Merchants Bancshares, Inc. (NASDAQ: MBVT), the parent company of Merchants Bank, today announced net income of $3.63 million and $6.73 million, or diluted earnings per share of $0.58 and $1.08, for the quarter and six months ended June 30, 2011, respectively. This compares with net income of $4.59 million and $8.42 million, or diluted earnings per share of $0.74 and $1.37, for the quarter and six months ended June 30, 2010, respectively.Merchants previously announced the declaration of a dividend of $0.28 per share, payable August 18, 2011, to shareholders of record as of August 4, 2011. The return on average assets was 0.98 percent and 0.91 percent for the quarter and six months ended June 30, 2011 compared to 1.29 percent and 1.19 percent for the same periods in 2010. The return on average equity was 14.20 percent and 13.38 percent for the quarter and six months end ed June 30, 2011 compared to 19.48 percent and 18.10 percent for the same periods in 2010.”The second quarter demonstrated significant improvement compared to the first quarter of this year. We saw healthy increases in loans and our net interest margin. At this point we believe we are on track to post loan growth for the year that will meet or exceed 10 percent. Although we are trailing 2010’s record results we believe we are in line to report another very solid year,” commented Michael R. Tuttle, President and Chief Executive Officer.Taxable equivalent net interest income was $12.95 million and $25.11 million for the quarter and six months ended June 30, 2011, respectively, compared to $12.90 million and $25.32 million for the same periods in 2010. Our taxable equivalent net interest margin decreased 19 basis points to 3.62% for the second quarter of 2011 compared to 3.81% for the same period in 2010, and decreased 24 basis points to 3.53% for the six months ended June 30, 2011 compared to 3.77% for the same period in 2010. The margin for the second quarter of 2011 increased by 25 basis points when compared to the fourth quarter of 2010, and increased 17 basis points from the first quarter of 2011.Merchants recorded a $250 thousand provision for credit losses during the second quarter of 2011, compared to no provision in the second quarter of 2010. Our provision for credit losses for the first six months of 2011 was $250 thousand compared to $600 thousand for the first six months of 2010. Our non-performing asset totals decreased to $3.44 million at June 30, 2011 from $4.30 million at December 31, 2010 and $8.78 million at June 30, 2010.Merchants quarterly average loans for the second quarter of 2011 were $944.81 million compared to $916.38 million for the first quarter of 2011 and $905.05 million for the fourth quarter of 2010. Ending balances at June 30, 2011 were $943.35 million, $32.56 million higher than balances at December 31, 2010. During the second quarter, growth in average monthly loan balances was strong with average monthly loan balances for April 2011 at $931.64 million, increasing to $943.84 million for May, and $958.99 million in June. Growth in commercial loans reflects new customers and expansion of existing relationships combined with increased utilization of credit lines by existing customers. Seasonal fluctuations in municipal cash flows reduced June 30, 2011 loan balances by almost $26 million. Municipal loan balances increased to $82.72 million at July 1, 2011 from $37.93 million at June 30, 2011. Total loans at July 1, 2011 were $987.03 million.Total deposits at June 30, 2011 were $1.10 billion, slightly higher than balances at December 31, 2010. Although deposit growth from the end of last year to the end of the second quarter was minimal, the composition of the deposit base has shifted away from interest bearing deposits and into demand deposits. Demand deposits grew $19.73 million to $161.14 million at June 30, 2011 from $141.41 million at December 31, 2010. Approximately $10 million of that growth is a result of a shift in our retail cash rewards checking product from interest bearing to non-interest bearing. Securities sold under agreement to repurchase (“repos”) decreased by $71.70 million to $160.49 million at June 30, 2011 compared to December 31, 2010, primarily a result of seasonal fluctuations concentrated in municipal cash flows.Merchants investment portfolio totaled $405.53 million at June 30, 2011, a decrease of $61.23 million from the December 31, 2010 ending balance of $466.76 million. We are working to reduce our exposure to premium write off in the investment portfolio and have sold $77.03 million in collateralized mortgage obligations for a total net gain of $127 thousand during 2011. Proceeds from the sales have funded our strong loan growth, and have replaced reductions in repo balances.Total noninterest income decreased to $2.56 million and $4.65 million for the quarter and six months ended June 30, 2011, respectively, compared to $3.16 million and $6.07 million for the same periods in 2010. Excluding net gains (losses) on security sales and other than temporary impairment losses, noninterest