Banknorth 8-K Financial statements and exhibits

Exhibit 99.1

For Immediate Release

For Further Information, Contact

Brian Arsenault, SVP, Investor Relations

207 761-8517

Record Quarterly Net Income at Banknorth

(Second quarter earnings conference call at 1:30 p.m. Eastern Time today, July 21, 2003. Dial-in number for USA and Canada is 800 310-6649. International number is 719 457-2693. Confirmation code for both numbers is 607045. Replay number for USA and Canada is 888 203-1112, International number is 719 457-0820. Same confirmation number as for live calls. Live webcast and webcast replay available at www.banknorth.com , Investor Relations.)

Portland, Maine, July 21, 2003 - Banknorth Group, Inc. (NYSE: BNK) today announced record quarterly net income of $87.5 million for the second quarter ended June 30, 2003, an increase of 15% over net income of $76.2 million for the second quarter of 2002.  On a diluted earnings per share basis, the Company earned 53 cents for the second quarter, up 4% from 51 cents for the same quarter a year ago.  Exclusive of merger and consolidation charges, earnings for the second quarter ended June 30, 2003 were $88.5 million, or 54 cents per diluted share, as compared to $76.9 million, or 52 cents per diluted share, for the second quarter of 2002.

For the first six months of 2003, the Company’s net income was $168.9 million, up 17% over $144.6 million in the first half of 2002.  On a diluted earnings per share basis, the Company earned $1.04 for the first half of 2003, up 8% over $0.96 for the same period a year ago. Exclusive of merger and consolidation charges, earnings for the first half of 2003 were $172.8 million, or $1.07 per diluted share, as compared to $150.7 million, or $1.00 per diluted share for the first six months of 2002.

“I am pleased that strong net interest income and fee income supported by sound expense management have resulted in a record quarter,” said William J. Ryan, Banknorth Chairman, President and Chief Executive Officer. “We also enhanced shareholder value by actively repurchasing our shares in the second quarter to maximize the balance sheet deleveraging strategy that strengthened our net interest margin.”

Banknorth’s net interest margin was 3.71% for the quarter ended June 30, 2003, up from 3.66% in the first quarter of the year, but down from 4.18% from the same quarter a year ago as a result of a lower interest rate environment.

The increase in Banknorth’s net interest margin during the second quarter of 2003, as compared to the first quarter of 2003, was primarily attributable to a deleveraging strategy which resulted in the sale of $901 million of investment securities with an approximate weighted average yield of 5.05% and prepayment of $853 million of borrowings with a weighted average rate of 4.49% during the second quarter of 2003.  The $29.2 million gain from the sale of these securities was substantially offset by the $28.5 million prepayment penalty incurred on the early payoff of borrowings. In addition, the Company implemented other asset/liability management strategies in the second quarter that resulted in a $4.2 million gain from the sale of securities and a $2 million prepayment penalty incurred on the early payoff of borrowings.

The Company’s deleveraging strategy also included the repurchase of 3.7 million shares of Banknorth common stock in the second quarter to further enhance the impact of this strategy on earnings per share.

The Company’s loan and lease portfolio was 21% higher at June 30, 2003 than at June 30, 2002 (1% exclusive of acquisitions) and increased by 1% when compared to the balance at March 31, 2003.  The overall loan growth from the second quarter of 2002 to the second quarter of 2003 was a strong offset to margin compression over the same timeframes.

The Company’s non-residential loans increased 22% from June 30, 2002 to June 30, 2003 (10% exclusive of acquisitions) and 3% compared to March 31, 2003. By category:

•Consumer loans and leases at June 30, 2003 increased by 27% over June 30, 2002 (9% exclusive of acquisitions) and by 1% over the March 31, 2003 balance.

•Commercial business loans and leases at June 30, 2003 increased by 21% over June 30, 2002 (11% exclusive of acquisitions) and by 5% over the March 31, 2003 balance.

•Commercial real estate loans at June 30, 2003 increased by 19% over June 30, 2002 (10% exclusive of acquisitions) and by 2% over the balance at March 31, 2003.

Residential mortgages increased by 14% from June 30, 2002 to June 30, 2003 but declined by 26% during this period exclusive of acquisitions, primarily due to heavy refinancings in the mortgage sector. Residential mortgages declined by 6% from their balance at March 31, 2003.

