BURLINGTON, Vt., April 20 /PRNewswire-FirstCall/ -- Chittenden Corporation
(NYSE: CHZ) Chairman, President and Chief Executive Officer, Paul A. Perrault,
today announced earnings for the quarter ended March 31, 2005, of $19.1
million or $0.41 per diluted share, compared to $17.5 million or $0.37 per
diluted share a year ago. Chittenden also announced its quarterly dividend of
$0.18 per share, which will be paid on May 13, 2005, to shareholders of record
on April 29, 2005.
FIRST QUARTER 2005 FINANCIAL HIGHLIGHTS
* Total loans increased $348 million from March 31, 2004. The primary
drivers were increases of 18% in the commercial loan portfolio, 11% in
the commercial real estate loan portfolio and 7% in the 1-4 family
residential loan portfolio.
* The Company's deposits increased 5% from March 31, 2004 due to growth
in demand, CMA/money market and jumbo CD accounts.
* The Company's net interest margin for the first quarter of 2005 was
4.30% up thirteen basis points from the similar quarter in 2004. The
increase was primarily related to higher yields on loans, as well as
continued improvement in the Company's earning asset mix.
* Similar to the first quarter of 2004, the Company experienced low net
charge-offs of $295,000 in the first quarter of 2005. As a percentage
of average loans, net charge-offs were 1 basis point in both periods,
compared to 3 basis points in the fourth quarter of last year.
In making the announcement, Perrault said, "I'm pleased with the first
quarter results and the significant progress that was achieved compared with
the first quarter of 2004. EPS growth was more than 10% year over year.
Deposit levels, which in the past have tended to dip at March 31st compared to
year-end, held nicely, and loan growth in the first quarter of 2005 was
similar to the same quarter a year ago. We are well positioned to continue
executing our plan for 2005."
ASSETS
Total loans at March 31, 2005 increased $51 million from the prior year-
end and $348 million from a year-ago. The increases were attributable to
continued growth in the commercial and commercial real estate portfolios and
in 1-4 family residential real estate loans. Consumer loans increased slightly
from the prior year-end and declined from March 31, 2004. The increase in
commercial real estate loans from December 31, 2004 was partially offset by a
reduction in the construction portfolio as commercial customers completed
their projects and rolled them into permanent financing. Residential loans
increased from both periods primarily as a result of higher originations of
hybrid ARM mortgages as well as increased production of private banking loans.
The consumer loan decline of $10 million from March 31, 2004 was driven by
higher than normal prepayments in the indirect auto portfolio.
LIABILITIES
Total deposits increased $24 million from year-end and $229 million from
March 31, 2004. The increase from a year-ago was driven primarily by the
Company's commercial customers and resulted in higher activity in demand,
CMA/money market accounts, and jumbo CDs. Borrowings at March 31, 2005 were
$346 million, compared with $356 million at December 31, 2004 and $312 million
at March 31, 2004. The increase from March 31, 2004 was due to higher dealer
repurchase agreements and short-term borrowings, which were utilized to fund
loan growth.
NET INTEREST INCOME
Net interest income on a tax equivalent basis for the three months ended
March 31, 2005 was $59.4 million, which was essentially flat on a linked
quarter basis and up $4.4 million from the same period a year ago. The
increase in net interest income from the same period a year ago was due to
continued growth in average earning assets as well as a higher net interest
margin. The Company's net interest margin for the first quarter was 4.30%, an
increase of 3 basis points from the fourth quarter of last year and 13 basis
points from the first quarter of 2004. The increase in the net interest margin
primarily related to a higher yield on loans, which was driven by increases in
the prime rate, as well as continued improvement in the Company's asset mix.
The contribution from the loan portfolio increased 3% to 74% of average
earning assets and the yield on the loan portfolio increased 46 basis points
to 5.75% from the similar period of a year ago.
