BURLINGTON, Vt., Jan. 20 /PRNewswire-FirstCall/ -- Chittenden Corporation
(NYSE: CHZ) Chairman, President and Chief Executive Officer, Paul A. Perrault,
today announced earnings for the year ended December 31, 2004 of $75.1 million
or $1.61 per diluted share, compared to $74.8 million or $1.66 per diluted
share a year ago. For the fourth quarter of 2004, net income was $20.0 million
or $0.43 per diluted share, compared to $19.7 million or $0.43 per diluted
share earned in the fourth quarter of 2003. Chittenden also announced its
quarterly dividend of $0.18 per share. The dividend will be paid on February
11, 2005, to shareholders of record on January 28, 2005.
In making the announcement, Perrault said, "We accomplished many important
things internally in 2004, including the core data processing systems
conversion and the merger of Granite Bank into Ocean National Bank. At the
same time significant progress was made externally, as evidenced by double
digit growth in both commercial and commercial real estate loans. I look
forward to putting these developments to the advantage of our shareholders,
customers, and employees in 2005."
Total loans increased $97 million from September 30, 2004 and $352 million
from December 31, 2003. Both the quarter to date (on an annualized basis) and
the year over year increases were approximately 9.5%. The increase in both
periods was primarily driven by growth in the Company's commercial (22%
increase year over year) and commercial real estate (11% increase year over
year) loan portfolios. In addition, financings for commercial customers also
influenced the Company's construction loan portfolio growth, which increased
$33 million from year-end 2003 and $30 million from September 30, 2004.
Consumer loans declined from both the prior year-end and on a linked quarter
basis. This decrease was primarily due to runoff in the Company's discontinued
indirect auto lease portfolio. Runoff from the prior year in the 1-4 family
residential real estate portfolio was more than offset by growth in home
equity lines of credit.
Total deposits increased $69 million from a year ago and declined $54
million from the third quarter. The decline from the prior quarter was due to
the Company's normal seasonal trends, driven primarily by municipal and
commercial customers. The increase from the prior year-end was primarily
attributable to higher levels of deposits from our commercial customers in our
Vermont and New Hampshire franchises. Borrowings increased from both the third
quarter as well as from the prior year-end due to higher levels of short-term
borrowings, which resulted from the seasonal declines in deposits and the
strong loan growth in the fourth quarter.
The Company's net interest margin for the fourth quarter was 4.27%,
compared with 4.20% for the third quarter of 2004 and 4.14% for the same
period in 2003. For 2004 the net interest margin was 4.21% compared with 4.12%
for 2003. The increase in net interest margin primarily related to higher
yields on loans due to increases in the prime rate as well as continued
improvement in the Company's asset mix.
Net charge-offs as a percentage of average loans were 3 basis points in
the fourth quarter and 7 basis points for the year ended December 31, 2004,
compared to 8 basis points and 16 basis points for the respective periods in
2003. Net charge-offs on a year-to-date basis totaled $2.8 million compared
with $5.8 million in 2003. Nonperforming assets were $20.0 million at December
31, 2004, down $1.5 million from September 30, 2004. As a percentage of total
loans this represented 49 basis points, down 5 basis points from the third
quarter and up from the unusually low level in the fourth quarter of 2003 of
39 basis points. The provision for loan losses was $4.4 million in 2004
compared to $7.2 million in 2003. Continued lower levels of net charge-offs,
and strong asset quality drove the provision for 2004. As a percentage of
total loans, the allowance for loan losses was 1.45%, down from 1.47% at
September 30, 2004, primarily as a result of continued loan growth.
Noninterest income for the fourth quarter of 2004 declined $6.0 million
from the same quarter of 2003. The primary drivers of the decline were lower
securities gains, mortgage banking revenues and retail investment income.
Gains on sales of securities were $107,000 in the fourth quarter of 2004,
compared with $3.0 million in 2003. Securities gains in the fourth quarter of
2003 were substantially offset by $916,000 in losses on the prepayment of
borrowings and $2.2 million in conversion and restructuring charges. Mortgage
banking revenues declined $2.5 million from the fourth quarter of 2004 due to
a 50% decline in loan sales volumes. Retail investment income declined
$449,000 primarily due to lower annuity sales at Chittenden Securities, Inc.
Noninterest income for the year ended December 31, 2004 was $73.4 million,
a decline of $23.6 million from the prior year. Lower levels of gains on sales
of securities and mortgage loans, net of lower losses on prepayments of
borrowings, accounted for all of the variance. Excluding these items,
noninterest income was $1.6 million higher in 2004 than in 2003, driven
primarily by higher levels of investment management income, which offset lower
levels of retail investment income. Also included in the 2004 other income
amount was $1.3 million in gains on sales of two branches.
