EX-99 2 merc5-99.htm EXHIBIT 99.1

Exhibit 99.1
 

For Release: August 2, 2005

Contact: Lisa Razo

(802) 865-1838
 

Merchants Bancshares, Inc. Announces 2005 Second Quarter Results
 

SOUTH BURLINGTON, VT - Merchants Bancshares, Inc. (NASDAQ: MBVT), the parent company of Merchants Bank, today announced net income of $3.06 million, or diluted earnings of 48 cents per share, for the quarter ended June 30, 2005. This compares with net income of $2.84 million, or diluted earnings per share of 45 cents for the quarter ended June 30, 2004. The return on average assets was 1.15% and the return on average equity was 18.89% for the second quarter of 2005, compared to 1.15% and 12.96%, respectively, for the second quarter of 2004. Merchants declared a dividend on July 21, 2005, of 27 cents per share payable August 18, 2005, to shareholders of record as of August 4, 2005. For more information on the quarter please refer to Merchants' quarterly Form 10-Q, which will be filed no later than August 3 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 Time on Friday August 5, 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 Friday August 12, 2005. The U.S. replay dial-in number is (800) 475-6701. The replay access code is 750849.
 

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 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 June 30, 2005

(In thousands except share and per share data)
 
 

06/30/05

  

12/31/04

  

06/30/04

  

12/31/03
 

 

 

 

               

Balance Sheets - Period End

              

Total assets

$1,054,435

  

$1,032,405

  

$1,033,186

  

$969,902

Loans

595,176

  

584,332

  

589,108

  

568,997

Allowance for loan losses ("ALL")

7,497

  

7,512

  

7,999

  

7,954

Net loans

587,679

  

576,820

  

581,109

  

561,043

Investment securities

388,733

  

376,547

  

377,564

  

340,337

Other assets

78,023

  

79,038

  

74,513

  

68,522

Deposits

837,942

  

834,164

  

816,756

  

808,083

Short-term borrowings

41,957

  

57,374

  

46,153

  

57,058

Long-term debt

76,594

  

49,757

  

63,280

  

6,618

Junior subordinated debentures issued to

              

  Unconsolidated subsidiary trust

20,619

  

20,619

  

--

  

--

Other liabilities

11,016

  

5,307

  

20,206

  

11,830

Shareholders' equity

66,307

  

65,184

  

86,791

  

86,313

Balance Sheets - Quarter-to-Date Averages

              

Total assets

$1,059,300

  

$1,041,944

  

$   991,802

  

$965,247

Loans

590,400

  

586,268

  

579,975

  

564,421

Allowance for loan losses

7,505

  

7,862

  

8,002

  

8,032

Net loans

582,895

  

578,406

  

571,973

  

556,389

Investment securities, including Federal Home

              

  Loan Bank stock

406,871

  

391,967

  

348,111

  

338,042

Federal funds sold, securities purchased under

             

  agreements to resell, and interest bearing

             

  deposits with banks

55

  

433

  

2,362

  

1,398

Other assets

69,479

  

71,138

  

69,356

  

69,418

Deposits

839,639

  

844,958

  

813,943

  

804,694

Short-term borrowings

47,251

  

45,652

  

41,084

  

57,962

Long-term debt

80,066

  

52,157

  

37,379

  

6,482

Junior subordinated debentures issued to

              

  Unconsolidated subsidiary trust

20,619

  

3,214

  

--

  

--

Other liabilities

7,006

  

14,113

  

11,675

  

10,571

Shareholders' Equity

64,719

  

81,850

  

87,721

  

85,538

Interest earning assets

997,326

  

978,668

  

930,448

  

903,861

Interest bearing liabilities

872,081

  

822,601

  

781,766

  

760,812

Ratios and Supplemental Information

              

Book value per share

$10.53

  

$10.44

  

$13.94

  

$13.93

Tier I leverage ratio

8.19%

  

8.09%

  

8.77%

  