Noninterest income excluding net gains on sales of securities was $82.4 million for the quarter ended June 30, 2003, an increase of 32% (84% including securities gains) over the same quarter a year ago and a 9% increase (48% including securities gains) over the previous quarter.  On the banking side of the Company, deposit services and merchant and electronic banking income increased by more than 15% in the second quarter of 2003 as compared to the second quarter of 2002.

Investment planning services and insurance brokerage commissions grew substantially on the financial services side of the Company in the quarter ended June 30, 2003 over the same quarter a year ago.  Trust and investment management services, while down in the second quarter of 2003 from the same quarter a year ago, increased over the first quarter of the year, reflecting a strengthening stock market.  Fees for trust and investment management services are largely dependent on stock market performance.

2

Exclusive of prepayment penalties on borrowings, noninterest expenses for the second quarter were up 12% (35% including prepayment penalties on borrowings) over the same quarter a year ago, primarily due to acquisitions completed in 2002 and 2003, but increased by only 2% (23% including prepayment penalties on borrowings) over the first quarter of 2003.

“Although we are operating in a challenging environment for banks, we believe that the consensus street earnings estimate for the Company is in a reasonable range,” said Mr. Ryan.  The consensus First Call 2003 earnings estimate for Banknorth, which excludes merger and consolidation charges, is $2.18 per diluted share.

Total deposits at Banknorth on June 30, 2003 were 23% higher than at June 30, 2002, with double digit increases in all major categories, including savings accounts, noninterest bearing deposits (principally checking accounts), money market and NOW accounts and certificates of deposit.Exclusive of acquisitions, total deposits increased by 1.6% from June 30, 2002 to June 30, 2003.  Excluding certificates of deposit and brokered deposits, as well as acquisitions, total deposits increased 9.4% from June 30, 2002 to June 30, 2003.  Deposits at June 30, 2003 increased by 1% from their balance at March 31, 2003.

The Company repurchased 3.7 million shares during the second quarter of 2003 at an average price of $23.72 per share. During the first two quarters of 2003, the Company has repurchased 4.4 million shares at an average price of $23.47 per share. The Company’s stock price closed at $25.52 on June 30, 2003.

Solid asset quality remained a feature at Banknorth:

•Nonperforming loans to total loans and leases at June 30, 2003 were 0.39%, down from 0.51% for the same quarter a year ago and from 0.51% for the first quarter of 2003.

•Nonperforming assets to total assets at June 30, 2003 were 0.25%, down from 0.34% for the same quarter a year ago and from 0.31% for the previous quarter.

•Net charge-offs to average loans for the three months ended June 30, 2003 amounted to 0.25%, virtually the same as the 0.26% ratio for the three months ended June 30, 2002 and the 0.24% ratio for the three months ended March 31, 2003.

At June 30, 2003, the Company’s allowance for loan and lease losses to total loans and leases was 1.44% and its allowance for loan and lease losses to nonperforming loans was 374%.

At June 30, 2003, the Company’s Tier 1 leverage capital ratio was 6.36%, its total risk based capital ratio was 11.05%, and its ratio of tangible equity to tangible assets was 5.41%.  Banknorth and its banking subsidiary, Banknorth, N.A., each continues to be a “well capitalized” institution under applicable laws and regulations.

Banknorth Group, Inc., headquartered in Portland, Maine, is a $25.8 billion banking and financial services company. 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).

3

The Company also operates subsidiaries and divisions in insurance, investment planning, trust and investments services, leasing, merchant services, mortgage banking, government banking and other financial services.

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.

