As of March 31, 2004
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 established and tangible shareholder orientation
2
Accomplishments for 2003
Net interest income increased 13.2% and EPS increased 5.73%
Solid loan growth of 20.1%, commercial loan growth of 21.0% and strong deposit growth of 21.9%
Double digit growth in fee income from business services
Significant progress on the IT conversion, including selection of a vendor and establishing a detailed plan to ensure a successful conversion
Developed plan to streamline the retail franchise through selling two branches, consolidating eight branches and closing/selling twenty-seven stand alone ATMs. Plan to be executed in early 2004 culminating with the IT conversion
3
Objectives and Outlook for 2004
Complete the merger of Granite into Ocean National Bank and other franchise streamlining initiatives
Complete the IT conversion from Fidelity to Jack Henry and realize the product, operating and financial benefits of the new system
Maintain a risk based capital ratio in excess of 11% and tangible common equity of 6% or higher
Maintain strong asset quality and an allowance for loan losses greater than 1.40%
Continue the steady growth in the Company’s earnings per share and improve the efficiency ratio by at least 2%
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Our Target Markets
12/31/93 03/31/04
Assets (in millions)
Chittenden Bank $ 1,231 $ 2,842
Ocean/Granite Banks $ 1,633
Bank of Western Mass $ 546
Flagship Bank $ 481
Maine Bank & Trust $ 306
Total $ 1,231 $ 5,808
Loans by State
12/31/93 03/31/04
VT 100% 41%
NH 23%
MA 25%
ME 11%
Deposits by State
12/31/93 03/31/04
VT 100% 51%
NH 20%
MA 19%
ME 10%
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Our Target Markets
Vermont Market
State population over 600,000
Greater Burlington population over 150,000
11% population growth 1990-2000
Greater Burlington median household income of $48,000
Burlington/Chittenden Co. median age = 34
10,000 new business startups in 2003
23% new job growth 1990-2000 (Chittenden Co.)
30,000 businesses and 70,000 households
Small Business Culture - 50% of jobs are from companies with less than 100 employees
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Our Target Markets
Greater Springfield Market
Population of over 450,000 in Hampden Co.
Median household income of $40,000
Median age = 36
Above national/regional employment averages in education, insurance, health services, manufacturing
13 colleges located in Greater Springfield
1993 - 2000 Pioneer Valley job growth over 15%
23,000 businesses and 90,000 households
Greater Worcester Market
3rd largest city in New England
Population of 750,000 in Worcester Co.
Median household income of $48,000
Median age = 36
38,000 new jobs created in Worcester Co. between 1991 - 2001
Over 18% job growth in region (1993 - 2000)
Value of Worcester’s total assessed property value up nearly 15% in FY2003
Downtown office space occupancy of 90%
Over 25,000 businesses and 110,000 households
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Our Target Markets
Southern NH/Seacoast Market
Total regional population just under 1 million
12% population growth 1990 - 2000
Median household income for region of $50,000
Median age for region = 37
Large pool of professionals, 42% of Portsmouth residents hold a bachelor’s degree or >
75% of NH businesses employ <10 people
Over 50% of all employees are with firms <250 people
Over 5,000 new business startups in NH annually (1998-2002)
6.8 million tourist visits in 2002 resulting in $689 million in revenue
Over 40,000 businesses and 150,000 households
Greater Portland Market
Combined population of Cumberland and York Co. exceeds 450,000
