BURLINGTON, Vt., July 20 /PRNewswire-FirstCall/ -- Chittenden
Corporation (NYSE:CHZ) Chairman, President and Chief Executive
Officer, Paul A. Perrault, today announced earnings for the quarter
ended June 30, 2006 of $21.0 million, or $0.45 per diluted share,
compared to $19.5 million or $0.41 per diluted share from the same
period a year ago. For the first six months of 2006, earnings were
$41.2 million or $0.87 per diluted share, compared to $38.5 million
or $0.82 per diluted share for the same period of a year ago.
Chittenden also announced its quarterly dividend of $0.20 per
share, which will be paid on August 11, 2006, to shareholders of
record on July 28, 2006. SECOND QUARTER 2006 FINANCIAL HIGHLIGHTS *
Earnings per share were 10% higher than the same period in 2005
driven by higher revenues and lower income taxes. * Total loans
increased 8% from June 30, 2005 with strong growth in several
commercial categories. * Noninterest income increased 8% from the
same period in 2005 with solid growth from wealth management and
business services. * Noninterest expenses were well controlled and
the efficiency ratio improved by 3.0% to 56.87%. In making the
announcement, Perrault said, "Despite intense competition, our
banks continue to make progress, as our approach to local banking
with broad capabilities continues to be attractive to our markets.
I am particularly proud of how our bankers are bringing true value
to our customers." In addition, Perrault announced that the Company
had completed the buyback of one million shares of common stock,
which was authorized by the Board of Directors on October 19, 2005.
Perrault also announced that the Board of Directors approved a new
share repurchase plan on July 19, 2006 for one million shares of
the Corporation's common stock. The repurchase of the common stock
may be done in negotiated transactions or open market purchases
over the next two years. ASSETS Total loans increased $320 million
from the second quarter of 2005 to $4.6 billion at June 30, 2006.
The increases were attributable to solid growth in the commercial,
construction and residential real estate portfolios. The growth in
commercial and commercial real estate was particularly strong in
Vermont and New Hampshire. Municipal loans experienced their
historical seasonal trend, declining 48% from March 31, 2006, as
June 30th coincides with the end of the fiscal year for most
municipalities. LIABILITIES Total deposits increased $173 million
from June 30, 2005 and decreased $66 million from March 31, 2006.
On a linked quarter basis the Company experienced its normal
seasonal declines in municipal deposits, which was partially offset
by higher demand deposits and CDs from our commercial customers.
Borrowings at June 30, 2006 were $424 million, compared with $354
million at June 30, 2005. The increase was primarily due to higher
customer and wholesale repurchase agreements, which were utilized
to fund loan growth. NET INTEREST INCOME Net interest income on a
tax equivalent basis for the three months ended June 30, 2006 was
$62.8 million, which was up $2.3 million from the same period a
year ago. The Company's net interest margin for the second quarter
was 4.22%, an increase of 2 basis points from the first quarter of
2006 and a decrease of 7 basis points from the same period a year
ago. The increase in net interest margin from the first quarter of
2006 was attributable to higher interest recoveries on former
non-performing loans. The decline from the same period a year ago
was due to higher funding costs, which were primarily driven by the
Federal Reserve increasing short-term interest rates as well as
strong competition for deposits. NONINTEREST INCOME Noninterest
income for the second quarter of 2006 increased $1.4 million or 8%
from the same period a year ago. The increase from 2005 was driven
by higher investment management and trust fees, service charges on
deposits, mortgage servicing, and other noninterest income.
