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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 | |
---|---|---|---|---|---|---|---|---|---|---|
3.77 | 3.29% | 118.38 | 118.22 | 118.50 | 118.71 | 114.3204 | 115.45 | 16,585 | 16:20:49 |
|
West Virginia
|
55-0619957
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
25 Gatewater Road
|
|
Charleston, West Virginia
|
25313
|
(Address of principal executive offices)
|
(Zip Code)
|
Yes
|
[X]
|
No
|
[ ]
|
|
Yes
|
[X]
|
No
|
[ ]
|
|
Large accelerated filer [ ]
|
|
Accelerated filer [X]
|
|
|
|
|
|
Non-accelerated filer [ ]
|
|
Smaller reporting company [ ]
|
|
Yes
|
[ ]
|
No
|
[X]
|
|
Pages
|
||
|
|
|
Item 1.
|
Financial Statements (Unaudited).
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
Part I -
|
Financial Information
|
Item 1 -
|
Financial Statements
|
Assets
|
June 30, 2013
|
|
December 31, 2012
|
|||||
(Unaudited)
|
|
|||||||
Cash and due from banks
|
$
|
186,707
|
|
|
$
|
58,718
|
|
|
Interest-bearing deposits in depository institutions
|
5,627
|
|
|
16,276
|
|
|||
Federal funds sold
|
—
|
|
|
10,000
|
|
|||
Cash and Cash Equivalents
|
192,334
|
|
|
84,994
|
|
|||
|
|
|
|
|||||
Investment securities available for sale, at fair value
|
328,782
|
|
|
377,122
|
|
|||
Investment securities held-to-maturity, at amortized cost (approximate fair value at June 30, 2013 and December 31, 2012, - $5,951 and $13,861, respectively)
|
4,293
|
|
|
13,454
|
|
|||
Other securities
|
13,344
|
|
|
11,463
|
|
|||
Total Investment Securities
|
346,419
|
|
|
402,039
|
|
|||
|
|
|
|
|||||
Gross loans
|
2,527,445
|
|
|
2,146,369
|
|
|||
Allowance for loan losses
|
(20,069
|
)
|
|
(18,809
|
)
|
|||
Net Loans
|
2,507,376
|
|
|
2,127,560
|
|
|||
|
|
|
|
|||||
Bank owned life insurance
|
90,444
|
|
|
81,901
|
|
|||
Premises and equipment, net
|
82,190
|
|
|
72,728
|
|
|||
Accrued interest receivable
|
8,275
|
|
|
6,692
|
|
|||
Net deferred tax asset
|
46,549
|
|
|
32,737
|
|
|||
Goodwill and other intangible assets
|
74,642
|
|
|
65,057
|
|
|||
Other assets
|
34,321
|
|
|
43,758
|
|
|||
Total Assets
|
$
|
3,382,550
|
|
|
$
|
2,917,466
|
|
|
Liabilities
|
|
|
|
|
|
|||
Deposits:
|
|
|
|
|
|
|||
Noninterest-bearing
|
$
|
510,713
|
|
|
$
|
429,969
|
|
|
Interest-bearing:
|
|
|
|
|
|
|||
Demand deposits
|
612,950
|
|
|
553,132
|
|
|||
Savings deposits
|
603,818
|
|
|
506,869
|
|
|||
Time deposits
|
1,108,469
|
|
|
919,346
|
|
|||
Total Deposits
|
2,835,950
|
|
|
2,409,316
|
|
|||
|
|
|
|
|||||
Short-term borrowings:
|
|
|
|
|
|
|||
Customer repurchase agreements
|
124,343
|
|
|
114,646
|
|
|||
Long-term debt
|
16,495
|
|
|
16,495
|
|
|||
Other liabilities
|
36,871
|
|
|
43,735
|
|
|||
Total Liabilities
|
3,013,659
|
|
|
2,584,192
|
|
|||
|
|
|
|
|||||
Shareholders’ 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, 2013 and December 31, 2012, less 2,815,397 and 3,665,999 shares in treasury, respectively
|
46,249
|
|
|
46,249
|
|
||
|
|
|
|
||||
Capital surplus
|
107,235
|
|
|
103,524
|
|
||
Retained earnings
|
318,397
|
|
|
309,270
|
|
||
Cost of common stock in treasury
|
(97,450
|
)
|
|
(124,347
|
)
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
|
|
||
Unrealized (loss) gain on securities available-for-sale
|
(545
|
)
|
|
3,573
|
|
||
Underfunded pension liability
|
(4,995
|
)
|
|
(4,995
|
)
|
||
Total Accumulated Other Comprehensive Loss
|
(5,540
|
)
|
|
(1,422
|
)
|
||
Total Shareholders’ Equity
|
368,891
|
|
|
333,274
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
3,382,550
|
|
|
$
|
2,917,466
|
|
Interest Income
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
|
|
|
|
|
|
|
|||||||||
Interest and fees on loans
|
$
|
31,771
|
|
|
$
|
23,143
|
|
|
$
|
61,709
|
|
|
$
|
46,210
|
|
Interest on investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Taxable
|
2,632
|
|
|
3,943
|
|
|
5,382
|
|
|
7,907
|
|
||||
Tax-exempt
|
312
|
|
|
368
|
|
|
636
|
|
|
755
|
|
||||
Interest on federal funds sold
|
9
|
|
|
12
|
|
|
22
|
|
|
23
|
|
||||
Total Interest Income
|
34,724
|
|
|
27,466
|
|
|
67,749
|
|
|
54,895
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest on deposits
|
3,195
|
|
|
3,383
|
|
|
6,422
|
|
|
7,051
|
|
||||
Interest on short-term borrowings
|
79
|
|
|
77
|
|
|
149
|
|
|
150
|
|
||||
Interest on long-term debt
|
153
|
|
|
165
|
|
|
309
|
|
|
333
|
|
||||
Total Interest Expense
|
3,427
|
|
|
3,625
|
|
|
6,880
|
|
|
7,534
|
|
||||
Net Interest Income
|
31,297
|
|
|
23,841
|
|
|
60,869
|
|
|
47,361
|
|
||||
Provision for loan losses
|
2,011
|
|
|
1,675
|
|
|
3,749
|
|
|
3,625
|
|
||||
Net Interest Income After Provision for Loan Losses
|
29,286
|
|
|
22,166
|
|
|
57,120
|
|
|
43,736
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-interest Income
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total investment securities impairment losses
|
—
|
|
|
(606
|
)
|
|
—
|
|
|
(606
|
)
|
||||
Noncredit impairment losses recognized in other comprehensive income
|
—
|
|
|
302
|
|
|
—
|
|
|
302
|
|
||||
Net investment securities impairment losses
|
—
|
|
|
(304
|
)
|
|
—
|
|
|
(304
|
)
|
||||
Gains on sale of investment securities
|
9
|
|
|
832
|
|
|
93
|
|
|
801
|
|
||||
Net investment securities gains
|
9
|
|
|
528
|
|
|
93
|
|
|
497
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Service charges
|
6,897
|
|
|
6,497
|
|
|
13,432
|
|
|
12,545
|
|
||||
Bankcard revenue
|
3,450
|
|
|
3,152
|
|
|
6,649
|
|
|
6,194
|
|
||||
Insurance commissions
|
1,358
|
|
|
1,347
|
|
|
3,198
|
|
|
3,343
|
|
||||
Trust and investment management fee income
|
964
|
|
|
942
|
|
|
1,954
|
|
|
1,749
|
|
||||
Bank owned life insurance
|
799
|
|
|
766
|
|
|
1,611
|
|
|
1,489
|
|
||||
Other income
|
775
|
|
|
558
|
|
|
1,641
|
|
|
1,091
|
|
||||
Total Non-interest Income
|
14,252
|
|
|
13,790
|
|
|
28,578
|
|
|
26,908
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and employee benefits
|
12,640
|
|
|
10,668
|
|
|
25,589
|
|
|
20,913
|
|
||||
Occupancy and equipment
|
2,500
|
|
|
1,978
|
|
|
4,971
|
|
|
3,913
|
|
||||
Depreciation
|
1,453
|
|
|
1,109
|
|
|
2,852
|
|
|
2,195
|
|
||||
FDIC insurance expense
|
341
|
|
|
394
|
|
|
853
|
|
|
779
|
|
||||
Advertising
|
819
|
|
|
675
|
|
|
1,554
|
|
|
1,319
|
|
||||
Bankcard expenses
|
766
|
|
|
694
|
|
|
1,493
|
|
|
1,314
|
|
||||
Postage, delivery, and statement mailings
|
552
|
|
|
488
|
|
|
1,158
|
|
|
1,036
|
|
||||
Office supplies
|
463
|
|
|
396
|
|
|
904
|
|
|
851
|
|
||||
Legal and professional fees
|
535
|
|
|
421
|
|
|
971
|
|
|
738
|
|
||||
Telecommunications
|
465
|
|
|
387
|
|
|
910
|
|
|
776
|
|
||||
Repossessed asset (gains) losses, net of expenses
|
(23
|
)
|
|
650
|
|
|
(178
|
)
|
|
771
|
|
Merger related costs
|
65
|
|
|
4,042
|
|
|
5,604
|
|
|
4,177
|
|
||||
Other expenses
|
3,383
|
|
|
2,861
|
|
|
6,682
|
|
|
5,496
|
|
||||
Total Non-interest Expense
|
23,959
|
|
|
24,763
|
|
|
53,363
|
|
|
44,278
|
|
||||
Income Before Income Taxes
|
19,579
|
|
|
11,193
|
|
|
32,335
|
|
|
26,366
|
|
||||
Income tax expense
|
6,573
|
|
|
3,780
|
|
|
11,342
|
|
|
8,924
|
|
||||
Net Income Available to Common Shareholders
|
$
|
13,006
|
|
|
$
|
7,413
|
|
|
$
|
20,993
|
|
|
$
|
17,442
|
|
|
|
|
|
|
|
|
|
||||||||
Total comprehensive income
|
$
|
8,798
|
|
|
$
|
6,673
|
|
|
$
|
16,875
|
|
|
$
|
18,872
|
|
|
|
|
|
|
|
|
|
||||||||
Average common shares outstanding
|
15,582
|
|
|
14,680
|
|
|
15,521
|
|
|
14,676
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Employee stock options and warrants outstanding
|
170
|
|
|
79
|
|
|
166
|
|
|
84
|
|
||||
Shares for diluted earnings per share
|
15,752
|
|
|
14,759
|
|
|
15,687
|
|
|
14,760
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
0.83
|
|
|
$
|
0.50
|
|
|
$
|
1.34
|
|
|
$
|
1.18
|
|
Diluted earnings per common share
|
$
|
0.82
|
|
|
$
|
0.50
|
|
|
$
|
1.33
|
|
|
$
|
1.17
|
|
Dividends declared per common share
|
$
|
0.37
|
|
|
$
|
0.35
|
|
|
$
|
0.74
|
|
|
$
|
0.70
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
13,006
|
|
|
$
|
7,413
|
|
|
$
|
20,993
|
|
|
$
|
17,442
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on available-for-sale securities arising during the period
|
(6,661
|
)
|
|
(659
|
)
|
|
(6,434
|
)
|
|
2,791
|
|
||||
Reclassification adjustment for (gains)
|
(9
|
)
|
|
(528
|
)
|
|
(93
|
)
|
|
(497
|
)
|
||||
Other comprehensive income (loss) before income taxes
|
(6,670
|
)
|
|
(1,187
|
)
|
|
(6,527
|
)
|
|
2,294
|
|
||||
Tax effect
|
2,462
|
|
|
447
|
|
|
2,409
|
|
|
(864
|
)
|
||||
Other comprehensive income (loss), net of tax
|
(4,208
|
)
|
|
(740
|
)
|
|
(4,118
|
)
|
|
1,430
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income, net of tax
|
$
|
8,798
|
|
|
$
|
6,673
|
|
|
$
|
16,875
|
|
|
$
|
18,872
|
|
|
Common Stock
|
|
Capital Surplus
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders’ Equity
|
||||||||||||
Balance at December 31, 2011
|
$
|
46,249
|
|
|
$
|
103,335
|
|
|
$
|
291,050
|
|
|
$
|
(125,593
|
)
|
|
(3,907
|
)
|
|
$
|
311,134
|
|
|
Net income
|
|
|
|
|
|
|
17,442
|
|
|
|
|
|
|
|
|
17,442
|
|
||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
1,430
|
|
|
1,430
|
|
||||||
Acquisition of Virginia Savings Bancorp, Inc.
