Concord, NH (December 15, 2006) Merrimack Bancorp, a mutual holding company and parent of Merrimack County Savings Bank, and Bow Mills Bank and Trust jointly announced today the signing of a definitive agreement providing for the merger of Bow Mills Bank with and into Merrimack County Savings Bank.

The combined bank will operate under the Merrimack name and will remain a mutual institution, with approximately $539 million in assets and $397 million in deposits. Based on June 30, 2006 data, the combined bank will have the third largest deposit market share in Merrimack County, NH, and will rank fourth among independent banks headquartered in New Hampshire.

Ronald A. Wilbur, President and CEO of Merrimack commented, “I am very excited about this opportunity. The merger combines two banks with strong traditions of commitment to our customers, employees and the communities we serve. By joining together, we create a stronger bank positioned for continued independence in the future. I have no doubt that we will better serve customers with a broader array of products and services that are relevant to the needs of our customers today and in the future. Equally important is our intention to maintain and build on the same high levels of personal service and community focus that are the hallmarks of both institutions.”

Peter H. Winship, President and CEO of Bow Mills Bank also commented, “This partnership will continue and strengthen our commitment to quality service, diverse product lines and superior convenience for customers of both banks. It brings together the best of both banks in a win-win situation for our customers, our community, and our employees. In 18 years, Bow Mills has grown into a well-respected and thriving local institution. This is the natural next step to build on that foundation.”

In order to accomplish this consolidation, Merrimack will pay $39.00 per share in cash for all the outstanding shares of common stock and stock options of Bow Mills Bank, for a total transaction value of approximately $22.5 million. The purchase price represents approximately 2.2 x Bow Mills Bank’s September 30, 2006 book value and tangible book value, 25 x earnings for the latest twelve month period ended September 30, 2006 and a 12% premium to core deposits at September 30, 2006. Following the merger, one member of Bow Mills Bank’s board of directors will join the board of directors of Merrimack and three members of Bow Mills Bank’s board of directors will join the Merrimack board of corporators.

The merger, which has been unanimously approved by the boards of directors of both banks, is subject to regulatory approvals and Bow Mills Bank’s shareholder approval, and is expected to close in the first half of 2007.

Founded in 1867, Merrimack County Savings Bank is the sole subsidiary of Merrimack Bancorp, a New Hampshire chartered mutual holding company. It operates three branches and a mortgage center in Concord, NH and one branch in Nashua, NH. Merrimack provides customers with a full range of retail, commercial banking, and wealth management services. On September 30, 2006, Merrimack had $ 415 million in assets, $329 million in loans and $283 million in deposits.

Founded in 1989, Bow Mills Bank and Trust, a New Hampshire chartered commercial bank operates three branches in the greater Concord, NH market. In addition to providing customers with a full range of retail and commercial banking services, Bow Mills Bank operates a trust and investment business which had $55 million of assets under management as of September 30, 2006. Bow Mills Bank had $124 million in assets, $94 million in loans, and $114 million in deposits as of September 30, 2006.