Exhibit 99.1
For Immediate Release
For Further Information, Contact:
Brian Arsenault, SVP, Investor Relations
207 761-8517
Net Income Up 11% at Banknorth
(First Quarter Earnings Conference Call at 1:30 p.m. Eastern Time today, April 26, 2004. Dial-in number for USA and Canada is 800 901-5241. International dial-in number is 617 786-2963. Passcode for both numbers is 10986982. Replay number for USA and Canada is 888 286-8010. International dial-in number is 617 801-6888. Replay passcode is 7000157. Live webcast and webcast replay available at www.banknorth.com, Investor Relations.)
Portland, Maine, April 26, 2004 – Banknorth Group, Inc. (NYSE: BNK) today announced net income of $90.3 million for the first quarter ended March 31, 2004, an 11% increase over net income of $81.4 million for the first quarter of 2003. On a per diluted share basis, net income was 54 cents for the first quarter, up 6% over the same quarter a year ago.
Exclusive of merger and consolidation costs, net income was $91.4 million, or 55 cents per diluted share, for the quarter ended March 31, 2004, up 8% from $84.3 million, or 53 cents per diluted share, for the first quarter of 2003.
“We sacrificed a penny or more of earnings per share this quarter to provide additional marketing dollars to prepare for the market opportunity created by the Bank of America acquisition of Fleet/Boston,” said William J. Ryan, Company Chairman, President and Chief Executive Officer. “We believe a short-time sacrifice for potential long-term gains is well worth it and will ultimately provide enhanced shareholder value.”
Net interest income was $208.1 million in the first quarter of 2004, a 7% increase as compared to $195.2 million of net interest income in the first quarter of 2003. Loans and leases also increased by 7% from March 31, 2003 to March 31, 2004, with commercial real estate loans and consumer loans both up 11% and commercial business loans and leases up 13%. Loans and leases increased by an annualized rate of 8% from December 31, 2003 to March 31, 2004 due to growth in commercial business loans and leases and consumer loans.
Noninterest income, principally fee income from banking and non-banking financial services, increased 13% in the first quarter of 2004 as compared to the first quarter of 2003. Investment planning services income increased 49%, trust and investment management services income increased 24%, deposit services fees rose 16%, merchant and electronic banking income increased 15%, and insurance brokerage commissions were up 11%.
Noninterest expense increased to $159.7 million for the quarter ended March 31, 2004, up 7% from the same quarter a year ago. Marketing expenses increased $2.5 million, nearly 50% higher than the same quarter a year ago, while staffing expenses increased $6.8 million, or 8%.
Total deposits at March 31, 2004 were 2% higher than at March 31, 2003 as Banknorth continued to allow higher interest certificates of deposit to decline. Noninterest bearing deposits, principally checking accounts, increased by 16% and money market and NOW accounts increased by 10%. Regular savings accounts increased by 3% at March 31, 2004 as compared to March 31, 2003. Total deposits at March 31, 2004 were flat from year-end despite modest increases in retail money market and NOW accounts and regular savings accounts.
The Company’s net interest margin for the quarter ended March 31, 2004 was 3.68% as compared to 3.66% for the quarter ended March 31, 2003 and 3.65% for the quarter ended December 31, 2003.
Banknorth’s capital strengthened over both the previous year and the previous quarter. Tier I leverage capital climbed to 6.84% at March 31, 2004, as compared to 6.53% at March 31, 2003 and 6.65% at December 31, 2003. Tangible equity to tangible assets increased to 5.79% at March 31, 2004, as compared to 5.42% at March 31, 2003 and 5.37% at December 31, 2003. Total risk-based capital increased by similar margins to 11.51% at March 31, 2004.
Book value per share at March 31, 2004 was $16.26 as compared to $15.24 at March 31, 2003 and $15.54 at December 31, 2003. Tangible book value per share was $9.14 at the end of the first quarter as compared to $8.31 at March 31, 2003 and $8.37 at December 31, 2003. Shareholders’ equity was $2.65 billion at March 31, 2004, up 6% from $2.50 billion at March 31, 2003 and 5% from $2.52 billion at December 31, 2003.
Banknorth also announced today that it expects to finalize its acquisitions of CCBT Financial Companies, Inc. (NASDAQ: CCBT), the parent company of Cape Cod Bank and Trust Company, and Foxborough Savings Bank (OTS: FOXS.PK) on April 30, 2004. Both companies’ stock will trade on April 30, 2004 but not subsequently.
“These acquisitions strengthen our increasing presence in Massachusetts, a vital market for Banknorth,” Mr. Ryan said. “We are now a significant banking presence south of Boston and into the important Cape Cod market area.”
2
At March 31, 2004, Banknorth Group, headquartered in Portland, Maine, had $26.9 billion in assets. The two pending acquisitions are expected to increase Banknorth’s assets by more than $1.5 billion. Banknorth’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 offer 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.
