-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P+XkgLyb0phc477SDPlA/eUsCNpzN+yIabTciDACuR9TOIwwoLHDRRI0svy+40mQ XQF/TAgBeSKvtSIJ/ze4+Q== 0000950135-99-003631.txt : 19990728 0000950135-99-003631.hdr.sgml : 19990728 ACCESSION NUMBER: 0000950135-99-003631 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990720 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLES HERITAGE FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000829750 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 010437984 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-16947 FILM NUMBER: 99670831 BUSINESS ADDRESS: STREET 1: ONE PORTLAND SQ STREET 2: P O BOX 9540 CITY: PORTLAND STATE: ME ZIP: 04112 BUSINESS PHONE: 2077618500 MAIL ADDRESS: STREET 1: P O BOX 9540 CITY: PORTLAND STATE: ME ZIP: 04112-9540 8-K 1 PEOPLES HERITAGE FINANCIAL GOUP, INC. 1 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 July 20 and 26, 1999 - -------------------------------------------------------------------------------- (Date of earliest event reported) Peoples Heritage Financial Group, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maine 0-16947 01-0437984 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) P.O. Box 9540, One Portland Square, Portland, Maine 04112-9540 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (207) 761-8500 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 2 ITEM 5. OTHER EVENTS On July 20 and July 26, 1999, Peoples Heritage Financial Group, Inc. issued the press releases included as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K, respectively, which are hereby incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) The following exhibits are included with this Current Report on Form 8-K: Exhibit 99.1 Press release, dated July 20, 1999 Exhibit 99.2 Press release, dated July 26, 1999 2 3 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. PEOPLES HERITAGE FINANCIAL GROUP, INC. By: /s/ Peter J. Verrill ------------------------------------- Name: Peter J. Verrill Title: Executive Vice President, Chief Financial Officer and Treasurer Date: July 26, 1999 3 EX-99.1 2 PRESS RELEASE DATED JULY 20, 1999 1 Peoples Heritage Financial Group P.O. Box 9540 NEWS RELEASE Portland, ME 04112-9540 Tel: 207-761-8500 [PEOPLES LOGO] FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT: BRIAN ARSENAULT, SENIOR VICE PRESIDENT, CORPORATE COMMUNICATIONS (207) 761-8517 (Second quarter earnings conference call at 1:30 p.m. eastern time today, July 20, 1999. Conference call telephone number: 1 800 289-0436, confirmation code, 720976. 48-hour replay number available, 1 888 203-1112, same access code.) RECORD QUARTER EARNINGS AT PEOPLES HERITAGE FINANCIAL GROUP COMPANY TO COMMENCE REPURCHASE OF UP TO 4 MILLION SHARES Portland, Maine, July 20, 1999 -- People Heritage Financial Group, Inc. (NASDAQ:PHBK) today announced record quarterly earnings of $40.8 million, or 39 cents per diluted share, for the second quarter ended June 30, 1999. The Company also announced plans to repurchase up to 4 million shares of its common stock in the open market. The record quarterly earnings for the quarter ended June 30, 1999 were up 11% over operating earnings for the second quarter a year ago of $36.6 million, or 35 cents per diluted share. Net income was up $28.2 million, or 225 percent, from net income for the quarter ended June 30, 1998 but the second quarter of last year was negatively affected by one-time charges related to the acquisition of CFX Corporation. For the six months ended June 30, 1999, the Company reported net income of $54.3 million, or 52 cents per diluted share, which was 25 percent higher than net income of $43.7 million, or 41 cents per diluted share, for the same period of 1998. Operating income for the first six months of 1999 was $78.3 million, or 75 cents per diluted share, 15 percent higher than