As of December 31, 2005 Exhibit 99.1 |
2 • Multi-bank holding company with significant operating autonomy at the individual banks • Banking assets of $6.5 billion at December 31, 2005 • Listed on the NYSE (CHZ), market capitalization as of December 31, 2005 was $1.3 billion • 121 full service banking offices and 152 ATM locations in VT, NH, MA, ME • Commercial loans represent over 70% of the total loan portfolio and core deposits comprise over 95% of total funding • Strong wealth management operation with assets under administration of $9.1 billion and assets under management of $2.0 billion • Excellent credit quality with year-to-date net charge-offs at .05% and an allowance for credit losses to loans of 1.38% Who We Are |
3 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 A Tradition of Success |
4 Our Target Markets 12/31/05 % Assets (in millions) Chittenden Bank $3,229 50% Ocean National Bank $1,646 25% Bank of Western Mass $694 11% Flagship Bank $539 8% Maine Bank & Trust $357 6% Total $6,465 100% VT 43% NH 22% MA 26% ME 9% VT 53% NH 19% MA 19% ME 9% 12/31/05 Loans by State Deposits by State 12/31/05 |
5 CUSTOMERS CUSTOMERS Chittenden Bank Ocean National Bank Bank of Western Massachusetts Flagship Bank & Trust Maine Bank & Trust CHITTENDEN SERVICES CHITTENDEN SERVICES GROUP GROUP CORPORATE CORPORATE Corporate Structure |
6 Vermont Market • Population over 620,000 • Greater Burlington population 150,000 • 13% population growth in Chittenden County since 1990 • Greater Burlington median household income of $48,000 • Greater Burlington median age = 34 • Homeownership rate of over 70% exceeds national average • Median housing value increased by 24% from 2000-2003 • Nearly 9,000 new business startups in 2004 • 23% new job growth 1990-2000 (Greater Burlington area) • 30,000 businesses and 70,000 households • Small Business Culture - 50% of jobs are from companies with less than 100 employees • Over 20 colleges and universities in Vermont • Creative economy—”Burlington is #1 metro area under 250,000” Our Target Markets |
7 Greater Springfield Market Greater Worcester Market • Population nearly 850,000 in Pioneer Valley and North Central, CT • Median household income of $41,000 • Median age = 36 • Above national/regional employment averages in education, insurance, health services, manufacturing • 1993 - 2000 Pioneer Valley job growth over 15% • 23,000 businesses and 90,000 households • Telecommunications crossroads for New England • Hartford/Springfield “the knowledge corridor”—26 colleges and universities • 3rd largest city in New England • Population of 777,000 in Worcester Co. • 6 million people within a 50 mile radius • Median household income of $48,000 • Median age = 36 • 32,000 new jobs created in Worcester area between 1991 - 2003 • Over 18% job growth in region (1993 - 2000) • Value of Worcester’s total assessed property value up nearly 15% in FY2003 • Over 25,000 businesses and 110,000 households • 16 colleges in Worcester Co. • Known as “The Center of Excellence in Biotechnology” • Advanced manufacturing--$76 billion, Worcester Co. Our Target Markets |