Investment management and trust fees increased $319,000 primarily
due to higher brokerage and annuity sales at Chittenden Securities,
LLC. Service charges on deposits increased due to higher overdraft
and cash management fees. The increase in mortgage servicing income
was attributable to lower MSR amortization and increased impairment
recoveries driven by higher long-term interest rates. Other
noninterest income increased $379,000 due to higher gains on the
sale of assets. NONINTEREST EXPENSE Noninterest expenses for the
second quarter of 2006 were $47.6 million, an increase of $1.4
million from the same period in 2005. The increase from the prior
year was attributable to a one-time gain of $1.5 million which
reduced employee benefit expense in 2005. This gain resulted from
the Company's decision to change the delivery mechanism for its
employees' pension benefits. The Company's efficiency ratio
improved by 3% from the similar quarter in 2005 to 56.87% for the
second quarter of 2006. INCOME TAXES The effective income tax rate
was 32.7% for the second quarter and 33.4% year to date compared
with 34.3% and 34.5% respectively for the same periods in 2005. The
lower effective income tax rates were primarily attributable to
higher levels of tax-exempt municipal loan interest and tax credits
from qualified low-income housing projects. CREDIT QUALITY The
provision for credit losses was $1.8 million for the second quarter
of 2006 compared to $1.4 million for the same quarter of 2005.
Higher net charge-offs and continued loan growth primarily drove
the increase in the provision for credit losses from the comparable
period in 2005. Non-performing assets as a percentage of total
loans at June 30, 2006 were 54 basis points, which was flat with
the second quarter of 2005. Net charge-offs as a percentage of
average loans were 2 basis points for the second quarter of 2006,
up from 1 basis point for the same quarter a year ago. The increase
in net charge-offs primarily relates to one commercial finance loan
that was placed on non-accrual status in the first quarter of 2006.
As a percentage of total loans, the allowance for credit losses was
1.38%, flat with year-end, and down from 1.43% at June 30, 2005.
EARNINGS CONFERENCE CALL Kirk W. Walters, Executive Vice President
and Chief Financial Officer of Chittenden Corporation, will host a
conference call on July 20, 2006 at 10:30 a.m. eastern time to
discuss these earnings results. The Company may answer one or more
questions concerning business and financial developments, trends
and other business. Some of the responses to these questions may
contain information that has not been previously disclosed.
Interested parties may access the conference call by calling
866-578-5801, passcode 95332695. International dial-in number is
617-213-8058. Participants are asked to call in a few minutes prior
to the call to allow time for registration. Internet access to the
call is also available (listen only) by clicking "webcasts" under
the Investor Resources section of the Company's website at
http://www.chittendencorp.com/. A replay of the call will be
available through July 27, 2006 by calling 888-286-8010
(International dial number is 617-801-6888), passcode 98460587. A
replay of the call will also be available on the Company's website
at the address above for an extended period of time. Chittenden is
a bank holding company headquartered in Burlington, Vermont.
Through its subsidiary banks(1), the Company offers a broad range
of financial products and services to customers throughout Northern
New England and Massachusetts, including deposit accounts and
services; commercial and consumer loans; insurance; and investment
and trust services to businesses, individuals, and the public
sector. Chittenden Corporation's news releases, including earnings
announcements, are available on the Company's website. This press
release contains statements that may be considered forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Chittenden intends for these forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995 and is including this statement for purposes of
complying with these safe harbor provisions. These forward-looking
statements are based on current plans and expectations, which are
subject to a number of risk factors and uncertainties that could
cause future results to differ materially from historical
performance or future expectations. These differences may be the
result of various factors, including changes in general, national
or regional economic conditions, changes in loan default and
charge-off rates, reductions in deposit levels necessitating
increased borrowing to fund loans and investments, changes in
interest rates, changes in levels of income and expense in
noninterest income and expense related activities, competition and
other risk factors. For further information on these risk factors
and uncertainties, please see Chittenden's filings with the
Securities and Exchange Commission, including Chittenden's Annual
Report on Form 10-K for the year ended December 31, 2005.
