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For Immediate Release
April 26, 2006

Contact:
Jeff Nathanson, Director, Investor Relations and Corporate Communications
(207) 761-8517

Web Site: http://www.tdbank.com/

TD Banknorth Reports First Quarter Results and Announces Quarterly Dividend

Highlights for the first quarter of 2006 include:
  • Adjusted earnings increased to $115.6 million in the first quarter of 2006 up from $111.8 million in the first quarter of 2005.
    Adjusted earnings per diluted share of $0.55 met the analysts' consensus estimate.
  • The Company closed on the acquisition of Hudson United Bancorp in the first quarter, adding over 200 branches to its already extensive branch network in the Northeast.
  • Asset quality remained strong - total net chargeoffs declined by 39% as compared to the first quarter of 2005.
  • The Board of Directors declared a dividend of 22 cents per share payable on May 15, 2006 to shareholders of record as of the close of business on May 5, 2006.

First Quarter Adjustments (Items of Note) (1)
The following items of note (net of tax) are included in the Company's reported GAAP earnings for the first quarter of 2006. All comparisons are between the first quarter of 2006 and the first quarter of 2005. Share impact is on a per diluted share basis.
  • Amortization of identifiable intangible assets of $22.9 million (11 cents per share) as compared to $7.5 million (4 cents per share) for the first quarter of 2005.
  • Merger and restructuring charges of $14.9 million (7 cents per share) as compared to $23.4 million (13 cents per share) for the first quarter of 2005.
  • Losses associated with the Company's balance sheet deleveraging programs of $214 thousand (no meaningful per share impact) as compared to $41.6 million (22 cents per share) for the first quarter of 2005.
  • Losses of $5.3 million (3 cents per share) related to changes in unrealized loss on derivatives incurred in the first quarter of 2005 as compared to none in the first quarter of 2006.
  • Losses of $1.3 million (1 cent per share) incurred in the first quarter of 2006 related to energy businesses acquired from Hudson United, which the Company classified as "discontinued operations" in the first quarter of 2006.

(1) All references in this release to "adjusted" results reflect the exclusion of the impact of these items of note. For a detailed explanation of the use of non-GAAP financial measures, please see the "Notes" section of this release, and for a reconciliation of adjusted financial measures to the most comparable reported GAAP financial measures, please see the reconciliation table in the financial tables which accompany this release.

News Release

PORTLAND, Maine (April 26, 2006)- TD Banknorth Inc. ("TD Banknorth" or the "Company") (NYSE: BNK) today reported net income of $76.2 million for the quarter ended March 31, 2006 as compared to $34.1 million for the quarter ended March 31, 2005. On a per diluted share basis, reported net income was 36 cents for the first quarter of 2006 as compared to 18 cents for the first quarter of 2005. The increase in reported net income for the first quarter of 2006 as compared to the first quarter of 2005 was primarily attributable to reduced merger and restructuring charges and reduced losses associated with the Company's deleveraging programs.

Adjusted earnings (reported GAAP earnings excluding the items of note listed above) were $115.6 million for the first quarter of 2006 as compared to $111.8 million for the first quarter of 2005. On a per diluted share basis, adjusted earnings were 55 cents for the first quarter of 2006 as compared to 60 cents for the same quarter a year ago.

The Company's operations in the first quarter were adversely impacted by a number of factors, including: 1) margin compression due to rates paid on deposits increasing more than the yields on loans; 2) a seasonal slowdown in the organic growth rate of both loans and deposits; and 3) two months of operating expenses associated with the acquisition of Hudson United Bancorp, which closed on January 31, 2006. The Company believes that it will begin to realize anticipated cost savings associated with the acquisition of Hudson United beginning in the third quarter of 2006 following a systems conversion in late May.

"It was a challenging quarter given the competitive environment for loans and deposits," said William J. Ryan, TD Banknorth Chairman, President and Chief Executive Officer. "There is no doubt that this is a difficult environment for banks in general but we remain focused on executing our strategy. We were pleased to close on the acquisition of Hudson United and look forward to successfully integrating Hudson United into the Company."