8 Southern NH/Seacoast Market • Total regional population over 1 million • 17% population growth 1990 - 2003 • Median household income of $50,000 • Median age = 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) • New Hampshire gross domestic product up 5.6% in 2003, 16 th fastest growth in the United States • Over 40,000 businesses and 150,000 households • NH business friendly—no sales tax, inventory tax, use tax, income tax, or capital gains tax Greater Portland Market • Combined population of Cumberland and York Co. nearly 470,000 • 15% population growth 1990 - 2003 • Median household income of $44,000 • Median age = 35 • Median housing value up 36% for 2000-2003 • 30% of population with bachelor’s degree or higher • 25% increase in residential building permits from 2000-2003 • 20% of Maine workforce in businesses with 4 or < employees • Over 20,000 businesses and nearly 60,000 households • 3.6 million tourist visits annually to Portland area • Named #1 market in small business vitality (American City Business Journal, 2005) Our Target Markets |
9 Our Target Customers Commercial Banking Businesses with Revenues of $1 to $100 Million; Loan Needs up to $20 Million; Multiple Product and Service Needs Community Banking Individuals and Families who are Financially Sophisticated with Multiple Product and Service Needs and Household Incomes building to > $50,000 Wealth Management Businesses and Individuals with Investment Management, Brokerage, Trust and/or Private and Professional Banking Needs |
10 Commercial & Community Banking * * * * * * * * * |
11 A Diversified Loan Portfolio 12/31/01 12/31/05 Consumer 12% Municipal 3% Multi Family 2% Commercial RE 32% Home Equity 6% Residential 22% Construction 3% C&I 20% Total loans as of December 31, 2001 and December 31, 2005 were $2.8 billion and $4.5 billion respectively Consumer 6% Municipal 4% Multi Family 4% Commercial RE 40% Home Equity 7% Residential 16% Construction 4% C&I 19% Growth in C & I and Commercial Real Estate 14% 25% 14% 10% 18% 0% 10% 20% 30% 2001 2002 2003 2004 2005 60% 65% 67% 71% 70% 29% 30% 33% 35% 40% 0% 20% 40% 60% 80% 2001 2002 2003 2004 2005 Commercial Consumer |
12 Commercial Loan Diversification by Industry 1. This chart encompasses the total commercial loan portfolio at December 31, 2005, which includes C&I, municipal, commercial RE, construction, and multi family loans. 2. Industry classifications are based on NAICS sector codes Admin/Support & Waste Mgmt & Remediation Svcs 0.99% Arts, Entertainment & Rec 2.51% Construction 5.87% Agriculture, Forestry, Fishing & Hunting 1.03% Other 0.67% Wholesale Trade 4.93% Accomodation & Food Srvc 11.34% Other Srvc (except Public Admin) 3.15% Transportation & Warehousing 1.69% Real Estate, Rental & Leasing 31.95% Utilities 0.03% Health Care & Soc Assist 4.95% 1.63% Manufacturing 9.67% Educational Srvc 4.35% Professional, Scientific, & Tech Srvc 2.54% Mgmt of Companies & Enterprises 0.34% Retail Trade 8.17% Information 1.40% Mining 0.58% Public Admin 2.23% |
13 Cash Secured 0.41% Warehouse 4.43% Restaurant/Bar 0.98% Other Business Assets 2.30% Development 0.78% Elderly Housing 0.38% Other 3.93% Office 26.44% Mobile Home Park 0.73% Mixed 13.50% Industrial 7.41% Apartments 21.93% Educational 0.08% Recreational 0.46% Land 1.51% Mercantile 1.28% Manufacturing 1.81% Hotel/Motel 0.32% Auto Sales/Svc Station 1.41% Shopping Ctr/Stores 9.91% Real Estate, Rental and Leasing 1. This chart is a subset of the Commercial Loan Diversification by Industry chart on page 12 2. Industry classifications are based on NAICS sector codes |
14 Continuing Core Deposit Growth 12/31/01 12/31/05 Total Deposits as of December 31, 2001 and December 31, 2005 were $3.7 billion and $5.5 billion respectively CDs < $100,000 17% CDs > $100,000 5% CMA/MMA 37% Demand Deposits 17% NOW 13% Savings 10% Borrowings 1% CDs < $100,000 14% CDs > $100,000 11% CMA/MMA 30% Demand Deposits 17% NOW 15% Savings 9% Borrowings 4% 57% 43% 53% 47% 56% 44% 57% 43% 53% 47% 0% 15% 30% 45% 60% 75% 2001 2002 2003 2004 2005 Consumer Commercial 30% 29% 35% 34% 32% 0% 10% 20% 30% 40% 2001 2002 2003 2004 2005 Transaction Deposits % of Total Funding |
