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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 | 4,896 | 14:49:31 |
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.5 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $20.1 million and diluted earnings of $1.25 per share for the quarter ended September 30, 2020. For the third quarter of 2020, the Company achieved a return on assets of 1.46% and a return on tangible equity of 13.8%.
Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “Like all of the world, City Holding Company and City National Bank have experienced repercussions from the economic slow-down that has accompanied COVID-19. As an essential business, our company has focused on continuing to provide our customers safe access to banking products and services consistent with our reputation for exceptional customer service. In 2020, City was recognized for the third consecutive year by the JD Power organization as the “Highest in Customer Satisfaction” in the North Central US. We have also been highly focused on protecting the health of our employees and customers. Branches were open by appointment only during the initial months of the pandemic, but by the end of the third quarter of 2020, all 94 of our locations were fully open to customers. We are pleased that while many businesses in our nation have had to implement layoffs, we have been fortunate not to have to consider such painful changes, and City’s family of dedicated employees have continued to demonstrate their exceptional commitment to each other, our customers, our communities, and to our company. I thank all of them for their brave and hard work during a very stressful time.”
“The COVID crisis caused the Federal Reserve to lower short-term interest rates to nearly zero during the second quarter of 2020. As a result, deposit rates are very low across all financial institutions. And yet, deposits at banks have ballooned this year. At City, deposits are up nearly $350 million since December 31, 2019 – or about 8%. While the economy continued to recover in the third quarter of 2020, the drop-off in the second quarter of 2020 was extraordinarily steep and thus loan demand outside of the Government sponsored Paycheck Protection Program ("PPP") remains very weak. Despite these lingering effects of COVID-19, City was again able to produce strong results during the third quarter of 2020. Net interest income for the third quarter of 2020 was about flat with the linked quarter. Provision expense was low. Fee income was solid and expenses continue to be well managed. These successes are attributable to the hard working team of City professionals, and I thank them for their dedication and effort.”
“Asset quality seems to be the top concern for analysts who follow banking organizations. In our opinion, City’s asset quality continues to remain solid. As compared to pre-COVID asset quality levels at December 31, 2019, nonperforming assets have improved; past-due loans have improved and troubled-debt restructured loans have improved! Further, the amount of loans in deferment status dropped dramatically during the quarter ended September 30, 2020. As of September 30, 2020, approximately $180 million of commercial loans have been granted deferrals as compared to approximately $430 million as of June 30, 2020. Nearly $160 million of the commercial loan deferments were for hotel and lodging related loans at September 30, 2020. While reduced business and personal travel have lowered occupancy rates for our hotel and lodging loan customers, occupancy rates continued to improve during the third quarter of 2020. As of September 30, 2020, approximately $15 million of mortgage loans have been granted deferrals as compared to approximately $125 million at June 30, 2020.”
Net Interest Income
The Company’s net interest income decreased slightly from $38.1 million during the second quarter of 2020 to $38.0 million during the third quarter of 2020. The Company’s tax equivalent net interest income remained level at $38.3 million for both the second and third quarters of 2020. Lower loan yields (21 basis points) decreased net interest income by $1.5 million and a decrease in accretion fair value adjustments lowered net interest income by $0.5 million. These decreases were essentially offset by an increase in investment income due to higher yields and an increase in balances and a decrease in rates paid on deposits (13 basis points) which increased net interest income by $0.9 million and $0.8 million, respectively. The Company’s reported net interest margin decreased from 3.13% for the second quarter of 2020 to 3.02% for the third quarter of 2020. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.97% for the quarter ended September 30, 2020 and 3.05% for the quarter ended June 30, 2020.
Credit Quality
The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.48% at June 30, 2020 to 0.43% at September 30, 2020. Total nonperforming assets decreased from $17.6 million at June 30, 2020 to $15.7 million at September 30, 2020. Total past due loans increased marginally from $7.1 million, or 0.19% of total loans outstanding, at June 30, 2020 to $7.4 million, or 0.20% of total loans outstanding, at September 30, 2020.
As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a provision for credit losses of $1.0 million in the third quarter of 2020, compared to a provision for loan losses of $0.3 million for the comparable period in 2019 and a provision for credit losses of $1.25 million for the second quarter of 2020. The provision for credit losses recognized in the third quarter of 2020 primarily relates to changes in outstanding balances in the Company’s loan portfolio and their associated loss rates and downgrades of certain hotel/motel credits during the quarter based on current market conditions which increased the Company’s ACL by $2.0 million and $1.2 million. Partially offsetting these increases in the ACL was a decrease in the ACL due to the upgrade of a specific credit that was downgraded in 2017, but has since seen improved financial performance. This upgrade released $2.2 million of ACL reserves.
