TD Banknorth Reports Solid First Quarter Results; Adopts Purchase Acco

    Business Editors

    PORTLAND, Maine--(BUSINESS WIRE)--May 16, 2005--The First Quarter Earnings Conference Call will be held at 9:00 a.m. Eastern Daylight Time today, May 16, 2005. The Dial-in number for USA and Canada is 800 573-4842 and the international dial-in number is 617-224-4327. The passcode for both numbers is 25230710. The replay number for USA and Canada is 888-286-8010. The international dial-in number is 617-801-6888. The replay passcode is 73107906. The live webcast and webcast replay is available at www.banknorth.com/investorrelations.
    TD Banknorth Inc. (NYSE: BNK) ("TD Banknorth" or "the Company") today released its earnings for the first quarter of 2005 using the purchase method of accounting to account for the transaction with the TD Bank Financial Group ("TD") which closed on March 1, 2005. The Company determined, based on discussions with the staff of the Office of Chief Accountant of the SEC, to use the purchase method to account for the transaction. As a result, the Company has marked its assets and liabilities to fair value as of March 1, 2005 and will amortize an additional $696 million of identifiable intangible assets in future quarters over the useful lives of those assets.
    On April 25th, the Company released its preliminary earnings using both historical and purchase accounting to account for the transaction with TD. This release presents the Company's first quarter earnings using purchase accounting to account for the transaction and supersedes in its entirety the preliminary earnings release issued on April 25, 2005.
    "It is important to note that TD Banknorth's earnings exclusive of the amortization of identifiable intangible assets will not be materially impacted by this decision and we remain well capitalized," said TD Banknorth Chairman, President and CEO, William J. Ryan. "As I have previously said, we are pleased with our first quarter results and believe that we are well positioned for future growth," he added.
    The use of purchase accounting will have little impact on the Company's earnings exclusive of the amortization of identifiable intangible assets beyond the second quarter of 2005. On a going-forward basis, the Company will report its earnings on a GAAP basis and on a cash basis net of the amortization of identifiable intangible assets.

    Impact of Purchase Accounting on the Company's Balance Sheet

    As a result of accounting for the TD transaction under the purchase method, the Company has marked its balance sheet to fair value as of March 1, 2005. Included in the Company's financial results is a schedule indicating the purchase accounting adjustments to the Company's consolidated balance sheet and a schedule identifying the impact purchase accounting had on the Company's consolidated income statement for the one month period from March 1, 2005 to March 31, 2005.
    As a result of the purchase accounting adjustments when compared to historical accounting, the Company's total assets increased by $3.8 billion to $32.1 billion, primarily as a result of a $3.0 billion increase in goodwill, a $696 million increase in identifiable intangible assets and a $107 million increase in net loans and leases.
    Purchase accounting adjustments also resulted in a $401 million increase in the Company's total liabilities, primarily as a result of a $247 million increase in the deferred tax liability on identifiable intangible assets, a $54 million increase in other liabilities, a $44 million increase in retail certificates of deposit and a $55 million increase in borrowings.
    Shareholders' equity increased by $3.4 billion primarily due to the increase in goodwill of $3.0 billion and the creation of an additional $696 million of identifiable intangible assets which more than offset a $247 million increase in the deferred tax liability on identifiable intangible assets.

