Exhibit 2.1

                     PLAN OF REORGANIZATION AND ACQUISITION

                     Pursuant to Section 26B of Chapter 172
                      of the General Laws of Massachusetts

        This Plan of Reorganization  and Acquisition (the "Plan") is dated as of
February 17, 1999 and made between Ipswich Savings Bank, a Massachusetts savings
bank (the "Bank"),  and Ipswich  Bancshares,  Inc., a Massachusetts  corporation
(the "Holding Company").

        The Bank is a stock savings bank,  duly  organized and validly  existing
under the laws of The Commonwealth of  Massachusetts,  with its principal office
at 23 Market Street, Ipswich,  Massachusetts 01938. The authorized capital stock
of the Bank consists of (i)  12,000,000  shares of common stock,  par value $.10
per share (the "Bank Common Stock"),  of which  2,392,286  shares are issued and
outstanding as of the date hereof, and (ii) 1,000,000 shares of preferred stock,
par value $.10 per share,  none of which are  issued and  outstanding  as of the
date hereof.

        The  Holding  Company  is a  corporation,  duly  organized  and  validly
existing under the laws of Massachusetts, with its principal office at 23 Market
Street,  Ipswich,  Massachusetts  01938.  The  authorized  capital  stock of the
Holding Company  consists of 12,000,000  shares of common stock,  par value $.10
per share (the "Holding  Company Common Stock"),  of which 100 shares are issued
and  outstanding  as of the date hereof,  all of which are held by the Bank, and
1,000,000 shares of preferred stock, par value $.10 per share, none of which are
issued and outstanding as of the date hereof.

        The Bank and the Holding  Company  have agreed that the Holding  Company
will  acquire all of the issued and  outstanding  shares of Bank Common Stock in
exchange for shares of Holding  Company  Common Stock pursuant to the provisions
of Section 26B of Chapter 172 of the General Laws of  Massachusetts  and of this
Plan.  This Plan has been adopted and approved by a vote of a majority of all of
the members of the Board of Directors  of the Bank,  and by a vote of a majority
of all the  members  of the  Board of  Directors  of the  Holding  Company.  The
officers  of the Bank and of the Holding  Company  whose  respective  signatures
appear below have been duly authorized to execute and deliver this Plan.

        NOW,  THEREFORE,  in  consideration  of the  premises,  the Bank and the
Holding Company agree as follows:

SECTION 1.   Approval and Filing of Plan

        1.1.  The Plan shall be  submitted  for  approval by the holders of Bank
Common  Stock  at a  meeting  to be  called  and  held in  accordance  with  the
applicable provisions of law. Notice of such meeting shall be published at least
once a week for two  successive  weeks in a newspaper of general  circulation in
the  County  of  Essex,  The  Commonwealth  of   Massachusetts.   Both  of  said
publications  of notice of such meeting  shall be at least fifteen days prior to
the date of the meeting.
<PAGE>
        1.2.  Upon  approval of the Plan by vote of the holders of two-thirds of
the outstanding shares of Bank Common Stock as required by law, the Bank and the
Holding  Company  shall  submit  the  Plan to the  Commissioner  of Banks of The
Commonwealth of  Massachusetts  (the "Bank  Commissioner")  for his approval and
filing in  accordance  with the  provisions of Section 26B of Chapter 172 of the
General  Laws  of   Massachusetts.   The  Plan  shall  be  accompanied  by  such
certificates  of the respective  officers of the Bank and the Holding Company as
may be required by law.

SECTION 2.  Definition of Effective Time

        2.1. The Plan shall become effective at 12:01 a.m. on the date specified
in the written  notice  filed by the Bank and the Holding  Company with the Bank
Commissioner  stating (i) that all the conditions precedent to the Plan becoming
effective  specified in Section 4 have been satisfied and (ii) that the Plan has
not been  abandoned by the Bank or the Holding  Company in  accordance  with the
provisions of Section 5. Such time is hereafter called the "Effective Time".

SECTION 3.  Actions at the Effective Time

        3.1. At the  Effective  Time,  the Holding  Company  shall,  without any
further  action on its part or on the part of the holders of Bank Common  Stock,
automatically  and by  operation  of law  acquire  and  become the owner for all
purposes of all of the then issued and  outstanding  shares of Bank Common Stock
and  shall  be  entitled  to have  issued  to it by the  Bank a  certificate  or
certificates  representing  such shares.  Thereafter,  the Holding Company shall
have full and  exclusive  power to vote such  shares of Bank  Common  Stock,  to
receive dividends thereon and to exercise all rights of an owner thereof.

