8-K

UNITED STATES
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

Date of Report (Date of earliest event reported) October 18, 2004

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)

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

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.14d-2(b))
o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14d-2(b))
o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

     On October 18, 2004, Banknorth Group, Inc. issued a press release announcing its results of operations for the quarter ended September 30, 2004. A copy of the press release is included as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

                  (a)     Not applicable.

                  (b)     Not applicable.

                  (c)     The following exhibits are included with this Report:

Exhibit No.	Description
99.1	Press Release, dated October 18, 2004

     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 18, 2004

EX-99.1

Exhibit 99.1

For Immediate Release
For Further Information, Contact:
Jeffrey Nathanson, Director, Investor Relations
207 761-8517

Banknorth reports record earnings. Net Income Up 8%.

(Third Quarter Earnings Conference Call at 10:30 a.m. Eastern Time today, October 18, 2004. Dial-in number for USA and Canada is 800 901-5259. International dial-in number is 617-786-4514. Passcode for both numbers is 81790025. Replay number for USA and Canada is 888-286-8010. International replay dial-in number is 617-801-6888. Replay passcode for both is 29324389. Live webcast and webcast replay available at www.banknorth.com, Investor Relations.)

Banknorth Group, Inc. (NYSE: BNK) today reported record quarterly net income of $97.8 million for the third quarter ended September 30, 2004, up 8% from net income of $90.3 million for the third quarter a year ago. On a per diluted share basis, net income was 55 cents for the third quarter of 2004 and 55 cents for the third quarter of 2003.

Exclusive of merger and consolidation costs, income was $102.1 million for the quarter ended September 30, 2004, up 12% from $90.8 million for the quarter ended September 30, 2003. On a per diluted share basis, income exclusive of merger and consolidation costs was 58 cents for the quarter ended September 30, 2004, up 5.5% from 55 cents for the quarter ended September 30, 2003.

For the nine months ended September 30, 2004, net income was up 10% over the first nine months of last year to $283.9 million from $259.2 million. On a per diluted share basis, net income for the first nine months of 2004 increased 4% to $1.65 from $1.59 for the first nine months of 2003.

For the nine months ended September 30, 2004, income excluding merger and consolidation costs was up 11% to $292.0 million from $263.6 million for the same period a year ago. On a per diluted share basis, income excluding merger and consolidation costs for the first nine months of 2004 increased 5% to $1.70 from $1.62 for the first nine months of 2003.

“I am pleased to continue our track record of delivering record quarterly earnings,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. “It was a good quarter with solid loan and deposit growth despite only a slight increase in our net interest margin,” added Mr. Ryan.

The Company also announced today a balance sheet de-leveraging whereby the Company has sold approximately $1.2 billion of securities and prepaid a similar amount of borrowings both of which had a duration of approximately 3.5 years. The transaction will result in an after-tax charge of approximately $52.5 million ($80.8 million pre-tax) in the 4th quarter of 2004. “We continuously review our balance sheet and given the current interest rate environment, the de-leveraging made good economic sense at this time.” said Mr. Ryan. “On a pro forma basis, the de-leveraging should enhance shareholder value by improving the Company’s annual net interest margin by approximately 24 basis points, pre-tax earnings by approximately $24.5 million, return on assets by approximately 12 basis points and return on equity by approximately 79 basis points.” In addition, on a pro forma basis, the de-leveraging will decrease the Company’s securities as a percent of total assets by 3%. The yield on the securities portfolio sold was 2.76% while the interest rate on the borrowings paid off was 4.77%.

Total loans and leases at September 30, 2004 increased by 16% over the levels at September 30, 2003, led by increases in commercial business loans and leases of 18%, commercial real

estate mortgages of 16% and consumer loans and leases of 14%. Exclusive of acquisitions, total loans and leases increased by 8% which included a 14% increase in commercial business loans, a 6% increase in commercial real estate mortgages and a 10% increase in consumer loans and leases.

Total deposits at September 30, 2004 increased by 9% over the levels at September 30, 2003 primarily as a result of increases in noninterest bearing deposits of 23% and retail money market and NOW accounts of 14% and net of a decline in retail certificates of deposit of 6%. Exclusive of acquisitions, total deposits increased by 0.6% which included a 12% increase in noninterest bearing deposits and a 5% increase in retail money market and NOW accounts, which more than offset an 11% decline in retail certificates of deposit.

The Company’s net interest margin during the three months ended September 30, 2004 was 3.68%, up 5 basis points from 3.63% for the quarter ended September 30, 2003 and up slightly from 3.66% for the quarter ended June 30, 2004. The margin did not expand significantly due in part to a flattening of the yield curve in the third quarter of 2004.

