8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

April 17, 2003 (Date of earliest event reported)

Banknorth Group, Inc. (Exact name of registrant as specified in its charter)

Maine	001-31251	01-0437984
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

P.O. Box 9540, Two Portland Square, Portland, Maine	04112-9540
(Address of principal executive offices)	(Zip Code)

(207) 761-8500 (Registrant’s telephone number, including area code)

Not Applicable (Former name, former address and former fiscal year, if changed since last report)

Item 7.               Financial Statements, Pro Forma Financial Information and Exhibits

(a)	Not applicable.
(b)	Not applicable.
(c)	The following exhibit is included with this Report:

Exhibit No.	Description
99.1	Press Release, dated April 17, 2003

Item 9.               Regulation FD Disclosure (Results of Operations and Financial Condition)

               On April 17, 2003, Banknorth Group, Inc. issued a press release announcing its results of operations for the quarter ended March 31, 2003. A copy of the press release is included as Exhibit 99.1 and is incorporated herein by reference. This information, which is required by Item 12 of Form 8-K, is being provided under Item 9 pursuant to Commission Release 34-47583.

2

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BANKNORTH GROUP, INC.
By:	/s/ Peter J. Verrill
	Name:	Peter J. Verrill
	Title:	Senior Executive Vice President,
		Chief Operating Officer and Chief
		Financial Officer

Date: April 17, 2003

3 EX-99.1 3 w85620exv99w1.htm EXHIBIT 99.1

Exhibit 99.1

For Immediate Release
For Further Information, Contact
Brian Arsenault, SVP, Investor Relations
207 761-8517

Record Quarterly Net Income at Banknorth

(First quarter earnings Conference call at 1:30 p.m. Eastern Time. Dial-in number for USA and Canada is 877-585 2577. International number is 706 679-7449. Confirmation code for both numbers is 9439275. Replay number for USA and Canada is 800 642-1687, International number is 706 645-9291. Same confirmation number as for live calls. Live webcast and webcast replay available at www.banknorth.com, Investor Relations.)

Portland, Maine, April 17, 2003 – Banknorth Group, Inc. (NYSE: BNK) today announced record quarterly net income of $81.4 million for the first quarter ended March 31, 2003, an increase of 19% over net income of $68.5 million for the first quarter of 2002. On a diluted earnings per share basis, the Company earned 51 cents for the first quarter, up 13 percent from 45 cents for the same quarter a year ago. Exclusive of special items, primarily merger-related charges, earnings in the first quarter ended March 31, 2003 were $84.3 million, or 53 cents per diluted share, as compared to $73.8 million, or 49 cents per diluted share, for the same quarter a year ago.

“Our profitable acquisition strategy combined with our ability to compete successfully in our traditional markets for loans and deposits continues to drive our earnings upward even in a challenging economy,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. “This year may well be the most challenging in more than a decade but we are determined to again produce solid earnings.”

Total loans at March 31, 2003 were 22 percent higher than at March 31, 2002 and 11 percent higher than at December 31, 2002, with a better than 20 percent increase in commercial business loans and leases, consumer loans and leases and commercial real estate mortgages over March 31, 2002 and double digit increases in residential mortgages and consumer loans over year-end. Exclusive of acquisitions, non-residential loans were 11 percent higher at March 31, 2003 than at March 31, 2002 and were 2 percent higher at March 31, 2003 than at December 31, 2002.

2

Total deposits at the end of the first quarter of 2003 were 24 percent higher than at the end of the first quarter a year ago and 12 percent higher than at year-end 2002. Deposit growth was strong in all categories, led by 43 percent growth in regular savings accounts, 28 percent growth in NOW and money market accounts and a 25 percent increase in noninterest bearing deposits, principally checking accounts, over March 31, 2002 balances. Exclusive of acquisitions and certificates of deposit, deposits were 11 percent higher at March 31, 2003 than at March 31, 2002 and were 2 percent higher than at December 31, 2002.

Noninterest income, principally fee income, for the quarter ended March 31, 2003, was $78.2 million, an increase of 27 percent over $61.6 million for the same quarter a year ago. Mortgage banking services, deposit services, and merchant and electronic banking income in the first quarter of 2003 showed strong increases on the banking side over the same quarter a year ago while insurance brokerage commissions and investment planning services income grew substantially on the financial services side of the Company. Trust and investment management services, where fees are closely tied to the performance of the stock market, showed a decline in income for the first quarter as compared to the same quarter a year ago.

