Record Quarterly Earnings at Banknorth

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Record Quarterly Earnings at Banknorth

Mon, 10/21/2002 - 8:00pm -- tim

Banknorth Group Inc. (NASDAQ: BKNG)
announced record quarterly net income of $76.9 million, or 51 cents
per diluted share, for the three months ended September 30, 2002, an
increase of 24% from net income of $62.2 million, or 45 cents per diluted
share, for the same quarter a year ago. Exclusive of special charges,
third quarter earnings were $78.3 million, or 52 cents per diluted share,
up 26 % from $62.2 million, or 45 cents per diluted per share, for the
same quarter a year ago.
For the first nine months of 2002, net income was $221.5 million, or $1.48
per diluted share, an increase of 25% from $177.2 million, or $1.27 per
diluted share, for the first nine months of 2001. Exclusive of special
charges, income for the first nine months of the year was $228.9 million,
or $1.53 per diluted share, up 26% from $181.1 million, or $1.30 per
diluted share, for the first three quarters of 2001.
The Company also announced today that it will move to the New York Stock
Exchange on November 4, 2002, where its common stock will trade under the
symbol BNK.
“Our growth in assets to $22.5 billion as of September 30, our continued
strong earnings, and our geographic expansion to a strong presence in
every New England state except Rhode Island convinces us that the time is
right to move to the NYSE,” said William J. Ryan, Chairman, President and
Chief Executive Officer.
The Company’s acquisitions over the past year and a half were a major
factor in double-digit growth in loans and deposits.
Total loans at September 30, 2002 were 26% higher than total loans at
September 30, 2001. Exclusive of acquisitions, nonresidential loan growth
was still strong at 11%, with the strongest growth coming in commercial
business and commercial real estate loans.
Total deposits at September 30, 2002 were 24% higher than total deposits
at September 30, 2001, with the greatest growth in checking, retail money
market and NOW accounts. Exclusive of acquisitions, core deposit growth
was 13%.
Acquisitions and the loan and deposit growth helped achieve net interest
income for the quarter ended September 30, 2002 that was 18% higher than
for the same period in the prior year, despite margin pressure largely due
to more loan prepayments primarily as a result of declining interest
rates.
The net interest margin for the quarter ended September 30, 2002 was
4.03%, down from 4.08% for the same quarter a year ago and down from 4.18%
from the previous quarter. The net interest margin for the nine months
ended September 30, 2002 was 4.14%, as compared to a net interest margin
of 3.94% for the first three quarters of 2001.
Asset quality improved over both the same quarter a year ago and the
previous quarter.
At September 30, 2002, nonperforming assets as a percentage of total
assets were 0.31% as compared to 0.39% at September 30, 2001 and to 0.34%
at June 30, 2002. Nonperforming loans as a percentage of total loans at
September 30, 2002 were 0.47% as compared to 0.59% at September 30, 2001
and to 0.51% at June 30, 2002. Net charge offs to average loans of 0.31%
for the quarter ended September 30, 2002 and 0.30% for the first nine
months of the year were essentially consistent with the same periods a
year ago.
The Company’s efficiency ratio for the quarter ended September 30, 2002
was 52.35% as compared to 54.22% for the same quarter a year ago.
Noninterest income for the quarter ended September 30, 2002, principally
fee income from deposit and nonbanking services, increased 8% over the
same quarter a year ago, from $60.6 million to $65.5 million. Noninterest
income increases were primarily in deposit services, investment planning
services, insurance brokerage commissions and merchant and electronic
banking. These increases more than offset a decrease in mortgage banking
income, which experienced $2.6 million of impairment and amortization
charges to the value of mortgage servicing rights, and a decrease in trust
and investment management services income, which reflected the weak stock
market. The mortgage banking impairment and amortization left a remaining
balance of capitalized mortgage servicing rights at September 30, 2002
totaling $5.2 million, or approximately 70 basis points of the unpaid
balance of loans serviced for others.
Shareholders’ equity at September 30, 2002 was $1.92 billion, up 32% from
$1.46 billion at September 30, 2001. Book value per share at September 30,
2002 was $13.01.
The Company completed the acquisitions of Ipswich Bancshares, Inc, based
in Ipswich Massachusetts, and Bancorp Connecticut, Inc, parent company of
Southington Savings Bank, during the quarter ended September 30, 2002.
The acquisitions of Warren Bancorp (NASDAQ: WRNB), headquartered in
Peabody, Massachusetts, and American Financial Holdings, Inc. (NASDAQ:
AMFH), parent company of American Savings Bank in Connecticut, are pending
regulatory approvals and votes by the shareholders of both companies. It
is anticipated that these acquisitions will increase the Company’s total
assets to over $26 billion.
The Company’s results for the nine months ended September 30, 2002 reflect
its adoption of Statement of Financial Accounting Standards (“SFAS”) No.
147, “Acquisitions of Certain Financial Institutions.” Under SFAS No.
147, the Company can reclassify certain unidentifiable intangible assets
to goodwill and cease amortization beginning January 1, 2002. As a result,
earnings for the first nine months have been increased by two cents per
share. Exclusive of the adoption of SFAS No.147, earnings for the quarter
ended September 30, 2002 exclusive of special charges still were 52 cents
per share.