|
|
|
276
|
|
|
|
|
7,447
|
|
|
|
|
7,723
|
|
|||||||||
Cash dividends declared ($0.70 per share)
|
|
|
|
|
|
|
(10,337
|
)
|
|
|
|
|
|
|
|
(10,337
|
)
|
||||||
Stock-based compensation expense, net
|
|
|
|
(49
|
)
|
|
|
|
|
706
|
|
|
|
|
|
657
|
|
||||||
Exercise of 16,899 stock options
|
|
|
|
(113
|
)
|
|
|
|
|
601
|
|
|
|
|
|
488
|
|
||||||
Purchase of 237,535 treasury shares
|
|
|
|
|
|
|
|
|
|
(7,915
|
)
|
|
|
|
|
(7,915
|
)
|
||||||
Balance at June 30, 2012
|
$
|
46,249
|
|
|
$
|
103,449
|
|
|
$
|
298,155
|
|
|
$
|
(124,754
|
)
|
|
$
|
(2,477
|
)
|
|
$
|
320,622
|
|
|
Common Stock
|
|
Capital Surplus
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Shareholders’ Equity
|
||||||||||
Balance at December 31, 2012
|
46,249
|
|
|
$
|
103,524
|
|
|
$
|
309,270
|
|
|
(124,347
|
)
|
|
$
|
(1,422
|
)
|
|
$
|
333,274
|
|
Net income
|
|
|
|
|
|
|
20,993
|
|
|
|
|
|
|
|
|
20,993
|
|
||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,118
|
)
|
|
(4,118
|
)
|
||||
Acquisition of Community Financial Corporation
|
|
|
|
4,236
|
|
|
|
|
|
24,272
|
|
|
|
|
|
28,508
|
|
||||
Cash dividends declared ($0.74 per share)
|
|
|
|
|
|
|
(11,866
|
)
|
|
|
|
|
|
|
|
(11,866
|
)
|
||||
Stock-based compensation expense, net
|
|
|
|
(512
|
)
|
|
|
|
|
1,215
|
|
|
|
|
|
703
|
|
||||
Exercise of 62,685 stock options
|
|
|
|
(13
|
)
|
|
|
|
|
1,410
|
|
|
|
|
|
1,397
|
|
||||
Balance at June 30, 2013
|
46,249
|
|
|
$
|
107,235
|
|
|
$
|
318,397
|
|
|
(97,450
|
)
|
|
$
|
(5,540
|
)
|
|
$
|
368,891
|
|
|
Six months ended June 30,
|
||||||
2013
|
|
2012
|
|||||
Net income
|
$
|
20,993
|
|
|
$
|
17,442
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Amortization and accretion
|
(3,694
|
)
|
|
1,412
|
|
||
Provision for loan losses
|
3,749
|
|
|
3,625
|
|
||
Depreciation of premises and equipment
|
2,852
|
|
|
2,195
|
|
||
Deferred income tax expense
|
3,268
|
|
|
263
|
|
||
Net periodic employee benefit cost
|
378
|
|
|
262
|
|
||
Realized investment securities gains
|
(93
|
)
|
|
(497
|
)
|
||
Stock-compensation expense
|
703
|
|
|
657
|
|
||
Increase in value of bank-owned life insurance
|
(1,608
|
)
|
|
(1,462
|
)
|
||
Loans originated for sale
|
(15,656
|
)
|
|
(17,844
|
)
|
||
Proceeds from the sale of loans originated for sale
|
19,576
|
|
|
18,010
|
|
||
Gain on sale of loans
|
(427
|
)
|
|
(353
|
)
|
||
Change in accrued interest receivable
|
(189
|
)
|
|
454
|
|
||
Change in other assets
|
15,945
|
|
|
545
|
|
||
Change in other liabilities
|
(11,469
|
)
|
|
(1,647
|
)
|
||
Net Cash Provided by Operating Activities
|
34,328
|
|
|
23,062
|
|
||
|
|
|
|
||||
Proceeds from sales of securities available-for-sale
|
18,438
|
|
|
15,642
|
|
||
Proceeds from maturities and calls of securities available-for-sale
|
60,543
|
|
|
51,167
|
|
||
Proceeds from maturities and calls of securities held-to-maturity
|
9,188
|
|
|
4,158
|
|
||
Purchases of securities available-for-sale
|
(22,335
|
)
|
|
(66,560
|
)
|
||
Net (increase) in loans
|
(11,732
|
)
|
|
(22,965
|
)
|
||
Purchases of premises and equipment
|
(3,276
|
)
|
|
(4,944
|
)
|
||
Acquisition of Community Financial Corporation, net of cash acquired of $8,888
|
(21,852
|
)
|
|
—
|
|
||
Acquisition of Virginia Savings Bancorp, net of cash acquired of $24,943
|
—
|
|
|
20,389
|
|
||
Net Cash Provided by (Used in) Investing Activities
|
28,974
|
|
|
(3,113
|
)
|
||
|
|
|
|
||||
Net increase in noninterest-bearing deposits
|
37,908
|
|
|
40,841
|
|
||
Net increase in interest-bearing deposits
|
6,291
|
|
|
10,580
|
|
||
Net increase (decrease) in short-term borrowings
|
9,697
|
|
|
(65,976
|
)
|
||
Purchases of treasury stock
|
—
|
|
|
(7,915
|
)
|
||
Proceeds from exercise of stock options
|
1,397
|
|
|
488
|
|
||
Dividends paid
|
(11,255
|
)
|
|
(10,326
|
)
|
||
Net Cash Provided by (Used in) Financing Activities
|
44,038
|
|
|
(32,308
|
)
|
||
Increase (decrease) in Cash and Cash Equivalents
|
107,340
|
|
|
(12,359
|
)
|
||
Cash and cash equivalents at beginning of period
|
84,994
|
|
|
146,399
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
192,334
|
|
|
$
|
134,040
|
|
(1)
|
ASC Topic 310-20 is used to value loans that do not have evidence of credit quality deterioration. For these loans, the difference between the fair value of the loan and the amortized cost of the loan would be amortized or accreted into income using the interest method.
|
(2)
|
ASC Topic 310-30 is used to value loans that have evidence of credit quality deterioration. For these loans, the expected cash flows that exceed the fair value of the loan represent the accretable yield, which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. The non-accretable difference represents the difference between the contractually required principal and interest payments and the cash flows expected to be collected based upon management’s estimation. Subsequent decreases in the expected cash flows will require the Company to evaluate the need for additions to the Company’s allowance for loan losses. Subsequent increases in the expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges with a corresponding adjustment to the accretable yield, which will result in the recognition of additional interest income over the remaining lives of the loans.
|
|
Virginia
|
|
|
|
|
||||||
|
Savings
|
|
Community
|
|
Total
|
||||||
Contractually required principal and interest
|
$
|
11,567
|
|
|
$
|
58,014
|
|
|
$
|
69,581
|
|
Contractual cash flows not expected to be collected (non-accretable difference)
|
(3,973
|
)
|
|
(20,724
|
)
|
|
(24,697
|
)
|
|||
Expected cash flows
|
7,594
|
|
|
37,290
|
|
|
44,884
|
|
|||
Interest component of expected cash flows (accretable difference)
|
(954
|
)
|
|
(5,587
|
)
|
|
(6,541
|
)
|
|||
Estimated fair value of purchased credit impaired loans acquired
|
$
|
6,640
|
|
|
$
|
31,703
|
|
|
$
|
38,343
|
|
|
|
|
|
|
|
|
|
Intangible Assets
|
||
Balance, beginning of period
|
$
|
2,069
|
|
Core deposit intangible acquired in conjunction with the acquisition of Community
|
2,711
|
|
|
Amortization expense
|
(519
|
)
|
|
Balance, end of period
|
$
|
4,261
|
|
|
Goodwill
|
||
Balance, beginning of period
|
$
|
62,988
|
|
Adjustment to goodwill acquired in conjunction with the acquisition of Virginia Savings
|
143
|
|
|
Goodwill acquired in conjunction with the acquisition of Community
|
7,250
|
|
|
Balance, end of period
|
$
|
70,381
|
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
|||||||||||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasuries and U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
government agencies
|
|
$
|
2,857
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
2,925
|
|
|
$
|
3,792
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
3,888
|
|
Obligations of states and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
political subdivisions
|
|
43,155
|
|
|
908
|
|
|
74
|
|
|
43,989
|
|
|
47,293
|
|
|
1,651
|
|
|
15
|
|
|
48,929
|
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. government agencies
|
|
251,565
|
|
|
3,356
|
|
|
3,665
|
|
|
251,256
|
|
|
279,336
|
|
|
7,231
|
|
|
85
|
|
|
286,482
|
|
||||||||
Private label
|
|
2,675
|
|
|
22
|
|
|
21
|
|
|
2,676
|
|
|
3,235
|
|
|
37
|
|
|
—
|
|
|
3,272
|
|
||||||||
Trust preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
securities
|
|
13,614
|
|
|
572
|
|
|
2,479
|
|
|
11,707
|
|
|
15,402
|
|
|
55
|
|
|
2,812
|
|
|
12,645
|
|
||||||||
Corporate securities
|
|
9,780
|
|
|
245
|
|
|
181
|
|
|
9,844
|
|
|
16,152
|
|
|
207
|
|
|
412
|
|
|
15,947
|
|
||||||||
Total Debt Securities
|
|
323,646
|
|
|
5,171
|
|
|
6,420
|
|
|
322,397
|
|
|
365,210
|
|
|
9,277
|
|
|
3,324
|
|
|
371,163
|
|
||||||||
Marketable equity securities
|
|
3,381
|
|
|
1,490
|
|
|
—
|
|
|
4,871
|
|
|
3,381
|
|
|
804
|
|
|
—
|
|
|
4,185
|
|
||||||||
Investment funds
|
|
1,525
|
|
|
—
|
|
|
11
|
|
|
1,514
|
|
|
1,724
|
|
|
50
|
|
|
—
|
|
|
1,774
|
|
||||||||
Total Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale
|
|
$
|
328,552
|
|
|
$
|
6,661
|
|
|
$
|
6,431
|
|
|
$
|
328,782
|
|
|
$
|
370,315
|
|
|
$
|
10,131
|
|
|
$
|
3,324
|
|
|
$
|
377,122
|
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
|||||||||||||||||
Securities held-to-maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trust preferred securities
|
|
$
|
4,293
|
|
|
$
|
1,658
|
|
|
$
|
—
|
|
|
$
|
5,951
|
|
|
$
|
13,454
|
|
|
$
|
465
|
|
|
$
|
58
|
|
|
$
|
13,861
|
|
Total Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Held-to-Maturity
|
|
$
|
4,293
|
|
|
$
|
1,658
|
|
|
$
|
—
|
|
|
$
|
5,951
|
|
|
$
|
13,454
|
|
|
$
|
465
|
|
|
$
|
58
|
|
|
$
|
13,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable equity securities
|
|
$
|
13,344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,344
|
|
|
$
|
11,463
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,463
|
|
Total Other Investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Securities
|
|
$
|
13,344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,344
|
|
|
$
|
11,463
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,463
|
|
|
|
June 30, 2013
|
||||||||||||||||||||||
|
Less Than Twelve Months
|
|
Twelve Months or Greater
|
|
Total
|
|||||||||||||||||||
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|||||||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
$
|
2,583
|
|
|
$
|
66
|
|
|
$
|
851
|
|
|
$
|
8
|
|
|
$
|
3,434
|
|
|
$
|
74
|
|
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Government agencies
|
|
138,569
|
|
|
3,665
|
|
|
—
|
|
|
—
|
|
|
138,569
|
|
|
3,665
|
|
||||||
Private label
|
|
1,781
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
1,781
|
|
|
21
|
|
||||||
Trust preferred securities
|
|
3,136
|
|
|
312
|
|
|
4,979
|
|
|
2,167
|
|
|
8,115
|
|
|
2,479
|
|
||||||
Corporate securities
|
|
6,534
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
6,534
|
|
|
181
|
|
||||||
Investment funds
|
|
1,489
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
1,489
|
|
|
11
|
|
||||||
Total
|
|
$
|
154,092
|
|
|
$
|
4,256
|
|
|
$
|
5,830
|
|
|
$
|
2,175
|
|
|
$
|
159,922
|
|
|
$
|
6,431
|
|
|
|
December 31, 2012
|
||||||||||||||||||||||
|
Less Than Twelve Months
|
|
Twelve Months or Greater
|
|
Total
|
|||||||||||||||||||
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|
Estimated Fair Value
|
|
Unrealized Loss
|
|||||||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
|
$
|
1,163
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,163
|
|
|
$
|
15
|
|
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Government agencies
|
|
16,225
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
16,225
|
|
|
85
|
|
||||||
Trust preferred securities
|
|
348
|
|
|
51
|
|
|
5,836
|
|
|
2,761
|
|
|
6,184
|
|
|
2,812
|
|
||||||
Corporate securities
|
|
1,950
|
|
|
49
|
|
|
4,344
|
|
|
363
|
|
|
6,294
|
|
|
412
|
|
||||||
Total
|
|
$
|
19,686
|
|
|
$
|
200
|
|
|
$
|
10,180
|
|
|
$
|
3,124
|
|
|
$
|
29,866
|
|
|
$
|
3,324
|
|
Securities held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trust preferred securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,380
|
|
|
$
|
58
|
|
|
$
|
3,380
|
|
|
$
|
58
|
|
|
|
Debt Securities
|
|
Equity Securities
|
|
Total
|
||||||
Balance at January 1, 2012
|
|
$
|
20,610
|
|
|
$
|
6,048
|
|
|
$
|
26,658
|
|
Additions:
|
|
|
|
|
|
|
|
|
|
|||
Initial credit impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Additional credit impairment
|
|
576
|
|
|
—
|
|
|
576
|
|
|||
Deductions:
|
|
|
|
|
|
|
|
|
|
|||
Called
|
|
—
|
|
|
(1,235
|
)
|
|
(1,235
|
)
|
|||
Balance at December 31, 2012
|
|
21,186
|
|
|
4,813
|
|
|
25,999
|
|
|||
Additions:
|
|
|
|
|
|
|
|
|
|
|||
Initial credit impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Additional credit impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Deductions:
|
|
|
|
|
|
|
|
|
|
|||
Sold
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at June 30, 2013
|
|
$
|
21,186
|
|
|
$
|
4,813
|
|
|
$
|
25,999
|
|
(1)
|
The differences noted consist of unrealized losses recorded at
June 30, 2013
and noncredit other-than-temporary impairment losses recorded subsequent to April 1, 2009 that have not been reclassified as credit losses.