operating income of $68.3 million, or 65 cents per diluted share, for the first six months of 1998. "With a strong record quarter in hand, we decided to further enhance shareholder value by repurchasing shares," said William J. Ryan, Company Chairman, President and Chief Executive Officer. Mr. Ryan said that management believes that plans to repurchase up to 4 million shares constitute an attractive use of the Company's capital at this time. He said that a repurchase program expresses the Company's confidence in its performance and its stock. Mr. Ryan also announced that the Company will not be bidding on the divestitures resulting from the merger of Fleet Financial Group and BankBoston Corporation. He said that a key factor in the Company's decision not to bid was reaching agreement during the second quarter of 1999 to acquire Banknorth Group. 2 2 "Our early interest in the Fleet/BankBoston divestitures was to improve our Massachusetts franchise," said Mr. Ryan. "The Banknorth acquisition allows us to do that, gaining the second largest market share in the Worcester, Massachusetts area, New England's second largest city, while also providing us entry into Vermont and upstate New York and adding to our New Hampshire franchise. With that accomplished, the best next step for our shareholders is, in our view, a repurchase program." Strengths of the quarter ended June 30, 1999 included double digit growth in consumer and commercial business loans over loan totals in those two categories at June 30, 1998. While total loans declined by 9% from June 30, 1998 to June 30, 1999, due mostly to the Company's securitization of $601 million of residential mortgages during the second quarter, net interest income grew by 3 percent because of the higher yields generated by commercial and consumer loans. "We are consciously changing our balance sheet to focus on higher yielding consumer and commercial loans while reducing dependence on lower yielding mortgage loans," said Mr. Ryan. Another strength of the quarter ended June 30, 1999 was a 12 percent increase in noninterest income over the same quarter a year ago. Fee income from the Company's insurance agency business increased 55% for the quarter ended June 30, 1999 over the quarter ended June 30, 1998 and trust and investment income increased 24% for the same periods. Return on average equity (ROE) for the quarter ended June 30, 1999 was 18.08%, up a full point from the quarter ended June 30, 1998 and represented the first quarter the Company's ROE has exceeded 18 percent. Return on average assets for the second quarter of 1999 remained relatively stable at 1.25%. Net interest margin for the quarter ended June 30, 1999 was down to 3.62% for the second quarter, largely because of price competition on loans and an increased level of investment securities on the Company's balance sheet. The Company achieved a new low in its efficiency ratio of 54.49% for the quarter ended June 30, 1999, as compared to 56.84% for the same quarter a year ago. Peoples Heritage Financial Group is a multi-state banking and financial services holding company with total assets of $13.5 billion. The Company owns Peoples Heritage Bank with the leading market share in Maine, Bank of New Hampshire with the leading market share in the sate, Family/SIS Bank in Massachusetts and Glastonbury Bank & Trust in Connecticut. On June 2, 1999, the Company announced that it had reached agreement to acquire Banknorth Group, Inc. (NASDAQ:BKNG), a $4.4 billion bank holding company with banks in Vermont, Massachusetts, upstate New York and New Hampshire. The acquisition is expected to close around year-end 1999. (end) 3 Peoples Heritage Financial Group, Inc. and Subsidiaries - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, -------------------- % (In Thousands) 1999 1998 Change ---- ---- ------ Cash and due from