Form 10-Q
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

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

                  For the Quarterly Period Ended September 30, 1999.

                                       OR

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

                         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)

                                 (978) 356-7777
                                 --------------
              (Registrant's telephone number, including area code)


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 [  ]

The number of shares outstanding of the Registrant's common stock as of November
5, 1999 is:

--------------------------------------------------------------------------------
Common stock, par value $.10 per share                               2,525,427
                        (Class)                                    (Outstanding)

<PAGE>
<TABLE>
<CAPTION>
                                        IPSWICH BANCSHARES, INC. AND SUBSIDIARIES
                                               Consolidated Balance Sheets
                                      (Dollars in thousands, except per share data)

                                                                            September 30,  December 31,   September 30,
                                                                                1999           1998             1998
                                                                            ----------      ----------      ----------
                                    Assets                                   (unaudited)    (unaudited)      (unaudited)

<S>                                                                            <C>             <C>             <C>
Cash and due from banks                                                          6,743           7,079           7,373
Interest-bearing deposits and federal funds sold                                 7,929           5,016           1,987
Investment securities available for sale                                        35,844          29,085          21,031
Investment securities held to maturity                                          21,395          10,196          17,168
Loans held for sale                                                                  0          24,000           5,045

Loans:
     Residential                                                               163,135         161,840         162,221
     Home equity                                                                21,993          19,772          19,302
     Commercial                                                                  4,969           6,191           6,310
     Consumer                                                                    1,090           1,188           1,143
                                                                            ----------      ----------      ----------
          Total gross loans                                                    191,187         188,991         188,976

Allowance for possible loan losses                                              (1,819)         (1,742)         (1,757)
                                                                            ----------      ----------      ----------

      Net loans                                                                189,368         187,249         187,219
                                                                            ----------      ----------      ----------

Stock in FHLB of Boston                                                          3,977           2,905           2,905
Savings Bank Life Insurance Company stock                                          253             253             253
Banking premises and equipment, net                                              3,201           3,298           3,096
Other real estate owned, net                                                       718             718             765
Accrued interest receivable                                                      1,301           1,053           1,195
Deferred premium on loans sold/mortgage servicing rights, net                    1,326             229           1,310
Other assets                                                                       214             247              87
                                                                            ----------      ----------      ----------

      Total assets                                                             272,269         271,328         249,434
                                                                            ==========      ==========      ==========

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                            <C>             <C>             <C>
                     Liabilities and Stockholders' Equity

Liabilities:
  Deposits:
     Non-interest-bearing checking accounts                                     19,034          18,656          16,733
     Interest-bearing checking accounts                                         25,360          22,954          19,349
     Savings accounts                                                           36,398          37,768          35,521
     Money market accounts                                                      58,167          55,418          52,714
     Certificates of deposit                                                    64,064          64,961          67,092
                                                                            ----------      ----------      ----------
          Total deposits                                                       203,023         199,757         191,409


  Borrowed funds                                                                48,000          53,000          40,000
  Mortgagors' escrow accounts                                                    1,047           1,043           1,074
  Deferred income tax liability, accrued expenses and other liabilities          3,760           3,305           3,213
                                                                            ----------      ----------      ----------

      Total liabilities                                                        255,830         257,105         235,696
                                                                            ----------      ----------      ----------


Equity capital                                                                  16,305          14,038          13,532
Unrealized gain on investment securities available for sale, net                   134             185             206
                                                                            ----------      ----------      ----------
      Total stockholders' equity                                                16,439          14,223          13,738
                                                                            ----------      ----------      ----------

      Total liabilities and stockholders' equity                               272,269         271,328         249,434
                                                                            ==========      ==========      ==========

Shares outstanding                                                           2,525,427       2,392,286       2,392,286

Selected data (end of period):

  Equity to assets  (in %)                                                        6.04            5.24            5.51
  Total non-performing assets, net                                                 809           1,186           1,774
  Loans serviced for investors                                                  91,573          18,848         108,997
  Book value per share                                                            6.51            5.95            5.74

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                   IPSWICH BANCSHARES, INC. AND SUBSIDIARIES
                                       Consolidated Statements of Income
                                 (Dollars in thousands, except per share data)

                                                            Three Months Ended         Nine Months Ended
                                                               September 30,              September 30,
                                                            1999          1998          1999          1998
                                                         ---------     ---------     ---------     ---------
                                                         (unaudited)   (unaudited)   (unaudited)   (unaudited)
<S>                                                      <C>           <C>          <C>           <C>
Interest and dividend income:
   Loans                                                     3,587         3,442        10,816        10,345
   Investment securities available for sale                    540           262         1,613           677
   Investment securities held to maturity                      344           311           803         1,138
   Interest-bearing deposits and federal funds sold             65            38           137            84
                                                         ---------     ---------     ---------     ---------

