Shareholders of Flagship Bank and Trust Co. have approved its acquisition by Burlington, Vt.-based Chittenden Corp. for $37 million in stock.

The transaction, which has been approved by federal regulators but is still subject to state approval, is expected to close by today.

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.

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