15 Business Services Cash Management (10%) • High level of service to business clients • Seasoned delivery team with national level expertise • Full menu of products Merchant Services ACH Lock box Sweep accounts Payroll Services (3%) • Over 1,300 customers • Full menu of products • Annualized three year growth rate of 18% Business Credit Cards (2%) • Only available to commercial customers • Credit review performed as part of the normal commercial lending process • Outstanding loans were $10.5 million and interchange fee income was $1.3 million for 2005 Retirement Plan Services (1%) • Primary focus is on defined benefit and contribution plans • Over 465 customers advised • Total retirement plan assets of $1.1 billion • Full array of services Design Administration/recordkeeping Custodial/trustee Investment management Insurance (9%) • Specializes in commercial property and casualty insurance • Gross premiums for 2005 were $67 million * Numbers in ( ) are a percentage of total noninterest income |
16 Captive Insurance • The captive insurance market has grown 15% annually over the last 3 years • Vermont is the U.S. domicile of choice for captive insurance companies – 65% of the active captive insurers bank with Chittenden* • Vermont has more captive insurance companies than all other states combined • Over $234 million in bank deposits and $885 million in Institutional Trust Assets under administration • Over $63 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 527 597 674 717 754 0 200 400 600 800 2001 2002 2003 2004 2005 Captives in Vermont |
17 Government Banking • Leader in government banking for Vermont • Expanding our presence within the Massachusetts and New Hampshire franchises • Customers use a wide array of transaction, loan and deposit products • Over $160 million in municipal loans and $543 million in deposits and repos Deposits & Repurchase Agreements VT 63% MA 15% NH 22% Loans VT 79% MA 17% NH 4% |
18 Mortgage Banking • Originations for 2004 and 2005 were $693 million and $611 million, of which $491 million and $427 million, respectively, were sold in the secondary markets • Underlying coupons in the mortgage servicing portfolio continue to decline • Mortgage servicing portfolio of $2.1 billion at December 31, 2005 with a conservative valuation of $13.7 million or 66 basis points* • Continued expansion through our affiliate banks into other states: 2001 2003 2004 2005 Under 5% 0% 10% 11% 10% 5%<6% 2% 42% 52% 55% 6%<7% 38% 32% 30% 30% 7%<8% 50% 12% 6% 4% Over 8% 10% 4% 1% 1% *The mortgage servicing portfolio is carried at the lower of cost or market and the fair market value at December 31, 2005 was $21.5 million, or 105 basis points Originations by Bank FBT 4% ONB 17% Chittenden 64% BWM 9% MBT 6% |
19 Wealth Management * * * * * * * * * |
20 • Assets under administration – Assets under discretionary management $2.0 billion – Personal Trust/Custody 2.2 billion – Retail Investments .2 billion – Bond Administration Services 2.7 billion – Captive Insurance .9 billion – Retirement Plan Services 1.1 billion Total $9.1 billion Wealth Management |