Non-interest Income
Non-interest income was $17.0 million for the third quarter of 2020 as compared to $16.7 million for the third quarter of 2019. During the third quarter of 2020, the Company reported $0.5 million of unrealized fair value gains on the Company’s equity securities compared to $0.3 million of unrealized fair value losses on the Company’s equity securities in the third quarter of 2019. Exclusive of these gains, non-interest income decreased from $17.0 million for the third quarter of 2019 to $16.5 million for the third quarter of 2020. This decrease was largely attributable to a decrease of $1.9 million, or 23.1%, in service charges as average deposit balances have increased during the COVID-19 pandemic. This decrease was partially offset by increases in our bankcard revenues ($0.6 million), other income due to fees from loan interest rate swap originations ($0.5 million), and bank owned life insurance revenues due to death benefit proceeds ($0.3 million).
Non-interest Expenses
Non-interest expenses increased $0.3 million (1.1%), from $28.4 million in the third quarter of 2019 to $28.7 million in the third quarter of 2020. This increase was primarily due to an increase in equipment and software related expenses of $0.4 million, FDIC insurance expense of $0.4 million, and other expenses of $0.2 million. These increases were partially offset by decreases in advertising expenses ($0.4 million) and occupancy related expenses ($0.3 million).
Balance Sheet Trends
Loans increased $47.9 million (1.3%) from December 31, 2019 to $3.66 billion at September 30, 2020. As a result of the Company’s participation in the PPP loans administered by the SBA, commercial and industrial loans increased $88.5 million. Excluding PPP loans, total loans decreased $40.6 million, (1.1%), from December 31, 2019 to $3.58 billion at September 30, 2020. Residential real estate loans decreased $19.1 million (1.2%), commercial and industrial loans decreased $12.5 million (4.1%) (excluding PPP loans), home equity loans decreased $8.8 million (5.9%) and consumer loans decreased $3.7 million (6.9%). These decreases were partially offset by an increase in commercial real estate loans of $5.0 million (0.3%). Decreases in loan outstandings are reflective of the low-interest rate environment driving residential mortgage originations toward fixed rate loans and a general lack of borrowing for commercial loans.
Total average depository balances increased $133.4 million, or 3.1%, from the quarter ended June 30, 2020 to the quarter ended September 30, 2020. Average noninterest-bearing demand deposit balances increased $70.8 million, average savings deposit balances increased $56.5 million, and average interest-bearing demand deposit balances increased $37.3 million. These increases were partially offset by a decrease in time deposit balances of $31.2 million. Since December 31, 2019, depository balances have increased $344.2 million (8.4%) due to the infusion of government transfer payments for unemployment insurance, PPP loans and stimulus checks. Additionally, due to very low interest rates across a wide array of investment alternatives, it appears that customers are stockpiling cash in banking institutions.
Income Tax Expense
The Company’s effective income tax rate for the third quarter of 2020 was 20.2% compared to 21.3% for the year ended December 31, 2019, and 21.7% for the quarter ended September 30, 2019.
Capitalization and Liquidity
The Company’s loan to deposit ratio was 82.9% and the loan to asset ratio was 66.5% at September 30, 2020. The Company maintained investment securities totaling 21.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 56.6% of assets at September 30, 2020. Time deposits fund 23.6% of assets at September 30, 2020, 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 decreased from 11.0% at December 31, 2019 to 10.6% at September 30, 2020. At September 30, 2020, City National Bank’s Leverage Ratio was 9.32%, its Common Equity Tier I ratio was 14.46%, its Tier I Capital ratio was 14.46%, and its Total Risk-Based Capital ratio was 15.04%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On September 30, 2020, the Board of Directors of the Company approved a quarterly cash dividend of $0.57 per share payable October 30, 2020, to shareholders of record as of October 15, 2020. During the quarter ended September 30, 2020, the Company repurchased 231,000 common shares at a weighted average price of $59.49 as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of September 30, 2020, the Company could repurchase approximately 247,000 additional shares under the plan.
