Banknorth Reports Record Earnings. Net Income Up 10%.PORTLAND, Maine Portland is the largest city in the U.S. state of Maine, with a 2004 population of 63,882. Portland is Maine's cultural, social and economic capital. Tourists are drawn to Portland's historic Old Port district along Portland Harbor, which is at the mouth of the Fore River and part -- (Second Quarter Earnings Conference Call at 1:30 p.m. Eastern Time today, July July: see month. 19, 2004. Dial-in number for USA and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of is 800 901-5241. International dial-in number is 617-786-2963. Passcode for both numbers is 10986982. Replay number for USA and Canada is 888-286-8010. International replay dial-in number is 617-801-6888. Replay passcode for both is 67555612. Live webcast and webcast replay available at www.banknorth.com, Investor Relations Investor relations The process by which the corporation communicates with its investors. .) Banknorth Group, Inc. (NYSE NYSE See: New York Stock Exchange : BNK BNK Bangkok BNK Bundesverband Niedergelassener Kardiologen eV BNK Banking ) today announced net income of $95.8 million for the second quarter ended June June: see month. 30, 2004, a 10% increase over net income of $87.5 million for the second quarter of 2003. On a per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share basis, net income was 55 cents for the second quarter, up 4% over the same quarter a year ago. Exclusive of merger and consolidation costs, net income was $98.5 million for the quarter ended June 30, 2004, up 11% from $88.5 million for the second quarter of 2003. On a per share basis, net income exclusive of merger and consolidation costs was 57 cents per diluted share for the quarter ended June 30, 2004 up 6% from 54 cents per diluted share for the quarter ended June 30, 2003. Banknorth's net income for the six months ended June 30, 2004 amounted to $186.2 million, a 10% increase over net income of $168.9 million for the six months ended June 30, 2003. On a per diluted share basis, net income for the first half of 2004 was $1.10, which represented a 6% increase over the $1.04 net income per diluted share for the first half of 2003. "It was a solid quarter all the way around marked by strong loan and deposit growth, successful acquisition integration and tight expense control," said William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack J. Ryan Ryan may refer to: Places
Net interest income was $230.1 million in the second quarter of 2004, a 9% increase as compared to $211.6 million of net interest income in the second quarter of 2003. Noninterest income, excluding gains on sales of securities, increased 5% in the second quarter of 2004 as compared to the second quarter of 2003. Investment planning services income increased 32%, trust and investment management services income increased 24%, merchant and electronic banking income increased 18%, deposit services fees rose 15%, and insurance brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. commissions were up 12%. These increases were partially offset by a decrease in mortgage banking revenue of $2.7 million during the quarter ended June 30, 2004 as compared to the quarter ended June 30, 2003, and by a decrease in option income of $4.9 million for the same period. Noninterest expense, excluding prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. on borrowings in the second quarter of 2003 and merger and consolidation expenses, increased by 5% in the second quarter of 2004 as compared to the second quarter of 2003. Salaries and employee benefits and advertising and marketing expenses both increased by 6% for the quarter ended June 30, 2004 as compared to the quarter ended June 30, 2003. When compared to the first quarter of 2004, noninterest expense, excluding merger and consolidation expenses, increased by just $1.6 million or 1.0%. Total assets increased by 14% to $29.3 billion at June 30, 2004 up from $25.8 billion at June 30, 2003. Total assets increased by $2.4 billion at June 30, 2004 compared to March 31, 2004, of which $1.8 billion was due to the acquisitions of CCBT CCBT Comprehensive Cognitive Behavioral Therapy Financial Companies, Inc. and Foxborough Foxborough or Foxboro, town (1990 pop. 14,637), Norfolk co., SE Mass.; settled 1704, inc. 1778. During the Revolutionary War cannons and cannonballs were manufactured. Modern industry centers on the production of precision instruments. Savings Bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. on April 30, 2004. Total loans and leases increased by 15% to $18.1 billion at June 30, 2004 from $15.7 billion at June 30, 2003, with commercial real estate loans and commercial business loans and leases both up 18% and consumer loans up 13%. Total loans and leases at June 30, 2004 were 9% higher than the $16.6 billion of total loans and leases at March 31, 2004. Total deposits at June 30, 2004 were $19.3 billion, 9% higher than at June 30, 2003. Noninterest bearing deposits, principally checking accounts, increased by 24% and money market and NOW accounts increased by 16% while regular savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: increased by 6%. Retail certificates of deposit declined by 8%, reflecting the Company's strategy to allow these higher rate CDs to run off. Total deposits at June 30, 2004 were 8% higher than the $18.0 billion of total deposits at March 31, 2004. The Company's net interest margin for the quarter ended June 30, 2004 was 3.66% as compared to 3.71% for the quarter ended June 30, 2003 and 3.68% for the quarter ended March 31, 2004. Asset quality remained strong and continued positive trends. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. decreased by $2.7 million or 4% in the second quarter of 2004 as compared to the first quarter of 2004. As a percentage of total loans, non-performing loans declined to .36% at June 30, 2004, down from .39% at June 30, 2003 and down from .41% at March 31, 2004. As a percentage of total assets, non-performing assets declined to .23% at June 30, 2004 as compared to .25% at June 30, 2003 and .26% at March 31, 2004. At June 30, 2004, the Company's Tier 1 leverage capital was 6.75% as compared to 6.36% at June 30, 2003 and 6.84% at March 31, 2004. The Company's total risk based capital ratio was 10.98% at June 30, 2004 as compared to 10.99% at June 30, 2003 and 11.47% at March 31, 2004. At June 30, 2004, the Company's book value per share was $16.61 while tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. book value per share was $8.39. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $2.87 billion at June 30, 2004. Banknorth also announced today that it has completed the previously-announced acquisition of Drake drake 1. male duck. 2. loliumtemulentum. , Swan swan, common name for a large aquatic bird of both hemispheres, related to ducks and geese. It has a long, gracefully curved neck and an extremely long, convoluted trachea which makes possible its far-carrying calls. & Crocker Crock´er n. 1. A potter. Insurance Agency of Orleans, Massachusetts Orleans is a town in Barnstable County, Massachusetts, Barnstable County coextensive with Cape Cod. The population was 6,341 at the 2000 census. For geographic and demographic information on the census-designated place Orleans, please see the article Orleans (CDP), . At June 30, 2004, Banknorth Group, headquartered in Portland, Maine and one of the 30 largest commercial banks in the country, had $29.3 billion in assets. The pending acquisition of BostonFed Bancorp, Inc., expected to close in the first quarter of 2005, is projected to increase Banknorth's assets by more than $1.5 billion. Banknorth's banking subsidiary, Banknorth, N.A., operates banking divisions in Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). (Banknorth Connecticut); Maine Maine, ship Maine, U.S. battleship destroyed (Feb. 15, 1898) in Havana harbor by an explosion that killed 260 men. The incident helped precipitate the Spanish-American War (Apr., 1898). Commanded by Capt. Charles Sigsbee, the ship had been sent (Jan. (Peoples Heritage Bank); Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. (Banknorth Massachusetts); New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). (Bank of New
Hampshire); New York New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (Evergreen evergreen, term commonly used as synonymous with conifer and applied also to all those broad-leaved plants that bear green leaves throughout the year. Of the latter, most are plants of the tropics, subtropics, and other areas where the growing season is prolonged (e. Bank); and Vermont Vermont (vərmŏnt`) [Fr.,=green mountain], New England state of the NE United States. It is bordered by New Hampshire, across the Connecticut R. (Banknorth Vermont). The Company and Banknorth, N.A. also operate subsidiaries and divisions in insurance, money management, merchant services Merchant services is the name given in the United States to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment by use of the customer's credit or , mortgage banking, government banking and other financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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 CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of mergers and acquisitions and costs related to the integration of merged entities, as well as the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , as well as other economic, competitive, governmental, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and accounting and technological factors affecting Banknorth's operations. In addition, acquisitions may result in large one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges to income, may not produce revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. 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.
Banknorth Group, Inc. and Subsidiaries
----------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, June 30, % March 31, %
(In thousands) 2004 2003 Change 2004 Change
------------ ------------ ------ ------------ ------
Cash and due
from banks $613,675 $661,103 -7% $516,772 19%
Federal funds
sold and other
short-term
investments 10,917 2,968 268% 8,356 31%
Securities
available
for sale 7,888,172 6,992,917 13% 7,389,833 7%
Securities held
