Exhibit 99.1
Banknorth Reports Fourth Quarter and 2004 Earnings
PORTLAND, Maine—(BUSINESS WIRE)—Jan. 19, 2005—(Fourth Quarter Earnings Conference Call at 9:00 a.m. Eastern Time January 20, 2005. Dial-in number for USA and Canada is 800 638-5439. International dial-in number is 617 614-3945. Passcode for both numbers is 47614076. Replay number for USA and Canada is 888 286-8010. International replay dial-in number is 617 801-6888. Replay passcode is 75674933. Live webcast and webcast replay available at www.banknorth.com/investorrelations.)
Banknorth Group Inc. (NYSE: BNK) reported earnings for 2004 of $304.6 million as compared to $350.8 million in 2003. For the fourth quarter ended December 31, 2004, Banknorth’s earnings were $20.7 million as compared to $91.6 million for the same quarter a year ago. The declines in earnings for both the quarter and the year were attributable to the Company’s previously-announced deleveraging strategy and certain merger and consolidation costs associated with the Company’s pending transaction with The Toronto-Dominion Bank, or “TD”. Earnings per diluted share for 2004 were $1.75 as compared to $2.15 in 2003. Earnings per diluted share were 12 cents for the quarter ended December 31, 2004 as compared to 55 cents for the quarter ended December 31, 2003.
Exclusive of the after-tax impact of merger and consolidation costs and of the Company’s balance sheet deleveraging, earnings for 2004 were $396.6 million up 11% as compared to $356.0 million for 2003 while earnings for the quarter ended December 31, 2004 were $104.6 million up 13% as compared to $92.4 million for the quarter ended December 31, 2003.
Exclusive of the after-tax impact of merger and consolidation costs and of the Company’s balance sheet deleveraging, earnings per diluted share for 2004 increased by 5% to $2.28 from $2.18 in 2003 while earnings for the quarter ended December 31, 2004 increased to 58 cents as compared to 56 cents for the quarter ended December 31, 2003.
Earnings per diluted share were impacted primarily by two events in the fourth quarter. First, the after-tax impact associated with the Company’s previously-announced deleveraging strategy of $51.6 million represented 29 cents per diluted share for the quarter ended December 31, 2004. Second, merger and consolidation costs of $32.3 million represented an additional 17 cents per diluted share. A majority of the $32.3 million of merger and consolidation costs was due to the payment of certain long-term incentive payments and other expenses related to the acquisition of 51% of Banknorth by TD.
In addition to the above, as a result of the pending transaction with TD, a significant number of Banknorth employees exercised stock options in the fourth quarter of 2004. As a result, the number of weighted average shares outstanding on a diluted basis increased by 3.2 million shares in the fourth quarter ended December 31, 2004, resulting in a decrease in earnings, exclusive of the after-tax impact of merger and consolidation costs and of the Company’s balance sheet deleveraging, of approximately 1 cent per share.
“Our core banking business remains strong,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. “We continue to see solid loan and deposit growth and believe that we are well positioned to execute our growth strategy going forward.” Ryan added.
Total average loans and leases in 2004 were $17.7 billion, up 13% from $15.6 billion in 2003, led by increases in commercial business loans and leases of 17%, commercial real estate mortgages of 15% and consumer loans and leases of 14%. Exclusive of acquisitions, total average commercial and consumer loans increased by 11% in 2004.
Total average core deposits consisting of noninterest bearing deposits, retail money market and NOW accounts and regular savings accounts increased to $14.2 billion in 2004, up 16% from $12.3 billion in 2003, led by increases in noninterest bearing deposits of 24% and retail money market and NOW accounts of 15%, which more than offset a decline in retail certificates of deposit of 8%. Exclusive of acquisitions, total average core deposits increased by 9% in 2004.
The Company’s capital ratios improved in 2004. At December 31, 2004, the Company’s Tier 1 leverage capital ratio was 7.58% and its total risk based capital ratio was 12.16% as compared to 6.65% and 11.29%, respectively, at December 31, 2003. Tangible equity to tangible assets at December 31, 2004 was 6.45%, up 108 basis points from 5.37% at December 31, 2003. Shareholders’ equity at December 31, 2004 was $3.2 billion, up from $2.5 billion at December 31, 2003.
Excluding the net gain/loss on the sale of securities, noninterest income increased 7% in 2004 over 2003 led by increases in wealth management services income of 25%, investment planning services income of 24%, net merchant banking and electronic banking income of 21%, deposit services income of 12% and insurance brokerage commissions of 10%, all of which more than offset a decline in other noninterest income of 21% due primarily to a decline in covered call option income. For the fourth quarter ended December 31, 2004, excluding the net gain/loss on the sale of securities, noninterest income increased 8% over the same quarter a year ago.
Excluding merger and consolidation costs and the prepayment penalties associated with the Company’s balance sheet deleveraging, noninterest expense increased by 8.5% in 2004, the majority of which was associated with the acquisitions of CCBT Financial Companies and Foxborough Savings Bank. The Company’s cash efficiency ratio exclusive of these items and amortization of intangible assets improved slightly to 50.38% in 2004 as compared to 50.94% in 2003.
The Company’s net interest margin during the three months ended December 31, 2004 increased to 3.87%, up 19 basis points from 3.68% for the quarter ended September 30, 2004. The margin was positively impacted by the Company’s balance sheet deleveraging.
For the quarter ended December 31, 2004, total nonperforming assets (“NPAs”) increased to $81 million from $68 million for the quarter ended September 30, 2004 due primarily to an increase in nonperforming assets associated with one large commercial business loan. “Despite an uptick in our NPAs, our overall asset quality remains strong,” said Mr. Ryan. Total net charge-offs for the year ended December 31, 2004 of $36.5 million declined by $.8 million as compared to the year ended December 31, 2003. The Company’s ratio of nonperforming assets to total assets was just 28 basis points at December 31, 2004 up slightly from 24 basis points at December 31, 2003. At December 31, 2004, the Company’s allowance for loan and lease losses to nonperforming loans was 322% and the Company’s allowance as a percentage of total outstanding loans was 1.34%.
In 2004, the Company completed acquisitions in Massachusetts of Foxborough Savings Bank, which had $242 million in assets, and CCBT Financial Companies, which had $1.3 billion in assets. The Company also completed the acquisition of Drake, Swan & Crocker Insurance Agency of Orleans, Massachusetts. The Company anticipates closing the acquisition of BostonFed Bancorp, Inc., with assets of $1.5 billion, on or about January 21, 2005.
On August 26, 2004, Banknorth Group, Inc. and TD announced that they entered into a definitive merger agreement for TD to acquire 51% of the outstanding shares of Banknorth, subject to receipt of required regulatory and shareholder approvals and other customary conditions. A special meeting of Banknorth shareholders to vote on the merger agreement will be held on February 18, 2005.
