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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 3.81 | 3.32% | 118.42 | 118.25 | 118.57 | 118.71 | 114.3204 | 115.45 | 36,708 | 17:34:30 |
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 third quarter net income per diluted share of $0.69 and net income of $10.6 million. For the third quarter of 2015, the Company achieved a return on assets of 1.21%, a return on tangible equity of 12.2%, a net interest margin of 3.62%, and an efficiency ratio of 57.3%. For the nine months ended September 30, 2015, the Company achieved net income of $40.6 million, a return on assets of 1.53%, a return on tangible equity of 15.9%, a net interest margin of 3.81%, and an efficiency ratio of 55.4%.
Net Interest Income
The Company’s tax equivalent net interest income declined $0.9 million, or 3.2%, from $28.9 million during the second quarter of 2015 to $28.0 million during the third quarter of 2015. This is primarily due to the decrease in accretion related to earlier acquisitions of Virginia Savings and Community Bank ($1.1 million for quarter ended September 30, 2015 compared to $1.6 million for the quarter ended June 30, 2015). The Company’s reported net interest margin decreased from 3.82% for the second quarter of 2015 to 3.62% for the third quarter of 2015. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 3.48% for the quarter ended September 30, 2015 and 3.60% for the quarter ended June 30, 2015. The Company continues to originate a significant portion of its commercial loans based on WSJ Prime or LIBOR and has elected to keep fixed rate investment security balances at approximately 10% of total assets and allow cash balances to increase. The Company believes that these measures position its balance sheet to benefit from a rising rate environment.
Credit Quality
The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.84% at June 30, 2015 to 1.03% at September 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. This increase was entirely related to a single commercial customer engaged in the mining and energy sectors (per the North American Industry Classification System (NAICS)) which filed for bankruptcy and for which the Company recorded a charge off in the second quarter of 2015. Total past due loans increased modestly from $9.6 million, or 0.36% of total loans outstanding, at June 30, 2015 to $10.6 million, or 0.39% of total loans outstanding, at September 30, 2015. Acquired past due loans represent approximately 34% of total past due loans at September 30, 2015 and have declined $12.8 million, or 78%, 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 $0.5 million in the third quarter of 2015, compared to $1.9 for the comparable period in 2014 and $2.8 million for the second quarter of 2015. The provision for loan losses recorded in the third quarter of 2015 reflects the modest growth in the loan portfolio, changes in the quality of the portfolio and general improvement in the Company’s historical loss rates used to compute the allowance not specifically allocated to individual credits. For the nine months ended September 30, 2015, the Company recorded provision for loan losses of $4.2 million and net charge offs for the same period were approximately $3.4 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
Non-interest income decreased $0.8 million to $13.7 million in the third quarter of 2015 as compared to $14.5 million in the third quarter of 2014. The primary reason for this decrease was the sale of CityInsurance effective January 1, 2015, which had insurance commission revenues of $1.4 million in the third quarter of 2014. This decrease was partially offset by an increase in other income of $0.3 million primarily related to mortgage banking activities and bank owned life insurance income of $0.2 million due to death benefit proceeds.
Non-interest Expenses
Non-interest expenses increased $1.1 million, from $24.3 million in the third quarter of 2014 to $25.4 million in the third quarter of 2015. This increase was primarily related to an increase in other expenses as the Company recognized a loss related to a partnership investment in Mountaineer Capital LP. In 2000, the Company’s former management team committed $2.8 million to an investment in Mountaineer Capital LP that to date has returned $0.6 million. The Company has taken various write-downs totaling $0.8 million related to this investment. Based upon recently obtained information from the partnership, the Company has concluded that it will not receive any significant additional value from its investment in Mountaineer Capital LP and has written down the remainder of its basis in this investment of $1.4 million. In addition, the Company realized losses of $0.5 million during the third quarter of 2015 on the sale of repossessed assets and $0.2 million in merger related expenses in connection with the Company’s forthcoming acquisition of three branches in Lexington, Kentucky from American Founders Bank, Inc., a wholly-owned subsidiary of Financial Holdings, Inc. These increases were partially offset by a decrease in salaries and employee benefits of $1.0 million as a result of the sale of CityInsurance.
Balance Sheet Trends
Loans increased $12.0 million (0.5%) from June 30, 2015 to $2.70 billion at September 30, 2015. Residential real estate loans increased $32.6 million (2.5%) and junior lien home equity loans increased $1.0 million (0.7%). These increases were partially offset by a decrease in commercial and industrial (“C&I”) loans of $17.6 million (12.4%) and commercial real estate loans of $3.2 million (0.3%). During the third quarter the decrease in C&I loans outstanding was largely due to a C&I loan customer that sold its business and repaid a $7.6 million loan.