to maturity 103,792 166,239 -38% 115,442 -10%
Loans and leases
held for sale 67,207 92,795 -28% 46,970 43%
Loans and leases:
Residential
real estate
mortgages 3,092,269 2,852,991 8% 2,647,540 17%
Commercial
real estate
mortgages 6,086,800 5,140,130 18% 5,549,406 10%
Commercial
business loans
and leases 3,825,003 3,229,718 18% 3,482,093 10%
Consumer loans
and leases 5,106,240 4,510,473 13% 4,944,573 3%
------------ ------------ ------------
Total loans
and leases 18,110,312 15,733,312 15% 16,623,612 9%
Less: Allowance
for loan and
lease losses 247,620 227,240 9% 233,297 6%
------------ ------------ ------------
Loans and
leases, net 17,862,692 15,506,072 15% 16,390,315 9%
Premises and
equipment 288,362 271,124 6% 260,302 11%
Goodwill 1,364,716 1,092,345 25% 1,127,799 21%
Identifiable
intangible
assets 53,972 38,986 38% 34,491 56%
Bank owned life
insurance 500,132 476,470 5% 493,729 1%
Other assets 522,153 449,091 16% 495,583 5%
------------ ------------ ------------
$29,275,790 $25,750,110 14% $26,879,592 9%
============ ============ ============
----------------------------------------------------------------------
Liabilities & Shareholders' Equity
Deposits:
Regular savings $2,624,256 $2,472,816 6% $2,517,632 4%
Retail money
market and
NOW accounts 7,872,310 6,759,000 16% 7,268,948 8%
Retail
certificates
of deposit 4,701,046 5,122,392 -8% 4,592,577 2%
Noninterest
bearing
deposits 4,139,017 3,340,408 24% 3,578,609 16%
------------ ------------ ------------
Total
deposits 19,336,629 17,694,616 9% 17,957,766 8%
Borrowings from
the Federal
Home Loan Bank 1,476,626 1,634,507 -10% 1,485,014 -1%
Federal funds
purchased and
securities sold
under repurchase
agreements 4,625,277 2,610,493 77% 3,823,452 21%
Subordinated
debt and senior
notes 340,002 362,942 -6% 362,961 -6%
Other borrowings 158,774 8,758 1713% 61,360 159%
Junior
subordinated
debentures 310,746 - 100% 305,591 2%
Company obligated,
mandatorily
redeemable securities
of subsidiary trusts
holding solely
parent junior
subordinated
debentures - 295,056 -100% - 0%
Other
liabilities 161,044 679,987 -76% 231,537 -30%
------------ ------------ ------------
Total
liabilities 26,409,098 23,286,359 13% 24,227,681 9%
------------ ------------ ------------
Shareholders'
equity 2,866,692 2,463,751 16% 2,651,911 8%
------------ ------------ ------------
$29,275,790 $25,750,110 14% $26,879,592 9%
============ ============ ============
Banknorth Group, Inc. and Subsidiaries
---------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except
per share data)
Six Months Ended Three Months Ended
June 30, June 30,
------------------ % ----------------- %
2004 2003 Change 2004 2003 Change
--------- -------- ------ --------- ------- ------
Interest and
dividend income $601,798 $611,805 -2% $309,146 $302,478 2%
Interest expense 154,139 194,095 -21% 79,096 90,904 -13%
--------- --------- --------- ---------
Net interest
income 447,659 417,710 7% 230,050 211,574 9%
Provision for
loan and lease
losses 19,000 21,401 -11% 9,500 10,500 -10%
--------- --------- --------- ---------
Net interest
income after
provision for
loan and lease
losses 428,659 396,309 8% 220,550 201,074 10%
--------- --------- --------- ---------
Noninterest income:
Deposit services 53,412 46,273 15% 27,260 23,747 15%
Insurance brokerage
commissions 26,014 23,305 12% 12,278 10,948 12%
Merchant and
electronic
banking
income, net 23,474 20,118 17% 13,069 11,098 18%
Trust and
investment
management
services 19,019 15,309 24% 9,870 7,957 24%
Bank owned life
insurance 11,771 11,168 5% 6,275 5,826 8%
Investment
planning
services 9,985 7,167 39% 5,146 3,911 32%
Net gains on
sales of
securities 6,936 36,206 -81% 3,355 33,423 -90%
Other noninterest
income 27,083 34,521 -22% 12,223 18,918 -35%
--------- --------- --------- ---------
177,694 194,067 -8% 89,476 115,828 -23%
--------- --------- --------- ---------
Noninterest expense:
Salaries and
employee
benefits 174,538 162,941 7% 87,005 82,248 6%
Occupancy and
equipment expense 55,111 53,739 3% 27,512 27,579 0%
Data processing 20,455 20,593 -1% 10,018 10,415 -4%
Advertising
and marketing 13,827 11,017 26% 6,303 5,957 6%
Amortization of
identifiable
intangible assets 3,988 4,302 -7% 2,084 2,306 -10%
Merger and
consolidation
costs (1) 5,748 5,981 -4% 4,135 1,530 170%
Prepayment
penalties on
borrowings - 30,490 NM - 30,490 NM
Other noninterest
expense 49,877 44,884 11% 26,769 23,514 14%
--------- --------- --------- ---------
323,544 333,947 -3% 163,826 184,039 -11%
--------- --------- --------- ---------
Income before
income tax
expense 282,809 256,429 10% 146,200 132,863 10%
Income tax
expense 96,636 87,510 10% 50,353 45,338 11%
--------- --------- --------- ---------
Net Income $186,173 $168,919 10% $95,847 $87,525 10%
========= ========= ========= =========
Weighted average
shares
outstanding:
Basic 166,318 159,980 4% 169,637 162,312 5%
Diluted 169,903 161,898 5% 173,109 164,559 5%
Earnings per
share:
Basic $1.12 $1.06 6% $0.57 $0.54 6%
Diluted 1.10 1.04 6% 0.55 0.53 4%
----------------------------------------------------------------------
(1) Merger and consolidation costs consist of merger charges,
certain asset write-downs and branch closing costs.
