City Holding Company, “the Company” (NASDAQ:CHCO), a $3.5
billion bank holding company headquartered in Charleston, today
announced second quarter net income per diluted share of $0.78 and
net income of $12.0 million. For the second quarter of 2015, the
Company achieved a return on assets of 1.34%, a return on tangible
equity of 14.1%, a net interest margin of 3.82%, and an efficiency
ratio of 54.8%. For the six months ended June 30, 2015, the Company
achieved net income of $30.0 million, a return on assets of 1.69%,
a return on tangible equity of 17.8%, a net interest margin of
3.90%, and an efficiency ratio of 54.5%.
Net Interest Income
The Company’s tax equivalent net interest income declined $0.6
million, or 2.1%, from $29.5 million during the first quarter of
2015 to $28.9 million during the second quarter of 2015. This is
primarily due to the anticipated decrease in accretion related to
earlier acquisitions of Virginia Savings and Community Bank ($1.6
million for quarter ended June 30, 2015 compared to $2.5 million
for the quarter ended March 31, 2015). The Company’s reported net
interest margin decreased from 3.99% for the first quarter of 2015
to 3.82% for the second quarter of 2015. Excluding the favorable
impact of the accretion from the fair value adjustments, the net
interest margin would have been 3.60% for the quarter ended June
30, 2015 and 3.66% for the quarter ended March 31, 2015. An
important factor in this decrease is that City continues to
originate a significant portion of its commercial loans based on
WSJ Prime or LIBOR. In addition, the Company has elected to keep
fixed rate investment security balances at approximately 10% of
total assets and allow cash balances to increase. By taking these
measures, the Company believes that it has positioned its balance
sheet to benefit from a rising rate environment.
Credit Quality - Asset Quality Continues to Improve
The Company’s ratio of nonperforming assets to total loans and
other real estate owned improved from 0.96% at March 31, 2015 to
0.84% at June 30, 2015. Excluded from this ratio are purchased
credit-impaired loans in which the Company estimated cash flows and
estimated a credit mark. These loans are considered performing
loans provided that the loan is performing in accordance with the
estimated expectations. Such loans would be considered
nonperforming loans if the loan’s performance deteriorates below
the initial expectations. Total past due loans declined from $10.2
million, or 0.39% of total loans outstanding, at March 31, 2015 to
$9.6 million, or 0.36% of total loans outstanding, at June 30,
2015. Acquired past due loans represent approximately 37% of total
past due loans at June 30, 2015 and have declined $12.9 million, or
78.5%, since March 31, 2013.
As a result of the Company’s quarterly analysis of the adequacy
of the Allowance for Loan Losses (“ALLL”), the Company recorded a
provision for loan losses of $2.8 million in the second quarter of
2015, compared to $0.4 for the comparable period in 2014 and $0.9
million for the first quarter of 2015. The provision for loan
losses recorded in the second quarter of 2015 reflects difficulties
encountered by a certain commercial borrower of the Company engaged
in the mining and energy sectors (per the North American Industry
Classification System (NAICS)) during the quarter and a charge-off
related to a specific credit of said borrower. In addition, as a
result of this loss, the historical loss rates used to compute the
allowance not specifically allocated to individual credits for
loans in our commercial and industrial mining and energy sector
increased which resulted in an increase in the provision for the
quarter. City’s portfolio of loans in the mining and energy sector
is approximately $20 million and does not include any direct loans
to any mine or mining operation. For the six months ended June 30,
2015, the Company recorded provision for loan losses of $3.7
million and net charge offs for the same period were approximately
$3.2 million. 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.
Non-interest Income
During the second quarter of 2015, the Company realized
investment gains of $2.1 million from the call of trust preferred
securities which represented a partial recovery of impairment
charges previously recognized. Excluding investment security
transactions, non-interest income decreased $1.0 million to $13.3
million in the second quarter of 2015 as compared to $14.3 million
in the second quarter of 2014. The primary reason for this decrease
was the sale of CityInsurance effective January 1, 2015, which had
insurance commission revenues of $1.3 million in the second quarter
of 2014.
Non-interest Expenses
Non-interest expenses decreased $1.1 million, from $24.3 million
in the second quarter of 2014 to $23.2 million in the second
quarter of 2015. This decline was largely due to a decrease in
salaries and employee benefits of $0.8 million as a result of the
sale of CityInsurance.
Balance Sheet Trends
Loans increased $52.0 million (2.0%) from March 31, 2015 to
$2.68 billion at June 30, 2015. Residential real estate loans
increased $22.2 million (1.7%), commercial real estate loans
increased $20.6 million (2.0%), and commercial and industrial
(“C&I”) loans increased $9.9 million (7.5%).
Total average depository balances increased $24.8 million, or
0.9%, from the quarter ended March 31, 2015 to the quarter ended
June 30, 2015. Increases in noninterest-bearing deposits ($14.4
million), savings deposits ($14.3 million) and interest-bearing
deposits ($11.2 million), were partially offset by a decrease in
time deposits of $15.1 million.
Income Tax Expense
The Company’s effective income tax rate for the second quarter
of 2015 was 33.8% compared to 31.4% for the year ended December 31,
2014, and 33.7% for the quarter ended June 30, 2014. The effective
rate is based upon the Company’s expected tax rate for the year
ending December 31, 2015.