At December 31, 2004, Banknorth Group Inc., headquartered in Portland, Maine, had assets of $28.7 billion. The Company’s banking subsidiary, Banknorth, N.A., operates banking divisions in Connecticut (Banknorth Connecticut); Maine (Peoples Heritage Bank); Massachusetts (Banknorth Massachusetts); New Hampshire (Bank of New Hampshire); New York (Evergreen Bank); and Vermont (Banknorth Vermont). The Company and Banknorth, N.A. also operate subsidiaries and divisions in insurance, money management, merchant services, mortgage banking, government banking and other financial services 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 with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management uses these non-GAAP measures in its analysis of the Company’s performance. These measures typically adjust GAAP performance measures to exclude the effects of charges and expenses related to the consummation of mergers and acquisitions and costs related to the integration of merged entities, as well as the amortization of intangible assets in the case of “cash basis” performance measures. These non-GAAP measures also may exclude other significant gains or losses that are unusual in nature, such as security gains and prepayment penalties. Because these items and their impact on the Company’s performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
This news release contains certain forward-looking statements 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, as well as other economic, competitive, governmental, regulatory and accounting and technological factors affecting Banknorth’s operations. In addition, acquisitions may result in large one-time charges to income, may not produce revenue enhancements 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.
CONTACT: Banknorth Group, Inc.
Jeffrey Nathanson, 207-761-8517
SOURCE: Banknorth Group, Inc.
Banknorth Group, Inc. and Subsidiaries
| December 31, | December 31, | % | September 30, | % | ||||||||||||||||
| (In thousands) | 2004 | 2003 | Change | 2004 | Change | |||||||||||||||
| Cash and due from banks | $ | 541,994 | $ | 669,686 | -19 | % | $ | 575,840 | -6 | % | ||||||||||
| Federal funds sold and other short-term investments | 2,312 | 4,645 | -50 | % | 4,031 | -43 | % | |||||||||||||
| Securities available for sale | 6,905,765 | 7,122,992 | -3 | % | 7,369,269 | -6 | % | |||||||||||||
| Securities held to maturity | 87,013 | 124,240 | -30 | % | 94,026 | -7 | % | |||||||||||||
| Loans and leases held for sale | 51,693 | 41,696 | 24 | % | 47,487 | 9 | % | |||||||||||||
| Loans and leases: | ||||||||||||||||||||
| Residential real estate mortgages | 3,081,217 | 2,710,483 | 14 | % | 3,096,739 | -1 | % | |||||||||||||
| Commercial real estate mortgages | 6,249,513 | 5,528,862 | 13 | % | 6,182,835 | 1 | % | |||||||||||||
| Commercial business loans and leases | 3,928,594 | 3,287,094 | 20 | % | 3,856,296 | 2 | % | |||||||||||||
| Consumer loans and leases | 5,333,670 | 4,819,523 | 11 | % | 5,274,921 | 1 | % | |||||||||||||
| Total loans and leases | 18,592,994 | 16,345,962 | 14 | % | 18,410,791 | 1 | % | |||||||||||||
| Less: Allowance for loan and lease losses | 243,152 | 232,287 | 5 | % | 242,885 | 0 | % | |||||||||||||
| Loans and leases, net | 18,349,842 | 16,113,675 | 14 | % | 18,167,906 | 1 | % | |||||||||||||
| Premises and equipment | 300,120 | 264,818 | 13 | % | 285,940 | 5 | % | |||||||||||||
| Goodwill | 1,365,780 | 1,126,639 | 21 | % | 1,369,112 | 0 | % | |||||||||||||
| Identifiable intangible assets | 50,376 | 36,415 | 38 | % | 52,593 | -4 | % | |||||||||||||
| Bank owned life insurance | 523,129 | 488,756 | 7 | % | 517,359 | 1 | % | |||||||||||||
| Other assets | 509,786 | 460,173 | 11 | % | 502,521 | 1 | % | |||||||||||||
| $ | 28,687,810 | $ | 26,453,735 | 8 | % | $ | 28,986,084 | -1 | % | |||||||||||
Liabilities & Shareholders’ Equity | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Regular savings | $ | 2,546,018 | $ | 2,460,522 | 3 | % | $ | 2,572,473 | -1 | % | ||||||||||
| Retail money market and NOW accounts | 7,907,513 | 7,130,532 | 11 | % | 7,924,839 | 0 | % | |||||||||||||
| Retail certificates of deposit | 4,484,370 | 4,733,104 | -5 | % | 4,646,725 | -3 | % | |||||||||||||
| Brokered deposits | 576 | — | NM | 575 | 0 | % | ||||||||||||||
| Noninterest bearing deposits | 4,289,104 | 3,577,027 | 20 | % | 4,225,861 | 1 | % | |||||||||||||
| Total deposits | 19,227,581 | 17,901,185 | 7 | % | 19,370,473 | -1 | % | |||||||||||||
| Borrowings from the Federal Home Loan Bank | 1,997,336 | 1,495,385 | 34 | % | 1,479,160 | 35 | % | |||||||||||||
| Federal funds purchased and securities sold under repurchase agreements | 2,952,476 | 3,659,550 | -19 | % | 3,453,476 | -15 | % | |||||||||||||
| Subordinated debt and senior notes | 346,879 | 348,293 | 0 | % | 354,684 | -2 | % | |||||||||||||
| Other borrowings | 383,268 | 84,361 | 354 | % | 759,369 | -50 | % | |||||||||||||
| Junior subordinated debentures | 310,746 | — | NM | 310,746 | 0 | % | ||||||||||||||
| Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures | — | 295,275 | -100 | % | — | NM | ||||||||||||||
| Other liabilities | 293,410 | 149,167 | 97 | % | 211,934 | 38 | % | |||||||||||||
| Total liabilities | 25,511,696 | 23,933,216 | 7 | % | 25,939,842 | -2 | % | |||||||||||||
| Shareholders’ equity | 3,176,114 | 2,520,519 | 26 | % | 3,046,242 | 4 | % | |||||||||||||
| $ | 28,687,810 | $ | 26,453,735 | 8 | % | $ | 28,986,084 | -1 | % | |||||||||||
4
Banknorth Group, Inc. and Subsidiaries
| (In thousands, except per share data) | Year Ended December 31, | % | Three Months Ended December 31, | % | ||||||||||||||||||||
| 2004 | 2003 | Change | 2004 | 2003 | Change | |||||||||||||||||||
