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) January 19, 2005

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)

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 January 19, 2005, Banknorth Group, Inc. issued a press release announcing its results of operations for the quarter and year ended December 31, 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 January 19, 2005

     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.

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: January 19, 2005

EX-99.1

Exhibit 99.1

Banknorth Reports Fourth Quarter and 2004 Earnings

PORTLAND, Maine—(BUSINESS WIRE)—Jan. 19, 2005—(Fourth Quarter Earnings Conference Call at 9:00 a.m. Eastern Time January 20, 2005. Dial-in number for USA and Canada is 800 638-5439. International dial-in number is 617 614-3945. Passcode for both numbers is 47614076. Replay number for USA and Canada is 888 286-8010. International replay dial-in number is 617 801-6888. Replay passcode is 75674933. Live webcast and webcast replay available at www.banknorth.com/investorrelations.)

Banknorth Group Inc. (NYSE: BNK) reported earnings for 2004 of $304.6 million as compared to $350.8 million in 2003. For the fourth quarter ended December 31, 2004, Banknorth’s earnings were $20.7 million as compared to $91.6 million for the same quarter a year ago. The declines in earnings for both the quarter and the year were attributable to the Company’s previously-announced deleveraging strategy and certain merger and consolidation costs associated with the Company’s pending transaction with The Toronto-Dominion Bank, or “TD”. Earnings per diluted share for 2004 were $1.75 as compared to $2.15 in 2003. Earnings per diluted share were 12 cents for the quarter ended December 31, 2004 as compared to 55 cents for the quarter ended December 31, 2003.

Exclusive of the after-tax impact of merger and consolidation costs and of the Company’s balance sheet deleveraging, earnings for 2004 were $396.6 million up 11% as compared to $356.0 million for 2003 while earnings for the quarter ended December 31, 2004 were $104.6 million up 13% as compared to $92.4 million for the quarter ended December 31, 2003.

Exclusive of the after-tax impact of merger and consolidation costs and of the Company’s balance sheet deleveraging, earnings per diluted share for 2004 increased by 5% to $2.28 from $2.18 in 2003 while earnings for the quarter ended December 31, 2004 increased to 58 cents as compared to 56 cents for the quarter ended December 31, 2003.

Earnings per diluted share were impacted primarily by two events in the fourth quarter. First, the after-tax impact associated with the Company’s previously-announced deleveraging strategy of $51.6 million represented 29 cents per diluted share for the quarter ended December 31, 2004. Second, merger and consolidation costs of $32.3 million represented an additional 17 cents per diluted share. A majority of the $32.3 million of merger and consolidation costs was due to the payment of certain long-term incentive payments and other expenses related to the acquisition of 51% of Banknorth by TD.

In addition to the above, as a result of the pending transaction with TD, a significant number of Banknorth employees exercised stock options in the fourth quarter of 2004. As a result, the number of weighted average shares outstanding on a diluted basis increased by 3.2 million shares in the fourth quarter ended December 31, 2004, resulting in a decrease in earnings, exclusive of the after-tax impact of merger and consolidation costs and of the Company’s balance sheet deleveraging, of approximately 1 cent per share.

“Our core banking business remains strong,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. “We continue to see solid loan and deposit growth and believe that we are well positioned to execute our growth strategy going forward.” Ryan added.

Total average loans and leases in 2004 were $17.7 billion, up 13% from $15.6 billion in 2003, led by increases in commercial business loans and leases of 17%, commercial real estate mortgages of 15% and consumer loans and leases of 14%. Exclusive of acquisitions, total average commercial and consumer loans increased by 11% in 2004.

Total average core deposits consisting of noninterest bearing deposits, retail money market and NOW accounts and regular savings accounts increased to $14.2 billion in 2004, up 16% from $12.3 billion in 2003, led by increases in noninterest bearing deposits of 24% and retail money market and NOW accounts of 15%, which more than offset a decline in retail certificates of deposit of 8%. Exclusive of acquisitions, total average core deposits increased by 9% in 2004.

The Company’s capital ratios improved in 2004. At December 31, 2004, the Company’s Tier 1 leverage capital ratio was 7.58% and its total risk based capital ratio was 12.16% as compared to 6.65% and 11.29%, respectively, at December 31, 2003. Tangible equity to tangible assets at December 31, 2004 was 6.45%, up 108 basis points from 5.37% at December 31, 2003. Shareholders’ equity at December 31, 2004 was $3.2 billion, up from $2.5 billion at December 31, 2003.

Excluding the net gain/loss on the sale of securities, noninterest income increased 7% in 2004 over 2003 led by increases in wealth management services income of 25%, investment planning services income of 24%, net merchant banking and electronic banking income of 21%, deposit services income of 12% and insurance brokerage commissions of 10%, all of which more than offset a decline in other noninterest income of 21% due primarily to a decline in covered call option income. For the fourth quarter ended December 31, 2004, excluding the net gain/loss on the sale of securities, noninterest income increased 8% over the same quarter a year ago.

