9% Increase in Quarterly Dividend at Peoples Heritage

Portland, Maine, July 27, 1999 -- Peoples Heritage Financial Group, Inc. (NASDAQ: PHBK) announced today that its Board of Directors has voted to increase the Company's quarterly dividend to 12 cents per share based on earnings for the second quarter ended June 30, 1999. The dividend represents a 9 percent increase over the dividend paid for the same quarter a year ago and is a half cent per share higher than the dividend paid for the previous quarter.

The dividend will be paid on August 17, 1999 to shareholders of record on August 6, 1999. The Company recently reported record quarterly net income of $40.8 million, or 39 cents per diluted share, for the quarter ended June 30, 1999.

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 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.

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