**EXHIBIT
13**






**ANNUAL
REPORT TO SHAREHOLDERS**







Our roots
run deep in Bangor, a city once described by Henry David Thoreau as “a star on
the edge of night.” We have been proud, over the years, to be associated with
many projects which have contributed to Bangor’s luster and vitality.





In 2004,
we were pleased to have an opportunity to purchase one of its landmarks, the
former Penobscot Theatre property located at 183 Main Street. Originally named
“Memorial Parlor,” the historic building was substantially funded in memory of a
member of the Wood family, owners of the Wood & Bishop Foundry, one of
Bangor’s largest companies in the 1880’s. Our plan is to renovate the building,
maintaining the beautiful arched ceilings and other unique architectural
features of the Victorian period, and to use it as a home for our Trust and
Investment Services Department and to accommodate future growth.





We have
worked closely with the City on the project, which will be a significant
contribution to the aesthetic improvement of the Downtown District and
neighboring waterfront area. This is a win-win partnership and a signal to all
of our Company’s commitment to Bangor and the future.











**Selected
Financial Highlights**





*(Dollars
in thousands, except per share data)*


**For
      the Year**
    
    2004
    
    2003
    
    2002
    
    2001
    
    2000Net
      income
    
    $
    4,907
    
    $
    4,302
    
    $
    3,845
    
    $
    3,254
    
    $
    2,619Net
      interest income
    
    
    13,773
    
    
    12,479
    
    
    12,463
    
    
    11,542
    
    
    10,026Non-interest
      income
    
    
    5,005
    
    
    5,181
    
    
    3,963
    
    
    3,299
    
    
    3,155Non-interest
      expense
    
    
    11,042
    
    
    10,718
    
    
    10,205
    
    
    9,468
    
    
    8,823**Per
      Common Share**(adjusted
      for 3% stock dividend in 2004)Basic
      earnings per share
    
    $
    1.46
    
    $
    1.26
    
    $
    1.24
    
    $
    1.10
    
    $
    0.87Diluted
      earnings per share
    
    
    1.44
    
    
    1.26
    
    
    1.11
    
    
    0.95
    
    
    0.77Dividends
      per share
    
    
    0.56
    
    
    0.47
    
    
    0.38
    
    
    0.28
    
    
    0.22Book
      value per share at year end
    
    
    9.38
    
    
    8.92
    
    
    8.59
    
    
    8.92
    
    
    8.00Stock
      price:High
    
    
    25.65
    
    
    21.18
    
    
    15.32
    
    
    10.52
    
    
    10.77Low
    
    
    20.11
    
    
    14.21
    
    
    10.34
    
    
    8.44
    
    
    5.78Close
    
    
    21.59
    
    
    21.09
    
    
    14.70
    
    
    10.34
    
    
    7.77**Key
      Performance Ratios**Return
      on average equity
    
    
    16.06
    %
    
    14.74
    %
    
    13.93
    %
    
    13.18
    %
    
    11.94
    %Return
      on average assets
    
    
    1.36
    
    
    1.34
    
    
    1.33
    
    
    1.26
    
    
    1.16Equity
      to assets at year end
    
    
    8.50
    
    
    8.93
    
    
    9.24
    
    
    9.34
    
    
    9.45Non-performing
      assets to total assets
    
    
    0.44
    
    
    0.18
    
    
    0.25
    
    
    0.26
    
    
    0.25Net
      charge-offs to average loans
    
    
    0.05
    
    
    0.04
    
    
    0.07
    
    
    0.08
    
    
    0.03Efficiency
      ratio
    
    
    59.29
    
    
    60.51
    
    
    62.01
    
    
    63.96
    
    
    66.63Dividend
      payout ratio
    
    
    38.32
    
    
    37.16
    
    
    31.27
    
    
    25.87
    
    
    25.52**At
      Year End**Total
      assets
    
    $
    368,690
    
    $
    342,189
    
    $
    307,316
    
    $
    278,197
    
    $
    246,413Loans
    
    
    282,988
    
    
    246,512
    
    
    214,729
    
    
    188,080
    
    
    165,923Deposits
    
    
    299,782
    
    
    258,848
    
    
    238,857
    
    
    219,309
    
    
    200,451Shareholders’
      equity
    
    
    31,329
    
    
    30,553
    
    
    28,388
    
    
    25,985
    
    
    23,292














Dear
Shareholders:





2004 was
an outstanding year for our Company. We achieved record earnings of $4.9 million
representing a 14% increase over last year. This performance is attributable to
strong loan and deposit growth and effective risk management in a volatile rate
environment, as well as tremendous effort on the part of our employees. They are
the bedrock of Merrill Merchants Bancshares, Inc. and their dedication and
diligence over the past twelve years have enabled us to build a solid foundation
for the future growth of our Company.