|
(2)
|
Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. This model for this security assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure, thus this bond could recover at a higher percentage upon default than zero.
|
(3)
|
Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. The model for this security assumes that
one
of the banks that is currently deferring will cure. If additional underlying issuers cure, this bond could recover at a higher percentage.
|
(4)
|
Excess subordination is defined as the additional defaults/deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a "break in yield." This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The "percent of current performing collateral" is the ratio of the "excess subordination amount" to current performing collateral—a higher percent means there is more excess subordination to absorb additional defaults/deferrals, and the better our security is protected from loss.
|
(5)
|
No
other-than-temporary impairment losses were recognized during the
six months ended June 30, 2013
. Other-than-temporary impairment losses of
$11,000
were recognized during the
year ended December 31, 2012
.
|
(6)
|
No
other-than-temporary impairment losses were recognized during the
six months ended June 30, 2013
. Other-than-temporary impairment losses of
$565,000
were recognized during the
year ended December 31, 2012
.
|
|
Cost
|
|
Estimated Fair Value
|
||||
Securities Available-for-Sale
|
|
|
|
||||
Due in one year or less
|
$
|
6,024
|
|
|
$
|
6,033
|
|
Due after one year through five years
|
23,148
|
|
|
23,475
|
|
||
Due after five years through ten years
|
41,376
|
|
|
42,611
|
|
||
Due after ten years
|
253,098
|
|
|
250,278
|
|
||
|
$
|
323,646
|
|
|
$
|
322,397
|
|
Securities Held-to-Maturity
|
|
|
|
|
|
||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
Due after one year through five years
|
—
|
|
|
—
|
|
||
Due after five years through ten years
|
—
|
|
|
—
|
|
||
Due after ten years
|
4,293
|
|
|
5,951
|
|
||
|
$
|
4,293
|
|
|
$
|
5,951
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Gross realized gains
|
$
|
9
|
|
|
$
|
946
|
|
|
$
|
93
|
|
|
$
|
946
|
|
Gross realized losses
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
(145
|
)
|
||||
Net investment security gains
|
$
|
9
|
|
|
$
|
832
|
|
|
$
|
93
|
|
|
$
|
801
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||
Residential real estate
|
$
|
1,170,123
|
|
|
$
|
1,031,435
|
|
Home equity – junior liens
|
138,367
|
|
|
143,110
|
|
||
Commercial and industrial
|
138,299
|
|
|
108,739
|
|
||
Commercial real estate
|
1,023,311
|
|
|
821,970
|
|
||
Consumer
|
54,242
|
|
|
36,564
|
|
||
DDA overdrafts
|
3,103
|
|
|
4,551
|
|
||
Gross loans
|
2,527,445
|
|
|
2,146,369
|
|
||
Allowance for loan losses
|
(20,069
|
)
|
|
(18,809
|
)
|
||
Net loans
|
$
|
2,507,376
|
|
|
$
|
2,127,560
|
|
|
Virginia
|
|
|
|
|
||||||
|
Savings
|
|
Community
|
|
Total
|
||||||
June 30, 2013
|
|
|
|
|
|
||||||
Outstanding loan balance
|
$
|
57,294
|
|
|
$
|
330,214
|
|
|
$
|
387,508
|
|
|
|
|
|
|
|
||||||
Credit-impaired loans:
|
|
|
|
|
|
||||||
Carrying value
|
5,421
|
|
|
27,845
|
|
|
33,266
|
|
|||
Contractual principal and interest
|
7,330
|
|
|
47,850
|
|
|
55,180
|
|
|||
|
|
|
|
|
|
||||||
December 31, 2012
|
|
|
|
|
|
||||||
Outstanding loan balance
|
$
|
65,219
|
|
|
$
|
—
|
|
|
$
|
65,219
|
|
|
|
|
|
|
|
||||||
Credit-impaired loans:
|
|
|
|
|
|
||||||
Carrying value
|
7,018
|
|
|
—
|
|
|
7,018
|
|
|||
Contractual principal and interest
|
10,759
|
|
|
—
|
|
|
10,759
|
|
|
Virginia Savings
|
|
Community
|
|
Total
|
||||||||||||||||||
|
|
|
Carrying
|
|
|
|
Carrying
|
|
|
|
Carrying
|
||||||||||||
|
Accretable
|
|
Amount
|
|
Accretable
|
|
Amount
|
|
Accretable
|
|
Amount
|
||||||||||||
|
Yield
|
|
of Loans
|
|
Yield
|
|
of Loans
|
|
Yield
|
|
of Loans
|
||||||||||||
Balance at the beginning of the period
|
$
|
1,823
|
|
|
$
|
7,018
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,823
|
|
|
$
|
7,018
|
|
Additions
|
—
|
|
|
—
|
|
|
5,587
|
|
|
31,703
|
|
|
5,587
|
|
|
31,703
|
|
||||||
Accretion
|
(746
|
)
|
|
746
|
|
|
(1,088
|
)
|
|
1,088
|
|
|
(1,834
|
)
|
|
1,834
|
|
||||||
Net reclassifications to accretable yield from
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
non-accretable yield
|
889
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
889
|
|
|
—
|
|
||||||
Payments received, net
|
—
|
|
|
(2,341
|
)
|
|
—
|
|
|
(4,946
|
)
|
|
—
|
|
|
(7,287
|
)
|
||||||
Disposals
|
(554
|
)
|
|
(2
|
)
|
|
(20
|
)
|
|
—
|
|
|
(574
|
)
|
|
(2
|
)
|
||||||
Balance at the end of period
|
$
|
1,412
|
|
|
$
|
5,421
|
|
|
$
|
4,479
|
|
|
$
|
27,845
|
|
|
$
|
5,891
|
|
|
$
|
33,266
|
|
|
Virginia
|
|
|
|
|
||||||
|
Savings
|
|
Community
|
|
Total
|
||||||
Contractual required principal and interest
|
$
|
7,330
|
|
|
$
|
47,850
|
|
|
$
|
55,180
|
|
Nonaccretable difference
|
(497
|
)
|
|
(15,526
|
)
|
|
(16,023
|
)
|
|||
Expected cash flows
|
6,833
|
|
|
32,324
|
|
|
39,157
|
|
|||
Accretable yield
|
(1,412
|
)
|
|
(4,479
|
)
|
|
(5,891
|
)
|
|||
Basis in acquired loans
|
$
|
5,421
|
|
|
$
|
27,845
|
|
|
$
|
33,266
|
|
|
Commercial &
|
Commercial
|
Residential
|
|
|
DDA
|
|
||||||||||||||
|
Industrial
|
Real Estate
|
Real Estate
|
Home equity
|
Consumer
|
Overdrafts
|
Total
|
||||||||||||||
Six months ended June 30, 2013
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for loan loss
|
|||||||||||||||||||||
Beginning balance
|
$
|
498
|
|
$
|
10,440
|
|
$
|
5,229
|
|
$
|
1,699
|
|
$
|
81
|
|
$
|
862
|
|
$
|
18,809
|
|
Charge-offs
|
392
|
|
622
|
|
1,111
|
|
270
|
|
224
|
|
687
|
|
3,306
|
|
|||||||
Recoveries
|
21
|
|
34
|
|
68
|
|
—
|
|
217
|
|
477
|
|
817
|
|
|||||||
Provision
|
939
|
|
642
|
|
1,792
|
|
222
|
|
7
|
|
147
|
|
3,749
|
|
|||||||
Ending balance
|
$
|
1,066
|
|
$
|
10,494
|
|
$
|
5,978
|
|
$
|
1,651
|
|
$
|
81
|
|
$
|
799
|
|
$
|
20,069
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Six months ended June 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allowance for loan loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning balance
|
$
|
590
|
|
$
|
11,666
|
|
$
|
3,591
|
|
$
|
2,773
|
|
$
|
88
|
|
$
|
701
|
|
$
|
19,409
|
|
Charge-offs
|
117
|
|
2,015
|
|
494
|
|
856
|
|
95
|
|
710
|
|
4,287
|
|
|||||||
Recoveries
|
2
|
|
97
|
|
7
|
|
11
|
|
64
|
|
524
|
|
705
|
|
|||||||
Provision
|
110
|
|
1,341
|
|
720
|
|
1,009
|
|
171
|
|
274
|
|
3,625
|
|
|||||||
Ending balance
|
$
|
585
|
|
$
|
11,089
|
|
$
|
3,824
|
|
$
|
2,937
|
|
$
|
228
|
|
$
|
789
|
|
$
|
19,452
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allowance for loan loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually
|
$
|
—
|
|
$
|
750
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
750
|
|
Collectively
|
1,066
|
|
9,567
|
|
5,978
|
|
1,651
|
|
81
|
|
799
|
|
19,142
|
|
|||||||
Acquired with deteriorated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
credit quality
|
—
|
|
177
|
|
—
|
|
—
|
|
—
|
|
—
|
|
177
|
|
|||||||
Total
|
$
|
1,066
|
|
$
|
10,494
|
|
$
|
5,978
|
|
$
|
1,651
|
|
$
|
81
|
|
$
|
799
|
|
$
|
20,069
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually
|
$
|
—
|
|
$
|
12,505
|
|
$
|
464
|
|
$
|
297
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13,266
|
|
Collectively
|
133,697
|
|
985,856
|
|
1,168,267
|
|
135,856
|
|
54,134
|
|
3,103
|
|
2,480,913
|
|
|||||||
Acquired with deteriorated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
credit quality
|
4,602
|
|
24,950
|
|
1,392
|
|
2,214
|
|
108
|
|
—
|
|
33,266
|
|
|||||||
Total
|
$
|
138,299
|
|
$
|
1,023,311
|
|
$
|
1,170,123
|
|
$
|
138,367
|
|
$
|
54,242
|
|
$
|
3,103
|
|
$
|
2,527,445
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As of December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allowance for loan loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Collectively
|
498
|
|
10,440
|
|
5,229
|
|
1,699
|
|
81
|
|
862
|
|
18,809
|
|
|||||||
Acquired with deteriorated
|
|
|
|
|
|
|
|
||||||||||||||
credit quality
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Total
|
$
|
498
|
|
$
|
10,440
|
|
$
|
5,229
|
|
$
|
1,699
|
|
$
|
81
|
|
$
|
862
|
|
$
|
18,809
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Individually
|
$
|
—
|
|
$
|
9,912
|
|
$
|
469
|
|
$
|
298
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,679
|
|
Collectively
|
107,044
|
|
807,060
|
|
1,030,840
|
|
142,724
|
|
36,453
|
|
4,551
|
|
2,128,672
|
|
|||||||
Acquired with deteriorated
|
|
|
|
|
|
|
|
||||||||||||||
credit quality
|
1,695
|
|
4,998
|
|
126
|
|
88
|
|
111
|
|
—
|
|
7,018
|
|
|||||||
Total
|
$
|
108,739
|
|
$
|
821,970
|
|
$
|
1,031,435
|
|
$
|
143,110
|
|
$
|
36,564
|
|
$
|
4,551
