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                                   EXHIBIT INDEX


Exhibit 99.1      Press Release issued by BostonFed Bancorp, Inc. on
                  September 20, 2002.




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FOR IMMEDIATE RELEASE                                        September 20, 2002

Contact:              Amy L. Timmerman, AVP, Investor Relations - 781-221-6396
                      John A. Simas, EVP and CFO - 781-221-6307
                      FAX: 781-221-7594

BOSTONFED BANCORP, INC. ANNOUNCES SETTLEMENT OF LAWSUIT.

BostonFed  Bancorp,  Inc.  announced  today  that  its  wholly-owned,   indirect
subsidiary,  Diversified  Ventures,  Inc.,  ("Diversified") has resolved all its
disputes with a claimant bank ("claimant").  The claimant had filed a claim with
respect to the contract  between the parties  regarding the origination and sale
of manufactured  home loans.  The settlement  resolves  Diversified's  remaining
contractual obligations to the claimant as well as all litigation. The agreement
will result in a one-time charge to the Company of approximately  $500,000,  net
after taxes, which will be recorded in the quarter ended September 30, 2002.