**Looking
to the Future**





In April,
a long-planned leadership transition became effective with founding board
chairman, William C. Bullock, Jr., passing his gavel to Edwin N. Clift. Bill
continues to provide leadership and guidance as a director of the Company and
the Bank and as chairman of the trust and investment committee of the board. We
are most appreciative of Bill’s central role in the start up and early years of
our Company and of his ongoing interest in our day-to-day activities, most
particularly the investment area, which has been one of his life-long passions.
In addition to his new responsibilities as chairman, Ed continues to serve as
chief executive officer of the Company.





William
P. Lucy is now our president. A key member of the original management team, Bill
had most recently served as executive vice president and senior loan officer for
the Bank. In addition to his new duties as president, he will continue to
oversee the Bank’s lending area, which, under his leadership, has experienced an
average annual growth rate of 22% over the last twelve years while maintaining
solid asset quality.





In
September, we were very pleased to welcome Michael T. Shea as a director of the
Bank. Mike is the president and chief executive officer of Webber Energy Fuels
of Bangor and a twenty-eight year veteran of the petroleum industry. Mike’s
business acumen, integrity and understanding of the Maine economy are very
valuable to our board.





**Taking
the Lead**





Since
1992, we have established an enviable record of financial services achievements.
We are pleased to regularly rank among the top U. S. Small Business
Administration (SBA) lenders in the State of Maine and to have earned their
“Preferred Lender” status. We are very proud, in this current SBA fiscal year,
to once again be ranked number one in SBA loans originated in
Maine.





We
continue to be among the leading mortgage originators in Penobscot County and
this year we were pleased to see our marketing and business developments bear
fruit as we took over the number two spot in deposit market share in Bangor.
Construction lending, which is a niche where we have built a solid reputation
among builders based on our ability to provide rapid turn around, prompt
disbursements and attention to detail, was at an all time high in 2004.





That same
exceptional service and a record of solid investment performance have been
convincing marketing tools for our Trust and Investment Services Department,
which added significantly to its client base and grew trust assets by $40.9
million in 2004. This represents 13% growth, year over year, and brings our
total assets under administration to $356.4 million.





Another
first in the market for our Company this past year was the introduction of Free
Business Checking. We doubled our business checking account openings in 2004 and
added $5.0 million in new funds as a result of this offering, which is an arm of
the High Performance Checking program we first introduced to personal banking
customers in 2002.





And M
& M Consulting, LLC, a joint venture owned 50% by the Bank, has experienced
significant growth providing internal audit, loan review and other regulatory
training and consulting services to more than 55 financial institutions
throughout New England.











As a
result of these and other accomplishments, we are confident that our Company has
a well-honed competitive edge and we are well-poised to take advantage of
whatever growth opportunities arise in the future.





**Stock
Performance**





In
keeping with our commitment to return value to shareholders, the Company issued
its ninth annual stock dividend in 2004. For the fourth consecutive year, the
Company also increased the quarterly dividend payment twice in the same year. In
2004, dividends declared per share increased 19% to $0.56 per share. The fourth
quarter dividend of $.15 per share translates to a current dividend yield of
2.78%.





Following
a trend of many other community banks, trading at earnings multiples
significantly above the small capitalization bank average, our stock reached an
all-time market high of $25.65 in May. At year end, our stock price was at
$21.59, a 2.3% increase over the closing price of $21.10 in 2003. Combining
market appreciation and dividend reinvestment, our shareholders who invested in
the Company in 1992 have experienced an average rate of return of 17.03% and
investors in the 1998 initial public offering have experienced an average rate
of return of 15.02%.





**Recognition**





We are
very pleased to announce that Meris J. Bickford, Esq., a valued senior member of
our Trust and Investment Services Department, was elected president of the Maine
State Bar Association in January 2005. It is an honor for the Bank to have her
serving in this distinguished capacity.




In April,
we will bid adieu to Robert E. Knowles, a founding director of the Bank and a
director of the Company since 2001. We will miss Bob’s business savvy and
guidance and are deeply appreciative of his service on behalf of the
Company.