      Total interest and dividend income                     4,536         4,053        13,369        12,244
                                                         ---------     ---------     ---------     ---------
Interest expense:
   Deposits                                                  1,623         1,686         4,844         4,741
   Borrowed funds                                              634           566         2,081         1,934
                                                         ---------     ---------     ---------     ---------

      Total interest expense                                 2,257         2,252         6,925         6,675
                                                         ---------     ---------     ---------     ---------

      Net interest and dividend income                       2,279         1,801         6,444         5,569

Provision for possible loan losses                              10            45           100           135
                                                         ---------     ---------     ---------     ---------
      Net interest and dividend income after
        provision for possible loan losses                   2,269         1,756         6,344         5,434
                                                         ---------     ---------     ---------     ---------
Non-interest income:
   Mortgage banking revenues, net                              437           309         1,199           991
   Retail banking fees                                         341           306         1,064           849
   Net gain on sales of securities                               0             0            65            16
   Other                                                        41             7            47            11
                                                         ---------     ---------     ---------     ---------

      Total non-interest income                                819           622         2,375         1,867
                                                         ---------     ---------     ---------     ---------

      Net interest, dividend and non-interest income         3,088         2,378         8,719         7,301
                                                         ---------     ---------     ---------     ---------
Non-interest expenses:
   Salaries and employee benefits                              834           664         2,396         1,933
   Occupancy and equipment expenses                            226           181           676           483
   Data processing services                                    205           215           564           481
   Marketing expense                                           102           158           368           448
   Professsional fees                                           71            45           231           185
   Office expense                                              100            85           294           265
   Other                                                        80            91           409           354
                                                         ---------     ---------     ---------     ---------

      Total non-interest expenses                            1,618         1,439         4,938         4,149
                                                         ---------     ---------     ---------     ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                      <C>           <C>          <C>           <C>
Expenses from Holding Company & REIT formation                   0             0           380             0

Income before income taxes                                   1,470           939         3,401         3,152

Income tax expense                                             441           338         1,020         1,135
                                                         ---------     ---------     ---------     ---------

      Net income                                             1,029           601         2,381         2,017
                                                         =========     =========     =========     =========

Basic earnings per share                                      0.41          0.25          0.97          0.84
Diluted earnings per share                                    0.40          0.24          0.94          0.79

Weighted average common shares outstanding (basic)       2,525,227     2,391,614     2,460,572     2,389,704
Weighted average common shares outstanding (diluted)     2,550,416     2,555,866     2,539,232     2,561,337

Dividends per share                                           0.05          0.04          0.15          0.12

Selected performance data:

  (Expense ratios exclude one time charges)
   Return on average equity  (in %)                          25.74         17.96         20.78         20.97
   Return on average assets  (in %)                           1.52          1.00          1.18          1.14
   Net interest margin  (in %)                                3.51          3.09          3.33          3.30
   Expenses to average assets  (in %)                         2.40          2.40          2.44          2.34
   Efficiency ratio  (in %)                                  53.35         62.53         56.84         57.82
   Mortgage and equity loan production                      23,076        47,405        96,189       152,509
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                         IPSWICH BANCSHARES, INC. AND SUBSIDIARIES
                                 Consolidated Statements of Changes in Stockholders' Equity
                                       Nine Months Ended September 30, 1999 and 1998
                                       (Dollars in thousands, except for share data)
                                                        (unaudited)

                                                                                                   Accumulated
                                                                       Additional                       other          Total
                                           Shares           Common       paid-in      Retained     comprehensive   stockholders'
                                         outstanding         stock       capital      earnings          income        equity
                                         -----------         -----       -------      --------          ------        ------
<S>                                       <C>                 <C>         <C>           <C>               <C>        <C>
Balance at December 31, 1997              2,385,076           239         1,969         9,559             66         11,833

Comprehensive income:
  Net income                                      0             0             0         2,017              0          2,017
  Change in net unrealized gain/
      (loss) on investment securities
      available for sale                          0             0             0             0            140            140
                                          ---------     ---------     ---------     ---------      ---------      ---------
Total comprehensive income                        0             0             0         2,017            140          2,157

