TD Banknorth Reports First Quarter Results and Announces Quarterly Dividend.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 -- TD Banknorth  This article or section may be confusing or unclear for some readers.Please [improve the article] or discuss this issue on the talk page. Inc. (NYSE NYSE See: New York Stock Exchange : BNK BNK Bangkok BNK Bundesverband Niedergelassener Kardiologen eV BNK Banking ): (First Quarter Earnings Conference Call at 10:30 a.m. Eastern Time today, April 26, 2006. 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 800-638-4930. International dial-in number is 617-614-3944. Passcode for both numbers is 62573335. Replay number for USA and Canada is 888-286-8010. International replay dial-in number is 617-801-6888. Replay passcode for both is 67153276. Live webcast and webcast replay available at www.tdbanknorth.com, Investor Relations Investor relations The process by which the corporation communicates with its investors. .) Highlights for the first quarter of 2006 include: --Adjusted earnings increased to $115.6 million in the first quarter of 2006 up from $111.8 million in the first quarter of 2005. --Adjusted earnings per diluted 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 of $0.55 met the analysts' consensus estimate. --The Company closed on the acquisition of Hudson Hudson, towns, United States Hudson. 1 Industrial town (1990 pop. 17,233), Middlesex co., E central Mass., on the Assabet River, in an apple-growing region; settled c.1699, inc. 1866. United Bancorp in the first quarter, adding over 200 branches to its already extensive branch network in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. . --Asset quality remained strong - total net chargeoffs declined by 39% as compared to the first quarter of 2005. --The Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a dividend of 22 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. payable on May 15, 2006 to shareholders of record as of the close of business on May 5, 2006. First Quarter Adjustments (Items of Note) (1) The following items of note (net of tax) are included in the Company's reported GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings for the first quarter of 2006. All comparisons are between the first quarter of 2006 and the first quarter of 2005. Share impact is on a per diluted share basis. --Amortization of identifiable intangible assets 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. of $22.9 million (11 cents per share) as compared to $7.5 million (4 cents per share) for the first quarter of 2005. --Merger and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $14.9 million (7 cents per share) as compared to $23.4 million (13 cents per share) for the first quarter of 2005. --Losses associated with the Company's balance sheet deleveraging programs of $214 thousand (no meaningful per share impact) as compared to $41.6 million (22 cents per share) for the first quarter of 2005. --Losses of $5.3 million (3 cents per share) related to changes in unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. incurred in the first quarter of 2005 as compared to none in the first quarter of 2006. --Losses of $1.3 million (1 cent per share) incurred in the first quarter of 2006 related to energy businesses acquired from Hudson United, which the Company classified as "discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. " in the first quarter of 2006. (1) All references in this release to "adjusted" results reflect the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of the impact of these items of note. For a detailed explanation of the use of non-GAAP financial measures, please see the "Notes" section of this release, and for a reconciliation of adjusted financial measures to the most comparable reported GAAP financial measures, please see the reconciliation table in the financial tables which accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this release. TD Banknorth Inc. ("TD Banknorth" or the "Company") (NYSE: BNK) today reported net income of $76.2 million for the quarter ended March 31, 2006 as compared to $34.1 million for the quarter ended March 31, 2005. On a per diluted share basis, reported net income was 36 cents for the first quarter of 2006 as compared to 18 cents for the first quarter of 2005. The increase in reported net income for the first quarter of 2006 as compared to the first quarter of 2005 was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to reduced merger and restructuring charges and reduced losses associated with the Company's deleveraging programs. Adjusted earnings (reported GAAP earnings excluding the items of note listed above) were $115.6 million for the first quarter of 2006 as compared to $111.8 million for the first quarter of 2005. On a per diluted share basis, adjusted earnings were 55 cents for the first quarter of 2006 as compared to 60 cents for the same quarter a year ago. The Company's operations in the first quarter were adversely impacted by a number of factors, including: 1) margin compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. due to rates paid on deposits increasing more than the yields on loans; 2) a seasonal slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the organic growth rate of both loans and deposits; and 3) two months of operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. associated with the acquisition of Hudson United Bancorp, which closed on January January: see month. 31, 2006. The Company believes that it will begin to realize anticipated cost savings associated with the acquisition of Hudson United beginning in the third quarter of 2006 following a systems conversion in late May. "It was a challenging quarter given the competitive environment for loans and deposits," said William 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
Total Assets Total assets at March 31, 2006 were $40.9 billion, up 27% from $32.1 billion at December December: see month. 31, 2005 due to the acquisition of Hudson United. The increase in total assets at March 31, 2006 as compared to December 31, 2005 included a $5.5 billion increase in total loans and leases, a $3.2 billion increase in certain short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, a $2.2 billion decrease in securities available for sale, a $1.5 billion increase in goodwill and a $180.5 million increase in identifiable intangible assets. Average Loans and Leases Average loans and leases increased by 20% to $23.8 billion for the quarter ended March 31, 2006 as compared to the first quarter of 2005, due primarily to the acquisition of Hudson United. Excluding the effects of acquisitions, average commercial business loans and leases, commercial real estate mortgages and consumer loans and leases (including credit cards) increased 9% in the aggregate for the quarter ended March 31, 2006 as compared to the same period a year ago. On a linked quarter basis, average commercial business loans and leases, commercial real estate mortgages and consumer loans and leases (including credit cards), increased 1.7% (6.8% annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. ), reflecting the competition for high-quality commercial and consumer loans as well as seasonality in new loan originations 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. . Securities Available for Sale Securities available for sale at March 31, 2006 amounted to $2.3 billion, a decrease of 52% from March 31, 2005 and 49% from December 31, 2005, due largely to the sale of securities associated with the Company's balance sheet deleveraging and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programs. The proceeds from these sales were temporarily invested in certain short-term investments. In April 2006, the Company completed its balance sheet restructuring announced on January 10, 2006. Average Deposits Average deposits increased by 24% to $24.5 billion for the quarter ended March 31, 2006 as compared to the quarter ended March 31, 2005 due primarily to the acquisition of Hudson United. Excluding the effects of acquisitions, average deposits increased 1% for the quarter ended March 31, 2006. On a linked quarter basis, average deposits declined by 1% reflecting seasonality and competitive factors. Net Interest Income Net interest income was $282.4 million for the first quarter of 2006, a 12% increase over the same quarter of 2005, due primarily to the acquisition of Hudson United. Interest and dividend income increased by 33% to $456.5 million in the first quarter of 2006 due primarily to the acquisition of Hudson United. Interest expense increased by 91% to $174.1 million in