Exhibit 99
NEWS RELEASE
For Immediate Release
July 16, 2003
For Further Information Contact:
Charles R. Hageboeck, CFO
(304) 769-1102
City Holding Company Announces Strong Second Quarter Performance
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO; NASDAQ:CHCOP), a $2 billion bank holding company headquartered in Charleston, today announced 2003 second quarter earnings of $12.1 million, an increase of 58.2% over $7.7 million earned in the second quarter of 2002. Earnings per diluted share for the second quarter were $0.72, an increase of 60.0% over $0.45 per diluted share reported for the second quarter of 2002.
The Company’s second quarter 2003 operating results were positively affected by continued growth in non-interest income, specifically in service charge revenues earned on depository relationships, continued success in managing non-interest expenses, and a strong net interest margin. Additionally, during the second quarter of 2003, the Company recorded a negative loan loss provision of $3.3 million, which added $0.13 per diluted share, after income taxes, to the Company’s operating results for the period. The Company has experienced lower than anticipated losses and improving credit quality within certain segments of its loan portfolio. The Company has also had greater than expected success in pursuing recoveries of previously charged-off loans, as evidenced by $0.9 million of net recoveries for the first six months of 2003. As a result, the Company determined that it was appropriate to record the $3.3 million negative loan loss provision for the second quarter. Excluding the impact of the negative loan loss provision, the Company would have reported net income of $10.0 million, or $0.59 per diluted share, for the second quarter of 2003, and $19.3 million, or $1.14 per diluted share, for the first six months of the year. If the Company continues to experience either low net charge-offs or net recoveries in future periods, and continues to experience improvements in loan loss ratios, it is possible that the Company will record additional negative provision expense in forthcoming periods.
For the second quarter of 2003, the Company reported return on average assets (“ROA”) of 2.43%, return on average equity (“ROE”) of 28.13%, net interest margin (“NIM”) of 4.72%, and an efficiency ratio of 50.35%. Each of these ratios compares favorably to the second quarter of 2002 when the Company reported ROA of 1.48%, ROE of 19.70%, NIM of 4.67%, and an efficiency ratio of 59.76%. For comparison purposes, had the Company reported no provision expense, either positive or negative, the Company would have reported ROA of 2.00 %, ROE of 23.16%, NIM of 4.72%, and an efficiency ratio of 50.35%.
Balance Sheet Trends
Total loans increased $10.74 million during the quarter, from $1.19 billion at March 31, 2003 to $1.20 billion at June 30, 2003, despite planned declines within the installment and indirect auto lending portfolios. The Company continued to experience strong growth within the home equity (up $21.1 million, or 9.11%) and commercial real estate (up $12.6 million, or 4.36%) portfolios during the quarter. As previously announced, the Company has strategically focused on real estate secured lending, while intentionally reducing its lending in products not secured by real estate and exiting the indirect auto lending business line. The Company also recorded $4.93 million in previously securitized loans, as described below, during the second quarter of 2003. Since December 31, 2002, total loans increased by $13.5 million, or 1.1%, after allowing for a $20 million fed fund line to another depository institution classified on the balance sheet as a loan. Since December 31, 2002, installment and indirect auto loans were down by $31.0 million while home equity loans (up $42.4 million, or 20.1%) and commercial real estate loans (up
$27.4 million or 10.0%) have grown. Total deposits increased from $1.565 billion at March 31, 2003 to $1.598 billion at June 30, 2003, reflecting an increase of $33.3 million or 2.1%.
Net Interest Income
The Company reported fully taxable net interest income of $22.0 million for the second quarter of 2003, compared to $22.2 million for the second quarter of 2002. The Company’s net interest margin remained strong and increased from 4.67% for the second quarter of 2002 to 4.72% for the same period of 2003. The Company’s net interest margin has benefited from the yield recognized on the Company’s investment in retained interests as well as significant declines in funding costs. Over the past several quarters the Company has continued to focus on funding its balance sheet with checking and savings deposit balances, and with additional equity capital. On average, equity capital increased by $16.8 million, or 10.8%, in the second quarter of 2003 as compared to the second quarter of 2002. Also, non-interest earning assets have declined from $170.4 million at June 30, 2002 to $131.2 million at June 30, 2003. As a result, the average balances of more expensive time deposits, short-term borrowing and long-term borrowings declined $97.0 million, or 11.6%, between the second quarter of 2002 and the second quarter of 2003, thus helping to improve the Company’s net interest margin.
Because interest rates are at historically low levels, the industry is generally experiencing compression in net interest margin. While the Company has, thus far, been successful in maintaining a relatively high net interest margin, the Company could also experience contraction in its net interest margin in future periods should interest rates remain at low levels and as the average balance of its retained interests decline as the result of cash collections.
Credit Quality
As previously noted, the Company recorded negative loan loss provision of $3.3 million during the second quarter of 2003. This action reflects the success the Company has achieved in attaining its credit quality objectives. During the second quarter of 2003, the Company reported gross charge-offs of $1.7 million, which were more than offset by $2.2 million in recoveries. As has been previously reported, the Company vigorously pursues collection of previously charged-off loans and has experienced better-than-expected results in doing so. Additionally, the Company has experienced noticeable improvement in its loss experience in each of the major components of the loan portfolio.
At June 30, 2003, the allowance for loan losses (“ALLL”) was $26.1 million, or 2.18% of total loans outstanding and 701% of non-performing loans, compared to March 31, 2003 in which the ALLL was $28.9 million or 2.44% of total loans outstanding and 1057% of non-performing loans. The Company believes that its methodology for determining its ALLL adequately provides for probable losses inherent in the loan portfolio at June 30. If the Company’s loan loss experience continues or improves upon recent trends, the methodology used to establish the ALLL could lead to low or zero loan loss expense, or, potentially, additional negative provision expense in future periods.
