TD Banknorth Reports Fourth Quarter and 2006 Results and Announces Quarterly Dividend

Business Wire, Jan 24, 2007

PORTLAND, Maine -- TD Banknorth Inc.

(Fourth Quarter and 2006 Earnings Conference Call at 10:30 a.m. Eastern Time today, January 24, 2007. Dial-in number for USA and Canada is 866-700-5192. International dial-in number is 617-213-8833. Passcode for both numbers is 37364473. Replay number for USA and Canada is 888-286-8010. International replay dial-in number is 617-801-6888. Replay passcode for both is 30545902. Live webcast and webcast replay available at www.tdbanknorth.com, Investor Relations.)

Highlights for the fourth quarter of 2006 include:

* Adjusted earnings1 increased to $117.8 million in the fourth quarter of 2006 up from $108.1 million in the fourth quarter of 2005, reflecting in part the acquisition of Hudson United Bancorp on January 31, 2006.

* The Company's capital ratios improved in the fourth quarter of 2006 as compared to the third quarter of 2006 with the Company's total risk-based capital ratio increasing to 11.62% at December 31, 2006 as compared to 11.44% at September 30, 2006.

* The Board of Directors declared a dividend of 22 cents per share payable on February 15, 2007 to shareholders of record as of the close of business on February 5, 2007.

Fourth Quarter Adjustments (Items of Note) 1

The following material items of note (net of tax) are included in the Company's reported GAAP earnings for the fourth quarter of 2006 as compared to the fourth quarter of 2005. Share impact is on a per diluted share basis.

* Amortization of identifiable intangible assets of $24.0 million (10 cents per share) as compared to $20.0 million (11 cents per share) for the fourth quarter of 2005.

* Merger and restructuring charges of $8.9 million (4 cents per share) as compared to $3.4 million (2 cents per share) for the fourth quarter of 2005.

* $1.5 million impact (1 cent per share) related to the discontinued operations associated with certain subsidiaries engaged in energy operations acquired from Hudson United as compared to no related impact for the fourth quarter of 2005.

* Deleveraging losses of $29.3 million (17 cents per share) for the fourth quarter of 2005 as compared to no related impact for the fourth quarter of 2006.

TD Banknorth Inc. ("TD Banknorth" or the "Company") (NYSE: BNK) today reported net income of $83.4 million for the quarter ended December 31, 2006 as compared to $55.6 million for the quarter ended December 31, 2005. On a per diluted share basis, reported net income was 36 cents for the fourth quarter of 2006 as compared to 32 cents for the fourth quarter of 2005.

Net income for the year ended December 31, 2006 was $339.1 million as compared to $274.0 million for the year ending December 31, 2005. On a per diluted share basis, net income for the year ended December 31, 2006 was $1.51 as compared to $1.55 for the year ending December 31, 2005.

Adjusted earnings were $117.8 million for the fourth quarter of 2006 as compared to $108.1 million for the fourth quarter of 2005. On a per diluted share basis, adjusted earnings were 51 cents for the fourth quarter of 2006 as compared to 62 cents for the same quarter a year ago.

Adjusted earnings for the year ended December 31, 2006 were $478.7 million as compared to $438.5 million for 2005. On a per diluted share basis, adjusted earnings for the year ended December 31, 2006 were $2.13 as compared to $2.48 for the same period a year ago.

The Company's results for the fourth quarter of 2006 reflect the full impact of the acquisition of Hudson United Bancorp on January 31, 2006. On a per diluted share basis, results for both the fourth quarter of 2006 and for the year ended December 31, 2006 reflect the issuance of approximately 62 million shares of TD Banknorth common stock in conjunction with the acquisition of Hudson United Bancorp, which was offset in part by the Company's repurchase of 8.5 million shares during the first quarter of 2006.

"The current operating environment continues to be challenging," said TD Banknorth President, Bharat B. Masrani. "While competition for loans and deposits continues to be intense, we remain focused on the organic growth of our loans, deposits and fee income."

Total Assets

Total assets at December 31, 2006 were $40.2 billion, up 25% from $32.1 billion at December 31, 2005. The increase was due primarily to the acquisition of Hudson United.

Average Loans and Leases

Average loans and leases increased by 27% to $25.6 billion for the quarter ended December 31, 2006 as compared to $20.2 billion for the fourth quarter of 2005, due primarily to the acquisition of Hudson United. For the year ended December 31, 2006, total average loans and leases were $25.2 billion as compared to $20.0 billion for the same period in 2005, also largely due to the acquisition of Hudson United.

Excluding the effects of acquisitions and purchase accounting adjustments, average commercial business loans and leases, commercial real estate mortgages and consumer loans and leases increased 6.3% in the aggregate for the year ended December 31, 2006 as compared to the same period a year ago. On a linked quarter basis, average commercial business loans and leases, commercial real estate mortgages and consumer loans and leases for the fourth quarter of 2006 were essentially flat as compared with the previous quarter, reflecting the competition for high-quality commercial and consumer loans.