Exhibit 99.1

MASSBANK Corp.	August 7, 2008
Reading, MA

FOR IMMEDIATE RELEASE

MASSBANK Corp. Reports Second Quarter 2008 Earnings Results

READING, MA—(Marketwire)—August 7, 2008 — MASSBANK Corp. (Nasdaq:MASB), the Holding Company for MASSBANK, today reported a net loss of $378,000 or $0.09 in basic and diluted earnings per share for the second quarter of 2008, compared with net income of $1,422,000 or $0.33 in basic and diluted earnings per share in the second quarter of 2007. For the first six months of 2008, the Company had a net loss of $197,000 or $0.05 in basic and diluted earnings per share as compared with net income of $3,503,000 or $0.81 in basic and $0.80 in diluted earnings per share for the first six months of 2007. The results for the second quarter of 2008 compared to the second quarter of 2007 were adversely affected by a decline of $1,584,000 in net interest income, an increase in securities losses of $578,000 and one-time merger expenses of $258,000 associated with the Company’s merger with Eastern Bank. The decline in net interest income was principally due to changes in the Company’s investment portfolio as the Company increased the liquidity of the portfolio as called for by the merger agreement with Eastern Bank. Consistent with the merger agreement, the percentage of the Company’s total assets consisting of short-term investments and term Federal funds sold increased from 26.2% on June 30, 2007 to 47.0% on June 30, 2008.

Balance Sheet

The Company’s total assets decreased $33.9 million to $783.0 million at June 30, 2008 from $816.9 million at June 30, 2007. Deposits decreased $31.2 million or 4.4% year-over-year from $704.6 million at June 30, 2007 to $673.4 million at June 30, 2008 due in part to increased competition for relatively expensive short-term deposits. Stockholders’ equity was $105.2 million at June 30, 2008, representing a book value of $24.85 per share. This compares to $107.3 million at June 30, 2007 representing a book value of $24.83 per share.

The Company’s non-accrual loans are near historical lows totaling $26,000 at June 30, 2008 representing 0.01% of total loans. This compares to $192,000 representing 0.10% of total loans at June 30, 2007. At June 30, 2008, the Bank’s allowance for loan losses totaled $1.411 million representing 0.69% of total loans compared to $1.372 million representing 0.69% of total loans at June 30, 2007. In addition, the Bank’s allowance for loan losses on off-balance sheet credit exposures totaled $302,000 at June 30, 2008 compared to $345,000 a year earlier. This is intended to protect the bank against loan commitments made to customers that have not yet been drawn down.

MASSBANK Corp. is the holding company for MASSBANK, a Massachusetts chartered savings bank. The Bank operates fifteen banking offices in Reading, Chelmsford, Dracut, Everett, Lowell, Medford, Melrose, Stoneham, Tewksbury, Westford and Wilmington, providing a variety of deposit, lending and trust services.

ADDITIONAL INFORMATION

Stockholder approval of Merger

As previously announced, the Company’s stockholders approved on July 15, 2008 the Company’s merger with Eastern Bank Corporation. The merger remains subject to regulatory approvals. The merger is expected to close during the third quarter of 2008.

August 7, 2008

Page Two

Cautionary Statement

This press release may contain forward-looking information, including information concerning the Company’s expectations of future business prospects. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results or performance to be materially different from the results and performance expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning the Company’s belief, expectations or intentions concerning the Company’s future performance, the financial outlook of the markets it serves and the performance and activities of its competitors. These statements reflect the Company’s current views. They are based on numerous assumptions and are subject to numerous risks and uncertainties, including but not limited to the following: (1) changing economic conditions; (2) movements in interest rates; (3) the credit environment; (4) levels of activity in the capital markets, including the stock and bond market; (5) changes in the levels of non-performing assets; (6) changes in the competitive pricing pressures within the Company’s market which may result in an increase in the Company’s cost of funds, changes in loan originations, a change in deposits and assets; (7) adverse legislative and regulatory developments; (8) a significant decline in residential real estate values in the Company’s market area; (9) adverse impacts resulting from the continuing war on terrorism; (10) a significant increase in employee benefit costs; (11) the impact of changes in accounting principles; (12) the impact of inflation or deflation; (13) the disruption to the Company’s business as a result of the announcement and pending merger with Eastern Corporation, including the Company’s ability to retain depositors and loan relationships and key personnel; and (14) the Company’s success at managing the risks involved in the foregoing and other factors described in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2007. In addition, the completion of the previously announced merger with Eastern Corporation is subject to numerous risks and uncertainties, including: (a) the risk the Company will be unable to satisfy all of the closing conditions set forth in the merger agreement; and (b) the possibility that the Company may not obtain the necessary state and federal regulatory approvals to consummate the merger or that an adverse regulatory condition will be imposed in connection with those approvals.