income decreased $229 thousand to $2.42 million for the second quarter of this year compared to $2.65 million for the same period in 2010 and decreased $407 thousand to $4.53 million for the first six months of 2011 compared to the first six months of 2010. This decrease is primarily a result of reductions in overdraft fee revenue attributable to legislative changes that went into effect on August 15, 2010. Trust division income continued to grow during 2011 and increased to $632 thousand and $1.26 million for the quarter and six months ended June 30, 2011, respectively, compared to $533 thousand and $1.05 million for the same periods in 2010. Trust division assets und er management have grown to $488.85 million at June 30, 2011 from $460.42 million at December 31, 2010 and $388.24 million at June 30, 2010. Other categories of noninterest income were generally flat compared to 2010.Total noninterest expense was $10.21 million and $20.32 million for the quarter and six months ended June 30, 2011, respectively, compared to $9.62 million and $19.09 million for the same periods in 2010. There were several factors that combined to produce the changes. Salaries and wages and employee benefits were slightly higher for the quarter and six months ended June 30, 2011 compared to the same periods in 2010, primarily a result of normal salary increases. Occupancy and Equipment expenses were $1.76 million and $3.59 million for the quarter and six months ended June 30, 2011 compared to $1.62 million and $3.23 million for the same periods in 2010. This increase is primarily a result of depreciation related to significant bank-wide investments in telecommunication and computer equipment. We anticipate that these investments will provide us with additional operating efficiencies and cost savings. FDIC insurance expense for the second quarter of 2011 was $194 thousand com pared to $340 thousand for the same period in 2010, a result of the new deposit insurance assessment rates effective April 1, 2011. We booked expense recoveries and gains related to the sale of other real estate owned (“OREO”) properties totaling $318 thousand during the first quarter of 2010. This gain resulted in a negative OREO expense during the quarter and six months ended June 30, 2010 of $(196) thousand and $(390) thousand, respectively, compared to expenses of $65 thousand and $81 thousand for the quarter and six months ended June 30, 2011.Michael R. Tuttle, Merchants’ President and Chief Executive Officer, Janet P. Spitler, Merchants’ Chief Financial Officer and Geoffrey R. Hesslink, Executive Vice President and Senior Lender of Merchants will host a conference call to discuss these earnings results at 10:00 a.m. Eastern Time on Wednesday, July 27, 2011. Interested parties may participate in the conference call by dialing U.S. number (800) 230-1059; the title of the call is Merchants Bancshares, Inc. Earnings Call. Participants are asked to call a few minutes prior to register. A replay will be available until noon on Wednesday, August 3, 2011. The U.S. replay dial-in telephone number is (800) 475-6701. The international replay telephone number is (320) 365-3844. The replay access code for both replay telephone numbers is 200985.Vermont Matters. Merchants Bank strives to fulfill its role as the state’s leading independent community bank through a wide range of initiatives. The bank supports organizations throughout Vermont in addressing essential needs, sustaining community programs, providing small business and job start capital, funding financial literacy education and delivering enrichment through local sports activities.Merchants Bank was established in 1849 in Burlington, Vermont. Its continuing mission is to provide Vermonters with a statewide community bank that combines a strong technology platform with a genuine appreciation for local markets. Merchants Bank delivers this commitment through a branch-based system that includes: 34 community bank offices and 43 ATMs throughout Vermont; local branch presidents and personal bankers dedicated to high-quality customer service; free online banking, phone banking, and electronic bill payment services; high-value depositing programs that feature Cash Rewards Checking, Rewards Checking for Business, business cash management, money market accounts, health savings accounts, certificates of deposit, Flexible CD, IRAs, and overdraft assurance; feature-rich loan programs including mortgages, home equity credit, vehicle loans, personal and small business loans and lines of credit; and merchant card processing. Merchants Bank offers a strong set of comm ercial and government banking solutions, delivered by experienced banking officers in markets throughout the state; these teams provide customized financing for medium-to-large companies, non-profits, cities, towns, and school districts. Merchants Trust Company, a division of Merchants Bank, provides investment management, financial planning and trustee services. Please visit www.mbvt.com(link is external) for access to Merchants Bank