    First Quarter Results Based on Purchase Accounting

    To present the effects of the TD transaction on the Company's financial statements, the accompanying financial statements use the term "predecessor" to refer to the results of Banknorth Group, Inc., the predecessor entity to TD Banknorth Inc., for the period January 1, 2005 to February 28, 2005 and prior periods, which are based on historical accounting, and the term "successor" to refer to the results of TD Banknorth Inc. for the period March 1, 2005 to March 31, 2005 following TD Banknorth's application of purchase accounting as of March 1, 2005. To assist in the comparability of our financial results and to make it easier to discuss and understand these results, the financial information discussed herein combines the "predecessor period" January 1, 2005 to February 28, 2005 with the "successor period" March 1, 2005 to March 31, 2005 to present "combined" quarterly results for the three months ended March 31, 2005. Due to the application of purchase accounting as of March 1, 2005, results for the combined period may not be comparable to results for the predecessor period.
    The Company's net income for the first quarter ended March 31, 2005 amounted to $34.1 million, as compared to $90.3 million for the first quarter of 2004. On a per diluted share basis, net income was 18 cents for the first quarter of 2005 versus 54 cents for the same quarter a year ago. The decline in earnings for the quarter was attributable to losses associated with the Company's previously-announced balance sheet deleveraging strategy, merger and consolidation costs which were primarily attributable to the Company's transaction with TD, the change in unrealized loss on derivatives and the amortization of identifiable intangible assets.
    Exclusive of the after-tax impact of merger and consolidation costs, the Company's balance sheet deleveraging strategy, the change in unrealized loss on derivatives and the amortization of identifiable intangible assets, earnings for the quarter ended March 31, 2005 were $111.8 million, up 21% as compared to $92.6 million for the first quarter of 2004. Earnings per diluted share for the first quarter of 2005, exclusive of the after-tax impact of merger and consolidation costs, the Company's balance sheet deleveraging strategy, the change on unrealized loss on derivatives and the effects of the amortization of identifiable intangible assets, were 60 cents versus 56 cents for the same quarter a year ago, an increase of 7%.
    Earnings per diluted share were impacted primarily by several cash and non-cash charges in the first quarter of 2005. First, the after-tax loss associated with the Company's previously-announced balance sheet deleveraging strategy of $41.6 million represented 22 cents per diluted share. Second, the after-tax effects of merger and consolidation costs of $23.4 million, when combined with the after-tax effect of the change in unrealized loss on derivatives of $5.3 million resulting from application of purchase accounting, represented a loss of 16 cents per diluted share. Third, as a result of the application of purchase accounting, the after-tax impact of the amortization of identifiable intangible assets of $7.5 million represented a loss of 4 cents per diluted share.
    Although the application of purchase accounting resulted in certain adjustments to TD Banknorth's capital accounts and resulting regulatory capital ratios, TD Banknorth and its banking subsidiary continue to qualify as "well capitalized" institutions under applicable laws and regulations. At March 31, 2005, the Company's Tier 1 leverage capital ratio was estimated to be 6.29% as compared to 6.84% at March 31, 2004. The Company's tangible equity/tangible assets ratio at March 31, 2005 was 4.92% as compared to 5.84% at March 31, 2004, and the Company's total risk based capital ratio was 10.13% at March 31, 2005 as compared to 11.47% at March 31, 2004.
    The Company's net interest income was $255.1 million in the first quarter of 2005, a 17% increase as compared to $217.6 million in the first quarter of 2004.
    For the quarter ended March 31, 2005, the Company's net interest margin improved to 3.97% up from 3.68% for the quarter ended March 31, 2004 and from 3.87% for the quarter ended December 31, 2004. The improvement was due, in large part, to the impact of the balance sheet deleveraging strategies implemented in both the fourth quarter of 2004 and the first quarter of 2005. For the balance of the year, the Company anticipates that the net interest margin will be above 4.00%.
    The Company's provision for loan and lease losses amounted to $2.1 million for the three months ended March 31, 2005, as compared to $9.5 million for the same period in the prior year. "Our consistently strong asset quality, loss experience and migration analysis dictated that we reduce our provision for loan and lease losses this quarter," said Mr. Ryan. If its recent loss experience continues, the Company anticipates that the amount of the quarterly provisions for loan and lease losses in the remainder of 2005 will be substantially less than the amount of its quarterly provisions in 2004.
    Largely as a result of the sale of securities associated with the balance sheet deleveraging strategy, securities available for sale at March 31, 2005 declined to $4.7 billion, down 35% from $7.2 billion at March 31, 2004. As a percent of total assets, securities available for sale declined to 15% at March 31, 2005 from 27% at March 31, 2004 as a result of both the sale of securities associated with the balance sheet deleveraging strategies and the increase in total assets as a result of the application of purchase accounting.
    Average loans and leases increased by 20% for the quarter ended March 31, 2005 compared to the same quarter a year ago, including increases of 40% for residential real estate mortgages (largely due to the acquisition of BostonFed Bancorp, Inc.), 16% for commercial real estate mortgages, 19% for commercial business loans and leases and 13% for consumer loans and leases. Excluding the impact of acquisitions, average loans and leases for commercial and consumer loans increased 9% for the quarter ended March 31, 2005 as compared to the same period a year ago, while residential real estate mortgages decreased by 3% during the same period.
    Average deposits increased by 11% in the three months ended March 31, 2005 as compared to the three months ended March 31, 2004, in large part due to acquisitions. During the three months ended March 31, 2005 average noninterest bearing deposits, principally checking accounts, increased by 21%, average retail money market and NOW accounts increased by 14% and average regular savings accounts increased by 7% as compared to the three months ended March 31, 2004. Excluding acquisitions, average demand deposits increased 11% and average core deposits (noninterest bearing deposits, retail money market and NOW accounts and regular savings accounts) increased 3% in the three months ended March 31, 2005 as compared to the same period in the prior year.
    Noninterest income increased 6% in the first quarter of 2005 as compared to the first quarter of 2004, excluding the securities and deleveraging-related losses and the change in unrealized loss on derivatives. This increase was primarily attributable to increases in merchant and electronic banking income of 26%, wealth management services income of 15% and deposit services income of 8%, all of which more than offset declines in other noninterest income of 13% and investment planning income of 3%. Noninterest income was impacted by a pre-tax loss of $8.2 million attributable to the change in unrealized loss on derivatives; this decline was more than offset in April 2005.
    Noninterest expense increased by 11% for the quarter ended March 31, 2005 as compared to the same period a year ago, excluding merger and consolidation costs, prepayment penalties associated with the Company's balance sheet deleveraging strategies and the amortization of identifiable intangible assets. A substantial majority of this increase was attributable to acquisitions.
    During the first quarter of 2005, the Company's allowance for loan and lease losses was decreased by $21.4 million due to the application of specific reserves against certain nonperforming loans and leases to the carrying value of such assets in accordance with the purchase method of accounting. In addition to reducing the total allowance, this action resulted in a $21.4 million decrease in the Company's nonperforming loans, reflecting the write down to fair value of certain nonperforming commercial real estate mortgages and commercial business loans and leases.
    Largely due to application of the specific reserve to certain nonperforming loans and leases described above, total nonperforming loans and leases decreased to $62.9 million at March 31, 2005 from $77.6 million at December 31, 2004. Total net charge-offs were $10.1 million for the quarter ended March 31, 2005, down from $10.4 million for the quarter ended December 31, 2004. The ratio of nonperforming loans to total loans and leases improved to .32% at March 31, 2005, largely due to the decline in total nonperforming loans and leases.
    At March 31, 2005, book value per diluted share increased to $36.65, reflecting the increases in total assets and shareholders' equity as a result of the application of purchase accounting, while tangible book value per diluted share was $7.63.
    Although the transaction with TD was not predicated on synergies, the Company continues to identify both expense and revenue-related synergies. At this time, the Company has identified potential synergies totaling approximately $7 million in 2005 and $14 million in 2006.
    The Company also announced that it has completed its previously-announced buyback of 15.3 million shares. At March 31, 2005, the number of shares of common stock outstanding was 173.2 million.

    About TD Banknorth Inc.

    TD Banknorth Inc. is a leading banking and financial services company headquartered in Portland, Maine and a majority-owned subsidiary of TD Bank Financial Group. At March 31, 2005, the Company had $32.1 billion of total consolidated assets and provided financial services to over 1.3 million households in the Northeast. TD 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). TD Banknorth and Banknorth, N.A. also operate subsidiaries and divisions in insurance, wealth management, merchant services, mortgage banking, government banking and other financial services and offer investment products in association with PrimeVest Financial Services, Inc. TD Banknorth Inc. trades on the New York Stock Exchange under the symbol "BNK".

    This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America. 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 the Company. 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 the Company'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 the Company's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding the Company, including information which could affect the Company's forward-looking statements. The forward-looking statements in this press release speak only as of the date of the press release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements.

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (Unaudited)

Successor Predecessor Predecessor ------------ ------------ ------------ March 31, March 31, % December 31, % (In thousands) 2005 2004 Change 2004 Change ------------ ------------ ------ ------------ ------

Cash and due from banks $540,812 $516,772 5% $541,994 0% Federal funds sold and other short-term investments 3,247 8,356 -61% 2,312 40% Securities available for sale 4,656,122 7,235,716 -36% 6,728,523 -31% Securities held to maturity 80,259 115,442 -30% 87,013 -8%

Loans and leases held for sale 558,137 46,970 NM 51,693 NM Loans and leases: Residential real estate mortgages 3,388,907 2,647,540 28% 3,081,217 10% Commercial real estate mortgages 6,559,459 5,549,406 18% 6,249,513 5% Commercial business loans and leases 4,094,627 3,482,093 18% 3,928,594 4% Consumer loans and leases 5,606,950 4,944,573 13% 5,333,670 5% ------------ ------------ ------------ Total loans and leases 19,649,943 16,623,612 18% 18,592,994 6% Less: Allowance for loan and lease losses 228,165 233,297 -2% 243,152 -6% ------------ ------------ ------------ Loans and leases, net 19,421,778 16,390,315 18% 18,349,842 6%

