EX-99.1 3 w93307exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1

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

Banknorth Earnings Up 17% in 2003; 19% in Fourth Quarter

(Fourth Quarter Earnings Conference Call at 1:30 p.m. Eastern Time today, January 20, 2004. 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 replay dial-in number is 617 801-6888. Replay passcode is 83503010. Live webcast and webcast replay available at www.banknorth.com, Investor Relations.)

Portland, Maine, January 20, 2004 – Banknorth Group Inc. (NYSE: BNK) announced today that earnings for 2003 increased 17% over the previous year to $350.8 million from $298.6 million in 2002. For the fourth quarter ended December 31, 2003, Banknorth’s earnings increased 19% to $91.6 million from $77.1 million for the same quarter a year ago. Fourth quarter earnings were $1.3 million higher than earnings for the third quarter of 2003.

Earnings per diluted share for 2003 increased 8% to $2.15 from $1.99 in 2002. Fourth quarter earnings per diluted share of 55 cents increased 6% from 52 cents in the fourth quarter of 2002. Exclusive of merger and consolidation costs, 2003 earnings per diluted share were $2.18 and fourth quarter earnings per diluted share were 56 cents.

“We continue to be a leading banking presence in New England and we will soon be the largest banking company headquartered in the region,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. “We are expanding our loan base while maintaining strong asset quality and managing expenses.

“Soon after year-end, we were excited to learn that Forbes Magazine had named us the ‘Best Managed Bank in America’,” Mr. Ryan continued. “Perhaps most satisfying of all, though, our stock price increased by 44% over the course of 2003.”

 

 

2

The Company reported strong loan and deposit growth in 2003:

Total loans and leases at December 31, 2003 were 16% higher than at December 31, 2002 and total deposits were 14% higher. All loan categories increased by double digits, led by consumer loans and leases, up 23% over the previous year-end (9% exclusive of acquisitions) and commercial real estate mortgages, up 15% (12% exclusive of acquisitions). Savings and checking accounts experienced the greatest increases on the deposit side for the year.

Even with strong loan growth, Banknorth improved key asset quality numbers. Total nonperforming loans declined from $65.3 million at December 31, 2002 to $59.8 million at December 31, 2003 while the Company’s total assets grew by $3 billion in the same period. Also for the same timeframe, nonperforming loans as a percentage of total loans declined from 0.46% to 0.37% and nonperforming assets as a percentage of total assets declined from 0.29% to 0.24%. The same measurements of asset quality also improved from the previous quarter ended September 30, 2003.

Noninterest income, principally fee income, increased 34% in 2003 over 2002 while noninterest expenses grew only 11% during this period. For the fourth quarter ended December 31, 2003, noninterest income was flat with the same quarter a year ago, largely due to a reduction in income from securities sales, and noninterest expenses declined 2%.

The Company’s net interest margin continued to reflect the low interest rate environment. The margin was 3.66% for 2003 and 3.65% for the fourth quarter of 2003, as compared to 4.07% for 2002 and 3.86% for the same quarter a year ago. However, the net interest margin was up slightly in the fourth quarter from 3.63% for the third quarter ended September 30, 2003.

In 2003, Banknorth completed the acquisitions of American Savings Bank in Connecticut, which had $2.7 billion in assets, and First & Ocean National Bank in Massachusetts, which had $275 million in assets. During 2003 the Company also announced and has pending the acquisitions of Foxborough Savings Bank and CCBT Financial Companies, Inc., the parent company of Cape Cod Bank & Trust Company, N.A., both in Massachusetts.

Banknorth Group, Inc., headquartered in Portland, Maine, is one of the country’s 35 largest commercial banking companies with $26.5 billion in assets. 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 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.

 

 

3

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)
                                         
    December 31,   December 31,   %   September 30,   %
(In thousands)   2003   2002   Change   2003   Change
 
Cash and due from banks
   $ 669,686     $ 690,250       -3 %   $ 559,056       20 %
Federal funds sold and other short-term investments
     4,645       79,753       -94 %     31,645       -85 %
Securities available for sale
     7,122,992       6,731,467       6 %     6,938,938       3 %
Securities held to maturity
     124,240       216,409       -43 %     141,626       -12 %
Loans and leases held for sale
     41,696       128,622       -68 %     74,696       -44 %
Loans and leases:
                                        
Residential real estate mortgages
     2,710,483       2,382,197       14 %     2,702,895       0 %
Commercial real estate mortgages
     5,528,862       4,792,049       15 %     5,310,179       4 %
Commercial business loans and leases
     3,287,094       2,968,474       11 %     3,265,795       1 %
Consumer loans and leases
     4,819,523       3,913,288       23 %     4,646,983       4 %
 
                                        
Total loans and leases
     16,345,962       14,056,008       16 %     15,925,852       3 %
Less: Allowance for loan and lease losses
     232,287       208,273       12 %     229,581       1 %
 
