Banknorth Reports Record Quarterly Earnings.Business Editors PORTLAND Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Maine--(BUSINESS WIRE)--Oct. 16, 2003 (Third Quarter Earnings Conference Call at 1:30 p.m. Eastern Time today, October October: see month. 16, 2003. 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 dial-in number is 617 801-6888. Replay passcode is 27745454. 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 reported record quarterly net income of $90.3 million for the third quarter ended September September: see month. 30, 2003, up 17% from net income of $76.9 million for the third quarter a year ago. 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 rose 8% to 55 cents for the third quarter of 2003 from 51 cents for the third quarter of 2002. For the nine months ended September 30, 2003, net income was also up 17% over the first nine months of last year, to $259.2 million from $221.5 million. On a per diluted share basis, earnings for the first nine months of 2003 rose 7%, to $1.59 from $1.48 for the first nine months of 2002. "Strong commercial and consumer loan growth and fee income growth coupled with solid expense control resulted in a record quarter in challenging economic times," 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
The Company indicated that it continues to be comfortable with the consensus earnings estimate of $2.18, exclusive of merger and consolidation charges, for 2003. For 2004, the Company indicated it was more comfortable with estimated earnings increases in the high single digits than those estimates above 10%. Consumer loans and leases and commercial real estate loans at September 30, 2003 increased by more than 20% over the levels at September 30, 2002. Exclusive of acquisitions, consumer loans and leases increased 8% and commercial real estate loans increased 12%. Commercial business loans and leases were up 14% at September 30, 2003 over September 30, 2002, and increased 8 % exclusive of acquisitions. The loan growth helped offset a decline in the Company's net interest margin to 3.63% for the three months ended September 30, 2003, as compared to 4.03% for the three months ended September 30, 2002. The margin also declined from 3.71% for the previous quarter, reflecting in part the continuing low interest rate environment resulting in accelerated loan prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. and the most recent interest rate reduction by the Federal Reserve Board. Several categories of fee income increased by double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. for the three months ended September 30, 2003 as compared to the three months ended September 30, 2002. Noninterest income rose to 28.9% of total income for the quarter ended September 30, 2003, up from 24.5 % for the quarter ended September 30, 2002. By comparison to an overall 35% increase in noninterest income, noninterest expenses increased by only 7% for the three months ended September 30, 2003 as compared to the quarter ended September 30, 2002. Total deposits at September 30, 2003 increased by 17% over the levels at September 30, 2002, and increased 10% exclusive of acquisitions and certificates of deposit. Asset quality remained sound with nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. to total assets, nonperforming loans to total loans and net charge-offs to average loans in the third quarter of 2003 all lower than levels for the third quarter of 2002. Nonperforming assets to total assets and nonperforming loans to total loans for the third quarter increased slightly over the second quarter, from 0.25% to 0.27% and from 0.39% to 0.42%, respectively, but net charge-offs to average loans were down from 0.25% to 0.20%. Net charge-offs were $8.2 million for the third quarter as compared to $9.9 million in the previous quarter. At September 30, 2003, the Company's Tier 1 leverage capital ratio was 6.56%, its total risk based capital ratio was 11.30% and its ratio of 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. equity to tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. was 5.46%. All three capital ratios were higher than the previous quarter. 