Charles
W. Hart, executive vice president, and one of the key players in the formation
of our Company, retired in December after a distinguished banking career
spanning four decades. Charlie had a rare talent for getting to the heart of a
matter and we will miss his wit and wisdom.





**Pledge
of Trust**





The
values which have been such an integral part of our past success continue to
guide us. We are firmly committed to upholding the highest ethical standards.
Our reputation and the trust of our shareholders, employees and customers is
something we hold sacred. You have our pledge that we have the appropriate
corporate governance policies in place and that we are operating Merrill
Merchants Bancshares, Inc. with both honesty and integrity.





Sincerely,Edwin N. Clift
    William
      P. Lucy*Chairman and Chief Executive
      Officer*
    *President*















**Condensed
Consolidated Balance Sheets**


****December
      31,
    ****
    **2004**
    ****
    **2003***(In
      thousands)***Assets**Cash
      and due from banks
    
    $
    10,220
    
    $
    10,746Securities
    
    
    66,099
    
    
    76,140Loans
      held for sale
    
    
    617
    
    
    789Loans
    
    
    282,988
    
    
    246,512Allowance
      for loan losses
    
    
    (3,866
    )
    
    (3,652
    )Other
      assets
    
    
    12,632
    
    
    11,654Total
      assets
    
    $
    368,690
    
    $
    342,189**Liabilities
      and Shareholders’ Equity**DepositsInterest-bearing
    
    $
    247,837
    
    $
    210,968Noninterest-bearing
    
    
    51,945
    
    
    47,880Total
      deposits
    
    
    299,782
    
    
    258,848Borrowings
    
    
    33,524
    
    
    49,260Other
      liabilities
    
    
    4,055
    
    
    3,528Total
      liabilities
    
    
    337,361
    
    
    311,636Shareholders’
      equity
    
    
    31,329
    
    
    30,553Total
      liabilities and shareholders’ equity
    
    $
    368,690
    
    $
    342,189














**Condensed
Consolidated Statements of Income**




Year Ended December 31,
    
    **2004**
    ****
    **2003**
    ****
    **2002**(In
      Thousands, except per share data)Interest
      and dividend income
    
    $
    18,708
    
    $
    17,213
    
    $
    18,307Interest
      expense
    
    
    4,935
    
    
    4,734
    
    
    5,844Net
      interest income
    
    
    13,773
    
    
    12,479
    
    
    12,463Provision
      for loan losses
    
    
    348
    
    
    444
    
    
    453Net
      interest income after provision for loan losses
    
    
    13,425
    
    
    12,035
    
    
    12,010Noninterest
      income:Deposit
      services
    
    
    1,399
    
    
    1,161
    
    
    858Trust
      and investment advisory services
    
    
    1,382
    
    
    1,186
    
    
    1,075Net
      gain on sale of mortgage loans
    
    
    897
    
    
    1,808
    
    
    796Net
      securities gains (losses)
    
    
    155
    
    
    (51
    )
    
    (30
    )Other
      noninterest income
    
    
    1,172
    
    
    1,077
    
    
    1,2645,005
    
    
    5,181
    
    
    3,963Noninterest
      expense:Compensation
      and employee benefits
    
    
    6,310
    
    
    5,887
    
    
    5,452Occupancy
    
    
    858
    
    
    811
    
    
    825Equipment
    
    
    606
    
    
    637
    
    
    716Data
      processing
    
    
    686
    
    
    626
    
    
    558Advertising
      and marketing
    
    
    578
    
    
    607
    
    
    346Professional
      fees
    
    
    375
    
    
    397
    
    
    459Other
      noninterest expense
    
    
    1,629
    
    
    1,753
    
    
    1,84911,042
    
    
    10,718
    
    
    10,205Income
      before income tax expense
    
    
    7,388
    
    
    6,498
    
    
    5,768Income
      tax expense
    
    
    2,481
    
    
    2,196
    
    
    1,923Net
      income
    
    $
    4,907
    
    $
    4,302
    
    $
    3,845Weighted
      shares outstanding:Basic
    
    
    3,371,147
    
    
    3,404,872
    
    
    3,079,525Diluted
    
    
    3,399,706
    
    
    3,425,897
    
    
    3,476,476Earnings
      per share:Basic
    
    $
    1.46
    
    $
    1.26
    
    $
    1.23Diluted
    
    $
    1.44
    
    $
    1.26
    
    $
    1.11











**Financial
Results**





Record
earnings for 2004 were driven by strong loan growth early in the year and
limiting operating expenses to an overall 3% increase. We also came close,
despite the challenge of historically low interest rates and a cooling off in
residential refinance activity, to replacing the decline in mortgage gains
through growth in all other fee income categories.