banks $ 397,060 $ 467,038 -15% Federal funds sold and other short-term investments 45,194 254,001 -82% Securities available for sale 5,044,822 2,181,199 131% Securities held to maturity 601,151 233,767 157% Loans and leases held for sale 132,325 653,272 -80% Loans and leases: Residential real estate mortgages 1,533,439 2,704,749 -43% Commercial real estate mortgages 1,727,284 1,587,129 9% Commercial business loans and leases 1,267,105 1,136,649 11% Consumer loans and leases 2,088,700 1,838,553 14% ----------- ----------- Total loans and leases 6,616,528 7,267,080 -9% Less: Allowance for loan losses 110,639 110,371 0% ----------- ----------- Loan and leases, net 6,505,889 7,156,709 -9% Premises and equipment 139,541 145,246 -4% Goodwill and other intangible assets 117,144 122,324 -4% Mortgage servicing rights 47,314 96,056 -51% Bank owned life insurance 222,262 65,152 241% Other assets 226,996 234,977 -3% ----------- ----------- $13,479,698 $11,069,741 16% =========== =========== - ---------------------------------------------------------------------------------- LIABILITIES & SHAREHOLDERS' EQUITY Deposits: Regular savings $ 1,285,715 $ 1,352,426 -5% Retail money market and NOW accounts 2,112,302 1,880,620 12% Retail certificates of deposit 3,335,663 3,417,945 -2% Brokered deposits 185,155 303,995 -39% Demand deposits 1,285,492 1,256,978 2% ----------- ----------- Total deposits 8,204,327 8,211,964 0% ----------- ----------- Borrowings from Federal Home Loan Bank 3,644,173 1,736,569 110% Securities sold under repurchase agreements 568,413 540,201 5% Other borrowings 33,441 29,809 12% Other liabilities 65,839 136,204 -52% ----------- ----------- Total liabilities 12,516,193 10,654,747 17% ----------- ----------- Company obligated, mandatorily redeemable securities of subsidiary trust holding solely parent junior subordinated debentures 68,775 100,000 -31% Shareholders' equity 894,730 854,994 5% ----------- ----------- $13,479,698 $11,609,741 16% =========== =========== - ----------------------------------------------------------------------------------
4
Peoples Heritage Financial Group, Inc. and Subsidiaries - ----------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In Thousands, except number of Six Months Ended June 30, % Three Months Ended June 30, % shares and per share data) ------------------------------ ------------------------------ 1999 1998 Change 1999 1998 Change ---------------------------------------------------------------------------- Interest and dividend income $ 430,598 $ 418,293 3% $ 220,350 $ 208,614 6% Interest expense 213,534 205,522 4% 111,224 102,395 9% ------------- ------------ ------------ ------------ Net interest income 217,064 212,771 2% 109,126 106,219 3% Provision for loan and lease loans 7,130 6,484 10% 3,565 3,235 10% Net interest income after provision ------------- ------------ ------------ ------------ for loan and lease losses 209,934 206,287 2% 105,561 102,984 3% ------------- ------------ ------------ ------------ Noninterest income: Customer services 23,550 19,555 20% 12,738 10,070 26% Mortgage banking services 10,781 16,884 -36% 6,576 9,517 -31% Trust and investment advisory services 9,645 7,796 24% 5,200 4,189 24% Net gains on sales securities of 278 2,052 -86% 260 2 NM Insurance commissions 9,596 5,688 69% 4,314 2,790 55% Bank owned life insurance 5,318 1,926 176% 3,009 878 NM Other noninterest income 4,046 5,089 -20% 1,683 2,828 -10% ------------- ------------ ------------ ------------ 63,214 58,990 7% 33,780 30,274 12% ------------- ------------ ------------ ------------ Noninterest expense: Salaries and employee benefits 79,340 82,995 -4% 39,170 40,183 -3% Data processing 14,099 11,410 24% 7,093 5,596 27% Occupancy and equipment expense 24,118 24,556 -2% 12,362 11,472 8% Distributions on securities of subsidiary trust 3,571 4,530 -21% 1,585 2,286 -31% Amortization of goodwill & deposit premiums 5,901 5,776 2% 2,993 2,914 1% Special charges (1) 33,235 35,374 -6% 0 34,474 100% Other noninterest expense 30,052 34,694 -13% 16,169 17,422 -7% ------------- ------------ ------------ ------------ 190,316 199,335 -5% 79,312 114,347 -31% ------------- ------------ ------------ ------------ Income before income tax expense 82,832 65,942 26% 60,029 18,911 NM Income tax expense 28,572 22,290 28% 19,263 6,375 NM ------------- ---------- ------------ ------------ Net income $ 54,260 $ 43,652 24% $ 40,766 $ 12,536 NM ------------- ------------ ------------ ------------ Weighted average shares outstanding Basic 103,708,421 103,391,860 0% 103,957,104 103,404,866 1% Diluted 105,003,725 105,750,425 -1% 105,121,969 105,761,510 -1% Earnings per share: Basic $ 0.52 $ 0.42 24% $ 0.39 $ 0.12 225% Diluted $ 0.52 $ 0.41 25% $ 0.39 $ 0.12 225% - ----------------------------------------------------------------------------------------------------------------------------------- Operating Financial Data - ------------------------ Operating non-interest expense (2) $ 157,081 $ 163,961 -4% $ 79,312 $ 79,873 -1% Operating net income (3) $ 78,339 $ 68,279 15% $ 40,766 $ 36,578 11% Basic Operating earnings per share (3) $ 0.76 $ 0.66 14% $ 0.39 $ 0.35 11% Diluted operating earnings per share (3) $ 0.75 $ 0.65 16% $ 0.39 $ 0.35 11%
(1) Consists of merger related charges of $25,871 and $35,374 and costs to discontinue the correspondent mortgage business of $7,364 and $0 for the six months ended June 30, 1999 and 1998. For the quarter ended June 30, 1998, special charges consists of merger related charges. (2) Excludes pre-tax special charges of $33,235 ad $35,374 for the six months ended June 30, 1999 and 1998 and $0 and $34,474 for the quarters ended June 30, 1999 and 1998, respectively. (3) Excludes post-tax special charges of $24,079 and $24,627 for the six months ended June 30, 1999 and 1998 and $0 and $24,042 for the quarters ended June 30, 1999 and 1998, respectively. 5
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------------ (In Thousands, except number of shares and per share data) Six Months Ended June 30, Three Months Ended June 30, ------------------------------- --------------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Net interest income $ 217,064 $ 212,771 $ 109,126 $ 106,219 Net income $ 54,260 $ 43,652 $ 40,766 $ 12,536 Operating net income(1) $ 78,339 $ 58,279 $ 40,766 $ 36,578 Shares outstanding (end of period) 104,676,162 103,229,013 104,676,162 103,229,013 Weighted average shares outstanding: Basic 103,708,421 103,391,860 103,957,104 103,404,866 Diluted 105,003,725 105,750,425 105,121,969 105,761,510 Earnings per share: Basic $ 0.52 $ 0.42 $ 0.39 $ 0.12 Diluted $ 0.52 $ 0.41 $ 0.39 $ 0.12 Operating earnings per share(1): Basic $ 0.76 $ 0.66 $ 0.39 $ 0.35 Diluted $ 0.75 $ 0.65 $ 0.39 $ 0.35 Operating cash earnings per share(2): Basic $ 0.81 $ 0.72 $ 0.42 $ 0.38 Diluted $ 0.80 $ 0.70 $ 0.42 $ 0.37 Shareholders' equity $ 894,730 $ 854,994 $ 894,730 $ 854,994 Book value per share $ 8.55 $ 8.28 $ 8.55 $ 8.28 Tangible book value per share $ 7.43 $ 7.10 $ 7.43 $ 7.10 - ------------------------------------------------------------------------------------------------------------------------ Ratios: Net interest margin (net interest income as a % of average earning assets)(3) 3.74% 4.07% 3.62% 4.03% Net interest spread (yield on earning assets minus yield on interest- bearing liabilities)(3) 3.24% 3.53% 3.14% 3.47% Return on average assets 0.87% 0.76% 1.25% 0.43% Operating return on average assets(1) 1.25% 1.19% 1.25% 0.27% Operating cash return on average assets(2) 1.36% 1.31% 1.36% 1.38% Returns on average equity 12.34% 10.32% 18.08% 5.86% Operating return on average equity(1) 17.82% 16.14% 18.08% 17.08% Operating cash return on average equity(2) 22.20% 20.54% 22.32% 21.58% Tier 1 leverage capital ratio at end of period 6.88% 7.17% 6.88% 7.17% Efficiency ratio(4) 54.83% 59.11% 54.49% 56.84% Non-performing loans $ 51,739 $ 59,480 $ 51,739 $ 59,480 Total non-performing assets $ 62,320 $ 71,650 $ 62,320 $ 71,650 Non-performing loans as a % of total loans 0.78% 0.82% 0.78% 0.82% Non-performing assets as a % of total assets 0.46% 0.62% 0.46% 0.62% Full service banking offices 220 227 220 227 - ------------------------------------------------------------------------------------------------------------------------
