Exhibit 99.1
Seacoast Financial Services Corporation Settles REIT Tax Dispute with
Massachusetts DOR

    NEW BEDFORD, Mass.--(BUSINESS WIRE)--June 24, 2003--Seacoast
Financial Services Corporation (Nasdaq: SCFS), holding company for
CompassBank and Nantucket Bank, announced today that it has entered
into a settlement to pay $8.5 million ($5.5 million on an after-tax
basis) to the Massachusetts Department of Revenue ("DOR"),
representing approximately 50% of a disputed tax liability for which
the Company previously accrued a liability of approximately $11.2
million, net of taxes. As a result of this settlement, the Company
will recognize income, net of taxes, of approximately $5.7 million in
the second quarter of 2003, representing the unused portion of the
accrual.
    The dispute involved the DOR's disallowance of the deduction taken
by the Company's two subsidiary banks for dividends received from
their REIT subsidiaries for the 1999, 2000, 2001 and 2002 tax years.
In March 2003, legislation was enacted in Massachusetts expressly
disallowing the deduction for dividends received from a real estate
investment trust subsidiary, retroactive to tax years ending on or
after December 31, 1999. As a result of the enactment of this
legislation, the Company ceased recording the tax benefits associated
with the dividends received deduction effective for the 2003 tax year
and established the $11.2 million accrual, representing an estimate of
the additional state tax liability, including interest (net of any
federal tax deduction associated with such taxes and interest),
relating to the deduction for dividends received from the REIT
subsidiaries for the 1999 through 2002 fiscal years.
    Kevin G. Champagne, President and Chief Executive Officer of the
Company, commented, "We were perplexed that the Commonwealth of
Massachusetts had enacted a retroactive change in the tax laws, given
the lack of clear legal precedent authorizing the state to effect such
a change. However, if the Company had pressed its challenge of the
retroactive provision of the legislation, we expected litigation to be
prolonged three to five years. Through an organized effort by the
Massachusetts Bankers Association, the majority of impacted banks
agreed to a settlement with the DOR. We believe it is in the best
interests of shareholders to put this issue behind us and continue to
move forward with our strategic initiatives."
    Seacoast Financial Services Corporation is the holding company for
CompassBank and Nantucket Bank and is headquartered in New Bedford,
Massachusetts. CompassBank is a $3.8 billion Massachusetts chartered
savings bank serving eastern Massachusetts through a network of 46
full service branch offices and 52 branch and remote ATMs, a customer
call center and on-line banking at www.compassbank.com. Nantucket Bank
is a $468 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.

    The foregoing contains 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 and management's expectations
about new and existing programs and products, relationships,
opportunities, technology and market conditions. Such forward-looking
statements involve certain risks and uncertainties. These include, but
are not limited to, the direction of movements in interest rates, the
possibility of disruption in credit markets, successful implementation
and integration of acquisitions, the effects of economic conditions
and the impact of legal and regulatory barriers and structures. Actual
results may differ materially from such forward-looking statements.
Seacoast Financial assumes no obligation for updating any such
forward-looking statements at any time.

    CONTACT: Seacoast Financial Services Corporation
             James R. Rice, Senior Vice President, 508/984-6102