the first quarter of 2006 due to the higher average volume of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities resulting from the acquisition of Hudson United as well as to higher interest costs paid on the Company's interest-bearing deposits and borrowings. The increase in rates paid on interest-bearing deposits reflects the competitive environment for deposits throughout the Company's market area. Net Interest Margin The Company's net interest margin for the quarter ended March 31, 2006 was 3.83% as compared to 3.96% for each of the quarters ended March 31, 2005 and December 31, 2005, respectively. The decline in net interest margin was due largely to the rates paid on interest-bearing liabilities increasing more than the yield on loans reflecting the competitive environment for both loans and deposits. Provision for Loan and Lease Losses and Asset Quality The Company's provision for loan and lease losses amounted to $7.2 million for the quarter ended March 31, 2006, as compared to $2.1 million for the quarter ended March 31, 2005 and $6.3 million for the quarter ended December 31, 2005. Total nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. increased to $90.7 million at March 31, 2006, up from $68.9 million at March 31, 2005 and $61.5 million at December 31, 2005. The increase in nonperforming assets was primarily due to nonperforming assets acquired from Hudson United. Even with the increase in nonperforming assets as a result of the acquisition of Hudson United, the Company's asset quality ratios remained strong during the first quarter of 2006. As a percentage of total loans, nonperforming loans amounted to 0.31% at March 31, 2006, as compared to 0.32% at March 31, 2005 and 0.30% at December 31, 2005. Total net charge-offs for the quarter ended March 31, 2006 declined to $6.2 million from $10.1 million for the same period a year ago and from $11.3 million for the quarter ended December 31, 2005. Noninterest Income Reported noninterest income increased to $117.8 million in the first quarter of 2006 as compared $25.6 million in the first quarter of 2005. This increase reflected the absence in the first quarter of 2006 of losses associated with the deleveraging program and changes in unrealized loss on certain derivatives incurred in the first quarter of 2005, as well as increases in all other noninterest income categories. Adjusted noninterest income increased 29% to $118.2 million for the first quarter of 2006 as compared to $91.4 million for the first quarter of 2005 due primarily to the acquisition of Hudson United. On a linked quarter basis, adjusted noninterest income, also excluding noninterest income associated with Hudson United, declined $1.2 million, which included a $1.9 million decline in mortgage banking income, a $1.5 million decline in covered call option covered call option A call option sold short by an investor owning the underlying stock. If the option is later exercised against the short seller of the option, the seller is covered by the stock that is owned. Compare naked option. income and an aggregate increase of $2.2 million in all other noninterest income categories. Noninterest Expense Reported noninterest expense increased $53.9 million for the first quarter of 2006 as compared to the same quarter of 2005, largely due to Hudson United-related operating expenses and to increases in the amortization of identifiable intangible assets, which more than offset a decrease in merger and restructuring charges. Adjusted noninterest expense increased 26% to $219.6 million for the first quarter of 2006 as compared to $174.1 million for the first quarter of 2005 largely due to increased operating expenses associated with the acquisition of Hudson United. As discussed above, the Company believes that it will begin to realize anticipated cost savings associated with the acquisition of Hudson United beginning in the third quarter of 2006 following the systems conversion planned for May. On a linked quarter basis, adjusted noninterest expense, also excluding noninterest expense associated with the operations of Hudson United, increased by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.2 million, of which $2.9 million was related to accounting for stock-based compensation and $1 million related to state franchise taxes that were classified in tax expense in prior periods. Capital The Company and its banking subsidiary continue to qualify as "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. " institutions under applicable laws and regulations. At March 31, 2006, the Company's tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. ratio was 6.75% as compared to 7.07% at December 31, 2005, its total risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. was 11.02% as compared to 11.73% at December 31, 2005 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 4.80% as compared to 5.69% at December 31, 2005. The decrease in the ratio of tangible equity to tangible assets was due, in part, to the acquisition of Hudson United and to the Company's repurchase 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. of 8.5 million shares in the first quarter of 2006. The Company anticipates that its ratio of tangible equity to tangible assets will increase to over 5% by December 31, 2006. Share Repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. and Other Information The number of weighted average shares outstanding on a diluted basis for the quarter ended March 31, 2006 was 210.4 million as compared to 184.9 million for the quarter ended March 31, 2005. The increase was primarily attributable to the issuance of approximately 62 million shares related to the acquisition of Hudson United (including the sale of 29.6 million shares of common stock to the Company's parent, TD Bank Financial Group), which was in part offset by the Company's repurchase of 8.5 million shares during the first quarter of 2006. As detailed in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. financial statements, the Company's adjusted return on average tangible equity for the first quarter of 2006 was 29.21% as compared to 25.70% for the same period a year ago and the Company's adjusted return on average tangible assets for the first quarter of 2006 was 1.43% as compared to 1.63% for the same period a year ago. At March 31, 2006, the Company's tangible book value per share was $7.16 as compared to $7.61 at March 31, 2005. Average tangible equity was $1.6 billion for the quarter ended March 31, 2006 as compared to $1.8 billion for the same period a year ago. Quarterly Dividend TD Banknorth also announced today that its Board of Directors has approved a quarterly dividend of 22 cents per share based on earnings for the first quarter ended March 31, 2006. The dividend is level with the dividend paid following the fourth quarter ended December 31, 2005 and will be paid on May 15, 2006 to shareholders of record at the close of business on May 5, 2006. Acquisition of Interchange An interchange is a location where two things meet, usually perform some kind of exchange, and possibly go on their ways again. It is most commonly used in four contexts:
Please [ improve this article] or discuss the issue on the talk page. Corporation On April 13, 2006, the Company announced it had entered into a definitive agreement to acquire Interchange Financial Services Corporation (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 : IFCJ IFCJ International Fellowship of Christians and Jews (Washington, DC) ), Saddle Brook, New Jersey Saddle Brook is a township in Bergen County, New Jersey, United States. As of the United States 2000 Census, the township population was 13,155. Saddle Brook adopted its current name on November 8, 1955, replacing Saddle River Township. , for approximately $480.6 million in cash. As part of the transaction, TD Bank Financial Group has agreed to purchase 13 million shares of TD Banknorth common stock at a price of $31.17 per share. The acquisition is subject to the receipt of Interchange shareholder approval and all required regulatory 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. approvals and other customary conditions and is anticipated to close early in the first quarter of 2007 with systems integration shortly thereafter. Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index Two Notch notch (noch) incisure; an indentation on the edge of a bone or other organ. aortic notch dicrotic n. cardiac notch 1. Upgrade On April 21, 2006, Standard & Poor's Services raised its counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit rating on TD Banknorth Inc. to 'A-1' from 'BBB' and the counterparty credit ratings on related entities, including TD Banknorth NA, were raised to 'A/A-1' from 'BBB+/A-2'. About TD Banknorth Inc. TD Banknorth Inc. is a leading banking and financial services company headquartered in Portland, Maine and a majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. of TD Bank Financial Group. At March 31, 2006, TD Banknorth had over $40 billion of total consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: assets and provided financial services to more than 1.5 million households in the Northeast. TD Banknorth's banking subsidiary, TD Banknorth, N.A., operates banking divisions in Connecticut 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 Jersey, 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 , Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York 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. . TD Banknorth and TD Banknorth, N.A. also operate subsidiaries and divisions in insurance, wealth 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, private label credit cards, insurance premium financing Premium Financing involves the lending of funds to a person or company to cover the cost of an insurance premium. Premium finance loans are often provided by third party finance entity known as a "Premium Financing Company"; however insurance companies and brokerages occasionally and other financial services and offers investment products in association with PrimeVest Financial Services, Inc. The TD Banknorth common stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "BNK". For more information, visit http://www.TDBanknorth.com. NOTES: 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"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. The Company arrives at these measures, indicated by the use of the term "adjusted," by removing "items of note" from the reported GAAP measure. The items of note excluded from adjusted measures are described at the outset of this release, and a reconciliation of these non-GAAP measures to the most comparable GAAP measure can be found in the financial tables in the back of this release. The items of note relate to items which management does not believe are indicative indicative: see mood. of underlying business performance, and typically are 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. Items of note may also be other significant gains or losses that are unusual in nature, such as securities gains or losses and prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. incurred in connection with deleveraging strategies. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of adjusted financial measures excluding the impact of these items of note provide useful supplemental information that is essential to a proper understanding of the operating results of the Company. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. This press release contains forward-looking statements 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 TD Banknorth. Words such as "expect", "feel", "believe", "will", "may", "anticipate", "plan", "estimate", "intend", "should" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to, changes in general economic conditions, interest rates, deposit flows, loan demand, competition, legislation or regulation and accounting principles, policies or guidelines 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 and accounting and technological factors affecting TD 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 synergies at levels or within time frames originally anticipated and may result in unforeseen integration difficulties. Investors are encouraged to access TD Banknorth's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding TD Banknorth, including information which could affect TD Banknorth's forward-looking statements. TD Banknorth does not undertake any obligation to update these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that may occur after the date on which such statements were made. On May 16, 2005, the Company announced that it had adopted purchase accounting to account for TD Bank Financial Group's acquisition of a majority interest in the Company on March 1, 2005. To most accurately reflect the application of purchase accounting, the Company uses the term "predecessor predecessor - parent " to refer to the results of Banknorth Group, Inc., the predecessor entity to TD Banknorth Inc., at the dates and for the periods ending on or prior to February February: see month. 28, 2005, which are based on historical accounting, and the term "successor 1. SuccessoR - A language for distributed computing derived from SR. ["SuccessoR: Refinements to SR", R.A. Olsson et al, TR 84-3, U Arizona 1984]. 2. successor - daughter " to refer to the results of TD Banknorth Inc. at the dates and for the periods beginning on or after March 1, 2005, which are based on the application of purchase accounting. To assist in the comparability of the Company's financial results and to make it easier to discuss and understand these results, the financial information discussed herein and presented in the accompanying financial statements under the heading "Combined" combines the "predecessor period" January 1, 2005 to February 28, 2005 with the applicable "successor period" thereafter. Due to the application of purchase accounting as of March 1, 2005, results for the combined periods may not be comparable to the results for the respective predecessor periods. For a detailed discussion of the impact of purchase accounting on the Company's balance sheet and income statement, reference is made to the Company's first quarter 2005 earnings release dated May 16, 2005.
TD Banknorth Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
Successor Successor Successor
------------ ------------ ------------
March 31, March 31, % December 31, %
(In thousands) 2006 2005 Change 2005 Change
------------ ------------ ------ ------------ ------
Cash and due from
banks $836,108 $540,812 55% $758,751 10%
Federal funds sold,
securities purchased
under agreements to
resell, and other
short term
investments 3,210,712 3,247 NM 10,507 NM
Securities
available for
sale 2,251,530 4,656,122 -52% 4,419,877 -49%
Securities held
to maturity 60,026 80,259 -25% 64,126 -6%
Loans and leases
held for sale 25,233 558,137 -95% 31,398 -20%
Loans and leases:
Residential
real estate
mortgages 2,902,999 3,388,907 -14% 2,878,323 1%
Commercial
real estate
mortgages 8,708,106 6,559,459 33% 6,776,837 28%
Commercial
business
loans and
leases 6,365,259 4,094,627 55% 4,278,048 49%
Consumer loans
and leases,
exc credit
cards 7,269,035 5,606,950 30% 6,186,519 17%
Credit card
loans 375,113 - NM - NM
------------ ------------ ------------
Total loans
and leases 25,620,512 19,649,943 30% 20,119,727 27%
Less:
Allowance for
loan and
lease losses 276,342 228,165 21% 223,030 24%
------------ ------------ ------------
Loans and
leases, net 25,344,170 19,421,778 30% 19,896,697 27%
Premises and
equipment 460,021 308,109 49% 331,912 39%
Goodwill 6,015,756 4,537,623 33% 4,547,604 32%
Identifiable
intangible
assets 848,880 757,504 12% 668,365 27%
Bank-owned life
insurance 767,043 556,265 38% 572,847 34%
Other assets 1,052,715 714,965 47% 793,269 33%
------------ ------------ ------------
$40,872,194 $32,134,821 27% $32,095,353 27%
============ ============ ============
Liabilities &
Shareholders'
Equity
Deposits:
Regular
savings $4,368,767 $2,703,160 62% $2,653,233 65%
Retail money
market and
NOW accounts 9,898,522 8,168,207 21% 7,819,812 27%
Retail
certificates
of deposit 6,716,414 4,753,407 41% 5,132,117 31%
Brokered
deposits 270,061 80,951 234% 63,953 322%
Noninterest
bearing
deposits 5,616,850 4,215,574 33% 4,603,533 22%
------------ ------------ ------------
Total
deposits 26,870,614 19,921,299 35% 20,272,648 33%
Borrowings from
the Federal Home
Loan Bank 444,050 2,334,098 -81% 551,609 -19%
Federal funds
purchased and
securities sold
under repurchase
agreements 3,402,386 2,240,947 52% 3,339,091 2%
Subordinated debt
and senior notes 847,906 377,349 125% 606,260 40%
Other borrowings 8,671 26,802 -68% 60,773 -86%
Junior
subordinated
debentures 527,511 374,700 41% 366,237 44%
Deferred tax
liability related
to other
identifiable
intangible assets 337,557 265,126 27% 261,932 29%
Other liabilities 273,276 246,007 11% 152,930 79%
------------ ------------ ------------
Total
liabilities 32,711,971 25,786,328 27% 25,611,480 28%
------------ ------------ ------------
Shareholders'
equity 8,160,223 6,348,493 29% 6,483,873 26%
------------ ------------ ------------
$40,872,194 $32,134,821 27% $32,095,353 27%
============ ============ ============
NM - Calculated % change is not meaningful.
