City Holding Company Announces First Quarter Results
CHARLESTON, W.Va., April 24, 2012 /PRNewswire/ -- City Holding Company, "the Company" (NASDAQ: CHCO), a $2.8 billion bank holding company headquartered in Charleston, today announced net income per diluted share for the first quarter of $0.67 compared to $0.62 per diluted share in the first quarter of 2011. Net income for the first quarter of 2012 was $10.0 million compared to $9.6 million in the first quarter of 2011. For the first quarter of 2012, the Company achieved a return on assets of 1.47%, a return on tangible equity of 15.4%, a net interest margin of 3.98%, and an efficiency ratio of 53.0%. This compares with a return on assets of 1.44%, a return on equity of 14.7%, a net interest margin of 3.95%, and an efficiency ratio of 55.7% for the comparable period of 2011.
City's CEO Charles Hageboeck stated that, "The Company increased its earnings per share in the first quarter of 2012 as compared to the first quarter of 2011, despite the loss of $0.7 million of interest income from interest rate floors and continued regulatory pressures on how service fees are collected. Net interest income increased $0.7 million from the first quarter of 2011 even though $0.7 million of interest income from purchased interest rate floors (that expired in June 2011) was recognized in the first quarter of 2011. This increase was achieved by growth in average loan balances of $111 million from the quarter ended March 31, 2011 that was funded primarily by increases in non-time deposits. As a result of this growth and prudent pricing of our interest bearing deposits (particularly time deposits), the net interest margin improved from 3.95% for the first quarter of 2011 (which included $0.7 million of interest income associated with interest rate floors) to 3.98% for the first quarter of 2012.
"Our asset quality remains strong and stable. Non-performing assets (1.48% of total loans and other real estate owned) were down as compared to the prior quarter. The Company experienced a higher level of charge-offs on commercial real estate loans in the first quarter of 2012 as compared to prior quarters primarily due to the charge-off associated with one particular loan, which was previously considered and reserved for in our allowance for loan losses.
"Although the Company ceased processing check transactions in high-to-low order during the fourth quarter of 2011, our service fee revenues were essentially flat compared to the first quarter of 2011. A slight dip in non-sufficient funds fees was offset by an increase in revenues from electronic transactions. In addition, our insurance commission revenues grew $0.4 million, or 23%, due to increased business during the first quarter of 2012. Expenses declined $0.4 million from the first quarter of 2011, primarily due to lower FDIC insurance expense as a result of a change in the FDIC assessment methodology. Overall, expenses of the Company continue to be well maintained.
"During the first quarter, City announced that an amendment had been executed to the definitive agreement to acquire Virginia Savings Bancorp, Inc. of Front Royal, Virginia. This amendment reflected a reduction of the merger consideration arising from unexpected termination charges contained in contracts associated with Virginia Savings Bancorp, Inc.'s data service provider that Virginia Bancorp inadvertently did not provide to City during the due diligence process and were discovered after the definitive agreement had been executed. The amendment revised the terms of the original agreement. The proposed merger is still expected to close in the second quarter of 2012, subject to all regulatory approvals, approval by the shareholders of Virginia Savings Bancorp, Inc., and satisfaction of various covenants, representations and warranties. We are eagerly anticipating our expansion into northwestern Virginia," Hageboeck concluded.
Net Interest Income
The Company's tax equivalent net interest income increased $0.3 million, or 1.2%, from $23.4 million during the fourth quarter of 2011 to $23.7 million during the first quarter of 2012. This increase is due to a decrease in interest expense that was primarily related to a decline in the average rate paid on interest bearing deposits which declined from 0.85% for the fourth quarter of 2011 to 0.79% for the first quarter of 2012. This decline is primarily due to the average interest rate paid on time deposits decreasing ten basis points to 1.49% for the first quarter of 2012. The Company's reported net interest margin increased from 3.90% for the quarter ended December 31, 2011 to 3.98% for the quarter ended March 31, 2012.
Credit Quality
The Company's ratio of non-performing assets to total loans and other real estate owned decreased from 1.52% at December 31, 2011 to 1.48% at March 31, 2012. Past due loans decreased from $13.3 million at December 31, 2011 to $8.7 million or 0.44% of total loans outstanding at March 31, 2012. Past due residential real estate loans were $4.1 million or 0.64% of residential real estate loans outstanding at March 31, 2012; past due home equity loans were $1.6 million or 0.36% of home equity loans outstanding at March 31, 2012; and past due commercial real estate loans were $2.6 million or 0.35% of commercial real estate loans outstanding at March 31, 2012.
The Company had net charge-offs of $2.7 million for the first quarter of 2012, which primarily consists of net charge-offs on commercial real estate loans of $1.9 million and home equity loans of $0.5 million. Charge-offs for commercial real estate loans were primarily related to a specific borrower filing bankruptcy and the related impaired credits that had been appropriately considered in establishing the allowance for loan losses in prior periods. The Company is currently reviewing recovery options based on its collateral position, although no assurances of any such recoveries can be made at this time.
At March 31, 2012, the Allowance for Loan Losses ("ALLL") was $18.6 million or 0.94% of total loans outstanding and 89% of non-performing loans compared to $18.4 million or 0.98% of loans outstanding and 72% of non-performing loans at March 31, 2011, and $19.4 million or 0.98% of loans outstanding and 88% of non-performing loans at December 31, 2011.