Total average depository balances decreased $29.2 million, or 1.0%, from the quarter ended June 30, 2015 to the quarter ended September 30, 2015. Decreases in savings deposits ($17.4 million), time deposits ($17.2 million) and interest-bearing deposits ($3.6 million), were partially offset by an increase in noninterest-bearing deposits ($9.1 million).
Income Tax Expense
The Company’s effective income tax rate for the third quarter of 2015 was 32.6% compared to 31.4% for the year ended December 31, 2014, and 33.6% for the quarter ended September 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 94.1% and the loan to asset ratio was 76.9% at September 30, 2015. The Company maintained investment securities totaling 11.2% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 53.7% of assets at September 30, 2015. Time deposits fund 28.0% of assets at September 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 10.1% at September 30, 2015 compared to 9.4% at December 31, 2014. At September 30, 2015, City National Bank’s Leverage Ratio is 9.65%, its Common Equity Tier I ratio is 12.64%, its Tier I Capital ratio is 13.62%, and its Total Risk-Based Capital ratio is 14.48%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On September 30, 2015, the Board approved a quarterly cash dividend of $0.42 cents per share payable October 30, 2015, to shareholders of record as of October 15, 2015.
City Holding Company is the parent company of City National Bank of West Virginia. City National Bank 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 fourth quarter of 2015, pending final 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 September 30, 2015 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2015 results and will adjust the amounts if necessary.
CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended September 30, Percent 2015 2014 Change Earnings ($000s, except per share data): Net Interest Income (FTE) $ 28,005 $ 29,622 (5.46 )% Net Income available to common shareholders 10,607 11,872 (10.66 )% Earnings per Basic Share 0.69 0.76 (9.63 )% Earnings per Diluted Share 0.69 0.76 (9.27 )% Key Ratios (percent): Return on Average Assets 1.21 % 1.40 % (14.04 )% Return on Average Tangible Equity 12.19 % 14.65 % (16.79 )% Net Interest Margin 3.62 % 3.95 % (8.49 )% Efficiency Ratio 57.26 % 54.74 % 4.61 % Average Shareholders' Equity to Average Assets 11.90 % 11.78 % 1.05 % Consolidated Risk Based Capital Ratios (a): CET I 14.42 % * N/A Tier I 15.08 % 13.36 % 12.87 % Total 15.95 % 14.21 % 12.24 % Tangible Equity to Tangible Assets 10.14 % 9.58 % 5.80 % Common Stock Data: Cash Dividends Declared per Share $ 0.42 $ 0.40 5.00 % Book Value per Share 27.34 25.52 7.11 % Tangible Book Value per Share 22.72 20.67 9.93 % Market Value per Share: High 51.73 46.44 11.39 % Low 45.56 41.20 10.58 % End of Period 49.30 42.13 17.02 % Price/Earnings Ratio (b) 17.84 13.78 29.49 % Nine Months Ended September 30, Percent 2015 2014Change
Earnings ($000s, except per share data): Net Interest Income (FTE) $ 86,464 $ 88,817 (2.65 )% Net Income available to common shareholders 40,582 38,432 5.59 % Earnings per Basic Share 2.66 2.45 8.29 % Earnings per Diluted Share 2.65 2.44 8.73 % Key Ratios (percent): Return on Average Assets 1.53 % 1.51 % 1.21 % Return on Average Tangible Equity 15.87 % 15.90 % (0.21 )% Net Interest Margin 3.81 % 4.02 % (5.23 )% Efficiency Ratio (c) 55.43 % 54.24 % 2.19 % Average Shareholders' Equity to Average Assets 11.64 % 11.71 % (0.57 )% Common Stock Data: Cash Dividends Declared per Share $ 1.26 $ 1.20 5.00 % Market Value per Share: High 51.73 46.69 10.79 % Low 41.76 41.20 1.36 % Price/Earnings Ratio (b) 13.92 12.89 8.06 % (a) September 30, 2015 risk-based capital ratios are estimated. (b) September 30, 2015 price/earnings ratio computed based on annualized third quarter 2015 earnings. (c) The