1855 Bancorp and Sandwich Bancorp Announce Regulatory Developments.

NEW BEDFORD, Mass. and SANDWICH, Mass.--(BUSINESS WIRE)--July 14, 1998--The 1855 Bancorp ("1855 Bancorp"), the mutual holding company of Compass Bank for Savings, and Sandwich Bancorp, Inc. ("Sandwich Bancorp"), the stock holding company of Sandwich Co-operative Bank, announced today that they have received draft regulations promulgated by the Massachusetts Commissioner of Banks governing mutual-to-stock conversions of mutual holding companies, including conversions undertaken in connection with mergers and acquisitions.

1855 Bancorp intends to convert from mutual to stock form under the name "Seacoast Financial Services Corporation" in connection with its proposed acquisition of Sandwich Bancorp in a stock-for-stock exchange. 1855 Bancorp's planned mutual-to-stock conversion would be the first conversion of a mutual holding company in Massachusetts, and its acquisition of Sandwich Bancorp is the first acquisition undertaken in Massachusetts in connection with an acquiror's mutual-to-stock conversion. As a result, 1855 Bancorp's transaction would be the first transaction to be considered by the Commissioner under the new regulations.

Under Massachusetts law setting forth the process that all state agencies must follow in adopting new regulations, the earliest that the new regulations are expected to be finalized would be early September. Once the regulations are finalized and all necessary approvals are received, 1855 Bancorp will commence the stock offering related to its conversion and Sandwich Bancorp will hold a special meeting of its stockholders to vote on the merger. Sandwich Bancorp currently expects to hold its special stockholder meeting sometime in the fall. 1855 Bancorp and Sandwich Bancorp have no reason to believe that this regulatory process will impact the parties' ability to timely secure all regulatory approvals necessary for the transaction.

Kevin G. Champagne, President and Chief Executive Officer of 1855 Bancorp and its subsidiary, CompassBank, said, "We are pleased that the Commissioner is dedicating the resources of his office toward the preparation of regulations that establish the regulatory framework for these kinds of transactions. Before we announced our transaction, we knew that we would be breaking regulatory ground, as the first mutual holding company in Massachusetts to convert from mutual to stock form, and as one of the first banks to propose an acquisition in connection with a conversion. We look forward to participating in the regulatory process."

Frederic D. Legate, President and Chief Executive Officer of Sandwich Bancorp and its subsidiary Sandwich Co-operative Bank, said, "Sandwich Bancorp and 1855 Bancorp are continuing to move forward on the many tasks that must be accomplished in preparation for the completion of our merger. The more closely we work together toward our common goal, the more apparent it becomes that the two banks are a good "fit" for one another in areas such as product mix, corporate culture and customer focus. The financial needs of all Cape Cod residents and businesses, including the current customers of Sandwich Co-operative Bank, will be better served as a result of the combination between our two strong banks."

In addition to the approval of the Commissioner, the transaction requires approvals of the Massachusetts Board of Bank Incorporation, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System. Also, the shares of 1855 Bancorp common stock to be issued in the conversion and in the merger are subject to registration with the Securities and Exchange Commissioner under the federal securities laws. 1855 Bancorp has filed regulatory applications with all applicable banking agencies, and has filed a Registration Statement on Form S-1 with the Securities and Exchange Commission. In addition, Sandwich Bancorp has filed preliminary proxy materials with the SEC relating to the special stockholder meeting at which the Sandwich Bancorp stockholders will be asked to vote on the transaction. Finally, the Board of Corporators of The 1855 Bancorp will be asked to vote on the transaction at a meeting expected to be held sometime in August. The parties currently expect that the conversion and merger will be consummated in the fourth calendar quarter of 1998, subject to the receipt of all necessary corporate and regulatory approvals.

    CONTACT: CompassBank for Savings
              Jim Rice, 508/984-6102
               or
              Sandwich Bancorp, Inc.
              Dana S. Briggs, 508/833-7222