Excluding merger and consolidation costs and the prepayment penalties associated with the Company’s balance sheet deleveraging, noninterest expense increased by 8.5% in 2004, the majority of which was associated with the acquisitions of CCBT Financial Companies and Foxborough Savings Bank. The Company’s cash efficiency ratio exclusive of these items and amortization of intangible assets improved slightly to 50.38% in 2004 as compared to 50.94% in 2003.

The Company’s net interest margin during the three months ended December 31, 2004 increased to 3.87%, up 19 basis points from 3.68% for the quarter ended September 30, 2004. The margin was positively impacted by the Company’s balance sheet deleveraging.

For the quarter ended December 31, 2004, total nonperforming assets (“NPAs”) increased to $81 million from $68 million for the quarter ended September 30, 2004 due primarily to an increase in nonperforming assets associated with one large commercial business loan. “Despite an uptick in our NPAs, our overall asset quality remains strong,” said Mr. Ryan. Total net charge-offs for the year ended December 31, 2004 of $36.5 million declined by $.8 million as compared to the year ended December 31, 2003. The Company’s ratio of nonperforming assets to total assets was just 28 basis points at December 31, 2004 up slightly from 24 basis points at December 31, 2003. At December 31, 2004, the Company’s allowance for loan and lease losses to nonperforming loans was 322% and the Company’s allowance as a percentage of total outstanding loans was 1.34%.

In 2004, the Company completed acquisitions in Massachusetts of Foxborough Savings Bank, which had $242 million in assets, and CCBT Financial Companies, which had $1.3 billion in assets. The Company also completed the acquisition of Drake, Swan & Crocker Insurance Agency of Orleans, Massachusetts. The Company anticipates closing the acquisition of BostonFed Bancorp, Inc., with assets of $1.5 billion, on or about January 21, 2005.

On August 26, 2004, Banknorth Group, Inc. and TD announced that they entered into a definitive merger 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. A special meeting of Banknorth shareholders to vote on the merger agreement will be held on February 18, 2005.

At December 31, 2004, Banknorth Group Inc., headquartered in Portland, Maine, had assets of $28.7 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.

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)

	December 31,		December 31,		%			September 30,		%
(In thousands)	2004		2003		Change			2004		Change
Cash and due from banks	$	541,994	$	669,686		-19	%	$	575,840		-6	%
Federal funds sold and other short-term investments		2,312		4,645		-50	%		4,031		-43	%
Securities available for sale		6,905,765		7,122,992		-3	%		7,369,269		-6	%
Securities held to maturity		87,013		124,240		-30	%		94,026		-7	%
Loans and leases held for sale		51,693		41,696		24	%		47,487		9	%
Loans and leases:
Residential real estate mortgages		3,081,217		2,710,483		14	%		3,096,739		-1	%
Commercial real estate mortgages		6,249,513		5,528,862		13	%		6,182,835		1	%
Commercial business loans and leases		3,928,594		3,287,094		20	%		3,856,296		2	%
Consumer loans and leases		5,333,670		4,819,523		11	%		5,274,921		1	%
Total loans and leases		18,592,994		16,345,962		14	%		18,410,791		1	%
Less: Allowance for loan and lease losses		243,152		232,287		5	%		242,885		0	%
Loans and leases, net		18,349,842		16,113,675		14	%		18,167,906		1	%
Premises and equipment		300,120		264,818		13	%		285,940		5	%
Goodwill		1,365,780		1,126,639		21	%		1,369,112		0	%
Identifiable intangible assets		50,376		36,415		38	%		52,593		-4	%
Bank owned life insurance		523,129		488,756		7	%		517,359		1	%
Other assets		509,786		460,173		11	%		502,521		1	%
	$	28,687,810	$	26,453,735		8	%	$	28,986,084		-1	%
Liabilities & Shareholders’ Equity
Deposits:
Regular savings	$	2,546,018	$	2,460,522		3	%	$	2,572,473		-1	%
Retail money market and NOW accounts		7,907,513		7,130,532		11	%		7,924,839		0	%
Retail certificates of deposit		4,484,370		4,733,104		-5	%		4,646,725		-3	%
Brokered deposits		576		—	NM				575		0	%
Noninterest bearing deposits		4,289,104		3,577,027		20	%		4,225,861		1	%
Total deposits		19,227,581		17,901,185		7	%		19,370,473		-1	%
Borrowings from the Federal Home Loan Bank		1,997,336		1,495,385		34	%		1,479,160		35	%
Federal funds purchased and securities sold under repurchase agreements		2,952,476		3,659,550		-19	%		3,453,476		-15	%
Subordinated debt and senior notes		346,879		348,293		0	%		354,684		-2	%
Other borrowings		383,268		84,361		354	%		759,369		-50	%
Junior subordinated debentures		310,746		—	NM				310,746		0	%
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures		—		295,275		-100	%		—	NM
Other liabilities		293,410		149,167		97	%		211,934		38	%
Total liabilities		25,511,696		23,933,216		7	%		25,939,842		-2	%
Shareholders’ equity		3,176,114		2,520,519		26	%		3,046,242		4	%
	$	28,687,810	$	26,453,735		8	%	$	28,986,084		-1	%

