PORTLAND (Dow Jones/AP) – Banknorth Group Inc. (BNK) signed a definitive agreement to acquire First & Ocean BanCorp (FIOC) for $51 million in cash.

First & Ocean, of Newburyport, Mass., owns First & Ocean National Bank and has $274 million in assets.

In a press release Wednesday, Banknorth said it anticipates the deal to slightly add to 2004 earnings per share. Thomson First Call projects 2003 earnings of $2.18 a share and 2004 earnings of $2.42 a share.

Banknorth also expects cost savings of 35 percent on completion of the deal. A company spokesman said it will make cuts principally in senior management and consolidate back-office operations. He said it was too early to give figures.

“This small but significant acquisition is a great addition to the Essex County portion of our Banknorth Massachusetts operations,” Chairman, President and Chief Executive William J. Ryan said in the release.

In the past two years, Banknorth has acquired Andover Bank, Ipswich Savings Bank and Warren Five Cents Savings Bank in the area. Andover had previously acquired Gloucester Bank & Trust.

AP-ES-09-03-03 1144EDT