New Capital Markets group staffed by former State Street executives

BOSTON, Mass., June 5, 2002 – Eastern Bank today announced it has hired most of the municipal financial advisory group from State Street Corp., enabling Eastern to expand its advisory and underwriting services to municipalities and government agencies.

The new employees have joined Eastern’s capital markets group, which last year was the number one underwriter of Massachusetts tax-exempt notes and, according to Thomson Financial, is the nation’s 12th largest underwriter of short-term notes, with volume reaching almost $1.2 billion in 2001.

The new employees enable Eastern to provide advisory services that help government agencies – such as cities and regional school districts – structure bond and note offerings before bringing the debt to the markets. Eastern has also added an underwriter of municipal bonds and notes from State Street.

State Street provided financial advisory services to more than 100 municipalities and other government agencies before exiting the business last month. Eastern expects to retain business relationships with most if not all of the former State Street clients, thanks in part to State Street’s help in making the transition a smooth one. The clients are located across New England, but concentrated in Massachusetts.

“We’ve hired the best team in the business and we couldn’t be happier,” said bank President Richard E. Holbrook. “The new team will significantly enhance our ability to serve government banking customers.”

In all, six former State Street employees will be joining Eastern. The employees average 20 years of public finance experience and make Eastern the only bank dealership headquartered in Massachusetts.

Created two years ago, capital markets is one of Eastern’s fastest-growing businesses. The group buys and sells municipal bonds and notes, Treasury and federal agency obligations, corporate debt securities and jumbo CDs, along with its newly added financial advisory and underwriting services for government agencies.

Eastern has a tradition of serving the government and municipal markets. Its government banking group provides cash management services to dozens of municipalities and government agencies, with deposits totaling more than $250 million.

“Our new financial advisory unit should foster an even stronger relationship between the bank and local government agencies,” said James Fox, senior vice president in charge of capital markets. “Their track record is excellent. In recent years, the team has assisted municipalities in improving their bond ratings, which has resulted in lower interest rates on the debt and, therefore, lower local property taxes for property owners.”

Eastern Bank is a $4 billion full-service banking company with 45 offices in Greater Boston. Eastern’s business lines include consumer banking, corporate lending, capital markets, small business banking, cash management, equipment leasing, private banking, trust and investment management, mortgage banking and consumer finance.

For more information, contact: Joe Bartolotta, Public Relations Director, Eastern Bank,
(781) 596-4411, or e-mail Joe Bartolotta.