BURLINGTON, Vt., Jan. 18 /PRNewswire-FirstCall/ -- Chittenden
Corporation (NYSE:CHZ) Chairman, President and Chief Executive
Officer, Paul A. Perrault, today announced higher earnings for the
year ended December 31, 2006 of $85.5 million or $1.83 per diluted
share, compared to $82.0 million or $1.74 per diluted share a year
ago. For the fourth quarter of 2006, net income was $22.5 million
or $0.48 per diluted share, compared to $21.8 million or $0.46 per
diluted share earned in the fourth quarter of 2005. In making the
announcement, Perrault said, "I am pleased to report to
shareholders that your Company's discipline and strong strategic
implementation continues to deliver solid results despite the
challenging environment." Chittenden also announced its quarterly
dividend of $0.20 per share, which will be paid on February 9,
2007, to shareholders of record on January 26, 2007. Perrault also
announced that the Board of Directors approved a new share
repurchase plan on January 17, 2007 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. FOURTH QUARTER 2006 FINANCIAL HIGHLIGHTS *
Commercial loans increased 7% from the end of 2005. * Average
deposits for 2006 increased 4% from 2005 with solid growth in
CMA/money market deposits of over 4%. * Net interest margin held
steady for 2006 at 4.24% and the fourth quarter increased 6 basis
points to 4.29%. * Nonperforming assets declined 22% from the third
quarter of 2006. * The efficiency ratio improved to 54.6% for the
fourth quarter of 2006. * The Company repurchased 762,500 common
shares in the fourth quarter and the tangible capital ratio
remained over 7.00% at year end. ASSETS The Company's securities
portfolio declined from both the prior year end and on a linked
quarter basis to $1.1 billion. The decrease in securities was
primarily utilized to fund loan growth and reduce borrowings. Total
loans increased by $210 million from the end of last year to $4.7
billion at December 31, 2006. The Company experienced solid loan
growth in 2006 throughout all of its markets with particularly
strong increases in its multifamily real estate, commercial real
estate and construction portfolios. LIABILITIES Total deposits
decreased $20 million from September 30, 2006 reflecting the start
of the normal seasonal decline in deposits, which is primarily
driven by the operating cycles of the Company's municipal and
commercial customers. Borrowings at December 31, 2006, were $210
million, a decrease of $17 million from the end of last year due to
lower FHLB advances. NET INTEREST INCOME Tax-equivalent net
interest income for the fourth quarter of 2006 was $64.0 million,
compared to $63.7 million for the same quarter of 2005 and $63.5
million for the third quarter of 2006. The increase in net interest
income from the same period a year ago was due to higher average
earning assets, which was partially offset by a slightly lower net
interest margin. The Company's net interest margin for the fourth
quarter was 4.29%, an increase of 6 basis points from the third
quarter of 2006 and a decline of 1 basis point from the same period
a year ago. The increase in net interest margin from the third
quarter of 2006 was attributable to higher interest recoveries on
former non-performing loans. The decline in the net interest margin
from the fourth quarter of 2005 was due to an increase in funding
costs, which was partially offset by an increase in the yield on
interest earning assets. The increase in funding costs was driven
by strong competition for both commercial and consumer deposits as
well as increases in the federal funds rate in 2005 and 2006.
NONINTEREST INCOME Noninterest income was $17.9 million for the
fourth quarter of 2006, compared with $16.1 million for the third
quarter and $17.4 million for the same period a year ago. The
increase in noninterest income was primarily attributable to higher
investment management and trust fees and other noninterest income,
which was partially offset by lower gains on the sales of mortgage
loans. The increase in other noninterest income from the fourth
quarter of 2005 was due to $1.1 million received in relation to the
Company's interest in a mortgage insurance captive, which was
partially offset by higher amortization on investments in low
income housing limited partnerships. NONINTEREST EXPENSE
Noninterest expense was $46.3 million for the fourth quarter of
2006, compared to $46.0 million for the same quarter of 2005. The
increase from the fourth quarter a year ago is primarily a result
of higher salary expense which related to increased share-based
compensation costs and new branch openings in 2006. The Company
recognized $785,000 of share-based compensation in the fourth
quarter of 2006 as compared to $4,000 in the same quarter a year
ago. INCOME TAXES The effective income tax rates for 2006 were
31.5% for the fourth quarter and 32.1% for the full year compared
with 34.2% and 34.5%, respectively, for the same periods in 2005.
