For Immediate Release
April 25, 2008
For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102
City Holding Company Announces Record Quarterly Earnings Per Share
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $2.5 billion bank holding company headquartered in Charleston, today announced record net income per diluted share for the first quarter of $0.80 compared to $0.76 per diluted share in the first quarter of 2007, or a 5.3% increase. Net income for the first quarter of 2008 was $13.0 million, a decrease of 1.5% from $13.2 million in the first quarter of 2007. For the first quarter of 2008, the Company achieved a return on assets of 2.09%, a return on tangible equity of 21.6%, a net interest margin of 4.40%, and an efficiency ratio of 48.2%. This compares with a return on assets of 2.10%, a return on equity of 21.2%, a net interest margin of 4.41%, and an efficiency ratio of 44.9% for the comparable period of 2007.
As previously announced during the first quarter of 2008, the Company recognized a $3.3 million gain as a result of the partial redemption of its equity interest in Visa, Inc. (“Visa”). In addition, the Company incurred charges of $1.2 million for the early redemption of all of the Company’s outstanding 9.15% trust preferred securities in the amount of $16.0 million.
Net Interest Income
The Company’s tax equivalent net interest income decreased $0.6 million, or 2.2%, from $24.7 million during the first quarter of 2007 to $24.1 million during the first quarter of 2008. This decrease is primarily attributable to two factors. First, the Company experienced a decrease of $0.2 million in interest income from previously securitized loans in the first quarter of 2008 as compared to the first quarter of 2007 as the average balance of these loans decreased 55.3%. The decrease in average balances was partially mitigated by an increase in the yield on these loans from 49.5% for the first quarter of 2007 and 93.2% for the fourth quarter of 2007 to 98.8% for the first quarter of 2008 (see Previously Securitized Loans). The remaining decrease in net interest income of $0.4 million occurred as interest income from loans (excluding Previously Securitized loans) and investments decreased more quickly than the interest expense on deposits and other interest-bearing liabilities. The Company’s net interest margin was 4.40% in the first quarter of 2008 as compared to 4.41% in the first quarter of 2007. Excluding the previously securitized loans, the Company’s net interest margin decreased 3 basis points from 4.18% during the first quarter of 2007 to 4.15% for the first quarter of 2008.
Credit Quality
At March 31, 2008, the Allowance for Loan Losses (“ALLL”) was $18.6 million or 1.09% of total loans outstanding and 114% of non-performing loans compared to $16.1 million or 0.95% of loans outstanding and 236% of non-performing loans at March 31, 2007, and $17.6 million or 1.00% of loans outstanding and 103% of non-performing loans at December 31, 2007.
As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.6 million in the first quarter of 2008 compared to $0.9 million for the comparable period in 2007 and $1.65 million in the fourth quarter of 2007. The provision for loan losses recorded during the first quarter of 2008 reflects the difficulties of certain commercial borrowers of the Company during the quarter, the downgrade of their related credits, and management’s assessment of the impact of these difficulties on the ultimate collectability of the loans. Changes in the amount of the provision and related allowance are based on the Company’s detailed methodology and are directionally consistent with growth and changes in the composition and quality of the Company’s loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.
The Company’s ratio of non-performing assets to total loans and other real estate owned increased slightly from 1.20% at December 31, 2007 to 1.21% at March 31, 2008. Based on our analysis, the Company believes that the reserves allocated to the substandard and nonperforming loans after considering the value of the collateral securing such loans are adequate to cover losses that may result from these loans. The Company’s ratio of non-performing assets to total loans and other real estate owned is 26 basis points lower than that of our peer group (bank holding companies with total assets between $1 and $5 billion), which reported average non-performing assets as a percentage of loans and other real estate owned of 1.47% for the most recently reported quarter ended December 31, 2007.
The Company had net charge-offs of $0.6 million for the first quarter of 2008. Net charge-offs on commercial and residential loans were $0.4 and $0.2 million, respectively, for the first quarter. Charge-offs for commercial loans were primarily related to a specific credit that had been appropriately considered in establishing the allowance for loans losses in prior periods.
Non-interest Income
During the first quarter of 2008, the Company recognized a $3.3 million gain in connection with Visa’s successful initial public offering (“IPO”) completed in March 2008. The Company received approximately $2.3 million on the partial redemption of its equity interest in Visa. The Company’s remaining Class B shares will be converted to Class A shares on the third anniversary of Visa’s IPO or upon Visa’s settlement of certain litigation matters, whichever is later. The unconverted Class B shares are not reflected in the Company’s balance sheet at March 31, 2008 as the Company has no historical basis in these shares. Visa also escrowed a portion of the proceeds from the IPO to satisfy approximately $1.0 million of liabilities
that represented the Company’s proportionate share of legal judgments and settlements related to Visa litigation with American Express and Discover Financial Services.
Exclusive of investment gains, the gain from the Visa IPO, and the gain from the sale of the Company’s merchant credit card portfolio in the first quarter of 2007, non-interest income increased $0.8 million to $13.7 million in the first quarter of 2008 as compared to $12.9 million in the first quarter of 2007. The largest source of non-interest income is service charges from depository accounts, which increased $0.9 million, or 9.2%, from $10.1 million during the first quarter of 2007 to $11.0 million during the first quarter of 2008.
Non-interest Expenses
During the first quarter of 2008, the Company fully redeemed $16.0 million of 9.15% trust preferred securities that had been issued in 1998. As a result of this redemption, the Company incurred charges of $1.2 million to fully amortize issuance costs incurred in 1998 and for the early redemption premium. Excluding the loss on the early redemption of the trust preferred securities, non-interest expenses increased $1.1 million from $17.6 million in the first quarter of 2007 to $18.7 million in the first quarter of 2008. Salaries and employee benefits increased $0.3 million, or 3.4%, from the first quarter of 2007 due in part to additional staffing for new retail locations. Other expenses also include increased charitable contributions of approximately $0.5 million. The Company anticipates charitable contributions of up to an additional $0.5 million during the remainder of 2008. This increase in charitable contributions for 2008 reflects the Company’s exceptionally strong financial performance between 2002 and 2007. This special charitable giving for 2008, which is above normal levels, is given in appreciation of our employees who have led City to the pinnacle of financial performance during that period and our loyal customers throughout each community in which we operate.