Total Assets

Total assets at March 31, 2006 were $40.9 billion, up 27% from $32.1 billion at December 31, 2005 due to the acquisition of Hudson United. The increase in total assets at March 31, 2006 as compared to December 31, 2005 included a $5.5 billion increase in total loans and leases, a $3.2 billion increase in certain short-term investments, a $2.2 billion decrease in securities available for sale, a $1.5 billion increase in goodwill and a $180.5 million increase in identifiable intangible assets.

Average Loans and Leases

Average loans and leases increased by 20% to $23.8 billion for the quarter ended March 31, 2006 as compared to the first quarter of 2005, due primarily to the acquisition of Hudson United. Excluding the effects of acquisitions, average commercial business loans and leases, commercial real estate mortgages and consumer loans and leases (including credit cards) increased 9% in the aggregate for the quarter ended March 31, 2006 as compared to the same period a year ago. On a linked quarter basis, average commercial business loans and leases, commercial real estate mortgages and consumer loans and leases (including credit cards), increased 1.7% (6.8% annualized), reflecting the competition for high-quality commercial and consumer loans as well as seasonality in new loan originations.

Securities Available for Sale

Securities available for sale at March 31, 2006 amounted to $2.3 billion, a decrease of 52% from March 31, 2005 and 49% from December 31, 2005, due largely to the sale of securities associated with the Company's balance sheet deleveraging and restructuring programs. The proceeds from these sales were temporarily invested in certain short-term investments. In April 2006, the Company completed its balance sheet restructuring announced on January 10, 2006.

Average Deposits

Average deposits increased by 24% to $24.5 billion for the quarter ended March 31, 2006 as compared to the quarter ended March 31, 2005 due primarily to the acquisition of Hudson United. Excluding the effects of acquisitions, average deposits increased 1% for the quarter ended March 31, 2006. On a linked quarter basis, average deposits declined by 1% reflecting seasonality and competitive factors.

Net Interest Income

Net interest income was $282.4 million for the first quarter of 2006, a 12% increase over the same quarter of 2005, due primarily to the acquisition of Hudson United. Interest and dividend income increased by 33% to $456.5 million in the first quarter of 2006 due primarily to the acquisition of Hudson United. Interest expense increased by 91% to $174.1 million in the first quarter of 2006 due to the higher average volume of interest-bearing liabilities resulting from the acquisition of Hudson United as well as to higher interest costs paid on the Company's interest-bearing deposits and borrowings. The increase in rates paid on interest-bearing deposits reflects the competitive environment for deposits throughout the Company's market area.

Net Interest Margin

The Company's net interest margin for the quarter ended March 31, 2006 was 3.83% as compared to 3.96% for each of the quarters ended March 31, 2005 and December 31, 2005, respectively. The decline in net interest margin was due largely to the rates paid on interest-bearing liabilities increasing more than the yield on loans reflecting the competitive environment for both loans and deposits.

Provision for Loan and Lease Losses and Asset Quality

The Company's provision for loan and lease losses amounted to $7.2 million for the quarter ended March 31, 2006, as compared to $2.1 million for the quarter ended March 31, 2005 and $6.3 million for the quarter ended December 31, 2005. Total nonperforming assets increased to $90.7 million at March 31, 2006, up from $68.9 million at March 31, 2005 and $61.5 million at December 31, 2005. The increase in nonperforming assets was primarily due to nonperforming assets acquired from Hudson United.

Even with the increase in nonperforming assets as a result of the acquisition of Hudson United, the Company's asset quality ratios remained strong during the first quarter of 2006. As a percentage of total loans, nonperforming loans amounted to 0.31% at March 31, 2006, as compared to 0.32% at March 31, 2005 and 0.30% at December 31, 2005. Total net charge-offs for the quarter ended March 31, 2006 declined to $6.2 million from $10.1 million for the same period a year ago and from $11.3 million for the quarter ended December 31, 2005.