Capitalization and Liquidity
The Company’s loan to deposit ratio was 92.5% and the loan to
asset ratio was 76.4% at June 30, 2015. The Company maintained
investment securities totaling 10.9% of assets as of this date.
Further, the Company’s deposit mix is weighted heavily toward
checking and saving accounts that fund 54.2% of assets at June 30,
2015. Time deposits fund 28.4% of assets at June 30, 2015, 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 continues to be strongly capitalized. The Company’s
tangible equity ratio was 9.9% at June 30, 2015 compared to 9.4% at
December 31, 2014. At June 30, 2015, City National Bank’s Leverage
Ratio is 9.26%, its Common Equity Tier I ratio is 12.26%, its Tier
I Capital ratio is 13.24%, and its Total Risk-Based Capital ratio
is 14.10%. These regulatory capital ratios are significantly above
levels required to be considered “well capitalized,” which is the
highest possible regulatory designation.
On June 24, 2015, the Board approved a quarterly cash dividend
of $0.42 cents per share payable July 31, 2015, to shareholders of
record as of July 15, 2015.
City Holding Company is the parent company of City National Bank
of West Virginia. City National operates 82 branches across West
Virginia, Virginia, Kentucky and Ohio.
On June 1, 2015, the Company announced that City National Bank
of West Virginia had executed an agreement to acquire three
branches in Lexington, Kentucky, from American Founders Bank, Inc.,
a wholly-owned subsidiary of Financial Holdings, Inc. The proposed
acquisition is expected to be completed in the third quarter of
2015, pending regulatory approval and the completion of other
closing conditions. This acquisition is expected to be immediately
accretive to earnings per share.
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 materially 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) 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; (13) the effects of the Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”) and the regulations
promulgated and to be promulgated thereunder, which may subject the
Company and its subsidiaries to a variety of new and more stringent
legal and regulatory requirements which adversely affect their
respective businesses; (14) the impact of new minimum capital
thresholds established as a part of the implementation of Basel
III; and (15) other risk factors relating to the banking industry
or the Company as detailed from time to time in the Company’s
reports filed with the Securities and Exchange Commission,
including those risk factors included in the disclosures under the
heading “ITEM 1A Risk Factors” of the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2014.
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
June 30, 2015 Form 10-Q. The Company will continue to evaluate the
impact of any subsequent events on the preliminary June 30, 2015
results and will adjust the amounts if necessary.
CITY HOLDING COMPANY AND SUBSIDIARIES Financial
Highlights (Unaudited)
Three Months Ended June 30, Percent
2015 2014 Change Earnings
($000s, except per share data): Net Interest Income (FTE) $ 28,927
$ 29,006 (0.27 )% Net Income available to common shareholders
11,983 12,757 (6.07 )% Earnings per Basic Share 0.78 0.81 (3.35 )%
Earnings per Diluted Share 0.78 0.80 (2.56 )%
Key Ratios (percent): Return on Average Assets
1.34 % 1.50 % (10.49 )% Return on Average Tangible Equity 14.05 %
15.77 % (10.90 )% Net Interest Margin 3.82 % 3.95 % (3.38 )%
Efficiency Ratio 54.81 % 55.75 % (1.68 )% Average Shareholders'
Equity to Average Assets 11.54 % 11.71 % (1.45 )%
Consolidated Risk Based Capital Ratios (a): CET I 14.17 %
*
N/A Tier I 14.82 % 13.69 % 8.25 % Total 15.70 % 14.54 % 7.98 %
Tangible Equity to Tangible Assets 9.89 % 9.80 % 0.89 %
Common Stock Data: Cash
Dividends Declared per Share $ 0.42 $ 0.40 5.00 % Book Value per
Share 26.92 25.45 5.76 % Tangible Book Value per Share 22.29 20.67
7.83 % Market Value per Share: High 50.22 46.43 8.16 % Low 45.00
41.74 7.81 % End of Period 49.25 45.12 9.15 % Price/Earnings
Ratio (b) 15.69 13.90 12.93 %
Six Months Ended June 30, Percent 2015
2014 Change Earnings ($000s, except per
share data): Net Interest Income (FTE) $ 58,459 $ 59,196 (1.25 )%
Net Income available to common shareholders 29,975 26,560 12.86 %
Earnings per Basic Share 1.97 1.69 16.52 % Earnings per Diluted
Share 1.96 1.67 17.51 %
Key Ratios (percent): Return on Average Assets 1.69 % 1.57 % 7.96 %
Return on Average Tangible Equity 17.77 % 16.54 % 7.46 % Net
Interest Margin 3.90 % 4.05 % (3.58 )% Efficiency Ratio (c) 54.52 %
53.99 % 0.99 % Average Shareholders' Equity to Average Assets 11.51
% 11.67 % (1.39 )% Common
Stock Data: Cash Dividends Declared per Share $ 0.84 $ 0.80 5.00 %
Market Value per Share: High 50.22 46.69 7.56 % Low 41.76 41.74
0.05 % Price/Earnings Ratio (b) 12.53 13.37 (6.32 )%
(a) June 30, 2015 risk-based capital ratios are estimated. (b) June
30, 2015 price/earnings ratio computed based on annualized second
quarter 2015 earnings. (c) The June 30, 2015 efficiency ratio
calculation excludes the gain on sale of insurance division. (*)
Basel III CET 1 ratio requirements are effective beginning January
1, 2015 and are not required for prior periods.