As a result of the Company's quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.95 million in the first quarter of 2012, compared to the $1.09 million for the comparable period in 2011 and $2.23 million for the fourth quarter of 2011. Changes in the amount of the provision and related allowance are based on the Company's detailed systematic methodology and are directionally consistent with changes in the composition and quality of the Company's loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.
Non-interest Income
Non-interest income increased $0.4 million to $13.1 million in the first quarter of 2012 as compared to $12.7 million in the first quarter of 2011. This increase was primarily the result of insurance commissions increasing $0.4 million, or 23.1%, to $2.0 million for the quarter ended March 31, 2012. In addition, service charges were essentially flat for the first quarter of 2012 compared to the first quarter of 2011. While service charge revenues from non-sufficient funds charges declined modestly during this time period, this decline was offset by increased revenues from electronic transactions over the same time period.
Non-interest Expenses
Non-interest expenses decreased $0.4 million, from $19.9 million in the first quarter of 2011 to $19.5 million in the first quarter of 2012. This decrease was primarily related to lower FDIC insurance expense ($0.6 million) due to a change in the assessment base methodology, and lower occupancy and equipment expenses ($0.2 million) due to more favorable weather conditions in the first quarter of 2012. These decreases were partially offset by increased salaries and employee benefit expenses ($0.3 million) and other expenses ($0.3 million).
Balance Sheet Trends
Loan balances at December 31, 2011 and March 31, 2012 were essentially flat at $1.97 billion. Increases in commercial real estate loans of $13.4 million (1.8%) and residential real estate loans of $9.8 million (1.1%) were essentially offset by a decline in commercial and industrial ("C&I") loans of $22.2 million. The Company elected to exit from its participation in a C&I loan that, when originated, was a local company, but over time had became a "Shared National Credit" and would have yielded less than 1.50% going forward. Additionally, a large C&I customer sold their business and paid off their outstanding loan balance of $9 million.
Total average depository balances increased $45.5 million, or 2.1%, from the quarter ended December 31, 2011 to the quarter ended March 31, 2012. This growth was primarily in interest-bearing deposits ($22.2 million), savings deposits ($15.0 million) and noninterest-bearing deposits ($5.4 million).
Income Tax Expense
The Company's effective income tax rate for the first quarter of 2012 was 33.9% compared to 33.6% for the year ended December 31, 2011, and 33.8% for the quarter ended March 31, 2011. The effective rate is based upon the Company's expected tax rate for the year ending December 31, 2012.
Capitalization and Liquidity
One of the Company's strengths is that it is highly profitable while maintaining strong liquidity and capital. With respect to liquidity, the Company's loan to deposit ratio was 85.7% and the loan to asset ratio was 70.9% at March 31, 2012. The Company maintained investment securities totaling 14.4% of assets as of this date. Further, the Company's deposit mix is weighted heavily toward checking and saving accounts that fund 50.8% of assets at March 31, 2012. Time deposits fund 31.9% of assets at March 31, 2012, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.
The Company is also strongly capitalized. The Company's tangible equity ratio was 9.5% at March 31, 2012 compared to 9.4% at December 31, 2011. At March 31, 2012, City National Bank's Leverage Ratio is 9.45%, its Tier I Capital ratio is 12.35%, and its Total Risk-Based Capital ratio is 13.27%. These regulatory capital ratios are significantly above levels required to be considered "well capitalized," which is the highest possible regulatory designation.
On March 30, 2012, the Board approved a quarterly cash dividend of $0.35 cents per share payable April 30, 2012, to shareholders of record as of April 13, 2012. During the quarter ended March 31, 2012, the Company repurchased 88,000 common shares at a weighted average price of $34.91 as part of a one million share repurchase plan authorized by the Board of Directors in July 2011. At March 31, 2012, the Company could repurchase approximately 604,000 shares under the July 2011 authorization.
On March 14, 2012, the Company announced that an amendment to the definitive agreement to acquire Virginia Savings Bancorp, Inc. of Front Royal, Virginia and its principal banking subsidiary, Virginia Savings Bank, had been executed. The proposed merger is expected to close in the second quarter of 2012, subject to all regulatory approvals, the approval of the shareholders of Virginia Savings Bancorp, Inc. and the satisfaction of various covenants, representations and warranties.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 68 branches across West Virginia, Eastern Kentucky and Southern Ohio.
Forward-Looking Information
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 results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may incur increased charge-offs in the future; (3) the Company could have adverse legal actions of a material nature; (4) the Company may face competitive loss of customers; (5) the Company may be unable to manage its expense levels; (6) the Company may have difficulty retaining key employees; (7) changes in the interest rate environment may have results on the Company's operations materially different from those anticipated by the Company's market risk management functions; (8) changes in general economic conditions and increased competition could adversely affect the Company's operating results; (9) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company's operating results; (10) the Company may experience difficulties growing loan and deposit balances; (11) the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; (12) continued deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; and (13) the effects of the Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") recently adopted by the United States Congress. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its March 31, 2012 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2012 results and will adjust the amounts if necessary.