4

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
	June 30,		June 30,		%		March 31,		%
(In thousands)	2003		2002		Change		2003		Change
Cash and due from banks	$	661,103	$	512,703	29	%	$	604,779	9	%
Federal funds sold and other short-term investments	2,968		133,853		-98	%	2,838		5	%
Securities available for sale	6,992,917		6,031,881		16	%	7,674,151		-9	%
Securities held to maturity	166,239		281,668		-41	%	193,181		-14	%
Loans and leases held for sale	92,795		52,061		78	%	87,396		6	%
Loans and leases:
Residential real estate mortgages	2,852,991		2,510,233		14	%	3,028,851		-6	%
Commercial real estate mortgages	5,140,130		4,316,080		19	%	5,016,865		2	%
Commercial business loans and leases	3,229,718		2,677,760		21	%	3,080,034		5	%
Consumer loans and leases	4,510,473		3,549,053		27	%	4,453,423		1	%
Total loans and leases	15,733,312		13,053,126		21	%	15,579,173		1	%
Less: Allowance for loan and lease losses	227,240		193,444		17	%	226,677		0	%
Loans and leases, net	15,506,072		12,859,682		21	%	15,352,496		1	%
Premises and equipment	271,124		238,006		14	%	278,316		-3	%
Goodwill	1,092,345		409,051		167	%	1,095,476		0	%
Identifiable intangible assets	38,986		52,352		-26	%	41,292		-6	%
Mortgage servicing rights	2,973		7,578		-61	%	3,620		-18	%
Bank owned life insurance	476,470		369,774		29	%	470,645		1	%
Other assets	446,118		315,532		41	%	451,101		-1	%
	$	25,750,110	$	21,264,141	21	%	$	26,255,291	-2	%
Liabilities & Shareholders’ Equity
Deposits:
Regular savings	$	2,472,816	$	1,724,735	43	%	$	2,439,896	1	%
Retail money market and NOW accounts	6,759,000		5,386,871		25	%	6,632,023		2	%
Retail certificates of deposit	5,122,392		4,579,648		12	%	5,381,509		-5	%
Brokered deposits	—		41,585		-100	%	—		NM
Noninterest bearing deposits	3,340,408		2,670,739		25	%	3,093,152		8	%
Total deposits	17,694,616		14,403,578		23	%	17,546,580		1	%
Borrowings from the Federal Home Loan Bank	1,634,507		2,467,378		-34	%	2,453,698		-33	%
Federal funds purchased and securities sold under repurchase agreements	2,610,493		1,842,195		42	%	3,016,512		-13	%
Subordinated debt and senior notes	362,942		200,000		81	%	201,880		80	%
Other borrowings	8,758		71,558		-88	%	26,619		-67	%
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures	295,056		293,756		0	%	295,056		0	%
Other liabilities	679,987		167,941		305	%	216,752		214	%
Total liabilities	23,286,359		19,446,406		20	%	23,757,097		-2	%
Shareholders’ equity	2,463,751		1,817,735		36	%	2,498,194		-1	%
	$	25,750,110	$	21,264,141	21	%	$	26,255,291	-2	%

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Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(In thousands, except per share data)	Six Months Ended June 30,				%		Three Months Ended June 30,				%
	2003		2002		Change		2003		2002		Change
Interest and dividend income	$	611,805	$	615,393	-1		$	302,478	$	309,387	-2	%
Interest expense	194,095		219,434		-12	%	90,904		109,914		-17	%
Net interest income	417,710		395,959		5	%	211,574		199,473		6	%
Provision for loan and lease losses	21,401		22,656		-6	%	10,500		10,829		-3	%
Net interest income after provision for loan and lease losses	396,309		373,303		6	%	201,074		188,644		7	%
Noninterest income:
Deposit services	46,273		38,896		19	%	23,747		19,936		19	%
Insurance brokerage commissions	23,305		20,215		15	%	10,948		10,060		9	%
Merchant and electronic banking income, net	20,328		17,410		17	%	11,210		9,660		16	%
Trust and investment management services	15,309		16,796		-9	%	7,957		8,519		-7	%
Bank owned life insurance	11,168		9,371		19	%	5,826		4,994		17	%
Investment planning services	7,167		5,681		26	%	3,911		2,964		32	%
Net gains on sales of securities	36,206		369		NM		33,423		350		NM
Other noninterest income	34,311		15,824		117	%	18,806		6,503		189	%
	194,067		124,562		56	%	115,828		62,986		84	%
Noninterest expense:
Salaries and employee benefits	162,941		151,044		8	%	82,248		75,747		9	%
Occupancy and equipment expense	53,739		44,922		20	%	27,579		22,693		22	%
Data processing	20,593		20,425		1	%	10,415		9,843		6	%
Advertising and marketing	11,017		8,215		34	%	5,957		4,237		41	%
Amortization of identifiable intangible assets	4,302		2,727		58	%	2,306		1,143		102	%
Merger and consolidation costs (1)	5,981		9,265		-35	%	1,530		1,061		44	%
Prepayment penalties on borrowings	30,490		-		NM		30,490		-		NM
Other noninterest expense	44,883		43,090		4	%	23,514		22,067		7	%
	333,946		279,688		19	%	184,039		136,791		35	%
Income before income tax expense	256,430		218,177		18	%	132,863		114,839		16	%
Income tax expense	87,511		73,539		19	%	45,338		38,680		17	%
Net Income	$	168,919	$	144,638	17	%	$	87,525	$	76,159	15	%
Weighted average shares outstanding:
Basic	159,980		148,258		8	%	162,312		147,233		10	%
Diluted	161,898		150,068		8	%	164,559		149,064		10	%
Earnings per share:
Basic	$	1.06	$	0.98	8	%	$	0.54	$	0.52	4	%
Diluted	1.04		0.96		8	%	0.53		0.51		4	%