Balance Sheet Trends
As compared to December 31, 2007, loans have decreased $62.2 million (3.5%) at March 31, 2008 due to decreases in loans to depository institutions of $60.0 million (100.0%), commercial loans of $8.3 million (1.2%), installment loans of $2.7 million (5.6%), and previously securitized loans of $0.9 million (12.6%). These decreases were partially offset by increases in home equity loans of $6.2 million (1.8%) and residential real estate loans of $3.5 million (0.6%).
Total average depository balances increased $36.5 million, or 1.8%, from the quarter ended December 31, 2007 to the quarter ended March 31, 2008. This growth was primarily in savings and time deposits, which have increased $13.6 million and $11.9 million, respectively.
During the first quarter of 2008, the Company completed a private placement of $16.0 million trust preferred securities through its City Holding Capital Trust III subsidiary. Distributions on the Trust Preferred Securities are cumulative and will be payable quarterly at an interest rate of 3.50% over the three-month LIBOR Rate, reset quarterly.
Interest payments are due in March, June, September, and December. The securities mature in 30 years and are redeemable at par by the Company after five years. The proceeds of the capital securities were used to fund the redemption of all the Company's outstanding 9.15% trust preferred securities in the amount of $16.0 million during the first quarter.
Income Tax Expense
The Company’s effective income tax rate for the first quarter of 2008 was 33.0% compared to 33.6% for the year ended December 31 2007 and 34.8% for the quarter ended March 31, 2007. The effective rate is based upon the Company’s expected tax rate for the year ending December 31, 2008.
Previously Securitized Loans
At March 31, 2008, the Company reported “Previously Securitized Loans” of $6.0 million compared to $6.9 million at December 31, 2007 and $12.7 million at March 31, 2007, respectively, representing a decrease of 12.6% and 52.7%, respectively. The yield on the previously securitized loans was 98.8% for the quarter ended March 31, 2008, compared to 93.2% for the quarter ended December 31, 2007, and 49.5% for the quarter ended March 31, 2007. The yield on the previously securitized loans has increased due to improved cash flows as net default rates have been less than previously estimated. The default rates have decreased as a result of the Company’s assumption of the servicing of all of the pool balances during the second quarter of 2005. Subsequent to our assumption of the servicing of these loans, the Company has averaged net recoveries, but does not believe that continued net recoveries can be sustained indefinitely.
Capitalization and Liquidity
One of the Company’s strengths is that it is highly profitable while maintaining strong liquidity and capital. With respect to liquidity, the Company’s loan to deposit ratio was 84.5% and the loan to asset ratio was 67.5% at March 31, 2008. The Company maintained investment securities totaling 19.7% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 43.3% of assets at March 31, 2008. Time deposits fund 36.7% of assets at March 31, 2008, but very few of these deposits are in accounts that have balances of more than $150,000, reflecting the core retail orientation of the Company.
The Company is also strongly capitalized. With respect to regulatory capital, at March 31, 2008, the Company’s Leverage Ratio is 10.47%, the Tier I Capital ratio is 13.96%, and the Total Risk-Based Capital ratio is 14.97%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On February 27, 2008 the Board approved a 10% increase in the quarterly cash dividend to 34 cents per share payable April 30, 2008 to shareholders of record as of April 15, 2008. During the quarter ended March 31, 2008, the Company repurchased 104,960 common shares at a weighted average price of $35.37 as part of a one million share repurchase plan authorized by the Board of Directors in August 2007. The Company’s tangible equity ratio was 10.0% at March 31, 2008 compared with a tangible equity ratio of 9.7% at December 31,
2007.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 69 branches across West Virginia, Eastern Kentucky and Southern Ohio.
Forward-Looking Information
This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company's actual results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may incur increased charge-offs in the future; (3) the Company may experience increases in the default rates on previously securitized loans that would result in impairment losses or lower the yield on such loans; (4) the Company may continue to benefit from strong recovery efforts on previously securitized loans resulting in improved yields on these assets; (5) the Company could have adverse legal actions of a material nature; (6) the Company may face competitive loss of customers; (7) the Company may be unable to manage its expense levels; (8) the Company may have difficulty retaining key employees; (9) changes in the interest rate environment may have results on the Company’s operations materially different from those anticipated by the Company’s market risk management functions; (10) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (11) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company’s operating results; and (12) the Company may experience difficulties growing loan and deposit balances. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.
