Capital Crossing Bank to Be Acquired by Lehman Brothers

Capital Crossing Bank today announced that it has signed a definitive agreement whereby Capital Crossing would be acquired by Lehman Brothers Bank, FSB, a subsidiary of Lehman Brothers, the global investment bank. Under the terms of the agreement, Lehman Brothers will pay $30.00 per share in cash in exchange for each outstanding share of Capital Crossing, representing a premium of approximately 11.7% over the closing price of Capital Crossing shares on September 19, 2006 and an aggregate deal value of approximately $210 million. The acquisition is expected to be completed during the first quarter of 2007, subject to customary closing conditions and regulatory approvals.

“We are extremely excited about a combination with Lehman Brothers,” said Richard Wayne, President and Co-Chief Executive Officer of Capital Crossing. “We have partnered with Lehman Brothers on loan purchase transactions for quite some time, and believe that a combination of our platform, people and expertise with their balance sheet and brand equity will take our business to the next level.”

Nicholas W. Lazares, Chairman and Co-Chief Executive Officer, added, “As we reviewed the landscape and competitive environment in our business, it became increasingly clear that it would be more difficult to achieve all of our goals as a relatively small, publicly traded bank. By combining with Lehman Brothers, we have both rewarded our shareholders for their loyal following with attractive consideration as well as expanded our opportunities for growth. We are entering this combination to improve and grow our business and look forward to working with our colleagues at Lehman Brothers in that regard.”

Upon completion of the acquisition, Capital Crossing will become a division of Lehman Brothers Bank, FSB. Capital Crossing will remain headquartered in Boston, MA. Mr. Wayne and Mr. Lazares will continue to serve as Co-Chief Executive Officers of Capital Crossing and will join Lehman Brothers as managing directors. Edward Mehm and Demetrios Kyrios, Executive Vice Presidents of Capital Crossing, will also join Lehman Brothers as managing directors.

RBC Capital Markets served as financial advisor to Capital Crossing Bank in the transaction and Wachtell, Lipton, Rosen & Katz served as counsel.