Chittenden — Investor Presentation (September 2007)
38 slides from Chittenden's investor presentation, Sep 7, 2007
Slide 1: As of June 30, 2007
Exhibit 99.1 As of June 30, 2007
Slide 2: Who We Are
Who We Are • Multi-bank holding company with significant operating autonomy at the individual banks • Banking assets of $6.9 billion at June 30, 2007 • Listed on the NYSE (CHZ), market capitalization as of June 30, 2007 was $1.6 billion • 133 full service banking offices and 160 ATM locations in VT,
Slide 3: A Tradition of Success
A Tradition of Success Recognized competency in an attractive business mix Deep relationships with worthwhile customers Conservative underwriting standards and disciplined lending Efficient generator of low cost stable deposits Proven leadership focus to achieve superior financial results Well-estab
Slide 4: Our Target Markets
Our Target Markets 6/30/07 % Assets (in millions) Chittenden Bank $3,103 45% Ocean National Bank $1,597 23% Bank of Western Mass $780 11% Flagship Bank $497 7% Maine Bank & Trust $376 6% Merrill Bank $525 8% Total $6,878 100% Loans by State 6/30/07 VT 39% MA 23% NH 20% CT 3% ME 15% Deposits by State
Slide 5: Corporate Structure
Corporate Structure CUSTOMERS Chittenden Ocean Flagship Bank Bank of Western Maine Bank & Merrill Bank National Bank & Trust Massachusetts Trust Bank CHITTENDEN SERVICES GROUP CORPORATE 5
Slide 6: Our Target Markets
Our Target Markets Vermont Market Southern NH/Seacoast Market • Population over 620,000 • Total regional population over 1 million • Greater Burlington population 150,000 • 17% population growth 1990 - 2003 • 13% population growth in Chittenden County since 1990 • Median household income of $50,000
Slide 7: Our Target Markets
Our Target Markets Greater Springfield Market Greater Worcester Market • Population nearly 850,000 in Pioneer Valley and • 3rd largest city in New England North Central, CT • Population of 777,000 in Worcester Co. • Median household income of $41,000 • 6 million people within a 50 mile radius • Medi
Slide 8: Our Target Markets
Our Target Markets Greater Portland Market Greater Bangor Market • Combined population of Cumberland and York Co. • Combined population of Penobscot County is nearly 470,000 147,068 • 15% population growth 1990 - 2003 • 60,820 households • Median household income of $44,000 • Median household income
Slide 9: Our Target Customers
Our Target Customers Businesses with Revenues of Commercial Banking $1 to $100 Million; Loan Needs up to $20 Million; Multiple Product and Service Needs Individuals and Families who are Financially Sophisticated with Multiple Product and Service Community Banking Needs and Household Incomes building
Slide 10: Commercial & Community Banking
* * * * * * * * * Commercial & Community Banking * * * 10
Slide 11: A Diversified Loan Portfolio
A Diversified Loan Portfolio 12/31/03 6/30/07 Municipal Consumer Municipal Consumer C&I 2% C&I 5% 2% 7% 18% 18% Residential 17% Construction Construction Residential 4% 5% 19% Multi Family Home Equity Multi Family 5% Home Equity 7% 5% 7% Commercial RE Commercial RE 41% 38% 30% 25% 80% 71% 67% 70% 71
Slide 12: Commercial Loan Diversification by Industry
Commercial Loan Diversification by Industry Agriculture, Forestry, Fishing and Hunting 1.04% Transportation and Warehousing Utilities Wholesale Trade 1.73% 0.03% 4.99% Construction 7.20% Other Services (except Public Administration) 2.75% Accommodation and Food Services 12.04% Arts, Entertainment, a
Slide 13: Real Estate, Rental and Leasing
Real Estate, Rental and Leasing Auto Sales/Svc Station 1-4 Family 1.42% Educational 5.15% 0.10% Cash Secured Warehouse 0.62% Development Shopping Centers/Stores 4.77% 0.55% 9.41% Elderly Housing Restaurant/Bar 0.58% 1.39% Hotel/Motel 0.79% Recreational Industrial Land 0.38% 7.22% 1.84% Other Busines
Slide 14: Continuing Core Deposit Growth
Continuing Core Deposit Growth 12/31/03 6/30/07 CDs > $100,000 CDs > $100,000 Borrowings 5% Borrowings 12% 7% CDs < $100,000 6% 15% Demand Deposits Demand Deposits CDs < $100,000 16% 17% 16% NOW CMA/MMA NOW 15% 30% 17% CMA/MMA Savings 26% Savings 10% 8% 75% 35% 36% 56% 57% 34% 60% 53% 51% 49% 51% 49
