UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 2008
SALISBURY BANCORP, INC.
(Exact name of registrant as specified in charter)
Connecticut 000-24751 06-1514263
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5 Bissell Street, Lakeville, Connecticut 06039-1868
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (860) 435-9801
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions (see General Instructions A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
C.F.R. 230.425)
|_| Soliciting material pursuant to Rule 14a-2 under the Exchange Act (17
C.F.R. 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 C.F.R. 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 C.F.R. 240.13e-4(c))
Form 8-K, Current Report
Salisbury Bancorp, Inc.
Section 8. Other Events
Item 8.01. Other Events
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Salisbury Bancorp, Inc. ("Salisbury" or the "Company") (AMEX: SAL), parent
company of Salisbury Bank and Trust Company ("Bank"), announced today that the
U.S. Government's actions with respect to Fannie Mae and Freddie Mac would
adversely impact the value of Salisbury's preferred stock investments in Fannie
Mae.
On September 7, the U.S. Treasury, the Federal Reserve and the Federal
Housing Finance Agency (FHFA) announced that the FHFA was putting Fannie Mae and
Freddie Mac under conservatorship and giving management control to their
regulator, the FHFA. Key provisions of the U.S. Government's Plan announced to
date were as follows:
o Dividends on Fannie Mae and Freddie Mac common and preferred stock
were eliminated.
o Fannie Mae and Freddie Mac will be required to reduce their mortgage
portfolios over time.
o The U.S. Government agreed to provide equity capital to cover
mortgage defaults in return for $1 billion of senior preferred stock
in Fannie Mae and Freddie Mac and warrants for the purchase of 79.9%
of the common stock of Fannie Mae and Freddie Mac.
o The U.S. Government also announced that the U.S. Treasury would
provide secured loans to Fannie Mae and Freddie Mac as needed until
the end of 2009 and that the U.S. Treasury plans to purchase
mortgage backed securities from Fannie Mae and Freddie Mac in the
open market.
As of September 9, 2008, Salisbury Bancorp owned preferred stock in
Federal Home Loan Mortgage Corporation ("FHLMC") with an amortized cost basis of
$2,975,000. This represents approximately 1.8% of the Bank's total Investment
portfolio of $166,372,708 and is approximately 7.1% of the Bank's total capital
position of $41,853,459.
The impact of the Government's actions described above and concerns in the
market place about the future value of the perpetual preferred stock of Fannie
Mae and Freddie Mac have caused values for these investments to decrease
materially. It is unclear when and if the value of the investments will improve
in the future. Given the above developments, Salisbury expects to record a
non-cash other-than-temporary impairment on these investments for the quarter
ending September 30, 2008.
Management has evaluated the capital condition of both Salisbury Bancorp,
Inc. and its banking subsidiary, Salisbury Bank and Trust Company, and concluded
both will remain above the highest regulatory capital level of "well
capitalized" under any valuation scenario involving the FHLMC preferred stock
holdings. Management continues to evaluate all of its options related to these
securities.
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 hereto duly authorized.
Dated: September 10, 2008 SALISBURY BANCORP, INC.
By: /s/ John F. Perotti
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John F. Perotti
Chairman and Chief Executive Officer