                                        
Loans and leases, net
     16,113,675       13,847,735       16 %     15,696,271       3 %
Premises and equipment
     264,818       271,677       -3 %     264,752       0 %
Goodwill
     1,126,639       660,684       71 %     1,094,334       3 %
Identifiable intangible assets
     36,415       34,474       6 %     37,340       -2 %
Mortgage servicing rights
     2,783       3,598       -23 %     3,802       -27 %
Bank owned life insurance
     488,756       380,405       28 %     482,255       1 %
Other assets
     457,390       373,867       22 %     416,222       10 %
 
                                        
 
   $ 26,453,735     $ 23,418,941       13 %   $ 25,740,937       3 %
 
                                        
 
                                        
 
 
                                        
Liabilities & Shareholders’ Equity
                                        
 
                                        
Deposits:
                                        
Regular savings
   $ 2,460,522     $ 1,940,195       27 %   $ 2,473,397       -1 %
Retail money market and NOW accounts
     7,130,534       6,091,429       17 %     6,922,924       3 %
Retail certificates of deposit
     4,733,104       4,658,778       2 %     4,943,292       -4 %
Noninterest bearing deposits
     3,577,025       2,974,199       20 %     3,444,084       4 %
 
                                        
Total deposits
     17,901,185       15,664,601       14 %     17,783,697       1 %
Borrowings from the Federal Home Loan Bank
     1,495,385       2,482,582       -40 %     1,557,622       -4 %
Federal funds purchased and securities sold under repurchase agreements
     3,659,550       2,446,515       50 %     2,740,809       34 %
Subordinated debt and senior notes
     348,293       200,000       74 %     359,172       -3 %
Other borrowings
     84,361       8,428       901 %     7,309       1054 %
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures
     295,275       295,056       0 %     295,056       0 %
Other liabilities
     149,167       258,274       -42 %     521,692       -71 %
 
                                        
Total liabilities
     23,933,216       21,355,456       12 %     23,265,357       3 %
 
                                        
Shareholders’ equity
     2,520,519       2,063,485       22 %     2,475,580       2 %
 
                                        
 
   $ 26,453,735     $ 23,418,941       13 %   $ 25,740,937       3 %
 
                                        
 
                                        
 

 

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
                                                 
                 
    Year Ended December 31,   %   Three Months Ended December 31,   %
(In thousands, except per share data)   2003   2002   Change   2003   2002   Change
 
Interest and dividend income
   $ 1,192,969     $ 1,235,117       -3 %   $ 290,414     $ 306,569       -5 %
Interest expense
     352,138       438,600       -20 %     77,126       107,006       -28 %
 
                                                
Net interest income
     840,831       796,517       6 %     213,288       199,563       7 %
Provision for loan and lease losses
     42,301       44,314       -5 %     10,400       10,829       -4 %
 
                                                
Net interest income after provision for loan and lease losses
     798,530       752,203       6 %     202,888       188,734       7 %
 
                                                
Noninterest income:
                                                
Deposit services
     97,323       82,139       18 %     25,881       22,427       15 %
Insurance brokerage commissions
     45,714       44,439       3 %     11,480       12,554       -9 %
Merchant and electronic banking income, net
     41,778       37,643       11 %     10,542       10,376       2 %
Trust and investment management services
     31,956       32,453       -2 %     8,470       7,866       8 %
Bank owned life insurance
     22,930       20,002       15 %     5,978       5,525       8 %
Investment planning services
     15,692       11,572       36 %     4,765       3,120       53 %
Net gains on sales of securities
     42,460       7,282     NM     2,682       6,705     NM
Other noninterest income
     69,306       38,978       78 %     14,637       15,868       -8 %
 
                                                
 
     367,159       274,508       34 %     84,435       84,441       0 %
 
                                                
Noninterest expense:
                                                
Salaries and employee benefits
     326,621       311,385       5 %     81,451       80,622       1 %
Occupancy and equipment expense
     106,659       93,355       14 %     26,731       25,733       4 %
Data processing
     40,940       40,702       1 %     9,881       10,514       -6 %
Advertising and marketing
     22,000       17,239       28 %     5,430       4,723       15 %
Amortization of identifiable intangible assets
     8,946       6,492       38 %     2,324       2,070       12 %
Merger and consolidation costs (1)
     8,104       14,691       -45 %     1,316       3,258       -60 %
Write-off of branch automation project (2)
     —       6,170     NM     —       6,170     NM
Prepayment penalties on borrowings
     30,490       —     NM     —       —     NM
Other noninterest expense
     97,510       89,358       9 %     28,543       25,036       14 %
 
                                                
 
     641,270       579,392       11 %     155,676       158,126       -2 %
 
                                                
Income before income tax expense
     524,419       447,319       17 %     131,647       115,049       14 %
Income tax expense
     173,660       148,681       17 %     40,085       37,911       6 %
 