Noninterest expense for the quarter ended March 31, 2003 increased only five percent over noninterest expense for the same quarter a year ago.

“In the face of economic uncertainty this year, we have made expense control a point of emphasis,” said Mr. Ryan. “First quarter results indicate that our efforts have had a high degree of success.”

Mr. Ryan pointed to pressure on the Company’s net interest margin as a major indication of the challenges of the current economy. The margin (net interest income on a fully tax equivalent basis divided by average interest earning assets) reflects in part the Company’s earning strength on its loans. For the quarter ended March 31, 2003, Banknorth’s net interest margin was 3.66% as compared to 4.23% for the first quarter a year ago.

The Company’s return on average assets for the first quarter of 2003 was similar to that of the same quarter a year ago, 1.32% as compared to 1.36%, but its return on average equity declined to 14.26% for the first quarter of 2003 as compared to 15.73% for the same quarter in 2002. However, on a cash basis, return on average equity was up to 24.95% for the first quarter ended March 31, 2003 as compared to 23.49% for the same quarter a year ago. (Cash basis measurements exclude the effects of intangible assets and related amortization expense, as well as special items such as merger-related charges.)

The Company’s efficiency ratio improved to 51.66% for the first quarter of 2003 as compared to 52.20% for the first quarter a year ago. (Excludes securities gains/(losses), special charges, and amortization of intangible assets.)

Book value per share at the end of the first quarter of 2003 was $15.24. Shareholders’ equity was $2.5 billion at March 31, 2003.

3

At March 31, 2003, the Company’s Tier 1 leverage capital ratio was 6.54%, its total risk based capital ratio was 11.21% and tangible equity to capital assets was 5.42%. Banknorth and its banking subsidiary, Banknorth, NA, each continues to be a “well capitalized” institution under applicable laws and regulations.

Banknorth Group, Inc., headquartered in Portland, Maine, is a $26.3 billion banking and financial services company. The Company’s banking subsidiary, Banknorth, N.A. operates banking divisions in Connecticut (Banknorth Connecticut), Maine (Peoples Heritage Bank), Massachusetts (Banknorth Massachusetts), New Hampshire (Bank of New Hampshire), New York (Evergreen Bank) and Vermont (Banknorth Vermont). The Company also operates subsidiaries and divisions in insurance, investment planning, trust and investments services, leasing, merchant services, mortgage banking, government banking and other financial services.

Note: This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of mergers and acquisitions and costs related to the integration of merged entities, as well as the amortization of intangible assets in the case of “cash basis” performance measures. These non-GAAP measures also may exclude other significant gains or losses that are unusual in nature. Because these items and their impact on the Company’s performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

This news release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Banknorth. Forward-looking statements are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited, to, changes in general economic conditions, interest rates, deposit flows, loan demand, competition, legislation or regulation and accounting principles, policies or guidelines, as well as other economic, competitive, governmental, regulatory and accounting and technological factors affecting Banknorth’s operations. In addition, acquisitions may result in large one-time charges to income, may not produce revenue enhancements or cost savings at levels or within time frames originally anticipated and may result in unforeseen integration difficulties. Investors are encouraged to access Banknorth’s periodic reports filed with the Securities and Exchange Commission for financial and business information regarding Banknorth, including information which could affect Banknorth’s forward-looking statements.

