For Immediate Release
April 23, 2013
For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102
City Holding Company Announces First Quarter Results
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $3.4 billion bank holding company headquartered in Charleston, today announced first quarter net income per diluted share of $0.51 and net income of $8.0 million. The results for the first quarter of 2013 include $5.5 million, or $0.23 diluted per share on an after tax basis, of acquisition and integration expenses related to the acquisition of Community Financial Corporation (”Community Bank”). For the first quarter of 2013, the Company achieved a return on assets of 0.96%, a return on tangible equity of 11.3%, a net interest margin of 4.18%, and an efficiency ratio of 66.5%. Excluding the acquisition and integration expenses, the Company would have reported net income of $11.7 million, a return on assets of 1.40%, a return on tangible equity of 16.4%, and an efficiency ratio of 53.9% for the first quarter of 2013.
City’s CEO Charles Hageboeck stated that, “During the first quarter of 2013, we continued to expand our footprint in Virginia by successfully completing our acquisition of Community Bank. This marked our second acquisition in Virginia in the last 12 months and the ten branches of Community Bank added approximately $381 million in deposits and $363 million in loans, net of the credit mark of $45 million. We are excited about our growth in Virginia and look forward to ongoing efforts to further develop our Virginia presence.”
“Our net interest income increased $4.0 million from the fourth quarter of 2012 due to the acquisition of Community Bank and correspondingly, our net interest margin increased from 3.99% in the fourth quarter of 2012 to 4.18% in the first quarter of 2013. Noninterest income increased $1.1 million from the first quarter of 2012 due to our acquisitions of Virginia Savings Bancorp, Inc. (“Virginia Savings”) and Community Bank and increased mortgage-related lending activity and trust and investment management fee income.”
“In March 2013, we announced a 6% increase in our quarterly dividend from 35 cents per share to 37 cents per share. This increase is based on the Company’s current strong liquidity position, our outstanding financial performance in 2012 and our confidence in the Company being able to sustain this performance,” Hageboeck concluded.
Net Interest Income
The Company’s tax equivalent net interest income increased $4.0 million, or 15.7%, from $25.7 million during the fourth quarter of 2012 to $29.7 million during the first quarter of 2013. This increase is due to the acquisition of Community Bank as of January 10, 2013 and an increase in the accretion related to the acquisitions of Virginia Savings and Community Bank. The Company’s reported net interest margin increased from 3.99% for the fourth quarter of 2012 to 4.18% for the first quarter of 2013. Excluding the favorable impact of the accretion from the fair value adjustments ($2.2 million for the quarter ended March 31, 2013 and $1.7 million for the quarter ended December 31, 2012), the net interest margin would have been 3.87% for the quarter ended March 31, 2013 and 3.73% for the quarter ended December 31, 2012.
Credit Quality
As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.7 million in the first quarter of 2013, compared to $1.95 for the comparable period in 2012 and $1.8 million for the fourth quarter of 2012. The provision for loan losses recorded in the first quarter of 2013 reflects 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 systematic methodology and are directionally consistent with changes in the composition and quality of the Company’s loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.
Non-interest Income
Excluding investment security transactions, non-interest income increased $1.1 million to $14.2 million in the first quarter of 2013 as compared to $13.1 million in the first quarter of 2012. Service charges increased $0.5 million, or 8.1%, to $6.5 million while bankcard revenues increased $0.2 million, or 5.2%, to $3.2 million. These increases were primarily due to the acquisitions of Virginia Savings and Community Bank. In addition, other income increased $0.3 million or 62.5%, to $0.9 million primarily as a result of increased mortgage related revenues. Trust and investment management fee income increased $0.2 million, or 22.7%, to $1.0 million due to core growth, as Virginia Savings and Community Bank did not offer these services.
Non-interest Expenses
During the first quarter of 2013, the Company completed its acquisition of Community Bank and recognized $5.5 million of acquisition and integration expenses. Excluding these expenses, non-interest expenses increased $4.4 million, from $19.5 million in the first quarter of 2012 to $23.9 million in the first quarter of 2013. This increase was primarily related to higher salaries and employee benefits ($2.7 million) due to the acquisitions of Virginia Savings and Community Bank ($1.9 million), higher pension costs ($0.3 million), and higher health insurance ($0.2 million). In addition, other expenses increased $0.7 million, occupancy and equipment expense increased $0.5 million and depreciation increased $0.3 million. These increases were primarily attributable to the acquisitions of Virginia Savings and Community Bank.
Balance Sheet Trends
Loans have increased $350.7 million (16.3%) from December 31, 2012 to $2.50 billion at March 31, 2013, primarily due to the Company’s acquisition of Community Bank ($370.9 million). Excluding the Community Bank acquisition, loans have decreased $20.2 million (1.0%) from December 31, 2012 to $2.13 billion at March 31, 2013. Consumer loans declined $5.4 million (14.7%), commercial real estate loans decreased $5.1 million (0.6%), home equity loans declined $5.0 million (3.5%) and commercial and industrial (“C&I”) loans decreased $4.8 million (4.4%). The Company strategically decided to reduce consumer loans due to the acquisition of an indirect portfolio of auto loans associated with Community Bank. These loans have higher loss percentages compared to the Company’s historical consumer portfolio. In addition, the Company has opted to allow certain other high risk loans to exit the portfolio.
Total average depository balances increased $397.1 million, or 16.6%, from the quarter ended December 31, 2012 to the quarter ended March 31, 2013. This growth was primarily attributable to deposits acquired from Community Bank ($337.3 million). Exclusive of this contribution, noninterest-bearing deposits increased $24.5 million, interest-bearing deposits increased $21.0 million, and savings deposits increased $16.1 million.
Income Tax Expense
The Company’s effective income tax rate for the first quarter of 2013 was 37.4% compared to 34.3% for the year ended December 31, 2012, and 33.9% for the quarter ended March 31, 2012. As a result of the Company’s acquisition of Community Bank during the first quarter of 2013, the Company’s effective tax rate for 2013 is expected to decrease from 34.3% for the year ending December 31, 2012 to 33.7% for the year ending December 31, 2013. Due to this decline in the effective rate, the Company’s net deferred tax assets are expected to be realized at a lower effective rate, and as a result, the Company’s net deferred tax asset was reduced by $0.5 million in the first quarter ($0.03 diluted per share).