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 2011
20.39 20.58 20.86 21.05 26.06 37.22 2012 21.46 21.63 22.14 22.47
30.96 37.16 2013 23.36 23.52 24.03 24.61 36.07 49.21 2014 25.05
25.45 25.52 25.85 41.20 46.95 2015 26.63 26.92 45.00 50.22
Earnings per Basic Share Quarter
Ended March 31 June 30 September 30
December 31 Year-to-Date 2011
0.62 0.65 0.77 0.65 2.68 2012 0.68 0.50 0.71 0.73 2.63 2013 0.51
0.83 0.89 0.84 3.07 2014 0.87 0.81 0.76 0.95 3.40 2015 1.18 0.78
1.97
Earnings per Diluted Share
Quarter Ended March 31 June 30
September 30 December 31
Year-to-Date 2011 0.62 0.64 0.76 0.65 2.67 2012 0.67
0.50 0.71 0.73 2.61 2013 0.51 0.82 0.88 0.83 3.04 2014 0.86 0.80
0.76 0.95 3.38 2015 1.17 0.78 1.96
CITY HOLDING COMPANY AND
SUBSIDIARIES Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
Three Months Ended June 30, 2015 2014
Interest Income Interest and fees on loans $ 28,812 $
28,621 Interest on investment securities: Taxable 2,641 2,930
Tax-exempt 267 277
Total Interest
Income 31,720 31,828
Interest Expense Interest on
deposits 2,699 2,737 Interest on short-term borrowings 85 85
Interest on long-term debt 153 151
Total Interest Expense 2,937 2,973
Net Interest Income 28,783 28,855 Provision for loan
losses 2,836 435
Net Interest Income
After Provision for Loan Losses 25,947 28,420
Non-Interest Income Gains on sale of investment securities
2,116 818 Service charges 6,589 6,739 Bankcard revenue 4,002 3,838
Insurance commissions - 1,319 Trust and investment management fee
income 1,201 1,111 Bank owned life insurance 783 765 Gain on sale
of insurance division - - Other income 714 549
Total Non-Interest Income 15,405 15,139
Non-Interest Expense Salaries and employee benefits 12,193
12,977 Occupancy and equipment 2,529 2,395 Depreciation 1,516 1,533
FDIC insurance expense 445 357 Advertising 701 925 Bankcard
expenses 797 833 Postage, delivery, and statement mailings 507 530
Office supplies 347 420 Legal and professional fees 542 612
Telecommunications 463 506 Repossessed asset losses, net of
expenses 335 142 Merger related expenses 108 - Other expenses
2,761 3,075
Total Non-Interest
Expense 23,244 24,305
Income
Before Income Taxes 18,108 19,254 Income tax expense
6,125 6,497
Net Income Available to Common
Shareholders $ 11,983 $ 12,757 Distributed
earnings allocated to common shareholders $ 6,344 $ 6,178
Undistributed earnings allocated to common shareholders
5,505 6,448 Net earnings allocated to common
shareholders $ 11,849 $ 12,626 Average common
shares outstanding 15,104 15,556 Effect of dilutive securities:
Employee stock options and warrants 23 150
Shares for diluted earnings per share 15,127
15,706 Basic earnings per common share $ 0.78
$ 0.81 Diluted earnings per common share $ 0.78 $ 0.80 Dividends
declared per common share $ 0.42 $ 0.40
Comprehensive Income
$ 10,344 $ 14,462
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited) ($
in 000s, except per share data) Six months ended June
30, 2015 2014 Interest
Income Interest and fees on loans $ 58,200 $ 58,355 Interest on
investment securities: Taxable 5,353 5,933 Tax-exempt 531
558
Total Interest Income 64,084 64,846
Interest Expense Interest on deposits 5,440 5,490 Interest
on short-term borrowings 167 160 Interest on long-term debt
303 301
Total Interest Expense 5,910
5,951
Net Interest Income 58,174 58,895 Provision for loan
losses 3,724 1,798
Net Interest Income After
Provision for Loan Losses 54,450 57,097
Non-Interest
Income Gains on sale of investment securities 2,130 901 Service
charges 12,516 12,899 Bankcard revenue 8,076 7,523 Insurance
commissions - 3,344 Trust and investment management fee income
2,401 2,148 Bank owned life insurance 1,547 1,521 Gain on sale of
insurance division 11,084 - Other income 1,672 1,108
Total Non-Interest Income 39,426 29,444
Non-Interest Expense Salaries and employee benefits 24,372
26,116 Occupancy and equipment 5,119 5,010 Depreciation 3,027 3,011
FDIC insurance expense 895 767 Advertising 1,405 1,749 Bankcard
expenses 1,615 1,639 Postage, delivery, and statement mailings
1,068 1,105 Office supplies 693 830 Legal and professional fees
1,109 1,021 Telecommunications 938 844 Repossessed asset losses,
net of expenses 555 521 Merger related expenses 108 - Other
expenses 5,505 5,068
Total Non-Interest
Expense 46,409 47,681
Income Before Income
Taxes 47,467 38,860 Income tax expense 17,492
12,300
Net Income Available to Common Shareholders $ 29,975
$ 26,560 Distributed earnings allocated to common