                                                
Net Income
   $ 350,759     $ 298,638       17 %   $ 91,562     $ 77,138       19 %
 
                                                
Weighted average shares outstanding:
                                                
Basic
     160,914       148,213       9 %     162,149       148,226       9 %
Diluted
     163,520       149,829       9 %     165,685       149,389       11 %
Earnings per share:
                                                
Basic
   $ 2.18     $ 2.01       8 %   $ 0.56     $ 0.52       8 %
Diluted
     2.15       1.99       8 %     0.55       0.52       6 %
 
                                                
 

(1)   Merger and consolidation charges consist of merger charges, certain asset write-downs, charter consolidation costs and branch closing costs.
(2)   Represents previously capitalized costs written off in connection with the abandonment of a project to upgrade all of our teller stations and CSR desktops.

NM — calculated % change is not meaningful

 

Banknorth Group, Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
                                                 
                     
                 
    Year Ended December 31,   %   Three Months Ended December 31,   %
(In thousands, except per share data)   2003   2002   Change   2003   2002   Change
 
Net interest income
   $ 840,831     $ 796,517       6 %   $ 213,288     $ 199,563       7 %
Net income
   $ 350,759     $ 298,638       17 %   $ 91,562     $ 77,138       19 %
Shares outstanding (end of period)
     162,188       150,579       8 %     162,188       150,579       8 %
Weighted average shares outstanding:
                                                
Basic
     160,914       148,213       9 %     162,149       148,226       9 %
Diluted
     163,520       149,829       9 %     165,685       149,389       11 %
Earnings per share:
                                                
Basic
   $ 2.18     $ 2.01       8 %   $ 0.56     $ 0.52       8 %
Diluted
   $ 2.15     $ 1.99       8 %   $ 0.55     $ 0.52       6 %
Shareholders’ equity (end of period)
   $ 2,520,519     $ 2,063,485       22 %   $ 2,520,519     $ 2,063,485       22 %
Book value per share (end of period)
   $ 15.54     $ 13.70       13 %   $ 15.54     $ 13.70       13 %
Tangible book value per share (end of period)
   $ 8.37     $ 9.09       -8 %   $ 8.37     $ 9.09       -8 %
 
                    Nominal                   Nominal
                    Inc/(Dec)                   Inc/(Dec)
 
                                                
RATIOS & OTHER INFORMATION:
                                                
Net interest margin (net interest income as a % of average earning assets) (1)
     3.66 %     4.07 %     -0.41 %     3.65 %     3.86 %     -0.21 %
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)
     3.41 %     3.69 %     -0.28 %     3.42 %     3.50 %     -0.08 %
 
Return on average assets
     1.37 %     1.39 %     -0.02 %     1.39 %     1.35 %     0.04 %
Return on average equity
     14.51 %     16.25 %     -1.74 %     14.72 %     15.75 %     -1.03 %
 
At period end:
                                                
Tier 1 leverage capital ratio
     6.65 %     7.13 %     -0.48 %     6.65 %     7.13 %     -0.48 %
Tangible equity/tangible assets
     5.37 %     6.02 %     -0.65 %     5.37 %     6.02 %     -0.65 %
Total risk based capital ratio
     11.28 %     12.15 %     -0.87 %     11.28 %     12.15 %     -0.87 %
 
Non-performing loans
   $ 59,762     $ 65,317       -9 %   $ 59,762     $ 65,317       -9 %
Total non-performing assets
   $ 63,103     $ 68,952       -8 %   $ 63,103     $ 68,953       -8 %
Non-performing loans as a % of total loans
     0.37 %     0.46 %     -0.09 %     0.37 %     0.46 %     -0.09 %
Non-performing assets as a % of total assets
     0.24 %     0.29 %     -0.05 %     0.24 %     0.29 %     -0.05 %
 
Full service banking offices
     359       326               359       326          
 
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):        
 
Noninterest income as a percent of total income (2)
     27.86 %     25.12 %     2.74 %     27.71 %     28.03 %     -0.32 %
 
Merger and consolidation costs on a net of tax basis (3)
   $ 5,275     $ 9,566       -45 %   $ 855     $ 2,125       -60 %
Per diluted share:
     0.03       0.07       -57 %     0.01       0.01       0 %
 
Noninterest expense (4)
   $ 602,676     $ 564,701       7 %   $ 154,360     $ 154,868       0 %
 
Return on average assets (5)
     1.39 %     1.44 %     -0.05 %     1.41 %     1.39 %     0.02 %
Cash return on average tangible assets (5) (6)
     1.47 %     1.49 %     -0.02 %     1.49 %     1.45 %     0.04 %
 