**Record
earnings**


Earnings
for 2004 increased 14% to $4.9 million, up from $4.3 million in 2003. Earnings
per diluted share increased 14% to $1.44 from $1.26 in the prior
year.





**Loan
growth**


Total
loans grew 15% in 2004. Real estate lending was strong with construction
balances increasing 33%, home equity balances growing 20% and residential
mortgages up 9%. The commercial and commercial real estate portfolio grew at a
rate of 16% and consumer loans increased 8% from a year ago.





**Asset
quality**


We
continue to maintain strong asset quality with net charge-offs of $134,000 in
2004 representing 0.05% of average net loans compared to 0.04% in 2003.
Nonperforming assets as a percentage of total assets were 0.44% at year-end, up
from 0.18% at the close of 2003. Despite the increase in nonperforming assets to
$1.6 million at year-end, only $500,000 of the balance is not guaranteed by the
SBA.





**Deposit
growth**


The
direct mail marketing campaign to businesses and individuals under the High
Performance Checking program combined with business development efforts has
resulted in a 15% increase in checking account balances in 2004. Money market
and savings accounts increased 19% while certificate of deposit balances grew
13% in 2004.





**Noninterest
income**


Fee
income declined 3% in 2004 due to the substantial drop in mortgage refinance
activity which resulted in a decline in the gain on loan sales of $911,000. We
experienced growth in all other fee categories with service fees on deposit
accounts increasing 20%, trust fees growing 17% and gains on investment
securities increasing $206,000 from a year ago.





**Noninterest
expense**


Our
efficiency ratio continued to improve decreasing to 59.3%, down from 60.5% in
2003. Operating expenses increased only 3% in 2004 as increases in salaries and
employee benefits, occupancy costs, and data processing costs were offset by
declines in equipment expense, merchant processing expense and mortgage
servicing rights amortization.











**People
You Trust**





Banking
is a people business and one of the keys to our ongoing success has been the
dedicated people who work for our Company. We are fortunate to have attracted
some of Maine’s best and brightest talent over the past twelve years and it is a
pleasure to have them assume increasing responsibilities within various
departments and management.





They
understand our mission - to be the best community bank in our market area - and
they are fully engaged in accomplishing that goal, whether it’s through business
development activities, streamlining operational procedures to enhance customer
service or ensuring proper security measures are in place to protect the privacy
of our customers.





Whatever
the challenge, we want our people to have the banking knowledge and skills
required to do their jobs and to feel empowered to make good decisions. Toward
that end, we instituted a leadership training program this year which includes
elements of outdoor adventure, public speaking and special projects. The real
strength of the program for participants is that it allows them to step outside
their jobs and focus on developing the communication and interpersonal skills
required for effective leadership.





In
February 2005, Paul Pasquine, a former Merrill Trust Company colleague, joined
us as senior vice president and senior trust officer. Paul’s thirty years of
financial services experience, including many years of trust, employee benefits
and investment management are invaluable to our Company and we are very pleased
to have his counsel and leadership in this area.





In our
business it all comes down to people you trust. It’s a responsibility we take
very seriously and we are fully committed to having the best banking staff in
Maine.





**Relationship
Products**





In
addition to our talented staff, we offer an array of relationship products
designed to meet the needs of today’s customers, both business and personal, who
appreciate our personalized approach to banking but who also want to access
financial services using a host of options. This year we were pleased to be one
of the first banks in Maine to offer Health Savings Accounts, a product which
has been very well received by those who appreciate the benefits of this account
to both employees and employers as they contemplate how to help manage the
increasing cost of healthcare.





**Internet
Banking**


Online
banking service is available for both business and personal customers who prefer
to conduct day-to-day transactions from the convenience of their home or office.
For businesses this includes wire transfers and ACH originations in addition to
regular funds transfers, stop payments, transaction download capability and bill
payment.