For further information contact Reginald E. Cormier, Senior Vice President, Treasurer and CFO at (781) 942-8192.

August 7, 2008

Page Three

MASSBANK CORP.

FINANCIAL HIGHLIGHTS

($ in thousands except share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
For the Period Ended
Total interest and dividend income	$	7,295		$	10,056		$	16,057		$	20,035
Total interest expense		4,115			5,292			8,862			10,480
Net interest income		3,180			4,764			7,195			9,555
Provision (credit) for loan losses		15			(10	)		43			(10	)
Net interest income after provision (credit) for loan losses		3,165			4,774			7,152			9,565
Gains (losses) on securities, net		(584	)		(6	)		83			1,128
Other non-interest income		255			461			525			817
Non-interest expense		3,460			3,091			8,068			6,191
Income tax expense (benefit)		(246	)		716			(111	)		1,816
Net income (loss)	$	(378	)	$	1,422		$	(197	)	$	3,503
Weighted Average Common Shares Outstanding
Basic		4,233,079			4,331,823			4,237,508			4,333,696
Diluted		4,270,506			4,356,972			4,271,290			4,359,200
Per Common Share
Earnings (loss):
Basic	$	(0.09	)	$	0.33		$	(0.05	)	$	0.81
Diluted		(0.09	)		0.33			(0.05	)		0.80
Cash dividends paid		0.29			0.28			0.58			0.56
Book value (period end)								24.85			24.83
Ratios (1)
Return on average assets		(0.19	)%		0.69	%		(0.05	)%		0.85	%
Return on average equity		(1.42	)		5.28			(0.37	)		6.53
Net interest margin		1.66			2.40			1.87			2.39
Total equity to assets (period end)								13.43			13.13

	At June 30,
	2008			2007
At Period End
Assets	$	783,031		$	816,948
Deposits		673,436			704,583
Total loans		203,679			198,458
Stockholders’ equity	$	105,172		$	107,252
Common shares outstanding		4,233,079			4,319,554
Asset Quality
Non-accrual loans	$	26		$	192
Real estate acquired through foreclosure		—			—
Total non-performing assets	$	26		$	192
Allowance for loan losses	$	1,411		$	1,372
Percent of non-accrual loans to total loans		0.01	%		0.10	%

(1) Ratios are presented on an annualized basis with the exception of equity to assets.

August 7, 2008

Page Four

MASSBANK CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

($ in thousands except share data)

	At June 30, 2008			At June 30, 2007
Assets:
Cash and due from banks	$	7,476		$	7,100
Short-term investments		318,183			174,006
Total cash and cash equivalents		325,659			181,106
Term federal funds sold		50,000			40,000
Securities available for sale, at fair value (amortized cost of $117,010 in 2008 and $138,029 in 2007)		117,338			136,144
Securities held to maturity, at amortized cost (market value of $7,193 in 2008 and $4,945 in 2007)		7,257			5,188
Trading securities, at fair value:		63,522			236,985
Loans:
Mortgage loans		194,722			188,558
Other loans		8,957			9,900
Total loans		203,679			198,458
Allowance for loan losses		(1,411	)		(1,372	)
Net loans		202,268			197,086
Premises and equipment		8,368			8,119
Real estate held for resale		—			425
Accrued interest and income receivable		2,194			4,252
Goodwill		1,090			1,090
Income tax receivable, net		223			19
Deferred income tax asset, net		1,191			3,349
Other assets		3,921			3,185
Total assets	$	783,031		$	816,948
Liabilities and Stockholders’ Equity:
Deposits:
Demand and NOW	$	73,247		$	74,446
Savings		312,694			323,168
Time certificates of deposit		287,495			306,969
Total deposits		673,436			704,583
Escrow deposits of borrowers		975			921
Allowance for loan losses on off-balance sheet credit exposures		302			345
Other liabilities		3,146			3,847
Total liabilities		677,859			709,696
Stockholders’ equity:
Preferred stock, par value $1.00 per share; 2,000,000 shares authorized, none issued		—			—
Common stock, par value $1.00 per share; 10,000,000 shares authorized, 7,900,942 and 7,871,017 shares issued in 2008 and 2007, respectively		7,901			7,871
Additional paid-in capital		59,410			58,430
Retained earnings		105,016			105,893
		172,327			172,194
Treasury stock at cost 3,667,863 and 3,551,463 shares in 2008 and 2007, respectively		(67,673	)		(63,519	)
Accumulated other comprehensive income (loss)		518			(1,423	)
Shares held in rabbi trust at cost, 20,194 and 18,944 shares in 2008 and 2007, respectively		(503	)		(458	)
Deferred compensation obligation		503			458
Total stockholders’ equity		105,172			107,252
Total liabilities and stockholders’ equity	$	783,031		$	816,948

