<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
---
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THREE MONTHS ENDED MARCH 31, 1998
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
of the Securities Exchange Act of 1934
FOR THE TRANSITION PERIOD FROM ____________TO____________
COMMISSION FILE NUMBER 0-7974
CHITTENDEN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
VERMONT 03-0228404
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
TWO BURLINGTON SQUARE
BURLINGTON, VERMONT 05401
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (802) 658-4000
NOT APPLICABLE
FORMER NAME, FORMER ADDRESS AND FORMAL FISCAL YEAR
IF CHANGED SINCE LAST REPORT
INDICATE BY CHECKMARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
---
AT MARCH 31, 1998 THERE WERE 15,929,661 SHARES OF THE CORPORATION'S $1.00 PAR
VALUE COMMON STOCK ISSUED, WITH 14,401,128 SHARES OUTSTANDING.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
2
<PAGE>
Chittenden Corporation
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------------------------
<S> <C> <C>
(in thousands)
Assets
Cash and cash equivalents $ 141,524 $ 143,394
Securities available for sale 397,823 363,279
Federal Home Loan Bank stock 5,591 5,591
Mortgage loans held for sale 25,220 16,433
Loans:
Commercial 365,139 365,042
Real Estate:
Residential 433,029 456,396
Commercial 312,023 314,477
Construction 23,312 21,900
---------------------------
Total Real Estate 768,364 792,773
Consumer 244,416 241,323
---------------------------
Total Loans 1,377,919 1,399,138
Less: Allowance for possible loan losses (26,725) (26,721)
---------------------------
Net loans 1,351,194 1,372,417
Accrued interest receivable 14,015 14,431
Other real estate owned 850 747
Net deferred tax asset 479 1,857
Other assets 16,159 17,736
Premises and equipment, net 27,952 27,412
Intangible assets 13,498 13,853
TOTAL ASSETS $1,994,305 $1,977,150
===========================
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Demand $ 293,766 $ 302,555
Savings 939,244 924,846
Other time 408,537 409,055
Certificates of deposit $100,000 and over 127,011 121,089
---------------------------
Total deposits 1,768,558 1,757,545
Short-term borrowings 31,454 23,250
Accrued expenses and other liabilities 26,056 31,843
Long-term debt 2,254 2,239
Total liabilities 1,828,322 1,814,877
Commitments and contingencies
Stockholders' Equity:
Preferred stock - $100 par value - -
authorized - 200,000 shares; issued and outstanding - none
Common stock - $1 par value authorized - 30,000,000 shares; 15,930 15,930
issued 15,929,661 in 1998 and 1997
Surplus 72,442 72,611
Retained earnings 107,290 102,553
Treasury stock, at cost 1,528,533 shares in 1998 and 1,508,076 shares in 1997 (31,213) (30,084)
Accumulated other comprehensive income 1,924 1,675
Unearned portion of employee restricted stock (390) (412)
TOTAL STOCKHOLDERS' EQUITY 165,983 162,273
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,994,305 $1,977,150
===========================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
CHITTENDEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1998 1997
----------------- ------------------
INTEREST INCOME: (in thousands, except per share amounts)
<S> <C> <C>
Interest on loans $30,671 $29,727
Investment securities:
Mortgage-backed securities 2,016 1,778
Taxable 3,991 3,920
Tax-favored debt 5 9
Tax-favored equity 409 290
Short-term investments 462 454
TOTAL INTEREST INCOME 37,554 36,178
----------------- ------------------
INTEREST EXPENSE:
Deposits:
Savings 7,662 7,052
Time 6,885 6,617
----------------- ------------------
Total interest on deposits 14,547 13,669
Short-term borrowings 478 517
Long-term debt 46 50
TOTAL INTEREST EXPENSE 15,071 14,236
----------------- ------------------
Net interest income 22,483 21,942
PROVISION FOR POSSIBLE LOAN LOSSES 1,275 1,013
Net interest income after provision for possible loan losses 21,208 20,929
----------------- ------------------
NONINTEREST INCOME:
Asset management 1,465 1,289
Service charges on deposit accounts 1,746 1,596
Mortgage servicing income 478 564
Gains on sales of mortgage loans, net 1,108 405
Credit card income, net 871 1,344
Insurance commissions, net 966 -
Other 1,236 1,213
TOTAL NONINTEREST INCOME 7,870 6,411
----------------- ------------------
NONINTEREST EXPENSE:
Salaries 7,315 6,607
Employee benefits 2,593 2,502
Net occupancy expense 2,419 2,322
FDIC deposit insurance 56 53
Other real estate owned, income and expense, net 39 56
Other 5,401 5,402
TOTAL NONINTEREST EXPENSE 17,823 16,942
Income before income taxes 11,255 10,398
Provision for income taxes 3,919 3,514
----------------- ------------------
NET INCOME $ 7,336 $ 6,884
================= ==================
Basic earnings per share $0.51 $0.45
Diluted earnings per share 0.50 0.44
Dividends per share $0.18 $0.16
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
CHITTENDEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1998 1997