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| Financial Highlights | | | | | | | | | |
| (Unaudited) | | | | | | | | | |
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| | | Three Months Ended March 31, | | | Percent | |
| | | 2008 | | | 2007 | | | Change | |
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| Earnings ($000s, except per share data): | | | | | | | | | |
| Net Interest Income (FTE) | | $ | 24,133 | | | $ | 24,671 | | | | (2.18 | )% |
| Net Income | | | 13,038 | | | | 13,231 | | | | (1.46 | )% |
| Earnings per Basic Share | | | 0.81 | | | | 0.76 | | | | 6.58 | % |
| Earnings per Diluted Share | | | 0.80 | | | | 0.76 | | | | 5.26 | % |
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| Key Ratios (percent): | | | | | | | | | | | | |
| Return on Average Assets | | | 2.09 | % | | | 2.10 | % | | | (0.54 | )% |
| Return on Average Tangible Equity | | | 21.55 | % | | | 21.15 | % | | | 1.92 | % |
| Net Interest Margin | | | 4.40 | % | | | 4.41 | % | | | (0.21 | )% |
| Efficiency Ratio | | | 48.17 | % | | | 44.93 | % | | | 7.21 | % |
| Average Shareholders' Equity to Average Assets | | | 12.03 | % | | | 12.27 | % | | | (1.99 | )% |
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| Consolidated Risk Based Capital Ratios (a): | | | | | | | | | | | | |
| Tier I | | | 13.96 | % | | | 15.31 | % | | | (8.82 | )% |
| Total | | | 14.97 | % | | | 16.25 | % | | | (7.88 | )% |
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| Tangible Equity to Tangible Assets | | | 10.00 | % | | | 9.79 | % | | | 2.23 | % |
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| Common Stock Data: | | | | | | | | | | | | |
| Cash Dividends Declared per Share | | $ | 0.34 | | | $ | 0.31 | | | | 9.68 | % |
| Book Value per Share | | | 18.92 | | | | 17.62 | | | | 7.40 | % |
| Tangible Book Value per Share | | | 15.32 | | | | 14.21 | | | | 7.79 | % |
| Market Value per Share: | | | | | | | | | | | | |
| High | | | 41.37 | | | | 41.54 | | | | (0.41 | )% |
| Low | | | 32.51 | | | | 38.04 | | | | (14.54 | )% |
| End of Period | | | 39.90 | | | | 40.45 | | | | (1.36 | )% |
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| Price/Earnings Ratio (b) | | | 12.31 | | | | 13.31 | | | | (7.45 | )% |
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| (a) March 31, 2008 risk-based capital ratios are estimated | | | | | | | | | |
| (b) March 31, 2008 price/earnings ratio computed based on annualized first quarter 2008 earnings | | | | | |
| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | |
| Financial Highlights | | | | | | | | | | | | | | | | |
| (Unaudited) | | | | | | | | | | | | | | | | | | |
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| Book Value and Market Price Range per Share | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Market Price | |
| | | Book Value per Share | | | Range per Share | |
| | | March 31 | | | June 30 | | | September 30 | | | December 31 | | | Low | | | High | |
| | | | | | | | | | | | | | | | | | | |
| 2004 | | $ | 12.09 | | | $ | 11.89 | | | $ | 12.70 | | | $ | 13.03 | | | $ | 27.30 | | | $ | 37.58 | |
| 2005 | | | 13.20 | | | | 15.56 | | | | 15.99 | | | | 16.14 | | | | 27.57 | | | | 39.21 | |
| 2006 | | | 16.17 | | | | 16.17 | | | | 16.99 | | | | 17.46 | | | | 34.53 | | | | 41.87 | |
| 2007 | | | 17.62 | | | | 17.40 | | | | 17.68 | | | | 18.14 | | | | 31.16 | | | | 41.54 | |
| 2008 | | | 18.92 | | | | | | | | | | | | | | | | 32.51 | | | | 41.37 | |
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| Earnings per Basic Share | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | |
| | | March 31 | | | June 30 | | | September 30 | | | December 31 | | | Year-to-Date | | | | | |
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| 2004 | | $ | 0.66 | | | $ | 0.80 | | | $ | 0.66 | | | $ | 0.67 | | | $ | 2.79 | | | | | |
| 2005 | | | 0.70 | | | | 0.72 | | | | 0.73 | | | | 0.72 | | | | 2.87 | | | | | |
| 2006 | | | 0.71 | | | | 0.78 | | | | 0.78 | | | | 0.74 | | | | 3.00 | | | | | |
| 2007 | | | 0.76 | | | | 0.72 | | | | 0.76 | | | | 0.78 | | | | 3.02 | | | | | |
| 2008 | | | 0.81 | | | | | | | | | | | | | | | | 0.81 | | | | | |
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| Earnings per Diluted Share | | | | | | | | | | | | | | | | | | | | | |
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| | | Quarter Ended | | | | | |
| | | March 31 | | | June 30 | | | September 30 | | | December 31 | | | Year-to-Date | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| 2004 | | $ | 0.65 | | | $ | 0.79 | | | $ | 0.65 | | | $ | 0.66 | | | $ | 2.75 | | | | | |
| 2005 | | | 0.69 | | | | 0.71 | | | | 0.72 | | | | 0.72 | | | | 2.84 | | | | | |
| 2006 | | | 0.71 | | | | 0.77 | | | | 0.77 | | | | 0.74 | | | | 2.99 | | | | | |
| 2007 | | | 0.76 | | | | 0.72 | | | | 0.76 | | | | 0.78 | | | | 3.01 | | | | | |
| 2008 | | | 0.80 | | | | | | | | | | | | | | | | 0.80 | | | | | |
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| Consolidated Statements of Income | | | | | | |
| (Unaudited) ($ in 000s, except per share data) | | | | | | |
| | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2008 | | | 2007 | |
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| Interest Income | | | | | | |
| Interest and fees on loans | | $ | 30,992 | | | $ | 31,464 | |
| Interest on investment securities: | | | | | | | | |
