Exhibit 99
NEWS RELEASE
For Immediate Release
October 18, 2004
For Further Information Contact:
Jerry Francis, Chairman, President & CEO
(304) 769-1101
City Holding Company Announces Third Quarter Earnings
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $2.2 billion bank holding company headquartered in Charleston, today announced net income for the third quarter of $11.0 million, or diluted earnings per share of $0.65 compared to $11.5 million, or $0.68 per diluted share in the third quarter of 2003. For the quarter, the Company achieved a return on assets of 1.98%, a return on equity of 21.4%, a net interest margin of 4.27%, and an efficiency ratio of 48.4%, placing the Company among the most profitable banks for the quarter. At September 30, 2004 the book value of the Company’s common stock was $12.70 per share compared to a book value of $11.03 per share at September 30, 2003, representing a 15.1% increase.
During the third quarter of 2003, the Company recorded negative provision for loan losses of $1.9 million, which had the effect of increasing after-tax net income by $0.07 per diluted share. Also during the third quarter of 2003, the Company recognized $1.6 million pre-tax in non-interest income resulting from a legal settlement with the FDIC, which had the effect of adding $0.06 per diluted share, after-tax, to operating results in the third quarter of 2003. These were partially offset by losses on the sale of low-yielding securities of $0.8 million in the third quarter of 2003. Cumulatively, these three events added $0.10 to diluted earnings per share during the third quarter of 2003.
“The Company enjoyed strong performance in its core businesses during the third quarter of 2004” said Jerry Francis, President and CEO of the Company. “Loans grew, deposits grew, and net interest income for the third quarter of 2004 was $21.6 million compared to $20.5 million for the comparable quarter in 2003 representing an increase of 5.4%. Excluding investment security losses and revenues from legal settlements, the Company experienced nearly 14% growth in non-interest income while expenses grew by only 4.4%.”
Balance Sheet Trends
As compared to September 30, 2003, loans have increased $101.7 million. Specifically, home equity loan balances increased by $32.8 million and commercial real estate loan balances grew by $60.2 million. Additionally, the carrying value of Previously Securitized Loans increased $33.6 million from September 30, 2003 to September 30, 2004. This increase was due to the Company’s early redemption of the outstanding obligations pursuant to each of its six securitization trusts, resulting in the Company becoming the beneficial owner of the remaining mortgage loans held by those trusts. Offsetting the targeted loan growth, were decreases in loan portfolios that the Company has de-emphasized, including decreases in indirect loans of $16.1 million and decreases in unsecured consumer loans of $19.2 million. The Company also experienced strong and steady increases in average depository balances, which were 4.4% higher in the third quarter of 2004 as compared to the third quarter of 2003, increasing from $1.595 billion to $1.665 billion. This growth occurred in average non-interest bearing deposits, which were up 4.8%; interest-bearing demand deposits, which were up 6.2%; and time deposits, which were up 6.5%.
Net Interest Income
Tax equivalent net interest income in the third quarter of 2004 increased by $1.1 million or 5.1%, as compared to the third quarter of 2003. This increase can primarily be attributed to growth in interest
earning assets. In addition to the increase in loans discussed above, investment security balances increased by over $140 million between the third quarter of 2003 and the third quarter of 2004 offset by increased borrowings effected through the Federal Home Loan Bank of Pittsburgh. Also, during the fourth quarter of 2003, the Company reduced its funding costs through the redemption of $57.5 million in 9.125% trust preferred securities.
The average rate earned on interest-earning assets decreased 35 basis points from 6.19% in the third quarter of 2003 to 5.84% in the third quarter of 2004 reflecting growth in lower yielding investment securities and the impact of earning assets which repriced downward due to lower interest rates. The corresponding cost of interest-bearing liabilities decreased 17 basis points from 2.09% in the third quarter of 2003 to 1.92% in the third quarter of 2004. This decrease was primarily attributable to the redemption of trust preferred securities discussed above. The net interest margin declined by 23 basis points from 4.50% in the third quarter of 2003 to 4.27% in the third quarter of 2004 as the combined impact of an increase in investment securities at lower average yields and the repricing of loans downward more than offset the benefits of repositioning the Company’s trust preferred debt.