Non-Interest Income
Non-interest income continued to experience strong revenue growth during the second quarter of 2003 and represented 30.29% of total revenues (net interest income plus non-interest income). Within the non-interest income category, service charge revenues and insurance commissions reflected significant growth, as compared to the second quarter of 2002, while trust fee revenues remained stable. In particular, service charge revenues increased $1.3 million, or 22.1%, from the second quarter of 2002 to 2003, reflecting growth in new depository relationships and additional services provided to the Company’s deposit-based customers.
Non-Interest Expenses
Supplementing the Company’s focus on growing revenues, it has also endeavored to consistently focus on managing and containing non-interest expenses to further enhance its profitability. This is evidenced by the
Company’s efficiency ratio (defined as non-interest expenses as a percent of total revenues), which fell from 59.76% in the second quarter of 2002 to 50.35% for the same period of 2003. Non-interest expenses declined $2.1 million, or 12.0%, from $17.9 million in the second quarter of 2002 to $15.7 million in the same period of 2003, as sustainable reductions have been achieved in virtually each component of non-interest expense.
Compensation expense declined $0.4 million, or 4.6%, from $8.0 million in the second quarter of 2002 to $7.6 million in the second quarter of 2003. This decline corresponds to a decline in the number of full time equivalent employees (FTEs) of 3.9% period-to-period. Depreciation expense declined 25.7% in the second quarter of 2003 as compared to the second quarter of 2002, reflecting the Company’s focus on limiting capital expenditures to those that have proven ability to improve customer service, lower expenses, or grow revenues. Telecommunication expenses were down 15.6% reflecting renegotiated contracts with the Company’s primary telecommunication vendors. Insurance and regulatory expenses declined 33.5% as lower regulatory expenses and lower FDIC insurance expense accompanied the Company’s improved financial condition. Repossessed asset losses and expenses were greatly improved as the Company recognized nonrecurring income of $0.547 million on recoveries of properties held in OREO as compared to losses of $0.295 million in the second quarter of 2002. Partially offsetting this nonrecurring revenue were expenses associated with a consulting engagement designed to identify revenue and expense opportunities and costs associated with terminating a $10 million Federal Home Loan Bank advance.
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 May 31, 2003 (the most current date that information is available), the outstanding principal balances of the mortgages securitized were $176.2 million. The outstanding obligation to the purchasers of the priority claims was $68.7 million with the Company having an interest in the remaining $107.5 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 June 30, 2003 the Company estimates the fair value of these assets to be $92.8 million, compared to the book value of $80.0 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 18.79% during the second quarter of 2003. During the first six months of 2003, the Company accrued income of $7.4 million and received cash of $4.5 million.
Principal amounts owed to investors in the securitizations are evidenced by securities (i.e., “Notes”). The Notes are subject to redemption, in whole but not in part, at the option of the Company, as owner of the retained interests in the securitization transactions, or, if the holder of the retained interests does not exercise such option, at the option of the Note insurer, on or after the date on which the related note balance has declined to 5% or less of the original Note balance. Once the Notes have been redeemed, the Company becomes the beneficial owner of the mortgage loans and records the loans as assets of the Company within the loan portfolio. During the second quarter of 2003, the outstanding Note balance on the Company’s 1997-1 securitization declined below this 5% threshold and the Company exercised its early redemption option for $1.5 million. As a result, the $1.5 million combined with the remaining book value of $3.8 million in the retained interest in the 1997-1 securitization, were reclassed to loans on the Company’s balance sheet and reported as “Previously securitized loans” of $5.3 million. As of June 30, 2003, the book value of previously securitized loans had declined to $4.9 million through principal collections and charge-offs. While no immediate gain or loss was recognized by the Company as a result of exercising the early redemption, the Company expects to realize higher yields on the book value of the remaining loans as a result of redeeming Notes that were paying interest at a rate of 6.86%.
Forward Looking Information
During the third quarter of 2003, the Company expects to exercise its early redemption option on two additional securitizations and anticipates that it may be able to exercise early redemption on two of the
remaining three securitizations during the fourth quarter of this year. As a result, the Company anticipates that it will experience increased income associated with these assets through year-end 2003 and that its December 31, 2003 balance sheet will include Retained Interests of approximately $1 million (down from the current book value of $80 million) and Previously Securitized Loan balances of $111 million (up from the current book value of $4.9 million). These balances will then decline as loans are paid off by the borrowers at prepayment rates that have been running more than 40% in recent months. At present, and based upon its assumptions about prepayment speeds, the Company believes that outstanding balances of these loans previously securitized as well as the remaining retained interests will be:
| December 31, 2004 | $76 million | |
December 31, 2005 | $54 million | |
December 31, 2006 | $42 million | |
December 31, 2007 | $32 million | |
The Company’s current performance has also been positively affected by its success since 2002 in achieving low levels of non-performing assets and its success in achieving net loan recoveries totaling $1.369MM over the prior four quarters. These successes have led to the point that the Company recognized a negative provision for loan losses in the second quarter of 2003 of $3.30 million. As a measure of comparison, based upon the Company’s specific mix of loans, insured depository institutions in the U.S. over the last five fiscal years have experienced a net charge-off rate of 32 basis points on average loans and leases outstanding.
However, neither of these factors is sustainable in the long-term. Eventually the retained interests and the loans previously securitized will be paid-off, and eventually the Company, like all other banking institutions, will need to incur normal provision expense. In reviewing the forgoing financial results, investors should recognize that these two factors currently contribute to tbe Company’s strong financial performance.
Liquidity and Capitalization
As of June 30, 2003, ratios that measure the adequacy of the Company’s liquidity and capital remain strong. With respect to liquidity, the Company’s loan to deposit ratio was 75% and the loan to asset ratio was 60.4%. The Company maintained investment securities totaling 27.8% of assets at June 30, 2003 including $17.8 million invested in money market funds. Further, The Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 49.3% of assets at June 30, 2003. Time deposits fund 31.3% of assets, but very few of these deposits are in accounts of more than $250,000, reflecting the core retail orientation of the Company.