3
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands) |
| March 31, |
| March 31, |
| % |
| December 31, |
| % |
| |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash and due from banks |
| $ | 516,772 |
| $ | 604,779 |
| -15 | % | $ | 669,686 |
| -23 | % |
Federal funds sold and other short-term investments |
| 8,356 |
| 2,838 |
| 194 | % | 4,645 |
| 80 | % | |||
Securities available for sale |
| 7,389,833 |
| 7,674,151 |
| -4 | % | 7,122,992 |
| 4 | % | |||
Securities held to maturity |
| 115,442 |
| 193,181 |
| -40 | % | 124,240 |
| -7 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Loans and leases held for sale |
| 46,970 |
| 87,396 |
| -46 | % | 41,696 |
| 13 | % | |||
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
| |||
Residential real estate mortgages |
| 2,647,540 |
| 3,028,851 |
| -13 | % | 2,710,483 |
| -2 | % | |||
Commercial real estate mortgages |
| 5,549,406 |
| 5,016,865 |
| 11 | % | 5,528,862 |
| 0 | % | |||
Commercial business loans and leases |
| 3,482,093 |
| 3,080,034 |
| 13 | % | 3,287,094 |
| 6 | % | |||
Consumer loans and leases |
| 4,944,573 |
| 4,453,423 |
| 11 | % | 4,819,523 |
| 3 | % | |||
Total loans and leases |
| 16,623,612 |
| 15,579,173 |
| 7 | % | 16,345,962 |
| 2 | % | |||
Less: Allowance for loan and lease losses |
| 233,297 |
| 226,677 |
| 3 | % | 232,287 |
| 0 | % | |||
Loans and leases, net |
| 16,390,315 |
| 15,352,496 |
| 7 | % | 16,113,675 |
| 2 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Premises and equipment |
| 260,302 |
| 278,316 |
| -6 | % | 264,818 |
| -2 | % | |||
Goodwill |
| 1,127,799 |
| 1,095,476 |
| 3 | % | 1,126,639 |
| 0 | % | |||
Identifiable intangible assets |
| 34,491 |
| 41,292 |
| -16 | % | 36,415 |
| -5 | % | |||
Bank owned life insurance |
| 493,729 |
| 470,645 |
| 5 | % | 488,756 |
| 1 | % | |||
Other assets |
| 495,583 |
| 454,721 |
| 9 | % | 460,173 |
| 8 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
|
| $ | 26,879,592 |
| $ | 26,255,291 |
| 2 | % | $ | 26,453,735 |
| 2 | % |
|
|
|
|
|
|
|
|
|
|
|
| |||
Liabilities & Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Deposits: |
|
|
|
|
|
|
|
|
|
|
| |||
Regular savings |
| $ | 2,517,632 |
| $ | 2,439,896 |
| 3 | % | $ | 2,460,522 |
| 2 | % |
Retail money market and NOW accounts |
| 7,268,948 |
| 6,632,023 |
| 10 | % | 7,130,534 |
| 2 | % | |||
Retail certificates of deposit |
| 4,592,577 |
| 5,381,509 |
| -15 | % | 4,733,104 |
| -3 | % | |||
Noninterest bearing deposits |
| 3,578,609 |
| 3,093,152 |
| 16 | % | 3,577,025 |
| 0 | % | |||
Total deposits |
| 17,957,766 |
| 17,546,580 |
| 2 | % | 17,901,185 |
| 0 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Borrowings from the Federal Home Loan Bank |
| 1,485,014 |
| 2,453,698 |
| -39 | % | 1,495,385 |
| -1 | % | |||
Federal funds purchased and securities sold under repurchase agreements |
| 3,823,452 |
| 3,016,512 |
| 27 | % | 3,659,550 |
| 4 | % | |||
Subordinated debt and senior notes |
| 362,961 |
| 201,880 |
| 80 | % | 348,293 |
| 4 | % | |||
Other borrowings |
| 61,360 |
| 26,619 |
| 131 | % | 84,361 |
| -27 | % | |||
Junior subordinated debentures |
| 305,591 |
| — |
| 100 | % | — |
| 100 | % | |||
Company obligated, mandatorily redeemable securities of subsidiary trusts holding solely parent junior subordinated debentures |
| — |
| 295,056 |
| -100 | % | 295,275 |
| -100 | % | |||
Other liabilities |
| 231,537 |
| 216,752 |
| 7 | % | 149,167 |
| 55 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Total liabilities |
| 24,227,681 |
| 23,757,097 |
| 2 | % | 23,933,216 |
| 1 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
Shareholders’ equity |
| 2,651,911 |
| 2,498,194 |
| 6 | % | 2,520,519 |
| 5 | % | |||
|
|
|
|
|
|
|
|
|
|
|
| |||
|
| $ | 26,879,592 |
| $ | 26,255,291 |
| 2 | % | $ | 26,453,735 |
| 2 | % |
4
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
| Three Months Ended March 31, |
| % |
| ||||
(In thousands, except per share data) |
| 2004 |
| 2003 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
Interest and dividend income |
| $ | 292,652 |
| $ | 309,327 |
| -5 | % |
Interest expense |
| 75,043 |
| 103,190 |
| -27 | % | ||
Net interest income |
| 217,609 |
| 206,137 |
| 6 | % | ||