|
|
$
|
2,146,369
|
|
|
Commercial and industrial
|
|
Commercial real estate
|
|
Total
|
||||||
June 30, 2013
|
|
|
|
|
|
||||||
Pass
|
$
|
123,406
|
|
|
$
|
933,365
|
|
|
$
|
1,056,771
|
|
Special mention
|
3,252
|
|
|
30,769
|
|
|
34,021
|
|
|||
Substandard
|
11,202
|
|
|
58,661
|
|
|
69,863
|
|
|||
Doubtful
|
439
|
|
|
516
|
|
|
955
|
|
|||
Total
|
$
|
138,299
|
|
|
$
|
1,023,311
|
|
|
$
|
1,161,610
|
|
|
|
|
|
|
|
||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|||
Pass
|
$
|
105,690
|
|
|
$
|
771,617
|
|
|
$
|
877,307
|
|
Special mention
|
878
|
|
|
15,015
|
|
|
15,893
|
|
|||
Substandard
|
2,171
|
|
|
35,338
|
|
|
37,509
|
|
|||
Doubtful
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
108,739
|
|
|
$
|
821,970
|
|
|
$
|
930,709
|
|
|
Performing
|
|
Non-Performing
|
|
Total
|
||||||
June 30, 2013
|
|
|
|
|
|
||||||
Residential real estate
|
$
|
1,159,816
|
|
|
$
|
10,307
|
|
|
$
|
1,170,123
|
|
Home equity - junior lien
|
137,683
|
|
|
684
|
|
|
138,367
|
|
|||
Consumer
|
53,502
|
|
|
740
|
|
|
54,242
|
|
|||
DDA overdrafts
|
2,813
|
|
|
290
|
|
|
3,103
|
|
|||
Total
|
$
|
1,353,814
|
|
|
$
|
12,021
|
|
|
$
|
1,365,835
|
|
|
|
|
|
|
|
||||||
December 31, 2012
|
|
|
|
|
|
||||||
Residential real estate
|
$
|
1,029,142
|
|
|
$
|
2,293
|
|
|
$
|
1,031,435
|
|
Home equity - junior lien
|
141,961
|
|
|
1,149
|
|
|
143,110
|
|
|||
Consumer
|
36,564
|
|
|
—
|
|
|
36,564
|
|
|||
DDA overdrafts
|
4,548
|
|
|
3
|
|
|
4,551
|
|
|||
Total
|
$
|
1,212,215
|
|
|
$
|
3,445
|
|
|
$
|
1,215,660
|
|
|
Originated Loans
|
||||||||||||||||||||||
|
June 30, 2013
|
||||||||||||||||||||||
|
Accruing
|
|
|
|
|
||||||||||||||||||
|
Current
|
|
30-59 days
|
|
60-89 days
|
|
Over 90 days
|
|
Non-accrual
|
|
Total
|
||||||||||||
Residential real estate
|
$
|
1,045,086
|
|
|
$
|
5,609
|
|
|
$
|
716
|
|
|
$
|
200
|
|
|
$
|
1,851
|
|
|
$
|
1,053,462
|
|
Home equity - junior lien
|
135,000
|
|
|
621
|
|
|
34
|
|
|
—
|
|
|
28
|
|
|
135,683
|
|
||||||
Commercial and industrial
|
100,805
|
|
|
18
|
|
|
—
|
|
|
216
|
|
|
88
|
|
|
101,127
|
|
||||||
Commercial real estate
|
795,074
|
|
|
1,701
|
|
|
204
|
|
|
652
|
|
|
13,739
|
|
|
811,370
|
|
||||||
Consumer
|
35,089
|
|
|
97
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
35,191
|
|
||||||
DDA overdrafts
|
2,813
|
|
|
281
|
|
|
7
|
|
|
2
|
|
|
—
|
|
|
3,103
|
|
||||||
Total
|
$
|
2,113,867
|
|
|
$
|
8,327
|
|
|
$
|
966
|
|
|
$
|
1,070
|
|
|
$
|
15,706
|
|
|
$
|
2,139,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Acquired Loans
|
||||||||||||||||||||||
|
June 30, 2013
|
||||||||||||||||||||||
|
Accruing
|
|
|
|
|
||||||||||||||||||
|
Current
|
|
30-59 days
|
|
60-89 days
|
|
Over 90 days
|
|
Non-accrual
|
|
Total
|
||||||||||||
Residential real estate
|
$
|
114,730
|
|
|
$
|
785
|
|
|
$
|
77
|
|
|
$
|
1,069
|
|
|
$
|
—
|
|
|
$
|
116,661
|
|
Home equity - junior lien
|
2,684
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,684
|
|
||||||
Commercial and industrial
|
33,864
|
|
|
771
|
|
|
64
|
|
|
2,473
|
|
|
—
|
|
|
37,172
|
|
||||||
Commercial real estate
|
199,663
|
|
|
1,187
|
|
|
195
|
|
|
10,896
|
|
|
—
|
|
|
211,941
|
|
||||||
Consumer
|
18,413
|
|
|
577
|
|
|
32
|
|
|
29
|
|
|
—
|
|
|
19,051
|
|
||||||
DDA overdrafts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
369,354
|
|
|
$
|
3,320
|
|
|
$
|
368
|
|
|
$
|
14,467
|
|
|
$
|
—
|
|
|
$
|
387,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total Loans
|
||||||||||||||||||||||
|
June 30, 2013
|
||||||||||||||||||||||
|
Accruing
|
|
|
|
|
||||||||||||||||||
|
Current
|
|
30-59 days
|
|
60-89 days
|
|
Over 90 days
|
|
Non-accrual
|
|
Total
|
||||||||||||
Residential real estate
|
$
|
1,159,816
|
|
|
$
|
6,394
|
|
|
$
|
793
|
|
|
$
|
1,269
|
|
|
$
|
1,851
|
|
|
$
|
1,170,123
|
|
Home equity - junior lien
|
137,684
|
|
|
621
|
|
|
34
|
|
|
—
|
|
|
28
|
|
|
138,367
|
|
||||||
Commercial and industrial
|
134,669
|
|
|
789
|
|
|
64
|
|
|
2,689
|
|
|
88
|
|
|
138,299
|
|
||||||
Commercial real estate
|
994,737
|
|
|
2,888
|
|
|
399
|
|
|
11,548
|
|
|
13,739
|
|
|
1,023,311
|
|
||||||
Consumer
|
53,502
|
|
|
674
|
|
|
37
|
|
|
29
|
|
|
—
|
|
|
54,242
|
|
||||||
DDA overdrafts
|
2,813
|
|
|
281
|
|
|
7
|
|
|
2
|
|
|
—
|
|
|
3,103
|
|
||||||
Total
|
$
|
2,483,221
|
|
|
$
|
11,647
|
|
|
$
|
1,334
|
|
|
$
|
15,537
|
|
|
$
|
15,706
|
|
|
$
|
2,527,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Originated Loans
|
||||||||||||||||||||||
|
December 31, 2012
|
||||||||||||||||||||||
|
Accruing
|
|
|
|
|
||||||||||||||||||
|
Current
|
|
30-59 days
|
|
60-89 days
|
|
Over 90 days
|
|
Non-accrual
|
|
Total
|
||||||||||||
Residential real estate
|
$
|
1,008,190
|
|
|
$
|
4,910
|
|
|
$
|
599
|
|
|
$
|
239
|
|
|
$
|
2,054
|
|
|
$
|
1,015,992
|
|
Home equity - junior lien
|
132,847
|
|
|
2,379
|
|
|
477
|
|
|
37
|
|
|
1,112
|
|
|
136,852
|
|
||||||
Commercial and industrial
|
105,989
|
|
|
260
|
|
|
236
|
|
|
—
|
|
|
98
|
|
|
106,583
|
|
||||||
Commercial real estate
|
766,404
|
|
|
433
|
|
|
199
|
|
|
1
|
|
|
15,930
|
|
|
782,967
|
|
Consumer
|
34,084
|
|
|
113
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
34,205
|
|
||||||
DDA overdrafts
|
4,270
|
|
|
270
|
|
|
8
|
|
|
3
|
|
|
—
|
|
|
4,551
|
|
||||||
Total
|
$
|
2,051,784
|
|
|
$
|
8,365
|
|
|
$
|
1,527
|
|
|
$
|
280
|
|
|
$
|
19,194
|
|
|
$
|
2,081,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Acquired Loans
|
||||||||||||||||||||||
|
December 31, 2012
|
||||||||||||||||||||||
|
Accruing
|
|
|
|
|
||||||||||||||||||
|
Current
|
|
30-59 days
|
|
60-89 days
|
|
Over 90 days
|
|
Non-accrual
|
|
Total
|
||||||||||||
Residential real estate
|
$
|
15,443
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,443
|
|
Home equity - junior lien
|
6,258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,258
|
|
||||||
Commercial and industrial
|
1,152
|
|
|
—
|
|
|
—
|
|
|
1,004
|
|
|
—
|
|
|
2,156
|
|
||||||
Commercial real estate
|
37,210
|
|
|
9
|
|
|
47
|
|
|
1,737
|
|
|
—
|
|
|
39,003
|
|
||||||
Consumer
|
2,359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,359
|
|
||||||
DDA overdrafts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
62,422
|
|
|
$
|
9
|
|
|
$
|
47
|
|
|
$
|
2,741
|
|
|
$
|
—
|
|
|
$
|
65,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total Loans
|
||||||||||||||||||||||
|
December 31, 2012
|
||||||||||||||||||||||
|
Accruing
|
|
|
|
|
||||||||||||||||||
|
Current
|
|
30-59 days
|
|
60-89 days
|
|
Over 90 days
|
|
Non-accrual
|
|
Total
|
||||||||||||
Residential real estate
|
$
|
1,023,633
|
|
|
$
|
4,910
|
|
|
$
|
599
|
|
|
$
|
239
|
|
|
$
|
2,054
|
|
|
$
|
1,031,435
|
|
Home equity - junior lien
|
139,105
|
|
|
2,379
|
|
|
477
|
|
|
37
|
|
|
1,112
|
|
|
143,110
|
|
||||||
Commercial and industrial
|
107,141
|
|
|
260
|
|
|
236
|
|
|
1,004
|
|
|
98
|
|
|
108,739
|
|
||||||
Commercial real estate
|
803,614
|
|
|
442
|
|
|
246
|
|
|
1,738
|
|
|
15,930
|
|
|
821,970
|
|
||||||
Consumer
|
36,443
|
|
|
113
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
36,564
|
|
||||||
DDA overdrafts
|
4,270
|
|
|
270
|
|
|
8
|
|
|
3
|
|
|
—
|
|
|
4,551
|
|
||||||
Total
|
$
|
2,114,206
|
|
|
$
|
8,374
|
|
|
$
|
1,574
|
|
|
$
|
3,021
|
|
|
$
|
19,194
|
|
|
$
|
2,146,369
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
|
|
Unpaid
|
|
|
|
|
|
Unpaid
|
|
|
||||||||||||
|
Recorded
|
|
Principal
|
|
Related
|
|
Recorded
|
|
Principal
|
|
Related
|
||||||||||||
|
Investment
|
|
Balance
|
|
Allowance
|
|
Investment
|
|
Balance
|
|
Allowance
|
||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential real estate
|
$
|
464
|
|
|
$
|
464
|
|
|
$
|
—
|
|
|
$
|
469
|
|
|
$
|
469
|
|
|
$
|
—
|
|
Home equity - junior liens
|
297
|
|
|
297
|
|
|
—
|
|
|
298
|
|
|
298
|
|
|
—
|
|
||||||
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate
|
9,420
|
|
|
13,101
|
|
|
—
|
|
|
9,912
|
|
|
14,781
|
|
|
—
|
|
||||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
DDA overdrafts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
10,181
|
|
|
$
|
13,862
|
|
|
$
|
—
|
|
|
$
|
10,679
|
|
|
$
|
15,548
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Home equity - junior liens
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial real estate
|
3,085
|
|
|
3,085
|
|
|
750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
DDA overdrafts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
3,085
|
|
|
$
|
3,085
|
|
|
$
|
750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the six months ended
|
||||||||||||||
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||
|
Average
|
|
Interest
|
|
Average
|
|
Interest
|
||||||||
|
Recorded
|
|
Income
|
|
Recorded
|
|
Income
|
||||||||
|
Investment
|
|
Recognized
|
|
Investment
|
|
Recognized