The Company is also strongly capitalized. Capitalization (as measured by average equity to average assets) significantly increased from 7.51% at June 31, 2002 to 8.53% at March 31, 2003 and to 8.65% at June 30, 2003 as a result of the Company’s strong earnings. With respect to regulatory capital, at June 30, 2003, the Company’s Leverage Ratio is 9.81% the Tier I Capital ratio is 11.63% and the Total risk-based Capital ratio is 14.93%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized”, which is the highest possible regulatory designation.
Earlier this month, the Company announced that it had declared a third quarter dividend of $0.20 per common share payable on July 31, 2003, to shareholders of record on July 15, 2003. The Company also announced that it would pay current dividends on the Company’s 9.125% Capital Securities issued by the Company’s wholly-owned subsidiary, City Holding Capital Trust II payable on July 31, 2003 to shareholders of record as of July 16, 2003.
In June of 2002, the Board of Directors of the Company announced a one million share purchase program. During the second quarter of 2003, no shares were purchased under this program. As of June 30, 2003 a total of 420,700 shares have been repurchased under this program. 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 June 30, 2003 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, paying 9.125%, 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 may experience either faster or slower rates of amortization of its retained interests and loans previously securitized; (6) the Company could have adverse legal actions of a material nature; (7) the Company may face competitive loss of customers associated with its efforts to increase fee-based revenues; (8) the Company may be unable to maintain or improve upon current levels of expense associated with managing its business; (9) 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; (10) 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; (11) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (12) 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; (13) 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 (14) 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 | ||||||||||
June 30 2003 | June 30 2002 | ||||||||||
Earnings ($000s, except per share data): | |||||||||||
Net Interest Income (FTE) | $ | 21,978 | $ | 22,248 | (1.21 | )% | |||||
Net Income | 12,137 | 7,671 | 58.22 | % | |||||||
Earnings per Basic Share | 0.73 | 0.45 | 62.22 | % | |||||||
Earnings per Diluted Share | 0.72 | 0.45 | 60.00 | % | |||||||
Key Ratios (percent): | |||||||||||
Return on Average Assets | 2.43 | % | 1.48 | % | 64.19 | % | |||||
Return on Average Equity | 28.13 | % | 19.70 | % | 42.79 | % | |||||
Net Interest Margin | 4.72 | % | 4.67 | % | 1.07 | % | |||||
Efficiency Ratio | 50.35 | % | 59.76 | % | (15.75 | )% | |||||
Average Shareholders’ Equity to Average Assets | 8.65 | % | 7.51 | % | 15.18 | % | |||||
Risk-Based Capital Ratios (a): | |||||||||||
Tier I | 11.63 | % | 9.99 | % | 16.42 | % | |||||
Total | 14.93 | % | 13.76 | % | 8.50 | % | |||||
Common Stock Data: | |||||||||||
Cash Dividends Declared per Share | $ | 0.20 | $ | 0.15 | 33.33 | % | |||||
Book Value per Share | 10.74 | 9.40 | 14.26 | % | |||||||
Market Value per Share: | |||||||||||
High | 30.00 | 23.80 | 26.05 | % | |||||||
Low | 27.30 | 15.06 | 81.27 | % | |||||||
End of Period | 29.26 | 23.41 | 24.99 | % | |||||||
Price/Earnings Ratio (b) | 10.02 | 13.00 | (22.92 | )% | |||||||
(a) June 30, 2003 risk-based capital ratios are estimated. (b) June 30, 2003 price/earnings ratio computed based on annualized second quarter 2003 earnings.
| |||||||||||
Six Months Ended | Percent Change | ||||||||||
June 30 2003 | June 30 2002 | ||||||||||
Earnings ($000s, except per share data): | |||||||||||
Net Interest Income (FTE) | $ | 43,500 | $ | 44,265 | (1.73 | )% | |||||
Net Income | 21,489 | 14,079 | 52.63 | % | |||||||
Earnings per Basic Share | 1.29 | 0.83 | 55.42 | % | |||||||
Earnings per Diluted Share | 1.27 | 0.82 | 54.88 | % | |||||||
Key Ratios (percent): | |||||||||||
Return on Average Assets | 2.16 | % | 1.35 | % | 60.00 | % | |||||
Return on Average Equity | 25.16 | % | 18.40 | % | 36.74 | % | |||||
Net Interest Margin | 4.69 | % | 4.60 | % | 1.96 | % | |||||
Efficiency Ratio | 51.83 | % | 61.78 | % | (16.11 | )% | |||||
Average Shareholders’ Equity to Average Assets | 8.59 | % | 7.32 | % | 17.35 | % | |||||
Common Stock Data: | |||||||||||
Cash Dividends Declared per Share | $ | 0.40 | $ | 0.15 | 166.67 | % | |||||
Market Value per Share: | |||||||||||
High | 30.00 | 23.80 | 26.05 | % | |||||||
Low | 25.50 | 12.04 | 111.79 | % | |||||||
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 | ||||||||||||||||||
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 | |||||||||||||||||