Noninterest Income

Reported noninterest income increased to $117.8 million in the first quarter of 2006 as compared $25.6 million in the first quarter of 2005. This increase reflected the absence in the first quarter of 2006 of losses associated with the deleveraging program and changes in unrealized loss on certain derivatives incurred in the first quarter of 2005, as well as increases in all other noninterest income categories. Adjusted noninterest income increased 29% to $118.2 million for the first quarter of 2006 as compared to $91.4 million for the first quarter of 2005 due primarily to the acquisition of Hudson United. On a linked quarter basis, adjusted noninterest income, also excluding noninterest income associated with Hudson United, declined $1.2 million, which included a $1.9 million decline in mortgage banking income, a $1.5 million decline in covered call option income and an aggregate increase of $2.2 million in all other noninterest income categories.

Noninterest Expense

Reported noninterest expense increased $53.9 million for the first quarter of 2006 as compared to the same quarter of 2005, largely due to Hudson United-related operating expenses and to increases in the amortization of identifiable intangible assets, which more than offset a decrease in merger and restructuring charges. Adjusted noninterest expense increased 26% to $219.6 million for the first quarter of 2006 as compared to $174.1 million for the first quarter of 2005 largely due to increased operating expenses associated with the acquisition of Hudson United. As discussed above, the Company believes that it will begin to realize anticipated cost savings associated with the acquisition of Hudson United beginning in the third quarter of 2006 following the systems conversion planned for May. On a linked quarter basis, adjusted noninterest expense, also excluding noninterest expense associated with the operations of Hudson United, increased by approximately $4.2 million, of which $2.9 million was related to accounting for stock-based compensation and $1 million related to state franchise taxes that were classified in tax expense in prior periods.

Capital

The Company and its banking subsidiary continue to qualify as "well capitalized" institutions under applicable laws and regulations. At March 31, 2006, the Company's tier 1 capital ratio was 6.75% as compared to 7.07% at December 31, 2005, its total risk-based capital ratio was 11.02% as compared to 11.73% at December 31, 2005 and its ratio of tangible equity to tangible assets was 4.80% as compared to 5.69% at December 31, 2005. The decrease in the ratio of tangible equity to tangible assets was due, in part, to the acquisition of Hudson United and to the Company's repurchase of 8.5 million shares in the first quarter of 2006. The Company anticipates that its ratio of tangible equity to tangible assets will increase to over 5% by December 31, 2006.

Share Repurchases and Other Information

The number of weighted average shares outstanding on a diluted basis for the quarter ended March 31, 2006 was 210.4 million as compared to 184.9 million for the quarter ended March 31, 2005. The increase was primarily attributable to the issuance of approximately 62 million shares related to the acquisition of Hudson United (including the sale of 29.6 million shares of common stock to the Company's parent, TD Bank Financial Group), which was in part offset by the Company's repurchase of 8.5 million shares during the first quarter of 2006.

The Company's adjusted return on average tangible equity for the first quarter of 2006 was 29.21% as compared to 25.70% for the same period a year ago and the Company's adjusted return on average tangible assets for the first quarter of 2006 was 1.43% as compared to 1.63% for the same period a year ago.

At March 31, 2006, the Company's tangible book value per share was $7.16 as compared to $7.61 at March 31, 2005. Average tangible equity was $1.6 billion for the quarter ended March 31, 2006 as compared to $1.8 billion for the same period a year ago.

Quarterly Dividend

TD Banknorth also announced today that its Board of Directors has approved a quarterly dividend of 22 cents per share based on earnings for the first quarter ended March 31, 2006. The dividend is level with the dividend paid following the fourth quarter ended December 31, 2005 and will be paid on May 15, 2006 to shareholders of record at the close of business on May 5, 2006.