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||
| Financial Highlights |
|||
| (Unaudited) |
|||
| Three Months Ended March 31, |
Percent |
||
| 2012 |
2011 |
Change |
|
| Earnings ($000s, except per share data): |
|||
| Net Interest Income (FTE) |
$23,730 |
$23,062 |
2.90% |
| Net Income available to common shareholders |
10,031 |
9,614 |
4.34% |
| Earnings per Basic Share |
0.68 |
0.62 |
9.24% |
| Earnings per Diluted Share |
0.67 |
0.62 |
9.23% |
| Key Ratios (percent): |
|||
| Return on Average Assets |
1.47% |
1.44% |
1.95% |
| Return on Average Tangible Equity |
15.42% |
14.68% |
5.07% |
| Net Interest Margin |
3.98% |
3.95% |
0.67% |
| Efficiency Ratio |
52.95% |
55.69% |
(4.92)% |
| Average Shareholders' Equity to Average Assets |
11.55% |
11.91% |
(2.97)% |
| Consolidated Risk Based Capital Ratios (a): |
|||
| Tier I |
13.36% |
13.54% |
(1.33)% |
| Total |
14.27% |
14.47% |
(1.38)% |
| Tangible Equity to Tangible Assets |
9.54% |
9.63% |
(0.95)% |
| Common Stock Data: |
|||
| Cash Dividends Declared per Share |
$ 0.35 |
$ 0.34 |
2.94% |
| Book Value per Share |
21.46 |
20.39 |
5.25% |
| Tangible Book Value per Share |
17.65 |
16.69 |
5.78% |
| Market Value per Share: |
|||
| High |
37.16 |
37.22 |
(0.16)% |
| Low |
32.59 |
33.79 |
(3.55)% |
| End of Period |
34.74 |
35.36 |
(1.75)% |
| Price/Earnings Ratio (b) |
12.81 |
14.24 |
(10.06)% |
| (a) March 31, 2012 risk based capital ratios are estimated |
|||
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||||
| Financial Highlights |
|||||||
| (Unaudited) |
|||||||
| Book Value and Market Price Range per Share |
|||||||
| Market Price |
|||||||
| Book Value per Share |
Range per Share |
||||||
| March 31 |
June 30 |
September 30 |
December 31 |
Low |
High |
||
| 2008 |
$ 18.92 |
$ 18.72 |
$ 17.61 |
$ 17.58 |
$ 29.08 |
$42.88 |
|
| 2009 |
17.69 |
18.24 |
18.95 |
19.37 |
20.88 |
34.34 |
|
| 2010 |
19.71 |
20.02 |
20.31 |
20.31 |
26.87 |
38.03 |
|
| 2011 |
20.39 |
20.58 |
20.86 |
21.05 |
26.06 |
37.22 |
|
| 2012 |
21.46 |
32.59 |
37.16 |
||||
| Earnings per Basic Share |
|||||||
| Quarter Ended |
|||||||
| March 31 |
June 30 |
September 30 |
December 31 |
Year-to-Date |
|||
| 2008 |
$ 0.81 |
$ 0.83 |
$ (0.16) |
$ 0.26 |
$ 1.74 |
||
| 2009 |
0.69 |
0.64 |
0.66 |
0.70 |
2.69 |
||
| 2010 |
0.59 |
0.68 |
0.58 |
0.64 |
2.48 |
||
| 2011 |
0.62 |
0.65 |
0.77 |
0.65 |
2.68 |
||
| 2012 |
0.68 |
0.68 |
|||||
| Earnings per Diluted Share |
|||||||
| Quarter Ended |
|||||||
| March 31 |
June 30 |
September 30 |
December 31 |
Year-to-Date |
|||
| 2008 |
$ 0.80 |
$ 0.83 |
$ (0.16) |
$ 0.26 |
$ 1.74 |
||
| 2009 |
0.69 |
0.64 |
0.66 |
0.70 |
2.68 |
||
| 2010 |
0.58 |
0.68 |
0.58 |
0.64 |
2.47 |
||
| 2011 |
0.62 |
0.64 |
0.76 |
0.65 |
2.67 |
||
| 2012 |
0.67 |
0.67 |
|||||
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||
| Consolidated Statements of Income |
|||
| (Unaudited) ($ in 000s, except per share data) |
|||
| Three Months Ended March 31, |
|||
| 2012 |
2011 |
||
| Interest Income |
|||
| Interest and fees on loans |
$ 23,068 |
$ 23,738 |
|
| Interest on investment securities: |
|||
| Taxable |
3,964 |
4,541 |
|
| Tax-exempt |
387 |
462 |
|
| Interest on federal funds sold |
11 |
13 |
|
| Total Interest Income |
27,430 |
28,754 |
|
| Interest Expense |
|||
| Interest on deposits |
3,668 |
5,711 |
|
| Interest on short-term borrowings |
73 |
72 |
|
| Interest on long-term debt |
167 |
157 |
|
| Total Interest Expense |
3,908 |
5,940 |
|
| Net Interest Income |
23,522 |
22,814 |
|
| Provision for loan losses |
1,950 |
1,086 |
|
| Net Interest Income After Provision for Loan Losses |
21,572 |
21,728 |
|
| Non-Interest Income |
|||
| Total investment securities impairment losses |
- |
- |
|
| Noncredit impairment losses recognized in other comprehensive income |
- |
- |
|
| Net investment securities impairment losses |
- |
- |
|
| Gains (losses) on sale of investment securities |
(31) |
- |
|
| Net investment securities (losses) |
(31) |
- |
|
