Net Income up 11 % at Banknorth Group

Portland, Maine, April 26, 2004 – Banknorth Group, Inc. (NYSE: BNK) today announced net income of $90.3 million for the first quarter ended March 31, 2004, an 11% increase over net income of $81.4 million for the first quarter of 2003. On a per diluted share basis, net income was 54 cents for the first quarter, up 6% over the same quarter a year ago.

Exclusive of merger and consolidation costs, net income was $91.4 million, or 55 cents per diluted share, for the quarter ended March 31, 2004, up 8% from $84.3 million, or 53 cents per diluted share, for the first quarter of 2003.

“We sacrificed a penny or more of earnings per share this quarter to provide additional marketing dollars to prepare for the market opportunity created by the Bank of America acquisition of Fleet/Boston,” said William J. Ryan, Company Chairman, President and Chief Executive Officer. “We believe a short-time sacrifice for potential long-term gains is well worth it and will ultimately provide enhanced shareholder value.”

Net interest income was $208.1 million in the first quarter of 2004, a 7% increase as compared to $195.2 million of net interest income in the first quarter of 2003. Loans and leases also increased by 7% from March 31, 2003 to March 31, 2004, with commercial real estate loans and consumer loans both up 11% and commercial business loans and leases up 13%. Loans and leases increased by an annualized rate of 8% from December 31, 2003 to March 31, 2004 due to growth in commercial business loans and leases and consumer loans.

Noninterest income, principally fee income from banking and non-banking financial services, increased 13% in the first quarter of 2004 as compared to the first quarter of 2003. Investment planning services income increased 49%, trust and investment management services income increased 24%, deposit services fees rose 16%, merchant and electronic banking income increased 15%, and insurance brokerage commissions were up 11%.

Noninterest expense increased to $159.7 million for the quarter ended March 31, 2004, up 7% from the same quarter a year ago. Marketing expenses increased $2.5 million, nearly 50% higher than the same quarter a year ago, while staffing expenses increased $6.8 million, or 8%.

Total deposits at March 31, 2004 were 2% higher than at March 31, 2003 as Banknorth continued to allow higher interest certificates of deposit to decline. Noninterest bearing deposits, principally checking accounts, increased by 16% and money market and NOW accounts increased by 10%. Regular savings accounts increased by 3% at March 31, 2004 as compared to March 31, 2003. Total deposits at March 31, 2004 were flat from year-end despite modest increases in retail money market and NOW accounts and regular savings accounts.

The Company’s net interest margin for the quarter ended March 31, 2004 was 3.68% as compared to 3.66% for the quarter ended March 31, 2003 and 3.65% for the quarter ended December 31, 2003.

Banknorth’s capital strengthened over both the previous year and the previous quarter.
Tier I leverage capital climbed to 6.84% at March 31, 2004, as compared to 6.53% at March 31, 2003 and 6.65% at December 31, 2003. Tangible equity to tangible assets increased to 5.79% at March 31, 2004, as compared to 5.42% at March 31, 2003 and 5.37% at December 31, 2003. Total risk-based capital increased by similar margins to 11.51% at March 31, 2004.

Book value per share at March 31, 2004 was $16.26 as compared to $15.24 at March 31, 2003 and $15.54 at December 31, 2003. Tangible book value per share was $9.14 at the end of the first quarter as compared to $8.31 at March 31, 2003 and $8.37 at December 31, 2003. Shareholders’ equity was $2.65 billion at March 31, 2004, up 6% from $2.50 billion at March 31, 2003 and 5% from $2.52 billion at December 31, 2003.

Banknorth also announced today that it expects to finalize its acquisitions of CCBT Financial Companies, Inc. (NASDAQ: CCBT), the parent company of Cape Cod Bank and Trust Company, and Foxborough Savings Bank (OTS: FOXS.PK) on April 30, 2004. Both companies’ stock will trade on April 30, 2004 but not subsequently.

“These acquisitions strengthen our increasing presence in Massachusetts, a vital market for Banknorth,” Mr. Ryan said. “We are now a significant banking presence south of Boston and into the important Cape Cod market area.”

At March 31, 2004, Banknorth Group, headquartered in Portland, Maine, had $26.9 billion in assets. The two pending acquisitions are expected to increase Banknorth’s assets by more than $1.5 billion. Banknorth’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 offer 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.