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. at September 30, 2003 was $2.5 billion, up from $1.9 billion at September 30, 2002. Banknorth Group, headquartered in 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 , is one of the country's 35 largest commercial banking companies with $25.7 billion in assets. The Company'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 offers 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 Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. . 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)
Sept. 30, Sept. 30, % June 30, %
(In thousands) 2003 2002 Change 2003 Change
Cash and due from
banks $559,056 $633,455 -12% $661,103 -15%
Federal funds sold and
other short-term
investments 31,645 5,883 438% 2,968 966%
Securities available
for sale 6,938,938 6,483,010 7% 6,992,917 -1%
Securities held to
maturity 141,626 253,131 -44% 166,239 -15%
Loans and leases held
for sale 74,696 76,399 -2% 92,795 -20%
Loans and leases:
Residential real
estate mortgages 2,702,895 2,646,432 2% 2,852,991 -5%
Commercial real
estate mortgages 5,310,179 4,426,120 20% 5,140,130 3%
Commercial business
loans and leases 3,265,795 2,872,191 14% 3,229,718 1%
Consumer loans and
leases 4,646,983 3,786,794 23% 4,510,473 3%
Total loans and
leases 15,925,852 13,731,537 16% 15,733,312 1%
Less: Allowance for
loan and lease
losses 229,581 201,689 14% 227,240 1%
Loans and leases,
net 15,696,271 13,529,848 16% 15,506,072 1%
Premises and equipment 264,752 266,170 -1% 271,124 -2%
Goodwill 1,094,334 569,814 92% 1,092,345 0%
Identifiable
intangible assets 37,340 31,595 18% 38,986 -4%
Mortgage servicing
rights 3,802 5,202 -27% 2,973 28%
Bank owned life
insurance 482,255 374,880 29% 476,470 1%
Other assets 416,222 316,753 31% 446,118 -7%
$25,740,937 $22,546,140 14%$25,750,110 0%
Liabilities & Shareholders' Equity
Deposits:
Regular savings $2,473,397 $1,835,688 35% $2,472,816 0%
Retail money market
and NOW accounts 6,922,924 5,769,357 20% 6,759,000 2%
Retail certificates
of deposit 4,943,292 4,749,210 4% 5,122,392 -3%
Brokered deposits - 32,532 -100% - 0%
Noninterest bearing
deposits 3,444,084 2,855,122 21% 3,340,408 3%
Total deposits 17,783,697 15,241,909 17% 17,694,616 1%
Borrowings from the
Federal Home Loan
Bank 1,557,622 2,482,180 -37% 1,634,507 -5%
Federal funds
purchased and
securities sold under
repurchase agreements 2,740,809 2,081,269 32% 2,610,493 5%
Subordinated debt and
senior notes 359,172 200,000 80% 362,942 -1%
Other borrowings 7,309 103,030 -93% 8,758 -17%
Company obligated,
mandatorily redeemable
securities of subsidiary
trusts holding solely
parent junior
subordinated
debentures 295,056 295,056 0% 295,056 0%
Other liabilities 521,692 218,537 139% 679,987 -23%
Total liabilities 23,265,357 20,621,981 13% 23,286,359 0%
Shareholders' equity 2,475,580 1,924,159 29% 2,463,751 0%
$25,740,937 $22,546,140 14%$25,750,110 0%
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, Nine months Ended Three Months Ended
except per share September 30, % September 30, %
data) 2003 2002 Change 2003 2002 Change
Interest and dividend
income $902,555 $928,549 -3% $290,750 $313,157 -7%
Interest expense 275,012 331,594 -17% 80,918 112,161 -28%
Net interest income 627,543 596,955 5% 209,832 200,996 4%
Provision for loan and
lease losses 31,901 33,486 -5% 10,500 10,829 -3%
Net interest income
after provision
for loan and
lease losses 595,642 563,469 6% 199,332 190,167 5%
Noninterest income:
Deposit services 71,441 59,712 20% 25,167 20,816 21%
Insurance brokerage
commissions 34,235 31,885 7% 10,930 11,670 -6%
Merchant and
electronic banking
income, net 31,235 27,267 15% 11,115 10,108 10%
Trust and
investment
management
services 23,486 24,587 -4% 8,178 7,791 5%