|
||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
||||||||
Residential real estate
|
$
|
464
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Home equity - junior liens
|
297
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial and industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial real estate
|
9,450
|
|
|
—
|
|
|
4,337
|
|
|
85
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
DDA overdrafts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
10,211
|
|
|
$
|
—
|
|
|
$
|
4,337
|
|
|
$
|
85
|
|
|
|
|
|
|
|
|
|
||||||||
With an allowance recorded
|
|
|
|
|
|
|
|
||||||||
Residential real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
936
|
|
|
$
|
22
|
|
Home equity - junior liens
|
—
|
|
|
—
|
|
|
1,657
|
|
|
20
|
|
||||
Commercial and industrial
|
—
|
|
|
—
|
|
|
184
|
|
|
5
|
|
||||
Commercial real estate
|
3,103
|
|
|
—
|
|
|
14,409
|
|
|
298
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
DDA overdrafts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
3,103
|
|
|
$
|
—
|
|
|
$
|
17,186
|
|
|
$
|
345
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
|
Non-
|
|
|
|
|
|
Non-
|
|
|
|||||||||||||
Accruing
|
|
Accruing
|
|
Total
|
|
Accruing
|
|
Accruing
|
|
Total
|
|||||||||||||
Commercial and industrial
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
95
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
101
|
|
Commercial real estate
|
1,791
|
|
|
—
|
|
|
1,791
|
|
|
734
|
|
|
—
|
|
|
734
|
|
||||||
Residential real estate
|
20,891
|
|
|
588
|
|
|
21,479
|
|
|
15,083
|
|
|
162
|
|
|
15,245
|
|
||||||
Home equity
|
2,949
|
|
|
14
|
|
|
2,963
|
|
|
7,068
|
|
|
418
|
|
|
7,486
|
|
||||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
142
|
|
||||||
|
$
|
25,726
|
|
|
$
|
602
|
|
|
$
|
26,328
|
|
|
$
|
23,128
|
|
|
$
|
580
|
|
|
$
|
23,708
|
|
|
New TDRs
|
|
New TDRs
|
||||||||||||||||||
|
For the six months ended
|
|
For the six months ended
|
||||||||||||||||||
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||||||
|
|
Pre
|
|
Post
|
|
|
|
Pre
|
|
Post
|
|||||||||||
|
|
Modification
|
|
Modification
|
|
|
|
Modification
|
|
Modification
|
|||||||||||
|
|
Outstanding
|
|
Outstanding
|
|
|
|
Outstanding
|
|
Outstanding
|
|||||||||||
Number of
|
|
Recorded
|
|
Recorded
|
|
Number of
|
|
Recorded
|
|
Recorded
|
|||||||||||
Contracts
|
|
Investment
|
|
Investment
|
|
Contracts
|
|
Investment
|
|
Investment
|
|||||||||||
Commercial and industrial
|
1
|
|
|
$
|
95
|
|
|
$
|
95
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
3
|
|
|
1,571
|
|
|
1,571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
26
|
|
|
2,845
|
|
|
2,845
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Home equity
|
8
|
|
|
185
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
146
|
|
|
146
|
|
||||
|
38
|
|
|
$
|
4,696
|
|
|
$
|
4,696
|
|
|
1
|
|
|
$
|
146
|
|
|
$
|
146
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.78% and 3.89%, respectively
|
$
|
16,495
|
|
|
$
|
16,495
|
|
Fair Value:
|
June 30, 2013
|
|
December 31, 2012
|
||||
|
|
|
|||||
Other Assets
|
$
|
5,758
|
|
|
$
|
14,012
|
|
Other Liabilities
|
5,758
|
|
|
14,012
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Change in Fair Value:
|
|
|
|
|
|
|
|
||||||||
Other income - derivative asset
|
$
|
(6,211
|
)
|
|
$
|
4,016
|
|
|
$
|
(7,790
|
)
|
|
$
|
2,258
|
|
Other income - derivative liability
|
6,211
|
|
|
(4,016
|
)
|
|
7,790
|
|
|
(2,258
|
)
|
|
|
|
|
Gross Amounts
|
|
|
|||||||||||
|
|
|
|
Not Offset in the Statement
|
|
|
|||||||||||
|
|
|
|
of Financial Position
|
|
|
|||||||||||
|
|
|
|
|
|
Total
|
|
||||||||||
|
|
|
|
|
|
of Gross
|
|
||||||||||
|
|
|
|
|
|
Amounts
|
|
||||||||||
|
|
|
|
|
|
Not Offset in
|
|
||||||||||
|
|
|
|
|
|
the Statement
|
|
||||||||||
|
|
|
|
|
|
of Financial
|
|
||||||||||
|
|
|
|
|
|
Position
|
|
||||||||||
|
|
|
|
Netting
|
|
Including
|
|
||||||||||
|
|
Gross
|
Net Amounts
|
Adjustment
|
|
Applicable
|
|
||||||||||
|
|
Amounts
|
of Assets
|
per
|
|
Netting
|
|
||||||||||
|
Gross
|
Offset in the
|
presented in
|
Applicable
|
|
Agreement
|
|
||||||||||
|
Amounts of
|
Statement of
|
the Statement
|
Master
|
Fair Value
|
and Fair
|
|
||||||||||
|
Recognized
|
Financial
|
of Financial
|
Netting
|
of Financial
|
Value of
|
|
||||||||||
Description
|
Assets
|
Position
|
Position
|
Arrangements
|
Collateral
|
Collateral
|
Net Amount
|
||||||||||
|
(a)
|
(b)
|
(c)=(a)-(b)
|
|
|
(d)
|
(c)-(d)
|
||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
||||||||||
Interest rate swap agreements
|
$
|
5,758
|
|
|
$
|
5,758
|
|
|
$
|
5,758
|
|
$
|
5,758
|
|
$
|
—
|
|
|
Six months ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
||||||||||
Options
|
|
Weighted-Average Exercise Price
|
|
Options
|
|
Weighted-Average Exercise Price
|
|||||||
Outstanding at January 1
|
289,544
|
|
|
$
|
34.38
|
|
|
293,817
|
|
|
$
|
33.95
|
|
Granted
|
15,475
|
|
|
37.74
|
|
|
16,876
|
|
|
35.39
|
|
||
Exercised
|
(62,685
|
)
|
|
32.89
|
|
|
(16,899
|
)
|
|
28.87
|
|
||
Forfeited
|
(1,500
|
)
|
|
36.90
|
|
|
(1,500
|
)
|
|
34.73
|
|
||
Outstanding at June 30
|
240,834
|
|
|
$
|
34.96
|
|
|
292,294
|
|
|
$
|
34.32
|
|
Ranges of Exercise Prices
|
No. of Options Outstanding
|
Weighted-Average Exercise Price
|
Weighted-Average Remaining Contractual Life (Months)
|
Aggregate Intrinsic Value (in thousands)
|
No. of Options Currently Exercisable
|
Weighted-Average Exercise Price of Options Currently Exercisable
|
Weighted-Average Remaining Contractual Life (Months)
|
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
|
||||||||||
$26.62 - $33.90
|
102,483
|
|
$
|
31.25
|
|
45
|
$
|
789
|
|
52,565
|
|
$
|
32.28
|
|
21
|
$
|
350
|
|
$35.09 - $40.88
|
138,351
|
|
37.71
|
|
63
|
209
|
|
90,000
|
|
38.61
|
|
40
|
69
|
|
||||
|
240,834
|
|
|
|
|
$
|
998
|
|
142,565
|
|
|
|
|
$
|
419
|
|
|
Six months ended June 30,
|
||||
|
2013
|
|
2012
|
||
Risk-free interest rate
|
1.88
|
%
|
|
2.51
|
%
|
Expected dividend yield
|
3.70
|
%
|
|
3.90
|
%
|
Volatility factor
|
41.35
|
%
|
|
48.40
|
%
|
Expected life of option
|
8.0 years
|
|
5.0 years
|
|
Six months ended June 30,
|
||||||||||||
|
2013
|
|
2012
|
||||||||||
Restricted Awards
|
|
Average Market Price at Grant
|
|
Restricted Awards
|
|
Average Market Price at Grant
|
|||||||
Outstanding at January 1
|
116,711
|
|
|
|
|
108,209
|
|
|
|
||||
Granted
|
32,083
|
|
|
$
|
37.57
|
|
|
23,336
|
|
|
$
|
34.94
|
|
Forfeited/Vested
|
(8,075
|
)
|
|
|
|
|
(12,900
|
)
|
|
|
|
||
Outstanding at June 30
|
140,719
|
|
|
|
|
|
118,645
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Components of net periodic cost:
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
186
|
|
|
$
|
159
|
|
|
$
|
332
|
|
|
$
|
318
|
|
Expected return on plan assets
|
(233
|
)
|
|
(202
|
)
|
|
(419
|
)
|
|
(404
|
)
|
||||
Net amortization and deferral
|
245
|
|
|
174
|
|
|
465
|
|
|
348
|
|
||||
Net Periodic Pension Cost
|
$
|
198
|
|
|
$
|
131
|
|
|
$
|
378
|
|
|
$
|
262
|
|
|
June 30, 2013
|
|
December 31, 2012
|
||||
Commitments to extend credit:
|
|
|
|
||||
Home equity lines
|
$
|
177,076
|
|
|
$
|
156,274
|
|
Commercial real estate
|
30,892
|
|
|
33,869
|
|
||
Other commitments
|
186,444
|
|
|
171,670
|
|
||
Standby letters of credit
|
15,098
|
|
|
16,743
|
|
||
Commercial letters of credit
|
1,028
|
|
|
425
|
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
|
|
|
Unrealized
|
|
|
||||||
|
|
|
Gains (Losses) on
|
|
|
||||||
|
Defined Benefit
|
|
Securities
|
|
|
||||||
|
Pension Plans
|
|
Available-for-Sale
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Balance at December 31, 2011
|
$
|
(4,732
|
)
|
|
$
|
825
|
|
|
$
|
(3,907
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassifications
|
—
|
|
|
1,740
|
|
|
1,740
|
|
|||
Amounts reclassified from other comprehensive loss
|
—
|
|
|
(310
|
)
|
|
(310
|
)
|
|||
|
—
|
|
|
1,430
|
|
|
1,430
|
|
|||
|
|
|
|
|
|
||||||
Balance at June 30, 2012
|
$
|
(4,732
|
)
|
|
$
|
2,255
|
|
|
$
|
(2,477
|
)
|
|
|
|
|
|
|
||||||
Balance at December 31, 2012
|
$
|
(4,995
|
)
|
|
$
|
3,573
|
|
|
$
|
(1,422
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income before reclassifications
|
—
|
|
|
(4,059
|
)
|
|
(4,059
|
)
|
|||
Amounts reclassified from other comprehensive loss
|
—
|
|
|
(59
|
)
|
|
(59
|
)
|
|||
|
—
|
|
|
(4,118
|
)
|
|
(4,118
|
)
|
|||
|
|
|
|
|
|
||||||
Balance at June 30, 2013
|
$
|
(4,995
|
)
|
|
$
|
(545
|
)
|
|
$
|
(5,540
|
)
|
|
Amount reclassified from Other Comprehensive Loss
|
|
|||||||||||
|
Three months ended
|
Six months ended
|
Affected line item
|
||||||||||
|
June 30,
|
June 30,
|
in the Statements
|
||||||||||
|
2013
|
2012
|
2013
|
2012
|
of Income
|
||||||||
|
|
|
|
|
|
||||||||