4

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)	Year Ended December 31,					%			Three Months Ended December 31,					%
	2004			2003		Change			2004			2003		Change
Interest and dividend income	$	1,257,005		$	1,192,969		5	%	$	329,846		$	290,414		14	%
Interest expense		323,623			352,138		-8	%		83,783			77,126		9	%
Net interest income		933,382			840,831		11	%		246,063			213,288		15	%
Provision for loan and lease losses		40,340			42,301		-5	%		10,670			10,400		3	%
Net interest income after provision for loan and lease losses		893,042			798,530		12	%		235,393			202,888		16	%
Noninterest income:
Deposit services		109,321			97,323		12	%		28,326			25,881		9	%
Insurance brokerage commissions		50,311			45,714		10	%		11,880			11,480		3	%
Merchant and electronic banking income, net		50,564			41,778		21	%		13,368			10,542		27	%
Wealth management services		39,788			31,956		25	%		10,489			8,470		24	%
Bank owned life insurance		23,282			22,930		2	%		5,779			5,978		-3	%
Investment planning services		19,418			15,692		24	%		4,799			4,765		1	%
Net gains/(losses) on sales of securities		(7,701	)		42,460		-118	%		(17,761	)		2,682		-762	%
Other noninterest income		54,816			69,306		-21	%		13,711			14,637		-6	%
		339,799			367,159		-7	%		70,591			84,435		-16	%
Noninterest expense:
Salaries and employee benefits		356,611			326,621		9	%		90,138			81,451		11	%
Occupancy and equipment expense		112,372			106,659		5	%		29,320			26,731		10	%
Data processing		43,141			40,940		5	%		11,568			9,881		17	%
Advertising and marketing		25,550			22,000		16	%		5,445			5,430		0	%
Amortization of identifiable intangible assets		8,627			8,946		-4	%		2,260			2,324		-3	%
Merger and consolidation costs (1)		49,635			8,104		512	%		38,286			1,316		2809	%
Prepayment penalties on borrowings		61,546			30,490		102	%		61,546			—	NM
Other noninterest expense		107,619			97,510		10	%		28,796			28,543		1	%
		765,101			641,270		19	%		267,359			155,676		72	%
Income before income tax expense		467,740			524,419		-11	%		38,625			131,647		-71	%
Income tax expense		163,097			173,660		-6	%		17,927			40,085		-55	%
Net Income	$	304,643		$	350,759		-13	%	$	20,698		$	91,562		-77	%
Weighted average shares outstanding:
Basic		170,766			160,914		6	%		177,071			162,149		9	%
Diluted		174,158			163,520		7	%		179,953			165,685		9	%
Earnings per share:
Basic	$	1.78		$	2.18		-18	%	$	0.12		$	0.56		-79	%
Diluted		1.75			2.15		-19	%		0.12			0.55		-78	%

