MID-ATLANTIC 2003
SUPER-COMMUNITY BANK CONFERENCE
November 4th 2003
FORWARD-LOOKING STATEMENT
This information may contain "forward-looking statements" either expressed or
implied which are made in good faith by Chester Valley Bancorp Inc. ("CVAL"),
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements may include statements with
respect to CVAL's strategies, goals, beliefs, expectations, estimates,
intentions, financial condition, results of operations, future performance and
business of CVAL. These forward-looking statements involve risks and
uncertainties that are subject to change based on various important factors.
Numerous competitive, economic, regulatory, legal and technological factors,
among others, could cause CVAL's financial performance to differ materially from
the goals, plans, objectives, intentions and expectations expressed in
such forward-looking statements. CVAL does not undertake to update any
forward-looking statement whether written or oral, that may be made from time to
time by or on behalf of CVAL.
CHESTER VALLEY BANCORP INC.
COMPANY BACKGROUND
CHESTER VALLEY BANCORP INC.
ORGANIZATION HISTORY
1922-Downingtown Building and Loan Founded
1987-Initial IPO
1988-Renamed First Financial Savings Bank
1989-Converted to Thrift Holding Company
1997-Name Changed to First Financial Bank
1998-Acquired Philadelphia Corporation for Investment Services
2001-Converted to Commercial Bank Charter
2001-Approval of Bank Holding Co. and Financial Holding Co.
2001-Establishment of First Financial Investments Inc.
CHESTER VALLEY BANCORP INC.
HOLDING COMPANY STRUCTURE
Chester Valley Bancorp Inc.
NASDAQ: CVAL
Philadelphia Corporation
First Financial Bank for Investment Services
o Commercial Bank o Full Service Broker-Dealer
o 10 Full Service Offices o Registered Investment Advisor
o $598MM in Assets* o 2 Investment Offices
o $399MM in Deposits*
o First Financial Investments, Inc
*As of 9/30/03
CHESTER VALLEY BANCORP INC.
STRONG MANAGEMENT TEAM
- --------------------------------------------------------------------------------
YEARS IN PRIOR
NAME FUNCTION FIN. SERV. INSTITUTIONS
- --------------------------------------------------------------------------------
Donna M. Coughey President & CEO 31 Mellon, Marine Midland
(CVAL & FFB)
Joseph T. Crowley CFO & Treasurer 18 Crusader Holding Co.,
(CVAL & FFB) KPMG
Louis Denton PCIS Chairman/CEO 20 Hopper Soliday & Co.
Mathew Kelly PCIS President/COO 17 PNC Advisors, Mellon
Richard Bertolet EVP - Credit Admin 35 Mellon
Colin N. Maropis EVP - Lending 27 Sun Life of Canada
William Byrne SVP - Lending 19 Mellon
Chris Breslin SVP - Retail 17 First Union, Chase
Margaret Leimkuhler SVP - CAO 19 Keystone, Frankford
Thomas Varley SVP - Trust 29 Glenmede, Mellon
CHESTER VALLEY BANCORP INC.
MARKETPLACE
CHESTER VALLEY BANCORP INC.
CHESTER COUNTY, PENNSYLVANIA
[GRAPHIC PENNSYLVANIA/CHESTER COUNTY OMITTED]
O IN THE TOP 20 FASTEST-GROWING COUNTIES IN THE UNITED STATES.
O CURRENTLY 166,244 HOUSEHOLDS, WITH FURTHER GROWTH OF 8.4% BY 2008.
O AVERAGE HOUSEHOLD INCOME OF $95,309 EXPECTED TO GROW NEARLY 14.5% BY 2008.
SOURCE: SNL Financial, Claritas
CHESTER VALLEY BANCORP INC.
BRANCH LOCATIONS
Chester County, PA
[GRAPHIC OMITTED]
Existing Branches
Planned Locations
CHESTER VALLEY BANCORP INC.
MARKET POSITION IN CHESTER COUNTY
AS A PERCENT OF TOTAL DEPOSITS
4th Largest of the 39 Banks Competing in Chester County
2nd Largest of the 10 Banks Headquartered in Chester County
SOURCE: FDIC Summary of Deposits as of 6/30/02
CHESTER VALLEY BANCORP INC.
BECOMING A COMMERCIAL BANK
CHESTER VALLEY BANCORP INC.
DRIVERS OF THE TRANSITION
o Broaden Commercial Lending Scope
o Emphasis on Business and Retail Core Deposits
o Maximize Non-interest Revenue
CHESTER VALLEY BANCORP INC.
SMALL BUSINESS COMMERCIAL
LOAN GROWTH
(IN THOUSANDS)
6/30/02 6/30/03 9/30/03
------- ------- -------
Outstandings $6,443 $15,131 $17,911
% growth 134.82% 18.37%
# of loans 181 247 277
CHESTER VALLEY BANCORP INC.