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
			March 31,		March 31,		%			December 31,		%
(In thousands)			2003		2002		Change			2002		Change
Cash and due from banks			$	604,779	$	479,151		26	%	$	690,250		-12	%
Federal funds sold and other short-term investments				2,838		20,061		-86	%		79,753		-96	%
Securities available for sale				7,674,151		5,979,155		28	%		6,731,467		14	%
Securities held to maturity				193,181		310,724		-38	%		216,409		-11	%
Loans and leases held for sale				87,396		62,471		40	%		128,622		-32	%
Loans and leases:
	Residential real estate mortgages			3,028,851		2,561,552		18	%		2,382,197		27	%
	Commercial real estate mortgages			5,016,865		4,134,095		21	%		4,792,049		5	%
	Commercial business loans and leases			3,080,034		2,502,967		23	%		2,968,474		4	%
	Consumer loans and leases			4,453,423		3,569,126		25	%		3,913,288		14	%
		Total loans and leases		15,579,173		12,767,740		22	%		14,056,008		11	%
	Less: Allowance for loan and lease losses			226,677		190,890		19	%		208,273		9	%
		Loans and leases, net		15,352,496		12,576,850		22	%		13,847,735		11	%
Premises and equipment				278,316		238,691		17	%		271,677		2	%
Goodwill				1,095,476		444,487		146	%		660,684		66	%
Identifiable intangible assets				41,292		18,801		120	%		34,474		20	%
Mortgage servicing rights				3,620		8,503		-57	%		3,598		1	%
Bank owned life insurance				470,645		364,779		29	%		380,405		24	%
Other assets				451,101		353,216		28	%		373,867		21	%
			$	26,255,291	$	20,856,889		26	%	$	23,418,941		12	%
Liabilities & Shareholders’ Equity
Deposits:
	Regular savings		$	2,439,896	$	1,705,517		43	%	$	1,940,195		26	%
	Retail money market and NOW accounts			6,632,023		5,170,005		28	%		6,091,429		9	%
	Retail certificates of deposit			5,381,509		4,726,465		14	%		4,658,778		16	%
	Brokered deposits			—		60,596		-100	%		—	NM
	Noninterest bearing deposits			3,093,152		2,468,844		25	%		2,974,199		4	%
		Total deposits		17,546,580		14,131,427		24	%		15,664,601		12	%
Borrowings from the Federal Home Loan Bank				2,453,698		2,529,520		-3	%		2,482,582		-1	%
Federal funds purchased and securities sold under repurchase agreements				3,016,512		1,576,127		91	%		2,446,515		23	%
Subordinated debt				201,880		200,000		1	%		200,000		1	%
Other borrowings				26,619		8,739		205	%		8,428		216	%
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures				295,056		293,756		0	%		295,056		0	%
Other liabilities				216,752		419,283		-48	%		258,719		-16	%
	Total liabilities			23,757,097		19,158,852		24	%		21,355,901		11	%
Shareholders’ equity				2,498,194		1,698,037		47	%		2,063,485		21	%
			$	26,255,291	$	20,856,889		26	%	$	23,418,941		12	%

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share data)				Three Months Ended March 31,				%
				2003		2002		Change
Interest and dividend income				$	309,327	$	306,006		1	%
Interest expense					103,190		109,520		-6	%
Net interest income					206,137		196,486		5	%
Provision for loan and lease losses					10,901		11,828		-8	%
			Net interest income after provision for loan and lease losses		195,236		184,658		6	%
Noninterest income:
	Deposit services				22,526		18,960		19	%
	Insurance brokerage commissions				12,357		10,155		22	%
	Merchant and electronic banking income, net				9,118		7,749		18	%
	Trust and investment management services				7,351		8,277		-11	%
	Bank owned life insurance				5,342		4,376		22	%
	Investment planning services				3,256		2,718		20	%
	Net gains on sales of securities				2,782		19	NM
	Other noninterest income				15,506		9,322		66	%
					78,238		61,576		27	%
Noninterest expense:
	Salaries and employee benefits				80,693		75,298		7	%
	Occupancy and equipment expense				26,159		22,228		18	%
	Data processing				10,178		10,582		-4	%
	Advertising and marketing				5,060		3,978		27	%
	Amortization of identifiable intangible assets				1,997		1,584		26	%
	Special charges (1)				4,450		8,204		-46	%
	Other noninterest expense				21,371		21,023		2	%
					149,908		142,897		5	%
Income before income tax expense					123,566		103,337		20	%
Income tax expense					42,173		34,859		21	%
		Net Income		$	81,393	$	68,478		19	%
Weighted average shares outstanding:
			Basic		157,667		149,347		6	%
			Diluted		159,328		151,116		5	%
Earnings per share:
			Basic	$	0.52	$	0.46		13	%
			Diluted		0.51		0.45		13	%

(1) Special charges consist of merger charges, certain asset write-downs, charter consolidation costs and branch closing costs which on a net of tax basis amounted to $2.9 million for the three months ended March 31, 2003 and $5.3 million for the three months ended March 31, 2002 or $.02 and $.04 per diluted share, respectively.