------------------------
<S> <C> <C>
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,336 $ 6,884
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for possible loan losses 1,275 1,013
Depreciation and amortization 913 861
Amortization of intangible assets 355 299
Amortization of premiums, fees, and discounts, net (154) 245
Investment securities gains (3) -
Deferred income taxes 1,255 101
Loans originated and purchased for sale (100,000) (29,523)
Proceeds from sales of loans 92,321 34,381
Gains on sales of loans (1,108) (405)
Changes in assets and liabilities:
Accrued interest receivable 416 784
Other assets 1,694 1,262
Accrued expenses and other liabilities (5,844) (1,285)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,544) 14,617
------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale 16,672 35,055
Proceeds from maturing securities and principal payments 56,640 62,395
on securities available for sale
Purchases of securities available for sale (107,467) (91,458)
Proceeds from principal payments on securities held for investment - 1,857
Purchases of securities held for investment - (189)
Loans originated, net of principal repayments 20,152 (14,469)
Purchases of premises and equipment (1,453) (951)
NET CASH USED IN INVESTING ACTIVITIES (15,456) (7,760)
------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 11,013 (87,252)
Net increase in short-term borrowings 8,204 20,141
Net increase in long term borrowings 15 14
Proceeds from issuance of treasury and common stock 233 40
Dividends on common stock (2,598) (2,457)
Repurchase of common stock (1,737) (3,844)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 15,130 (73,358)
------------------------
Net decrease in cash and cash equivalents (1,870) (66,501)
Cash and cash equivalents at beginning of year 143,394 214,459
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 141,524 $147,958
========================
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 14,983 $ 14,384
Income taxes 237 57
Non-cash investing and financing activities:
Loans transferred to other real estate owned 220 991
Issuance of treasury and restricted stock 39 268
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
CHITTENDEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
NOTE 1 - ACCOUNTING POLICIES
The Company's significant accounting policies, other than those described in
Note 2 below, are described in Note 1 of the Notes to Consolidated Financial
Statements included in its 1997 Annual Report on Form 10-K filed with the
Securities and Exchange Commission. For interim reporting purposes, the Company
follows the same basic accounting policies and considers each interim period as
an integral part of an annual period. Certain amounts for 1997 have been
reclassified to conform to 1998 classifications.
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods. Results for interim periods are
not necessarily indicative of the results of operations for the full year or any
other interim period.
NOTE 2 - ACCOUNTING POLICY CHANGES - ADOPTION OF SFAS 130
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income ("SFAS 130"). SFAS 130
establishes standards for the reporting and display of comprehensive income and
its components (revenues, expenses, gains, and losses) in a full set of general-
purpose financial statements. Comprehensive income is the total of net income
and all other nonowner changes in equity. SFAS 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements in year end financial
statements. Interim period disclosure may be shown in the footnotes to the
consolidated financial statements. The Company's comprehensive income for the
three months ended March 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1998 1997
---------------------------------
<S> <C> <C>
(in thousands)
NET INCOME $7,336 $ 6,884
Unrealized gains (losses) on investment securities:
Unrealized holding gains (losses) arising during period 377 (3,671)
Less: Reclassification adjustments for (gains) losses included in net
income (3) -
---------------------------------
Other comprehensive income, before tax 7,710 3,213
Income tax expense (benefit) related to:
Unrealized holding gains (losses) arising during period 126 (1,327)
Gains (losses) included in net income (1) -
---------------------------------
Total income tax expense (benefit) related to items of comprehensive income 125 (1,327)
Comprehensive income $7,585 $ 4,540
=================================
</TABLE>
NOTE 3 - SUBSEQUENT EVENT
On, April 15, 1998, the Company declared regular dividends of approximately
$2.9 million, or $0.20 per share, to be paid on May 15, 1998 to shareholders of
record on May 1, 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Chittenden Corporation posted first quarter 1998 net income of $7.3 million,
an increase of 7% over the $6.9 million earned in the same period last year.