8.70%

Period end common shares outstanding

6,296,640

  

6,243,710

  

6,226,756

  

6,196,053

Credit Quality - Period End

              

Nonperforming loans ("NPLs")

$3,597

  

$3,336

  

$893

  

$2,212

Nonperforming assets ("NPAs")

3,597

  

3,336

  

893

  

2,212

NPLs as a percent of total loans

0.60%

  

0.57%

  

0.15%

  

0.39%

NPAs as a percent of total assets

0.34%

  

0.32%

  

0.09%

  

0.23%

ALL as a percent of NPLs

208%

  

225%

  

896%

  

360%
               

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For the Three Months Ended

  

For the Six Months Ended
 

June 30,

  

June 30,

  

June 30,

  

June 30,
 

2005

  

2004

  

2005

  

2004
 

 

 

 

               

Operating Results

              

Interest income

              

Interest and fees on loans

$  9,030

  

$  8,026 

  

$17,586

  

$16,066 

Interest and dividends on investments

4,255

  

3,479 

  

8,477

  

7,078 

Total interest income

13,285

  

11,505 

  

26,063

  

23,144 

Interest expense

              

Deposits

2,072

  

1,477 

  

3,723

  

3,056 

Short-term borrowings

365

  

118 

  

716

  

322 

Long-term debt

926

  

201 

  

1,688

  

277 

Total interest expense

3,363

  

1,796 

  

6,127

  

3,655 

Net interest income

9,922

  

9,709 

  

19,936

  

19,489 

Provision for loan losses

--

  

-- 

  

--

  

-- 

Net interest income after provision for loan losses

9,922

  

9,709 

  

19,936

  

19,489 

Noninterest income

              

Trust Company income

414

  

390 

  

835

  

768 

Service charges on deposits

1,126

  

1,254 

  

2,202

  

2,401 

Gain (loss) on sale of investments, net

23

  

(67)

  

84

  

(4)

Other noninterest income

740

  

635 

  

1,366

  

1,198 

Total noninterest income

2,303

  

2,212 

  

4,487

  

4,363 

Noninterest expense

              

Salaries and employee benefits

4,016

  

3,827 

  

8,022

  

7,762 

Occupancy and equipment expenses

1,563

  

1,497 

  

3,181

  

3,007 

Legal and professional fees

472

  

540 

  

897

  

963 

Marketing expenses

226

  

304 

  

574

  

686 

Equity in losses of real estate limited partnerships

420

  

431 

  

850

  

844 

Other noninterest expense

1,537

  

1,532 

  

3,096

  

3,046 

Total noninterest expense

8,234

  

8,131 

  

16,620

  

16,308 

Income before income taxes

3,991

  

3,790 

  

7,803

  

7,544 

Income taxes

934

  

948 

  

1,846

  

1,882 

Net income

$3,057

  

$2,842 

  

$5,957

  

$5,662 

Ratios and Supplemental Information

              

Weighted average common shares outstanding

6,316,227

  

6,224,674 

  

6,322,872

  

6,217,467 

Weighted average diluted shares outstanding

6,358,506

  

6,288,573 

  

6,366,141

  

6,284,865 

Basic earnings per common share

$0.48

  

$0.46 

  

$0.94

  

$0.91 

Diluted earnings per common share

0.48

  

0.45 

  

0.94

  

0.90 

Return on average assets

1.15%

  

1.15% 

  

1.13%

  

1.14% 

Return on average shareholders' equity

18.89%

  

12.96% 

  

18.29%

  

12.91% 

Net interest rate spread

3.80%

  

4.05% 

  

3.88%

  

4.06% 

Net interest margin

3.99%

  

4.20% 

  

4.06%

  

4.21% 

Efficiency ratio (1)

61.36%

  

61.63% 

  

62.15%

  

62.27% 
               

(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 June 30, 2005, the Bank had off-balance sheet liabilities in the form of standby letters of credit to customers in the amount of $8.66 million.

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