| Taxable | | | 6,064 | | | | 6,933 | |
| Tax-exempt | | | 399 | | | | 427 | |
| Interest on deposits in depository institutions | | | 65 | | | | 117 | |
| Interest on federal funds sold | | | - | | | | 257 | |
| Total Interest Income | | | 37,520 | | | | 39,198 | |
| | | | | | | | | |
| Interest Expense | | | | | | | | |
| Interest on deposits | | | 12,015 | | | | 12,712 | |
| Interest on short-term borrowings | | | 1,145 | | | | 1,513 | |
| Interest on long-term debt | | | 441 | | | | 531 | |
| Total Interest Expense | | | 13,601 | | | | 14,756 | |
| Net Interest Income | | | 23,919 | | | | 24,442 | |
| Provision for loan losses | | | 1,600 | | | | 900 | |
| Net Interest Income After Provision for Loan Losses | | | 22,319 | | | | 23,542 | |
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| Non-Interest Income | | | | | | | | |
| Investment securities gains | | | 2 | | | | - | |
| Service charges | | | 10,991 | | | | 10,063 | |
| Insurance commissions | | | 1,038 | | | | 1,012 | |
| Trust and investment management fee income | | | 632 | | | | 568 | |
| Bank owned life insurance | | | 676 | | | | 696 | |
| Gain on sale of credit card merchant agreements | | | - | | | | 1,500 | |
| VISA IPO Gain | | | 3,289 | | | | - | |
| Other income | | | 407 | | | | 532 | |
| Total Non-Interest Income | | | 17,035 | | | | 14,371 | |
| | | | | | | | | |
| Non-Interest Expense | | | | | | | | |
| Salaries and employee benefits | | | 9,363 | | | | 9,057 | |
| Occupancy and equipment | | | 1,597 | | | | 1,637 | |
| Depreciation | | | 1,133 | | | | 1,070 | |
| Professional fees | | | 367 | | | | 403 | |
| Postage, delivery, and statement mailings | | | 654 | | | | 777 | |
| Advertising | | | 617 | | | | 852 | |
| Telecommunications | | | 418 | | | | 455 | |
| Bankcard expenses | | | 621 | | | | 518 | |
| Insurance and regulatory | | | 338 | | | | 385 | |
| Office supplies | | | 457 | | | | 455 | |
| Repossessed asset losses (gains), net of expenses | | | 32 | | | | (14 | ) |
| Loss on early extinguishment of debt | | | 1,208 | | | | - | |
| Other expenses | | | 3,094 | | | | 2,021 | |
| Total Non-Interest Expense | | | 19,899 | | | | 17,616 | |
| Income Before Income Taxes | | | 19,455 | | | | 20,297 | |
| Income tax expense | | | 6,417 | | | | 7,066 | |
| Net Income | | $ | 13,038 | | | $ | 13,231 | |
| | | | | | | | | |
| Basic earnings per share | | $ | 0.81 | | | $ | 0.76 | |
| Diluted earnings per share | | $ | 0.80 | | | $ | 0.76 | |
| Average Common Shares Outstanding: | | | | | | | | |
| Basic | | | 16,147 | | | | 17,369 | |
| Diluted | | | 16,205 | | | | 17,424 | |
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| Consolidated Statements of Changes in Stockholders' Equity | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | |
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| | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2008 | | | March 31, 2007 | |
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| Balance at January 1 | | $ | 293,994 | | | $ | 305,307 | |
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| Cumulative effect of adopting FIN 48 | | | - | | | | (125 | ) |
| Net income | | | 13,038 | | | | 13,231 | |
| Other comprehensive income: | | | | | | | | |
| Change in unrealized gain on securities available-for-sale | | | 1,748 | | | | 723 | |
| Change in unrealized gain on interest rate floors | | | 4,899 | | | | 122 | |
| Cash dividends declared ($0.34/share) | | | (5,476 | ) | | | - | |
| Cash dividends declared ($0.31/share) | | | - | | | | (5,342 | ) |
| Issuance of stock award shares, net | | | 273 | | | | 264 | |
| Exercise of 5,700 stock options | | | 76 | | | | - | |
| Exercise of 5,300 stock options | | | - | | | | 82 | |
| Excess tax benefits on stock compensation | | | 6 | | | | - | |
| Purchase of 104,960 common shares of treasury | | | (3,717 | ) | | | - | |
| Purchase of 274,300 common shares of treasury | | | - | | | | (10,908 | ) |
| Balance at March 31 | | $ | 304,841 | | | $ | 303,354 | |
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| Condensed Consolidated Quarterly Statements of Income | | | | | | | |
| (Unaudited) ($ in 000s, except per share data) | | | | | | | | | | |
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| | | Quarter Ended | |
| | | March 31 | | | Dec. 31 | | | Sept. 30 | | | June 30 | | | March 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | |
| Interest income | | $ | 37,520 | | | $ | 38,989 | | | $ | 39,597 | | | $ | 39,530 | | | $ | 39,198 | |
| Taxable equivalent adjustment | | | 214 | | | | 226 | | | | 224 | | | | 231 | | | | 230 | |
| Interest income (FTE) | | | 37,734 | | | | 39,215 | | | | 39,821 | | | | 39,761 | | | | 39,428 | |
| Interest expense | | | 13,601 | | | | 14,950 | | | | 15,374 | | | | 15,196 | | | | 14,756 | |
| Net interest income | | | 24,133 | | | | 24,265 | | | | 24,447 | | | | 24,565 | | | | 24,672 | |
| Provision for loan losses | | | 1,600 | | | | 1,650 | | | | 1,200 | | | | 1,600 | | | | 900 | |
| Net interest income after provision | | | | | | | | | | | | | | | | | | | | |
| for loan losses | | | 22,533 | | | | 22,615 | | | | 23,247 | | | | 22,965 | | | | 23,772 | |
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| Noninterest income | | | 17,035 | | | | 14,281 | | | | 13,814 | | | | 13,689 | | | | 14,371 | |
| Noninterest expense | | | 19,899 | | | | 17,861 | | | | 18,031 | | | | 17,525 | | | | 17,616 | |
