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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