TD Banknorth Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share data)
Successor Combined
--------- ---------
Three Three
Months Months
Ended Ended
March 31, March 31, %
2006 2005 Change
--------- --------- ------
Interest and dividend income $456,499 $343,647 33%
Interest expense 174,055 90,912 91%
--------- ---------
Net interest income 282,444 252,735 12%
Noninterest income:
Deposit services 38,479 28,182 37%
Insurance brokerage commissions 15,839 13,892 14%
Merchant and electronic banking income,
net 15,636 13,114 19%
Wealth management services 11,348 10,504 8%
Loan fee income 12,392 6,921 79%
Bank-owned life insurance 7,288 6,098 20%
Investment planning services 5,142 4,689 10%
Net securities gains/(losses) (90) (50,476) -100%
Loans held for sale - lower of cost or
market adjustment - (7,500) -100%
Change in unrealized loss on certain
derivatives - (8,175) -100%
Other noninterest income 11,805 8,373 41%
--------- ---------
Total noninterest income 117,839 25,622 360%
--------- ---------
Total Revenue 400,283 278,357 44%
--------- ---------
Provision for loan and lease losses 6,900 2,069 233%
Noninterest expense:
Salaries and employee benefits 125,210 100,868 24%
Occupancy and equipment 39,180 30,738 27%
Data processing 15,233 11,033 38%
Advertising and marketing 8,191 6,695 22%
Amortization of identifiable intangible
assets 37,666 11,495 228%
Merger and restructuring charges (1) 19,818 31,191 -36%
Prepayment penalties on borrowings - 6,303 -100%
Other noninterest expense 31,738 24,787 28%
--------- ---------
Total noninterest expense 277,036 223,110 24%
--------- ---------
Income before income tax expense 116,347 53,178 119%
Income tax expense 38,799 19,103 103%
--------- ---------
Net income from continuing
operations 77,548 34,075 128%
Income (loss) from discontinued operations,
net of tax (1,342) 0 NM
--------- ---------
Net income $76,206 $34,075 124%
========= =========
Weighted average shares outstanding:
Basic 209,690 183,393 14%
Diluted 210,444 184,890 14%
Earnings per share:
Basic $0.36 $0.19 89%
Diluted 0.36 0.18 100%
(1) Merger and restructuring charges consist of merger related and
corporate restructuring charges.
NM - calculated % change is not meaningful
TD Banknorth Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands, except
per share data)
Successor Combined
------------------------
Three Months Three Months
Ended March Ended March
31, 31, %
2006 2005 Change
----------- ----------- ---------
Net interest income $282,444 $252,735 12%
Net income $76,206 $34,075 124%
Shares outstanding
(end of period) 227,951 173,208 32%
Weighted average shares
outstanding:
Basic 209,690 183,393 14%
Diluted 210,444 184,890 14%
Earnings per share:
Basic $0.36 $0.19 89%
Diluted $0.36 $0.18 100%
Shareholders' equity
(end of period) $8,160,223 $6,348,498 NM
Book value per share
(end of period) $35.80 $36.65 NM
Tangible book value
per share (end of
period) 7.16 7.61 -6%
Nominal
RATIOS & OTHER INFORMATION: Inc/(Dec)
----------
Net interest margin,
fully-taxable
equivalent basis 3.83% 3.96% -0.13%
Return on average
assets 0.79% 0.45% 0.34%
Return on average
equity 4.07% 3.09% 0.98%
At period end:
--------------------
Tangible
equity/tangible
assets 4.80% 4.91% -0.11%
Tier 1 leverage
capital ratio 6.75% 6.30% 0.45%
Tier 1 risk based
capital ratio 7.66% 7.97% -0.31%
Total risk based
capital ratio 11.02% 10.13% 0.89%
Nonperforming loans (1) $78,569 $62,916 $15,653
Total nonperforming
assets (1) $90,670 $68,928 $21,742
Nonperforming loans
as a % of total
loans 0.31% 0.32% -0.01%
Nonperforming assets
as a % of total
assets 0.22% 0.21% 0.01%
Full service banking
offices 597 396
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP
Financial Information):
See page 13 for a reconciliation table of non-GAAP financial
information.
Earnings per diluted
share, GAAP basis $0.36 $0.18 $0.18
Merger and
restructuring costs,
per diluted share,
net of tax (2) 0.07 0.13 (0.06)
Discontinued
operations, per
diluted share, net
of tax (3) 0.01 - 0.01
Change in unrealized
loss on certain
derivatives, per
diluted
share, net of tax - 0.03 (0.03)
Deleveraging losses,
per diluted share,
net of tax (4) - 0.22 (0.22)
Amortization of
intangibles, per
diluted share, net
of tax 0.11 0.04 0.07
----------- ----------- --------
Earnings per diluted
share, as adjusted $0.55 $0.60 ($0.05)
=========== =========== ========
Noninterest income as
a percent of total
income (5) 29.45% 26.64% 2.82%
Noninterest income (5) $118,169 $91,435 $26,734
Return on average
assets (6) 0.96% 1.38% -0.42%
Cash return on
average tangible
assets (6) (7) 1.43% 1.63% -0.20%
Return on average
equity (6) 4.95% 9.45% -4.50%
Cash return on
average tangible
equity (6) (7) 29.21% 25.70% 3.51%
Noninterest expense (8) $219,552 $174,120 $45,432
Efficiency ratio (9) 64.24% 53.88% 10.36%
Cash efficiency
ratio (10) 54.84% 50.54% 4.30%
(1) During the three months ended March 31, 2005, in connection with
the use of purchase accounting for the transaction with TD on
March 1, 2005, nonperforming loans and nonperforming assets were
reduced by $21.4 million of specific reserves on impaired loans
which were applied to reduce the loan balance under SOP 03-3
"Accounting for Certain Loans or Debt Securities Acquired in a
Transfer".
(2) Merger and restructuring costs consist of merger related charges
and corporate restructuring.
(3) Discontinued operations reflect costs incurred in connection with
landfill gas and power generation facilities.
(4) Deleveraging losses consist of losses on securities sales, lower
of cost or market adjustments and prepayment penalties on
borrowings incurred in connection with balance sheet
restructurings.
(5) Excludes deleveraging securities losses, lower of cost or market
adjustments, and gains/losses on certain derivatives.
