EXHIBIT 99.1

                                 CONTACT: James R. Rice, Senior Vice President
                                                                (508) 984-6102

FOR IMMEDIATE RELEASE

              SEACOAST FINANCIAL SERVICES CORPORATION RESERVES FOR
                         POTENTIAL STATE TAX LIABILITY

March 6, 2003 -- New Bedford, MA - Seacoast Financial Services Corporation
(Nasdaq: SCFS), holding company for CompassBank and Nantucket Bank, announced
today that it will record a provision in the first quarter of 2003 of
approximately $11.2 million, representing an estimate of the additional state
tax liability, including interest (net of any federal or state tax deduction
associated with such taxes and interest), relating to the deduction for
dividends received by Compass Bank and Nantucket Bank from their real estate
investment trust subsidiaries (REITs) for the 1999 through 2002 fiscal years,
thus reducing earnings for the first quarter of 2003 by that amount.

The provision relates to new legislation signed on March 5, 2003 by the Governor
of Massachusetts that amends Massachusetts law to expressly disallow the
deduction for dividends received from a REIT. This amendment applies
retroactively to tax years ending on or after December 31, 1999. Although
Seacoast Financial questions the constitutionality of this retroactive
legislation, accounting principles generally accepted in the United States
dictate that the total estimated assessment, including interest, be provided for
at the time the law is enacted. Accordingly, Seacoast Financial will record this
accrued liability. In addition, as a result of the new legislation, Seacoast
Financial will also cease recording the tax benefits associated with the
dividend received deduction, effective for the 2003 tax year. This loss of
deduction, impacting both CompassBank and Nantucket Bank REITs, is expected to
result in a reduction in the consolidated net income in 2003 of approximately
$3.1 million or $0.14 per diluted share.

Seacoast Financial believes that this new legislation would apply to numerous
financial institutions in Massachusetts and that it will be challenged,
especially the retroactive provisions, on constitutional and other grounds.
Seacoast Financial would support such a challenge and otherwise intends to
vigorously defend its position.

Seacoast Financial Services Corporation is the holding company for CompassBank
and Nantucket Bank and is headquartered in New Bedford, Massachusetts.
CompassBank is a $3.2 billion state chartered savings bank serving Southeastern
Massachusetts through a network of 40 full service branch offices and 46 branch
and remote ATMs, a customer call center and on-line banking at
www.compassbank.com. Nantucket Bank is a $456 million state chartered savings
bank serving Nantucket Island with 3 full service branch offices. CompassBank
ranks as the second largest publicly traded savings bank headquartered in
Massachusetts. The banks provide a wide array of financial services




including consumer banking, mortgage lending, commercial lending, consumer
finance, private banking and alternative investments to retail and business
customers.

THIS PRESS MAY CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE NOT
HISTORICAL FACTS AND INCLUDE EXPRESSIONS ABOUT MANAGEMENT'S CONFIDENCE AND
STRATEGIES. SUCH FORWARD-LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. THESE INCLUDE, BUT ARE NOT LIMITED TO, CHANGES IN LEGISLATION,
PREVAILING INTEREST RATES AND CHANGES IN ECONOMIC CONDITIONS. SEACOAST FINANCIAL
ASSUMES NO OBLIGATION FOR UPDATING ANY SUCH FORWARD-LOOKING STATEMENTS AT ANY
TIME.