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

October 16, 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 of incorporation)	(Commission File Number)	(IRS Employer 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 October 16, 2003

Item 12.  Results of Operations and Financial Condition

     On October 16, 2003, Banknorth Group, Inc. issued a press release announcing its results of operations for the quarter ended September 30, 2003. A copy of the press release is included as Exhibit 99.1 and is incorporated herein by reference.

     This information, including the press release filed as Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933.

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 and Chief Operating Officer
Date: October 16, 2003

3 EX-99.1 3 w90735exv99w1.htm PRESS RELEASE, DATED OCTOBER 16, 2003

Exhibit 99.1   

For Immediate Release
For Further Information, Contact
Brian Arsenault, SVP, Investor Relations
(207) 761-8517
barsenault@banknorth.com

Banknorth Reports Record Quarterly Earnings

(Third Quarter Earnings Conference Call at 1:30 p.m. Eastern Time today, October 16, 2003. Dial-in number for USA and Canada is 800 901-5241. International dial-in number is 617 786-2963. Passcode for both numbers is 10986982. Replay number for USA and Canada is 888 286-8010. International dial-in number is 617 801-6888. Replay passcode is 27745454. Live webcast and webcast replay available at www.banknorth.com, Investor Relations.)

Portland, Maine, October 16, 2003 – Banknorth Group, Inc. (NYSE: BNK) today reported record quarterly net income of $90.3 million for the third quarter ended September 30, 2003, up 17% from net income of $76.9 million for the third quarter a year ago. On a per diluted share basis, net income rose 8% to 55 cents for the third quarter of 2003 from 51 cents for the third quarter of 2002.

For the nine months ended September 30, 2003, net income was also up 17% over the first nine months of last year, to $259.2 million from $221.5 million. On a per diluted share basis, earnings for the first nine months of 2003 rose 7%, to $1.59 from $1.48 for the first nine months of 2002.

“Strong commercial and consumer loan growth and fee income growth coupled with solid expense control resulted in a record quarter in challenging economic times,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer.

The Company indicated that it continues to be comfortable with the consensus earnings estimate of $2.18, exclusive of merger and consolidation charges, for 2003. For 2004, the Company indicated it was more comfortable with estimated earnings increases in the high single digits than those estimates above 10%.

2

Consumer loans and leases and commercial real estate loans at September 30, 2003 increased by more than 20% over the levels at September 30, 2002. Exclusive of acquisitions, consumer loans and leases increased 8% and commercial real estate loans increased 12%. Commercial business loans and leases were up 14% at September 30, 2003 over September 30, 2002, and increased 8% exclusive of acquisitions.

The loan growth helped offset a decline in the Company’s net interest margin to 3.63% for the three months ended September 30, 2003, as compared to 4.03% for the three months ended September 30, 2002. The margin also declined from 3.71% for the previous quarter, reflecting in part the continuing low interest rate environment resulting in accelerated loan prepayments and the most recent interest rate reduction by the Federal Reserve Board.

Several categories of fee income increased by double digits for the three months ended September 30, 2003 as compared to the three months ended September 30, 2002. Noninterest income rose to 28.9% of total income for the quarter ended September 30, 2003, up from 24.5% for the quarter ended September 30, 2002.

By comparison to an overall 35% increase in noninterest income, noninterest expenses increased by only 7% for the three months ended September 30, 2003 as compared to the quarter ended September 30, 2002.

Total deposits at September 30, 2003 increased by 17% over the levels at September 30, 2002, and increased 10% exclusive of acquisitions and certificates of deposit.

Asset quality remained sound with nonperforming assets to total assets, nonperforming loans to total loans and net charge-offs to average loans in the third quarter of 2003 all lower than levels for the third quarter of 2002. Nonperforming assets to total assets and nonperforming loans to total loans for the third quarter increased slightly over the second quarter, from 0.25% to 0.27% and from 0.39% to 0.42%, respectively, but net charge-offs to average loans were down from 0.25% to 0.20%. Net charge-offs were $8.2 million for the third quarter as compared to $9.9 million in the previous quarter.