2003 | 10.10 | 10.74 | — | — | 25.50 | 30.00 | |||||||||||||||||
Earnings per Basic Share | |||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||
| March 31 | June 30 | September 30 | December 31 | Year-to-Date | |||||||||||||||||||
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 | ||||||||||||||||||
2003 | 0.56 | 0.73 | — | — | 1.29 | ||||||||||||||||||
Earnings per Diluted Share | |||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||
| March 31 | June 30 | September 30 | December 31 | Year-to-Date | |||||||||||||||||||
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 | ||||||||||||||||||
2003 | 0.55 | 0.72 | — | — | 1.27 | ||||||||||||||||||
| (a) | Book value and per share amounts reported 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 June 30. | |||||||
| 2003 | 2002 | ||||||
Interest Income | |||||||
Interest and fees on loans | $ | 19,577 | $ | 23,809 | |||
Interest on investment securities: | |||||||
Taxable | 5,663 | 5,102 | |||||
Tax-exempt | 559 | 684 | |||||
Interest on retained interests | 3,842 | 2,991 | |||||
Interest on deposits in depository institutions | 28 | — | |||||
Interest on federal funds sold | — | 181 | |||||
Total Interest Income | 29,669 | 32,767 | |||||
Interest Expense | |||||||
Interest on deposits | 5,598 | 7,640 | |||||
Interest on short-term borrowings | 132 | 525 | |||||
Interest on long-term debt | 255 | 539 | |||||
Interest on trust preferred securities | 2,006 | 2,183 | |||||
Total Interest Expense | 7,991 | 10,887 | |||||
Net Interest Income | 21,678 | 21,880 | |||||
Provision for loan losses | (3,300 | ) | 900 | ||||
Net Interest Income After Provision for Loan Losses | 24,978 | 20,980 | |||||
Non-Interest Income | |||||||
Investment securities gains | 22 | 238 | |||||
Service charges | 7,041 | 5,768 | |||||
Insurance commissions | 591 | 532 | |||||
Trust fee income | 355 | 354 | |||||
Mortgage banking income | 180 | 189 | |||||
Other income | 1,230 | 1,615 | |||||
Total Non-Interest Income | 9,419 | 8,696 | |||||
Non-Interest Expense | |||||||
Salaries and employee benefits | 7,629 | 7,995 | |||||
Occupancy and equipment | 1,489 | 1,638 | |||||
Depreciation | 1,113 | 1,497 | |||||
Professional fees and litigation expense | 981 | 733 | |||||
Postage, delivery, and statement mailings | 744 | 767 | |||||
Advertising | 557 | 699 | |||||
Telecommunications | 518 | 614 | |||||
Insurance and regulatory | 326 | 490 | |||||
Office supplies | 405 | 405 | |||||
Repossessed asset losses and expenses | (547 | ) | 295 | ||||
Other expenses | 2,510 | 2,741 | |||||
Total Non-Interest Expense | 15,725 | 17,874 | |||||
Income Before Income Taxes | 18,672 | 11,802 | |||||
Income Tax Expense | 6,535 | 4,131 | |||||
Net Income | $ | 12,137 | $ | 7,671 | |||
Basic Earnings per Share | $ | 0.73 | $ | 0.45 | |||
Diluted Earnings per Share | $ | 0.72 | $ | 0.45 | |||
Average Common Shares Outstanding: | |||||||
Basic | 16,622 | 16,892 | |||||
Diluted | 16,918 | 17,133 | |||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
Six Months Ended June 30 | |||||||
| 2003 | 2002 | ||||||
Interest Income | |||||||
Interest and fees on loans | $ | 39,879 | $ | 49,382 | |||
Interest on investment securities: | |||||||
Taxable | 10,876 | 9,687 | |||||
Tax-exempt | 1,130 | 1,415 | |||||
Interest on retained interests | 7,365 | 5,797 | |||||
Interest on deposits in depository institutions | 58 | — | |||||
Interest on federal funds sold | 60 | 367 | |||||
Total Interest Income | 59,368 | 66,648 | |||||
Interest Expense | |||||||
Interest on deposits | 11,365 | 16,618 | |||||
Interest on short-term borrowings | 566 | 1,141 | |||||
Interest on long-term debt | 533 | 1,085 | |||||
Interest on trust preferred securities | 4,012 | 4,301 | |||||
Total Interest Expense | 16,476 | 23,145 | |||||
Net Interest Income | 42,892 | 43,503 | |||||
Provision for loan losses | (3,300 | ) | 1,800 | ||||
Net Interest Income After Provision for Loan Losses | 46,192 | 41,703 | |||||
Non-Interest Income | |||||||
Investment securities gains | 375 | 470 | |||||
Service charges | 13,122 | 10,397 | |||||
Insurance commissions | 1,353 | 1,037 | |||||
Trust fee income | 703 | 670 | |||||
Mortgage banking income | 348 | 375 | |||||
Other income | 2,503 | 2,761 | |||||
Total Non-Interest Income | 18,404 | 15,710 | |||||
Non-Interest Expense | |||||||
Salaries and employee benefits | 15,367 | 16,633 | |||||
Occupancy and equipment | 3,034 | 3,266 | |||||
Depreciation | 2,300 | 3,094 | |||||
Professional fees and litigation expense | 1,818 | 1,373 | |||||
Postage, delivery, and statement mailings | 1,524 | 1,601 | |||||
Advertising | 1,207 | 1,342 | |||||
Telecommunications | 923 | 1,303 | |||||
Insurance and regulatory | 651 | 1,017 | |||||
Office supplies | 840 | 742 | |||||
Repossessed asset losses and expenses | (738 | ) | 642 | ||||
Other expenses | 4,806 | 5,033 | |||||