| Interest and dividend income | $ | 1,257,005 | $ | 1,192,969 | 5 | % | $ | 329,846 | $ | 290,414 | 14 | % | ||||||||||||
| Interest expense | 323,623 | 352,138 | -8 | % | 83,783 | 77,126 | 9 | % | ||||||||||||||||
| Net interest income | 933,382 | 840,831 | 11 | % | 246,063 | 213,288 | 15 | % | ||||||||||||||||
| Provision for loan and lease losses | 40,340 | 42,301 | -5 | % | 10,670 | 10,400 | 3 | % | ||||||||||||||||
| Net interest income after provision for loan and lease losses | 893,042 | 798,530 | 12 | % | 235,393 | 202,888 | 16 | % | ||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||
| Deposit services | 109,321 | 97,323 | 12 | % | 28,326 | 25,881 | 9 | % | ||||||||||||||||
| Insurance brokerage commissions | 50,311 | 45,714 | 10 | % | 11,880 | 11,480 | 3 | % | ||||||||||||||||
| Merchant and electronic banking income, net | 50,564 | 41,778 | 21 | % | 13,368 | 10,542 | 27 | % | ||||||||||||||||
| Wealth management services | 39,788 | 31,956 | 25 | % | 10,489 | 8,470 | 24 | % | ||||||||||||||||
| Bank owned life insurance | 23,282 | 22,930 | 2 | % | 5,779 | 5,978 | -3 | % | ||||||||||||||||
| Investment planning services | 19,418 | 15,692 | 24 | % | 4,799 | 4,765 | 1 | % | ||||||||||||||||
| Net gains/(losses) on sales of securities | (7,701 | ) | 42,460 | -118 | % | (17,761 | ) | 2,682 | -762 | % | ||||||||||||||
| Other noninterest income | 54,816 | 69,306 | -21 | % | 13,711 | 14,637 | -6 | % | ||||||||||||||||
| 339,799 | 367,159 | -7 | % | 70,591 | 84,435 | -16 | % | |||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||
| Salaries and employee benefits | 356,611 | 326,621 | 9 | % | 90,138 | 81,451 | 11 | % | ||||||||||||||||
| Occupancy and equipment expense | 112,372 | 106,659 | 5 | % | 29,320 | 26,731 | 10 | % | ||||||||||||||||
| Data processing | 43,141 | 40,940 | 5 | % | 11,568 | 9,881 | 17 | % | ||||||||||||||||
| Advertising and marketing | 25,550 | 22,000 | 16 | % | 5,445 | 5,430 | 0 | % | ||||||||||||||||
| Amortization of identifiable intangible assets | 8,627 | 8,946 | -4 | % | 2,260 | 2,324 | -3 | % | ||||||||||||||||
| Merger and consolidation costs (1) | 49,635 | 8,104 | 512 | % | 38,286 | 1,316 | 2809 | % | ||||||||||||||||
| Prepayment penalties on borrowings | 61,546 | 30,490 | 102 | % | 61,546 | — | NM | |||||||||||||||||
| Other noninterest expense | 107,619 | 97,510 | 10 | % | 28,796 | 28,543 | 1 | % | ||||||||||||||||
| 765,101 | 641,270 | 19 | % | 267,359 | 155,676 | 72 | % | |||||||||||||||||
| Income before income tax expense | 467,740 | 524,419 | -11 | % | 38,625 | 131,647 | -71 | % | ||||||||||||||||
| Income tax expense | 163,097 | 173,660 | -6 | % | 17,927 | 40,085 | -55 | % | ||||||||||||||||
| Net Income | $ | 304,643 | $ | 350,759 | -13 | % | $ | 20,698 | $ | 91,562 | -77 | % | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||
| Basic | 170,766 | 160,914 | 6 | % | 177,071 | 162,149 | 9 | % | ||||||||||||||||
| Diluted | 174,158 | 163,520 | 7 | % | 179,953 | 165,685 | 9 | % | ||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||
| Basic | $ | 1.78 | $ | 2.18 | -18 | % | $ | 0.12 | $ | 0.56 | -79 | % | ||||||||||||
| Diluted | 1.75 | 2.15 | -19 | % | 0.12 | 0.55 | -78 | % | ||||||||||||||||
(1) Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs.
NM — calculated % change is not meaningful
5
Banknorth Group, Inc. and Subsidiaries
| (In thousands, except per share data) | ||||||||||||||||||||||||
| Year Ended December 31, | % | Three Months Ended December 31, | % | |||||||||||||||||||||
| 2004 | 2003 | Change | 2004 | 2003 | Change | |||||||||||||||||||
| Net interest income | $ | 933,382 | $ | 840,831 | 11 | % | $ | 246,063 | $ | 213,288 | 15 | % | ||||||||||||
| Net income | $ | 304,643 | $ | 350,759 | -13 | % | $ | 20,698 | $ | 91,562 | -77 | % | ||||||||||||
| Shares outstanding (end of period) | 179,298 | 162,188 | 11 | % | 179,298 | 162,188 | 11 | % | ||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||
| Basic | 170,766 | 160,D914 | 6 | % | 177,071 | 162,149 | 9 | % | ||||||||||||||||
| Diluted | 174,158 | 163,520 | 7 | % | 179,953 | 165,685 | 9 | % | ||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||
| Basic | $ | 1.78 | $ | 2.18 | -18 | % | $ | 0.12 | $ | 0.56 | -79 | % | ||||||||||||
| Diluted | $ | 1.75 | $ | 2.15 | -19 | % | $ | 0.12 | $ | 0.55 | -78 | % | ||||||||||||
| Shareholders’ equity (end of period) | $ | 3,176,114 | $ | 2,520,519 | 26 | % | $ | 3,176,114 | $ | 2,520,519 | 26 | % | ||||||||||||
| Book value per share (end of period) | $ | 17.71 | $ | 15.54 | 14 | % | $ | 17.71 | $ | 15.54 | 14 | % | ||||||||||||
| Tangible book value per share (end of period) | $ | 9.82 | $ | 8.37 | 17 | % | $ | 9.82 | $ | 8.37 | 17 | % | ||||||||||||
| Nominal | Nominal | |||||||||||||||||||||||
| RATIOS & OTHER INFORMATION: | Inc/(Dec) | Inc/(Dec) | ||||||||||||||||||||||
| Net interest margin (net interest income as a % of average earning assets) (1) | 3.72 | % | 3.66 | % | 0.06 | % | 3.87 | % | 3.65 | % | 0.22 | % | ||||||||||||
| Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1) | 3.47 | % | 3.41 | % | 0.06 | % | 3.59 | % | 3.42 | % | 0.17 | % | ||||||||||||
| Return on average assets | 1.08 | % | 1.37 | % | -0.29 | % | 0.29 | % | 1.39 | % | -1.10 | % | ||||||||||||
| Return on average equity | 10.63 | % | 14.51 | % | -3.88 | % | 2.66 | % | 14.72 | % | -12.06 | % | ||||||||||||
At period end: | ||||||||||||||||||||||||
| Tier 1 leverage capital ratio | 7.58 | % | 6.65 | % | 0.93 | % | 7.58 | % | 6.65 | % | 0.93 | % | ||||||||||||
| Tangible equity/tangible assets | 6.45 | % | 5.37 | % | 1.08 | % | 6.45 | % | 5.37 | % | 1.08 | % | ||||||||||||
| Total risk based capital ratio | 12.16 | % | 11.29 | % | 0.87 | % | 12.16 | % | 11.29 | % | 0.87 | % | ||||||||||||