| Service charges |
9,090 |
9,054 |
|
| Insurance commissions |
1,996 |
1,621 |
|
| Trust and investment management fee income |
807 |
753 |
|
| Bank owned life insurance |
723 |
758 |
|
| Other income |
533 |
476 |
|
| Total Non-Interest Income |
13,118 |
12,662 |
|
| Non-Interest Expense |
|||
| Salaries and employee benefits |
10,245 |
9,912 |
|
| Occupancy and equipment |
1,935 |
2,106 |
|
| Depreciation |
1,086 |
1,136 |
|
| FDIC insurance expense |
385 |
952 |
|
| Advertising |
644 |
680 |
|
| Bankcard expenses |
620 |
501 |
|
| Postage, delivery, and statement mailings |
548 |
554 |
|
| Office supplies |
455 |
539 |
|
| Legal and professional fees |
447 |
469 |
|
| Telecommunications |
389 |
429 |
|
| Repossessed asset (gains)/losses, net of expenses |
121 |
198 |
|
| Other expenses |
2,640 |
2,382 |
|
| Total Non-Interest Expense |
19,515 |
19,858 |
|
| Income Before Income Taxes |
15,175 |
14,532 |
|
| Income tax expense |
5,144 |
4,918 |
|
| Net Income Available to Common Shareholders |
$ 10,031 |
$ 9,614 |
|
| Comprehensive Income |
$ 12,201 |
$ 10,207 |
|
| Distributed earnings allocated to common shareholders |
$ 5,118 |
$ 5,154 |
|
| Undistributed earnings allocated to common shareholders |
4,837 |
4,394 |
|
| Net earnings allocated to common shareholders |
$ 9,955 |
$ 9,548 |
|
| Average common shares outstanding |
14,679 |
15,380 |
|
| Effect of dilutive securities: |
|||
| Employee stock options |
80 |
82 |
|
| Shares for diluted earnings per share |
14,759 |
15,462 |
|
| Basic earnings per common share |
$ 0.68 |
$ 0.62 |
|
| Diluted earnings per common share |
$ 0.67 |
$ 0.62 |
|
| Dividends declared per common share |
$ 0.35 |
$ 0.34 |
|
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||
| Consolidated Statements of Changes in Stockholders' Equity |
|||
| (Unaudited) ($ in 000s) |
|||
| Three Months Ended |
|||
| March 31, 2012 |
March 31, 2011 |
||
| Balance at January 1 |
$ 311,134 |
$ 314,861 |
|
| Net income |
10,031 |
9,614 |
|
| Other comprehensive income: |
|||
| Change in unrealized gain on securities available-for-sale |
2,170 |
789 |
|
| Change in unrealized (loss) on interest rate floors |
- |
(196) |
|
| Cash dividends declared ($0.35/share) and ($0.34/share), respectively |
(5,144) |
(5,190) |
|
| Issuance of stock award shares, net |
442 |
464 |
|
| Exercise of 16,899 stock options |
485 |
- |
|
| Exercise of 5,476 stock options |
- |
153 |
|
| Purchase of 88,000 common shares of treasury |
(3,072) |
- |
|
| Purchase of 270,745 common shares of treasury |
- |
(9,373) |
|
| Balance at March 31 |
$ 316,046 |
$ 311,122 |
|
| CITY HOLDING COMPANY AND SUBSIDIARIES |
||||||
| Condensed Consolidated Quarterly Statements of Income |
||||||
| (Unaudited) ($ in 000s, except per share data) |
||||||
| Quarter Ended |
||||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
||
| 2012 |
2011 |
2011 |
2011 |
2011 |
||
| Interest income |
$ 27,430 |
$ 27,441 |
$ 28,370 |
$ 28,323 |
$ 28,754 |
|
| Taxable equivalent adjustment |
208 |
215 |
212 |
240 |
248 |
|
| Interest income (FTE) |
27,638 |
27,656 |
28,582 |
28,563 |
29,002 |
|
| Interest expense |
3,908 |
4,216 |
4,799 |
5,803 |
5,940 |
|
| Net interest income |
23,730 |
23,440 |
23,783 |
22,760 |
23,062 |
|
| Provision for loan losses |
1,950 |
2,229 |
- |
1,286 |
1,086 |
|
| Net interest income after provision |
||||||
| for loan losses |
21,780 |
21,211 |
23,783 |
21,474 |
21,976 |
|
| Noninterest income |
13,118 |
12,128 |
13,531 |
16,537 |
12,662 |
|
| Noninterest expense |
19,515 |
18,685 |
19,688 |
22,912 |
19,858 |
|
| Income before income taxes |
15,383 |
14,654 |
17,626 |
15,099 |
14,780 |
|
| Income tax expense |
5,144 |
4,787 |
5,837 |
5,029 |
4,918 |
|
| Taxable equivalent adjustment |
208 |
215 |
212 |
240 |
248 |
|
| Net income available to common shareholders |
$ 10,031 |
$ 9,652 |
$ 11,577 |
$ 9,830 |
$ 9,614 |
|
| Distributed earnings allocated to common shareholders |
$ 5,118 |
$ 5,136 |
$ 5,015 |
$ 5,092 |
$ 5,154 |