Noninterest income for the quarter ended September 30, 2004 increased by 3% from the quarter ended September 30, 2003, primarily as a result of a 26% increase in trust and investment management services income, a 23% increase in both merchant and electronic banking services income and investment planning services income, and a 14% increase in insurance commissions. These increases in noninterest income were partially offset by a decline in both net gains on sales of securities of 13% and other noninterest income of 30%. For the nine month period ended September 30, 2004, noninterest income declined 5% to $269.2 million from $282.7 million for the same period a year ago, due primarily to declines in net gains on sales of securities and other noninterest income.

Excluding merger and consolidation expenses, noninterest expense for the quarter ended September 30, 2004 increased by 12% from the quarter ended September 30, 2003. Excluding both the impact of acquisitions and merger and consolidation costs, noninterest expense was up 5% for the third quarter of 2004 as compared to the third quarter of 2003.

Asset quality remained sound with total nonperforming assets declining to $68.1 million at September 30, 2004 from $70.4 million at September 30, 2003. Nonperforming loans as a percentage of total loans and leases declined to .36% at September 30, 2004 from .42% at September 30, 2003. Net charge-offs amounted to $8.8 million during the third quarter of 2004 and were essentially flat from the second quarter of 2004. As a percentage of average loans, net chargeoffs declined slightly to 19 basis points during the three months ended September 30, 2004.

At September 30, 2004, the Company’s Tier 1 leverage capital ratio was 6.95% and its total risk based capital ratio was 11.62% as compared to 6.56% and 11.29%, respectively, at September 30, 2003. Tangible equity to tangible assets at September 30, 2004 was 5.89%, up 43 basis points from 5.46% at September 30, 2003. Shareholders’ equity at September 30, 2004 was $3.0 billion, up from $2.5 billion at September 30, 2003. At September 30, 2004, the Company’s book value per share was $17.50 and its tangible book value per share was $9.34 up from $15.32 and $8.32, respectively, at September 30, 2003.

At September 30, 2004, Banknorth Group Inc., headquartered in Portland, Maine, had assets of $29 billion. The pending acquisition of BostonFed Bancorp, Inc., expected to close in the first quarter of 2005, is projected to increase Banknorth’s assets by more than $1.5 billion. 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.

On August 26, 2004, Banknorth Group, Inc. and TD Bank Financial Group (NYSE and TSE: TD) announced that they entered into a definitive agreement for TD to acquire 51% of the outstanding shares of Banknorth, subject to receipt of required regulatory and shareholder approvals and other customary conditions.

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.

CONTACT: Banknorth Group, Inc.

Jeffrey Nathanson, 207-761-8517

SOURCE: Banknorth Group, Inc.

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS (Unaudited)

	September 30,		September 30,		%			June 30,		%
(In thousands)	2004		2003		Change			2004		Change
Cash and due from banks	$	575,840	$	559,056		3	%	$	613,675		-6	%
Federal funds sold and other short-term investments		4,031		31,645		-87	%		10,917		-63	%
Securities available for sale		7,369,269		6,938,938		6	%		7,888,172		-7	%
Securities held to maturity		94,026		141,626		-34	%		103,792		-9	%
Loans and leases held for sale		47,487		74,696		-36	%		67,207		-29	%
Loans and leases:
Residential real estate mortgages		3,096,739		2,702,895		15	%		3,092,269		0	%
Commercial real estate mortgages		6,182,835		5,310,179		16	%		6,086,800		2	%
Commercial business loans and leases		3,856,296		3,265,795		18	%		3,825,003		1	%
Consumer loans and leases		5,274,921		4,646,983		14	%		5,106,240		3	%
Total loans and leases		18,410,791		15,925,852		16	%		18,110,312		2	%
Less: Allowance for loan and lease losses		242,885		229,581		6	%		247,620		-2	%
Loans and leases, net		18,167,906		15,696,271		16	%		17,862,692		2	%
Premises and equipment		285,940		264,752		8	%		288,362		-1	%
Goodwill		1,369,112		1,094,334		25	%		1,364,716		0	%
Identifiable intangible assets		52,593		37,340		41	%		53,972		-3	%
Bank owned life insurance		517,359		482,255		7	%		500,132		3	%
Other assets		502,521		420,024		20	%		522,153		-4	%
	$	28,986,084	$	25,740,937		13	%	$	29,275,790		-1	%
Liabilities & Shareholders’ Equity
Deposits:
Regular savings	$	2,572,473	$	2,473,397		4	%	$	2,624,256		-2	%
Retail money market and NOW accounts		7,924,839		6,922,924		14	%		7,872,310		1	%
Retail certificates of deposit		4,646,725		4,943,292		-6	%		4,701,046		-1	%
Brokered deposits		575		—	NM				—	NM
Noninterest bearing deposits		4,225,861		3,444,084		23	%		4,139,017		2	%
Total deposits		19,370,473		17,783,697		9	%		19,336,629		0	%
Borrowings from the Federal Home Loan Bank		1,479,160		1,557,622		-5	%		1,476,626		0	%
Federal funds purchased and securities sold under repurchase agreements		3,453,476		2,740,809		26	%		4,625,277		-25	%
Subordinated debt and senior notes		354,684		359,172		-1	%		340,002		4	%
Other borrowings		759,369		7,309		10290	%		158,774		378	%
Junior subordinated debentures		310,746		—	NM				310,746		0	%
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures		—		295,056		-100	%		—	NM
Other liabilities		211,934		521,692		-59	%		161,044		32	%
Total liabilities		25,939,842		23,265,357		11	%		26,409,098		-2	%
Shareholders’ equity		3,046,242		2,475,580		23	%		2,866,692		6	%
	$	28,986,084	$	25,740,937		13	%	$	29,275,790		-1	%

