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)--April 18, 2002 (Earnings conference call at 1:30 p.m., Eastern Time today, April 18, 2002. Dial in number for U.S. 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 toll free at 877 585-2566, Conference ID is 3664367. International Dial in number is 706 679-7449, same Conference ID. Replay available two hours after the call through April 25, 2002. U.S. and Canada dial-in is 800 642-1687, International replay number is 706 645-9291. Enter the conference ID for the live call. Live webcast and webcast replay also available at www.banknorth.com, Investor Relations Investor relations The process by which the corporation communicates with its investors. .) Banknorth Group, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BKNG) today announced record quarterly earnings of $67.3 million, or 45 cents 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, for the first quarter ended March 31, 2002, up 22% on a dollar basis and up 15% on a per diluted share basis from earnings of $55.1 million, or 39 cents per diluted share, for the first quarter of 2001. On an operating basis, exclusive of special charges which mostly related to the acquisitions of Andover Andover (ăn`dōvər), town (1990 pop. 29,151), Essex co., NE Mass.; inc. 1646. Chiefly a textile producer in the 19th cent., Andover now makes toiletries, electronic and computer equipment, chemicals, medical instruments, rubber products, Bancorp and MetroWest This article is about a region in Massachusetts. For the planned community in Fairfax, Virginia, see Fairlee Metro-West. MetroWest is a cluster of cities and towns lying west of Boston and east of Worcester, in the US state of Massachusetts. Bank in the fourth quarter of 2001, earnings for the quarter ended March 31, 2002 were $72.7 million, or 48 cents per diluted share. First quarter operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were up 23% on a dollar basis and 14% on a per diluted share basis from the same quarter a year ago. Operating cash earnings, which are operating earnings exclusive of expenses associated with the amortization of deposit premiums and other 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. , were 50 cents per diluted share for the first quarter of 2002, up 11% from 45 cents for the same quarter a year ago. "As we emerge from the recession of last year it is difficult to predict how fast business activity and employment levels will recover so we are pleased to achieve record earnings in what is historically our slowest quarter of the year," 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
"Much of the additional expenses will be gone with the full integration of the acquisitions but we believe that the loan and deposit growth can be sustained in the current economic envrionment." The improved earnings were primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a 26% increase in net interest income for the quarter ended March 31, 2002 as compared to the same quarter a year ago. Total loans at the end of the first quarter were up 19% as compared to the end of the first quarter of 2001, largely due to the acquisitions of Andover and MetroWest. Banknorth's net interest margin for the first quarter of 2002 was 4.24% as compared to 3.78% for the same quarter a year ago. Loan growth was achieved with continuing sound asset quality, with two key measurements for the quarter ended March 31, 2002 virtually the same as for the same quarter a year ago and the previous quarter ended December December: see month. 31, 2001. Nonperforming loans as a percentage of total loans improved slightly to 0.56% at March 31, 2002 as compared to 0.57% at March 31, 2001 and to 0.59% at December 31, 2001. 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. as a percentage of total assets at March 31, 2002 was the same as March 31, 2001 at 0.37% and slightly better than 0.39% at December 31, 2001. The most significant areas of loan growth for the quarter ended March 31, 2002 were in residential and commercial mortgages, up 20% and 41%, respectively, over the same quarter a year ago. Period end total loans from December 31, 2001, which included loans from Andover and MetroWest, to March 31, 2002 increased by $52 million. Last year, during the same period, total loans actually decreased. "The growth in loans during the quarter may well indicate a strengthening economy but certainly indicates our ability to compete successfully for available sound loans," said Mr. Ryan. The most significant areas of deposit growth for the quarter ended March 31, 2002 were in the core areas of money market/NOW accounts and noninterest bearing deposits, principally checking accounts, up 27% and 22%, respectively, over the same quarter a year ago. In the fee income area, investment planning services increased by 60% during the quarter ended March 31, 2002, as compared to the same quarter a year ago and merchant and electronic banking income increased 19% for the same periods. Trust and investment management services decreased 6% during the first quarter of 2002 as compared to the first quarter a year ago, reflecting stock market declines which negatively affect fees in the money management sector. Insurance brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. commissions were up slightly. During the first quarter of 2002, Banknorth repurchased 5.5 million shares at a weighted average price of $24.14 per share. At March 31, 2002, Banknorth was authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 8.2 million additional shares. 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 March 31, 2002 was $1.70 billion, up from $1.36 billion at March 31, 2001. Book value per share at March 31, 2002 was $11.55, up from $9.82 at March 31, 2001. Banknorth Group, Inc., 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 total assets of $20.9 billion at March 31, 2002. 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). , 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. , Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. , 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). , 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 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 also operates subsidiaries and divisions in insurance, investment planning, money management, leasing, 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. . Note: 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.