(1) Excludes merger related and special charges of $24,079 and $24,627 after tax for the ended six months ended June 30, 1999 and 1998 and $0 and $24,042 after tax for the quarters ended June 30, 1999 and 1998, respectively. (2) Earnings before special charges and amortization of goodwill and core deposit premiums. (3) Adjusted to fully taxable equivalent basis. (4) Excludes distributions on securities of subsidiary trust, net gains on sales of securities and special charges. 6
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES ==================================================================================================================== CONSOLIDATED AVERAGE BALANCE SHEETS (UNAUDITED) THREE MONTHS ENDED JUNE 30, - --------------------------------------------------------------------------------- ---------------------------------- 1999 1998 - --------------------------------------------------------------------------------- ---------------------------------- Average Yield/ Average Yield/ (Dollars in Thousands) Balance Rate Balance Rate - --------------------------------------------------------------------------------- ---------------------------------- Assets Loans and leases(1) Residential real estate mortgages $ 1,801,616 7.24% $ 3,363,259 7.44% Commercial real estate mortgages 1,689,588 8.77% 1,600,841 9.44% Commercial loans and leases 1,232,071 8.47% 1,090,450 9.35% Consumer loans and leases 2,081,520 8.63% 2,017,090 8.87% ----------- ----------- 6,804,795 8.27% 8,071,640 8.45% Securities 5,103,801 6.12% 2,462,955 6.27% Federal funds sold & other short-term investments 189,798 4.93% 96,298 2.64% ----------- ----------- Total earning assets 12,098,394 7.31% 10,630,893 7.90% Earning assets 950,405 948,706 ----------- ----------- Total assets $13,048,799 $11,579,599 =========== =========== Utilities & Shareholders' Equity Interest-bearing deposits: Regular savings $ 1,268,159 2.03% $ 1,361,919 2.38% Retail money market and NOW accounts 2,078,200 2.41% 1,915,109 2.56% Retail certificates of deposit 3,391,976 4.93% 3,472,084 5.46% Brokered deposits 201,244 5.60% 315,289 5.73% ----------- ----------- Total interest-bearing deposits 6,939,579 3.67% 7,064,401 4.09% Borrowed funds 3,769,847 5.09% 2,215,643 5.49% ----------- ----------- Total interest-bearing liabilities 10,709,426 4.17% 9,280,044 4.43% Demand accounts 1,284,420 1,220,460 Other liabilities 80,378 120,338 Minority interest 69,987 100,000 Shareholders' equity 904,588 858,757 ----------- ----------- Total liabilities, minority interest and shareholders' equity $13,048,799 $11,579,599 =========== =========== earning assets $ 1,388,968 $ 1,350,849 =========== =========== interest income (fully taxable equivalent) $ 108,402 $ 107,029 : fully taxable equivalent adjustments (464) (810) ----------- ----------- interest income $ 107,938 $ 106,219 =========== =========== interest rate spread (fully taxable equivalent) 3.14% 3.47% interest margin (fully taxable equivalent) 3.62% 4.03% - --------------------------------------------------------------------------------- ----------------------------------
(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans. 7
