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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT: DECEMBER 16, 1997

UST CORP.
(Exact name of registrant as specified in its charter)

MASSACHUSETTS 0-9623 04-2436093
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
Incorporation)

40 Court Street 02109
Boston, Massachusetts (Zip Code)
(Address of principal executive offices)

(617) 726-7000
(Registrant's telephone number,
including area code)

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Item 5. OTHER EVENTS.

A. On December 9, 1997, UST Corp. (the "COMPANY") executed an
Affiliation Agreement and Plan of Reorganization (the "SOMERSET AGREEMENT") with
Somerset Savings Bank ("SOMERSET"), pursuant to which Somerset will be merged
with and into the Company's wholly-owned principal bank subsidiary, USTrust.
Somerset is a Massachusetts savings bank which serves the consumer and small
business banking needs of its customers through its five branch offices located
in the Massachusetts communities of Somerville and Burlington. The transaction,
which is structured to qualify as a pooling-of-interests for accounting
purposes, is subject to the approval of the shareholders of Somerset as well as
to the receipt of federal and state regulatory banking approvals. Subject to the
foregoing conditions, the Somerset transaction is expected to close during the
first half of 1998.

The Somerset transaction is structured as a tax-free exchange of 0.19
shares of the Company's common stock for each share of Somerset's common stock.
At the Company's closing stock price of $29.625 on December 9, 1997, the
Somerset transaction would be valued at approximately $93.7 million, and
Somerset shareholders would receive a value of $5.63 in Company common stock for
each share of Somerset common stock. The purchase price represents a multiple of
2.3 times stated book value of Somerset at September 30, 1997. The Company
expects to record a one-time pre-tax charge of approximately $7.5 million of
acquisition related costs in connection with the Somerset transaction.

Immediately after execution of the Somerset Agreement on December 10,
1997, the Company entered into a Stock Option Agreement (the "SOMERSET STOCK
OPTION AGREEMENT") with Somerset pursuant to which Somerset has granted to the
Company the option to purchase under certain circumstances, 2,777,000 shares of
Somerset common stock at an exercise price of $4.875 per share and has also
granted the Company certain additional consideration related to the option.

Copies of the Somerset Agreement and the Company's press release are
included herewith as Exhibits 1 and 2, respectively and incorporated herein by
reference. The form of the Somerset Stock Option Agreement is included as
Exhibit B to the Somerset Agreement. The preceding description of the Somerset
Agreement and the Somerset Stock Option Agreement is qualified in its entirety
by the reference to the copies of each attached hereto and incorporated herein.

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B. On December 15, 1997, the Company executed an Affiliation Agreement
and Plan of Reorganization (the "AFFILIATED AGREEMENT") with Affiliated
Community Bancorp, Inc. ("AFFILIATED"), pursuant to which the Company will
acquire Affiliated. Affiliated is a $1.1 billion bank holding company for three
community banks, Lexington Savings Bank, The Federal Savings Bank and Middlesex
Bank and Trust Company (together, the "AFFILIATED BANKS") which serve consumer
and small business banking needs through twelve branch offices located in
eastern Middlesex County. The transaction, which is structured as a
pooling-of-interests for accounting purposes is subject to the approval of the
shareholders of the Company and Affiliated as well as to the receipt of federal
and state regulatory banking approvals. Subject to the foregoing conditions, the
transaction is expected to close during the first half of 1998. While the
Company will first acquire Affiliated thereby making the Affiliated Banks
subsidiaries of the Company, the Company anticipates merging the banks into its
principal banking subsidiary, USTrust, in 1998.

The Affiliated transaction is structured as a tax-free exchange of 1.41
shares of the Company's common stock for each share of Affiliated common stock.
At the Company's closing stock price of $28.3125 on December 12, 1997, the
transaction would be valued at approximately $259 million, and Affiliated
shareholders would receive a value of $39.92 in Company common stock for each
share of Affiliated common stock. The purchase price represents a multiple of
2.3 times stated book value of Affiliated at September 30, 1997. The Company
expects to record a one-time pre-tax charge of approximately $12 million of
acquisition related costs in connection with the transaction. If the Company's
average stock price during a period prior to closing is less than $24.06 per
share and the Company's stock price has declined by more than 15% relative to a
certain bank stock index, Affiliated can terminate the agreement, subject to the
right of the Company to issue additional shares of its common stock to ensure
that shareholders of Affiliated receive a per share value of $33.92 in Company
common stock.

Immediately after execution of the Affiliated Agreement on December 15,
1997, the Company entered into a Stock Option Agreement (the "Affiliated Stock
Option Agreement") with Affiliated pursuant to which Affiliated has granted to
the Company the option to purchase, under certain circumstances, up to 1,300,078
shares of its outstanding stock at an exercise price of $32.937 per share.

Copies of the Affiliated Agreement, the Company's press release and
materials used in the presentation to analysts are included herewith as Exhibits
3, 4 and 5, respectively and incorporated herein by reference. The form
of the Affiliated Stock Option Agreement is included as Exhibit B to the
Affiliated Agreement. The preceding description of the

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Affiliated Agreement and the Affiliated Stock Option Agreement is qualified in
its entirety by the reference to the copies of each attached hereto and
incorporated herein.

C. Information contained in the Exhibits to this Current Report on Form
8-K may contain statements which are forward-looking in nature, such as
references to strategic plans and expectations. These forward-looking
statements are inherently uncertain, and actual results may differ from Company
expectations. Risk factors that could impact current and future performance
include but are not limited to: changes in asset quality; adverse changes in
the economy of the Company's primary market; adverse changes in collateral
values; fluctuations in market rates and prices which can negatively affect net
interest margin, asset valuations and expense expectations; and changing
requirements of federal and state bank regulatory agencies that could materially
impact future operations of the Company.

Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(A)(B) Financial Statements including pro forma financial information
will be provided within sixty days of the consummation of each of the proposed
transactions. At the current time it is impracticable to provide this
information.

1. Affiliation Agreement and Plan of Reorganization, dated as of
December 9, 1997, between UST Corp. and Somerset Savings Bank.

2. UST Corp.'s press release dated December 10, 1997, related to
the acquisition by UST Corp. of Somerset Savings Bank.

3. Affiliation Agreement and Plan of Reorganization, dated as of
December 15, 1997, between UST Corp., Mosaic Corp. and Affiliated Community
Bancorp, Inc.

4. UST Corp.'s press release dated December 15, 1997, related to
the acquisition by UST Corp. of Affiliated Community Bancorp, Inc.

5. UST Corp.'s Presentation to Analysts dated December 15, 1997,
related to the acquisition by UST Corp. of Affiliated Community Bancorp, Inc.
and Somerset Savings Bank.

SIGNATURES

Pursuant to the requirement of the Securities and Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

UST Corp.

/s/ James K. Hunt
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James K. Hunt
Executive Vice President, Chief
Financial Officer and Treasurer

/s/ Eric R. Fischer
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Eric R. Fischer
Executive Vice President,
General Counsel and Clerk

Dated: December 16, 1997