<PAGE>
EXHIBIT 28
July 20, 2000
#22/00
CHITTENDEN REPORTS EARNINGS AND QUARTERLY DIVIDENDS
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Burlington, VT -- Chittenden Corporation (NYSE:CHZ) Chairman, President and
Chief Executive Officer, Paul A. Perrault, today announced second quarter 2000
net income of $14.5 million compared to operating net income of $12.1 million
earned in the same period last year. This represents $0.53 per diluted share, an
increase of 26% compared to the $0.42 per diluted share earned in the second
quarter of 1999. For the first six months of 2000, operating earnings were $29.9
million or $1.07 per diluted share, an increase of 27% from $0.84 for the same
period last year. Chittenden also announced its quarterly dividend of $0.24 per
share. The dividend will be paid on August 18, 2000, to shareholders of record
on August 4, 2000.
Mr. Perrault also announced that the Board of Directors authorized the
repurchase of an additional 2,000,000 shares of the Corporation's common stock
(approximately 7% of the Company's outstanding Common Stock) in negotiated
transactions or open market purchases. This is in addition to the 2,000,000
shares authorized by the Board earlier in the year. As of June 30, 2000,
approximately 1.75 million shares of the original authorization had been
repurchased.
In making the announcements, Perrault said, "Our operations continue to show
good gains. The repurchase program and our dividend policy are the foundation of
the capital management plan which is designed to maximize shareholder return
without sacrificing future capital flexibility."
The net interest margin for the second quarter of 2000 was 4.66%, compared with
4.61% in the same period of 1999, and 4.81% for the first quarter of 2000. The
net interest margin for the first six months of 2000 was 4.74%, compared with
4.61% for the 1999 period. Net interest income was $41.2 million for the second
quarter of 2000 and $43.4 million for the second quarter of 1999. For the first
half of 2000, net interest income was $83.7 million, compared with $86.4 million
in 1999. The decrease in net interest income from 1999 to 2000 was attributed
primarily to lower levels of earning assets resulting from required branch
divestitures, which occurred during the second half of 1999 and the first
quarter of 2000.
Noninterest income amounted to $14.2 million for the second quarter of 2000 and
$28.2 million for the first half of 2000, down from $16.5 million and $32.7
million for the respective periods last year. The declines in noninterest income
for 2000 were primarily attributable to lower levels of service charges on
deposit accounts caused by the required branch divestitures referred to above.
Also contributing were reduced gains on sales of mortgage loans related to lower
volumes due to higher market interest rates.
Operating noninterest expenses were $31.2 million for the second quarter of 2000
and $63.3 million for the first six months of 2000, compared to $38.3 million
and $76.5 million for the same periods last year. These amounts were
approximately 18% lower than the respective periods of the previous year. The
reduction in noninterest expense was due to reduced compensation expense caused
by lower staffing levels, lower levels of incentive compensation accruals,
reduced depreciation expense related to duplicative fixed assets written off as
a result of the merger, and lower levels of amortization of intangibles
resulting from the recovery of goodwill related to the divested branches.
The operating return on average equity was 17.32% for the second quarter of
2000, compared with 12.28% in the same quarter of 1999. The operating return on
average assets for the second quarter of 2000 was 1.52%, up from 1.17% for the
second quarter of
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1999. The increases in operating ROE and ROA were attributable to higher levels
of operating net income. Also contributing to the increase in operating ROE were
lower levels of average stockholders equity in 2000, which resulted from the
one-time merger related charges taken in the second quarter of 1999, the
recovery of goodwill associated with branches divested in the fourth quarter of
1999 and the share repurchase program commenced in January of 2000. For the six
months of 2000, the operating return on average assets was 1.56%, up from 1.16%
a year ago. The operating return on average equity for the six months ended June
30, 2000 was 17.24%, compared to 12.35% a year ago.