At September 30, 2003, the Company’s Tier 1 leverage capital ratio was 6.56%, its total risk based capital ratio was 11.30% and its ratio of tangible equity to tangible assets was 5.46%. All three capital ratios were higher than the previous quarter. Shareholders’ equity at September 30, 2003 was $2.5 billion, up from $1.9 billion at September 30, 2002.

Banknorth Group, headquartered in Portland, Maine, is one of the country’s 35 largest commercial banking companies with $25.7 billion in assets. The Company’s banking subsidiary, Banknorth, N.A., operates banking divisions in Connecticut (Banknorth Connecticut); Maine (Peoples Heritage Bank); Massachusetts (Banknorth

3

Massachusetts); New Hampshire (Bank of New Hampshire); New York (Evergreen Bank); and Vermont (Banknorth Vermont). The Company and Banknorth, N.A. also operate subsidiaries and divisions in insurance, money management, merchant services, mortgage banking, government banking and other financial services and offers investment products in association with PrimeVest Financial Services, Inc. The Company’s website is at www.banknorth.com.

Note: This news 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, such as security gains and prepayment penalties. 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 contains 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)

			September 30,		September 30,		%			June 30,		%
(In thousands)			2003		2002		Change			2003		Change
Cash and due from banks			$	559,056	$	633,455		-12	%	$	661,103		-15	%
Federal funds sold and other short-term investments				31,645		5,883		438	%		2,968		966	%
Securities available for sale				6,938,938		6,483,010		7	%		6,992,917		-1	%
Securities held to maturity				141,626		253,131		-44	%		166,239		-15	%
Loans and leases held for sale				74,696		76,399		-2	%		92,795		-20	%
Loans and leases:
	Residential real estate mortgages			2,702,895		2,646,432		2	%		2,852,991		-5	%
	Commercial real estate mortgages			5,310,179		4,426,120		20	%		5,140,130		3	%
	Commercial business loans and leases			3,265,795		2,872,191		14	%		3,229,718		1	%
	Consumer loans and leases			4,646,983		3,786,794		23	%		4,510,473		3	%
		Total loans and leases		15,925,852		13,731,537		16	%		15,733,312		1	%
	Less: Allowance for loan and lease losses			229,581		201,689		14	%		227,240		1	%
		Loans and leases, net		15,696,271		13,529,848		16	%		15,506,072		1	%
Premises and equipment				264,752		266,170		-1	%		271,124		-2	%
Goodwill				1,094,334		569,814		92	%		1,092,345		0	%
Identifiable intangible assets				37,340		31,595		18	%		38,986		-4	%
Mortgage servicing rights				3,802		5,202		-27	%		2,973		28	%
Bank owned life insurance				482,255		374,880		29	%		476,470		1	%
Other assets				416,222		316,753		31	%		446,118		-7	%
			$	25,740,937	$	22,546,140		14	%	$	25,750,110		0	%
Liabilities & Shareholders’ Equity
Deposits:
	Regular savings		$	2,473,397	$	1,835,688		35	%	$	2,472,816		0	%
	Retail money market and NOW accounts			6,922,924		5,769,357		20	%		6,759,000		2	%
	Retail certificates of deposit			4,943,292		4,749,210		4	%		5,122,392		-3	%
	Brokered deposits			—		32,532		-100	%		—		0	%
	Noninterest bearing deposits			3,444,084		2,855,122		21	%		3,340,408		3	%
		Total deposits		17,783,697		15,241,909		17	%		17,694,616		1	%
Borrowings from the Federal Home Loan Bank				1,557,622		2,482,180		-37	%		1,634,507		-5	%
Federal funds purchased and securities sold under repurchase agreements				2,740,809		2,081,269		32	%		2,610,493		5	%
Subordinated debt and senior notes				359,172		200,000		80	%		362,942		-1	%
Other borrowings				7,309		103,030		-93	%		8,758		-17	%
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures				295,056		295,056		0	%		295,056		0	%
Other liabilities				521,692		218,537		139	%		679,987		-23	%
	Total liabilities			23,265,357		20,621,981		13	%		23,286,359		0	%
Shareholders’ equity				2,475,580		1,924,159		29	%		2,463,751		0	%
			$	25,740,937	$	22,546,140		14	%	$	25,750,110		0	%