Cash dividends ($.12 per share)                   0             0             0          (286)             0           (286)
Stock options exercised                       7,210             0            18             0              0             18
Issuance of stock rights                          0             0            16             0              0             16
                                          ---------     ---------     ---------     ---------      ---------      ---------
Balance at September 30, 1998             2,392,286           239         2,003        11,290            206         13,738

Comprehensive income:
  Net income                                      0             0             0           621              0            621
Change in net unrealized gain/
    (loss) on investment securities
    available for sale                            0             0             0             0            (21)           (21)
                                          ---------     ---------     ---------     ---------      ---------      ---------
Total comprehensive income                        0             0             0           621            (21)           600

Cash dividends ($.05 per share)                   0             0             0          (121)             0           (121)
Stock options exercised                           0             0             0             0              0              0
Issuance of stock rights                          0             0             6             0              0              6
                                          ---------     ---------     ---------     ---------      ---------      ---------
Balance at December 31, 1998              2,392,286           239         2,009        11,790            185         14,223

Comprehensive income:
  Net income                                      0             0             0         2,381              0          2,381
Change in net unrealized gain/
    (loss) on investment securities
    available for sale                            0             0             0             0            (51)           (51)
                                          ---------     ---------     ---------     ---------      ---------      ---------
Total comprehensive income                        0             0             0         2,381            (51)         2,330

Cash dividends ($.15 per share)                   0             0             0          (373)             0           (373)
Issuance of stock rights                          0             0            18             0              0             18
                                          ---------     ---------     ---------     ---------      ---------      ---------
Balance September 30, 1999                2,525,427           253         2,254        13,798            134         16,439
                                          =========     =========     =========     =========      =========      =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              IPSWICH BANCSHARES, INC. AND SUBSIDIARIES
                                                Consolidated Statements of Cash Flows
                                            Nine Months Ended September 30, 1999 and 1998
                                                       (Dollars in thousands)
                                                             (unaudited)

                                                                           1999           1998
                                                                           ----           ----
<S>                                                                       <C>          <C>
Net cash flows from operating activities:
  Net income                                                                2,381        2,017

  Adjustments  to reconcile net income to net cash provided (used)
  by operating activities:
       Provision for possible loan losses                                     100          135
       Deferred income tax expense                                              0          (94)
       Depreciation expense                                                   252          167
       Amortization of premiums on investment securities, net                 129           55
       (Gain) on sale of loans, net                                          (977)      (1,218)
       (Gain) on sale of real estate acquired by foreclosure                    0         (153)
       (Gain) on investment securities available for sale, net                (65)         (16)
       Origination of loans held for sale                                 (72,592)    (117,560)
       Proceeds from sale of loans                                         11,544       22,059
       Proceeds from sale of securitized loans                             76,954       87,470
       (Increase) decrease in loan origination fees                          (170)         214
       (Decrease) in loan discounts                                            (2)         (39)
       (Increase) in deferred premium on loans sold and mortgage
       servicing rights                                                    (1,097)        (824)
       (Increase) in accrued interest receivable                             (248)         (59)
       Decrease in other assets, net                                           33           75
       Increase in accrued expenses and other liabilities                     489          126
                                                                         --------     --------

  Net cash provided (used) by operating activities                         16,731       (7,645)

Net cash flows from investing activities:
  Purchase of investment securities available for sale                    (13,380)     (10,619)
  Principal paydowns on investment securities available for sale           10,674        5,678
  Proceeds from the sale of investment securities available for sale        4,860        1,474
  Purchase of investment securities held to maturity                      (13,926)      (4,067)
  Principal paydowns on investment securities held to maturity                736        3,211
  Principal from the call of investment securities held to maturity         2,000        7,000
  Purchases of stock in FHLB of Boston                                     (1,072)        (861)
  Net (increase) in loans                                                  (2,047)     (11,072)
  Proceeds from sale of real estate acquired by foreclosure                     0          160
  Purchases of equipment, net                                                (155)        (604)
                                                                         --------     --------
  Net cash (used) provided by investing activities                        (12,310)      (9,700)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                       <C>          <C>
Cash flows from financing activities:

  Net proceeds from the issuance of common stock                              259           35
  Cash dividends                                                             (373)        (287)
  Net increase in deposits                                                  3,266       20,168
  Proceeds from Federal Home Loan Bank advances                            69,500      108,649
  Repayment of Federal Home Loan Bank advances                            (74,500)    (109,009)
  Increase in mortgagors' escrow accounts                                       4          376
                                                                         --------     --------

  Net cash (used) provided by financing activities                         (1,844)      19,932
                                                                         --------     --------