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,				%
	2004		2003		Change			2004		2003		Change
Interest and dividend income	$	927,159	$	902,555		3	%	$	325,361	$	290,750		12	%
Interest expense		239,840		275,012		-13	%		85,701		80,918		6	%
Net interest income		687,319		627,543		10	%		239,660		209,832		14	%
Provision for loan and lease losses		29,670		31,901		-7	%		10,670		10,500		2	%
Net interest income after provision for loan and lease losses		657,649		595,642		10	%		228,990		199,332		15	%
Noninterest income:
Deposit services		80,995		71,441		13	%		27,583		25,167		10	%
Insurance brokerage commissions		38,431		34,235		12	%		12,417		10,930		14	%
Merchant and electronic banking income, net		37,196		31,235		19	%		13,723		11,115		23	%
Trust and investment management services		29,300		23,486		25	%		10,280		8,178		26	%
Bank owned life insurance		17,503		16,952		3	%		5,732		5,785		-1	%
Investment planning services		14,619		10,928		34	%		4,634		3,761		23	%
Net gains on sales of securities		10,060		39,778		-75	%		3,124		3,573		-13	%
Other noninterest income		41,103		54,668		-25	%		14,020		20,147		-30	%
		269,207		282,723		-5	%		91,513		88,656		3	%
Noninterest expense:
Salaries and employee benefits		266,473		245,170		9	%		91,935		82,230		12	%
Occupancy and equipment expense		83,051		79,928		4	%		27,940		26,188		7	%
Data processing		31,573		31,059		2	%		11,118		10,466		6	%
Advertising and marketing		20,105		16,569		21	%		6,278		5,553		13	%
Amortization of identifiable intangible assets		6,367		6,622		-4	%		2,379		2,320		3	%
Merger and consolidation costs (1)		11,351		6,788		67	%		5,603		808		593	%
Prepayment penalties on borrowings		—		30,490		-100	%		—		—	NM
Other noninterest expense		78,822		68,968		14	%		28,945		24,082		20	%
		497,742		485,594		3	%		174,198		151,647		15	%
Income before income tax expense		429,114		392,771		9	%		146,305		136,341		7	%
Income tax expense		145,169		133,574		9	%		48,534		46,063		5	%
Net Income	$	283,945	$	259,197		10	%	$	97,771	$	90,278		8	%
Weighted average shares outstanding:
Basic		168,646		160,498		5	%		173,271		161,517		7	%
Diluted		172,201		162,789		6	%		176,756		164,446		7	%
Earnings per share:
Basic	$	1.68	$	1.61		4	%	$	0.56	$	0.56		0	%
Diluted		1.65		1.59		4	%		0.55		0.55		0	%