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)					Nine months Ended September 30,							Three Months Ended September 30,
									%							%
					2003		2002		Change			2003		2002		Change
Interest and dividend income					$	902,555	$	928,549		-3	%	$	290,750	$	313,157		-7	%
Interest expense						275,012		331,594		-17	%		80,918		112,161		-28	%
Net interest income						627,543		596,955		5	%		209,832		200,996		4	%
Provision for loan and lease losses						31,901		33,486		-5	%		10,500		10,829		-3	%
				Net interest income after provision for loan and lease losses		595,642		563,469		6	%		199,332		190,167		5	%
Noninterest income:
		Deposit services				71,441		59,712		20	%		25,167		20,816		21	%
		Insurance brokerage commissions				34,235		31,885		7	%		10,930		11,670		-6	%
		Merchant and electronic banking income, net				31,235		27,267		15	%		11,115		10,108		10	%
		Trust and investment management services				23,486		24,587		-4	%		8,178		7,791		5	%
		Bank owned life insurance				16,952		14,477		17	%		5,785		5,107		13	%
		Investment planning services				10,928		8,452		29	%		3,761		2,770		36	%
		Net gains on sales of securities				39,778		578	NM				3,573		208	NM
	Other noninterest income					54,668		23,109		137	%		20,147		7,035		186	%
						282,723		190,067		49	%		88,656		65,505		35	%
Noninterest expense:
		Salaries and employee benefits				245,170		230,763		6	%		82,230		79,718		3	%
		Occupancy and equipment expense				79,928		67,622		18	%		26,188		22,701		15	%
		Data processing				31,059		30,188		3	%		10,466		9,763		7	%
		Advertising and marketing				16,569		12,515		32	%		5,553		4,301		29	%
		Amortization of identifiable intangible assets				6,622		4,422		50	%		2,320		1,684		38	%
		Merger and consolidation costs (1)				6,788		11,433		-41	%		808		2,168		-63	%
		Prepayment penalties on borrowings				30,490		—	NM				—		—	NM
		Other noninterest expense				68,968		64,322		7	%		24,082		21,242		13	%
						485,594		421,265		15	%		151,647		141,577		7	%
Income before income tax expense						392,771		332,271		18	%		136,341		114,095		19	%
Income tax expense						133,574		110,771		21	%		46,063		37,233		24	%
			Net Income		$	259,197	$	221,500		17	%	$	90,278	$	76,862		17	%
Weighted average shares outstanding:
				Basic		160,498		148,208		8	%		161,517		148,099		9	%
				Diluted		162,789		149,935		9	%		164,446		149,662		10	%
Earnings per share:
				Basic	$	1.61	$	1.49		8	%	$	0.56	$	0.52		8	%
				Diluted		1.59		1.48		7	%		0.55		0.51		8	%
(1) Merger and consolidation costs on a net of tax basis:					$	4,419	$	7,441				$	525	$	1,410
				Per diluted share:		0.03		0.05					—	$	0.01

