Banknorth Reports Record Quarterly Earnings

(Third Quarter Earnings live webcast and webcast replay available at www.banknorth.com, Investor Relations.)

Portland, Maine, October 16, 2003 ö Banknorth Group, Inc. (NYSE: BNK) today reported record quarterly net income of $90.3 million for the third quarter ended September 30, 2003, up 17% from net income of $76.9 million for the third quarter a year ago. On a per diluted share basis, net income rose 8% to 55 cents for the third quarter of 2003 from 51 cents for the third quarter of 2002.

For the nine months ended September 30, 2003, net income was also up 17% over the first nine months of last year, to $259.2 million from $221.5 million. On a per diluted share basis, earnings for the first nine months of 2003 rose 7%, to $1.59 from $1.48 for the first nine months of 2002.

"Strong commercial and consumer loan growth and fee income growth coupled with solid expense control resulted in a record quarter in challenging economic times," said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer.

The Company indicated that it continues to be comfortable with the consensus earnings estimate of $2.18, exclusive of merger and consolidation charges, for 2003. For 2004, the Company indicated it was more comfortable with estimated earnings increases in the high single digits than those estimates above 10%.

Consumer loans and leases and commercial real estate loans at September 30, 2003 increased by more than 20% over the levels at September 30, 2002. Exclusive of acquisitions, consumer loans and leases increased 8% and commercial real estate loans increased 12%. Commercial business loans and leases were up 14% at September 30, 2003 over September 30, 2002, and increased 8% exclusive of acquisitions.

The loan growth helped offset a decline in the Company's net interest margin to 3.63% for the three months ended September 30, 2003, as compared to 4.03% for the three months ended September 30, 2002. The margin also declined from 3.71% for the previous quarter, reflecting in part the continuing low interest rate environment resulting in accelerated loan prepayments and the most recent interest rate reduction by the Federal Reserve Board.

Several categories of fee income increased by double digits for the three months ended September 30, 2003 as compared to the three months ended September 30, 2002. Noninterest income rose to 28.9% of total income for the quarter ended September 30, 2003, up from 24.5 % for the quarter ended September 30, 2002.

By comparison to an overall 35% increase in noninterest income, noninterest expenses increased by only 7% for the three months ended September 30, 2003 as compared to the quarter ended September 30, 2002.

Total deposits at September 30, 2003 increased by 17% over the levels at September 30, 2002, and increased 10% exclusive of acquisitions and certificates of deposit.

Asset quality remained sound with nonperforming assets to total assets, nonperforming loans to total loans and net charge-offs to average loans in the third quarter of 2003 all lower than levels for the third quarter of 2002. Nonperforming assets to total assets and nonperforming loans to total loans for the third quarter increased slightly over the second quarter, from 0.25% to 0.27% and from 0.39% to 0.42%, respectively, but net charge-offs to average loans were down from 0.25% to 0.20%. Net charge-offs were $8.2 million for the third quarter as compared to $9.9 million in the previous quarter.

At September 30, 2003, the Company's Tier 1 leverage capital ratio was 6.56%, its total risk based capital ratio was 11.30% and its ratio of tangible equity to tangible assets was 5.46%. All three capital ratios were higher than the previous quarter. Shareholders' equity at September 30, 2003 was $2.5 billion, up from $1.9 billion at September 30, 2002.

Banknorth Group, headquartered in Portland, Maine, is one of the country's 35 largest commercial banking companies with $25.7 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 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.