Exhibit 99
NEWS RELEASE
For Immediate Release
January 21, 2003
For Further Information Contact:
Jerry Francis, Chairman, President & CEO
(304) 769-1101
City Holding Company Announces 22% increase
in Fourth Quarter Net Income
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO; NASDAQ:CHCOP), a $2 billion bank holding company headquartered in Charleston, today announced net income for the fourth quarter of $9.4 million, or diluted earnings per share of $0.55, compared to $7.6 million, or $0.45 per diluted share, in the fourth quarter of 2001, representing a 22% increase. However, the Company actually experienced an improvement in net income of 60% after adjusting for a $4.7 million pre-tax gain it recognized on the sale of its California banking affiliates in the fourth quarter of 2001, offset by no provision for loan losses taken during the fourth quarter of 2002. During the fourth quarter of 2002, the Company had a Return on Assets of 1.90%, a Return on Equity of 22.9%, Net Interest Margin of 4.70%, and an Efficiency Ratio of 54.9%, placing the Company among the most profitable banks in the United States for the quarter. For the full year, the Company reported net income of $32.5 million, or diluted earnings per share of $1.90, compared with a loss for 2001 of $26 million, or $1.54 per diluted share. For the full year, the Company’s Return on Assets was 1.59%, Return on Equity was 20.5%, Net Interest Margin was 4.69%, and the Efficiency Ratio was 58.7%.
“These results demonstrate that City Holding Company’s financial performance is stronger than most of its peers, and that the Company has achieved one of the strongest turnarounds in banking history”, stated Jerry Francis, Chairman, President, and CEO of City Holding Company and its primary subsidiary City National Bank of West Virginia. “The Company was ranked the 7th top performing stock of 2002 earlier this month by the “Bloomberg 100” annual index of best performing stocks and was the only bank to appear in the top 10 of this much-heralded annual list. Over the past two years, common shares of the Company appreciated nearly four-fold, or 391%, making it the best stock value of all banks in the United States, and the fourth best value of all American publicly traded companies during this time period (excluding small companies with share prices under $5 and market capitalization below $100 million.) Our shareholders have been richly rewarded for the confidence that they have shown in our Company as the value of the shares held in City Holding Company has risen by over $350 million. As an additional honor for our Company and its employees, in December I was honored as “2002 Community Banker of the Year” by theAmerican Banker, our industry’s most highly respected trade publication. I accepted that award on behalf of our Board of Directors, management, and the Company’s employees whose efforts all contributed to make City the “Community Bank of the Year”.”
Other accomplishments for the Company during the year included our release from formal agreements with the Office of Comptroller of the Currency and the Federal Reserve Bank of Richmond in May of 2002; and, the restoration of dividend payments on both our common shares and our two outstanding Trust Preferred series in June of 2002. We are extremely proud of these achievements and look forward to further accomplishments on behalf of our shareholders in 2003.”
Net Interest Income
For the full year, the Company recorded net interest income of $88.5 million as compared to $92.9 million during 2001. The decrease can be attributed to the sale of the California banking affiliates that contributed net interest income during 2001 of $6.8 million. After adjusting for the sale of the California banking
affiliates, the Company actually experienced a 2.8% increase in net interest income for the full year despite the Company’s efforts to reduce exposure to certain loans. The net interest margin for 2002 was 4.69% compared to 4.12% during 2001. The increase in net interest margin can be attributed to a full year accrual of interest on the Company’s retained interest in securitized loans and the Company’s strategic efforts to reduce the Company’s reliance on short-term borrowing, brokered time deposits, and high-cost in-market time deposits which allowed the Company’s average cost of liabilities to fall by 172 basis points while asset rates declined by only 102 basis points.
For the fourth quarter of 2002, the Company recorded net interest income of $21.6 million as compared to $24.6 million in the fourth quarter of 2001, a decrease of $3 million. The decrease is partly attributable to the sale of the California banking affiliates that contributed $1.2 million of net interest income during the fourth quarter of 2001. The Company’s net interest margin was 4.70% in the fourth quarter of 2002 as compared to 4.67% during the fourth quarter of 2001.
Credit Quality
The Company achieved dramatic improvement in the credit quality of its loan portfolio during 2002 as demonstrated by fourth quarter net charge-offs of $0.1 million, as compared to net charge-offs of $8.3 million during the fourth quarter of 2001. For the full year, the Company recorded net charge-offs of $21.9 million, as compared to net charge-offs of $22.1 million during 2001.
During 2001 and 2002, the Company’s new management was focused on identifying and resolving problem loans. As a result, non-performing assets fell from $31.7 million at December 31, 2001 to $3.4 million at December 31, 2002, representing just 0.28% of total loans and other real estate outstanding. The provision for loan losses declined from $32.2 million in 2001 to $1.8 million in 2002, with no provision required in the fourth quarter of 2002 (compared to $1.8 million in the fourth quarter of 2001). The Company believes that its methodology for determining its Allowance for Loan Losses (“ALLL”) adequately provides for probable losses inherent in the loan portfolio at December 31, 2002 when the ALLL was $28.5 million, or 948% of non-performing loans and 2.37% of total loans. If the Company’s loan loss experience remains good in the future, the methodology used to establish the ALLL could lead to low, zero, or negative provision expense in future periods.
Non-Interest Income
Non-Interest Income in the fourth quarter of 2002 was $9.6 million compared to $8.7 million in the fourth quarter of 2001 (net of a $4.7 million gain on the sale of the California affiliates). This increase in non-interest income is attributable primarily to a $1.0 million increase in service charges reflecting new services provided to the Company’s retail banking customers.
For the full year, non-interest income in 2002 was $34.1 million as compared to $38.2 million in 2001 (net of a $4.7 million gain on the sale of the California affiliates), a decrease of $4.1 million. However, service charge revenues were up $5.6 million in 2002 as compared to 2001, reflecting the Company’s focus on its retail deposit customer base. This increase in service charges was offset by a decrease of $3.2 million in out-of-market mortgage origination and servicing revenues and a $3.4 million gain on the sale of other affiliates during 2001.
Non-Interest Expenses
Non-interest expenses fell to $16.5 million in the fourth quarter of 2002 from $22.5 million in the fourth quarter of 2001, a 27% decrease. For the full year, expenses dropped from $114.4 million for 2001 to $69.8 million in 2002, representing a 39% decrease reflecting the Company’s active focus on managing expenses to appropriate levels. The Efficiency Ratio (defined as non-interest expense as a percent of total revenues) was 87% in 2001, but averaged only 58.7% during 2002. By the fourth quarter of 2002, the Efficiency Ratio had been further reduced to 54.9%. As a result, the Company went from having a sub-par Efficiency Ratio to achieving expenses lower than comparable banks in less than 18 months. Sustainable reductions have been achieved in virtually all expense categories. Compensation expense has declined as the result of
a “Best Practices” project that re-engineered work flows within the Company allowing a reduction of nearly 25% of the Company’s staff. During 2002, the Company continued to manage staffing to more efficient levels, resulting in a decline in the number of employees from 802 at December 31, 2001 to 737 at December 31, 2002. Occupancy expenses are down after exiting facilities associated with out-of-market operations. The reduction in depreciation expense reflects the Company’s intention of embarking upon only those capital expenditures that have proven ability to improve customer service, lower expenses, or grow revenues. Telecommunication expenses have been reduced primarily as a result of the Company’s exit from out-of-market businesses and a decision to eliminate a customer call center to increase customer interaction with local staff rather than a distant call center. Repossessed Asset Losses and Expenses and Losses on Disposal and Impairment of Fixed Assets have been greatly reduced as the quality of the Company’s assets has improved. The Company recognized expenses for out-of-market Loan Production Office Advisory Fees in 2001 and also took charges relating to Retained Interest Impairment during 2001. Finally, the Company’s insurance and regulatory expenses have declined as a result of lower OCC regulatory expenses and lower FDIC insurance expense accompanying the Company’s improved financial condition.