City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. The Company recently commenced construction of a new branch in Spring Mills, WV. Located in Berkeley County, the branch will serve one of West Virginia’s fastest growing markets in the second-most populous of West Virginia’s 55 counties.
Forward-Looking Information
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
September 30, 2020
September 30, 2019
Earnings Net Interest Income (fully taxable equivalent)$
38,278
$
38,287
$
40,603
$
40,036
$
40,729
$
117,168
$
122,118
Net Income available to common shareholders
20,126
18,251
29,000
22,611
22,371
67,374
66,741
Per Share Data Earnings per share available to common shareholders: Basic
$
1.25
$
1.12
$
1.79
$
1.38
$
1.36
$
4.15
$
4.05
Diluted
1.25
1.12
1.78
1.38
1.36
4.15
4.04
Weighted average number of shares (in thousands): Basic
15,950
16,081
16,080
16,207
16,271
16,065
16,350
Diluted
15,970
16,097
16,101
16,230
16,289
16,084
16,368
Period-end number of shares (in thousands)
15,848
16,077
16,140
16,303
16,302
15,848
16,302
Cash dividends declared
$
0.57
$
0.57
$
0.57
$
0.57
$
0.57
$
1.71
$
1.63
Book value per share (period-end)
$
43.62
$
43.15
$
42.45
$
40.36
$
39.85
$
43.62
$
39.85
Tangible book value per share (period-end)
36.11
35.72
35.03
32.98
32.44
36.11
32.44
Market data: High closing price
$
67.98
$
71.19
$
82.40
$
82.72
$
78.30
$
82.40
$
82.56
Low closing price
55.37
55.18
57.11
74.33
72.35
55.18
67.58
Period-end closing price
57.61
65.17
66.53
81.95
76.25
57.61
76.25
Average daily volume (in thousands)
67
89
69
54
62
75
56
Treasury share activity: Treasury shares repurchased (in thousands)
231
79
182
-
99
492
261
Average treasury share repurchase price
$
59.49
$
61.75
$
71.31
$
-
$
74.17
$
64.23
$
74.54
Key Ratios (percent) Return on average assets
1.46
%
1.35
%
2.29
%
1.80
%
1.81
%
1.68
%
1.81
%
Return on average tangible equity
13.8
%
12.6
%
20.6
%
16.8
%
17.0
%
15.6
%
17.5
%
Yield on interest earning assets
3.43
%
3.64
%
4.22
%
4.22
%
4.42
%
3.75
%
4.46
%
Cost of interest bearing liabilities
0.58
%
0.71
%
0.91
%
1.00
%
1.10
%
0.73
%
1.08
%
Net Interest Margin
3.02
%
3.13
%
3.54
%
3.46
%
3.59
%
3.22
%
3.64
%
Non-interest income as a percent of total revenue
30.3
%
27.4
%
30.6
%
31.2
%
29.2
%
35.8
%
29.3
%
Efficiency Ratio
51.6
%
53.3
%
49.7
%
50.0
%
48.2
%
51.5
%
50.0
%
Price/Earnings Ratio (a)
11.53
14.50
17.63
14.82
13.98
10.40
14.13
Capital (period-end) Average Shareholders' Equity to Average Assets
12.71
%
12.91
%
13.50
%
13.12
%
13.12
%
Tangible equity to tangible assets
10.61
%
10.62
%
11.38
%
10.98
%
10.93
%
Consolidated City Holding Company risk based capital ratios (b): CET I
15.93
%
16.10
%
16.02
%
16.05
%
15.62
%
Tier I
15.93
%
16.10
%
16.02
%
16.05
%
15.74
%
Total
16.50
%
16.69
%
16.46
%
16.40
%
16.14
%
Leverage
10.19
%
10.45
%
11.10
%
10.90
%
10.87
%
City National Bank risk based capital ratios (b): CET I
14.46
%
14.55
%
14.32
%
13.92
%
14.00
%
Tier I
14.46
%
14.55
%
14.32
%
13.92
%
14.00
%
Total
15.04
%
15.15
%
14.82
%
14.28
%
14.40
%
Leverage
9.32
%
9.29
%
9.98
%
9.51
%
9.72
%
Other (period-end) Branches
94
94
95
95
95
FTE
921
913
921
918
916
Assets per FTE (in thousands)
$
5,984
$
6,058
$
5,525
$
5,467
$
5,412
Deposits per FTE (in thousands)
4,799
4,834
4,400
4,440
4,399
(a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes).