21 Asset Management Services • Services include asset management and personal trust • Over $2.0 billion in assets under management • Over $2.2 billion in assets under administration • Average relationship size of $1.2 million • Average managed account fee of 65 bps • Operating margin of approximately 40% As of 12/31/05 Assets Under Management 55% 35% 10% 0% 20% 40% 60% Equity Bonds Cash |
22 Wealth Management Retail Investments – Broker/Dealer • Over $190 million in assets under administration • 2005 Revenue: – 5% Annuity – 80% Brokerage – 15% Other • Serving over 7,300 customers in four states Bond Administration Services • Operates throughout New England • Over $2.7 billion in assets under administration • Total revenue for 2005 was $2.9 million Revenue by State VT 70% MA 20% NH/ME 10% Bond Administration Services 2% 53% 30% 15% 0% 20% 40% 60% 80% VT MA NH ME |
23 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 capital base *SNL Securities $5-$10 Billion index; data for 12/31/05 not yet available Net Interest Margin 4.53% 4.12% 4.21% 4.31% 4.08% 4.20% 3.82% 3.89% 4.74% 3.00% 4.00% 5.00% 2001 2002 2003 2004 2005 CHZ SNL* |
25 Average Cost of Funds Average Cost of Deposits *SNL Securities $5-$10 Billion index; data for 12/31/05 not yet available 1.4% 0.8% 1.0% 1.6% 2.8% 1.4% 1.7% 2.3% 3.6% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 2001 2002 2003 2004 2005 CHZ SNL* Average Yield on Securities Average Yield on Loans 7.7% 6.5% 5.5% 8.0% 6.9% 6.0% 5.7% 6.1% 5.4% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2001 2002 2003 2004 2005 CHZ SNL* 1.2% 0.7% 0.9% 1.5% 2.7% 1.1% 1.3% 2.0% 3.2% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 2001 2002 2003 2004 2005 CHZ SNL* 6.0% 5.2% 6.4% 5.6% 4.4% 4.3% 4.2% 4.3% 4.1% 3.0% 5.0% 7.0% 9.0% 2001 2002 2003 2004 2005 CHZ SNL* |
26 Noninterest Income Business Services 18% Mortgage Banking 23% Deposit Services 22% Other 9% Wealth Management 28% Business Services 25% Mortgage Banking 16% Deposit Services 25% Other 6% Wealth Management 28% 12/31/05 *SNL Securities $5-$10 Billion index; data for 12/31/05 not yet available 12/31/01 Noninterest Income/Operating Revenue 27.20% 25.25% 22.26% 24.56% 30.79% 26.66% 29.98% 31.75% 26.66% 15.00% 25.00% 35.00% 2001 2002 2003 2004 2005 CHZ SNL* |
27 Noninterest Expense 12/31/01 12/31/05 *SNL Securities $5-$10 Billion index; data for 12/31/05 not yet available Benefits 12% Occupancy 14% DP Exp 2% Other 23% Compensation 49% Benefits 10% Occupancy 13% DP Exp 8% Other 24% Compensation 45% Efficiency Ratio 56.13% 58.56% 54.59% 56.91% 56.00% 60.48% 57.38% 58.96% 58.87% 52% 54% 56% 58% 60% 62% 2001 2002 2003 2004 2005 CHZ SNL* |
28 Financial Summary 2001 2002 2003 2004 2005 Per Common Share Earnings Diluted Earnings $1.44 $1.57 $1.66 $1.61 $1.77 Cash Earnings* $1.49 $1.59 $1.70 $1.65 $1.81 Dividends $0.61 $0.63 $0.64 $0.70 $0.72 Book Value $9.25 $10.49 $12.66 $13.38 $14.15 Tangible Book Value $8.42 $8.87 $7.44 $8.28 $9.16 Ratios Dividend Payout Ratio 42.15% 39.88% 37.84% 42.45% 40.12% Return on Average Equity 16.55% 16.12% 13.90% 12.70% 13.11% Return on Average Tangible Equity* 18.54% 19.27% 22.92% 21.43% 20.99% Return on Average Assets 1.51% 1.40% 1.29% 1.27% 1.34% Return on Average Tangible Assets* 1.57% 1.44% 1.37% 1.36% 1.42% Net Interest Margin 4.74% 4.53% 4.12% 4.21% 4.31% Efficiency Ratio 56.13% 58.56% 60.48% 57.38% 56.00% Credit NPAs to Loans & OREO 0.46% 0.49% 0.39% 0.49% 0.36% Credit Loss Reserve to Loans 1.59% 1.62% 1.54% 1.45% 1.38% Net Charge-Offs to Average Loans 0.24% 0.28% 0.16% 0.07% 0.05% Capital Tangible 8.19% 7.29% 6.02% 6.58% 6.88% Leverage 7.99% 9.28% 7.79% 8.42% 9.09% Tier 1 10.32% 12.25% 10.07% 10.44% 11.05% Risk-Based 11.57% 13.50% 11.32% 11.64% 12.23% * see Appendix |
