8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 21, 2005

MASSBANK Corp.

(Exact name of registrant as specified in its charter)

Delaware	0-15137	04-2930382
(State or other jurisdiction of incorporation or organization)	Commission file number	(I.R.S. Employer Identification No.)

123 Haven Street, Reading, Massachusetts 01867

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: (781) 662-0100

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 21, 2005, MASSBANK Corp. (the “Company”) issued a press release discussing the Company’s first quarter 2005 results. The press release, attached as Exhibit 99.1 hereto and incorporated herein by reference, is being furnished to the SEC and shall not be deemed to be “filed” for any purpose.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits. The following exhibit is furnished herewith:

99.1 Press Release, dated April 21, 2005, of MASSBANK Corp.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be filed on its behalf by the undersigned hereunto duly authorized.

	MASSBANK Corp.
Dated: April 25, 2005	By:	/s/ Reginald E. Cormier
	Name:	Reginald E. Cormier
	Title:	Senior Vice President, Treasurer and Chief Financial Officer

EXHIBIT INDEX

99.1     Press Release, dated April 21, 2005, of MASSBANK Corp..

EX-99.1

Exhibit: 99.1

MASSBANK CORP.	April 21, 2005
Reading, MA

FOR IMMEDIATE RELEASE

MASSBANK CORP. REPORTS FIRST QUARTER 2005 EARNINGS OF

$1.7 MILLION OR $0.38 PER SHARE

AND DECLARES CASH DIVIDEND

MASSBANK Corp. (NASDAQ – MASB), the Holding Company for MASSBANK, today reported net income of $1,694,000 or $0.38 in diluted earnings per share for the first quarter 2005, compared with net income of $1,949,000 or $0.43 in diluted earnings per share in the first quarter of 2004. Basic earnings per share in the recent quarter were $0.39 per share compared to $0.44 per share in the first quarter of last year.

Income Statement

Net interest income totaled $5,304,000 for the first quarter of 2005, up $63,000 from the same quarter in 2004. The net interest margin improved to 2.28% in the recent quarter as compared to 2.17% in the first quarter of last year. The 11 basis point improvement is primarily the result of a rise in short-term interest rates. The Federal Reserve Bank Board’s Federal Open Market Committee (FOMC) has raised the target rate for Federal Funds by 25 basis points seven times since the end of June 2004, increasing the rate from 1.00% to 2.75%. A further “measured rate” of increases is expected by most economists to continue in 2005. This will likely have a positive affect on the bank’s future net interest income and net interest margin.

The negative provisions for loan losses in the first quarter of 2005 and 2004 of $53,000 and $62,000, respectively, are due to reductions in the size of the bank’s loan portfolio and a low level of problem loans.

Non-interest income for the first quarter of 2005 totaled $197,000, compared to $861,000 for the same period in 2004. The decrease of $664,000 is due primarily to lower securities gains in the recent quarter compared to the same quarter of 2004.

Non-interest expense in the first quarter of 2005 decreased $129,000 compared to the same quarter in 2004. This is attributable to a decrease in salaries and employee benefits due in part to a reduction in the number of bank employees.

Balance Sheet

The Company’s total assets decreased $35.2 million to $971.5 million at March 31, 2005 from $1.007 billion at March 31, 2004. Deposits decreased $33.3 million or 3.8% year-over-year from $870.9 million at March 31, 2004 to $837.6 million at March 31, 2005. Stockholders’ equity was $107.7 million at March 31, 2005, representing a book value of $24.43 per share. This compares to $113.2 million at March 31, 2004 representing a book value of $25.56 per share.

April 21, 2005

Page Two

The Company’s non-accrual loans remain low totaling $128,000 at March 31, 2005, representing 0.06% of total loans. This compares to $205,000 representing 0.08% of total loans at March 31, 2004. At March 31, 2005, the Bank’s allowance for loan losses totaled $1.253 million representing 0.54% of total loans compared to $1.491 million representing 0.60% of total loans at March 31, 2004. In addition, the Bank’s allowance for loan losses on off-balance sheet credit exposures totaled $605,000 at March 31, 2005, compared to $626,000 a year earlier. This is intended to protect the bank against loan commitments made to customers that have not yet been drawn down.