| Income before income taxes | | | 19,669 | | | | 19,035 | | | | 19,030 | | | | 19,129 | | | | 20,527 | |
| Income tax expense | | | 6,417 | | | | 6,051 | | | | 6,092 | | | | 6,576 | | | | 7,066 | |
| Taxable equivalent adjustment | | | 214 | | | | 226 | | | | 224 | | | | 231 | | | | 230 | |
| Net income | | $ | 13,038 | | | $ | 12,758 | | | $ | 12,714 | | | $ | 12,322 | | | $ | 13,231 | |
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| Basic earnings per share | | $ | 0.81 | | | $ | 0.78 | | | $ | 0.76 | | | $ | 0.72 | | | $ | 0.76 | |
| Diluted earnings per share | | | 0.80 | | | | 0.78 | | | | 0.76 | | | | 0.72 | | | | 0.76 | |
| Cash dividends declared per share | | | 0.34 | | | | 0.31 | | | | 0.31 | | | | 0.31 | | | | 0.31 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Average Common Share (000s): | | | | | | | | | | | | | | | | | | | | |
| Outstanding | | | 16,147 | | | | 16,359 | | | | 16,714 | | | | 17,100 | | | | 17,369 | |
| Diluted | | | 16,205 | | | | 16,414 | | | | 16,767 | | | | 17,158 | | | | 17,424 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin | | | 4.40 | % | | | 4.32 | % | | | 4.32 | % | | | 4.32 | % | | | 4.41 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Non-Interest Income and Non-Interest Expense | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | |
| | | March 31 | | | Dec. 31 | | | Sept. 30 | | | June 30 | | | Mar 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | |
| Non-Interest Income: | | | | | | | | | | | | | | | |
| Service charges | | $ | 10,991 | | | $ | 11,735 | | | $ | 11,192 | | | $ | 11,426 | | | $ | 10,063 | |
| Insurance commissions | | | 1,038 | | | | 1,119 | | | | 1,127 | | | | 832 | | | | 1,012 | |
| Trust and investment management fee income | | | 632 | | | | 514 | | | | 523 | | | | 437 | | | | 568 | |
| Bank owned life insurance | | | 676 | | | | 600 | | | | 596 | | | | 585 | | | | 696 | |
| Other income | | | 407 | | | | 312 | | | | 377 | | | | 364 | | | | 532 | |
| Subtotal | | | 13,744 | | | | 14,280 | | | | 13,815 | | | | 13,644 | | | | 12,871 | |
| Investment securities gains (losses) | | | 2 | | | | 1 | | | | (1 | ) | | | 45 | | | | - | |
| VISA IPO Gain | | | 3,289 | | | | - | | | | - | | | | - | | | | - | |
| Gain on sale of credit card merchant agreements | | | - | | | | - | | | | - | | | | - | | | | 1,500 | |
| Total Non-Interest Income | | $ | 17,035 | | | $ | 14,281 | | | $ | 13,814 | | | $ | 13,689 | | | $ | 14,371 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-Interest Expense: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 9,363 | | | $ | 8,759 | | | $ | 9,307 | | | $ | 8,912 | | | $ | 9,057 | |
| Occupancy and equipment | | | 1,597 | | | | 1,604 | | | | 1,600 | | | | 1,525 | | | | 1,637 | |
| Depreciation | | | 1,133 | | | | 1,133 | | | | 1,160 | | | | 1,109 | | | | 1,070 | |
| Professional fees | | | 367 | | | | 424 | | | | 416 | | | | 385 | | | | 403 | |
| Postage, delivery, and statement mailings | | | 654 | | | | 601 | | | | 641 | | | | 569 | | | | 777 | |
| Advertising | | | 617 | | | | 590 | | | | 801 | | | | 880 | | | | 852 | |
| Telecommunications | | | 418 | | | | 456 | | | | 438 | | | | 460 | | | | 455 | |
| Bankcard expenses | | | 621 | | | | 617 | | | | 623 | | | | 597 | | | | 518 | |
| Insurance and regulatory | | | 338 | | | | 422 | | | | 364 | | | | 383 | | | | 385 | |
| Office supplies | | | 457 | | | | 469 | | | | 472 | | | | 442 | | | | 455 | |
| Repossessed asset losses (gains), net of expenses | | | 32 | | | | (105 | ) | | | (47 | ) | | | 9 | | | | (14 | ) |
| Loss on early extinguishment of debt | | | 1,208 | | | | - | | | | - | | | | - | | | | - | |
| Other expenses | | | 3,094 | | | | 2,891 | | | | 2,256 | | | | 2,254 | | | | 2,021 | |
| Total Non-Interest Expense | | $ | 19,899 | | | $ | 17,861 | | | $ | 18,031 | | | $ | 17,525 | | | $ | 17,616 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Employees (Full Time Equivalent) | | | 821 | | | | 811 | | | | 808 | | | | 807 | | | | 791 | |
| Branch Locations | | | 69 | | | | 69 | | | | 68 | | | | 68 | | | | 68 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Consolidated Balance Sheets | | | | | | |
| ($ in 000s) | | | | | | |
| | | March 31 | | | December 31 | |
| | | 2008 | | | 2007 | |
| | | (Unaudited) | | | | |
| Assets | | | | | | |
| Cash and due from banks | | $ | 65,705 | | | $ | 64,726 | |
| Interest-bearing deposits in depository institutions | | | 11,252 | | | | 9,792 | |
| Cash and cash equivalents | | | 76,957 | | | | 74,518 | |
| | | | | | | | | |
| Investment securities available-for-sale, at fair value | | | 464,215 | | | | 382,098 | |
| Investment securities held-to-maturity, at amortized cost | | | 33,748 | | | | 34,918 | |
| Total investment securities | | | 497,963 | | | | 417,016 | |
| | | | | | | | | |
| Gross loans | | | 1,704,800 | | | | 1,767,021 | |
| Allowance for loan losses | | | (18,567 | ) | | | (17,581 | ) |
| Net loans | | | 1,686,233 | | | | 1,749,440 | |
| | | | | | | | | |
| Bank owned life insurance | | | 68,143 | | | | 64,467 | |
| Premises and equipment | | | 54,144 | | | | 54,635 | |
| Accrued interest receivable | | | 10,562 | | | | 11,254 | |
| Net deferred tax assets | | | 16,019 | | | | 20,633 | |
| Intangible assets | | | 58,065 | | | | 58,238 | |
| Other assets | | | 56,842 | | | | 32,566 | |