Return on average equity (5)
     14.73 %     16.77 %     -2.04 %     14.86 %     16.18 %     -1.32 %
Cash return on average tangible equity (5) (6)
     27.07 %     23.65 %     3.42 %     27.86 %     23.84 %     4.02 %
 
Efficiency ratio (7)
     51.71 %     53.09 %     -1.38 %     52.32 %     55.85 %     -3.53 %
Cash efficiency ratio (8)
     50.94 %     52.48 %     -1.54 %     51.53 %     55.10 %     -3.57 %
 
 
 
                                                

(1)   Adjusted to fully taxable equivalent basis.
(2)   Excludes securities gains/(losses).
(3)   Merger and consolidation charges consist of merger charges, certain asset write-downs, charter consolidation costs and branch closing costs.
(4)   Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(5)   Excludes merger and consolidation costs, net of related tax benefits.
(6)   Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(7)   Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(8)   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 December 31,
    2003   2002
    Average   Yield/   Average   Yield/
(Dollars in Thousands)   Balance   Rate   Balance   Rate
 
Assets
                                
 
                                
Loans and leases (1)
                                
Residential real estate mortgages
   $ 2,718,881       5.25 %   $ 2,641,957       6.42 %
Commercial real estate mortgages
     5,392,549       5.78 %     4,504,625       6.71 %
Commercial loans and leases
     3,233,277       4.83 %     2,844,994       5.57 %
Consumer loans and leases
     4,676,259       5.29 %     3,830,542       6.45 %
 
                                
 
     16,020,966       5.36 %     13,822,118       6.35 %
Securities
     7,432,088       4.09 %     6,896,813       5.04 %
Federal funds sold and other short-term investments
     5,176       2.00 %     22,576       1.54 %
 
                                
Total earning assets
     23,458,230       4.96 %     20,741,507       5.91 %
 
                                
Bank owned life insurance
     484,428               376,857          
Noninterest-earning assets
     2,124,138               1,527,324          
 
                                
Total assets
   $ 26,066,796             $ 22,645,688          
 
                                
Liabilities & Shareholders’ Equity
                                
 
                                
Interest-bearing deposits:
                                
Regular savings
   $ 2,476,385       0.37 %   $ 1,835,068       0.69 %
Retail money market and NOW accounts
     6,982,431       0.79 %     5,889,603       1.28 %
Retail certificates of deposit
     4,803,437       2.10 %     4,624,776       2.90 %
Brokered deposits
     —       0.00 %     22,431       1.70 %
 
                                
Total interest-bearing deposits
     14,262,253       1.16 %     12,371,878       1.80 %
Borrowed funds
     5,643,402       2.51 %     5,296,244       3.83 %
 
                                
Total interest-bearing liabilities
     19,905,655       1.54 %     17,668,122       2.41 %
Noninterest bearing deposits
     3,494,692               2,837,369          
Other liabilities
     198,424               196,567          
Shareholders’ equity
     2,468,025               1,943,630          
 
                                
 
                                
Total liabilities and shareholders’ equity
   $ 26,066,796             $ 22,645,688          
 
                                
 
                                
Net earning assets
   $ 3,552,575             $ 3,073,385          
 
                                
 
                                
Net interest income (fully taxable equivalent)
   $ 214,865             $ 200,769          
Less: fully taxable equivalent adjustments
     (1,577 )             (1,206 )        
 
                                
Net interest income
   $ 213,288             $ 199,563          
 
                                
 
                                
Net interest rate spread (fully taxable equivalent)
             3.42 %             3.50 %
Net interest margin (fully taxable equivalent)
             3.65 %             3.86 %
 
 

(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)
                                 
    Year Ended December 31,
    2003   2002
    Average   Yield/   Average   Yield/
(Dollars in Thousands)   Balance   Rate   Balance   Rate
 
Assets
                                
 
                                
Loans and leases (1)
                                
Residential real estate mortgages
   $ 2,839,969       5.61 %   $ 2,635,952       6.75 %
Commercial real estate mortgages
     5,162,413       6.06 %     4,293,816       6.95 %
Commercial loans and leases
     3,153,293       5.10 %     2,665,973       5.94 %
Consumer loans and leases
     4,477,532       5.61 %     3,641,062       6.89 %
 
                                
 
     15,633,207       5.65 %     13,236,803       6.69 %
Securities
     7,464,162       4.22 %     6,403,807       5.52 %
Federal funds sold and other short-term investments
     11,004       1.46 %     60,257       1.77 %
 
                                
Total earning assets
     23,108,373       5.19 %     19,700,867       6.30 %
 
                                
Bank owned life insurance
     465,446               359,994          
Noninterest-earning assets
     2,042,528               1,399,858          
 
                                
Total assets
   $ 25,616,347             $ 21,460,719          
 
                                
 
                                
Liabilities & Shareholders’ Equity
                                
 
                                
Interest-bearing deposits:
                                