Securities available-for-sale:
|
|
|
|
|
|
||||||||
Net securities (gains) losses reclassified into earnings
|
$
|
(9
|
)
|
$
|
(528
|
)
|
$
|
(93
|
)
|
$
|
(497
|
)
|
Security gains (losses)
|
Related income tax expense (benefit)
|
3
|
|
199
|
|
34
|
|
187
|
|
Income tax expense
|
||||
Net effect on accumulated other comprehensive loss
|
$
|
(6
|
)
|
$
|
(329
|
)
|
$
|
(59
|
)
|
$
|
(310
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Distributed earnings allocated to common stock
|
$
|
5,751
|
|
|
$
|
5,146
|
|
|
$
|
11,502
|
|
|
$
|
10,291
|
|
Undistributed earnings allocated to common stock
|
7,139
|
|
|
2,208
|
|
|
9,303
|
|
|
7,011
|
|
||||
Net earnings allocated to common shareholders
|
$
|
12,890
|
|
|
$
|
7,354
|
|
|
$
|
20,805
|
|
|
$
|
17,302
|
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding
|
15,582
|
|
|
14,680
|
|
|
15,521
|
|
|
14,676
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrants outstanding
|
62
|
|
|
—
|
|
|
59
|
|
|
—
|
|
||||
Employee stock options
|
108
|
|
|
79
|
|
|
107
|
|
|
84
|
|
||||
Shares for diluted earnings per share
|
15,752
|
|
|
14,759
|
|
|
15,687
|
|
|
14,760
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.83
|
|
|
$
|
0.50
|
|
|
$
|
1.34
|
|
|
$
|
1.18
|
|
Diluted earnings per share
|
$
|
0.82
|
|
|
$
|
0.50
|
|
|
$
|
1.33
|
|
|
$
|
1.17
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Gains (Losses)
|
||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government agencies
|
$
|
2,925
|
|
|
$
|
—
|
|
|
$
|
2,925
|
|
|
$
|
—
|
|
|
|
||
Obligations of states and political subdivisions
|
43,989
|
|
|
—
|
|
|
43,989
|
|
|
—
|
|
|
|
||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Government agencies
|
251,256
|
|
|
—
|
|
|
251,256
|
|
|
—
|
|
|
|
||||||
Private label
|
2,676
|
|
|
—
|
|
|
2,676
|
|
|
—
|
|
|
|
||||||
Trust preferred securities
|
11,707
|
|
|
—
|
|
|
9,258
|
|
|
2,449
|
|
|
|
||||||
Corporate securities
|
9,844
|
|
|
—
|
|
|
9,844
|
|
|
—
|
|
|
|
||||||
Marketable equity securities
|
4,871
|
|
|
4,871
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Investment funds
|
1,514
|
|
|
1,514
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Derivative assets
|
5,758
|
|
|
—
|
|
|
5,758
|
|
|
—
|
|
|
|
||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative liabilities
|
5,758
|
|
|
—
|
|
|
5,758
|
|
|
—
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Impaired loans
|
$
|
12,516
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,516
|
|
|
$
|
(750
|
)
|
Other real estate owned
|
10,837
|
|
|
—
|
|
|
—
|
|
|
10,837
|
|
|
(20
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Government agencies
|
$
|
3,888
|
|
|
$
|
—
|
|
|
$
|
3,888
|
|
|
$
|
—
|
|
|
|
|
|
Obligations of states and political subdivisions
|
48,929
|
|
|
—
|
|
|
48,929
|
|
|
—
|
|
|
|
|
|||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Government agencies
|
286,482
|
|
|
—
|
|
|
286,482
|
|
|
—
|
|
|
|
|
|||||
Private label
|
3,272
|
|
|
—
|
|
|
3,272
|
|
|
—
|
|
|
|
|
|||||
Trust preferred securities
|
12,645
|
|
|
—
|
|
|
10,260
|
|
|
2,385
|
|
|
|
|
|||||
Corporate securities
|
15,947
|
|
|
—
|
|
|
15,947
|
|
|
—
|
|
|
|
|
|||||
Marketable equity securities
|
4,185
|
|
|
4,185
|
|
|
—
|
|
|
—
|
|
|
|
|
|||||
Investment funds
|
1,774
|
|
|
1,774
|
|
|
—
|
|
|
—
|
|
|
|
|
|||||
Derivative assets
|
14,012
|
|
|
—
|
|
|
14,012
|
|
|
—
|
|
|
|
|
|||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Derivative liabilities
|
14,012
|
|
|
—
|
|
|
14,012
|
|
|
—
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonrecurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impaired loans
|
$
|
10,679
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,679
|
|
|
$
|
—
|
|
Other real estate owned
|
$
|
8,162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,162
|
|
|
$
|
(1,021
|
)
|
Other assets
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
(288
|
)
|
|
Six months ended June 30,
|
||||||
2013
|
|
2012
|
|||||
Beginning balance
|
$
|
2,385
|
|
|
$
|
1,982
|
|
Impairment losses on investment securities
|
—
|
|
|
—
|
|
||
Included in other comprehensive income
|
1,840
|
|
|
61
|
|
||
Dispositions
|
(1,776
|
)
|
|
—
|
|
||
Transfers into Level 3
|
—
|
|
|
—
|
|
||
Ending Balance
|
$
|
2,449
|
|
|
$
|
2,043
|
|
|
Six months ended June 30,
|
||||||
2013
|
|
2012
|
|||||
|
|
|
|
||||
Beginning balance
|
$
|
10,679
|
|
|
$
|
13,500
|
|
|
|
|
|
||||
Loans classified as impaired during the period
|
3,085
|
|
|
—
|
|
||
Specific valuation allowance allocations
|
(750
|
)
|
|
—
|
|
||
|
2,335
|
|
|
—
|
|
||
|
|
|
|
||||
(Additional) reduction in specific valuation allowance allocations
|
—
|
|
|
1,371
|
|
||
|
|
|
|
||||
Paydowns, payoffs, other activity
|
(498
|
)
|
|
(2,755
|
)
|
||
|
|
|
|
||||
Ending balance
|
$
|
12,516
|
|
|
$
|
12,116
|
|
|
|||||||
|
Six months ended June 30,
|
||||||
|
2013
|
|
2012
|
||||
|
|
|
|
||||
Beginning balance
|
$
|
8,162
|
|
|
$
|
7,948
|
|
|
|
|
|
||||
OREO remeasured at initial recognition:
|
|
|
|
||||
Carrying value of foreclosed assets prior to remeasurement
|
3,307
|
|
|
3,266
|
|
||
Charge-offs recognized in the allowance for loan losses
|
(1,059
|
)
|
|
(1,161
|
)
|
||
Fair value
|
2,248
|
|
|
2,105
|
|
||
|
|
|
|
||||
OREO remeasured subsequent to initial recognition
|
|
|
|
||||
Carrying value of foreclosed assets prior to remeasurement
|
85
|
|
|
1,581
|
|
||
Fair value
|
65
|
|
|
985
|
|
||
Write-downs included in other non-interest expense
|
(20
|
)
|
|
(596
|
)
|
||
|
|
|
|
||||
Acquired
|
3,492
|
|
|
728
|
|
||
Disposed
|
(3,045
|
)
|
|
(1,488
|
)
|
||
|
|
|
|
||||
Ending balance
|
$
|
10,837
|
|
|
$
|
8,697
|
|
|
Carrying Amount
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
192,334
|
|
|
$
|
192,334
|
|
|
$
|
192,334
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities available-for-sale
|
328,782
|
|
|
328,782
|
|
|
6,385
|
|
|
319,948
|
|
|
2,449
|
|
|||||
Securities held-to-maturity
|
4,293
|
|
|
5,951
|
|
|
—
|
|
|
5,951
|
|
|
—
|
|
|||||
Other securities
|
13,344
|
|
|
13,344
|
|
|
—
|
|
|
13,344
|
|
|
—
|
|
|||||
Net loans
|
2,507,376
|
|
|
2,536,584
|
|
|
—
|
|
|
—
|
|
|
2,536,584
|
|
|||||
Accrued interest receivable
|
8,275
|
|
|
8,275
|
|
|
8,275
|
|
|
—
|
|
|
—
|
|
|||||
Derivative assets
|
5,758
|
|
|
5,758
|
|
|
—
|
|
|
5,758
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
2,835,950
|
|
|
2,844,748
|
|
|
1,727,481
|
|
|
1,117,267
|
|
|
—
|
|
|||||
Short-term debt
|
124,343
|
|
|
124,349
|
|
|
—
|
|
|
124,349
|
|
|
—
|
|
|||||
Long-term debt
|
16,495
|
|
|
16,463
|
|
|
—
|
|
|
16,463
|
|
|
—
|
|
|||||
Derivative liabilities
|
5,758
|
|
|
5,758
|
|
|
—
|
|
|
5,758
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
84,994
|
|
|
84,994
|
|
|
84,994
|
|
|
—
|
|
|
—
|
|
|||||
Securities available-for-sale
|
377,122
|
|
|
377,122
|
|
|
5,959
|
|
|
368,778
|
|
|
2,385
|
|
|||||
Securities held-to-maturity
|
13,454
|
|
|
13,861
|
|
|
—
|
|
|
13,861
|
|
|
—
|
|
|||||
Other securities
|
11,463
|
|
|
11,463
|
|
|
—
|
|
|
11,463
|
|
|
—
|
|
|||||
Net loans
|
2,127,560
|
|
|
2,162,856
|
|
|
—
|
|
|
—
|
|
|
2,162,856
|
|
|||||
Accrued interest receivable
|
6,692
|
|
|
6,692
|
|
|
6,692
|
|
|
—
|
|
|
—
|
|
|||||
Derivative assets
|
14,012
|
|
|
14,012
|
|
|
—
|
|
|
14,012
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
2,409,316
|
|
|
2,381,495
|
|
|
1,447,954
|
|
|
933,541
|
|
|
—
|
|
|||||
Short-term debt
|
114,646
|
|
|
114,648
|
|
|
—
|
|
|
114,648
|
|
|
—
|
|
|||||
Long-term debt
|
16,495
|
|
|
16,462
|
|
|
—
|
|
|
16,462
|
|
|
—
|
|
|||||
Derivative liabilities
|
14,012
|
|
|
14,012
|
|
|
—
|
|
|
14,012
|
|
|
—
|
|
Item 2 -
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Virginia Savings
|
|
Community
|
|
|
||||||||||||||
|
|
|
|
Certificates of
|
|
|
|
Certificates of
|
|
|
||||||||||
Year Ended
|
|
Loans
|
|
Deposit
|
|
Loans
|
|
Deposit
|
|
Total
|
||||||||||
1Q 2013
|
|
$
|
985
|
|
|
$
|
178
|
|
|
$
|
858
|
|
|
$
|
160
|
|
|
$
|
2,181
|
|
2Q 2013
|
|
1,334
|
|
|
122
|
|
|
1,887
|
|
|
174
|
|
|
3,517
|
|
|||||
Remainder 2013
|
|
718
|
|
|
242
|
|
|
2,755
|
|
|
305
|
|
|
4,020
|
|
|||||
2014
|
|
974
|
|
|
537
|
|
|
3,483
|
|
|
294
|
|
|
5,288
|
|
|||||
2015
|
|
729
|
|
|
518
|
|
|
1,993
|
|
|
160
|
|
|
3,400
|
|
|||||
Thereafter
|
|
1,494
|
|
|
497
|
|
|
8,458
|
|
|
48
|
|
|
10,497
|
|
Assets
|
Six months ended June 30,
|
||||||||||||||||||||
2013
|
|
2012
|
|||||||||||||||||||
Average
Balance
|
|
Interest
|
|
Yield/
Rate
|
|
Average
Balance
|
|
Interest
|
|
Yield/
Rate
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loan portfolio
(1)
:
|
|||||||||||||||||||||
Residential real estate
(2)
|
$
|
1,283,907
|
|
|
$
|
27,284
|
|
|
4.29
|
%
|
|
$
|
1,082,038