        3.2. At the Effective  Time,  the shares of Holding  Company stock which
are outstanding will be cancelled.

        3.3.  At the  Effective  Time,  the  holders  of  the  then  issued  and
outstanding  shares of Bank Common  Stock shall,  without any further  action on
their part or on the part of the Holding Company, automatically and by operation
of law cease to own such shares and shall instead  become owners of one share of
Holding  Company  Common  Stock for each share of Bank Common Stock held by them
immediately  prior to the Effective  Time.  Thereafter,  such persons shall have
full and exclusive power to vote such shares of Holding Company Common Stock, to
receive dividends thereon, except as provided herein, and to exercise all rights
of an owner thereof.

        3.4.  At the  Effective  Time,  all  previously  issued and  outstanding
certificates  representing  shares of Bank Common Stock (the "Old Certificates")
shall  automatically  and by operation of law cease to represent  shares of Bank
Common  Stock or any interest  therein and each Old  Certificate  shall  instead
represent  the  ownership by the holder  thereof of an equal number of shares of
Holding Company Common Stock. No holder of an Old Certificate  shall be entitled
to  vote  the  shares  of  Bank  Common  Stock  formerly   represented  by  such
certificate, or to receive dividends thereon, or to exercise any other rights of
ownership in respect thereof.
<PAGE>
        3.5.  Notwithstanding any of the foregoing,  any dissenting stockholder,
as  defined  in  Subsection  7.1,  shall  have such  rights as are  provided  by
Subsection 7.2 and by the laws of The Commonwealth of Massachusetts.

SECTION 4.  Conditions Precedent

        The Plan shall not become  effective  unless all of the following  first
shall have occurred:

        4.1. The Plan shall have been  approved by a vote of  two-thirds  of the
outstanding  Bank  Common  Stock at a meeting of the  holders of the Bank Common
Stock held for such purpose.

        4.2. The Plan shall have been  approved by the Bank  Commissioner  and a
copy of the Plan with his approval endorsed thereon shall have been filed in his
office,  all as provided  in Section  26B of Chapter 172 of the General  Laws of
Massachusetts.

        4.3. The  acquisition of the Bank by the Holding Company shall have been
reviewed without objection by any appropriate federal agency.

        4.4. The Bank shall have received a favorable  opinion from its counsel,
satisfactory  in form and  substance  to the Bank,  with  respect to the federal
income tax consequences of the Plan and the acquisition contemplated thereby.

        4.5.  The  Bank  shall  have  received  a  favorable   letter  from  its
independent public accountants,  satisfactory in form and substance to the Bank,
with respect to the accounting treatment of the transaction.

        4.6.  The shares of  Holding  Company  Common  Stock to be issued to the
holders of Bank Common Stock pursuant to the Plan shall have been  registered or
shall be exempt from registration  under the Securities Act of 1933, as amended,
and all applicable state securities laws.

        4.7.  The Bank and the Holding  Company  shall have  obtained  all other
consents, permissions,  opinions and approvals and taken all actions required by
law or agreement,  or deemed  necessary by the Bank or the Holding  Company,  to
enable the Holding  Company to have and exercise  all rights of  ownership  with
respect to all of the  outstanding  shares of Bank Common  Stock  acquired by it
under the Plan.

SECTION 5.  Abandonment of Plan

        5.1. The Plan may be abandoned by either the Bank or the Holding Company
at any time before the Effective Time in the event that:
<PAGE>
                (a)  The  number  of  shares  of  Bank  Common  Stock  owned  by
        Dissenting   Stockholders,   as  defined  in  Section  7.1,  shall  make
        consummation of the acquisition  contemplated by the Plan inadvisable in
        the opinion of the Bank or the Holding Company;

                (b) Any action,  suit,  proceeding or claim has been instituted,
        made or threatened relating to the Plan which shall make consummation of
        the acquisition  contemplated by the Plan  inadvisable in the opinion of
        the Bank or the Holding Company; or

                (c)  For  any  other  reason  consummation  of  the  acquisition
        contemplated  by the Plan is  inadvisable  in the opinion of the Bank or
        the Holding Company.

        Such abandonment  shall be effected by written notice by either the Bank
or the Holding Company to the other of them, and shall be authorized or approved
by the Board of Directors  of the party  giving such notice.  Upon the giving of
such  notice,  the Plan  shall be  terminated  and there  shall be no  liability
hereunder  or on  account  of such  termination  on the party of the Bank or the
Holding Company or the Directors, officers, employees, agents or stockholders of
either of them. In the event of  abandonment of the Plan, the Bank shall pay the
fees and expenses  incurred by itself and the Holding Company in connection with
the Plan and the proposed  acquisition.  If either  party  hereto gives  written
notice of  termination  to the other party  pursuant to this section,  the party
giving such written  notice shall  simultaneously  furnish a copy thereof to the
Bank Commissioner.

SECTION 6.  Amendment of Plan

        6.1.  The  Plan  may be  amended  or  modified  at any  time by  written
agreement  approved by the Boards of  Directors  of the Holding  Company and the
Bank (i) prior to the approval  hereof by the  stockholders  of the Bank, in any
respect, and (ii) subsequent to such approval, in any respect, provided that the
Bank Commissioner shall approve of such amendment or modification.