Bank owned life
insurance 16,952 14,477 17% 5,785 5,107 13%
Investment planning
services 10,928 8,452 29% 3,761 2,770 36%
Net gains on sales
of securities 39,778 578 NM 3,573 208 NM
Other noninterest
income 54,668 23,109 137% 20,147 7,035 186%
282,723 190,067 49% 88,656 65,505 35%
Noninterest expense:
Salaries and
employee benefits 245,170 230,763 6% 82,230 79,718 3%
Occupancy and
equipment expense 79,928 67,622 18% 26,188 22,701 15%
Data processing 31,059 30,188 3% 10,466 9,763 7%
Advertising and
marketing 16,569 12,515 32% 5,553 4,301 29%
Amortization of
identifiable
intangible assets 6,622 4,422 50% 2,320 1,684 38%
Merger and
consolidation
costs(1) 6,788 11,433 -41% 808 2,168 -63%
Prepayment
penalties on
borrowings 30,490 - NM - - NM
Other noninterest
expense 68,968 64,322 7% 24,082 21,242 13%
485,594 421,265 15% 151,647 141,577 7%
Income before income
tax expense 392,771 332,271 18% 136,341 114,095 19%
Income tax expense 133,574 110,771 21% 46,063 37,233 24%
Net Income $259,197 $221,500 17% $90,278 $76,862 17%
Weighted average
shares outstanding:
Basic 160,498 148,208 8% 161,517 148,099 9%
Diluted 162,789 149,935 9% 164,446 149,662 10%
Earnings per share:
Basic $1.61 $1.49 8% $0.56 $0.52 8%
Diluted 1.59 1.48 7% 0.55 0.51 8%
(1) Merger and
consolidation
costs on a net
of tax basis: $4,419 $7,441 $525 $1,410
Per diluted
share: 0.03 0.05 - $0.01
NM - calculated % change is not meaningful
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except
per share data)
Nine months Ended Three Months Ended
September 30, % September 30, %
2003 2002 Change 2003 2002 Change
Net interest
income $627,543 $596,955 5% $209,832 $200,996 4%
Net income $259,197 $221,500 17% $90,278 $76,862 17%
Shares
outstanding
(end of
period) 161,543 147,937 9% 161,543 147,937 9%
Weighted average
shares
outstanding:
Basic 160,498 148,208 8% 161,517 148,099 9%
Diluted 162,789 149,935 9% 164,446 149,662 10%
Earnings per
share:
Basic $1.61 $1.49 8% $0.56 $0.52 8%
Diluted $1.59 $1.48 7% $0.55 $0.51 8%
Shareholders'
equity, (end
of period) $2,475,580 $1,924,158 29% $2,475,580 $1,924,158 29%
Book value
per share,
(end of
period) $15.32 $13.01 18% $15.32 $13.01 18%
Tangible book
value per
share, (end of
period) $8.32 $8.94 -7% $8.32 $8.94 -7%
RATIOS & OTHER Nominal Nominal
INFORMATION: Inc/ Inc/
(Dec) (Dec)
Net interest margin
(net interest
income as a % of
average earning
assets)(1) 3.67% 4.14% -0.47% 3.63% 4.03% -0.40%
Net interest spread
(yield on earning
assets minus
yield on
interest-
bearing
liabilities)(1) 3.40% 3.75% -0.35% 3.39% 3.64% -0.25%
Return on
average assets 1.36% 1.41% -0.05% 1.39% 1.40% -0.01%
Return on
average equity 14.45% 16.46% -2.01% 14.85% 16.25% -1.40%
Noninterest
income as a
percent of
total income(2) 27.91% 24.09% 3.82% 28.85% 24.52% 4.33%
At period end:
Tier 1 leverage
capital ratio 6.56% 7.21% -0.65% 6.56% 7.21% -0.65%
Tangible
equity/tangible
assets 5.46% 6.03% -0.57% 5.46% 6.03% -0.57%
Total risk based
capital ratio 11.30% 12.28% -0.98% 11.30% 12.28% -0.98%
Non-performing
loans $66,725 $64,873 3% $66,725 $64,873 3%
Total non-
performing
assets $70,357 $68,772 2% $70,357 $68,772 2%
Non-performing
loans as a % of
total loans 0.42% 0.47% -0.05% 0.42% 0.47% -0.05%
Non-performing
assets as a %
of total assets 0.27% 0.31% -0.04% 0.27% 0.31% -0.04%
Full service
banking offices 357 321 357 321
EARNINGS AND RATIOS
EXCLUDING CERTAIN ITEMS
(Non-GAAP Financial
Information):
Non-interest
expense(3) $448,315 $409,832 9% $150,839 $139,409 8%
Return on
average assets
(4) 1.38% 1.45% -0.07% 1.40% 1.42% -0.02%
Cash return on
average
tangible assets
(4)(5) 1.47% 1.51% -0.04% 1.48% 1.48% 0.00%
Return on
average equity
(4) 14.69% 17.01% -2.32% 14.93% 16.55% -1.62%
Cash return on
average
tangible equity
(4)(5) 26.83% 23.63% 3.20% 28.63% 23.24% 5.39%
Efficiency ratio
(6) 51.50% 52.11% -0.61% 51.15% 52.35% -1.20%
Cash efficiency
ratio(7) 50.74% 51.55% -0.81% 50.36% 51.72% -1.36%
(1) Adjusted to fully taxable equivalent basis.