Provision for loan and lease losses |
| 9,500 |
| 10,901 |
| -13 | % | ||
Net interest income after provision for loan and lease losses |
| 208,109 |
| 195,236 |
| 7 | % | ||
|
|
|
|
|
|
|
| ||
Noninterest income: |
|
|
|
|
|
|
| ||
Deposit services |
| 26,153 |
| 22,526 |
| 16 | % | ||
Insurance brokerage commissions |
| 13,736 |
| 12,357 |
| 11 | % | ||
Merchant and electronic banking income, net |
| 10,404 |
| 9,021 |
| 15 | % | ||
Trust and investment management services |
| 9,149 |
| 7,351 |
| 24 | % | ||
Bank owned life insurance |
| 5,496 |
| 5,342 |
| 3 | % | ||
Investment planning services |
| 4,839 |
| 3,256 |
| 49 | % | ||
Net gains on sales of securities |
| 3,581 |
| 2,782 |
| 29 | % | ||
Other noninterest income |
| 14,859 |
| 15,603 |
| -5 | % | ||
|
| 88,217 |
| 78,238 |
| 13 | % | ||
Noninterest expense: |
|
|
|
|
|
|
| ||
Salaries and employee benefits |
| 87,534 |
| 80,693 |
| 8 | % | ||
Occupancy and equipment expense |
| 27,599 |
| 26,159 |
| 6 | % | ||
Data processing |
| 10,436 |
| 10,178 |
| 3 | % | ||
Advertising and marketing |
| 7,523 |
| 5,060 |
| 49 | % | ||
Amortization of identifiable intangible assets |
| 1,904 |
| 1,997 |
| -5 | % | ||
Merger and consolidation costs (1) |
| 1,614 |
| 4,450 |
| -64 | % | ||
Other noninterest expense |
| 23,109 |
| 21,371 |
| 8 | % | ||
|
| 159,719 |
| 149,908 |
| 7 | % | ||
|
|
|
|
|
|
|
| ||
Income before income tax expense |
| 136,607 |
| 123,566 |
| 11 | % | ||
Income tax expense |
| 46,280 |
| 42,173 |
| 10 | % | ||
Net Income |
| $ | 90,327 |
| $ | 81,393 |
| 11 | % |
|
|
|
|
|
|
|
| ||
Weighted average shares outstanding: |
|
|
|
|
|
|
| ||
Basic |
| 162,965 |
| 157,667 |
| 3 | % | ||
Diluted |
| 166,657 |
| 159,328 |
| 5 | % | ||
Earnings per share: |
|
|
|
|
|
|
| ||
Basic |
| $ | 0.55 |
| $ | 0.52 |
| 6 | % |
Diluted |
| 0.54 |
| 0.51 |
| 6 | % | ||
(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
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(In thousands, except per share data)
|
| Three Months Ended March 31, |
| % |
| ||||
|
| 2004 |
| 2003 |
| Change |
| ||
|
|
|
|
|
|
|
| ||
Net interest income |
| $ | 217,609 |
| $ | 206,137 |
| 6 | % |
Net income |
| $ | 90,327 |
| $ | 81,393 |
| 11 | % |
Shares outstanding (end of period) |
| 163,046 |
| 163,881 |
| -1 | % | ||
Weighted average shares outstanding: |
|
|
|
|
|
|
| ||
Basic |
| 162,965 |
| 157,667 |
| 3 | % | ||
Diluted |
| 166,657 |
| 159,328 |
| 5 | % | ||
|
|
|
|
|
|
|
| ||
Earnings per share: |
|
|
|
|
|
|
| ||
Basic |
| $ | 0.55 |
| $ | 0.52 |
| 6 | % |
Diluted |
| $ | 0.54 |
| $ | 0.51 |
| 6 | % |
|
|
|
|
|
|
|
| ||
Shareholders’ equity (end of period) |
| $ | 2,651,911 |
| $ | 2,498,194 |
| 6 | % |
Book value per share (end of period) |
| $ | 16.26 |
| $ | 15.24 |
| 7 | % |
Tangible book value per share (end of period) |
| $ | 9.14 |
| $ | 8.31 |
| 10 | % |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
| Nominal |
| ||
RATIOS & OTHER INFORMATION: |
|
|
|
|
|
|
| ||
Net interest margin (net interest income as a % of average earning assets) (1) |
| 3.68 | % | 3.66 | % | 0.02 | % | ||
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1) |
| 3.46 | % | 3.37 | % | 0.09 | % | ||
|
|
|
|
|
|
|
| ||
Return on average assets |
| 1.37 | % | 1.32 | % | 0.05 | % | ||
Return on average equity |
| 14.13 | % | 14.26 | % | -0.13 | % | ||
|
|
|
|
|
|
|
| ||
At period end: |
|
|
|
|
|
|
| ||
Tier 1 leverage capital ratio |
| 6.84 | % | 6.53 | % | 0.31 | % | ||
Tangible equity/tangible assets |
| 5.79 | % | 5.42 | % | 0.37 | % | ||
Total risk based capital ratio |
| 11.51 | % | 11.20 | % | 0.31 | % | ||
|
|
|
|
|
|
|
| ||
Non-performing loans |
| $ | 67,854 |
| $ | 78,837 |
| -14 | % |
Total non-performing assets |
| $ | 70,554 |
| $ | 82,654 |
| -15 | % |
Non-performing loans as a % of total loans |
| 0.41 | % | 0.51 | % | -0.10 | % | ||
Non-performing assets as a % of total assets |
| 0.26 | % | 0.31 | % | -0.05 | % | ||
|
|
|
|
|
|
|
| ||
Full service banking offices |
| 358 |
| 360 |
|
|
| ||
|
|
|
|
|
|
|
| ||
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information): |
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
Noninterest income as a percent of total income (2) |
