FOR IMMEDIATE RELEASE                                          July 10, 2003

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. TO PURCHASE SEVEN BRANCH OFFICES

Burlington,  MA - BostonFed  Bancorp,  Inc.  (AMEX - BFD) (the  "Company"),  the
parent of Boston Federal Savings Bank,  ("BFSB"),  a  federally-chartered  stock
savings bank, and Broadway National Bank, a national chartered  commercial bank,
announced  today that BFSB had signed a definitive  agreement  to purchase  from
Encore Bank seven branch offices located in Belmont, Lexington, Needham, Newton,
Sudbury, Wellesley and Woburn, Massachusetts.  As of June 30, 2003, the deposits
to be purchased from Encore Bank totaled  approximately  $330 million.  BFSB has
agreed to pay a premium of approximately 1.3% of the deposits on the acquisition
date.

Subject to  regulatory  approval,  the  acquisition  is expected to close in the
fourth quarter of 2003.

Commenting  on the  agreement,  David F. Holland,  Chairman and Chief  Executive
officer,  stated,  "We are  delighted  to have this  opportunity  to expand  our
presence in the Boston area.  The  purchase of these  branch  offices will be an
ideal addition to the Company's franchise."

Keefe, Bruyette & Woods, Inc. advised  BFSB and Sandler O'Neill & Partners, L.P.
advised Encore Bank.

This press release may contain  statements that are not historical facts and are
considered   forward-looking  statements  within  the  meaning  of  the  federal
securities  laws.  These  statements  are based on  management's  beliefs and on
assumptions made by, and information  currently  available to,  management.  You
should not rely on  forward-looking  statements  because  the  Company's  actual
results may differ  materially  from those  indicated  by these  forward-looking
statements as a result of a number of important factors.  These factors include,
but are not limited to, changes in  legislation,  prevailing  interest rates and
changes  in  economic   conditions.   The  Company   cautions  you  that,  while
forward-looking statements reflect its good faith beliefs when the Company makes
them,  they are not guarantees of future  performance and are impacted by actual
events when they occur after the Company makes such statements.