NM — calculated % change is not meaningful

Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(In thousands, except per share data)
			Nine months Ended September 30,									Three Months Ended September 30,
									%									%
			2003			2002			Change			2003			2002			Change
Net interest income			$	627,543		$	596,955			5	%	$	209,832		$	200,996			4	%
Net income			$	259,197		$	221,500			17	%	$	90,278		$	76,862			17	%
Shares outstanding (end of period)				161,543			147,937			9	%		161,543			147,937			9	%
Weighted average shares outstanding:
		Basic		160,498			148,208			8	%		161,517			148,099			9	%
		Diluted		162,789			149,935			9	%		164,446			149,662			10	%
Earnings per share:
	Basic		$	1.61		$	1.49			8	%	$	0.56		$	0.52			8	%
	Diluted		$	1.59		$	1.48			7	%	$	0.55		$	0.51			8	%
Shareholders’ equity, (end of period)			$	2,475,580		$	1,924,158			29	%	$	2,475,580		$	1,924,158			29	%
Book value per share, (end of period)			$	15.32		$	13.01			18	%	$	15.32		$	13.01			18	%
Tangible book value per share, (end of period)			$	8.32		$	8.94			-7	%	$	8.32		$	8.94			-7	%
RATIOS & OTHER INFORMATION:									Nominal Inc/(Dec)									Nominal Inc/(Dec)
Net interest margin (net interest income as a % of average earning assets) (1)				3.67	%		4.14	%		-0.47	%		3.63	%		4.03	%		-0.40	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)				3.40	%		3.75	%		-0.35	%		3.39	%		3.64	%		-0.25	%
Return on average assets				1.36	%		1.41	%		-0.05	%		1.39	%		1.40	%		-0.01	%
Return on average equity				14.45	%		16.46	%		-2.01	%		14.85	%		16.25	%		-1.40	%
Noninterest income as a percent of total income (2)				27.91	%		24.09	%		3.82	%		28.85	%		24.52	%		4.33	%
At period end:
Tier 1 leverage capital ratio				6.56	%		7.21	%		-0.65	%		6.56	%		7.21	%		-0.65	%
Tangible equity/tangible assets				5.46	%		6.03	%		-0.57	%		5.46	%		6.03	%		-0.57	%
Total risk based capital ratio				11.30	%		12.28	%		-0.98	%		11.30	%		12.28	%		-0.98	%
Non-performing loans			$	66,725		$	64,873			3	%	$	66,725		$	64,873			3	%
Total non-performing assets			$	70,357		$	68,772			2	%	$	70,357		$	68,772			2	%
Non-performing loans as a % of total loans				0.42	%		0.47	%		-0.05	%		0.42	%		0.47	%		-0.05	%
Non-performing assets as a % of total assets				0.27	%		0.31	%		-0.04	%		0.27	%		0.31	%		-0.04	%
Full service banking offices				357			321						357			321
EARNINGS AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Non-interest expense (3)			$	448,315		$	409,832			9	%	$	150,839		$	139,409			8	%
Return on average assets (4)				1.38	%		1.45	%		-0.07	%		1.40	%		1.42	%		-0.02	%
Cash return on average tangible assets (4) (5)				1.47	%		1.51	%		-0.04	%		1.48	%		1.48	%		0.00	%
Return on average equity (4)				14.69	%		17.01	%		-2.32	%		14.93	%		16.55	%		-1.62	%
Cash return on average tangible equity (4) (5)				26.83	%		23.63	%		3.20	%		28.63	%		23.24	%		5.39	%
Efficiency ratio (6)				51.50	%		52.11	%		-0.61	%		51.15	%		52.35	%		-1.20	%
Cash efficiency ratio (7)				50.74	%		51.55	%		-0.81	%		50.36	%		51.72	%		-1.36	%

(1)	Adjusted to fully taxable equivalent basis.
(2)	Excludes securities gains/(losses).
(3)	Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(4)	Excludes merger and consolidation costs, 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/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(7)	Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets.

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)