| Total Assets | | $ | 2,524,928 | | | $ | 2,482,767 | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Deposits: | | | | | | | | |
| Noninterest-bearing | | $ | 310,646 | | | $ | 314,231 | |
| Interest-bearing: | | | | | | | | |
| Demand deposits | | | 420,328 | | | | 397,510 | |
| Savings deposits | | | 362,041 | | | | 350,607 | |
| Time deposits | | | 925,630 | | | | 927,733 | |
| Total deposits | | | 2,018,645 | | | | 1,990,081 | |
| Short-term borrowings | | | 139,378 | | | | 161,916 | |
| Long-term debt | | | 21,425 | | | | 4,973 | |
| Other liabilities | | | 40,639 | | | | 31,803 | |
| Total Liabilities | | | 2,220,087 | | | | 2,188,773 | |
| | | | | | | | | |
| Stockholders' Equity | | | | | | | | |
| Preferred stock, par value $25 per share: 500,000 shares authorized; none issued | | | - | | | | - | |
| Common stock, par value $2.50 per share: 50,000,000 shares authorized; | | | | | | | | |
| 18,499,282 shares issued at March 31, 2008 and December 31, 2007 | | | | | | | | |
| less 2,383,242 and 2,292,357 shares in treasury, respectively | | | 46,249 | | | | 46,249 | |
| Capital surplus | | | 103,276 | | | | 103,390 | |
| Retained earnings | | | 231,948 | | | | 224,386 | |
| Cost of common stock in treasury | | | (83,912 | ) | | | (80,664 | ) |
| Accumulated other comprehensive income: | | | | | | | | |
| Unrealized loss on securities available-for-sale | | | (35 | ) | | | (1,783 | ) |
| Unrealized gain on derivative instruments | | | 9,289 | | | | 4,390 | |
| Underfunded pension liability | | | (1,974 | ) | | | (1,974 | ) |
| Total Accumulated Other Comprehensive Income | | | 7,280 | | | | 633 | |
| Total Stockholders' Equity | | | 304,841 | | | | 293,994 | |
| Total Liabilities and Stockholders' Equity | | $ | 2,524,928 | | | $ | 2,482,767 | |
| | | | | | | | | | |
| Loan Portfolio | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | | | March 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 605,579 | | | $ | 602,057 | | | $ | 600,094 | | | $ | 601,045 | | | $ | 596,412 | |
| Home equity | | | 347,986 | | | | 341,818 | | | | 338,161 | | | | 330,203 | | | | 324,653 | |
| Commercial, financial, and agriculture | | | 699,653 | | | | 707,987 | | | | 666,960 | | | | 681,388 | | | | 663,183 | |
| Loans to depository institutions | | | - | | | | 60,000 | | | | 60,000 | | | | 60,000 | | | | 50,000 | |
| Installment loans to individuals | | | 45,557 | | | | 48,267 | | | | 46,244 | | | | 47,397 | | | | 44,756 | |
| Previously securitized loans | | | 6,025 | | | | 6,892 | | | | 8,317 | | | | 10,321 | | | | 12,744 | |
| Gross Loans | | $ | 1,704,800 | | | $ | 1,767,021 | | | $ | 1,719,776 | | | $ | 1,730,354 | | | $ | 1,691,748 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | |
| Previously Securitized Loans | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in millions) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Annualized | | | Effective | | | | | |
| | | | | | | December 31 | | | Interest | | | Annualized | | | | | |
| | | Year Ended: | | | Balance (a) | | | Income (a) | | | Yield (a) | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | 2007 | | | $ | 6.9 | | | $ | 7.3 | | | | 69 | % | | | | |
| | | 2008 | | | | 4.8 | | | | 5.7 | | | | 98 | % | | | | |
| | | 2009 | | | | 3.5 | | | | 4.1 | | | | 98 | % | | | | |
| | | 2010 | | | | 3.0 | | | | 3.2 | | | | 98 | % | | | | |
| | | 2011 | | | | 2.4 | | | | 2.7 | | | | 98 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| a - 2007 amounts are based on actual results. 2008 amounts are based on actual results through March 31, 2008 and estimated amounts for the remainder of the year. 2009, 2010, and 2011 amounts are based on estimated amounts. | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Note: The amounts reflected in the table above require management to make significant assumptions based on estimated future default, prepayment, and discount rates. Actual performance could be significantly different from that assumed, which could result in the actual results being materially different from the amounts estimated above. | |
| | | | | | | | | | |
| Consolidated Average Balance Sheets, Yields, and Rates | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | | | | 2008 | | | | | | | | | 2007 | | | | |
| | | Average | | | | | | Yield/ | | | Average | | | | | | Yield/ | |
| | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| | | | | | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | | | | |
| Loan portfolio: | | | | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 601,600 | | | $ | 9,886 | | | | 6.61 | % | | $ | 594,504 | | | $ | 8,854 | | | | 6.04 | % |
| Home equity | | | 343,658 | | | | 5,912 | | | | 6.92 | % | | | 322,647 | | | | 6,242 | | | | 7.85 | % |
| Commercial, financial, and agriculture | | | 700,155 | | | | 12,234 | | | | 7.03 | % | | | 667,073 | | | | 12,689 | | | | 7.71 | % |
| Loans to depository institutions | | | 4,670 | | | | 35 | | | | 3.01 | % | | | 49,444 | | | | 654 | | | | 5.36 | % |
| Installment loans to individuals | | | 47,629 | | | | 1,346 | | | | 11.37 | % | | | 42,903 | | | | 1,269 | | | | 12.00 | % |
| Previously securitized loans | | | 6,421 | | | | 1,578 | | | | 98.84 | % | | | 14,375 | | | | 1,756 | | | | 49.54 | % |
| Total loans | | | 1,704,133 | | | | 30,991 | | | | 7.31 | % | | | 1,690,946 | | | | 31,464 | | | | 7.55 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 455,663 | | | | 6,064 | | | | 5.35 | % | | | 505,585 | | | | 6,933 | | | | 5.56 | % |