September 30, 2015 YTD 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 27.34 45.56 51.73 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 0.69 2.66 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 0.69 2.65 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended September 30, 2015 2014 Interest Income Interest and fees on loans $ 27,875 $ 29,292 Interest on investment securities: Taxable 2,621 2,864 Tax-exempt 272 282 Total Interest Income 30,768 32,438 Interest Expense Interest on deposits 2,686 2,730 Interest on short-term borrowings 69 86 Interest on long-term debt 155 152 Total Interest Expense 2,910 2,968 Net Interest Income 27,858 29,470 Provision for loan losses 451 1,872 Net Interest Income After Provision for Loan Losses 27,407 27,598 Non-Interest Income Gains on sale of investment securities - 71 Service charges 6,907 6,934 Bankcard revenue 3,895 3,796 Insurance commissions - 1,396 Trust and investment management fee income 1,176 1,103 Bank owned life insurance 929 771 Other income 799 538 Total Non-Interest Income 13,706 14,609 Non-Interest Expense Salaries and employee benefits 12,179 13,144 Occupancy and equipment 2,575 2,531 Depreciation 1,522 1,542 FDIC insurance expense 456 432 Advertising 777 799 Bankcard expenses 785 877 Postage, delivery, and statement mailings 523 557 Office supplies 384 405 Legal and professional fees 620 476 Telecommunications 418 510 Repossessed asset losses, net of expenses 492 31 Merger related expenses 175 - Other expenses 4,471 3,021 Total Non-Interest Expense 25,377 24,325 Income Before Income Taxes 15,736 17,882 Income tax expense 5,129 6,010 Net Income Available to Common Shareholders $ 10,607 $ 11,872 Distributed earnings allocated to common shareholders $ 6,362 $ 6,073 Undistributed earnings allocated to common shareholders 4,125 5,673 Net earnings allocated to common shareholders $ 10,487 $ 11,746 Average common shares outstanding 15,178 15,363 Effect of dilutive securities: Employee stock options and warrants 20 82 Shares for diluted earnings per share 15,198 15,445 Basic earnings per common share $ 0.69 $ 0.76 Diluted earnings per common share $ 0.69 $ 0.76 Dividends declared per common share $ 0.42 $ 0.40 Comprehensive Income $ 11,939 $ 11,460 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Nine months ended September 30, 2015 2014 Interest Income Interest and fees on loans $ 86,075 $ 87,647 Interest on investment securities: Taxable 7,974 8,797 Tax-exempt 803 840 Total Interest Income 94,852 97,284 Interest Expense Interest on deposits 8,126 8,220 Interest on short-term borrowings 236 246 Interest on long-term debt 458 453 Total Interest Expense 8,820 8,919 Net Interest Income 86,032 88,365 Provision for loan losses 4,175 3,670 Net Interest Income After Provision for Loan Losses 81,857 84,695 Non-Interest Income Gains on sale of investment securities 2,130 972 Service charges 19,423 19,833 Bankcard revenue 11,971 11,319 Insurance commissions - 4,740 Trust and investment management fee income 3,577 3,251 Bank owned life insurance 2,476 2,292 Gain on sale of insurance division 11,084 - Other income 2,471 1,646 Total Non-Interest Income 53,132 44,053 Non-Interest Expense Salaries and employee benefits 36,551 39,260 Occupancy and equipment 7,694 7,541 Depreciation 4,549 4,553 FDIC insurance expense 1,351 1,199 Advertising 2,182 2,548 Bankcard expenses 2,485 2,607 Postage, delivery, and statement mailings 1,591 1,662 Office supplies 1,077 1,235 Legal and professional fees 1,729 1,497 Telecommunications 1,356 1,354 Repossessed asset losses, net of expenses 1,047 552 Merger related expenses 283 - Other expenses 9,891 7,998 Total Non-Interest Expense 71,786 72,006 Income Before Income Taxes 63,203 56,742 Income tax expense 22,621 18,310 Net Income Available to Common Shareholders $ 40,582 $ 38,432 Distributed