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 86.6% and the loan to asset ratio was 72.9% at March 31, 2013. The Company maintained investment securities totaling 10.7% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 51.3% of assets at March 31, 2013. Time deposits fund 32.9% of assets at March 31, 2013, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.
The Company continues to be strongly capitalized. The Company’s tangible equity ratio was 8.6% at March 31, 2013 compared to 9.4% at December 31, 2012. At March 31, 2013, City National Bank’s Leverage Ratio is 8.70%, its Tier I Capital ratio is 11.53%, and its Total Risk-Based Capital ratio is 12.34%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On March 28, 2013, the Board approved a quarterly cash dividend of $0.37 cents per share payable April 30, 2013, to shareholders of record as of April 15, 2013.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 83 branches across West Virginia, Virginia, Kentucky and 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 could have adverse legal actions of a material nature; (4) the Company may face competitive loss of customers; (5) the Company may be unable to manage its expense levels; (6) the Company may have difficulty retaining key employees; (7) changes in the interest rate environment may have results on the Company’s operations materially different from those anticipated by the Company’s market risk management functions; (8) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (9) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company’s operating results; (10) the Company may experience difficulties growing loan and deposit balances; (11) the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; (12) continued deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; (13) the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) recently adopted by the United States Congress and (14) the integration of the operations of City Holding and Community Financial may be more difficult than anticipated. Forward-looking statements made herein reflect management’s expectations as of the date such statements are made. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its March 31, 2013 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2013 results and will adjust the amounts if necessary.
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | |
| Financial Highlights | | | | | | | | | |
| (Unaudited) | | | | | | | | | |
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| | | Three Months Ended March 31, | | | Percent | |
| | | 2013 | | | 2012 | | | Change | |
| | | | | | | | | | |
| Earnings ($000s, except per share data): | | | | | | | | | |
| Net Interest Income (FTE) | | $ | 29,745 | | | $ | 23,730 | | | | 25.35 | % |
| Net Income available to common shareholders | | | 7,987 | | | | 10,031 | | | | (20.38 | )% |
| Earnings per Basic Share | | | 0.51 | | | | 0.68 | | | | (24.51 | )% |
| Earnings per Diluted Share | | | 0.51 | | | | 0.67 | | | | (24.84 | )% |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Key Ratios (percent): | | | | | | | | | | | | |
| Return on Average Assets | | | 0.96 | % | | | 1.47 | % | | | (34.36 | )% |
| Return on Average Tangible Equity | | | 11.26 | % | | | 15.42 | % | | | (27.00 | )% |
| Net Interest Margin | | | 4.18 | % | | | 3.98 | % | | | 5.08 | % |
| Efficiency Ratio | | | 66.52 | % | | | 52.95 | % | | | 25.62 | % |
| Average Shareholders' Equity to Average Assets | | | 10.74 | % | | | 11.55 | % | | | (7.06 | )% |
| | | | | | | | | | | | | |
| Consolidated Risk Based Capital Ratios (a): | | | | | | | | | | | | |
| Tier I | | | 11.90 | % | | | 13.36 | % | | | (10.93 | )% |
| Total | | | 12.74 | % | | | 14.27 | % | | | (10.72 | )% |
| | | | | | | | | | | | | |
| Tangible Equity to Tangible Assets | | | 8.61 | % | | | 9.54 | % | | | (9.71 | )% |
| | | | | | | | | | | | | |
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| Common Stock Data: | | | | | | | | | | | | |
| Cash Dividends Declared per Share | | $ | 0.37 | | | $ | 0.35 | | | | 5.71 | % |
| Book Value per Share | | | 23.27 | | | | 21.46 | | | | 8.48 | % |
| Tangible Book Value per Share | | | 18.44 | | | | 17.65 | | | | 4.46 | % |
| Market Value per Share: | | | | | | | | | | | | |
| High | | | 40.05 | | | | 37.16 | | | | 7.78 | % |
| Low | | | 36.07 | | | | 32.59 | | | | 10.68 | % |
| End of Period | | | 39.79 | | | | 34.74 | | | | 14.54 | % |
| | | | | | | | | | | | | |
| Price/Earnings Ratio (b) | | | 19.43 | | | | 12.81 | | | | 51.72 | % |
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| | | | | | | | | | | | | |
| (a) March 31, 2013 risk-based capital ratios are estimated | | | | | | | | | |
| (b) March 31, 2013 price/earnings ratio computed based on annualized first quarter 2013 earnings | | | | | |
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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 | |
| | | | | | | | | | | | | | | | | | | |
| 2009 | | $ | 17.69 | | | $ | 18.24 | | | $ | 18.95 | | | $ | 19.37 | | | $ | 20.88 | | | $ | 34.34 | |
| 2010 | | | 19.71 | | | | 20.02 | | | | 20.31 | | | | 20.31 | | | | 26.87 | | | | 38.03 | |
| 2011 | | | 20.39 | | | | 20.58 | | | | 20.86 | | | | 21.05 | | | | 26.06 | | | | 37.22 | |
| 2012 | | | 21.46 | | | | 21.63 | | | | 22.14 | | | | 22.47 | | | | 30.96 | | | | 37.16 | |
| 2013 | | | 23.27 | | | | | | | | | | | | | | | | 36.07 | | | | 40.05 | |
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| Earnings per Basic Share | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | |
| | | March 31 | | | June 30 | | | September 30 | | | December 31 | | | Year-to-Date | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| 2009 | | $ | 0.69 | | | $ | 0.64 | | | $ | 0.66 | | | $ | 0.70 | | | $ | 2.69 | | | | | |