Regular savings
   $ 2,399,179       0.46 %   $ 1,743,501       0.89 %
Retail money market and NOW accounts
     6,652,030       0.89 %     5,463,179       1.45 %
Retail certificates of deposit
     5,027,739       2.36 %     4,693,518       3.18 %
Brokered deposits
     —       0.00 %     43,311       1.83 %
 
                                
Total interest-bearing deposits
     14,078,948       1.34 %     11,943,509       2.05 %
Borrowed funds
     5,693,420       2.87 %     4,870,795       3.98 %
 
                                
Total interest-bearing liabilities
     19,772,368       1.78 %     16,814,304       2.61 %
Noninterest bearing deposits
     3,224,035               2,623,135          
Other liabilities
     203,018               185,216          
Shareholders’ equity
     2,416,926               1,838,064          
 
                                
 
                                
Total liabilities and shareholders’ equity
   $ 25,616,347             $ 21,460,719          
 
                                
 
                                
Net earning assets
   $ 3,336,005             $ 2,886,563          
 
                                
 
                                
Net interest income (fully taxable equivalent)
   $ 846,727             $ 801,520          
Less: fully taxable equivalent adjustments
     (5,896 )             (5,003 )        
 
                                
Net interest income
   $ 840,831             $ 796,517          
 
                                
Net interest rate spread (fully taxable equivalent)
             3.41 %             3.69 %
Net interest margin (fully taxable equivalent)
             3.66 %             4.07 %
 
 

(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)   12/31/2003   9/30/2003   6/30/2003   3/31/2003   12/31/2002
 
Non-performing Assets:
                                        
 
                                        
Residential real estate mortgages
   $ 7,157     $ 9,135     $ 9,827     $ 9,828     $ 5,781  
Commercial real estate mortgages
     19,700       27,069       19,139       22,990       17,649  
Commercial business loans and leases
     24,412       22,857       24,577       38,562       32,693  
Consumer loans and leases
     8,493       7,664       7,192       7,457       9,194  
 
                                        
Total non-performing loans
     59,762       66,725       60,735       78,837       65,317  
 
                                        
Other non-performing assets (net)
     3,341       3,632       3,725       3,817       3,636  
 
                                        
 
                                        
Total non-performing assets
   $ 63,103     $ 70,357     $ 64,460     $ 82,654     $ 68,953  
 
                                        
 
                                        
Allowance for loan and lease losses
   $ 232,287     $ 229,581     $ 227,240     $ 226,677     $ 208,273  
 
                                        
 
                                        
Net loan charge-offs:
                                        
 
                                        
Real estate mortgages
   $ 10     $ 58     $ 31     $ 33       ($274 )
Commercial real estate mortgages
     (168 )     (269 )     (474 )     (272 )     389  
 
                                        
Total real estate
     (158 )     (211 )     (443 )     (239 )     115  
Commercial business loans and leases
     2,402       518       4,468       2,516       2,432  
Consumer loans and leases
     8,111       7,852       5,913       6,566       6,670  
 
                                        
Total net charge-offs
   $ 10,355     $ 8,159     $ 9,938     $ 8,843     $ 9,217  
 
                                        
 
                                        
Ratios:
                                        
 
                                        
Allowance for loan and lease losses to total loans and leases
     1.42 %     1.44 %     1.44 %     1.46 %     1.48 %
Allowance for loan and lease losses to non-performing loans
     388.69 %     344.07 %     374.15 %     287.53 %     318.87 %
Non-performing loans to total loans and leases
     0.37 %     0.42 %     0.39 %     0.51 %     0.46 %
Non-performing assets to total assets
     0.24 %     0.27 %     0.25 %     0.31 %     0.29 %
Net charge-offs to average loans — QTD (1)
     0.26 %     0.20 %     0.25 %     0.24 %     0.27 %
Net charge-offs to average loans — YTD (1)
     0.24 %     0.23 %     0.25 %     0.24 %     0.29 %
 
 

(1)   Annualized

 

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
                                         
    Three Months Ended
(In thousands, except per share data)   12/31/2003   9/30/2003   6/30/2003   3/31/2003   12/31/2002
 
Interest and dividend income
   $ 290,414     $ 290,750     $ 302,478     $ 309,327     $ 306,569  
Interest expense
     77,126       80,918       90,904       103,190       107,006  
 
                                        
Net interest income
     213,288       209,832       211,574       206,137       199,563  
Provision for loan and lease losses
     10,400       10,500       10,500       10,901       10,829  
 
                                        
Net interest income after provision for loan and lease losses
     202,888       199,332       201,074       195,236       188,734  
 
                                        
 
                                        
Noninterest income:
                                        