Total Non-Interest Expense | 31,732 | 36,046 | |||||
Income Before Income Taxes | 32,864 | 21,367 | |||||
Income Tax Expense | 11,375 | 7,288 | |||||
Net Income | $ | 21,489 | $ | 14,079 | |||
Basic Earnings per Share | $ | 1.29 | $ | 0.83 | |||
Diluted Earnings per Share | $ | 1.27 | $ | 0.82 | |||
Average Common Shares Outstanding: | |||||||
Basic | 16,630 | 16,890 | |||||
Diluted | 16,936 | 17,074 | |||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited) ($ in 000s)
| Three Months Ended | ||||||||
| June 30, 2003 | June 30, 2002 | |||||||
Balance at March 31 | $ | 167,877 | $ | 150,707 | ||||
Net income | 12,137 | 7,671 | ||||||
Other comprehensive income: | ||||||||
Change in unrealized gain on securities available-for-sale | 1,776 | 2,761 | ||||||
Cash dividends declared ($0.15/share) | — | (2,536 | ) | |||||
Cash dividends declared ($0.20/share) | (3,325 | ) | — | |||||
Exercise of 17,500 stock options | — | 225 | ||||||
Exercise of 7,400 stock options | 106 | — | ||||||
Balance at June 30 | $ | 178,571 | $ | 158,828 | ||||
| Six Months Ended | ||||||||
| June 30, 2003 | June 30, 2002 | |||||||
Balance at December 31 | $ | 165,393 | $ | 146,349 | ||||
Net income | 21,489 | 14,079 | ||||||
Other comprehensive income: | ||||||||
Change in unrealized gain on securities available-for-sale | 718 | 711 | ||||||
Cash dividends declared ($0.15/share) | — | (2,536 | ) | |||||
Cash dividends declared ($0.40/share) | (6,652 | ) | — | |||||
Exercise of 17,500 stock options | — | 225 | ||||||
Exercise of 86,482 stock options | 881 | — | ||||||
Purchase of 118,300 common shares for treasury | (3,258 | ) | — | |||||
Balance at June 30 | $ | 178,571 | $ | 158,828 | ||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
| Quarter Ended | ||||||||||||||||||||
June 30 2003 | March 31 2003 | Dec. 31 2002 | Sept. 30 2002 | June 30 2002 | ||||||||||||||||
Interest income | $ | 29,669 | $ | 29,699 | $ | 30,616 | $ | 31,701 | $ | 32,767 | ||||||||||
Taxable equivalent adjustment | 300 | 308 | 341 | 351 | 368 | |||||||||||||||
Interest income (FTE) | 29,969 | 30,007 | 30,957 | 32,052 | 33,135 | |||||||||||||||
Interest expense | 7,991 | 8,485 | 9,465 | 9,689 | 10,887 | |||||||||||||||
Net interest income | 21,978 | 21,522 | 21,492 | 22,363 | 22,248 | |||||||||||||||
Provision for loan losses | (3,300 | ) | — | — | — | 900 | ||||||||||||||
Net interest income after provision for loan losses | 25,278 | 21,522 | 21,492 | 22,363 | 21,348 | |||||||||||||||
Noninterest income | 9,419 | 8,985 | 9,555 | 8,839 | 8,696 | |||||||||||||||
Noninterest expense | 15,725 | 16,007 | 16,486 | 17,257 | 17,874 | |||||||||||||||
Income before income taxes | 18,972 | 14,500 | 14,561 | 13,945 | 12,170 | |||||||||||||||
Income tax expense | 6,535 | 4,840 | 4,812 | 4,622 | 4,131 | |||||||||||||||
Taxable equivalent adjustment | 300 | 308 | 341 | 351 | 368 | |||||||||||||||
Net income | $ | 12,137 | $ | 9,352 | $ | 9,408 | $ | 8,972 | $ | 7,671 | ||||||||||
Basic earnings per share | $ | 0.73 | $ | 0.56 | $ | 0.56 | $ | 0.53 | $ | 0.45 | ||||||||||
Diluted earnings per share | 0.72 | 0.55 | 0.55 | 0.52 | 0.45 | |||||||||||||||
Cash dividends declared per share | 0.20 | 0.20 | 0.15 | 0.15 | 0.15 | |||||||||||||||
Average Common Share (000s): | ||||||||||||||||||||
Outstanding | 16,622 | 16,638 | 16,652 | 16,804 | 16,892 | |||||||||||||||
Diluted | 16,918 | 16,950 | 16,999 | 17,140 | 17,133 | |||||||||||||||
Net Interest Margin | 4.72 | % | 4.66 | % | 4.68 | % | 4.83 | % | 4.67 | % | ||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
| Quarter Ended | ||||||||||||||||||
June 30 2003 | March 31 2003 | Dec.31 2002 | Sept. 30 2002 | June 30 2002 | ||||||||||||||
Non-Interest Income: | ||||||||||||||||||
Service charges | $ | 7,041 | $ | 6,081 | $ | 6,790 | $ | 6,313 | $ | 5,768 | ||||||||
Insurance commissions | 591 | 762 | 411 | 436 | 532 | |||||||||||||
Trust fee income | 355 | 348 | 345 | 319 | 354 | |||||||||||||
Mortgage banking income | 180 | 168 | 233 | 248 | 189 | |||||||||||||
Other income | 1,230 | 1,273 | 1,110 | 1,200 | 1,615 | |||||||||||||
Subtotal | 9,397 | 8,632 | 8,889 | 8,516 | 8,458 | |||||||||||||
Investment security gains | 22 | 353 | 666 | 323 | 238 | |||||||||||||
Total Non-Interest Income | $ | 9,419 | $ | 8,985 | $ | 9,555 | $ | 8,839 | $ | 8,696 | ||||||||
Non-Interest Expense: | ||||||||||||||||||
Salaries and employee benefits | $ | 7,629 | $ | 7,738 | $ | 7,631 | $ | 7,651 | $ | 7,995 | ||||||||
Occupancy and equipment | 1,489 | 1,545 | 1,679 | 1,710 | 1,638 | |||||||||||||
Depreciation | 1,113 | 1,187 | 1,288 | 1,367 | 1,497 | |||||||||||||
Professional fees and litigation expense | 981 | 837 | 702 | 782 | 733 | |||||||||||||
Postage, delivery, and statement mailings | 744 | 780 | 718 | 873 | 767 | |||||||||||||
Advertising | 557 | 650 | 646 | 580 | 699 | |||||||||||||
Telecommunications | 518 | 405 | 565 | 536 | 614 | |||||||||||||
