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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 13.64%
                  INCREASE IN QUARTERLY DIVIDEND

Keene, New Hampshire -- March 10, 1998 -- Granite State Bankshares,
Inc. today announced that the Board of Directors has declared  a
regular quarterly cash dividend of $ 0.125 per share of common stock
outstanding. This represents a 13.64% increase over the cash dividend
declared last quarter. The dividend will be payable April 7, 1998 to
stockholders of record March 23, 1998.

Granite State Bankshares, Inc. is the parent company for Granite Bank,
a New Hampshire state-chartered commercial bank with 20 offices operating
throughout southern  New Hampshire. Granite Bank is the largest independent 
commercial bank in the State of New Hampshire.


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