| 2010 | | | 0.59 | | | | 0.68 | | | | 0.58 | | | | 0.64 | | | | 2.48 | | | | | |
| 2011 | | | 0.62 | | | | 0.65 | | | | 0.77 | | | | 0.65 | | | | 2.68 | | | | | |
| 2012 | | | 0.68 | | | | 0.50 | | | | 0.71 | | | | 0.73 | | | | 2.63 | | | | | |
| 2013 | | | 0.51 | | | | | | | | | | | | | | | | 0.51 | | | | | |
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| Earnings per Diluted Share | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | |
| | | March 31 | | | June 30 | | | September 30 | | | December 31 | | | Year-to-Date | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| 2009 | | $ | 0.69 | | | $ | 0.64 | | | $ | 0.66 | | | $ | 0.70 | | | $ | 2.68 | | | | | |
| 2010 | | | 0.58 | | | | 0.68 | | | | 0.58 | | | | 0.64 | | | | 2.47 | | | | | |
| 2011 | | | 0.62 | | | | 0.64 | | | | 0.76 | | | | 0.65 | | | | 2.67 | | | | | |
| 2012 | | | 0.67 | | | | 0.50 | | | | 0.71 | | | | 0.73 | | | | 2.61 | | | | | |
| 2013 | | | 0.51 | | | | | | | | | | | | | | | | 0.51 | | | | | |
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CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | |
| Consolidated Statements of Income | | | | | | |
| (Unaudited) ($ in 000s, except per share data) | | | | | | |
| | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2013 | | | 2012 | |
| | | | | | | |
| Interest Income | | | | | | |
| Interest and fees on loans | | $ | 29,939 | | | $ | 23,068 | |
| Interest on investment securities: | | | | | | | | |
| Taxable | | | 2,750 | | | | 3,964 | |
| Tax-exempt | | | 324 | | | | 387 | |
| Interest on federal funds sold | | | 13 | | | | 11 | |
| Total Interest Income | | | 33,026 | | | | 27,430 | |
| | | | | | | | | |
| Interest Expense | | | | | | | | |
| Interest on deposits | | | 3,227 | | | | 3,668 | |
| Interest on short-term borrowings | | | 71 | | | | 73 | |
| Interest on long-term debt | | | 157 | | | | 167 | |
| Total Interest Expense | | | 3,455 | | | | 3,908 | |
| Net Interest Income | | | 29,571 | | | | 23,522 | |
| Provision for loan losses | | | 1,738 | | | | 1,950 | |
| Net Interest Income After Provision for Loan Losses | | | 27,833 | | | | 21,572 | |
| | | | | | | | | |
| Non-Interest Income | | | | | | | | |
| Total investment securities impairment losses | | | - | | | | - | |
| Noncredit impairment losses recognized in other comprehensive income | | | - | | | | - | |
| Net investment securities impairment losses | | | - | | | | - | |
| Gains (losses) on sale of investment securities | | | 84 | | | | (31 | ) |
| Net investment securities losses | | | 84 | | | | (31 | ) |
| | | | | | | | | |
| Service charges | | | 6,535 | | | | 6,048 | |
| Bankcard revenue | | | 3,199 | | | | 3,042 | |
| Insurance commissions | | | 1,840 | | | | 1,996 | |
| Trust and investment management fee income | | | 990 | | | | 807 | |
| Bank owned life insurance | | | 812 | | | | 723 | |
| Other income | | | 866 | | | | 533 | |
| Total Non-Interest Income | | | 14,326 | | | | 13,118 | |
| | | | | | | | | |
| Non-Interest Expense | | | | | | | | |
| Salaries and employee benefits | | | 12,949 | | | | 10,245 | |
| Occupancy and equipment | | | 2,472 | | | | 1,935 | |
| Depreciation | | | 1,399 | | | | 1,086 | |
| FDIC insurance expense | | | 511 | | | | 385 | |
| Advertising | | | 735 | | | | 644 | |
| Bankcard expenses | | | 727 | | | | 620 | |
| Postage, delivery, and statement mailings | | | 605 | | | | 548 | |
| Office supplies | | | 441 | | | | 455 | |
| Legal and professional fees | | | 435 | | | | 447 | |
| Telecommunications | | | 445 | | | | 389 | |
| Repossessed asset (gains)/losses, net of expenses | | | (155 | ) | | | 121 | |
| Merger related expenses | | | 5,540 | | | | - | |
| Other expenses | | | 3,299 | | | | 2,640 | |
| Total Non-Interest Expense | | | 29,403 | | | | 19,515 | |
| Income Before Income Taxes | | | 12,756 | | | | 15,175 | |
| Income tax expense | | | 4,769 | | | | 5,144 | |
| Net Income Available to Common Shareholders | | $ | 7,987 | | | $ | 10,031 | |
| | | | | | | | | |
| | | | | | | | | |
| Distributed earnings allocated to common shareholders | | $ | 5,747 | | | $ | 5,118 | |
| Undistributed earnings allocated to common shareholders | | | 2,175 | | | | 4,837 | |
| Net earnings allocated to common shareholders | | $ | 7,922 | | | $ | 9,955 | |
| | | | | | | | | |
| Average common shares outstanding | | | 15,473 | | | | 14,679 | |
| Effect of dilutive securities: | | | | | | | | |
| Employee stock options | | | 154 | | | | 80 | |
| Shares for diluted earnings per share | | | 15,627 | | | | 14,759 | |
| | | | | | | | | |
| Basic earnings per common share | | $ | 0.51 | | | $ | 0.68 | |
| Diluted earnings per common share | | $ | 0.51 | | | $ | 0.67 | |
| Dividends declared per common share | | $ | 0.37 | | | $ | 0.35 | |
| | | | | | | | | |
| Comprehensive Income | | $ | 8,077 | | | $ | 12,201 | |
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CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | |
| Consolidated Statements of Changes in Stockholders' Equity | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | |
| | | | | | | |
| | | | | | | |
| | | Three Months Ended | |
| | | March 31, 2013 | | | March 31, 2012 | |
| | | | | | | |
| Balance at January 1 | | $ | 333,274 | | | $ | 311,134 | |
| | | | | | | | | |
| Net income | | | 7,987 | | | | 10,031 | |
| Other comprehensive income: | | | | | | | | |
| Change in unrealized loss on securities available-for-sale | | | 90 | | | | 2,170 | |
| Cash dividends declared ($0.37/share) and ($0.35/share), respectively | | | (6,064 | ) | | | (5,144 | ) |
| Issuance of stock award shares, net | | | 1,380 | | | | 442 | |
| Acquisition of Community Financial Corporation | | | 26,405 | | | | - | |
| Exercise of 42,250 stock options | | | 1,397 | | | | - | |