Insurance and regulatory | 326 | 325 | 189 | 450 | 490 | |||||||||||||
Office supplies | 405 | 435 | 468 | 347 | 405 | |||||||||||||
Repossessed asset losses and expenses | (547 | ) | (191 | ) | (3 | ) | 25 | 295 | ||||||||||
Other expenses | 2,510 | 2,296 | 2,603 | 2,936 | 2,741 | |||||||||||||
Total Non-Interest Expense | $ | 15,725 | $ | 16,007 | $ | 16,486 | $ | 17,257 | $ | 17,874 | ||||||||
Employees (Full Time Equivalent) | 719 | 722 | 737 | 743 | 748 | |||||||||||||
Branch Locations | 55 | 55 | 55 | 55 | 55 | |||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
June 30 2003 | December 31 2002 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 57,792 | $ | 64,003 | ||||
Interest-bearing deposits in depository institutions | 11,809 | 45,315 | ||||||
Federal funds sold | — | 20,000 | ||||||
Cash and cash equivalents | 69,601 | 129,318 | ||||||
Investment securities available-for-sale, at fair value | 483,358 | 445,384 | ||||||
Investment securities held-to-maturity, at amortized cost | 67,975 | 72,410 | ||||||
Total investment securities | 551,333 | 517,794 | ||||||
Securities purchased under agreement to resell | — | 27,202 | ||||||
Loans: | ||||||||
Residential real estate | 452,014 | 471,806 | ||||||
Home equity | 253,178 | 210,753 | ||||||
Commercial real estate | 301,321 | 273,904 | ||||||
Other commercial | 85,356 | 95,323 | ||||||
Loans to depository institutions | — | 20,000 | ||||||
Installment | 46,877 | 64,181 | ||||||
Indirect | 35,059 | 48,709 | ||||||
Credit card | 19,155 | 19,715 | ||||||
Previously securitized loans | 4,933 | — | ||||||
Gross Loans | 1,197,893 | 1,204,391 | ||||||
Allowance for loan losses | (26,092 | ) | (28,504 | ) | ||||
Net loans | 1,171,801 | 1,175,887 | ||||||
Retained interests | 79,978 | 80,923 | ||||||
Premises and equipment | 35,702 | 37,802 | ||||||
Accrued interest receivable | 10,954 | 11,265 | ||||||
Net deferred tax assets | 31,515 | 35,895 | ||||||
Other assets | 32,414 | 31,825 | ||||||
Total Assets | $ | 1,983,298 | $ | 2,047,911 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 301,233 | $ | 281,290 | ||||
Interest-bearing: | ||||||||
Demand deposits | 387,875 | 377,165 | ||||||
Savings deposits | 287,962 | 286,198 | ||||||
Time deposits | 620,832 | 619,927 | ||||||
Total deposits | 1,597,902 | 1,564,580 | ||||||
Federal funds purchased and securities sold under agreement to repurchase | 78,873 | 146,937 | ||||||
Securities sold, not yet purchased | — | 26,284 | ||||||
Long-term debt | 15,000 | 25,000 | ||||||
Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts holding solely subordinated debentures of City Holding Company | 87,500 | 87,500 | ||||||
Other liabilities | 25,452 | 32,217 | ||||||
Total Liabilities | 1,804,727 | 1,882,518 | ||||||
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 shares issued and outstanding at June 30, 2003 and December 31, 2002, including 293,381 and 261,563 shares in treasury | 42,298 | 42,298 | ||||||
Capital surplus | 57,550 | 59,029 | ||||||
Retained earnings | 80,913 | 66,076 | ||||||
Cost of common stock in treasury | (7,324 | ) | (6,426 | ) | ||||
Accumulated other comprehensive income: | ||||||||
Unrealized gain on securities available-for-sale | 6,678 | 5,960 | ||||||
Underfunded pension liability | (1,544 | ) | (1,544 | ) | ||||
Total Accumulated Other Comprehensive Income | 5,134 | 4,416 | ||||||
Total Stockholders’ Equity | 178,571 | 165,393 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,983,298 | $ | 2,047,911 | ||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
June 30 2003 | March 31 2003 | Dec. 31 2002 | Sept. 30 2002 | June 30 2002 | |||||||||||
Residential real estate | $ | 452,014 | $ | 463,813 | $ | 471,806 | $ | 486,566 | $ | 522,016 | |||||
Home equity | 253,178 | 232,048 | 210,753 | 185,084 | 157,577 | ||||||||||
Commercial real estate | 301,321 | 288,724 | 273,904 | 262,824 | 251,347 | ||||||||||
Other commercial | 85,356 | 88,824 | 95,323 | 109,068 | 110,468 | ||||||||||
Loans to depository institutions | — | — | 20,000 | 35,000 | — | ||||||||||
Installment | 46,877 | 53,488 | 64,181 | 75,047 | 89,117 | ||||||||||
Indirect | 35,059 | 41,475 | 48,709 | 56,425 | 65,634 | ||||||||||
Credit card | 19,155 | 18,780 | 19,715 | 19,081 | 18,285 | ||||||||||
Previously securitized loans | 4,933 | — | — | — | — | ||||||||||
Gross Loans | $ | 1,197,893 | $ | 1,187,152 | $ | 1,204,391 | $ | 1,229,095 | $ | 1,214,444 | |||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| Three Months Ended June 30, | ||||||||||||||||||||
| 2003 | 2002 | |||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||
Assets: | ||||||||||||||||||||
Total loans | $ | 1,188,363 | $ | 19,577 | 6.59 | % | $ | 1,253,098 | $ | 23,809 | 7.60 | % | ||||||||
Securities: | ||||||||||||||||||||
Taxable | 538,998 | 5,663 | 4.20 | % | 477,358 | 5,102 | 4.28 | % | ||||||||||||
