Peoples Heritage Launches Online Banking

New service allows customers to check their balance, transfer funds or pay bills electronically; part of major web initiative launched by Banknorth Group, Inc.

(PORTLAND, Maine) -- Peoples Heritage Bank, part of the Banknorth Group, Inc. (NASDAQ: BKNG) headquartered in Portland, Maine, has launched online banking for its 235,000 customer households statewide, giving them the ability to get their balance, transfer funds, issue stop payments on checks, look at their credit cards or pay bills online. The web site, which was redesigned to offer online banking and be more customer-friendly, is at http://www.peoplesheritage.com.

"Now, customers can go to their computer to check their balance or pay a bill, which is a major convenience as it saves them precious time," said Michael W. McNamara, president and CEO of Peoples Heritage Bank. "It's basically an extension of what we provide at our branches, ATMs and telephone banking systems -- only now we're also doing it via the Internet. It's another way for our customers to access their money at a time that's convenient for them, and that's important."

A major part of the bank's new online initiative announced today is a strong customer service department, where customers can talk to someone seven days a week if they have questions about online banking. Called Customer eCare, the department is open for calls from Monday through Friday from 7 a.m. to 11 p.m. and on Saturday and Sunday from 9 a.m. to 5 p.m.

"That's what customers want when they do online banking, someone to talk to if they have a question or a problem," said Brian Wood, executive vice president and head of eCommerce and Direct Banking at Banknorth Group. "Our research has shown that not being able to reach a live person when customers encountered difficulty or had questions was their main reason for being dissatisfied with online banking at other banks."

Free to Peoples Heritage Bank customers, the new online banking program allows Peoples customers to view current balances and account histories, transfer funds, issue a stop payment on a check, order additional checks, change account address information, view credit card information, or learn about the bank's products and services.

Also derived directly from its customer research that showed online users value quick, easy enrollment and transactions, the online banking process is simple and fast, allowing customers to do transactions within minutes of signing on for the first time. For questions, persons may call Direct Banking at (800) 295-7400 and select the Customer eCare option.

Paying bills online offered

In addition, customers can now pay their bills online by signing up for the bank's new electronic bill payment service. Called eBillPay, the program costs about $3 to $7 a month, depending on the type of account they have, which includes 15 transactions/month (there is a 35 cent charge for each bill payment after 15). Unlike some banks' bill payment services, Peoples service offers customers the ability to pay anyone with eBillPay - - not just certain large companies. From making a recurring mortgage payment and utility bills to making a one-time payment for the local lawn service, the eBillPay service is a major time saver for those who use it.

Studies show a growing need for online banking

"The trend toward customer usage and interest in online banking has definitely been increasing and is projected to grow quite rapidly in the next two to three years. Online user statistics for the six states in the Banknorth market area show that a little less than half of all households have access to the Internet, which is on par with national statistics," Wood said. Studies have also shown that nationally between 20 and 25 percent of those Internet-connected households use some form of online banking, which translates to about 10 to 12 percent of the overall population. A variety of online industry sources project that usage to double to between 20 and 25 percent of the overall population by 2003.

New site praised for ease of use

The new Peoples site is one of nine new integrated sites launched by Banknorth this week for the company and for its affiliate banks. A pilot study conducted with 250 customers and employees of the new online banking program and web sites showed positive results in all areas - from navigation and ease of use to lack of clutter and lack of down time.

"In all, it was very well received compared to other sites which our users found harder to use or had far too much information on them. And what little criticism we did hear about we immediately changed and improved, and additional improvements are already planned to make the site as simple and convenient as possible," Wood said.

Sign up takes less than 5 minutes

Signing up for online banking at Peoples takes less than five minutes, Wood said. Customers go to the bank's web site at http://www.peoplesheritage.com, where they will be invited to participate in online banking. They then fill out a simple form and within minutes they can view their account and conduct transactions.

Security features solid

The new online services introduced this week were designed with reliability and security as primary features. Customers logging on to the site to conduct transactions create a personal password to gain access, then need to use that password to log on each time. Once logged on, they are secure through the use of 128-bit encrypted technology.

"We decided early on that security and system reliability must be top notch. From 128-bit encrypted technology, the online industry standard, to building an entire back-up system for each component of the eCommerce infrastructure, we're committed to offering a secure and reliable system to our customers. We also set strict internal security guidelines before building the system, and joined forces with only the best technology partners to be able to offer a reliable site," Wood said.

Privacy was another area the bank focused on.

"We do not and will not sell customer information to third parties," Wood said. "We have a strict privacy commitment to our customers to not sell their name and address information to list services or others online. After all, trust is the number one asset a bank can offer, so our commitment to our customers goes beyond the traditional assurances - we actually have a privacy statement built into the site when you log on for the first time."

Peoples Heritage Bank has more than 60 branches statewide and is headquartered in Portland. Its parent company, Banknorth Group, is one of the country's 50 largest commercial banking companies with $18.2 billion in assets. In addition to Maine, Banknorth Group operates banking subsidiaries in New Hampshire through Bank of New Hampshire, NA; in Massachusetts through First Massachusetts Bank, NA; in Vermont through The Howard Bank, NA, Franklin Lamoille Bank, NA, and First Vermont Bank, NA; in New York through Evergreen Bank, NA; and in north central Connecticut through GBT, a division of First Massachusetts Bank, NA.

All of the Banknorth Group banks will now be connected through a new web site launched this week with the introduction of online banking. The web site addresses of the affiliate banks are:

Peoples Heritage Bank, http://www.peoplesheritage.com

Bank of New Hampshire, http://www.banknh.com

First Massachusetts Bank, http://www.firstmass.com

GBT, a division of First Massachusetts Bank, NA, http://www.gbtbank.com

First Vermont Bank, http://www.firstvermont.com

Franklin Lamoille Bank, http://www.franklinlamoille.com

Howard Bank, http://www.thehowardbank.com

Evergreen Bank, http://www.evergreenny.com

Customers can also access any of the above banks through the Banknorth Group corporate web site address, which is http://www.banknorth.com.

Banknorth Group also operates a variety of insurance agencies in New England as subsidiaries of Morse, Payson & Noyes Insurance, its lead agency; a money management firm, The Stratevest Group, NA; an investment subsidiary, Heritage Investment Planning Group; and a leasing company, Banknorth Leasing. Other subsidiaries and divisions provide services in mortgage banking, asset based lending, private banking, merchant services and other financial services.

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