| Exercise of 16,899 stock options | | | - | | | | 485 | |
| Purchase of 88,000 common shares of treasury | | | - | | | | (3,072 | ) |
| Balance at March 31 | | $ | 364,469 | | | $ | 316,046 | |
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CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | |
| Condensed Consolidated Quarterly Statements of Income | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s, except per share data) | | | | | | | | | | | | | | | |
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| | | Quarter Ended | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | 2013 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | | |
| Interest income | | $ | 33,026 | | | $ | 28,884 | | | $ | 28,432 | | | $ | 27,466 | | | $ | 27,430 | |
| Taxable equivalent adjustment | | | 174 | | | | 183 | | | | 185 | | | | 198 | | | | 208 | |
| Interest income (FTE) | | | 33,200 | | | | 29,067 | | | | 28,617 | | | | 27,664 | | | | 27,638 | |
| Interest expense | | | 3,455 | | | | 3,360 | | | | 3,557 | | | | 3,625 | | | | 3,908 | |
| Net interest income | | | 29,745 | | | | 25,707 | | | | 25,060 | | | | 24,039 | | | | 23,730 | |
| Provision for loan losses | | | 1,738 | | | | 1,775 | | | | 975 | | | | 1,675 | | | | 1,950 | |
| Net interest income after provision | | | | | | | | | | | | | | | | | | | | |
| for loan losses | | | 28,007 | | | | 23,932 | | | | 24,085 | | | | 22,364 | | | | 21,780 | |
| | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | 14,326 | | | | 14,266 | | | | 14,079 | | | | 13,790 | | | | 13,118 | |
| Noninterest expense | | | 29,403 | | | | 21,273 | | | | 21,846 | | | | 24,763 | | | | 19,515 | |
| Income before income taxes | | | 12,930 | | | | 16,925 | | | | 16,318 | | | | 11,391 | | | | 15,383 | |
| Income tax expense | | | 4,769 | | | | 5,848 | | | | 5,526 | | | | 3,780 | | | | 5,144 | |
| Taxable equivalent adjustment | | | 174 | | | | 183 | | | | 185 | | | | 198 | | | | 208 | |
| Net income available to common shareholders | | $ | 7,987 | | | $ | 10,894 | | | $ | 10,607 | | | $ | 7,413 | | | $ | 10,031 | |
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| | | | | | | | | | | | | | | | | | | | | |
| Distributed earnings allocated to common shareholders | | $ | 5,747 | | | $ | 5,151 | | | $ | 5,150 | | | $ | 5,146 | | | $ | 5,118 | |
| Undistributed earnings allocated to common shareholders | | | 2,175 | | | | 5,658 | | | | 5,373 | | | | 2,208 | | | | 4,837 | |
| Net earnings allocated to common shareholders | | $ | 7,922 | | | $ | 10,809 | | | $ | 10,523 | | | $ | 7,354 | | | $ | 9,955 | |
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| Average common shares outstanding | | | 15,473 | | | | 14,755 | | | | 14,751 | | | | 14,680 | | | | 14,679 | |
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| Effect of dilutive securities: | | | | | | | | | | | | | | | | | | | | |
| Employee stock options | | | 154 | | | | 82 | | | | 83 | | | | 79 | | | | 80 | |
| | | | | | | | | | | | | | | | | | | | | |
| Shares for diluted earnings per share | | | 15,627 | | | | 14,837 | | | | 14,834 | | | | 14,759 | | | | 14,759 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per common share | | $ | 0.51 | | | $ | 0.73 | | | $ | 0.71 | | | $ | 0.50 | | | $ | 0.68 | |
| Diluted earnings per common share | | | 0.51 | | | | 0.73 | | | | 0.71 | | | | 0.50 | | | | 0.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| Cash dividends declared per share | | | 0.37 | | | | 0.35 | | | | 0.35 | | | | 0.35 | | | | 0.35 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin | | | 4.18 | % | | | 3.99 | % | | | 3.95 | % | | | 3.91 | % | | | 3.98 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Interest Income from Accretion Related to Fair Value Adjusments Recorded as a Result of Acquisition | | $ | 2,181 | | | $ | 1,658 | | | $ | 936 | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | |
| Non-Interest Income and Non-Interest Expense | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | 2013 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | | |
| Non-Interest Income: | | | | | | | | | | | | | | | |
| Service charges | | $ | 6,535 | | | $ | 7,113 | | | $ | 6,750 | | | $ | 6,497 | | | $ | 6,048 | |
| Bankcard revenue | | | 3,199 | | | | 3,101 | | | | 3,111 | | | | 3,152 | | | | 3,042 | |
| Insurance commissions | | | 1,840 | | | | 1,289 | | | | 1,439 | | | | 1,347 | | | | 1,996 | |
| Trust and investment management fee income | | | 990 | | | | 1,112 | | | | 912 | | | | 942 | | | | 807 | |
| Bank owned life insurance | | | 812 | | | | 754 | | | | 738 | | | | 766 | | | | 723 | |
| Other income | | | 866 | | | | 897 | | | | 671 | | | | 558 | | | | 533 | |
| Subtotal | | | 14,242 | | | | 14,266 | | | | 13,621 | | | | 13,262 | | | | 13,149 | |
| Total investment securities impairment losses | | | - | | | | - | | | | (272 | ) | | | (606 | ) | | | - | |
| Noncredit impairment losses recognized in other | | | | | | | | | | | | | | | | | | | | |
| comprehensive income | | | - | | | | - | | | | - | | | | 302 | | | | - | |
| Net investment securities impairment losses | | | - | | | | - | | | | (272 | ) | | | (304 | ) | | | - | |
| Gain (loss) on sale of investment securities | | | 84 | | | | - | | | | 730 | | | | 832 | | | | (31 | ) |
| Total Non-Interest Income | | $ | 14,326 | | | $ | 14,266 | | | $ | 14,079 | | | $ | 13,790 | | | $ | 13,118 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-Interest Expense: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 12,949 | | | $ | 11,301 | | | $ | 11,295 | | | $ | 10,668 | | | $ | 10,245 | |
| Occupancy and equipment | | | 2,472 | | | | 2,147 | | | | 2,126 | | | | 1,978 | | | | 1,935 | |
| Depreciation | | | 1,399 | | | | 1,234 | | | | 1,175 | | | | 1,109 | | | | 1,086 | |