|
| Undistributed earnings allocated to common shareholders |
4,837 |
4,446 |
6,479 |
4,669 |
4,394 |
|
| Net earnings allocated to common shareholders |
$ 9,955 |
$ 9,582 |
$ 11,494 |
$ 9,761 |
$ 9,548 |
|
| Average common shares outstanding |
14,679 |
14,743 |
15,003 |
15,120 |
15,380 |
|
| Effect of dilutive securities: |
||||||
| Employee stock options |
80 |
71 |
68 |
73 |
82 |
|
| Shares for diluted earnings per share |
14,759 |
14,814 |
15,071 |
15,193 |
15,462 |
|
| Basic earnings per common share |
$ 0.68 |
$ 0.65 |
$ 0.77 |
$ 0.65 |
$ 0.62 |
|
| Diluted earnings per common share |
0.67 |
0.65 |
0.76 |
0.64 |
0.62 |
|
| Cash dividends declared per share |
0.35 |
0.35 |
0.34 |
0.34 |
0.34 |
|
| Net Interest Margin |
3.98% |
3.90% |
3.93% |
3.78% |
3.95% |
|
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Non-Interest Income and Non-Interest Expense |
|||||
| (Unaudited) ($ in 000s) |
|||||
| Quarter Ended |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 |
2011 |
2011 |
2011 |
2011 |
|
| Non-Interest Income: |
|||||
| Service charges |
$ 9,090 |
$ 9,360 |
$ 9,840 |
$ 9,855 |
$ 9,054 |
| Insurance commissions |
1,996 |
1,433 |
1,388 |
1,504 |
1,621 |
| Trust and investment management fee income |
807 |
925 |
699 |
730 |
753 |
| Bank owned life insurance |
723 |
728 |
952 |
745 |
758 |
| Other income |
533 |
599 |
380 |
575 |
476 |
| Subtotal |
13,149 |
13,045 |
13,259 |
13,409 |
12,662 |
| Total investment securities impairment losses |
- |
(918) |
(1,849) |
- |
- |
| Noncredit impairment losses recognized in other |
|||||
| comprehensive income |
- |
- |
1,494 |
- |
- |
| Net investment securities impairment losses |
- |
(918) |
(355) |
- |
- |
| Gain (loss) on sale of investment securities |
(31) |
1 |
627 |
3,128 |
- |
| Total Non-Interest Income |
$ 13,118 |
$ 12,128 |
$ 13,531 |
$ 16,537 |
$ 12,662 |
| Non-Interest Expense: |
|||||
| Salaries and employee benefits |
$ 10,245 |
$ 10,320 |
$ 10,302 |
$ 10,183 |
$ 9,912 |
| Occupancy and equipment |
1,935 |
1,929 |
2,057 |
1,921 |
2,106 |
| Depreciation |
1,086 |
1,100 |
1,131 |
1,140 |
1,136 |
| FDIC insurance expense |
385 |
300 |
392 |
932 |
952 |
| Advertising |
644 |
153 |
546 |
628 |
680 |
| Bankcard expenses |
620 |
566 |
559 |
633 |
501 |
| Postage, delivery and statement mailings |
548 |
484 |
551 |
510 |
554 |
| Office supplies |
455 |
429 |
492 |
452 |
539 |
| Legal and professional fees |
447 |
366 |
567 |
3,511 |
469 |
| Telecommunications |
389 |
388 |
371 |
417 |
429 |
| Repossessed asset (gains) losses, net of expenses |
121 |
(27) |
109 |
(7) |
198 |
| Other expenses |
2,640 |
2,677 |
2,611 |
2,592 |
2,382 |
| Total Non-Interest Expense |
$ 19,515 |
$ 18,685 |
$ 19,688 |
$ 22,912 |
$ 19,858 |
| Employees (Full Time Equivalent) |
797 |
795 |
792 |
795 |
796 |
| Branch Locations |
68 |
68 |
68 |
68 |
68 |
| CITY HOLDING COMPANY AND SUBSIDIARIES |
||
| Consolidated Balance Sheets |
||
| ($ in 000s) |
||
| March 31 |
December 31 |
|
| 2012 |
2011 |
|
| (Unaudited) |
||
| Assets |
||
| Cash and due from banks |
$ 105,328 |
$ 140,873 |
| Interest-bearing deposits in depository institutions |
7,431 |
5,526 |
| Federal funds sold |
35,000 |
- |
| Cash and cash equivalents |
147,759 |
146,399 |
| Investment securities available-for-sale, at fair value |
366,483 |
360,783 |
| Investment securities held-to-maturity, at amortized cost |
23,438 |
23,458 |
| Other securities |
11,674 |
11,934 |
| Total investment securities |
401,595 |
396,175 |
| Gross loans |
1,971,964 |
1,973,103 |
| Allowance for loan losses |
(18,628) |
(19,409) |
| Net loans |
1,953,336 |
1,953,694 |
| Bank owned life insurance |
79,683 |
78,961 |
| Premises and equipment, net |
65,497 |
64,612 |
| Accrued interest receivable |
6,729 |
7,093 |
| Net deferred tax assets |
29,578 |
32,219 |
| Intangible assets |
56,066 |
56,164 |
| Other assets |
40,560 |
41,792 |
| Total Assets |
$ 2,780,803 |
$ 2,777,109 |
| Liabilities |
||
| Deposits: |
||
| Noninterest-bearing |
