EX-99 2 mer83-99.htm EXHIBIT 99.1

For Release: May 4, 2005
Contact: Lisa Razo
(802) 865-1838
 

Merchants Bancshares, Inc. Announces 2005 First Quarter Results
 

SOUTH BURLINGTON, VT - Merchants Bancshares, Inc. (NASDAQ: MBVT), the parent company of Merchants Bank, today announced net income of $2.90 million, or diluted earnings of 46 cents per share, for the quarter ended March 31, 2005. This compares with net income of $2.82 million, or diluted earnings per share of 45 cents for the quarter ended March 31, 2004. The return on average assets was 1.11% and the return on average equity was 17.68% for the first quarter of 2005, compared to 1.14% and 12.88%, respectively, for the first quarter of 2004. Merchants declared a dividend on April 21, 2005, of 27 cents per share payable May 19, 2005, to shareholders of record as of May 5, 2005. For more information on the quarter please refer to Merchants' quarterly Form 10-Q, which was filed today and is available on the SEC website at www.sec.gov.
 

Mr. Joseph Boutin, President and Chief Executive Officer, Mr. Michael Tuttle, Chief Operating Officer and Ms. Janet Spitler, Chief Financial Officer, will host a conference call to discuss these earnings results at 9:00 a.m. Eastern Standard Time on Monday May 9, 2005. Interested parties may participate in the conference call by dialing (800) 230-1085; the title of the call is Earnings Release Conference Call for Merchants Bancshares, Inc. Participants are asked to call a few minutes prior to the conference in order to register. A replay will be available through Monday May 16, 2005. The U.S. replay dial-in number is (800) 475-6701. The replay access code is 750848.
 

The mission of Merchants Bank is to provide best-in-class community banking services in the state of Vermont. This commitment is fulfilled through a community, branch-based system that includes 35 bank offices throughout Vermont, employees dedicated to quality customer service, and innovative banking products such as Free Checking for LifeÒ , MoneyLYNXÒ money market accounts, and CommerceLYNXÒ business banking products. Merchants Bank also includes a trust and investment division, known as Merchants Trust Company, serving individuals and institutions. For more information about Merchants Bank visit our website at www.mbvt.com. Merchants' stock is traded on the NASDAQ National Market system under the symbol MBVT. Member FDIC.
 

Some of the statements contained in this press release constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements reflect Merchants' current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause Merchants' actual results to differ significantly from those expressed in any forward-looking statement. Forward-looking statements should not be relied on since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Merchants' control and which could materially affect actual results. The factors that could cause actual results to differ materially from current expectations include changes in general economic conditions in Vermont, changes in interest rates, changes in competitive product and pricing pressures among financial institutions within Merchants' markets, and changes in the financial condition of Merchants' borrowers. The forward-looking statements contained herein represent

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Merchants' judgment as of the date of this report, and Merchants cautions readers not to place undue reliance on such statements. For further information, please refer to Merchants' reports filed with the Securities and Exchange Commission.

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Merchants Bancshares, Inc.
Financial Highlights
For the period ended March 31, 2005
(In thousands except share and per share data)
 
 

03/31/05

  

12/31/04

  

03/31/04

  

12/31/03

Balance Sheets - Period End

              

Total assets

$1,065,035

  

$1,032,405

  

$960,068

  

$969,902

Loans

585,750

  

584,332

  

573,977

  

568,997

Allowance for loan losses ("ALL")

7,477

  

7,512

  

7,962

  

7,954

Net loans

578,273

  

576,820

  

566,015

  

561,043

Investment securities

409,266

  

376,547

  

327,589

  

340,337

Other assets

77,496

  

79,038

  

66,464

  

68,522

Deposits

833,333

  

834,164

  

801,808

  

808,083

Short-term borrowings

50,931

  

57,374

  

31,078

  

57,058

Long-term debt

86,878

  

49,757

  

36,368

  

6,618

Junior subordinated debentures issued to

              

 Unconsolidated subsidiary trust

20,619

  

20,619

  

--

  

--

Other liabilities

9,895

  

5,307

 

10,986

  

11,830

Shareholders' equity

63,379

  

65,184

 

89,828

  

86,313

Balance Sheets - Quarter-to-Date Averages

              

Total assets

$1,044,327

  

$1,041,944

  

$990,749

  

$965,247

Loans

578,582

  

586,268

  

567,250

  

564,421

Allowance for loan losses

7,518

  

7,862

  

7,958

  

8,032

Net loans

571,064

  

578,406

  

559,292

  

556,389

Investment securities, including Federal Home

              

 Loan Bank stock

403,912

  

391,967

  