earnings allocated to common shareholders $ 19,086 $ 18,220 Undistributed earnings allocated to common shareholders 21,040 19,809 Net earnings allocated to common shareholders $ 40,126 $ 38,029 Average common shares outstanding 15,111 15,509 Effect of dilutive securities: Employee stock options and warrants 21 85 Shares for diluted earnings per share 15,132 15,594 Basic earnings per common share $ 2.66 $ 2.45 Diluted earnings per common share $ 2.65 $ 2.44 Dividends declared per common share $ 1.26 $ 1.20 Comprehensive Income $ 41,181 $ 40,501 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders' Equity (Unaudited) ($ in 000s) Three Months Ended September 30, 2015 September 30, 2014 Balance at July 1 $ 411,240 $ 397,231 Net income 10,607 11,872 Other comprehensive income:Change in unrealized (loss) gain on securities available-for-sale
1,332 (412 ) Cash dividends declared ($0.42/share) and ($0.40/share), respectively (6,435 ) (6,169 ) Issuance of stock award shares, net 370 321 Exercise of 42,500 stock options 1,653 - Purchase of 262,205 common shares of treasury - (11,170 ) Balance at September 30 $ 418,767 $ 391,673 Nine Months Ended September 30, 2015 September 30, 2014 Balance at January 1 $ 390,853 $ 387,623 Net income 40,582 38,432 Other comprehensive income: Change in unrealized gain (loss) on securities available-for-sale 599 2,069 Cash dividends declared ($1.26/share) and ($1.20/share), respectively (19,242 ) (18,681 ) Issuance of stock award shares, net 1,430 1,210 Exercise of 71,750 stock options 2,649 - Exercise of 19,000 stock options - 553 Exercise of 61,796 warrants 1,896 - Purchase of 456,856 common shares of treasury - (19,533 ) Balance at September 30 $ 418,767 $ 391,673 CITY HOLDING COMPANY AND SUBSIDIARIES Condensed Consolidated Quarterly Statements of Income (Unaudited) ($ in 000s, except per share data) Quarter Ended September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Interest income$ 30,768 $ 31,720 $ 32,364 $ 32,282 $ 32,438 Taxable equivalent adjustment
147 144 142 164 152 Interest income (FTE) 30,915 31,864 32,506 32,446 32,590 Interest expense
2,910 2,937 2,973 3,041 2,968 Net interest income
28,005 28,927 29,533 29,405 29,622 Provision for loan losses 451 2,836 888 384 1,872 Net interest income after provision for loan losses 27,554 26,091 28,645 29,021 27,750 Noninterest income 13,706 15,405 24,021 14,669 14,609 Noninterest expense 25,377 23,244 23,165 23,035 24,325 Income before income taxes 15,883 18,252 29,501 20,655 18,034 Income tax expense 5,129 6,125 11,367 5,961 6,010 Taxable equivalent adjustment 147 144 142 164 152 Net income $ 10,607 $ 11,983 $ 17,992 $ 14,530 $ 11,872 Distributed earnings allocated to common shareholders $ 6,362 $ 6,344 $ 6,315 $ 5,996 $ 6,073 Undistributed earnings allocated to common shareholders 4,125 5,505 11,468 8,378 5,673 Net earnings allocated to common shareholders $ 10,487 $ 11,849 $ 17,783 $ 14,374 $ 11,746 Average common shares outstanding 15,178 15,104 15,067 15,096 15,363 Effect of dilutive securities: Employee stock options and warrants 20 23 82 86 82 Shares for diluted earnings per share 15,198 15,127 15,149 15,182 15,445 Basic earnings per common share $ 0.69 $ 0.78 $ 1.18 $ 0.95 $ 0.76 Diluted earnings per common share 0.69 0.78 1.17 0.95 0.76 Cash dividends declared per share 0.42 0.42 0.42 0.40 0.40 Net Interest Margin 3.62 % 3.82 % 3.99 % 3.89 % 3.95 % Interest Income from Accretion Related to Fair Value Adjustments Recorded as a Result of Acquisition $ 1,056 $ 1,607 $ 2,450 $ 1,307 $ 1,836 Net Interest Margin (excluding accretion) 3.48 % 3.60 % 3.66 % 3.71 % 3.71 % CITY HOLDING COMPANY AND SUBSIDIARIES Non-Interest Income and Non-Interest Expense (Unaudited) ($ in 000s) Quarter Ended September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Non-Interest Income: Service charges $ 6,907 $ 6,589 $ 5,927 $ 6,750 $ 6,934 Bankcard revenue 3,895 4,002 4,074 3,744 3,796 Insurance commissions - - - 1,238 1,396 Trust and investment management fee income 1,176 1,201 1,200 1,363 1,103 Bank owned life insurance 929 783 764 778 771 Gain on sale of insurance division - - 11,084 - - Other income 799 714 958 612 538 Subtotal 13,706 13,289 24,007 14,485 14,538 Gains on sale of investment securities - 2,116 14 184 71 Total Non-Interest Income $ 13,706 $ 15,405 $ 24,021 $ 14,669 $ 14,609 Non-Interest Expense: Salaries and employee benefits $ 12,179 $ 12,193 $ 12,179 $ 12,489 $ 13,144 Occupancy and equipment 2,575 2,529 2,590 2,449 2,531 Depreciation 1,522 1,516 1,511 1,534 1,542 FDIC insurance expense 456 445 450 448 432 Advertising 777 701 704 726 799 Bankcard expenses 785 829 870 948 877 Postage, delivery and statement mailings 523 507 561 549 557 Office supplies 384 347 346 360 405 Legal and professional fees 620 542 567 552 476 Telecommunications 418 463 475 522 510 Repossessed asset gains, net of expenses 492 335 220 27 31 Merger related expenses 175 108 - - - Other expenses 4,471 2,729 2,692 2,431 3,021 Total Non-Interest Expense $ 25,377 $ 23,244 $ 23,165 $ 23,035 $ 24,325 Employees (Full Time Equivalent) 828 844 845 889 908 Branch Locations 82 82 82 82 82 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) September 30, 2015 December 31, 2014 (Unaudited) Assets Cash and due from banks $ 109,627 $ 138,503 Interest-bearing deposits in depository institutions 9,081 9,725 Cash and cash equivalents 118,708 148,228 Investment securities available-for-sale, at fair value 300,865 254,043 Investment securities held-to-maturity, at amortized cost 81,095 90,786 Other securities 9,926 9,857 Total investment securities 391,886 354,686 Gross loans 2,696,438 2,652,066 Allowance for loan losses (20,941 ) (20,150 ) Net loans 2,675,497 2,631,916 Bank owned life insurance 97,157 95,116 Premises and equipment, net 73,419 77,988 Accrued interest receivable 7,690 6,826 Net deferred tax assets 33,342 36,766 Intangible assets 70,653 74,198 Other assets 36,266 35,909 Total Assets $ 3,504,618 $ 3,461,633 Liabilities Deposits: Noninterest-bearing $ 542,177 $ 545,465 Interest-bearing: Demand deposits 647,792 639,932 Savings deposits 693,184 660,727 Time deposits 982,349 1,026,663 Total deposits 2,865,502 2,872,787 Short-term borrowings Customer repurchase agreements 147,036 134,931 Long-term debt 16,495 16,495 Other liabilities 56,818 46,567 Total Liabilities 3,085,851 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 September 30, 2015 and December 31, 2014 less 3,179,832 and 3,345,590 shares in treasury, respectively 46,249 46,249 Capital surplus 106,108 107,370 Retained earnings 383,551 362,211 Cost of common stock in treasury (113,581 ) (120,818 ) Accumulated other comprehensive loss: Unrealized gain on securities available-for-sale 1,789 1,190 Underfunded pension liability (5,349 ) (5,349 ) Total Accumulated Other Comprehensive Loss (3,560 ) (4,159 ) Total Stockholders' Equity 418,767 390,853 Total Liabilities and Stockholders' Equity $ 3,504,618 $ 3,461,633 CITY HOLDING COMPANY AND SUBSIDIARIES Investment Portfolio (Unaudited) ($ in 000s) Original Cost
Credit-Related Net
Investment
Impairment Losses
through
September 30,
2015
Unrealized Gains
(Losses)