Tax-exempt | 45,091 | 859 | 7.62 | % | 54,617 | 1,052 | 7.70 | % | ||||||||||||
Total securities | 584,089 | 6,522 | 4.47 | % | 531,975 | 6,154 | 4.63 | % | ||||||||||||
Retained interest in securitized loans | 81,774 | 3,842 | 18.79 | % | 75,140 | 2,991 | 15.92 | % | ||||||||||||
Deposits in depository institutions | 10,190 | 28 | 1.10 | % | — | — | — | |||||||||||||
Federal funds sold | — | — | — | 44,493 | 181 | 1.63 | % | |||||||||||||
Total interest-earning assets | 1,864,416 | 29,969 | 6.43 | % | 1,904,706 | 33,135 | 6.96 | % | ||||||||||||
Cash and due from banks | 45,391 | 66,605 | ||||||||||||||||||
Bank premises and equipment | 36,334 | 41,067 | ||||||||||||||||||
Other assets | 78,885 | 100,155 | ||||||||||||||||||
Less: Allowance for loan losses | (29,380 | ) | (37,473 | ) | ||||||||||||||||
Total assets | $ | 1,995,646 | $ | 2,075,060 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Interest-bearing demand deposits | $ | 386,348 | $ | 531 | 0.55 | % | $ | 373,691 | $ | 544 | 0.58 | % | ||||||||
Savings deposits | 294,108 | 395 | 0.54 | % | 314,639 | 882 | 1.12 | % | ||||||||||||
Time deposits | 620,543 | 4,672 | 3.01 | % | 682,688 | 6,214 | 3.64 | % | ||||||||||||
Short-term borrowings | 94,784 | 132 | 0.56 | % | 114,343 | 525 | 1.84 | % | ||||||||||||
Long-term debt | 22,143 | 255 | 4.61 | % | 37,475 | 539 | 5.75 | % | ||||||||||||
Trust preferred securities | 87,500 | 2,006 | 9.17 | % | 87,500 | 2,183 | 9.98 | % | ||||||||||||
Total interest-bearing liabilities | 1,505,426 | 7,991 | 2.12 | % | 1,610,336 | 10,887 | 2.70 | % | ||||||||||||
Noninterest-bearing demand deposits | 291,971 | 275,919 | ||||||||||||||||||
Other liabilities | 25,645 | 33,048 | ||||||||||||||||||
Stockholders’ equity | 172,604 | 155,757 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,995,646 | $ | 2,075,060 | ||||||||||||||||
Net interest income | $ | 21,978 | $ | 22,248 | ||||||||||||||||
Net yield on earning assets | 4.72 | % | 4.67 | % | ||||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| Six Months Ended June 30, | ||||||||||||||||||||
| 2003 | 2002 | |||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||
Assets: | ||||||||||||||||||||
Total loans | $ | 1,192,184 | $ | 39,879 | 6.69 | % | $ | 1,298,044 | $ | 49,382 | 7.61 | % | ||||||||
Securities: | ||||||||||||||||||||
Taxable | 514,553 | 10,876 | 4.23 | % | 452,087 | 9,687 | 4.29 | % | ||||||||||||
Tax-exempt | 46,317 | 1,738 | 7.50 | % | 56,561 | 2,177 | 7.70 | % | ||||||||||||
Total securities | 560,870 | 12,614 | 4.50 | % | 508,648 | 11,864 | 4.66 | % | ||||||||||||
Retained interest in securitized loans | 81,535 | 7,365 | 18.07 | % | 73,690 | 5,797 | 15.73 | % | ||||||||||||
Deposits in depository institutions | 14,294 | 82 | 1.15 | % | — | — | — | |||||||||||||
Federal funds sold | 6,868 | 36 | 1.05 | % | 46,103 | 367 | 1.59 | % | ||||||||||||
Total interest-earning assets | 1,855,751 | 59,976 | 6.46 | % | 1,926,485 | 67,410 | 7.00 | % | ||||||||||||
Cash and due from banks | 46,498 | 63,373 | ||||||||||||||||||
Bank premises and equipment | 36,872 | 41,791 | ||||||||||||||||||
Other assets | 78,737 | 102,392 | ||||||||||||||||||
Less: Allowance for loan losses | (29,248 | ) | (42,435 | ) | ||||||||||||||||
Total assets | $ | 1,988,610 | $ | 2,091,606 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Interest-bearing demand deposits | $ | 381,445 | $ | 1,051 | 0.55 | % | $ | 378,529 | $ | 1,098 | 0.58 | % | ||||||||
Savings deposits | 291,204 | 846 | 0.58 | % | 305,538 | 1,777 | 1.16 | % | ||||||||||||
Time deposits | 620,494 | 9,468 | 3.05 | % | 707,276 | 13,743 | 3.89 | % | ||||||||||||
Short-term borrowings | 101,189 | 566 | 1.12 | % | 113,767 | 1,141 | 2.01 | % | ||||||||||||
Long-term debt | 23,564 | 533 | 4.52 | % | 37,312 | 1,085 | 5.82 | % | ||||||||||||
Trust preferred securities | 87,500 | 4,012 | 9.17 | % | 87,500 | 4,301 | 9.83 | % | ||||||||||||
Total interest-bearing liabilities | 1,505,396 | 16,476 | 2.19 | % | 1,629,922 | 23,145 | 2.84 | % | ||||||||||||
Noninterest-bearing demand deposits | 284,984 | 274,219 | ||||||||||||||||||
Other liabilities | 27,399 | 34,392 | ||||||||||||||||||
Stockholders’ equity | 170,831 | 153,073 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,988,610 | $ | 2,091,606 | ||||||||||||||||
Net interest income | $ | 43,500 | $ | 44,265 | ||||||||||||||||
Net yield on earning assets | 4.69 | % | 4.60 | % | ||||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)
June 30 2003 (a) | March 31 2003 | Dec. 31 2002 | Sept. 30 2002 | June 30 2002 | ||||||||||||||||
Tier I Capital: | ||||||||||||||||||||
Stockholders’ equity | $ | 178,571 | $ | 167,877 | $ | 165,393 | $ | 160,705 | $ | 158,828 | ||||||||||
Goodwill and other intangibles | (6,574 | ) | (6,652 | ) | (6,730 | ) | (6,808 | ) | (6,885 | ) | ||||||||||