MASSBANK Corp. is the holding company for MASSBANK, a Massachusetts chartered savings bank. The Bank operates fifteen banking offices in Reading, Chelmsford, Dracut, Everett, Lowell, Medford, Melrose, Stoneham, Tewksbury, Westford and Wilmington, providing a variety of deposit, lending and trust services.

ADDITIONAL INFORMATION

Dividend Declaration

MASSBANK Corp. today announced a quarterly cash dividend on its common stock of $0.26 per share. This, the Company’s seventy-fifth consecutive dividend, will be payable on May 19, 2005 to stockholders of record at the close of business on May 4, 2005.

Stock Repurchase Program

During the three months ended March 31, 2005, the Company continued the repurchase of its common stock by acquiring 11,060 shares. As of March 31, 2005 there were 115,117 shares available for repurchase in the current program.

Annual Meeting of Stockholders

At the Annual Meeting of Stockholders of MASSBANK Corp. held on April 19, 2005 stockholders voted affirmatively to elect Gerard H. Brandi, William F. Rucci, Jr. and O. Bradley Latham to serve as Directors of the Company until the 2008 Annual Meeting of Stockholders.

Cautionary Statement

This press release may contain forward-looking information, including information concerning the Company’s expectations of future business prospects. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results or performance to be materially different from the results and performance expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning the Company’s belief, expectations or intentions concerning the Company’s future performance, the financial outlook of the markets it serves and the performance and activities of its competitors. These statements reflect the Company’s current views. They are based on numerous assumptions and are subject to numerous risks and uncertainties, including the strength of the local economy and the U.S. economy in general, unexpected fluctuations in market interest rates, unexpected fluctuations in the markets for equities, bonds, federal funds and other financial instruments, an increase in the level of non-performing assets, an increase in competitive pricing pressures within the Company’s market, adverse legislative or regulatory developments, a significant decline in residential real estate values in the Company’s market area, adverse impacts resulting from the continuing war on terrorism, an increase in other employee-related costs, the impact of deflation or inflation, and other factors described in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2004.

For further information contact Reginald E. Cormier, Senior Vice President, Treasurer and CFO at (781) 942-8192.

April 21, 2005

Page Three

MASSBANK CORP.

FINANCIAL HIGHLIGHTS

($ in thousands except share data)

	Three Months Ended March 31,
	2005			2004
For the Period Ended
Total interest and dividend income	$	8,765		$	8,345
Total interest expense		3,461			3,104
Net interest income		5,304			5,241
Provision (credit) for loan losses		(53	)		(62	)
Net interest income after provision (credit) for loan losses		5,357			5,303
Gains (losses) on securities, net		(56	)		574
Other non-interest income		253			287
Non-interest expense		3,031			3,160
Income tax expense		829			1,055
Net income	$	1,694		$	1,949
Weighted Average Common Shares Outstanding
Basic		4,399,798			4,427,395
Diluted		4,469,753			4,545,237
Per Common Share
Earnings:
Basic	$	0.39		$	0.44
Diluted		0.38			0.43
Cash dividends paid		0.26			0.25
Book value (period end)		24.43			25.56
Ratios (1)
Return on average assets		0.71	%		0.79	%
Return on average equity		6.21			6.98
Net interest margin		2.28			2.17
Total equity to assets (period end)		11.08			11.24
	At March 31,
	2005			2004
At Period End
Assets	$	971,475		$	1,006,670
Deposits		837,581			870,901
Total loans		230,301			246,546
Stockholders’ equity	$	107,678		$	113,168
Common shares outstanding		4,407,292			4,428,175
Asset Quality
Non-accrual loans	$	128		$	205
Real estate acquired through foreclosure		—			—
Total non-performing assets	$	128		$	205
Allowance for loan losses	$	1,253		$	1,491
Non-accrual loans to total loans		0.06	%		0.08	%

(1) Ratios are presented on an annualized basis with the exception of equity to assets.