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

NM — calculated % change is not meaningful

5

Banknorth Group, Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(In thousands, except per share data)
	Year Ended December 31,						%			Three Months Ended December 31,						%
	2004			2003			Change			2004			2003			Change
Net interest income	$	933,382		$	840,831			11	%	$	246,063		$	213,288			15	%
Net income	$	304,643		$	350,759			-13	%	$	20,698		$	91,562			-77	%
Shares outstanding (end of period)		179,298			162,188			11	%		179,298			162,188			11	%
Weighted average shares outstanding:
Basic		170,766			160,D914			6	%		177,071			162,149			9	%
Diluted		174,158			163,520			7	%		179,953			165,685			9	%
Earnings per share:
Basic	$	1.78		$	2.18			-18	%	$	0.12		$	0.56			-79	%
Diluted	$	1.75		$	2.15			-19	%	$	0.12		$	0.55			-78	%
Shareholders’ equity (end of period)	$	3,176,114		$	2,520,519			26	%	$	3,176,114		$	2,520,519			26	%
Book value per share (end of period)	$	17.71		$	15.54			14	%	$	17.71		$	15.54			14	%
Tangible book value per share (end of period)	$	9.82		$	8.37			17	%	$	9.82		$	8.37			17	%
							Nominal									Nominal
RATIOS & OTHER INFORMATION:							Inc/(Dec)									Inc/(Dec)
Net interest margin (net interest income as a % of average earning assets) (1)		3.72	%		3.66	%		0.06	%		3.87	%		3.65	%		0.22	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)		3.47	%		3.41	%		0.06	%		3.59	%		3.42	%		0.17	%
Return on average assets		1.08	%		1.37	%		-0.29	%		0.29	%		1.39	%		-1.10	%
Return on average equity		10.63	%		14.51	%		-3.88	%		2.66	%		14.72	%		-12.06	%
At period end:
Tier 1 leverage capital ratio		7.58	%		6.65	%		0.93	%		7.58	%		6.65	%		0.93	%
Tangible equity/tangible assets		6.45	%		5.37	%		1.08	%		6.45	%		5.37	%		1.08	%
Total risk based capital ratio		12.16	%		11.29	%		0.87	%		12.16	%		11.29	%		0.87	%
Non-performing loans	$	77,559		$	59,762			30	%	$	77,559		$	59,762			30	%
Total non-performing assets	$	81,103		$	63,103			29	%	$	81,103		$	63,103			29	%
Non-performing loans as a % of total loans		0.42	%		0.37	%		0.05	%		0.42	%		0.37	%		0.05	%
Non-performing assets as a % of total assets		0.28	%		0.24	%		0.04	%		0.28	%		0.24	%		0.04	%
Full service banking offices		386			359						386			359
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Noninterest income as a percent of total income (2)		27.13	%		27.86	%		-0.73	%		26.42	%		27.71	%		-1.29	%
Merger and consolidation costs on a net of tax basis (3)	$	40,395		$	5,275			666	%	$	32,316		$	855			3680	%
Per diluted share:	$	0.23		$	0			667	%	$	0.17		$	0.01			1600	%
Deleveraging losses, net of tax basis (4)	$	51,560			—			NM		$	51,560			—			NM
Per diluted share:	$	0.30			—			NM		$	0.29			—			NM
Noninterest expense (5)	$	653,919		$	602,676			9	%	$	167,528		$	154,360			9	%
Return on average assets (6)		1.41	%		1.39	%		0.02	%		1.46	%		1.41	%		0.05	%
Cash return on average tangible assets (6) (7)		1.48	%		1.45	%		0.03	%		1.53	%		1.49	%		0.04	%
Return on average equity (6)		13.84	%		14.71	%		-0.87	%		13.43	%		14.86	%		-1.43	%
Cash return on average tangible equity (6) (7)		25.99	%		26.60	%		-0.61	%		24.80	%		27.86	%		-3.06	%
Efficiency ratio (8)		51.05	%		51.71	%		-0.66	%		50.10	%		52.32	%		-2.22	%
Cash efficiency ratio (9)		50.38	%		50.94	%		-0.56	%		49.42	%		51.53	%		-2.11	%

(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)	Deleveraging losses consist of losses on securities sales and prepayment penalties on borrowings incurred in connection with a balance sheet restructuring in October 2004.
(5)	Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(6)	Excludes merger and consolidation costs and deleveraging losses, net of related tax benefits.
(7)	Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(8)	Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(9)	Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets.

6

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)

	Three Months Ended December 31,
	2004						2003
	Average			Yield/			Average			Yield/
(Dollars in thousands)	Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
Residential real estate mortgages	$	3,138,974			4.94	%	$	2,718,881			5.25	%
Commercial real estate mortgages		6,250,243			5.95	%		5,392,549			5.78	%
Commercial loans and leases		3,853,844			5.19	%		3,233,277			4.83	%
Consumer loans and leases		5,308,272			5.28	%		4,676,259			5.29	%
		18,551,333			5.43	%		16,020,966			5.36	%
Securities		6,974,995			4.51	%		7,432,088			4.09	%
Federal funds sold and other short-term investments		12,461			0.95	%		5,176			2.00	%
Securities purchased under agreements to resell		1,667			1.75	%		—			0.00	%
Total earning assets		25,540,456			5.18	%		23,458,230			4.96	%
Bank owned life insurance		519,506						484,428
Noninterest-earning assets		2,516,439						2,124,138
Total assets	$	28,576,401					$	26,066,796
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
Regular savings	$	2,568,297			0.29	%	$	2,476,385			0.37	%
Retail money market and NOW accounts		8,057,876			0.86	%		6,982,431			0.79	%
Retail certificates of deposit		4,539,483			2.04	%		4,803,437			2.10	%
Brokered deposits		576			2.38	%		—			0.00	%
Total interest-bearing deposits		15,166,232			1.12	%		14,262,253			1.16	%
Borrowed funds		5,805,974			2.83	%		5,643,402			2.51	%
Total interest-bearing liabilities		20,972,206			1.59	%		19,905,655			1.54	%
Noninterest bearing deposits		4,319,603						3,494,692
Other liabilities		187,705						198,424
Shareholders’ equity		3,096,887						2,468,025
Total liabilities and shareholders’ equity	$	28,576,401					$	26,066,796
Net earning assets	$	4,568,250					$	3,552,575
Net interest income (fully taxable equivalent)	$	247,821					$	214,865
Less: fully taxable equivalent adjustments		(1,758	)					(1,577	)
Net interest income	$	246,063					$	213,288
Net interest rate spread (fully taxable equivalent)					3.59	%					3.42	%
Net interest margin (fully taxable equivalent)					3.87	%					3.65	%

