We present a new numerical relativity code designed for simulations of compact binaries involving matter. The code is an upgrade of the BAM code to include general relativistic hydrodynamics and implements state-of-the-art high-resolution-shock-capturing schemes on a hierarchy of mesh refined Cartesian grids with moving boxes. We test and validate the code in a series of standard experiments involving single neutron star spacetimes. We present test evolutions of quasi-equilibrium equal-mass irrotational binary neutron star configurations in quasi-circular orbits which describe the late inspiral to merger phases. Neutron star matter is modeled as a zero-temperature fluid; thermal effects can be included by means of a simple ideal-gas prescription. We analyze the impact that the use of different values of damping parameter in the Gamma-driver shift condition has on the dynamics of the system. The use of different reconstruction schemes and their impact in the post-merger dynamics is investigated. We compute and characterize the gravitational radiation emitted by the system. Self-convergence of the waves is tested, and we consistently estimate error-bars on the numerically generated waveforms in the inspiral phase.