Deposit services
     25,881       25,167       23,747       22,526       22,427  
Insurance brokerage commissions
     11,480       10,930       10,948       12,357       12,554  
Merchant and electronic banking income, net
     10,542       11,115       11,098       9,021       10,376  
Trust and investment management services
     8,470       8,178       7,957       7,351       7,866  
Bank owned life insurance
     5,978       5,785       5,826       5,342       5,525  
Investment planning services
     4,765       3,761       3,911       3,256       3,120  
Net gains on sales of securities
     2,682       3,573       33,423       2,782       6,705  
Other noninterest income
     14,637       20,147       18,918       15,603       15,868  
 
                                        
 
     84,435       88,656       115,828       78,238       84,441  
 
                                        
 
                                        
Noninterest expense:
                                        
Salaries and employee benefits
     81,451       82,230       82,248       80,693       80,622  
Occupancy and equipment expense
     26,731       26,188       27,579       26,159       25,733  
Data processing
     9,881       10,466       10,415       10,178       10,514  
Advertising and marketing
     5,430       5,553       5,957       5,060       4,723  
Amortization of goodwill
     —       —       —       —       —  
Amortization of identifiable intangible assets
     2,324       2,320       2,306       1,997       2,070  
Merger and consolidation costs (1)
     1,316       808       1,530       4,450       3,258  
Write-off of branch automation project (2)
     —       —       —       —       6,170  
Prepayment penalties on borrowings
     —       —       30,490       —       —  
Other noninterest expense
     28,543       24,082       23,514       21,371       25,036  
 
                                        
 
     155,676       151,647       184,039       149,908       158,126  
 
                                        
Income before income tax expense
     131,647       136,341       132,863       123,566       115,049  
Income tax expense
     40,085       46,063       45,338       42,173       37,911  
 
                                        
Net Income
   $ 91,562     $ 90,278     $ 87,525     $ 81,393     $ 77,138  
 
                                        
 
                                        
Weighted average shares outstanding:
                                        
Basic
     162,149       161,517       162,312       157,667       148,226  
Diluted
     165,685       164,446       164,559       159,328       149,389  
Earnings per share:
                                        
Basic
   $ 0.56     $ 0.56     $ 0.54     $ 0.52     $ 0.52  
Diluted
     0.55       0.55       0.53       0.51       0.52  

 
(1)   Merger and consolidation charges consist of merger charges, certain asset write-downs, charter consolidation costs and branch closing costs.
 
(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)
                                         
    Three Months Ended
(In thousands, except per share data)   12/31/2003   9/30/2003   6/30/2003   3/31/2003   12/31/2002
 
Net interest income
   $ 213,288     $ 209,832     $ 211,574     $ 206,137     $ 199,563  
Net income
   $ 91,562     $ 90,278     $ 87,525     $ 81,393     $ 77,138  
Shares outstanding (end of period)
     162,188       161,543       160,843       163,881       150,579  
Weighted average shares outstanding:
                                        
Basic
     162,149       161,517       162,312       157,667       148,226  
Diluted
     165,685       164,446       164,559       159,328       149,389  
 
Earnings per share:
                                        
Basic
   $ 0.56     $ 0.56     $ 0.54     $ 0.52     $ 0.52  
Diluted
   $ 0.55     $ 0.55     $ 0.53     $ 0.51     $ 0.52  
 
Shareholders’ equity (end of period)
   $ 2,520,519     $ 2,475,580     $ 2,463,751     $ 2,498,194     $ 2,063,485  
Book value per share (end of period)
   $ 15.54     $ 15.32     $ 15.32     $ 15.24     $ 13.70  
Tangible book value per share (end of period)
   $ 8.37     $ 8.32     $ 8.28     $ 8.31     $ 9.09  
 
                                        
RATIOS & OTHER INFORMATION:
                                        
Net interest margin (net interest income as a % of average earning assets) (1)
     3.65 %     3.63 %     3.71 %     3.66 %     3.86 %
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)
     3.42 %     3.39 %     3.45 %     3.37 %     3.50 %
 
                                        
Return on average assets
     1.39 %     1.39 %     1.38 %     1.32 %     1.35 %
Return on average equity
     14.72 %     14.85 %     14.24 %     14.26 %     15.75 %
 
                                        
At period end:
                                        
Tier 1 leverage capital ratio
     6.65 %     6.56 %     6.36 %     6.53 %     7.13 %
Tangible equity/tangible assets
     5.37 %     5.46 %     5.41 %     5.42 %     6.02 %
Total risk based capital ratio
     11.28 %     11.29 %     10.99 %     11.20 %     12.15 %
 
                                        
Non-performing loans
   $ 59,762     $ 66,725     $ 60,735     $ 78,837     $ 65,317  
Total non-performing assets
   $ 63,103     $ 70,357     $ 64,460     $ 82,654     $ 68,953  
Non-performing loans as a % of total loans
     0.37 %     0.42 %     0.39 %     0.51 %     0.46 %
Non-performing assets as a % of total assets
     0.24 %     0.27 %     0.25 %     0.31 %     0.29 %
 