Premises and equipment 308,109 260,302 18% 300,120 3% Goodwill 4,537,623 1,127,799 NM 1,365,780 NM Identifiable intangible assets 757,504 34,491 NM 50,376 NM Bank-owned life insurance 556,265 493,729 13% 523,129 6% Other assets 714,965 649,700 10% 687,028 4% ------------ ------------ ------------

$32,134,821 $26,879,592 20% $28,687,810 12% ============ ============ ============

------------------------------ ---------------------------------------

Liabilities & Shareholders' Equity

Deposits: Regular savings $2,703,160 $2,517,632 7% $2,546,018 6% Retail money market and NOW accounts 8,168,207 7,268,948 12% 7,907,513 3% Retail certificates of deposit 4,753,407 4,592,577 4% 4,484,370 6% Brokered deposits 80,951 - NM 576 NM Noninterest bearing deposits 4,215,574 3,578,609 18% 4,289,104 -2% ------------ ------------ ------------ Total deposits 19,921,299 17,957,766 11% 19,227,581 4%

Borrowings from the Federal Home Loan Bank 2,334,096 1,485,014 57% 1,997,336 17% Federal funds purchased and securities sold under repurchase agreements 2,240,947 3,823,452 -41% 2,952,476 -24% Subordinated debt and senior notes 377,349 362,961 4% 346,879 9% Other borrowings 26,802 60,778 -56% 382,385 -93% Junior subordinated debentures 374,699 306,173 22% 311,629 20% Deferred tax liability related to other identifiable intangible assets 268,303 12,072 NM 17,632 NM Other liabilities 242,833 219,465 11% 275,778 -12% ------------ ------------ ------------

Total liabilities 25,786,328 24,227,681 6% 25,511,696 1% ------------ ------------ ------------

Shareholders' equity 6,348,493 2,651,911 NM 3,176,114 NM ------------ ------------ ------------

$32,134,821 $26,879,592 20% $28,687,810 12% ============ ============ ============

----------------------------------------------------------------------

NM - Calculated % change is not meaningful.

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands, except per share data)

Predecessor Successor Combined Predecessor ----------- --------- --------- ----------- Two Months Three Three Months Ended Months Ended Ended February Month of March March 28, March 31, 31, % 2005 2005 2005 2004 Change ----------- --------- --------- ----------- ------

Interest and dividend income $229,619 $116,422 $346,041 $292,652 18% Interest expense 63,348 27,564 90,912 75,043 21% ----------- --------- --------- ----------- Net interest income 166,271 88,858 255,129 217,609 17% Provision for loan and lease losses 1,069 1,000 2,069 9,500 -78% ----------- --------- --------- ----------- Net interest income after provision for loan and lease losses 165,202 87,858 253,060 208,109 22% ----------- --------- --------- -----------

Noninterest income: Deposit services 18,359 9,823 28,182 26,153 8% Insurance brokerage commissions 8,252 5,640 13,892 13,736 1% Merchant and electronic banking income, net 7,751 5,363 13,114 10,404 26% Wealth management services 6,959 3,545 10,504 9,149 15% Bank-owned life insurance 4,169 1,929 6,098 5,496 11% Investment planning services 2,815 1,874 4,689 4,839 -3% Net securities gains/(losses) (46,548) (3,928) (50,476) 3,581 NM Loans held for sale - lower of cost or market adjustment (7,500) - (7,500) - NM Change in unrealized loss on derivatives - (8,175) (8,175) - NM Other noninterest income 7,617 5,280 12,897 14,859 -13% ----------- --------- --------- ----------- 1,874 21,351 23,225 88,217 -74% ----------- --------- --------- ----------- Noninterest expense: Salaries and employee benefits 67,977 32,891 100,868 87,534 15% Occupancy and equipment 19,851 10,887 30,738 27,599 11% Data processing 7,233 3,800 11,033 10,436 6% Advertising and marketing 4,373 2,322 6,695 7,523 -11% Amortization of identifiable intangible assets 1,561 9,934 11,495 1,904 NM Merger and consolidation costs (1) 27,264 3,927 31,191 1,614 NM Prepayment penalties on borrowings 6,300 3 6,303 - NM Other noninterest expense 15,887 8,899 24,786 23,109 7% ----------- --------- --------- ----------- 150,446 72,663 223,109 159,719 40% ----------- --------- --------- -----------

Income before income tax expense 16,630 36,546 53,176 136,607 -61% Income tax expense 6,182 12,919 19,101 46,280 -59% ----------- --------- --------- ----------- Net Income $10,448 $23,627 $34,075 $90,327 -62% =========== ========= ========= ===========

Weighted average shares outstanding: Basic 183,393 162,965 13% Diluted 184,890 166,657 11% Earnings per share: Basic $0.19 $0.55 -65% Diluted 0.18 0.54 -67% ----------------------------------------------------------------------

(1) Merger and consolidation costs consist of merger charges and certain asset write-downs.

NM - calculated % change is not meaningful

TD Banknorth Inc. and Subsidiaries SELECTED FINANCIAL HIGHLIGHTS (Unaudited) ----------------------------------------------------------------------

(In thousands, except per share data) Combined Predecessor -------------- ------------- Three Months Three Months Ended Ended March 31, March 31, % 2005 2004 Change -------------- ------------- ---------

Net interest income $255,129 $217,609 17% Net income $34,075 $90,327 -62% Shares outstanding (end of period) 173,208 163,046 6% Weighted average shares outstanding: Basic 183,393 162,965 13% Diluted 184,890 166,657 11%

Earnings per share: Basic $0.19 $0.55 -65% Diluted $0.18 $0.54 -67%

Shareholders' equity (end of period) $6,348,493 $2,651,911 NM Book value per share (end of period) $36.65 $16.26 NM Tangible book value per share (end of period) $7.63 $9.21 -17%

Nominal RATIOS & OTHER INFORMATION: Inc/(Dec) --------- Net interest margin, fully- taxable equivalent basis 3.97% 3.68% 0.29%

Return on average assets 0.45% 1.37% -0.92% Return on average equity 3.09% 14.13% NM

At period end: -------------- Tangible equity/tangible assets 4.92% 5.84% -0.92% Tier 1 leverage capital ratio (1) 6.29% 6.84% -0.55% Tier 1 risk based capital ratio 7.97% 9.18% -1.21% Total risk based capital ratio 10.13% 11.47% -1.34%

Nonperforming loans (2) $62,916 $67,854 -7% Total nonperforming assets (2) $68,928 $70,554 -2% Nonperforming loans as a % of total loans 0.32% 0.41% -0.09% Nonperforming assets as a % of total assets 0.21% 0.26% -0.05%

Full service banking offices 396 358

FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):

Noninterest income as a percent of total income (3) 25.94% 28.00% -2.06%

Merger and consolidation costs, net of tax (4) $28,689 $1,049 NM Per diluted share: $0.16 $0.01 NM Deleveraging losses, net of tax basis (5) $41,562 - NM Per diluted share: $0.22 - NM