NM - calculated % change is not meaningful
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
----------------------------------------------------------------------
(In thousands, except
per share data)
Six Months Ended Three Months Ended
June 30, June 30,
---------------- % ---------------- %
2004 2003 Change 2004 2003 Change
-------- ------ ------ ------- ------ ------
Net interest
income $447,659 $417,710 7% $230,050 $211,574 9%
Net income $186,173 $168,919 10% $95,847 $87,525 10%
Shares outstanding
(end of
period) 172,546 160,843 7% 172,546 160,843 7%
Weighted average
shares outstanding:
Basic 166,318 159,980 4% 169,637 162,312 5%
Diluted 169,903 161,898 5% 173,109 164,559 5%
Earnings per
share:
Basic $1.12 $1.06 6% $0.57 $0.54 6%
Diluted $1.10 $1.04 6% $0.55 $0.53 4%
Shareholders'
equity
(end of
period) $2,866,692 $2,463,751 16% $2,866,692 $2,463,751 16%
Book value per
share (end of
period) $16.61 $15.32 8% $16.61 $15.32 8%
Tangible book
value per share
(end of period) $8.39 $8.28 1% $8.39 $8.28 1%
RATIOS & OTHER INFORMATION: Nominal Nominal
Inc/ Inc/
(Dec) (Dec)
----- -----
Net interest margin
(net interest
income as a %
of average earning
assets) (1) 3.67% 3.69% -0.02% 3.66% 3.71% -0.05%
Net interest spread
(yield on earning
assets minus yield
on interest-bearing
liabilities) (1) 3.44% 3.41% 0.03% 3.43% 3.45% -0.02%
Return on average
assets 1.36% 1.35% 0.01% 1.36% 1.38% -0.02%
Return on average
equity 13.82% 14.25% -0.43% 13.54% 14.24% -0.70%
At period end:
--------------
Tier 1 leverage
capital ratio 6.75% 6.36% 0.39% 6.75% 6.36% 0.39%
Tangible
equity/tangible
assets 5.20% 5.41% -0.21% 5.20% 5.41% -0.21%
Total risk based
capital ratio 10.98% 10.99% -0.01% 10.98% 10.99% -0.01%
Non-performing
loans $65,143 $60,735 7% $65,143 $60,735 7%
Total non-
performing
assets $67,167 $64,460 4% $67,167 $64,460 4%
Non-performing
loans as a %
of total loans 0.36% 0.39% -0.03% 0.36% 0.39% -0.03%
Non-performing
assets as a %
of total assets 0.23% 0.25% -0.02% 0.23% 0.25% -0.02%
Full service
banking offices 389 357 389 357
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS
(Non-GAAP Financial Information):
Noninterest income
as a percent of
total income (2) 27.61% 27.43% 0.18% 27.24% 28.03% -0.79%
Merger and
consolidation
costs on a net
of tax basis (3) $3,737 $3,895 -4% $2,687 $997 170%
Per diluted
share: 0.02 0.03 -33% 0.02 0.01 100%
Noninterest
expense (4) $317,796 $297,476 7% $159,691 $152,018 5%
Return on
average
assets (5) 1.39% 1.38% 0.01% 1.40% 1.39% 0.01%
Cash return on
average
tangible
assets (5)(6) 1.48% 1.46% 0.02% 1.49% 1.48% 0.01%
Return on
average
equity (5) 14.09% 14.58% -0.49% 13.92% 14.40% -0.48%
Cash return on
average
tangible
equity (5)(6) 26.54% 25.92% 0.62% 26.67% 27.15% -0.48%
Efficiency
ratio (7) 51.39% 51.68% -0.29% 50.51% 51.71% -1.20%
Cash efficiency
ratio (8) 50.74% 50.94% -0.20% 49.85% 50.93% -1.08%
----------------------------------------------------------------------
(1) Adjusted to fully taxable equivalent basis.
(2) Excludes securities gains/(losses).
(3) Merger and consolidation costs consist of merger charges, certain
asset write-downs and branch closing costs.
(4) Excludes pre-tax merger and consolidation costs.
(5) Excludes merger and consolidation costs, net of related tax
benefits.
(6) Cash ratios reflect an adjustment to add back the amortization of
intangible assets, net of related tax benefits.
(7) Excludes securities gains/(losses) and merger and consolidation
costs.
(8) Excludes securities gains/(losses), merger and consolidation costs
and amortization of intangible assets.
Ratios are annualized where appropriate.
Banknorth Group, Inc. and Subsidiaries
----------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
Three Months Ended June 30,
----------------------------------------------------------------------
2004 2003
----------------------------------------------------------------------
Average Yield/ Average Yield/
(Dollars in thousands) Balance Rate Balance Rate
----------------------------------------------------------------------
Assets
Loans and leases (1)
Residential real estate
mortgages $2,987,625 5.00% $2,996,485 5.76%
Commercial real estate
mortgages 5,883,659 5.74% 5,074,540 6.19%
Commercial loans and
leases 3,675,217 4.71% 3,154,085 5.23%
Consumer loans and leases 4,981,924 5.02% 4,463,057 5.76%
------------ ------------
17,528,425 5.19% 15,688,167 5.79%
Securities 7,875,274 4.27% 7,280,880 4.24%
Federal funds sold and other
short-term investments 3,683 1.74% 18,077 1.20%
------------ ------------
Total earning assets 25,407,382 4.91% 22,987,124 5.30%
Bank owned life insurance 497,250 472,853
Noninterest-earning assets 2,478,117 2,040,703
------------ ------------
Total assets $28,382,749 $25,500,680
============ ============
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Regular savings $2,614,679 0.30% $2,468,244 0.50%
Retail money market and
NOW accounts 7,646,403 0.79% 6,582,004 0.97%
Retail certificates of
deposit 4,719,524 1.93% 5,243,908 2.43%
------------ ------------
Total interest-bearing
deposits 14,980,606 1.06% 14,294,156 1.42%
Borrowed funds 6,467,964 2.46% 5,459,725 2.95%
------------ ------------
Total interest-bearing
liabilities 21,448,570 1.48% 19,753,881 1.85%
Noninterest bearing deposits 3,898,967 3,099,420
Other liabilities 188,596 181,765
Shareholders' equity 2,846,616 2,465,614
------------ ------------
Total liabilities and
shareholders' equity $28,382,749 $25,500,680
============ ============
Net earning assets $3,958,812 $3,233,243
============ ============
Net interest income (fully
taxable equivalent) $231,594 $213,066
Less: fully taxable
equivalent adjustments (1,544) (1,492)
------------ ------------
Net interest income $230,050 $211,574
============ ============
Net interest rate spread
(fully taxable equivalent) 3.43% 3.45%
Net interest margin (fully
taxable equivalent) 3.66% 3.71%
----------------------------------------------------------------------
(1) Loans and leases include portfolio loans and leases, loans
held for sale and nonperforming loans.