shareholders $ 12,688 $ 12,356 Undistributed earnings allocated to
common shareholders 16,950 13,931 Net earnings
allocated to common shareholders $ 29,638 $ 26,287 Average
common shares outstanding 15,079 15,583 Effect of dilutive
securities: Employee stock options and warrants 22
155 Shares for diluted earnings per share 15,101
15,738 Basic earnings per common share $ 1.97 $ 1.69 Diluted
earnings per common share $ 1.96 $ 1.67 Dividends declared per
common share $ 0.84 $ 0.80 Comprehensive Income $ 29,242 $
29,041
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) ($ in 000s) Three Months
Ended June 30, 2015 June 30, 2014
Balance at April 1 $ 405,075 $ 393,750 Net income
11,983 12,757 Other comprehensive income:
Change in unrealized (loss) gain on
securities available-for-sale
(1,639 ) 1,705 Cash dividends declared ($0.42/share) and
($0.40/share), respectively (6,418 ) (6,225 ) Issuance of stock
award shares, net 320 316 Exercise of 750 stock options 23 -
Exercise of 12,000 stock options - 355 Exercise of 61,796 warrants
1,896 - Purchase of 126,506 common shares of treasury -
(5,427 )
Balance at June 30 $ 411,240 $
397,231
Six Months Ended June
30, 2015 June 30, 2014 Balance at
January 1 $ 390,853 $ 387,623 Net income 29,975 26,560
Other comprehensive income: Change in unrealized gain (loss) on
securities available-for-sale (733 ) 2,481 Cash dividends declared
($0.84/share) and ($0.80/share), respectively (12,807 ) (12,512 )
Issuance of stock award shares, net 1,060 889 Exercise of 29,250
stock options 996 - Exercise of 19,000 stock options - 553 Exercise
of 61,796 warrants 1,896 - Purchase of 194,651 common shares of
treasury - (8,363 )
Balance at June
30 $ 411,240 $ 397,231
CITY HOLDING
COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
Quarter Ended June 30 March 31 December
31 September 30 June 30 2015
2015 2014 2014
2014 Interest income
$ 31,720 $ 32,364 $ 32,282 $ 32,438 $ 31,828 Taxable equivalent
adjustment
144 142 164
152 151 Interest income
(FTE) 31,864 32,506 32,446 32,590 31,979 Interest expense
2,937 2,973 3,041
2,968 2,973 Net
interest income
28,927 29,533 29,405 29,622 29,006 Provision for loan losses
2,836 888 384
1,872 435 Net interest
income after provision for loan losses 26,091 28,645 29,021 27,750
28,571 Noninterest income 15,405 24,021 14,669 14,609 15,139
Noninterest expense 23,244 23,165
23,035 24,325
24,305 Income before income taxes 18,252
29,501 20,655 18,034 19,405 Income tax expense 6,125 11,367 5,961
6,010 6,497 Taxable equivalent adjustment 144
142 164 152
151 Net income $ 11,983 $ 17,992
$ 14,530 $ 11,872 $
12,757
Distributed
earnings allocated to common shareholders $ 6,344 $ 6,315 $ 5,996 $
6,073 $ 6,178 Undistributed earnings allocated to common
shareholders 5,505 11,468 8,378
5,673 6,448 Net earnings
allocated to common shareholders $ 11,849 $ 17,783
$ 14,374 $ 11,746 $
12,626 Average common shares outstanding 15,104
15,067 15,096 15,363 15,556 Effect of dilutive securities:
Employee stock options and warrants 23
82 86 82
150 Shares for diluted earnings per share
15,127 15,149
15,182 15,445 15,706
Basic earnings per common share $ 0.78 $ 1.18 $ 0.95
$ 0.76 $ 0.81 Diluted earnings per common share 0.78 1.17 0.95 0.76
0.80 Cash dividends declared per share 0.42 0.42 0.40 0.40
0.40
Net Interest Margin 3.82 % 3.99 % 3.89
% 3.95 % 3.95 % Interest Income from Accretion Related to
Fair Value Adjustments Recorded as a Result of Acquisition $ 1,607
$ 2,450 $ 1,307 $ 1,836 $ 1,494 Net Interest Margin
(excluding accretion) 3.60 % 3.66 % 3.71 % 3.71 % 3.75 %
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense (Unaudited)
($ in 000s) Quarter Ended June 30 March
31 December 31 September 30 June 30
2015 2015 2014
2014 2014 Non-Interest Income:
Service charges $ 6,589 $ 5,927 $ 6,750 $ 6,934 $ 6,739 Bankcard
revenue 4,002 4,074 3,744 3,796 3,838 Insurance commissions - -
1,238 1,396 1,319 Trust and investment management fee income 1,201
1,200 1,363 1,103 1,111 Bank owned life insurance 783 764 778 771
765 Gain on sale of insurance division - 11,084 - - - Other income
714 958 612 538
549
Subtotal 13,289 24,007 14,485 14,538
14,321 Gain (loss) on sale of investment securities 2,116
14 184 71
818
Total Non-Interest Income $ 15,405 $ 24,021
$ 14,669 $ 14,609 $ 15,139
Non-Interest Expense: Salaries and employee benefits $
12,193 $ 12,179 $ 12,489 $ 13,144 $ 12,977 Occupancy and equipment
2,529 2,590 2,449 2,531 2,395 Depreciation 1,516 1,511 1,534 1,542
