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                      Granite State: Earnings News Release


FOR IMMEDIATE RELEASE

Contact: William G. Pike
         Executive Vice President & CFO
         (603) 352-1600


               GRANITE STATE BANKSHARES, INC. ANNOUNCES A 10.53%
                      INCREASE IN FIRST QUARTER EARNINGS

Keene, New Hampshire - April 7, 2000 -- Granite State Bankshares, Inc.
(NASD: GSBI) today announced net earnings for the three months ended March 31,
2000 of $2,509,000 compared to net earnings of $2,270,000 for the three months
ended March 31, 1999. Basic earnings per share were $.44 for the three months
ended March 31, 2000, compared to $.39 for the three months ended March 31,
1999. Diluted earnings per share were $.44 for the three months ended March 31,
2000 compared to $.38 for the three months ended March 31, 1999.

Net interest and dividend income for the three months ended March 31, 2000 was
$7,931,000, compared with $7,908,000 for the three months ended March 31, 1999.
Interest rate spread for the three months ended March 31, 2000 was 3.40%,
compared with 3.51% for the three months ended March 31, 1999.

The provision for possible loan losses for the three months ended March 31,
2000 was $30,000, compared with $50,000 for the three months ended March 31,
1999.

Total assets at March 31, 2000 were $858,656,000 compared to $867,677,000 at
December 31, 1999.

Total nonperforming assets were $2,918,000 or 0.34% of total assets at March
31, 2000 and consisted of $1,745,000 of nonperforming loans and $1,173,000 of
other real estate owned. At December 31, 1999, total nonperforming assets were
$2,804,000 or 0.32% of total assets and consisted of $1,516,000 of
nonperforming loans and $1,288,000 of other real estate owned. The allowance
for possible loan losses was $7,025,000 or 402.58% of nonperforming loans at
March 31, 2000. At December 31, 1999, the allowance for possible loan losses
was $7,032,000, or 463.85% of nonperforming loans.

Stockholders' equity at March 31, 2000 and December 31, 1999 was $70,685,000
and $70,369,000, respectively, representing 8.23% and 8.11% of total assets,
respectively.

Chairman and CEO Charles W. Smith said, "We are pleased with the increase in
earnings for the three months ended March 31, 2000 over the same period in
1999. The Company's Board of Directors were also delighted to increase the
quarterly cash dividend to $.16 per share, which represents an increase of
14.29% over the previous quarter's dividend and an annualized dividend rate of
$.64 per share."

Granite State Bankshares, Inc. is the parent company for Granite Bank, a New
Hampshire state-chartered commercial bank and the largest independent bank in
the state of New Hampshire with 18 offices operating throughout southern New
Hampshire.

                 GRANITE STATE BANKSHARES, INC. and SUBSIDIARY
                          Selected Balance Sheet Data
                    ($ in thousands, except per share data)



                                       March 31,      December 31,
                                          2000           1999
                                       ---------      ------------
                                              (unaudited)

Total assets                          $  858,656     $     867,677
Securities held to maturity               18,016            18,017
Securities available for sale            201,494           215,572
Stock in Federal Home Loan Bank
 of Boston                                 7,201             7,201
Loans held for sale                           67               479

Loans                                    571,299           568,694
Unearned income                            1,200             1,248
Allowance for possible loan losses         7,025             7,032
Net loans                                563,074           560,414

Nonperforming loans                        1,745             1,516
Other real estate owned                    1,173             1,288
Total nonperforming assets                 2,918             2,804
Nonperforming assets as percent
 of total assets                           0.34%             0.32%
Allowance for possible loan losses
 as a percent of nonperforming loans     402.58%           463.85%

Total deposits                           639,193           628,018

Securities sold under agreements
 to repurchase                            64,350            75,042

Other borrowings-Federal Home Loan
 Bank of Boston                           80,551            90,563

Stockholders' equity                      70,685            70,369

Book value per share                       12.35             12.24


                 GRANITE STATE BANKSHARES, INC. and SUBSIDIARY
                       Selected Operating Statement Data
                    ($ in thousands, except per share data)


                                        Three Months Ended
                                             March 31,
                                       --------------------
                                         2000          1999
                                       --------      --------
                                           (unaudited)

Interest and dividend income          $  15,314     $  14,870
Interest expense                          7,383         6,962
                                         ------        ------
  Net interest and dividend income        7,931         7,908
Provision for possible loan losses           30            50
Net gains on sales of securities
 available for sale                           6             5
Other noninterest income                  1,266         1,109
Other noninterest expenses                5,280         5,446
                                         ------        ------
  Earnings before income taxes            3,893         3,526
Income taxes                              1,384         1,256
                                         ------        ------
  Net earnings                        $   2,509     $   2,270
                                         ======        ======
Weighted average shares outstanding
  Basic                               5,704,777     5,830,661
  Diluted                             5,752,907     5,978,915

Net earnings per share-basic             $ 0.44        $ 0.39
                                           ====          ====

Net earnings per share-diluted           $ 0.44        $ 0.38
                                           ====          ====

Dividends declared per share             $ 0.16        $ 0.14
                                           ====          ====
Key Operating Ratios:
  Return on Average Assets                1.16%         1.07%
                                          =====         =====

  Return on Average Equity               14.25%        12.58%
                                         ======        ======

  Weighted Average Interest
   Rate Spread                            3.40%         3.51%
                                          =====         =====

  Net Yield on Average Interest
   Earning Assets                         3.89%         3.97%
                                          =====         =====









Ends.



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