Banknorth Group, Inc. and Subsidiaries
----------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
Six Months Ended June 30,
----------------------------------------------------------------------
2004 2003
----------------------------------------------------------------------
Average Yield/ Average Yield/
(Dollars in thousands) Balance Rate Balance Rate
----------------------------------------------------------------------
Assets
Loans and leases (1)
Residential real estate
mortgages $2,856,423 5.09% $2,895,113 5.86%
Commercial real estate
mortgages 5,712,075 5.72% 4,994,310 6.31%
Commercial loans and
leases 3,531,263 4.76% 3,080,635 5.27%
Consumer loans and leases 4,932,477 5.07% 4,325,750 5.89%
------------ ------------
17,032,238 5.23% 15,295,808 5.89%
Securities 7,607,260 4.25% 7,578,748 4.40%
Federal funds sold and other
short-term investments 5,605 1.12% 11,346 1.40%
------------ ------------
Total earning assets 24,645,103 4.92% 22,885,902 5.40%
Bank owned life insurance 493,839 449,126
Noninterest-earning assets 2,315,929 1,949,017
------------ ------------
Total assets $27,454,871 $25,284,045
============ ============
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Regular savings $2,541,547 0.30% $2,321,821 0.54%
Retail money market and
NOW accounts 7,382,671 0.79% 6,400,948 1.00%
Retail certificates of
deposit 4,689,767 1.95% 5,128,769 2.53%
------------ ------------
Total interest-bearing
deposits 14,613,985 1.08% 13,851,538 1.49%
Borrowed funds 6,257,627 2.43% 5,863,321 3.16%
------------ ------------
Total interest-bearing
liabilities 20,871,612 1.48% 19,714,859 1.99%
Noninterest bearing deposits 3,693,342 3,003,113
Other liabilities 179,954 175,298
Shareholders' equity 2,709,963 2,390,775
------------ ------------
Total liabilities and
shareholders' equity $27,454,871 $25,284,045
============ ============
Net earning assets $3,773,491 $3,171,043
============ ============
Net interest income (fully
taxable equivalent) $450,694 $420,464
Less: fully taxable
equivalent adjustments (3,035) (2,754)
------------ ------------
Net interest income $447,659 $417,710
============ ============
Net interest rate spread
(fully taxable equivalent) 3.44% 3.41%
Net interest margin (fully
taxable equivalent) 3.67% 3.69%
----------------------------------------------------------------------
(1) Loans and leases include portfolio loans and leases, loans held
for sale and nonperforming loans.
Banknorth Group, Inc. and Subsidiaries
----------------------------------------------------------------------
Asset Quality (unaudited)
(Dollars in thousands)
6/30/2004 3/31/2004 12/31/2003 9/30/2003 6/30/2003
---------- ---------- ----------- ---------- ----------
Non-performing
assets:
Residential
real estate
mortgages $7,870 $7,990 $7,157 $9,135 $9,827
Commercial
real estate
mortgages 27,951 24,620 19,700 27,069 19,139
Commercial
business
loans and
leases 23,637 28,977 24,412 22,857 24,577
Consumer loans
and leases 5,685 6,267 8,493 7,664 7,192
---------- ---------- ----------- ---------- ----------
Total non-
performing
loans and
leases 65,143 67,854 59,762 66,725 60,735
Other non-
performing
assets, net 2,024 2,700 3,341 3,632 3,725
---------- ---------- ----------- ---------- ----------
Total non-
performing
assets $67,167 $70,554 $63,103 $70,357 $64,460
========== ========== =========== ========== ==========
Allowance for
loan and lease
losses $247,620 $233,297 $232,287 $229,581 $227,240
========== ========== =========== ========== ==========
Net loan charge-offs
(recoveries):
Residential
real estate
mortgages ($41) ($72) $10 $58 $31
Commercial
real estate
mortgages (665) (446) (168) (269) (474)
-------------------------------------------------------
Total real estate
mortgages (706) (518) (158) (211) (443)
Commercial
business loans
and leases 3,387 1,785 2,404 519 4,468
Consumer loans
and leases 6,160 7,223 8,111 7,853 5,913
---------- ---------- ----------- ---------- ----------
Total net
charge-offs $8,841 $8,490 $10,357 $8,161 $9,938
========== ========== =========== ========== ==========
Ratios:
Allowance for loan
and lease losses
to total loans
and leases 1.37% 1.40% 1.42% 1.44% 1.44%
Allowance for loan
and lease losses
to non-performing
loans 380.12% 343.82% 388.69% 344.07% 374.15%
Non-performing
loans to total
loans and leases 0.36% 0.41% 0.37% 0.42% 0.39%
Non-performing
assets to
total assets 0.23% 0.26% 0.24% 0.27% 0.25%
Net charge-offs to
average loans (1) 0.20% 0.21% 0.26% 0.20% 0.25%
----------------------------------------------------------------------
(1) Annualized.
