Granite State Bankshares, Inc. Announces Increases In Second Quarter And Year To Date Core Earnings


KEENE, New Hampshire, July 11, 2000 (PRIMEZONE) -- Granite State Bankshares, Inc. (Nasdaq:GSBI) today announced net earnings for the three and six months ended June 30, 2000 of $2,522,000 and $5,031,000 compared to net earnings of $2,557,000 and $4,827,000 for the three and six months ended June 30, 1999. Basic earnings per share were $.45 and $.89 for the three and six months ended June 30, 2000, compared to $.44 and $.83 for the three and six months ended June 30, 1999. Diluted earnings per share were $.45 and $.89 for the three and six months ended June 30, 2000 compared to $.43 and $.81 for the three and six months ended June 30, 1999.

Earnings before income taxes, exclusive of net gains on sales of securities available for sale (core earnings), were $3,933,000 and $7,820,000, respectively, for the three and six months ended June 30, 2000, compared to $3,683,000 and $7,204,000, respectively, for the three and six months ended June 30, 1999, representing increases of 6.79% and 8.55%, respectively.

Net interest and dividend income for the three and six months ended June 30, 2000 was $8,081,000 and $16,012,000, compared with $7,970,000 and $15,878,000 for the three and six months ended June 30, 1999. Interest rate spread for the three and six months ended June 30, 2000 was 3.46% and 3.43%, compared with 3.54% and 3.53% for the three and six months ended June 30, 1999.

The provision for possible loan losses for the three and six months ended June 30, 2000 was $50,000 and $80,000, compared with $0 and $50,000 for the three and six months ended June 30, 1999.

Total assets at June 30, 2000 were $876,738,000 compared to $867,677,000 at December 31, 1999.

Total nonperforming assets were $1,928,000 or 0.22% of total assets at June 30, 2000 and consisted of $1,315,000 of nonperforming loans and $613,000 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 $7,032,000 or 534.75% of nonperforming loans at June 30, 2000. At December 31, 1999, the allowance for possible loan losses was $7,032,000, or 463.85% of nonperforming loans.

Stockholders' equity at June 30, 2000 and December 31, 1999 was $68,997,000 and $70,369,000, respectively, representing 7.87% and 8.11% of total assets, respectively.

Chairman and CEO Charles W. Smith said, "We are pleased with the continued increase in core earnings and the continued reduction in the level of nonperforming assets. We are also pleased that in a period of rising interest rates, our interest rate spread and the net yield on interest earning assets increased for the three months ended June 30, 2000 compared to the three months ended March 31, 2000."

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)

                                        June 30,      December 31,
                                          2000           1999
                                        --------      ------------
                                              (unaudited)

 Total assets                           $ 876,738     $   867,677
 Securities held to maturity               18,014          18,017
 Securities available for sale            201,276         215,572
 Stock in Federal Home Loan Bank
  of Boston                                 7,201           7,201
 Loans held for sale                          141             479
 
 Loans                                    587,100         568,694
 Unearned income                            1,156           1,248
 Allowance for possible loan losses         7,032           7,032
 Net loans                                578,912         560,414
 
 Nonperforming loans                        1,315           1,516
 Other real estate owned                      613           1,288
 Total nonperforming assets                 1,928           2,804
 Nonperforming assets as a percent
  of total assets                           0.22%           0.32%
 Allowance for possible loan losses
  as a percent of nonperforming loans     534.75%         463.85%
 
 Total deposits                           650,260         628,018
 
 Securities sold under agreements
  to repurchase                            74,097          75,042

 Other borrowings-Federal Home Loan
  Bank of Boston                           80,539          90,563
 
 Stockholders' equity                      68,997          70,369
 
 Book value per share                       12.51           12.24

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

                              Three Months Ended      Six Months Ended
                                   June 30,               June 30,
                              ------------------      ----------------
                               2000        1999       2000       1999
                              ------      ------     ------     ------
                                  (unaudited)           (unaudited)

 Interest and
  dividend income         $ 15,579    $ 14,753   $ 30,893   $ 29,623
 Interest expense            7,498       6,783     14,881     13,745
                            ------      ------     ------     ------
   Net interest
    and dividend income      8,081       7,970     16,012     15,878
 Provision for possible
  loan losses                   50           0         80         50
 Net gains on sales of
  Securities available
   for sale                      0         286          6        291
 Other noninterest income    1,376       1,188      2,642      2,297
 Other noninterest expenses  5,474       5,475     10,754     10,921
                            ------      ------     ------     ------
  Earnings before
   income taxes              3,933       3,969      7,826      7,495
 Income taxes                1,411       1,412      2,795      2,668
                            ------      ------     ------     ------
   Net earnings           $  2,522    $  2,557   $  5,031   $  4,827
                            ======      ======     ======     ======
 Weighted average 
  shares outstanding
   Basic                 5,561,220   5,804,985  5,632,999  5,817,752
   Diluted               5,585,656   5,967,108  5,669,282  5,972,978
 
 Net earnings per share
  - basic                   $ 0.45      $ 0.44     $ 0.89     $ 0.83
                              ====        ====       ====       ====
 Net earnings per share
  - diluted                 $ 0.45      $ 0.43     $ 0.89     $ 0.81
                              ====        ====       ====       ====
  Dividends declared
   per share                $ 0.16      $ 0.14     $ 0.32     $ 0.28
                              ====        ====       ====       ====
 Key Operating Ratios:
  Return on Average Assets    1.17%       1.21%      1.17%      1.14%
                              =====       =====      =====      =====
  Return on Average Equity   14.50%      13.96%     14.38%     13.27%
                             ======      ======     ======     ======
  Weighted Average Interest
   Rate Spread                3.46%       3.54%      3.43%      3.53%
                              =====       =====      =====      =====
   Net Yield on Average
    Interest Earning
    Assets                    3.98%       4.01%      3.94%      3.99%
                              =====       =====      =====      =====


            

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