(1)	Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs.
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,						%
	2004			2003			Change			2004			2003			Change
Net interest income	$	687,319		$	627,543			10	%	$	239,660		$	209,832			14	%
Net income	$	283,945		$	259,197			10	%	$	97,771		$	90,278			8	%
Shares outstanding (end of period)		174,023			161,543			8	%		174,023			161,543			8	%
Weighted average shares outstanding:
Basic		168,646			160,498			5	%		173,271			161,517			7	%
Diluted		172,201			162,789			6	%		176,756			164,446			7	%
Earnings per share:
Basic	$	1.68		$	1.61			4	%	$	0.56		$	0.56			0	%
Diluted	$	1.65		$	1.59			4	%	$	0.55		$	0.55			0	%
Shareholders’ equity (end of period)	$	3,046,242		$	2,475,580			23	%	$	3,046,242		$	2,475,580			23	%
Book value per share (end of period)	$	17.50		$	15.32			14	%	$	17.50		$	15.32			14	%
Tangible book value per share (end of period)	$	9.34		$	8.32			12	%	$	9.34		$	8.32			12	%
RATIOS & OTHER INFORMATION:							Nominal Inc/(Dec)									Nominal Inc/(Dec)
Net interest margin (net interest income as a % of average earning assets) (1)		3.67	%		3.67	%		0.00	%		3.68	%		3.63	%		0.05	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)		3.44	%		3.40	%		0.04	%		3.42	%		3.39	%		0.03	%
Return on average assets		1.35	%		1.36	%		-0.01	%		1.33	%		1.39	%		-0.06	%
Return on average equity		13.61	%		14.45	%		-0.84	%		13.24	%		14.85	%		-1.61	%
At period end:
Tier 1 leverage capital ratio		6.95	%		6.56	%		0.39	%		6.95	%		6.56	%		0.39	%
Tangible equity/tangible assets		5.89	%		5.46	%		0.43	%		5.89	%		5.46	%		0.43	%
Total risk based capital ratio		11.62	%		11.29	%		0.33	%		11.62	%		11.29	%		0.33	%
Non-performing loans	$	66,012		$	66,725			-1	%	$	66,012		$	66,725			-1	%
Total non-performing assets	$	68,068		$	70,357			-3	%	$	68,068		$	70,357			-3	%
Non-performing loans as a % of total loans		0.36	%		0.42	%		-0.06	%		0.36	%		0.42	%		-0.06	%
Non-performing assets as a % of total assets		0.23	%		0.27	%		-0.04	%		0.23	%		0.27	%		-0.04	%
Full service banking offices		387			357						387			357
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Noninterest income as a percent of total income (2)		27.38	%		27.91	%		-0.53	%		26.94	%		28.85	%		-1.91	%
Merger and consolidation costs on a net of tax basis (3)	$	8,078		$	4,420			83	%	$	4,342		$	525			727	%
Per diluted share:		0.05			0.03			67	%		0.03			—		NM
Noninterest expense (4)	$	486,392		$	448,316			8	%	$	168,595		$	150,839			12	%
Return on average assets (5)		1.39	%		1.38	%		0.01	%		1.39	%		1.40	%		-0.01	%
Cash return on average tangible assets (5) (6)		1.48	%		1.47	%		0.01	%		1.49	%		1.48	%		0.01	%
Return on average equity (5)		14.00	%		14.69	%		-0.69	%		13.82	%		14.93	%		-1.11	%
Cash return on average tangible equity (5) (6)		26.83	%		26.83	%		0.00	%		27.20	%		28.63	%		-1.43	%
Efficiency ratio (7)		51.39	%		51.50	%		-0.11	%		51.39	%		51.15	%		0.24	%
Cash efficiency ratio (8)		50.72	%		50.74	%		-0.02	%		50.67	%		50.36	%		0.31	%

(1)	Adjusted to fully taxable equivalent basis.
(2)	Excludes securities gains/(losses).
(3)	Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs.
(4)	Excludes pre-tax merger and consolidation costs and prepayment penalties.
(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) and merger and consolidation costs.
(8)	Excludes securities gains/(losses), merger and consolidation costs and amortization of intangible assets.
Ratios are annualized where appropriate.

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)

	Three Months Ended September 30,
	2004						2003
	Average			Yield/			Average			Yield/
(Dollars in thousands)	Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
Residential real estate mortgages	$	3,135,400			4.95	%	$	2,852,568			5.43	%
Commercial real estate mortgages		6,158,271			5.76	%		5,263,002			5.88	%
Commercial loans and leases		3,827,919			4.93	%		3,216,254			5.04	%
Consumer loans and leases		5,185,483			5.10	%		4,577,421			5.43	%
		18,307,073			5.26	%		15,909,245			5.50	%
Securities		7,822,646			4.35	%		7,270,800			3.96	%
Federal funds sold and other short-term investments		5,609			1.55	%		16,113			1.36	%
Total earning assets		26,135,328			4.98	%		23,196,158			5.02	%
Bank owned life insurance		508,425						478,572
Noninterest-earning assets		2,532,355						2,139,519
Total assets	$	29,176,108					$	25,814,249
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
Regular savings	$	2,603,474			0.29	%	$	2,474,169			0.40	%
Retail money market and NOW accounts		7,884,927			0.80	%		6,815,603			0.80	%
Retail certificates of deposit		4,672,879			1.91	%		5,053,277			2.27	%
Brokered deposits		506			1.63	%		—			0.00	%
Total interest-bearing deposits		15,161,786			1.05	%		14,343,049			1.25	%
Borrowed funds		6,652,815			2.73	%		5,407,580			2.63	%
Total interest-bearing liabilities		21,814,601			1.56	%		19,750,629			1.63	%
Noninterest bearing deposits		4,236,569						3,388,018
Other liabilities		186,203						263,171
Shareholders’ equity		2,938,735						2,412,431
Total liabilities and shareholders’ equity	$	29,176,108					$	25,814,249
Net earning assets	$	4,320,727					$	3,445,529
Net interest income (fully taxable equivalent)	$	241,339					$	211,397
Less: fully taxable equivalent adjustments		(1,679	)					(1,565	)
Net interest income	$	239,660					$	209,832
Net interest rate spread (fully taxable equivalent)					3.42	%					3.39	%
Net interest margin (fully taxable equivalent)					3.68	%					3.63	%