| 28.00 | % | 26.80 | % | 1.20 | % | ||
|
|
|
|
|
|
|
| ||
Merger and consolidation costs on a net of tax basis (3) |
| $ | 1,049 |
| $ | 2,899 |
| -64 | % |
Per diluted share: |
| 0.01 |
| 0.02 |
| -50 | % | ||
|
|
|
|
|
|
|
| ||
Noninterest expense (4) |
| $ | 158,105 |
| $ | 145,458 |
| 9 | % |
|
|
|
|
|
|
|
| ||
Return on average assets (5) |
| 1.39 | % | 1.36 | % | 0.03 | % | ||
Cash return on average tangible assets (5) (6) |
| 1.47 | % | 1.44 | % | 0.03 | % | ||
|
|
|
|
|
|
|
| ||
Return on average equity (5) |
| 14.29 | % | 14.77 | % | -0.48 | % | ||
Cash return on average tangible equity (5) (6) |
| 26.44 | % | 24.76 | % | 1.68 | % | ||
|
|
|
|
|
|
|
| ||
Efficiency ratio (7) |
| 52.31 | % | 51.66 | % | 0.65 | % | ||
Cash efficiency ratio (8) |
| 51.68 | % | 50.95 | % | 0.73 | % | ||
(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) Excludes pre-tax merger and consolidation costs.
(5) Excludes merger and consolidation costs, net of related tax benefits.
(6) Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(7) Excludes securities gains/(losses) and merger and consolidation costs.
(8) Excludes securities gains/(losses), merger and consolidation costs and amortization of intangible assets.
6
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
|
| Three Months Ended March 31, |
| ||||||||
|
| 2004 |
| 2003 |
| ||||||
(Dollars in thousands) |
| Average |
| Yield/ |
| Average |
| Yield/ |
| ||
|
|
|
|
|
|
|
|
|
| ||
Assets |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Loans and leases (1) |
|
|
|
|
|
|
|
|
| ||
Residential real estate mortgages |
| $ | 2,725,221 |
| 5.19 | % | $ | 2,792,615 |
| 5.97 | % |
Commercial real estate mortgages |
| 5,540,489 |
| 5.71 | % | 4,913,188 |
| 6.42 | % | ||
Commercial loans and leases |
| 3,387,309 |
| 4.82 | % | 3,006,370 |
| 5.32 | % | ||
Consumer loans and leases |
| 4,883,031 |
| 5.12 | % | 4,186,917 |
| 6.02 | % | ||
|
| 16,536,050 |
| 5.27 | % | 14,899,090 |
| 6.00 | % | ||
Securities |
| 7,339,247 |
| 4.22 | % | 7,879,925 |
| 4.54 | % | ||
Federal funds sold and other short-term investments |
| 7,624 |
| 0.80 | % | 4,535 |
| 2.21 | % | ||
Total earning assets |
| 23,882,921 |
| 4.94 | % | 22,783,550 |
| 5.50 | % | ||
|
|
|
|
|
|
|
|
|
| ||
Bank owned life insurance |
| 490,428 |
|
|
| 425,136 |
|
|
| ||
Noninterest-earning assets |
| 2,153,677 |
|
|
| 1,858,791 |
|
|
| ||
Total assets |
| $ | 26,527,026 |
|
|
| $ | 25,067,477 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Liabilities & Shareholders’ Equity |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
| ||
Regular savings |
| $ | 2,468,416 |
| 0.30 | % | $ | 2,173,771 |
| 0.57 | % |
Retail money market and NOW accounts |
| 7,118,939 |
| 0.80 | % | 6,217,880 |
| 1.02 | % | ||
Retail certificates of deposit |
| 4,660,009 |
| 1.97 | % | 5,012,351 |
| 2.64 | % | ||
Brokered deposits |
| — |
| 0.00 | % | — |
| 0.00 | % | ||
Total interest-bearing deposits |
| 14,247,364 |
| 1.10 | % | 13,404,002 |
| 1.55 | % | ||
Borrowed funds |
| 6,048,457 |
| 2.41 | % | 6,272,657 |
| 3.34 | % | ||
Total interest-bearing liabilities |
| 20,295,821 |
| 1.48 | % | 19,676,659 |
| 2.13 | % | ||
Noninterest bearing deposits |
| 3,487,716 |
|
|
| 2,905,737 |
|
|
| ||
Other liabilities |
| 171,584 |
|
|
| 170,732 |
|
|
| ||
Shareholders’ equity |
| 2,571,905 |
|
|
| 2,314,349 |
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Total liabilities and shareholders’ equity |
| $ | 26,527,026 |
|
|
| $ | 25,067,477 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net earning assets |
| $ | 3,587,100 |
|
|
| $ | 3,106,891 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net interest income (fully taxable equivalent) |
| $ | 219,099 |
|
|
| $ | 207,399 |
|
|
|
Less: fully taxable equivalent adjustments |
| (1,490 | ) |
|
| (1,262 | ) |
|
| ||
Net interest income |
| $ | 217,609 |
|
|
| $ | 206,137 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Net interest rate spread (fully taxable equivalent) |
|
|
| 3.46 | % |
|
| 3.37 | % | ||
Net interest margin (fully taxable equivalent) |
|
|
| 3.68 | % |
|
| 3.66 | % | ||
(1) Loans and leases include portfolio loans and leases, loans held for sale and nonperforming loans.
