Record Quarterly Earnings at Banknorth Up 24% Over Year-Ago Third Quarter

Company Will Move to NYSE November 4

Portland, Maine, October 21, 2002 - Banknorth Group Inc. (NASDAQ: BKNG) today announced record quarterly net income of $76.9 million, or 51 cents per diluted share, for the three months ended September 30, 2002, an increase of 24% from net income of $62.2 million, or 45 cents per diluted share, for the same quarter a year ago. Exclusive of special charges, third quarter earnings were $78.3 million, or 52 cents per diluted share, up 26 % from $62.2 million, or 45 cents per diluted per share, for the same quarter a year ago.

For the first nine months of 2002, net income was $221.5 million, or $1.48 per diluted share, an increase of 25% from $177.2 million, or $1.27 per diluted share, for the first nine months of 2001. Exclusive of special charges, income for the first nine months of the year was $228.9 million, or $1.53 per diluted share, up 26% from $181.1 million, or $1.30 per diluted share, for the first three quarters of 2001.

The Company also announced today that it will move to the New York Stock Exchange on November 4, 2002, where its common stock will trade under the symbol BNK.

"Our growth in assets to $22.5 billion as of September 30, our continued strong earnings, and our geographic expansion to a strong presence in every New England state except Rhode Island convinces us that the time is right to move to the NYSE," said William J. Ryan, Chairman, President and Chief Executive Officer.

The Company's acquisitions over the past year and a half were a major factor in double-digit growth in loans and deposits.

Total loans at September 30, 2002 were 26% higher than total loans at September 30, 2001. Exclusive of acquisitions, nonresidential loan growth was still strong at 11%, with the strongest growth coming in commercial business and commercial real estate loans.

Total deposits at September 30, 2002 were 24% higher than total deposits at September 30, 2001, with the greatest growth in checking, retail money market and NOW accounts. Exclusive of acquisitions, core deposit growth was 13%.

Acquisitions and the loan and deposit growth helped achieve net interest income for the quarter ended September 30, 2002 that was 18% higher than for the same period in the prior year, despite margin pressure largely due to more loan prepayments primarily as a result of declining interest rates.

The net interest margin for the quarter ended September 30, 2002 was 4.03%, down from 4.08% for the same quarter a year ago and down from 4.18% from the previous quarter. The net interest margin for the nine months ended September 30, 2002 was 4.14%, as compared to a net interest margin of 3.94% for the first three quarters of 2001.

Asset quality improved over both the same quarter a year ago and the previous quarter.

At September 30, 2002, nonperforming assets as a percentage of total assets were 0.31% as compared to 0.39% at September 30, 2001 and to 0.34% at June 30, 2002. Nonperforming loans as a percentage of total loans at September 30, 2002 were 0.47% as compared to 0.59% at September 30, 2001 and to 0.51% at June 30, 2002. Net charge offs to average loans of 0.31% for the quarter ended September 30, 2002 and 0.30% for the first nine months of the year were essentially consistent with the same periods a year ago.

The Company's efficiency ratio for the quarter ended September 30, 2002 was 52.35% as compared to 54.22% for the same quarter a year ago.

Noninterest income for the quarter ended September 30, 2002, principally fee income from deposit and nonbanking services, increased 8% over the same quarter a year ago, from $60.6 million to $65.5 million. Noninterest income increases were primarily in deposit services, investment planning services, insurance brokerage commissions and merchant and electronic banking. These increases more than offset a decrease in mortgage banking income, which experienced $2.6 million of impairment and amortization charges to the value of mortgage servicing rights, and a decrease in trust and investment management services income, which reflected the weak stock market. The mortgage banking impairment and amortization left a remaining balance of capitalized mortgage servicing rights at September 30, 2002 totaling $5.2 million, or approximately 70 basis points of the unpaid balance of loans serviced for others.

Shareholders' equity at September 30, 2002 was $1.92 billion, up 32% from $1.46 billion at September 30, 2001. Book value per share at September 30, 2002 was $13.01.

The Company completed the acquisitions of Ipswich Bancshares, Inc., based in Ipswich Massachusetts, and Bancorp Connecticut, Inc., parent company of Southington Savings Bank, during the quarter ended September 30, 2002.

The acquisitions of Warren Bancorp (NASDAQ: WRNB), headquartered in Peabody, Massachusetts, and American Financial Holdings, Inc. (NASDAQ: AMFH), parent company of American Savings Bank in Connecticut, are pending regulatory approvals and votes by the shareholders of both companies. It is anticipated that these acquisitions will increase the Company's total assets to over $26 billion.

The Company's results for the nine months ended September 30, 2002 reflect its adoption of Statement of Financial Accounting Standards ("SFAS") No. 147, "Acquisitions of Certain Financial Institutions." Under SFAS No. 147, the Company can reclassify certain unidentifiable intangible assets to goodwill and cease amortization beginning January 1, 2002. As a result, earnings for the first nine months have been increased by two cents per share. Exclusive of the adoption of SFAS No.147, earnings for the quarter ended September 30, 2002 exclusive of special charges still were 52 cents per share.

Banknorth Group, headquartered in Portland, Maine, is one of the country's 35 largest commercial banking companies. The Company's banking subsidiary, Banknorth, N.A. operates banking subsidiaries in Maine (Peoples Heritage Bank), New Hampshire (Bank of New Hampshire), Massachusetts (Banknorth Massachusetts), Connecticut (Banknorth Connecticut), Vermont (Banknorth Vermont), and Upstate New York (Evergreen Bank). The Company also operates subsidiaries and divisions in insurance, investment planning, money management, leasing, merchant services, mortgage banking, government banking and other financial services.

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.