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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   
                                 QUARTERLY DIVIDEND

Keene, New Hampshire - December 14, 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. The dividend
will be payable January 14, 2000 to stockholders of record January 3, 2000.

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


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