Slide 15: Business Services
Business Services Insurance (10%) Business Credit Cards (2%) • Specializes in commercial property and • Only available to commercial customers casualty insurance • Credit review performed as part of the • Gross premiums for the first six months of normal commercial lending process 2007 were $31 mill
Slide 16: Captive Insurance
Captive Insurance • Vermont is the U.S. domicile of choice for captive insurance companies – 27% of the active captive insurers bank with Chittenden* • Vermont has more captive insurance companies than all other states combined • Over $203 million in bank deposits and $1 billion in Institutional Tru
Slide 17: Government Banking
Government Banking • Leader in government banking for Vermont • Expanding our presence within the Massachusetts, New Hampshire and Maine franchises • Customers use a wide array of transaction, loan and deposit products • $116 million in municipal loans and $454 million in deposits and repos Loans De
Slide 18: Mortgage Banking
Mortgage Banking • Originations for the first six months of 2006 and 2007 were $204 million and $211 million, of which $145 million and $157 million, respectively, were sold in the secondary markets • Underlying coupons in the mortgage servicing portfolio remain very low 2001 2004 2005 2006 6/07 Und
Slide 19: Wealth Management
* * * * * * * * * * Wealth Management * * 19
Slide 20: Asset Management Services
Asset Management Services • Asset management and personal trust services • Over $2.5 billion in assets under management • Average managed account fee of 72 bps • Over $1.3 billion in assets under administration Assets Under Management 55% 33% 12% Equity Bonds Cash As of 6/30/07 20
Slide 21: Wealth Management
Wealth Management Retail Investments – Broker/Dealer Bond Administration Services • $432 million in assets under administration • Operates throughout New England • 2007 Revenue: • Over $3.2 billion in assets under administration – 17% Annuity and Life Insurance • Revenue for the first six months of
Slide 22: Financial Performance
* * * * * * * * * * * * * Financial Performance * * 22
Slide 23: Consistent Superior Financial Performance
Consistent Superior Financial Performance Strong net interest margin Low cost stable sources of funding and excellent liquidity position Strong fee based revenues in targeted businesses Conservative reserves and excellent credit quality Strong capital base Net Interest Margin 5.00% 4.31% 4.24% 4.21%
Slide 24: Average Yield on Securities, Loans, Deposits and Funds
Average Yield on Securities Average Yield on Loans 9.0% 9.0% 7.6% 7.7% 8.0% 6.6% 7.0% 7.0% 6.0% 5.7% 7.0% 7.2% 6.0% 4.8% 5.0% 5.5% 6.1% 4.4% 4.3% 4.5% 5.0% 5.4% 5.0% 4.0% 4.3% 4.2% 4.2% 4.4% 4.1% 2003 2004 2005 2006 6/07 3.0% 2003 2004 2005 2006 6/07 CHZ SNL* CHZ SNL* Average Cost of Deposits Averag
Slide 25: Noninterest Income
Noninterest Income 12/31/03 6/30/07 ** Other Wealth Other 20% Management 5% Wealth 21% Deposit Management Services 30% 25% Deposit Business Services Services 19% 17% Mortgage Banking 12% Mortgage Business Banking Services 23% 28% Noninterest Income/Operating Revenue 35.00% 31.75% 29.98% 26.65% 26.84
Slide 26: Noninterest Expense
Noninterest Expense 12/31/03 6/30/07 ** Compensation Other Compensation Other 47% 24% 49% 26% DP Exp 2% DP Exp 5% Occupancy 13% Occupancy 12% Benefits Benefits 10% 12% Efficiency Ratio 64% 61.82% 58.96% 60% 57.81% 58.49% 58.42% 58.87% 58.67% 57.92% 56% 56.67% 55.98% 52% 2003 2004 2005 2006 6/07 CHZ
Slide 27: Financial Summary
Financial Summary 2003 2004 2005 2006 6/06 6/07 Per Common Share Earnings Diluted Earnings $1.60 $1.56 $1.74 $1.83 $0.87 $0.64 Diluted Core Earnings* $1.60 $1.56 $1.74 $1.83 $0.87 $0.91 Cash Earnings* $1.64 $1.60 $1.78 $1.86 $0.89 $0.66 Core Cash Earnings* $1.64 $1.60 $1.78 $1.86 $0.89 $0.93 Dividen
Slide 28: Financial Summary
Financial Summary 2003 2004 2005 2006 6/06 6/07 Credit NPAs to Loans & OREO 0.39% 0.49% 0.36% 0.43% 0.54% 0.58% Credit Loss Reserve to Loans 1.54% 1.45% 1.38% 1.35% 1.38% 1.34% Net Charge-Offs to Average Loans 0.16% 0.07% 0.05% 0.12% 0.08%** 0.08%** Capital Tangible* 6.14% 6.71% 7.01% 7.10% 6.79% 6.