Acquisition of Interchange Financial Services Corporation

On April 13, 2006, the Company announced it had entered into a definitive agreement to acquire Interchange Financial Services Corporation (NASDAQ: IFCJ), Saddle Brook, New Jersey, for approximately $480.6 million in cash. As part of the transaction, TD Bank Financial Group has agreed to purchase 13 million shares of TD Banknorth common stock at a price of $31.17 per share. The acquisition is subject to the receipt of Interchange shareholder approval and all required regulatory approvals and other customary conditions and is anticipated to close early in the first quarter of 2007 with systems integration shortly thereafter.

Standard and Poor's Two Notch Upgrade

On April 21, 2006, Standard & Poor's Services raised its counterparty credit rating on TD Banknorth Inc. to 'A-1' from 'BBB' and the counterparty credit ratings on related entities, including TD Banknorth NA, were raised to 'A/A-1' from 'BBB+/A-2'.

About TD Banknorth Inc.

TD Banknorth Inc. is a leading banking and financial services company headquartered in Portland, Maine and a majority-owned subsidiary of TD Bank Financial Group. At March 31, 2006, TD Banknorth had over $40 billion of total consolidated assets and provided financial services to more than 1.5 million households in the Northeast. TD Banknorth's banking subsidiary, TD Banknorth, N.A., operates banking divisions in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Vermont. TD Banknorth and TD Banknorth, N.A. also operate subsidiaries and divisions in insurance, wealth management, merchant services, mortgage banking, government banking, private label credit cards, insurance premium financing and other financial services and offers investment products in association with PrimeVest Financial Services, Inc. The TD Banknorth common stock trades on the New York Stock Exchange under the symbol "BNK". For more information, visit www.TDBanknorth.com.

# # #

NOTES: 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. The Company arrives at these measures, indicated by the use of the term "adjusted," by removing "items of note" from the reported GAAP measure. The items of note excluded from adjusted measures are described at the outset of this release, and a reconciliation of these non-GAAP measures to the most comparable GAAP measure can be found in the financial tables in the back of this release. The items of note relate to items which management does not believe are indicative of underlying business performance, and typically are 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. Items of note may also be other significant gains or losses that are unusual in nature, such as securities gains or losses and prepayment penalties incurred in connection with deleveraging strategies. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of adjusted financial measures excluding the impact of these items of note provide useful supplemental information that is essential to a proper understanding of the operating results of the Company. 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 press release contains forward-looking statements with respect to the financial condition, results of operations and business of TD Banknorth. Words such as "expect", "feel", "believe", "will", "may", "anticipate", "plan", "estimate", "intend", "should" and similar expressions are intended to identify forward-looking statements. 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 TD Banknorth's operations. In addition, acquisitions may result in large one-time charges to income, may not produce revenue enhancements or synergies at levels or within time frames originally anticipated and may result in unforeseen integration difficulties. Investors are encouraged to access TD Banknorth's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding TD Banknorth, including information which could affect TD Banknorth's forward-looking statements. TD Banknorth does not undertake any obligation to update these forward-looking statements to reflect events or circumstances that may occur after the date on which such statements were made.

On May 16, 2005, the Company announced that it had adopted purchase accounting to account for TD Bank Financial Group's acquisition of a majority interest in the Company on March 1, 2005. To most accurately reflect the application of purchase accounting, the Company uses the term "predecessor" to refer to the results of Banknorth Group, Inc., the predecessor entity to TD Banknorth Inc., at the dates and for the periods ending on or prior to February 28, 2005, which are based on historical accounting, and the term "successor" to refer to the results of TD Banknorth Inc. at the dates and for the periods beginning on or after March 1, 2005, which are based on the application of purchase accounting. To assist in the comparability of the Company's financial results and to make it easier to discuss and understand these results, the financial information discussed herein and presented in the accompanying financial statements under the heading "Combined" combines the "predecessor period" January 1, 2005 to February 28, 2005 with the applicable "successor period" thereafter. Due to the application of purchase accounting as of March 1, 2005, results for the combined periods may not be comparable to the results for the respective predecessor periods. For a detailed discussion of the impact of purchase accounting on the Company's balance sheet and income statement, reference is made to the Company's first quarter 2005 earnings release dated May 16, 2005.



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