A Letter From
James D. Egan, Chairman/President/CEO

We are pleased to announce that 2007 was another exciting year of growth for Bank of Canton.

During a year when many of our competitors struggled to grow and the Massachusetts economy slowed significantly, we increased our total assets to $844 million, our total loans by 9% to $625 million, and our total deposits by 6% to $688 million. While on our path of solid growth, we hired 25 new employees, opened a new Loan Production Office in Auburn, Mass., and introduced several new and innovative products and services. These future-focused investments, as well as continued interest rate compression and weakness in business, construction, and mortgage lending opportunities, led to a reduction in net income of $1 million to $4.1 million.

In 2007, we maintained our 173-year commitment to providing our customers and communities with exceptional products, customer service, and charitable support and were proud to receive and celebrate several notable awards and milestones. We were designated by MassHousing as the leading bank in Massachusetts for generating affordable first mortgages, we celebrated achieving the $100 million deposit milestone at our Randolph branch, and we donated close to $150,000 to organizations and causes that enrich our lives and make Massachusetts a better place to live.

We are confident that the investments we made in our people, products, and communities during 2007 position us for an outstanding future filled with continued growth and increased profitability.

James D. Egan
Chairman/President/CEO

Consolidated Balance Sheets  December 31, 2007 and 2006 (Unaudited and in Thousands)
ASSETS	2007	2006
Cash and due from banks	$12,269	$10,773
Short-term investments	6,875	52,185
Investment securities	162,290	151,818
Loans, net	624,816	572,545
Bank premises and equipment, net	8,180	8,624
Accrued interest receivable	3,405	3,420
Other assets	26,568	24,132
Total Assets	$844,403	$823,497

LIABILITIES and SURPLUS	2007	2006
Deposits	$688,207	$648,942
Borrowed Funds	71,758	93,993
Repurchase Agreements	21,254	19,800
Mortgagors Escrow	1,163	970
Other liabilities	4,643	4,069
Total Liabilities	787,025	767,774

Minority interest	10,300	10,300
Retained earnings	51,787	48,378
Common stock	3	3
Unrealized loss on securities available for sale, net	(4,712)	(2,958)
Total Surplus	57,378	55,723
Total Liabilities and Surplus	$844,403	$823,497

Officers

Chairman/President/CEO James D. Egan Executive Vice President/ Lending Group Stephen P. Costello Senior Vice President/CFO John M. Sweeney Senior Vice Presidents Anthony F. Caruso George M. DeMello Edward J. Gaughan, Jr. Rhonda L. Kale Brian W. McDavitt John M. Sharry Peter M. Shea William T. Treddin Vice Presidents Brian J. Allsop Paula M. Burke Adam M. Coldwell Brian E. Dunn Charles L. Gaffney Michelle Higgins Lillian E. MacKinnon John G. McCarthy David A. Packard J. Wesley Rawding Wendy S. Reiter, C.P.A. Timothy P. Rhuda Louise M. Slattery Zachary C. Swain David S. Tait

Assistant Vice Presidents Kenneth G. Anderson Juan P. Barrera Constance Boulos Joseph M. de Sousa Judy A. Higgins Marilyn Jones Elaine P. Joseph Paul L. McNiff Jeanne M. Roche Assistant Branch Managers Filomena M. Correia Mary E. Czyras Barbara Hewitt Katherleen A. Ludecker Charles Walker Clerk of the Corporation Marian K. Pendergast Commercial Loan Officer Matthew B. Kreiser Customer Information Center Officer Geralyn E. Ryan Loan Operations Officer Karen W. Santorelli Residential Loan Officer Sean V. Wilson

Board of Directors

Gloria Anita Baker John H. Draper III James D. Egan Brian T. Fitzgerald Michael A. Galer, C.P.A. Irving W. Goldberg Leslie Lockard, Esq. Donald P. McNeice, Jr. Marian K. Pendergast Steven V. Rotella, C.P.A. Donald R. Smith

Honorary Directors Edward V. Cogliano, Sr., C.P.A. Edward W. Dockray Virginia M. Hagerty Ralph C. Jackson William B. McPherson, Jr. Charles W. Pinkham Joseph F. Ronayne

Corporators

Robert L. Allen, Jr., Esq. Gloria Anita Baker Russell F. Baker Brian A. Callery Earl J. d'Entremont, Jr. Benson Diamond, Esq. Peter S. Donadio Mark H. Donahue John H. Draper III Kristin Draper Driscoll James D. Egan Richard G. Farrow Brian T. Fitzgerald Michael A. Galer, C.P.A. Irving W. Goldberg

Robert H. Graham Paul C. Hart James R. Kelly, Esq. Leslie Lockard, Esq. Harry Mah Maralin A. Manning Nicholas J. Marathas, Jr. Edward J. Marshall Donald P. McNeice, Jr. Michael W. Merrill, Esq. Robert P. Moritz, O.D. Gregory L. Pando, A.I.A. Marian K. Pendergast Leonard Pepe, C.P.A. Nicholas A. Pepe, C.P.A.

Donald A. Podgurski Edward V. Puopolo, Esq. J. Wesley Rawding Steven V. Rotella, C.P.A. Richard T. Russell Robert M. Russell, Esq. Todd A. Sandler Diann C. Silvia Donald R. Smith William E. Staples, D.M.D. Glenn D. Stewart Susan D. Walsh Janet Wiederhold Anthony Will