29 Risk Management * * * * * * * * * |
30 Credit Quality Net Charge-offs to Average Loans NPAs to Loans & OREO 0.46% 0.49% 0.71% 0.75% 0.65% 0.49% 0.39% 0.36% 0.60% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 2001 2002 2003 2004 2005 CHZ SNL* Credit Reserves/Loans *SNL Securities $5-$10 Billion index; data for 12/31/05 not yet available 0.24% 0.28% 0.33% 0.27% 0.07% 0.16% 0.05% 0.35% 0.20% 0.00% 0.15% 0.30% 0.45% 2001 2002 2003 2004 2005 CHZ SNL* 1.59% 1.62% 1.35% 1.41% 1.44% 1.45% 1.54% 1.38% 1.29% 1.00% 1.20% 1.40% 1.60% 1.80% 2001 2002 2003 2004 2005 CHZ SNL* |
31 Granularity of Non-Accrual Loans As of 12/31/2005 Size of Total Relationship Book Balance % >$1.0 MM $5,701 36% $500 M to $1 MM 1,560 10% $100 M to $500 M 5,800 37% <$100 M 2,758 17% Total $15,819 100% |
32 Interest Rate Risk • Net Interest Income Sensitivity (Shocked)* +200 bps +1.99% +100 bps +1.04% -100 bps –0.74% -200 bps –5.04% • Static Gap 6 month -5.37% 12 month 0.07% • Net Income Sensitivity (Shocked)* +200 bps +3.31% +100 bps +1.79% -100 bps -1.48% -200 bps -9.14% • Naturally Hedged • Net Interest Income Sensitivity (Ramped)* +50 bps +0.62% +25 bps +0.30% -25 bps –0.43% -50 bps –1.90% • Net Income Sensitivity (Ramped)* +50 bps +1.10% +25 bps +0.54% -25 bps -0.76% -50 bps -3.52% *12 month forward estimates as of 9/30/05 |
33 In Summary * * * * * * * * * |
34 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 Annual Equivalent Total Shareholder Return Annual Equivalent 10.48% 0.54% 2.00% 0% 5% 10% 15% CHZ S&P 500 Dow Jones Ind Avg 5-Year Period 11.09% 9.06% 9.79% 0% 10% 20% 30% CHZ S&P 500 Dow Jones Ind Avg 10-Year Period |
35 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. |
36 Appendix * * * * * * * * * |
37 Reconciliation of non-GAAP measurements to GAAP Tangible Ratios YTD YTD YTD YTD YTD Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Net Income (GAAP) $58,501 $63,645 $74,799 $75,127 $83,391 Amortization of identified intangibles, net of tax 1,925 831 1,786 2,000 1,799 Tangible Net Income (A) 60,426 64,476 76,585 77,127 85,190 Average Equity (GAAP) 353,529 394,740 538,217 591,693 636,254 Average Identified Intangibles 0 9,108 22,493 21,741 19,056 Average Deferred Tax on Identified Intangibles (594) (2,280) (5,763) (6,392) (4,785) Average Goodwill 28,147 53,293 187,369 216,519 216,127 Average Tangible Equity (B) 325,976 334,619 334,118 359,825 405,856 Return on Average Tangible Equity (A) / (B) 18.54% 19.27% 22.92% 21.43% 20.99% Average Assets (GAAP) $3,871,017 $4,551,879 $5,777,538 $5,895,720 $6,216,492 Average Identified Intangibles 0 9,108 22,493 21,741 19,056 Average Deferred Tax on Identified Intangibles (594) (2,280) (5,763) (6,392) (4,785) Average Goodwill 28,147 53,293 187,369 216,519 216,127 Average Tangible Assets (C) 3,843,464 4,491,758 5,573,439 5,663,852 5,986,094 Return on Average Tangible Assets (A) / (C) 1.57% 1.44% 1.37% 1.36% 1.42% Cash Earnings YTD YTD YTD YTD YTD Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Net Income (GAAP) $58,501 $63,645 $74,799 $75,127 $83,391 Amortization of identified intangibles, net of tax 1,925 831 1,786 2,000 1,799 Tangible Net Income (A) 60,426 64,476 76,585 77,127 85,190 Net Income (Operating) (A) $60,426 $64,476 $76,585 $77,127 $85,190 Average Common and Common Equivalents (B) 40,684 40,619 45,150 46,731 47,051 Cash Earnings (A) / (B) $1.49 $1.59 $1.70 $1.65 $1.81 |