(2) Excludes securities gains/(losses).
(3) Excludes pre-tax merger and consolidation costs and prepayment
penalties on borrowings.
(4) Excludes merger and consolidation costs, net of related tax
benefits.
(5) Cash ratios reflect an adjustment to add back the amortization of
intangible assets, net of related tax benefits.
(6) Excludes securities gains/(losses), prepayment penalties on
borrowings, and merger and consolidation costs.
(7) Excludes securities gains/(losses), prepayment penalties on
borrowings, merger and consolidation costs, and amortization of
intangible assets.
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS
(Unaudited)
Three Months Ended September 30,
2003 2002
Average Yield/ Average Yield/
(Dollars in Thousands) Balance Rate Balance Rate
Assets
Loans and leases(1)
Residential real estate
mortgages $2,852,568 5.43% $2,657,333 6.65%
Commercial real estate
mortgages 5,263,002 5.88% 4,347,508 6.86%
Commercial loans and leases 3,216,254 5.04% 2,754,430 5.81%
Consumer loans and leases 4,577,421 5.43% 3,662,187 6.78%
15,909,245 5.50% 13,421,458 6.58%
Securities 7,270,800 3.96% 6,487,448 5.64%
Federal funds sold and other
short-term investments 16,113 1.36% 118,281 1.71%
Total earning assets 23,196,158 5.02% 20,027,187 6.25%
Bank owned life insurance 478,572 371,552
Noninterest-earning assets 2,139,519 1,399,012
Total assets $25,814,249 $21,797,751
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Regular savings $2,474,169 0.40% $1,773,402 0.94%
Retail money market and NOW
accounts 6,815,603 0.80% 5,608,231 1.53%
Retail certificates of deposit 5,053,277 2.27% 4,736,817 3.04%
Brokered deposits - 0.00% 37,000 1.85%
Total interest-bearing
deposits 14,343,049 1.25% 12,155,450 2.03%
Borrowed funds 5,407,580 2.63% 4,885,461 4.05%
Total interest-bearing
liabilities 19,750,629 1.63% 17,040,911 2.61%
Noninterest bearing deposits 3,388,018 2,684,263
Other liabilities 263,171 196,573
Shareholders' equity 2,412,431 1,876,004
Total liabilities and
shareholders' equity $25,814,249 $21,797,751
Net earning assets $3,445,529 $2,986,276
Net interest income (fully taxable
equivalent) $211,397 $202,233
Less: fully taxable equivalent
adjustments (1,565) (1,237)
Net interest income $209,832 $200,996
Net interest rate spread (fully
taxable equivalent) 3.39% 3.64%
Net interest margin (fully taxable
equivalent) 3.63% 4.03%
(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)
Nine months Ended September 30,
2003 2002
Average Yield/ Average Yield/
(Dollars in Thousands) Balance Rate Balance Rate
Assets
Loans and leases(1)
Residential real estate
mortgages $2,880,776 5.72% $2,634,050 6.85%
Commercial real estate
mortgages 5,084,858 6.16% 4,222,861 7.04%
Commercial loans and leases 3,126,338 5.19% 2,605,746 6.07%
Consumer loans and leases 4,410,562 5.73% 3,577,483 7.05%
15,502,534 5.76% 13,040,140 6.81%
Securities 7,474,971 4.26% 6,237,668 5.70%
Federal funds sold and other
short-term investments 12,922 1.39% 72,133 1.81%
Total earning assets 22,990,427 5.27% 19,349,941 6.43%
Bank owned life insurance 459,049 354,311
Noninterest-earning assets 2,016,447 1,356,848
Total assets $25,465,923 $21,061,100
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Regular savings $2,373,161 0.49% $1,712,748 0.95%
Retail money market and NOW
accounts 6,540,686 0.93% 5,319,602 1.52%
Retail certificates of deposit 5,103,328 2.44% 4,716,914 3.27%
Brokered deposits - 0.00% 50,348 1.85%
Total interest-bearing
deposits 14,017,175 1.40% 11,799,612 2.14%
Borrowed funds 5,710,875 2.99% 4,728,125 4.04%
Total interest-bearing
liabilities 19,728,050 1.87% 16,527,737 2.68%
Noninterest bearing deposits 3,132,825 2,551,397
Other liabilities 206,378 182,536
Shareholders' equity 2,398,670 1,799,430
Total liabilities and
shareholders' equity $25,465,923 $21,061,100
Net earning assets $3,262,377 $2,822,204
Net interest income (fully taxable
equivalent) $631,862 $600,752
Less: fully taxable equivalent
adjustments (4,319) (3,797)
Net interest income $627,543 $596,955
Net interest rate spread (fully