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, %
(In thousands) 2002 2001 Change
Cash and due from banks $ 479,151 $ 466,928 3%
Federal funds sold and
other short-term
investments 20,061 71,562 -72%
Securities available
for sale 5,979,155 5,560,556 8%
Securities held to
maturity 310,724 432,338 -28%
Loans and leases held
for sale 62,471 112,685 -45%
Loans and leases:
Residential real
estate mortgages 2,561,552 2,140,142 20%
Commercial real estate
mortgages 4,134,095 2,935,949 41%
Commercial business
loans and leases 2,502,967 2,309,017 8%
Consumer loans and
leases 3,569,126 3,373,255 6%
Total loans and
leases 12,767,740 10,758,363 19%
Less: Allowance for
loan and lease losses 190,890 153,621 24%
Loans and leases, net 12,576,850 10,604,742 19%
Premises and equipment 238,691 204,088 17%
Goodwill 407,579 132,109 209%
Identifiable intangible
assets 53,956 48,031 12%
Mortgage servicing
rights 8,503 491 NM
Bank owned life
insurance 364,779 308,620 18%
Other assets 353,218 309,981 14%
$20,855,138 $18,252,131 14%
Liabilities &
Shareholders' Equity
Deposits:
Regular savings $ 1,705,517 $ 1,420,072 20%
Retail money market
and NOW accounts 5,170,005 4,081,659 27%
Retail certificates of
deposit 4,726,465 4,481,266 5%
Brokered deposits 60,596 166,998 -64%
Noninterest bearing
deposits 2,468,844 2,031,478 22%
Total deposits 14,131,427 12,181,473 16%
Borrowings from the
Federal Home Loan Bank 2,529,520 3,297,289 -23%
Federal funds purchased
and securities sold
under repurchase
agreements 1,576,127 965,943 63%
Subordinated debt 200,000 - NM
Other borrowings 8,739 201,575 -96%
Company obligated,
mandatorily redeemable
securities of
subsidiary trusts
holding solely parent
junior subordinated
debentures 293,756 98,775 197%
Other liabilities 418,680 146,213 186%
Total liabilities 19,158,249 16,891,268 13%
Shareholders' equity 1,696,889 1,360,863 25%
$20,855,138 $18,252,131 14%
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except
per share data) Three Months Ended March 31, %
2002 2001 Change
Interest and dividend
income $ 306,006 $ 326,545 -6%
Interest expense 109,483 170,578 -36%
Net interest income 196,523 155,967 26%
Provision for loan and
lease losses 11,828 7,138 66%
Net interest income
after provision for
loan and lease losses 184,695 148,829 24%
Noninterest income:
Deposit services 18,960 17,546 8%
Mortgage banking
services 1,676 3,234 -48%
Trust and investment
management services 8,277 8,787 -6%
Investment planning
services 2,718 1,698 60%
Insurance brokerage
commissions 10,155 9,968 2%
Bank owned life
insurance 4,376 4,306 2%
Merchant and
electronic banking
income, net 7,749 6,491 19%
Net gains(losses) on
sales of securities 19 759 NM
Loan fee income 5,433 2,703 101%
Other noninterest
income 2,213 3,264 -32%
61,576 58,756 5%
Noninterest expense:
Salaries and employee
benefits 75,298 61,694 22%
Data processing 10,582 8,961 18%
Occupancy and
equipment expense 22,228 19,973 11%
Amortization of
goodwill (1) - 2,793 NM
Amortization of
identifiable
intangible assets 3,335 2,631 27%
Special charges (2) 8,204 5,608 46%
Other noninterest
expense 25,039 23,199 8%
144,686 124,859 16%
Income before income
tax expense 101,585 82,726 23%
Income tax expense 34,256 27,343 25%
Net income before
cumulative effect of
change in accounting
principle 67,329 55,383 22%
Cumulative effect of
change in accounting
principle, net of
tax (3) - (290) NM