| Tax-exempt | | | 37,723 | | | | 614 | | | | 6.55 | % | | | 40,413 | | | | 658 | | | | 6.60 | % |
| Total securities | | | 493,386 | | | | 6,678 | | | | 5.44 | % | | | 545,998 | | | | 7,591 | | | | 5.64 | % |
| Deposits in depository institutions | | | 8,697 | | | | 65 | | | | 3.01 | % | | | 13,033 | | | | 117 | | | | 3.64 | % |
| Federal funds sold | | | - | | | | - | | | | - | | | | 19,533 | | | | 256 | | | | 5.32 | % |
| Total interest-earning assets | | | 2,206,216 | | | | 37,734 | | | | 6.88 | % | | | 2,269,510 | | | | 39,428 | | | | 7.05 | % |
| Cash and due from banks | | | 65,442 | | | | | | | | | | | | 50,129 | | | | | | | | | |
| Bank premises and equipment | | | 54,709 | | | | | | | | | | | | 44,968 | | | | | | | | | |
| Other assets | | | 186,273 | | | | | | | | | | | | 169,046 | | | | | | | | | |
| Less: Allowance for loan losses | | | (17,837 | ) | | | | | | | | | | | (15,636 | ) | | | | | | | | |
| Total assets | | $ | 2,494,803 | | | | | | | | | | | $ | 2,518,017 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | | 409,745 | | | | 712 | | | | 0.70 | % | | | 430,201 | | | | 1,332 | | | | 1.26 | % |
| Savings deposits | | | 360,587 | | | | 1,104 | | | | 1.23 | % | | | 330,023 | | | | 1,307 | | | | 1.61 | % |
| Time deposits | | | 933,502 | | | | 10,199 | | | | 4.39 | % | | | 921,937 | | | | 10,074 | | | | 4.43 | % |
| Short-term borrowings | | | 127,793 | | | | 1,145 | | | | 3.60 | % | | | 146,455 | | | | 1,512 | | | | 4.19 | % |
| Long-term debt | | | 22,505 | | | | 441 | | | | 7.88 | % | | | 32,434 | | | | 532 | | | | 6.65 | % |
| Total interest-bearing liabilities | | | 1,854,132 | | | | 13,601 | | | | 2.95 | % | | | 1,861,050 | | | | 14,757 | | | | 3.22 | % |
| Noninterest-bearing demand deposits | | | 311,885 | | | | | | | | | | | | 316,716 | | | | | | | | | |
| Other liabilities | | | 28,770 | | | | | | | | | | | | 31,234 | | | | | | | | | |
| Stockholders' equity | | | 300,016 | | | | | | | | | | | | 309,017 | | | | | | | | | |
| Total liabilities and | | | | | | | | | | | | | | | | | | | | | | | | |
| stockholders' equity | | $ | 2,494,803 | | | | | | | | | | | $ | 2,518,017 | | | | | | | | | |
| Net interest income | | | | | | $ | 24,133 | | | | | | | | | | | $ | 24,671 | | | | | |
| Net yield on earning assets | | | | | | | | | | | 4.40 | % | | | | | | | | | | | 4.41 | % |
| | | | | | | | | | | | | | | |
| Analysis of Risk-Based Capital | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | | | March 31 | |
| | | 2008 (a) | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | |
| Tier I Capital: | | | | | | | | | | | | | | | |
| Stockholders' equity | | $ | 304,841 | | | $ | 293,994 | | | $ | 291,720 | | | $ | 294,783 | | | $ | 303,354 | |
| Goodwill and other intangibles | | | (58,065 | ) | | | (58,238 | ) | | | (58,328 | ) | | | (58,504 | ) | | | (58,681 | ) |
| Accumulated other comprehensive (income) loss | | | (7,280 | ) | | | (633 | ) | | | 4,396 | | | | 8,647 | | | | 2,014 | |
| Qualifying trust preferred stock | | | 16,000 | | | | 16,000 | | | | 16,000 | | | | 16,000 | | | | 16,000 | |
| Unrealized Loss on AFS securities | | | (275 | ) | | | (247 | ) | | | (94 | ) | | | (97 | ) | | | - | |
| Excess deferred tax assets | | | - | | | | - | | | | - | | | | (342 | ) | | | - | |
| Total tier I capital | | $ | 255,221 | | | $ | 250,876 | | | $ | 253,694 | | | $ | 260,486 | | | $ | 262,374 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Risk-Based Capital: | | | | | | | | | | | | | | | | | | | | |
| Tier I capital | | $ | 255,221 | | | $ | 250,876 | | | $ | 253,694 | | | $ | 260,486 | | | $ | 262,687 | |
| Qualifying allowance for loan losses | | | 18,567 | | | | 17,581 | | | | 16,980 | | | | 16,616 | | | | 16,082 | |
| Total risk-based capital | | $ | 273,788 | | | $ | 268,457 | | | $ | 270,674 | | | $ | 277,102 | | | $ | 278,456 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net risk-weighted assets | | $ | 1,828,559 | | | $ | 1,776,158 | | | $ | 1,709,486 | | | $ | 1,719,540 | | | $ | 1,715,664 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Ratios: | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 12.03 | % | | | 11.84 | % | | | 11.82 | % | | | 12.11 | % | | | 12.27 | % |
| Tangible capital ratio | | | 10.00 | % | | | 9.72 | % | | | 9.59 | % | | | 9.58 | % | | | 9.79 | % |
| Risk-based capital ratios: | | | | | | | | | | | | | | | | | | | | |
| Tier I capital | | | 13.96 | % | | | 14.12 | % | | | 14.84 | % | | | 15.15 | % | | | 15.31 | % |
| Total risk-based capital | | | 14.97 | % | | | 15.11 | % | | | 15.83 | % | | | 16.11 | % | | | 16.25 | % |
| Leverage capital | | | 10.47 | % | | | 10.31 | % | | | 10.38 | % | | | 10.52 | % | | | 10.68 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| (a) March 31, 2008 risk-based capital ratios are estimated | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | |
| Intangibles | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | As of and for the Quarter Ended | |
| | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | | | March 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2006 | |
| | | | | | | | | | | | | | | | | | | | | |
| Intangibles, net | | $ | 58,065 | | | $ | 58,238 | | | $ | 58,328 | | | $ | 58,504 | | | $ | 58,681 | |