taxable equivalent) 3.40% 3.75%
Net interest margin (fully taxable
equivalent) 3.67% 4.14%
(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)
9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002
Non-performing
Assets:
Residential
real estate
mortgages $9,135 $9,827 $9,828 $5,781 $6,733
Commercial real
estate
mortgages 27,069 19,139 22,990 17,649 16,762
Commercial
business loans
and leases 22,857 24,577 38,562 32,693 33,014
Consumer loans
and leases 7,664 7,192 7,457 9,194 8,364
Total non-
performing loans 66,725 60,735 78,837 65,317 64,873
Other non-
performing
assets (net) 3,632 3,725 3,817 3,636 3,899
Total non-
performing
assets $70,357 $64,460 $82,654 $68,953 $68,772
Allowance for
loan and lease
losses $229,581 $227,240 $226,677 $208,273 $201,689
Net loan charge-
offs:
Real estate
mortgages $58 $31 $33 ($274) ($9)
Commercial real
estate
mortgages (269) (474) (272) 389 (70)
Total real estate (211) (443) (239) 115 (79)
Commercial
business loans
and leases 518 4,468 2,516 2,432 5,596
Consumer loans
and leases 7,852 5,913 6,566 6,670 4,889
Total net charge-
offs $8,159 $9,938 $8,843 $9,217 $10,406
Ratios:
Allowance for
loan and lease
losses to total
loans and leases 1.44% 1.44% 1.46% 1.48% 1.47%
Allowance for
loan and lease
losses to non-
performing loans 344.07% 374.15% 287.53% 318.87% 310.90%
Non-performing
loans to total
loans and leases 0.42% 0.39% 0.51% 0.46% 0.47%
Non-performing
assets to total
assets 0.27% 0.25% 0.31% 0.29% 0.31%
Net charge-offs
to average loans
- QTD(1) 0.20% 0.25% 0.24% 0.27% 0.31%
Net charge-offs
to average loans
- YTD(1) 0.23% 0.25% 0.24% 0.29% 0.30%
(1) Annualized
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands,
except per share
data) Three Months Ended
9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002
Interest and
dividend income $290,750 $302,478 $309,327 $306,569 $313,157
Interest expense 80,918 90,904 103,190 107,006 112,161
Net interest income 209,832 211,574 206,137 199,563 200,996
Provision for loan
and lease losses 10,500 10,500 10,901 10,829 10,829
Net interest
income after
provision for
loan and lease
losses 199,332 201,074 195,236 188,734 190,167
Noninterest income:
Deposit services 25,167 23,747 22,526 22,427 20,816
Insurance
brokerage
commissions 10,930 10,948 12,357 12,554 11,670
Merchant and
electronic
banking income,
net 11,115 11,098 9,021 10,376 10,108
Trust and
investment
management
services 8,178 7,957 7,351 7,866 7,791
Bank owned life
insurance 5,785 5,826 5,342 5,525 5,107
Investment
planning
services 3,761 3,911 3,256 3,120 2,770
Net gains on
sales of
securities 3,573 33,423 2,782 6,705 208
Other noninterest
income 20,147 18,918 15,603 15,868 7,035
88,656 115,828 78,238 84,441 65,505
Noninterest
expense:
Salaries and
employee
benefits 82,230 82,248 80,693 80,622 79,718
Occupancy and
equipment
expense 26,188 27,579 26,159 25,733 22,701
Data processing 10,466 10,415 10,178 10,514 9,763
Advertising and
marketing 5,553 5,957 5,060 4,723 4,301
Amortization of
goodwill - - - - -
Amortization of
identifiable
intangible
assets 2,320 2,306 1,997 2,070 1,684
Merger and
consolidation
costs (1) 808 1,530 4,450 3,258 2,168
Write-off of
branch
automation
project (2) - - - 6,170 -
Prepayment
penalties on
borrowings - 30,490 - - -
Other
noninterest
expense 24,082 23,514 21,371 25,036 21,242
151,647 184,039 149,908 158,126 141,577
Income before
income tax expense 136,341 132,863 123,566 115,049 114,095
Income tax expense 46,063 45,338 42,173 37,911 37,233
Net Income $90,278 $87,525 $81,393 $77,138 $76,862
Weighted average
shares
outstanding:
Basic 161,517 162,312 157,667 148,226 148,099
Diluted 164,446 164,559 159,328 149,389 149,662
Earnings per share:
Basic $0.56 $0.54 $0.52 $0.52 $0.52
Diluted $0.55 $0.53 $0.51 $0.52 $0.51
(1) Merger and
consolidation
costs on a net
of tax basis: $525 $996 $2,899 $2,125 $1,410
Per diluted
share: $0.00 $0.01 $0.02 $0.01 $0.01
(2) Represents previously capitalized costs written off in connection
with the abandonment of a project to upgrade all teller stations and
CSR desktops.