These earnings represented $0.50 per diluted share, a 14% increase compared with
the $0.44 per diluted share earned in the first quarter of 1997. Return on
average equity was 18.14% for the quarter ended March 31, 1998 compared with
15.92% for the same period in 1997. Return on average assets was 1.52% for the
first quarter of 1998, up from 1.47% for the same period last year.
6
<PAGE>
Net interest income for the first quarter of 1998 was $22.5 million, up from
$21.9 million for the same quarter a year ago. Net interest income on a fully
taxable equivalent basis was $23.0 million for the three months ended March 31,
1998 compared to $22.3 million a year ago. The increase was primarily
attributable to higher level of average interest-earning assets, which were up
$62 million compared to the same three-month period a year ago. The net yield on
earning assets for the first quarter of 1998 was 5.06%, compared with 5.08% in
the same period last year and 5.08% in the fourth quarter of 1997. The change
in the net yield on earning assets was primarily attributable to a
proportionally higher level of interest bearing liabilities to interest earning
assets for the current period.
The following table presents an analysis of average rates and yields on a
fully taxable equivalent basis for the three months ended March 31,
<TABLE>
<CAPTION>
1998 1997
----------------------------------------------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE (1) RATE (1) BALANCE EXPENSE (1) RATE (1)
----------------------------------------------------------------------
Assets (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $1,401,343 $31,047 8.99% $1,356,426 $ 30,009 8.97%
Investments:
Taxable 371,415 6,007 6.56 370,423 5,775 6.32
Tax-favored debt securities 313 8 10.37 490 13 10.35
Tax-favored equity securities 37,345 563 6.11 20,448 290 5.75
Interest-bearing deposits in banks 100 1 3.25 100 1 3.25
Federal funds sold 33,536 461 5.57 34,251 453 5.36
--------------------------- ------------------------
Total interest-earning assets 1,844,052 38,087 8.38 1,782,138 36,541 8.32
-------------- ------------
Noninterest-earning assets 145,268 140,016
Allowance for possible loan losses (27,114) (28,197)
------------- -----------
Total assets $1,962,206 $1,893,957
============= ===========
Liabilities and stockholders' equity
Interest-bearing liabilities:
Savings and interest-bearing transactional accounts $ 922,119 $ 7,662 3.37 $ 867,600 $ 7,052 3.30
Certificates of deposit $100,000 and over 123,699 1,621 5.31 106,888 1,394 5.29
Other time deposits 409,005 5,264 5.22 415,404 5,223 5.10
--------------------------- ------------------------
Total interest-bearing deposits 1,454,823 14,547 4.06 1,389,892 13,669 3.99
Short-term borrowings 28,357 478 6.83 32,818 517 6.39
Long-term debt 2,424 46 7.73 2,549 50 7.96
--------------------------- ------------------------
Total interest-bearing liabilities 1,485,604 15,071 4.11 1,425,259 14,236 4.05
-------------- ------------
Noninterest-bearing liabilities:
Demand deposits 283,969 272,401
Other liabilities 28,618 20,900
------------- ------------
Total liabilities 1,798,191 1,718,560
Stockholders' equity 164,015 175,397
------------ ---------------
Total liabilities and stockholders' equity $1,962,206 $1,893,957
============ ===============
Net interest income $23,016 $ 22,305
============= ============
Interest rate spread (2) 4.27% 4.27%
Net yield on earning assets (3) 5.06 5.08
</TABLE>
(1) On a fully taxable equivalent basis. Calculated using a Federal income tax
rate of 35%. Loan income includes fees.
(2) Interest rate spread is the average rate earned on total interest-earning
assets less the average rate paid on interest-bearing liabilities.
(3) Net yield on earning assets is net interest income divided by total
interest-earning assets.
