CompassBank Announces Plan To Purchase Up To 24.9 Percent of Sandwich Bancorp Common Stock.

NEW BEDFORD, Mass.--(BUSINESS WIRE)--Feb. 18, 1998--CompassBank for Savings announced today that it intends to file an application for permission from regulatory authorities to acquire up to 24.9 percent of the common stock of Sandwich Bancorp, Inc. (NASDAQ:SWCB) ("Sandwich"), the parent holding company of Sandwich Cooperative Bank of Sandwich, Mass.

On Feb. 2, 1998, Compass and its parent mutual holding company, The 1855 Bancorp, entered into an Affiliation and Merger Agreement with Sandwich ("Affiliation Agreement") to acquire by merger all of the shares of Sandwich for $53.00 per share in cash. Like many acquirors, Compass determined that it would be in the mutual interests of both Sandwich and Compass for Compass to acquire shares of Sandwich stock in the open market in advance of the proposed merger, and Compass now holds slightly less than 4.9 percent of the outstanding Sandwich common stock. Compass's present intent to purchase on the open market up to 24.9 percent of Sandwich's common stock is for the purpose of assuring that the Compass/Sandwich merger will be consummated in accordance with the terms of the negotiated and signed Affiliation Agreement.

Sandwich announced yesterday that Cape Cod Bank & Trust (NASDAQ:CCBT) had submitted an unsolicited nonbinding expression of interest in acquiring Sandwich in an ill-defined stock-for-stock or stock and cash merger, an overture which Compass considers to be an attempt to interfere with the existing contract between Compass and Sandwich and to derail the Compass/Sandwich merger. Compass President and Chief Executive Officer Kevin G. Champagne said that Compass intends to do what is necessary to protect the integrity of the existing contract between Compass and Sandwich. "Our agreement with Sandwich provides the Sandwich stockholders with an outstanding, unwavering cash value for their shares," Champagne said. "In today's volatile market, a stock-for-stock exchange may look attractive at first, but there is no guarantee that the would-be acquiror's shares will retain their value, particularly in light of the severe dilution that could be created by issuing the number of additional shares contemplated by the proposal. On the other hand, our contract with Sandwich offers a guaranteed value to the Sandwich stockholders of $53.00 per share."

Champagne added: "We believe that the customers and employees of Sandwich and CCBT would all be disadvantaged by CCBT's proposal. CCBT is a rival of Sandwich whose branch network substantially overlaps with Sandwich's branch network. An unsolicited takeover of Sandwich by CCBT would result in the disappearance of one of the last independent community-based banking franchises on the Cape, and would most likely result in the closing of a number of branches in local communities. Additionally, given the price CCBT claims to be willing to pay, we believe that the acquisition would result in significant layoffs of either Sandwich or CCBT employees, in order to appease CCBT's stockholders. On the other hand, Compass, as a strong independent community bank that is not currently operating on the Cape, would bring increased competition to the marketplace and would retain jobs and improve the banking choices available to local customers."

CompassBank is a $1.1 billion state chartered savings bank operating as a wholly-owned subsidiary of The 1855 Bancorp. The bank has 23 full service branch offices, 2 limited service offices in area high schools and a network of 25 branch and remote ATMs, serving Southeastern Massachusetts and Martha's Vineyard. The bank provides a wide array of financial services including consumer banking, mortgage lending, commercial lending, consumer finance and alternative investments.

CONTACT: CompassBank for Savings

Jim Rice, 508/984-6102