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands,
except per share
data) Three Months Ended
9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002
Net interest
income $209,832 $211,574 $206,137 $199,563 $200,996
Net income $90,278 $87,525 $81,393 $77,138 $76,862
Shares
outstanding
(end of period) 161,543 160,843 163,881 150,579 147,937
Weighted average
shares
outstanding:
Basic 161,517 162,312 157,667 148,226 148,099
Diluted 164,446 164,559 159,328 149,389 149,662
Earnings per
share:
Basic $0.56 $0.54 $0.52 $0.52 $0.52
Diluted $0.55 $0.53 $0.51 $0.52 $0.51
Shareholders'
equity, (end
of period) $2,475,580 $2,463,751 $2,498,194 $2,063,485 $1,924,158
Book value per
share, (end
of period) $15.32 $15.32 $15.24 $13.70 $13.01
Tangible book
value per share,
(end of period) $8.32 $8.28 $8.31 $9.09 $8.94
RATIOS & OTHER INFORMATION:
Net interest
margin (net
interest income
as a % of
average
earning
assets)(1) 3.63% 3.71% 3.66% 3.86% 4.03%
Net interest
spread (yield on
earning assets
minus yield on
interest-
bearing
liabilities)(1) 3.39% 3.45% 3.37% 3.50% 3.64%
Return on average
assets 1.39% 1.38% 1.32% 1.35% 1.40%
Return on average
equity 14.85% 14.24% 14.26% 15.75% 16.25%
Noninterest
income as a
percent of total
income(2) 28.85% 28.03% 26.80% 28.03% 24.52%
At period end:
Tier 1 leverage
capital ratio 6.56% 6.36% 6.53% 7.13% 7.21%
Tangible
equity/tangible
assets 5.46% 5.41% 5.42% 6.02% 6.03%
Total risk based
capital ratio 11.30% 10.99% 11.20% 12.15% 12.28%
Non-performing
loans $66,725 $60,735 $78,837 $65,317 $64,873
Total non-
performing
assets $70,357 $64,460 $82,654 $68,952 $68,772
Non-performing
loans as a % of
total loans 0.42% 0.39% 0.51% 0.46% 0.47%
Non-performing
assets as a % of
total assets 0.27% 0.25% 0.31% 0.29% 0.31%
Full service
banking offices 357 357 360 326 321
EARNINGS AND RATIOS EXCLUDING CERTAIN ITEMS
(Non-GAAP Financial Information):
Non-interest
expense(3) $150,839 $152,018 $145,458 $154,868 $139,409
Return on average
assets(4) 1.40% 1.39% 1.36% 1.39% 1.42%
Cash return on
average tangible
assets(4)(5) 1.48% 1.48% 1.44% 1.45% 1.48%
Return on average
equity(4) 14.93% 14.40% 14.77% 16.18% 16.55%
Cash return on
average tangible
equity(4)(5) 28.63% 27.15% 24.76% 23.84% 23.24%
Efficiency ratio(6) 51.15% 51.71% 51.66% 55.85% 52.35%
Cash efficiency
ratio(7) 50.36% 50.93% 50.95% 55.10% 51.72%
(1) Adjusted to fully taxable equivalent basis.