The Company’s net interest income in the third quarter of 2004 increased by 7 basis points to 4.27% as compared to 4.20% in the second quarter of 2004. This increase can be attributed to increases in the Prime rate of 0.75% during the third quarter. As the Prime rate increased, the rate earned on the Company’s assets increased faster than the Company’s cost of liabilities which is consistent with what the Company has previously described as its exposure to rising interest rates.
Credit Quality
At September 30, 2004, the ALLL was $18.5 million or 1.38% of total loans outstanding and 515% of non-performing loans. Adjusting for $71 million in previously securitized loans, where losses are not expected to flow through the allowance for loan losses but instead are reflected in the yield on these assets, the ALLL represents 1.46% of loans net of previously securitized loans. The Company believes that its methodology for determining its ALLL adequately provides for probable losses inherent in the loan portfolio at September 30. The Company recorded no provision for loan losses in the third quarter of 2004. During the third quarter of 2004, the Company had gross charge-offs of $2.957 million. These charge-offs were offset by $1.661 million in recoveries, resulting in net charge-offs of $1.296 million. These charged off loans had been adequately considered in determining the adequacy of the allowance for loan losses in prior periods.
Non-Interest Income
Non-interest income in the third quarter of 2004 was $10.856 million as compared to $10.346 million in the third quarter of 2003. During the third quarter of 2003, the Company recorded income of $1.6 million associated with a legal settlement and investment security losses of $0.810 million. Net of these two events, non-interest income would have been $9.556 million reflecting growth in the third quarter of 2004 as compared to the year-ago quarter of 13.6%. The largest source of non-interest income is fee income from depository accounts, which increased from $7.3 million during the third quarter of 2003 to $8.4 million during the third quarter of 2004, or 15.9%, reflecting growth in new customers and services provided to the Company’s depository customers.
Non-Interest Expenses
Non-interest expense increased by $0.7 million for the quarter, from $15.1 million in the third quarter of 2003 to $15.8 million in the third quarter of 2004, an increase of 4.4%. This increase is attributable to an increase of $0.4 million in the cost of salaries and employee benefits – principally higher health care costs and the costs of providing for executive severances.
Previously Securitized Loans
Between 1997 and 1999, the company originated and securitized $760 million in 125% loan to value junior-lien underlying mortgages in six separate pools known as City Capital Home Loan Trust 1997-1, 98-1, 98-2, 98-3, 98-4 and 99-1. The Company had a retained interest in the residual cash flows associated with these underlying mortgages after satisfying priority claims. Principal amounts owed to investors in the securitizations were evidenced by securities that were subject to redemption under certain circumstances. Once the Notes were redeemed, the Company became the beneficial owner of the mortgage loans and recorded the loans as “Previously Securitized Loans” within the loan portfolio. As of April 30, 2004, the Company had exercised its early redemption option with respect to all of these Trusts.
Because the carrying value of the previously securitized loans incorporates discounts for expected prepayment and default rates, the carrying value of the loans is generally less than the contractual outstanding balance of the loans. As of September 30, 2004, the contractual outstanding balances of the mortgages securitized were $87.4 million while the carrying value of these assets was $71.0 million. The difference between the carrying value and the contractual outstanding balance of previously securitized loans is accreted into interest income over the life of the loans.
Net credit losses on previously securitized loans are first recorded against this discount and, therefore, impact the yield earned on these loans. Should net credit losses exceed the reported balance of the discount over the life of the loans, credit losses would then be provided for through the Company’s provision and allowance for loan losses. Based upon its assumptions, the Company expects the net carrying value of previously securitized loan balances to decrease as shown below:
| | | |
December 31, 2004 | | $ | 64 million |
December 31, 2005 | | $ | 44 million |
December 31, 2006 | | $ | 32 million |
December 31, 2007 | | $ | 24 million |
Capitalization and Liquidity
One of the Company’s strengths is that it is highly profitable while maintaining strong liquidity and capital. With respect to liquidity, the Company’s loan to deposit ratio was 81.3% and the loan to asset ratio was 60.7% at September 30, 2004. The Company maintained investment securities totaling 31.8% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 44.8% of assets at September 30, 2004. Time deposits fund 29.8% of assets but very few of these deposits are in accounts of more than $250,000 reflecting the core retail orientation of the Company. Equity represents 9.5% of total assets, leaving only 15.9% of the Company’s assets funded by short and long-term borrowings and other liabilities.