1,533 FDIC insurance expense 445 450 448 432 357 Advertising 701
704 726 799 925 Bankcard expenses 797 818 891 843 833 Postage,
delivery and statement mailings 507 561 549 557 530 Office supplies
347 346 360 405 420 Legal and professional fees 542 567 552 476 612
Telecommunications 463 475 522 510 506 Repossessed asset (gains)
losses, net of expenses 335 220 27 31 142 Merger related expenses
108 - - - - Other expenses 2,761 2,744 2,488
3,055 3,075
Total Non-Interest Expense $
23,244 $ 23,165 $ 23,035 $ 24,325 $ 24,305
Employees (Full Time Equivalent) 844 845 889 908 912 Branch
Locations 82 82 82 82 82
CITY HOLDING COMPANY AND
SUBSIDIARIES Consolidated Balance Sheets ($ in
000s) June 30, 2015 December 31,
2014 (Unaudited) Assets Cash and due from banks $
142,335 $ 138,503 Interest-bearing deposits in depository
institutions 11,089 9,725 Federal funds sold -
-
Cash and cash equivalents 153,424 148,228
Investment securities available-for-sale, at fair value
287,609 254,043 Investment securities held-to-maturity, at
amortized cost 84,082 90,786 Other securities 9,926
9,857
Total investment securities
381,617 354,686 Gross loans 2,684,457 2,652,066 Allowance
for loan losses (20,809 ) (20,150 )
Net
loans 2,663,648 2,631,916 Bank owned life insurance
96,663 95,116 Premises and equipment, net 75,900 77,988 Accrued
interest receivable 7,838 6,826 Net deferred tax assets 32,674
36,766 Intangible assets 70,779 74,198 Other assets 30,080
35,909
Total Assets $ 3,512,623
$ 3,461,633
Liabilities
Deposits: Noninterest-bearing $ 563,715 $ 545,465 Interest-bearing:
Demand deposits 646,198 639,932 Savings deposits 695,383 660,727
Time deposits 997,387 1,026,663
Total deposits 2,902,683 2,872,787 Short-term borrowings
Customer repurchase agreements 153,171 134,931 Long-term debt
16,495 16,495 Other liabilities 29,034
46,567
Total Liabilities 3,101,383 3,070,780
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 June 30, 2015 and December 31, 2014 less 3,222,332
and 3,345,590 shares in treasury, respectively 46,249 46,249
Capital surplus 105,891 107,370 Retained earnings 379,379 362,211
Cost of common stock in treasury (115,387 ) (120,818 ) Accumulated
other comprehensive loss: Unrealized gain on securities
available-for-sale 457 1,190 Underfunded pension liability
(5,349 ) (5,349 )
Total Accumulated Other
Comprehensive Loss (4,892 ) (4,159 )
Total Stockholders' Equity 411,240
390,853
Total Liabilities and Stockholders'
Equity $ 3,512,623 $ 3,461,633
CITY
HOLDING COMPANY AND SUBSIDIARIES
Investment Portfolio (Unaudited) ($ in 000s)
Original Cost
Credit-Related
Net Investment
Impairment
Losses through
June 30, 2015
Unrealized Gains
(Losses)
Carrying Value Roll Total US Government
Agencies $ 5 $ - $ - $ 5 5 Mortgage Backed Securities 309,159 - 68
309,227 309,227 Municipal Bonds 38,556 - 339 38,895 38,895 Pooled
Bank Trust Preferreds 14,517 (11,689 ) (931 ) 1,897 1,897 Single
Issuer Bank Trust Preferreds, Subdebt of Financial Institutions,
and Bank Holding Company Preferred Stocks 16,655 (15 ) 55 16,695
16,695 Money Markets and Mutual Funds 1,525 - (10 ) 1,515 1,515
Federal Reserve Bank and FHLB stock 9,926 - - 9,926 9,926 Community
Bank Equity Positions 3,715 (1,584 ) 1,326
3,457 3,457
Total Investments $ 394,058 $
(13,288 ) $ 847 $ 381,617 381,617
CITY HOLDING COMPANY
AND SUBSIDIARIES Loan
Portfolio (Unaudited) ($ in 000s) June 30
March 31 December 31 September 30 June
30 2015 2015 2014
2014 2014 Residential real estate (1) $
1,325,453 $ 1,303,258 $ 1,294,576 $ 1,274,062 $ 1,242,972 Home
equity - junior liens 143,772 143,670 145,604 146,965 145,452
Commercial and industrial 142,065 132,127 140,548 139,220 158,164
Commercial real estate (2) 1,032,333 1,011,777 1,028,831 1,025,835
984,830 Consumer 37,555 38,436 39,705 41,042 42,858 DDA overdrafts
3,279 3,203 2,802
3,618 3,501
Gross Loans $ 2,684,457 $
2,632,471 $ 2,652,066 $ 2,630,742 $ 2,577,777
Construction loans included in: (1) - Residential real
estate loans $ 15,412 $ 17,459 $ 22,992 $ 22,426 $ 20,078 (2) -
Commercial real estate loans $ 4,043 $ 30,554 $ 28,652 $ 24,875 $
24,608
CITY HOLDING COMPANY AND SUBSIDIARIES Acquisition
Activity - Accretion (Unaudited) ($ in 000s)
The following table presents the actual and forecasted
accretion related to the fair value adjustments on net interest
income recorded as a result of the Virginia Savings Bancorp
("Virginia Savings") and Community Financial Corporation
("Community") acquisitions.