Net increase in cash and cash equivalents                                   2,577        2,587

Cash and cash equivalents at beginning of year                             12,095        6,798
                                                                         --------     --------

Cash and cash equivalents at end of year                                   14,672        9,385
                                                                         ========     ========

Supplemental disclosure of cash flow information:
  Cash paid for:
       Interest on deposit accounts                                         4,844        4,741
       Interest on borrowed funds                                           2,081        1,934
       Income tax expense, net                                              1,020        1,135

Supplemental schedule of non-cash investing and financing activities:
  Conversion of residential real estate loans to mortgage-
  backed securities                                                        87,520       86,417
  Transfer of real estate acquired by foreclosure to loans                      0          422
  Net (decrease) required by Statement of Financial Accounting
  Standards No. 115:
       Investment securities                                                  (11)         234
       Deferred income tax liability                                           40           94
       Net unrealized gain (loss) on investment securities available
       for sale                                                               (51)         140
</TABLE>
<PAGE>
                    IPSWICH BANCSHARES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                           September 30, 1999 and 1998

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  wholly owned  subsidiaries,  Ipswich  Preferred  Capital
Corporation, Ipswich Securities Corporation, Historic Ipswich, Inc., North Shore
Financial Services,  Inc. and Rowley Investment Corporation (Ipswich Bancshares,
Inc.  and  its  subsidiaries  are  sometimes  collectively  referred  to as  the
Company).  All  significant  intercompany  accounts and  transactions  have been
eliminated in consolidation.

Ipswich  Preferred  Capital  Corporation  was formed as a mortgage  real  estate
investment  trust to hold  residential  mortgages as a  subsidiary  of the Bank.
Ipswich Securities  Corporation was formed to exclusively transact in securities
on its own behalf as a wholly-owned  subsidiary of the Bank.  Historic  Ipswich,
Inc. and North Shore Financial Services,  Inc. were incorporated for the purpose
of holding  direct  investments  in real  estate  and  foreclosed  real  estate,
respectively.  Rowley Investment  Corporation was incorporated to facilitate the
holding and permitting of certain bank-owned 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.

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.

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.

Components of Accumulated Other Comprehensive Income

Accumulated   other   comprehensive   income   consists   solely  of  unrealized
appreciation on investment securities available for sale, net of taxes.
<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;  competitive pressure among depository institutions
may increase; and the impact of the Year 2000 issue may be more significant than
currently  anticipated.  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, 1999  reflect  the  operations  of the  Company and its direct and  indirect
subsidiaries,  Ipswich  Savings  Bank,  Ipswich  Preferred  Capital  Corporation
("IPCC"), Ipswich Securities Corporation, North Shore Financial Services, Rowley
Investment Corporation and Historic Ipswich, Inc. 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
<PAGE>
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
(Federal  Reserve)  and the  Bank is  subject  to  regulation,  supervision  and
examination  by the Federal  Deposit  Insurance  Corporation  (the FDIC) and the
Massachusetts Commissioner of Banks (the Commissioner).

ASSET / LIABILITY MANAGEMENT

A  primary  objective  of the  Asset/Liability  Management  Policy  is to manage
interest rate risk over time to achieve a prudent  level of net interest  income
in changing interest rate environments.  Management's strategies are intended to
be responsive to changes in interest  rates and to recognize  market demands for
particular types of deposit and loan products. The strategies are overseen by an
internal Asset/Liability Management Committee.

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 came 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 results of this analysis,  the static GAP position in
the 0 to 12 months range is a negative $46.6 million at September 30, 1999.

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. However,
these measurements do reflect major trends and thus the Company's sensitivity to
interest rate changes over time.

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 flows and to meet operating  expenses.  The primary sources of liquidity
are  interest  and  amortization  from loans,  mortgage  backed  securities  and
investments,  sales and maturities of  investments,  loan sales,  deposits,  and
Federal Home Loan Bank of Boston (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 $48.0 million at September 30, 1999.