13% population growth 1990 - 2000
Median household income of $44,000
Median age for Greater Portland area = 35
15% growth in housing units 1990-2000
20% of Maine workforce in businesses with 4 or < employees
Average annual job growth of 2% since 1995
Unemployment rate of just 3.3% through 1st Quarter 2004
Over 20,000 businesses and nearly 60,000 households
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Our Target Customers
Commercial Banking Businesses with Revenues of $1 to $100 Million; Loan Needs up to $20 Million and Multiple Product and Service Needs
Community Banking Individuals and Families, Age 30+ who are Financially Sophisticated with Multiple Product and Service Needs and with Household Incomes > $50,000
Wealth Management Businesses and Individuals with Investment Management, Brokerage, Trust and/or Private and Professional Banking Needs
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Commercial & Community Banking 10
A Diversified Loan Portfolio
12/31/01
Municipal Commercial Consumer 3% 12% 20% Home Equity
6% Construction 3%
Residential 1-4 22% Commercial RE
32% Multi Family 2%
03/31/04
Municipal
Consumer Commercial 2%
7% 18% Home Equity
7% Construction 4%
Residential 1-4 18%
Commercial RE Multi Family 39% 5%
Growth in C&I and CRE
35.00%
29.63%
30.00%
24.95%
25.00% 22.14%
20.00% 16.80% 15.12% 15.91%
15.00%
8.49%
10.00%
5.00% 1.51% 0.00%
2001 2002 2003 3/31/2004* C&I CRE
*Annualized
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Commercial Loan Diversification by Industry
Accommodation and Food Services 10.45%
Wholesale Trade 5.33%
Utilities 0.03%
Other 2.42%
Admin/Support & Waste Mgt & Remediation Svcs 1.07%
Transportation and Warehousing 2.37%
Agriculture, Forestry, Fishing and Hunting 1.38%
Retail Trade 8.69%
Arts, Entertainment, and Recreation 2.73%
Construction 5.91%
Educational Services 2.90%
Finance and Insurance 2.07%
Real Estate, Rental and Leasing 29.09%
Health Care and Social Assistance 5.46%
Information 1.01%
Public Administration 2.30%
Management of Companies and Enterprises 0.56%
Mining 0.12%
Manufacturing 9.72%
Professional, Scientific, and Technical Services 2.65%
Other Services (except Public Administration) 3.74%
1. Based on loan data at 03/31/04
2. Includes C&I and CRE
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Real Estate, Rental and Leasing
Auto Sales/Svc Station 1.23%
Shopping Centers/Stores 11.76%
Warehouse 1.94%
Cash Secured 0.66%
Industrial 9.62%
Restaurant/Bar 1.42%
Land 1.96%
Recreational 0.44%
Manufacturing 1.48%
Other Business Assets 2.16%
Mercantile 1.59%
Other 11.32%
Mixed 10.34%
Mobile Home Park 0.65%
Elderly Housing 0.55%
Educational 0.28%
Apartments 24.52%
Office 17.87% Development 0.21%
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Continuing Core Deposit Growth
12/31/01
CDs > $100,000 5%
Borrowings 1%
Demand Deposits 17%
CDs < $100,000 17%
Savings 10%
NOW 13%
MMA 37%
03/31/04
Borrowings 3%
CDs > $100,000 6%
Demand Deposits 17%
CDs < $100,000 16%
Savings 11%
MMA 29%
NOW 18%
$3,714
$5,022
Total Deposits
40% 35% 35% 30% 29%
30% 20%
10% 4% 3% 4% 1%
0%
2001 2002 2003 3/31/04
Transactions Deposits % of Total Funding Non-core Funding % of Total Funding
75%
57% 56% 57%
60%
43% 53%47% 44% 43%
45% 30% 15% 0%
2001 2002 2003 3/31/04
Consumer Business
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Business Services
Cash Management (5%)
Full menu of products
Domiciled on one operating system
Web based access available
Merchant Services (4%)
Full array of products
High level of service to business clients
Only offered within the franchise
Volume of transactions processed for the three months ending March 31, 2004 were $216 million
Business Credit Cards (1%)
Only available to commercial customers