Net Income $ 67,329 $ 55,093 22%
Weighted average shares
outstanding:
Basic 149,347 140,800 6%
Diluted 151,116 142,007 6%
Earnings per share:
Basic $ 0.45 $ 0.39 15%
Diluted $ 0.45 $ 0.39 15%
Operating cash earnings
per share (4):
Basic $ 0.50 $ 0.45 11%
Diluted $ 0.50 $ 0.45 11%
Operating Financial
Data
Operating non-interest
expense (5) $ 136,482 $ 119,251 14%
Operating net
income (6) $ 72,671 $ 59,034 23%
Basic operating
earnings per share (6) $ 0.49 $ 0.42 17%
Diluted operating
earnings per share (6) $ 0.48 $ 0.42 14%
(1) Excluding the amortization of goodwill for the three months ended
March 31, 2001, which amounted to $2.8 million ($2.5 million post
tax), net income for this period would have been $57.6 million, or
$0.41 and $0.41 per basic and fully diluted share, respectively.
(2) Special charges consist of merger charges, certain asset
write-downs, charter consolidation costs and branch closing costs.
(3) Derivatives and hedging activities (FAS 133)
(4) Equals operating earnings plus the post tax effect of amortization
of intangible assets.
(5) Excludes pre-tax special charges.
(6) Excludes the post tax effect of special charges and cumulative
effect of change in accounting principle.
NM - calculated % change is not meaningful
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands, except per share data)
Three Months Ended March 31,
2002 2001
Net interest income $ 196,523 $ 155,967
Net income $ 67,329 $ 55,093
Operating net income (1) $ 72,671 $ 59,034
Shares outstanding (end of period) 146,916 138,598
Weighted average shares outstanding:
Basic 149,347 140,800
Diluted 151,116 142,007
Earnings per share:
Basic $ 0.45 $ 0.39
Diluted $ 0.45 $ 0.39
Operating earnings per share (1):
Basic $ 0.49 $ 0.42
Diluted $ 0.48 $ 0.42
Operating cash earnings per share (2):
Basic $ 0.50 $ 0.45
Diluted $ 0.50 $ 0.45
Shareholders' equity $1,696,889 $1,360,863
Book value per share $ 11.55 $ 9.82
Tangible book value per share $ 8.41 $ 8.52
RATIOS:
Net interest margin (net interest income
as a % of average earning
assets) (3) 4.24% 3.78%
Net interest spread (yield on earning
assets minus yield on
interest-bearing liabilities) (3) 3.84% 3.17%
Return on average assets 1.33% 1.24%
Operating return on average assets (1) 1.44% 1.32%
Operating cash return on average assets (2) 1.53% 1.44%
Return on average equity 15.46% 16.59%
Operating return on average equity (1) 16.69% 17.78%
Operating cash return on average
equity (2) 23.50% 22.15%
Tier 1 leverage capital ratio at end of
period 7.63% 7.07%
Tier 1 risk based capital ratio
(estimated) 10.53% 10.27%
Total risk based capital ratio
(estimated) 13.16% 11.52%
Noninterest income as a percent of total
income (4) 23.85% 27.62%
Efficiency ratio (5) 52.88% 55.73%
Cash efficiency ratio (6) 51.58% 52.82%
Non-performing loans $ 71,165 $ 61,624
Total non-performing assets $ 76,782 $ 67,869
Non-performing loans as a % of total
loans 0.56% 0.57%
Non-performing assets as a % of total
assets 0.37% 0.37%
Full service banking offices 307 284
(1) Excludes special charges and cumulative effect of change in
accounting principle.
(2) Equals operating earnings plus the amortization of intangible
assets.
(3) Adjusted to fully taxable equivalent basis.
(4) Excludes securities gains/(losses).
(5) Excludes securities gains/(losses) and special charges.
(6) Excludes securities gains/(losses), special charges and
amortization of intangible assets.