Noninterest income amounted to $7.9 million for the first quarter of 1998, up
from $6.4 million for the first quarter of 1997. Commissions from insurance
sales, which commenced in June of 1997 with the acquisition of the Pomerleau
Agency, were $966,000 in the first quarter of 1998. Gains on sales of mortgages
increased $703,000 from the first quarter of 1997 due to increased market
activity. Significant increases were also seen in asset management income, up
$176,000 or 14%, and service charges on deposit accounts, up $150,000 or 9%.
Mortgage servicing income declined slightly in 1998 as a result of increased
amortization expense related to originated mortgage servicing rights. Net
credit card income declined $473,000 to $871,000. Tighter margins and slightly
lower volumes of transactions processed accounted for approximately $235,000 and
$135,000 of the decrease, respectively, while another $123,000 was attributable
to higher processing expenses in the commercial customer credit
7
<PAGE>
card processing business. The decreases in the margin and the volume reflect the
Company's continuing evaluation of its credit card processing customer base. The
increase in processing expenses is related to an increase in the use of third
parties, for the processing of certain charge-back transactions.
Noninterest expenses were $17.8 million for the first quarter of 1998, an
increase of $881,000 from 1997. Noninterest expenses related to the Pomerleau
Agency were $596,000 for the first quarter of 1998. Excluding the expenses
related to the insurance agency, total noninterest expenses were 1.7% higher in
1998 than in 1997.
INCOME TAXES
The Company and its subsidiaries are taxed on income by the IRS at the Federal
level and by various states in which they do business. The majority of the
Company's income is generated in the State of Vermont, which levies franchise
taxes on financial institutions based upon average deposit levels in lieu of
taxing income. On August 1, 1997, the franchise tax rate increased from $.04
per $1,000 of deposits to $.096. This increased franchise tax expense to
$364,000 for the three months ended March 31, 1998 from $142,000 for the same
period in 1997. Franchise taxes are included in income tax expense in the
consolidated statements of income.
For the three months ended March 31, 1998 and 1997, Federal and state income
tax provisions amounted to $3.9 million and $3.5 million, respectively. The
effective tax rates for the respective periods were 34.8% and 33.8%. During
both periods, the Company's statutory Federal corporate tax rate was 35%. The
Company's effective tax rates differed from the statutory rates primarily
because of 1) the proportion of interest income from state and municipal
securities and corporate dividend income which are partially exempt from Federal
taxation and 2) tax credits on investments in qualified low income housing
projects.
FINANCIAL POSITION
Total assets increased slightly from $1.977 billion at December 31, 1997 to
$1.994 billion at March 31, 1998. The Company invests the majority of its
assets in loans and investments. During the first three months of 1998, total
loans decreased $21.2 million, to $1.378 billion at March 31, 1998. This
decrease was primarily attributable to higher prepayments on adjustable rate
residential real estate loans that have been refinanced to fixed rate loans, due
to favorable interest rates. Consistent with the Company's past practice, all
conforming fixed-rate loan production is sold on the secondary market. The
proceeds from these sales have been reinvested in various securities available
for sale, which were up $34.5 million at March 31, 1998 compared to December 31,
1997. Total deposits at March 31, 1998 were $1.769 billion, up $11.0 million or
0.6% from the December 31, 1997 level.
CREDIT QUALITY
Nonperforming assets include nonaccrual loans, restructured debt, and
foreclosed real estate (Other Real Estate Owned). As of March 31, 1998,
nonperforming assets totaled $8.1 million, compared to $8.0 million and $12.3
million at December 31 and March 31, 1997 respectively. The allowance for loan
losses was $26.7 million at March 31, 1998, unchanged from the December 31, 1997
level. The provision for possible loan losses that was charged against earnings
in the first quarter was $1.3 million compared to $1.0 million a year ago.