Balance Sheet Trends
Total assets at December 31, 2002 were $2.048 billion as compared to $2.116 billion at December 31, 2001. Strategically, the Company has focused on improving the credit quality of its loan portfolio and maintaining the overall profitability of these loans. The Company’s philosophy is to make loans that are both profitable and have acceptable credit quality. The Company believes that its high levels of profitability in 2002 reflect the strong core deposit franchise of the Company more than its total loan balances outstanding. As a result, the Company accepted decreases in loan balances during the year. With respect to its funding, the Company’s strategic focus was on reduced reliance on borrowings from the Federal Home Loan Bank, brokered deposits, and time deposits at above market rates – sources of funding that do not reflect the Company’s core deposit franchise. As a result, the Company’s balance sheet was allowed to shrink in order to improve the quality of the Company’s assets and to improve the Company’s liquidity and capital strength.
In line with this strategic repositioning of the balance sheet, gross loan balances decreased from $1.390 billion at December 31, 2001 to $1.204 billion at December 31, 2002. Residential loans decreased by 25% as interest rates fell and customers refinanced existing home mortgage loans. While the Company originated a significant volume of new loans during the year, it was unable to replace all maturing loans as a result of its focus on originating only profitable loans within its core markets. The Company was very successful in its strategic goals relating to Home Equity loan originations, which grew by 115% during 2002.The Company’s concentration of home equity loans is among the highest in the industry, reflecting the Company’s focus on growing profitable retail loans with acceptable credit quality. The Company’s commercial lending division was focused on improving the overall credit quality of the portfolio. As a result, total commercial loan balances have fallen. However, Commercial Real Estate loans decreased by only 4% while Other Commercial loans have decreased by 35% since December 31, 2001 reflecting the Company’s preference for real estate secured commercial lending. Consistent with its strategy of exiting the business, Indirect loans decreased by 44%. Installment loans were down 50% as well, reflecting the Company’s strategy of significantly reducing loans with higher levels of credit risk or inadequate profitability.
During the fourth quarter of 2002, loan balances decreased by $25 million, including a reduction of $15 million in Loans to Depository Institutions. Increases in Home Equity loans of $26 million (14% growth) offset a reduction of $15 million in Residential Real Estate loans. Growth in Commercial Real Estate lending of $11 million, or 4%, primarily offset the decrease in non-real estate secured Other Commercial loans of $14 million, while Credit Card loans were up $1 million. Therefore, the main reason for the decrease in loan balances during the quarter can be linked to a reduction of $19 million in Indirect auto loans and consumer Installment lending reflecting the Company’s strategic goals.
Total deposits were $1.565 billion at December 31, 2002 as compared to $1.562 billion at September 30, 2002 and $1.691 billion at December 31, 2001. This is a reduction of $127 million, of which $122 million
was in the form of high cost time deposits used by the Company to fund its balance sheet growth in 2000. This reduction was part of the Company’s strategic plan to increase profitability and improve liquidity.
Retained Interests in Securitized Loans
Between 1997 and 1999, the company originated and securitized $760 million in 125% loan to value junior-lien mortgages. The Company has a retained interest in the final cash flows associated with these underlying mortgages after satisfying priority claims. At November 30, 2002 (the most current date that information is available), the outstanding principal balances of the mortgages securitized were $235.8 million. The outstanding obligation to the purchasers of the priority claims was $123.2 million with the Company having an interest in the remaining $112.6 million in balances. The Company determines the value of the retained interests using assumptions regarding default rates, prepayment rates, and an appropriate discount rate for assets of similar characteristics. At December 31, 2002 the Company estimates the fair value of these assets to be $90.3 million, compared to the book value of $80.9 million. The Bank is required to accrete the difference between the fair value and the book value over the life of the investment. Therefore, the retained interests accrued at the rate of 16.87% during the fourth quarter of 2002. During 2002 and 2001, the Company accrued $12.4 and $7.4 million toward the expectation of when, and how much, cash will be received in the future, reflecting an annual yield of 16.26% and 10.40%, respectively. The Company received its initial cash in 2002 totaling $2.7 million.
Capitalization
As required by regulation, effective September 30, 2002 the Company implemented new regulatory capital requirements related to the Bank’s investment in retained interest in securitized mortgages. Under these new regulations, the Company’s Tier I Capital ratio at December 31, 2002 was 9.92%, the Total Risk-based Capital Ratio was 13.42%, and the Leverage Ratio was 8.49%. Both the Company and the Bank are “well capitalized”, which is the highest possible regulatory designation regarding capital levels.
During December of 2002, the Board approved payment of current dividends on the Company’s 9.125% Capital Securities issued by the Company’s wholly-owned subsidiary, City Holding Capital Trust II payable January 31, 2003 to shareholders of record as of January 16, 2003. In addition, the board approved a quarterly cash dividend of 15 cents per share on the Company’s common shares payable on January 31, 2003 to shareholders of record at January 16, 2003.
In June of 2002, the Board of Directors of the Company announced a one million share purchase program. As a result of this program, at December 31, 2002 the Company had purchased 302,400 shares of common stock at an average price of $24.71. In June of 2002, the Board of Directors of the Company also announced a $25 million program to retire the outstanding capital securities issued by either City Holding Capital Trust or City Holding Capital Trust II. As of December 31, 2002 the Company has not taken any action on these securities, but remains ready to do so if the opportunity appears financially attractive. It should be noted that shares of City Holding Capital Trust II are callable, in whole or in part, at par on October 31, 2003.
City Holding Company is the parent company of City National Bank of West Virginia. In addition to the Bank, City National Bank operates CityInsurance Professionals, an insurance agency offering a full range of insurance products and services.
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, or conversely, the Company may incur less, or even negative, loan loss provision due to positive credit quality trends in the future; (2 ) the Company may not continue to
experience significant recoveries of previously charged-off loans and the Company may incur increased charge-offs in the future; (3) the Company may experience increases in the default rates on its retained interests in securitized mortgages causing it to take impairment charges to earnings; (4) the Company may not realize the expected cash payments that it is presently accruing from its retained interests in securitized mortgages; (5) the Company could have adverse legal actions of a material nature; (6) the Company may face competitive loss of customers associated with its efforts to increase fee-based revenues; (7) the Company may be unable to manage its expense levels due to the expenses associated with its loan portfolio quality, regulatory, and legal issues; (8) rulings affecting, among other things, the Company’s and its banking subsidiaries’ regulatory capital and required loan loss allocations may change, resulting in the need for increased capital levels; (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; (12) the planned purchase of Trust I and Trust II Capital Securities and the common stock may not occur or may not have the effects anticipated; and (13) 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.