The Company is also strongly capitalized. Capitalization (as measured by average equity to average assets) was 9.50% at September 30, 2004 as a result of the Company’s strong earnings. The Company’s tangible equity ratio was 9.24% at September 30, 2004. With respect to regulatory capital, at September 30, 2004, the Company’s Leverage Ratio is 10.47%, the Tier I Capital ratio is 15.21%, and the Total Risk-Based Capital ratio is 16.44%. The Company’s regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
During the third quarter of 2004, the Company repurchased 87,740 common shares at a weighted average price of $29.96 as part of a 1 million share repurchase plan originally authorized by the Board of Directors in June of 2002. Under this authorization, as of September 30, 2004, the Company may repurchase an additional 382,260 shares from time to time depending upon market conditions.
Other Events of Interest
In September, City National Bank opened new banking offices in Wal-Mart Supercenters located in Barboursville and Charleston, West Virginia. These two new locations provide City customers with convenient access to their financial needs in two of the state’s most popular shopping areas. In October, the Company announced plans to provide banking services in two new Wal-Mart Supercenters currently under construction in Beckley, West Virginia and in Ashland, Kentucky. Both branches are expected to open in the second quarter of 2005. We are very pleased with the initial success of our first two Wal-Mart branches and we will continue to look for opportunities to build on this successful partnership. City National Bank is committed to providing customers with convenient access to their financial needs and Wal-Mart has tremendous exposure and high traffic counts, which give us considerable opportunity for new Totally Free Checking and Home Equity relationships.
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 previously securitized loans causing the yields on these assets to decline; (4) the Company could have adverse legal actions of a material nature; (5) the Company may face competitive loss of customers; (6) the Company may be unable to manage its expense levels; (7) changes in the interest rate environment may have results on the Company’s operations materially different from those anticipated by the Company’s market risk management functions; (8) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (9) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company’s operating results; and (10) 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
| | | | |
| | | September
30 2004
| | | September
30 2003
| | | Percent Change
| |
Earnings ($000s, except per share data): | | | | | | | | | | | |
Net Interest Income (FTE) | | $ | 21,868 | | | $ | 20,800 | | | 5.13 | % |
Net Income | | | 10,956 | | | | 11,533 | | | (5.00 | )% |
Earnings per Basic Share | | | 0.66 | | | | 0.69 | | | (4.35 | )% |
Earnings per Diluted Share | | | 0.65 | | | | 0.68 | | | (4.41 | )% |
| | | |
Key Ratios (percent): | | | | | | | | | | | |
Return on Average Assets | | | 1.98 | % | | | 2.31 | % | | (14.17 | )% |
Return on Average Equity | | | 21.41 | % | | | 25.04 | % | | (14.51 | )% |
Net Interest Margin | | | 4.27 | % | | | 4.50 | % | | (5.07 | )% |
Efficiency Ratio | | | 48.43 | % | | | 47.50 | % | | 1.96 | % |
