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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 15, 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. The dividend
will be payable January 19, 1999 to stockholders of record January 4, 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
bank in the State of New Hampshire.


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