information, programs, and services. Merchants’ stock is traded on the NASDAQ National Market system under the symbol MBVT. Member FDIC. Equal Housing Lender.Non-GAAP Financial Measure. In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. Merchants’ management believes that the supplemental non-GAAP information, which consists of the tangible capital ratio, is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements, which are based on certain assumptions and describe Merchants’ future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. Merchants’ actual results could differ materially from those projec ted in the forward-looking statements as a result of, among others, general, national, regional or local economic conditions which are less favorable than anticipated, including continued global recession, impacting the performance of Merchants’ investment portfolio, quality of credits or the overall demand for services; changes in loan default and charge-off rates which could affect the allowance for credit losses; declines in the equity and financial markets; reductions in deposit levels which could necessitate increased and/or higher cost borrowing to fund loans and investments; declines in mortgage loan refinancing, equity loan and line of credit activity which could reduce net interest and non-interest income; changes in the domestic interest rate environment and inflation; changes in the carrying value of investment securities and other assets; misalignment of Merchants’ interest-bearing assets and liabilities; increases in loan repayment rates affecting interest incom e and the value of mortgage servicing rights; changing business, banking, or regulatory conditions or policies, or new legislation affecting the financial services industry, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, that could lead to changes in the competitive balance among financial institutions, restrictions on bank activities, changes in costs (including deposit insurance premiums), increased regulatory scrutiny, declines in consumer confidence in depository institutions, or changes in the secondary market for bank loan and other products; and changes in accounting rules, federal and state laws, IRS regulations, and other regulations and policies governing financial holding companies and their subsidiaries which may impact Merchants’ ability to take appropriate action to protect Merchants’ financial interests in certain loan situations.You should not place undue reliance on Merchants’ forward-looking statements, and are cautioned that forward-looking statements are inherently uncertain. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, which are included in more detail in Merchants’ Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Merchants does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. SOUTH BURLINGTON, VT–(Marketwire – July 25, 2011) –
DEFENSIVE FRAILTIES LONDON (AP): By reeling off a sixth successive English Premier League victory on Saturday, Manchester City underlined just how formidable they are under Pep Guardiola. But Jose Mourinho might finally have found the way to stop Manchester United being eclipsed by City this season – drop Wayne Rooney. Having fended off mounting criticism of his captain, Mourinho left Rooney on the bench, and the reward was a 4-1 victory over champions Leicester. It ensured City, with a 3-1 victory at Swansea, couldn’t pull further away from United, who are six points behind their neighbours. The most impressive performance of the day came from Arsenal, who marked the 20th anniversary of Arsene Wenger’s appointment by ruthlessly beating Chelsea 3-0. The day’s biggest scorers were Liverpool, who routed Hull 5-1, while Tottenham are second after winning 2-1 at Middlesbrough. Man United’s goals all came in a sparkling first-half display. Juan Mata – Rooney’s replacement in the No. 10 role – Marcus Rashford, and Paul Pogba scored in a rampant five-minute spell. United took the lead through Chris Smalling, the captain in place of Rooney. United ended a run of two straight league defeats, but Leicester have lost three of its opening six games, as many as in their 38-game title-winning campaign last season. Back from suspension and immediately back in the goals, Sergio Aguero scored twice to take his tally to 11 in six games. Raheem Sterling grabbed the other goal for City and the only blot was the sight of playmaker Kevin De Bruyne limping off late on with an apparent hamstring injury. Chelsea’s defensive frailties were exposed as Antonio Conte’s team was left with one point from three league games in September. Alexis Sanchez, Theo Walcott and Mesut Ozil provided the goals in the first half that gave the Gunners their first win over Chelsea in five years. Chelsea hadn’t even conceded a league goal to Arsenal since January 2013 before this capitulation. Results: Manchester United 4 Leicester 1; Swansea 1 Manchester City 3; Arsenal 3 Chelsea 0; Liverpool 5 Hull 1; Middlesbrough 1 Tottenham 2; Bournemouth 1 Everton 0; Sunderland 2 Crystal Palace 3; Stoke 1 West Brom 1.