Noninterest income (6) $89,376 $84,636 6% Noninterest expense (7) $174,120 $156,201 11%

Return on average assets (8) 1.38% 1.39% -0.01% Cash return on average tangible assets (8) (9) 1.63% 1.47% 0.16%

Return on average equity (8) 9.45% 14.29% -4.84% Cash return on average tangible equity (8) (9) 25.70% 26.21% -0.51%

Efficiency ratio (10) 53.88% 52.31% 1.57% Cash efficiency ratio (11) 50.54% 51.68% -1.14%

---------------------------------------------------------------------

(1) The tier 1 leverage ratio at March 31, 2005 is estimated. (2) During the three months ended March 31, 2005, nonperforming loans and nonperforming assets were reduced by $21.4 million of specific reserves on impaired loans which were applied to reduce the loan balance under SOP 03-3 "Accounting for Certain Loans or Debt Securities Acquired in a Transfer". (3) Excludes securities gains/(losses), lower of cost or market adjustments, and change in unrealized loss on derivatives. (4) Merger and consolidation costs consist of merger related charges and certain asset write-downs. (5) Deleveraging losses consist of losses on securities sales, lower of cost or market adjustments and prepayment penalties on borrowings incurred in connection with a balance sheet restructuring in the first quarter of 2005. (6) Excludes securities gains/(losses), lower of cost or market adjustments, and change in unrealized loss on derivatives. (7) Excludes pre-tax merger and consolidation costs, prepayment penalties on borrowings, and amortization of intangible assets. (8) Excludes merger and consolidation costs and deleveraging losses, net of related tax benefits. (9) Cash ratios reflect adjustments to exclude the effects of intangible assets, net of related taxes. (10) Excludes securities gains/(losses), lower of cost or market adjustments, prepayment penalties on borrowings, change in unrealized loss on derivatives, and merger and consolidation costs. (11) Excludes securities gains/(losses), lower of cost or market adjustments, prepayment penalties on borrowings, merger and consolidation costs, change in unrealized loss on derivatives, and amortization of intangible assets. Ratios are annualized where appropriate. See reconciliation table for a reconciliation of non-GAAP financial information.

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)

Combined (1) Predecessor -------------------- ---------------------- Three Months Ended Three Months Ended March 31, March 31, 2005 2004 -------------------- ---------------------- Average Yield/ Average Yield/ (Dollars in thousands) Balance Rate Balance Rate --------------------------------------------- ------------ ---------

Assets

Loans and leases (2) Residential real estate mortgages $3,806,469 5.13% $2,725,221 5.19% Commercial real estate mortgages 6,447,894 5.96% 5,540,489 5.71% Commercial loans and leases 4,018,664 5.65% 3,387,309 4.82% Consumer loans and leases 5,501,291 5.47% 4,883,031 5.12% ------------ ------------ 19,774,318 5.60% 16,536,050 5.27% Securities 6,316,949 4.68% 7,339,247 4.22% Federal funds sold and other short-term investments 11,427 2.96% 7,624 0.80% ------------ ------------ Total earning assets 26,102,694 5.38% 23,882,921 4.94%

Bank-owned life insurance 545,954 490,428 Goodwill 2,517,379 1,127,670 Identifiable intangible assets 301,197 35,213 Noninterest-earning assets 1,238,280 990,795 ------------ ------------ Total assets $30,705,504 $26,527,027 ============ ============

Liabilities & Shareholders' Equity

Interest-bearing deposits: Regular savings $2,643,204 0.29% $2,468,416 0.30% Retail money market and NOW accounts 8,088,136 1.05% 7,118,939 0.80% Retail certificates of deposit 4,698,450 1.90% 4,660,009 1.97% Brokered deposits 65,860 3.90% - - ------------ ------------ Total interest- bearing deposits 15,495,650 1.19% 14,247,364 1.10% Borrowed funds 6,154,440 2.99% 6,048,457 2.41% ------------ ------------ Total interest- bearing liabilities 21,650,090 1.70% 20,295,821 1.48% Noninterest bearing deposits 4,221,735 3,487,716 Deferred tax liability related to other identifiable intangible assets 105,419 12,325 Other liabilities 250,610 159,259 Shareholders' equity 4,477,650 2,571,906 ------------ ------------

Total liabilities and shareholders' equity $30,705,504 $26,527,027 ============ ============

Net earning assets $4,452,604 $3,587,100 ============ ============

Net interest income (fully-taxable equivalent) $256,871 $219,099 Less: fully-taxable equivalent adjustments (1,742) (1,490) ------------ ------------ Net interest income $255,129 $217,609 ============ ============

Net interest rate spread (fully-taxable equivalent) 3.68% 3.46% Net interest margin (fully-taxable equivalent) 3.97% 3.68% ----------------------------------------------------------------------

(1) Includes two months of average balances based on historical cost and one month of average balances based on purchase accounting adjustments recorded as of 3/1/05. Had the acquisition occurred at the beginning of the quarter, noninterest-earning assets, total assets, shareholders' equity, and total liabilities and shareholders' equity would have been approximately $2.5 billion higher than the amounts in the above table, primarily related to intangible assets.

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

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- Asset Quality (unaudited) (Dollars in thousands)

Succ- Pre- Pre- Pre- Pre- essor decessor decessor decessor decessor --------- --------- --------- --------- -------- 3/31/ 12/31/ 9/30/ 6/30/ 3/31/ 2005 2004 2004 2004 2004 --------- --------- --------- --------- --------

Nonperforming assets:

Residential real estate mortgages $8,614 $7,846 $7,274 $7,870 $7,990 Commercial real estate mortgages 23,553 (1) 29,948 33,249 27,951 24,619 Commercial business loans and leases 24,520 (2) 32,421 18,573 23,636 28,978 Consumer loans and leases 6,229 7,344 6,827 5,685 6,267 --------- --------- --------- --------- -------- Total nonperforming loans and leases 62,916 77,559 65,923 65,142 67,854

Other nonperforming assets, net 6,012 3,544 2,056 2,025 2,700

--------- --------- --------- --------- -------- Total nonperforming assets $68,928 (3) $81,103 $67,979 $67,167 $70,554 ========= ========= ========= ========= ========

Allowance for loan and lease losses $228,165 $243,152 $242,885 $247,620 $233,297 Liability for unfunded credit commitments (4) 6,707 6,707 6,600 - - --------- --------- --------- --------- -------- Total reserve for credit losses $234,872 (3)$249,859 $249,485 $247,620 $233,297 ========= ========= ========= ========= ========

Net loan charge- offs (recoveries):