NM - calculated % change is not meaningful

Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands, except per share data)
		Three Months Ended March 31,						%
		2003			2002			Change
Net interest income		$	206,137		$	196,486			5	%
Net income		$	81,393		$	68,478			19	%
Shares outstanding (end of period)			163,881			146,916			12	%
Weighted average shares outstanding:
	Basic		157,667			149,347			6	%
	Diluted		159,328			151,116			5	%
Earnings per share:
	Basic	$	0.52		$	0.46			13	%
	Diluted	$	0.51		$	0.45			13	%
Shareholders’ equity, (end of period)		$	2,498,194		$	1,698,037			47	%
Book value per share, (end of period)		$	15.24		$	11.56			32	%
Tangible book value per share, (end of period)		$	8.31		$	8.40			-1	%
								Nominal
RATIOS & OTHER INFORMATION:								Inc/(Dec)
Net interest margin (net interest income as a % of average earning assets) (1)			3.66	%		4.23	%		-0.57	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)			3.37	%		3.83	%		-0.46	%
Return on average assets			1.32	%		1.36	%		-0.04	%
Return on average equity			14.26	%		15.73	%		-1.47	%
Noninterest income as a percent of total income (2)			26.80	%		23.86	%		2.94	%
At period end:
Tier 1 leverage capital ratio			6.54	%		7.63	%		-1.09	%
Tangible equity/tangible assets			5.42	%		6.05	%		-0.63	%
Total risk based capital ratio			11.21	%		13.18	%		-1.97	%
Non-performing loans		$	78,837		$	71,165			11	%
Total non-performing assets		$	82,654		$	76,782			8	%
Non-performing loans as a % of total loans			0.51	%		0.56	%		-0.05	%
Non-performing assets as a % of total assets			0.31	%		0.37	%		-0.06	%
Full service banking offices			360			307
EARNINGS AND RATIOS EXCLUDING SPECIAL ITEMS (Non GAAP Financial Information):
Non-interest expense (3)		$	145,457		$	134,693			8	%
Return on average assets (4)			1.36	%		1.46	%		-0.10	%
Cash return on average assets (4) (5)			1.45	%		1.53	%		-0.08	%
Return on average equity (4)			14.77	%		16.95	%		-2.18	%
Cash return on average equity (4) (5)			24.95	%		23.49	%		1.46	%
Efficiency ratio (6)			51.66	%		52.20	%		-0.54	%
Cash efficiency ratio (7)			50.95	%		51.58	%		-0.63	%

(1)	Adjusted to fully taxable equivalent basis.
(2)	Excludes securities gains/(losses).
(3)	Excludes pre-tax special charges.
(4)	Excludes special charges, net of related tax benefits.
(5)	Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(6)	Excludes securities gains and special charges.
(7)	Excludes securities gains, special charges, and amortization of intangible assets.

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
				Three Months Ended March 31,
				2003						2002
				Average			Yield/			Average			Yield/
(Dollars in Thousands)				Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
	Residential real estate mortgages			$	2,792,615			5.97	%	$	2,675,415			7.07	%
	Commercial real estate mortgages				4,913,188			6.42	%		4,101,873			7.19	%
	Commercial loans and leases				3,006,370			5.32	%		2,464,378			6.36	%
	Consumer loans and leases				4,186,917			6.02	%		3,539,213			7.33	%
					14,899,090			6.00	%		12,780,879			7.04	%
Securities					7,879,925			4.54	%		5,943,057			5.68	%
Federal funds sold and other short-term investments					4,535			2.21	%		72,107			2.33	%
		Total earning assets			22,783,550			5.50	%		18,796,043			6.59	%
Noninterest-earning assets					2,283,927						1,671,783
		Total assets		$	25,067,477					$	20,467,826
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
	Regular savings			$	2,173,771			0.57	%	$	1,646,822			0.98	%
	Retail money market and NOW accounts				6,217,880			1.02	%		5,099,310			1.50	%
	Retail certificates of deposit				5,012,351			2.64	%		4,762,399			3.55	%
	Brokered deposits				—			0.00	%		63,594			1.84	%
			Total interest-bearing deposits		13,404,002			1.55	%		11,572,125			2.27	%
Borrowed funds					6,272,657			3.34	%		4,511,945			4.01	%
			Total interest-bearing liabilities		19,676,659			2.13	%		16,084,070			2.76	%
Noninterest bearing deposits					2,905,737						2,446,539
Other liabilities					170,732						171,449
Shareholders’ equity					2,314,349						1,765,768
			Total liabilities and shareholders’ equity	$	25,067,477					$	20,467,826
Net earning assets				$	3,106,891					$	2,711,973
Net interest income (fully taxable equivalent)				$	207,399					$	197,793
Less: fully taxable equivalent adjustments					(1,262	)					(1,307	)
Net interest income				$	206,137					$	196,486
Net interest rate spread (fully taxable equivalent)								3.37	%					3.83	%
Net interest margin (fully taxable equivalent)								3.66	%					4.23	%

(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans.