(6) Excludes merger and restructuring costs, discontinued operations,
changes in unrealized loss on certain derivatives and deleveraging
losses, net of related tax benefits.
(7) Cash ratios reflect adjustments to exclude amortization expense on
intangible assets, net of related taxes.
(8) Excludes pre-tax merger and restructuring costs, prepayment
penalties on borrowings, amortization of intangible assets,
corporate restructuring and discontinued operations.
(9) Excludes securities gains/(losses), lower of cost or market
adjustments, prepayment penalties on borrowings, and gains/losses
on certain derivatives, merger and corporate restructuring costs
and discontinued operations.
(10) Excludes the items in note 9 and amortization of intangible
assets. Ratios are annualized where appropriate.
TD Banknorth Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
Successor Combined (1)
----------------------------------------------------------------------
Three Months Ended Three Months Ended
March 31, March 31,
----------------------------------------------------------------------
2006 2005
----------------------------------------------------------------------
Average Yield/ Average Yield/
(Dollars in thousands) Balance Rate Balance Rate
----------------------------------------------------------------------
Assets
Loans and leases (2)
Residential real estate
mortgages $2,916,912 5.52% $3,806,469 5.13%
Commercial real estate
mortgages 7,996,632 6.70% 6,447,894 5.96%
Commercial loans and leases 5,722,504 6.71% 4,018,664 5.65%
Consumer loans and leases,
exc credit cards 6,908,585 6.19% 5,501,291 5.47%
Credit card loans 243,287 13.07% - 0.00%
------------ ------------
Total loans and leases 23,787,920 6.48% 19,774,318 5.60%
Securities 5,634,703 5.06% 6,107,346 4.68%
Federal funds sold, securities
purchased under agreements to
resell and other short term
investments 609,369 4.82% 11,427 2.96%
------------ ------------
Total earning assets 30,031,992 6.18% 25,893,091 5.38%
Bank-owned life insurance 697,668 545,954
Goodwill 5,509,988 2,517,379
Identifiable intangible assets 801,665 301,197
Other assets 1,944,528 1,447,883
------------ ------------
Total assets $38,985,841 $30,705,504
============ ============
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Regular savings $3,708,031 1.01% $2,643,204 0.29%
Retail money market and NOW
accounts 9,172,611 2.15% 8,088,136 1.05%
Retail certificates of
deposit 6,226,033 3.03% 4,698,450 1.90%
Brokered deposits 211,689 4.50% 65,860 3.90%
------------ ------------
Total interest-bearing
deposits 19,318,364 2.24% 15,495,650 1.19%
Borrowed funds 6,250,112 4.36% 6,154,440 2.99%
------------ ------------
Total interest-bearing
liabilities 25,568,476 2.76% 21,650,090 1.70%
Noninterest bearing deposits 5,166,252 4,221,735
Deferred tax liability related
to other identifiable
intangible assets 315,498 105,419
Other liabilities 334,445 250,610
Shareholders' equity 7,601,170 4,477,650
------------ ------------
Total liabilities and
shareholders' equity $38,985,841 $30,705,504
============ ============
Net earning assets $4,463,516 $4,243,001
============ ============
Net interest income (fully-
taxable equivalent) $284,732 $254,477
Less: fully-taxable equivalent
adjustments (2,288) (1,742)
------------ ------------
Net interest income $282,444 $252,735
============ ============
Net interest rate spread
(fully-taxable equivalent) 3.42% 3.68%
Net interest margin (fully-
taxable equivalent) 3.83% 3.96%
(1) Includes two months of average balances based on historical cost
and one month of average balances including purchase accounting
and fair value adjustments. Had TD's acquisition of a majority
interest in TD Banknorth occurred at the beginning of the first
quarter, noninterest-earning assets, total assets, shareholders'
equity, and total liabilities and shareholders' equity would have
been approximately $2.5 billion higher than the amounts in the
above table, primarily related to intangible assets.
(2) Loans and leases include portfolio loans and leases and loans held
for sale.
TD Banknorth Inc. and Subsidiaries
Asset Quality (unaudited)
(Dollars in
thousands)
Successor
-------------------------------------------------------
3/31/2006 12/31/2005 9/30/2005 6/30/2005 3/31/2005
---------- ----------- ---------- ---------- ----------
Nonperforming
assets:
Residential
real estate
mortgages $9,827 $7,970 $6,531 $6,165 $8,614
Commercial
real estate
mortgages 31,192 25,219 29,224 30,353 23,553
Commercial
business
loans and
leases 31,460 20,211 21,306 26,776 24,520
Consumer
loans and
leases 6,090 7,165 6,899 6,816 6,229
---------- ----------- ---------- ---------- ----------
Total
nonperforming
loans and
leases 78,569 60,565 63,960 70,110 62,916
Other
nonperforming
assets, net 12,101 970 2,929 3,796 6,012
---------- ----------- ---------- ---------- ----------
Total
nonperforming
assets $90,670 $61,535 $66,889 $73,906 $68,928
========== =========== ========== ========== ==========
Accruing loans
which are 90
days overdue $12,934 $6,887 $6,489 $6,122 $5,041
Allowance for
loan and
lease losses $276,342 $223,030 $228,334 $228,168 $228,165
Liability for
unfunded
credit
commitments 8,207 7,907 7,607 6,807 6,707
---------- ----------- ---------- ---------- ----------
Total allowance
for credit
losses $284,549 $230,937 $235,941 $234,975 $234,872
========== =========== ========== ========== ==========
Net loan
charge-offs
(recoveries):
Residential
real estate
mortgages $111 ($13) ($125) $89 $57
Commercial
real estate
mortgages (6) (30) 1,717 (391) 4,032
-------------------------------------------- ----------
Total real
estate
mortgages 105 (43) 1,592 (302) 4,089
Commercial
business
loans and
leases (1,584) 4,355 3 (229) 544
Consumer
loans and
leases exc
credit
cards 4,985 6,994 4,739 4,126 5,481
Credit card
loans 2,645 - - - -
---------- ----------- ---------- ---------- ----------
Total net
charge-offs $6,151 $11,306 $6,334 $3,595 $10,114
========== =========== ========== ========== ==========
Provision for
credit losses:
Provision for
loan and lease
losses $6,900 $6,000 $5,500 $3,597 $2,069
Provision for
off balance
sheet
commitments (1) 300 300 800 100 -
---------- ----------- ---------- ---------- ----------
Total provision
for credit
losses $7,200 $6,300 $6,300 $3,697 $2,069
========== =========== ========== ========== ==========
Ratios:
Allowance for
credit losses
to total
loans and
leases 1.11% 1.15% 1.18% 1.17% 1.20%
Allowance for
credit losses
to
nonperforming
loans 362.16% 381.30% 368.89% 335.15% 373.31%
Nonperforming
loans to
total loans
and leases 0.31% 0.30% 0.32% 0.35% 0.32%
Nonperforming
assets to
total assets 0.22% 0.19% 0.21% 0.23% 0.21%
Net charge-
offs to
average loans
- QTD (2) 0.10% 0.22% 0.13% 0.07% 0.21%
----------------------------------------------------------------------
(1) Included in other noninterest expense
(2) Annualized.