                                        
Full service banking offices
     359       357       357       360       326  
 
                                        
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
                                        
 
                                        
Noninterest income as a percent of total income (2)
     27.71 %     28.85 %     28.03 %     26.80 %     28.03 %
 
                                        
Merger and consolidation costs on a net of tax basis (3)
   $ 855     $ 525     $ 996     $ 2,899     $ 2,125  
Per diluted share:
     0.01       —       0.01       0.02       0.01  
 
                                        
Noninterest expense (4)
   $ 154,360     $ 150,839     $ 152,018     $ 145,458     $ 154,868  
 
                                        
Return on average assets (5)
     1.41 %     1.40 %     1.39 %     1.36 %     1.39 %
Cash return on average tangible assets (5) (6)
     1.49 %     1.48 %     1.48 %     1.44 %     1.45 %
 
                                        
Return on average equity (5)
     14.86 %     14.93 %     14.40 %     14.77 %     16.18 %
Cash return on average tangible equity (5) (6)
     27.86 %     28.63 %     27.15 %     24.76 %     23.84 %
 
                                        
Efficiency ratio (7)
     52.32 %     51.15 %     51.71 %     51.66 %     55.85 %
Cash efficiency ratio (8)
     51.53 %     50.36 %     50.93 %     50.95 %     55.10 %

 
(1)   Adjusted to fully taxable equivalent basis.
(2)   Excludes securities gains/(losses).
(3)   Merger and consolidation charges consist of merger charges, certain asset write-downs, charter consolidation costs and branch closing costs.
(4)   Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(5)   Excludes merger and consolidation costs, net of related tax benefits.
(6)   Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(7)   Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(8)   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)
                                         
    Three Months Ended
(In thousands, except per share data)   12/31/2003   9/30/2003   6/30/2003   3/31/2003   12/31/2002
 
Net income (including merger and consolidation costs)
   $ 91,562     $ 90,278     $ 87,525     $ 81,393     $ 77,138  
Add back merger and consolidation costs, net of tax
                                        
Merger related
     862       525       1,396       2,927       2,125  
Branch closings
     (7 )     —       —       (28 )     —  
Revised auto lease residual charge
     —       —       (400 )     —       —  
 
                                        
Excluding merger and consolidation costs
     92,417       90,803       88,521       84,292       79,263  
Amortization of intangibles, net of tax
     1,511       1,508       1,499       1,298       1,346  
 
                                        
Cash basis, excluding merger and consolidation costs
   $ 93,928     $ 92,311     $ 90,020     $ 85,590     $ 80,609  
 
                                        
 
Basic earnings per share
   $ 0.56     $ 0.56     $ 0.54     $ 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
     0.57       0.56       0.55       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
   $ 0.58     $ 0.57     $ 0.55     $ 0.54     $ 0.54  
 
                                        
 
Diluted earnings per share
   $ 0.55     $ 0.55     $ 0.53     $ 0.51     $ 0.52  
Effects of merger and consolidation costs, net of tax
     0.01       —       0.01       0.02       0.01  
 
                                        
Excluding merger and consolidation costs
     0.56       0.55       0.54       0.53       0.53  
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
   $ 0.57     $ 0.56     $ 0.55     $ 0.54     $ 0.54  
 
                                        
 
Return on average assets
     1.39 %     1.39 %     1.38 %     1.32 %     1.35 %
Effects of merger and consolidation costs, net of tax
     0.02 %     0.01 %     0.01 %     0.04 %     0.04 %
 
                                        
Excluding merger and consolidation costs
     1.41 %     1.40 %     1.39 %     1.36 %     1.39 %
Effects of amortization of intangibles, net of tax
     0.08 %     0.08 %     0.09 %     0.08 %     0.06 %
 
                                        
Cash basis, excluding merger and consolidation costs
     1.49 %     1.48 %     1.48 %     1.44 %     1.45 %
 
                                        
 
Return on average equity
     14.72 %     14.85 %     14.24 %     14.26 %     15.75 %
Effects of merger and consolidation costs, net of tax
     0.14 %     0.08 %     0.16 %     0.51 %     0.43 %
 
                                        
Excluding merger and consolidation costs
     14.86 %     14.93 %     14.40 %     14.77 %     16.18 %
Effects of amortization of intangibles, net of tax
     13.00 %     13.70 %     12.75 %     9.99 %     7.66 %
 
                                        
Cash basis, excluding merger and consolidation costs
     27.86 %     28.63 %     27.15 %     24.76 %     23.84 %
 
                                        
 
Efficiency ratio
     52.29 %     50.80 %     56.21 %     52.71 %     55.68 %
Effects of securities gains and prepayment penalties on borrowings
     0.47 %     0.62 %     -3.98 %     0.53 %     1.34 %
Effects of merger and consolidation costs
     -0.44 %     -0.27 %     -0.52 %     -1.58 %     -1.17 %
 