8
<PAGE>
A summary of credit quality follows:
<TABLE>
<CAPTION>
3/31/98 12/31/97 3/31/97
--------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Nonaccrual loans $ 7,132 $ 6,481 $ 9,172
Restructured debt 116 767 842
Other real estate owned (OREO) 850 747 2,276
Total nonperforming assets (NPA) $ 8,098 $ 7,995 $ 12,290
========================================================
Loans past due 90 days or more and still accruing interest $ 2,026 $ 2,838 $ 2,326
Allowance for possible loan losses 26,725 26,721 28,200
NPA as % of loans plus OREO 0.58% 0.56% 0.90%
Allowance as % of loans 1.90% 1.89% 2.06%
Allowance as % of nonperforming loans 368.72% 368.67% 282.20%
Allowance as % of NPA 330.02% 334.22% 229.45%
</TABLE>
Provisions for and activity in the allowance for possible loan losses are
summarized as follows:
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-----------------------------------
1998 1997
----------------- ----------------
<S> <C> <C>
(In thousands)
Beginning Balance, Allowance for Possible Loan Losses $26,721 $28,096
Provision for Possible Loan Losses 1,275 1,013
Loans Charged Off (1,650) (1,359)
Loan Recoveries 379 450
Ending Balance, Allowance for Possible Loan Losses $26,725 $28,200
===================================
</TABLE>
Based on its assessment of the loan portfolios management believes that the
allowance for possible loan losses is adequate. While management uses available
information to assess possible losses, future additions to the allowance may be
necessary.
CAPITAL
Stockholders' equity totaled $166.0 million at March 31, 1998, compared to
$162.3 million at year-end 1997. The increase during the current three-month
period reflects net income of $7.3 million, which was partially offset by stock
repurchases totaling $1.7 million and dividends paid to shareholders of $2.6
million.
"Tier One" capital, consisting entirely of common equity, measured 9.97% of
risk-weighted assets at March 31, 1998. Total capital, including the "Tier Two"
allowance for loan losses, was 11.28% of risk-weighted assets. The leverage
capital ratio was 7.60%. These ratios placed Chittenden in the "well-
capitalized" category according to regulatory standards.
LIQUIDITY
The Company's liquidity and rate sensitivity are monitored by the asset and
liability committee, based upon policies approved by the Board of Directors.
Strategies are implemented by the Company's asset and liability committee. This
committee meets periodically to review and direct the Banks' lending and
deposit-gathering functions. Investment and borrowing activities are managed by
the Company's Treasury function.
The measure of an institution's liquidity is its ability to meet its cash
commitments at all times with available cash or by conversion of other assets to
cash at a reasonable price. At March 31, 1998, the Company maintained cash
balances and short-term investments of approximately $141.5 million, compared
with $143.4 million at December 31, 1997. During the first three months of
1998, the Company continued to be an average daily net seller of Federal Funds.
9
<PAGE>
Interest-rate risk is the sensitivity of income to variations in interest
rates over both short-term and long-term horizons. The primary goal of
interest-rate management is to control this risk within limits approved by the
Board of Directors. These limits and guidelines reflect the Company's tolerance
for interest-rate risk. The Company attempts to control interest-rate risk by
identifying exposures, quantifying them and taking appropriate actions. The
Company quantifies its interest-rate risk exposure using sophisticated
simulation and valuation models, as well as simpler gap analyses. For a full
discussion of interest-rate risk see "Liquidity and Rate Sensitivity" in the
Company's 1997 annual report on Form 10-K. There has not been a material change
in the Company's interest-rate exposure or its anticipated market risk during
the current period.