TD Banknorth Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
2006 2005
--------- ---------------------------------------
Successor Combined
--------------------------------------- ---------
(In thousands, except
per share data) First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
--------- --------- --------- --------- ---------
Interest and
dividend income $456,499 $363,917 $350,679 $342,447 $343,647
Interest expense 174,055 120,477 101,682 89,819 90,912
--------- --------- --------- --------- ---------
Net interest income 282,444 243,440 248,997 252,628 252,735
Noninterest income:
Deposit services 38,479 35,137 34,558 31,752 28,182
Insurance
brokerage
commissions 15,839 10,798 12,216 13,604 13,892
Merchant and
electronic
banking income,
net 15,636 15,238 15,824 14,727 13,114
Wealth
management
services 11,348 10,622 10,662 10,395 10,504
Loan fee income 12,392 7,613 8,031 8,891 6,921
Bank-owned life
insurance 7,288 6,009 5,994 6,106 6,098
Investment
planning
services 5,142 4,433 4,708 5,462 4,689
Net securities
gains/(losses) (90) (45,048) 1,014 1,439 (50,476)
Loans held for
sale - lower of
cost or market
adjustment - - - 386 (7,500)
Change in
unrealized loss
on derivatives - (11) (711) 14,840 (8,175)
Other
noninterest
income 11,805 15,306 11,311 9,669 8,373
--------- --------- --------- --------- ---------
Total noninterest
income 117,839 60,097 103,607 117,271 25,622
--------- --------- --------- --------- ---------
Total Revenue 400,283 303,537 352,604 369,899 278,357
--------- --------- --------- --------- ---------
Provision for loan
and lease losses 6,900 6,000 5,500 3,597 2,069
--------- --------- --------- --------- ---------
Noninterest
expense:
Salaries and
employee
benefits 125,210 100,904 102,059 105,096 100,868
Occupancy and
equipment 39,180 30,548 29,945 31,048 30,738
Data processing 15,233 11,693 11,675 11,618 11,033
Advertising and
marketing 8,191 8,097 7,503 8,087 6,695
Amortization of
identifiable
intangible
assets 37,666 30,894 31,041 31,657 11,495
Merger and
restructuring
charges (1) 19,818 4,957 1,162 5,367 31,191
Prepayment
penalties on
borrowings - - - - 6,303
Other
noninterest
expense 31,738 28,564 28,344 27,459 24,787
--------- --------- --------- --------- ---------
277,036 215,657 211,729 220,332 223,110
--------- --------- --------- --------- ---------
Income before
income tax expense 116,347 81,880 135,375 145,970 53,178
Income tax expense 38,799 26,315 46,634 50,376 19,103
--------- --------- --------- --------- ---------
Net income
from
continuing
operations 77,548 55,565 88,741 95,594 34,075
Income (loss) from
discontinued
operations, net of
tax (1,342) - - - -
--------- --------- --------- --------- ---------
Net income $76,206 $55,565 $88,741 $95,594 $34,075
========= ========= ========= ========= =========
Weighted average
shares
outstanding:
Basic 209,690 173,745 173,661 173,428 183,393
Diluted 210,444 174,427 174,398 174,261 184,890
Earnings per share:
Basic $0.36 $0.32 $0.51 $0.55 $0.19
Diluted 0.36 0.32 0.51 0.55 0.18
(1) Merger and restructuring charges consist of merger related charges
and corporate restructuring charges.
TD Banknorth Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
2006 2005
-----------------------------------------------------
Successor Combined
-----------------------------------------------------
First Fourth Third Second First
(In thousands, Quarter Quarter Quarter Quarter Quarter
except per
share data)
-----------------------------------------------------
Net interest
income $282,444 $243,440 $248,997 $252,628 $252,735
Net income $76,206 $55,565 $88,740 $95,595 $34,075
Shares
outstanding
(end of period) 227,951 173,665 173,615 173,406 173,208
Weighted average
shares
outstanding:
Basic 209,690 173,745 173,661 173,428 183,393
Diluted 210,444 174,427 174,398 174,261 184,890
Earnings per
share:
Basic $0.36 $0.32 $0.51 $0.55 $0.19
Diluted $0.36 $0.32 $0.51 $0.55 $0.18
Shareholders'
equity (end
of period) $8,160,223 $6,483,873 $6,463,623 $6,473,496 $6,348,498
Book value per
share (end of
period) $35.80 $37.34 $37.23 $37.33 $36.65
Tangible book
value per share
(end of period) $7.16 $8.81 $8.50 $8.45 $7.61
RATIOS & OTHER
INFORMATION:
Net interest
margin, fully-
taxable
equivalent basis 3.83% 3.96% 4.09% 4.12% 3.96%
Return on
average assets 0.79% 0.69% 1.11% 1.20% 0.45%
Return on
average equity 4.07% 3.42% 5.44% 5.98% 3.09%
At period end:
----------------
Tangible
equity/tangible
assets 4.80% 5.69% 5.55% 5.53% 4.91%
Tier 1 leverage
capital ratio 6.75% 7.07% 7.00% 6.65% 6.30%
Tier 1 risk
based capital
ratio 7.66% 8.63% 8.54% 8.28% 7.97%
Total risk based
capital ratio 11.02% 11.73% 11.72% 10.41% 10.13%
Nonperforming
loans (1) $78,569 $60,565 $63,960 $70,110 $62,916
Total
nonperforming
assets (1) $90,670 $61,535 $66,889 $73,906 $68,928
Nonperforming
loans as a % of
total loans 0.31% 0.30% 0.32% 0.35% 0.32%
Nonperforming
assets as a % of
total assets 0.22% 0.19% 0.21% 0.23% 0.21%
Full service
banking offices 597 396 397 395 396
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS
(Non-GAAP Financial Information):
See page 13 for a reconciliation table of non-GAAP
financial information.