(1) Merger and consolidation costs on a net of tax basis amounted to $3.9 million for the six months ended June 30, 2003 and $6.0 million for the six months ended June 30, 2002 or $.02 and $.04 per diluted share, respectively.  Merger and consolidation costs on a net of tax basis amounted to $1.0 million for the three months ended June 30, 2003 and $0.7 million for the three months ended June 30, 2002 or $.01 per diluted share each quarter.

NM - calculated % change is not meaningful

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Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands, except per share data)
	Six Months Ended June 30,									%			Three Months Ended June 30,								%
	2003						2002			Change			2003			2002					Change
Net interest income	$		417,710				$	395,959		5	%		$	211,574		$		199,473			6	%
Net income	$		168,919				$	144,638		17	%		$	87,525		$		76,159			15	%
Shares outstanding (end of period)	160,843						147,095			9	%		160,843			147,095					9	%
Weighted average shares outstanding:
Basic	159,980						148,258			8	%		162,312			147,233					10	%
Diluted	161,898						150,068			8	%		164,559			149,064					10	%
Earnings per share:
Basic	$		1.06				$	0.98		8	%		$	0.54		$		0.52			4	%
Diluted	$		1.04				$	0.96		8	%		$	0.53		$		0.51			4	%
Shareholders' equity, (end of period)	$		2,463,751				$	1,817,735		36	%		$	2,463,751		$		1,817,735			36	%
Book value per share, (end of period)	$		15.32				$	12.36		24	%		$	15.32		$		12.36			24	%
Tangible book value per share, (end of period)	$		8.28				$	9.22		-10	%		$	8.28		$		9.22			-10	%
RATIOS & OTHER INFORMATION:										Nominal Inc/(Dec	)										Nominal Inc/(Dec	)
Net interest margin (net interest income as a % of average earning assets) (1)	3.69				%		4.21		%	-0.52	%		3.71		%	4.18				%	-0.47	%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)	3.41				%		3.81		%	-0.40	%		3.45		%	3.80				%	-0.35	%
Return on average assets	1.35				%		1.41		%	-0.06	%		1.38		%	1.46				%	-0.08	%
Return on average equity	14.25				%		16.58		%	-2.33	%		14.24		%	17.45				%	-3.21	%
Noninterest income as a percent of total income (2)	27.43				%		23.88		%	3.55	%		28.03		%	23.90				%	4.13	%
At period end:
Tier 1 leverage capital ratio	6.36				%		7.75		%	-1.39	%		6.36		%	7.75				%	-1.39	%
Tangible equity/tangible assets	5.41				%		6.52		%	-1.11	%		5.41		%	6.52				%	-1.11	%
Total risk based capital ratio	11.05				%		13.23		%	-2.18	%		11.05		%	13.23				%	-2.18	%
Non-performing loans	$		60,735				$	66,910		-9	%		$	60,735		$		66,910			-9	%
Total non-performing assets	$		64,460				$	72,190		-11	%		$	64,460		$		72,190			-11	%
Non-performing loans as a % of total loans	0.39				%		0.51		%	-0.12	%		0.39		%	0.51				%	-0.12	%
Non-performing assets as a % of total assets	0.25				%		0.34		%	-0.09	%		0.25		%	0.34				%	-0.09	%
Full service banking offices	357						306						357			306
EARNINGS AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Non-interest expense (3)		$		297,475			$	270,423		10	%	$		152,019			$		135,730		12	%
Return on average assets (4)		1.38				%	1.47		%	-0.09	%	1.39			%		1.48			%	-0.09	%
Cash return on average tangible assets (4) (5)		1.47				%	1.53		%	-0.06	%	1.49			%		1.53			%	-0.04	%
Return on average equity (4)		14.58				%	17.27		%	-2.69	%	14.40			%		17.60			%	-3.20	%
Cash return on average tangible equity (4) (5)		26.13				%	23.84		%	2.29	%	27.38			%		24.21			%	3.17	%
Efficiency ratio (6)		51.68				%	51.99		%	-0.31	%	51.71			%		51.78			%	-0.07	%
Cash efficiency ratio (7)		50.94				%	51.46		%	-0.52	%	50.93			%		51.34			%	-0.41	%

(1) Adjusted to fully taxable equivalent basis.