| FDIC insurance expense | | | 511 | | | | 407 | | | | 405 | | | | 394 | | | | 385 | |
| Advertising | | | 735 | | | | 596 | | | | 674 | | | | 675 | | | | 644 | |
| Bankcard expenses | | | 727 | | | | 628 | | | | 720 | | | | 694 | | | | 620 | |
| Postage, delivery and statement mailings | | | 605 | | | | 514 | | | | 529 | | | | 488 | | | | 548 | |
| Office supplies | | | 441 | | | | 412 | | | | 407 | | | | 396 | | | | 455 | |
| Legal and professional fees | | | 435 | | | | 437 | | | | 611 | | | | 421 | | | | 317 | |
| Telecommunications | | | 445 | | | | 405 | | | | 433 | | | | 387 | | | | 389 | |
| Repossessed asset (gains) losses, net of expenses | | | (155 | ) | | | 146 | | | | 429 | | | | 650 | | | | 121 | |
| Merger related expenses | | | 5,540 | | | | 373 | | | | 157 | | | | 4,042 | | | | 135 | |
| Other expenses | | | 3,299 | | | | 2,673 | | | | 2,885 | | | | 2,861 | | | | 2,635 | |
| Total Non-Interest Expense | | $ | 29,403 | | | $ | 21,273 | | | $ | 21,846 | | | $ | 24,763 | | | $ | 19,515 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Employees (Full Time Equivalent) | | | 932 | | | | 843 | | | | 836 | | | | 831 | | | | 797 | |
| Branch Locations | | | 83 | | | | 73 | | | | 73 | | | | 73 | | | | 68 | |
| | | | | | | | | | | | | | | | | | | | | |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | |
| Consolidated Balance Sheets | | | | | | |
| ($ in 000s) | | | | | | |
| | | March 31 | | | December 31 | |
| | | 2013 | | | 2012 | |
| | | (Unaudited) | | | | |
| Assets | | | | | | |
| Cash and due from banks | | $ | 191,865 | | | $ | 58,718 | |
| Interest-bearing deposits in depository institutions | | | 6,872 | | | | 16,276 | |
| Federal funds sold | | | 35,000 | | | | 10,000 | |
| Cash and cash equivalents | | | 233,737 | | | | 84,994 | |
| | | | | | | | | |
| Investment securities available-for-sale, at fair value | | | 348,146 | | | | 377,122 | |
| Investment securities held-to-maturity, at amortized cost | | | 8,383 | | | | 13,454 | |
| Other securities | | | 11,502 | | | | 11,463 | |
| Total investment securities | | | 368,031 | | | | 402,039 | |
| | | | | | | | | |
| Gross loans | | | 2,497,023 | | | | 2,146,369 | |
| Allowance for loan losses | | | (19,721 | ) | | | (18,809 | ) |
| Net loans | | | 2,477,302 | | | | 2,127,560 | |
| | | | | | | | | |
| Bank owned life insurance | | | 89,645 | | | | 81,901 | |
| Premises and equipment, net | | | 82,002 | | | | 72,728 | |
| Accrued interest receivable | | | 8,701 | | | | 6,692 | |
| Net deferred tax assets | | | 45,983 | | | | 32,737 | |
| Intangible assets | | | 75,750 | | | | 65,057 | |
| Other assets | | | 46,067 | | | | 43,758 | |
| Total Assets | | $ | 3,427,218 | | | $ | 2,917,466 | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Deposits: | | | | | | | | |
| Noninterest-bearing | | $ | 525,870 | | | $ | 429,969 | |
| Interest-bearing: | | | | | | | | |
| Demand deposits | | | 629,244 | | | | 553,132 | |
| Savings deposits | | | 603,191 | | | | 506,869 | |
| Time deposits | | | 1,125,946 | | | | 919,346 | |
| Total deposits | | | 2,884,251 | | | | 2,409,316 | |
| Short-term borrowings | | | | | | | | |
| Customer repurchase agreements | | | 116,427 | | | | 114,646 | |
| Long-term debt | | | 16,495 | | | | 16,495 | |
| Other liabilities | | | 45,576 | | | | 43,735 | |
| Total Liabilities | | | 3,062,749 | | | | 2,584,192 | |
| | | | | | | | | |
| 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, 2013 and December 31, 2012 | | | | | | | | |
| less 2,839,589 and 3,665,999 shares in treasury, respectively | | | 46,249 | | | | 46,249 | |
| Capital surplus | | | 107,977 | | | | 103,524 | |
| Retained earnings | | | 311,193 | | | | 309,270 | |
| Cost of common stock in treasury | | | (98,240 | ) | | | (124,347 | ) |
| Accumulated other comprehensive loss: | | | | | | | | |
| Unrealized gain on securities available-for-sale | | | 3,664 | | | | 3,573 | |
| Underfunded pension liability | | | (6,374 | ) | | | (4,995 | ) |
| Total Accumulated Other Comprehensive Loss | | | (2,710 | ) | | | (1,422 | ) |
| Total Stockholders' Equity | | | 364,469 | | | | 333,274 | |
| Total Liabilities and Stockholders' Equity | | $ | 3,427,218 | | | $ | 2,917,466 | |
| | | | | | | | | |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | |
| Investment Portfolio | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Original Cost | | | Credit-Related Net Investment Impairment Losses through March 31, 2013 | | | Unrealized Gains (Losses) | | | Carrying Value | |
| | | | | | | | | | | | | |
| US Government Agencies | | $ | 3,295 | | | $ | - | | | $ | 88 | | | $ | 3,383 | |
| Mortgage Backed Securities | | | 257,098 | | | | - | | | | 5,906 | | | | 263,004 | |
| Municipal Bonds | | | 44,311 | | | | - | | | | 1,490 | | | | 45,801 | |
| Pooled Bank Trust Preferreds | | | 26,839 | | | | (20,171 | ) | | | (3,166 | ) | | | 3,502 | |
| Single Issuer Bank Trust Preferreds, | | | | | | | | | | | | | | | | |
| Subdebt of Financial Institutions, and | | | | | | | | | | | | | | | | |
| Bank Holding Company Preferred Stocks | | | 35,360 | | | | (1,015 | ) | | | (110 | ) | | | 34,235 | |
| Money Markets and Mutual Funds | | | 1,724 | | | | - | | | | 39 | | | | 1,763 | |
| Federal Reserve Bank and FHLB stock | | | 11,502 | | | | - | | | | - | | | | 11,502 | |
| Community Bank Equity Positions | | | 8,194 | | | | (4,813 | ) | | | 1,460 | | | | 4,841 | |
| Total Investments | | $ | 388,323 | | | $ | (25,999 | ) | | $ | 5,707 | | | $ | 368,031 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | |
| Loan Portfolio | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | | 2013 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | | | |
Residential real estate (1) | | | $ | 1,149,411 | | | $ | 1,031,435 | | | $ | 1,008,305 | | | $ | 997,016 | | | $ | 939,611 | |
