City Holding Company · NASDAQ:CHCO
City — Shareholder Meeting (May 2006)
33 slides from City's shareholder meeting presentation, May 11, 2006
Slide 1: Shareholder Annual Meeting May 10, 2006
Shareholder Annual Meeting May 10, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company’s actual resul
Slide 3: 67 Locations, 805 Employees in WV, KY & OH
n 67 Locations n 805 Employees in West Virginia, Kentucky & Ohio n Largest Bank operating in Huntington/Ashland MSA, Beckley, Lewisburg n 2 nd Largest Bank in Charleston MSA n Strong Presences in Eastern Panhandle, Mason Co., Clarksburg/Bridgeport
Slide 4: Key Markets
Key Markets 1 st & 10% Market Share in Huntington WV/Ashland KY MSA 8% Market Share in Morgan, Berkeley & Jefferson Co. WV 1 st & 30% Market Share 2 nd & 12% Market Share in WV’s largest market
Slide 5: Themes in 2005
Themes in 2005: n Changes in Management and Governance n Consistently superior results n Conservative Strategies n Growth in slow-growth markets
Slide 6: New Management Team
New Management Team: n Skip Hageboeck became CEO in February 2005 n Craig Stilwell became EVP-Retail in March 2005 n John DeRito became EVP-Commercial in July 2004 n Dave Bumgarner joined City in January 2005
Slide 7: Board Changes in 2005
Board Changes in 2005: n Ned Payne elected Chairman in August 2005 n Executive Committee expanded in March 2006 to include: Ned Payne, Chairman Sam Bowling, Vice-Chairman Skip Hageboeck, President & CEO Dallas Kayser, Chairman of Compensation Committee Jay Goldman, Chairman of Governance Committee J
Slide 8: Unequaled financial performance
1 st Best * Rankings among 246 public banks $1-$10 Billion Unequaled financial performance 2004 2005 n ROA 2.10% 2.09% n NIM 4.29% 4.49% n Efficiency Ratio 48.7% 46.7% n Non-Int Rev/Total Rev 33% 34% n Non-performing Loans/Loans 0.29% 0.27%
Slide 9: CHCO: Conservative Franchise
CHCO: Conservative Franchise Conservative Loan Portfolios Strong Asset Quality Exceptional Core Deposit Base Highly Liquid Very Efficient Strongly Capitalized Benefiting from rising rates u u u u u u u
Slide 10: Conservative Loan Portfolio Mix
Loan to Deposits 83.6% Loan to Deposits 92.0% Sample of 222 publicly traded banks and thrifts with assets between $1-$5 billion as of December 31, 2005 As of December 31, 2005 Conservative Loan Portfolio Mix
Slide 11: Strong Loan Quality
As of December 31, 2005 Sample of 222 publicly traded banks and thrifts with assets between $1 and $5 billion Strong Loan Quality
Slide 12: Customer Profile: Retail Focused
Source: Internal data as of December 31, 2005 Customer Profile: Retail Focused
Slide 13: Deposits: Low Cost and Stable
Deposits: Low Cost and Stable Data: December 31, 2005
Slide 14: Cost of Funds
Source: SNL, $1 to $5 Billion banks Cost of Funds:
Slide 15: Favorable Revenue Profile
34% 21% 79% 66% * As of December 31, 2005. Non-interest income excludes security gains Sample of 222 publicly traded banks and thrifts with assets between $1 and $5 billion as of December 31, 2005 Favorable Revenue Profile
Slide 16: City is Highly Efficient
2004 Efficiency Ratio adjusted to eliminate $5.5 million in revenue from Legal Settlement and associated legal expenses of $500M; Peers: Sample of 222 publicly traded banks and thrifts with assets between $1 to $5 Billion as of December 31, 2005 91 st percentile City is Highly Efficient
Slide 17: Strong Capital facilitates growth
12/31/05 Equity/Assets 11.7% Tang Equity/Tang Assets 9.5% Leverage Ratio 11.0% Tier I Capital Ratio 15.4% Total Risk-based Capital Ratio 16.4% Strong Capital facilitates growth:
Slide 18: CHCO: Growth in slow-growth markets
CHCO: Growth in slow-growth markets Internal Loan Growth Internal Deposit Growth Improvements to Retail Distribution System Acquisition u u u u
Slide 19: Growth in Targeted Lines of Business - Loans
Growth in Targeted Lines of Business - Loans 8.0% CAGR (excluding acquisition) since December 2002
Slide 20: Growth in Deposits: Transactional Accounts 2002-2005
Growth in Deposits: Transactional Accounts 2002-2005
Slide 21: Growth in Fees
20% CAGR 2 nd Q 2001 to 4 th Q 2005 In addition to dramatic growth in Fees:
Slide 22: City continues to innovate to offer the best products
City continues to innovate to offer the best products to our customers: City Gold Checking
Slide 23: Restructuring the Retail Delivery System
Restructuring the Retail Delivery System Wal-Mart Strategy New Branches in growing areas of existing markets DeNovo entry into contiguous markets u u u
Slide 24: City's Wal-Mart Strategy
City’s Wal-Mart Strategy Supports existing retail distribution outlets in City’s major Markets: Charleston – Sept 2004 Huntington – Sept 2004 Beckley – May 2005 Ashland – August 2005 Ripley – 2007 Hurricane – 2007 u u u u u u
Slide 25: Wal-Mart Branches
Wal-Mart Branches – average age 13 months 6.0% of City’s branches 4.6% of total branch expenses 3.6% of branch FTE’s @ 3/31/06 0.3% of total deposit balances @ 3/31/06 0.3% of total loan balances @ 3/31/06 3.8% of fee income as of 3/31/06 3.0% of all transactions are processed by these branches
Slide 26: Branch Optimization
Branch Optimization n April 2006 Relocate Downtown Charleston branch n May 2006 Open new Branch in Charles Town, WV n December 2006 New Branch in Martinsburg, WV n 2007-2008 Additional branches in Eastern Panhandle Potential expansion into adjacent markets Additional Wal-Mart Locations u u u u u u
Slide 27: New Charleston Downtown Location
New Charleston Downtown Location: Deposits, Mortgages, Executive Banking, Commercial, Trust & Investments
Slide 28: Charles Town – City's first new branch in years
Charles Town – City’s first new branch in 10 years
Slide 29: Martinsburg Branch: Opening December 2006
Martinsburg Branch: Opening December 2006
Slide 30: Classic Acquisition
Classic Acquisition: Closed May 20, 2005 n Added 10 Locations n Added 79 Employees n Added $338 million in assets n Integration of Systems, Operations, and Staff couldn’t have been accomplished more successfully
Slide 31: Classic Results – June 2005 through December 2005
Classic Results – June 2005 through December 2005 Annualized net income - $5.8MM Issued 1.472 million shares Annualized EPS of $3.89/incremental share issued for CLAS NIM of 4.05% Efficiency ratio of 37.7% Non-interest revenue/total revenue ratio of 23.1% (Improvement & Opportunity!)
Slide 32: Summary
Summary n CHCO is highly profitable n CHCO is a conservatively run franchise Retail bank with strong core deposits Strong fee income Conservative loan portfolio Well capitalized Liquid n CHCO is growing in ordinary markets Loans, Deposits, Improved Distribution, and Excess Capital Opportunities u u
Slide 33: Pricing Metrics
• Based on Price of $37.45 on May 4, 2006 ** Based on average Analyst Estimate of $2.93 Pricing Metrics* n Price to Book: 232% n Price to Tangible Book: 292% n Price to 2006 Projected Earnings**: 12.8x n Institutional Ownership 37%