(2) Excludes securities gains/(losses).

(3) Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.

(4) Excludes merger and consolidation costs, net of related tax benefits.

(5) Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.

(6) Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.

(7) Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets.

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Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
	Three Months Ended June 30,
	2003					2002
	Average			Yield/		Average			Yield/
(Dollars in Thousands)	Balance			Rate		Balance			Rate
Assets
Loans and leases (1)
Residential real estate mortgages	$	2,996,485		5.76	%	$	2,569,964		6.84	%
Commercial real estate mortgages	5,074,540			6.19	%	4,216,766			7.07	%
Commercial loans and leases	3,154,085			5.23	%	2,595,548			6.08	%
Consumer loans and leases	4,463,057			5.76	%	3,530,040			7.06	%
	15,688,167			5.79	%	12,912,318			6.82	%
Securities	7,280,880			4.24	%	6,276,523			5.79	%
Federal funds sold and other short-term investments	18,077			1.20	%	25,856			0.81	%
Total earning assets	22,987,124			5.30	%	19,214,697			6.48	%
Noninterest-earning assets	2,513,556					1,676,185
Total assets	$	25,500,680				$	20,890,882
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
Regular savings	$	2,468,244		0.50	%	$	1,716,942		0.95	%
Retail money market and NOW accounts	6,582,004			0.97	%	5,246,053			1.52	%
Retail certificates of deposit	5,243,908			2.43	%	4,652,499			3.21	%
Brokered deposits	—			0.00	%	50,741			1.86	%
Total interest-bearing deposits	14,294,156			1.42	%	11,666,235			2.11	%
Borrowed funds	5,459,725			2.95	%	4,784,197			4.06	%
Total interest-bearing liabilities	19,753,881			1.85	%	16,450,432			2.68	%
Noninterest bearing deposits	3,099,420					2,520,968
Other liabilities	181,765					168,403
Shareholders’ equity	2,465,614					1,751,079
Total liabilities and shareholders’ equity	$	25,500,680				$	20,890,882
Net earning assets	$	3,233,243				$	2,764,265
Net interest income (fully taxable equivalent)	$	213,066				$	200,726
Less: fully taxable equivalent adjustments	(1,492		)			(1,253		)
Net interest income	$	211,574				$	199,473
Net interest rate spread (fully taxable equivalent)				3.45	%				3.80	%
Net interest margin (fully taxable equivalent)				3.71	%				4.18	%

(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans.

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Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
	Six Months Ended June 30,
	2003					2002
	Average			Yield/		Average			Yield/
(Dollars in Thousands)	Balance			Rate		Balance			Rate
Assets
Loans and leases (1)
Residential real estate mortgages	$	2,895,113		5.86	%	$	2,622,398		6.96	%
Commercial real estate mortgages	4,994,310			6.31	%	4,159,637			7.13	%
Commercial loans and leases	3,080,635			5.27	%	2,530,326			6.21	%
Consumer loans and leases	4,325,750			5.89	%	3,534,601			7.19	%
	15,295,808			5.89	%	12,846,962			6.93	%
Securities	7,578,748			4.40	%	6,110,711			5.73	%
Federal funds sold and other short-term investments	11,346			1.40	%	48,854			1.93	%
Total earning assets	22,885,902			5.40	%	19,006,527			6.53	%
Noninterest-earning assets	2,398,143					1,673,796
Total assets	$	25,284,045				$	20,680,323
Liabilities & Shareholders’ Equity
Interest-bearing deposits:
Regular savings	$	2,321,821		0.54	%	$	1,682,076		0.96	%
Retail money market and NOW accounts	6,400,948			1.00	%	5,173,087			1.51	%
Retail certificates of deposit	5,128,769			2.53	%	4,707,146			3.38	%
Brokered deposits	—			0.00	%	57,131			1.85	%
Total interest-bearing deposits	13,851,538			1.49	%	11,619,440			2.19	%
Borrowed funds	5,863,321			3.16	%	4,648,327			4.03	%
Total interest-bearing liabilities	19,714,859			1.99	%	16,267,767			2.72	%
Noninterest bearing deposits	3,003,113					2,483,959
Other liabilities	175,298					169,654
Shareholders’ equity	2,390,775					1,758,943
Total liabilities and shareholders’ equity	$	25,284,045				$	20,680,323
Net earning assets	$	3,171,043				$	2,738,760
Net interest income (fully taxable equivalent)	$	420,464				$	398,519
Less: fully taxable equivalent adjustments	(2,754		)			(2,560		)
Net interest income	$	417,710				$	395,959
Net interest rate spread (fully taxable equivalent)				3.41	%				3.81	%
Net interest margin (fully taxable equivalent)				3.69	%				4.21	%

(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans.