Noninterest expenses were $43.0 million for the fourth quarter of 2004
compared with $48.1 million for the same period in 2003. Conversion and
restructuring charges in the fourth quarter of 2004 were $291,000, a decline
of $1.9 million from the similar quarter a year ago. The 2003 restructuring
charges primarily related to $1.8 million for the consolidation of 11 branches
and the closure of 30 offsite ATMs. Data processing expense declined $1.5
million, as a result of the Company's core data processing conversion in the
second quarter of 2004. Salaries were approximately $1.0 million lower than
the year ago level and other noninterest expenses declined $719,000.
In 2004 noninterest expenses were $15 million lower than in 2003,
primarily driven by $6.7 million in reduced conversion and restructuring
charges. An additional $4.8 million was due to reduced salary expenses, driven
by lower staffing and reduced levels of incentive compensation. Lower levels
of data processing expenses also accounted for $3.2 million of the decline.
Increased employee benefits costs, driven by higher medical and dental
benefits of $699,000, were offset by reduced levels of occupancy expenses of
$587,000 and other noninterest expenses of $1.4 million.
The effective income tax rate for 2004 was 36.0% for the fourth quarter
and 36.4% year to date compared with 34.8% and 35.8% for the respective
periods in 2003. The higher effective income tax rate was primarily
attributable to increased taxable income in New Hampshire, which has a higher
statutory tax rate than other states in which the Company has operations.
The return on average equity was 12.70% for 2004, compared with 13.90% for
a year ago. The decrease from 2003 primarily resulted from higher levels of
average equity due to the Granite acquisition and retention of earnings. The
return on average assets for year ended December 31, 2004 was 1.27%, a
decrease of 2 basis points from 2003.
Kirk W. Walters, Executive Vice President and Chief Financial Officer of
Chittenden Corporation, will host a conference call on January 20, 2005 at
10:30 am eastern time to discuss these earnings results. Interested parties
may access the conference call by calling 800-901-5217, passcode 56712003.
International dial-in number is 617-786-2964. 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 27, 2005 by calling 888-286-8010 (International dial number is 617-
801-6888), passcode 27736802. A replay of the call will also be available on
the Company's website at the address above for an extended period of time. The
Company may answer one or more questions concerning business and financial
developments and trends and other business. Some of the responses to these
questions may contain information that has not been previously disclosed.
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 individuals,
businesses, 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 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 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/A for the year ended
December 31, 2003. 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 Bank, The Bank of Western
Massachusetts, Flagship Bank and Trust Company, Maine Bank & Trust Company,
and Ocean National Bank. Chittenden Bank also operates under the name Mortgage
Service Center, and it owns Chittenden Insurance Group, and Chittenden
Securities, Inc.
CHITTENDEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
ASSETS 12/31/04 9/30/04 6/30/04 3/31/04 12/31/03
Cash and Cash
Equivalents $136,468 $165,191 $170,940 $154,178 $174,939
Securities
Available For
Sale 1,446,221 1,458,149 1,412,206 1,473,497 1,588,151
FRB and FHLB
Stock 19,243 19,243 12,240 20,753 20,753
Loans Held For
Sale 33,535 35,723 49,497 32,276 25,262
Loans:
Commercial 801,369 770,933 740,410 686,304 658,615
Municipal 106,120 105,781 66,533 92,338 87,080
Real Estate:
Residential:
1-4 family 688,017 685,714 667,676 666,753 700,671
Multi-family 182,541 181,622 189,589 182,085 176,478