**Business
Banking**


All of
our lending decisions are made promptly by Maine people who
understand **** the local
economy and have the flexibility to customize products to meet individual
business needs. **** Our
complete line of products includes Free Business Checking, money market and
savings accounts as well as an array of commercial lending services such as
lines of credit, letters of credit, commercial mortgages, and guaranteed loans
as well as a full range of corporate services including overnight investment
accounts, credit sweep accounts, account reconciliation, zero balance accounts,
ACH origination and international services.








****


**Personal
Banking**


Our
personal deposit services include seven checking accounts, including *Totally
Free Checking* as well
as statement and passbook savings accounts, plus both regular and Individual
Retirement Account (IRA) money markets and certificates of deposit. Our consumer
loan products include mortgage loans, home equity loans, auto loans, credit
cards and other secured and non-secured loans.





**Trust
& Investment Services**


Our
professional staff brings a broad base of knowledge and experience, including
legal, employee benefit and investment expertise, to their responsibilities and
we are pleased to include among our services: investment management accounts and
services, custody of assets, personal trusts, retirement plans, estate and tax
planning assistance and estate settlement services.





**Merrill
Financial Services**


A
division of the Bank, Merrill Financial Services was established to provide
clients with a full range of financial planning options including investment and
insurance strategies. Through a partnership with UVEST Financial Services,
clients have access to customized investment and insurance options targeted to
achieve specific investment goals. Among the options available are financial
needs analysis, mutual funds, annuities, life insurance and more.





**Maine
Acceptance Corporation**


Maine
Acceptance Corporation, a division of the Bank, focuses on indirect lending to
several Maine auto and recreational vehicle dealers as well as direct lending to
individuals, including personal unsecured, recreational vehicle, automobile,
mobile home and home equity loans.





**ATM
Network**


The Bank
has a network of fifteen ATMs located at its banking offices and other locations
and provides statewide surcharge-free ATM access through its participation in
the Maine Cash Access network of more than 170 ATMs located throughout the state
of Maine.





**Building
Our Communities**


Community
outreach is a part of our daily life at the Bank. Our presence in the Central
Maine area covers a broad geographic base centered in Bangor and extending south
along I-95, including the communities of Newport, Pittsfield and Waterville.





**Volunteerism**


Our
employees play a very active role in these communities, serving in leadership
roles for various organizations such as United Way of Eastern Maine, Husson
College, Waterville Osteopathic Hospital, Bangor Historical Society, St. Joseph
Healthcare, Abnaki Girl Scout Council, Bangor Humane Society, Ronald McDonald
House, and the University of Maine to name but a few. Others are involved as
advisors, coaches, and soup kitchen volunteers. The Bank’s total employee
volunteer time in 2004 amounted to more than 10,000 hours, or the equivalent of
five full-time employees.











This year
several of our employees were honored with prestigious awards for their
individual efforts. Ed Clift received the “Spirit of Volunteerism Award” from
the Department of Defense in recognition of his service as Chairman of the Maine
Committee for ESGR (Employer Support for the Guard and Reserve). Lucille
Zelenkewich was honored by the Alfond Youth Center (Waterville) at their Kid
Lover’s Holiday Ball for her many years of support and Chuck Bickford was
honored at the annual meeting of the Mid-Maine Chamber of Commerce with their
Distinguished Community Service Award.





**Charitable
Giving**


The Bank
also supports a number of non-profit organizations through capital campaigns,
annual giving and sponsorships each year. In 2004 this totaled in excess of
$150,000 including our support of the United Way of Eastern Maine, Forest
Society of Maine, Bangor Symphony Orchestra, Maine Discovery Museum, St. Joseph
Hospital, Eastern Maine Community College, Maine Central Institute and a host of
other worthy endeavors that enrich the lives of our communities.





**Partnerships**


Our
partnership with Penquis Community Action Program resulted in two significant
affordable housing projects in 2004, Windward Housing in Searsport and the 165
Griffin Road Project in Bangor, as well as ongoing support for their Homebuyer
Education classes. And we are partnering with Penquis on another affordable
housing project, due for construction in 2005, in the Corinna area.





**Looking
Ahead**





The
future looks bright for our Company. Thanks to the innovative and unselfish
efforts of our employees and the guidance of our directors, we have a solid
foundation on which to build. We have the leadership, the teamwork, the
opportunity and the desire to accomplish great things. Creating value for
customers, employees and investors is the fuel that drives us forward and will
enable future success.