Residential real estate mortgages $57 ($9) $86 ($42) ($72) Commercial real estate mortgages 4,032 (486) (530) (663) (446) -------------------------------------------------- Total real estate mortgages 4,089 (495) (444) (705) (518) Commercial business loans and leases 545 5,594 2,939 3,387 1,785 Consumer loans and leases 5,481 5,305 6,310 6,160 7,223

--------- --------- --------- --------- -------- Total net charge- offs $10,115 $10,404 $8,805 $8,842 $8,490 ========= ========= ========= ========= ========

Ratios:

Reserve for credit losses to total loans and leases 1.20% 1.34% 1.36% 1.37% 1.40% Reserve for credit losses to nonperforming loans 373.31% 322.15% 378.45% 380.12% 343.82% Nonperforming loans to total loans and leases 0.32% 0.42% 0.36% 0.36% 0.41% Nonperforming assets to total assets 0.21% 0.28% 0.23% 0.23% 0.26% Net charge-offs to average loans - QTD (5) 0.21% 0.22% 0.19% 0.20% 0.21%

----------------------------------------------------------------------

(1) As of 3/1/05, specific reserves of $6.9 million were applied to reduce the individual loan balances on impaired commercial real estate loans. (2) As of 3/1/05, specific reserves of $14.5 million were applied to reduce the individual loan balances on impaired commercial business loans and leases. (3) The decreases in nonperforming assets and total reserve for credit losses reflect the application of specific reserves against certain nonperforming loans and leases to the carrying value of such assets in accordance with the purchase method of accounting. (4) Commencing in the third quarter 2004, amounts have been transferred from the allowance for loan and lease losses to a liability account related to reserves for off-balance sheet loan commitments. (5) Annualized.

TD Banknorth Inc. and Subsidiaries ---------------------------- CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)

Successor Predecessor --------- ---------------------------------------- (In thousands, Three Three Three Three Three except per share Months Months Months Months Months data) Ended Ended Ended Ended Ended 3/31/ 12/31/ 9/30/ 6/30/ 3/31/ 2005 2004 2004 2004 2004 --------- --------- --------- --------- ----------

Interest and dividend income $346,041 $329,846 $325,361 $309,146 $292,652 Interest expense 90,912 83,783 85,701 79,096 75,043 --------- --------- --------- --------- ---------- Net interest income 255,129 246,063 239,660 230,050 217,609 Provision for loan and lease losses 2,069 10,670 10,670 9,500 9,500 --------- --------- --------- --------- ---------- Net interest income after provision for loan and lease losses 253,060 235,393 228,990 220,550 208,109 --------- --------- --------- --------- ----------

Noninterest income: Deposit services 28,182 28,326 27,583 27,260 26,153 Insurance brokerage commissions 13,892 11,880 12,417 12,278 13,736 Merchant and electronic banking income, net 13,114 13,368 13,723 13,069 10,404 Wealth management services 10,504 10,489 10,280 9,870 9,149 Bank-owned life insurance 6,098 5,779 5,732 6,275 5,496 Investment planning services 4,689 4,799 4,634 5,146 4,839 Net securities gains/(losses) (50,476) (17,761) 3,124 3,355 3,581 Loans held for sale - lower of cost or market adjustment (7,500) - - - - Change in unrealized loss on derivatives (8,175) - - - - Other noninterest income 12,897 13,711 14,020 12,223 14,859 --------- --------- --------- --------- ---------- 23,225 70,591 91,513 89,476 88,217 --------- --------- --------- --------- ---------- Noninterest expense: Salaries and employee benefits 100,868 90,138 91,935 87,005 87,534 Occupancy and equipment 30,738 29,320 27,940 27,512 27,599 Data processing 11,033 11,568 11,118 10,018 10,436 Advertising and marketing 6,695 5,445 6,278 6,303 7,523 Amortization of identifiable intangible assets 11,495 2,260 2,379 2,084 1,904 Merger and consolidation costs (2) 31,191 38,286 5,603 4,135 1,614 Prepayment penalties on borrowings 6,303 61,546 - - - Other noninterest expense 24,786 28,796 28,945 26,769 23,109 --------- --------- --------- --------- ---------- 223,109 267,359 174,198 163,826 159,719 --------- --------- --------- --------- ----------

Income before income tax expense 53,176 38,625 146,305 146,200 136,607 Income tax expense 19,101 17,927 48,534 50,353 46,280 --------- --------- --------- --------- ---------- Net Income $34,075 $20,698 $97,771 $95,847 $90,327 ========= ========= ========= ========= ==========

Weighted average shares outstanding: Basic 183,393 177,071 173,271 169,637 162,965 Diluted 184,890 179,953 176,756 173,109 166,657 Earnings per share: Basic $0.19 $0.12 $0.56 $0.57 $0.55 Diluted 0.18 0.12 0.55 0.55 0.54

---------------------------------------------------------------------

(1) Included two months of results based on historical cost and one month results based on purchase accounting adjustments recorded as of 3/1/05. (2) Merger and consolidation costs consist of merger charges and certain asset write-downs.

TD Banknorth Inc. and Subsidiaries --------------------------------------------- SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

Combined Predecessor ----------- ------------------------ (In thousands, except per share Three Months Three Months Three Months data) Ended Ended Ended 3/31/2005 12/31/2004 9/30/2004 ----------- ----------- -----------

Net interest income $255,129 $246,063 $239,660 Net income $34,075 $20,698 $97,771 Shares outstanding (end of period) 173,208 179,298 174,023 Weighted average shares outstanding: Basic 183,393 177,071 173,271 Diluted 184,890 179,953 176,756

Earnings per share: Basic $0.19 $0.12 $0.56 Diluted $0.18 $0.12 $0.55

Shareholders' equity (end of period) $6,348,493 $3,176,114 $3,046,242 Book value per share (end of period) $36.65 $17.71 $17.50 Tangible book value per share (end of period) $7.63 $9.91 $9.44

RATIOS & OTHER INFORMATION:

Net interest margin, fully-taxable equivalent basis 3.97% 3.87% 3.68%

Return on average assets 0.45% 0.29% 1.33% Return on average equity 3.09% 2.66% 13.24%

At period end: -------------- Tangible equity/tangible assets 4.92% 6.52% 5.96% Tier 1 leverage capital ratio (1) 6.29% 7.58% 6.95% Tier 1 risk based capital ratio 7.97% 9.96% 9.42% Total risk based capital ratio 10.13% 12.16% 11.62%

Nonperforming loans (2) $62,916 $77,559 $65,923 Total nonperforming assets (2) $68,928 $81,103 $67,979 Nonperforming loans as a % of total loans 0.32% 0.42% 0.36% Nonperforming assets as a % of total assets 0.21% 0.28% 0.23%

Full service banking offices 396 386 387

FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):