Home equity 294,656 287,479 276,640 277,062 270,959
Commercial 1,590,457 1,558,221 1,505,880 1,485,031 1,430,945
Construction 174,283 143,871 129,901 138,497 140,801
Total Real
Estate 2,929,954 2,856,907 2,769,686 2,749,428 2,719,854
Consumer 239,750 246,889 249,208 252,097 259,135
Total Loans 4,077,193 3,980,510 3,825,837 3,780,167 3,724,684
Less: Allowance
for Loan
Losses (59,031) (58,598) (57,969) (57,500) (57,464)
Net Loans 4,018,162 3,921,912 3,767,868 3,722,667 3,667,220
Accrued Interest
Receivable 28,956 26,607 27,376 25,582 29,124
Other Real
Estate Owned 109 987 47 36 100
Other Assets 64,861 66,069 71,534 57,095 71,536
Premises and
Equipment,
net 74,271 73,927 72,805 72,273 72,130
Mortgage Servicing
Rights 11,826 12,119 12,562 10,866 12,265
Identified
Intangibles 20,422 21,196 21,972 21,978 22,733
Goodwill 216,136 216,697 216,697 216,431 216,431
Total
Assets $6,070,210 $6,017,820 $5,835,744 $5,807,632 $5,900,644
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $890,561 $907,396 $891,244 $848,758 $898,920
Savings 519,623 534,286 541,138 526,625 517,789
NOW 890,701 903,307 912,175 894,575 899,018
CMAs/ Money
Market 1,577,474 1,603,059 1,491,522 1,472,377 1,604,138
Certificates
of Deposit
less than
$100,000 752,828 755,494 779,492 780,940 789,066
Certificates
of Deposit
$100,000
and Over 407,543 388,935 298,721 311,067 260,960
Total
Deposits 5,038,730 5,092,477 4,914,292 4,834,342 4,969,891
Securities Sold
Under Agreements
to Repurchase 76,716 71,056 75,016 76,051 78,980
Other
Borrowings 279,755 182,450 204,122 236,446 208,454
Accrued Expenses
and Other
Liabilities 54,752 60,769 54,452 61,308 63,368
Total
Liabilities 5,449,953 5,406,752 5,247,882 5,208,147 5,320,693
Stockholders' Equity:
Common Stock 50,204 50,202 50,202 50,196 50,178
Surplus 249,036 248,828 248,241 247,464 246,938
Retained
Earnings 384,679 372,980 361,623 351,569 341,441
Treasury Stock,
at cost (69,246) (71,017) (72,967) (76,058) (78,579)
Accumulated Other Comprehensive Income:
Unrealized Gains
(Losses) on
Securities
Available
for Sale 672 5,377 (3,772) 21,964 15,595
Directors Deferred
Compensation
to be Settled
in Stock 4,930 4,720 4,562 4,381 4,413
Unearned Portion
of Employee
Restricted
Stock (18) (22) (27) (31) (35)
Total Stockholders'
Equity 620,257 611,068 587,862 599,485 579,951
Total Liabilities
and Stockholders'
Equity $6,070,210 $6,017,820 $5,835,744 $5,807,632 $5,900,644
CHITTENDEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, except for per share amounts)
For the Three Months For the Year
Ended December 31, Ended December 31,
2004 2003 2004 2003
Interest Income:
Loans $56,302 $49,878 $209,107 $199,436
Investment Securities:
Taxable 15,269 17,176 60,413 71,551
Tax-favored 14 13 53 162
Short-term Investments 76 71 194 293
Total Interest Income 71,661 67,138 269,767 271,442
Interest Expense:
Deposits 10,300 8,507 36,439 41,172
Borrowings 2,167 2,277 7,830 12,207
Total Interest Expense 12,467 10,784 44,269 53,379
Net Interest Income 59,194 56,354 225,498 218,063
Provision for Loan
Losses 1,825 1,025 4,377 7,175
Net Interest Income
after Provision
for Loan Losses 57,369 55,329 221,121 210,888
Noninterest Income:
Investment Management
and Trust 4,648 4,321 18,383 15,956
Service Charges
on Deposits 4,179 4,686 17,886 18,396
Mortgage Servicing (260) 592 159 281
Gains on Sales of Loans,
Net 2,604 4,272 9,661 21,765
Gains on Sales
of Securities, Net 107 3,031 2,335 17,380
Loss on Prepayments
of Borrowings - (916) (1,194) (3,070)
Credit Card Income, Net 1,074 1,057 4,150 4,079
Insurance Commissions,
Net 1,223 1,501 6,966 6,686
Retail Investment Services 674 1,123 3,239 4,621
Other 2,674 3,327 11,820 10,937
Total Noninterest
Income 16,923 22,994 73,405 97,031
Noninterest Expense:
Salaries 21,302 22,248 84,619 89,431
Employee Benefits 5,281 5,157 21,958 20,578
Net Occupancy Expense 5,410 5,603 22,669 23,256
Data Processing 916 2,404 6,188 9,384
Amortization
of Intangibles 774 755 3,077 2,748
Conversion and