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
|
| | | Three Months Ended
| | | Percent Change
| |
| | | December 31, 2002
| | | December 31, 2001
| | |
| Earnings ($000s, except per share data): | | | | | | | | | | | |
| Net Interest Income (FTE) | | $ | 21,574 | | | $ | 24,600 | | | (12.30 | )% |
| Net Income | | | 9,408 | | | | 7,595 | | | 23.87 | % |
| Earnings per Basic Share | | | 0.56 | | | | 0.45 | | | 24.44 | % |
| Earnings per Diluted Share | | | 0.55 | | | | 0.45 | | | 22.22 | % |
|
| Key Ratios (percent): | | | | | | | | | | | |
| Return on Average Assets | | | 1.90 | % | | | 1.34 | % | | 41.79 | % |
| Return on Average Equity | | | 22.88 | % | | | 20.93 | % | | 9.32 | % |
| Net Interest Margin | | | 4.70 | % | | | 4.67 | % | | 0.64 | % |
| Efficiency Ratio | | | 54.88 | % | | | 60.88 | % | | (9.86 | )% |
| Average Shareholders' Equity to Average Assets | | | 8.30 | % | | | 6.42 | % | | 29.28 | % |
| Risk-Based Capital Ratios (a), (b): | | | | | | | | | | | |
| Tier I | | | 9.92 | % | | | 7.65 | % | | 29.67 | % |
| Total | | | 13.42 | % | | | 11.43 | % | | 17.41 | % |
|
| Common Stock Data: | | | | | | | | | | | |
| Cash Dividends Declared per Share | | $ | 0.15 | | | $ | — | | | N/A | |
| Book Value per Share | | | 9.93 | | | | 8.67 | | | 14.53 | % |
| Market Value per Share: | | | | | | | | | | | |
| High | | | 30.20 | | | | 13.40 | | | 125.37 | % |
| Low | | | 21.75 | | | | 9.25 | | | 135.14 | % |
| End of Period | | | 28.26 | | | | 12.04 | | | 134.72 | % |
| Price/Earnings Ratio (c) | | | 12.62 | | | | 6.69 | | | 88.64 | % |
| (a) | | December 31, 2002 risk-based capital ratios are estimated. |
| (b) | | Effective September 30, 2002, the Company implemented new regulatory capital requirements related to the Company's investment in retained interests in securitized mortgages. The December 31, 2001 capital ratios reported in the table above have been modified to reflect the impact of new regulatory guidelines as if the new guidelines had been implemented in December 2001. |
| (c) | | December 31, 2002 price/earnings ratio computed based on annualized fourth quarter 2002 earnings. |
|
| | | Twelve Months Ended
| | | Percent Change
| |
| | | December 31, 2002
| | | December 31, 2001
| | |
| Earnings ($000s, except per share data): | | | | | | | | | | | |
| Net Interest Income (FTE) | | $ | 88,467 | | | $ | 92,863 | | | (4.73 | )% |
| Net Income (Loss) | | | 32,459 | | | | (26,000 | ) | | N/A | |
| Earnings (Loss) per Basic Share | | | 1.93 | | | | (1.54 | ) | | N/A | |
| Earnings (Loss) per Diluted Share | | | 1.90 | | | | (1.54 | ) | | N/A | |
|
| Key Ratios (percent): | | | | | | | | | | | |
| Return on Average Assets | | | 1.59 | % | | | (1.07 | )% | | N/A | |
| Return on Average Equity | | | 20.54 | % | | | (16.85 | )% | | N/A | |
| Net Interest Margin | | | 4.69 | % | | | 4.12 | % | | 13.83 | % |
| Efficiency Ratio | | | 58.67 | % | | | 86.98 | % | | (32.55 | )% |
| Average Shareholders' Equity to Average Assets | | | 7.74 | % | | | 6.34 | % | | 22.08 | % |
|
| Common Stock Data: | | | | | | | | | | | |
| Cash Dividends Declared per Share | | $ | 0.45 | | | $ | — | | | N/A | |
| Market Value per Share: | | | | | | | | | | | |
| High | | | 30.20 | | | | 14.64 | | | 106.28 | % |
| Low | | | 12.04 | | | | 5.13 | | | 134.93 | % |
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Book Value and Market Price Range per Share
| | | Book Value per Share
| | Market Price Range per Share
|
| | | March 31
| | June 30
| | September 30
| | December 31
| | Low
| | High
|
| 1997 (a) | | $ | 13.90 | | $ | 14.41 | | $ | 16.18 | | $ | 16.56 | | $ | 25.75 | | $ | 43.25 |
| 1998 (a) | | | 17.18 | | | 18.72 | | | 18.56 | | | 13.09 | | | 30.00 | | | 51.00 |
| 1999 | | | 13.07 | | | 12.85 | | | 12.80 | | | 11.77 | | | 12.50 | | | 32.75 |
| 2000 | | | 11.76 | | | 11.72 | | | 11.72 | | | 9.68 | | | 4.88 | | | 16.19 |
| 2001 | | | 8.82 | | | 8.70 | | | 8.37 | | | 8.67 | | | 5.13 | | | 14.64 |
| 2002 | | | 8.92 | | | 9.40 | | | 9.64 | | | 9.93 | | | 12.04 | | | 30.20 |
Earnings per Basic Share
| | | Quarter Ended
| |
| | | March 31
| | | June 30
| | | September 30
| | | December 31
| | | Year-to-Date
| |
| 1997 (a) | | $ | 0.47 | | | $ | 0.52 | | | $ | 0.57 | | | $ | 0.47 | | | $ | 2.03 | |
| 1998 (a) | | | 0.48 | | | | 0.49 | | | | 0.56 | | | | (0.89 | ) | | | 0.31 | |
| 1999 | | | 0.31 | | | | 0.42 | | | | 0.14 | | | | (0.49 | ) | | | 0.37 | |
| 2000 | | | 0.24 | | | | 0.02 | | | | (0.05 | ) | | | (2.47 | ) | | | (2.27 | ) |
| 2001 | | | (0.34 | ) | | | (1.19 | ) | | | (0.46 | ) | | | 0.45 | | | | (1.54 | ) |
| 2002 | | | 0.38 | | | | 0.45 | | | | 0.53 | | | | 0.56 | | | | 1.93 | |
Earnings per Diluted Share
| | | Quarter Ended
| |
| | | March 31
| | | June 30
| | | September 30
| | | December 31
| | | Year-to-Date
| |
| 1997 (a) | | $ | 0.47 | | | $ | 0.52 | | | $ | 0.57 | | | $ | 0.47 | | | $ | 2.03 | |
| 1998 (a) | | | 0.48 | | | | 0.49 | | | | 0.56 | | | | (0.89 | ) | | | 0.31 | |
| 1999 | | | 0.31 | | | | 0.42 | | | | 0.14 | | | | (0.49 | ) | | | 0.37 | |
| 2000 | | | 0.24 | | | | 0.02 | | | | (0.05 | ) | | | (2.47 | ) | | | (2.27 | ) |
| 2001 | | | (0.34 | ) | | | (1.19 | ) | | | (0.46 | ) | | | 0.45 | | | | (1.54 | ) |
| 2002 | | | 0.38 | | | | 0.45 | | | | 0.52 | | | | 0.55 | | | | 1.90 | |
| (a) | | Book value and per share amounts reported in 1997 and through September 30, 1998 are as previously reported by City Holding Company and have not been restated to include the operations of Horizon Bancorp, Inc. |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | Three Months Ended December 31
|
| | | 2002
| | | 2001
|
Interest Income | | | | | | | |
| Interest and fees on loans | | $ | 21,573 | | | $ | 32,104 |
| Interest on investment securities: | | | | | | | |
| Taxable | | | 4,906 | | | | 3,989 |
| Tax-exempt | | | 635 | | | | 770 |
| Interest on retained interests | | | 3,390 | | | | 2,628 |
| Interest on federal funds sold | | | 112 | | | | 394 |
| | |
|
|
| |
|
|
Total Interest Income | | | 30,616 | | | | 39,885 |
Interest Expense | | | | | | | |
| Interest on deposits | | | 6,161 | | | | 11,988 |
| Interest on short-term borrowings | | | 1,014 | | | | 1,128 |
| Interest on long-term debt | | | 284 | | | | 497 |
| Interest on trust preferred securities | | | 2,006 | | | | 2,087 |
| | |
|
|
| |
|
|
Total Interest Expense | | | 9,465 | | | | 15,700 |
| | |
|
|
| |
|
|
Net Interest Income | | | 21,151 | | | | 24,185 |
| Provision for loan losses | | | — | | | | 1,820 |
| | |
|
|
| |
|
|
