EX-99 2 ex-991.htm EXHIBIT 99.1

Exhibit 99.1
 

For Release: May 1, 2006

Contact: Lisa Razo

(802) 865-1838
 

Merchants Bancshares, Inc. Announces 2006 First Quarter Results
 

SOUTH BURLINGTON, VT - Merchants Bancshares, Inc. (NASDAQ: MBVT), the parent company of Merchants Bank, today announced net income of $2.72 million, or diluted earnings per share of 43 cents, for the quarter ended March 31, 2006. This compares with net income of $2.90 million, or diluted earnings per share of 46 cents for the quarter ended March 31, 2005. The return on average assets was 1.01% and the return on average equity was 16.47% for the first quarter of 2006, compared to 1.11% and 17.68%, respectively, for the first quarter of 2005. Merchants declared a dividend on April 20, 2006, of 28 cents per share payable May 18, 2006, to shareholders of record as of May 4, 2006. For more information on the quarter please refer to Merchants' quarterly Form 10-Q, which will be filed on or about May 1, 2006, and will be available on the SEC website at www.sec.gov.
 

Mr. Joseph Boutin, Merchants' President and Chief Executive Officer; Ms. Janet Spitler, Merchants' Chief Financial Officer; and Mr. Michael Tuttle, President and Chief Executive Officer of Merchants Bank will host a conference call to discuss these earnings results at 10:00 a.m. Eastern Time on Thursday May 4, 2006. 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 register. A replay will be available until noon on Thursday May 11, 2006. The U.S. replay dial-in telephone number is (800) 475-6701. The international replay dial-in telephone number is (320) 365-3844. The replay access code is 806413.
 

The continuing mission of Merchants Bank is to provide Vermonters with a true community bank. It fulfills this commitment through a branch-based system that includes 35 bank offices and 42 ATMs throughout Vermont, personal bankers dedicated to top-quality customer service, and streamlined products: FreedomLYNX® Banking which consists of Free Checking for Life®, a Money Market Account, Free Online Banking and Bill Pay, Overdraft Coverage, Direct Deposit, a Free Debit Card and Free Automated Phone Banking; TimeLYNX® Certificates of Deposit; HomeLYNX® Home Equity Loans; RealLYNX® Residential Mortgages and CommerceLYNX® Business Banking. 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 mbvt.com. Merchants' stock is traded on the NASDAQ National Market system under the symbol MBVT. Member FDIC. Equal Housing Lender.
 

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

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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 March 31, 2006

(In thousands except share and per share data)
 
 

03/31/06

  

12/31/05

  

03/31/05

  

12/31/04
               

Balance Sheets - Period End

              

Total assets

$1,099,987

  

$1,075,236

  

$1,065,035

  

$1,032,405

Loans

621,874

  

605,926

  

585,750

  

584,332

Allowance for loan losses ("ALL")

6,637

  

7,083

  

7,477

  

7,512

Net loans

615,237

  

598,843

  

578,273

  

576,820

Investment securities

410,353

  

390,460

  

409,266

  

376,547

Other assets

74,397

  

85,933

  

77,496

  

79,038

Deposits

852,447

  

854,576

  

833,333

  

834,164

Short-term borrowings

75,750

  

52,988

  

50,931

  

57,374

Long-term debt

55,188

  

55,764

  

86,878

  

49,757

Securities sold under agreement to repurchase

20,456

  

20,000

  

--

  

--

Junior subordinated debentures issued to

              

  Unconsolidated subsidiary trust

20,619

  

20,619

  

20,619

  

20,619

Other liabilities

10,496

  

4,892

  

9,895

  

5,307

Shareholders' equity

65,031

  

66,397

  

63,379

  

65,184

Balance Sheets - Quarter-to-Date Averages

              

Total assets

$1,081,803

  

$1,059,923

  

$1,044,327

  

$1,041,944

Loans

608,881

  

598,159

  

578,582

  

586,268

Allowance for loan losses

7,109

  

7,101

  

7,518

  

7,862

Net loans

601,772

  

591,058

  

571,064

  

578,406

Investment securities, including Federal Home

              

  Loan Bank stock

411,947

  

396,034

  

403,912

  

391,967

Federal funds sold, securities purchased under agreements

              

  to resell, and interest bearing deposits with banks

228

  

58

  

114

  

433

Other assets

67,856

  

72,773

  

69,237

  

71,138

Deposits

846,620

  

854,591

  

827,463

  

844,958

Short-term borrowings

72,791

  