Noninterest income as a percent of total income (3) 25.94% 26.42% 26.94%

Merger and consolidation costs, net of tax (4) $28,689 $32,316 $4,342 Per diluted share: $0.16 $0.17 $0.03 Deleveraging, net of tax basis (5) $41,562 $51,560 - Per diluted share: $0.22 $0.29 -

Noninterest income (6) $89,376 $88,352 $88,389 Noninterest expense (7) $174,120 $165,267 $166,216

Return on average assets (8) 1.38% 1.46% 1.39% Cash return on average tangible assets (8) (9) 1.63% 1.55% 1.49%

Return on average equity (8) 9.45% 13.43% 13.82% Cash return on average tangible equity (8) (9) 25.70% 24.89% 26.87%

Efficiency ratio (10) 53.88% 50.10% 51.39% Cash efficiency ratio (11) 50.54% 49.42% 50.67%

Predecessor ------------------------ Three Months Three Months Ended Ended 6/30/2004 3/31/2004 ------------- ----------

Net interest income $230,050 $217,609 Net income $95,847 $90,327 Shares outstanding (end of period) 172,546 163,046 Weighted average shares outstanding: Basic 169,637 162,965 Diluted 173,109 166,657

Earnings per share: Basic $0.57 $0.55 Diluted $0.55 $0.54

Shareholders' equity (end of period) $2,866,692 $2,651,911 Book value per share (end of period) $16.61 $16.26 Tangible book value per share (end of period) $8.50 $9.21

RATIOS & OTHER INFORMATION:

Net interest margin, fully-taxable equivalent basis 3.66% 3.68%

Return on average assets 1.36% 1.37% Return on average equity 13.54% 14.13%

At period end: ---------------------------------------------- Tangible equity/tangible assets 5.27% 5.84% Tier 1 leverage capital ratio (1) 6.80% 6.84% Tier 1 risk based capital ratio 8.97% 9.18% Total risk based capital ratio 11.13% 11.47%

Nonperforming loans (2) $65,142 $67,854 Total nonperforming assets (2) $67,167 $70,554 Nonperforming loans as a % of total loans 0.36% 0.41% Nonperforming assets as a % of total assets 0.23% 0.26%

Full service banking offices 389 358

FINANCIAL INFORMATION AND RATIOS EXCLUDING CERTAIN ITEMS (Non-GAAP Financial Information):

Noninterest income as a percent of total income (3) 27.24% 28.00%

Merger and consolidation costs, net of tax (4) $2,687 $1,049 Per diluted share: $0.02 $0.01 Deleveraging, net of tax basis (5) - - Per diluted share: - -

Noninterest income (6) $86,121 $84,636 Noninterest expense (7) $157,607 $156,201

Return on average assets (8) 1.40% 1.39% Cash return on average tangible assets (8) (9) 1.49% 1.47%

Return on average equity (8) 13.92% 14.29% Cash return on average tangible equity (8) (9) 26.39% 26.21%

Efficiency ratio (10) 50.51% 52.31% Cash efficiency ratio (11) 49.85% 51.68%

----------------------------------------------------------------------

(1) The tier 1 leverage ratio at March 31, 2005 is estimated. (2) During the three months ended March 31, 2005, nonperforming loans and nonperforming assets were reduced by $21.4 million of specific reserves on impaired loans which were applied to reduce the loan balance under SOP 03-3 "Accounting for Certain Loans or Debt Securities Acquired in a Transfer". (3) Excludes securities gains/(losses), lower of cost or market adjustments, and change in unrealized loss on derivatives. (4) Merger and consolidation costs consist of merger related charges and certain asset write-downs. (5) Deleveraging losses consist of losses on securities sales, lower of cost or market adjustments and prepayment penalties on borrowings incurred in connection with a balance sheet restructuring in the first quarter of 2005 and fourth quarter of 2004. (6) Excludes securities gains/(losses), lower of cost or market adjustments, and change in unrealized loss on derivatives. (7) Excludes pre-tax merger and consolidation costs, prepayment penalties on borrowings, and amortization of intangible assets. (8) Excludes merger and consolidation costs and deleveraging losses, net of related tax benefits. (9) Cash ratios reflect adjustments to exclude the effects of intangible assets, net of related taxes. (10) Excludes securities gains/(losses), lower of cost or market adjustments, prepayment penalties on borrowings, change in unrealized loss on derivatives, and merger and consolidation costs. (11) Excludes securities gains/(losses), lower of cost or market adjustments, prepayment penalties on borrowings, merger and consolidation costs, change in unrealized loss on derivatives, and amortization of intangible assets. Ratios are annualized where appropriate. See reconciliation table for a reconciliation of non-GAAP financial information.

TD Banknorth Inc. and Subsidiaries Reconciliation Table - Non-GAAP Financial Information (Unaudited) ----------------------------------------------------------------------

Combined Predecessor ------------ -------------------------- (In thousands, except per Three Months Three Months Three Months share data) Ended Ended Ended 3/31/2005 12/31/2004 9/30/2004 ------------ ------------ ------------

Net income (GAAP) $34,075 $20,698 $97,771 Add back merger and consolidation costs and deleveraging losses, net of tax Merger related 23,375 32,381 4,342 Change in unrealized loss on derivatives 5,314 - - Revised auto lease residual charge - (65) - Deleveraging 41,562 51,560 - ------------ ------------ ------------ Excluding merger and consolidation costs and deleveraging losses 104,326 104,574 102,113

Add back amortization of intangibles, net of tax 7,472 1,470 1,547 ------------ ------------ ------------ Cash basis, excluding merger and consolidation costs and deleveraging losses $111,798 $106,044 $103,660 ============ ============ ============

Diluted earnings per share (GAAP) $0.18 $0.12 $0.55 Effects of merger and consolidation costs and change in unrealized loss on derivatives, net of tax 0.16 0.17 0.03 Effects of deleveraging losses, net of tax 0.22 0.29 - ------------ ------------ ------------ Excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 0.56 0.58 0.58 Effects of amortization of intangibles, net of tax 0.04 0.01 0.01 ------------ ------------ ------------ Cash basis, excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses $0.60 $0.59 $0.59 ============ ============ ============

Average Assets (GAAP) $30,705,504 $28,576,401 $29,176,108 Average goodwill (2,517,379) (1,368,912) (1,369,166) Average identifiable intangible assets (301,197) (50,645) (53,568) ------------ ------------ ------------ Average tangible assets 27,886,928 27,156,844 27,753,374 ============ ============ ============

Average Equity (GAAP) $4,477,650 $3,096,887 $2,938,735 Average goodwill (2,517,379) (1,368,912) (1,369,166) Average identifiable intangible assets (301,197) (50,645) (53,568) Average deferred tax liability related to other identifiable intangible assets 105,419 17,726 18,749 ------------ ------------ ------------ Average tangible equity 1,764,493 1,695,056 1,534,750 ============ ============ ============

