Earnings of bank increase by 24% Banknorth has high loan growth

PORTLAND – Banknorth Group Inc. reported record quarterly earnings Monday that were up 24 percent from a year ago, but said its income growth would slow in the year ahead.

Banknorth reported earnings of 51 cents per diluted share for the three-month period ending Sept. 30. Excluding special charges, the bank had earnings of 52 cents per share, which was in line with consensus estimates from analysts surveyed by Thomson First Call.

Jim Ackor, an analyst with RBC Capital Markets in Portland, said Banknorth continues to experience strong loan growth and a high quality of assets. The report is the latest in a string of strong earnings statements from Banknorth.

“They have a machine that’s firing on all eight cylinders, there’s no question about that,” Ackor said.

During a conference call following the earnings release, bank officials said they expected earnings to grow at about 8 percent next year, lower than the 12 percent rate analysts were projecting for 2003.

Banknorth spokesman Brian Arsenault said slower earnings growth is expected because the bank’s profit margins are being squeezed by low interest rates on customer loans.

William J. Ryan, chairman and chief executive, announced Monday that Banknorth stock will begin trading on the New York Stock Exchange beginning Nov. 4. It now trades on the Nasdaq stock exchange, and its new trading symbol will be BNK.

“Our growth in assets to $22.5 billion, 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,” Ryan said.

Boosted by several acquisitions of out-of-state banks, Banknorth has had double-digit growth in earnings and deposits. In the past year, Banknorth Group has acquired four bank chains in Massachusetts and two in Connecticut.

For the first nine months of the year, it reported income of $221.5 million, up 25 percent from the same period in 2001. Its deposits on Sept. 30 were 24 percent higher than a year earlier.

Banknorth is the parent company of Peoples Heritage Bank in Maine, Bank of New Hampshire, Banknorth Massachusetts, Banknorth Vermont, Banknorth Connecticut and Evergreen Bank in upstate New York.

The Banknorth stock price closed down 3 percent for the day to $23.47.