Banknorth Group, Inc. and Subsidiaries
Asset Quality (unaudited)
(Dollars in thousands)
		3/31/2003			12/31/2002			9/30/2002			6/30/2002			3/31/2002
Non-performing Assets:
	Residential real estate mortgages	$	9,828		$	5,719		$	6,733		$	7,075		$	7,689
	Commercial real estate mortgages		22,990			17,649			16,762			20,254			20,812
	Commercial business loans and leases		38,562			32,693			33,014			33,573			34,481
	Consumer loans and leases		7,457			9,194			8,364			6,008			8,183
Total non-performing loans			78,837			65,255			64,873			66,910			71,165
Other non-performing assets (net)			3,817			3,636			3,899			5,280			5,617
Total non-performing assets		$	82,654		$	68,891		$	68,772		$	72,190		$	76,782
Allowance for loan and lease losses		$	226,677		$	208,273		$	201,689		$	193,444		$	190,890
Net loan charge-offs:
	Real estate mortgages	$	33			($274	)		($9	)	$	180			($157	)
	Commercial real estate mortgages		(272	)		389			(70	)		246			608
Total real estate			(239	)		115			(79	)		426			451
	Commercial business loans and leases		2,573			2,432			5,596			3,182			4,274
	Consumer loans and leases		6,509			6,670			4,889			4,666			6,050
Total net charge-offs		$	8,843		$	9,217		$	10,406		$	8,274		$	10,775
Ratios:
Allowance for loan and lease losses to total loans and leases			1.46	%		1.48	%		1.47	%		1.48	%		1.50	%
Allowance for loan and lease losses to non-performing loans			287.53	%		319.17	%		310.90	%		289.11	%		268.24	%
Non-performing loans to total loans and leases			0.51	%		0.46	%		0.47	%		0.51	%		0.56	%
Non-performing assets to total assets			0.31	%		0.29	%		0.31	%		0.34	%		0.37	%
Net charge-offs to average loans — QTD (1)			0.24	%		0.27	%		0.31	%		0.26	%		0.34	%
Net charge-offs to average loans — YTD (1)			0.24	%		0.29	%		0.30	%		0.30	%		0.34	%

(1) Annualized

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share data)			Three Months Ended
			3/31/2003		12/31/2002		9/30/2002		6/30/2002		3/31/2002
Interest and dividend income			$	309,327	$	306,569	$	313,156	$	309,387	$	306,006
Interest expense				103,190		107,006		112,160		109,914		109,520
Net interest income				206,137		199,563		200,996		199,473		196,486
Provision for loan and lease losses				10,901		10,829		10,829		10,828		11,828
		Net interest income after provision for loan and lease losses		195,236		188,734		190,167		188,645		184,658
Noninterest income:
	Deposit services			22,526		22,427		20,816		19,936		18,960
	Insurance brokerage commissions			12,357		12,554		11,670		10,060		10,155
	Merchant and electronic banking income, net			9,118		10,476		10,195		9,660		7,749
	Trust and investment management services			7,351		7,866		7,791		8,519		8,277
	Bank owned life insurance			5,342		5,525		5,107		4,994		4,376
	Investment planning services			3,256		3,120		2,770		2,964		2,718
	Net gains on sales of securities			2,782		6,705		208		350		19
	Other noninterest income			15,506		15,768		6,948		6,503		9,322
				78,238		84,441		65,505		62,986		61,576
Noninterest expense:
	Salaries and employee benefits			80,693		80,622		79,718		75,747		75,298
	Occupancy and equipment expense			26,159		25,733		22,701		22,693		22,228
	Data processing			10,178		10,514		9,763		9,843		10,582
	Advertising and marketing			5,060		4,723		4,302		4,237		3,978
	Amortization of goodwill			—		—		—		—		—
	Amortization of identifiable intangible assets			1,997		2,070		1,684		1,154		1,584
	Special charges (1)			4,450		3,258		2,168		1,061		8,204
	Write-off of branch automation project (2)			—		6,170		—		—		-
	Other noninterest expense			21,371		25,036		21,241		22,056		21,023
				149,908		158,126		141,577		136,791		142,897
Income before income tax expense				123,566		115,049		114,095		114,840		103,337
Income tax expense				42,173		37,911		37,233		38,680		34,859
		Net Income	$	81,393	$	77,138	$	76,862	$	76,160	$	68,478
Weighted average shares outstanding:
		Basic		157,667		148,226		148,099		147,233		149,347
		Diluted		159,328		149,389		149,662		149,064		151,116
Earnings per share:
		Basic	$	0.52	$	0.52	$	0.52	$	0.52	$	0.46
		Diluted	$	0.51	$	0.52	$	0.51	$	0.51	$	0.45