Return on average assets (GAAP) 0.45% 0.29% 1.33% Effects of merger and consolidation costs and change in unrealized loss on derivatives, net of tax 0.38% 0.45% 0.06% Effects of deleveraging losses, net of tax 0.55% 0.72% - ------------ ------------ ------------ Excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 1.38% 1.46% 1.39% Effects of amortization of intangibles, net of tax 0.25% 0.09% 0.10% ------------ ------------ ------------ Cash basis, excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 1.63% 1.55% 1.49% ============ ============ ============

Return on average equity (GAAP) 3.09% 2.66% 13.24% Effects of merger and consolidation costs and change in unrealized loss on derivatives, net of tax 2.59% 4.15% 0.58% Effects of deleveraging losses, net of tax 3.77% 6.62% - ------------ ------------ ------------ Excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 9.45% 13.43% 13.82% Effects of amortization of intangibles, net of tax 16.25% 11.46% 13.05% ------------ ------------ ------------ Cash basis, excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 25.70% 24.89% 26.87% ============ ============ ============

Efficiency ratio 80.15% 84.43% 52.60% Effects of securities gains (losses) and prepayment penalties -17.22% -22.89% 0.50% Effects of merger and consolidation costs and change in unrealized loss on derivatives -9.05% -11.44% -1.71% ------------ ------------ ------------ Excluding securities gains (losses), change in unrealized loss on derivatives, merger and consolidation costs, and prepayment penalties 53.88% 50.10% 51.39% Effects of amortization of intangibles -3.34% -0.68% -0.72% ------------ ------------ ------------ Cash basis, excluding securities gains (losses), prepayment penalties, merger and consolidation costs, and change in unrealized loss on derivatives 50.54% 49.42% 50.67% ============ ============ ============

Noninterest Income $23,225 $70,591 $91,513 Net securities gains (losses) 50,476 17,761 (3,124) Lower of cost or market adjustments 7,500 - - Change in unrealized loss on derivatives 8,175 - - ------------ ------------ ------------ Excluding securities gains (losses), lower of cost or market adjustments, and change in unrealized loss on derivatives $89,376 $88,352 $88,389 ============ ============ ============

Noninterest Expense $223,109 $267,359 $174,198 Merger and consolidation costs (31,191) (38,286) (5,603) Prepayment penalties on borrowings (6,303) (61,546) - ------------ ------------ ------------ Excluding merger and consolidation costs and prepayment penalties $185,615 $167,527 $168,595 Amortization of intangibles (11,495) (2,260) (2,379) ------------ ------------ ------------ Excluding merger and consolidation costs, prepayment penalties, and amortization of intangibles $174,120 $165,267 $166,216 ============ ============ ============

Predecessor ------------------------- (In thousands, except per share data) Three Months Three Months Ended Ended 6/30/2004 3/31/2004 ------------ ------------

Net income (GAAP) $95,847 $90,327 Add back merger and consolidation costs and deleveraging losses, net of tax Merger related 2,687 1,354 Change in unrealized loss on derivatives - - Revised auto lease residual charge - (305) Deleveraging - - ------------ ------------ Excluding merger and consolidation costs and deleveraging losses 98,534 91,376

Add back amortization of intangibles, net of tax 1,355 1,238 ------------ ------------ Cash basis, excluding merger and consolidation costs and deleveraging losses $99,889 $92,614 ============ ============

Diluted earnings per share (GAAP) $0.55 $0.54 Effects of merger and consolidation costs and change in unrealized loss on derivatives, net of tax 0.02 0.01 Effects of deleveraging losses, net of tax - - ------------ ------------ Excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 0.57 0.55 Effects of amortization of intangibles, net of tax 0.01 0.01 ------------ ------------ Cash basis, excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses $0.58 $0.56 ============ ============

Average Assets (GAAP) $28,382,749 $26,527,027 Average goodwill (1,295,806) (1,127,670) Average identifiable intangible assets (44,164) (35,213) ------------ ------------ Average tangible assets 27,042,779 25,364,145 ============ ============

Average Equity (GAAP) $2,846,616 $2,571,905 Average goodwill (1,295,806) (1,127,670) Average identifiable intangible assets (44,164) (35,213) Average deferred tax liability on intangible assets 15,457 12,325 --------- ------------ Average tangible equity 1,522,103 1,421,347 ============ ============

Return on average assets (GAAP) 1.36% 1.37% Effects of merger and consolidation costs and change in unrealized loss on derivatives, net of tax 0.04% 0.02% Effects of deleveraging losses, net of tax - - ------------ ------------ Excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 1.40% 1.39% Effects of amortization of intangibles, net of tax 0.09% 0.08% ------------ ------------ Cash basis, excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 1.49% 1.47% ============ ============

Return on average equity (GAAP) 13.54% 14.13% Effects of merger and consolidation costs and change in unrealized loss on derivatives, net of tax 0.38% 0.16% Effects of deleveraging losses, net of tax - - ------------ ------------ Excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 13.92% 14.29% Effects of amortization of intangibles, net of tax 12.47% 11.92% ------------ ------------ Cash basis, excluding merger and consolidation costs, change in unrealized loss on derivatives, and deleveraging losses 26.39% 26.21% ============ ============

Efficiency ratio 51.27% 52.23% Effects of securities gains (losses) and prepayment penalties 0.54% 0.61% Effects of merger and consolidation costs and change in unrealized loss on derivatives -1.30% -0.53% ------------ ------------ Excluding securities gains (losses), change in unrealized loss on derivatives, merger and consolidation costs, and prepayment penalties 50.51% 52.31% Effects of amortization of intangibles -0.66% -0.63% ------------ ------------ Cash basis, excluding securities gains (losses), prepayment penalties, merger and consolidation costs, and change in unrealized loss on derivatives 49.85% 51.68% ============ ============

Noninterest Income $89,476 $88,217 Net securities gains (losses) (3,355) (3,581) Lower of cost or market adjustments - - Change in unrealized loss on derivatives - - ------------ ------------ Excluding securities gains (losses), lower of cost or market adjustments, and change in unrealized loss on derivatives $86,121 $84,636 ============ ============

Noninterest Expense $163,826 $159,719 Merger and consolidation costs (4,135) (1,614) Prepayment penalties on borrowings - - ------------ ------------ Excluding merger and consolidation costs and prepayment penalties $159,691 $158,105 Amortization of intangibles (2,084) (1,904) ------------ ------------ Excluding merger and consolidation costs, prepayment penalties, and amortization of intangibles $157,607 $156,201 ============ ============

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- EFFECTS OF PURCHASE ACCOUNTING ON CONSOLIDATED BALANCE SHEET (Unaudited)