April 21, 2005

Page Four

MASSBANK CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

($ in thousands except share data)

	At March 31, 2005			At March 31, 2004
Assets:
Cash and due from banks	$	9,748		$	7,633
Interest-bearing deposits in banks		2,066			6,888
Federal funds sold		198,926			213,055
Short-term investments		—			24,573
Debt securities available for sale:
Mortgage-backed securities		128,132			100,612
Other securities		310,412			295,867
Equity securities available for sale		7,646			10,694
Mortgage-backed securities held-to-maturity		4,859			—
Trading securities		41,317			70,505
Loans:
Mortgage loans		220,352			235,762
Other loans		9,949			10,784
Total loans		230,301			246,546
Allowance for loan losses		(1,253	)		(1,491	)
Net loans		229,048			245,055
Premises and equipment		6,332			6,770
Accrued interest receivable		4,056			4,137
Goodwill		1,090			1,090
Deferred income tax asset, net		2,436			—
Other assets		25,407			19,791
Total assets	$	971,475		$	1,006,670
Liabilities and Stockholders’ Equity:
Deposits:
Demand and NOW	$	85,267		$	84,037
Savings		534,068			597,973
Time certificates of deposit		218,246			188,891
Total deposits		837,581			870,901
Escrow deposits of borrowers		988			1,117
Current income tax liability		120			483
Deferred income tax liability		—			1,453
Allowance for loan losses on off-balance sheet credit exposures		605			626
Other liabilities		24,503			18,922
Total liabilities		863,797			893,502
Stockholders’ equity:
Preferred stock, par value $1.00 per share; 2,000,000 shares authorized, none issued		—			—
Common stock, par value $1.00 per share; 10,000,000 shares authorized, 7,773,055 and 7,714,055 shares issued, respectively		7,773			7,714
Additional paid-in capital		56,175			54,865
Retained earnings		102,555			99,880
		166,503			162,459
Treasury stock at cost 3,365,763 and 3,285,880 shares, respectively		(57,206	)		(54,372	)
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on securities available for sale, net of tax effect		(1,619	)		5,081
Shares held in rabbi trust at cost 14,744 and 26,200 shares, respectively		(321	)		(554	)
Deferred compensation obligation		321			554
Total stockholders’ equity		107,678			113,168
Total liabilities and stockholders’ equity	$	971,475		$	1,006,670

April 21, 2005

Page Five

MASSBANK CORP. AND SUBSIDIARIES

Consolidated Statements of Income

($ in thousands except share data)

	Three Months Ended
	March 31, 2005			March 31, 2004
Interest and dividend income:
Mortgage loans	$	3,112		$	3,582
Other loans		162			169
Securities available for sale:
Mortgage-backed securities		1,718			1,485
Other securities		2,315			2,261
Mortgage-backed securities held-to-maturity		62			—
Trading securities		248			285
Federal funds sold		1,130			486
Other investments		18			77
Total interest and dividend income		8,765			8,345
Interest expense:
Deposits		3,461			3,104
Total interest expense		3,461			3,104
Net interest income		5,304			5,241
Provision (credit) for loan losses		(53	)		(62	)
Net interest income after provision (credit) for loan losses		5,357			5,303
Non-interest income:
Deposit account service fees		100			121
Gains on securities available for sale, net		58			364
Gains (losses) on trading securities, net		(114	)		210
Other		153			166
Total non-interest income		197			861
Non-interest expense:
Salaries and employee benefits		1,775			1,897
Occupancy and equipment		599			598
Data processing		141			137
Professional services		130			137
Advertising and marketing		20			17
Deposit insurance		38			41
Other		328			333
Total non-interest expense		3,031			3,160
Income before income taxes		2,523			3,004
Income tax expense		829			1,055
Net income	$	1,694		$	1,949
Weighted average common shares outstanding:
Basic		4,399,798			4,427,395
Diluted		4,469,753			4,545,237
Earnings per share (in dollars):
Basic	$	0.39		$	0.44
Diluted		0.38			0.43