				Three Months Ended September 30,
				2003						2002
				Average			Yield/			Average			Yield/
(Dollars in Thousands)				Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
	Residential real estate mortgages			$	2,852,568			5.43	%	$	2,657,333			6.65	%
	Commercial real estate mortgages				5,263,002			5.88	%		4,347,508			6.86	%
	Commercial loans and leases				3,216,254			5.04	%		2,754,430			5.81	%
	Consumer loans and leases				4,577,421			5.43	%		3,662,187			6.78	%
					15,909,245			5.50	%		13,421,458			6.58	%
Securities					7,270,800			3.96	%		6,487,448			5.64	%
Federal funds sold and other short-term investments					16,113			1.36	%		118,281			1.71	%
		Total earning assets			23,196,158			5.02	%		20,027,187			6.25	%
Bank owned life insurance					478,572						371,552
Noninterest-earning assets					2,139,519						1,399,012
		Total assets		$	25,814,249					$	21,797,751
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
	Regular savings			$	2,474,169			0.40	%	$	1,773,402			0.94	%
	Retail money market and NOW accounts				6,815,603			0.80	%		5,608,231			1.53	%
	Retail certificates of deposit				5,053,277			2.27	%		4,736,817			3.04	%
	Brokered deposits				—			0.00	%		37,000			1.85	%
			Total interest-bearing deposits		14,343,049			1.25	%		12,155,450			2.03	%
Borrowed funds					5,407,580			2.63	%		4,885,461			4.05	%
			Total interest-bearing liabilities		19,750,629			1.63	%		17,040,911			2.61	%
Noninterest bearing deposits					3,388,018						2,684,263
Other liabilities					263,171						196,573
Shareholders’ equity					2,412,431						1,876,004
			Total liabilities and shareholders’ equity	$	25,814,249					$	21,797,751
Net earning assets				$	3,445,529					$	2,986,276
Net interest income (fully taxable equivalent)				$	211,397					$	202,233
Less: fully taxable equivalent adjustments					(1,565	)					(1,237	)
Net interest income				$	209,832					$	200,996
Net interest rate spread (fully taxable equivalent)								3.39	%					3.64	%
Net interest margin (fully taxable equivalent)								3.63	%					4.03	%

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

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)

				Nine months Ended September 30,
				2003						2002
				Average			Yield/			Average			Yield/
(Dollars in Thousands)				Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
	Residential real estate mortgages			$	2,880,776			5.72	%	$	2,634,050			6.85	%
	Commercial real estate mortgages				5,084,858			6.16	%		4,222,861			7.04	%
	Commercial loans and leases				3,126,338			5.19	%		2,605,746			6.07	%
	Consumer loans and leases				4,410,562			5.73	%		3,577,483			7.05	%
					15,502,534			5.76	%		13,040,140			6.81	%
Securities					7,474,971			4.26	%		6,237,668			5.70	%
Federal funds sold and other short-term investments					12,922			1.39	%		72,133			1.81	%
		Total earning assets			22,990,427			5.27	%		19,349,941			6.43	%
Bank owned life insurance					459,049						354,311
Noninterest-earning assets					2,016,447						1,356,848
		Total assets		$	25,465,923					$	21,061,100
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
	Regular savings			$	2,373,161			0.49	%	$	1,712,748			0.95	%
	Retail money market and NOW accounts				6,540,686			0.93	%		5,319,602			1.52	%
	Retail certificates of deposit				5,103,328			2.44	%		4,716,914			3.27	%
	Brokered deposits				—			0.00	%		50,348			1.85	%
			Total interest-bearing deposits		14,017,175			1.40	%		11,799,612			2.14	%
Borrowed funds					5,710,875			2.99	%		4,728,125			4.04	%
			Total interest-bearing liabilities		19,728,050			1.87	%		16,527,737			2.68	%
Noninterest bearing deposits					3,132,825						2,551,397
Other liabilities					206,378						182,536
Shareholders’ equity					2,398,670						1,799,430
			Total liabilities and shareholders’ equity	$	25,465,923					$	21,061,100
Net earning assets				$	3,262,377					$	2,822,204
Net interest income (fully taxable equivalent)				$	631,862					$	600,752
Less: fully taxable equivalent adjustments					(4,319	)					(3,797	)
Net interest income				$	627,543					$	596,955
Net interest rate spread (fully taxable equivalent)								3.40	%					3.75	%
Net interest margin (fully taxable equivalent)								3.67	%					4.14	%

(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)