| Home equity - junior liens | | | | 138,333 | | | | 143,110 | | | | 143,058 | | | | 143,400 | | | | 139,764 | |
| Commercial and industrial | | | | 149,677 | | | | 108,739 | | | | 105,027 | | | | 116,288 | | | | 108,707 | |
Commercial real estate (2) | | | | 1,001,453 | | | | 821,970 | | | | 787,887 | | | | 768,176 | | | | 745,586 | |
| Consumer | | | | 55,274 | | | | 36,564 | | | | 38,285 | | | | 37,383 | | | | 35,448 | |
| DDA overdrafts | | | | 2,876 | | | | 4,551 | | | | 2,670 | | | | 3,326 | | | | 2,848 | |
| Gross Loans | | | $ | 2,497,024 | | | $ | 2,146,369 | | | $ | 2,085,232 | | | $ | 2,065,589 | | | $ | 1,971,964 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Construction loans included in: | | | | | | | | | | | | | | | | | | | | | |
(1) - Residential real estate loans | | | $ | 16,884 | | | $ | 15,408 | | | $ | 12,787 | | | $ | 11,919 | | | $ | 11,613 | |
(2) - Commercial real estate loans | | | $ | 26,163 | | | $ | 15,352 | | | $ | 17,072 | | | $ | 18,544 | | | $ | 20,661 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | | |
| Acquisition Activity - Accretion | | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in millions) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| The following table presents the actual and forecasted accretion related to the fair value adjustments on net interest income recorded as a result of the Virginia Savings Bancorp (VSB) and Community Financial Corporation (Community) acquisitions. | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | VSB | | | Community | | | | | |
| | | | Loan | | | Certificates of | | | Loan | | | Certificates of | | | | | |
| Year Ended: | | | Accretion(a) | | | Deposit(a) | | | Accretion(a) | | | Deposit(a) | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 1Q 2013 | | | $ | 985 | | | $ | 178 | | | $ | 858 | | | $ | 160 | | | $ | 2,181 | |
| Remainder 2013 | | | | 1,318 | | | | 364 | | | | 2,800 | | | | 480 | | | | 4,962 | |
| | 2014 | | | | 1,001 | | | | 537 | | | | 3,043 | | | | 294 | | | | 4,875 | |
| | 2015 | | | | 790 | | | | 518 | | | | 1,750 | | | | 160 | | | | 3,218 | |
| Thereafter | | | | 1,252 | | | | 497 | | | | 6,791 | | | | 46 | | | | 8,586 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| a - 1Q 2013 amounts are based on actual results. Remainder 2013, 2014, 2015, and Thereafter amounts are based on estimated amounts. | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | �� | | | | | | | | | | | | | | | | | | | | |
| Note: The amounts reflected in the table above require management to make significant assumptions based on estimated future default, prepayment, and discount | |
| rates. Actual performance could be significantly different from that assumed, which could result in the actual results being materially different from the amounts | |
| estimated above. | |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | |
| Consolidated Average Balance Sheets, Yields, and Rates | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | | | | 2013 | | | | | | | | | 2012 | | | | |
| | | Average | | | | | | Yield/ | | | Average | | | | | | Yield/ | |
| | | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| | | | | | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | | | | |
Loan portfolio (1): | | | | | | | | | | | | | | | | | | |
Residential real estate (2) | | $ | 1,277,557 | | | $ | 13,720 | | | | 4.36 | % | | $ | 1,067,911 | | | $ | 11,827 | | | | 4.45 | % |
Commercial, financial, and agriculture (3) | | | 1,121,916 | | | | 14,192 | | | | 5.13 | % | | | 862,886 | | | | 9,584 | | | | 4.47 | % |
| Loans to depository institutions | | | - | | | | - | | | | - | | | | - | | | | - | | | | 0.00 | % |
Installment loans to individuals (4), (5) | | | 65,863 | | | | 1,377 | | | | 8.48 | % | | | 41,681 | | | | 770 | | | | 7.43 | % |
Previously securitized loans (6) | | | *** | | | | 650 | | | | *** | | | | *** | | | | 887 | | | | *** | |
| Total loans | | | 2,465,336 | | | | 29,939 | | | | 4.93 | % | | | 1,972,478 | | | | 23,068 | | | | 4.70 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 350,128 | | | | 2,750 | | | | 3.19 | % | | | 351,811 | | | | 3,964 | | | | 4.53 | % |
Tax-exempt (7) | | | 32,991 | | | | 498 | | | | 6.12 | % | | | 41,117 | | | | 595 | | | | 5.82 | % |
| Total securities | | | 383,119 | | | | 3,248 | | | | 3.44 | % | | | 392,928 | | | | 4,559 | | | | 4.67 | % |
| Deposits in depository institutions | | | 9,033 | | | | - | | | | - | | | | 7,587 | | | | - | | | | - | |
| Federal funds sold | | | 29,932 | | | | 13 | | | | 0.18 | % | | | 27,462 | | | | 11 | | | | 0.16 | % |
| Total interest-earning assets | | | 2,887,420 | | | | 33,200 | | | | 4.66 | % | | | 2,400,455 | | | | 27,638 | | | | 4.63 | % |
| Cash and due from banks | | | 112,002 | | | | | | | | | | | | 75,484 | | | | | | | | | |
| Bank premises and equipment | | | 80,958 | | | | | | | | | | | | 64,746 | | | | | | | | | |
| Other assets | | | 259,335 | | | | | | | | | | | | 216,379 | | | | | | | | | |
| Less: Allowance for loan losses | | | (19,472 | ) | | | | | | | | | | | (19,726 | ) | | | | | | | | |
| Total assets | | $ | 3,320,243 | | | | | | | | | | | $ | 2,737,338 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | | 603,300 | | | | 178 | | | | 0.12 | % | | | 523,761 | | | | 178 | | | | 0.14 | % |
| Savings deposits | | | 584,048 | | | | 213 | | | | 0.15 | % | | | 448,435 | | | | 188 | | | | 0.17 | % |
Time deposits (8) | | | 1,106,982 | | | | 2,836 | | | | 1.04 | % | | | 889,110 | | | | 3,302 | | | | 1.49 | % |
| Short-term borrowings | | | 111,870 | | | | 71 | | | | 0.26 | % | | | 113,946 | | | | 73 | | | | 0.26 | % |
| Long-term debt | | | 16,495 | | | | 157 | | | | 3.86 | % | | | 16,495 | | | | 167 | | | | 4.07 | % |
| Total interest-bearing liabilities | | | 2,422,695 | | | | 3,455 | | | | 0.58 | % | | | 1,991,747 | | | | 3,908 | | | | 0.79 | % |