YEAR 2000
The Year 2000 problem, which is common to most corporations, concerns the
inability of information systems, primarily computer software programs, to
properly recognize and process date sensitive information as the year 2000
approaches. The Company has completed an assessment of its mainframe systems
and has developed a specific workplan to address issues identified. The
Company's assessment of its personal computer-based systems is expected to be
completed in the second quarter of 1998. Required renovations to mission
critical systems have commenced. Validation and testing of the renovations is
scheduled to begin in the second quarter of this year. The Company believes it
will be able to modify or replace its affected systems in time to minimize any
detrimental effects on operations. The Company has prepared an estimate of the
costs to be incurred relative to the Year 2000 problem and has determined that
the costs specifically identifiable to the Year 2000 issue are not expected to
have a material impact on the Company's results of operations or financial
position in any future period.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
EXHIBIT 27. FINANCIAL DATA SCHEDULE
EXHIBIT 27.1. RESTATED FINANCIAL DATA SCHEDULES
(B) REPORTS ON FORM 8-K
NONE
10
<PAGE>
CHITTENDEN CORPORATION
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHITTENDEN CORPORATION
Registrant
MAY 13, 1998 S/PAUL A. PERRAULT
------------ -------------------------------------
Date Paul A. Perrault,
President and Chief Executive Officer
MAY 13, 1998 S/KIRK W. WALTERS
------------ -------------------------------------
Date Kirk W. Walters
Executive Vice President,
Treasurer, and Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 83954
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 57470
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 403414
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1403139
<ALLOWANCE> (26725)
<TOTAL-ASSETS> 1994305
<DEPOSITS> 1768558
<SHORT-TERM> 31454
<LIABILITIES-OTHER> 26056
<LONG-TERM> 2254
0
0
<COMMON> 15930
<OTHER-SE> 150053
<TOTAL-LIABILITIES-AND-EQUITY> 1994305
<INTEREST-LOAN> 30671
<INTEREST-INVEST> 6883
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 37554
<INTEREST-DEPOSIT> 14547
<INTEREST-EXPENSE> 15071
<INTEREST-INCOME-NET> 22483
<LOAN-LOSSES> 1275
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 17823
<INCOME-PRETAX> 11255
<INCOME-PRE-EXTRAORDINARY> 11255
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7336
<EPS-PRIMARY> 0.51
<EPS-DILUTED> 0.50
<YIELD-ACTUAL> 4.94
<LOANS-NON> 7132
<LOANS-PAST> 2026
<LOANS-TROUBLED> 116
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 26721
<CHARGE-OFFS> 1650
<RECOVERIES> 379
<ALLOWANCE-CLOSE> 26725
<ALLOWANCE-DOMESTIC> 26725
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996 DEC-31-1996 DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1996 JAN-01-1996 JAN-01-1996 JAN-01-1995
<PERIOD-END> MAR-31-1996 JUN-30-1996 SEP-30-1996 DEC-31-1996 DEC-31-1995
<CASH> 150,868 120,442 163,587 133,159 139,951
<INT-BEARING-DEPOSITS> 100 100 100 2,100 100
<FED-FUNDS-SOLD> 32,010 55,010 63,500 95,000 57,089
<TRADING-ASSETS> 0 0 0 0 0
<INVESTMENTS-HELD-FOR-SALE> 302,695 320,289 349,106 358,536 278,322
<INVESTMENTS-CARRYING> 42,179 42,222 40,617 38,556 43,164
<INVESTMENTS-MARKET> 41,640 42,054 38,748 38,381 42,634
<LOANS> 1,208,604 1,267,439 1,287,565 1,296,568 1,207,606
<ALLOWANCE> 27,997 28,107 28,328 28,096 27,818
<TOTAL-ASSETS> 1,806,755 1,870,792 1,969,387 1,988,746 1,794,704
<DEPOSITS> 1,579,749 1,618,334 1,699,019 1,761,579 1,587,723