SECTION 7.  Rights of Dissenting Stockholders

        7.1.  "Dissenting  Stockholders" shall mean those holders of Bank Common
Stock who file with the Bank  before the taking of the vote on the Plan  written
objection  to the  Plan,  pursuant  to  Chapter  156B  of the  General  Laws  of
Massachusetts,  stating  that they intend to demand  payment for their shares of
Bank Common Stock if the Plan is  consummated  and whose shares are not voted in
favor of the Plan.

        7.2. Dissenting  Stockholders who comply with the provisions of Sections
86 to 98,  inclusive,  of Chapter 156B of the General Laws of Massachusetts  and
all other  applicable  provisions  of law shall be entitled to receive  from the
Bank  payment  of the fair  value of their  shares  of Bank  Common  Stock  upon
surrender  by such  holders of the  certificates  which  previously  represented
shares of Bank Common Stock.  Certificates so obtained by the Bank, upon payment
of the fair value of such shares of provided by law, shall be cancelled.  Shares
of Holding Company Common Stock to which Dissenting Stockholders would have been
entitled had they not  dissented  shall be deemed to constitute  authorized  but
unissued  shares of Holding  Company  Common  Stock and may be sold or otherwise
disposed of by the Holding  Company at the  discretion  of, and on such terms as
may be fixed by, its Board of Directors.
<PAGE>
SECTION 8.  Stock Option Plans

        By consummation of the acquisition contemplated by the Plan, the Holding
Company  shall have  approved  its  adoption of the Bank's  existing  1996 Stock
Incentive  Plan and 1992  Incentive and  Nonqualified  Stock Option Plan and, if
adopted  by  the  Bank's   stockholders,   of  the  1998  Stock  Incentive  Plan
(collectively,  the  "Stock  Option  Plans")  as the Stock  Option  Plans of the
Holding  Company and shall have agreed to issue Holding  Company Common Stock in
lieu of Bank Common Stock pursuant to options  currently  outstanding  under the
existing  Stock  Option  Plans  of the  Bank.  As of  the  Effective  Time,  the
unexercised  portion of the options  outstanding under the existing Stock Option
Plans of the Bank shall be assumed by the Holding  Company and thereafter  shall
be exercisable  only for shares of Holding Company Common Stock,  with each such
option being  exercisable for a number of shares of Holding Company Common Stock
equal  to the  number  of  shares  of Bank  Common  Stock  that  were  available
thereunder  immediately  prior to the Effective  Time, and with no change in the
option exercise price or any other term or condition of such option. The Holding
Company and the Bank shall make  appropriate  amendments  to the existing  Stock
Option  Plans to reflect  the  adoption of the Stock  Option  Plans as the Stock
Option  Plans of the Holding  Company  without  adverse  effect upon the options
outstanding under the existing Stock Option Plans of the Bank.

SECTION 9.  Directors' Deferred Compensation Plan

        By consummation of the acquisition contemplated by the Plan, the Holding
Company shall have approved its adoption of the existing  Deferred  Compensation
Plan for  Directors  of  Ipswich  Savings  Bank and shall  have  agreed to issue
Holding  Company  Stock in lieu of Bank  Common  Stock in payment of stock units
allocated to a Director's  account  pursuant to the Deferred  Compensation  Plan
(each such stock unit, as allocated, a "Stock Unit). At the Effective Time, each
Stock Unit shall represent one share of Holding Company Stock.

SECTION 10.  Governing Law

        The Plan shall take effect as a sealed  instrument and shall be governed
by  and  construed  in  accordance   with  the  laws  of  The   Commonwealth  of
Massachusetts.

SECTION 11.  Counterparts

        The Plan may be  executed  in several  identical  counterparts,  each of
which when  executed and  delivered by the parties  hereto shall be an original,
but all of which together shall constitute a single instrument.  In making proof
of the Plan,  it shall not be  necessary to produce or account for more than one
such counterpart.
<PAGE>
        IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Plan of
Reorganization  and  Acquisition  to be duly  executed  as of the date first set
forth above and their corporate seals to be hereunto affixed.


[SEAL]                                      IPSWICH SAVINGS BANK

Attest:

/s/ Mariell Lyons                           By: /s/ David L. Grey
--------------------------------                --------------------------------
Mariell Lyons, Clerk                            David L. Grey, President
                                                  and Chief Executive Officer

[SEAL]                                      IPSWICH BANCSHARES, INC.

Attest:

/s/ Mariell Lyons                           By: /s/ David L. Grey
--------------------------------                --------------------------------
Mariell Lyons, Clerk                            David L. Grey, President
                                                  and Chief Executive Officer