed securities of $7.9 million,  payoffs
and principal  amortization  is the loan portfolio of $11.9 million and the sale
of investment  securities of $7.0 million.  The primary uses of funds were $38.1
million in  residential  first mortgage loan  originations  and $13.3 million in
investment purchases.

CAPITAL RESOURCES

Total  stockholders'  equity at September 30, 2000 was $16.3 million, a decrease
of $689,000  from $17.0  million at the end of 1999.  Included in  stockholders'
equity at September  30, 2000 is an  unrealized  gain on  marketable  securities
available  for sale,  net of taxes,  of  $303,000,  an  increase  of $293,000 as
compared to $10,000 at December 31, 1999.  Future  interest rate increases could
reduce the market value of these securities and reduce stockholders' equity.

                                    Page -9-

<PAGE>

The Company  completed a stock repurchase plan of 10% of the outstanding  shares
announced  March 2000.  Through  September 30, 2000, the Company had repurchased
262,400 or 10% of the  outstanding  shares at an average price of $8.75 totaling
$2.3  million,  which is  reflected as a decrease to equity.  Subsequently,  the
Company announced a second 10% stock repurchase plan on October 19, 2000.

The Federal Reserve's and the FDIC's capital  guidelines require the Company and
the Bank, respectively,  generally to maintain a minimum Tier 1 leverage capital
ratio of at least 4% (5% to be classified as  "well-capitalized").  At September
30, 2000 Tier 1 leverage  capital  ratio for the  Company was 5.48%  compared to
6.33% at  December  31, 1999 and 5.49% and 6.29% for the Bank on  September  30,
2000 and December 31, 1999, respectively.

The  Federal  Reserve  and  the  FDIC  have  also  imposed   risk-based  capital
requirements  on the Company and the Bank,  respectively,  which give  different
risk  weightings  to  assets  and to off  balance  sheet  assets,  such  as loan
commitments.  The Federal Reserve's and the FDIC's risk-based capital guidelines
require  the  Company and the Bank,  respectively,  to maintain a minimum  total
risk-based capital ratio of 8% (10% to be classified as "well-capitalized")  and
a  Tier  1   risk-based   capital   ratio  of  4%  (6%  to  be   classified   as
"well-capitalized").  At September  30,  2000,  the  Company's  total and Tier 1
risk-based  capital ratios were 12.66% and 11.41% (compared to 14.38% and 13.13%
at December 31, 1999).  At September 30, 2000,  the Bank's total and Tier 1 risk
based  capital  ratios were 12.61% and 11.42%  (compared to 14.29% and 13.04% at
December 31, 1999).

As of  September  30, 2000,  the Bank was  considered  "well-capitalized"  under
applicable regulatory capital guidelines.

FINANCIAL CONDITION

The  Company's  total  assets at  September  30,  2000 were $288.6  million,  an
increase of $12.3 million from December 31, 1999 assets of $276.3  million.  The
increase was largely due to the addition of $10.9  million in total loans,  $2.4
million  in  mortgages  held for sale,  and $12.4  million  in  adjustable  rate
mortgaged backed  securities.  Funding the increase in assets for the first nine
months  of 2000 was  deposit  growth of $15.2  million,  primarily  in  checking
accounts and  certificates  of deposit.  Conversely,  borrowed funds decrease by
$2.4 million in 2000 from year-end 1999.

Federal Funds Sold

Interest-bearing deposits and federal funds sold at September 30, 2000 was zero,
versus $1.7  million at December  31,  1999.  The decrease in fed funds sold was
primarily due to the payoff of borrowings  that matured in the first nine months
of 2000.

Investment and Mortgage-Backed Securities

Total investments and mortgage backed securities available for sale at September
30, 2000 was $39.7  million,  an increase of $167,000 in 2000.  The increase was
primarily  the  result of the  purchase  of $12.4  million  in  adjustable  rate
mortgage-backed   securities,   and  $920,000  of  equity   securities  and  the
securitization  from the loan  portfolio  of $575,000  of fixed rate  mortgages,
offset by $7.0 million in sales and $7.2 million in principal amortization.

The  unrealized  gain on the  portfolio of available  for sale  securities,  was
$510,000 at September  30, 2000.  The  increase in value is  principally  in the
portfolio of adjustable rate mortgage-backed securities,  which in a rising rate
environment,  will  increase  in  yield as the  underlying  loans  reprice.  The
repricing aspect of these securities helps to sustain the market values.

