Banknorth Group Earnings Up 17% in 2003

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

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

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

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

The Company reported strong loan and deposit growth in 2003:

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

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

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

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

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

Banknorth Group, Inc., headquartered in Portland, Maine, is one of the country's 35 largest commercial banking companies with $26.5 billion in assets. The Company's banking subsidiary, Banknorth, N.A., operates banking divisions in Connecticut (Banknorth Connecticut); Maine (Peoples Heritage Bank); Massachusetts (Banknorth Massachusetts); New Hampshire (Bank of New Hampshire); New York (Evergreen Bank); and Vermont (Banknorth Vermont). The Company and Banknorth, N.A. also operate subsidiaries and divisions in insurance, money management, merchant services, mortgage banking, government banking and other financial services and offers investment products in association with PrimeVest Financial Services, Inc. The Companys 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 Òcash basisÓ 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 CompanyÕs 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.