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES ==================================================================================================================== CONSOLIDATED AVERAGE BALANCE SHEETS (UNAUDITED) SIX MONTHS ENDED JUNE 30, - --------------------------------------------------------------------------------- ---------------------------------- 1999 1998 - --------------------------------------------------------------------------------- ---------------------------------- Average Yield/ Average Yield/ (Dollars in Thousands) Balance Rate Balance Rate - --------------------------------------------------------------------------------- ---------------------------------- Assets Loans and leases(1) Residential real estate mortgages $ 2,176,886 7.32% $ 3,375,738 7.55% Commercial real estate mortgages 1,671,443 8.91% 1,598,831 9.50% Commercial loans and leases 1,186,214 8.81% 1,052,483 9.33% Consumer loans and leases 2,104,142 8.61% 1,995,058 8.92% ----------- ----------- 7,138,685 8.32% 8,022,110 8.51% Securities 4,346,071 6.10% 2,444,191 6.44% Federal funds sold & other short-term investments 188,141 4.52% 103,638 3.64% ----------- ----------- Total earning assets 11,672,897 7.43% 10,569,939 7.99% Earning assets 932,494 986,128 ----------- ----------- Total assets $12,605,391 $11,556,067 =========== =========== Utilities & Shareholders' Equity Interest-bearing deposits: Regular savings $ 1,252,356 2.03% $ 1,371,929 2.43% Retail money market and NOW accounts 2,057,633 2.40% 1,877,951 2.82% Retail certificates of deposit 3,420,717 5.06% 3,463,053 5.32% Brokered deposits 206,344 5.32% 302,750 5.83% ----------- ----------- Total interest-bearing deposits 6,937,050 3.73% 7,015,683 4.11% Borrowed funds 3,349,000 5.13% 2,287,356 5.52% ----------- ----------- Total interest-bearing liabilities 10,286,050 4.19% 9,303,039 4.46% Demand accounts 1,283,622 1,163,299 Other liabilities 71,708 136,588 Minority interest 77,452 100,000 Shareholders' equity 886,559 853,141 ----------- ----------- Total liabilities, minority interest and shareholders' equity $12,605,391 $11,556,067 =========== =========== earning assets $ 1,386,847 $ 1,266,900 =========== =========== interest income (fully taxable equivalent) $ 218,113 $ 214,142 : fully taxable equivalent adjustments (1,049) (1,371) ----------- ----------- interest income $ 217,064 $ 212,771 =========== =========== interest rate spread (fully taxable equivalent) 3.24% 3.53% interest margin (fully taxable equivalent) 3.74% 4.07% - --------------------------------------------------------------------------------- ----------------------------------
(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans. EX-99.2 3 PRESS RELEASE DATED JULY 26, 1999 1 Peoples Heritage Financial Group P.O. Box 9540 NEWS RELEASE Portland, ME 04112-9540 Tel: 207-761-8500 [PEOPLES LOGO] FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT: BRIAN ARSENAULT, SENIOR VICE PRESIDENT, CORPORATE COMMUNICATIONS (207) 761-8517 PEOPLES HERITAGE TO COMMENCE REPURCHASE PROGRAM ON JULY 27 Portland, Maine, July 26, 1999 -- Peoples Heritage Financial Group, Inc. (NASDAQ:PHBK) announced today that it will commence its previously announced repurchase of up to 4 million shares of its common stock tomorrow, July 27. The shares will be repurchased in open market transactions. Peoples Heritage Financial Group is a multi-state banking and financial services holding company with total assets of $13.5 billion. The Company owns Peoples Heritage Bank with the leading market share in Maine, Bank, of New Hampshire with the leading market share in that state, Family/SIS Bank in Massachusetts and Glastonbury Bank & Trust in Connecticut. On June 2, 1999, the Company announced that it had reached agreement to acquire Banknorth Group, Inc. (NASDAQ:BKNG), a $4.4 billion bank holding company with banks in Vermont, Massachusetts, upstate New York and New Hampshire. The acquisition is expected to close around year-end 1999. (end) -----END PRIVACY-ENHANCED MESSAGE-----