The lower effective income tax rate was attributable to higher
low-income housing and historic rehabilitation tax credits. CREDIT
QUALITY The provision for credit losses was $2.0 million for the
fourth quarter of 2006 compared to $1.4 million for the same
quarter of 2005. The increase in the provision for credit losses
from the comparable period in 2005 was primarily due to higher net
charge offs and nonperforming loans. Net charge- offs as a
percentage of average loans were 4 basis points for the fourth
quarter of 2006, up from 2 basis points 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. The allowance for credit losses as a
percentage of total loans excluding municipal loans was 1.39% at
December 31, 2006 compared to 1.43% for the fourth quarter of 2005.
EARNINGS CONFERENCE CALL Kirk W. Walters, Executive Vice President
and Chief Financial Officer of Chittenden Corporation, will host a
conference call on January 18, 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
800-561-2718, passcode 37851780. International dial-in number is
617-614-3525. 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 January 25, 2007 by calling 888-286-8010
(International dial number is 617-801-6888), passcode 51014444. 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, Massachusetts and Connecticut, 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 borrowings 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, Chittenden Services
Group, Chittenden Mortgage Services, and it owns Chittenden
Insurance Group, LLC, and Chittenden Securities, LLC. CHITTENDEN
CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands)
Assets: 12/31/06 9/30/06 6/30/06 3/31/06 12/31/05 Cash and Cash
Equivalents $199,358 $145,393 $172,567 $142,887 $180,707 Securities
Available For Sale 1,137,352 1,231,369 1,288,390 1,344,016
1,383,909 FRB and FHLB Stock 13,403 16,124 18,577 19,352 19,352
Loans Held For Sale 17,354 21,646 18,882 19,319 19,737 Loans:
Commercial & Industrial (C&I) 853,839 854,475 851,692
836,986 848,420 Municipal 141,522 144,152 90,206 172,443 160,357
Multi-Family 216,049 213,153 205,443 195,809 196,590 Commercial
Real Estate 1,942,685 1,933,279 1,884,716 1,827,096 1,778,202
Construction 232,000 211,187 218,123 212,824 192,165 Residential
Real Estate 751,450 749,106 750,031 731,798 737,462 Home Equity
Credit Lines 322,124 325,814 319,606 316,355 316,465 Consumer
237,541 246,394 254,839 254,719 257,829 Total Loans 4,697,210
4,677,560 4,574,656 4,548,030 4,487,490 Less: Allowance for Loan
Losses (62,160) (62,153) (62,070) (61,464) (60,822) Net Loans
4,635,050 4,615,407 4,512,586 4,486,566 4,426,668 Accrued Interest
Receivable 33,123 32,393 31,138 32,772 32,621 Other Assets 83,938
89,759 102,079 93,673 93,377 Premises and Equipment 67,036 67,952
69,503 68,568 69,731 Mortgage Servicing Rights 14,155 14,347 14,529
13,966 13,741 Identified Intangibles 14,996 15,661 16,326 16,991
17,655 Goodwill 216,038 216,038 216,038 216,038 216,038 Total
Assets $6,431,803 $6,466,089 $6,460,615 $6,454,148 $6,473,536
LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Demands
$966,758 $971,378 $965,794 $929,718 $973,752 Savings 468,294
481,380 474,883 489,944 489,734 NOWs 861,435 866,134 895,817
906,934 861,000 CMAs / Money Markets 1,655,349 1,658,319 1,441,573
1,584,777 1,749,878 Certificates of Deposit Less than $100,000