March 1, 2005 Historical Purchase Basis Accounting Successor ---------- Adjustments, --------- (In thousands) March 31, Net of March 31, 2005 (1) Amortization 2005 ------------ ------------- ------------

Cash and due from banks $540,812 - $540,812 Federal funds sold and other short-term investments 3,247 - 3,247 Securities available for sale 4,656,578 ($456) 4,656,122 Securities held to maturity 80,259 - 80,259

Loans and leases held for sale 558,137 - 558,137 Loans and leases: Residential real estate mortgages 3,424,898 (35,991) 3,388,907 Commercial real estate mortgages 6,480,825 78,634 6,559,459 Commercial business loans and leases 4,074,360 20,267 4,094,627 Consumer loans and leases 5,584,061 22,889 5,606,950 ------------ ------------- ------------ Total loans and leases 19,564,144 85,799 19,649,943 Less: Allowance for loan and lease losses 249,600 (21,435) 228,165 ------------ ------------- ------------ Loans and leases, net 19,314,544 107,234 19,421,778

Premises and equipment 308,109 - 308,109 Goodwill 1,503,642 3,033,981 4,537,623 Identifiable intangible assets 61,117 696,387 757,504 Bank-owned life insurance 556,265 - 556,265 Other assets 737,734 (22,769) 714,965 ------------ ------------- ------------

$28,320,444 $3,814,377 $32,134,821 ============ ============= ============

----------------------------------------------------------------------

Liabilities & Shareholders' Equity

Deposits: Regular savings $2,703,160 - $2,703,160 Retail money market and NOW accounts 8,168,208 ($1) 8,168,207 Retail certificates of deposit 4,709,291 44,116 4,753,407 Brokered deposits 80,951 - 80,951 Noninterest bearing deposits 4,215,574 - 4,215,574 ------------ ------------- ------------ Total deposits 19,877,184 44,115 19,921,299

Borrowings from the Federal Home Loan Bank 2,332,825 1,271 2,334,096 Federal funds purchased and securities sold under repurchase agreements 2,241,277 (330) 2,240,947 Subordinated debt and senior notes 344,003 33,346 377,349 Other borrowings 26,802 - 26,802 Junior subordinated debentures 353,069 21,630 374,699 Deferred tax liability on indentifiable intangible assets 21,391 246,912 268,303 Other liabilities 188,532 54,301 242,833 ------------ ------------- ------------

Total liabilities 25,385,083 401,245 25,786,328 ------------ ------------- ------------

Shareholders' equity 2,935,361 3,413,132 6,348,493 ------------ ------------- ------------

$28,320,444 $3,814,377 $32,134,821 ============ ============= ============

----------------------------------------------------------------------

(1) Assumes that the transaction with TD was accounted for on a historical basis without adjustment of the values of TD Banknorth's assets and liabilities under the purchase method, as required.

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- EFFECTS OF PURCHASE ACCOUNTING ON CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)

Historical Combined Basis (2) ---------- -------- (In thousands, except per share data) Three Three Months Net Effect Months Ended of Ended March 31, Purchase March 31, 2005 (1) Accounting 2005 ---------- ----------- --------

Interest and dividend income $348,474 ($2,433) $346,041 Interest expense 95,016 (4,104) 90,912 ---------- ---------- --------- Net interest income 253,458 1,671 255,129 Provision for loan and lease losses 2,069 - 2,069 ---------- ---------- --------- Net interest income after provision for loan and lease losses 251,389 1,671 253,060 ---------- ---------- ---------

Noninterest income: Deposit services 28,182 - 28,182 Insurance brokerage commissions 13,892 - 13,892 Merchant and electronic banking income, net 13,114 - 13,114 Wealth management services 10,504 - 10,504 Bank-owned life insurance 6,098 - 6,098 Investment planning services 4,689 - 4,689 Net securities gains/(losses) (50,021) (455) (50,476) Loans held for sale - lower of cost or market adjustment (7,500) - (7,500) Change in unrealized loss on derivatives - (8,175) (8,175) Other noninterest income 14,236 (1,339) 12,897 ---------- ---------- --------- 33,194 (9,969) 23,225 ---------- ---------- --------- Noninterest expense: Salaries and employee benefits 101,658 (790) 100,868 Occupancy and equipment 30,738 - 30,738 Data processing 11,033 - 11,033 Advertising and marketing 6,695 - 6,695 Amortization of identifiable intangible assets 2,431 9,064 11,495 Merger and consolidation costs (3) 31,191 - 31,191 Prepayment penalties on borrowings 6,303 - 6,303 Other noninterest expense 24,785 1 24,786 ---------- ---------- --------- 214,834 8,275 223,109 ---------- ---------- ---------

Income before income tax expense 69,749 (16,573) 53,176 Income tax expense 27,488 (8,387) 19,101 ---------- ---------- --------- Net Income $42,261 ($8,186) $34,075 ========== ========== =========

Weighted average shares outstanding: Basic 183,393 - 183,393 Diluted 184,890 - 184,890 Earnings per share: Basic $0.23 ($0.04) $0.19 Diluted 0.23 (0.05) 0.18

----------------------------------------------------------------------

(1) Assumes that the transaction with TD was accounted for on a historical basis without adjustment of the values of TD Banknorth's assets and liabilities under the purchase method, as required. (2) Combines the predecessor period January 1, 2005 to February 28, 2005 with the successor period March 1, 2005 to March 31, 2005. (3) Merger and consolidation costs consist of merger charges and certain asset write-downs.

TD Banknorth Inc. and Subsidiaries ---------------------------------------------------------------------- Identifiable Intangible Assets Estimated Future Amortization Expense (Unaudited)

Other Total Core Deposit Identifiable Identifiable Intangibles Intangibles Intangibles ----------- ------------ ------------

Amortization Expense: January and February 2005 (Predecessor) $1,237 $324 $1,561 March 2005 (Successor) 8,583 1,351 9,934 ----------- ------------ ------------ Three months ended March 31, 2005 9,820 1,675 11,495 Estimated Future Amortization Expense: April 2005 through December 2005 77,250 12,156 89,406 ----------- ------------ ------------ Full Year 2005 87,070 13,831 100,901 2006 93,000 15,764 108,764 2007 72,667 15,033 87,700 2008 59,833 14,353 74,186 2009 49,667 13,723 63,390 thereafter 205,000 129,058 334,058

--30--DB/ny*

CONTACT: TD Banknorth Inc. Jeffrey Nathanson, 207-761-8517

KEYWORD: MAINE INTERNATIONAL EUROPE INDUSTRY KEYWORD: INSURANCE BANKING EARNINGS CONFERENCE CALLS SOURCE: TD Banknorth Inc.

Copyright Business Wire 2005