9

Banknorth Group, Inc. and Subsidiaries
Asset Quality (unaudited)
	6/30/2003			3/31/2003			12/31/2002			9/30/2002			6/30/2002
(Dollars in thousands)
Non-performing Assets:
Residential real estate mortgages	$	9,827		$	9,828		$	5,719		$	6,733		$	7,075
Commercial real estate mortgages	19,139			22,990			17,649			16,762			20,254
Commercial business loans and leases	24,577			38,562			32,693			33,014			33,573
Consumer loans and leases	7,192			7,457			9,194			8,364			6,008
Total non-performing loans	60,735			78,837			65,255			64,873			66,910
Other non-performing assets (net)	3,725			3,817			3,636			3,899			5,280
Total non-performing assets	$	64,460		$	82,654		$	68,891		$	68,772		$	72,190
Allowance for loan and lease losses	$	227,240		$	226,677		$	208,273		$	201,689		$	193,444
Net loan charge-offs:
Real estate mortgages	$	31		$	33		$	(274	)	$	(9	)	$	180
Commercial real estate mortgages	(474		)	(272		)	389			(70		)	246
Total real estate	(443		)	(239		)	115			(79		)	426
Commercial business loans and leases	4,468			2,516			2,432			5,596			3,182
Consumer loans and leases	5,913			6,566			6,670			4,889			4,666
Total net charge-offs	$	9,938		$	8,843		$	9,217		$	10,406		$	8,274
Ratios:
Allowance for loan and lease losses to total loans and leases	1.44		%	1.46		%	1.48		%	1.47		%	1.48		%
Allowance for loan and lease losses to non-performing loans	374.15		%	287.53		%	319.17		%	310.90		%	289.11		%
Non-performing loans to total loans and leases	0.39		%	0.51		%	0.46		%	0.47		%	0.51		%
Non-performing assets to total assets	0.25		%	0.31		%	0.29		%	0.31		%	0.34		%
Net charge-offs to average loans - QTD (1)	0.25		%	0.24		%	0.27		%	0.31		%	0.26		%
Net charge-offs to average loans - YTD (1)	0.25		%	0.24		%	0.29		%	0.30		%	0.30		%

(1) Annualized

10

Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
	Three Months Ended
	6/30/2003			3/31/2003		12/31/2002		9/30/2002		6/30/2002
(In thousands, except per share data)
Interest and dividend income	$		302,478	$	309,327	$	306,569	$	313,156	$	309,387
Interest expense	90,904			103,190		107,006		112,160		109,914
Net interest income	211,574			206,137		199,563		200,996		199,473
Provision for loan and lease losses	10,500			10,901		10,829		10,829		10,829
Net interest income after provision for loan and lease losses	201,074			195,236		188,734		190,167		188,644
Noninterest income:
Deposit services	23,747			22,526		22,427		20,816		19,936
Insurance brokerage commissions	10,948			12,357		12,554		11,670		10,060
Merchant and electronic banking income, net	11,210			9,118		10,476		10,195		9,660
Trust and investment management services	7,957			7,351		7,866		7,791		8,519
Bank owned life insurance	5,826			5,342		5,525		5,107		4,994
Investment planning services	3,911			3,256		3,120		2,770		2,964
Net gains on sales of securities	33,423			2,782		6,705		208		350
Other noninterest income	18,806			15,506		15,768		6,948		6,503
	115,828			78,238		84,441		65,505		62,986
Noninterest expense:
Salaries and employee benefits	82,248			80,693		80,622		79,718		75,747
Occupancy and equipment expense	27,579			26,159		25,733		22,701		22,693
Data processing	10,415			10,178		10,514		9,763		9,843
Advertising and marketing	5,957			5,060		4,723		4,302		4,237
Amortization of goodwill	—			—		—		—		—
Amortization of identifiable intangible assets	2,306			1,997		2,070		1,684		1,143
Merger and consolidation costs (1)	1,530			4,450		3,258		2,168		1,061
Write-off of branch automation project (2)	—			—		6,170		—		—
Prepayment penalties on borrowings	30,490			—		—		—		—
Other noninterest expense	23,514			21,371		25,036		21,241		22,067
	184,039			149,908		158,126		141,577		136,791
Income before income tax expense	132,863			123,566		115,049		114,095		114,839
Income tax expense	45,338			42,173		37,911		37,233		38,680
Net Income	$		87,525	$	81,393	$	77,138	$	76,862	$	76,159
Weighted average shares outstanding:
Basic	162,312			157,667		148,226		148,099		147,233
Diluted	164,559			159,328		149,389		149,662		149,064
Earnings per share:
Basic	$		0.54	$	0.52	$	0.52	$	0.52	$	0.52
Diluted	$	0.53		$	0.51	$	0.52	$	0.51	$	0.51