NONINTEREST INCOME
Noninterest income increased $636,000 on a linked quarter basis and
declined $444,000 from the same period a year-ago. The increase from the
fourth quarter of 2004 was due to higher mortgage servicing income and
seasonal increases in insurance commissions, which was partially offset by
declines in investment management and trust income and gains on sales of
loans. Mortgage servicing income increased from both the fourth quarter of
2004 and first quarter in 2004 due to higher impairment recoveries and lower
amortization. The decrease in noninterest income from the same quarter a year
ago was primarily due to lower service charges on deposits, gains on sales of
securities net of losses on prepayment of borrowings, and investment
management and trust fees which were partially offset by increases in mortgage
servicing income and gains on sales of loans.
NONINTEREST EXPENSE
Noninterest expense was $45.4 million for the first quarter of 2005, an
increase of $2.4 million on a linked quarter basis and $838,000 from the same
period a year ago. The increase from the fourth quarter was primarily
attributable to higher employee benefits of $1.2 million, occupancy expense of
$916,000 and an increase of $388,000 in other noninterest expense. The
employee benefit expense increase was driven by higher pension expense, and
the normal seasonal trend in payroll taxes. The increase in occupancy expense
was due to higher utility bills, additional snow removal expenses and higher
property expenses in the New Hampshire franchise. The increase from the
comparable quarter a year ago is primarily a result of higher salaries,
employee benefits and other expense, which was partially offset by lower data
processing expense.
INCOME TAXES
The effective income tax rate for the first quarter of 2005 was 36.4%,
compared with 36.9% for the comparable quarter in 2004. The lower effective
income tax rate from the first quarter of 2004 was primarily attributable to
higher tax credits from qualified low-income housing projects.
CREDIT QUALITY
Net charge-offs as a percentage of average loans were 1 basis point for
the first quarter of 2004, down 2 basis points from the fourth quarter of last
year and flat with the same quarter a year ago. Nonperforming assets as a
percentage of total loans at the end of the first quarter of 2005 were 50
basis points, which was flat from the prior year-end and down 5 basis points
from the similar quarter in 2004. The provision for loan losses was $1.1
million for the first quarter of 2005, compared to $1.8 million for the fourth
quarter of last year and $427,000 in the first quarter of 2004. The provision
at March 31, 2005 declined from the fourth quarter of 2004 due to continued
strong asset quality and slower loan growth. The increase in the provision
from the same period a year ago was a result of higher loan growth. As a
percentage of total loans, the allowance for loan losses was 1.45%, flat from
December 31, 2004.
EARNINGS CONFERENCE CALL
Kirk W. Walters, Executive Vice President and Chief Financial Officer of
Chittenden Corporation, will host a conference call on April 21, 2005 at 10:30
am eastern time to discuss these earnings results. Interested parties may
access the conference call by calling 800-591-6945, passcode 95626419.
International dial-in number is 617-614-4911. 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
April 28, 2005 by calling 888-286-8010 (International dial number is 617-801-
6888), passcode 65236875. 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 for the year ended December
31, 2004. 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.
CHITTENDEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
ASSETS 3/31/05 12/31/04 3/31/04
Cash and Cash Equivalents $146,861 $136,468 $154,178
Securities Available For Sale 1,409,434 1,446,221 1,473,497
FRB / FHLB Stock 19,352 19,243 20,753
Loans Held For Sale 22,131 33,535 32,276
Loans:
Commercial 812,050 801,369 686,304
Municipal 98,128 106,120 92,338
Real Estate:
Residential:
1-4 family 712,133 688,017 666,753
Multi-family 180,632 182,541 182,085
Home equity 297,649 294,656 277,062
Commercial 1,651,247 1,590,457 1,485,031
Construction 133,799 174,283 138,497
Total Real Estate 2,975,460 2,929,954 2,749,428
Consumer 242,239 239,750 252,097
Total Loans 4,127,877 4,077,193 3,780,167
Less:
Allowance for Loan Losses (59,811) (59,031) (57,500)
Net Loans 4,068,066 4,018,162 3,722,667
Accrued Interest Receivable 28,443 28,956 25,582
Other Real Estate Owned 17 109 36
Other Assets 66,729 64,861 51,834
Premises and Equipment, net 72,336 74,271 77,534
Mortgage Servicing Rights 12,074 11,826 10,866
Identified Intangibles 19,648 20,422 21,978
Goodwill 216,136 216,136 216,431
Total Assets $6,081,227 $6,070,210 $5,807,632
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $881,954 $890,561 $848,758
Savings 514,215 519,623 526,625
NOW 898,720 890,701 894,575
CMAs/ Money Market 1,527,753 1,577,474 1,472,377
Certificates of Deposit
less than $100,000 781,111 752,828 780,940
Certificates of Deposit
$100,000 and Over 459,410 407,543 311,067
Total Deposits 5,063,163 5,038,730 4,834,342
Securities Sold Under
Agreements to Repurchase 91,443 76,716 76,051
Other Borrowings 254,418 279,755 236,446
Accrued Expenses and
Other Liabilities 54,721 54,752 61,308
Total Liabilities 5,463,745 5,449,953 5,208,147
Stockholders' Equity:
Common Stock 50,207 50,204 50,196
Surplus 248,864 249,036 247,464
Retained Earnings 395,410 384,679 351,569
Treasury Stock, at cost (68,233) (69,246) (76,058)
Accumulated Other Comprehensive Income:
Unrealized Gains (Losses)
on Securities Available
for Sale (13,747) 672 21,964
Directors Deferred Compensation
to be Settled in Stock 4,996 4,930 4,381
Unearned Portion of
Employee Restricted Stock (15) (18) (31)
Total Stockholders' Equity 617,482 620,257 599,485
Total Liabilities and
Stockholders' Equity $6,081,227 $6,070,210 $5,807,632
CHITTENDEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, except for per share amounts)
For the Three Months Ended
3/31/05 12/31/04 3/31/04
Interest Income:
Loans $58,151 $56,302 $49,254
Investment Securities:
Taxable 15,043 15,269 15,580
Tax-favored 13 14 13
Short-term Investments 5 76 7
Total Interest Income 73,212 71,661 64,854
Interest Expense:
Deposits 11,268 10,300 8,189
Borrowings 2,959 2,167 1,954
Total Interest Expense 14,227 12,467 10,143
Net Interest Income 58,985 59,194 54,711
Provision for Loan Losses 1,075 1,825 427
Net Interest Income
after Provision for Loan Losses 57,910 57,369 54,284
Noninterest Income:
Investment Management and Trust 4,971 5,322 5,296
Service Charges on Deposits 4,041 4,179 4,691
Mortgage Servicing 355 (260) (767)
Gains on Sales of Loans, Net 2,131 2,604 1,901
Gains on Sales of Securities - 107 1,802
Loss on Prepayments of Borrowings - - (1,194)
Credit Card Income, Net 975 1,074 908
Insurance Commissions, Net 2,364 1,223 2,626
Other 2,722 2,674 2,740
Total Noninterest Income 17,559 16,923 18,003
Noninterest Expense:
Salaries 21,676 21,302 20,879
Employee Benefits 6,479 5,281 5,971