(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,
	2004						2003
	Average			Yield/			Average			Yield/
(Dollars in thousands)	Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
Residential real estate mortgages	$	2,950,094			5.04	%	$	2,880,776			5.72	%
Commercial real estate mortgages		5,861,892			5.74	%		5,084,858			6.16	%
Commercial loans and leases		3,630,870			4.82	%		3,126,338			5.19	%
Consumer loans and leases		5,017,428			5.08	%		4,410,562			5.73	%
		17,460,284			5.24	%		15,502,534			5.76	%
Securities		7,680,939			4.28	%		7,474,971			4.26	%
Federal funds sold and other short-term investments		5,562			1.27	%		12,922			1.39	%
Total earning assets		25,146,785			4.95	%		22,990,427			5.27	%
Bank owned life insurance		498,736						459,049
Noninterest-earning assets		2,391,826						2,016,447
Total assets	$	28,037,347					$	25,465,923
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
Regular savings	$	2,562,340			0.29	%	$	2,373,161			0.49	%
Retail money market and NOW accounts		7,551,311			0.79	%		6,540,686			0.93	%
Retail certificates of deposit		4,684,097			1.94	%		5,103,328			2.44	%
Brokered deposits		170			1.63	%		—			0.00	%
Total interest-bearing deposits		14,797,918			1.07	%		14,017,175			1.40	%
Borrowed funds		6,394,319			2.53	%		5,710,875			2.99	%
Total interest-bearing liabilities		21,192,237			1.51	%		19,728,050			1.87	%
Noninterest bearing deposits		3,875,740						3,132,825
Other liabilities		182,209						206,378
Shareholders’ equity		2,787,161						2,398,670
Total liabilities and shareholders’ equity	$	28,037,347					$	25,465,923
Net earning assets	$	3,954,548					$	3,262,377
Net interest income (fully taxable equivalent)	$	692,033					$	631,862
Less: fully taxable equivalent adjustments		(4,714	)					(4,319	)
Net interest income	$	687,319					$	627,543
Net interest rate spread (fully taxable equivalent)					3.44	%					3.40	%
Net interest margin (fully taxable equivalent)					3.67	%					3.67	%

(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)

	9/30/2004			6/30/2004			3/31/2004			12/31/2003			9/30/2003
Non-performing assets:
Residential real estate mortgages	$	7,274		$	7,870		$	7,990		$	7,157		$	9,135
Commercial real estate mortgages		33,338			27,951			24,619			19,700			27,069
Commercial business loans and leases		18,573			23,636			28,978			24,412			22,857
Consumer loans and leases		6,827			5,685			6,267			8,493			7,664
Total non-performing loans and leases		66,012			65,142			67,854			59,762			66,725
Other non-performing assets, net		2,056			2,025			2,700			3,342			3,632
Total non-performing assets	$	68,068		$	67,167		$	70,554		$	63,104		$	70,357
Allowance for loan and lease losses	$	242,885	(1)	$	247,620		$	233,297		$	232,287		$	229,581
Net loan charge-offs (recoveries):
Residential real estate mortgages	$	86		$	(42	)	$	(72	)	$	10		$	58
Commercial real estate mortgages		(529	)		(663	)		(446	)		(168	)		(269	)
Total real estate mortgages		(443	)		(705	)		(518	)		(158	)		(211	)
Commercial business loans and leases		2,939			3,387			1,785			2,402			518
Consumer loans and leases		6,308			6,160			7,223			8,111			7,852
Total net charge-offs	$	8,804		$	8,842		$	8,490		$	10,355		$	8,159
Ratios:
Allowance for loan and lease losses to total loans and leases		1.32	%(1)		1.37	%		1.40	%		1.42	%		1.44	%
Allowance for loan and lease losses to non-performing loans		367.94	%(1)		380.12	%		343.82	%		388.69	%		344.07	%
Non-performing loans to total loans and leases		0.36	%		0.36	%		0.41	%		0.37	%		0.42	%
Non-performing assets to total assets		0.23	%		0.23	%		0.26	%		0.24	%		0.27	%
Net charge-offs to average loans — QTD (2)		0.19	%		0.20	%		0.21	%		0.26	%		0.20	%