(b) September 30, 2020 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data)Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
September 30, 2020
September 30, 2019
Interest Income Interest and fees on loans$
35,761
$
37,718
$
41,335
$
41,615
$
42,944
$
114,813
$
128,397
Interest on investment securities: Taxable
6,266
5,718
5,871
5,924
6,044
17,855
17,465
Tax-exempt
1,132
821
707
711
722
2,659
2,257
Interest on deposits in depository institutions
72
55
304
298
271
432
1,034
Total Interest Income
43,231
44,312
48,217
48,548
49,981
135,759
149,153
Interest Expense Interest on deposits
5,123
5,963
7,238
7,897
8,585
18,324
24,768
Interest on short-term borrowings
131
279
464
762
814
873
2,729
Interest on long-term debt
-
-
100
42
45
100
140
Total Interest Expense
5,254
6,242
7,802
8,701
9,444
19,297
27,637
Net Interest Income
37,977
38,070
40,415
39,847
40,537
116,462
121,516
Provision for (recovery of) credit losses
1,026
1,250
7,972
(75
)
274
10,248
(1,175
)
Net Interest Income After Provision for (Recovery of) Credit Losses
36,951
36,820
32,443
39,922
40,263
106,214
122,691
Non-Interest Income Net (losses) gains on sale of investment securities
-
(6
)
63
-
(40
)
56
69
Unrealized gains (losses) recognized on equity securities still held
461
242
(2,402
)
914
(214
)
(1,698
)
(27
)
Service charges
6,295
4,945
7,723
8,233
8,183
18,962
23,281
Bankcard revenue
6,065
5,888
5,115
5,162
5,440
17,068
15,931
Trust and investment management fee income
1,844
1,931
1,799
2,016
1,802
5,574
5,144
Bank owned life insurance
1,088
848
1,676
856
762
3,611
2,910
Sale of VISA shares
-
-
17,837
-
-
17,837
-
Other income
1,232
783
1,536
861
765
3,550
3,139
Total Non-Interest Income
16,985
14,631
33,347
18,042
16,698
64,960
50,447
Non-Interest Expense Salaries and employee benefits
15,361
14,873
15,851
15,918
15,210
46,085
46,220
Occupancy related expense
2,428
2,402
2,488
2,540
2,725
7,318
8,055
Equipment and software related expense
2,607
2,504
2,429
2,302
2,248
7,540
6,662
FDIC insurance expense
355
167
-
-
-
522
639
Advertising
462
933
843
694
861
2,238
2,650
Bankcard expenses
1,517
1,498
1,435
1,285
1,554
4,450
4,270
Postage, delivery, and statement mailings
513
592
616
588
659
1,721
1,828
Office supplies
396
353
394
392
382
1,143
1,167
Legal and professional fees
548
589
601
706
539
1,738
1,665
Telecommunications
547
531
511
563
569
1,589
1,892
Repossessed asset losses (gains), net of expenses
39
76
198
224
(59
)
313
410
Merger related expenses
-
-
-
-
-
-
797
Other expenses
3,939
3,950
4,102
3,822
3,709
11,992
12,326
Total Non-Interest Expense
28,712
28,468
29,468
29,034
28,397
86,649
88,581
Income Before Income Taxes
25,224
22,983
36,322
28,930
28,564
84,525
84,557
Income tax expense
5,098
4,732
7,322
6,319
6,193
17,151
17,816
Net Income Available to Common Shareholders
$
20,126
$
18,251
$
29,000
$
22,611
$
22,371
$
67,374
$
66,741
Distributed earnings allocated to common shareholders
$
8,944
$
9,073
$
9,117
$
9,209
$
9,213
$
26,832
$
26,346
Undistributed earnings allocated to common shareholders
10,984
8,998
19,620
13,200
12,966
39,884
39,828
Net earnings allocated to common shareholders
$
19,928
$
18,071
$
28,737
$
22,409
$
22,179
$
66,716
$
66,174
Average common shares outstanding
15,950
16,081
16,080
16,207
16,271
16,065
16,350
Shares for diluted earnings per share
15,970
16,097
16,101
16,230
16,289
16,084
16,368
Basic earnings per common share
$
1.25
$
1.12
$
1.79
$
1.38
$
1.36
$
4.15
$
4.05
Diluted earnings per common share
$
1.25