Restructuring Charges 291 2,169 2,266 8,969
Other 9,022 9,741 35,595 37,005
Total Noninterest
Expense 42,996 48,077 176,372 191,371
Income Before Income
Taxes 31,296 30,246 118,154 116,548
Income Tax Expense 11,268 10,528 43,027 41,749
Net Income $20,028 $19,718 $75,127 $74,799
Earnings Per Share,
Basic $0.43 $0.43 $1.63 $1.67
Earnings Per Share,
Diluted 0.43 0.43 1.61 1.66
Dividends Per Share 0.18 0.16 0.70 0.64
Return on Average
Equity 12.95% 13.66% 12.70% 13.90%
Return on Average Assets 1.31% 1.31% 1.27% 1.29%
CHITTENDEN CORPORATION
SELECTED QUARTERLY FINANCIAL DATA
(Unaudited)
(In thousands, except ratios and per share amounts)
Selected Financial Ratios
12/31/04 9/30/04 6/30/04 3/31/04 12/31/03
Return on Average
Equity 12.95% 13.11% 12.40% 11.97% 13.66%
Return on Average
Assets 1.31% 1.31% 1.26% 1.21% 1.31%
Return on Average
Tangible
Equity(1) 21.25% 22.13% 21.01% 20.38% 23.63%
Return on Average
Tangible
Assets(1) 1.39% 1.40% 1.35% 1.30% 1.40%
Net Yield on
Earning Assets 4.27% 4.20% 4.18% 4.17% 4.14%
Efficiency Ratio 55.64% 56.87% 58.05% 60.34% 59.58%
Tangible Capital
Ratio 6.58% 6.46% 6.24% 6.48% 6.02%
Leverage Ratio 8.42% 8.39% 8.22% 8.28% 7.79%
Tier 1 Capital
Ratio 10.44% 10.51% 10.46% 10.36% 10.07%
Total Capital
Ratio 11.64% 11.76% 11.73% 11.61% 11.32%
Common Share Data
Common Shares
Outstanding 46,342 46,241 46,135 45,954 45,796
Weighted Avg Common
Shares
Outstanding 46,293 46,188 46,045 45,899 45,729
Weighted Avg Common and Common
Equivalent Shares
Outstanding 46,960 46,863 46,556 46,522 46,390
Book Value
per Share $13.38 $13.21 $12.74 $13.05 $12.66
Tangible Book
Value per Share $8.28 $8.07 $7.57 $7.86 $7.44
Credit Quality Data
Nonperforming Assets
(including OREO) $20,024 $21,565 $20,624 $20,657 $14,431
90 days past due
and still
accruing 2,604 3,140 3,777 3,201 4,029
Total $22,628 $24,705 $24,401 $23,858 $18,460
Nonperforming
Assets
to Loans Plus
OREO 0.49% 0.54% 0.54% 0.55% 0.39%
Allowance to Loans 1.45% 1.47% 1.52% 1.52% 1.54%
Allowance
to Nonperforming
Loans
(excluding OREO) 296.41% 284.76% 281.70% 278.85% 400.99%
Gross Charge-offs $2,821 $1,654 $1,433 $1,251 $4,176
Gross Recoveries 1,428 1,258 802 860 1,444
Net Charge-offs $1,393 $396 $631 $391 $2,732
Net Charge-offs
to Average Loans 0.03% 0.01% 0.02% 0.01% 0.08%
QTD Average Balance Sheet Data
Securities $1,495,302 $1,440,938 $1,447,419 $1,530,534 $1,647,313
Loans, Net 4,000,917 3,892,431 3,777,039 3,701,494 3,697,490
Earning Assets 5,572,226 5,414,750 5,294,057 5,292,868 5,446,055
Total Assets 6,089,616 5,930,272 5,799,583 5,792,012 5,960,054
Deposits 5,128,344 5,017,991 4,868,682 4,808,334 5,033,498
Borrowings 291,919 267,323 290,730 339,983 298,478
Stockholders'
Equity 615,420 591,137 589,067 586,788 572,512
(1). Reconciliation of non-GAAP measurements to GAAP
Net Income
(GAAP) $20,028 $19,478 $18,154 $17,467 $19,718
Amortization
of identified
intangibles,
net of tax 503 504 502 491 491
Tangible Net
Income (A) $20,531 $19,982 $18,656 $17,958 $20,209
Average Equity
(GAAP) 615,420 591,137 589,067 586,788 572,512
Average
Identified
Intangibles 20,919 21,695 21,960 22,405 23,148
Average Deferred
Tax on Identified
Intangibles (6,392) (6,392) (6,392) (6,392) (6,392)
Average
Goodwill 216,502 216,697 216,439 216,431 216,431
Average Tangible
Equity (B) 384,391 359,137 357,060 354,344 339,325
Return on Average
Tangible
Equity (A)/(B) 21.25% 22.13% 21.01% 20.38% 23.63%
Average Assets
(GAAP) 6,089,616 5,930,272 5,799,583 5,792,012 5,960,054
Average
Identified
Intangibles 20,919 21,695 21,960 22,405 23,148
Average Deferred
Tax on Identified
Intangibles (6,392) (6,392) (6,392) (6,392) (6,392)
Average Goodwill 216,502 216,697 216,439 216,431 216,431
Average Tangible
Assets (C) 5,858,587 5,698,272 5,567,576 5,559,568 5,726,867
Return on Average
Tangible
Assets (A)/(C) 1.39% 1.40% 1.35% 1.30% 1.40%
SOURCE Chittenden Corporation
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CONTACT:
Kirk W. Walters of Chittenden,
+1-802-660-1561
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