$ 403,292 |
$ 369,025 |
| Interest-bearing: |
||
| Demand deposits |
544,664 |
526,824 |
| Savings deposits |
464,525 |
439,823 |
| Time deposits |
887,697 |
885,596 |
| Total deposits |
2,300,178 |
2,221,268 |
| Short-term borrowings |
||
| Federal Funds purchased |
- |
75,000 |
| Customer repurchase agreements |
113,824 |
114,050 |
| Long-term debt |
16,495 |
16,495 |
| Other liabilities |
34,260 |
39,162 |
| Total Liabilities |
2,464,757 |
2,465,975 |
| Stockholders' Equity |
||
| Preferred stock, par value $25 per share: 500,000 shares authorized; none issued |
- |
- |
| Common stock, par value $2.50 per share: 50,000,000 shares authorized; |
||
| 18,499,282 shares issued at March 31, 2012 and December 31, 2011 |
||
| less 3,769,112 and 3,717,993 shares in treasury, respectively |
46,249 |
46,249 |
| Capital surplus |
102,959 |
103,335 |
| Retained earnings |
295,934 |
291,050 |
| Cost of common stock in treasury |
(127,359) |
(125,593) |
| Accumulated other comprehensive loss: |
||
| Unrealized gain on securities available-for-sale |
2,995 |
825 |
| Underfunded pension liability |
(4,732) |
(4,732) |
| Total Accumulated Other Comprehensive Loss |
(1,737) |
(3,907) |
| Total Stockholders' Equity |
316,046 |
311,134 |
| Total Liabilities and Stockholders' Equity |
$ 2,780,803 |
$ 2,777,109 |
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||||
| Investment Portfolio |
|||||||
| (Unaudited) ($ in 000s) |
|||||||
| Original Cost |
Credit-Related |
Unrealized Gains |
Carrying Value |
||||
| US Government Agencies |
$ 5,350 |
$ - |
$ 148 |
$ 5,498 |
|||
| Mortgage Backed Securities |
230,518 |
- |
6,794 |
237,312 |
|||
| Municipal Bonds |
52,426 |
- |
1,645 |
54,071 |
|||
| Pooled Bank Trust Preferreds |
27,034 |
(19,596) |
(4,037) |
3,401 |
|||
| Single Issuer Bank Trust Preferreds, |
|||||||
| Subdebt of Financial Institutions, and |
|||||||
| Bank Holding Company Preferred Stocks |
85,045 |
(1,653) |
(572) |
82,820 |
|||
| Money Markets and Mutual Funds |
1,725 |
- |
36 |
1,761 |
|||
| Federal Reserve Bank and FHLB stock |
11,674 |
- |
- |
11,674 |
|||
| Community Bank Equity Positions |
10,367 |
(6,048) |
739 |
5,058 |
|||
| Total Investments |
$ 424,139 |
$ (27,297) |
$ 4,753 |
$ 401,595 |
|||
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Loan Portfolio |
|||||
| (Unaudited) ($ in 000s) |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 |
2011 |
2011 |
2011 |
2011 |
|
| Residential real estate (1) |
$ 939,611 |
$ 929,788 |
$ 916,122 |
$ 902,846 |
$ 891,003 |
| Home equity - junior liens (including lines of credit) |
139,764 |
141,797 |
142,028 |
140,024 |
140,351 |
| Commercial and industrial |
108,707 |
130,899 |
119,377 |
121,149 |
129,475 |
| Commercial real estate (2) |
745,586 |
732,146 |
708,558 |
693,959 |
668,710 |
| Consumer |
35,448 |
35,845 |
36,575 |
36,626 |
37,482 |
| DDA overdrafts |
2,848 |
2,628 |
2,924 |
2,415 |
1,970 |
| Previously securitized loans |
- |
- |
214 |
325 |
533 |
| Gross Loans |
$1,971,964 |
$ 1,973,103 |
$ 1,925,798 |
$1,897,344 |
$1,869,524 |
| Construction loans included in: |
|||||
| (1)- Residential real estate loans |
$ 11,613 |
$ 9,287 |
$ 7,456 |
$ 6,879 |
$ 9,404 |
| (2)- Commercial real estate loans |
$ 20,661 |
$ 20,201 |
$ 23,915 |
$ 23,433 |
$ 24,328 |
| CITY HOLDING COMPANY AND SUBSIDIARIES |
||||||
| Consolidated Average Balance Sheets, Yields, and Rates |
||||||
| (Unaudited) ($ in 000s) |
||||||
| Three Months Ended March 31, |
||||||
| 2012 |
2011 |
|||||
| Average |
Yield/ |
Average |
Yield/ |
|||
| Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
|
| Assets: |
||||||
| Loan portfolio (1): |
||||||
| Residential real estate (2) |
$ 1,067,911 |
$ 11,827 |
4.45% |
$ 1,023,317 |
$ 12,544 |
4.97% |
| Commercial, financial, and agriculture (3) |
862,886 |
9,584 |
4.47% |
792,536 |
9,477 |
4.85% |
| Installment loans to individuals (4) |
41,681 |
770 |
7.43% |
45,249 |
812 |
7.28% |
| Previously securitized loans (5) |
*** |
887 |