$
1.12
$
1.78
$
1.38
$
1.36
$
4.15
$
4.04
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
Assets Cash and due from banks$
76,451
$
87,658
$
92,365
$
88,658
$
71,332
Interest-bearing deposits in depository institutions
176,267
285,596
18,271
51,486
44,862
Cash and cash equivalents
252,718
373,254
110,636
140,144
116,194
Investment securities available-for-sale, at fair value
1,157,399
1,055,185
934,113
810,106
798,930
Investment securities held-to-maturity, at amortized cost
-
-
-
49,036
51,211
Other securities
26,548
26,144
26,827
28,490
28,070
Total investment securities
1,183,947
1,081,329
960,940
887,632
878,211
Gross loans
3,663,966
3,665,596
3,613,050
3,616,099
3,582,571
Allowance for credit losses
(24,867
)
(25,199
)
(24,393
)
(11,589
)
(13,186
)
Net loans
3,639,099
3,640,397
3,588,657
3,604,510
3,569,385
Bank owned life insurance
117,501
116,746
116,000
115,261
114,616
Premises and equipment, net
77,031
77,991
78,948
76,965
76,929
Accrued interest receivable
16,627
14,200
12,570
11,569
12,929
Net deferred tax assets
-
-
2,159
6,669
6,432
Intangible assets
119,004
119,417
119,829
120,241
120,773
Other assets
105,361
105,438
98,710
55,765
62,248
Total Assets
$
5,511,288
$
5,528,772
$
5,088,449
$
5,018,756
$
4,957,717
Liabilities Deposits: Noninterest-bearing
$
1,061,310
$
1,079,469
$
857,501
$
805,087
$
795,548
Interest-bearing: Demand deposits
940,791
921,761
837,966
896,465
898,704
Savings deposits
1,117,684
1,067,254
989,609
1,009,771
980,539
Time deposits
1,300,291
1,342,631
1,366,977
1,364,571
1,354,787
Total deposits
4,420,076
4,411,115
4,052,053
4,075,894
4,029,578
Short-term borrowings Federal Funds purchased
-
-
9,900
-
-
Customer repurchase agreements
279,866
282,676
224,247
211,255
202,622
Long-term debt
-
-
-
4,056
4,055
Net deferred tax liabilities
1,601
2,598
-
-
-
Other liabilities
118,386
138,633
117,021
69,568
71,859
Total Liabilities
4,819,929
4,835,022
4,403,221
4,360,773
4,308,114
Stockholders' Equity Preferred stock
-
-
-
-
-
Common stock
47,619
47,619
47,619
47,619
47,619
Capital surplus
170,526
169,881
170,096
170,309
169,794
Retained earnings
576,901
565,804
556,718
539,253
525,933
Cost of common stock in treasury
(134,177
)
(120,583
)
(116,665
)
(105,038
)
(105,138
)
Accumulated other comprehensive income: Unrealized gain on securities available-for-sale
36,760
37,299
33,730
12,110
17,266
Underfunded pension liability
(6,270
)
(6,270
)
(6,270
)
(6,270
)
(5,871
)
Total Accumulated Other Comprehensive Income
30,490
31,029
27,460
5,840
11,395
Total Stockholders' Equity
691,359
693,750
685,228
657,983
649,603
Total Liabilities and Stockholders' Equity
$
5,511,288
$
5,528,772
$
5,088,449
$
5,018,756
$
4,957,717
Regulatory Capital Total CET 1 capital
$
548,269
$
548,972
$
547,040
$
532,829
$
518,175
Total tier 1 capital
548,269
548,972
547,040
532,829
522,175
Total risk-based capital
568,153
569,213
561,944
544,479
535,441
Total risk-weighted assets
3,442,629
3,410,589
3,412,591
3,319,998
3,318,386
CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s)
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
Residential real estate (1)$
1,621,265
$
1,631,151
$
1,629,578
$
1,640,396
$
1,643,416
Home equity - junior liens
140,135
142,672
146,034
148,928
150,808
Commercial and industrial
383,980
369,122
308,567
308,015
296,927
Commercial real estate (2)
1,464,701
1,467,673
1,470,949
1,459,737
1,431,983
Consumer
50,541
52,278
54,749
54,263
54,799
DDA overdrafts
3,344
2,700
3,173
4,760
4,638
Gross Loans$
