Chittenden reports lower earnings

Chittenden Corp., parent company of Ocean National Bank, reported sharply reduced earnings on Thursday but blamed it on costs related to a previous merger.

Chittenden’s net income was about $9 million for the second quarter of the year, or 20 cents a diluted share, compared to $21 million, or 45 cents a share, for the same quarter in the previous year.

But that was primarily due to a repositioning of the company’s securities portfolio and merger costs, both related to acquisition of the Maine-based Merrill Merchants Bancshares, completed at the end of May. Without those costs, the company would have made about $21.6 million, which was roughly the same as same quarter last year.

There are other mergers in the works for Chittenden. The Burlington, Vt.-based company is in the midst of acquiring the Wolfeboro, N.H.-based Community Bank & Trust Company in a $124 million deal expected to be completed at the end of the year, and merging it into Ocean National.

And Chittenden itself is being acquired by Connecticut-based Peoples United Financial in a $1.9 billion deal expected to be finalized in the first quarter of next year.

The company reported losing some $14.1 million on the sale of securities connected to the Merrill merger and spent another $4.1 million in merger costs. On the other hand, because of the merger the company has $6.9 billion in assets, about a $500 million increase. Some $73 million of that increase because of “goodwill” and “intangibles,” it said.

While the company made a slightly smaller provision for credit losses than the same period the previous year, nonperforming assets rose to $29.4 million, about a $5 million increase, primarily due to small commercial loans, it said. – BOB SANDERS