Net Interest Income After Provision for Loan Losses | | | 21,151 | | | | 22,365 |
Non-Interest Income | | | | | | | |
| Investment securities gains | | | 666 | | | | 565 |
| Service charges | | | 6,790 | | | | 5,759 |
| Insurance commissions | | | 411 | | | | 537 |
| Trust fee income | | | 345 | | | | 322 |
| Mortgage banking income | | | 233 | | | | 248 |
| Other income | | | 1,110 | | | | 5,978 |
| | |
|
|
| |
|
|
Total Non-Interest Income | | | 9,555 | | | | 13,409 |
Non-Interest Expense | | | | | | | |
| Salaries and employee benefits | | | 7,631 | | | | 9,175 |
| Occupancy and equipment | | | 1,679 | | | | 2,200 |
| Depreciation | | | 1,288 | | | | 1,805 |
| Advertising | | | 646 | | | | 528 |
| Telecommunications | | | 565 | | | | 765 |
| Office supplies | | | 468 | | | | 725 |
| Postage and delivery | | | 204 | | | | 713 |
| Loan production office advisory fees | | | — | | | | — |
| Professional fees and litigation expense | | | 702 | | | | 1,547 |
| Loss on disposal and impairment of fixed assets | | | 6 | | | | 469 |
| Repossessed asset losses and expenses | | | (3 | ) | | | 326 |
| Insurance and regulatory | | | 189 | | | | 507 |
| Retained interest impairment | | | — | | | | — |
| Other expenses | | | 3,111 | | | | 3,784 |
| | |
|
|
| |
|
|
Total Non-Interest Expense | | | 16,486 | | | | 22,544 |
| | |
|
|
| |
|
|
Income Before Income Taxes and Cumulative Effect of Accounting Change | | | 14,220 | | | | 13,230 |
| Income Tax Expense | | | 4,812 | | | | 5,635 |
| | |
|
|
| |
|
|
Net Income Before Cumulative Effect of Accounting Change | | | 9,408 | | | | 7,595 |
| Cumulative Effect of Accounting Change, Net of Tax | | | — | | | | — |
| | |
|
|
| |
|
|
Net Income | | $ | 9,408 | | | $ | 7,595 |
| | |
|
|
| |
|
|
Basic Earnings per Share: | | | | | | | |
| Net Income Before Cumulative Effect of Accounting Change | | $ | 0.56 | | | $ | 0.45 |
| Cumulative Effect of Accounting Change | | | — | | | | — |
| | |
|
|
| |
|
|
Net Income | | $ | 0.56 | | | $ | 0.45 |
| | |
|
|
| |
|
|
Diluted Earnings per Share: | | | | | | | |
| Net Income Before Cumulative Effect of Accounting Change | | $ | 0.55 | | | $ | 0.45 |
| Cumulative Effect of Accounting Change | | | — | | | | — |
| | |
|
|
| |
|
|
Net Income | | $ | 0.55 | | | $ | 0.45 |
| | |
|
|
| |
|
|
Average Common Shares Outstanding: | | | | | | | |
| Basic | | | 16,652 | | | | 16,888 |
| Diluted | | | 16,999 | | | | 16,961 |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | Twelve Months Ended December 31
| |
| | | 2002
| | | 2001
| |
Interest Income | | | | | | | | |
| Interest and fees on loans | | $ | 93,380 | | | $ | 150,036 | |
| Interest on investment securities: | | | | | | | | |
| Taxable | | | 19,871 | | | | 15,518 | |
| Tax-exempt | | | 2,701 | | | | 3,340 | |
| Interest on retained interests | | | 12,427 | | | | 7,430 | |
| Interest on federal funds sold | | | 586 | | | | 1,156 | |
| | |
|
|
| |
|
|
|
Total Interest Income | | | 128,965 | | | | 177,480 | |
|
Interest Expense | | | | | | | | |
| Interest on deposits | | | 29,350 | | | | 67,543 | |
| Interest on short-term borrowings | | | 2,765 | | | | 8,604 | |
| Interest on long-term debt | | | 1,809 | | | | 2,147 | |
| Interest on trust preferred securities | | | 8,375 | | | | 8,121 | |
| | |
|
|
| |
|
|
|
Total Interest Expense | | | 42,299 | | | | 86,415 | |
| | |
|
|
| |
|
|
|
Net Interest Income | | | 86,666 | | | | 91,065 | |
| Provision for loan losses | | | 1,800 | | | | 32,178 | |
| | |
|
|
| |
|
|
|
Net Interest Income After Provision for Loan Losses | | | 84,866 | | | | 58,887 | |
|
Non-Interest Income | | | | | | | | |
| Investment securities gains | | | 1,459 | | | | 2,382 | |
| Service charges | | | 23,500 | | | | 17,905 | |
| Insurance commissions | | | 1,884 | | | | 2,214 | |
| Trust fee income | | | 1,334 | | | | 1,385 | |
| Mortgage banking income | | | 856 | | | | 4,020 | |
| Other income | | | 5,071 | | | | 14,946 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Income | | | 34,104 | | | | 42,852 | |
|
Non-Interest Expense | | | | | | | | |
| Salaries and employee benefits | | | 31,915 | | | | 42,758 | |
| Occupancy and equipment | | | 6,655 | | | | 9,377 | |
| Depreciation | | | 5,749 | | | | 8,777 | |
| Advertising | | | 2,568 | | | | 2,465 | |
| Telecommunications | | | 2,404 | | | | 4,054 | |
| Office supplies | | | 1,557 | | | | 2,234 | |
| Postage and delivery | | | 938 | | | | 2,563 | |
| Loan production office advisory fees | | | — | | | | 2,198 | |
| Professional fees and litigation expense | | | 2,857 | | | | 9,248 | |
| Loss on disposal and impairment of fixed assets | | | (85 | ) | | | 3,951 | |
| Repossessed asset losses and expenses | | | 664 | | | | 2,557 | |
| Insurance and regulatory | | | 1,656 | | | | 2,134 | |
| Retained interest impairment | | | — | | | | 2,182 | |
| Other expenses | | | 12,911 | | | | 19,907 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Expense | | | 69,789 | | | | 114,405 | |
| | |
|
|
| |
|
|
|
Income (Loss) Before Income Taxes and Cumulative Effect of Accounting Change | | | 49,181 | | | | (12,666 | ) |
| Income Tax Expense (Benefit) | | | 16,722 | | | | (4,651 | ) |
| | |
|
|
| |
|
|
|
Net Income (Loss) Before Cumulative Effect of Accounting Change | | | 32,459 | | | | (8,015 | ) |
| Cumulative Effect of Accounting Change, Net of Tax | | | — | | | | (17,985 | ) |
| | |
|
|
| |
|
|
|
Net Income (Loss) | | $ | 32,459 | | | $ | (26,000 | ) |
| | |
|
|
| |
|
|
|
Basic Earnings (Loss) per Share: | | | | | | | | |
| Net Income (Loss) Before Cumulative Effect of Accounting Change | | $ | 1.93 | | | $ | (0.47 | ) |
| Cumulative Effect of Accounting Change | | | — | | | | (1.07 | ) |
| | |
|
|
| |
|
|
|
Net Income (Loss) | | $ | 1.93 | | | $ | (1.54 | ) |
| | |
|
|
| |
|
|
|
Diluted Earnings (Loss) per Share: | | | | | | | | |
| Net Income (Loss) Before Cumulative Effect of Accounting Change | | $ | 1.90 | | | $ | (0.47 | ) |
| Cumulative Effect of Accounting Change | | | — | | | | (1.07 | ) |
| | |
|
|
| |
|
|
|
Net Income (Loss) | | $ | 1.90 | | | $ | (1.54 | ) |
| | |
|
|
| |
|
|
|
Average Common Shares Outstanding: | | | | | | | | |
| Basic | | | 16,809 | | | | 16,888 | |
| Diluted | | | 17,072 | | | | 16,888 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) ($ in 000s)
| | | Three Months Ended
| |
| | | December 31, 2002
| | | December 31, 2001
| |
Balance at September 30 | | $ | 160,705 | | | $ | 141,363 | |
|
| Net Income | | | 9,408 | | | | 7,595 | |
| Other Comprehensive Income: | | | | | | | | |
| Change in Unrealized Gain on Securities Available for Sale | | | (117 | ) | | | (2,609 | ) |
