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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| City Holding Company | NASDAQ:CHCO | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2.88 | 2.51% | 117.49 | 116.77 | 117.88 | 117.49 | 114.3204 | 115.45 | 4,930 | 14:49:31 |
From Jul 2019 to Jul 2024
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 $ 0.40Comprehensive 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 2015189
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 outstanding2,658,484
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
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