| Non-performing loans | $ | 77,559 | $ | 59,762 | 30 | % | $ | 77,559 | $ | 59,762 | 30 | % | ||||||||||||
| Total non-performing assets | $ | 81,103 | $ | 63,103 | 29 | % | $ | 81,103 | $ | 63,103 | 29 | % | ||||||||||||
| Non-performing loans as a % of total loans | 0.42 | % | 0.37 | % | 0.05 | % | 0.42 | % | 0.37 | % | 0.05 | % | ||||||||||||
| Non-performing assets as a % of total assets | 0.28 | % | 0.24 | % | 0.04 | % | 0.28 | % | 0.24 | % | 0.04 | % | ||||||||||||
| Full service banking offices | 386 | 359 | 386 | 359 | ||||||||||||||||||||
| FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information): | ||||||||||||||||||||||||
| Noninterest income as a percent of total income (2) | 27.13 | % | 27.86 | % | -0.73 | % | 26.42 | % | 27.71 | % | -1.29 | % | ||||||||||||
| Merger and consolidation costs on a net of tax basis (3) | $ | 40,395 | $ | 5,275 | 666 | % | $ | 32,316 | $ | 855 | 3680 | % | ||||||||||||
| Per diluted share: | $ | 0.23 | $ | 0 | 667 | % | $ | 0.17 | $ | 0.01 | 1600 | % | ||||||||||||
| Deleveraging losses, net of tax basis (4) | $ | 51,560 | — | NM | $ | 51,560 | — | NM | ||||||||||||||||
| Per diluted share: | $ | 0.30 | — | NM | $ | 0.29 | — | NM | ||||||||||||||||
| Noninterest expense (5) | $ | 653,919 | $ | 602,676 | 9 | % | $ | 167,528 | $ | 154,360 | 9 | % | ||||||||||||
| Return on average assets (6) | 1.41 | % | 1.39 | % | 0.02 | % | 1.46 | % | 1.41 | % | 0.05 | % | ||||||||||||
| Cash return on average tangible assets (6) (7) | 1.48 | % | 1.45 | % | 0.03 | % | 1.53 | % | 1.49 | % | 0.04 | % | ||||||||||||
| Return on average equity (6) | 13.84 | % | 14.71 | % | -0.87 | % | 13.43 | % | 14.86 | % | -1.43 | % | ||||||||||||
| Cash return on average tangible equity (6) (7) | 25.99 | % | 26.60 | % | -0.61 | % | 24.80 | % | 27.86 | % | -3.06 | % | ||||||||||||
| Efficiency ratio (8) | 51.05 | % | 51.71 | % | -0.66 | % | 50.10 | % | 52.32 | % | -2.22 | % | ||||||||||||
| Cash efficiency ratio (9) | 50.38 | % | 50.94 | % | -0.56 | % | 49.42 | % | 51.53 | % | -2.11 | % | ||||||||||||
| (1) | Adjusted to fully taxable equivalent basis. | |||
| (2) | Excludes securities gains/(losses). | |||
| (3) | Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs. | |||
| (4) | Deleveraging losses consist of losses on securities sales and prepayment penalties on borrowings incurred in connection with a balance sheet restructuring in October 2004. | |||
| (5) | Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings. | |||
| (6) | Excludes merger and consolidation costs and deleveraging losses, net of related tax benefits. | |||
| (7) | Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits. | |||
| (8) | Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs. | |||
| (9) | Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets. | |||
6
Banknorth Group, Inc. and Subsidiaries
| Three Months Ended December 31, | |||||||||||||||||
| 2004 | 2003 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||||
| (Dollars in thousands) | Balance | Rate | Balance | Rate | |||||||||||||
Assets | |||||||||||||||||
| Loans and leases (1) | |||||||||||||||||
| Residential real estate mortgages | $ | 3,138,974 | 4.94 | % | $ | 2,718,881 | 5.25 | % | |||||||||
| Commercial real estate mortgages | 6,250,243 | 5.95 | % | 5,392,549 | 5.78 | % | |||||||||||
| Commercial loans and leases | 3,853,844 | 5.19 | % | 3,233,277 | 4.83 | % | |||||||||||
| Consumer loans and leases | 5,308,272 | 5.28 | % | 4,676,259 | 5.29 | % | |||||||||||
| 18,551,333 | 5.43 | % | 16,020,966 | 5.36 | % | ||||||||||||
| Securities | 6,974,995 | 4.51 | % | 7,432,088 | 4.09 | % | |||||||||||
| Federal funds sold and other short-term investments | 12,461 | 0.95 | % | 5,176 | 2.00 | % | |||||||||||
| Securities purchased under agreements to resell | 1,667 | 1.75 | % | — | 0.00 | % | |||||||||||
| Total earning assets | 25,540,456 | 5.18 | % | 23,458,230 | 4.96 | % | |||||||||||
| Bank owned life insurance | 519,506 | 484,428 | |||||||||||||||
| Noninterest-earning assets | 2,516,439 | 2,124,138 | |||||||||||||||
| Total assets | $ | 28,576,401 | $ | 26,066,796 | |||||||||||||
Liabilities & Shareholders’ Equity | |||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||
| Regular savings | $ | 2,568,297 | 0.29 | % | $ | 2,476,385 | 0.37 | % | |||||||||
| Retail money market and NOW accounts | 8,057,876 | 0.86 | % | 6,982,431 | 0.79 | % | |||||||||||
| Retail certificates of deposit | 4,539,483 | 2.04 | % | 4,803,437 | 2.10 | % | |||||||||||
| Brokered deposits | 576 | 2.38 | % | — | 0.00 | % | |||||||||||
| Total interest-bearing deposits | 15,166,232 | 1.12 | % | 14,262,253 | 1.16 | % | |||||||||||
| Borrowed funds | 5,805,974 | 2.83 | % | 5,643,402 | 2.51 | % | |||||||||||
| Total interest-bearing liabilities | 20,972,206 | 1.59 | % | 19,905,655 | 1.54 | % | |||||||||||
| Noninterest bearing deposits | 4,319,603 | 3,494,692 | |||||||||||||||
| Other liabilities | 187,705 | 198,424 | |||||||||||||||
| Shareholders’ equity | 3,096,887 | 2,468,025 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 28,576,401 | $ | 26,066,796 | |||||||||||||
| Net earning assets | $ | 4,568,250 | $ | 3,552,575 | |||||||||||||
| Net interest income (fully taxable equivalent) | $ | 247,821 | $ | 214,865 | |||||||||||||
| Less: fully taxable equivalent adjustments | (1,758 | ) | (1,577 | ) | |||||||||||||
| Net interest income | $ | 246,063 | $ | 213,288 | |||||||||||||
| Net interest rate spread (fully taxable equivalent) | 3.59 | % | 3.42 | % | |||||||||||||
| Net interest margin (fully taxable equivalent) | 3.87 | % | 3.65 | % | |||||||||||||
(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans.
