Record Quarterly Net Income at Banknorth

Portland, Maine, April 17, 2003 - Banknorth Group, Inc. (NYSE: BNK) today announced record quarterly net income of $81.4 million for the first quarter ended March 31, 2003, an increase of 19% over net income of $68.5 million for the first quarter of 2002. On a diluted earnings per share basis, the Company earned 51 cents for the first quarter, up 13 percent from 45 cents for the same quarter a year ago. Exclusive of special items, primarily merger-related charges, earnings in the first quarter ended March 31, 2003 were $84.3 million, or 53 cents per diluted share, as compared to $73.8 million, or 49 cents per diluted share, for the same quarter a year ago.

"Our profitable acquisition strategy combined with our ability to compete successfully in our traditional markets for loans and deposits continues to drive our earnings upward even in a challenging economy," said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. "This year may well be the most challenging in more than a decade but we are determined to again produce solid earnings."

Total loans at March 31, 2003 were 22 percent higher than at March 31, 2002 and 11 percent higher than at December 31, 2002, with a better than 20 percent increase in commercial business loans and leases, consumer loans and leases and commercial real estate mortgages over March 31, 2002 and double digit increases in residential mortgages and consumer loans over year-end. Exclusive of acquisitions, non-residential loans were 11 percent higher at March 31, 2003 than at March 31, 2002 and were 2 percent higher at March 31, 2003 than at December 31, 2002.

Total deposits at the end of the first quarter of 2003 were 24 percent higher than at the end of the first quarter a year ago and 12 percent higher than at year-end 2002. Deposit growth was strong in all categories, led by 43 percent growth in regular savings accounts, 28 percent growth in NOW and money market accounts and a 25 percent increase in noninterest bearing deposits, principally checking accounts, over March 31, 2002 balances. Exclusive of acquisitions and certificates of deposit, deposits were 11 percent higher at March 31, 2003 than at March 31, 2002 and were 2 percent higher than at December 31, 2002.

Noninterest income, principally fee income, for the quarter ended March 31, 2003, was $78.2 million, an increase of 27 percent over $61.6 million for the same quarter a year ago. Mortgage banking services, deposit services, and merchant and electronic banking income in the first quarter of 2003 showed strong increases on the banking side over the same quarter a year ago while insurance brokerage commissions and investment planning services income grew substantially on the financial services side of the Company. Trust and investment management services, where fees are closely tied to the performance of the stock market, showed a decline in income for the first quarter as compared to the same quarter a year ago.

Noninterest expense for the quarter ended March 31, 2003 increased only five percent over noninterest expense for the same quarter a year ago.

"In the face of economic uncertainty this year, we have made expense control a point of emphasis," said Mr. Ryan. "First quarter results indicate that our efforts have had a high degree of success."

Mr. Ryan pointed to pressure on the Company's net interest margin as a major indication of the challenges of the current economy. The margin (net interest income on a fully tax equivalent basis divided by average interest earning assets) reflects in part the Company's earning strength on its loans. For the quarter ended March 31, 2003, Banknorth's net interest margin was 3.66% as compared to 4.23% for the first quarter a year ago.

The Company's return on average assets for the first quarter of 2003 was similar to that of the same quarter a year ago, 1.32% as compared to 1.36%, but its return on average equity declined to 14.26% for the first quarter of 2003 as compared to 15.73% for the same quarter in 2002. However, on a cash basis, return on average equity was up to 24.95% for the first quarter ended March 31, 2003 as compared to 23.49% for the same quarter a year ago. (Cash basis measurements exclude the effects of intangible assets and related amortization expense, as well as special items such as merger-related charges.)

The Company's efficiency ratio improved to 51.66% for the first quarter of 2003 as compared to 52.20% for the first quarter a year ago. (Excludes securities gains/(losses), special charges, and amortization of intangible assets.)

Book value per share at the end of the first quarter of 2003 was $15.24. Shareholders' equity was $2.5 billion at March 31, 2003.

At March 31, 2003, the Company's Tier 1 leverage capital ratio was 6.54%, its total risk based capital ratio was 11.21% and tangible equity to capital assets was 5.42%. Banknorth and its banking subsidiary, Banknorth, NA, each continues to be a "well capitalized" institution under applicable laws and regulations.

Banknorth Group, Inc., headquartered in Portland, Maine, is a $26.3 billion banking and financial services company. 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 also operates subsidiaries and divisions in insurance, investment planning, trust and investments services, leasing, merchant services, mortgage banking, government banking and other financial services.

Note: This press 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. 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 may contain 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.

To receive a copy of the Banknorth quarterly financial statement as an Excel spreadsheet, contact Wolfe Public Relations at (207) 775-5115.