PORTLAND – Canada’s TD Bank Financial Group is discussing “a possible transaction” with Banknorth Group Inc., the companies confirmed Wednesday.

Banknorth, which has more than 350 branches in New England and upstate New York and assets of $29.3 billion, has been viewed in recent years as a potential takeover target. TD Bank, based in Toronto and owner of Toronto-Dominion Bank, has assets of nearly $240 billion ($312 billion Canadian) and more than 1,000 branches across Canada.

The companies issued a statement saying negotiations were under way.

“At this point there can be no assurances that the discussions will lead to an agreement,” the statement said. “The companies do not intend to comment further on this subject unless an agreement is reached or the discussions have been terminated.”

Published reports said that TD Bank and Banknorth are in advanced stages of negotiations that would see TD Bank take controlling interest of Banknorth in a cash and stock deal that could be worth between $2.2 billion and $3.5 billion. The deal would value Banknorth shares at 20 percent to 30 percent above Tuesday’s close of $31.70 a share, the Wall Street Journal reported, citing people familiar with the talks.

On Wall Street, Banknorth ended the day up 10 percent at $34.88 a share. TD Bank’s U.S. shares fell 2.9 percent to $34.17 a share.

James Ackor, director of equity research at RBC Capital Markets in Portland, said a merger would make sense for both companies.

For Banknorth, it would give shareholders a premium while allowing the company to remain intact and continue growing through acquisitions of its own. Commercial customers would benefit with more products and services, and personal banking customers probably wouldn’t see any difference, he said.

It would give TD Bank a foothold in the United States with a profitable, conservatively run institution that is of sufficient size to expand over time. “Banknorth fits that bill to a T,” Ackor said.

Brad McCurtain, president of Maine Securities Corp. in Portland, said it would be unusual for a bank to acquire a portion of another bank rather than buy it in its entirety.

If that’s how a deal plays out, Banknorth could continue growing by buying suburban banks in upstate New York, the New York City suburbs and elsewhere the way it has in Massachusetts and Connecticut in recent years, he said.

Still, there’s always the fear that personalized service will suffer as a bank gets bigger.

“You have to expect that as a bank gets larger it’s going to look a lot like a large bank,” McCurtain said.

TD has made previous attempts to enter the U.S. market. Canadian banks are interested in the U.S. market because there are relatively few banks – and therefore few merger opportunities – in Canada, Ackor said.

Last year, it was in talks to merge its TD Waterhouse brokerage with online broker ETrade Financial Corp. The merger would have created the second-largest discount broker in the United States, but talks were called off in January after the two sides said they couldn’t agree on terms.