Chittenden undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or other changes. (1) Chittenden's
subsidiaries are Chittenden Trust Company, The Bank of Western
Massachusetts, Flagship Bank and Trust Company, Maine Bank &
Trust Company, and Ocean National Bank. Chittenden Trust Company
also operates under the names Chittenden Bank, CHZ Services Group,
Mortgage Service Center, and it owns Chittenden Insurance Group,
LLC, and Chittenden Securities, LLC. CHITTENDEN CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) Assets:
6/30/06 3/31/06 12/31/05 6/30/05 Cash and Cash Equivalents $172,567
$142,887 $180,707 $176,425 Securities Available For Sale 1,288,390
1,344,016 1,383,909 1,363,180 FRB / FHLB Stock 18,577 19,352 19,352
19,352 Loans Held For Sale 18,882 19,319 19,737 22,611 Loans:
Commercial & Industrial (C&I) 851,692 836,986 848,420
831,537 Municipal 90,206 172,443 160,357 79,070 Multi-Family
205,443 195,809 196,590 185,920 Commercial Real Estate 1,884,716
1,827,096 1,778,202 1,736,665 Construction 218,123 212,824 192,165
124,648 Residential Real Estate 750,031 731,798 737,462 733,472
Home Equity Credit Lines 319,606 316,355 316,465 307,866 Consumer
254,839 254,719 257,829 255,239 Total Loans 4,574,656 4,548,030
4,487,490 4,254,417 Less: Allowance for Loan Losses (62,070)
(61,464) (60,822) (60,805) Net Loans 4,512,586 4,486,566 4,426,668
4,193,612 Accrued Interest Receivable 31,138 32,772 32,621 29,689
Other Assets 102,079 93,673 93,377 87,492 Premises and Equipment,
net 69,503 68,568 69,731 71,632 Mortgage Servicing Rights 14,529
13,966 13,741 12,073 Identified Intangibles 16,326 16,991 17,655
18,983 Goodwill 216,038 216,038 216,038 216,136 Total Assets
$6,460,615 $6,454,148 $6,473,536 $6,211,185 LIABILITIES AND
STOCKHOLDERS' EQUITY Liabilities: Deposits: Demand $965,794
$929,718 $973,752 $934,234 Savings 474,883 489,944 489,734 502,525
NOW 895,817 906,934 861,000 908,148 CMAs/ Money Market 1,441,573
1,584,777 1,749,878 1,418,634 Certificates of Deposit less than
$100,000 878,181 853,645 814,289 811,389 Certificates of Deposit
$100,000 and Over 661,322 618,319 625,682 569,505 Total Deposits
5,317,570 5,383,337 5,514,335 5,144,435 Securities Sold Under
Agreements to Repurchase 138,773 53,238 56,315 56,775 Other
Borrowings 285,497 288,482 171,008 296,903 Accrued Expenses and
Other Liabilities 63,299 59,295 60,488 64,466 Total Liabilities
5,805,139 5,784,352 5,802,146 5,562,579 Stockholders' Equity:
Common Stock 50,235 50,235 50,220 50,210 Surplus 273,723 272,696
276,278 273,533 Retained Earnings 442,456 430,811 419,057 392,312
Treasury Stock, at cost (85,678) (64,189) (60,801) (67,657)
Accumulated Other Comprehensive Income (30,924) (25,216) (18,968)
(4,978) Directors' Deferred Compensation to be Settled in Stock
5,664 5,459 5,604 5,197 Unearned Portion of Employee Restricted
Stock - - - (11) Total Stockholders' Equity 655,476 669,796 671,390
648,606 Total Liabilities and Stockholders' Equity $6,460,615
$6,454,148 $6,473,536 $6,211,185 Prior year amounts reflect the
modified retrospective application of SFAS 123-R "Accounting for
Stock-Based Compensation." CHITTENDEN CORPORATION CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (In Thousands, except for per