Average Shareholders’ Equity to Average Assets | | | 9.26 | % | | | 9.23 | % | | 0.35 | % |
| | | |
Risk-Based Capital Ratios (a): | | | | | | | | | | | |
Tier I | | | 15.21 | % | | | 13.58 | % | | 12.00 | % |
Total | | | 16.44 | % | | | 16.58 | % | | (0.84 | )% |
| | | |
Common Stock Data: | | | | | | | | | | | |
Cash Dividends Declared per Share | | $ | 0.22 | | | $ | 0.20 | | | 10.00 | % |
Book Value per Share | | | 12.70 | | | | 11.03 | | | 15.14 | % |
Market Value per Share: | | | | | | | | | | | |
High | | | 33.05 | | | | 36.00 | | | (8.19 | )% |
Low | | | 28.69 | | | | 28.91 | | | (0.76 | )% |
End of Period | | | 32.89 | | | | 33.17 | | | (0.84 | )% |
| | | |
Price/Earnings Ratio (b) | | | 12.46 | | | | 12.02 | | | 3.66 | % |
| (a) | September 30, 2004 risk-based capital ratios are estimated. |
| (b) | September 30, 2004 price/earnings ratio computed based on annualized third quarter 2004 earnings. |
| | | | | | | | | | | |
| | | Nine Months Ended
| | | Percent Change | |
| | September 30 2004
| | | September 30 2003
| | |
Earnings ($000s, except per share data): | | | | | | | | | | | |
Net Interest Income (FTE) | | $ | 66,116 | | | $ | 64,300 | | | 2.82 | % |
Net Income | | | 35,257 | | | | 33,022 | | | 6.77 | % |
Earnings per Basic Share | | | 2.12 | | | | 1.99 | | | 6.53 | % |
Earnings per Diluted Share | | | 2.09 | | | | 1.95 | | | 7.18 | % |
| | | |
Key Ratios (percent): | | | | | | | | | | | |
Return on Average Assets | | | 2.12 | % | | | 2.21 | % | | (3.92 | )% |
Return on Average Equity | | | 23.12 | % | | | 25.11 | % | | (7.91 | )% |
Net Interest Margin | | | 4.30 | % | | | 4.63 | % | | (7.23 | )% |
Efficiency Ratio | | | 47.91 | % | | | 50.24 | % | | (4.64 | )% |
Average Shareholders’ Equity to Average Assets | | | 9.18 | % | | | 8.81 | % | | 4.23 | % |
| | | |
Common Stock Data: | | | | | | | | | | | |
Cash Dividends Declared per Share | | $ | 0.66 | | | $ | 0.60 | | | 10.00 | % |
Market Value per Share: | | | | | | | | | | | |
High | | | 36.18 | | | | 36.00 | | | 0.50 | % |
Low | | | 27.30 | | | | 25.50 | | | 7.06 | % |
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
|
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 | | 11.03 | | 11.51 | | 25.50 | | 37.15 |
2004 | | 12.09 | | 11.89 | | 12.70 | | | | 27.30 | | 36.18 |
| | | | | | | | | | | | | | | |
Earnings per Basic Share | | | | | | | | | | |
| | | | | |
| | | March 31
| | | June 30
| | | Quarter Ended September 30
| | | December 31
| | | Year-to-Date
| |
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 | | | 0.69 | | | 0.64 | | | 2.63 | |
2004 | | 0.66 | | | 0.80 | | | 0.66 | | | | | | 2.12 | |
Earnings per Diluted Share | | | | | | | | | | |
| | | | | |
| | | March 31
| | | June 30
| | | Quarter Ended September 30
| | | December 31
| | | Year-to-Date
| |
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 | | | 0.68 | | | 0.63 | | | 2.58 | |
2004 | | 0.65 | | | 0.79 | | | 0.65 | | | | | | 2.09 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | | | | | |
| | | Three Months Ended September 30
| |
| | | 2004
| | 2003
| |
Interest Income | | | | | | | |
Interest and fees on loans | | $ | 21,481 | | $ | 20,086 | |
Interest on investment securities: | | | | | | | |
Taxable | | | 7,733 | | | 4,631 | |
Tax-exempt | | | 438 | | | 503 | |
Interest on retained interests | | | — | | | 3,100 | |
Interest on deposits in depository institutions | | | 15 | | | 21 | |