                                    Page -10-

<PAGE>

Total  investments  and  mortgage-backed  securities held to maturity were $27.3
million at September 30, 2000,  versus $28.1  million at December 31, 1999.  The
decline is due to principal  amortization  on the  portfolio of  mortgage-backed
securities of $743,000.

Loans and Loans Held for Sale

Loans held for sale  increased to $2.4 million at September 30, 2000,  versus $0
at year-end 1999.  The Company's  portfolio of mortgages held for sale increased
due to the recent origination of fixed rate loans.

The loan  portfolio at  September  30, 2000 was $204.2  million,  an increase of
$10.9  million in  comparison  to the  portfolio  at December 31, 1999 of $193.3
million.  The increase was principally in adjustable  rate mortgages,  which are
written for  portfolio  versus sale in the  secondary  market.  The Company will
continue to place  adjustable rate mortgages in its portfolio as a result of the
more favorable interest rate risk profile for these loans in comparison to fixed
rate loans.  Current  originations of fixed rate loans are sold in the secondary
market.

CREDIT QUALITY

Non-Performing Loans

Loans  placed  on  non-performing  status at  September  30,  2000 was  $27,000,
substantially  unchanged  since  year-end.  Accrual  of  interest  on  loans  is
discontinued  either  when a  reasonable  doubt  exists,  as to the full  timely
collection of principal and interest,  or when a loan comes  contractually  past
due by ninety (90) days or more,  unless the loan is  adequately  secured and in
the process of collection.

When a loan is placed on non-accrual  status, all interest  previously  accrued,
but not collected, is reversed against current period interest income. Income on
such loans is  recognized  to the extent that cash is received  and the ultimate
collection  of  principal  and  interest  is  probable.   Following   collection
procedures,  the Company generally  institutes  appropriate actions to foreclose
the property.

Real Estate Acquired by Foreclosure

Real estate acquired by foreclosure totaled $0 at September 30, 2000, a decrease
of $111,000  since year-end 1999. The decrease is due to the sale of OREO during
the first  half of the year.  The  Company  owns two  parcels of land which have
previously  been written down to $1 each. Real estate acquired by foreclosure is
reflected  at the  lower  of the  net  carrying  value,  or fair  value,  of the
property, less estimated costs of disposition.

Allowance for Loan Loss

The allowance  for loan loss at September  30, 2000 was $1.8 million,  unchanged
since year-end 1999. The entire allowance for loan losses is available to absorb
charge-offs  in any  category  of loans.  Loan  losses are  charged  against the
allowance when management believes that the collectibility of the loan principal
is unlikely. The allowance for possible loan losses is established by management
to absorb future  charge-offs  of loans deemed  uncollectible.  The allowance is
increased by provisions  charged to operating expense and by recoveries on loans
previously  charged-off.  In evaluating current information and events regarding
borrowers ability to repay their obligations,  management  considers  commercial
loans over  $200,000 to be impaired when it is probable that the Company will be
unable to collect all amounts  due,  according to the  contractual  terms of the
note agreement;  other loans are evaluated  collectively for impairment.  When a
loan is  considered  to be impaired,  the amount of the  impairment  is measured
based on the present value of expected future

                                    Page -11-

<PAGE>

cash flows discounted at the loan's effective interest rate or the fair value of
collateral, if the loan is collateral-dependent.  Impairment losses are included
in the  allowance  for loan losses  through a charge to the  provision  for loan
losses.  Management  believes  that the  allowance  for possible  loan losses is
adequate as of September 30, 2000. While  management uses available  information
to  recognize  losses  on  loans,  future  additions  to  the  allowance  may be
necessary.

Liabilities

Deposits increased by $15.2 million in the nine months of 2000, to end September
30, 2000 at $225.3  million.  Deposits  totaled  $210.1  million at December 31,
1999.  The increase in deposits  resulted  from the Company's  ongoing  checking
account program which generated an increase of $9.5 million in checking accounts
balances in 2000. In addition, certificates of deposit increased by $6.7 million
as rising rates made CDs a more attractive investment vehicle for depositors.

