Vermont’s Chittenden Reports Q1 Earnings

April 23, 2004

Chittenden Corporation (NYSE: CHZ) Chairman Paul A. Perrault announced earnings for the quarter ended March 31, 2004 of $17.5 million or $0.47 per diluted share, compared to $16.6 million or $0.49 a year ago.

Chittenden also announced a 10 percent increase in its quarterly dividend to $0.22 per share. The dividend will be paid on May 14, 2004, to shareholders of record on April 30, 2004.

In making the announcement, Perrault said, “By and large, most core
businesses are doing well. However, the volatility of market interest rates and the timing of their movements during the quarter adversely impacted the mortgage banking business. On the whole, we consider the quarter’s results a little disappointing, though there is cause for optimism. Commercial loan growth was particularly good during the quarter and accelerated in the month of March. In mortgage banking, the interest rate dip in March led to significant mortgage application activity late in the quarter, which should bode well for better mortgage gains as we move forward into the coming months.”

Noninterest income declined $5.0 million from the prior quarter and $1.2 million from the same period a year ago. The decline from the fourth quarter of 2003 was attributable to reduced gains on sales of mortgages, lower mortgage servicing income, and a decline in gains on sales of securities.

Partially offsetting this decline were significantly higher insurance commissions and increased investment management income. Insurance commissions increased $1.1 million from the prior quarter primarily due to the timing of policy renewals and increased performance-based income. The increase from the same quarter a year ago was due to the inclusion of Granite Bank’s (purchased in 2003) insurance operations for the full quarter in 2004 versus only one month in 2003.

Chittenden is a bank holding company headquartered in Burlington, Vermont. The company offers financial products to customers throughout northern New England and Massachusetts, including deposit accounts and services; commercial and consumer loans; insurance; and investment and trust services to individuals, businesses, and the public sector. Chittenden’s subsidiaries are Chittenden Bank, The Bank of Western Massachusetts, Flagship Bank and Trust Company, Maine Bank & Trust Company, Ocean National Bank, and Granite Bank. Chittenden Bank also operates under the name Mortgage Service Center, and it owns Chittenden Insurance Group, and Chittenden Securites, Inc. Granite Bank operates an insurance agency
subsidiary under the name GSBI Insurance Group.

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