BURLINGTON, Vt., Jan. 19 /PRNewswire-FirstCall/ -- Chittenden
Corporation (NYSE: CHZ) and Merrill Merchants Bancshares, Inc. (Nasdaq:
MERB) ("Merrill"), announced today that they signed a definitive merger
agreement whereby Chittenden will acquire Merrill and its subsidiary,
Merrill Merchants Bank, for approximately $111.4 million in cash and stock.
Consummation of the agreement is subject to the approval of the
shareholders of Merrill, as well as various regulatory agencies. The
acquisition is expected to close in the second quarter of 2007. Following
the completion of the transaction, Merrill Merchants Bank will operate as a
separate unit of Chittenden Corporation, maintaining its name and senior
management team.
In announcing the agreement, Paul A. Perrault, Chittenden's Chairman,
President and Chief Executive Officer, said, "I am delighted that Merrill
Merchants will join the Chittenden family of banks. Their well-established
history of relationship banking has resulted in strong growth and high
performance, and therefore will blend into our culture and strategies very
nicely. By using Chittenden's broad capabilities and products, they will be
able to deepen their relationships and attract new ones. With a very strong
and experienced management team remaining in place, this is a great
strategic fit for both companies."
Edwin Clift, Chairman and Chief Executive Officer of Merrill Merchants
Bancshares, Inc., commented, "Merrill has accomplished a great deal as an
organization and has operated at a high level of performance. We have known
the management group at Chittenden for a number of years, and in working
together have found that our banking policies and philosophies are very
similar. Chittenden understands community banking and the need to keep
local bankers with authority in place. Our Board of Directors carefully
considered the interests of our shareholders and employees and determined
Chittenden to be an ideal merger partner for us. This transaction is good
news for our communities, customers, and employees."
Under the terms of the merger agreement, shareholders of Merrill can
elect to receive $31.00 per share in cash, with total cash consideration of
approximately $44.57 million, or 1.02 shares of Chittenden common stock for
each share of Merrill stock they own, with total stock consideration of
approximately 2.20 million shares of Chittenden common stock. Elections
will be subject to allocation procedures that are intended to ensure that
60% of the Merrill common stock outstanding immediately prior to
consummation of the merger will be converted to Chittenden common stock.
The transaction is intended to qualify as a reorganization for federal
income tax purposes, and as a result, the shares of Merrill common stock
exchanged for shares of Chittenden common stock are expected to be
transferred on a tax-free exchange basis.
Chittenden was advised by its legal counsel, Goodwin Procter LLP.
Merrill was advised by, Keefe, Bruyette & Woods, Inc., and its legal
counsel was Thacher Proffitt & Wood LLP, Washington, D.C.
Merrill and its subsidiary, Merrill Merchants Bank, are headquartered
in Bangor, Maine. Merrill had total assets of $449 million, $339 million in
loans, deposits of $360 million, and $39 million of stockholders' equity at
December 31, 2006. Merrill presently operates 11 banking offices in central
and eastern Maine.
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 Chittenden's website. Chittenden has prepared an investor
package, which may be requested via e-mail at efortin@chittenden.com or by
calling (802) 660-1412 for a fax copy.
Additional Information about the Merger and Where to Find It
In connection with the proposed merger of Merrill with and into
Chittenden, Chittenden and Merrill intend to file relevant materials with
the Securities and Exchange Commission, including a registration statement
on Form S-4 that will contain a proxy statement/prospectus. INVESTORS ARE
URGED TO READ THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT CHITTENDEN, MERRILL MERCHANTS
BANCSHARES AND THE MERGER. The proxy statement/prospectus and other
relevant materials (when they become available), and any other documents
filed by Chittenden or Merrill with the SEC, may be obtained free of charge
at the SEC's website at http://www.sec.gov. In addition, investors may obtain free
copies of the documents filed with the SEC by Chittenden by directing a
written request to Chittenden Corporation, 2 Burlington Square, Burlington,
Vermont 05402-0820, Attention: General Counsel, and free copies of the
documents filed with the SEC by Merrill by directing a written request to
Merrill Merchants Bancshares, Inc., 201 Main Street, Bangor, Maine 04401,
Attention: Diane Smith.
Chittenden, Merrill and their respective executive officers and
directors may be deemed to be participants in the solicitation of proxies
from the shareholders of Merrill in connection with the merger. Information
about the directors and executive officers of Chittenden and Merrill and
information about any other persons who may be deemed participants in this
transaction will be included in the proxy statement/prospectus. You can
find information about Chittenden's directors and executive officers in the
proxy statement for Chittenden's annual meeting of stockholders filed with
the SEC on March 8, 2006. You can find information about Merrill's
directors and executive officers in the proxy statement for Merrill's 2005
annual meeting of shareholders filed with the SEC on March 13, 2006. You
can obtain free copies of these documents from the SEC, Chittenden or
Merrill using the contact information above.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy any
securities.
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. These
forward- looking statements are intended to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and this statement is included
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, among others: (1) failure of the parties to satisfy the
closing conditions in the merger agreement in a timely manner or at all;
(2) failure of the shareholders of Merrill Merchants Bancshares to approve
the merger agreement; (3) failure to obtain governmental approvals of the
merger, or imposition of adverse regulatory conditions in connection with
such approvals; (4) disruptions to the parties' businesses as a result of
the announcement and pendency of the merger; (5) costs or difficulties
related to the integration of the businesses following the merger; (6)
changes in general, national or regional economic conditions; (7) changes
in loan default and charge-off rates; (8) reductions in deposit levels
necessitating increased borrowings to fund loans and investments; (9)
changes in interest rates; (10) changes in levels of income and expense in
noninterest income and expense related activities; and (11) competition.
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 and Merrill 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.
SOURCE Chittenden Corporation
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Related links:
http://www.chittendencorp.com
http://www.prnewswire.com/comp/124292.html/
CONTACT:
Kirk W. Walters of Chittenden Corporation,
+1-802-660-1561; or Edwin N. Clift or Deborah Jordan,
+1-207-942-4800, both of Merrill Merchants Bancshares, Inc.
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