On May 28, 1999, Chittenden Corporation completed its acquisition of Vermont
Financial Services Corp. (VFSC) in a stock-for-stock merger. The acquisition has
been accounted for as a pooling of interests. The Company recorded $71 million
(pre-tax) of special charges in the second quarter of 1999. Merger related
charges for the quarter ended June 30, 1999 totaled $49.9 million on a pre-tax
basis. These merger expenses included conversion, severance and transaction
costs, such as legal, advisory and accounting fees. Additionally, impaired
goodwill, related to VFSC's purchase of Eastern Bancorp, totaling approximately
$21.1 million was written off as a result of the divestitures required by the
U.S. Department of Justice and the Federal Reserve. As a result of these special
charges, Chittenden's net losses for the second quarter and the first six months
of 1999 were $44.4 million and $32.5 million, respectively, or $1.58 and $1.16
per diluted share.
The allowance for possible loan losses was $39.6 million at June 30, 2000, down
from $42.4 million a year ago, and $41.2 million at March 31, 2000.
Nonperforming assets were $11.6 million at June 30, 2000, flat from the $12.0
million at March 31, 2000, and down from $14.4 million at the end of the second
quarter of 1999. Net charge-off activity totaled $3.8 million for the second
quarter of 2000 and $2.3 million for the second quarter of 1999 or 0.13% and
0.08%, respectively, of average loans for the periods.
Chittenden is a bank holding company with total assets of $3.8 billion at June
30, 2000. Its subsidiary banks are Chittenden Bank, The Bank of Western
Massachusetts, and Flagship Bank and Trust Company. It also operates under the
names First Savings of New Hampshire, Mortgage Service Center of New England,
The Pomerleau Agency, and Chittenden Securities, Inc. The Company offers a broad
range of financial products and services, including deposit accounts and
services; consumer, commercial, and public sector loans; insurance; brokerage;
and investment and trust services to individuals, businesses, and the public
sector. To find out more about Chittenden and its products, visit our web site
at www.chittenden.com. Chittenden Corporation news releases, including earnings
announcements, are available via fax by calling 800-758-5804. The six-digit code
is 124292.
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CHITTENDEN CORPORATION
SELECTED FINANCIAL DATA
(Unaudited)
(In Thousands, except for ratios, shares and per share amounts)
<TABLE>
<CAPTION>
Period End Balance Sheet Data 6/30/00 3/31/00 12/31/99 6/30/99
----------------------------- ------- ------- -------- -------
<S> <C> <C> <C> <C>
Cash and Cash Equivalents $155,785 $128,242 $150,415 $187,441
Securities 625,415 648,796 666,350 867,134
Loans:
Commercial 483,134 473,911 445,426 521,450
Municipal 67,942 98,527 90,148 83,502
Real Estate:
Residential 1,074,685 1,074,130 1,070,389 1,122,024
Commercial 720,532 704,126 689,254 631,655
Construction 70,684 60,752 57,429 63,271
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Total Real Estate 1,865,901 1,839,008 1,817,072 1,816,950
Consumer 512,265 540,517 546,010 478,706
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Total Loans 2,929,242 2,951,963 2,898,656 2,900,608
Less: Allowance for Possible Loan Losses (39,643) (41,228) (41,079) (42,431)
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Net Loans 2,889,599 2,910,735 2,857,577 2,858,177
Other Real Estate Owned 579 690 416 615
Goodwill 16,745 17,257 18,470 45,225
Other Assets 127,968 133,314 134,069 150,317
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Total Assets $3,816,091 $3,839,034 $3,827,297 $4,108,909
===========================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $496,762 $499,405 $532,120 $603,880
Money Market and Savings 1,828,440 1,841,013 1,807,843 1,948,703
Certificates of Deposit less than $100,000
and Other Time Deposits 617,941 630,244 649,051 814,274
Certificates of Deposit $100,000 and Over 221,762 216,387 215,084 188,029
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Total Deposits 3,164,905 3,187,049 3,204,098 3,554,886
Short-Term Borrowings 286,013 254,323 197,072 133,640