Federal Home Loan Bank of Boston  advances  decreased by $2.4 million in 2000 to
$42.6 million at September 30, 2000. Borrowed funds are typically used to manage
the liquidity of the Company and the  utilization  of borrowings is dependent on
cash flows from other assets and liabilities. The Company extended a substantial
portion  of its  borrowings  in the first  six  months of 2000 to hedge its risk
against rising interest rates.  The weighted  average maturity of its borrowings
is approximately 1.5 years at September 30, 2000.

Equity Capital

Equity  capital  decreased by $689,000 to $16.3  million at September  30, 2000.
Equity was  principally  impacted by  earnings  for the first nine months of the
year  of  $2.0  million  and an  increase  in the  unrealized  gain  or  loss on
investment securities of $293,000, net of taxes. Offsetting these increases were
payments of cash  dividends  to  shareholders  which  totaled  $723,000 in 2000.
Additionally,  the Company  repurchased 262,400 shares or 10% of its outstanding
shares in executing its  previously  announced 10% share  repurchase  plan.  The
average price per share was $8.75 totaling $2.3 million.  The cost of the shares
as reflected  in the equity  capital  section of the balance  sheet as "Treasury
Stock".  Subsequent to quarter end, on October 19, 2000, the Company announced a
second 10% share repurchase program.

                                    Page -12-

<PAGE>

       RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
             COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 1999

General

The Company  reported net income of $617,000 or $.26 per fully diluted share for
the third  quarter of 2000.  This  compares  with $1.0 million or $.40 per fully
diluted  share for the third  quarter of 1999.  The third  quarter 2000 earnings
were impacted by a pre-tax charge of $153,000  resulting from a restructuring of
a portion of the loan portfolio  consisting of the sale of $6.0 million of below
market  loans in the  secondary  market and the  reinvestment  of those funds in
higher rate loans with less interest rate risk.

Return on equity for the third quarter of 2000 was 14.58%, versus 25.74% for the
same quarter of 1999. The third quarter of 2000 return on assets was .85% versus
1.52% for the same quarter in 1999.

Net Interest and Dividend Income

Net interest income for the third quarter of 2000 was $2.2 million,  versus $2.3
million for the same time frame in 1999. The net interest margin  percentage was
3.18% for the third  quarter  of 2000  versus  3.51%  for the same  quarter  the
previous year.

As a result of the Company's  interest rate risk position,  net interest margins
have  experienced  compression  during the  current  quarter.  This  compression
resulted from the rates on borrowings  and deposits  increasing at a faster rate
than those on loans and investment.

Non-interest Income

Non-interest  income for the third quarter of 2000 was $370,000  versus $820,000
in the third quarter of 1999.  Non-interest  income was  substantially  lower in
2000, as a result of lower  mortgage  banking  revenues and a pre-tax  charge of
$153,000  taken from a partial  restructuring  of the loan  portfolio.  Mortgage
banking revenues are principally  generated from the sale of fixed rate loans in
the secondary market. As a result of the current interest rate environment,  the
Company is originating  primarily adjustable rate mortgages for portfolio versus
fixed rate loans to sell in the secondary  market.  The resulting impact is that
mortgage  banking  revenues for the third quarter of 2000 was  ($78,000)  versus
$436,000  for the third  quarter  of 1999 when the  Company  sold a  significant
amount of mortgages in the secondary market.

Retail  banking fees for the third quarter of 2000 was $449,000 versus  $380,000
for the same quarter in 1999.  This 18.2% increase is principally  the result of
the Company's  successful  efforts to acquire checking account  customers in its
market place, which generates fee income.

Non-interest Expense

Total  non-interest  expenses  were $1.7  million for the third  quarter of 2000
versus $1.6 million for the same time frame in 1999.  Expenses  which  exhibited
increases  included data processing costs which increased $6,000, or 2.9% in the
current  quarter  versus the same  quarter in 1999 and  professional  fees which
increased by $11,000 or 15.5% in the current quarter versus the previous.

Income Tax Expense

The second  quarter of 2000  effective tax rate was 35% versus 30% for the third
quarter of 1999.  A tax rate of 35% in 2000 is expected to continue  through the
remainder of the year.

                                    Page -13-

<PAGE>

       RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
              COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1999

General

The Company  reported net income of $2.0 million or $.81 per fully diluted share
for the first nine months of 2000.  This  compares with $2.4 million or $.94 per
fully diluted share for the first nine months of 1999.