Earnings per
diluted share,
GAAP basis $0.36 $0.32 $0.51 $0.55 $0.18
Merger and
restructuring
costs, per
diluted share,
net of tax (2) 0.07 0.02 - 0.02 0.13
Discontinued
operations, per
diluted share,
net of tax (3) 0.01 - - - -
Change in unrealized loss on certain
derivatives, per diluted
share, net of
tax - - 0.01 (0.06) 0.03
Deleveraging
losses, per
diluted share,
net of tax (4) - 0.17 - - 0.22
Amortization of
intangibles, per
diluted share,
net of tax 0.11 0.11 0.11 0.12 0.04
---- ---- ---- ---- ----
Earnings per
diluted share,
as adjusted 0.55 0.62 0.63 0.63 0.60
=========== =========== =========== =========== ===========
Noninterest
income as a
percent of total
income (5) 29.45% 30.17% 29.32% 28.48% 26.64%
Noninterest
income (5) $118,169 $105,108 $104,318 $102,263 $91,435
Return on
average assets
(6) 0.96% 1.09% 1.12% 1.12% 1.38%
Cash return on
average tangible
assets (6) (7) 1.43% 1.60% 1.64% 1.64% 1.63%
Return on
average equity
(6) 4.95% 5.43% 5.51% 5.58% 9.45%
Cash return on
average tangible
equity (6) (7) 29.21% 29.36% 29.39% 31.32% 25.70%
Noninterest
expense (8) $219,552 $179,806 $179,526 $183,308 $174,120
Efficiency ratio
(9) 64.24% 60.44% 59.77% 60.86% 53.88%
Cash efficiency
ratio (10) 54.84% 51.58% 50.96% 51.89% 50.54%
(1) During the three months ended March 31, 2005, in connection with
the use of purchase accounting for the transaction with TD on
March 1, 2005, nonperforming loans and nonperforming assets were
reduced by $21.4 million of specific reserves on impaired loans
which were applied to reduce the loan balance under SOP 03-3
"Accounting for Certain Loans or Debt Securities Acquired in a
Transfer".
(2) Merger and restructuring costs consist of merger related charges
and corporate restructuring.
(3) Discontinued operations reflect costs incurred in connection with
landfill gas and power generation facilities.
(4) Deleveraging losses consist of losses on securities sales, lower
of cost or market adjustments and prepayment penalties on
borrowings incurred in connection with balance sheet
restructurings.
(5) Excludes deleveraging securities losses, lower of cost or market
adjustments, and gains/losses on certain derivatives.
(6) Excludes merger and restructuring costs, discontinued operations,
changes in unrealized loss on certain derivatives and deleveraging
losses, net of related tax benefits.
(7) Cash ratios reflect adjustments to exclude amortization expense on
intangible assets, net of related taxes.
(8) Excludes pre-tax merger and restructuring costs, prepayment
penalties on borrowings, amortization of intangible assets,
corporate restructuring and discontinued operations.
(9) Excludes securities gains/(losses), lower of cost or market
adjustments, prepayment penalties on borrowings, and gains/losses
on certain derivatives, merger and corporate restructuring costs
and discontinued operations.
(10) Excludes the items in note 9 and amortization of intangible
assets. Ratios are annualized where appropriate.
TD Banknorth Inc. and Subsidiaries
Reconciliation Table - Non-GAAP Financial Information (Unaudited)
2006 2005
--------- --------------------------------------
Successor
------------------------------------------------
(In thousands, except First Fourth Third Second
per share data)
Quarter Quarter Quarter Quarter
----------------------- ------------ -----------
Net income (GAAP) $76,206 $55,565 $88,740 $95,595
Add back the
following, net of
tax:
Merger and
restructuring
charges 14,924 3,366 755 3,489
Loss from
discontinued
operations 1,342 - - -
Change in
unrealized
loss on
derivatives - 4 462 (9,646)
Deleveraging
losses (1) 214 29,250 - (109)
Amortization
of
intangibles 22,904 19,952 19,540 19,769
------------ ------------ ------------ ------------
Net income, as
adjusted $115,590 $108,137 $109,497 $109,098
============ ============ ============ ============
Diluted earnings per
share (GAAP) $0.36 $0.32 $0.51 $0.55
Add back the
following, net of
tax:
Merger and
restructuring
charges 0.07 0.02 - 0.02
Loss from
discontinued
operations 0.01 - - -
Change in
unrealized
loss on
derivatives - - 0.01 (0.06)
Deleveraging
losses (1) - 0.17 - -
Amortization
of
intangibles 0.11 0.11 0.11 0.12
------------ ------------ ------------ ------------
Diluted earnings
per share, as
adjusted $0.55 $0.62 $0.63 $0.63
============ ============ ============ ============
Return on average
assets (GAAP) 0.79% 0.69% 1.11% 1.20%
Effects of merger and
restructuring costs,
net of tax 0.16 0.04 0.01 0.04
Effects of
discontinued
operations, net of
tax 0.01 - - -
Effects of change in
unrealized loss on
derivatives, net of
tax - - - (0.12)
Effects of
deleveraging losses,
net of tax - 0.36 - -
Effects of
amortization of
intangibles, net of
tax 0.47 0.51 0.52 0.52
------------ ------------ ------------ ------------
Return on average
assets, as
adjusted 1.43% 1.60% 1.64% 1.64%
============ ============ ============ ============
Return on average
equity (GAAP) 4.07% 3.42% 5.44% 5.98%
Effects of merger
and restructuring
costs, net of tax 0.79 0.21 0.04 0.21
Effects of
discontinued
operations, net of
tax 0.07 - - -
Effects of change in
unrealized loss on
derivatives, net of
tax - - 0.03 (0.60)
Effects of
deleveraging losses,
net of tax 0.02 1.80 - (0.01)
Effects of
amortization of
intangibles, net of
tax 24.26 23.93 23.88 25.74
------------ ------------ ------------ ------------
Return on average
equity, as adjusted 29.21% 29.36% 29.39% 31.32%
============ ============ ============ ============
Efficiency ratio
(GAAP) 69.86% 71.05% 60.05% 59.57%
Effects of merger and
restructuring costs,
net of tax (4.95) (1.64) (0.33) (1.46)
Effects of
discontinued
operations, net of
tax (0.65) - - -
Effects of change in
unrealized loss on
derivatives, net of
tax - - (0.12) 2.43
Effects of Securities
gains/losses
(excluding deleveraging
losses) 0.04 (0.01) 0.17 0.29
Effects of
deleveraging losses,
net of tax (0.06) (8.96) - 0.03
Effects of
amortization of
intangibles, net of
tax (9.40) (8.86) (8.81) (8.97)
------------ ------------ ------------ ------------
Efficiency ratio, as
adjusted 54.84% 51.58% 50.96% 51.89%
============ ============ ============ ============
Noninterest income
(GAAP) $117,839 $60,097 $103,607 $117,271
Change in unrealized
loss on derivatives - 11 711 (14,840)
Deleveraging
securities losses 330 45,000 0 218
