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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 27, 1999
Merchants Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Vermont ______ 03-0287342
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) 0-11595 Identification No.)
164 College Street
Burlington, Vermont 05401
(Address of principal executive offices) (Zip Code)
(802) 658-3400
(Registrant's telephone number,
including area code)
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Item 5. Other Events.
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On May 19, 1999, Merchants Bank (the "Bank"), the principal
subsidiary of Merchants Bancshares, Inc. (the "Company"), executed a
Purchase and Assumption Agreement with Chittenden Trust Company and Vermont
National Bank pursuant to which the Bank will purchase certain assets and
assume deposit liabilities booked at and allocated to two Vermont National
Bank offices, located in Bellows Falls, Vermont and on Route 7 in Rutland,
Vermont. In connection with the transaction, the Bank is also acquiring
two automated teller machines located in Rutland, Vermont. These branches
are being acquired by the Bank in connection with the branch divestiture
required by federal regulators with respect to Chittenden Corporation's
pending merger with Vermont Financial Services Corporation, the parent
company of Vermont National Bank. The purchase is conditioned on the
Bank's receipt of the regulatory approvals noted below.
In the transaction, the Bank will assume approximately $44 million in
deposits and will purchase approximately $23 million in commercial loans
and $17 million in residential and consumer loans. In addition, the Bank
will purchase real property related to one of the branches and assume
certain lease obligations with respect to the other leased branch.
Furthermore, the Bank will acquire substantially all of the personalty in
these branches. These locations will continue to be used as branches of
the Bank. Upon consummation of the transaction, the Bank will pay a
premium equal to 3.2% of the deposit liabilities on the closing date. The
Company does not expect to issue any securities in connection with the
transaction and expects to recognize $330,000 of transaction-related
expenses prior to consummation.
In connection with the foregoing transaction, the Bank will also
offer employment to all of the Vermont National employees who are currently
employed at the two branches being acquired.
The transaction remains subject to receipt of regulatory approvals
from the Federal Deposit Insurance Corporation and notice to the Vermont
Banking Department. Subject to these approvals and notices, the purchase
is expected to be completed during the fourth quarter of 1999. A copy of
the Company's press release is included herewith as Exhibit 1 and
incorporated herein by reference.
Item 7. Financial Statements, Pro forma Financial Information and Exhibits.
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(A)(B) Financial Statements including pro forma financial
information will be provided within sixty days of the consummation of the
proposed transaction. At the current time it is impracticable to provide
this information.
(C) Exhibits
1. Merchants Bancshares, Inc. press release dated May 19, 1999,
related to the acquisition by Merchants Bank of two branches of Chittenden
Trust Company and Vermont National Bank.
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
MERCHANTS BANCSHARES, INC.
/s/ Joseph L. Boutin
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Joseph L. Boutin
President and Chief Executive
Officer
Dated: May 27, 1999
Exhibit 99
Merchants Bank Agrees to Acquire Two Vermont National Bank Offices from
Chittenden
Merchants Bancshares, Inc. (Nasdaq: MBVT) announced today that its
principal subsidiary, Merchants Bank, has signed a definitive agreement
with Chittenden Corporation (NYSE: CHZ) to purchase two Vermont National
Bank offices, located in Bellows Falls, VT and on Route 7 in Rutland, VT.
These branches are being acquired by Merchants in connection with the
branch divestiture required by federal regulators with respect to
Chittenden's pending merger with Vermont Financial Services Corporation
(Nasdaq: VFSC), the parent company of Vermont National Bank as well as
United Bank, located in Massachusetts. This purchase includes
approximately $44 million in deposits, $23 million in commercial loans, $17
million in residential and consumer loans, and certain fixed assets
associated with the branches. Chittenden received the approval of federal
regulators of its merger with Vermont Financial Services Corp. last week.
"This acquisition provides an exciting opportunity for Merchants Bank to
expand our statewide franchise," said Joseph L. Boutin, Merchants Bank
president and CEO. "We are pleased with the opportunity this transaction
provides these communities and our Company and we are eager to offer our
competitive LYNX products and services to customers in these communities.
The transaction is also an effective use of our capital, which we expect
will be accretive to earnings in 2000."
Paul A. Perrault, Chittenden's chairman, president and CEO, commented on
the agreement, "We are pleased to have reached this agreement with
Merchants Bank in connection with the branch divestiture required for our
pending merger with Vermont Financial. We believe this to be a great
opportunity for all parties involved and we look forward to completing our
transaction with Vermont Financial, which we know will benefit our
customers and the communities in which we operate."
This cash transaction is subject to review by federal and state regulators.
Subject to these reviews, the purchase is expected to be completed during
the fourth quarter of 1999.
Merchants Bancshares, Inc. is a publicly traded, bank holding company
located in Burlington, Vermont. Total consolidated assets at March 31,
1999 were approximately $635 million. The mission of Merchants Bank is to
provide Vermonters with community banking anytime, anyplace, any way. This
commitment is fulfilled through a community, branch-based system that
includes 33 bank offices throughout the state of Vermont, employees
dedicated to quality customer service, and innovative banking products such
as FreedomLYNX(R) checking, MoneyLYNX(TM) money market accounts, and
PhoneLYNX(SM). Merchants Bank includes a trust, investment and discount
brokerage division, known as Merchants Trust Company which provides
services to individuals and institutions.
Chittenden Corporation is a bank holding company headquartered in
Burlington, Vermont, with total assets of $2.1 billion at March 31, 1999.
Its subsidiary banks are Chittenden Bank, The Bank of Western
Massachusetts, and Flagship Bank and Trust Company. Chittenden Corporation
offers a broad range of financial products and services, including deposit
accounts and services; consumer, commercial, and public sector loans,
insurance; brokerage; and investments and trust services to individuals,
businesses, and the public sector.