Return on equity for the first nine months of 2000 was 15.53%, versus 20.78% for
the same time frame in 1999.  The first nine months of 2000 return on assets was
 .94% versus 1.18% for the time frame in 1999.

Net Interest and Dividend Income

Net interest  income for the first nine months of 2000 was $6.7 million,  versus
$6.4 million for the same time frame in 1999. The net interest margin percentage
was 3.20% versus 3.27% for the same time frame the previous year.

The net interest  income was positively  impacted by growth of the balance sheet
from $272.3  million at September  30, 1999 to $288.6  million at September  30,
2000.

Non-interest Income

Non-interest  income for the first nine months of 2000 was $1.3  million  versus
$2.4 million in the first nine months of 1999. Non-interest income declined as a
result of lower  mortgage  banking  revenues  and a pre-tax  charge of  $153,000
resulting from the partial restructuring of the loan portfolio. Mortgage banking
revenues  are  generated  from  the sale of fixed  rate  loans in the  secondary
market. Due to the current interest rate environment, the Company is originating
primarily  adjustable rate loans for portfolio versus fixed rate loans which are
sold in the secondary market. Total mortgage banking revenues for the first nine
months of 2000 were $14,000 versus $1.2 million for the same time frame in 1999.

Retail  banking  fees  totaled  $1.3  million  for the first nine months of 2000
versus $1.1 million for the same time frame in 1999,  an increase of $144,000 or
13%. Retail banking fees have increased as a result of the Company's emphasis on
generating  checking  accounts in its retail branch  network  which  contributes
significantly to fee income.

Non-interest Expense

Total  non-interest  expense was $5.1  million for the first nine months of 2000
versus $5.3  million  for the same time frame in 1999.  The 1999  expenses  were
impacted by a $380,000 charge to form the holding  company,  and its Residential
Real Estate Investment Trust.  Non-interest  expenses line items which increased
in 2000 over 1999 were  salaries and  benefits,  an increase of $87,000 or 3.6%,
and data  processing  expenses which  increased by $91,000 or 16.1%.  These cost
increases are a result of the Company's  successful efforts to generate checking
accounts  for  which  the  branch  staff is  incented,  and  corresponding  data
processing costs to support these new accounts.

Income Tax Expense

The first nine months of 2000  effective  tax rate was 28.2%  versus 30% for the
same time  frame in 1999.  The tax rate in 2000 was  impacted  by the  Company's
realization  of a  $190,000  tax  benefit  resulting  from  a  reduction  in its
valuation  reserve.  Excluding  the  one-time  credit,  the tax  rate in 2000 is
expected to be 35% versus  28.7% in 1999,  which was  impacted  by one-time  tax
benefits.

                                    Page -14-

<PAGE>

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company's  success is dependent  upon its ability to manage  interest  rate
risk.  Interest  rate risk can be defined as the exposure of the  Company's  net
interest  income to adverse  movements in interest  rates.  Although the Company
manages other risks,  as in credit and  liquidity  risk, in the normal course of
its business, management considers interest rate risk to be its most significant
market  risk and  could  potentially  have the  largest  material  effect on the
Company's  financial  condition and results of  operations.  Because the Company
does not maintain a trading  portfolio,  it is not exposed to significant market
risk from trading activities.

The  Company's  interest  rate  risk  management  is the  responsibility  of the
Asset/Liability  Management  Committee  (ALCO).  ALCO establishes  policies that
monitor and coordinate the Company's sources, uses and pricing of funds.

The  Company  seeks to  reduce  the  volatility  of its net  interest  income by
managing the  relationship of  interest-rate  sensitive  assets to interest-rate
sensitive  liabilities.  In  recent  years,  the  focus  has  been to  originate
adjustable-rate residential loans for portfolio, which reprice more quickly than
fixed-rate residential loans. The Company's  adjustable-rate loans are primarily
tied to published  indices,  such as the  one-year  Constant  Maturity  Treasury
(CMT).