361,805

  

338,042

Federal funds sold, securities purchased

              

 under agreements to resell, and interest

              

 bearing deposits with banks

114

  

433

  

1,680

  

1,398

Other assets

69,237

  

71,138

  

67,972

  

69,418

Deposits

827,463

  

844,958

  

801,727

  

804,694

Short-term borrowings

52,181

  

45,652

  

73,260

  

57,962

Long-term debt

68,750

  

52,157

  

14,717

  

6,482

Junior subordinated debentures issued to

              

 Unconsolidated subsidiary trust

20,619

  

3,214

  

--

  

--

Other liabilities

9,727

  

14,113

  

13,476

  

10,571

Shareholders' Equity

65,587

  

81,850

  

87,569

  

85,538

Interest earning assets

982,608

  

978,668

  

930,735

  

903,861

Interest bearing liabilities

853,194

  

822,601

  

783,713

  

760,812

Ratios and Supplemental Information

              

Book value per share

$10.03

  

$10.39

  

$14.45

  

$13.93

Tier I leverage ratio

8.22%

  

8.06%

  

8.64%

  

8.70%

Period end common shares outstanding

6,319,411

  

6,243,710

  

6,218,052

  

6,196,053

Credit Quality - Period End

              

Nonperforming loans ("NPLs")

$3,720

  

$3,336

  

$996

  

$2,212

Nonperforming assets ("NPAs")

3,720

  

3,336

  

996

  

2,212

NPLs as a percent of total loans

0.64%

  

0.57%

  

0.17%

  

0.39%

NPAs as a percent of total assets

0.35%

  

0.32%

  

0.10%

  

0.23%

ALL as a percent of NPLs

201%

  

225%

  

799%

  

360%

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For the Three Months Ended
   

March 31,
2005

  

March 31,
2004

  

December 31,
2004
             

Operating Results

            

Interest income

            

Interest and fees on loans

  

$8,556

  

$8,040

  

$8,454

Interest and dividends on investments

  

4,222

  

3,599

  

3,822

Total interest income

  

12,778

  

11,639

  

12,276

Interest expense

            

Deposits

  

1,651

  

1,579

  

1,552

Short-term borrowings

  

351

  

204

  

235

Long-term debt

  

762

  

76

  

382

Total interest expense

  

2,764

  

1,859

  

2,169

Net interest income

  

10,014

  

9,780

  

10,107

Provision for loan losses

  

--

  

--

  

--

Net interest income after provision for loan losses

  

10,014

  

9,780

  

10,107

Noninterest income

            

Trust Company income

  

421

  

378

  

407

Service charges on deposits

  

1,076

  

1,147

  

1,195

Gain (loss) on sale of investments, net

  

61

  

63

  

53

Other noninterest income

  

626

  

563

  

675

Total noninterest income

  

2,184

  

2,151

  

2,330

Noninterest expense

            

Salaries and employee benefits

  

4,006

  

3,935

  

3,998

Occupancy and equipment expenses

  

1,618

  

1,510

  

1,569

Legal and professional fees

  

425

  

423

  

403

Marketing expenses

  

348

  

382

  

357

Equity in losses of real estate limited partnerships

  

430

  

413

  

450

Other noninterest expense

  

1,559

  

1,514

  

1,353

Total noninterest expense

  

8,386

  

8,177

  

8,130

Income before income taxes

  

3,812

  

3,754

  

4,307

Income taxes

  

912

  

934

  

1,114

Net income

  

$2,900

  

$2,820

  

$3,193

Ratios and Supplemental Information

            

Weighted average common shares outstanding

  

6,320,850

  

6,210,260

  

6,241,720

Weighted average diluted shares outstanding

  

6,365,110

  

6,281,158

  

6,313,140

Basic earnings per common share

  

$0.46

  

$0.45

  

$0.51

Diluted earnings per common share

  

0.46

  

0.45

  

0.51

Return on average assets

  

1.11%

  

1.14%

  

1.23%

Return on average shareholders' equity

  

17.68%

  

12.88%

  

15.60%

Net interest rate spread

  

3.97%

  

4.08%

  

3.94%

Net interest margin

  

4.14%

  

4.23%

  

4.11%

Efficiency ratio (1)

  

62.94%

  

62.79%

  

59.40%
             

(1)

The efficiency ratio excludes amortization of intangibles, equity in losses of real estate limited partnerships, OREO expenses, gain/loss on sales of securities, state franchise taxes, and any significant nonrecurring items.

Note:

As of March 31, 2005, the Bank had off-balance sheet liabilities in the form of standby letters of credit to customers in the amount of $9.1 million.

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