DIVERSIFYING THE LOAN MIX
June 30, 1996 June 30, 2003
[JUNE 30, 1996 GRAPHIC OMITTED] [JUNE 30, 2003 GRAPHIC OMITTED]
Consumer 17% Consumer 22%
Commercial Business 3% Commercial Business 10%
Commercial R.E. 10% Commercial R.E. 30%
Construction 7% Construction 14%
Residential 63% Residential 24%
CHESTER VALLEY BANCORP INC.
RISK MANAGEMENT
We are highly focused on risk--evaluating it to ensure that it is either
mitigated or well-balanced with the reward.
o Credit Risk
- Strong Credit culture and policy
- Diversification of risks
- Early detection system to monitor and remediate emerging
substandard credits
- Independent review by third party
o Interest Rate Risk
- Emphasis of total return
- Selected use of off-balance sheet hedging instruments
CHESTER VALLEY BANCORP INC.
CHECKING ACCOUNT GROWTH
(IN THOUSANDS)
6/30/02 6/30/03 9/30/03
------- ------- -------
Retail Accounts $69,335 $78,192 $80,742
% Growth 13% 3%
Business Accounts $31,568 $44,422 $46,340
% Growth 41% 4%
CHESTER VALLEY BANCORP INC.
BUILDING CORE DEPOSITS
(IN THOUSANDS)
JUNE 30, 1996 JUNE 30, 2003
[JUNE 30, 1996 GRAPHIC OMITTED] [JUNE 30, 2003 GRAPHIC OMITTED]
CDs 61% $138,295 CDs 37% $146,633
DDA/NOW 18% $40,985 DDA/NOW 26% $121,734
MMA/SAV 21% $48,926 MMA/SAV 33% $137,219
CHESTER VALLEY BANCORP INC.
DEPOSIT AND LOAN FEES
(IN THOUSANDS)
[GRAPHIC OMITTED]
CAGR 20.49%(a)
Jun-99 $1,471
Jun-00 $1,652
Jun-01 $1,723
Jun-02 $1,911
Jun-03 $2,837
Sep-02 $714
Sep-03 $771
(a) CAGR (Compound Annual Growth Rate) is for the period 6/30/98 to 6/30/03.
CHESTER VALLEY BANCORP INC.
TACTICS
o Branch Advisory Boards
o Target marketing & relationship management
o Effective use of technology
o Comprehensive wealth management approach
CHESTER VALLEY BANCORP INC.
ADVISORY BOARDS
New Business -- Fiscal 2003:
o $5.0 million in commercial loans
o $4.0 million in managed trust assets
o $3.0 million in consumer loans
o $3.0 million in consumer deposits
o $1.0 million in commercial deposits
CHESTER VALLEY BANCORP INC.
SALES CULTURE
- -------------------------------------------------------------------------------
Actual Actual Actual Projected
Jun-01 Jun-02 Jun-03 Jun-04
- -------------------------------------------------------------------------------
Consumer Loans Closed $18,500,000 $51,000,000 $67,000,000 $84,000,000
- -------------------------------------------------------- ----------------------
Teller Referrals 650 1,556 10,713 12,000
Teller Close Ratio n/a 21% 24% 30%
- -------------------------------------------------------------------------------
Cross-sell Ratio 2.0% 2.8% 3.4% 3.6%
(Best in Class 3.9%)
- -------------------------------------------------------------------------------
CHESTER VALLEY BANCORP INC.
LEVERAGING TECHNOLOGY
o 100% Check Imaged
o Advanced System for Targeted Marketing
o eBank Real-Time Account Information
o Systems Integration on Every Workstation
o National Lock Box System
CHESTER VALLEY BANCORP INC.
CVAL WEALTH MANAGEMENT
o Focus - Personal versus Corporate Trust
o Integration of Trust and Phila. Corp Investment and Advisory Services
o Private Banking
o Segment to meet market demand
CHESTER VALLEY BANCORP INC.
TRUST & INVESTMENT SERVICES INCOME
(in thousands)
[GRAPHIC OMITTED]
Jun-01 $3,766
Jun-02 $3,818
Jun-03 $3,823
Sep-02 $892
Sep-03 $984
CHESTER VALLEY BANCORP INC.
UVEST PROGRAM
(IN WHOLE DOLLARS)
Actual Actual Projected
Jun-02(a) Jun-03 Jun-04
-----------------------------------------------------
o Uvest Investment Sales $2,857,000 $6,646,000 $9,000,000
o Gross Revenue $98,432 $217,395 $350,000
o No. of Trades 170 389 450
o Avg. Sale per Trade $16,805 $17,084 $20,000
o Appointments Closed N/A 50% 50%
o Assets under Mgt $3,200,000 $10,200,000 $20,000,000
(a) Based on 7 months of activity
CHESTER VALLEY BANCORP INC.
FINANCIAL PERFORMANCE
CHESTER VALLEY BANCORP INC.
ASSETS
(IN MILLIONS)
{GRAPHIC OMITTED]
CAGR 9.17%(a)
Jun-99 $451
Jun-00 $507
Jun-01 $545
Jun-02 $566
Jun-03 $585
Sep-03 $598
(a) CAGR (Compound Annual Growth Rate) is for the period 6/30/98 to 6/30/03.