**Board
of Directors**





**Edwin
N. Clift** **(A,
B)**


*Chairman
and CEO,* Merrill
Merchants Bancshares, Inc. and Merrill Merchants Bank





**William
P. Lucy** **(B)**


*President,* Merrill
Merchants Bancshares, Inc. and Merrill Merchants Bank





**William
C. Bullock, Jr.** **(A,
B)**


*Former
Chairman,* Merrill
Merchants Bancshares, Inc. and Merrill Merchants Bank


*Chairman:
Trust & Investment Committee*





**Joseph
H. Cyr** **(A,
B)**


*President,* John T.
Cyr & Sons, Inc.





**John
R. Graham** **(B)**


*President,* Automatic
Distributors





**Perry
B. Hansen** **(A,
B)**


*Chairman
and CEO,* THE
National Bank


*Chairman:
Nominating & Corporate Governance Committee*


*Chairman:
Compensation Committee*





**Charles
M. Hutchins** **(B)**


*Vice
President,* Alternative
Energy, Inc.





**Joseph
P. Irish** **(B)**


*President,* Waldo
County Oil





**Robert
E. Knowles** **(A,
B)**


*Investor*





**Frederick
A. Oldenburg, Jr., M.D.** **(A,
B)**


*Director,* Penobscot
Respiratory, P.A.





**Lloyd
D. Robinson** **(A, B)**


*Investor*





**Michael
T. Shea** **(B)**


*President
& CEO,* Webber
Energy Fuels





**Dennis
L. Shubert, M.D., Ph.D.** **(A,
B)**


*Executive
Director,* Maine
Quality Forum, The Dirigo Health Agency


*Chairman:
Audit Committee*





**Susan
B. Singer** **(A,
B)**


*Investor*





**(A)
Merrill Merchants Bancshares, Inc.**


**(B)
Merrill Merchants Bank**





**Merrill
Merchants Bank**


**Honorary
Directors**


J. Donald
Macintosh


Leonard
E. Minsky


Norman
Minsky, Esq.


Joseph
Sewall


Harold S.
Wright


****





****


**Senior
Management**





Edwin N.
Clift


*Chairman
& CEO*





William
P. Lucy


*President*





Deborah
A. Jordan


*Executive
Vice President*


*Chief
Financial Officer*





Jane H.
Madigan


*Senior
Vice President*


*Marketing
& Human Resources*





R. Paul
Pasquine


*Senior
Vice President*


*Trust
& Investment Services*





Lynne A.
Spooner


*Senior
Vice President*


*Retail
Banking*





Reginald
C. Williams, Jr.