                                        
Excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs
     52.32 %     51.15 %     51.71 %     51.66 %     55.85 %
Effects of amortization of intangibles
     -0.79 %     -0.79 %     -0.78 %     -0.71 %     -0.75 %
 
                                        
Cash basis, excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs
     51.53 %     50.36 %     50.93 %     50.95 %     55.10 %
 
                                        
 
Non Interest Income
   $ 84,435     $ 88,656     $ 115,828     $ 78,238     $ 84,441  
Net gains on sales of securities
     2,682       3,573       33,423       2,782       6,705  
 
                                        
Excluding securities gains
   $ 81,753     $ 85,083     $ 82,405     $ 75,456     $ 77,736  
 
                                        
Non Interest Expense
   $ 155,676     $ 151,647     $ 184,039     $ 149,908     $ 158,126  
Merger and consolidation costs
     1,316       808       1,530       4,450       3,258  
Write-off of branch automation project
     —       —       —       —       6,170  
Prepayment penalties on borrowings
     —       —       30,490       —       —  
 
                                        
Excluding merger and consolidation costs, write-off of branch automation project and prepayment penalties on borrowings
   $ 154,360     $ 150,839     $ 152,019     $ 145,458     $ 148,698  
 
                                        

 

 

Banknorth Group, Inc. and Subsidiaries

RECONCILIATION TABLE — NON-GAAP FINANCIAL INFORMATION (Unaudited)
                         
    Year Ended
(In thousands, except per share data)   12/31/2003           12/31/2002
 
Net income (including merger and consolidation costs)
   $ 350,759             $ 298,638  
Add back merger and consolidation costs, net of tax
                        
Merger related
     5,710               7,486  
Branch closings
     (35 )             (260 )
Charter consolidation
     —               2,340  
Revised auto lease residual charge
     (400 )             —  
 
                        
Excluding merger and consolidation costs
     356,034               308,204  
Amortization of intangibles, net of tax
     5,815               4,220  
 
                        
Cash basis, excluding merger and consolidation costs
   $ 361,849             $ 312,424  
 
                        
 
Basic earnings per share
   $ 2.18             $ 2.01  
Effects of merger and consolidation costs, net of tax
     0.03               0.07  
 
                        
Excluding merger and consolidation costs
     2.21               2.08  
Effects of amortization of intangibles, net of tax
     0.04               0.03  
 
                        
Cash basis, excluding merger and consolidation costs
   $ 2.25             $ 2.11  
 
                        
 
Diluted earnings per share
   $ 2.15             $ 1.99  
Effects of merger and consolidation costs, net of tax
     0.03               0.07  
 
                        
Excluding merger and consolidation costs
     2.18               2.06  
Effects of amortization of intangibles, net of tax
     0.03               0.03  
 
                        
Cash basis, excluding merger and consolidation costs
   $ 2.21             $ 2.09  
 
                        
 
Return on average assets
     1.37 %             1.39 %
Effects of merger and consolidation costs, net of tax
     0.02 %             0.05 %
 
                        
Excluding merger and consolidation costs
     1.39 %             1.44 %
Effects of amortization of intangibles, net of tax
     0.08 %             0.05 %
 
                        
Cash basis, excluding merger and consolidation costs
     1.47 %             1.49 %
 
                        
 
Return on average equity
     14.51 %             16.25 %
Effects of merger and consolidation costs, net of tax
     0.22 %             0.52 %
 
                        
Excluding merger and consolidation costs
     14.73 %             16.77 %
Effects of amortization of intangibles, net of tax
     12.34 %             6.88 %
 
                        
Cash basis, excluding merger and consolidation costs
     27.07 %             23.65 %
 
                        
 
Efficiency ratio
     53.09 %             54.10 %
Effects of securities gains and prepayment penalties on borrowings
     -0.69 %             0.37 %
Effects of merger and consolidation costs
     -0.69 %             -1.38 %
 
                        
Excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs
     51.71 %             53.09 %
Effects of amortization of intangibles
     -0.77 %             -0.61 %
 
                        
Cash basis, excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs
     50.94 %             52.48 %
 
                        
 
Non Interest Income
   $ 367,159             $ 274,508  
Net gains on sales of securities
     42,460               7,282  
 
                        
Excluding securities gains
   $ 324,699             $ 267,226  
 
                        
 
Non Interest Expense
   $ 641,270             $ 579,392  
Merger and consolidation costs
     8,104               14,691  
Write-off of branch automation project
     —               6,170  
Prepayment penalties on borrowings
     30,490               —  
 
                        
Excluding merger and consolidation costs, write-off of branch automation project and prepayment penalties on borrowings
   $ 602,676             $ 558,531