| Intangibles amortization expense | | | 173 | | | | 177 | | | | 176 | | | | 177 | | | | 176 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Summary of Loan Loss Experience | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | |
| | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | | | March 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 17,581 | | | $ | 16,980 | | | $ | 16,616 | | | $ | 16,083 | | | $ | 15,405 | |
| | | | | | | | | | | | | | | | | | | | | |
| Charge-offs: | | | | | | | | | | | | | | | | | | | | |
| Commercial, financial, and agricultural | | | 406 | | | | 359 | | | | - | | | | 120 | | | | 35 | |
| Real estate-mortgage | | | 274 | | | | 203 | | | | 240 | | | | 452 | | | | 111 | |
| Installment loans to individuals | | | 75 | | | | 108 | | | | 91 | | | | 60 | | | | 84 | |
| Overdraft deposit accounts | | | 622 | | | | 938 | | | | 1,035 | | | | 956 | | | | 860 | |
| Total charge-offs | | | 1,377 | | | | 1,608 | | | | 1,366 | | | | 1,588 | | | | 1,090 | |
| | | | | | | | | | | | | | | | | | | | | |
| Recoveries: | | | | | | | | | | | | | | | | | | | | |
| Commercial, financial, and agricultural | | | 13 | | | | 23 | | | | 19 | | | | 41 | | | | 148 | |
| Real estate-mortgage | | | 27 | | | | 35 | | | | 22 | | | | 15 | | | | 15 | |
| Installment loans to individuals | | | 108 | | | | 97 | | | | 89 | | | | 98 | | | | 132 | |
| Overdraft deposit accounts | | | 615 | | | | 404 | | | | 400 | | | | 367 | | | | 573 | |
| Total recoveries | | | 763 | | | | 559 | | | | 530 | | | | 521 | | | | 868 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | | 614 | | | | 1,049 | | | | 836 | | | | 1,067 | | | | 222 | |
| Provision for loan losses | | | 1,600 | | | | 1,650 | | | | 1,200 | | | | 1,600 | | | | 900 | |
| Balance at end of period | | $ | 18,567 | | | $ | 17,581 | | | $ | 16,980 | | | $ | 16,616 | | | $ | 16,083 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans outstanding | | $ | 1,704,800 | | | $ | 1,767,021 | | | $ | 1,719,776 | | | $ | 1,730,354 | | | $ | 1,691,748 | |
| Average loans outstanding | | | 1,704,133 | | | | 1,739,166 | | | | 1,729,267 | | | | 1,710,989 | | | | 1,690,946 | |
| Allowance as a percent of loans outstanding | | | 1.09 | % | | | 1.00 | % | | | 0.99 | % | | | 0.96 | % | | | 0.95 | % |
| Allowance as a percent of non-performing loans | | | 113.55 | % | | | 103.28 | % | | | 86.47 | % | | | 145.11 | % | | | 235.75 | % |
| Net charge-offs (annualized) as a | | | | | | | | | | | | | | | | | | | | |
| percent of average loans outstanding | | | 0.14 | % | | | 0.24 | % | | | 0.19 | % | | | 0.25 | % | | | 0.05 | % |
| Net charge-offs, excluding overdraft deposit | | | | | | | | | | | | | | | | | | | | |
| accounts, (annualized) as a percent of average loans outstanding | | | 0.14 | % | | | 0.12 | % | | | 0.05 | % | | | 0.11 | % | | | (0.02 | )% |
| | | | | | | | | | | | | | | |
| Summary of Non-Performing Assets | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | | | March 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 15,840 | | | $ | 16,437 | | | $ | 18,896 | | | $ | 11,194 | | | $ | 6,714 | |
| Accruing loans past due 90 days or more | | | 257 | | | | 390 | | | | 566 | | | | 212 | | | | 108 | |
| Previously securitized loans past due 90 days or more | | | 255 | | | | 198 | | | | 176 | | | | 45 | | | | - | |
| Total non-performing loans | | | 16,352 | | | | 17,025 | | | | 19,638 | | | | 11,451 | | | | 6,822 | |
| Other real estate owned, excluding property associated | | | | | | | | | | | | | | | | | | | | |
| with previously securitized loans | | | 4,192 | | | | 4,163 | | | | 1,091 | | | | 624 | | | | 290 | |
| Other real estate owned associated with previously | | | | | | | | | | | | | | | | | | | | |
| securitized loans | | | 148 | | | | - | | | | 405 | | | | 231 | | | | 252 | |
| Other real estate owned | | | 4,340 | | | | 4,163 | | | | 1,496 | | | | 855 | | | | 542 | |
| Total non-performing assets | | $ | 20,692 | | | $ | 21,188 | | | $ | 21,134 | | | $ | 12,306 | | | $ | 7,364 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-performing assets as a percent of loans and | | | | | | | | | | | | | | | | | | | | |
| other real estate owned | | | 1.21 | % | | | 1.20 | % | | | 1.23 | % | | | 0.71 | % | | | 0.44 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | |
| Summary of Total Past Due Loans | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | | | March 31 | |
| | | 2008 | | | 2007 | | | 2007 | | | 2007 | | | 2007 | |
| | | | | | | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 3,763 | | | $ | 5,480 | | | $ | 4,500 | | | $ | 3,354 | | | $ | 2,372 | |
| Home equity | | | 1,344 | | | | 2,141 | | | | 1,075 | | | | 879 | | | | 999 | |
| Commercial, financial, and agriculture | | | 806 | | | | 1,506 | | | | 311 | | | | 2,248 | | | | 1,185 | |
| Loans to depository institutions | | | - | | | | - | | | | - | | | | - | | | | - | |
| Installment loans to individuals | | | 360 | | | | 385 | | | | 279 | | | | 370 | | | | 283 | |
| Previously securitized loans | | | 897 | | | | 1,099 | | | | 948 | | | | 799 | | | | 596 | |
| Overdraft deposit accounts | | | 568 | | | | 612 | | | | 575 | | | | 692 | | | | 500 | |
| Total past due loans | | $ | 7,738 | | | $ | 11,223 | | | $ | 7,688 | | | $ | 8,342 | | | $ | 5,935 | |
| | | | | | | | | | | | | | | | | | | | | |
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