January 28, 1998

Board of Directors
Brookline Savings Bank
160 Washington Street
Brookline, Massachusetts 02147

Dear Board of Directors:

The notice of proposed mutual-to-stock conversion and subsequent amendments thereto, filed on behalf of Brookline Savings Bank ("Brookline") have been reviewed by the Federal Deposit Insurance Corporation ("FDIC") pursuant to section 303.15 of the FDIC Rules and Regulations. As described in the notice and the amendments, Brookline proposes to convert from a Massachusetts chartered mutual savings bank to a Massachusetts-chartered stock savings bank within a mutual holding company structure. The proposed reorganization would result in the formation of a mutual holding company which would own a majority of the shares of a second-tier stock holding company which in turn would own 100% of the stock of the savings bank. Up to 47% of the stock of the mid-tier holding company would be offered for sale to the public.

As part of the Notice, the bank has requested, in accordance with 12 C.F.R. 333.4(a), waiver of a certain provision of the FDIC's regulations with respect to mutual-to-stock conversions, specifically, the depositor vote requirement (12 C.F.R. 333.4(d)(2)). Under the Conversion Regulations, the bank's waiver request is appropriate for consideration by the FDIC's Board of Directors under the "good cause" exception to the Conversion Regulations, 12 C.F.R. Section 333.4(a), rather than the "conflicts with State law" exception under 12 C.F.R. Section 333.4(b). The FDIC Board has determined that the depositor voting requirement in the Conversion Regulations does not present a conflict with Massachusetts law, but rather is supplemental to Massachusetts law and procedures for mutual-to-stock conversions. The FDIC Board has considered the information provided by the bank with respect to the commercial borrowings and commercial relationships of the respective corporators of the bank. Applying the prescribed standard, the FDIC Board has determined that a sufficient number of the Bank's corporators are not insiders and have no apparent potential for conflict of interest and that a majority of the independent corporators voted in favor of the Plan of Reorganization.

The FDIC has relied on information provided in Brookline's Notice of Conversion and the accompanying business plan in reaching its decision. It is anticipated that details regarding any planned material deviations from the business plan, such as a return of capital, will be provided to the FDIC in advance of such an event.

Based on the information presented in the notice of conversion and representations made by the bank, the FDIC approves the waiver of the requirement for the depositor vote and plans to issue a letter of nonobjection to the proposed conversion transaction, provided that the bank satisfies the following conditions:

1. The bank must advise this office of the results of the subscription offering and deliver an updated appraisal that:

(a) takes the results of the subscription offering into account;

(b) discusses any material occurrences during the subscription period; and

(c) explains any order that may have been rejected.

2. The bank must receive final approval from the appropriate State Authority and the Board of Governors of the Federal Reserve System for establishment of the stock saving bank and the holding companies and for acquisition of the bank by the holding companies.

Provided that the bank meets the conditions outlined above and that the FDIC is satisfied with the appraiser's determination in the updated appraisal that the results of the subscription offering represent fair value for the bank, and provided further that there has been no significant alteration to the terms of the conversion transaction (by action of other regulators or otherwise) subsequent to the date of this letter, the FDIC will issue a letter of nonobjection to the proposed conversion transaction.

The conditional Order approving the related applications for federal deposit insurance and consent to merge is enclosed. If an extension of the time limitation included in the Order is required, a letter requesting a specific extension of the limitation including reasons therefore should be submitted to the Boston Regional Office.

Sincerely,

Mark S. Schmidt
Associate Director

Enclosure

FEDERAL DEPOSIT INSURANCE CORPORATION

RE: Brookline Savings Bank Brookline, Massachusetts

Applications for Federal Deposit Insurance and for Consent to Merge

ORDER AND BASIS FOR CORPORATION APPROVAL

Pursuant to Sections 5 and 18(c) of the Federal Deposit Insurance Act (the Act), applications have been filed on behalf of Brookline Savings Bank, Brookline, Massachusetts ("Stock Bank"), a newly-formed state-chartered stock savings bank and Bank Insurance Fund member, for federal deposit insurance and for the Corporation's consent to merge with Brookline Savings Bank, Brookline, Massachusetts ("Mutual Bank"), a state-chartered mutual savings bank and Bank Insurance Fund member, with total resources of $682,069,000 and total deposits of $483,114,000, as of September 30, 1997, under the charter of Stock Bank and the title of Mutual Bank. To facilitate the conversion from mutual to stock form, application has also been made for federal deposit insurance for Brookline De Novo Savings Bank which will immediately reorganize as Brookline Bancorp, MHC ("MHC"), a state-chartered mutual holding company.

Mutual Bank proposes to convert from a mutual savings bank to a stock savings bank which will be a wholly-owned subsidiary of Brookline Bancorp, Inc. ("Stock Holding Company"), a newly organized stock holding company. MHC will retain a majority ownership interest in Stock Holding Company with a minority interest to be sold to the public. The principal office will be at 160 Washington Street, Brookline, Massachusetts, the present location of Brookline.

A review of available information, including the Community Reinvestment Act (the "CRA") Statement of the proponent, discloses no inconsistencies with the purposes of the CRA. The resultant institution is expected to continue to meet the credit needs of its entire community, consistent with the safe and sound operation of the institution.

Favorable findings have been accorded to all factors required to be considered pertinent to each application. Accordingly, it is the Corporation's judgment that the applications should be and hereby are approved subject to the following conditions:

1. That the proposed transaction may not be consummated unless and until the applicant has received, from the Corporation, a letter of nonobjection to the proposed conversion transaction;

2. That federal deposit insurance shall not become effective unless and until the applicant has received all appropriate Federal and State regulatory approvals for establishment of the Stock Bank and the proposed holding company structure and the acquisition of Stock Bank by the holding companies;

3. That neither Stock Holding Company nor Stock Bank shall issue minority shares without prior written notification to and nonobjection from the FDIC;

4. That MHC shall provide written notification to the Corporation prior to its conversion to stock form and provide the Corporation with copies of all documents filed with state and federal banking and/or securities regulators in connection with any proposed conversion of the mutual holding company to stock form;

5. That any dividends waived by MHC must be retained by Stock Bank and segregated, earmarked, or otherwise identified on its books and records; such amounts must be taken into account in any valuation of Stock Bank and MHC and factored into the calculation used in establishing a fair and reasonable basis for exchanging bank shares for holding company shares in any subsequent conversion of MHC to stock form; such amounts shall not be available for payment to or the value thereof transferred to minority shareholders of the bank by any means, including through dividend payments or at liquidation;

6. That the transaction shall not be consummated sooner than fifteen calendar days after the date of this Order nor later than six months after the date of this Order unless such period is extended for good cause by the Corporation; and

7. That until the conditional commitment herein granted becomes effective, the Corporation shall have the right to alter, suspend, or withdraw the said commitment should any interim development be deemed to warrant such action;

By Order of the Associate Director of the Division of Supervision, acting pursuant to delegated authority of the Board of Directors of the Corporation.

Dated at Washington, D.C., this 28th day of January, 1988.

Mark S. Schmidt
Associate Director