(1)

In September 2004, $6.6 million was transferred from the allowance for loan and lease losses to a liability account related to reserves for off-balance sheet loan commitments. Had this amount not been transferred, the ratio of allowance for loan and lease losses to total loans and leases would have been 1.36% and the ratio of the allowance for loan and lease losses to non-performing loans would have been 378.10% at September 30, 2004.

(2)

Annualized.

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)	Three Months Ended
	9/30/2004		6/30/2004		3/31/2004		12/31/2003		9/30/2003
Interest and dividend income	$	325,361	$	309,146	$	292,652	$	290,414	$	290,750
Interest expense		85,701		79,096		75,043		77,126		80,918
Net interest income		239,660		230,050		217,609		213,288		209,832
Provision for loan and lease losses		10,670		9,500		9,500		10,400		10,500
Net interest income after provision for loan and lease losses		228,990		220,550		208,109		202,888		199,332
Noninterest income:
Deposit services		27,583		27,260		26,153		25,881		25,167
Insurance brokerage commissions		12,417		12,278		13,736		11,480		10,930
Merchant and electronic banking income, net		13,723		13,069		10,404		10,542		11,115
Trust and investment management services		10,280		9,870		9,149		8,470		8,178
Bank owned life insurance		5,732		6,275		5,496		5,978		5,785
Investment planning services		4,634		5,146		4,839		4,765		3,761
Net gains on sales of securities		3,124		3,355		3,581		2,682		3,573
Other noninterest income		14,020		12,223		14,859		14,637		20,147
		91,513		89,476		88,217		84,435		88,656
Noninterest expense:
Salaries and employee benefits		91,935		87,005		87,534		81,451		82,230
Occupancy and equipment expense		27,940		27,512		27,599		26,731		26,188
Data processing		11,118		10,018		10,436		9,881		10,466
Advertising and marketing		6,278		6,303		7,523		5,430		5,553
Amortization of identifiable intangible assets		2,379		2,084		1,904		2,324		2,320
Merger and consolidation costs (1)		5,603		4,135		1,614		1,316		808
Prepayment penalties on borrowings		—		—		—		—		—
Other noninterest expense		28,945		26,769		23,109		28,543		24,082
		174,198		163,826		159,719		155,676		151,647
Income before income tax expense		146,305		146,200		136,607		131,647		136,341
Income tax expense		48,534		50,353		46,280		40,085		46,063
Net Income	$	97,771	$	95,847	$	90,327	$	91,562	$	90,278
Weighted average shares outstanding:
Basic		173,271		169,637		162,965		162,149		161,517
Diluted		176,756		173,109		166,657		165,685		164,446
Earnings per share:
Basic	$	0.56	$	0.57	$	0.55	$	0.56	$	0.56
Diluted		0.55		0.55		0.54		0.55		0.55

(1) Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs.