Carrying Value US Government Agencies $ 5 $ - $ - $ 5 Mortgage Backed Securities 303,754 - 2,568 306,322 Municipal Bonds 42,254 - 448 42,702 Pooled Bank Trust Preferreds 18,381 (16,571 ) 35 1,845 Single Issuer Bank Trust Preferreds, Subdebt of Financial Institutions, and Bank Holding Company Preferred Stocks 27,541 (15 ) (1,072 ) 26,454 Money Markets and Mutual Funds 1,525 - 4 1,529 Federal Reserve Bank and FHLB stock 9,926 - - 9,926 Community Bank Equity Positions 3,715 (1,584 ) 972 3,103 Total Investments $ 407,101 $ (18,170 ) $ 2,955 $ 391,886 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Residential real estate (1) $ 1,358,083 $ 1,325,453 $ 1,303,258 $ 1,294,576 $ 1,274,062 Home equity - junior liens 144,748 143,772 143,670 145,604 146,965 Commercial and industrial 124,495 142,065 132,127 140,548 139,220 Commercial real estate (2) 1,029,103 1,032,333 1,011,777 1,028,831 1,025,835 Consumer 36,751 37,555 38,436 39,705 41,042 DDA overdrafts 3,258 3,279 3,203 2,802 3,618 Gross Loans $ 2,696,438 $ 2,684,457 $ 2,632,471 $ 2,652,066 $ 2,630,742 Construction loans included in: (1) - Residential real estate loans $ 14,765 $ 15,412 $ 17,459 $ 22,992 $ 22,426 (2) - Commercial real estate loans $ 11,970 $ 4,043 $ 30,554 $ 28,652 $ 24,875 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 3Q 2015 245 129 642 40 1,056 Remainder 2015 88 129 588 40 845 2016 247 497 1,358 48 2,150 2017 130 - 1,015 - 1,145 a - 1Q, 2Q & 3Q 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 September 30, 2015 2014 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,482,445 $ 14,469 3.87% $ 1,400,072 $ 14,077 3.99% Commercial, financial, and agriculture (2) 1,156,264 12,174 4.18% 1,155,269 13,733 4.72% Installment loans to individuals (2), (3) 40,720 875 8.53% 44,801 995 8.81% Previously securitized loans (4) *** 357 *** *** 487 *** Total loans 2,679,429 27,875 4.13% 2,600,142 29,292 4.47% Securities: Taxable 352,567 2,621 2.95% 335,760 2,864 3.38% Tax-exempt (5) 29,675 419 5.60% 28,199 434 6.11% Total securities 382,242 3,040 3.16% 363,959 3,298 3.60% Deposits in depository institutions 9,924 - - 8,924 - - Total interest-earning assets 3,071,595 30,915 3.99% 2,973,025 32,590 4.35% Cash and due from banks 156,575 107,550 Bank premises and equipment 74,543 79,865 Other assets 237,803 246,357 Less: Allowance for loan losses (21,425) (20,893) Total assets $ 3,519,091 $ 3,385,904 Liabilities: Interest-bearing demand deposits 644,375 122 0.08% 615,830 138 0.09% Savings deposits 691,600 165 0.09% 633,690 192 0.12% Time deposits (2) 989,149 2,399 0.96% 1,036,370 2,400 0.92% Short-term borrowings 135,274 69 0.20% 132,484 86 0.26% Long-term debt 16,495 155 3.73% 16,495 152 3.66% Total interest-bearing liabilities 2,476,893 2,910 0.47% 2,434,869 2,968 0.48% Noninterest-bearing demand deposits 594,821 522,083 Other liabilities 28,583 30,188 Stockholders' equity 418,794 398,764 Total liabilities and stockholders' equity $ 3,519,091 $ 3,385,904 Net interest income $ 28,005 $ 29,622 Net yield on earning assets 3.62% 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 September 30, 2015 Three Months Ended September 30, 2014 Virginia Savings Community Total Virginia Savings Community Total Residential real estate $ 95 $ 162 $ 257 $ 103 $ 105 $ 208 Commercial, financial, and agriculture 130 446 576 169 1,110 1,279 Installment loans to individuals 20 34 54 43 119 162 Time deposits 129 40 169 135 52 187 $ 374 $ 682 $ 1,056 $ 450 $ 1,386 $ 1,836 (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) Nine Months Ended September 30, 2015 2014 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,459,246 $ 42,797 3.92% $ 1,373,854 $ 41,425 4.03% Commercial, financial, and agriculture (2) 1,157,677 38,759 4.48% 1,158,198 41,308 4.77% Installment loans to individuals (2), (3) 41,338 3,209 10.38% 46,209 3,284 9.50% Previously securitized loans (4) *** 1,310 *** *** 1,630 *** Total loans 2,658,262 86,075 4.33% 2,578,261 87,647 4.55% Securities: Taxable 340,585 7,974 3.13% 342,349 8,797 3.44% Tax-exempt (5) 29,222 1,235 5.65% 27,685 1,292 6.24% Total securities 369,807 9,209 3.33% 370,034 10,089 3.65% Deposits in depository institutions 9,790 - - 8,955 - - Total interest-earning assets 3,037,859 95,284 4.19% 2,957,250 97,736 4.42% Cash and due from banks 202,423 127,229 Bank premises and equipment 76,273 81,038 Other assets 242,294 246,654 Less: Allowance for loan losses (20,960) (21,194) Total assets $ 3,537,889 $ 3,390,977 Liabilities: Interest-bearing demand deposits 643,086 379 0.08% 612,720 479 0.10% Savings deposits 698,433 520 0.10% 628,996 597 0.13% Time deposits (2) 1,005,548 7,227 0.96% 1,052,625 7,144 0.91% Short-term borrowings 138,192 236 0.23% 128,230 246 0.26% Long-term debt 16,495 458 3.71% 16,495 453 3.67% Total interest-bearing liabilities 2,501,754 8,820 0.47% 2,439,066 8,919 0.49% Noninterest-bearing demand deposits 584,046 522,341 Other liabilities 40,207 32,526 Stockholders' equity 411,882 397,044 Total liabilities and stockholders' equity $ 3,537,889 $ 3,390,977 Net interest income $ 86,464 $ 88,817 Net yield on earning assets 3.81% 4.02%
(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"): Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014 Virginia Savings Community Total Virginia Savings Community Total Residential real estate $ 246 $ 451 $ 697 $ 361 $ 363 $ 724 Commercial, financial, and agriculture 236 3,447 3,683 424 3,149 3,573 Installment loans to individuals 75 151 226 113 473 586 Time deposits 387 120 507 401 197 598 $ 944 $ 4,169 $ 5,113 $ 1,299 $ 4,182 $ 5,481 (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) September 30 June 30 March 31 December 31 September 302015 (a)
2015 2015 2014 2014 Tier I Capital: Stockholders' equity $ 418,767 $ 411,240 $ 405,075 $ 390,853 $ 391,673 Goodwill and other intangibles (69,103 ) (69,153 ) (69,227 ) (74,011 ) (74,247 ) Accumulated other comprehensive loss 3,560 4,892 3,253 4,159 2,921 Qualifying trust preferred stock 16,000 16,000 16,000 16,000 16,000 Excess deferred tax assets - - (1,564 ) (3,838 ) (3,131 ) Total tier I capital $ 369,224 $ 362,979 $ 353,537 $ 333,163 $ 333,216 Qualifying trust preferred stock (16,000 ) $ (16,000 ) $ (16,000 ) * * Total CET I capital $ 353,224 $ 346,979 $ 337,537 * * Total Risk-Based Capital: Tier I capital $ 369,224 $ 362,979 $ 353,537 $ 333,163 $ 333,216 Qualifying allowance for loan losses 20,941 20,809 20,179 20,150 20,487 Unrealized gain on securities 447 600 704 560 630 Total risk-based capital $ 390,612 $ 384,388 $ 374,420 $ 353,873 $ 354,333 Net risk-weighted assets $ 2,449,191 $ 2,448,848 $ 2,404,331 $ 2,493,078 $ 2,493,938 Ratios: Average stockholders' equity to average assets 11.90 % 11.54 % 11.48 % 11.40 % 11.78 % Tangible capital ratio 10.14 % 9.89 % 9.60 % 9.35 % 9.58 % Risk-based capital ratios: CET 1 capital 14.42 % 14.17 % 14.04 % * * Tier I capital 15.08 % 14.82 % 14.70 % 13.36 % 13.36 % Total risk-based capital 15.95 % 15.70 % 15.57 % 14.19 % 14.21 % Leverage capital 10.71 % 10.38 % 10.23 % 9.89 % 10.07 % (a) September 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 September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Intangibles, net $ 70,653 $ 70,779 $ 70,964 $ 74,198 $ 74,434 Intangibles amortization expense 126 185 214 236 236 CITY HOLDING COMPANY AND SUBSIDIARIES Summary of Loan Loss Experience (Unaudited) ($ in 000s) Quarter Ended September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Balance at beginning of period $ 20,809 $ 20,179 $ 20,150 $ 20,487 $ 20,536 Charge-offs: Commercial and industrial 89 (1,898 ) (94 ) 7 (325 ) Commercial real estate (1 ) 61 (337 ) (260 ) (696 ) Residential real estate (229 ) (272 ) (257 ) (414 ) (605 ) Home equity (128 ) (17 ) (91 ) (21 ) (142 ) Consumer (28 ) (69 ) (74 ) (17 ) (49 ) DDA overdrafts (414 ) (313 ) (311 ) (363 ) (390 ) Total charge-offs (711 ) (2,508 ) (1,164 ) (1,068 ) (2,207 ) Recoveries: Commercial and industrial 45 9 18 4 4 Commercial real estate 18 23 8 19 11 Residential real estate 66 54 10 96 28 Home equity - - - - - Consumer 75 51 28 32 43 DDA overdrafts 188 165 241 196 200 Total recoveries 392 302 305 347 286 Net charge-offs (319 ) (2,206 ) (859 ) (721 ) (1,921 ) Provision for (recovery of) acquired loans (24 ) 299 246 148 (3 ) Provision for loan losses 475 2,537 642 236 1,875 Balance at end of period $ 20,941 $ 20,809 $ 20,179 $ 20,150 $ 20,487 Loans outstanding $ 2,696,438 $ 2,684,457 $ 2,632,471 $ 2,652,066 $ 2,630,742 Average loans outstanding 2,679,429 2,658,484 2,636,400 2,639,106 2,600,142 Allowance as a percent of loans outstanding 0.78 % 0.78 % 0.77 % 0.76 % 0.78 % Allowance as a percent of non-performing loans