Lower of cost or
market adjustments
(included in
deleveraging
losses above) - - - (386)
------------ ------------ ------------ ------------
Noninterest income,
as adjusted $118,169 $105,108 $104,318 $102,263
============ ============ ============ ============
Noninterest expense
(GAAP) $277,036 $215,657 $211,729 $220,332
Merger and
restructuring costs 19,818 4,957 1,162 5,367
Prepayment penalties
on borrowings
(included in
deleveraging
losses above) - - - -
Amortization of
intangibles 37,666 30,894 31,041 31,657
------------ ------------ ------------ ------------
Noninterest expense,
as adjusted $219,552 $179,806 $179,526 $183,308
============ ============ ============ ============
Average assets
(GAAP) $38,985,841 $32,108,978 $31,734,972 $32,008,478
Average Goodwill
and
Intangibles 6,311,653 5,240,241 5,264,758 5,283,283
------------ ------------ ------------ ------------
Average Tangible
Assets $32,674,188 $26,868,737 $26,470,214 $26,725,195
============ ============ ============ ============
Average equity
(GAAP) $7,601,170 $6,447,337 $6,477,100 $6,415,590
Average Goodwill
and
Intangibles 6,311,654 5,240,241 5,264,758 5,283,283
Average Deferred
Taxes on
Intangibles 315,498 254,235 265,588 264,676
------------ ------------ ------------ ------------
Average Tangible
Equity $1,605,015 $1,461,331 $1,477,930 $1,396,983
============ ============ ============ ============
2005
-----------
Combined
-----------
First
Quarter
-----------
Net income (GAAP) $34,075
Add back the
following, net of
tax:
Merger and
restructuring
charges 23,375
Income from
discontinued
operations -
Change in
unrealized
loss on
derivatives 5,314
Deleveraging
losses 41,562
------------
Net income, as
adjusted 104,326
Amortization
of
intangibles 7,472
------------
Net income, as
adjusted $111,798
============
Diluted earnings per
share (GAAP) $0.18
Add back the
following, net of
tax:
Merger and
restructuring
charges 0.13
Income from
discontinued
operations -
Change in
unrealized
loss on
derivatives 0.03
Deleveraging
losses 0.22
------------
Diluted earnings per
share, as adjusted 0.56
Amortization
of
intangibles 0.04
------------
Diluted earnings per
share, as adjusted $0.60
============
Return on average
assets (GAAP) 0.45%
Effects of merger and
restructuring costs,
net of tax 0.31
Effects of
discontinued
operations, net of
tax -
Effects of change in
unrealized loss on
derivatives, net of
tax 0.07
Effects of
deleveraging losses,
net of tax 0.55
Effects of
amortization of
intangibles, net of
tax 0.25
------------
Return on average
assets, as adjusted 1.63%
============
Return on average
equity (GAAP) 3.09%
Effects of merger and
restructuring costs,
net of tax 2.11
Effects of
discontinued
operations, net of
tax -
Effects of change in
unrealized loss on
derivatives, net of
tax 0.49
Effects of
deleveraging losses,
net of tax 3.76
Effects of
amortization of
intangibles, net of
tax 16.25
------------
Return on average
equity, as adjusted 25.70%
============
Efficiency ratio
(GAAP) 80.15%
Effects of merger and
restructuring costs,
net of tax (11.20)
Effects of
discontinued
operations, net of
tax -
Effects of change in
unrealized loss on
derivatives, net of
tax
Effects of securities
gains/losses (excluding
deleveraging losses) (0.08)
Effects of
deleveraging losses,
net of tax (13.02)
Effects of
amortization of
intangibles, net of
tax (3.34)
------------
Efficiency ratio, as
adjusted 50.54%
============
Noninterest income
(GAAP) $25,621
Change in unrealized
loss on derivatives 8,175
Deleveraging securities
losses 50,139
Lower of cost or
market adjustments 7,500
------------
Noninterest income,
as adjusted $91,435
============
Noninterest expense
(GAAP) $223,109
Merger and
restructuring costs 31,191
Prepayment penalties
on borrowings 6,303
Amortization of
intangibles 11,495
------------
Noninterest expense,
as adjusted $174,120
============
Average assets (GAAP) $30,705,504
Average Goodwill and
Intangibles 2,818,576
------------
Average Tangible
Assets $27,886,928
============
Average equity (GAAP) $4,477,650
Average Goodwill and
Intangibles 2,818,576
Average Deferred
Taxes on Intangibles 105,419
------------
Average Tangible
Equity $1,764,493
============
TD Banknorth Inc. and Subsidiaries
Identifiable Intangible Assets
Estimated Future Amortization Expense (Unaudited)
Core Other
Deposit Identifiable
Intangibles Intangibles
------------------- -------------------
Historical TD Historical TD
Incremental Incremental
-------------------------------------------
Amortization
Expense:
Three months
ended March
31, 2005
(Combined) $1,945 $7,875 $355 $1,320
Three months
ended June
30, 2005 2,123 24,958 617 3,959
Three months
ended
September 30,
2005 2,123 24,625 334 3,959
Three months
ended
December 31,
2005 2,123 24,625 187 3,959
------------------- -------------------
Full Year
2005 $8,314 $82,083 $1,493 $13,197
=================== ===================
Three months
ended March
31, 2006 9,405 23,820 672 3,770
Identifiable
Intangible
Assets Balance
at March 31, 2006 $215,725 $404,441 $51,844 $176,870
============================================
Estimated
Future
Amortization
Expense
2006 (April
through
December) $28,207 $64,965 $2,705 $11,304
2007 36,813 68,249 3,608 14,342
2008 36,568 55,493 3,238 13,665
2009 36,568 45,327 3,238 13,035
2010 36,568 36,160 3,105 12,414
Thereafter 41,002 134,247 33,593 112,111
Total
Identifiable
Intangibles
----------------------
Historical TD Total
Incremental
-------------------------------
Amortization
Expense:
Three months
ended March
31, 2005
(Combined) $2,300 $9,195 $11,495
Three months
ended June
30, 2005 2,740 28,917 31,657
Three months
ended
September 30,
2005 2,457 28,584 31,041
Three months
ended
December 31,
2005 2,310 28,584 30,894
-------------------------------
Full Year
2005 $9,807 $95,280 $105,087
===============================
Three months
ended March
31, 2006 10,077 27,590 37,667
Identifiable
Intangible
Assets Balance
at March 31, 2006 $267,569 $581,311 $848,880
===============================
Estimated
Future
Amortization
Expense
2006 (April
through
December) $30,912 $76,269 $107,181
2007 40,421 82,591 123,012
2008 39,806 69,158 108,964
2009 39,806 58,362 98,168
2010 39,673 48,574 88,247
Thereafter 74,595 246,358 320,953
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