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

(In thousands, except per share data)	Three Months Ended
	9/30/2004			6/30/2004			3/31/2004			12/31/2003			9/30/2003
Net interest income	$	239,660		$	230,050		$	217,609		$	213,288		$	209,832
Net income	$	97,771		$	95,847		$	90,327		$	91,562		$	90,278
Shares outstanding (end of period)		174,023			172,546			163,046			162,188			161,543
Weighted average shares outstanding:
Basic		173,271			169,637			162,965			162,149			161,517
Diluted		176,756			173,109			166,657			165,685			164,446
Earnings per share:
Basic	$	0.56		$	0.57		$	0.55		$	0.56		$	0.56
Diluted	$	0.55		$	0.55		$	0.54		$	0.55		$	0.55
Shareholders’ equity (end of period)	$	3,046,242		$	2,866,692		$	2,651,911		$	2,520,519		$	2,475,580
Book value per share (end of period)	$	17.50		$	16.61		$	16.26		$	15.54		$	15.32
Tangible book value per share (end of period)	$	9.34		$	8.39		$	9.14		$	8.37		$	8.32
RATIOS & OTHER INFORMATION:
Net interest margin (net interest income as a % of average earning assets) (1)		3.68	%		3.66	%		3.68	%		3.65	%		3.63	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)		3.42	%		3.43	%		3.46	%		3.42	%		3.39	%
Return on average assets		1.33	%		1.36	%		1.37	%		1.39	%		1.39	%
Return on average equity		13.24	%		13.54	%		14.13	%		14.72	%		14.85	%
At period end:
Tier 1 leverage capital ratio		6.95	%		6.75	%		6.84	%		6.65	%		6.56	%
Tangible equity/tangible assets		5.89	%		5.20	%		5.79	%		5.37	%		5.46	%
Total risk based capital ratio		11.62	%		11.13	%		11.47	%		11.29	%		11.29	%
Non-performing loans	$	66,012		$	65,143		$	67,854		$	59,762		$	66,725
Total non-performing assets	$	68,068		$	67,167		$	70,554		$	63,104		$	70,357
Non-performing loans as a % of total loans		0.36	%		0.36	%		0.41	%		0.37	%		0.42	%
Non-performing assets as a % of total assets		0.23	%		0.23	%		0.26	%		0.24	%		0.27	%
Full service banking offices		387			389			358			359			357
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Noninterest income as a percent of total income (2)		26.94	%		27.24	%		28.00	%		27.71	%		28.85	%
Merger and consolidation costs on a net of tax basis (3)	$	4,342		$	2,687		$	1,049		$	855		$	525
Per diluted share:		0.03			0.02			0.01			0.01			—
Noninterest expense (4)	$	168,595		$	159,691		$	158,105		$	154,360		$	150,839
Return on average assets (5)		1.39	%		1.40	%		1.39	%		1.41	%		1.40	%
Cash return on average tangible assets (5) (6)		1.49	%		1.49	%		1.47	%		1.49	%		1.48	%
Return on average equity (5)		13.82	%		13.92	%		14.29	%		14.86	%		14.93	%
Cash return on average tangible equity (5) (6)		27.20	%		26.67	%		26.44	%		27.86	%		28.63	%
Efficiency ratio (7)		51.39	%		50.51	%		52.31	%		52.32	%		51.15	%
Cash efficiency ratio (8)		50.67	%		49.85	%		51.68	%		51.53	%		50.36	%

(1)	Adjusted to fully taxable equivalent basis.
(2)	Excludes securities gains/(losses).
(3)	Merger and consolidation costs consist of merger charges, certain asset write-downs 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.
Ratios are annualized where appropriate.

Banknorth Group, Inc. and Subsidiaries
Reconciliation Table — Non-GAAP Financial Information (Unaudited)

(In thousands, except per share data)	Three Months Ended
	9/30/2004			6/30/2004			3/31/2004			12/31/2003			9/30/2003
Net income (including merger and consolidation costs)	$	97,771		$	95,847		$	90,327		$	91,562		$	90,278
Add back merger and consolidation costs, net of tax
Merger related		4,342			2,687			1,355			862			525
Branch closings		—			—			(306	)		(7	)		—
Excluding merger and consolidation costs		102,113			98,534			91,376			92,417			90,803
Add back amortization of intangibles, net of tax		1,547			1,354			1,238			1,511			1,508
Cash basis, excluding merger and consolidation costs	$	103,660		$	99,888		$	92,614		$	93,928		$	92,311
Basic earnings per share	$	0.56		$	0.57		$	0.55		$	0.56		$	0.56
Effects of merger and consolidation costs, net of tax		0.03			0.01			0.01			0.01			—
Excluding merger and consolidation costs		0.59			0.58			0.56			0.57			0.56
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	$	0.60		$	0.59		$	0.57		$	0.58		$	0.57
Diluted earnings per share	$	0.55		$	0.55		$	0.54		$	0.55		$	0.55
Effects of merger and consolidation costs, net of tax		0.03			0.02			0.01			0.01			—
Excluding merger and consolidation costs		0.58			0.57			0.55			0.56			0.55
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	$	0.59		$	0.58		$	0.56		$	0.57		$	0.56
Return on average assets		1.33	%		1.36	%		1.37	%		1.39	%		1.39	%
Effects of merger and consolidation costs, net of tax		0.06	%		0.04	%		0.02	%		0.02	%		0.01	%
Excluding merger and consolidation costs		1.39	%		1.40	%		1.39	%		1.41	%		1.40	%
Effects of amortization of intangibles, net of tax		0.10	%		0.09	%		0.08	%		0.08	%		0.08	%
Cash basis, excluding merger and consolidation costs		1.49	%		1.49	%		1.47	%		1.49	%		1.48	%
Return on average equity		13.24	%		13.54	%		14.13	%		14.72	%		14.85	%
Effects of merger and consolidation costs, net of tax		0.58	%		0.38	%		0.16	%		0.14	%		0.08	%
Excluding merger and consolidation costs		13.82	%		13.92	%		14.29	%		14.86	%		14.93	%
Effects of amortization of intangibles, net of tax		13.38	%		12.75	%		12.15	%		13.00	%		13.70	%
Cash basis, excluding merger and consolidation costs		27.20	%		26.67	%		26.44	%		27.86	%		28.63	%
Efficiency ratio		52.60	%		51.27	%		52.23	%		52.29	%		50.80	%
Effects of securities gains		0.50	%		0.55	%		0.62	%		0.47	%		0.62	%
Effects of merger and consolidation costs		-1.71	%		-1.31	%		-0.53	%		-0.44	%		-0.27	%
Excluding securities gains and merger and consolidation costs		51.39	%		50.51	%		52.31	%		52.32	%		51.15	%
Effects of amortization of intangibles		-0.72	%		-0.66	%		-0.63	%		-0.79	%		-0.79	%
Cash basis, excluding securities gains, and merger and consolidation costs		50.67	%		49.85	%		51.68	%		51.53	%		50.36	%
Non Interest Income	$	91,513		$	89,476		$	88,217		$	84,435		$	88,656
Net gains on sales of securities		3,124			3,355			3,581			2,682			3,573
Excluding securities gains	$	88,389		$	86,121		$	84,636		$	81,753		$	85,083
Non Interest Expense	$	174,198		$	163,826		$	159,719		$	155,676		$	151,647
Merger and consolidation costs		5,603			4,135			1,614			1,316			808
Excluding merger and consolidation costs	$	168,595		$	159,691		$	158,105		$	154,360		$	150,839