Virginia Savings
Community Loan Certificates
of Loan Certificates of Year Ended:
Accretion(a) Deposit(a)
Accretion(a) Deposit(a)
Total 1Q 2015
$
123
$
129
$
2,158
$
40
$
2,450 2Q 2015
189
129
1,249
40 1,607 Remainder 2015 204 259 1,172 80 1,715 2016 269 497 1,399
48 2,213 2017 140 - 1,047 - 1,187 a - 1Q & 2Q 2015 amounts are
based on actual results. Remainder 2015, 2016 and 2017 amounts are
based on estimated amounts. Note: The amounts
reflected in the table above require management to make significant
assumptions based on estimated future default, prepayment, and
discount rates. Actual performance could be significantly different
from that assumed, which could result in the actual results being
materially different from the amounts estimated above.
CITY
HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s) Three Months Ended June
30, 2015 2014 Average Yield/
Average Yield/ Balance Interest
Rate Balance Interest
Rate Assets: Loan portfolio (1): Residential
real estate (2) $ 1,453,000 $ 14,437 3.99 % $ 1,366,485 $ 13,696
4.02 % Commercial, financial, and agriculture (2) 1,159,741 12,703
4.39 % 1,143,001 13,260 4.65 % Installment loans to individuals
(2), (3) 45,743 1,170 10.26 % 54,115 1,097 8.13 % Previously
securitized loans (4) *** 502 *** ***
568 *** Total loans 2,658,484 28,812 4.35 % 2,563,601 28,621
4.48 % Securities: Taxable 341,723 2,641 3.10 % 345,419 2,930 3.40
% Tax-exempt (5) 29,501 411
5.59 % 27,343 428 6.28 %
Total securities 371,224 3,052 3.30 % 372,762 3,358 3.61 % Deposits
in depository institutions 10,468 - - 9,108 - - Federal funds sold
- - -
- - 0.00 %
Total interest-earning
assets 3,040,176 31,864 4.20 % 2,945,471 31,979 4.35 % Cash and
due from banks 229,009 149,111 Bank premises and equipment 76,671
81,061 Other assets 244,661 247,510 Less: Allowance for loan losses
(20,789 ) (21,474
)
Total assets $ 3,569,728
$ 3,401,679
Liabilities: Interest-bearing demand deposits 647,991 125
0.08 % 610,489 165 0.11 % Savings deposits 709,034 174 0.10 %
634,718 198 0.13 % Time deposits (2) 1,006,376 2,400 0.96 %
1,051,811 2,374 0.91 % Short-term borrowings 149,785 85 0.23 %
133,282 85 0.26 % Long-term debt 16,495 153
3.72 % 16,495 151
3.67 %
Total interest-bearing liabilities 2,529,681
2,937 0.47 % 2,446,795 2,973 0.49 % Noninterest-bearing demand
deposits 585,720 527,679 Other liabilities 42,273 28,783
Stockholders' equity 412,054
398,422
Total
liabilities and stockholders' equity $ 3,569,728
$ 3,401,679
Net interest income $ 28,927
$ 29,006
Net yield on earning assets
3.82 %
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) Included in the above table are the following amounts (in
thousands) for the accretion of the fair value adjustments related
to the acquisitions of Virginia Savings Bancorp ("Virginia
Savings") and Community Financial Corporation ("Community"):
Three Months Ended June 30, 2015 Three Months Ended June 30,
2014 Virginia Savings Community Total Virginia
Savings Community Total Residential real estate
$
87
$
156
$
243
$
107
$
143
$
250 Commercial, financial, and agriculture 78 1,042 1,120 141 715
856 Installment loans to individuals 25 50 75 36 165 201 Time
deposits 129 40
169 135 52 187
$
319
$
1,288
$
1,607
$
419
$
1,075
$
1,494 (3) Includes the Company’s consumer and
DDA overdrafts loan categories. (4) Effective January 1, 2012, the
carrying value of the Company's previously securitized loans was
reduced to $0. (5) Computed on a fully federal tax-equivalent basis
assuming a tax rate of approximately 35%.