Interest on federal funds sold | | | — | | | — | |
| | |
|
| |
|
|
|
Total Interest Income | | | 29,667 | | | 28,341 | |
| | |
Interest Expense | | | | | | | |
Interest on deposits | | | 5,867 | | | 5,519 | |
Interest on short-term borrowings | | | 297 | | | 93 | |
Interest on long-term debt | | | 1,871 | | | 2,200 | |
| | |
|
| |
|
|
|
Total Interest Expense | | | 8,035 | | | 7,812 | |
| | |
|
| |
|
|
|
Net Interest Income | | | 21,632 | | | 20,529 | |
Provision for (recovery of) loan losses | | | — | | | (1,900 | ) |
| | |
|
| |
|
|
|
Net Interest Income After Provision for Loan Losses | | | 21,632 | | | 22,429 | |
| | |
Non-Interest Income | | | | | | | |
Investment securities gains | | | 4 | | | (810 | ) |
Service charges | | | 8,440 | | | 7,285 | |
Insurance commissions | | | 600 | | | 604 | |
Trust fee income | | | 446 | | | 493 | |
Bank owned life insurance | | | 575 | | | 414 | |
Mortgage banking income | | | 72 | | | 109 | |
Other income | | | 719 | | | 2,251 | |
| | |
|
| |
|
|
|
Total Non-Interest Income | | | 10,856 | | | 10,346 | |
| | |
Non-Interest Expense | | | | | | | |
Salaries and employee benefits | | | 8,150 | | | 7,787 | |
Occupancy and equipment | | | 1,472 | | | 1,431 | |
Depreciation | | | 972 | | | 1,055 | |
Professional fees and litigation expense | | | 668 | | | 519 | |
Postage, delivery, and statement mailings | | | 601 | | | 538 | |
Advertising | | | 459 | | | 555 | |
Telecommunications | | | 488 | | | 485 | |
Insurance and regulatory | | | 342 | | | 318 | |
Office supplies | | | 252 | | | 310 | |
Repossessed asset (gains) losses and expenses | | | 5 | | | 28 | |
Loss on early extinguishment of debt | | | — | | | — | |
Other expenses | | | 2,374 | | | 2,086 | |
| | |
|
| |
|
|
|
Total Non-Interest Expense | | | 15,783 | | | 15,112 | |
| | |
|
| |
|
|
|
Income Before Income Taxes | | | 16,705 | | | 17,663 | |
Income Tax Expense | | | 5,749 | | | 6,130 | |
| | |
|
| |
|
|
|
Net Income | | $ | 10,956 | | $ | 11,533 | |
| | |
|
| |
|
|
|
Basic Earnings per Share | | $ | 0.66 | | $ | 0.69 | |
Diluted Earnings per Share | | $ | 0.65 | | $ | 0.68 | |
Average Common Shares Outstanding: | | | | | | | |
Basic | | | 16,584 | | | 16,636 | |
Diluted | | | 16,812 | | | 16,953 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | | | | | | |
| | | Nine Months Ended September 30
| |
| | | 2004
| | | 2003
| |
Interest Income | | | | | | | | |
Interest and fees on loans | | $ | 64,588 | | | $ | 59,965 | |
Interest on investment securities: | | | | | | | | |
Taxable | | | 22,331 | | | | 15,507 | |
Tax-exempt | | | 1,372 | | | | 1,633 | |
Interest on retained interests | | | 808 | | | | 10,465 | |
Interest on deposits in depository institutions | | | 36 | | | | 103 | |
Interest on federal funds sold | | | — | | | | 36 | |
| | |
|
|
| |
|
|
|
Total Interest Income | | | 89,135 | | | | 87,709 | |
| | |
Interest Expense | | | | | | | | |
Interest on deposits | | | 17,274 | | | | 16,884 | |
Interest on short-term borrowings | | | 658 | | | | 659 | |
Interest on long-term debt | | | 5,826 | | | | 6,745 | |
| | |
|
|
| |
|
|
|
Total Interest Expense | | | 23,758 | | | | 24,288 | |
| | |
|
|
| |
|
|
|
Net Interest Income | | | 65,377 | | | | 63,421 | |
Provision for (recovery of) loan losses | | | — | | | | (5,200 | ) |
| | |
|
|
| |
|
|
|
Net Interest Income After Provision for Loan Losses | | | 65,377 | | | | 68,621 | |