95.81
% 130.98 % 121.81 % 128.10 % 112.61 % Net charge-offs (annualized) as a percent of average loans outstanding 0.05 % 0.33 % 0.13 % 0.11 % 0.30 %Net charge-offs, excluding overdraft
deposit accounts, (annualized) as a
percent of average loans outstanding
0.01 % 0.31 % 0.12 % 0.08 % 0.27 % CITY HOLDING COMPANY AND SUBSIDIARIES Summary of Non-Performing Assets (Unaudited) ($ in 000s) September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Nonaccrual loans $21,407
$ 15,623 $ 16,182 $ 15,307 $ 17,384 Accruing loans past due 90 days or more 449 264 384 423 809 Total non-performing loans21,856
15,887 16,566 15,730 18,193 Other real estate owned 6,026 6,729 8,771 8,180 9,162 Total non-performing assets $27,882
$ 22,616 $ 25,337 $ 23,910 $ 27,355 Non-performing assets as a percent of loans and other real estate owned1.03
% 0.84 % 0.96 % 0.90 % 1.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Summary of Troubled Debt Restructurings (Unaudited) ($ in 000s) September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Residential real estate $ 18,154 $ 19,021 $ 19,067 $ 18,492 $ 18,040 Home equity - junior liens 2,746 2,662 2,741 2,688 2,821 Commercial and industrial 62 66 70 73 77 Commercial real estate 1,921 1,872 1,894 2,263 2,270 Consumer - - - - - Total $ 22,883 $ 23,621 $ 23,772 $ 23,516 $ 23,208 CITY HOLDING COMPANY AND SUBSIDIARIES Summary of Total Past Due Loans (Unaudited) ($ in 000s) Originated September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Residential real estate $ 4,813 $ 4,107 $ 4,326 $ 5,164 $ 5,276 Home equity - junior liens 548 393 543 746 751 Commercial and industrial4
600 113 310 188 Commercial real estate 1,183 536 299 479 938 Consumer 89 82 122 197 58 DDA overdrafts 330 327 215 318 592 Total past due loans $6,967
$ 6,045 $ 5,618 $ 7,214 $ 7,803 Acquired September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Residential real estate $ 709 $ 1,163 $ 1,792 $ 714 $ 500 Home equity - junior liens 10 5 86 2 16 Commercial and industrial 351 14 490 143 96 Commercial real estate 2,439 2,179 2,018 2,372 2,972 Consumer 129 175 150 221 162 DDA overdrafts - - - - - Total past due loans $ 3,638 $ 3,536 $ 4,536 $ 3,452 $ 3,746 Total September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Residential real estate $5,522
$ 5,270 $ 6,118 $ 5,878 $ 5,776 Home equity - junior liens 558 398 629 748 767 Commercial and industrial355
614 603 453 284 Commercial real estate 3,622 2,715 2,317 2,851 3,910 Consumer 218 257 272 418 220 DDA overdrafts 330 327 215 318 592 Total past due loans $10,605
$ 9,581 $ 10,154 $ 10,666 $ 11,549 Total past due loans as a percent of loans outstanding0.39
% 0.36 % 0.39 % 0.40 % 0.44 % CITY HOLDING COMPANY AND SUBSIDIARIES Summary of Purchased Credit Impaired Loans (Unaudited) ($ in 000s) Virginia Savings Acquisition September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Contractual required principal and interest 2,149 2,376 2,419 2,407 3,481 Carrying value 1,861 1,984 1,979 1,964 2,987 Community Acquisition September 30 June 30 March 31 December 31 September 30 2015 2015 2015 2014 2014 Contractual required principal and interest 17,834 18,546 20,189 23,277 24,147 Carrying value 13,400 13,958 14,627 15,365 15,518
View source version on businesswire.com: http://www.businesswire.com/news/home/20151022005279/en/
City Holding CompanyCharles R. Hageboeck, 304-769-1102President and Chief Executive Officer
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