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
Three Months Ended March 31,
2002 2001
Average Yield/ Average Yield/
(Dollars in Balance Rate Balance Rate
Thousands)
Assets
Loans and
leases (1)
Residential
real estate
mortgages $ 2,675,415 7.07% $ 2,285,219 7.55%
Commercial
real estate
mortgages 4,101,873 7.19% 2,964,053 8.85%
Commercial
loans and
leases 2,464,378 6.36% 2,304,625 8.70%
Consumer
loans and
leases 3,539,213 7.33% 3,373,971 8.73%
12,780,879 7.04% 10,927,868 8.51%
Securities 5,943,057 5.68% 5,819,082 6.74%
Federal funds
sold & other
short-term
investments 72,107 2.33% 20,946 5.68%
Total
earning
assets 18,796,043 6.59% 16,767,896 7.89%
Noninterest
-earning
assets 1,671,783 1,307,350
Total
assets $ 20,467,826 $18,075,246
Liabilities
& Shareholders'
Equity
Interest
-bearing
deposits:
Regular
savings $ 1,646,822 0.98% $ 1,390,834 1.62%
Retail
money
market and
NOW
accounts 5,099,310 1.50% 3,969,403 3.32%
Retail
certificates
of deposit 4,762,399 3.55% 4,513,295 5.71%
Brokered
deposits 63,594 1.84% 165,065 6.48%
Total
interest
-bearing
deposits 11,572,125 2.27% 10,038,597 4.21%
Borrowed
funds 4,511,945 3.97% 4,572,935 5.82%
Total
interest
-bearing
liabilities 16,084,070 2.75% 14,611,532 4.72%
Noninterest
bearing
deposits 2,446,539 1,966,919
Other
liabilities 171,449 150,037
Shareholders'
equity 1,765,768 1,346,758
Total
liabilities
and
shareholders'
equity $ 20,467,826 $18,075,246
Net earning
assets $ 2,711,973 $ 2,156,364
Net interest
income (fully
taxable
equivalent) $ 201,511 $ 157,478
Less: fully
taxable
equivalent
adjustments (4,988) (1,511)
Net interest
income $ 196,523 $ 155,967
Net interest
rate spread
(fully taxable
equivalent) 3.84% 3.17%
Net interest
margin (fully
taxable
equivalent) 4.24% 3.78%
(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)
3/31/02 12/31/01 9/30/01 6/30/01 3/31/01
Non-performing Assets:
Residential real
estate mortgages $ 7,689 $ 8,311 $ 8,222 $ 9,590 $ 10,575
Commercial real
estate mortgages 20,812 17,124 15,145 12,550 13,205
Commercial business
loans and leases 34,481 40,341 34,220 39,208 32,233
Consumer loans and
leases 8,183 9,470 6,380 5,795 5,611
Total non-performing
loans 71,165 75,246 63,967 67,143 61,624
Other non-performing
assets (net) 5,617 5,981 6,896 6,126 6,245
Total non-performing
assets $ 76,782 $ 81,227 $ 70,863 $ 73,269 $ 67,869
Allowance for loan
and lease losses $190,890 $189,837 $158,534 $155,303 $153,621
Net loan charge-offs:
Real estate
mortgages $ 451 $ 731 $ 671 $ 375 $ 652
Commercial business
loans and leases 4,274 6,278 3,595 3,340 2,884
Consumer loans and
leases 6,050 6,342 4,564 3,914 3,530
Total net charge-offs $ 10,775 $ 13,351 $ 8,830 $ 7,629 $ 7,066
Ratios:
Allowance for loan
and lease losses to
total loans and
leases 1.50% 1.49% 1.45% 1.43% 1.43%
Allowance for loan and
lease losses to
non-performing loans 268.24% 252.29% 247.84% 231.30% 249.29%
Non-performing loans
to total loans and
leases 0.56% 0.59% 0.59% 0.62% 0.57%
Non-performing assets
to total assets 0.37% 0.39% 0.39% 0.40% 0.37%
Net charge-offs to
average loans
- QTD (1) 0.34% 0.44% 0.32% 0.28% 0.26%
Net charge-offs to
average loans
- YTD (1) 0.34% 0.33% 0.29% 0.27% 0.26%
(1) Annualized
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