3,663,966
$
3,665,596
$
3,613,050
$
3,616,099
$
3,582,571
Construction loans included in: (1) - Residential real estate loans$
28,947
$
28,252
$
28,870
$
29,033
$
24,955
(2) - Commercial real estate loans
42,449
42,092
44,453
64,049
55,267
CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s)Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
September 30, 2020
September 30, 2019
Allowance for Credit Losses Balance at beginning of period$
25,199
$
24,393
$
11,589
$
13,186
$
13,795
$
11,589
$
15,966
Charge-offs: Commercial and industrial
(757
)
-
(77
)
(193
)
(17
)
(834
)
(68
)
Commercial real estate
(75
)
(39
)
(383
)
(964
)
(216
)
(497
)
(394
)
Residential real estate
(252
)
(376
)
(483
)
(226
)
(194
)
(1,111
)
(922
)
Home equity
(126
)
(161
)
(45
)
(134
)
(43
)
(332
)
(160
)
Consumer
(74
)
(36
)
(55
)
(338
)
(279
)
(165
)
(478
)
DDA overdrafts
(554
)
(459
)
(703
)
(792
)
(772
)
(1,716
)
(1,985
)
Total charge-offs
(1,838
)
(1,071
)
(1,746
)
(2,647
)
(1,521
)
(4,655
)
(4,007
)
Recoveries: Commercial and industrial
3
5
9
581
43
17
183
Commercial real estate
44
128
203
10
7
375
614
Residential real estate
24
8
95
87
157
127
282
Home equity
33
9
47
-
-
89
-
Consumer
42
128
13
54
68
183
211
DDA overdrafts
334
349
451
393
363
1,134
1,112
Total recoveries
480
627
818
1,125
638
1,925
2,402
Net (charge-offs)/recoveries
(1,358
)
(444
)
(928
)
(1,522
)
(883
)
(2,730
)
(1,605
)
Provision for (recovery of) credit losses
1,026
1,250
7,972
(75
)
274
10,248
(1,175
)
Impact of Adopting ASC 326
-
-
5,760
-
-
5,760
-
Balance at end of period
$
24,867
$
25,199
$
24,393
$
11,589
$
13,186
$
24,867
$
13,186
Loans outstanding
$
3,663,966
$
3,665,596
$
3,613,050
$
3,616,099
$
3,582,571
Allowance as a percent of loans outstanding
0.68
%
0.69
%
0.68
%
0.32
%
0.37
%
Allowance as a percent of non-performing loans
182.7
%
185.1
%
202.2
%
98.6
%
84.3
%
Average loans outstanding$
3,661,569
$
3,660,174
$
3,608,868
$
3,607,864
$
3,544,548
$
3,643,603
$
3,553,417
Net charge-offs (recoveries) (annualized) as a percent of average loans outstanding
0.15
%
0.05
%
0.10
%
0.17
%
0.10
%
0.10
%
0.06
%
CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 Nonaccrual Loans Residential real estate$
3,983
$
3,477
$
2,750
$
3,393
$
2,570
Home equity
74
265
249
531
469
Commercial and industrial
728
1,087
1,175
1,182
2,059
Commercial real estate
8,479
8,715
7,865
6,384
10,099
Consumer
-
-
1
-
-
Total nonaccrual loans
13,264
13,544
12,040
11,490
15,197
Accruing loans past due 90 days or more
345
68
26
267
452
Total non-performing loans
13,609
13,612
12,066
11,757
15,649
Other real estate owned
2,080
3,997
3,922
4,670
2,326
Total non-performing assets
$
15,689
$
17,609
$
15,988
$
16,427
$
17,975
Non-performing assets as a percent of loans and other real estate owned
0.43
%
0.48
%
0.44
%
0.45
%
0.50
%
Past Due Loans Residential real estate$
5,153
$
5,261
$
7,815
$
7,485
$
6,859
Home equity
474
393
430
956
796
Commercial and industrial
691
160
71
458
526
Commercial real estate
602
917
1,021
1,580
1,276
Consumer
121
67
177
187
124
DDA overdrafts
379
273
467
730
626
Total past due loans
$
7,420
$
7,071
$
9,981
$
11,396
$
10,207
Total past due loans as a percent of loans outstanding
0.20
%
0.19
%
0.28
%
0.32
%
0.28
%
Troubled Debt Restructurings ("TDRs") Residential real estate$
20,398
$
20,631
$
21,413
$
21,029
$
21,320
Home equity
2,100
2,138
2,294
3,628
3,034
Commercial and industrial
-
-
-
-
83
Commercial real estate
4,894
4,915
5,163
4,973
8,100
Consumer
260
185
184