		9/30/03			6/30/03			3/31/03			12/31/02			9/30/02
Non-performing Assets:
	Residential real estate mortgages	$	9,135		$	9,827		$	9,828		$	5,781		$	6,733
	Commercial real estate mortgages		27,069			19,139			22,990			17,649			16,762
	Commercial business loans and leases		22,857			24,577			38,562			32,693			33,014
	Consumer loans and leases		7,664			7,192			7,457			9,194			8,364
Total non-performing loans			66,725			60,735			78,837			65,317			64,873
Other non-performing assets (net)			3,632			3,725			3,817			3,636			3,899
Total non-performing assets		$	70,357		$	64,460		$	82,654		$	68,953		$	68,772
Allowance for loan and lease losses		$	229,581		$	227,240		$	226,677		$	208,273		$	201,689
Net loan charge-offs:
	Real estate mortgages	$	58		$	31		$	33			($274	)		($9	)
	Commercial real estate mortgages		(269	)		(474	)		(272	)		389			(70	)
Total real estate			(211	)		(443	)		(239	)		115			(79	)
	Commercial business loans and leases		518			4,468			2,516			2,432			5,596
	Consumer loans and leases		7,852			5,913			6,566			6,670			4,889
Total net charge-offs		$	8,159		$	9,938		$	8,843		$	9,217		$	10,406
Ratios:
Allowance for loan and lease losses to total loans and leases			1.44	%		1.44	%		1.46	%		1.48	%		1.47	%
Allowance for loan and lease losses to non-performing loans			344.07	%		374.15	%		287.53	%		318.87	%		310.90	%
Non-performing loans to total loans and leases			0.42	%		0.39	%		0.51	%		0.46	%		0.47	%
Non-performing assets to total assets			0.27	%		0.25	%		0.31	%		0.29	%		0.31	%
Net charge-offs to average loans — QTD (1)			0.20	%		0.25	%		0.24	%		0.27	%		0.31	%
Net charge-offs to average loans — YTD (1)			0.23	%		0.25	%		0.24	%		0.29	%		0.30	%

(1) Annualized

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)					Three Months Ended
					9/30/03		6/30/03		3/31/03		12/31/02		9/30/02
Interest and dividend income					$	290,750	$	302,478	$	309,327	$	306,569	$	313,157
Interest expense						80,918		90,904		103,190		107,006		112,161
Net interest income						209,832		211,574		206,137		199,563		200,996
Provision for loan and lease losses						10,500		10,500		10,901		10,829		10,829
				Net interest income after provision for loan and lease losses		199,332		201,074		195,236		188,734		190,167
Noninterest income:
		Deposit services				25,167		23,747		22,526		22,427		20,816
		Insurance brokerage commissions				10,930		10,948		12,357		12,554		11,670
		Merchant and electronic banking income, net				11,115		11,098		9,021		10,376		10,108
		Trust and investment management services				8,178		7,957		7,351		7,866		7,791
		Bank owned life insurance				5,785		5,826		5,342		5,525		5,107
		Investment planning services				3,761		3,911		3,256		3,120		2,770
		Net gains on sales of securities				3,573		33,423		2,782		6,705		208
	Other noninterest income					20,147		18,918		15,603		15,868		7,035
						88,656		115,828		78,238		84,441		65,505
Noninterest expense:
		Salaries and employee benefits				82,230		82,248		80,693		80,622		79,718
		Occupancy and equipment expense				26,188		27,579		26,159		25,733		22,701
		Data processing				10,466		10,415		10,178		10,514		9,763
		Advertising and marketing				5,553		5,957		5,060		4,723		4,301
		Amortization of goodwill				—		—		—		—		—
		Amortization of identifiable intangible assets				2,320		2,306		1,997		2,070		1,684
		Merger and consolidation costs (1)				808		1,530		4,450		3,258		2,168
		Write-off of branch automation project (2)				—		—		—		6,170		—
		Prepayment penalties on borrowings				—		30,490		—		—		—
		Other noninterest expense				24,082		23,514		21,371		25,036		21,242
						151,647		184,039		149,908		158,126		141,577
Income before income tax expense						136,341		132,863		123,566		115,049		114,095
Income tax expense						46,063		45,338		42,173		37,911		37,233
			Net Income		$	90,278	$	87,525	$	81,393	$	77,138	$	76,862
Weighted average shares outstanding:
				Basic		161,517		162,312		157,667		148,226		148,099
				Diluted		164,446		164,559		159,328		149,389		149,662
Earnings per share:
				Basic	$	0.56	$	0.54	$	0.52	$	0.52	$	0.52
				Diluted	$	0.55	$	0.53	$	0.51	$	0.52	$	0.51
(1) Merger and consolidation costs on a net
				of tax basis:	$	525	$	996	$	2,899	$	2,125	$	1,410
				Per diluted share:	$	0.00	$	0.01	$	0.02	$	0.01	$	0.01
(2) Represents previously capitalized costs written off in connection with the abandonment of a project to upgrade all teller stations and    CSR desktops.

Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(In thousands, except per share data)			Three Months Ended
			9/30/03			6/30/03			3/31/03			12/31/02			9/30/02
Net interest income			$	209,832		$	211,574		$	206,137		$	199,563		$	200,996
Net income			$	90,278		$	87,525		$	81,393		$	77,138		$	76,862
Shares outstanding (end of period)				161,543			160,843			163,881			150,579			147,937
Weighted average shares outstanding:
		Basic		161,517			162,312			157,667			148,226			148,099
		Diluted		164,446			164,559			159,328			149,389			149,662
Earnings per share:
	Basic		$	0.56		$	0.54		$	0.52		$	0.52		$	0.52
	Diluted		$	0.55		$	0.53		$	0.51		$	0.52		$	0.51
Shareholders’ equity, (end of period)			$	2,475,580		$	2,463,751		$	2,498,194		$	2,063,485		$	1,924,158
Book value per share, (end of period)			$	15.32		$	15.32		$	15.24		$	13.70		$	13.01
Tangible book value per share, (end of period)			$	8.32		$	8.28		$	8.31		$	9.09		$	8.94
RATIOS & OTHER INFORMATION:
Net interest margin (net interest income as a % of average earning assets) (1)				3.63	%		3.71	%		3.66	%		3.86	%		4.03	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)				3.39	%		3.45	%		3.37	%		3.50	%		3.64	%
Return on average assets				1.39	%		1.38	%		1.32	%		1.35	%		1.40	%
Return on average equity				14.85	%		14.24	%		14.26	%		15.75	%		16.25	%
Noninterest income as a percent of total income (2)				28.85	%		28.03	%		26.80	%		28.03	%		24.52	%
At period end:
Tier 1 leverage capital ratio				6.56	%		6.36	%		6.53	%		7.13	%		7.21	%
Tangible equity/tangible assets				5.46	%		5.41	%		5.42	%		6.02	%		6.03	%
Total risk based capital ratio				11.30	%		10.99	%		11.20	%		12.15	%		12.28	%
Non-performing loans			$	66,725		$	60,735		$	78,837		$	65,317		$	64,873
Total non-performing assets			$	70,357		$	64,460		$	82,654		$	68,952		$	68,772
Non-performing loans as a % of total loans				0.42	%		0.39	%		0.51	%		0.46	%		0.47	%
Non-performing assets as a % of total assets				0.27	%		0.25	%		0.31	%		0.29	%		0.31	%
Full service banking offices				357			357			360			326			321
EARNINGS AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Non-interest expense (3)			$	150,839		$	152,018		$	145,458		$	154,868		$	139,409
Return on average assets (4)				1.40	%		1.39	%		1.36	%		1.39	%		1.42	%
Cash return on average tangible assets (4) (5)				1.48	%		1.48	%		1.44	%		1.45	%		1.48	%
Return on average equity (4)				14.93	%		14.40	%		14.77	%		16.18	%		16.55	%
Cash return on average tangible equity (4) (5)				28.63	%		27.15	%		24.76	%		23.84	%		23.24	%
Efficiency ratio (6)				51.15	%		51.71	%		51.66	%		55.85	%		52.35	%
Cash efficiency ratio (7)				50.36	%		50.93	%		50.95	%		55.10	%		51.72	%

