Eastern Bank Corporation Announces Plans to Acquire MASSBANK Corp.

Agreement enhances convenience and service for customers
BOSTON--(Business Wire)--
Eastern Bank Corporation signed a definitive agreement to acquire
MASSBANK Corp. (NASDAQ: MASB), parent company of Reading-based
MASSBANK, in a cash transaction valued at approximately $170 million,
or $40 per share, the two companies announced this evening.

The merger will provide enhanced convenience for Eastern Bank and
MASSBANK customers, who will have access to almost 90 branch locations
and more than 100 ATMs across eastern Massachusetts upon completion of
the merger. The merger is Eastern's third in the past four years, as
it continues to expand its presence throughout eastern Massachusetts.

"Middlesex County is an important market for Eastern and this
agreement improves our presence there, while enabling us to better
serve customers at both banks," said Richard E. Holbrook, Eastern's
chairman and CEO.

"We're proud of our nearly 200 year history of providing financial
advice and solutions to Massachusetts residents, and we look forward
to serving MASSBANK customers and the communities in which they live,"
Holbrook said. Mr. Holbrook will remain chairman and CEO of Eastern
Bank following the merger, and chairman, president and CEO of Eastern
Bank Corporation.

Pending approval by state and federal regulators and shareholders
of MASSBANK Corp., the merger creates a $7.6 billion bank serving more
than 400,000 consumers and businesses across eastern Massachusetts.
The boards of directors of both companies have approved the
transaction, which is expected to close in the second half of 2008.

"MASSBANK has been effective at both providing great service to
our customers and creating a prudent business strategy that has
allowed us to be one of the most successful community-based banks in
Massachusetts," said Gerard H. Brandi, MASSBANK's chairman, president
and CEO. "Eastern Bank shares our philosophy, and we believed the time
was right for a partnership that would benefit customers and
shareholders alike."

"By combining our resources with Eastern, we can offer both the
advantages of a larger bank - including up to date technology, access
to a larger network of ATMs and branches and greater product diversity
- while simultaneously ensuring that a locally operated bank will
serve our communities for many years to come," Brandi said. Mr. Brandi
is expected to become a vice chairman of Eastern Bank Corporation
following the merger.

MASSBANK operates 15 branches in Reading, Chelmsford, Dracut,
Everett, Lowell, Medford, Melrose, Stoneham, Tewksbury, Westford and
Wilmington. Chartered as a savings bank, MASSBANK's acquisition by
Eastern - a full-service commercial bank - will enable its locations
to better serve the small business community with lending and cash
management services.

Over the past several years, Eastern has consistently ranked among
the top lenders to small businesses in the Boston Metropolitan
Statistical Area, according to data compiled by the Federal Financial
Services Institution Council. It offers an array of commercial banking
services, including commercial and industrial lending, commercial real
estate financing and cash management. It also offers commercial
insurance products through its subsidiary, Eastern Insurance. Finally,
Eastern's private banking group, which is part of its wealth
management division, is adept at meeting the often-complex borrowing
and deposit needs of business owners and individuals alike.

Sandler O'Neill & Partners, L.P. acted as financial advisor to
Eastern Bank Corporation and provided a fairness opinion, while
Nutter, McClennen & Fish LLP acted as legal counsel. Friedman,
Billings, Ramsey & Co., Inc. acted as financial advisor to MASSBANK
Corp. and provided a fairness opinion, while Goodwin Procter LLP
served as legal counsel.

About Eastern Bank

Founded in 1818 and based in Boston, Eastern Bank is the largest
independent, mutually owned commercial banking franchise in New
England. With $6.8 billion in assets and 74 branches stretching from
Merrimack Valley to Cape Cod, Eastern offers superior service,
convenience and a full range of financial products for consumers,
businesses, investors, government agencies and not-for-profit
organizations. Its subsidiaries include Eastern Insurance and Fantini
& Gorga, a real estate advisory firm. For more information, visit
www.easternbank.com.

About MASSBANK

MASSBANK is a Massachusetts-chartered savings bank founded in 1872
as the Melrose Savings Bank. In 1983, the Reading Savings Bank was
merged with and into the Melrose Savings Bank and the name of the
resulting institution was changed to MASSBANK for Savings. In 1986,
the Bank converted from mutual to stock form of ownership. MASSBANK
has $800 million in assets and 15 branches serving Middlesex County.
For more information, visit www.massbank.com.

Cautionary Statement

This press release may contain forward-looking information,
including information concerning MASSBANK Corp., ("MASSBANK") and
expectations concerning the acquisition of MASSBANK by Eastern Bank
Corporation (the "Acquisition"). 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 MASSBANK'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 MASSBANK's belief,
expectations or intentions concerning MASSBANK's future performance
and the likelihood that the Acquisition will in fact occur in a timely
manner. These statements reflect MASSBANK's current views. They are
based on numerous assumptions and are subject to numerous risks and
uncertainties relating to the Acquisition, including obtaining all
requisite regulatory approvals in a timely fashion, obtaining the
timely approval of MASSBANK's stockholders, absence of a material
adverse effect on MASSBANK, satisfaction of all other conditions to
the Acquisition and timely closing of the Acquisition by both parties.

Additional Information and Where to Find It

MASSBANK plans to file with the Securities and Exchange Commission
(the "SEC") and mail to its stockholders a proxy statement in
connection with the transaction (the "Proxy Statement"). The Proxy
Statement will contain important information about MASSBANK, Eastern,
the transaction and related matters. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED
TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies
of the Proxy Statement and other documents filed with the SEC by
MASSBANK through the web site maintained by the SEC at www.sec.gov.

In addition, documents filed by MASSBANK with the SEC, including
filings that will be incorporated by reference in the Proxy Statement,
can be obtained, without charge, upon written request addressed to the
Secretary of the Company, 123 Haven Street, Reading, Massachusetts
01867.

MASSBANK, Eastern and their respective directors, executive
officers and other members of management may be deemed to be
participants in the solicitation of proxies in respect of the
transactions contemplated by the merger agreement. Information
regarding MASSBANK's directors and executive officers is contained in
MASSBANK's Annual Report on Form 10-K for the year ended December 31,
2006, as filed with the SEC on March 15, 2007, and its proxy statement
for its 2007 annual meeting, as filed with the SEC on March 16, 2007.
Information about Eastern's directors, executive officers and other
members of management is available from its 2006 Annual Report, which
can be obtained for free from its website at www.easternbank.com, and
will also be available in a Schedule 13D to be filed by Eastern with
the SEC. Additional information regarding the interests of those
participants may be obtained by reading the Proxy Statement regarding
the proposed transaction when it becomes available. INVESTORS AND
SECURITY HOLDERS SHOULD READ THE PROXY STATEMENT AND OTHER DOCUMENTS
TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING A DECISION.

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

Eastern Bank
Joe Bartolotta, 781-596-4411
or
MASSBANK
Geri Denterlein, 617-306-2105

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