-
-
Total TDRs
$
27,652
$
27,869
$
29,054
$
29,630
$
32,537
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2020 June 30, 2020 September 30, 2019 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2)
$
1,766,796
$
17,899
4.03
%
$
1,785,631
$
19,048
4.29
%
$
1,794,068
$
20,564
4.55
%
Commercial, financial, and agriculture (2)
1,839,939
16,910
3.66
%
1,818,344
17,665
3.91
%
1,692,000
21,293
4.99
%
Installment loans to individuals (2), (3)
54,834
804
5.83
%
56,199
852
6.10
%
58,480
928
6.30
%
Previously securitized loans (4)***
148
***
***
152
***
***
159
***
Total loans
3,661,569
35,761
3.89
%
3,660,174
37,717
4.14
%
3,544,548
42,944
4.81
%
Securities: Taxable
877,623
6,266
2.84
%
896,997
5,718
2.56
%
790,207
6,044
3.03
%
Tax-exempt (5)
204,178
1,433
2.79
%
120,751
1,039
3.46
%
96,011
914
3.78
%
Total securities
1,081,801
7,699
2.83
%
1,017,748
6,757
2.67
%
886,218
6,958
3.11
%
Deposits in depository institutions
304,498
72
0.09
%
236,320
55
0.09
%
72,736
271
1.48
%
Total interest-earning assets
5,047,868
43,532
3.43
%
4,914,242
44,529
3.64
%
4,503,502
50,173
4.42
%
Cash and due from banks
80,505
79,501
67,106
Premises and equipment, net
77,647
78,717
78,091
Goodwill and intangible assets
119,267
119,681
121,124
Other assets
229,667
230,423
188,206
Less: Allowance for credit losses
(25,311
)
(24,700
)
(13,786
)
Total assets$
5,529,643
$
5,397,864
$
4,944,243
Liabilities: Interest-bearing demand deposits
$
931,152
$
187
0.08
%
$
893,832
$
178
0.08
%
$
881,476
$
954
0.43
%
Savings deposits
1,093,886
303
0.11
%
1,037,387
363
0.14
%
978,198
1,159
0.47
%
Time deposits (2)
1,322,423
4,633
1.39
%
1,353,619
5,422
1.61
%
1,360,409
6,472
1.89
%
Short-term borrowings
260,518
131
0.20
%
256,790
279
0.44
%
187,301
814
1.72
%
Long-term debt
-
-
0.00
%
-
-
0.00
%
4,054
45
4.40
%
Total interest-bearing liabilities
3,607,979
5,254
0.58
%
3,541,628
6,242
0.71
%
3,411,438
9,444
1.10
%
Noninterest-bearing demand deposits
1,114,822
1,044,009
825,029
Other liabilities
104,084
115,110
58,857
Stockholders' equity
702,758
697,117
648,919
Total liabilities and stockholders' equity
$
5,529,643
$
5,397,864
$
4,944,243
Net interest income
$
38,278
$
38,287
$
40,729
Net yield on earning assets3.02
%
3.13
%
3.59
%
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income: Loan fees$
156
$
609
$
96
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions: Residential real estate$
132
$
194
$
50
Commercial, financial, and agriculture
250
651
1,110
Installment loans to individuals
38
37
13
Time deposits
155
155
75
$
575
$
1,037
$
1,248
(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 $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
Nine Months Ended
September 30, 2020
September 30, 2019
Average
Yield/
Average
Yield/
Balance
Interest
Rate
Balance
Interest
Rate
Assets:
Loan portfolio (1):
Residential real estate (2)
$
1,776,903
$
56,827
4.27
%
$
1,792,013
$
61,468
4.59
%
Commercial, financial, and agriculture (2)
1,810,165
55,051
4.06
%
1,704,141
63,796
5.01
%
Installment loans to individuals (2), (3)
56,535
2,519
5.95
%
57,263
2,656
6.20
%
Previously securitized loans (4)
***
415
***
***
477
***
Total loans
3,643,603
114,812
4.21
%
3,553,417
128,397
4.83
%
Securities:
Taxable
861,853
17,855
2.77
%
751,600
17,464
3.11
%
Tax-exempt (5)
140,075
3,366
3.21
%
99,555
2,856
3.84
%
Total securities
1,001,928
21,221
2.83
%
851,155
20,320
3.19
%
Deposits in depository institutions
214,912
432
0.27
%
82,214
1,038
1.69
%
Total interest-earning assets