7
Banknorth Group, Inc. and Subsidiaries
Asset Quality (unaudited)
(Dollars in thousands)
|
| 3/31/2004 |
| 12/31/2003 |
| 9/30/2003 |
| 6/30/2003 |
| 3/31/2003 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Non-performing Assets: |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Residential real estate mortgages |
| $ | 7,990 |
| $ | 7,157 |
| $ | 9,135 |
| $ | 9,827 |
| $ | 9,828 |
| |
Commercial real estate mortgages |
| 24,619 |
| 19,700 |
| 27,069 |
| 19,139 |
| 22,990 |
| ||||||
Commercial business loans and leases |
| 28,978 |
| 24,412 |
| 22,857 |
| 24,577 |
| 38,562 |
| ||||||
Consumer loans and leases |
| 6,267 |
| 8,493 |
| 7,664 |
| 7,192 |
| 7,457 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total non-performing loans |
| 67,854 |
| 59,762 |
| 66,725 |
| 60,735 |
| 78,837 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other non-performing assets, net |
| 2,700 |
| 3,341 |
| 3,632 |
| 3,725 |
| 3,817 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total non-performing assets |
| $ | 70,554 |
| $ | 63,103 |
| $ | 70,357 |
| $ | 64,460 |
| $ | 82,654 |
| |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Allowance for loan and lease losses |
| $ | 233,297 |
| $ | 232,287 |
| $ | 229,581 |
| $ | 227,240 |
| $ | 226,677 |
| |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net loan charge-offs: |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Residential real estate mortgages |
| $ | (72 | ) | $ | 10 |
| $ | 58 |
| $ | 31 |
| $ | 33 |
| |
Commercial real estate mortgages |
| (446 | ) | (168 | ) | (269 | ) | (474 | ) | (272 | ) | ||||||
Total real estate mortgages |
| (518 | ) | (158 | ) | (211 | ) | (443 | ) | (239 | ) | ||||||
Commercial business loans and leases |
| 1,785 |
| 2,402 |
| 518 |
| 4,468 |
| 2,516 |
| ||||||
Consumer loans and leases |
| 7,223 |
| 8,111 |
| 7,852 |
| 5,913 |
| 6,566 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Total net charge-offs |
| $ | 8,490 |
| $ | 10,355 |
| $ | 8,159 |
| $ | 9,938 |
| $ | 8,843 |
| |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Ratios: |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Allowance for loan and lease losses to total loans and leases |
| 1.40 | % | 1.42 | % | 1.44 | % | 1.44 | % | 1.46 | % | ||||||
Allowance for loan and lease losses to non-performing loans |
| 343.82 | % | 388.69 | % | 344.07 | % | 374.15 | % | 287.53 | % | ||||||
Non-performing loans to total loans and leases |
| 0.41 | % | 0.37 | % | 0.42 | % | 0.39 | % | 0.51 | % | ||||||
Non-performing assets to total assets |
| 0.26 | % | 0.24 | % | 0.27 | % | 0.25 | % | 0.31 | % | ||||||
Net charge-offs to average loans (1) |
| 0.21 | % | 0.24 | % | 0.23 | % | 0.25 | % | 0.24 | % | ||||||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(1) Annualized.