7
Banknorth Group, Inc. and Subsidiaries
| Year Ended December 31, | |||||||||||||||||
| 2004 | 2003 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||||||
| (Dollars in thousands) | Balance | Rate | Balance | Rate | |||||||||||||
Assets | |||||||||||||||||
| Loans and leases (1) | |||||||||||||||||
| Residential real estate mortgages | $ | 2,997,572 | 5.01 | % | $ | 2,839,969 | 5.61 | % | |||||||||
| Commercial real estate mortgages | 5,959,510 | 5.79 | % | 5,162,413 | 6.06 | % | |||||||||||
| Commercial loans and leases | 3,686,919 | 4.92 | % | 3,153,293 | 5.10 | % | |||||||||||
| Consumer loans and leases | 5,090,536 | 5.13 | % | 4,477,532 | 5.61 | % | |||||||||||
| 17,734,537 | 5.29 | % | 15,633,207 | 5.65 | % | ||||||||||||
| Securities | 7,501,956 | 4.33 | % | 7,464,162 | 4.22 | % | |||||||||||
| Federal funds sold and other short-term investments | 9,567 | 0.86 | % | 11,004 | 1.46 | % | |||||||||||
| Securities purchased under agreements to resell | 419 | 1.75 | % | — | 0.00 | % | |||||||||||
| Total earning assets | 25,246,479 | 5.00 | % | 23,108,373 | 5.19 | % | |||||||||||
| Bank owned life insurance | 503,957 | 465,446 | |||||||||||||||
| Noninterest-earning assets | 2,422,988 | 2,042,528 | |||||||||||||||
| Total assets | $ | 28,173,424 | $ | 25,616,347 | |||||||||||||
Liabilities & Shareholders’ Equity | |||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||
| Regular savings | $ | 2,563,838 | 0.29 | % | $ | 2,399,179 | 0.46 | % | |||||||||
| Retail money market and NOW accounts | 7,678,644 | 0.81 | % | 6,652,030 | 0.89 | % | |||||||||||
| Retail certificates of deposit | 4,647,746 | 1.96 | % | 5,027,739 | 2.36 | % | |||||||||||
| Brokered deposits | 272 | 2.03 | % | — | 0.00 | % | |||||||||||
| Total interest-bearing deposits | 14,890,500 | 1.08 | % | 14,078,948 | 1.34 | % | |||||||||||
| Borrowed funds | 6,245,995 | 2.60 | % | 5,693,420 | 2.87 | % | |||||||||||
| Total interest-bearing liabilities | 21,136,495 | 1.53 | % | 19,772,368 | 1.78 | % | |||||||||||
| Noninterest bearing deposits | 3,987,311 | 3,224,035 | |||||||||||||||
| Other liabilities | 184,078 | 203,018 | |||||||||||||||
| Shareholders’ equity | 2,865,540 | 2,416,926 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 28,173,424 | $ | 25,616,347 | |||||||||||||
| Net earning assets | $ | 4,109,984 | $ | 3,336,005 | |||||||||||||
| Net interest income (fully taxable equivalent) | $ | 939,853 | $ | 846,727 | |||||||||||||
| Less: fully taxable equivalent adjustments | (6,471 | ) | (5,896 | ) | |||||||||||||
| Net interest income | $ | 933,382 | $ | 840,831 | |||||||||||||
| Net interest rate spread (fully taxable equivalent) | 3.47 | % | 3.41 | % | |||||||||||||
| Net interest margin (fully taxable equivalent) | 3.72 | % | 3.66 | % | |||||||||||||
(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans.
8
Banknorth Group, Inc. and Subsidiaries
| 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 12/31/2003 | ||||||||||||||||
Non-performing assets: | ||||||||||||||||||||
| Residential real estate mortgages | $ | 7,846 | $ | 7,274 | $ | 7,870 | $ | 7,990 | $ | 7,157 | ||||||||||
| Commercial real estate mortgages | 29,948 | 33,249 | 27,951 | 24,619 | 19,700 | |||||||||||||||
| Commercial business loans and leases | 32,421 | 18,573 | 23,636 | 28,978 | 24,412 | |||||||||||||||
| Consumer loans and leases | 7,344 | 6,827 | 5,685 | 6,267 | 8,493 | |||||||||||||||
| Total non-performing loans and leases | 77,559 | 65,923 | 65,142 | 67,854 | 59,762 | |||||||||||||||
| Other non-performing assets, net | 3,544 | 2,056 | 2,025 | 2,700 | 3,341 | |||||||||||||||
| Total non-performing assets | $ | 81,103 | $ | 67,979 | $ | 67,167 | $ | 70,554 | $ | 63,103 | ||||||||||
| Allowance for loan and lease losses | $ | 243,152 | $ | 242,885 | (1) | $ | 247,620 | $ | 233,297 | $ | 232,287 | |||||||||
| Liability for unfunded credit commitments | 6,707 | 6,600 | ||||||||||||||||||
Total allowance for credit losses | $ | 249,859 | $ | 249,485 | ||||||||||||||||
Net loan charge-offs (recoveries): | ||||||||||||||||||||
| Residential real estate mortgages | $ | (9 | ) | $ | 86 | $ | (42 | ) | $ | (72 | ) | $ | 10 | |||||||
| Commercial real estate mortgages | (486 | ) | (530 | ) | (663 | ) | (446 | ) | (168 | ) | ||||||||||
| Total real estate mortgages | (495 | ) | (444 | ) | (705 | ) | (518 | ) | (158 | ) | ||||||||||
| Commercial business loans and leases | 5,594 | 2,939 | 3,387 | 1,785 | 2,402 | |||||||||||||||
| Consumer loans and leases | 5,305 | 6,310 | 6,160 | 7,223 | 8,111 | |||||||||||||||
| Total net charge-offs | $ | 10,404 | $ | 8,805 | $ | 8,842 | $ | 8,490 | $ | 10,355 | ||||||||||
Ratios: | ||||||||||||||||||||
| Allowance for credit losses to total loans and leases | 1.34 | % | 1.36 | %(1) | 1.37 | % | 1.40 | % | 1.42 | % | ||||||||||
| Allowance for credit losses to non-performing loans | 322.15 | % | 378.45 | %(1) | 380.12 | % | 343.82 | % | 388.69 | % | ||||||||||
| Non-performing loans to total loans and leases | 0.42 | % | 0.36 | % | 0.36 | % | 0.41 | % | 0.37 | % | ||||||||||
| Non-performing assets to total assets | 0.28 | % | 0.23 | % | 0.23 | % | 0.26 | % | 0.24 | % | ||||||||||
| Net charge-offs to average loans — QTD (2) | 0.22 | % | 0.19 | % | 0.20 | % | 0.21 | % | 0.26 | % | ||||||||||
| (1) | In September 2004, $6.6 million was transferred from the allowance for loan and lease losses to a liability account related to reserves for off-balance sheet loan commitments. | |||
| (2) | Annualized. | |||
9
Banknorth Group, Inc. and Subsidiaries
| (In thousands, except per share data) | Three Months Ended | |||||||||||||||||||