| | |
Non-Interest Income | | | | | | | | |
Investment securities gains | | | 1,140 | | | | (435 | ) |
Service charges | | | 23,931 | | | | 20,660 | |
Insurance commissions | | | 1,979 | | | | 1,957 | |
Trust fee income | | | 1,561 | | | | 1,196 | |
Bank owned life insurance | | | 1,747 | | | | 727 | |
Mortgage banking income | | | 212 | | | | 457 | |
Net proceeds from litigation settlement | | | 5,453 | | | | — | |
Other income | | | 2,144 | | | | 3,975 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Income | | | 38,167 | | | | 28,537 | |
| | |
Non-Interest Expense | | | | | | | | |
Salaries and employee benefits | | | 24,667 | | | | 23,154 | |
Occupancy and equipment | | | 4,425 | | | | 4,465 | |
Depreciation | | | 2,951 | | | | 3,355 | |
Professional fees and litigation expense | | | 2,694 | | | | 2,337 | |
Postage, delivery, and statement mailings | | | 1,885 | | | | 2,062 | |
Advertising | | | 1,766 | | | | 1,762 | |
Telecommunications | | | 1,417 | | | | 1,408 | |
Insurance and regulatory | | | 993 | | | | 969 | |
Office supplies | | | 838 | | | | 1,150 | |
Repossessed asset losses (gains) and expenses | | | (45 | ) | | | (710 | ) |
Loss on early extinguishment of debt | | | 263 | | | | 142 | |
Other expenses | | | 7,349 | | | | 6,537 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Expense | | | 49,203 | | | | 46,631 | |
| | |
|
|
| |
|
|
|
Income Before Income Taxes | | | 54,341 | | | | 50,527 | |
Income Tax Expense | | | 19,084 | | | | 17,505 | |
| | |
|
|
| |
|
|
|
Net Income | | $ | 35,257 | | | $ | 33,022 | |
| | |
|
|
| |
|
|
|
Basic Earnings per Share | | $ | 2.12 | | | $ | 1.99 | |
Diluted Earnings per Share | | $ | 2.09 | | | $ | 1.95 | |
Average Common Shares Outstanding: | | | | | | | | |
Basic | | | 16,653 | | | | 16,632 | |
Diluted | | | 16,907 | | | | 16,942 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited) ($ in 000s)
| | | | | | | | |
| | | Three Months Ended
| |
| | | September 30, 2004
| | | September 30, 2003
| |
Balance at June 30 | | $ | 197,569 | | | $ | 178,571 | |
| | |
Net income | | | 10,956 | | | | 11,533 | |
Other comprehensive income: | | | | | | | | |
Change in unrealized gain on securities available-for-sale | | | 7,599 | | | | (3,461 | ) |
Cash dividends declared ($0.22/share) | | | (3,644 | ) | | | — | |
Cash dividends declared ($0.20/share) | | | — | | | | (3,330 | ) |
Exercise of 29,600 stock options | | | 433 | | | | — | |
Exercise of 13,500 stock options | | | — | | | | 150 | |
Purchase of 87,740 common shares for treasury | | | (2,628 | ) | | | — | |
| | |
|
|
| |
|
|
|
Balance at September 30 | | $ | 210,285 | | | $ | 183,463 | |
| | |
|
|
| |
|
|
|
| |
| | | Nine Months Ended
| |
| | | September 30, 2004
| | | September 30, 2003
| |
Balance at January 1 | | $ | 190,690 | | | $ | 165,393 | |
| | |
Net income | | | 35,257 | | | | 33,022 | |
Other comprehensive income: | | | | | | | | |
Change in unrealized gain on securities available-for-sale | | | (226 | ) | | | (2,743 | ) |
Cash dividends declared ($0.66/share) | | | (10,979 | ) | | | — | |
Cash dividends declared ($0.60/share) | | | — | | | | (9,982 | ) |
Exercise of 114,403 stock options | | | 1,400 | | | | — | |
Exercise of 99,982 stock options | | | — | | | | 1,031 | |
Purchase of 197,040 common shares for treasury | | | (5,857 | ) | | | | |
Purchase of 118,300 common shares for treasury | | | — | | | | (3,258 | ) |
