Merchants Bancshares Inc. (MBVT, Financial) filed Quarterly Report for the period ended 2011-03-31.
Merchants Bancshares Inc. has a market cap of $159.7 million; its shares were traded at around $25.78 with a P/E ratio of 10.8 and P/S ratio of 2.2. The dividend yield of Merchants Bancshares Inc. stocks is 4.3%. Merchants Bancshares Inc. had an annual average earning growth of 5.3% over the past 10 years.
Provision for Credit Losses (Provision): Due to our continued strong asset quality, we did not record a provision in the first quarter of 2011. This compares to a provision of $600 thousand for the first quarter of 2010 and a negative $1.95 million for the fourth quarter of 2010. Our non-performing asset totals decreased to $3.91 million at March 31, 2011 compared to $4.30 million at December 31, 2010 and $9.70 million at March 31, 2010. Additionally, accruing substandard loans decreased to $13.50 million at March 31, 2011 from $18.07 million at December 31, 2010 and $23.55 million at March 31, 2010. Approximately $430 thousand in non-accruing loans carry some form of government guarantee. All of these factors are taken into consideration during managements quarterly review of the allowance for credit losses which we continue to deem reasonable at March 31, 2011. See Credit Quality and the Allowance for Credit Losses for additional information on the provision, the allowance for credit losses and the allowance for loan losses.
Noninterest Income: Total noninterest income decreased to $2.09 million for the first quarter of 2011 compared to $2.91 million for the first quarter of 2010, and $2.54 million for the fourth quarter of last year. Excluding net gains (losses) on security sales and other than temporary impairment losses, noninterest income decreased $178 thousand to $2.10 million for the first quarter of this year compared to $2.28 million for the same period last year and decreased $253 thousand from $2.36 million for the fourth quarter of 2010. Trust division income increased to $623 thousand for the first quarter of 2011 compared to $518 thousand for the first quarter of 2010, and $573 thousand for the fourth quarter of 2010. Revenue related to service charges on deposits decreased to $962 thousand for the first quarter of 2011 compared to $1.24 million for the first quarter of 2010, and $1.08 million for the fourth quarter of 2010. This decrease is almost entirely related to reduced overdraft service charge revenue. Net overdraft fee revenue for the first quarter of 2011 was 26% lower than the first quarter of 2010 at $756 thousand compared to $1.02 million for the first quarter of 2010 and $858 thousand for the fourth quarter of 2010. Reductions in overdraft fee revenue are almost entirely a result of legislative changes that went into effect on August 15, 2010. At the same time, other noninterest income increased slightly to $975 thousand for the first quarter of 2011 compared to $958 thousand for the first quarter of 2010, and decreased slightly from $1.12 million for the fourth quarter of 2010. Net debit card fee income, a component of other noninterest income, was $654 thousand for the first quarter of 2011 compared to $630 thousand for the first quarter of 2010 and $775 thousand for the fourth quarter of last year. Debit card fee income is typically lower in the first quarter of the year than in the fourth quarter. The Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the Federal Reserve Board to regulate debit card interchange fees; although the changes are aimed at large banks, it is possible that all banks will be impacted. It is not possible to predict at this time what, if any, impact the changes will have on our debit card revenue.
Noninterest Expense: Total noninterest expense for the first quarter of 2011 was $10.11 million compared to $9.47 million for the first quarter of 2010 and $13.34 million for the fourth quarter of last year. There were several factors that combined to produce the changes. We incurred a $3.07 million prepayment penalty during the fourth quarter of 2010 related to the prepayment of $46.50 million in long term debt. No prepayment penalties were incurred in the first quarter of 2011 or 2010. Salaries and wages were $3.76 million for the first quarter of 2011 compared to $3.70 million for the first quarter of 2010, and $4.33 million for the fourth quarter of 2010. Increased base salaries for the first quarter of 2011 compared to the same period in 2010 were largely offset by a lower incentive accrual for the first quarter of 2011 compared to the same period in 2010. The reduction in salaries when comparing the first quarter of 2011 to the fourth quarter of 2010 was primarily a result of a higher incentive accrual for the fourth quarter of 2010 as a result of our very strong results for 2010. We booked expense recoveries and gains related to the sale of OREO properties totaling $318 thousand during the first quarter of 2010. This gain resulted in a negative OREO expense during the first quarter of 2010 of ($194) thousand, compared to $16 thousand for the first quarter of 2011 and $1 thousand for the fourth quarter of 2010.
Quarterly average loans for the first quarter of 2011 were $916.38 million, an increase of $11.34 million over the fourth quarter of 2010, and ending balances at March 31, 2011 were $922.13 million, $11.33 million higher than ending balances at December 31, 2010. A combination of modest incremental demand from existing customers together with some new customer relationships lead to increased loan balances in the quarter.
Total deposits at March 31, 2011 were $1.10 billion, an increase of $6.47 million from year end 2010 balances of $1.09 billion. Average balances for the first quarter of 2011 were $1.09 billion, an increase of $9.90 million from average balances of $1.08 billion for the fourth quarter of 2010.