(1)	Adjusted to fully taxable equivalent basis.
(2)	Excludes securities gains/(losses).
(3)	Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(4)	Excludes merger and consolidation costs, 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/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(7)	Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, 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
		9/30/2003			6/30/2003			3/31/2003			12/31/2002			9/30/2002
Net income (including merger and consolidation costs)		$	90,278		$	87,525		$	81,393		$	77,138		$	76,862
Add back merger and consolidation costs, net of tax
	Merger related		525			1,396			2,927			2,125			1,271
	Charter consolidation		—			—			—			—			110
	Branch closings		—						(28	)		—			29
	Revise auto lease residual charge		—			(400	)		—			—			—
Excluding merger and consolidation costs			90,803			88,521			84,292			79,263			78,272
Amortization of intangibles, net of tax			1,508			1,499			1,298			1,346			1,094
Cash basis, excluding merger and consolidation costs		$	92,311		$	90,020		$	85,590		$	80,609		$	79,366
Basic earnings per share		$	0.56		$	0.54		$	0.52		$	0.52		$	0.52
Effects of merger and consolidation costs, net of tax			—			0.01			0.01			0.01			0.01
Excluding merger and consolidation costs			0.56			0.55			0.53			0.53			0.53
Effects of amortization of intangibles, net of tax			0.01			—			0.01			0.01			0.01
Cash basis, excluding merger and consolidation costs		$	0.57		$	0.55		$	0.54		$	0.54		$	0.54
Diluted earnings per share		$	0.55		$	0.53		$	0.51		$	0.52		$	0.51
Effects of merger and consolidation costs, net of tax			—			0.01			0.02			0.01			0.01
Excluding merger and consolidation costs			0.55			0.54			0.53			0.53			0.52
Effects of amortization of intangibles, net of tax			0.01			0.01			0.01			0.01			0.01
Cash basis, excluding merger and consolidation costs		$	0.56		$	0.55		$	0.54		$	0.54		$	0.53
Return on average assets			1.39	%		1.38	%		1.32	%		1.35	%		1.40	%
Effects of merger and consolidation costs, net of tax			0.01	%		0.01	%		0.04	%		0.04	%		0.02	%
Excluding merger and consolidation costs			1.40	%		1.39	%		1.36	%		1.39	%		1.42	%
Effects of amortization of intangibles, net of tax			0.08	%		0.09	%		0.08	%		0.06	%		0.06	%
Cash basis, excluding merger and consolidation costs			1.48	%		1.48	%		1.44	%		1.45	%		1.48	%
Return on average equity			14.85	%		14.24	%		14.26	%		15.75	%		16.25	%
Effects of merger and consolidation costs, net of tax			0.08	%		0.16	%		0.51	%		0.43	%		0.30	%
Excluding merger and consolidation costs			14.93	%		14.40	%		14.77	%		16.18	%		16.55	%
Effects of amortization of intangibles, net of tax			13.70	%		12.75	%		9.99	%		7.66	%		6.69	%
Cash basis, excluding merger and consolidation costs			28.63	%		27.15	%		24.76	%		23.84	%		23.24	%
Efficiency ratio			50.80	%		56.21	%		52.71	%		55.68	%		53.12	%
Effects of securities gains and prepayment penalties on borrowings			0.62	%		-3.98	%		0.53	%		1.34	%		0.05	%
Effects of merger and consolidation costs			-0.27	%		-0.52	%		-1.58	%		-1.17	%		-0.82	%
Excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs			51.15	%		51.71	%		51.66	%		55.85	%		52.35	%
Effects of amortization of intangibles			-0.79	%		-0.78	%		-0.71	%		-0.75	%		-0.63	%
Cash basis, excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs			50.36	%		50.93	%		50.95	%		55.10	%		51.72	%

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EX-99.1

exv99w1