(1) Merger and consolidation costs on a net of tax basis amounted to $1.0 million for the three months ended June 30, 2003, $2.9 million for the three months ended March 31, 2003, $2.1 million for the three months ended December 31, 2002, $1.4 million for the three months ended September 30, 2002, and $0.7 million for the three months ended June 30, 2002, or $.01, $.02, $.01, $.01, and $.01 per diluted share, respectively.

(2) Represents previously capitalized costs written off in connection with the abandonment of a project to upgrade all teller stations and CSR desktops.

NM - calculated % change is not meaningful

11

Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
	Three Months Ended
(In thousands, except per share data)	6/30/2003			3/31/2003			12/31/2002			9/30/2002			6/30/2002
Net interest income	$	211,574		$	206,137		$	199,563		$	200,996		$	199,473
Net income	$	87,525		$	81,393		$	77,138		$	76,862		$	76,159
Shares outstanding (end of period)	160,843			163,881			150,579			147,937			147,095
Weighted average shares outstanding:
Basic	162,312			157,667			148,226			148,099			147,233
Diluted	164,559			159,328			149,389			149,662			149,064
Earnings per share:
Basic	$	0.54		$	0.52		$	0.52		$	0.52		$	0.52
Diluted	$	0.53		$	0.51		$	0.52		$	0.51		$	0.51
Shareholders' equity, (end of period)	$	2,463,751		$	2,498,194		$	2,063,485		$	1,924,159		$	1,817,735
Book value per share, (end of period)	$	15.32		$	15.24		$	13.70		$	13.01		$	12.36
Tangible book value per share, (end of period)	$	8.28		$	8.31		$	9.09		$	8.94		$	9.22
RATIOS & OTHER INFORMATION:
Net interest margin (net interest income as a % of average earning assets) (1)	3.71		%	3.66		%	3.86		%	4.03		%	4.18		%
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1)	3.45		%	3.37		%	3.50		%	3.64		%	3.80		%
Return on average assets	1.38		%	1.32		%	1.35		%	1.40		%	1.46		%
Return on average equity	14.24		%	14.26		%	15.75		%	16.25		%	17.45		%
Noninterest income as a percent of total income (2)	28.03		%	26.80		%	28.03		%	24.52		%	23.90		%
At period end:
Tier 1 leverage capital ratio	6.36		%	6.53		%	7.13		%	7.21		%	7.75		%
Tangible equity/tangible assets	5.41		%	5.42		%	6.02		%	6.03		%	6.52		%
Total risk based capital ratio	11.05		%	11.20		%	12.15		%	12.28		%	13.23		%
Non-performing loans	$	60,735		$	78,837		$	65,255		$	64,873		$	66,910
Total non-performing assets	$	64,460		$	82,654		$	68,891		$	68,772		$	72,190
Non-performing loans as a % of total loans	0.39		%	0.51		%	0.46		%	0.47		%	0.51		%
Non-performing assets as a % of total assets	0.25		%	0.31		%	0.29		%	0.31		%	0.34		%
Full service banking offices	357			360			326			321			306
EARNINGS AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):
Non-interest expense (3)	$	152,019		$	145,457		$	154,868		$	139,409		$	135,730
Return on average assets (4)	1.39		%	1.36		%	1.39		%	1.42		%	1.48		%
Cash return on average tangible assets (4) (5)	1.49		%	1.45		%	1.46		%	1.49		%	1.53		%
Return on average equity (4)	14.40		%	14.77		%	16.18		%	16.55		%	17.60		%
Cash return on average tangible equity (4) (5)	27.38		%	24.95		%	24.03		%	23.40		%	24.21		%
Efficiency ratio (6)	51.71		%	51.66		%	55.85		%	52.35		%	51.78		%
Cash efficiency ratio (7)	50.93		%	50.95		%	55.10		%	51.72		%	51.34		%

(1) Adjusted to fully taxable equivalent basis.