| Noninterest-bearing demand deposits | | | 498,404 | | | | | | | | | | | | 392,902 | | | | | | | | | |
| Other liabilities | | | 42,615 | | | | | | | | | | | | 36,436 | | | | | | | | | |
| Stockholders' equity | | | 356,529 | | | | | | | | | | | | 316,253 | | | | | | | | | |
| Total liabilities and | | | | | | | | | | | | | | | | | | | | | | | | |
| stockholders' equity | | $ | 3,320,243 | | | | | | | | | | | $ | 2,737,338 | | | | | | | | | |
| Net interest income | | | | | | $ | 29,745 | | | | | | | | | | | $ | 23,730 | | | | | |
| Net yield on earning assets | | | | | | | | | | | 4.18 | % | | | | | | | | | | | 3.98 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
(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) - Interest income on residential real estate loans includes $0.3 million and $0.2 million of accretion related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. | |
| (3) - Interest income on commercial, financial, and agriculture loans includes $0.7 million and $0.6 million of accretion related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. | |
| (4) - Interest income on installment loans to individuals includes $0.1 million and $0.1 million of accretion related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. | |
| (5) Includes the Company’s consumer and DDA overdrafts loan categories. | |
| (6) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. | |
(7) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%. | |
| (8) - Interest expense on time deposits includes $0.2 million and $0.2 million in accretion of the fair market value adjustments related to the acquisition of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. | |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | |
| Analysis of Risk-Based Capital | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | 2013 (a) | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | | |
| Tier I Capital: | | | | | | | | | | | | | | | |
| Stockholders' equity | | $ | 364,469 | | | $ | 333,274 | | | $ | 328,415 | | | $ | 320,622 | | | $ | 316,046 | |
| Goodwill and other intangibles | | | (75,563 | ) | | | (64,866 | ) | | | (64,912 | ) | | | (64,971 | ) | | | (55,871 | ) |
| Accumulated other comprehensive loss | | | 2,710 | | | | 1,422 | | | | 365 | | | | 2,477 | | | | 1,737 | |
| Qualifying trust preferred stock | | | 16,000 | | | | 16,000 | | | | 16,000 | | | | 16,000 | | | | 16,000 | |
| Unrealized loss on AFS securities | | | - | | | | - | | | | - | | | | - | | | | - | |
| Excess deferred tax assets | | | (17,737 | ) | | | (6,577 | ) | | | (7,472 | ) | | | (7,847 | ) | | | (4,020 | ) |
| Total tier I capital | | $ | 289,880 | | | $ | 279,254 | | | $ | 272,397 | | | $ | 266,282 | | | $ | 273,892 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Risk-Based Capital: | | | | | | | | | | | | | | | | | | | | |
| Tier I capital | | $ | 289,880 | | | $ | 279,254 | | | $ | 272,397 | | | $ | 266,282 | | | $ | 273,892 | |
| Qualifying allowance for loan losses | | | 19,721 | | | | 18,809 | | | | 18,986 | | | | 19,452 | | | | 18,628 | |
| Unrealized gain on securities | | | 696 | | | | - | | | | - | | | | - | | | | - | |
| Total risk-based capital | | $ | 310,297 | | | $ | 298,063 | | | $ | 291,383 | | | $ | 285,734 | | | $ | 292,520 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net risk-weighted assets | | $ | 2,436,022 | | | $ | 2,152,622 | | | $ | 2,112,581 | | | $ | 2,136,249 | | | $ | 2,050,520 | |
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| Ratios: | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 10.74 | % | | | 11.49 | % | | | 11.32 | % | | | 11.47 | % | | | 11.55 | % |
| Tangible capital ratio | | | 8.61 | % | | | 9.40 | % | | | 9.29 | % | | | 9.03 | % | | | 9.54 | % |
| Risk-based capital ratios: | | | | | | | | | | | | | | | | | | | | |
| Tier I capital | | | 11.90 | % | | | 12.97 | % | | | 12.89 | % | | | 12.46 | % | | | 13.36 | % |
| Total risk-based capital | | | 12.74 | % | | | 13.85 | % | | | 13.79 | % | | | 13.38 | % | | | 14.27 | % |
| Leverage capital | | | 8.98 | % | | | 9.82 | % | | | 9.67 | % | | | 9.74 | % | | | 10.23 | % |
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| | | | | | | | | | | | | | | | | | | | | |
| (a) March 31, 2013 risk-based capital ratios are estimated | | | | | | | | | | | | | | | | | |
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| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | |
| Intangibles | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | As of and for the Quarter Ended | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | | 2013 | | | | 2012 | | | | 2012 | | | | 2012 | | | | 2012 | |
| | | | | | | | | | | | | | | | | | | | | |
| Intangibles, net | | $ | 75,750 | | | $ | 65,057 | | | $ | 65,103 | | | $ | 65,162 | | | $ | 56,066 | |
| Intangibles amortization expense | | | 260 | | | | 135 | | | | 135 | | | | 109 | | | | 98 | |
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CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | |
| Summary of Loan Loss Experience | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Quarter Ended | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | 2013 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 18,809 | | | $ | 18,986 | | | $ | 19,452 | | | $ | 18,628 | | | $ | 19,409 | |
| | | | | | | | | | | | | | | | | | | | | |
| Charge-offs: | | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | 62 | | | | 100 | | | | 9 | | | | 48 | | | | 69 | |
| Commercial real estate | | | 203 | | | | 1,744 | | | | 845 | | | | 26 | | | | 1,989 | |
| Residential real estate | | | 591 | | | | 284 | | | | 252 | | | | 296 | | | | 198 | |
| Home equity | | | 116 | | | | 366 | | | | 133 | | | | 347 | | | | 509 | |