| 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 12/31/2003 | ||||||||||||||||
| Interest and dividend income | $ | 329,846 | $ | 325,361 | $ | 309,146 | $ | 292,652 | $ | 290,414 | ||||||||||
| Interest expense | 83,783 | 85,701 | 79,096 | 75,043 | 77,126 | |||||||||||||||
| Net interest income | 246,063 | 239,660 | 230,050 | 217,609 | 213,288 | |||||||||||||||
| Provision for loan and lease losses | 10,670 | 10,670 | 9,500 | 9,500 | 10,400 | |||||||||||||||
| Net interest income after provision | ||||||||||||||||||||
| for loan and lease losses | 235,393 | 228,990 | 220,550 | 208,109 | 202,888 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Deposit services | 28,326 | 27,583 | 27,260 | 26,153 | 25,881 | |||||||||||||||
| Insurance brokerage commissions | 11,880 | 12,417 | 12,278 | 13,736 | 11,480 | |||||||||||||||
| Merchant and electronic banking income, net | 13,368 | 13,723 | 13,069 | 10,404 | 10,542 | |||||||||||||||
| Wealth management services | 10,489 | 10,280 | 9,870 | 9,149 | 8,470 | |||||||||||||||
| Bank owned life insurance | 5,779 | 5,732 | 6,275 | 5,496 | 5,978 | |||||||||||||||
| Investment planning services | 4,799 | 4,634 | 5,146 | 4,839 | 4,765 | |||||||||||||||
| Net gains/(losses) on sales of securities | (17,761 | ) | 3,124 | 3,355 | 3,581 | 2,682 | ||||||||||||||
| Other noninterest income | 13,711 | 14,020 | 12,223 | 14,859 | 14,637 | |||||||||||||||
| 70,591 | 91,513 | 89,476 | 88,217 | �� | 84,435 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 90,138 | 91,935 | 87,005 | 87,534 | 81,451 | |||||||||||||||
| Occupancy and equipment expense | 29,320 | 27,940 | 27,512 | 27,599 | 26,731 | |||||||||||||||
| Data processing | 11,568 | 11,118 | 10,018 | 10,436 | 9,881 | |||||||||||||||
| Advertising and marketing | 5,445 | 6,278 | 6,303 | 7,523 | 5,430 | |||||||||||||||
| Amortization of identifiable intangible assets | 2,260 | 2,379 | 2,084 | 1,904 | 2,324 | |||||||||||||||
| Merger and consolidation costs (1) | 38,286 | 5,603 | 4,135 | 1,614 | 1,316 | |||||||||||||||
| Prepayment penalties on borrowings | 61,546 | — | — | — | — | |||||||||||||||
| Other noninterest expense | 28,796 | 28,945 | 26,769 | 23,109 | 28,543 | |||||||||||||||
| 267,359 | 174,198 | 163,826 | 159,719 | 155,676 | ||||||||||||||||
| Income before income tax expense | 38,625 | 146,305 | 146,200 | 136,607 | 131,647 | |||||||||||||||
| Income tax expense | 17,927 | 48,534 | 50,353 | 46,280 | 40,085 | |||||||||||||||
| Net Income | $ | 20,698 | $ | 97,771 | $ | 95,847 | $ | 90,327 | $ | 91,562 | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 177,071 | 173,271 | 169,637 | 162,965 | 162,149 | |||||||||||||||
| Diluted | 179,953 | 176,756 | 173,109 | 166,657 | 165,685 | |||||||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.12 | $ | 0.56 | $ | 0.57 | $ | 0.55 | $ | 0.56 | ||||||||||
| Diluted | 0.12 | 0.55 | 0.55 | 0.54 | 0.55 | |||||||||||||||
(1) Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs.
10
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
| (In thousands, except per share data) | Three Months Ended | |||||||||||||||||||
| 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 12/31/2003 | ||||||||||||||||
| Net interest income | $ | 246,063 | $ | 239,660 | $ | 230,050 | $ | 217,609 | $ | 213,288 | ||||||||||
| Net income | $ | 20,698 | $ | 97,771 | $ | 95,847 | $ | 90,327 | $ | 91,562 | ||||||||||
| Shares outstanding (end of period) | 179,298 | 174,023 | 172,546 | 163,046 | 162,188 | |||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 177,071 | 173,271 | 169,637 | 162,965 | 162,149 | |||||||||||||||
| Diluted | 179,953 | 176,756 | 173,109 | 166,657 | 165,685 | |||||||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.12 | $ | 0.56 | $ | 0.57 | $ | 0.55 | $ | 0.56 | ||||||||||
| Diluted | $ | 0.12 | $ | 0.55 | $ | 0.55 | $ | 0.54 | $ | 0.55 | ||||||||||
| Shareholders’ equity (end of period) | $ | 3,176,114 | $ | 3,046,242 | $ | 2,866,692 | $ | 2,651,911 | $ | 2,520,519 | ||||||||||
| Book value per share (end of period) | $ | 17.71 | $ | 17.50 | $ | 16.61 | $ | 16.26 | $ | 15.54 | ||||||||||
| Tangible book value per share (end of period) | $ | 9.82 | $ | 9.34 | $ | 8.39 | $ | 9.14 | $ | 8.37 | ||||||||||
| RATIOS & OTHER INFORMATION: | ||||||||||||||||||||
| Net interest margin (net interest income as a % of average earning assets) (1) | 3.87 | % | 3.68 | % | 3.66 | % | 3.68 | % | 3.65 | % | ||||||||||
| Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1) | 3.59 | % | 3.42 | % | 3.43 | % | 3.46 | % | 3.42 | % | ||||||||||
| Return on average assets | 0.29 | % | 1.33 | % | 1.36 | % | 1.37 | % | 1.39 | % | ||||||||||
| Return on average equity | 2.66 | % | 13.24 | % | 13.54 | % | 14.13 | % | 14.72 | % | ||||||||||
At period end: | ||||||||||||||||||||
| Tier 1 leverage capital ratio | 7.58 | % | 6.95 | % | 6.80 | % | 6.84 | % | 6.65 | % | ||||||||||
| Tangible equity/tangible assets | 6.45 | % | 5.89 | % | 5.20 | % | 5.79 | % | 5.37 | % | ||||||||||
| Total risk based capital ratio | 12.16 | % | 11.62 | % | 11.13 | % | 11.47 | % | 11.29 | % | ||||||||||
| Non-performing loans | $ | 77,559 | $ | 65,923 | $ | 65,142 | $ | 67,854 | $ | 59,762 | ||||||||||
| Total non-performing assets | $ | 81,103 | $ | 67,979 | $ | 67,167 | $ | 70,554 | $ | 63,103 | ||||||||||
| Non-performing loans as a % of total loans | 0.42 | % | 0.36 | % | 0.36 | % | 0.41 | % | 0.37 | % | ||||||||||
| Non-performing assets as a % of total assets | 0.28 | % | 0.23 | % | 0.23 | % | 0.26 | % | 0.24 | % | ||||||||||