share amounts) For the Three Months For the Six Months Ended June
30, Ended June 30, 2006 2005 2006 2005 Interest Income: Loans
$78,547 $62,786 $151,812 $120,937 Investments 14,120 14,829 28,814
29,890 Total Interest Income 92,667 77,615 180,626 150,827 Interest
Expense: Deposits 25,715 14,193 48,780 25,461 Borrowings 4,900
3,342 8,798 6,301 Total Interest Expense 30,615 17,535 57,578
31,762 Net Interest Income 62,052 60,080 123,048 119,065 Provision
for Credit Losses 1,750 1,400 3,283 2,475 Net Interest Income after
Provision for Credit Losses 60,302 58,680 119,765 116,590
Noninterest Income: Investment Management and Trust 5,322 5,003
10,475 9,974 Service Charges on Deposits 4,358 4,093 8,287 8,134
Mortgage Servicing 657 209 1,320 564 Gains on Sales of Loans, Net
1,903 2,003 3,273 4,134 Credit Card Income, Net 1,269 1,131 2,461
2,106 Insurance Commissions, Net 1,429 1,526 3,475 3,890 Other
3,590 3,211 6,824 5,933 Total Noninterest Income 18,528 17,176
36,115 34,735 Noninterest Expense: Salaries 23,789 23,911 46,706
45,587 Employee Benefits 5,598 4,238 11,350 10,717 Net Occupancy
5,780 6,024 11,930 12,350 Data Processing 982 810 1,953 1,585
Amortization of Intangibles 664 664 1,329 1,438 Other 10,823 10,583
20,768 20,765 Total Noninterest Expense 47,636 46,230 94,036 92,442
Income Before Income Taxes 31,194 29,626 61,844 58,883 Income Tax
Expense 10,185 10,166 20,637 20,341 Net Income $21,009 $19,460
$41,207 $38,542 Basic Earnings Per Share $0.45 $0.42 $0.88 $0.83
Diluted Earnings Per Share 0.45 0.41 0.87 0.82 Dividends Per Share
0.20 0.18 0.38 0.36 Prior year amounts reflect the modified
retrospective application of SFAS 123-R "Accounting for Stock-Based
Compensation." CHITTENDEN CORPORATION SELECTED QUARTERLY FINANCIAL
DATA (Unaudited) (In thousands, except ratios and per share
amounts) 6/30/06 3/31/06 12/31/05 6/30/05 Selected Financial Ratios
Return on Average Tangible Equity (1) 19.87% 18.92% 20.47% 19.58%
Return on Average Equity 12.75% 12.21% 13.11% 12.24% Return on
Average Tangible Assets (1) 1.38% 1.35% 1.43% 1.35% Return on
Average Assets 1.30% 1.27% 1.35% 1.27% Net Yield on Earning Assets
4.22% 4.20% 4.30% 4.29% Efficiency Ratio (1) 56.87% 56.61% 54.37%
59.87% Tangible Capital Ratio 6.79% 7.02% 7.01% 6.92% Leverage
Ratio 9.04% 9.38% 9.21% 9.10% Tier 1 Capital Ratio 11.29% 11.61%
11.23% 10.73% Total Capital Ratio 12.49% 12.82% 12.40% 11.92%
Common Share Data Common Shares Outstanding 45,978 46,748 46,829
46,437 Weighted Average Shares Outstanding 46,423 46,804 46,690
46,414 Weighted Average and Common Equivalent Shares Outstanding
46,903 47,401 47,291 46,901 Book Value per Share $14.26 $14.33
$14.34 $13.97 Tangible Book Value per Share (1) $9.20 $9.34 $9.35
$8.90 Credit Quality Data Nonperforming Assets (NPAs) $24,727
$24,844 $16,194 $23,150 90 days Past Due and Still Accruing 2,283
3,323 3,038 1,981 Total $27,010 $28,167 $19,232 $25,131 NPAs to
Loans Plus OREO 0.54% 0.55% 0.36% 0.54% Allowance for Loan Losses
$62,070 $61,464 $60,822 $60,805 Reserve for Unfunded Commitments
(2) 1,200 1,200 1,200 - Allowance for Credit Losses (ACL) $63,270
$62,664 $62,022 $60,805 ACL to Loans 1.38% 1.38% 1.38% 1.43% ACL to
Loans (excluding Municipals) 1.41% 1.43% 1.43% 1.46% ACL to
Nonperforming Loans 260.13% 257.81% 392.06% 262.71% Gross