*** |
658 |
905 |
557.79% |
| Total loans |
1,972,478 |
23,068 |
4.70% |
1,861,760 |
23,738 |
5.17% |
| Securities: |
||||||
| Taxable |
351,811 |
3,964 |
4.53% |
420,082 |
4,541 |
4.38% |
| Tax-exempt (6) |
41,117 |
595 |
5.82% |
50,725 |
710 |
5.68% |
| Total securities |
392,928 |
4,559 |
4.67% |
470,807 |
5,251 |
4.52% |
| Deposits in depository institutions |
7,587 |
- |
- |
8,661 |
- |
- |
| Federal funds sold |
27,462 |
11 |
0.16% |
26,780 |
13 |
0.20% |
| Total interest-earning assets |
2,400,455 |
27,638 |
4.63% |
2,368,008 |
29,002 |
4.97% |
| Cash and due from banks |
75,484 |
56,459 |
||||
| Bank premises and equipment |
64,746 |
64,342 |
||||
| Other assets |
216,379 |
204,494 |
||||
| Less: Allowance for loan losses |
(19,726) |
(18,555) |
||||
| Total assets |
$ 2,737,338 |
$ 2,674,748 |
||||
| Liabilities: |
||||||
| Interest-bearing demand deposits |
523,761 |
178 |
0.14% |
485,204 |
244 |
0.20% |
| Savings deposits |
448,435 |
188 |
0.17% |
402,099 |
257 |
0.26% |
| Time deposits |
889,110 |
3,302 |
1.49% |
952,632 |
5,210 |
2.22% |
| Short-term borrowings |
113,946 |
73 |
0.26% |
111,192 |
72 |
0.26% |
| Long-term debt |
16,495 |
167 |
4.07% |
16,495 |
157 |
3.86% |
| Total interest-bearing liabilities |
1,991,747 |
3,908 |
0.79% |
1,967,622 |
5,940 |
1.22% |
| Noninterest-bearing demand deposits |
392,902 |
369,356 |
||||
| Other liabilities |
36,436 |
19,275 |
||||
| Stockholders' equity |
316,253 |
318,495 |
||||
| Total liabilities and |
||||||
| stockholders' equity |
$ 2,737,338 |
$ 2,674,748 |
||||
| Net interest income |
$ 23,730 |
$ 23,062 |
||||
| Net yield on earning assets |
3.98% |
3.95% |
||||
| (1)For purposes of this table, non-accruing loans have been included in average balances and loan fees, which are immaterial, have been included in interest income. |
||||||
| (2) Interest income includes $0 and $478 from interest rate floors for the three months ended March 31, 2012 and March 31, 2011, respectively. |
||||||
| (3) Includes the Company's commercial and industrial and commercial real estate loan categories. Interest income includes $0 and $246 from interest rate floors for the three months ended March 31, 2012 and March 31, 2011, respectively. |
||||||
| (4) Includes the Company's consumer and DDA overdrafts loan categories. |
||||||
| (5) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. |
||||||
| (6)Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%. |
||||||
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Analysis of Risk-Based Capital |
|||||
| (Unaudited) ($ in 000s) |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 (a) |
2011 |
2011 |
2011 |
2011 |
|
| Tier I Capital: |
|||||
| Stockholders' equity |
$ 316,046 |
$ 311,134 |
$ 309,892 |
$ 310,379 |
$ 311,122 |
| Goodwill and other intangibles |
(55,871) |
(55,969) |
(56,071) |
(56,173) |
(56,276) |
| Accumulated other comprehensive loss (income) |
1,737 |
3,907 |
2,701 |
1,838 |
1,904 |
| Qualifying trust preferred stock |
16,000 |
16,000 |
16,000 |
16,000 |
16,000 |
| Unrealized loss on AFS securities |
- |
(448) |
(1,081) |
(82) |
(856) |
| Excess deferred tax assets |
(4,020) |
(5,897) |
(5,435) |
(4,462) |
(4,174) |
| Total tier I capital |
$ 273,892 |
$ 268,727 |
$ 266,007 |
$ 267,500 |
$ 267,720 |
| Total Risk-Based Capital: |
|||||
| Tier I capital |
$ 273,892 |
$ 268,727 |
$ 266,007 |
$ 267,500 |
$ 267,720 |
| Qualifying allowance for loan losses |
18,628 |
19,409 |
19,848 |
18,944 |
18,414 |
| Total risk-based capital |
$ 292,520 |
$ 288,136 |
$ 285,855 |
$ 286,444 |
$ 286,134 |
| Net risk-weighted assets |
$ 2,050,520 |
$ 2,048,398 |
$ 2,013,294 |
$ 1,993,003 |
$ 1,977,395 |
| Ratios: |
|||||
| Average stockholders' equity to average assets |
11.55% |
11.65% |
11.67% |
11.59% |
11.91% |
| Tangible capital ratio |
9.54% |
9.37% |
9.65% |
9.56% |
9.63% |
| Risk-based capital ratios: |
|||||
| Tier I capital |
13.36% |
13.12% |
13.21% |
13.42% |
13.54% |
| Total risk-based capital |
14.27% |