Net Occupancy Expense 6,326 5,410 6,026
Data Processing 775 916 2,293
Amortization of Intangibles 774 774 755
Conversion and Restructuring
Charges - 291 152
Other 9,410 9,022 8,526
Total Noninterest Expense 45,440 42,996 44,602
Income Before Income Taxes 30,029 31,296 27,685
Income Tax Expense 10,947 11,268 10,218
Net Income $19,082 $20,028 $17,467
Earnings Per Share, Basic $0.41 $0.43 $0.38
Earnings Per Share, Diluted 0.41 0.43 0.37
Dividends Per Share 0.18 0.18 0.16
CHITTENDEN CORPORATION
SELECTED QUARTERLY FINANCIAL DATA
(Unaudited)
(In thousands, except ratios and per share amounts)
3/31/05 12/31/04 3/31/04
Selected Financial Ratios
Return on Average Equity 12.46% 12.95% 11.97%
Return on Average Assets 1.28% 1.31% 1.21%
Return on Average Tangible
Equity(1) 20.35% 21.25% 20.38%
Return on Average Tangible
Assets(1) 1.36% 1.39% 1.30%
Net Yield on Earning Assets 4.30% 4.27% 4.17%
Efficiency Ratio 58.07% 55.64% 60.34%
Tangible Capital Ratio 6.53% 6.58% 6.48%
Leverage Ratio 8.66% 8.42% 8.28%
Tier 1 Capital Ratio 10.46% 10.44% 10.36%
Total Capital Ratio 11.65% 11.64% 11.61%
Common Share Data
Common Shares Outstanding 46,402 46,342 45,954
Weighted Average Common
Shares Outstanding 46,385 46,293 45,899
Weighted Average Common and
Common Equivalent Shares
Outstanding 46,918 46,960 46,522
Book Value per Share $13.31 $13.38 $13.05
Tangible Book Value per Share $8.23 $8.28 $7.86
Credit Quality Data
Nonperforming Assets
(including OREO) $20,692 $20,024 $20,657
90 days past due and
still accruing 4,543 2,604 3,201
Total $25,235 $22,628 $23,858
Nonperforming Assets to
Loans Plus OREO 0.50% 0.49% 0.55%
Allowance to Loans 1.45% 1.45% 1.52%
Allowance to Nonperforming Loans
(excluding OREO) 289.29% 296.41% 278.85%
Gross Charge-offs $1,154 $2,821 $1,251
Gross Recoveries 859 1,428 860
Net Charge-offs $295 $1,393 $391
Net Charge-offs to Average Loans 0.01% 0.03% 0.01%
QTD Average Balance Sheet Data
Securities $1,450,210 $1,495,302 $1,530,534
Loans, Net 4,057,647 4,000,917 3,701,494
Earning Assets 5,568,124 5,572,226 5,292,868
Total Assets 6,060,179 6,089,616 5,792,012
Deposits 5,000,949 5,128,344 4,808,334
Borrowings 386,613 291,919 339,983
Stockholders' Equity 621,276 615,420 586,788
1. Reconciliation of non-GAAP measurements to GAAP
Net Income (GAAP) $19,082 $20,028 $17,467
Amortization of identified
intangibles, net of tax 503 503 491
Tangible Net Income (A) $19,585 $20,531 $17,958
Average Equity (GAAP) 621,276 615,420 586,788
Average Identified Intangibles 20,155 20,919 22,405
Average Deferred Tax on
Identified Intangibles (5,311) (6,392) (6,392)
Average Goodwill 216,136 216,502 216,431
Average Tangible Equity (B) 390,296 384,391 354,344
Return on Average Tangible
Equity (A) / (B) 20.35% 21.25% 20.38%
Average Assets (GAAP) 6,060,179 6,089,616 5,792,012
Average Identified
Intangibles 20,155 20,919 22,405
Average Deferred Tax on
Identified Intangibles (5,311) (6,392) (6,392)
Average Goodwill 216,136 216,502 216,431
Average Tangible Assets (C) 5,829,199 5,858,587 5,559,568
Return on Average Tangible
Assets (A) / (C) 1.36% 1.39% 1.30%
SOURCE Chittenden Corporation
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Related links:
http://www.chittenden.com
Company News On-Call:
http://www.prnewswire.com/comp/124292.html
CONTACT:
Kirk W. Walters of Chittenden Bank,
+1-802-658-4000, or +1-802-660-1561
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