Chittenden Corp. has completed its acquisition of Worcester, Mass.-based Flagship Bank and Trust Co. for $37 million in stock.

Under the deal, Chittenden will issue 1.4 million shares of common stock and will pay almost twice book value for $270 million-asset Flagship, which will operate as a subsidiary of $1.5 billion-asset Chittenden.

Flagship shareholders will receive 1.2 shares of Chittenden stock for each of their shares, and will control about 15% of Chittenden's outstanding stock.

Because the two banks operate in completely different markets, no branch closings, job cuts, name changes, or computer conversions will be required.

This is the second time Chittenden has ventured into Massachusetts. The company, Vermont's largest bank, bought $240 million-asset Bank of Western Massachusetts, Springfield, in March 1995.

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