During 1999 the primary  sources of liquidity  were $88.5 million in loan sales,
principal  amortization from mortgage backed securities of $11.4 million and the
sale of a fixed rate mortgage backed security of $4.9 million.  The primary uses
of funds were $96.2 million in residential  mortgage loan originations and $27.3
million in investment purchases.
<PAGE>
CAPITAL ADEQUACY

Total stockholders'  equity at September 30, 1999 was $16.4 million, an increase
of $2.2 million from $14.2 million at the end of 1998. Included in stockholders'
equity at September  30, 1999 is an  unrealized  gain on  marketable  securities
available for sale, net of taxes, of $134,000, a decrease of $51,000 as compared
to $185,000 at December 31, 1998.  At  September  30, 1999,  neither the Federal
Reserve Board nor the FDIC permitted the  unrealized  gain or loss to be used in
the calculation of the Tier 1 leverage capital (see below). Future interest rate
increases  could  reduce  the  market  value  of  these  securities  and  reduce
stockholders'  equity.  Tier 1 leverage capital was 5.57% at September 30, 1999,
compared to 5.24% at December 31, 1998.  The Company's Tier 1 capital is reduced
as a result of its  holding,  in a Bank  subsidiary,  a parcel of land  taken as
OREO. The land is currently being marketed for sale (see Real Estate Acquired by
Foreclosure).

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% for a bank to be classified as "well-capitalized").  At
September 30, 1999, the Bank's Tier 1 leverage capital ratio was 5.56% (compared
to 5.50% at December 31, 1998).

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,  1999,  the  Bank's  total  and  Tier 1
risk-based  capital ratios were 12.79% and 11.53% (compared to 11.70% and 10.45%
at December 31, 1998).

As of  September  30, 1999,  the Bank was  considered  "well-capitalized"  under
applicable regulatory capital guidelines.

YEAR 2000

The Year 2000 issue (commonly  referred to as "Y2K"),  is the result of computer
programs being written using two digits,  rather than four digits, to define the
applicable year. The Y2K issue, which is common to most corporations,  including
banks,  concerns  the  inability  of  information  systems,  primarily  (but not
exclusively)  computer  software  programs,  to properly  recognize  and process
date-sensitive   information  as  the  Year  2000   approaches.   The  following
constitutes  the  Company's  Y2K  readiness   disclosure  under  the  Year  2000
Information and Readiness Disclosure Act.

Since the  Company's  information  system  functions  are either  outsourced  to
service  bureaus or processed  in-house using programs  developed by third-party
vendors,  the direct effort to correct Y2K issues will be undertaken  largely by
third parties and will therefore not be within the company's direct control. The
Company expects to bring its mission critical  operating systems into compliance
with Y2K requirements  through  installation of updated or replacement  programs
developed by third parties.
<PAGE>
Bank regulators have recently  issued  additional  guidance under which they are
assessing Year 2000 readiness.  The failure of a financial institution,  such as
the Company,  to address  deficiencies in the Year 2000 management process could
result in (I) enforcement  actions that could have a material  adverse effect on
the  institution;  (ii) the  imposition of civil money  penalties;  or (iii) the
delay of receipt of regulatory approval for certain activities or acquisitions.

Awareness Phase

This phase  consists of  defining  the Y2K  problem;  developing  the  resources
necessary to perform  compliance work,  establishing a Y2K program committee and
developing  an overall  strategy  that  encompasses  in-house  systems,  service
bureaus for systems  that are  outsourced,  vendors,  auditors,  customers,  and
suppliers  (including  correspondents).  Currently  all of the  Company's  major
computer processing functions are outsourced to third party vendors.  This phase
has been completed by the Company's Y2K committee (see below).

Assessment Phase

The Company has organized a Y2K committee,  comprised of senior officers,  staff
employees and a consultant, to research,  develop and implement a plan that will
correct the issue within the time lines established by the Company's regulators.
The committee has  substantially  completed an  assessment,  identified  mission
critical  systems,  and created a formal tracking  system  identifying all third
party  vendors  and their Y2K  compliant  version of systems.  Mission  critical
systems include hardware,  software,  program  interfaces,  operating systems as
well as other mechanical systems. Based upon the results of the assessment,  the
Company has established  internal time frames to upgrade or replace its existing
hardware and software  systems.  During  1998,  the Company  replaced its teller
system hardware and software in its retail branch network.

The assessment phase has been materially  completed but is considered an ongoing
phase  for  the  Company.  The  Company  is in the  process  of  developing  its
contingency plan. The Company has currently estimated the total costs associated
with the Y2K issues to be $140,000.  As of September  30, 1999,  the Company has
incurred  approximately  $100,000  of Y2K  expenses.  The Company  continues  to
evaluate the estimated costs  associated with achieving Y2K readiness based upon
its experience to date.  However, no assurances can be given that the Company or
the third party vendors to whom the Company  outsources it  information  systems
will solve all the issues in a successful  and timely  fashion or that the costs
of such efforts will not exceed current estimates.

