Merchants Bancshares Announces Dividend Declaration and Extension of Stock Buyback Program

Merchants Bancshares, Inc.

, the parent company of Merchants Bank, announced that its Board of Directors declared today, January 19, 2012, a dividend of 28 cents per share, payable February 16, 2012, to shareholders of record as of February 2, 2012. This quarter represents our 61st consecutive quarterly dividend payment and our 25th consecutive quarter at the current payout level. Merchants also announced the extension, through January 2013, of its stock buyback program, originally adopted in January 2007. Under the program Merchants may repurchase 200,000 shares of its common stock on the open market from time to time, and had purchased 143,475 shares to date. Although Merchants did not repurchase any of its shares during the fourth quarter of 2011, and does not expect to repurchase shares in the near future, Merchants wanted to preserve the flexibility of an active buyback program.