4,860,443
136,465
3.75
%
4,486,786
149,755
4.46
%
Cash and due from banks
76,936
65,433
Premises and equipment, net
77,910
78,475
Goodwill and intangible assets
119,678
121,780
Other assets
218,695
191,231
Less: Allowance for credit losses
(21,984
)
(15,000
)
Total assets
$
5,331,678
$
4,928,705
Liabilities:
Interest-bearing demand deposits
$
898,440
$
833
0.12
%
$
880,763
$
2,796
0.42
%
Savings deposits
1,045,877
1,366
0.17
%
968,655
3,461
0.48
%
Time deposits (2)
1,347,013
16,125
1.60
%
1,370,934
18,511
1.81
%
Short-term borrowings
242,173
873
0.48
%
208,004
2,729
1.75
%
Long-term debt
1,109
100
12.04
%
4,053
140
4.62
%
Total interest-bearing liabilities
3,534,612
19,297
0.73
%
3,432,409
27,637
1.08
%
Noninterest-bearing demand deposits
1,004,144
811,411
Other liabilities
98,393
54,356
Stockholders' equity
694,529
630,529
Total liabilities and
stockholders' equity
$
5,331,678
$
4,928,705
Net interest income
$
117,168
$
122,118
Net yield on earning assets
3.22
%
3.64
%
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income:
Loan fees
$
881
$
711
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
Residential real estate
$
477
$
165
Commercial, financial, and agriculture
2,141
1,968
Installment loans to individuals
114
1
Time deposits
466
527
$
3,198
$
2,661
(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 $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.
CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data)
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
September 30, 2019
September 30, 2020
September 30, 2019
Net Interest Income/Margin Net interest income ("GAAP")$
37,977
$
38,070
$
40,415
$
39,847
$
40,537
$
116,462
$
121,516
Taxable equivalent adjustment
301
217
188
189
192
706
602
Net interest income, fully taxable equivalent
$
38,278
$
38,287
$
40,603
$
40,036
$
40,729
$
117,168
$
122,118
Average interest earning assets
$
5,047,868
$
4,914,242
$
4,617,157
$
4,585,008
$
4,503,502
$
4,860,443
$
4,486,786
Net Interest Margin
3.02
%
3.13
%
3.54
%
3.46
%
3.59
%
3.22
%
3.64
%
Accretion related to fair value adjustments
-0.05
%
-0.08
%
-0.14
%
-0.08
%
-0.11
%
-0.09
%
-0.08
%
Net Interest Margin (excluding accretion)
2.97
%
3.05
%
3.40
%
3.38
%
3.48
%
3.13
%
3.56
%
Tangible Equity Ratio (period end) Equity to assets ("GAAP")
12.54
%
12.55
%
13.47
%
13.11
%
13.10
%
Effect of goodwill and other intangibles, net
-1.93
%
-1.93
%
-2.09
%
-2.13
%
-2.17
%
Tangible common equity to tangible assets
10.61
%
10.62
%
11.38
%
10.98
%
10.93
%
Return on Tangible Equity Return on tangible equity ("GAAP")
13.8
%
12.6
%
20.6
%
16.8
%
17.0
%
15.6
%
17.5
%
Impact of merger related expenses
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.2
%
Impact of sale of VISA shares
0.0
%
0.0
%
-9.7
%
0.0
%
0.0
%
-3.1
%
0.0
%
Return on tangible equity, excluding merger related expenses and sale of VISA shares
13.8
%
12.6
%
10.9
%
16.8
%
17.0
%
12.5
%
17.7
%
Return on Assets Return on assets ("GAAP")
1.46
%
1.35
%
2.29
%
1.80
%
1.81
%
1.68
%
1.81
%
Impact of merger related expenses
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.02
%
Impact of sale of VISA shares
0.00
%
0.00
%
-1.08
%
0.00
%
0.00
%
-0.33
%
0.00
%
Return on assets, excluding merger related expenses and sale of VISA shares
1.46
%
1.35
%
1.21
%
1.80
%
1.81
%
1.35
%
1.83
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005077/en/
Charles R. Hageboeck, Chief Executive Officer and President (304) 769-1102
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