Banknorth Group, Inc. and Subsidiaries
----------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except
per share data) Three Months Ended
-----------------------------------------------------
6/30/2004 3/31/2004 12/31/2003 9/30/2003 6/30/2003
-----------------------------------------------------
Interest and
dividend income $309,146 $292,652 $290,414 $290,750 $302,478
Interest expense 79,096 75,043 77,126 80,918 90,904
---------- ---------- ----------- ---------- --------
Net interest
income 230,050 217,609 213,288 209,832 211,574
Provision for
loan and lease
losses 9,500 9,500 10,400 10,500 10,500
---------- ---------- ----------- ---------- --------
Net interest
income after
provision for
loan and
lease losses 220,550 208,109 202,888 199,332 201,074
---------- ---------- ----------- ---------- --------
Noninterest income:
Deposit services 27,260 26,153 25,881 25,167 23,747
Insurance brokerage
commissions 12,278 13,736 11,480 10,930 10,948
Merchant and
electronic banking
income, net 13,069 10,404 10,542 11,115 11,098
Trust and investment
management
services 9,870 9,149 8,470 8,178 7,957
Bank owned life
insurance 6,275 5,496 5,978 5,785 5,826
Investment planning
services 5,146 4,839 4,765 3,761 3,911
Net gains on sales
of securities 3,355 3,581 2,682 3,573 33,423
Other noninterest
income 12,223 14,859 14,637 20,147 18,918
---------- ---------- ----------- ---------- --------
89,476 88,217 84,435 88,656 115,828
---------- ---------- ----------- ---------- --------
Noninterest expense:
Salaries and
employee
benefits 87,005 87,534 81,451 82,230 82,248
Occupancy and
equipment expense 27,512 27,599 26,731 26,188 27,579
Data processing 10,018 10,436 9,881 10,466 10,415
Advertising and
marketing 6,303 7,523 5,430 5,553 5,957
Amortization of
identifiable
intangible assets 2,084 1,904 2,324 2,320 2,306
Merger and
consolidation
costs (1) 4,135 1,614 1,316 808 1,530
Prepayment
penalties on
borrowings - - - - 30,490
Other noninterest
expense 26,769 23,109 28,543 24,082 23,514
--------- ---------- ----------- ---------- --------
163,826 159,719 155,676 151,647 184,039
--------- ---------- ----------- ---------- --------
Income before income
tax expense 146,200 136,607 131,647 136,341 132,863
Income tax
expense 50,353 46,280 40,085 46,063 45,338
--------- ---------- ----------- ---------- --------
Net Income $95,847 $90,327 $91,562 $90,278 $87,525
========= ========== =========== ========== ========
Weighted average
shares
outstanding:
Basic 169,637 162,965 162,149 161,517 162,312
Diluted 173,109 166,657 165,685 164,446 164,559
Earnings per share:
Basic $0.57 $0.55 $0.56 $0.56 $0.54
Diluted 0.55 0.54 0.55 0.55 0.53
----------------------------------------------------------------------
(1) Merger and consolidation costs consist of merger charges, certain
asset write-downs and branch closing costs.
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
----------------------------------------------------------------------
(In thousands, except
per share data) Three Months Ended
-------------------------------------------------------
6/30/2004 3/31/2004 12/31/2003 9/30/2003 6/30/2003
-------------------------------------------------------
Net interest
income $230,050 $217,609 $213,288 $209,832 $211,574
Net income $95,847 $90,327 $91,562 $90,278 $87,525
Shares
outstanding
(end of
period) 172,546 163,046 162,188 161,543 160,843
Weighted average
shares
outstanding:
Basic 169,637 162,965 162,149 161,517 162,312
Diluted 173,109 166,657 165,685 164,446 164,559
Earnings per
share:
Basic $0.57 $0.55 $0.56 $0.56 $0.54
Diluted $0.55 $0.54 $0.55 $0.55 $0.53
Shareholders'
equity (end
of period) $2,866,692 $2,651,911 $2,520,519 $2,475,580 $2,463,751
Book value per
share (end of
period) $16.61 $16.26 $15.54 $15.32 $15.32
Tangible book
value per share
(end of period) $8.39 $9.14 $8.37 $8.32 $8.28
RATIOS & OTHER INFORMATION:
Net interest margin (net
interest income as a %
of average earning
assets) (1) 3.66% 3.68% 3.65% 3.63% 3.71%
Net interest
spread (yield on
earning assets
minus yield on
interest-bearing
liabilities)(1) 3.43% 3.46% 3.42% 3.39% 3.45%
Return on average
assets 1.36% 1.37% 1.39% 1.39% 1.38%
Return on average
equity 13.54% 14.13% 14.72% 14.85% 14.24%
At period end:
--------------
Tier 1 leverage
capital ratio 6.75% 6.84% 6.65% 6.56% 6.36%
Tangible
equity/tangible
assets 5.20% 5.79% 5.37% 5.46% 5.41%
Total risk based
capital ratio 10.98% 11.47% 11.29% 11.29% 10.99%
Non-performing
loans $65,143 $67,854 $59,762 $66,725 $60,735
Total non-
performing
assets $67,167 $70,554 $63,103 $70,357 $64,460
Non-performing
loans as a % of
total loans 0.36% 0.41% 0.37% 0.42% 0.39%
Non-performing
assets as a % of
total assets 0.23% 0.26% 0.24% 0.27% 0.25%
Full service
banking offices 389 358 359 357 357
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS
(Non-GAAP Financial Information):
Noninterest income
as a percent of
total income (2) 27.24% 28.00% 27.71% 28.85% 28.03%
Merger and
consolidation
costs on a net
of tax basis (3) $2,687 $1,049 $855 $525 $997
Per diluted
share: 0.02 0.01 0.01 - 0.01
Noninterest
expense (4) $159,691 $158,105 $154,360 $150,839 $152,018
Return on average
assets (5) 1.40% 1.39% 1.41% 1.40% 1.39%
Cash return on
average tangible
assets (5) (6) 1.49% 1.47% 1.49% 1.48% 1.48%
Return on average
equity (5) 13.92% 14.29% 14.86% 14.93% 14.40%
Cash return on
average tangible
equity (5) (6) 26.67% 26.44% 27.86% 28.63% 27.15%
Efficiency
ratio (7) 50.51% 52.31% 52.32% 51.15% 51.71%
Cash efficiency
ratio (8) 49.85% 51.68% 51.53% 50.36% 50.93%
----------------------------------------------------------------------
(1) Adjusted to fully taxable equivalent basis.