Accumulated other comprehensive income | (5,134 | ) | (3,357 | ) | (4,416 | ) | (6,077 | ) | (4,638 | ) | ||||||||||
Qualifying trust preferred stock | 57,812 | 54,840 | 53,659 | 51,543 | 51,397 | |||||||||||||||
Excess retained interests | (23,810 | ) | (29,169 | ) | (28,946 | ) | (30,000 | ) | (27,255 | ) | ||||||||||
Excess deferred tax assets | (9,048 | ) | (14,477 | ) | (15,104 | ) | (11,102 | ) | (14,766 | ) | ||||||||||
Total tier I capital | $ | 191,817 | $ | 169,062 | $ | 163,856 | $ | 158,261 | $ | 156,681 | ||||||||||
Total Risk-Based Capital: | ||||||||||||||||||||
Tier I capital | $ | 191,817 | $ | 169,062 | $ | 163,856 | $ | 158,261 | $ | 156,681 | ||||||||||
Qualifying allowance for loan losses | 24,701 | 24,139 | 24,068 | 23,477 | 22,910 | |||||||||||||||
Qualifying trust preferred stock | 29,688 | 32,660 | 33,841 | 35,957 | 36,103 | |||||||||||||||
Total risk-based capital | $ | 246,206 | $ | 225,861 | $ | 221,765 | $ | 217,695 | $ | 215,694 | ||||||||||
Net risk-weighted assets | $ | 1,648,715 | $ | 1,650,156 | $ | 1,660,489 | $ | 1,621,129 | $ | 1,567,809 | ||||||||||
Ratios: | ||||||||||||||||||||
Average stockholders’ equity to average assets | 8.65 | % | 8.53 | % | 8.30 | % | 8.05 | % | 7.51 | % | ||||||||||
Risk-based capital ratios: | ||||||||||||||||||||
Tier I capital | 11.63 | % | 10.25 | % | 9.87 | % | 9.76 | % | 9.99 | % | ||||||||||
Total risk-based capital | 14.93 | % | 13.69 | % | 13.36 | % | 13.43 | % | 13.76 | % | ||||||||||
Leverage capital | 9.81 | % | 8.75 | % | 8.49 | % | 8.08 | % | 7.73 | % | ||||||||||
(a) June 30, 2003 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES Intangibles (Unaudited) ($ in 000s)
| ||||||||||||||||||||
| As of and for the Quarter Ended | ||||||||||||||||||||
June 30 2003 | March 31 2003 | Dec. 31 2002 | Sept. 30 2002 | June 30 2002 | ||||||||||||||||
Intangibles, net | $ | 6,574 | $ | 6,652 | $ | 6,730 | $ | 6,808 | $ | 6,885 | ||||||||||
Intangibles amortization expense | 78 | 78 | 78 | 77 | 78 | |||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)
| Quarter Ended | ||||||||||||||||||||
June 30 2003 | March 31 2003 | Dec. 31 2002 | Sept. 30 2002 | June 30 2002 | ||||||||||||||||
Balance at beginning of period | $ | 28,910 | $ | 28,504 | $ | 28,623 | $ | 28,023 | $ | 37,779 | ||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial | 2 | 532 | 565 | 1,722 | 8,925 | |||||||||||||||
Real estate—mortgage | 503 | 594 | 421 | 212 | 3,222 | |||||||||||||||
Installment | 676 | 1,007 | 1,187 | 1,204 | 1,156 | |||||||||||||||
Overdraft deposit accounts | 501 | — | — | — | — | |||||||||||||||
Previously securitized loans | 28 | — | — | — | — | |||||||||||||||
Total charge-offs | 1,710 | 2,133 | 2,173 | 3,138 | 13,303 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Commercial | 1,309 | 929 | 490 | 2,703 | 2,129 | |||||||||||||||
Real estate—mortgage | 307 | 1,178 | 1,140 | 525 | 92 | |||||||||||||||
Installment | 408 | 432 | 424 | 510 | 426 | |||||||||||||||
Overdraft deposit accounts | 168 | — | — | — | — | |||||||||||||||
Previously securitized loans | — | — | — | — | — | |||||||||||||||
Total recoveries | 2,192 | 2,539 | 2,054 | 3,738 | 2,647 | |||||||||||||||
Net (recoveries) charge-offs | (482 | ) | (406 | ) | 119 | (600 | ) | 10,656 | ||||||||||||
Provision for loan losses | (3,300 | ) | — | — | — | 900 | ||||||||||||||
Balance at end of period | $ | 26,092 | $ | 28,910 | $ | 28,504 | $ | 28,623 | $ | 28,023 | ||||||||||
Loans outstanding | $ | 1,197,893 | $ | 1,187,152 | $ | 1,204,391 | $ | 1,229,095 | $ | 1,214,444 | ||||||||||
Average loans outstanding | 1,188,363 | 1,196,048 | 1,215,757 | 1,213,295 | 1,253,098 | |||||||||||||||
Allowance as a percent of loans outstanding | 2.18 | % | 2.44 | % | 2.37 | % | 2.36 | % | 2.31 | % | ||||||||||
Allowance as a percent of non-performing loans | 701 | % | 1057 | % | 948 | % | 1119 | % | 1729 | % | ||||||||||
Net (recoveries) charge-offs (annualized) as a percent of average loans outstanding | (0.16 | )% | (0.14 | )% | 0.04 | % | (0.20 | )% | 3.40 | % | ||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
June 30 2003 | March 31 2003 | Dec. 31 2002 | Sept. 30 2002 | June 30 2002 | ||||||||||||||||
Nonaccrual loans | $ | 1,919 | $ | 2,148 | $ | 2,126 | $ | 1,511 | $ | 626 | ||||||||||
Accruing loans past due 90 days or more | 1,744 | 588 | 880 | 1,046 | 995 | |||||||||||||||
Previously securitized loans past due 90 days or more | 61 | — | — | — | — | |||||||||||||||
Restructured loans | — | — | — | — | — | |||||||||||||||
Total non-performing loans | 3,724 | 2,736 | 3,006 | 2,557 | 1,621 | |||||||||||||||
Other real estate owned | 623 | 387 | 403 | 1,079 | 1,681 | |||||||||||||||
Total non-performing assets | $ | 4,347 | $ | 3,123 | $ | 3,409 | $ | 3,636 | $ | 3,302 | ||||||||||
Non-performing assets as a percent of loans and other real estate owned | 0.36 | % | 0.26 | % | 0.28 | % | 0.30 | % | 0.27 | % | ||||||||||