| Consumer | | | 3 | | | | 42 | | | | 53 | | | | 36 | | | | 59 | |
| DDA overdrafts | | | 339 | | | | 394 | | | | 418 | | | | 375 | | | | 335 | |
| Total charge-offs | | | 1,314 | | | | 2,930 | | | | 1,710 | | | | 1,128 | | | | 3,159 | |
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| Recoveries: | | | | | | | | | | | | | | | | | | | | |
| Commercial and industrial | | | 1 | | | | 19 | | | | 10 | | | | - | | | | 3 | |
| Commercial real estate | | | 18 | | | | 190 | | | | 3 | | | | - | | | | 96 | |
| Residential real estate | | | 48 | | | | 7 | | | | 8 | | | | 3 | | | | 4 | |
| Home equity | | | - | | | | 6 | | | | 1 | | | | 10 | | | | 1 | |
| Consumer | | | 147 | | | | 45 | | | | 26 | | | | 35 | | | | 29 | |
| DDA overdrafts | | | 274 | | | | 711 | | | | 221 | | | | 229 | | | | 295 | |
| Total recoveries | | | 488 | | | | 978 | | | | 269 | | | | 277 | | | | 427 | |
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| Net charge-offs | | | 826 | | | | 1,952 | | | | 1,441 | | | | 851 | | | | 2,731 | |
| Provision for loan losses | | | 1,738 | | | | 1,775 | | | | 975 | | | | 1,675 | | | | 1,950 | |
| Balance at end of period | | $ | 19,721 | | | $ | 18,809 | | | $ | 18,986 | | | $ | 19,452 | | | $ | 18,628 | |
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| Loans outstanding | | $ | 2,497,023 | | | $ | 2,146,369 | | | $ | 2,085,232 | | | $ | 2,065,589 | | | $ | 1,971,964 | |
| Average loans outstanding | | | 2,465,336 | | | | 2,104,483 | | | | 2,070,264 | | | | 2,019,281 | | | | 1,972,478 | |
| Allowance as a percent of loans outstanding | | | 0.79 | % | | | 0.88 | % | | | 0.91 | % | | | 0.94 | % | | | 0.94 | % |
| Allowance as a percent of non-performing loans | | | 57.85 | % | | | 84.67 | % | | | 82.61 | % | | | 88.92 | % | | | 88.78 | % |
| Net charge-offs (annualized) as a | | | | | | | | | | | | | | | | | | | | |
| percent of average loans outstanding | | | 0.13 | % | | | 0.37 | % | | | 0.28 | % | | | 0.17 | % | | | 0.55 | % |
| Net charge-offs, excluding overdraft deposit | | | | | | | | | | | | | | | | | | | | |
| accounts, (annualized) as a percent of average loans outstanding | | | 0.12 | % | | | 0.43 | % | | | 0.24 | % | | | 0.14 | % | | | 0.55 | % |
CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | |
| Summary of Non-Performing Assets | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | 2013 | | | 2012 | | | 2012 | | | 2012 | | | 2012 | |
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| Nonaccrual loans | | $ | 33,293 | | | $ | 21,935 | | | $ | 22,586 | | | $ | 21,726 | | | $ | 20,420 | |
| Accruing loans past due 90 days or more | | | 799 | | | | 280 | | | | 397 | | | | 149 | | | | 562 | |
| Previously securitized loans past due 90 days or more | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 34,092 | | | | 22,215 | | | | 22,983 | | | | 21,875 | | | | 20,982 | |
| Other real estate owned | | | 10,508 | | | | 8,162 | | | | 9,017 | | | | 8,697 | | | | 8,250 | |
| Total non-performing assets | | $ | 44,600 | | | $ | 30,377 | | | $ | 32,000 | | | $ | 30,572 | | | $ | 29,232 | |
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| Non-performing assets as a percent of loans and | | | | | | | | | | | | | | | | | | | | |
| other real estate owned | | | 1.78 | % | | | 1.41 | % | | | 1.53 | % | | | 1.47 | % | | | 1.48 | % |
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| | | | | | | | | | | | | | | | | | | | | |
| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | |
| Summary of Total Past Due Loans | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | | 2013 | | | | 2012 | | | | 2012 | | | | 2012 | | | | 2012 | |
| | | | | | | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 7,926 | | | $ | 5,748 | | | $ | 4,909 | | | $ | 5,575 | | | $ | 4,108 | |
| Home equity | | | 858 | | | | 2,893 | | | | 2,643 | | | | 1,864 | | | | 1,560 | |
| Commercial and industrial | | | 2,949 | | | | 496 | | | | 25 | | | | 540 | | | | 63 | |
| Commercial real estate | | | 2,315 | | | | 689 | | | | 1,271 | | | | 3,145 | | | | 2,636 | |
| Consumer | | | 947 | | | | 121 | | | | 136 | | | | 90 | | | | 58 | |
| DDA overdrafts | | | 337 | | | | 281 | | | | 319 | | | | 364 | | | | 304 | |
| Total past due loans | | $ | 15,332 | | | $ | 10,228 | | | $ | 9,303 | | | $ | 11,578 | | | $ | 8,729 | |
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| Past due loans as a percent of loans outstanding | | | 0.61 | % | | | 0.48 | % | | | 0.43 | % | | | 0.56 | % | | | 0.42 | % |
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| CITY HOLDING COMPANY AND SUBSIDIARIES | | | | | | | | | | | | | | | | | | | | |
| Summary of Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | |
| (Unaudited) ($ in 000s) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | March 31 | | | December 31 | | | September 30 | | | June 30 | | | March 31 | |
| | | | 2013 | | | | 2012 | | | | 2012 | | | | 2012 | | | | 2012 | |
| | | | | | | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 20,136 | | | $ | 18,988 | | | $ | 17,979 | | | $ | - | | | $ | - | |
| Home equity | | | 3,025 | | | | 3,743 | | | | 3,126 | | | | - | | | | - | |
| Commercial and industrial | | | 101 | | | | 101 | | | | - | | | | - | | | | - | |
| Commercial real estate | | | 1,805 | | | | 734 | | | | 227 | | | | 228 | | | | 228 | |
| Consumer | | | 142 | | | | 142 | | | | 144 | | | | 146 | | | | 147 | |
| Total | | $ | 25,209 | | | $ | 23,708 | | | $ | 21,476 | | | $ | 374 | | | $ | 375 | |
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| At September 30, 2012, the Company reclassified $21.1 million of loans as TDRs in accordance with recent regulatory guidance. The regulatory guidance requires loans to be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court and the borrower has not reaffirmed the debt. | |