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

7

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)

	Year Ended December 31,
	2004						2003
	Average			Yield/			Average			Yield/
(Dollars in thousands)	Balance			Rate			Balance			Rate
Assets
Loans and leases (1)
Residential real estate mortgages	$	2,997,572			5.01	%	$	2,839,969			5.61	%
Commercial real estate mortgages		5,959,510			5.79	%		5,162,413			6.06	%
Commercial loans and leases		3,686,919			4.92	%		3,153,293			5.10	%
Consumer loans and leases		5,090,536			5.13	%		4,477,532			5.61	%
		17,734,537			5.29	%		15,633,207			5.65	%
Securities		7,501,956			4.33	%		7,464,162			4.22	%
Federal funds sold and other short-term investments		9,567			0.86	%		11,004			1.46	%
Securities purchased under agreements to resell		419			1.75	%		—			0.00	%
Total earning assets		25,246,479			5.00	%		23,108,373			5.19	%
Bank owned life insurance		503,957						465,446
Noninterest-earning assets		2,422,988						2,042,528
Total assets	$	28,173,424					$	25,616,347
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
Regular savings	$	2,563,838			0.29	%	$	2,399,179			0.46	%
Retail money market and NOW accounts		7,678,644			0.81	%		6,652,030			0.89	%
Retail certificates of deposit		4,647,746			1.96	%		5,027,739			2.36	%
Brokered deposits		272			2.03	%		—			0.00	%
Total interest-bearing deposits		14,890,500			1.08	%		14,078,948			1.34	%
Borrowed funds		6,245,995			2.60	%		5,693,420			2.87	%
Total interest-bearing liabilities		21,136,495			1.53	%		19,772,368			1.78	%
Noninterest bearing deposits		3,987,311						3,224,035
Other liabilities		184,078						203,018
Shareholders’ equity		2,865,540						2,416,926
Total liabilities and shareholders’ equity	$	28,173,424					$	25,616,347
Net earning assets	$	4,109,984					$	3,336,005
Net interest income (fully taxable equivalent)	$	939,853					$	846,727
Less: fully taxable equivalent adjustments		(6,471	)					(5,896	)
Net interest income	$	933,382					$	840,831
Net interest rate spread (fully taxable equivalent)					3.47	%					3.41	%
Net interest margin (fully taxable equivalent)					3.72	%					3.66	%

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

8

Banknorth Group, Inc. and Subsidiaries

Asset Quality (unaudited)
(Dollars in thousands)

	12/31/2004			9/30/2004			6/30/2004			3/31/2004			12/31/2003
Non-performing assets:
Residential real estate mortgages	$	7,846		$	7,274		$	7,870		$	7,990		$	7,157
Commercial real estate mortgages		29,948			33,249			27,951			24,619			19,700
Commercial business loans and leases		32,421			18,573			23,636			28,978			24,412
Consumer loans and leases		7,344			6,827			5,685			6,267			8,493
Total non-performing loans and leases		77,559			65,923			65,142			67,854			59,762
Other non-performing assets, net		3,544			2,056			2,025			2,700			3,341
Total non-performing assets	$	81,103		$	67,979		$	67,167		$	70,554		$	63,103
Allowance for loan and lease losses	$	243,152		$	242,885	(1)	$	247,620		$	233,297		$	232,287
Liability for unfunded credit commitments		6,707			6,600
Total allowance for credit losses	$	249,859		$	249,485
Net loan charge-offs (recoveries):
Residential real estate mortgages	$	(9	)	$	86		$	(42	)	$	(72	)	$	10
Commercial real estate mortgages		(486	)		(530	)		(663	)		(446	)		(168	)
Total real estate mortgages		(495	)		(444	)		(705	)		(518	)		(158	)
Commercial business loans and leases		5,594			2,939			3,387			1,785			2,402
Consumer loans and leases		5,305			6,310			6,160			7,223			8,111
Total net charge-offs	$	10,404		$	8,805		$	8,842		$	8,490		$	10,355
Ratios:
Allowance for credit losses to total loans and leases		1.34	%		1.36	%(1)		1.37	%		1.40	%		1.42	%
Allowance for credit losses to non-performing loans		322.15	%		378.45	%(1)		380.12	%		343.82	%		388.69	%
Non-performing loans to total loans and leases		0.42	%		0.36	%		0.36	%		0.41	%		0.37	%
Non-performing assets to total assets		0.28	%		0.23	%		0.23	%		0.26	%		0.24	%
Net charge-offs to average loans — QTD (2)		0.22	%		0.19	%		0.20	%		0.21	%		0.26	%

(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.
(2)	Annualized.