(2) Excludes securities gains/(losses).
(3) Merger and consolidation costs consist of merger charges, certain
asset write-downs and branch closing costs.
(4) Excludes pre-tax merger and consolidation costs and prepayment
penalties on borrowings.
(5) Excludes merger and consolidation costs, net of related tax
benefits.
(6) Cash ratios reflect an adjustment to add back the amortization of
intangible assets, net of related tax benefits.
(7) Excludes securities gains/(losses), prepayment penalties on
borrowings, and merger and consolidation costs.
(8) Excludes securities gains/(losses), prepayment penalties on
borrowings, merger and consolidation costs, and amortization of
intangible assets.
Ratios are annualized where appropriate.
Banknorth Group, Inc. and Subsidiaries
Reconciliation Table - Non-GAAP Financial Information (Unaudited)
----------------------------------------------------------------------
(In thousands, except
per share data) Three Months Ended
------------------------------------------------------
6/30/2004 3/31/2004 12/31/2003 9/30/2003 6/30/2003
------------------------------------------------------
Net income
(including
merger and
consolidation
costs) $95,847 $90,327 $91,562 $90,278 $87,525
Add back merger
and consolidation
costs, net of tax
Merger related 2,687 1,355 862 525 1,397
Branch closings - (306) (7) - -
Revised auto lease
residual charge - - - - (400)
---------- ---------- ----------- ---------- --------
Excluding merger
and consolidation
costs 98,534 91,376 92,417 90,803 88,522
Add back
amortization of
intangibles,
net of tax 1,354 1,238 1,511 1,508 1,499
---------- ---------- ----------- ---------- --------
Cash basis,
excluding merger
and consolidation
costs $99,888 $92,614 $93,928 $92,311 $90,021
========== ========== =========== ========== ========
Basic earnings
per share $0.57 $0.55 $0.56 $0.56 $0.54
Effects of merger
and consolidation
costs, net of
tax 0.01 0.01 0.01 - 0.01
---------- ---------- ----------- ---------- --------
Excluding merger
and consolidation
costs 0.58 0.56 0.57 0.56 0.55
Effects of
amortization of
intangibles, net
of tax 0.01 0.01 0.01 0.01 -
---------- ---------- ----------- ---------- --------
Cash basis,
excluding merger
and consolidation
costs $0.59 $0.57 $0.58 $0.57 $0.55
========== ========== =========== ========== ========
Diluted earnings
per share $0.55 $0.54 $0.55 $0.55 $0.53
Effects of merger
and consolidation
costs, net of
tax 0.02 0.01 0.01 - 0.01
---------- ---------- ----------- ---------- --------
Excluding merger
and consolidation
costs 0.57 0.55 0.56 0.55 0.54
Effects of
amortization of
intangibles, net
of tax 0.01 0.01 0.01 0.01 0.01
---------- ---------- ----------- ---------- --------
Cash basis,
excluding merger
and consolidation
costs $0.58 $0.56 $0.57 $0.56 $0.55
========== ========== =========== ========== ========
Return on
average assets 1.36% 1.37% 1.39% 1.39% 1.38%
Effects of merger
and consolidation
costs, net of
tax 0.04% 0.02% 0.02% 0.01% 0.01%
---------- ---------- ----------- ---------- --------
Excluding merger
and consolidation
costs 1.40% 1.39% 1.41% 1.40% 1.39%
Effects of
amortization of
intangibles, net
of tax 0.09% 0.08% 0.08% 0.08% 0.09%
---------- ---------- ----------- ---------- --------
Cash basis,
excluding merger
and consolidation
costs 1.49% 1.47% 1.49% 1.48% 1.48%
========== ========== =========== ========== ========
Return on
average equity 13.54% 14.13% 14.72% 14.85% 14.24%
Effects of merger
and consolidation
costs, net of
tax 0.38% 0.16% 0.14% 0.08% 0.16%
---------- ---------- ----------- ---------- --------
Excluding merger
and consolidation
costs 13.92% 14.29% 14.86% 14.93% 14.40%
Effects of
amortization of
intangibles, net
of tax 12.75% 12.15% 13.00% 13.70% 12.75%
---------- ---------- ----------- ---------- --------
Cash basis,
excluding merger
and consolidation
costs 26.67% 26.44% 27.86% 28.63% 27.15%
========== ========== =========== ========== ========
Efficiency ratio 51.27% 52.23% 52.29% 50.80% 56.21%
Effects of
securities gains
and prepayment
penalties on
borrowings 0.55% 0.61% 0.48% 0.62% -3.98%
Effects of merger
and consolidation
costs -1.31% -0.53% -0.45% -0.27% -0.52%
--------- ---------- ----------- ---------- --------
Excluding securities
gains, prepayment
penalties on
borrowings, and
merger and
consolidation