August 7, 2008

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MASSBANK CORP. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

($ in thousands except share data)

	Three Months Ended
	June 30, 2008			June 30, 2007
Interest and dividend income:
Mortgage loans	$	2,544		$	2,603
Other loans		152			198
Securities available for sale:
Mortgage-backed securities		1,544			1,729
Other securities		30			32
Mortgage-backed securities held to maturity		106			68
Trading securities		856			2,639
Federal funds sold		1,233			2,200
Other investments		830			587
Total interest and dividend income		7,295			10,056
Interest expense:
Deposits		4,115			5,292
Total interest expense		4,115			5,292
Net interest income		3,180			4,764
Provision (credit) for loan losses		15			(10	)
Net interest income after provision (credit) for loan losses		3,165			4,774
Non-interest income:
Deposit account service fees		69			81
Gains (losses) on securities available for sale, net		(18	)		203
Losses on trading securities, net		(566	)		(209	)
Option fees		—			75
Deferred compensation plan income (loss)		(20	)		84
Other		206			221
Total non-interest income		(329	)		455
Non-interest expense:
Salaries and employee benefits		1,941			1,856
Deferred compensation plan expense (income)		—			108
Occupancy and equipment		520			494
Data processing		129			141
Professional services		243			113
Merger related expense		258			—
Advertising and marketing		22			36
Deposit insurance		34			28
Other		313			315
Total non-interest expense		3,460			3,091
Income (loss) before income taxes		(624	)		2,138
Income tax expense (benefit)		(246	)		716
Net income (loss)	$	(378	)	$	1,422
Weighted average common shares outstanding:
Basic		4,233,079			4,331,823
Diluted		4,270,506			4,356,972
Earnings (loss) per share (in dollars):
Basic	$	(0.09	)	$	0.33
Diluted		(0.09	)		0.33

August 7, 2008

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MASSBANK CORP. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

($ in thousands except share data)

	Six Months Ended
	June 30, 2008			June 30, 2007
Interest and dividend income:
Mortgage loans	$	5,034		$	5,279
Other loans		313			391
Securities available for sale:
Mortgage-backed securities		3,133			3,535
Other securities		57			63
Mortgage-backed securities held to maturity		221			137
Trading securities		2,521			5,276
Federal funds sold		3,102			4,380
Other investments		1,676			974
Total interest and dividend income		16,057			20,035
Interest expense:
Deposits		8,778			10,480
Borrowed funds		84			—
Total interest expense		8,862			10,480
Net interest income		7,195			9,555
Provision (credit) for loan losses		43			(10	)
Net interest income after provision (credit) for loan losses		7,152			9,565
Non-interest income:
Deposit account service fees		146			164
Gains (losses) on securities available for sale, net		(63	)		288
Gains on trading securities, net		146			840
Option fees		75			150
Deferred compensation plan income (loss)		(69	)		109
Other		373			394
Total non-interest income		608			1,945
Non-interest expense:
Salaries and employee benefits		3,881			3,740
Deferred compensation plan expense (income)		(21	)		156
Occupancy and equipment		1,113			1,025
Data processing		278			287
Professional services		912			241
Merger related expense		1,161			—
Advertising and marketing		60			69
Deposit insurance		60			56
Other		624			617
Total non-interest expense		8,068			6,191
Income (loss) before income taxes		(308	)		5,319
Income tax expense (benefit)		(111	)		1,816
Net income (loss)	$	(197	)	$	3,503
Weighted average common shares outstanding:
Basic		4,237,508			4,333,696
Diluted		4,271,290			4,359,200
Earnings (loss) per share (in dollars):
Basic	$	(0.05	)	$	0.81
Diluted		(0.05	)		0.80