<SHORT-TERM> 42,216 60,177 75,956 23,992 25,025
<LIABILITIES-OTHER> 24,056 27,660 24,662 26,234 25,523
<LONG-TERM> 2,498 2,512 2,526 2,540 2,484
0 0 0 0 0
0 0 0 0 0
<COMMON> 15,715 15,780 15,814 15,848 15,431
<OTHER-SE> 142,521 146,329 151,410 158,553 138,518
<TOTAL-LIABILITIES-AND-EQUITY> 1,806,755 1,870,792 1,969,387 1,988,746 1,794,704
<INTEREST-LOAN> 28,433 57,288 86,602 116,563 111,087
<INTEREST-INVEST> 5,777 11,671 17,781 24,502 22,025
<INTEREST-OTHER> 446 739 1,256 1,527 1,991
<INTEREST-TOTAL> 34,656 69,698 105,639 142,592 135,103
<INTEREST-DEPOSIT> 14,069 27,885 42,135 56,515 53,771
<INTEREST-EXPENSE> 14,592 28,990 43,818 58,599 56,772
<INTEREST-INCOME-NET> 20,064 40,708 61,821 83,993 78,331
<LOAN-LOSSES> 983 2,008 2,858 4,183 5,000
<SECURITIES-GAINS> 0 0 0 (98) 205
<EXPENSE-OTHER> 18,923 38,606 48,702 64,557 61,584
<INCOME-PRETAX> 8,981 18,861 29,038 40,173 33,787
<INCOME-PRE-EXTRAORDINARY> 8,981 18,861 29,038 40,173 33,787
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 6,013 12,710 21,937 26,721 22,131
<EPS-PRIMARY> 0.40 0.84 1.29 1.75 1.50
<EPS-DILUTED> 0.39 0.82 1.26 1.72 1.47
<YIELD-ACTUAL> 4.89 4.89 4.89 4.88 4.97
<LOANS-NON> 8,386 9,112 1,212 10,601 9,939
<LOANS-PAST> 2,026 2,420 2,360 966 1,054
<LOANS-TROUBLED> 2,854 2,892 2,791 638 2,502
<LOANS-PROBLEM> 0 0 0 0 0
<ALLOWANCE-OPEN> 27,818 27,818 27,818 27,818 22,163
<CHARGE-OFFS> 1,418 2,741 4,014 6,109 6,482
<RECOVERIES> 614 1,022 1,666 2,204 3,002
<ALLOWANCE-CLOSE> 27,997 28,107 28,328 28,096 27,818
<ALLOWANCE-DOMESTIC> 27,997 28,107 28,328 28,096 27,818
<ALLOWANCE-FOREIGN> 0 0 0 0 0
<ALLOWANCE-UNALLOCATED> 0 0 0 0 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1997 DEC-31-1997
<PERIOD-END> MAR-31-1997 JUN-30-1997 SEP-30-1997 DEC-31-1997
<PERIOD-START> Jan-01-1997 Jan-01-1997 Jan-01-1997 Jan-01-1997
<CASH> 90858 101366 93904 118294
<INT-BEARING-DEPOSITS> 100 100 100 100
<FED-FUNDS-SOLD> 57000 64850 67740 25000
<TRADING-ASSETS> 0 0 0 0
<INVESTMENTS-HELD-FOR-SALE> 319532 329708 343877 368870
<INVESTMENTS-CARRYING> 33893 24609 22680 0
<INVESTMENTS-MARKET> 33611 24201 22296 0
<LOANS> 1357960 1364124 1410504 1415571
<ALLOWANCE> 28200 28167 26227 26721
<TOTAL-ASSETS> 1918667 1955576 2011487 1977150
<DEPOSITS> 1674341 1674819 1736330 1757545
<SHORT-TERM> 44133 71942 70150 23250
<LIABILITIES-OTHER> 24891 34209 33480 31843
<LONG-TERM> 2554 6268 3225 2239
0 0 0 0
0 0 0 0
<COMMON> 15865 15880 15895 15930
<OTHER-SE> 156883 152458 152407 146343
<TOTAL-LIABILITIES-AND-EQUITY> 1918667 1955576 2011487 1977150
<INTEREST-LOAN> 29727 60740 92632 124201
<INTEREST-INVEST> 5997 12054 17949 24049
<INTEREST-OTHER> 454 891 1293 1939
<INTEREST-TOTAL> 36178 73685 111874 150189
<INTEREST-DEPOSIT> 1369 27561 42204 57097
<INTEREST-EXPENSE> 14236 28926 44221 59545
<INTEREST-INCOME-NET> 21942 44759 67653 90644
<LOAN-LOSSES> 1013 2025 3038 4050
<SECURITIES-GAINS> 0 0 0 0
<EXPENSE-OTHER> 16942 34572 52076 70072
<INCOME-PRETAX> 10398 21782 33296 44732
<INCOME-PRE-EXTRAORDINARY> 10398 21782 33296 44732
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 6884 14401 21937 29406
<EPS-PRIMARY> 0.45 0.95 1.47 1.99
<EPS-DILUTED> 0.44 0.93 1.43 1.94
<YIELD-ACTUAL> 5.08 5.04 5.01 5.01
<LOANS-NON> 9172 7845 7206 6481
<LOANS-PAST> 2326 1531 2847 2838
<LOANS-TROUBLED> 842 835 795 767
<LOANS-PROBLEM> 0 0 0 0
<ALLOWANCE-OPEN> 28096 28096 28096 28096
<CHARGE-OFFS> 1359 3022 6387 8237
<RECOVERIES> 450 1068 1480 2812
<ALLOWANCE-CLOSE> 28200 28167 26227 26721
<ALLOWANCE-DOMESTIC> 28200 28167 26227 26721
<ALLOWANCE-FOREIGN> 0 0 0 0
<ALLOWANCE-UNALLOCATED> 0 0 0 0
</TABLE>