|
|
|
$
|
23,731
|
|
|
4.41
|
%
|
Commercial, financial, and agriculture
(3)
|
1,139,187
|
|
|
29,845
|
|
|
5.28
|
|
|
869,782
|
|
|
19,326
|
|
|
4.47
|
|
||||
Installment loans to individuals
(4), (5)
|
66,649
|
|
|
3,217
|
|
|
9.73
|
|
|
44,060
|
|
|
1,521
|
|
|
6.94
|
|
||||
Previously securitized loans
(6)
|
—
|
|
|
1,363
|
|
|
***
|
|
—
|
|
|
1,632
|
|
|
***
|
||||||
Total loans
|
2,489,743
|
|
|
61,709
|
|
|
5.00
|
|
|
1,995,880
|
|
|
46,210
|
|
|
4.66
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Taxable
|
338,627
|
|
|
5,382
|
|
|
3.21
|
|
|
365,233
|
|
|
7,907
|
|
|
4.35
|
|
||||
Tax-exempt
(7)
|
32,386
|
|
|
978
|
|
|
6.09
|
|
|
40,397
|
|
|
1,162
|
|
|
5.78
|
|
||||
Total securities
|
371,013
|
|
|
6,360
|
|
|
3.46
|
|
|
405,630
|
|
|
9,069
|
|
|
4.50
|
|
||||
Deposits in depository institutions
|
8,238
|
|
|
—
|
|
|
—
|
|
|
7,269
|
|
|
—
|
|
|
—
|
|
||||
Federal funds sold
|
26,320
|
|
|
21
|
|
|
0.16
|
|
|
26,793
|
|
|
23
|
|
|
0.17
|
|
||||
Total interest-earning assets
|
2,895,314
|
|
|
68,090
|
|
|
4.74
|
|
|
2,435,572
|
|
|
55,302
|
|
|
4.57
|
|
||||
Cash and due from banks
|
144,096
|
|
|
|
|
|
|
|
|
73,171
|
|
|
|
|
|
|
|
||||
Bank premises and equipment
|
81,604
|
|
|
|
|
|
|
|
|
66,841
|
|
|
|
|
|
|
|
||||
Other assets
|
260,449
|
|
|
|
|
|
|
|
|
216,033
|
|
|
|
|
|
|
|
||||
Less: allowance for loan losses
|
(19,782
|
)
|
|
|
|
|
|
|
|
(19,452
|
)
|
|
|
|
|
|
|
||||
Total assets
|
$
|
3,361,681
|
|
|
|
|
|
|
|
|
$
|
2,772,165
|
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing demand deposits
|
$
|
607,339
|
|
|
$
|
358
|
|
|
0.12
|
%
|
|
$
|
528,714
|
|
|
351
|
|
|
0.13
|
%
|
|
Savings deposits
|
593,880
|
|
|
430
|
|
|
0.15
|
|
|
461,705
|
|
|
372
|
|
|
0.16
|
|
||||
Time deposits
(8)
|
1,111,696
|
|
|
5,634
|
|
|
1.02
|
|
|
892,516
|
|
|
6,328
|
|
|
1.43
|
|
||||
Short-term borrowings
|
118,838
|
|
|
149
|
|
|
0.25
|
|
|
117,685
|
|
|
150
|
|
|
0.26
|
|
||||
Long-term debt
|
16,495
|
|
|
309
|
|
|
3.78
|
|
|
16,495
|
|
|
333
|
|
|
4.06
|
|
||||
Total interest-bearing liabilities
|
2,448,248
|
|
|
6,880
|
|
|
0.57
|
|
|
2,017,115
|
|
|
7,534
|
|
|
0.75
|
|
||||
Noninterest-bearing demand deposits
|
508,865
|
|
|
|
|
|
|
|
|
403,305
|
|
|
|
|
|
|
|
||||
Other liabilities
|
40,142
|
|
|
|
|
|
|
|
|
32,676
|
|
|
|
|
|
|
|
||||
Stockholders’ equity
|
364,426
|
|
|
|
|
|
|
|
|
319,069
|
|
|
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
3,361,681
|
|
|
|
|
|
|
|
|
$
|
2,772,165
|
|
|
|
|
|
|
|
||
Net interest income
|
|
|
|
$
|
61,210
|
|
|
|
|
|
|
|
|
$
|
47,768
|
|
|
|
|
||
Net yield on earning assets
|
|
|
|
|
|
|
4.26
|
%
|
|
|
|
|
|
|
|
3.94
|
%
|
(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)
|
For the six months ended June 30, 2013, interest income on residential real estate loans includes $0.5 million and $0.2 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
(3)
|
For the six months ended June 30, 2013, interest income on commercial, financial and agriculture loans includes $1.7 million and $1.9 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
(4)
|
Includes the Company’s consumer and DDA overdrafts loan categories.
|
(5)
|
For the six months ended June 30, 2013, interest income on installment loans includes $0.1 million and $0.6 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
(6)
|
Effective January 1, 2012, there is no carrying value of the Company’s previously securitized loans.
|
(7)
|
Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
|
(8)
|
For the six months ended June 30, 2013, interest expense on time deposits includes $0.3 million and $0.3 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
|
Six months ended June 30, 2013 vs. 2012
|
||||||||||
Interest-earning assets:
|
Increase (Decrease)
Due to Change In:
|
||||||||||
Volume
|
|
Rate
|
|
Net
|
|||||||
|
|
|
|
|
|||||||
Loan portfolio
|
|||||||||||
Residential real estate
|
$
|
4,415
|
|
|
$
|
(862
|
)
|
|
$
|
3,553
|
|
Commercial, financial, and agriculture
|
5,969
|
|
|
4,550
|
|
|
10,519
|
|
|||
Installment loans to individuals
|
778
|
|
|
918
|
|
|
1,696
|
|
|||
Previously securitized loans
|
—
|
|
|
(269
|
)
|
|
(269
|
)
|
|||
Total loans
|
11,162
|
|
|
4,337
|
|
|
15,499
|
|
|||
Securities:
|
|
|
|
|
|
|
|
|
|||
Taxable
|
(574
|
)
|
|
(1,951
|
)
|
|
(2,525
|
)
|
|||
Tax-exempt
(1)
|
(230
|
)
|
|
46
|
|
|
(184
|
)
|
|||
Total securities
|
(804
|
)
|
|
(1,905
|
)
|
|
(2,709
|
)
|
|||
Federal funds sold
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Total interest-earning assets
|
$
|
10,358
|
|
|
$
|
2,430
|
|
|
$
|
12,788
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|||
Interest-bearing demand deposits
|
$
|
52
|
|
|
$
|
(45
|
)
|
|
$
|
7
|
|
Savings deposits
|
106
|
|
|
(48
|
)
|
|
58
|
|
|||
Time deposits
|
1,550
|
|
|
(2,244
|
)
|
|
(694
|
)
|
|||
Short-term borrowings
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Long-term debt
|
—
|
|
|
(24
|
)
|
|
(24
|
)
|
|||
Total interest-bearing liabilities
|
$
|
1,709
|
|
|
$
|
(2,363
|
)
|
|
$
|
(654
|
)
|
Net Interest Income
|
$
|
8,649
|
|
|
$
|
4,793
|
|
|
$
|
13,442
|
|
(1)
|
Fully federal taxable equivalent using a tax rate of approximately 35%.
|
Assets
|
Three months ended June 30,
|
||||||||||||||||||||
2013
|
|
2012
|
|||||||||||||||||||
Average
Balance
|
|
Interest
|
|
Yield/
Rate
|
|
Average
Balance
|
|
Interest
|
|
Yield/
Rate
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loan portfolio
(1)
:
|
|||||||||||||||||||||
Residential real estate
(2)
|
$
|
1,290,188
|
|
|
$
|
13,564
|
|
|
4.22
|
%
|
|
$
|
1,096,164
|
|
|
$
|
11,904
|
|
|
4.37
|
%
|
Commercial, financial, and agriculture
(3)
|
1,156,269
|
|
|
15,654
|
|
|
5.43
|
|
|
876,678
|
|
|
9,742
|
|
|
4.47
|
|
||||
Installment loans to individuals
(4),(5)
|
67,426
|
|
|
1,839
|
|
|
10.94
|
|
|
46,439
|
|
|
751
|
|
|
6.50
|
|
||||
Previously securitized loans
(6)
|
—
|
|
|
714
|
|
|
***
|
|
—
|
|
|
746
|
|
|
***
|
||||||
Total loans
|
2,513,883
|
|
|
31,771
|
|
|
5.07
|
|
|
2,019,281
|
|
|
23,143
|
|
|
4.61
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Taxable
|
327,252
|
|
|
2,632
|
|
|
3.23
|
|
|
378,656
|
|
|
3,943
|
|
|
4.19
|
|
||||
Tax-exempt
(7)
|
31,789
|
|
|
479
|
|
|
6.04
|
|
|
39,678
|
|
|
566
|
|
|
5.74
|
|
||||
Total securities
|
359,041
|
|
|
3,111
|
|
|
3.48
|
|
|
418,334
|
|
|
4,509
|
|
|
4.34
|
|
||||
Deposits in depository institutions
|
7,451
|
|
|
—
|
|
|
—
|
|
|
6,951
|
|
|
—
|
|
|
—
|
|
||||
Federal funds sold
|
22,747
|
|
|
9
|
|
|
0.16
|
|
|
26,124
|
|
|
12
|
|
|
0.20
|
|
||||
Total interest-earning assets
|
2,903,122
|
|
|
34,891
|
|
|
4.82
|
|
|
2,470,690
|
|
|
27,664
|
|
|
4.50
|
|
||||
Cash and due from banks
|
175,837
|
|
|
|
|
|
|
|
|
70,858
|
|
|
|
|
|
|
|
||||
Bank premises and equipment
|
82,243
|
|
|
|
|
|
|
|
|
68,936
|
|
|
|
|
|
|
|
||||
Other assets
|
261,552
|
|
|
|
|
|
|
|
|
215,692
|
|
|
|
|
|
|
|
||||
Less: allowance for loan losses
|
(20,089
|
)
|
|
|
|
|
|
|
|
(19,179
|
)
|
|
|
|
|
|
|
||||
Total assets
|
$
|
3,402,665
|
|
|
|
|
|
|
|
|
$
|
2,806,997
|
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest-bearing demand deposits
|
$
|
611,334
|
|
|
$
|
179
|
|
|
0.12
|
%
|
|
$
|
533,666
|
|
|
$
|
173
|
|
|
0.13
|
%
|
Savings deposits
|
603,604
|
|
|
216
|
|
|
0.14
|
|
|
474,976
|
|
|
184
|
|
|
0.16
|
|
||||
Time deposits
(8)
|
1,116,358
|
|
|
2,800
|
|
|
1.01
|
|
|
895,921
|
|
|
3,026
|
|
|
1.36
|
|
||||
Short-term borrowings
|
125,729
|
|
|
79
|
|
|
0.25
|
|
|
121,424
|
|
|
77
|
|
|
0.26
|
|
||||
Long-term debt
|
16,495
|
|
|
153
|
|
|
3.72
|
|
|
16,495
|
|
|
165
|
|
|
4.02
|
|
||||
Total interest-bearing liabilities
|
2,473,520
|
|
|
3,427
|
|
|
0.56
|
|
|
2,042,482
|
|
|
3,625
|
|
|
0.71
|
|
||||
Noninterest-bearing demand deposits
|
519,212
|
|
|
|
|
|
|
|
|
413,709
|
|
|
|
|
|
|
|
||||
Other liabilities
|
37,698
|
|
|
|
|
|
|
|
|
28,921
|
|
|
|
|
|
|
|
||||
Stockholders’ equity
|
372,235
|
|
|
|
|
|
|
|
|
321,885
|
|
|
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
3,402,665
|
|
|
|
|
|
|
|
|
$
|
2,806,997
|
|
|
|
|
|
|
|
||
Net interest income
|
|
|
|
$
|
31,464
|
|
|
|
|
|
|
|
|
$
|
24,039
|
|
|
|
|
||
Net yield on earning assets
|
|
|
|
|
|
|
4.35
|
%
|
|
|
|
|
|
|
|
3.91
|
%
|
(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)
|
For the three months ended June 30, 2013, interest income on residential real estate loans includes $0.2 million and $0.1 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
(3)
|
For the three months ended June 30, 2013, interest income on commercial, financial and agriculture loans includes $1.0 million and $1.3 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
(4)
|
Includes the Company’s consumer and DDA overdrafts loan categories.