| Full service banking offices | 386 | 387 | 389 | 358 | 359 | |||||||||||||||
| FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information): | ||||||||||||||||||||
| Noninterest income as a percent of total income (2) | 26.42 | % | 26.94 | % | 27.24 | % | 28.00 | % | 27.71 | % | ||||||||||
| Merger and consolidation costs on a net of tax basis (3) | $ | 32,316 | $ | 4,342 | $ | 2,687 | $ | 1,049 | $ | 855 | ||||||||||
| Per diluted share: | $ | 0.17 | $ | 0.03 | $ | 0.02 | $ | 0.01 | $ | 0.01 | ||||||||||
| Deleveraging, net of tax basis (4) | $ | 51,560 | — | — | — | — | ||||||||||||||
| Per diluted share: | $ | 0.29 | — | — | — | — | ||||||||||||||
| Noninterest expense (5) | $ | 167,528 | $ | 168,595 | $ | 159,691 | $ | 158,105 | $ | 154,360 | ||||||||||
| Return on average assets (6) | 1.46 | % | 1.39 | % | 1.40 | % | 1.39 | % | 1.41 | % | ||||||||||
| Cash return on average tangible assets (6) (7) | 1.53 | % | 1.49 | % | 1.49 | % | 1.47 | % | 1.49 | % | ||||||||||
| Return on average equity (6) | 13.43 | % | 13.82 | % | 13.92 | % | 14.29 | % | 14.86 | % | ||||||||||
| Cash return on average tangible equity (6) (7) | 24.80 | % | 27.20 | % | 26.67 | % | 26.44 | % | 27.86 | % | ||||||||||
| Efficiency ratio (8) | 50.10 | % | 51.39 | % | 50.51 | % | 52.31 | % | 52.32 | % | ||||||||||
| Cash efficiency ratio (9) | 49.42 | % | 50.67 | % | 49.85 | % | 51.68 | % | 51.53 | % | ||||||||||
| (1) | Adjusted to fully taxable equivalent basis. | |||
| (2) | Excludes securities gains/(losses). | |||
| (3) | Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs. | |||
| (4) | Deleveraging losses consist of losses on securities sales and prepayment penalties on borrowings incurred in connection with a balance sheet restructuring in October 2004. | |||
| (5) | Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings. | |||
| (6) | Excludes merger and consolidation costs and deleveraging losses, net of related tax benefits. | |||
| (7) | Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits. | |||
| (8) | Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs. | |||
| (9) | Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets. | |||
Ratios are annualized where appropriate.
11
Banknorth Group, Inc. and Subsidiaries
Reconciliation Table — Non-GAAP Financial Information (Unaudited)
| (In thousands, except per share data) | Three Months Ended | |||||||||||||||||||
| 12/31/2004 | 9/30/2004 | 6/30/2004 | 3/31/2004 | 12/31/2003 | ||||||||||||||||
Net income (GAAP) | $ | 20,698 | $ | 97,771 | $ | 95,847 | $ | 90,327 | $ | 91,562 | ||||||||||
| Add back merger and consolidation costs and deleveraging losses, net of tax | ||||||||||||||||||||
| Merger related | 32,381 | 4,342 | 2,687 | 1,354 | 862 | |||||||||||||||
| Branch Closings | — | — | — | — | (7 | ) | ||||||||||||||
| Revised auto lease residual charge | (65 | ) | — | — | (305 | ) | — | |||||||||||||
| Deleveraging | 51,560 | |||||||||||||||||||
| Excluding merger and consolidation costs and deleveraging losses | 104,574 | 102,113 | 98,534 | 91,376 | 92,417 | |||||||||||||||
| Add back amortization of intangibles, net of tax | 1,469 | 1,547 | 1,354 | 1,238 | 1,511 | |||||||||||||||
| Cash basis, excluding merger and consolidation costs and | ||||||||||||||||||||
| deleveraging losses | $ | 106,043 | $ | 103,660 | $ | 99,888 | $ | 92,614 | $ | 93,928 | ||||||||||
Basic earnings per share (GAAP) | $ | 0.12 | $ | 0.56 | $ | 0.57 | $ | 0.55 | $ | 0.56 | ||||||||||
| Effects of merger and consolidation costs, net of tax | 0.18 | 0.03 | 0.01 | 0.01 | 0.01 | |||||||||||||||
| Effects of deleveraging losses, net of tax | 0.29 | — | — | — | — | |||||||||||||||
| Excluding merger and consolidation costs and deleveraging losses | 0.59 | 0.59 | 0.58 | 0.56 | 0.57 | |||||||||||||||
| 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 and deleveraging losses | $ | 0.60 | $ | 0.60 | $ | 0.59 | $ | 0.57 | $ | 0.58 | ||||||||||
Diluted earnings per share (GAAP) | $ | 0.12 | $ | 0.55 | $ | 0.55 | $ | 0.54 | $ | 0.55 | ||||||||||
| Effects of merger and consolidation costs, net of tax | 0.17 | 0.03 | 0.02 | 0.01 | 0.01 | |||||||||||||||
| Effects of deleveraging losses, net of tax | 0.29 | — | — | — | — | |||||||||||||||
| Excluding merger and consolidation costs and deleveraging losses | 0.58 | 0.58 | 0.57 | 0.55 | 0.56 | |||||||||||||||
| 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 and deleveraging losses | $ | 0.59 | $ | 0.59 | $ | 0.58 | $ | 0.56 | $ | 0.57 | ||||||||||
Return on average assets (GAAP) | 0.29 | % | 1.33 | % | 1.36 | % | 1.37 | % | 1.39 | % | ||||||||||
| Effects of merger and consolidation costs, net of tax | 0.45 | % | 0.06 | % | 0.04 | % | 0.02 | % | 0.02 | % | ||||||||||
| Effects of deleveraging losses, net of tax | 0.72 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
| Excluding merger and consolidation costs and deleveraging losses | 1.46 | % | 1.39 | % | 1.40 | % | 1.39 | % | 1.41 | % | ||||||||||
| Effects of amortization of intangibles, net of tax | 0.07 | % | 0.10 | % | 0.09 | % | 0.08 | % | 0.08 | % | ||||||||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | 1.53 | % | 1.49 | % | 1.49 | % | 1.47 | % | 1.49 | % | ||||||||||
Return on average equity (GAAP) | 2.66 | % | 13.24 | % | 13.54 | % | 14.13 | % | 14.72 | % | ||||||||||
| Effects of merger and consolidation costs, net of tax | 4.15 | % | 0.58 | % | 0.38 | % | 0.16 | % | 0.14 | % | ||||||||||
| Effects of deleveraging losses, net of tax | 6.62 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
| Excluding merger and consolidation costs and deleveraging losses | 13.43 | % | 13.82 | % | 13.92 | % | 14.29 | % | 14.86 | % | ||||||||||