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Merchants Bancshares Inc. has a market cap of $159.7 million; its shares were traded at around $25.78 with a P/E ratio of 10.8 and P/S ratio of 2.2. The dividend yield of Merchants Bancshares Inc. stocks is 4.3%. Merchants Bancshares Inc. had an annual average earning growth of 5.3% over the past 10 years.
Highlight of Business Operations:
Loans ended the quarter at $922.13 million, an $11.33 million increase over year end balances. Investments ended the quarter at $477.03 million, $10.27 million increase over year end balances, and deposits ended the quarter at $1.10 billion, a $6.47 million increase over year end balances.Provision for Credit Losses (Provision): Due to our continued strong asset quality, we did not record a provision in the first quarter of 2011. This compares to a provision of $600 thousand for the first quarter of 2010 and a negative $1.95 million for the fourth quarter of 2010. Our non-performing asset totals decreased to $3.91 million at March 31, 2011 compared to $4.30 million at December 31, 2010 and $9.70 million at March 31, 2010. Additionally, accruing substandard loans decreased to $13.50 million at March 31, 2011 from $18.07 million at December 31, 2010 and $23.55 million at March 31, 2010. Approximately $430 thousand in non-accruing loans carry some form of government guarantee. All of these factors are taken into consideration during managements quarterly review of the allowance for credit losses which we continue to deem reasonable at March 31, 2011. See Credit Quality and the Allowance for Credit Losses for additional information on the provision, the allowance for credit losses and the allowance for loan losses.
Noninterest Income: Total noninterest income decreased to $2.09 million for the first quarter of 2011 compared to $2.91 million for the first quarter of 2010, and $2.54 million for the fourth quarter of last year. Excluding net gains (losses) on security sales and other than temporary impairment losses, noninterest income decreased $178 thousand to $2.10 million for the first quarter of this year compared to $2.28 million for the same period last year and decreased $253 thousand from $2.36 million for the fourth quarter of 2010. Trust division income increased to $623 thousand for the first quarter of 2011 compared to $518 thousand for the first quarter of 2010, and $573 thousand for the fourth quarter of 2010. Revenue related to service charges on deposits decreased to $962 thousand for the first quarter of 2011 compared to $1.24 million for the first quarter of 2010, and $1.08 million for the fourth quarter of 2010. This decrease is almost entirely related to reduced overdraft service charge revenue. Net overdraft fee revenue for the first quarter of 2011 was 26% lower than the first quarter of 2010 at $756 thousand compared to $1.02 million for the first quarter of 2010 and $858 thousand for the fourth quarter of 2010. Reductions in overdraft fee revenue are almost entirely a result of legislative changes that went into effect on August 15, 2010. At the same time, other noninterest income increased slightly to $975 thousand for the first quarter of 2011 compared to $958 thousand for the first quarter of 2010, and decreased slightly from $1.12 million for the fourth quarter of 2010. Net debit card fee income, a component of other noninterest income, was $654 thousand for the first quarter of 2011 compared to $630 thousand for the first quarter of 2010 and $775 thousand for the fourth quarter of last year. Debit card fee income is typically lower in the first quarter of the year than in the fourth quarter. The Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the Federal Reserve Board to regulate debit card interchange fees; although the changes are aimed at large banks, it is possible that all banks will be impacted. It is not possible to predict at this time what, if any, impact the changes will have on our debit card revenue.
Noninterest Expense: Total noninterest expense for the first quarter of 2011 was $10.11 million compared to $9.47 million for the first quarter of 2010 and $13.34 million for the fourth quarter of last year. There were several factors that combined to produce the changes. We incurred a $3.07 million prepayment penalty during the fourth quarter of 2010 related to the prepayment of $46.50 million in long term debt. No prepayment penalties were incurred in the first quarter of 2011 or 2010. Salaries and wages were $3.76 million for the first quarter of 2011 compared to $3.70 million for the first quarter of 2010, and $4.33 million for the fourth quarter of 2010. Increased base salaries for the first quarter of 2011 compared to the same period in 2010 were largely offset by a lower incentive accrual for the first quarter of 2011 compared to the same period in 2010. The reduction in salaries when comparing the first quarter of 2011 to the fourth quarter of 2010 was primarily a result of a higher incentive accrual for the fourth quarter of 2010 as a result of our very strong results for 2010. We booked expense recoveries and gains related to the sale of OREO properties totaling $318 thousand during the first quarter of 2010. This gain resulted in a negative OREO expense during the first quarter of 2010 of ($194) thousand, compared to $16 thousand for the first quarter of 2011 and $1 thousand for the fourth quarter of 2010.
Quarterly average loans for the first quarter of 2011 were $916.38 million, an increase of $11.34 million over the fourth quarter of 2010, and ending balances at March 31, 2011 were $922.13 million, $11.33 million higher than ending balances at December 31, 2010. A combination of modest incremental demand from existing customers together with some new customer relationships lead to increased loan balances in the quarter.
Total deposits at March 31, 2011 were $1.10 billion, an increase of $6.47 million from year end 2010 balances of $1.09 billion. Average balances for the first quarter of 2011 were $1.09 billion, an increase of $9.90 million from average balances of $1.08 billion for the fourth quarter of 2010.
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