Renovation Phase

This phase includes hardware and software upgrades, system replacements,  vendor
certification,  and other associated changes. Work has been prioritized based on
information  gathered during the assessment phase. The Company relies on outside
servicers for its data  processing and third party vendors for certain  in-house
processing  functions.  Each  servicer and vendor has been  contacted and has or
will provide  information to the Company concerning their efforts to comply with
the Y2K issue.

Validation Phase

Testing is a  multifaceted  process  that is  critical  to the Y2K  project  and
inherent in each phase of the project management plan. This process includes the
testing of incremental changes to hardware and software components.  In addition
to testing upgraded components, connections with other systems must be verified,
<PAGE>
and all changes  should be accepted by internal and external  users.  Management
will work with its service bureau and third-party  software vendors to establish
controls to assure the  effective  and timely  completion  of all  hardware  and
software testing prior to final  implementation.  As with the renovation  phase,
the Company  will be in ongoing  discussions  with its vendors on the success of
their validation efforts.

Implementation Phase

In this phase,  systems  should be validated as Y2K compliant and be accepted by
the Company. For any system failing  certification,  the business effect must be
assessed  clearly  and  the  organization's  Y2K  contingency  plans  should  be
implemented.  Any  potentially  noncompliant  mission-critical  system should be
brought to the attention of executive management immediately for resolution.  In
addition,  this phase must ensure that any new systems or subsequent  changes to
verified systems are compliant with Y2K requirements.

In  summary,  the  Company  recognizes  Y2K as a global  issue with  potentially
catastrophic  results if not  addressed.  The Company  has and will  continue to
undertake all the necessary steps to protect itself and its customers concerning
the Y2K issue. If the Company does not solve such issues, or does not do so in a
timely  manner,  the Y2K  issue  could  have a  material  adverse  impact on the
Company's business, future operating results and financial condition.

FINANCIAL CONDITION

The  Company's  total assets  increased to $272.3  million at September 30, 1999
from  $271.3  million at December  31,  1998.  The Company  added $18 million in
investment  securities  offset by a decline of $24 million in mortgages held for
sale.

Investment and Mortgage-Backed Securities

Investments and mortgage backed securities  available for sale increased by $6.8
million to $35.8  million at  September  30, 1999  primarily  as a result of the
securitization  of $9.1 million of adjustable  rate mortgage loans from the loan
portfolio,  offset by the sale of $4.9 million of securities and amortization of
$10.7 million.  The portfolio of investment and mortgage-backed  securities held
to maturity  increased  to $21.4  million,  an increase of $11.2  million,  as a
result of the  purchase  of $13.9  million  of  mortgage-backed  securities  and
callable agency securities.  Future increases in interest rates could reduce the
value of these investments.

Loans and Loans Held for Sale

Loans held for sale  decreased  by $24  million  during the first nine months of
1999, as a result of the decrease in fixed rate loan production and the delivery
of loans held for sale into forward mortgage-backed security commitments.  Total
mortgage  loan  production  for the  first  nine  months of 1999  totaled  $96.2
million.

The  permanent  loan  portfolio  increased by $2.2 million to $191.2  million at
September 30, 1999.  The increase was primarily in adjustable  rate  residential
first mortgage loans.
<PAGE>
CREDIT QUALITY

Non-Performing Loans

Non-accrual  loans were  $91,000 at September  30, 1999.  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 becomes contractually
past due by ninety (90) days or more, unless the loan is adequately  secured and
is 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 action to foreclose the
property.

Real Estate Acquired by Foreclosure

Real estate acquired by foreclosure  totaled $718,000 at September 30, 1999, the
same as at December 31, 1998.  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.  These  properties  consist mainly of land and
single family and multi-family dwellings. The Company currently has one piece of
property  totaling  $650,000,  which  is a 98 acre  parcel  of  land in  Rowley,
Massachusetts,  which  has been  permitted  to create a 40-lot  detached  single
family  residential  subdivision and 10 commercial  building lots. There remains
outstanding  a title  claim to a  portion  of the  property.  The claim is being
defended by the Company's title insurance company on behalf of Historic Ipswich,
Inc.; the ultimate  resolution  cannot be predicted.  Subsequent to quarter-end,
the property was placed  under a Purchase and Sale  Agreement  for more than the
$650,000  carrying  value.  The sale is scheduled to close in the fourth quarter
pending resolution of negotiated issues.