CHESTER VALLEY BANCORP INC.
LOANS (EXCLUDING RESIDENTIAL LOANS)
(IN MILLIONS)
{GRAPHIC OMITTED]
CAGR 18.57%(a)
Jun-99 $140
Jun-00 $169
Jun-01 $201
Jun-02 $243
Jun-03 $288
Sep-03 $318
(a) CAGR (Compound Annual Growth Rate) is for the period 6/30/98 to 6/30/03.
CHESTER VALLEY BANCORP INC.
LOAN LOSS RESERVE
TO TOTAL LOANS
[GRAPHIC OMITTED]
Peer Group Source: FDIC Statistics on
Depository Institution Report (National Average)
CHESTER VALLEY BANCORP INC.
NET CHARGE-OFFS TO LOANS
[GRAPHIC OMITTED]
Peer Group Source: FDIC Statistics on
Depository Institution Report (National Average)
CHESTER VALLEY BANCORP INC.
NET INTEREST MARGIN
[GRAPHIC OMITTED]
Jun-99 3.64%
Jun-00 3.49%
Jun-01 3.19%
Jun-02 3.66%
Jun-03 3.43%
Sep-03 3.51%
CHESTER VALLEY BANCORP INC.
NON-INTEREST INCOME
(IN THOUSANDS)
{GRAPHIC OMITTED]
CAGR 11.53%
Jun-99 $4,915
Jun-00 $5,466
Jun-01 $5,733
Jun-02 $6,010
Jun-03 $7,098
Sep-02 $1,657
Sep-03 $1,939
*Excludes Securities Gains/Losses
(a) CAGR (Compound Annual Growth Rate) is for the period 6/30/98 to 6/30/03.
CHESTER VALLEY BANCORP INC.
EFFICIENCY RATIO
[GRAPHIC OMITTED]
Jun-99 65.56%
Jun-00 65.76%
Jun-01 72.37%
Jun-02 64.10%
Jun-03 68.72%
Sep-03 64.29%
CHESTER VALLEY BANCORP INC.
NET INCOME TREND
(IN THOUSANDS)
[GRAPHIC OMITTED]
CAGR 7.73%(a)
Jun-99 $4,213
Jun-00 $4,557
Jun-01 $4,003
Jun-02 $5,575
Jun-03 $5,262
Sep-02 $1,465
Sep-03 $1,514
(a) CAGR (Compound Annual Growth Rate) is for the period 6/30/98 to 6/30/03.
CHESTER VALLEY BANCORP INC.
RETURN ON AVERAGE ASSETS
[GRAPHIC OMITTED]
Jun-99 1.02%
Jun-00 0.94%
Jun-01 0.76%
Jun-02 1.02%
Jun-03 0.90%
Sep-02 1.00%
Sep-03 1.02%
CHESTER VALLEY BANCORP INC.
RETURN ON AVERAGE EQUITY
[GRAPHIC OMITTED]
Jun-98 12.0%
Jun-99 12.6%
Jun-00 13.3%
Jun-01 10.5%
Jun-02 13.2%
Jun-03 11.3%
Sep-02 13.0%
Sep-03 12.2%
CHESTER VALLEY BANCORP INC.
CVAL
A GOOD INVESTMENT
CHESTER VALLEY BANCORP INC.
CHESTER VALLEY BANCORP INC.
HISTORICAL SHARE PRICE VS S&P 500 INDEX
[GRAPHIC OMITTED]
CUMULATIVE
RETURN CAGR(1)
CVAL 1.169.1% 16.9%
S&P 388.4% 10.2%
Source: Bloomberg
Note: All per share amounts have been adjusted for stock dividends and stock
splits.
(a) Return based on all cash dividends being reinvested into stock at the
time of distribution.
(b) CAGR (Compound Annual Growth Rate) is for the period 03/27/87 to 03/27/03.
CHESTER VALLEY BANCORP INC.
CHESTER VALLEY BANCORP
FYE HISTORICAL DIVIDEND PER SHARE
[GRAPHIC OMITTED]
15.3% CAGR(a)
1997 $0.17
1998 $0.25
1999 $0.26
2000 $0.29
2001 $0.30
2002 $0.36
2003 $0.38
Source: SNL Financial, Bloomberg
(a) CAGR (Compound Annual Growth Rate) is for the period 6/30/96 to 6/30/03.
CHESTER VALLEY BANCORP INC.
SUMMARY
CHESTER VALLEY BANCORP INC.
INVESTMENT HIGHLIGHTS
o Excellent Market Demographics
o Experienced Management Team
o Solid Loan Quality
o Strong Capital Position
o Substantial Core Deposit Base
CHESTER VALLEY BANCORP INC.
INVESTMENT HIGHLIGHTS
o NASDAQ-Listed Company (Symbol: CVAL)
o Market Capitalization of $105.9 Million*
o Directors and Executive Officers Own Approximately 21.30%
* Price as of October 17, 2003 was $21.91
CHESTER VALLEY BANCORP INC.
CHESTER VALLEY BANCORP INC.