The  Company  utilizes  a  simulation  model  to  analyze  net  interest  income
sensitivity to movements in interest  rates.  The simulation  model projects net
interest income based on both a rise or fall in interest rates (rate shock) over
twelve and twenty-four month periods.  The model is based on the actual maturity
and repricing characteristics of interest-rate sensitive assets and liabilities.
The model  incorporates  assumptions  regarding the impact of changing  interest
rates on the prepayment rate of certain assets and liabilities.  The assumptions
are based on nationally  published  prepayment  speeds on assets and liabilities
when  interest  rates  increase or decrease by 200 basis points or greater.  The
model factors in projections  for  anticipated  activity levels by product lines
offered by the  Company.  The  simulation  model also  takes  into  account  the
Company's  increased  ability to control the rates on deposit  products  more so
than adjustable-rate loans tied to published indices.

Interest rate risk  represents the  sensitivity of earnings to changes in market
interest rates. As interest rates change the interest income and expense streams
associated  with  the  Company's  financial  instruments  also  change,  thereby
impacting  net interest  income  (NII),  the primary  component of the Company's
earnings.  ALCO  utilizes  the  results of the  simulation  model and static GAP
reports to quantify the  estimated  exposure of NII to sustained  interest  rate
changes.

The  following  reflects the Company's  NII  sensitivity  analysis over a twelve
month period:

Rate Change               Estimated NII Sensitivity Over Twelve Months
                      September 30, 2000                 September 30, 1999
+200bp                      -5.05%                              -4.67%
-200bp                      -3.88%                              +5.08%

The preceding sensitivity analysis does not represent the Company's forecast and
should not be relied upon as being  indicative  of expected  operating  results.
These hypothetical estimates are based upon numerous assumptions including:  the
nature  and  timing  of  interest  rate  levels  including  yield  curve  shape,
prepayments on loans and securities,  deposit decay rates,  pricing decisions on
loans and deposits, reinvestment/replacement of asset and

                                    Page -15-

0<PAGE>

liability cash flows,  and others.  While  assumptions  are developed based upon
current  economic  and local  market  conditions,  the  Company  cannot make any
assurances  as to the  predictive  nature  of these  assumptions  including  how
customer preferences or competitor influences might change.

Also, as market conditions vary from those assumed in the sensitivity  analysis,
actual  results will also differ due to:  prepayment/refinancing  levels  likely
deviating from those assumed, the varying impact of interest rate change caps or
floors on adjustable-rate  assets, the potential effect of changing debt service
levels on customers with adjustable-rate  loans, depositor early withdrawals and
product preference changes, and other internal/external variables.  Furthermore,
the  sensitivity  analysis  does not  reflect  actions  that ALCO  might take in
responding to or anticipating changes in interest rates.

                                    Page -16-

<PAGE>

                     IPSWICH BANCSHARES, INC. AND SUBSIDIARY

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         a.  Exhibits

         b.  Reports on Form 8-K
             None

         c.  Exhibits

         2.1      Plan of  Reorganization  and Acquisition  dated as of February
                  17,  1999  between  the  Company  and  Ipswich   Savings  Bank
                  incorporated  by reference to the Company's  Form 8-K filed on
                  July 9, 1999.

         3.1      Articles of  Organization  of the Company  dated  February 12,
                  1999 and  incorporated by reference  herein from the Company's
                  June 30, 1999 Form 10-Q.

         3.2      By-laws of the Company is  incorporated  by  reference  herein
                  from the Company's June 30, 1999 Form 10-Q.

         4.1      Specimen stock  certificate for the Company's  Common Stock is
                  incorporated  by reference  herein from the Company's June 30,
                  1999 Form 10-Q.

         10.1     Lease dated April 25, 1994 for premises located at 451 Andover
                  Street,  North  Andover,   Massachusetts  is  incorporated  by
                  reference herein from the Company's June 30, 1999 Form 10-Q.

         10.2     Lease  dated March 4, 1996 for  premises  located at 588 Cabot
                  Street,  Beverly,  Massachusetts  is incorporated by reference
                  herein from the Company's June 30, 1999 Form 10-Q.

         10.3     Lease dated July 27, 1997 for  premises  located at 600 Loring
                  Avenue,  Salem,  Massachusetts  is  incorporated  by reference
                  herein from the Company's June 30, 1999 Form 10-Q.

                                    Page -17-

<PAGE>

         10.4     Lease  dated  February  27,  1998 for  premises  located at 89
                  Pleasant Street, Marblehead,  Massachusetts is incorporated by
                  reference herein from the Company's June 30, 1999 Form 10-Q.

