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                      Granite State: Dividend News Release








FOR IMMEDIATE RELEASE

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


          GRANITE STATE BANKSHARES, INC. ANNOUNCES A 12.0%
                    INCREASE IN QUARTERLY DIVIDEND

Keene, New Hampshire -- March 9, 1999 -- Granite State Bankshares, Inc. today
announced that the Board of Directors has declared  a  regular  quarterly
cash dividend of $ 0.14 per share of common stock outstanding.  This represents
a 12.0%  increase over the cash dividend declared last quarter.  The dividend
will be payable April 5, 1999 to stockholders of record March 22, 1999.

Granite State Bankshares, Inc. is the parent company for Granite Bank, a
New Hampshire state-chartered commercial bank with 19 offices operating
throughout southern New Hampshire. Granite Bank is the largest independent
commercial bank in the State of New Hampshire.


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