CITY HOLDING COMPANY
AND SUBSIDIARIES Consolidated Average
Balance Sheets, Yields, and Rates (Unaudited) ($ in
000s) Six Months Ended June 30, 2015
2014 Average Yield/ Average
Yield/ Balance Interest
Rate Balance Interest Rate
Assets: Loan portfolio (1): Residential real estate (2) $
1,444,904 $ 28,637 4.00 % $ 1,358,564 $ 27,442 4.07 % Commercial,
financial, and agriculture (2) 1,154,797 26,289 4.59 % 1,155,235
27,496 4.80 % Installment loans to individuals (2), (3) 47,801
2,320 9.79 % 53,340 2,275 8.60 % Previously securitized loans (4)
*** 954 *** *** 1,142 *** Total
loans 2,647,502 58,200 4.43 % 2,567,139 58,355 4.58 % Securities:
Taxable 334,494 5,353 3.23 % 345,699 5,933 3.46 % Tax-exempt (5)
28,992 816 5.68 %
27,424 859 6.32 % Total securities
363,486 6,169 3.42 % 373,123 6,792 3.67 % Deposits in depository
institutions 9,722 - - 8,970 - - Federal funds sold -
- 0.00 % -
- 0.00 %
Total interest-earning assets 3,020,710
64,369 4.30 % 2,949,232 65,147 4.45 % Cash and due from banks
225,727 137,232 Bank premises and equipment 77,152 81,635 Other
assets 244,578 246,804 Less: Allowance for loan losses
(20,724 ) (21,347 )
Total assets $ 3,547,443
$ 3,393,556
Liabilities: Interest-bearing demand deposits 642,431 257
0.08 % 611,139 341 0.11 % Savings deposits 701,907 355 0.10 %
626,610 407 0.13 % Time deposits (2) 1,013,883 4,828 0.96 %
1,060,887 4,742 0.90 % Short-term borrowings 139,676 167 0.24 %
126,067 160 0.26 % Long-term debt 16,495 303
3.70 % 16,495 301
3.68 %
Total interest-bearing liabilities 2,514,392
5,910 0.47 % 2,441,198 5,951 0.49 % Noninterest-bearing demand
deposits 578,570 522,472 Other liabilities 46,112 33,717
Stockholders' equity 408,369
396,169
Total
liabilities and stockholders' equity $ 3,547,443
$ 3,393,556
Net interest income $ 58,459
$ 59,196
Net yield on earning assets
3.90 %
4.05 %
(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) Included in the above table are the following amounts
(in thousands) for the accretion of the fair value adjustments
related to the acquisitions of Virginia Savings Bancorp ("Virginia
Savings") and Community Financial Corporation ("Community"):
Six Months Ended June 30, 2015 Six Months Ended June 30,
2014 Virginia Savings Community Total Virginia
Savings Community Total Residential real estate
$
151
$
289
$
440
$
258
$
258
$
516 Commercial, financial, and agriculture 106 3,000 3,106 255
2,039 2,294 Installment loans to individuals 55 117 172 70 354 424
Time deposits 259 80
339 266 145 411
$
571
$
3,486
$
4,057
$
849
$
2,796
$
3,645 (3) Includes the Company’s consumer and DDA overdrafts
loan categories. (4) Effective January 1, 2012, the carrying value
of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax
rate of approximately 35%.
CITY HOLDING COMPANY AND
SUBSIDIARIES Analysis of Risk-Based Capital
(Unaudited) ($ in 000s) June 30 March
31 December 31 September 30 June 30
2015 (a) 2015 2014 2014
2014 Tier I Capital: Stockholders' equity $ 411,240 $
405,075 $ 390,853 $ 391,673 $ 397,231 Goodwill and other
intangibles (69,153 ) (69,227 ) (74,011 ) (74,247 ) (74,483 )
Accumulated other comprehensive loss 4,892 3,253 4,159 2,921 2,509
Qualifying trust preferred stock 16,000 16,000 16,000 16,000 16,000
Excess deferred tax assets - (1,564 )
(3,838 ) (3,131 ) (4,019 ) Total tier I
capital $ 362,979 $ 353,537 $ 333,163 $ 333,216 $ 337,238
Qualifying trust preferred stock (16,000 ) $ (16,000 ) *
* * Total CET I capital $ 346,979 $ 337,537 *
* * Total
Risk-Based Capital: Tier I capital $ 362,979 $ 353,537 $ 333,163 $
333,216 $ 337,238 Qualifying allowance for loan losses 20,809
20,179 20,150 20,487 20,536 Unrealized gain on securities
600 704 560 630
605 Total risk-based capital $ 384,388 $
374,420 $ 353,873 $ 354,333 $ 358,379
Net risk-weighted assets $ 2,448,848 $ 2,404,331 $
2,493,078 $ 2,493,938 $ 2,464,081
Ratios: Average stockholders'
equity to average assets 11.54 % 11.48 % 11.40 % 11.78 % 11.71 %
Tangible capital ratio 9.89 % 9.60 % 9.35 % 9.58 % 9.80 %
Risk-based capital ratios: CET 1 capital 14.17 % 14.04 %
*
*
*
Tier I capital 14.82 % 14.70 % 13.36 % 13.36 % 13.69 % Total
risk-based capital 15.70 % 15.57 % 14.19 % 14.21 % 14.54 % Leverage
capital 10.38 % 10.23 % 9.89 % 10.07 % 10.15 % (a)
June 30, 2015 risk-based capital ratios are estimated. (*) Basel
III CET 1 ratio requirements are effective beginning January 1,
2015 and are not required for prior periods.