|
(5)
|
For the three months ended June 30, 2013, interest income on installment loans includes $0.1 million and $0.5 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
(6)
|
Effective January 1, 2012, there is no carrying value of the Company’s previously securitized loans.
|
(7)
|
Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
|
(8)
|
For the three months ended June 30, 2013, interest expense on time deposits includes $0.1 million and $0.2 million of accretion related to the fair value market adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively.
|
|
Three months ended June 30, 2013 vs. 2012
|
||||||||||
Interest-earning assets:
|
Increase (Decrease)
Due to Change In:
|
||||||||||
Volume
|
|
Rate
|
|
Net
|
|||||||
|
|
|
|
|
|||||||
Loan portfolio
|
|||||||||||
Residential real estate
|
$
|
2,113
|
|
|
$
|
(453
|
)
|
|
$
|
1,660
|
|
Commercial, financial, and agriculture
|
3,115
|
|
|
2,797
|
|
|
5,912
|
|
|||
Installment loans to individual
|
340
|
|
|
748
|
|
|
1,088
|
|
|||
Previously securitized loans
|
—
|
|
|
(32
|
)
|
|
(32
|
)
|
|||
Total loans
|
5,568
|
|
|
3,060
|
|
|
8,628
|
|
|||
Securities:
|
|
|
|
|
|
|
|
|
|||
Taxable
|
(537
|
)
|
|
(774
|
)
|
|
(1,311
|
)
|
|||
Tax-exempt
(1)
|
(113
|
)
|
|
26
|
|
|
(87
|
)
|
|||
Total securities
|
(650
|
)
|
|
(748
|
)
|
|
(1,398
|
)
|
|||
Federal funds sold
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Total interest-earning assets
|
$
|
4,916
|
|
|
$
|
2,311
|
|
|
$
|
7,227
|
|
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|||
Interest-bearing demand deposits
|
$
|
25
|
|
|
$
|
(19
|
)
|
|
$
|
6
|
|
Savings deposits
|
50
|
|
|
(18
|
)
|
|
32
|
|
|||
Time deposits
|
747
|
|
|
(973
|
)
|
|
(226
|
)
|
|||
Short-term borrowings
|
3
|
|
|
(1
|
)
|
|
2
|
|
|||
Long-term debt
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|||
Total interest-bearing liabilities
|
$
|
825
|
|
|
$
|
(1,023
|
)
|
|
$
|
(198
|
)
|
Net Interest Income
|
$
|
4,091
|
|
|
$
|
3,334
|
|
|
$
|
7,425
|
|
(1)
|
Fully federal taxable equivalent using a tax rate of approximately 35%.
|
|
June 30, 2013
|
|
December 31, 2012
|
|
June 30, 2012
|
||||||
Residential real estate
|
$
|
1,170,123
|
|
|
$
|
1,031,435
|
|
|
$
|
997,016
|
|
Home equity – junior liens
|
138,367
|
|
|
143,110
|
|
|
143,400
|
|
|||
Commercial and industrial
|
138,299
|
|
|
108,739
|
|
|
116,288
|
|
|||
Commercial real estate
|
1,023,311
|
|
|
821,970
|
|
|
768,176
|
|
|||
Consumer
|
54,242
|
|
|
36,564
|
|
|
37,383
|
|
|||
DDA overdrafts
|
3,103
|
|
|
4,551
|
|
|
3,326
|
|
|||
Total loans
|
$
|
2,527,445
|
|
|
$
|
2,146,369
|
|
|
$
|
2,065,589
|
|
|
Six months ended June 30,
|
|
Year ended
December 31,
|
||||||||
2013
|
|
2012
|
|
2012
|
|||||||
Balance at beginning of period
|
$
|
18,809
|
|
|
$
|
19,409
|
|
|
$
|
19,409
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|||
Commercial and industrial
|
392
|
|
|
117
|
|
|
226
|
|
|||
Commercial real estate
|
622
|
|
|
2,015
|
|
|
4,604
|
|
|||
Residential real estate
|
1,111
|
|
|
494
|
|
|
1,030
|
|
|||
Home equity
|
270
|
|
|
856
|
|
|
1,355
|
|
|||
Consumer
|
224
|
|
|
95
|
|
|
190
|
|
|||
DDA overdrafts
|
687
|
|
|
710
|
|
|
1,522
|
|
|||
Total charge-offs
|
3,306
|
|
|
4,287
|
|
|
8,927
|
|
|||
Recoveries:
|
|
|
|
|
|
|
|
|
|||
Commercial and industrial
|
21
|
|
|
2
|
|
|
32
|
|
|||
Commercial real estate
|
34
|
|
|
97
|
|
|
289
|
|
|||
Residential real estate
|
68
|
|
|
7
|
|
|
22
|
|
|||
Home equity
|
—
|
|
|
11
|
|
|
18
|
|
|||
Consumer
|
217
|
|
|
64
|
|
|
135
|
|
|||
DDA overdrafts
|
477
|
|
|
524
|
|
|
1,456
|
|
|||
Total recoveries
|
817
|
|
|
705
|
|
|
1,952
|
|
|||
Net charge-offs
|
2,489
|
|
|
3,582
|
|
|
6,975
|
|
|||
Provision for acquired loans
|
177
|
|
|
—
|
|
|
—
|
|
|||
Provision for loan losses
|
3,572
|
|
|
3,625
|
|
|
6,375
|
|
|||
Balance at end of period
|
$
|
20,069
|
|
|
$
|
19,452
|
|
|
$
|
18,809
|
|
As a Percent of Average Total Loans:
|
|
|
|
|
|
|
|
|
|||
Net charge-offs (annualized)
|
0.20
|
%
|
|
0.36
|
%
|
|
0.34
|
%
|
|||
Provision for loan losses (annualized)
|
0.30
|
%
|
|
0.36
|
%
|
|
0.31
|
%
|
|||
As a Percent of Non-Performing Loans:
|
|
|
|
|
|
|
|
|
|||
Allowance for loan losses
|
119.63
|
%
|
|
88.92
|
%
|
|
96.59
|
%
|
|
As of June 30,
|
|
December 31,
|
||||||||
2013
|
|
2012
|
|
2012
|
|||||||
Non-accrual loans
|
$
|
15,706
|
|
|
$
|
21,726
|
|
|
$
|
19,194
|
|
Accruing loans past due 90 days or more
|
1,070
|
|
|
149
|
|
|
280
|
|
|||
Total non-performing loans
|
16,776
|
|
|
21,875
|
|
|
19,474
|
|
|
As of June 30,
|
|
As of December 31,
|
||||||||
2013
|
|
2012
|
|
2012
|
|||||||
Impaired loans with a valuation allowance
|
$
|
3,085
|
|
|
$
|
19,084
|
|
|
$
|
—
|
|
Impaired loans with no valuation allowance
|
10,181
|
|
|
2,791
|
|
|
10,679
|
|
|||
Total impaired loans
|
$
|
13,266
|
|
|
$
|
21,875
|
|
|
$
|
10,679
|
|
Allowance for loan losses allocated to impaired loans
|
$
|
750
|
|
|
$
|
2,349
|
|
|
$
|
—
|
|
|
As of June 30,
|
|
As of December 31,
|
||||||||
2013
|
|
2012
|
|
2012
|
|||||||
Commercial and industrial
|
$
|
1,066
|
|
|
$
|
585
|
|
|
$
|
498
|
|
Commercial real estate
|
10,494
|
|
|
11,089
|
|
|
10,440
|
|
|||
Residential real estate
|
5,978
|
|
|
3,824
|
|
|
5,229
|
|
|||
Home equity
|
1,651
|
|
|
2,937
|
|
|
1,699
|
|
|||
Consumer
|
81
|
|
|
228
|
|
|
81
|
|
|||
DDA overdrafts
|
799
|
|
|
789
|
|
|
862
|
|
|||
Allowance for Loan Losses
|
$
|
20,069
|
|
|
$
|
19,452
|
|
|
$
|
18,809
|
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Net investment security gains
|
$
|
0.1
|
|
|
$
|
0.5
|
|
|
$
|
(0.4
|
)
|
|
(80.0
|
)%
|
Non-interest income
|
28.5
|
|
|
26.4
|
|
|
2.1
|
|
|
8.0
|
%
|
|||
Non-interest expense
|
53.4
|
|
|
44.3
|
|
|
9.1
|
|
|
20.5
|
%
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Net investment security gains
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
(0.5
|
)
|
|
(100.0
|
)%
|
Non-interest income
|
14.2
|
|
|
13.3
|
|
|
0.9
|
|
|
6.8
|
%
|
|||
Non-interest expense
|
24.0
|
|
|
24.8
|
|
|
(0.8
|
)
|
|
(3.2
|
)%
|
Immediate Basis Point Change in Interest Rates
|
|
Implied Federal Funds Rate Associated with Change in Interest Rates
|
|
Estimated Increase (Decrease) in Net Income Over 12 Months
|
|
Estimated Increase (Decrease) in Economic Value of Equity
|
||||
June 30, 2013
|
|
|
|
|
|
|
||||
+400
|
|
|
4.25
|
%
|
|
+2.9
|
%
|
|
+3.5
|
%
|
+300
|
|
|
3.25
|
|
|
+3.8
|
|
|
+5.8
|
|
+200
|
|
|
2.25
|
|
|
+2.8
|
|
|
+5.2
|
|
+100
|
|
|
1.25
|
|
|
+0.2
|
|
|
+2.4
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
+400
|
|
|
4.25
|
%
|
|
+4.2
|
%
|
|
+4.8
|
%
|
+300
|
|
|
3.25
|
|
|
+3.8
|
|
|
+5.4
|
|
+200
|
|
|
2.25
|
|
|
+2.5
|
|
|
+3.9
|
|
+100
|
|
|
1.25
|
|
|
(0.3
|
)
|
|
+1.6
|
|
City Holding:
|
Minimum
|
|
Well-
Capitalized
|
|
Actual
|
||||||
|
June 30, 2013
|
|
December 31, 2012
|
||||||||
|
|
|
|
|
|
|
|||||
Total
|
8.0
|
%
|
|
10.0
|
%
|
|
13.2
|
%
|
|
13.9
|
%
|
Tier I Risk-based
|
4.0
|
|
|
6.0
|
|
|
12.3
|
|
|
13.0
|
|
Tier I Leverage
|
4.0
|
|
|
5.0
|
|
|
9.1
|
|
|
9.8
|
|
City National Bank:
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
8.0
|
%
|
|
10.0
|
%
|
|
12.8
|
%
|
|
12.4
|
%
|
Tier I Risk-based
|
4.0
|
|
|
6.0
|
|
|
11.9
|
|
|
11.5
|
|
Tier I Leverage
|
4.0
|
|
|
5.0
|
|
|
8.8
|
|
|
8.7
|
|
Item 3 -
|
Quantitative and Qualitative Disclosure About Market Risk
|
Item 4 -
|
Controls and Procedures
|
Part II -
|
OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3.
|
Defaults Upon Senior Securities.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits
|
|
City Holding Company
|
|
|
(Registrant)
|
|
|
|
|
|
/s/ Charles R. Hageboeck
|
|
|
Charles R. Hageboeck
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ David L. Bumgarner
|
|
|
David L. Bumgarner
|
|
|
Senior Vice President, Chief Financial Officer and Principal Accounting Officer
|
|
|
(Principal Financial Officer)
|
1 Year City Chart |
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