Allowance for Loan Loss

The  allowance  for loan loss was $1.8  million at  September  30, 1999 and $1.7
million at December 31, 1998. 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.  This
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  amount  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 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.  While  management uses available  information to recognize  losses on
loans, future additions to the allowance may be necessary.
<PAGE>
Liabilities

Deposits  increased by $3.3 million to $203.0 million at September 30, 1999 from
$199.8   million  at  December   31,  1998.   The  increase  was   primarily  in
interest-bearing  checking  accounts  as a result  of the  Company's  continuing
program to attract transaction account balances.

Federal  Home Loan Bank of Boston  advances  decreased  by $5.0 million to $48.0
million at  September  30,  1999 from $53.0  million at  December  31, 1998 as a
function of cash and liquidity management.

Equity Capital

Equity capital increased by $2.2 million to $16.4 million of September 30, 1999.
Equity was  principally  impacted  by the nine month  earnings  of $2.4  million
offset by dividend payments of $373,000 in 1999.
<PAGE>
                RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
             SEPTEMBER 30, 1999 COMPARED TO THE THREE MONTHS ENDED
                               SEPTEMBER 30, 1998

General

The Company  reported net income of $1.0 million or $.40 per fully diluted share
for the third  quarter of 1999.  This  compares  with $601,000 or $.24 per fully
diluted share for the third quarter of 1998.  This  represents a 71% increase in
net income compared to the same period last year.

The third  quarter  return on equity was 25.74% which  compared to 17.96% in the
third  quarter  of 1998.  The third  quarter  return on assets  was 1.52%  which
compares to 1.00% for the same period in 1998.

Net Interest and Dividend Income

Compared to the third  quarter of 1998,  net  interest  income grew  $478,000 or
26.5% as a result of a $31.1 million growth in average earning  assets.  For the
third quarter of 1999,  net interest  margin was 3.51% compared to 3.09% for the
third quarter of 1998.

Non-interest Income

The third quarter non-interest income of $819,000 is an increase of $197,000, or
31.7% from the third quarter of 1998.  This increase is  principally  due to the
growth in retail  banking  fees as a result of the  Company's  effort to attract
transaction  accounts.  This  growth  was  realized  from  opening  two new Bank
branches  in the  second  half of 1998 and the  corresponding  deposit  balances
generated  from those  openings.  Net  mortgage  banking  revenues  increased by
$128,000  in the third  quarter  of 1999  versus the same  quarter of 1998.  The
increase in mortgage  banking  revenues  was due to the  recapture  of a reserve
established  in the first  half of 1999 of  $153,000  for the  valuation  of its
mortgage  servicing rights. The recapture was the result of an agreement to sell
the rights to  service  approximately  $90  million  in  mortgages.  The sale is
scheduled to close in the fourth quarter.

Non-interest Expense

Total  non-interest  expenses  were $1.6  million for the third  quarter of 1999
versus $1.4 million for the same quarter in 1998. This represents a 12% increase
in expenses.  The increase is principally  the result of the addition of two new
branches in the second half of 1998 which  resulted in a higher  level of salary
and benefit costs and occupancy and equipment costs.  Additionally,  the Company
added support level  operational  staff in the second half of 1998 as a means to
support potential future expansion.

Income Tax Expense

The  third  quarter  effective  tax rate was 30%  compared  to 36% for the third
quarter of 1998.  The lower tax rate for 1999 was due primarily to the formation
of a residential  mortgage REIT which resulted in the Company  realizing a lower
state tax expense.
<PAGE>
                 RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
                               SEPTEMBER 30, 1999
              COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 1998

General

The Company  reported net income for the nine months ended September 30, 1999 of
$2.4 million,  or $.94 per fully diluted share compared to $2.0 million, or $.79
per fully  diluted  share for the same  period  last year.  Return on equity was
20.78%  and  20.97%  for the  nine  months  ended  September  30,  1999 and 1998
respectively.  Return on average  assets was 1.18% and 1.14% for the nine months
ended September 30, 1999 and 1998, respectively.

Net Interest and Dividend Income

Total net  interest  and  dividend  income was $6.4  million for the nine months
ended  September  30, 1999 versus $5.6  million for the same time frame in 1998.
This  reflects  the  Company's  growth in its  average  earning  assets of $32.6
million  for the first nine  months of 1999  versus the same time frame in 1998.
The 1999 net interest margin was 3.33% compared to 3.30% for the same time frame
in 1998.