Banknorth Group, Inc. and Subsidiaries
Reconciliation Table — Non-GAAP Financial Information (Unaudited)

(In thousands, except per share data)	Nine Months Ended
	9/30/2004			9/30/2003
Net income (including merger and consolidation costs)	$	283,945		$	259,197
Add back merger and consolidation costs, net of tax
Merger related		8,412			4,848
Branch closings		(334	)		(28	)
Revised auto lease residual charge		—			(400	)
Excluding merger and consolidation costs		292,023			263,617
Add back amortization of intangibles, net of tax		4,139			4,304
Cash basis, excluding merger and consolidation costs	$	296,162		$	267,921
Basic earnings per share	$	1.68		$	1.61
Effects of merger and consolidation costs, net of tax		0.05			0.03
Excluding merger and consolidation costs		1.73			1.64
Effects of amortization of intangibles, net of tax		0.03			0.03
Cash basis, excluding merger and consolidation costs	$	1.76		$	1.67
Diluted earnings per share	$	1.65		$	1.59
Effects of merger and consolidation costs, net of tax		0.05			0.03
Excluding merger and consolidation costs		1.70			1.62
Effects of amortization of intangibles, net of tax		0.02			0.03
Cash basis, excluding merger and consolidation costs	$	1.72		$	1.65
Return on average assets		1.35	%		1.36	%
Effects of merger and consolidation costs, net of tax		0.04	%		0.02	%
Excluding merger and consolidation costs		1.39	%		1.38	%
Effects of amortization of intangibles, net of tax		0.09	%		0.09	%
Cash basis, excluding merger and consolidation costs		1.48	%		1.47	%
Return on average equity		13.61	%		14.45	%
Effects of merger and consolidation costs, net of tax		0.39	%		0.24	%
Excluding merger and consolidation costs		14.00	%		14.69	%
Effects of amortization of intangibles, net of tax		12.83	%		12.14	%
Cash basis, excluding merger and consolidation costs		26.83	%		26.83	%
Efficiency ratio		52.04	%		53.35	%
Effects of securities gains and prepayment penalties on borrowings		0.55	%		-1.07	%
Effects of merger and consolidation costs		-1.20	%		-0.78	%
Excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs		51.39	%		51.50	%
Effects of amortization of intangibles		-0.67	%		-0.76	%
Cash basis, excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs		50.72	%		50.74	%
Non Interest Income	$	269,207		$	282,723
Net gains on sales of securities		10,060			39,778
Excluding securities gains	$	259,147		$	242,945
Non Interest Expense	$	497,742		$	485,594
Merger and consolidation costs		11,351			6,788
Prepayment penalties on borrowings		—			30,490
Excluding merger and consolidation costs, write-off of branch automation project and prepayment penalties on borrowings.	$	486,391		$	448,316