(1)

Special charges consist of merger charges, certain asset write-downs, charter consolidation costs and branch closing costs which on a net of tax basis amounted to $2.9 million for the three months ended March 31, 2003, $2.1 million for the three months ended December 31, 2002, $1.4 million for the three months ended September 30, 2002, $0.7 million for the three months ended June 30, 2002, and $5.3 million for the three months ended March 31, 2002, or $.02, $.01, $.01, $.01 and $.04 per diluted share, respectively.

(2)

Represents previously capitalized costs written off in connection with the abandonment of a project to upgrade all teller stations and CSR desktops.

NM - calculated % change is not meaningful

Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands, except per share data)		Three Months Ended
		3/31/2003			12/31/2002			9/30/2002			6/30/2002			3/31/2002
Net interest income		$	206,137		$	199,563		$	200,996		$	199,473		$	196,486
Net income		$	81,393		$	77,138		$	76,862		$	76,160		$	68,478
Shares outstanding (end of period)			163,881			150,579			147,937			147,095			146,916
Weighted average shares outstanding:
	Basic		157,667			148,226			148,099			147,233			149,347
	Diluted		159,328			149,389			149,662			149,064			151,116
Earnings per share:
	Basic	$	0.52		$	0.52		$	0.52		$	0.52		$	0.46
	Diluted	$	0.51		$	0.52		$	0.51		$	0.51		$	0.45
Shareholders’ equity, (end of period)		$	2,498,194		$	2,063,485		$	1,924,159		$	1,817,736		$	1,698,037
Book value per share, (end of period)		$	15.24		$	13.70		$	13.01		$	12.36		$	11.56
Tangible book value per share, (end of period)		$	8.31		$	9.09		$	8.94		$	9.22		$	8.40
RATIOS & OTHER INFORMATION:
Net interest margin (net interest income as a % of average earning assets) (1)			3.66	%		3.86	%		4.03	%		4.18	%		4.23	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)			3.37	%		3.50	%		3.64	%		3.80	%		3.83	%
Return on average assets			1.32	%		1.35	%		1.40	%		1.46	%		1.36	%
Return on average equity			14.26	%		15.75	%		16.25	%		17.45	%		15.73	%
Noninterest income as a percent of total income (2)			26.80	%		28.03	%		24.52	%		23.90	%		23.86	%
At period end:
Tier 1 leverage capital ratio			6.54	%		7.13	%		7.21	%		7.75	%		7.63	%
Tangible equity/tangible assets			5.42	%		6.02	%		6.03	%		6.52	%		6.05	%
Total risk based capital ratio			11.21	%		12.15	%		12.33	%		13.32	%		13.18	%
Non-performing loans		$	78,837		$	65,255		$	64,873		$	66,910		$	71,165
Total non-performing assets		$	82,654		$	68,891		$	68,772		$	72,190		$	76,782
Non-performing loans as a % of total loans			0.51	%		0.46	%		0.47	%		0.51	%		0.56	%
Non-performing assets as a % of total assets			0.31	%		0.29	%		0.31	%		0.34	%		0.37	%
Full service banking offices			360			326			321			306			307
EARNINGS AND RATIOS EXCLUDING SPECIAL ITEMS (Non GAAP Financial Information):
Non-interest expense (3)		$	145,457		$	154,868		$	139,409		$	135,730		$	134,693
Return on average assets (4)			1.36	%		1.39	%		1.42	%		1.48	%		1.46	%
Cash return on average assets (4) (5)			1.45	%		1.46	%		1.49	%		1.53	%		1.53	%
Return on average equity (4)			14.77	%		16.18	%		16.55	%		17.60	%		16.95	%
Cash return on average equity (4) (5)			24.95	%		24.03	%		23.40	%		24.21	%		23.49	%
Efficiency ratio (6)			51.66	%		55.85	%		52.35	%		51.78	%		52.20	%
Cash efficiency ratio (7)			50.95	%		55.10	%		51.72	%		51.34	%		51.58	%