CITY HOLDING COMPANY
AND SUBSIDIARIES Intangibles (Unaudited) ($ in
000s) As of and for the Quarter Ended June
30 March 31 December 31 September 30
June 30 2015 2015 2014
2014 2014 Intangibles, net $ 70,779 $ 70,964 $
74,198 $ 74,434 $ 74,670 Intangibles amortization expense 185 214
236 236 236
CITY HOLDING COMPANY AND SUBSIDIARIES Summary
of Loan Loss Experience (Unaudited) ($ in 000s)
Quarter Ended June 30 March 31
December 31 September 30 June 30 2015
2015 2014 2014 2014
Balance at beginning of period $ 20,179 $ 20,150 $ 20,487 $ 20,536
$ 21,044
Charge-offs: Commercial and industrial
(1,898 ) (94 ) 7 (325 ) (1 ) Commercial real estate 61 (337 ) (260
) (696 ) (587 ) Residential real estate (272 ) (257 ) (414 ) (605 )
(316 ) Home equity (17 ) (91 ) (21 ) (142 ) (38 ) Consumer (69 )
(74 ) (17 ) (49 ) (38 ) DDA overdrafts (313 ) (311 )
(363 ) (390 ) (321 )
Total
charge-offs (2,508 ) (1,164 ) (1,068 ) (2,207 ) (1,301 )
Recoveries: Commercial and industrial 9 18 4 4 18 Commercial
real estate 23 8 19 11 53 Residential real estate 54 10 96 28 39
Home equity - - - - - Consumer 51 28 32 43 53 DDA overdrafts
165 241 196 200
195
Total recoveries 302 305 347 286
358
Net charge-offs
(2,206 ) (859 ) (721 ) (1,921 ) (943 ) Provision for (recovery of)
acquired loans 299 246 148 (3 ) 150 Provision for loan losses
2,537 642 236
1,875 285
Balance at end of
period $ 20,809 $ 20,179 $ 20,150 $
20,487 $ 20,536 Loans outstanding
$
2,684,457
$
2,632,471
$
2,652,066
$
2,630,742
$ 2,577,777 Average loans outstanding
2,658,484
2,636,400
2,639,106
2,600,142
2,563,601
Allowance as a percent of loans outstanding 0.78 %
0.77 % 0.76 % 0.78 % 0.80 %
Allowance as a percent of non-performing loans 130.98 %
121.81 % 128.10 % 112.61 %
106.86 % Net charge-offs (annualized) as a percent of average loans
outstanding 0.33 % 0.13 % 0.11 %
0.30 % 0.15 % Net charge-offs, excluding overdraft deposit
accounts, (annualized) as a percent of average loans outstanding
0.31 % 0.12 % 0.08 % 0.27 %
0.13 %
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets (Unaudited) ($ in
000s) June 30 March 31 December 31
September 30 June 30 2015 2015
2014 2014 2014 Nonaccrual loans
$ 15,623 $ 16,182 $ 15,307 $ 17,384 $ 18,423 Accruing loans past
due 90 days or more 264 384 423
809 794
Total non-performing
loans 15,887 16,566 15,730 18,193 19,217
Other real estate
owned 6,729 8,771 8,180
9,162 9,129
Total
non-performing assets $ 22,616 $ 25,337 $ 23,910
$ 27,355 $ 28,346 Non-performing assets
as a percent of loans and other real estate owned 0.84 % 0.96 %
0.90 % 1.04 % 1.10 %
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Troubled Debt Restructurings (Unaudited) ($ in
000s) June 30 March 31 December 31
September 30 June 30 2015 2015
2014 2014 2014 Residential real
estate $ 19,021 $ 19,067 $ 18,492 $ 18,040 $ 19,212 Home equity -
junior liens 2,662 2,741 2,688 2,821 2,858 Commercial and
industrial 66 70 73 77 86 Commercial real estate 1,872 1,894 2,263
2,270 2,281 Consumer - -
- - -
Total $
23,621 $ 23,772 $ 23,516 $
23,208 $ 24,437
CITY HOLDING COMPANY AND
SUBSIDIARIES Summary of Total Past Due Loans
(Unaudited) ($ in 000s) Originated June 30
March 31 December 31 September 30 June
30 2015 2015 2014
2014 2014 Residential real estate $ 4,107 $
4,326 $ 5,164 $ 5,276 $ 5,794 Home equity - junior liens 393 543
746 751 926 Commercial and industrial 600 113 310 188 25 Commercial
real estate 536 299 479 938 443 Consumer 82 122 197 58 80 DDA
overdrafts 327 215 318
592 281
Total past due loans $
6,045 $ 5,618 $ 7,214 $ 7,803
$ 7,549
Acquired June 30
March 31 December 31 September 30 June
30 2015 2015 2014
2014 2014 Residential real estate $ 1,163 $
1,792 $ 714 $ 500 $ 873 Home equity - junior liens 5 86 2 16 3
Commercial and industrial 14 490 143 96 58 Commercial real estate
2,179 2,018 2,372 2,972 2,110 Consumer 175 150 221 162 374 DDA
overdrafts - - -
- -
Total past due loans
$ 3,536 $ 4,536 $ 3,452 $ 3,746
$ 3,418
Total June 30 March
31 December 31 September 30 June 30
2015 2015 2014 2014
2014 Residential real estate $ 5,270 $ 6,118 $ 5,878
$ 5,776 $ 6,667 Home equity - junior liens 398 629 748 767 929
Commercial and industrial 614 603 453 284 83 Commercial real estate
2,715 2,317 2,851 3,910 2,553 Consumer 257 272 418 220 454 DDA
overdrafts 327 215 318
592 281
Total past due
loans $ 9,581 $ 10,154 $ 10,666
$ 11,549 $ 10,967 Total past due loans
as a percent of loans outstanding 0.36 % 0.39 % 0.40 % 0.44 % 0.43
%
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Purchased Credit Impaired Loans
(Unaudited) ($ in 000s) Virginia Savings
Acquisition June 30 March 31 December 31
September 30 June 30 2015 2015
2014 2014 2014
Contractual required principal and interest 2,376 2,419 2,407 3,481
3,735 Carrying value 1,984 1,979 1,964 2,987 3,098
Community Acquisition June 30 March 31
December 31 September 30 June 30 2015
2015 2014 2014
2014 Contractual required principal and interest
18,546 20,189 23,277 24,147 27,394 Carrying value 13,958 14,627
15,365 15,518 17,902
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150723005139/en/
City Holding CompanyCharles R. Hageboeck, President and Chief
Executive Officer304-769-1102
City (NASDAQ:CHCO)
Historical Stock Chart
From Jun 2024 to Jul 2024
City (NASDAQ:CHCO)
Historical Stock Chart
From Jul 2023 to Jul 2024