| Change in Underfunded Pension Liability | | | (1,544 | ) | | | | |
| Cash dividends declared ($0.15/share) | | | (2,495 | ) | | | — | |
| Exercise of 19,137 stock options | | | 436 | | | | — | |
| Purchase of 38,600 common shares for treasury | | | (1,000 | ) | | | — | |
| | |
|
|
| |
|
|
|
Balance at December 31 | | $ | 165,393 | | | $ | 146,349 | |
| | |
|
|
| |
|
|
|
|
| | | Twelve Months Ended
| |
| | | December 31, 2002
| | | December 31, 2001
| |
Balance at December 31 | | $ | 146,349 | | | $ | 163,457 | |
|
| Net Income (Loss) | | | 32,459 | | | | (26,000 | ) |
| Other Comprehensive Income: | | | | | | | | |
| Change in Unrealized Gain on Securities Available for Sale | | | 2,033 | | | | 2,407 | |
| Change in Unrealized Loss on Retained Interest in Securitized Mortgages | | | — | | | | 6,485 | |
| Change in Underfunded Pension Liability | | | (1,544 | ) | | | | |
| Cash dividends declared ($0.45/share) | | | (7,535 | ) | | | — | |
| Exercise of 72,151 stock options | | | 1,104 | | | | — | |
| Purchase of 302,400 common shares for treasury | | | (7,473 | ) | | | — | |
| | |
|
|
| |
|
|
|
Balance at December 31 | | $ | 165,393 | | | $ | 146,349 | |
| | |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | Quarter Ended
|
| | | Dec. 31 2002
| | Sept. 30 2002
| | June 30 2002
| | March 31 2002
| | Dec. 31 2001
|
| Interest income | | $ | 30,616 | | $ | 31,701 | | $ | 32,767 | | $ | 33,881 | | $ | 39,885 |
| Taxable equivalent adjustment | | | 423 | | | 351 | | | 368 | | | 394 | | | 415 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| Interest income (FTE) | | | 31,039 | | | 32,052 | | | 33,135 | | | 34,275 | | | 40,300 |
| Interest expense | | | 9,465 | | | 9,689 | | | 10,887 | | | 12,258 | | | 15,700 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| Net interest income | | | 21,574 | | | 22,363 | | | 22,248 | | | 22,017 | | | 24,600 |
| Provision for loan losses | | | — | | | — | | | 900 | | | 900 | | | 1,820 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| Net interest income after provision for loan losses | | | 21,574 | | | 22,363 | | | 21,348 | | | 21,117 | | | 22,780 |
| Noninterest income (a) | | | 9,555 | | | 8,839 | | | 8,696 | | | 7,014 | | | 13,409 |
| Noninterest expense | | | 16,486 | | | 17,257 | | | 17,874 | | | 18,172 | | | 22,544 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| Income before income taxes | | | 14,643 | | | 13,945 | | | 12,170 | | | 9,959 | | | 13,645 |
| Income tax expense | | | 4,812 | | | 4,622 | | | 4,131 | | | 3,157 | | | 5,635 |
| Taxable equivalent adjustment | | | 423 | | | 351 | | | 368 | | | 394 | | | 415 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| Net income | | | 9,408 | | | 8,972 | | | 7,671 | | | 6,408 | | | 7,595 |
| Cumulative effect of change in accounting principle, net | | | — | | | — | | | — | | | — | | | — |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
| Net income | | $ | 9,408 | | $ | 8,972 | | $ | 7,671 | | $ | 6,408 | | $ | 7,595 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
(a) During the fourth quarter of 2001, "noninterest income" included a gain of approximately $4.67 million resulting from the sale of the Company's banking offices in California.
|
| Basic earnings per share | | $ | 0.56 | | | $ | 0.53 | | | $ | 0.45 | | | $ | 0.38 | | | $ | 0.45 | |
| Diluted earnings per share | | | 0.55 | | | | 0.52 | | | | 0.45 | | | | 0.38 | | | | 0.45 | |
| Cash dividends declared per share | | | 0.15 | | | | 0.15 | | | | 0.15 | | | | — | | | | — | |
|
|
|
| Average Common Share (000s): | | | | | | | | | | | | | | | | | | | | |
| Outstanding | | | 16,652 | | | | 16,804 | | | | 16,892 | | | | 16,888 | | | | 16,888 | |
| Diluted | | | 16,999 | | | | 17,140 | | | | 17,133 | | | | 17,016 | | | | 16,961 | |
| Net Interest Margin | | | 4.70 | % | | | 4.83 | % | | | 4.67 | % | | | 4.52 | % | | | 4.67 | % |
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
| | | Quarter Ended
|
| | | Dec. 31 2002
| | | Sept. 30 2002
| | | June 30 2002
| | | March 31 2002
| | | Dec. 31 2001
|
Non-Interest Income: | | | | | | | | | | | | | | | | | | | |
| Service charges | | $ | 6,790 | | | $ | 6,313 | | | $ | 5,768 | | | $ | 4,629 | | | $ | 5,759 |
| Insurance commissions | | | 411 | | | | 436 | | | | 532 | | | | 505 | | | | 537 |
| Trust fee income | | | 345 | | | | 319 | | | | 354 | | | | 316 | | | | 322 |
| Mortgage banking income | | | 233 | | | | 248 | | | | 189 | | | | 186 | | | | 248 |
| Other income (a) | | | 1,110 | | | | 1,200 | | | | 1,615 | | | | 1,146 | | | | 5,978 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
Subtotal | | | 8,889 | | | | 8,516 | | | | 8,458 | | | | 6,782 | | | | 12,844 |
| Investment security gains | | | 666 | | | | 323 | | | | 238 | | | | 232 | | | | 565 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
Total Non-Interest Income | | $ | 9,555 | | | $ | 8,839 | | | $ | 8,696 | | | $ | 7,014 | | | $ | 13,409 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
Non-Interest Expense: | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 7,631 | | | $ | 7,651 | | | $ | 7,995 | | | $ | 8,638 | | | $ | 9,175 |
| Occupancy and equipment | | | 1,679 | | | | 1,710 | | | | 1,638 | | | | 1,628 | | | | 2,200 |
| Depreciation | | | 1,288 | | | | 1,367 | | | | 1,497 | | | | 1,597 | | | | 1,805 |
| Advertising | | | 646 | | | | 580 | | | | 699 | | | | 643 | | | | 528 |
| Telecommunications | | | 565 | | | | 536 | | | | 614 | | | | 689 | | | | 765 |
| Office supplies | | | 468 | | | | 347 | | | | 405 | | | | 337 | | | | 725 |
| Postage and delivery | | | 204 | | | | 294 | | | | 217 | | | | 223 | | | | 713 |
| Professional fees and litigation expense | | | 702 | | | | 782 | | | | 733 | | | | 640 | | | | 1,547 |
| Loss on disposal and impairment of fixed assets | | | 6 | | | | (1 | ) | | | (7 | ) | | | (83 | ) | | | 469 |
| Repossessed asset losses and expenses | | | (3 | ) | | | 25 | | | | 295 | | | | 347 | | | | 326 |
| Insurance and regulatory | | | 189 | | | | 450 | | | | 490 | | | | 527 | | | | 507 |
| Other expenses | | | 3,111 | | | | 3,516 | | | | 3,298 | | | | 2,986 | | | | 3,784 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
Total Non-Interest Expense | | $ | 16,486 | | | $ | 17,257 | | | $ | 17,874 | | | $ | 18,172 | | | $ | 22,544 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
(a) During the fourth quarter of 2001, "noninterest income" included a gain of approximately $4.67 million resulting from the sale of the Company's banking offices in California.