8
Banknorth Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
| Three Months Ended |
| |||||||||||||
(In thousands, except per share data) |
| 3/31/2004 |
| 12/31/2003 |
| 9/30/2003 |
| 6/30/2003 |
| 3/31/2003 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Interest and dividend income |
| $ | 292,652 |
| $ | 290,414 |
| $ | 290,750 |
| $ | 302,478 |
| $ | 309,327 |
|
Interest expense |
| 75,043 |
| 77,126 |
| 80,918 |
| 90,904 |
| 103,190 |
| |||||
Net interest income |
| 217,609 |
| 213,288 |
| 209,832 |
| 211,574 |
| 206,137 |
| |||||
Provision for loan and lease losses |
| 9,500 |
| 10,400 |
| 10,500 |
| 10,500 |
| 10,901 |
| |||||
Net interest income after provision for loan and lease losses |
| 208,109 |
| 202,888 |
| 199,332 |
| 201,074 |
| 195,236 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
| |||||
Deposit services |
| 26,153 |
| 25,881 |
| 25,167 |
| 23,747 |
| 22,526 |
| |||||
Insurance brokerage commissions |
| 13,736 |
| 11,480 |
| 10,930 |
| 10,948 |
| 12,357 |
| |||||
Merchant and electronic banking income, net |
| 10,404 |
| 10,542 |
| 11,115 |
| 11,098 |
| 9,021 |
| |||||
Trust and investment management services |
| 9,149 |
| 8,470 |
| 8,178 |
| 7,957 |
| 7,351 |
| |||||
Bank owned life insurance |
| 5,496 |
| 5,978 |
| 5,785 |
| 5,826 |
| 5,342 |
| |||||
Investment planning services |
| 4,839 |
| 4,765 |
| 3,761 |
| 3,911 |
| 3,256 |
| |||||
Net gains on sales of securities |
| 3,581 |
| 2,682 |
| 3,573 |
| 33,423 |
| 2,782 |
| |||||
Other noninterest income |
| 14,859 |
| 14,637 |
| 20,147 |
| 18,918 |
| 15,603 |
| |||||
|
| 88,217 |
| 84,435 |
| 88,656 |
| 115,828 |
| 78,238 |
| |||||
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
| |||||
Salaries and employee benefits |
| 87,534 |
| 81,451 |
| 82,230 |
| 82,248 |
| 80,693 |
| |||||
Occupancy and equipment expense |
| 27,599 |
| 26,731 |
| 26,188 |
| 27,579 |
| 26,159 |
| |||||
Data processing |
| 10,436 |
| 9,881 |
| 10,466 |
| 10,415 |
| 10,178 |
| |||||
Advertising and marketing |
| 7,523 |
| 5,430 |
| 5,553 |
| 5,957 |
| 5,060 |
| |||||
Amortization of identifiable intangible assets |
| 1,904 |
| 2,324 |
| 2,320 |
| 2,306 |
| 1,997 |
| |||||
Merger and consolidation costs (1) |
| 1,614 |
| 1,316 |
| 808 |
| 1,530 |
| 4,450 |
| |||||
Prepayment penalties on borrowings |
| — |
| — |
| — |
| 30,490 |
| — |
| |||||
Other noninterest expense |
| 23,109 |
| 28,543 |
| 24,082 |
| 23,514 |
| 21,371 |
| |||||
|
| 159,719 |
| 155,676 |
| 151,647 |
| 184,039 |
| 149,908 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Income before income tax expense |
| 136,607 |
| 131,647 |
| 136,341 |
| 132,863 |
| 123,566 |
| |||||
Income tax expense |
| 46,280 |
| 40,085 |
| 46,063 |
| 45,338 |
| 42,173 |
| |||||
Net Income |
| $ | 90,327 |
| $ | 91,562 |
| $ | 90,278 |
| $ | 87,525 |
| $ | 81,393 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| 162,965 |
| 162,149 |
| 161,517 |
| 162,312 |
| 157,667 |
| |||||
Diluted |
| 166,657 |
| 165,685 |
| 164,446 |
| 164,559 |
| 159,328 |
| |||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| $ | 0.55 |
| $ | 0.56 |
| $ | 0.56 |
| $ | 0.54 |
| $ | 0.52 |
|
Diluted |
| 0.54 |
| 0.55 |
| 0.55 |
| 0.53 |
| 0.51 |
| |||||
(1) Merger and consolidation costs consist of merger charges, certain asset write-downs and branch closing costs.
9
Banknorth Group, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
|
| Three Months Ended |
| |||||||||||||
(In thousands, except per share data) |
| 3/31/2004 |
| 12/31/2003 |
| 9/30/2003 |
| 6/30/2003 |
| 3/31/2003 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest income |
| $ | 217,609 |
| $ | 213,288 |
| $ | 209,832 |
| $ | 211,574 |
| $ | 206,137 |
|
Net income |
| $ | 90,327 |
| $ | 91,562 |
| $ | 90,278 |
| $ | 87,525 |
| $ | 81,393 |
|
Shares outstanding (end of period) |
| 163,046 |
| 162,188 |
| 161,543 |
| 160,843 |
| 163,881 |
| |||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| 162,965 |
| 162,149 |
| 161,517 |
| 162,312 |
| 157,667 |
| |||||
Diluted |
| 166,657 |
| 165,685 |
| 164,446 |
| 164,559 |
| 159,328 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| $ | 0.55 |