costs 50.51% 52.31% 52.32% 51.15% 51.71%
Effects of
amortization of
intangibles -0.66% -0.63% -0.79% -0.79% -0.78%
---------- ---------- ----------- ---------- --------
Cash basis,
excluding
securities gains,
prepayment
penalties on
borrowings and
merger and
consolidation
costs 49.85% 51.68% 51.53% 50.36% 50.93%
========== ========== =========== ========== ========
Non Interest
Income $89,476 $88,217 $84,435 $88,656 $115,828
Net gains on
sales of
securities 3,355 3,581 2,682 3,573 33,423
---------- ---------- ----------- ---------- --------
Excluding
securities
gains $86,121 $84,636 $81,753 $85,083 $82,405
========== ========== =========== ========== ========
Non Interest
Expense $163,826 $159,719 $155,676 $151,647 $184,039
Merger and
consolidation
costs 4,135 1,614 1,316 808 1,530
Prepayment
penalties on
borrowings - - - - 30,490
---------- ---------- ----------- ---------- --------
Excluding merger
and consolidation
costs and
prepayment
penalties on
borrowings $159,691 $158,105 $154,360 $150,839 $152,019
========== ========== =========== ========== =========
Banknorth Group, Inc. and Subsidiaries
Reconciliation Table - Non-GAAP Financial Information (Unaudited)
----------------------------------------------------------------------
(In thousands, except per share data) Six Months Ended
---------------------
6/30/2004 6/30/2003
---------------------
Net income (including merger and
consolidation costs) $186,173 $168,919
Add back merger and consolidation costs,
net of tax
Merger related 4,043 4,324
Branch closings (306) (29)
Revised auto lease residual charge - (400)
---------- ----------
Excluding merger and consolidation costs 189,910 172,814
Add back amortization of intangibles, net of tax 2,592 2,797
---------- ----------
Cash basis, excluding merger and
consolidation costs $192,502 $175,611
========== ==========
Basic earnings per share $1.12 $1.06
Effects of merger and consolidation costs,
net of tax 0.02 0.02
---------- ----------
Excluding merger and consolidation costs 1.14 1.08
Effects of amortization of intangibles,
net of tax 0.02 0.02
---------- ----------
Cash basis, excluding merger and
consolidation costs $1.16 $1.10
========== ==========
Diluted earnings per share $1.10 $1.04
Effects of merger and consolidation costs,
net of tax 0.02 0.03
---------- ----------
Excluding merger and consolidation costs 1.12 1.07
Effects of amortization of intangibles,
net of tax 0.01 0.01
---------- ----------
Cash basis, excluding merger and
consolidation costs $1.13 $1.08
========== ==========
Return on average assets 1.36% 1.35%
Effects of merger and consolidation costs,
net of tax 0.03% 0.03%
---------- ----------
Excluding merger and consolidation costs 1.39% 1.38%
Effects of amortization of intangibles,
net of tax 0.09% 0.08%
---------- ----------
Cash basis, excluding merger and
consolidation costs 1.48% 1.46%
========== ==========
Return on average equity 13.82% 14.25%
Effects of merger and consolidation costs,
net of tax 0.27% 0.33%
---------- ----------
Excluding merger and consolidation costs 14.09% 14.58%
Effects of amortization of intangibles,
net of tax 12.45% 11.34%
---------- ----------
Cash basis, excluding merger and
consolidation costs 26.54% 25.92%
========== ==========
Efficiency ratio 51.74% 54.59%
Effects of securities gains and prepayment
penalties on borrowings 0.58% -1.87%
Effects of merger and consolidation costs -0.93% -1.04%
---------- ----------
Excluding securities gains, prepayment
penalties on borrowings, and merger
and consolidation costs 51.39% 51.68%
Effects of amortization of intangibles -0.65% -0.74%
---------- ----------
Cash basis, excluding securities gains,
prepayment penalties on borrowings, and
merger and consolidation costs 50.74% 50.94%
========== ==========
Non Interest Income $177,694 $194,067
Net gains on sales of securities 6,936 36,206
---------- ----------
Excluding securities gains $170,758 $157,861
========== ==========
Non Interest Expense $323,544 $333,947
Merger and consolidation costs 5,748 5,981
Write-off of branch automation project - -
Prepayment penalties on borrowings - 30,490
---------- ----------
Excluding merger and consolidation costs,
write-off of branch automation project and
prepayment penalties on borrowings. $317,796 $297,476
========== ==========
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