14.07% |
14.20% |
14.37% |
14.47% |
| Leverage capital |
10.23% |
10.18% |
10.04% |
10.07% |
10.24% |
| (a) March 31, 2012 risk-based capital ratios are estimated |
|||||
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Intangibles |
|||||
| (Unaudited) ($ in 000s) |
|||||
| As of and for the Quarter Ended |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 |
2011 |
2011 |
2011 |
2011 |
|
| Intangibles, net |
$ 56,066 |
$ 56,164 |
$ 56,266 |
$ 56,368 |
$ 56,471 |
| Intangibles amortization expense |
98 |
102 |
102 |
103 |
102 |
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Summary of Loan Loss Experience |
|||||
| (Unaudited) ($ in 000s) |
|||||
| Quarter Ended |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 |
2011 |
2011 |
2011 |
2011 |
|
| Balance at beginning of period |
$ 19,409 |
$ 19,848 |
$ 18,944 |
$ 18,414 |
$ 18,224 |
| Charge-offs: |
|||||
| Commercial and industrial |
69 |
247 |
200 |
- |
75 |
| Commercial real estate |
1,988 |
1,650 |
141 |
166 |
34 |
| Residential real estate |
198 |
176 |
264 |
377 |
550 |
| Home equity |
509 |
475 |
209 |
168 |
237 |
| Consumer |
59 |
31 |
75 |
14 |
44 |
| DDA overdrafts |
335 |
394 |
492 |
392 |
434 |
| Total charge-offs |
3,158 |
2,973 |
1,381 |
1,117 |
1,374 |
| Recoveries: |
|||||
| Commercial and industrial |
2 |
15 |
2 |
3 |
3 |
| Commercial real estate |
96 |
- |
1,954 |
26 |
2 |
| Residential real estate |
4 |
10 |
1 |
12 |
6 |
| Home equity |
1 |
1 |
1 |
4 |
1 |
| Consumer |
29 |
29 |
58 |
11 |
38 |
| DDA overdrafts |
295 |
250 |
269 |
305 |
428 |
| Total recoveries |
427 |
305 |
2,285 |
361 |
478 |
| Net charge-offs |
2,731 |
2,668 |
(904) |
756 |
896 |
| Provision for loan losses |
1,950 |
2,229 |
- |
1,286 |
1,086 |
| Balance at end of period |
$ 18,628 |
$ 19,409 |
$ 19,848 |
$ 18,944 |
$ 18,414 |
| Loans outstanding |
$ 1,971,964 |
$ 1,973,103 |
$ 1,925,798 |
$ 1,897,344 |
$ 1,869,524 |
| Average loans outstanding |
1,972,478 |
1,940,950 |
1,917,246 |
1,876,530 |
1,861,760 |
| Allowance as a percent of loans outstanding |
0.94% |
0.98% |
1.03% |
1.00% |
0.98% |
| Allowance as a percent of non-performing loans |
88.78% |
87.76% |
87.27% |
81.08% |
72.14% |
| Net charge-offs (annualized) as a |
|||||
| percent of average loans outstanding |
0.55% |
0.55% |
(0.19)% |
0.16% |
0.19% |
| Net charge-offs, excluding overdraft deposit |
|||||
| accounts, (annualized) as a percent of average loans outstanding |
0.55% |
0.52% |
(0.24)% |
0.14% |
0.19% |
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Summary of Non-Performing Assets |
|||||
| (Unaudited) ($ in 000s) |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 |
2011 |
2011 |
2011 |
2011 |
|
| Nonaccrual loans |
$ 20,420 |
$ 21,951 |
$ 22,423 |
$ 23,178 |
$ 25,166 |
| Accruing loans past due 90 days or more |
562 |
166 |
320 |
188 |
358 |
| Total non-performing loans |
20,982 |
22,117 |
22,743 |
23,366 |
25,524 |
| Other real estate owned |
8,250 |
7,948 |
8,273 |
7,999 |
7,241 |
| Total non-performing assets |
$ 29,232 |
$ 30,065 |
$ 31,016 |
$ 31,365 |
$ 32,765 |
| Non-performing assets as a percent of loans and |
|||||
| other real estate owned |
1.48% |
1.52% |
1.60% |
1.65% |
1.75% |
| CITY HOLDING COMPANY AND SUBSIDIARIES |
|||||
| Summary of Total Past Due Loans |
|||||
| (Unaudited) ($ in 000s) |
|||||
| March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|
| 2012 |
2011 |
2011 |
2011 |
2011 |
|
| Residential real estate |
$ 4,108 |
$ 5,362 |
$ 4,569 |
$ 4,971 |
$ 3,293 |
| Home equity |
1,560 |
2,246 |
2,425 |
2,299 |
2,260 |
| Commercial and industrial |
63 |
1,243 |
37 |
476 |
397 |
| Commercial real estate |
2,636 |
3,415 |
2,423 |
2,186 |
1,740 |
| Consumer |
58 |
138 |
112 |
185 |
75 |
| Previously securitized loans |
- |
- |
403 |
305 |
262 |
| DDA overdrafts |
304 |
909 |
614 |
279 |
231 |
| Total past due loans |
$ 8,729 |
$ 13,313 |
$ 10,583 |
$ 10,701 |
$ 8,258 |
SOURCE City Holding Company
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