Exhibit 99.1

September 8, 2000

FOR IMMEDIATE RELEASE


                 MONTEREY BAY BANCORP, INC. ANNOUNCES SIGNING OF
               CORE PROCESSING AGREEMENT WITH OPEN SOLUTIONS INC.


                                                      Common Stock Symbol:  MBBC
                                                          NASDAQ National Market


         Watsonville,   CA.  September  8,  2000.  Monterey  Bay  Bancorp,  Inc.
("Company") today reported that its subsidiary,  Monterey Bay Bank ("Bank"), has
signed  an  Information  Processing  System  Agreement  ("Agreement")  with Open
Solutions Inc.  ("OSI").  Under the terms of the Agreement,  the Bank obtained a
five year license to utilize OSI's "The Complete Banking  Solution"  software as
its core processing system. OSI has licensed this software to over 135 financial
institutions  throughout the United States and is  headquartered in Glastonbury,
Connecticut.

         The OSI software  will  service a wide range of the Bank's  operations,
including all loan and deposit  accounts.  The Bank anticipates  converting from
its current service bureau  environment to the OSI software  sometime during the
first half of 2001. The OSI software  operates in a client / server  environment
over a wide area  network and is built upon a leading  relational  database.  In
conjunction with the implementation of the OSI software, the Bank plans to bring
its core  processing  in-house  along with the  installation  of new,  mirrored,
multi-processor   servers.   While  the  Bank  is   currently   developing   the
implementation  plan for the new system,  the Company  anticipates  that certain
operating  expenses will increase over the next several  quarters as a result of
the data conversion process.

         Commenting  on the  signing of the  Agreement,  C. Edward  Holden,  the
Company's Chief Executive Officer, stated "We look forward to converting to `The
Complete  Banking  Solution',  as this  software  presents  the  Bank  with  the
opportunity  to offer a wider array of products to a broader  range of customers
more effectively than our current core processing platform.  The OSI software is
therefore  consistent with and fundamental to the Bank's  continuing  conversion
from a traditional  savings & loan to a community based commercial  bank." Denis
Poole,  the Bank's Director of Information  Technology,  added "The OSI software
and related hardware incorporates a much newer generation of technology than the
Bank has  previously  had  available  for  core  processing.  Combined  with the
Internet  Banking suite of products planned to be introduced in the near future,
this new core processing  technology  highlights the Bank's commitment to better
serving its customers."

         The  Company's  common  stock is listed on the NASDAQ  National  Market
under  the  symbol  "MBBC".  The  Company  and the  Bank  are  headquartered  in
Watsonville, California. The Bank operates through its administrative offices in
Watsonville and eight full service  branches located in the Greater Monterey Bay
Area of Central California.







         This news release contains certain forward-looking  statements that are
subject to various factors that could cause actual results to differ  materially
from such statements.  Such factors include,  but are not limited to, changes in
technology and technology obsolescence,  the risks associated with converting to
and  implementing  new technology,  the possibility that the Company will not be
successful in achieving its strategic objectives, and other factors discussed in
documents filed by the Company with the Securities and Exchange  Commission from
time to time.


                        For further information contact:


C. Edward Holden                                        Mark R. Andino
Chief Executive Officer               or                Chief Financial Officer
(831) 768 - 4840                                        (831) 768 - 4806



                            INFO@MONTEREYBAYBANK.COM
                              Fax: (831) 722 - 6794