         10.5     Lease  dated June 12,  1998 for  premises  located at 470 Main
                  Street,  Reading,  Massachusetts  is incorporated by reference
                  herein from the Company's June 30, 1999 Form 10-Q.

         10.6*    Incentive  Compensation Plan for Senior Management and certain
                  other officers  dated  September 15, 1995 is  incorporated  by
                  reference herein from the Company's June 30, 1999 Form 10-Q.

         10.7*    Director Recognition and Retirement Plan adopted as of May 18,
                  1999 is  incorporated  by reference  herein from the Company's
                  June 30, 1999 Form 10-Q.

         10.8*    Merger and Severance  Benefits Program dated February 18, 1998
                  is  incorporated  by reference  herein from the Company's June
                  30, 1999 Form 10-Q.

         10.9*    Amended and Restated  Employment and Severance Agreement dated
                  May 18, 1999 between Ipswich Savings Bank and David L. Grey is
                  incorporated  by reference  herein from the Company's June 30,
                  1999 Form 10-Q.

         10.10*   Amended and Restated  Employment and Severance Agreement dated
                  May 18, 1999 between  Ipswich  Savings Bank and Francis Kenney
                  is  incorporated  by reference  herein from the Company's June
                  30, 1999 Form 10-Q.

         10.11*   Amended and Restated  Severance  Agreement  dated May 18, 1999
                  between   Ipswich   Savings  Bank  and  Thomas  R.  Girard  is
                  incorporated  by reference  herein from the Company's June 30,
                  1999 Form 10-Q.

         10.12*   Employment  Agreement  dated  June 18,  1998  between  Ipswich
                  Savings  Bank  and  Richard  P.  Duffett  is  incorporated  by
                  reference herein from the Company's June 30, 1999 Form 10-Q.

         10.13(a)*Amended and Restated Split Dollar Agreement dated May 18, 1999
                  among Ipswich Savings Bank,  Eastern Bank and David L. Grey is
                  incorporated  by reference  herein from the Company's June 30,
                  1999 Form 10-Q.

         10.13(b)*Amended and Restated Ipswich Irrevocable Insurance Trust dated
                  as of May 18, 1999 by and  between  Ipswich  Savings  Bank and
                  Eastern  Bank is  incorporated  by  reference  herein from the
                  Company's June 30, 1999 Form10-Q.

         10.14    Contract with Bank's data processor dated February 14, 1997 is
                  incorporated  by reference  herein from the Company's June 30,
                  1999 Form 10-Q.

         10.15*   1992   Incentive   and   Non-qualified   Stock   Option   Plan
                  incorporated  by  reference  to  the  Company's   Registration
                  Statement on Form S-8 filed on July 22, 1999.

                                    Page -18-

<PAGE>

         10.16*   1996 Stock  Incentive  Plan  incorporated  by reference to the
                  Company's Registration Statement on Form S-8 filed on July 22,
                  1999.

         10.17*   1998 Stock  Incentive  Plan  incorporated  by reference to the
                  Company's Registration Statement on Form S-8 filed on July 22,
                  1999.

         10.18*   Deferred  Compensation  Plan  for  Directors  incorporated  by
                  reference to the Company's Form S-8 filed on July 22, 1999.

         10.19    Contract  dated  April  6,  2000  with  U.S.  Bancorp  for ATM
                  processing services incorporated by reference to the Company's
                  March 31, 2000 Form 10-Q.

         10.20*   Severance  Agreement  dated  August  8, 2000  between  Ipswich
                  Savings  Bank and Mark E. Foley is  incorporated  by reference
                  herein from the Company's June 30, 2000 Form 10-Q.

         10.21    Lease dated September 15, 2000 for premises  located at Routes
                  133 and 1, Rowley, Massachusetts.

         11.      A statement regarding the computation of earnings per share is
                  included in the Notes to Consolidated Financial Statements.

         12.      Not applicable.

         27.      Financial Data Schedule.

* Denotes Management Contract or Compensation Plan.

                                   SIGNATURES

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

IPSWICH BANCSHARES, INC.

By:      /s/ David L. Grey                           Date:  November 13, 2000
         ----------------------------
         David L. Grey
         President and Chief Executive Officer


By:      /s/ Francis Kenney                          Date: November 13, 2000
         -----------------------
         Francis Kenney
         Treasurer
         (Principal Financial Officer and Principal Accounting Officer)

                                   Page -19-