January 19, 2007 03/07CHITTENDEN TO ACQUIRE MERRILL MERCHANTS BANCSHARES, INC.Burlington, VT — Chittenden Corporation (NYSE: CHZ) and Merrill Merchants Bancshares, Inc.(NASDAQ: MERB) (Merrill), announced today that they signed a definitive merger agreementwhereby Chittenden will acquire Merrill and its subsidiary, Merrill Merchants Bank, forapproximately $111.4 million in cash and stock. Consummation of the agreement is subject tothe approval of the shareholders of Merrill, as well as various regulatory agencies.Theacquisition is expected to close in the second quarter of 2007. Following the completion of thetransaction, Merrill Merchants Bank will operate as a separate unit of Chittenden Corporation,maintaining its name and senior management team.In announcing the agreement, Paul A. Perrault, Chittenden’s Chairman, President and ChiefExecutive Officer, said, I am delighted that Merrill Merchants will join the Chittenden family ofbanks. Their well-established history of relationship banking has resulted in strong growth andhigh performance, and therefore will blend into our culture and strategies very nicely. By usingChittendens broad capabilities and products, they will be able to deepen their relationships andattract new ones. With a very strong and experienced management team remaining in place,this is a great strategic fit for both companies.Edwin Clift, Chairman and Chief Executive Officer of Merrill Merchants Bancshares, Inc.,commented, “Merrill has accomplished a great deal as an organization and has operated at ahigh level of performance. We have known the management group at Chittenden for a numberof years, and in working together have found that our banking policies and philosophies are verysimilar. Chittenden understands community banking and the need to keep local bankers withauthority in place. Our Board of Directors carefully considered the interests of our shareholdersand employees and determined Chittenden to be an ideal merger partner for us. Thistransaction is good news for our communities, customers, and employees.”Under the terms of the merger agreement, shareholders of Merrill can elect to receive $31.00per share in cash, with total cash consideration of approximately $44.57 million, or 1.02 sharesof Chittenden common stock for each share of Merrill stock they own, with total stockconsideration of approximately 2.20 million shares of Chittenden common stock. Elections willbe subject to allocation procedures that are intended to ensure that 60% of the Merrill commonstock outstanding immediately prior to consummation of the merger will be converted toChittenden common stock. The transaction is intended to qualify as a reorganization for federalincome tax purposes, and as a result, the shares of Merrill common stock exchanged for sharesof Chittenden common stock are expected to be transferred on a tax-free exchange basis.Chittenden was advised by its legal counsel, Goodwin Procter LLP. Merrill was advised by,Keefe, Bruyette & Woods, Inc., and its legal counsel was Thacher Proffitt & Wood LLP,Washington, D.C.Merrill and its subsidiary, Merrill Merchants Bank, are headquartered in Bangor, Maine. Merrillhad total assets of $449 million, $339 million in loans, deposits of $360 million, and $39 millionof stockholders’ equity at December 31, 2006. Merrill presently operates 11 banking offices incentral and eastern Maine.
Chittenden to acquire Maine bank