Credit review performed as part of the normal commercial lending process
Insurance (15%)
Specializes in commercial property and casualty insurance
Wholesale brokerage operation covering ten states
Gross premiums for the three months ending March 31, 2004 were $18.5 million
Payroll Services (3%)
Over 950 customers
Full menu of products
Annualized three year growth rate of 21%
Retirement Plan Services (1%)
Primary focus is on defined benefit and contribution plans
Provides custodial/directed trustee services for non-qualified plans
Total retirement plan assets of $708 million
* Numbers in ( ) are a percentage of total non interest income
15
Captive Insurance
The captive insurance market has grown 10% annually over the last 5 years
Vermont is the U.S. domicile of choice for captive insurance companies
– 570 Captive Insurers are licensed in VT; 65% bank with Chittenden*
Vermont has more captive insurance companies than all other states combined
Over $200 million in bank deposits and $600 million in Corporate Trust Assets under administration
Over $67 million in stand-by letters of credit that are fully collateralized by cash or government securities held in trust at Chittenden Bank
*Some Chittenden customers have more than one captive
16
Government Banking
Leader in government banking for Vermont
Expanding into new markets in Massachusetts and New Hampshire
Customers use a wide array of transaction, loan and deposit products
Over $335 million in deposits and repos and nearly $100 million in loan balances
Loans
NH 11% MA
20%
VT 69%
Deposits & Repurchase Agreements
NH 13% MA
17%
VT 70%
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Mortgage Banking
Originations for 2003 were $1.5 billion, and $129 million for the first quarter of 2004
Continued expansion through our affiliate banks into other states:
2001 2003 03/31/04
VT 57% 44% 51%
MA 27% 20% 26%
NH 12% 29% 16%
ME 1% 5% 5%
Other 3% 2% 2%
Mortgage servicing portfolio of $2.3 billion at 03/31/04 with a conservative valuation of $10.9 million
Underlying coupons in the mortgage servicing portfolio continue to decline
2001 2003 03/31/04
Under 5% 0% 10% 10%
5%<6% 2% 42% 44%
6%<7% 38% 32% 31%
7%<8% 50% 12% 12%
Over 8% 10% 4% 3%
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Wealth Management
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Wealth Management
Assets under administration
– Personal Trust/Custody $2.6 billion
– Retail Investments .2 billion
– Corporate Trust 1.6 billion
– Captive Insurance .6 billion
– Retirement Plan Services .7 billion
Assets under management 1.9 billion
Total $7.6 billion
Private Banking
– Loans $61.7 million
– Deposits $48.8 million
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Asset Management Services
Services include asset management and personal trust
Over $1.9 billion in assets under management
Over $2.6 billion in assets under administration
Average account size of $488,000
Average fee of 76 bps
Operating margin of 40%
Assets Under Management
59%
60%
33%
40%
20% 8% 0% Equity Bonds Cash
21
Retail Investments—Broker/Dealer
Over $226 million in assets under administration
2003 Revenue:
– 70% Annuity Sales
– 24% Brokerage Sales
– 6% Other
Serving over 5,000 customers in three states
Revenue by State
2001
MA NH
5% 2%
VT 93%
2003
NH MA 16% 2%
VT 82%
22
Corporate Trust
Operates throughout New England
Annualized three year growth rate of 16%
Over $2.2 billion in assets under administration*
Total revenue for 2003 was approximately $3.0 million
2% ME
5% NH
41% MA
VT 52%
0% 20% 40% 60%
*Includes captive insurance assets under administration of $600 million
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Financial Performance
24