50,741

  

52,181

  

45,652

Long-term debt

52,399

  

59,365

  

68,750

  

52,157

Securities sold under agreement to repurchase

20,010

  

851

  

--

  

--

Junior subordinated debentures issued to

              

  Unconsolidated subsidiary trust

20,619

  

20,619

  

20,619

  

3,214

Other liabilities

3,279

  

9,250

  

9,727

  

14,113

Shareholders' Equity

66,085

  

64,506

  

65,587

  

81,850

Interest earning assets

1,021,056

  

994,251

  

982,608

  

978,668

Interest bearing liabilities

892,446

  

863,077

  

853,194

  

822,601

Ratios and Supplemental Information

              

Book value per share

$10.33

  

$10.55

  

$10.03

  

$10.44

Tier I leverage ratio

8.44%

  

8.54%

  

8.22%

  

8.09%

Period end common shares outstanding

6,295,286

  

6,290,889

  

6,319,411

  

6,243,710

Credit Quality - Period End

              

Nonperforming loans ("NPLs")

$1,876

  

$2,364

  

$3,720

  

$3,336

Nonperforming assets ("NPAs")

2,188

  

2,364

  

3,720

  

3,336

NPLs as a percent of total loans

0.30%

  

0.39%

  

0.64%

  

0.57%

NPAs as a percent of total assets

0.20%

  

0.22%

  

0.35%

  

0.32%

ALL as a percent of NPLs

354%

  

300%

  

201%

  

225%

ALL as a percent of total loans

1.07%

  

1.17%

  

1.28%

  

1.29%

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Merchants Bancshares, Inc.

Financial Highlights

For the period ended March 31, 2006

(In thousands except share and per share data)
 
 

For the Three Months Ended
 

March 31,

  

March 31,

  

December 31,
 

2006

  

2005

  

2005

Operating Results

        

Interest income

        

Interest and fees on loans

$  9,905 

  

$  8,556 

  

$  9,667 

Interest and dividends on investments

4,630 

  

4,222 

  

4,438 

Total interest income

14,535 

  

12,778 

  

14,105 

Interest expense

          

Deposits

3,093 

  

1,651 

  

2,819 

Short-term borrowings

1,061 

  

351 

  

541 

Long-term debt

752 

  

762 

  

783 

Total interest expense

4,906 

  

2,764 

  

4,143 

Net interest income

9,629 

  

10,014 

  

9,962 

Provision for loan losses

-- 

  

-- 

  

-- 

Net interest income after provision for loan losses

9,629 

  

10,014 

  

9,962 

Noninterest income

          

Trust Company income

458 

  

421 

  

413 

Service charges on deposits

1,113 

  

1,076 

  

1,110 

Gain (loss) on sale of investments, net

-- 

  

61 

  

(51)

Equity in losses of real estate limited partnerships

(423)

  

(430)

  

(421)

Other noninterest income

718 

  

626 

  

691 

Total noninterest income

1,866 

  

1,754 

  

1,742 

Noninterest expense

          

Salaries and employee benefits

4,068 

  

4,006 

  

3,808 

Occupancy and equipment expenses

1,498 

  

1,618 

  

1,432 

Legal and professional fees

537 

  

425 

  

600 

Marketing expenses

340 

  

348 

  

452 

Other noninterest expense

1,499 

  

1,559 

  

1,558 

Total noninterest expense

7,942 

  

7,956 

  

7,850 

Income before income taxes

3,553 

  

3,812 

  

3,854 

Income taxes

831 

  

912 

  

925 

Net income

$  2,722 

  

$  2,900 

  

$  2,929 

Ratios and Supplemental Information

        

Weighted average common shares outstanding

6,302,153 

  

6,320,850 

  

6,306,330 

Weighted average diluted shares outstanding

6,328,067 

  

6,365,110 

  

6,344,066 

Basic earnings per common share

$  0.43 

  

$  0.46 

  

$  0.46 

Diluted earnings per common share

0.43 

  

0.46 

  

0.46 

Return on average assets

1.01%

  

1.11%

  

1.11%

Return on average shareholders' equity

16.47%

  

17.68%

  

18.16%

Net interest rate spread

3.55%

  

3.97%

  

3.73%

Net interest margin

3.83%

  

4.14%

  

3.98%

Efficiency ratio (1)

63.91%

  

62.94%

  

62.11%
           

(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, 2006, the Bank had off-balance sheet liabilities in the form of standby letters of credit to customers in the amount of $5.95 million.

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