May 16, 2007
Flagship parent plans securities sale
By Matthew L. Brown
Chittenden Corp., the Vermont-based parent of Worcester's Flagship Bank and Trust Co., said it would sell about $572 million in investment securities to better position the company for the acquisition of Maine-based Merrill Merchants Bancshares Inc.
The acquisition is expected to close May 31.
As a result of the securities sale strategy, Chittenden expects to report a $14.2 million second quarter loss.
Chittenden said the sale would consist of low-yield, fixed rate securities backed by mortgages, and corporate notes. They would be replaced by short-term, high yield securities.
Chittenden expects the strategy to result in a $5.3 million decrease in its net income in 2007, and a $5.7 million increase in net income in 2008.
At the end of the first quarter, Chittenden reported $1.2 billion in securities available for sale, and total assets of $6.6 billion.
The acquisition is expected to close May 31.
As a result of the securities sale strategy, Chittenden expects to report a $14.2 million second quarter loss.
Chittenden said the sale would consist of low-yield, fixed rate securities backed by mortgages, and corporate notes. They would be replaced by short-term, high yield securities.
Chittenden expects the strategy to result in a $5.3 million decrease in its net income in 2007, and a $5.7 million increase in net income in 2008.
At the end of the first quarter, Chittenden reported $1.2 billion in securities available for sale, and total assets of $6.6 billion.
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