Banknorth Reports Record Quarterly Earnings

Portland, Maine, April 18, 2002 - Banknorth Group, Inc. (NASDAQ: BKNG) today announced record quarterly earnings of $67.3 million, or 45 cents per diluted share, for the first quarter ended March 31, 2002, up 22% on a dollar basis and up 15% on a per diluted share basis from earnings of $55.1 million, or 39 cents per diluted share, for the first quarter of 2001.

On an operating basis, exclusive of special charges which mostly related to the acquisitions of Andover Bancorp and MetroWest Bank in the fourth quarter of 2001, earnings for the quarter ended March 31, 2002 were $72.7 million, or 48 cents per diluted share. First quarter operating earnings were up 23% on a dollar basis and 14% on a per diluted share basis from the same quarter a year ago. Operating cash earnings, which are operating earnings exclusive of expenses associated with the amortization of deposit premiums and other intangible assets, were 50 cents per diluted share for the first quarter of 2002, up 11% from 45 cents for the same quarter a year ago.

"As we emerge from the recession of last year it is difficult to predict how fast business activity and employment levels will recover so we are pleased to achieve record earnings in what is historically our slowest quarter of the year," said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. "Our acquisitions meant higher expense growth than normal but they also contributed to stronger loan and deposit growth.

"Much of the additional expenses will be gone with the full integration of the acquisitions but we believe that the loan and deposit growth can be sustained in the current economic environment."

The improved earnings were primarily attributable to a 26% increase in net interest income for the quarter ended March 31, 2002 as compared to the same quarter a year ago. Total loans at the end of the first quarter were up 19% as compared to the end of the first quarter of 2001, largely due to the acquisitions of Andover and MetroWest. Banknorth's net interest margin for the first quarter of 2002 was 4.24% as compared to 3.78% for the same quarter a year ago.

Loan growth was achieved with continuing sound asset quality, with two key measurements for the quarter ended March 31, 2002 virtually the same as for the same quarter a year ago and the previous quarter ended December 31, 2001. Nonperforming loans as a percentage of total loans improved slightly to 0.56% at March 31, 2002 as compared to 0.57% at March 31, 2001 and to 0.59% at December 31, 2001. Nonperforming assets as a percentage of total assets at March 31, 2002 was the same as March 31, 2001 at 0.37% and slightly better than 0.39% at December 31, 2001.

The most significant areas of loan growth for the quarter ended March 31, 2002 were in residential and commercial mortgages, up 20% and 41%, respectively, over the same quarter a year ago. Period end total loans from December 31, 2001, which included loans from Andover and MetroWest, to March 31, 2002 increased by $52 million. Last year, during the same period, total loans actually decreased.

"The growth in loans during the quarter may well indicate a strengthening economy but certainly indicates our ability to compete successfully for available sound loans," said Mr. Ryan.

The most significant areas of deposit growth for the quarter ended March 31, 2002 were in the core areas of money market/NOW accounts and noninterest bearing deposits, principally checking accounts, up 27% and 22%, respectively, over the same quarter a year ago.

In the fee income area, investment planning services increased by 60% during the quarter ended March 31, 2002, as compared to the same quarter a year ago and merchant and electronic banking income increased 19% for the same periods. Trust and investment management services decreased 6% during the first quarter of 2002 as compared to the first quarter a year ago, reflecting stock market declines which negatively affect fees in the money management sector. Insurance brokerage commissions were up slightly.

During the first quarter of 2002, Banknorth repurchased 5.5 million shares at a weighted average price of $24.14 per share. At March 31, 2002, Banknorth was authorized to repurchase 8.2 million additional shares.

Shareholders' equity at March 31, 2002 was $1.70 billion, up from $1.36 billion at March 31, 2001. Book value per share at March 31, 2002 was $11.55, up from $9.82 at March 31, 2001.

Banknorth Group, Inc., headquartered in Portland, Maine, is one of the country's 35 largest commercial banking companies with total assets of $20.9 billion at March 31, 2002. The Company's banking subsidiary, Banknorth, N.A., operates banking divisions in Connecticut, Maine, Massachusetts, New Hampshire, New York and Vermont. Banknorth also operates subsidiaries and divisions in insurance, investment planning, money management, leasing, merchant services, mortgage banking, government banking and other financial services.

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Note: 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.