| Effects of amortization of intangibles, net of tax | 11.37 | % | 13.38 | % | 12.75 | % | 12.15 | % | 13.00 | % | ||||||||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | 24.80 | % | 27.20 | % | 26.67 | % | 26.44 | % | 27.86 | % | ||||||||||
Efficiency ratio | 84.43 | % | 52.60 | % | 51.27 | % | 52.23 | % | 52.29 | % | ||||||||||
| Effects of securities gains (losses) | -22.89 | % | 0.50 | % | 0.54 | % | 0.61 | % | 0.47 | % | ||||||||||
| Effects of merger and consolidation costs and prepayment penalties | -11.44 | % | -1.71 | % | -1.30 | % | -0.53 | % | -0.44 | % | ||||||||||
| Excluding securities gains (losses) and merger and consolidation costs and prepayment penalties | 50.10 | % | 51.39 | % | 50.51 | % | 52.31 | % | 52.32 | % | ||||||||||
| Effects of amortization of intangibles | -0.68 | % | -0.72 | % | -0.66 | % | -0.63 | % | -0.79 | % | ||||||||||
| Cash basis, excluding securities gains (losses), prepayment penalties and merger and consolidation costs | 49.42 | % | 50.67 | % | 49.85 | % | 51.68 | % | 51.53 | % | ||||||||||
Non Interest Income | $ | 70,591 | $ | 91,513 | $ | 89,476 | $ | 88,217 | $ | 84,435 | ||||||||||
| Net gains (losses) on sales of securities | (17,761 | ) | 3,124 | 3,355 | 3,581 | 2,682 | ||||||||||||||
| Excluding securities gains (losses) | $ | 88,352 | $ | 88,389 | $ | 86,121 | $ | 84,636 | $ | 81,753 | ||||||||||
Non Interest Expense | $ | 267,359 | $ | 174,198 | $ | 163,826 | $ | 159,719 | $ | 155,676 | ||||||||||
| Merger and consolidation costs | 38,286 | 5,603 | 4,135 | 1,614 | 1,316 | |||||||||||||||
| Prepayment penalties on borrowings | 61,546 | — | — | — | — | |||||||||||||||
| Excluding merger and consolidation costs and prepayment penalties | $ | 167,527 | $ | 168,595 | $ | 159,691 | $ | 158,105 | $ | 154,360 | ||||||||||
12
Banknorth Group, Inc. and Subsidiaries
Reconciliation Table — Non-GAAP Financial Information (Unaudited)
| (In thousands, except per share data) | Year Ended | |||||||
| 12/31/2004 | 12/31/2003 | |||||||
Net income (GAAP) | $ | 304,643 | $ | 350,759 | ||||
| Add back merger and consolidation costs and deleveraging losses, net of tax Merger related | 40,765 | 5,709 | ||||||
| Branch closings | — | (34 | ) | |||||
| Revised auto lease residual charge | (370 | ) | (400 | ) | ||||
| Deleveraging | 51,560 | — | ||||||
| Excluding merger and consolidation costs and deleveraging losses | 396,598 | 356,034 | ||||||
| Add back amortization of intangibles, net of tax | 5,608 | 5,815 | ||||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | $ | 402,206 | $ | 361,849 | ||||
Basic earnings per share (GAAP) | $ | 1.78 | $ | 2.18 | ||||
| Effects of merger and consolidation costs, net of tax | 0.24 | 0.03 | ||||||
| Effects of deleveraging losses, net of tax | 0.30 | — | ||||||
| Excluding merger and consolidation costs and deleveraging losses | 2.32 | 2.21 | ||||||
| Effects of amortization of intangibles, net of tax | 0.04 | 0.04 | ||||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | $ | 2.36 | $ | 2.25 | ||||
Diluted earnings per share (GAAP) | $ | 1.75 | $ | 2.15 | ||||
| Effects of merger and consolidation costs, net of tax | 0.23 | 0.03 | ||||||
| Effects of deleveraging losses, net of tax | 0.30 | — | ||||||
| Excluding merger and consolidation costs and deleveraging losses | 2.28 | 2.18 | ||||||
| Effects of amortization of intangibles, net of tax | 0.03 | 0.03 | ||||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | $ | 2.31 | $ | 2.21 | ||||
Return on average assets (GAAP) | 1.08 | % | 1.37 | % | ||||
| Effects of merger and consolidation costs, net of tax | 0.14 | % | 0.02 | % | ||||
| Effects of deleveraging losses, net of tax | 0.19 | % | 0.00 | % | ||||
| Excluding merger and consolidation costs and deleveraging losses | 1.41 | % | 1.39 | % | ||||
| Effects of amortization of intangibles, net of tax | 0.07 | % | 0.06 | % | ||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | 1.48 | % | 1.45 | % | ||||
Return on average equity (GAAP) | 10.63 | % | 14.51 | % | ||||
| Effects of merger and consolidation costs, net of tax | 1.41 | % | 0.20 | % | ||||
| Effects of deleveraging losses, net of tax | 1.80 | % | 0.00 | % | ||||
| Excluding merger and consolidation costs and deleveraging losses | 13.84 | % | 14.71 | % | ||||
| Effects of amortization of intangibles, net of tax | 12.15 | % | 11.89 | % | ||||
| Cash basis, excluding merger and consolidation costs and deleveraging losses | 25.99 | % | 26.60 | % | ||||
Efficiency ratio | 60.09 | % | 53.09 | % | ||||
| Effects of securities gains (losses) | -5.16 | % | -0.69 | % | ||||
| Effects of merger and consolidation costs and prepayment penalties | -3.88 | % | -0.69 | % | ||||
| Excluding securities gains (losses), prepayment penalties on borrowings, and merger and consolidation costs | 51.05 | % | 51.71 | % | ||||
| Effects of amortization of intangibles | -0.67 | % | -0.77 | % | ||||
| Cash basis, excluding securities gains (losses), prepayment penalties on borrowings, and merger and consolidation costs | 50.38 | % | 50.94 | % | ||||
Non Interest Income | $ | 339,799 | $ | 367,159 | ||||
| Net gains (losses) on sales of securities | (7,701 | ) | 42,460 | |||||
| Excluding securities gains (losses) | $ | 347,500 | $ | 324,699 | ||||
Non Interest Expense | $ | 765,101 | $ | 641,270 | ||||
| Merger and consolidation costs | 49,635 | 8,104 | ||||||
| Prepayment penalties on borrowings | 61,546 | 30,490 | ||||||
| Excluding merger and consolidation costs and prepayment penalties | $ | 653,920 | $ | 602,676 | ||||
13