Slide 29: Risk Management
* * * * * * * * * * * * * * * Risk Management * * * 29
Slide 30: Credit Quality
Credit Quality Net Charge-offs to Average Loans NPAs to Loans & OREO 0.45% 0.80% 0.70% 0.65% 0.30% 0.27% 0.60% 0.58% 0.20% 0.60% 0.13% 0.20% 0.50% 0.15% 0.12% 0.43% 0.44% 0.16% 0.49% 0.38% 0.40% 0.10% 0.08% ** 0.40% 0.39% 0.07% 0.05% 0.36% 0.00% 0.30% 2003 2004 2005 2006 6/07 2003 2004 2005 2006 6/0
Slide 31: Granularity of Non-Accrual Loans
Granularity of Non-Accrual Loans Size of Total Book Relationship Balance % $3.0 MM to $5.0 MM $7,808 27% $1.0 MM to $3.0 MM 5,880 20% $500 M to $1.0 MM 1,685 6% $100 M to $500 M 11,312 39% <$100 M 2,428 8% Total $29,113 100% As of 6/30/07 31
Slide 32: Interest Rate Risk
Interest Rate Risk • Naturally Hedged • Static Gap 6 month -6.53% 12 month –2.63% • Net Interest Income Sensitivity * • Net Income Sensitivity * +50 bps -0.21% +50 bps -.43% +25 bps -0.10% +25 bps -0.21% -25 bps +0.16% -25 bps +0.08% -50 bps +0.02% -50 bps -0.01% Rate Ramp-Net Interest Income 0.42%
Slide 33: In Summary
* * * * * * * * * * * * * * In Summary * * * * 33
Slide 34: A Compelling Story
A Compelling Story • Strong market share and a proven acquisition acumen • Low risk balance sheet with a prudent growth strategy • Diversified banking services with a solid balance of revenues • Low exposure to volatile sectors with a fortress balance sheet Total Shareholder Return 10-Year Period 5-
Slide 35: Visit our website for a wide range of products and financial reports
Visit our website for a wide range of products, latest financial reports and many other interactive services: www.chittendencorp.com This presentation contains “forward-looking statements” which may describe future plans and strategic initiatives. These forward- looking statements are based on curre
Slide 36: Appendix
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Slide 37: Reconciliation of non-GAAP measurements to GAAP
Reconciliation of non-GAAP measurements to GAAP Core Diluted Earnings YTD YTD YTD YTD YTD YTD Dec-03 Dec-04 Dec-05 Dec-06 Jun-06 Jun-07 Net Income (GAAP) $61,602 $72,253 $72,680 $82,039 $41,207 $29,064 Losses on Sales of Securities (after tax) 0 0 0 0 0 9,676 Non Recurring Charge for Merrill Merchan
Slide 38: Reconciliation of non-GAAP measurements to GAAP
Reconciliation of non-GAAP measurements to GAAP Cash Earnings YTD YTD YTD YTD YTD YTD Dec-03 Dec-04 Dec-05 Dec-06 Jun-06 Jun-07 Net Income (GAAP) $72,253 $72,680 $82,039 $85,468 $41,207 $29,064 Amortization of identified intangibles, net of tax 1,786 2,000 1,799 1,728 864 904 Tangible Net Income (A)