| $ | 0.56 |
| $ | 0.56 |
| $ | 0.54 |
| $ | 0.52 |
|
Diluted |
| $ | 0.54 |
| $ | 0.55 |
| $ | 0.55 |
| $ | 0.53 |
| $ | 0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shareholders’ equity (end of period) |
| $ | 2,651,911 |
| $ | 2,520,519 |
| $ | 2,475,580 |
| $ | 2,463,751 |
| $ | 2,498,194 |
|
Book value per share (end of period) |
| $ | 16.26 |
| $ | 15.54 |
| $ | 15.32 |
| $ | 15.32 |
| $ | 15.24 |
|
Tangible book value per share (end of period) |
| $ | 9.14 |
| $ | 8.37 |
| $ | 8.32 |
| $ | 8.28 |
| $ | 8.31 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
RATIOS & OTHER INFORMATION: |
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest margin (net interest income as a % of average earning assets) (1) |
| 3.68 | % | 3.65 | % | 3.63 | % | 3.71 | % | 3.66 | % | |||||
Net interest spread (yield on earning assets minus yield on interest-bearing liabilities) (1) |
| 3.46 | % | 3.42 | % | 3.39 | % | 3.45 | % | 3.37 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average assets |
| 1.37 | % | 1.39 | % | 1.39 | % | 1.38 | % | 1.32 | % | |||||
Return on average equity |
| 14.13 | % | 14.72 | % | 14.85 | % | 14.24 | % | 14.26 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
At period end: |
|
|
|
|
|
|
|
|
|
|
| |||||
Tier 1 leverage capital ratio |
| 6.84 | % | 6.65 | % | 6.56 | % | 6.36 | % | 6.53 | % | |||||
Tangible equity/tangible assets |
| 5.79 | % | 5.37 | % | 5.46 | % | 5.41 | % | 5.42 | % | |||||
Total risk based capital ratio |
| 11.51 | % | 11.29 | % | 11.29 | % | 10.99 | % | 11.20 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non-performing loans |
| $ | 67,854 |
| $ | 59,762 |
| $ | 66,725 |
| $ | 60,735 |
| $ | 78,837 |
|
Total non-performing assets |
| $ | 70,554 |
| $ | 63,103 |
| $ | 70,357 |
| $ | 64,460 |
| $ | 82,654 |
|
Non-performing loans as a % of total loans |
| 0.41 | % | 0.37 | % | 0.42 | % | 0.39 | % | 0.51 | % | |||||
Non-performing assets as a % of total assets |
| 0.26 | % | 0.24 | % | 0.27 | % | 0.25 | % | 0.31 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Full service banking offices |
| 358 |
| 359 |
| 357 |
| 357 |
| 360 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information): |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest income as a percent of total income (2) |
| 28.00 | % | 27.71 | % | 28.85 | % | 28.03 | % | 26.80 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Merger and consolidation costs on a net of tax basis (3) |
| $ | 1,049 |
| $ | 855 |
| $ | 525 |
| $ | 996 |
| $ | 2,899 |
|
Per diluted share: |
| 0.01 |
| 0.01 |
| — |
| 0.01 |
| 0.02 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Noninterest expense (4) |
| $ | 158,105 |
| $ | 154,360 |
| $ | 150,839 |
| $ | 152,018 |
| $ | 145,458 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average assets (5) |
| 1.39 | % | 1.41 | % | 1.40 | % | 1.39 | % | 1.36 | % | |||||
Cash return on average tangible assets (5) (6) |
| 1.47 | % | 1.49 | % | 1.48 | % | 1.48 | % | 1.44 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average equity (5) |
| 14.29 | % | 14.86 | % | 14.93 | % | 14.40 | % | 14.77 | % | |||||
Cash return on average tangible equity (5) (6) |
| 26.44 | % | 27.86 | % | 28.63 | % | 27.15 | % | 24.76 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Efficiency ratio (7) |
| 52.31 | % | 52.32 | % | 51.15 | % | 51.71 | % | 51.66 | % | |||||
Cash efficiency ratio (8) |
| 51.68 | % | 51.53 | % | 50.36 | % | 50.93 | % | 50.95 | % | |||||
(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) Excludes pre-tax merger and consolidation costs and prepayment penalties on borrowings.
(5) Excludes merger and consolidation costs, net of related tax benefits.
(6) Cash ratios reflect an adjustment to add back the amortization of intangible assets, net of related tax benefits.
(7) Excludes securities gains/(losses), prepayment penalties on borrowings, and merger and consolidation costs.
(8) Excludes securities gains/(losses), prepayment penalties on borrowings, merger and consolidation costs, and amortization of intangible assets.