9

Banknorth Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

(In thousands, except per share data)	Three Months Ended
	12/31/2004			9/30/2004		6/30/2004		3/31/2004		12/31/2003
Interest and dividend income	$	329,846		$	325,361	$	309,146	$	292,652	$	290,414
Interest expense		83,783			85,701		79,096		75,043		77,126
Net interest income		246,063			239,660		230,050		217,609		213,288
Provision for loan and lease losses		10,670			10,670		9,500		9,500		10,400
Net interest income after provision
for loan and lease losses		235,393			228,990		220,550		208,109		202,888
Noninterest income:
Deposit services		28,326			27,583		27,260		26,153		25,881
Insurance brokerage commissions		11,880			12,417		12,278		13,736		11,480
Merchant and electronic banking income, net		13,368			13,723		13,069		10,404		10,542
Wealth management services		10,489			10,280		9,870		9,149		8,470
Bank owned life insurance		5,779			5,732		6,275		5,496		5,978
Investment planning services		4,799			4,634		5,146		4,839		4,765
Net gains/(losses) on sales of securities		(17,761	)		3,124		3,355		3,581		2,682
Other noninterest income		13,711			14,020		12,223		14,859		14,637
		70,591			91,513		89,476		88,217		84,435
Noninterest expense:
Salaries and employee benefits		90,138			91,935		87,005		87,534		81,451
Occupancy and equipment expense		29,320			27,940		27,512		27,599		26,731
Data processing		11,568			11,118		10,018		10,436		9,881
Advertising and marketing		5,445			6,278		6,303		7,523		5,430
Amortization of identifiable intangible assets		2,260			2,379		2,084		1,904		2,324
Merger and consolidation costs (1)		38,286			5,603		4,135		1,614		1,316
Prepayment penalties on borrowings		61,546			—		—		—		—
Other noninterest expense		28,796			28,945		26,769		23,109		28,543
		267,359			174,198		163,826		159,719		155,676
Income before income tax expense		38,625			146,305		146,200		136,607		131,647
Income tax expense		17,927			48,534		50,353		46,280		40,085
Net Income	$	20,698		$	97,771	$	95,847	$	90,327	$	91,562
Weighted average shares outstanding:
Basic		177,071			173,271		169,637		162,965		162,149
Diluted		179,953			176,756		173,109		166,657		165,685
Earnings per share:
Basic	$	0.12		$	0.56	$	0.57	$	0.55	$	0.56
Diluted		0.12			0.55		0.55		0.54		0.55

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

10

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

(In thousands, except per share data)	Three Months Ended
	12/31/2004			9/30/2004			6/30/2004			3/31/2004			12/31/2003
Net interest income	$	246,063		$	239,660		$	230,050		$	217,609		$	213,288
Net income	$	20,698		$	97,771		$	95,847		$	90,327		$	91,562
Shares outstanding (end of period)		179,298			174,023			172,546			163,046			162,188
Weighted average shares outstanding:
Basic		177,071			173,271			169,637			162,965			162,149
Diluted		179,953			176,756			173,109			166,657			165,685
Earnings per share:
Basic	$	0.12		$	0.56		$	0.57		$	0.55		$	0.56
Diluted	$	0.12		$	0.55		$	0.55		$	0.54		$	0.55
Shareholders’ equity (end of period)	$	3,176,114		$	3,046,242		$	2,866,692		$	2,651,911		$	2,520,519
Book value per share (end of period)	$	17.71		$	17.50		$	16.61		$	16.26		$	15.54
Tangible book value per share (end of period)	$	9.82		$	9.34		$	8.39		$	9.14		$	8.37
RATIOS & OTHER INFORMATION:
Net interest margin (net interest income as a % of average earning assets) (1)		3.87	%		3.68	%		3.66	%		3.68	%		3.65	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)		3.59	%		3.42	%		3.43	%		3.46	%		3.42	%
Return on average assets		0.29	%		1.33	%		1.36	%		1.37	%		1.39	%
Return on average equity		2.66	%		13.24	%		13.54	%		14.13	%		14.72	%
At period end:
Tier 1 leverage capital ratio		7.58	%		6.95	%		6.80	%		6.84	%		6.65	%
Tangible equity/tangible assets		6.45	%		5.89	%		5.20	%		5.79	%		5.37	%
Total risk based capital ratio		12.16	%		11.62	%		11.13	%		11.47	%		11.29	%
Non-performing loans	$	77,559		$	65,923		$	65,142		$	67,854		$	59,762
Total non-performing assets	$	81,103		$	67,979		$	67,167		$	70,554		$	63,103
Non-performing loans as a % of total loans		0.42	%		0.36	%		0.36	%		0.41	%		0.37	%
Non-performing assets as a % of total assets		0.28	%		0.23	%		0.23	%		0.26	%		0.24	%
Full service banking offices		386			387			389			358			359
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Noninterest income as a percent of total income (2)		26.42	%		26.94	%		27.24	%		28.00	%		27.71	%
Merger and consolidation costs on a net of tax basis (3)	$	32,316		$	4,342		$	2,687		$	1,049		$	855
Per diluted share:	$	0.17		$	0.03		$	0.02		$	0.01		$	0.01
Deleveraging, net of tax basis (4)	$	51,560			—			—			—			—
Per diluted share:	$	0.29			—			—			—			—
Noninterest expense (5)	$	167,528		$	168,595		$	159,691		$	158,105		$	154,360
Return on average assets (6)		1.46	%		1.39	%		1.40	%		1.39	%		1.41	%
Cash return on average tangible assets (6) (7)		1.53	%		1.49	%		1.49	%		1.47	%		1.49	%
Return on average equity (6)		13.43	%		13.82	%		13.92	%		14.29	%		14.86	%
Cash return on average tangible equity (6) (7)		24.80	%		27.20	%		26.67	%		26.44	%		27.86	%
Efficiency ratio (8)		50.10	%		51.39	%		50.51	%		52.31	%		52.32	%
Cash efficiency ratio (9)		49.42	%		50.67	%		49.85	%		51.68	%		51.53	%