|
| Employees (Full Time Equivalent) | | | 737 | | | | 743 | | | | 748 | | | | 759 | | | | 802 |
| Branch Locations | | | 55 | | | | 55 | | | | 55 | | | | 55 | | | | 55 |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
| | | December 31 2002
| | | December 31 2001
| |
| | | (Unaudited) | | | | |
Assets | | | | | | | | |
| Cash and due from banks | | $ | 109,318 | | | $ | 81,827 | |
| Federal funds sold and securities purchased under agreement to resell | | | 47,202 | | | | 88,500 | |
| | |
|
|
| |
|
|
|
Cash and cash equivalents | | | 156,520 | | | | 170,327 | |
| Securities available for sale, at fair value | | | 445,384 | | | | 383,552 | |
| Securities held-to-maturity, at amortized cost | | | 72,410 | | | | — | |
| | |
|
|
| |
|
|
|
Total securities | | | 517,794 | | | | 383,552 | |
| Loans: | | | | | | | | |
| Residential real estate | | | 471,806 | | | | 631,103 | |
| Home equity | | | 210,753 | | | | 98,100 | |
| Commercial real estate | | | 273,904 | | | | 284,759 | |
| Other commercial | | | 95,323 | | | | 145,989 | |
| Loans to depository institutions | | | 20,000 | | | | — | |
| Installment | | | 64,181 | | | | 125,236 | |
| Indirect | | | 48,709 | | | | 86,474 | |
| Credit card | | | 19,715 | | | | 18,594 | |
| | |
|
|
| |
|
|
|
Gross Loans | | | 1,204,391 | | | | 1,390,255 | |
| Allowance for loan losses | | | (28,504 | ) | | | (48,635 | ) |
| | |
|
|
| |
|
|
|
Net loans | | | 1,175,887 | | | | 1,341,620 | |
| Retained interests | | | 80,923 | | | | 71,271 | |
| Premises and equipment | | | 37,802 | | | | 43,178 | |
| Accrued interest receivable | | | 11,265 | | | | 12,422 | |
| Net deferred tax assets | | | 35,895 | | | | 47,443 | |
| Other assets | | | 31,825 | | | | 46,482 | |
| | |
|
|
| |
|
|
|
Total Assets | | $ | 2,047,911 | | | $ | 2,116,295 | |
| | |
|
|
| |
|
|
|
Liabilities | | | | | | | | |
| Deposits: | | | | | | | | |
| Noninterest-bearing | | $ | 281,290 | | | $ | 284,649 | |
| Interest-bearing: | | | | | | | | |
| Demand deposits | | | 377,165 | | | | 392,258 | |
| Savings deposits | | | 286,198 | | | | 272,885 | |
| Time deposits | | | 619,927 | | | | 741,503 | |
| | |
|
|
| |
|
|
|
Total deposits | | | 1,564,580 | | | | 1,691,295 | |
| Federal funds purchased and securities sold under agreement to repurchase | | | 146,937 | | | | 127,204 | |
| Securities sold, not yet purchased | | | 26,284 | | | | — | |
| Long-term debt | | | 25,000 | | | | 29,328 | |
| Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts holding solely subordinated debentures of City Holding Company | | | 87,500 | | | | 87,500 | |
| Other liabilities | | | 32,217 | | | | 34,619 | |
| | |
|
|
| |
|
|
|
Total Liabilities | | | 1,882,518 | | | | 1,969,946 | |
|
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; 16,919,248 and 16,892,913 shares issued and outstanding at December 31, 2002 and December 31, 2001, respectively, including 261,563 and 4,979 shares in treasury | | | 42,298 | | | | 42,232 | |
| Capital surplus | | | 59,029 | | | | 59,174 | |
| Retained earnings | | | 66,076 | | | | 41,152 | |
| Cost of common stock in treasury | | | (6,426 | ) | | | (136 | ) |
| Accumulated other comprehensive income | | | 4,416 | | | | 3,927 | |
| | |
|
|
| |
|
|
|
Total Stockholders' Equity | | | 165,393 | | | | 146,349 | |
| | |
|
|
| |
|
|
|
Total Liabilities and Stockholders' Equity | | $ | 2,047,911 | | | $ | 2,116,295 | |
| | |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
| | | Dec. 31 2002
| | Sept. 30 2002
| | June 30 2002
| | March 31 2002
| | Dec. 31 2002
|
| Residential real estate | | $ | 471,806 | | $ | 486,566 | | $ | 522,016 | | $ | 573,757 | | $ | 631,103 |
| Home equity | | | 210,753 | | | 185,084 | | | 157,577 | | | 125,753 | | | 98,100 |
| Commercial real estate | | | 273,904 | | | 262,824 | | | 251,347 | | | 259,840 | | | 284,759 |
| Other commercial | | | 95,323 | | | 109,068 | | | 110,468 | | | 127,538 | | | 145,989 |
| Loans to depository institutions | | | 20,000 | | | 35,000 | | | — | | | — | | | — |
| Installment | | | 64,181 | | | 75,047 | | | 89,117 | | | 106,872 | | | 125,236 |
| Indirect | | | 48,709 | | | 56,425 | | | 65,634 | | | 75,619 | | | 86,474 |
| Credit card | | | 19,715 | | | 19,081 | | | 18,285 | | | 17,424 | | | 18,594 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Gross Loans | | $ | 1,204,391 | | $ | 1,229,095 | | $ | 1,214,444 | | $ | 1,286,803 | | $ | 1,390,255 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| | | Three Months Ended December 31,
| |
| | | 2002
| | | 2001
| |
| | | Average Balance
| | | Interest
| | Yield/ Rate
| | | Average Balance
| | | Interest
| | Yield/ Rate
| |
Assets: | | | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 1,215,757 | | | $ | 21,573 | | 7.10 | % | | $ | 1,552,323 | | | $ | 32,104 | | 8.27 | % |
| Loans held for sale | | | — | | | | — | | — | | | | — | | | | — | | — | |
| Securities: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 459,271 | | | | 4,906 | | 4.27 | % | | | 354,324 | | | | 3,989 | | 4.50 | % |
| Tax-exempt | | | 49,650 | | | | 1,058 | | 8.52 | % | | | 61,405 | | | | 1,185 | | 7.72 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
| Total securities | | | 508,921 | | | | 5,964 | | 4.69 | % | | | 415,729 | | | | 5,174 | | 4.98 | % |
| Retained interest in securitized loans | | | 80,390 | | | | 3,390 | | 16.87 | % | | | 69,542 | | | | 2,628 | | 15.12 | % |
| Federal funds sold | | | 30,800 | | | | 112 | | 1.45 | % | | | 69,204 | | | | 394 | | 2.28 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total earning assets | | | 1,835,868 | | | | 31,039 | | 6.76 | % | | | 2,106,798 | | | | 40,300 | | 7.65 | % |
| Cash and due from banks | | | 59,644 | | | | | | | | | | 56,656 | | | | | | | |
| Bank premises and equipment | | | 38,523 | | | | | | | | | | 45,119 | | | | | | | |
| Other assets | | | 76,224 | | | | | | | | | | 107,460 | | | | | | | |