*Senior
Vice President*


*Operations*











**Employees**





William
      W. Abbott
    Matthew
      J. Harvey
    Kathleen
      G. Prescott*Cindy
      L. Allen
    Diane
      M. Hewett
    Priscilla
      A. PullenMatthew
      E. Arnold*
    Amelie
      M. Hichborn
    Andrew
      C. Reed*Thomas
      W. Austin
    Jody
      E. Holmes
    Cindy
      L. RickmanRyan
      J. Babbidge
    Samantha
      J. Howe
    Carole
      L. RobinsonJill
      E. Bean
    Abbee
      L. Howes
    Dianne
      L. RoyNancy
      L. Bellefleur
    Mary
      Beth Inforati
    Laurie
      A. RyanScott
      D. Bennett
    Jerry
      C. Jarrell*
    DeAnn
      SeddonClarence
      E. Bickford*
    Deborah
      A. Jordan*
    Kelly
      A. ShoreyMeris
      J. Bickford*
    Judith
      D. Kelly
    Alena
      J. Sibley*Timothy
      H. Birmingham
    Kimberly
      A. Keniston
    Betsy
      A. Simpson*Christel
      B. Boone
    Gwendolyn
      A. King
    Kathryn
      A. SimpsonJacqueline
      A. Bouchey*
    Kim
      M. Kirchdorfer
    Jason
      D. Simsay*Kathy
      M. Boutin
    Janet
      L. Kochis
    Lori
      A. SinclairLynn
      M. Bowden*
    Stephanie
      E. Lagasse
    Benjamin
      J. SmithCynthia
      J. Brawn
    Jonathan
      S. Lander*
    Diane
      M. SmithAnn
      M. Brewer
    Ronald
      J. Landry
    Hope
      J. SmithTheresa
      M. Brooks*
    Janet
      L. Lane
    Jane
      F. SmithFred
      A. Brown*
    Darleen
      M. Lanphere
    Valrie
      G. SmithLinda
      J. Bryant
    Sandra
      J. Leavitt*
    Lynne
      A. Spooner*William
      C. Bullock, Jr.*
    Cynthia
      L. Leighton*
    Kathleen
      SpruceAngela
      T. Butler*
    Floyd
      W. Libby*
    Joshua
      T. St. LouisStacie
      A. Buzzell
    Linda
      M. Lizotte
    Linda
      J. St. LouisTanya
      R. Candage
    William
      P. Lucy*
    Kathleen
      A. SteinJessica
      L. Carver
    Jane
      H. Madigan*
    Tasha
      M. SwansonEva
      M. Charity
    Angela
      R. Madore
    Veronica
      E. SylviaAmanda
      S. Chretien
    Melony
      R. Maynard
    Susan
      V. Terrillion*Edwin
      N. Clift*
    Eunice
      M. McAfee
    Lorraine
      M. Therrien*Barbara
      J. Cochran
    Dorianna
      E. McNally
    Marlene
      D. Thomas*Alyson
      A. Coffin
    Suzanne
      M. Mercier
    Thomas
      A. Tilley*Michelle
      T. Czapiga
    Suzanne
      T. Moffatt*
    Lisa-Marie
      J. TocciGeorge
      E. Dandaneau*
    Michael
      J. Moody
    Joyce
      D. TomanCarla
      A. DeVita
    Jaime
      L. Moore
    Holly
      A. Vetelino*Jayne
      T. Dickey
    Pamela
      J. Mugnai
    Judy
      M. WallsMarjorie
      J. Downing*
    Debra
      L. Murray
    Jerina
      K. Warner*Melissa
      M. Eaton
    Lawrence
      M. Napoleone*
    Danelle
      L. Weston*Patricia
      L. Eldridge
    Roland
      L. Narofsky
    Reginald
      C. Williams, Jr.*Linda
      G. England*
    Richard
      M. Nickerson*
    Rhonda
      A. WilliamsBrent
      A. Folster*
    Deanna
      L. Ouellette
    Joanne
      E. WilsonRobert
      J. Gardner*
    R.
      Paul Pasquine*
    Christopher
      R. WinsteadJuliana
      H. Graham
    Lewis
      H. Payne*
    Jacqueline
      E. WolinskiBecky
      L. Ham
    Diane
      T. Pearson
    Judy
      L. YorkMelissa
      L. Hamlin
    Sue
      E. Perkins
    Lucille
      D. Zelenkewich*Clarice
      L. Hannan
    Donna
      M. Poland
    Ellen
      N. ZiobronBetsy
      B. Hanscom
    Angela
      M. Porter
    ***Officers**








**Annual
Shareholder Meeting**


The
annual meeting of shareholders will be held at 5:00 p.m. on Wednesday, April 27,
2005, at the Holiday Inn, 500 Main Street, Bangor, Maine.








****


**Corporate
Headquarters**


Merrill
Merchants Bancshares, Inc.


201 Main
Street


Bangor,
Maine 04401


207-942-4800


*www.merrillmerchants.com*





**Annual
Report on Form 10-K**


The
Company’s Annual Report on Form 10-K as filed with the Securities and Exchange
Commission is available online at the Commission’s website: www.sec.gov .
Shareholders may obtain a copy, without charge, upon written request to the
address listed above.





**Contact**


Deborah
Jordan, Chief Financial Officer at 207-942-2494 or Jane Madigan, Senior Vice
President at 207-990-4075





**Web
Site**


Our
internet address is www.merrillmerchants.com or via
electronic mail: info@merrillmerchants.com





**Stock
Listing**


Merrill
Merchants Bancshares, Inc. common stock is traded on the Nasdaq National Market
system under the symbol MERB.





**Transfer
Agent**


Shareholder
inquiries regarding change of address or title should be directed
to:


Registrar
and Transfer Company


10
Commerce Drive


Cranford,
NJ 07016


1-800-368-5948





**Independent
Certified Public Accountants**


Berry
Dunn McNeil and Parker


36
Pleasant Street


Bangor,
Maine 04401

















**BRANCH
LOCATIONS**


Bangor


201 Main
Street


920
Stillwater Avenue


992 Union
Street


Brewer


366
Wilson Street


Holden


Route
1A


Milford


2 Main
Street


Newport


Newport
Plaza


Orono


69 Main
Street


Orrington


191 River
Road


Pittsfield


27 Main
Street


Waterville


58 Elm
Street