(1)	Adjusted to fully taxable equivalent basis.
(2)	Excludes securities gains/(losses).
(3)	Excludes pre-tax special charges.
(4)	Excludes special charges, net of related tax benefits.
(5)	Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(6)	Excludes securities gains and special charges.
(7)	Excludes securities gains, special charges, and amortization of intangible assets.

Banknorth Group, Inc. and Subsidiaries
Reconciliation Table - Non GAAP Financial Information (Unaudited)
(In thousands, except per share data)		Three Months Ended
		3/31/2003			12/31/2002			9/30/2002			6/30/2002			3/31/2002
Net income (including special items)		$	81,393		$	77,138		$	76,862		$	76,160		$	68,478
Add back special items, net of tax
	Merger related		2,927			2,125			1,270			311			3,782
	Charter consolidation		—			—			111			710			1,517
	Branch closings		(28	)		—			29			(331	)		43
Net income excluding special items		$	84,292		$	79,263		$	78,272		$	76,850		$	73,820
Amortization of intangibles, net of tax			1,936			1,982			1,618			1,089			1,518
Cash basis operating earnings		$	86,228		$	81,245		$	79,890		$	77,939		$	75,338
Basic earnings per share		$	0.52		$	0.52		$	0.52		$	0.52		$	0.46
Effects of special items, net of tax			0.01			0.01			0.01			—			0.03
Operating basic earnings per share			0.53			0.53			0.53			0.52			0.49
Effects of amortization of intangibles, net of tax			0.02			0.02			0.01			0.01			0.01
Cash basis operating basic earnings per share		$	0.55		$	0.55		$	0.54		$	0.53		$	0.50
Diluted earnings per share		$	0.51		$	0.52		$	0.51		$	0.51		$	0.45
Effects of special items, net of tax			0.02			0.01			0.01			0.01			0.04
Operating diluted earnings per share			0.53			0.53			0.52			0.52			0.49
Effects of amortization of intangibles, net of tax			0.01			0.01			0.01			—			0.01
Cash basis operating diluted earnings per share		$	0.54		$	0.54		$	0.53		$	0.52		$	0.50
Return on average assets			1.32	%		1.35	%		1.40	%		1.46	%		1.36	%
Effects of special items, net of tax			0.04	%		0.04	%		0.02	%		0.02	%		0.10	%
Operating return on average assets			1.36	%		1.39	%		1.42	%		1.48	%		1.46	%
Effects of amortization of intangibles, net of tax			0.09	%		0.07	%		0.07	%		0.05	%		0.07	%
Cash basis operating return on average assets			1.45	%		1.46	%		1.49	%		1.53	%		1.53	%
Return on average equity			14.26	%		15.75	%		16.25	%		17.45	%		15.73	%
Effects of special items, net of tax			0.51	%		0.43	%		0.30	%		0.15	%		1.22	%
Operating return on average equity			14.77	%		16.18	%		16.55	%		17.60	%		16.95	%
Effects of amortization of intangibles, net of tax			10.18	%		7.85	%		6.85	%		6.61	%		6.54	%
Cash basis operating return on average equity			24.95	%		24.03	%		23.40	%		24.21	%		23.49	%
Efficiency ratio			52.71	%		55.68	%		53.12	%		52.12	%		55.37	%
Effects of securities gains			0.53	%		1.34	%		0.05	%		0.07	%		0.01	%
Effects of special items			-1.58	%		-1.17	%		-0.82	%		-0.41	%		-3.18	%
Operating efficiency ratio			51.66	%		55.85	%		52.35	%		51.78	%		52.20	%
Effects of amortization of intangibles			-0.71	%		-0.75	%		-0.63	%		-0.44	%		-0.62	%
Cash basis operating efficiency ratio			50.95	%		55.10	%		51.72	%		51.34	%		51.58	%

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EX-99.1

exv99w1