| Less: Allowance for loan losses | | | (29,045 | ) | | | | | | | | | (56,015 | ) | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total assets | | $ | 1,981,214 | | | | | | | | | $ | 2,260,018 | | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Liabilities: | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 365,692 | | | $ | 504 | | 0.55 | % | | $ | 413,932 | | | $ | 888 | | 0.86 | % |
| Savings deposits | | | 289,623 | | | | 490 | | 0.68 | % | | | 292,197 | | | | 1,167 | | 1.60 | % |
| Time deposits | | | 629,725 | | | | 5,167 | | 3.28 | % | | | 846,938 | | | | 9,933 | | 4.69 | % |
| Short-term borrowings | | | 120,909 | | | | 1,014 | | 3.35 | % | | | 135,288 | | | | 1,128 | | 3.34 | % |
| Long-term debt | | | 25,000 | | | | 284 | | 4.54 | % | | | 29,511 | | | | 497 | | 6.74 | % |
| Trust preferred securities | | | 87,500 | | | | 2,006 | | 9.17 | % | | | 90,900 | | | | 2,087 | | 9.18 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-bearing liabilities | | | 1,518,449 | | | | 9,465 | | 2.49 | % | | | 1,808,766 | | | | 15,700 | | 3.47 | % |
| Demand deposits | | | 272,485 | | | | | | | | | | 273,946 | | | | | | | |
| Other liabilities | | | 25,784 | | | | | | | | | | 32,175 | | | | | | | |
| Stockholders' equity | | | 164,496 | | | | | | | | | | 145,131 | | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total liabilities and stockholders' equity | | $ | 1,981,214 | | | | | | | | | $ | 2,260,018 | | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Net interest income | | | | | | $ | 21,574 | | | | | | | | | $ | 24,600 | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Net yield on earning assets | | | | | | | | | 4.70 | % | | | | | | | | | 4.67 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| | | Twelve Months Ended December 31,
| |
| | | 2002
| | | 2001
| |
| | | Average Balance
| | | Interest
| | Yield/ Rate
| | | Average Balance
| | | Interest
| | Yield/ Rate
| |
Assets: | | | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 1,255,890 | | | $ | 93,380 | | 7.44 | % | | $ | 1,758,834 | | | $ | 148,974 | | 8.47 | % |
| Loans held for sale | | | — | | | | — | | — | | | | 12,942 | | | | 1,062 | | 8.21 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 462,142 | | | | 19,871 | | 4.30 | % | | | 303,746 | | | | 15,518 | | 5.11 | % |
| Tax-exempt | | | 53,558 | | | | 4,502 | | 8.41 | % | | | 66,688 | | | | 5,138 | | 7.70 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
| Total securities | | | 515,700 | | | | 24,373 | | 4.73 | % | | | 370,434 | | | | 20,656 | | 5.58 | % |
| Retained interest in securitized loans | | | 76,450 | | | | 12,427 | | 16.26 | % | | | 71,459 | | | | 7,430 | | 10.40 | % |
| Federal funds sold | | | 36,627 | | | | 586 | | 1.60 | % | | | 39,935 | | | | 1,156 | | 2.89 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total earning assets | | | 1,884,667 | | | | 130,766 | | 6.94 | % | | | 2,253,604 | | | | 179,278 | | 7.96 | % |
| Cash and due from banks | | | 59,415 | | | | | | | | | | 60,441 | | | | | | | |
| Bank premises and equipment | | | 40,455 | | | | | | | | | | 51,785 | | | | | | | |
| Other assets | | | 93,419 | | | | | | | | | | 111,947 | | | | | | | |
| Less: Allowance for loan losses | | | (35,792 | ) | | | | | | | | | (45,428 | ) | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total assets | | $ | 2,042,164 | | | | | | | | | $ | 2,432,349 | | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Liabilities: | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 371,847 | | | $ | 2,105 | | 0.57 | % | | $ | 416,281 | | | $ | 9,161 | | 2.20 | % |
| Savings deposits | | | 299,958 | | | | 2,823 | | 0.94 | % | | | 291,072 | | | | 7,300 | | 2.51 | % |
| Time deposits | | | 672,030 | | | | 24,422 | | 3.63 | % | | | 962,671 | | | | 51,082 | | 5.31 | % |
| Short-term borrowings | | | 114,810 | | | | 2,765 | | 2.41 | % | | | 173,974 | | | | 8,604 | | 4.95 | % |
| Long-term debt | | | 33,506 | | | | 1,809 | | 5.40 | % | | | 31,854 | | | | 2,147 | | 6.74 | % |
| Trust preferred securities | | | 87,500 | | | | 8,375 | | 9.57 | % | | | 88,605 | | | | 8,121 | | 9.17 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-bearing liabilities | | | 1,579,651 | | | | 42,299 | | 2.68 | % | | | 1,964,457 | | | | 86,415 | | 4.40 | % |
| Demand deposits | | | 273,947 | | | | | | | | | | 274,220 | | | | | | | |
| Other liabilities | | | 30,555 | | | | | | | | | | 39,360 | | | | | | | |
| Stockholders' equity | | | 158,011 | | | | | | | | | | 154,312 | | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total liabilities and stockholders' equity | | $ | 2,042,164 | | | | | | | | | $ | 2,432,349 | | | | | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Net interest income | | | | | | $ | 88,467 | | | | | | | | | $ | 92,863 | | | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Net yield on earning assets | | | | | | | | | 4.69 | % | | | | | | | | | 4.12 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)
| | | Dec. 31 2002 (a), (b)
| | | Sept. 30 2002 (b)
| | | June 30 2002 (b)
| | | March 31 2002 (b)
| | | Dec. 31 2001 (b)
| |
| Tier I Capital: | | | | | | | | | | | | | | | | | | | | |
| Stockholders' equity | | $ | 165,393 | | | $ | 160,705 | | | $ | 158,828 | | | $ | 150,707 | | | $ | 146,349 | |
| Goodwill and other intangibles | | | (6,730 | ) | | | (6,808 | ) | | | (6,885 | ) | | | (6,963 | ) | | | (7,041 | ) |
| Accumulated other comprehensive income | | | (4,416 | ) | | | (6,077 | ) | | | (4,638 | ) | | | (1,877 | ) | | | (3,927 | ) |
| Qualifying trust preferred stock | | | 53,659 | | | | 51,543 | | | | 51,397 | | | | 49,610 | | | | 47,474 | |
| Excess retained interests | | | (28,946 | ) | | | (30,000 | ) | | | (27,255 | ) | | | (26,192 | ) | | | (25,557 | ) |