Accrued Expenses and Other Liabilities 31,429 46,073 63,667 75,508
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Total Liabilities 3,482,347 3,487,445 3,464,837 3,764,034
Total Stockholders' Equity 333,744 351,589 362,460 344,875
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Total Liabilities and Stockholders' Equity $3,816,091 $3,839,034 $3,827,297 $4,108,909
===========================================================
Book Value per Common Share $12.47 $12.68 $12.77 $12.23
Common Shares Outstanding 26,754,968 27,725,668 28,378,232 28,193,504
Credit Quality Data
-------------------
Nonperforming Assets (including OREO) $11,603 $11,970 $9,588 $14,179
90 days past due and still accruing 4,751 6,594 5,016 4,273
Nonperforming Assets to Loans Plus OREO 0.40% 0.41% 0.33% 0.49%
Allowance to Loans 1.35% 1.40% 1.42% 1.46%
Allowance to Nonperforming Loans (excluding 359.61% 365.50% 447.87% 312.82%
OREO)
QTD Average Balance Sheet Data
------------------------------
Loans, Net $2,921,259 $2,878,805 $2,874,550 $2,815,280
Earning Assets 3,604,521 3,601,692 3,695,548 3,844,795
Total Assets 3,840,153 3,855,612 3,974,702 4,164,198
Deposits 3,192,879 3,186,530 3,377,295 3,587,970
Stockholders' Equity 336,093 356,639 358,112 396,045
</TABLE>
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CHITTENDEN CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In Thousands, except for ratios, shares and per share amounts)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income:
Interest on Loans $61,319 $57,442 $120,935 $113,949
Interest on Investments 10,366 14,374 21,202 29,908
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Total Interest Income 71,685 71,816 142,137 143,857
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Interest Expense:
Deposits 26,176 26,873 50,655 54,243
Short-term Borrowings 4,307 1,567 7,757 3,210
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Total Interest Expense 30,483 28,440 58,412 57,453
Net Interest Income 41,202 43,376 83,725 86,404
Provision for Possible Loan Losses 2,175 2,175 4,350 4,350
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Net Interest Income after Provision
for Possible Loan Losses 39,027 41,201 79,375 82,054
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Noninterest Income:
Investment Management and Trust Income 3,375 3,657 6,868 7,199
Service Charges on Deposit Accounts 3,421 4,884 7,108 9,450
Mortgage Servicing Income 1,121 807 2,058 1,739
Gains on Sales of Mortgage Loans, Net 570 1,459 1,181 3,290
Credit Card Income, Net 1,473 1,350 2,626 2,593
Insurance Commissions, Net 688 560 1,469 1,201
Other 3,590 3,781 6,879 7,185
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Total Noninterest Income 14,238 16,498 28,189 32,657
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Noninterest Expense:
Salaries and Employee Benefits 15,945 19,407 32,274 38,845
Net Occupancy Expense 3,664 6,353 8,492 12,868
Other Real Estate Owned, Net (17) 262 (67) 292
Amortization of Intangibles 520 1,490 1,060 2,957
Special Charges - 70,995 833 70,995
Other 11,063 10,769 21,575 21,533
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Total Noninterest Expense 31,175 109,276 64,167 147,490
------------------------------- ------------------------------
Income (Loss) Before Income Taxes 22,090 (51,577) 43,397 (32,779)
Income Tax Expense (Benefit) 7,620 (7,174) 14,336 (294)
------------------------------- -------------------------------
Net Income (Loss) $14,470 $(44,403) $29,061 $(32,485)
=============================== ==============================
Weighted Average Common Shares Outstanding 27,169,070 28,121,995 27,648,697 28,044,635
Weighted Average Common and
Common Equivalent Shares Outstanding 27,457,560 28,601,396 27,971,691 28,543,302
Earnings (Loss) Per Share, Basic $0.53 $(1.58) $1.05 $(1.16)
Earnings (Loss) Per Share, Diluted 0.53 (1.58) 1.04 (1.16)
Dividends Per Share 0.24 0.22 0.46 0.40
Operating Net Income $14,470 $12,127 $29,854 $24,018
Operating Earnings Per Share, Basic 0.53 0.43 1.08 0.86
Operating Earnings Per Share, Diluted 0.53 0.42 1.07 0.84
Operating Return on Average Equity 17.32% 12.28% 17.24% 12.35%
Operating Return on Average Assets 1.52% 1.17% 1.56% 1.16%
Net Yield on Earning Assets 4.66% 4.61% 4.74% 4.61%
</TABLE>