(2) Excludes securities gains/(losses).
(3) Excludes pre-tax merger and consolidation costs and prepayment
penalties on borrowings.
(4) Excludes merger and consolidation costs, net of related tax
benefits.
(5) Cash ratios reflect an adjustment to add back the amortization of
intangible assets, net of related tax benefits.
(6) Excludes securities gains/(losses), prepayment penalties on
borrowings, and merger and consolidation costs.
(7) Excludes securities gains/(losses), prepayment penalties on
borrowings, merger and consolidation costs, and amortization of
intangible assets.
Banknorth Group, Inc. and Subsidiaries
Reconciliation Table - Non-GAAP
Financial Information (Unaudited)
(In thousands,
except per share
data) Three Months Ended
9/30/2003 6/30/2003 3/31/2003 12/31/2002 9/30/2002
Net income
(including merger
and consolidation
costs) $90,278 $87,525 $81,393 $77,138 $76,862
Add back merger and
consolidation costs, net of
tax
Merger related 525 1,396 2,927 2,125 1,271
Charter
consolidation - - - - 110
Branch closings - (28) - 29
Revise auto lease
residual charge - (400) - - -
Excluding merger
and consolidation
costs 90,803 88,521 84,292 79,263 78,272
Amortization of
intangibles, net
of tax 1,508 1,499 1,298 1,346 1,094
Cash basis,
excluding merger
and consolidation
costs $92,311 $90,020 $85,590 $80,609 $79,366
Basic earnings per
share $0.56 $0.54 $0.52 $0.52 $0.52
Effects of merger
and consolidation
costs, net of tax - 0.01 0.01 0.01 0.01
Excluding merger
and consolidation
costs 0.56 0.55 0.53 0.53 0.53
Effects of
amortization of
intangibles, net
of tax 0.01 - 0.01 0.01 0.01
Cash basis,
excluding merger
and consolidation
costs $0.57 $0.55 $0.54 $0.54 $0.54
Diluted earnings
per share $0.55 $0.53 $0.51 $0.52 $0.51
Effects of merger
and consolidation
costs, net of tax - 0.01 0.02 0.01 0.01
Excluding merger
and consolidation
costs 0.55 0.54 0.53 0.53 0.52
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 $0.56 $0.55 $0.54 $0.54 $0.53
Return on average
assets 1.39% 1.38% 1.32% 1.35% 1.40%
Effects of merger
and consolidation
costs, net of tax 0.01% 0.01% 0.04% 0.04% 0.02%
Excluding merger
and consolidation
costs 1.40% 1.39% 1.36% 1.39% 1.42%
Effects of
amortization of
intangibles, net
of tax 0.08% 0.09% 0.08% 0.06% 0.06%
Cash basis,
excluding merger
and consolidation
costs 1.48% 1.48% 1.44% 1.45% 1.48%
Return on average
equity 14.85% 14.24% 14.26% 15.75% 16.25%
Effects of merger
and consolidation
costs, net of tax 0.08% 0.16% 0.51% 0.43% 0.30%
Excluding merger
and consolidation
costs 14.93% 14.40% 14.77% 16.18% 16.55%
Effects of
amortization of
intangibles, net
of tax 13.70% 12.75% 9.99% 7.66% 6.69%
Cash basis, excluding
merger and
consolidation costs 28.63% 27.15% 24.76% 23.84% 23.24%
Efficiency ratio 50.80% 56.21% 52.71% 55.68% 53.12%
Effects of
securities gains
and prepayment
penalties on
borrowings 0.62% -3.98% 0.53% 1.34% 0.05%
Effects of merger
and consolidation
costs -0.27% -0.52% -1.58% -1.17% -0.82%
Excluding securities
gains, prepayment
penalties on borrowings,
and merger and
consolidation costs 51.15% 51.71% 51.66% 55.85% 52.35%
Effects of
amortization of
intangibles -0.79% -0.78% -0.71% -0.75% -0.63%
Cash basis, excluding
securities gains,
prepayment penalties
on borrowings, and
merger and
consolidation costs 50.36% 50.93% 50.95% 55.10% 51.72%
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