848,814 858,834 878,181 853,645 814,289 Certificates of Deposit
$100,000 and Over 678,243 663,086 661,322 618,319 625,682 Total
Deposits 5,478,893 5,499,131 5,317,570 5,383,337 5,514,335
Securities Sold Under Agreements to Repurchase 73,611 87,112
138,773 53,238 56,315 Other Borrowings 136,409 135,975 285,497
288,482 171,008 Accrued Expenses and Other Liabilities 71,804
63,162 63,299 59,295 60,488 Total Liabilities 5,760,717 5,785,380
5,805,139 5,784,352 5,802,146 Stockholders' Equity: Common Stock
50,235 50,235 50,235 50,235 50,220 Surplus 276,034 274,834 273,723
272,696 276,278 Retained Earnings 468,331 454,985 442,456 430,811
419,057 Treasury Stock, at cost (105,666) (85,613) (85,678)
(64,189) (60,801) Accumulated Other Comprehensive Income (24,008)
(19,470) (30,924) (25,216) (18,968) Directors' Deferred
Compensation to be Settled in Stock 6,160 5,738 5,664 5,459 5,604
Total Stockholders' Equity 671,086 680,709 655,476 669,796 671,390
Total Liabilities and Stockholders' Equity $6,431,803 $6,466,089
$6,460,615 $6,454,148 $6,473,536 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 Twelve Months Ended
December 31, Ended December 31, 2006 2005 2006 2005 Interest
Income: Loans $84,752 $71,834 $319,307 $261,359 Investments 13,052
14,960 55,405 58,883 Total Interest Income 97,804 86,794 374,712
320,242 Interest Expense: Deposits 30,905 20,904 108,553 63,926
Borrowings 3,670 2,857 17,157 12,003 Total Interest Expense 34,575
23,761 125,710 75,929 Net Interest Income 63,229 63,033 249,002
244,313 Provision for Credit Losses 1,967 1,354 6,920 5,154 Net
Interest Income after Provision for Credit Losses 61,262 61,679
242,082 239,159 Noninterest Income: Investment Management and Trust
5,585 5,047 21,293 20,017 Service Charges on Deposits 4,164 3,926
16,728 16,113 Mortgage Servicing 404 607 2,106 1,829 Gains on Sales
of Loans 1,397 2,301 6,294 9,021 Credit Card Income 1,270 1,193
5,107 4,536 Insurance Commissions 1,055 1,134 5,805 6,365 Other
4,062 3,243 12,856 12,083 Total Noninterest Income 17,937 17,451
70,189 69,964 Noninterest Expense: Salaries 23,311 21,659 93,217
89,496 Employee Benefits 5,168 5,717 22,155 22,218 Net Occupancy
5,789 5,900 23,424 24,094 Data Processing 1,092 951 4,079 3,457
Amortization of Intangibles 665 665 2,659 2,768 Other 10,288 11,097
40,833 41,808 Total Noninterest Expense 46,313 45,989 186,367
183,841 Income Before Income Taxes 32,886 33,141 125,904 125,282
Income Tax Expense 10,350 11,328 40,436 43,243 Net Income $22,536
$21,813 $85,468 $82,039 Basic Earnings Per Share $0.50 $0.46 $1.85
$1.76 Diluted Earnings Per Share 0.48 0.46 1.83 1.74 Dividends Per
Share 0.20 0.18 0.78 0.72 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) 12/31/06 9/30/06 6/30/06 3/31/06 12/31/05 Selected
Financial Ratios Return on Average Tangible Equity (1) 20.25%
20.20% 19.87% 18.92% 20.47% Return on Average Equity 13.20% 13.00%
12.75% 12.21% 13.11% Return on Average Tangible Assets (1) 1.47%
1.41% 1.38% 1.35% 1.43% Return on Average Assets 1.39% 1.33% 1.30%
1.27% 1.35% Net Yield on Earning Assets 4.29% 4.23% 4.22% 4.20%
4.30% Efficiency Ratio (1) 54.56% 55.91% 56.87% 56.61% 54.37%
Tangible Capital Ratio 7.10% 7.20% 6.79% 7.02% 7.01% Leverage Ratio
9.24% 9.24% 9.04% 9.38% 9.21% Tier 1 Capital Ratio 11.56% 11.59%
11.29% 11.61% 11.23% Total Capital Ratio 12.78% 12.80% 12.49%
12.82% 12.40% Common Share Data Common Shares Outstanding 45,360