Charge-offs $1,872 $1,753 $1,840 $1,313 Gross Recoveries 728 862
1,040 907 Net Charge-offs $1,144 $891 $800 $406 Net Charge-offs to
Average Loans 0.02% 0.02% 0.02% 0.01% QTD Average Balance Sheet
Data Securities $1,333,444 $1,391,413 $1,378,688 $1,409,045 Loans,
Net 4,552,727 4,455,403 4,408,205 4,174,491 Earning Assets
5,948,463 5,915,366 5,895,121 5,644,833 Total Assets 6,462,457
6,430,410 6,418,971 6,151,863 Deposits 5,372,367 5,377,674
5,454,388 5,085,064 Borrowings 367,521 321,073 246,660 367,617
Stockholders' Equity 661,020 671,058 660,353 637,904 Prior year
amounts reflect the modified retrospective application of SFAS
123-R "Accounting for Stock-Based Compensation." 1. Reconciliation
of non-GAAP measurements to GAAP 6/30/06 3/31/06 12/30/05 6/30/05
Net Income (GAAP) $21,009 $20,198 $21,813 $19,460 Amortization of
core deposit intangible, net of tax 431 432 432 431 Tangible Net
Income(A) $21,440 $20,630 $22,245 $19,891 Average Stockholders'
Equity (GAAP) $661,020 $671,058 $660,353 $637,904 Average Core
Deposit Intangible 16,659 17,323 17,992 19,417 Average Deferred Tax
on CDI (4,435) (4,610) (4,785) (5,136) Average Goodwill 216,038
216,038 216,103 216,136 Average Tangible Equity (B) $432,758
$442,307 $431,043 $407,487 Return on Average Tangible Equity (A) /
(B) 19.87% 18.92% 20.47% 19.58% Average Assets (GAAP) $6,462,457
$6,430,410 $6,418,971 $6,151,864 Average Core Deposit Intangible
16,659 17,323 17,992 19,417 Average Deferred Tax on CDI (4,435)
(4,610) (4,785) (5,136) Average Goodwill 216,038 216,038 216,103
216,136 Average Tangible Assets (C) $6,234,195 $6,201,659
$6,189,661 $5,921,447 Return on Average Tangible Assets (A) / (C)
1.38% 1.35% 1.43% 1.35% Efficiency Ratio: is computed by dividing
total noninterest expense (less oreo expense, amortization expense,
franchise tax and any nonrecurring items) by the sum of net
interest income on a tax equivalent basis and total noninterest
income (exclusive of gains and losses from securities, and
nonrecurring items). The Company uses this non-GAAP measure, which
is used widely in the banking industry, to provide important
information regarding its operational efficiency, e.g.
($47,636-$3-$664-$722) / ($62,799+$18,528) = 56.87%. Tangible book
value per share: is computed by subtracting goodwill and identified
intangibles from equity, and dividing the resultant number by
common shares outstanding, e.g. ($655,476-$16,326-$216,038) /
45,978= $9.20. While the Company's management uses non-GAAP
measures for operational and investment decisions and believes that
these measures are among several useful measures for understanding
its operating results and financial condition, these measures
should not be construed as a substitute for GAAP measures. Non-GAAP
measures should be read and used in conjunction with the Company's
reported GAAP operating results and financial information. 2. The
reserve for unfunded commitments is included in other liabilities
on the accompanying consolidated balance sheet. DATASOURCE:
Chittenden Corporation CONTACT: Kirk W. Walters of Chittenden
Corporation, +1-802-660-1561 Web site:
http://www.chittendencorp.com/ Company News On-Call:
http://www.prnewswire.com/comp/124292.html
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