Non-Interest Income

Non-interest  income for the first nine months of 1999 was $2.4 million,  versus
$1.9 million for the same time frame in 1998.  The Company  continued to realize
strong growth in its retail banking fees,  which increased by 25% in 1999 versus
1998.  This  was a result  of the  Company's  continuing  efforts  to  generated
transaction  accounts and  corresponding  fees  generated  from those  accounts.
Mortgage banking revenues increased by $208,000,  or 21% in 1999 versus 1998. In
the first nine months of 1998, the Company created a reserve for a write-down on
its  mortgage  servicing  rights of $140,000 as a result of  declining  interest
rates which impacted 1998 revenues.

Non-Interest Expenses

Non-interest  expenses for the first nine months of 1999, excluding the one-time
charge for the holding company and REIT formations, was $4.9 million versus $4.1
million for the first nine months of 1998. The increase in expenses reflects the
addition of two new  branches  which were added in the second half of 1998.  The
line items  affected by these  branches were salary and benefits,  occupancy and
data  processing  costs.  Additionally,  the  Company  realized  an  increase in
operating  expenses  as a result  of the  addition  of  support  staff to manage
potential future expansion.

Income Tax Expense

The  nine-month  1999  effective  tax  rate  was  30%  compared  to 36%  for the
nine-month  time frame ended September 30, 1998. The lower rate for 1999 was due
primarily  to the  establishment  of the REIT,  which will allow the  Company to
realize a lower state tax expense.
<PAGE>
ITEM 3
------
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------

Market risk is the risk of loss in a financial  instrument  arising from adverse
changes in market rates/prices such as interest rates, foreign currency exchange
rates,  commodity prices,  and equity prices.  The Company's primary market risk
exposure is interest rate risk.  The ongoing  monitoring  and management of this
risk is an  important  component  of the  Company's  asset/liability  management
process which is governed by policies of the Asset/Liability  Committees (ALCO).
In this capacity ALCO develops guidelines and strategies impacting the Company's
asset/liability  management  related activities based upon estimated market risk
sensitivity, policy limits and overall market interest rate levels/trends.

Interest Rate Risk

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 a simulation model and static GAP reports
to quantify the  estimated  exposure of NII to sustained  interest rate changes.
ALCO monitors simulated NII sensitivity over a rolling two-year horizon to gauge
its interest rate risk.

The  simulation  model  captures  the impact of changing  interest  rates on the
interest income received and interest expense paid on all assets and liabilities
reflected  on the  Company's  balance  sheet.  A parallel and pro forma shift in
rates of 200 basis  points (bp) upward and  downward on a static  balance  sheet
over a 12 month period is assumed.  The  following  reflects the  Company's  NII
sensitivity analysis as of the most recently reviewed time frame,  September 30,
1999 versus June 30, 1999.

                Rate Change                Estimated NII Sensitivity
                -----------                -------------------------
                                    September 30, 1999           June 30, 1999
                                    ------------------           -------------
                  +200pb                 (4.70%)                    (6.08%)
                  -200pb                  5.18%                      5.03%

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,  investment/  replacement of asset and 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>
                    IPSWICH BANCSHARES, INC. AND SUBSIDIARIES

PART II - OTHER INFORMATION

Item 1.           Legal Proceedings
-------           -----------------
None

Item 2.           Changes in Securities
-------           ---------------------
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

         1. No reports on Form 8-K were filed during the third quarter of 1999.

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 is
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 August 10, 1992 for premises  located at Route 133 and
Route 1, Rowley,  Massachusetts  is  incorporated  by reference  herein from the
Company's June 30, 1999 Form 10-Q.
<PAGE>
         10.2 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.

         10.3  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.

         10.4  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.

         10.5 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.

         10.6 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.

         10.7*  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.

         10.8* 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.

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

         10.10* 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.

         10.11* 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.

         10.12*  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.

         10.13* 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.

         10.14(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.

         10.14(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 Form 10-Q.

         10.15  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.
<PAGE>
         10.16* 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.

         10.17* 1996 Stock  Incentive  Plan  incorporated  by  reference  to the
Company's Registration Statement on Form S-8 filed on July 22, 1999.

         10.18* 1998 Stock  Incentive  Plan  incorporated  by  reference  to the
Company's Registration Statement on Form S-8 filed on July 22, 1999.

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

         10.20*Severance Agreement dated August 18, 1999 between Ipswich Savings
Bank and Keirsten Scanlon.

         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.
<PAGE>

                                   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 9, 1999
         -----------------
         David L. Grey
         President and Chief Executive Officer

By:      /s/Francis Kenney                  Date:  November 9, 1999
         -----------------
         Francis Kenney
         Treasurer
         (Principal Financial Officer and Principal Accounting Officer)