45,994 45,978 46,748 46,829 Weighted Average Shares Outstanding
45,745 45,982 46,423 46,804 46,690 Weighted Average and Common
Equivalent Shares Outstanding 46,388 46,504 46,903 47,401 47,291
Book Value per Share $14.79 $14.80 $14.26 $14.33 $14.34 Tangible
Book Value per Share (1) $9.70 $9.76 $9.20 $9.34 $9.35 Credit
Quality Data Nonperforming Assets (NPAs) $20,358 $26,089 $24,727
$24,844 $16,194 90 days Past Due and Still Accruing 3,352 3,196
2,283 3,323 3,038 NPAs to Loans Plus OREO 0.43% 0.56% 0.54% 0.55%
0.36% Allowance for Loan Losses $62,160 $62,153 $62,070 $61,464
$60,822 Reserve for Unfunded Commitments (2) 1,200 1,200 1,200
1,200 1,200 Allowance for Credit Losses (ACL) $63,360 $63,353
$63,270 $62,664 $62,022 ACL to Loans 1.35% 1.35% 1.38% 1.38% 1.38%
ACL to Loans (excluding Municipals) 1.39% 1.40% 1.41% 1.43% 1.43%
ACL to Nonperforming Loans 315.32% 248.90% 260.13% 257.81% 392.06%
Charge-offs $3,070 $2,093 $1,871 $1,753 $1,840 Recoveries 1,110 506
728 862 1,040 Net Charge-offs $1,960 $1,587 $1,143 $891 $800 Net
Charge-offs to Average Loans 0.04% 0.03% 0.03% 0.02% 0.02% QTD
Average Balance Sheet Data Securities $1,201,734 $1,269,907
$1,333,444 $1,391,413 $1,378,688 Loans, Net 4,632,538 4,626,194
4,552,727 4,455,403 4,408,205 Earning Assets 5,926,319 5,959,599
5,948,463 5,915,366 5,895,121 Total Assets 6,426,533 6,482,127
6,462,457 6,430,410 6,418,971 Deposits 5,434,889 5,442,894
5,372,367 5,377,674 5,454,388 Borrowings 249,344 312,430 367,521
321,073 246,660 Stockholders' Equity 677,244 662,964 661,020
671,058 660,353 Prior year amounts reflect the modified
retrospective application of SFAS 123-R "Accounting for Stock-Based
Compensation." 1. Reconciliation of non-GAAP measurements 12/31/06
9/30/06 6/30/06 3/31/06 12/30/05 Net Income (GAAP) $22,536 $21,725
$21,009 $20,198 $21,813 Amortization of Core Deposit Intangible,
net of tax 432 432 431 432 432 Tangible Net Income (A) $22,968
22,157 $21,440 $20,630 $22,245 Average Stockholders' Equity (GAAP)
$677,244 $662,964 $661,020 $671,058 $660,353 Average Core Deposit
Intangible (CDI) 15,328 15,996 16,659 17,323 17,992 Average
Deferred Tax on CDI (4,168) (4,345) (4,435) (4,610) (4,785) Average
Goodwill 216,038 216,038 216,038 216,038 216,103 Average Tangible
Equity (B) $450,046 $435,275 $432,758 $442,307 $431,043 Return on
Average Tangible Equity (A) / (B) 20.25% 20.20% 19.87% 18.92%
20.47% Average Assets (GAAP) $6,426,533 $6,482,127 $6,462,457
$6,430,410 $6,418,971 Average CDI 15,328 15,996 16,659 17,323
17,992 Average Deferred Tax on CDI (4,168) (4,345) (4,435) (4,610)
(4,785) Average Goodwill 216,038 216,038 216,038 216,038 216,103
Average Tangible Assets (C) $6,199,335 $6,254,438 $6,234,195
$6,201,659 $6,189,661 Return on Average Tangible Assets (A) / (C)
1.47% 1.41% 1.38% 1.35% 1.43% 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). This non-GAAP measure is used widely in the
banking industry to provide important information regarding
operational efficiency, e.g. ($46,313-$98-$665-$852) /
($64,001+$17,937- 10) = 54.56%. Tangible book value per share: is
computed by subtracting goodwill and identified intangibles from
equity, and dividing the resulting number by common shares
outstanding, e.g. ($671,086-$216,038-$14,996) / 45,360= $9.70.
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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