(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)	Deleveraging losses consist of losses on securities sales and prepayment penalties on borrowings incurred in connection with a balance sheet restructuring in October 2004.
(5)	Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(6)	Excludes merger and consolidation costs and deleveraging losses, net of related tax benefits.
(7)	Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(8)	Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(9)	Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets.

Ratios are annualized where appropriate.

11

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

(In thousands, except per share data)	Three Months Ended
	12/31/2004			9/30/2004			6/30/2004			3/31/2004			12/31/2003
Net income (GAAP)	$	20,698		$	97,771		$	95,847		$	90,327		$	91,562
Add back merger and consolidation costs and deleveraging losses, net of tax
Merger related		32,381			4,342			2,687			1,354			862
Branch Closings		—			—			—			—			(7	)
Revised auto lease residual charge		(65	)		—			—			(305	)		—
Deleveraging		51,560
Excluding merger and consolidation costs and deleveraging losses		104,574			102,113			98,534			91,376			92,417
Add back amortization of intangibles, net of tax		1,469			1,547			1,354			1,238			1,511
Cash basis, excluding merger and consolidation costs and
deleveraging losses	$	106,043		$	103,660		$	99,888		$	92,614		$	93,928
Basic earnings per share (GAAP)	$	0.12		$	0.56		$	0.57		$	0.55		$	0.56
Effects of merger and consolidation costs, net of tax		0.18			0.03			0.01			0.01			0.01
Effects of deleveraging losses, net of tax		0.29			—			—			—			—
Excluding merger and consolidation costs and deleveraging losses		0.59			0.59			0.58			0.56			0.57
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 and deleveraging losses	$	0.60		$	0.60		$	0.59		$	0.57		$	0.58
Diluted earnings per share (GAAP)	$	0.12		$	0.55		$	0.55		$	0.54		$	0.55
Effects of merger and consolidation costs, net of tax		0.17			0.03			0.02			0.01			0.01
Effects of deleveraging losses, net of tax		0.29			—			—			—			—
Excluding merger and consolidation costs and deleveraging losses		0.58			0.58			0.57			0.55			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 and deleveraging losses	$	0.59		$	0.59		$	0.58		$	0.56		$	0.57
Return on average assets (GAAP)		0.29	%		1.33	%		1.36	%		1.37	%		1.39	%
Effects of merger and consolidation costs, net of tax		0.45	%		0.06	%		0.04	%		0.02	%		0.02	%
Effects of deleveraging losses, net of tax		0.72	%		0.00	%		0.00	%		0.00	%		0.00	%
Excluding merger and consolidation costs and deleveraging losses		1.46	%		1.39	%		1.40	%		1.39	%		1.41	%
Effects of amortization of intangibles, net of tax		0.07	%		0.10	%		0.09	%		0.08	%		0.08	%
Cash basis, excluding merger and consolidation costs and deleveraging losses		1.53	%		1.49	%		1.49	%		1.47	%		1.49	%
Return on average equity (GAAP)		2.66	%		13.24	%		13.54	%		14.13	%		14.72	%
Effects of merger and consolidation costs, net of tax		4.15	%		0.58	%		0.38	%		0.16	%		0.14	%
Effects of deleveraging losses, net of tax		6.62	%		0.00	%		0.00	%		0.00	%		0.00	%
Excluding merger and consolidation costs and deleveraging losses		13.43	%		13.82	%		13.92	%		14.29	%		14.86	%
Effects of amortization of intangibles, net of tax		11.37	%		13.38	%		12.75	%		12.15	%		13.00	%
Cash basis, excluding merger and consolidation costs and deleveraging losses		24.80	%		27.20	%		26.67	%		26.44	%		27.86	%
Efficiency ratio		84.43	%		52.60	%		51.27	%		52.23	%		52.29	%
Effects of securities gains (losses)		-22.89	%		0.50	%		0.54	%		0.61	%		0.47	%
Effects of merger and consolidation costs and prepayment penalties		-11.44	%		-1.71	%		-1.30	%		-0.53	%		-0.44	%
Excluding securities gains (losses) and merger and consolidation costs and prepayment penalties		50.10	%		51.39	%		50.51	%		52.31	%		52.32	%
Effects of amortization of intangibles		-0.68	%		-0.72	%		-0.66	%		-0.63	%		-0.79	%
Cash basis, excluding securities gains (losses), prepayment penalties and merger and consolidation costs		49.42	%		50.67	%		49.85	%		51.68	%		51.53	%
Non Interest Income	$	70,591		$	91,513		$	89,476		$	88,217		$	84,435
Net gains (losses) on sales of securities		(17,761	)		3,124			3,355			3,581			2,682
Excluding securities gains (losses)	$	88,352		$	88,389		$	86,121		$	84,636		$	81,753
Non Interest Expense	$	267,359		$	174,198		$	163,826		$	159,719		$	155,676
Merger and consolidation costs		38,286			5,603			4,135			1,614			1,316
Prepayment penalties on borrowings		61,546			—			—			—			—
Excluding merger and consolidation costs and prepayment penalties	$	167,527		$	168,595		$	159,691		$	158,105		$	154,360