| Excess deferred tax assets | | | (15,104 | ) | | | (11,102 | ) | | | (14,766 | ) | | | (23,032 | ) | | | (29,003 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total tier I capital | | $ | 163,856 | | | $ | 158,261 | | | $ | 156,681 | | | $ | 142,253 | | | $ | 128,295 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
| Total Risk-Based Capital: | | | | | | | | | | | | | | | | | | | | |
| Tier I capital | | $ | 163,856 | | | $ | 158,261 | | | $ | 156,681 | | | $ | 142,253 | | | $ | 128,295 | |
| Qualifying allowance for loan losses | | | 23,991 | | | | 23,477 | | | | 22,910 | | | | 22,909 | | | | 23,427 | |
| Qualifying trust preferred stock | | | 33,841 | | | | 35,957 | | | | 36,103 | | | | 37,890 | | | | 40,026 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Total risk-based capital | | $ | 221,688 | | | $ | 217,695 | | | $ | 215,694 | | | $ | 203,052 | | | $ | 191,748 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Net risk-weighted assets | | $ | 1,652,535 | | | $ | 1,621,129 | | | $ | 1,567,809 | | | $ | 1,595,626 | | | $ | 1,677,391 | |
|
Ratios: | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 8.30 | % | | | 8.05 | % | | | 7.51 | % | | | 7.13 | % | | | 6.42 | % |
| Risk-based capital ratios: | | | | | | | | | | | | | | | | | | | | |
| Tier I capital | | | 9.92 | % | | | 9.76 | % | | | 9.99 | % | | | 8.92 | % | | | 7.65 | % |
| Total risk-based capital | | | 13.42 | % | | | 13.43 | % | | | 13.76 | % | | | 12.73 | % | | | 11.43 | % |
| Leverage capital | | | 8.49 | % | | | 8.08 | % | | | 7.73 | % | | | 6.93 | % | | | 5.84 | % |
| (a) | | December 31, 2002 risk-based capital ratios are estimated. |
| (b) | | Effective September 30, 2002, the Company implemented new regulatory capital requirements related to the Bank's investment in retained interests in securitized mortgages. Each of the prior periods in the table above have been modified to reflect the impact of the new regulatory guidelines as if the new guidelines had been implemented in September, 2001. |
CITY HOLDING COMPANY AND SUBSIDIARIES
Intangibles
(Unaudited) ($ in 000s)
| | | As of and for the Quarter Ended
|
| | | Dec. 31 2002
| | Sept. 30 2002
| | June 30 2002
| | March 31 2002
| | Dec. 31 2001
|
| Intangibles, net | | $ | 6,730 | | $ | 6,808 | | $ | 6,885 | | $ | 6,963 | | $ | 7,041 |
| Intangibles amortization expense | | | 78 | | | 77 | | | 78 | | | 78 | | | 230 |
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)
| | | Quarter Ended
| |
| | | Dec. 31 | | | Sept. 30 | | | June 30 | | | March 31 | | | Dec. 31 | |
| | | 2002
| | | 2002
| | | 2002
| | | 2002
| | | 2001
| |
| Balance at beginning of period | | $ | 28,623 | | | $ | 28,023 | | | $ | 37,779 | | | $ | 48,635 | | | $ | 57,196 | |
Charge-offs: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 565 | | | | 1,722 | | | | 8,925 | | | | 7,851 | | | | 5,870 | |
| Real estate—mortgage | | | 421 | | | | 212 | | | | 3,222 | | | | 3,505 | | | | 1,989 | |
| Installment | | | 1,187 | | | | 1,204 | | | | 1,156 | | | | 1,267 | | | | 1,582 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total charge-offs | | | 2,173 | | | | 3,138 | | | | 13,303 | | | | 12,623 | | | | 9,441 | |
Recoveries: | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | 490 | | | | 2,703 | | | | 2,129 | | | | 349 | | | | 503 | |
| Real estate—mortgage | | | 1,140 | | | | 525 | | | | 92 | | | | 92 | | | | 241 | |
| Installment | | | 424 | | | | 510 | | | | 426 | | | | 426 | | | | 362 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total recoveries | | | 2,054 | | | | 3,738 | | | | 2,647 | | | | 867 | | | | 1,106 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net charge-offs (recoveries) | | | 119 | | | | (600 | ) | | | 10,656 | | | | 11,756 | | | | 8,335 | |
| Provision for loan losses | | | — | | | | — | | | | 900 | | | | 900 | | | | 1,820 | |
| Balance of institutions sold | | | — | | | | — | | | | — | | | | — | | | | (2,046 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Balance at end of period | | $ | 28,504 | | | $ | 28,623 | | | $ | 28,023 | | | $ | 37,779 | | | $ | 48,635 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Loans outstanding | | $ | 1,204,391 | | | $ | 1,229,095 | | | $ | 1,214,444 | | | $ | 1,286,803 | | | $ | 1,390,255 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Average loans outstanding | | | 1,215,757 | | | | 1,213,295 | | | | 1,253,098 | | | | 1,343,307 | | | | 1,552,323 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Allowance as a percent of loans outstanding | | | 2.37 | % | | | 2.36 | % | | | 2.31 | % | | | 2.94 | % | | | 3.50 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Allowance as a percent of non-performing loans | | | 948 | % | | | 1119 | % | | | 1729 | % | | | 243 | % | | | 169 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Net charge-offs (recoveries) (annualized) as a percent of average loans outstanding | | | 0.04 | % | | | (0.20 | )% | | | 3.40 | % | | | 3.50 | % | | | 2.15 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
| | | Dec. 31 | | | Sept. 30 | | | June 30 | | | March 31 | | | Dec. 31 | |
| | | 2002
| | | 2002
| | | 2002
| | | 2002
| | | 2001
| |
| Nonaccrual loans | | $ | 2,126 | | | $ | 1,511 | | | $ | 626 | | | $ | 14,542 | | | $ | 23,777 | |
| Accruing loans past due 90 days or more | | | 880 | | | | 1,046 | | | | 995 | | | | 1,000 | | | | 4,915 | |
| Restructured loans | | | — | | | | — | | | | — | | | | — | | | | 167 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total non-performing loans | | | 3,006 | | | | 2,557 | | | | 1,621 | | | | 15,542 | | | | 28,859 | |
| Other real estate owned | | | 403 | | | | 1,079 | | | | 1,681 | | | | 2,295 | | | | 2,866 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total non-performing assets | | $ | 3,409 | | | $ | 3,636 | | | $ | 3,302 | | | $ | 17,837 | | | $ | 31,725 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Non-performing assets as a percent of loans and other real estate owned | | | 0.28 | % | | | 0.30 | % | | | 0.27 | % | | | 1.38 | % | | | 2.47 | % |