(2) Excludes securities gains/(losses).

(3) Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.

(4) Excludes merger and consolidation costs, net of related tax benefits.

(5) Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.

(6) Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.

(7) Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets.

12

Banknorth Group, Inc. and Subsidiaries
Reconciliation Table - Non-GAAP Financial Information (Unaudited)
	Three Months Ended
(In thousands, except per share data)	6/30/2003			3/31/2003			12/31/2002			9/30/2002			6/30/2002
Net income (including merger and consolidation costs)	$	87,525		$	81,393		$	77,138		$	76,862		$	76,159
Add back merger and consolidation costs, net of tax
Merger related	1,396			2,927			2,125			1,271			312
Charter consolidation	—			—			—			110			710
Branch closings	—			(28		)	—			29			(331		)
Revise auto lease residual charge	(400		)	—			—			—			—
Excluding merger and consolidation costs	88,521			84,292			79,263			78,272			76,850
Amortization of intangibles, net of tax	2,258			1,936			1,982			1,618			1,089
Cash basis, excluding merger and consolidation costs	$	90,779		$	86,228		$	81,245		$	79,890		$	77,939
Basic earnings per share	$	0.54		$	0.52		$	0.52		$	0.52		$	0.52
Effects of merger and consolidation costs, net of tax	0.01			0.01			0.01			0.01			—
Excluding merger and consolidation costs	0.55			0.53			0.53			0.53			0.52
Effects of amortization of intangibles, net of tax	0.01			0.02			0.02			0.01			0.01
Cash basis, excluding merger and consolidation costs	$	0.56		$	0.55		$	0.55		$	0.54		$	0.53
Diluted earnings per share	$	0.53		$	0.51		$	0.52		$	0.51		$	0.51
Effects of merger and consolidation costs, net of tax	0.01			0.02			0.01			0.01			0.01
Excluding merger and consolidation costs	0.54			0.53			0.53			0.52			0.52
Effects of amortization of intangibles, net of tax	0.01			0.01			0.01			0.01			—
Cash basis, excluding merger and consolidation costs	$	0.55		$	0.54		$	0.54		$	0.53		$	0.52
Return on average assets	1.38		%	1.32		%	1.35		%	1.40		%	1.46		%
Effects of merger and consolidation costs, net of tax	0.01		%	0.04		%	0.04		%	0.02		%	0.02		%
Excluding merger and consolidation costs	1.39		%	1.36		%	1.39		%	1.42		%	1.48		%
Effects of amortization of intangibles, net of tax	0.10		%	0.09		%	0.07		%	0.07		%	0.05		%
Cash basis, excluding merger and consolidation costs	1.49		%	1.45		%	1.46		%	1.49		%	1.53		%
Return on average equity	14.24		%	14.26		%	15.75		%	16.25		%	17.44		%
Effects of merger and consolidation costs, net of tax	0.16		%	0.51		%	0.43		%	0.30		%	0.16		%
Excluding merger and consolidation costs	14.40		%	14.77		%	16.18		%	16.55		%	17.60		%
Effects of amortization of intangibles, net of tax	12.98		%	10.18		%	7.85		%	6.85		%	6.61		%
Cash basis, excluding merger and consolidation costs	27.38		%	24.95		%	24.03		%	23.40		%	24.21		%
Efficiency ratio	56.21		%	52.71		%	55.68		%	53.12		%	52.12		%
Effects of securities gains and prepayment penalties on borrowings	-3.98		%	0.53		%	1.34		%	0.05		%	0.07		%
Effects of merger and consolidation costs	-0.52		%	-1.58		%	-1.17		%	-0.82		%	-0.41		%
Excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs	51.71		%	51.66		%	55.85		%	52.35		%	51.78		%
Effects of amortization of intangibles	-0.78		%	-0.71		%	-0.75		%	-0.63		%	-0.44		%
Cash basis, excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs	50.93		%	50.95		%	55.10		%	51.72		%	51.34		%

	Three months ended
	6/30/2003			6/30/2002			% increase
Non interest income	$	115,828		$	62,986		84	%
Less: Net gains on sales of securities	(33,423		)	(350		)
Non interest income excluding net gains on sales of securities	$	82,405		$	62,636		32	%
Non interest expense	$	184,039		$	136,791		35	%
Less: prepayment penalties on borrowings	(30,490		)	—
Non interest expense excluding penalties on borrowings	$	153,549		$	136,791		12	%

13