Toronto Bank Buying Majority of Banknorth

Officials at Banknorth Group, Inc. (NYSE: BNK) of Portland, Maine, and TD Bank Financial Group (TDBFG) of Toronto announced that they have signed a definitive agreement for TDBFG to acquire 51 percent of the outstanding shares of Banknorth for approximately $3.8 billion in cash and TD common shares.

“This strategic acquisition provides us with an expanding beachhead in the Northeastern United States and an outstanding personal and commercial banking complement to our strong U.S. wealth management franchise,” said Ed Clark, TD Bank Financial Group president and chief executive officer.

“The addition of Banknorth to our brand provides us with immediately accretive earnings and a majority interest in a company that has an excellent management team focused on growing their business both organically and through smart and profitable acquisitions.”

Banknorth, which in addition to banking also has one of the insurance agency operations in the Northeast, said the deal will allow it to continue acquisitons.

“Having TDBFG as our majority shareholder offers us the depth to continue with our strategy of acquiring high potential banks in strategic locations and positions us to move to the next level in terms of size and product capability,” said William J. Ryan, Banknorth’s chairman, president and chief executive officer.

The agreement between TDBFG and Banknorth provides for the merger of Banknorth with a TD subsidiary in which each Banknorth shareholder will receive a package of $12.24 in cash, 0.2351 of a TD common share and 0.49 shares of the new Banknorth stock, which will continue to be listed on the New York Stock Exchange. TD will be permitted to buy additional Banknorth shares up to a limit of 66 2/3 percent either in the open market or in specific circumstances directly from Banknorth, such as if Banknorth were looking to raise capital.
ill be tax free.

The agreement also permits TD to bid for the remaining publicly held shares in subsequent years, subject to certain limitations in the first two years, approval by a majority of designated independent directors and unaffiliated Banknorth shareholders during the first five years and approval by a majority of designated independent directors or unaffiliated Banknorth shareholders after five years. The deal, which is subject to approval by Banknorth’s shareholders and by U.S. and Canadian regulatory authorities, is expected to close in February, 2005 and be immediately accretive to TD’s earnings, without reliance on synergies.

“We have structured the deal this way to allow the maximum degree of flexibility for both TD and Banknorth. TD gains an important personal and commercial footprint in the U.S. while maintaining our strong capital ratios,” said Clark.

“From our perspective, we are gaining access to capital and additional flexibility to allow us to continue to participate in larger acquisitions,” added Ryan.

Ryan will remain chairman, president and CEO of Banknorth and will join TD’s Board of Directors upon the conclusion of the deal. He will continue to be based at Banknorth’s headquarters in Portland, Maine. Banknorth said its management team will remain intact.

TD will initially be adding up to five members to the board in addition to the current 14 Banknorth directors, all of whom are expected to remain on the board following the closing. A majority of both the full board and the directors appointed by TD will be required for any motion put before the board to reflect TDBFG’s majority shareholder position. TD will have the right to elect a majority of board members generally as long as it remains a majority shareholder.

A New England-based company recognized by Forbes magazine as the best managed bank in America, Banknorth offers personal and commercial banking, insurance, investment planning and wealth management services. The operations of Banknorth include:

Banknorth is first in combined market share in Maine, New Hampshire and Vermont, and 5th in Massachusetts and 6th in Connecticut.

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. In Canada and around the world, TD Bank Financial Group serves more than 13 million customers in three key businesses: personal and commercial banking including TD Canada Trust; wealth management including the global operations of TD Waterhouse; and wholesale banking, including TD Securities, operating in a number of locations in key financial centres around the globe. TD Bank Financial Group has more than 4.5 million on-line customers. TD Bank Financial Group had CDN$312 billion in assets, as of April 30, 2004. The Toronto-Dominion Bank trades on the Toronto and New York Stock Exchanges under the symbol “TD”.

At June 30, 2004, Banknorth Group, Inc. headquartered in Portland, Maine and one of the 30 largest publicly-traded commercial banks in the country, had $29.3 billion in assets. 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). The Company and Banknorth, N.A. also operate subsidiaries and divisions in insurance, money management, merchant services, mortgage banking, government banking and other financial services and offer investment products in association with PrimeVest Financial Services, Inc.

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