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 tier 1 capital base
25
Financial Summary
2001 2002 2003 03/31/04
Per Common Share
Earnings Diluted Earnings $ 1.80 $ 1.96 $ 2.07 $0.47
Cash Earnings $ 1.86 $ 1.98 $ 2.12 $0.48
Dividends $ 0.76 $ 0.79 $ 0.80 $0.20
Book Value $ 11.56 $ 13.11 $ 15.82 $ 16.31
Tangible Book Value $ 10.52 $ 11.09 $ 9.30 $9.82
Performance Dividend Payout Ratio 42.15% 39.88% 37.84% 42.02%
Ratios Return on Average Equity 16.55% 16.12% 13.90% 11.97%
Return on Average Tangible Equity 18.52% 19.27% 22.92% 20.38%
Return on Average Assets 1.51% 1.40% 1.29% 1.21%
Return on Average Tangible Assets 1.57% 1.44% 1.37% 1.30%
Net Interest Margin 4.74% 4.53% 4.12% 4.17%
Efficiency Ratio 56.13% 58.56% 60.48% 60.34%
Credit NPAs to Loans & OREO 0.46% 0.49% 0.39% 0.55%
Loan Loss Reserve to Loans 1.59% 1.62% 1.54% 1.52%
Net Charge-Offs to Average Loans 0.24% 0.28% 0.16% 0.01%
Tangible Capital 8.19% 7.29% 6.02% 6.48%
Capital Leverage 7.99% 9.28% 7.79% 8.28%
Tier 1 10.32% 12.25% 10.07% 10.36%
Risk-Based 11.57% 13.50% 11.32% 11.61%
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$20.00 $15.82 $16.31 $15.00 $13.11 $11.56
$10.00 $11.09 $10.52 $9.30 $9.82 $5.00
$0.00
2001 2002 2002 03/31/04
Book Value Tangible Book Value
6.00%
4.74%
4.53% 4.12% 4.17%
4.00%
2.00%
0.00%
2001 2002 2003 03/31/04
Net Interest Margin
25.00% 22.92% 20.98% 18.52% 19.27%
20.00% 15.00%
16.55% 16.12%
10.00% 13.90%
11.97%
5.00% 0.00%
2001 2002 2003 03/31/04
Return on Average Tangible Equity Return on Average Equity
15.00% 13.50%
11.57% 11.61% 11.32%
10.00%
8.19% 7.29%
5.00%
6.02% 6.48%
0.00%
2001 2002 2003 3/31/04
Tangible Capital Risk Based Capital
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Risk Management
28
Credit—Excellent Asset Quality
Credit—Excellent Asset Quality
Net Charge-offs to Average Loans
0.90% 0.75% 0.60%
0.45% 0.37%
0.33%
0.30% 0.23%
0.15% 0.28% 0.04% 0.24%
0.00% 0.16%
0.01%
2001 2002 2003 3/31/04
CHZ SNL
NPA to Loans & OREO
0.75%
0.80% 0.71%
0.65% 0.62%
0.60%
0.55%
0.40% 0.49% 0.46%
0.39%
0.20%
0.00%
2001 2002 2003 3/31/04
CHZ SNL
Reserves/Loans
2.00% 1.59% 1.62%
1.54% 1.52%
1.50%
1.35% 1.41% 1.44% 1.43%
1.00%
2001 2002 2003 3/31/04 CHZ SNL
SNL $5-$10 Billion index
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Granularity of Non-Accrual Loans
NPL Size # of Credits % $ Total %
>$1.0 MM 4 2% $5,371 26%
$500 M to $1 MM 8 5% 5,483 27%
$100 M to $500 M 29 16% 6,279 30%
<$100 M 139 77% 3,487 17%
Total 180 100% $20,620 100%
As of 03/31/04
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Interest Rate Risk
Naturally Hedged
Net Interest Income Sensitivity (Shocked)*
+200 bps +1.92%
+100 bps +1.02%
-100 bps –2.32%
-200 bps –9.36%
Net Interest Income Sensitivity (Ramped)*
+50 bps +.57%
+25 bps +.28%
-25 bps –.53%
-50 bps –2.73%
Net Income Sensitivity (Shocked)*
+200 bps +3.32%
+100 bps +1.75%
-100 bps –4.31%
-200 bps –17.24%
Net Income Sensitivity (Ramped)*
+50 bps +1.40%
+25 bps +.91%
-25 bps –.46%
-50 bps –4.54%
*12 month forward estimates as of 03/31/04
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CHZ SNL*
EPS growth 5.73% 4.65%
Reserves/Loans 1.54% 1.44%
Net interest margin 4.12% 3.82%
ROE 13.90% 15.45%
ROA 1.29% 1.34%
Efficiency ratio 60.48% 57.93%
*SNL $5-$10 Billion median *Data as of 12/31/03
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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
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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 current plans and expectations, which are subject to a number of factors and uncertainties that could cause future results to differ from historical performance or future expectations.
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