     

12

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

(In thousands, except per share data)	Year Ended
	12/31/2004			12/31/2003
Net income (GAAP)	$	304,643		$	350,759
Add back merger and consolidation costs and deleveraging losses, net of tax Merger related		40,765			5,709
Branch closings		—			(34	)
Revised auto lease residual charge		(370	)		(400	)
Deleveraging		51,560			—
Excluding merger and consolidation costs and deleveraging losses		396,598			356,034
Add back amortization of intangibles, net of tax		5,608			5,815
Cash basis, excluding merger and consolidation costs and deleveraging losses	$	402,206		$	361,849
Basic earnings per share (GAAP)	$	1.78		$	2.18
Effects of merger and consolidation costs, net of tax		0.24			0.03
Effects of deleveraging losses, net of tax		0.30			—
Excluding merger and consolidation costs and deleveraging losses		2.32			2.21
Effects of amortization of intangibles, net of tax		0.04			0.04
Cash basis, excluding merger and consolidation costs and deleveraging losses	$	2.36		$	2.25
Diluted earnings per share (GAAP)	$	1.75		$	2.15
Effects of merger and consolidation costs, net of tax		0.23			0.03
Effects of deleveraging losses, net of tax		0.30			—
Excluding merger and consolidation costs and deleveraging losses		2.28			2.18
Effects of amortization of intangibles, net of tax		0.03			0.03
Cash basis, excluding merger and consolidation costs and deleveraging losses	$	2.31		$	2.21
Return on average assets (GAAP)		1.08	%		1.37	%
Effects of merger and consolidation costs, net of tax		0.14	%		0.02	%
Effects of deleveraging losses, net of tax		0.19	%		0.00	%
Excluding merger and consolidation costs and deleveraging losses		1.41	%		1.39	%
Effects of amortization of intangibles, net of tax		0.07	%		0.06	%
Cash basis, excluding merger and consolidation costs and deleveraging losses		1.48	%		1.45	%
Return on average equity (GAAP)		10.63	%		14.51	%
Effects of merger and consolidation costs, net of tax		1.41	%		0.20	%
Effects of deleveraging losses, net of tax		1.80	%		0.00	%
Excluding merger and consolidation costs and deleveraging losses		13.84	%		14.71	%
Effects of amortization of intangibles, net of tax		12.15	%		11.89	%
Cash basis, excluding merger and consolidation costs and deleveraging losses		25.99	%		26.60	%
Efficiency ratio		60.09	%		53.09	%
Effects of securities gains (losses)		-5.16	%		-0.69	%
Effects of merger and consolidation costs and prepayment penalties		-3.88	%		-0.69	%
Excluding securities gains (losses), prepayment penalties on borrowings, and merger and consolidation costs		51.05	%		51.71	%
Effects of amortization of intangibles		-0.67	%		-0.77	%
Cash basis, excluding securities gains (losses), prepayment penalties on borrowings, and merger and consolidation costs		50.38	%		50.94	%
Non Interest Income	$	339,799		$	367,159
Net gains (losses) on sales of securities		(7,701	)		42,460
Excluding securities gains (losses)	$	347,500		$	324,699
Non Interest Expense	$	765,101		$	641,270
Merger and consolidation costs		49,635			8,104
Prepayment penalties on borrowings		61,546			30,490
Excluding merger and consolidation costs and prepayment penalties	$	653,920		$	602,676

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