10
Banknorth Group, Inc. and Subsidiaries
Reconciliation Table - Non-GAAP Financial Information (Unaudited)
|
| Three Months Ended |
| |||||||||||||
(In thousands, except per share data) |
| 3/31/2004 |
| 12/31/2003 |
| 9/30/2003 |
| 6/30/2003 |
| 3/31/2003 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income (including merger and consolidation costs) |
| $ | 90,327 |
| $ | 91,562 |
| $ | 90,278 |
| $ | 87,525 |
| $ | 81,393 |
|
Add back merger and consolidation costs, net of tax |
|
|
|
|
|
|
|
|
|
|
| |||||
Merger related |
| 1,355 |
| 862 |
| 525 |
| 1,396 |
| 2,927 |
| |||||
Branch closings |
| — |
| (7 | ) | — |
| — |
| (28 | ) | |||||
Revised auto lease residual charge |
| (306 | ) | — |
| — |
| (400 | ) | — |
| |||||
Excluding merger and consolidation costs |
| 91,376 |
| 92,417 |
| 90,803 |
| 88,521 |
| 84,292 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Amortization of intangibles, net of tax |
| 1,238 |
| 1,511 |
| 1,508 |
| 1,499 |
| 1,298 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash basis, excluding merger and consolidation costs |
| $ | 92,614 |
| $ | 93,928 |
| $ | 92,311 |
| $ | 90,020 |
| $ | 85,590 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per share |
| $ | 0.55 |
| $ | 0.56 |
| $ | 0.56 |
| $ | 0.54 |
| $ | 0.52 |
|
Effects of merger and consolidation costs, net of tax |
| 0.01 |
| 0.01 |
| — |
| 0.01 |
| 0.01 |
| |||||
Excluding merger and consolidation costs |
| 0.56 |
| 0.57 |
| 0.56 |
| 0.55 |
| 0.53 |
| |||||
Effects of amortization of intangibles, net of tax |
| 0.01 |
| 0.01 |
| 0.01 |
| — |
| 0.01 |
| |||||
Cash basis, excluding merger and consolidation costs |
| $ | 0.57 |
| $ | 0.58 |
| $ | 0.57 |
| $ | 0.55 |
| $ | 0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Diluted earnings per share |
| $ | 0.54 |
| $ | 0.55 |
| $ | 0.55 |
| $ | 0.53 |
| $ | 0.51 |
|
Effects of merger and consolidation costs, net of tax |
| 0.01 |
| 0.01 |
| — |
| 0.01 |
| 0.02 |
| |||||
Excluding merger and consolidation costs |
| 0.55 |
| 0.56 |
| 0.55 |
| 0.54 |
| 0.53 |
| |||||
Effects of amortization of intangibles, net of tax |
| 0.01 |
| 0.01 |
| 0.01 |
| 0.01 |
| 0.01 |
| |||||
Cash basis, excluding merger and consolidation costs |
| $ | 0.56 |
| $ | 0.57 |
| $ | 0.56 |
| $ | 0.55 |
| $ | 0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average assets |
| 1.37 | % | 1.39 | % | 1.39 | % | 1.38 | % | 1.32 | % | |||||
Effects of merger and consolidation costs, net of tax |
| 0.02 | % | 0.02 | % | 0.01 | % | 0.01 | % | 0.04 | % | |||||
Excluding merger and consolidation costs |
| 1.39 | % | 1.41 | % | 1.40 | % | 1.39 | % | 1.36 | % | |||||
Effects of amortization of intangibles, net of tax |
| 0.08 | % | 0.08 | % | 0.08 | % | 0.09 | % | 0.08 | % | |||||
Cash basis, excluding merger and consolidation costs |
| 1.47 | % | 1.49 | % | 1.48 | % | 1.48 | % | 1.44 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Return on average equity |
| 14.13 | % | 14.72 | % | 14.85 | % | 14.24 | % | 14.26 | % | |||||
Effects of merger and consolidation costs, net of tax |
| 0.16 | % | 0.14 | % | 0.08 | % | 0.16 | % | 0.51 | % | |||||
Excluding merger and consolidation costs |
| 14.29 | % | 14.86 | % | 14.93 | % | 14.40 | % | 14.77 | % | |||||
Effects of amortization of intangibles, net of tax |
| 12.15 | % | 13.00 | % | 13.70 | % | 12.75 | % | 9.99 | % | |||||
Cash basis, excluding merger and consolidation costs |
| 26.44 | % | 27.86 | % | 28.63 | % | 27.15 | % | 24.76 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Efficiency ratio |
| 52.23 | % | 52.29 | % | 50.81 | % | 56.21 | % | 52.71 | % | |||||
Effects of securities gains and prepayment penalties on borrowings |
| 0.61 | % | 0.47 | % | 0.62 | % | -3.98 | % | 0.53 | % | |||||
Effects of merger and consolidation costs |
| -0.53 | % | -0.44 | % | -0.28 | % | -0.52 | % | -1.58 | % | |||||
Excluding securities gains, prepayment penalties on borrowings, and merger and consolidation costs |
| 52.31 | % | 52.32 | % | 51.15 | % | 51.71 | % | 51.66 | % | |||||
Effects of amortization of intangibles |
| -0.63 | % | -0.79 | % | -0.79 | % | -0.78 | % | -0.71 | % | |||||
Cash basis, excluding securities gains, prepayment penalties on borrowings and merger and consolidation costs |
| 51.68 | % | 51.53 | % | 50.36 | % | 50.93 | % | 50.95 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non Interest Income |
| $ | 88,217 |
| $ | 84,435 |
| $ | 88,656 |
| $ | 115,828 |
| $ | 78,238 |
|
Net gains on sales of securities |
| 3,581 |
| 2,682 |
| 3,573 |
| 33,423 |
| 2,782 |
| |||||
Excluding securities gains |
| $ | 84,636 |
| $ | 81,753 |
| $ | 85,083 |
| $ | 82,405 |
| $ | 75,456 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non Interest Expense |
| $ | 159,719 |
| $ | 155,676 |
| $ | 151,647 |
| $ | 184,039 |
| $ | 149,908 |
|
Merger and consolidation costs |
| 1,614 |
| 1,316 |
| 808 |
| 1,530 |
| 4,450 |
| |||||
Prepayment penalties on borrowings |
| — |
| — |
| — |
| 30,490 |
| — |
| |||||
Excluding merger and consolidation costs and prepayment penalties on borrowings |
| $ | 158,105 |
| $ | 154,360 |
| $ | 150,839 |
| $ | 152,019 |
| $ | 145,458 |
|
11