| | |
|
|
| |
|
|
|
Balance at September 30 | | $ | 210,285 | | | $ | 183,463 | |
| | |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | | | | | | | | | | | | | | | | | | |
| | | Sept. 30 2004
| | | June 30 2004
| | | Quarter Ended March 31 2004
| | | Dec. 31 2003
| | | Sept. 30 2003
| |
Interest income | | $ | 29,667 | | | $ | 29,293 | | | $ | 30,175 | | | $ | 29,581 | | | $ | 28,341 | |
Taxable equivalent adjustment | | | 236 | | | | 246 | | | | 257 | | | | 257 | | | | 271 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Interest income (FTE) | | | 29,903 | | | | 29,539 | | | | 30,432 | | | | 29,838 | | | | 28,612 | |
Interest expense | | | 8,035 | | | | 7,860 | | | | 7,863 | | | | 7,497 | | | | 7,812 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net interest income | | | 21,868 | | | | 21,679 | | | | 22,569 | | | | 22,341 | | | | 20,800 | |
Provision for loan losses | | | — | | | | — | | | | — | | | | (1,000 | ) | | | (1,900 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net interest income after provision for loan losses | | | 21,868 | | | | 21,679 | | | | 22,569 | | | | 23,341 | | | | 22,700 | |
Noninterest income | | | 10,856 | | | | 16,389 | | | | 10,920 | | | | 10,201 | | | | 10,346 | |
Noninterest expense | | | 15,783 | | | | 16,985 | | | | 16,433 | | | | 17,867 | | | | 15,112 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income taxes | | | 16,941 | | | | 21,083 | | | | 17,056 | | | | 15,675 | | | | 17,934 | |
Income tax expense | | | 5,749 | | | | 7,539 | | | | 5,796 | | | | 4,746 | | | | 6,130 | |
Taxable equivalent adjustment | | | 236 | | | | 246 | | | | 257 | | | | 257 | | | | 271 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 10,956 | | | $ | 13,298 | | | $ | 11,003 | | | $ | 10,672 | | | $ | 11,533 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Basic earnings per share | | $ | 0.66 | | | $ | 0.80 | | | $ | 0.66 | | | $ | 0.64 | | | $ | 0.69 | |
Diluted earnings per share | | | 0.65 | | | | 0.79 | | | | 0.65 | | | | 0.63 | | | | 0.68 | |
Cash dividends declared per share | | | 0.22 | | | | 0.22 | | | | 0.22 | | | | 0.20 | | | | 0.20 | |
| | | | | |
Average Common Share (000s): | | | | | | | | | | | | | | | | | | | | |
Outstanding | | | 16,584 | | | | 16,694 | | | | 16,681 | | | | 16,641 | | | | 16,636 | |
Diluted | | | 16,812 | | | | 16,935 | | | | 16,972 | | | | 16,961 | | | | 16,953 | |
Net Interest Margin | | | 4.27 | % | | | 4.20 | % | | | 4.42 | % | | | 4.74 | % | | | 4.50 | % |
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | |
| | | Sept. 30 2004
| | June 30 2004
| | | Quarter Ended March 31 2004
| | Dec. 31 2003
| | Sept. 30 2003
| |
Non-Interest Income: | | | | | | | | | | | | | | | | | |
Service charges | | $ | 8,440 | | $ | 8,110 | | | $ | 7,381 | | $ | 7,762 | | $ | 7,285 | |
Insurance commissions | | | 600 | | | 718 | | | | 660 | | | 510 | | | 604 | |
Trust fee income | | | 446 | | | 627 | | | | 487 | | | 379 | | | 493 | |
Bank owned life insurance | | | 575 | | | 591 | | | | 581 | | | 593 | | | 414 | |
Mortgage banking income | | | 72 | | | 71 | | | | 69 | | | 60 | | | 109 | |
Net proceeds from litigation settlement | | | — | | | 5,453 | | | | — | | | — | | | — | |
Other income | | | 719 | | | 695 | | | | 730 | | | 610 | | | 2,251 | |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
|
|
Subtotal | | | 10,852 | | | 16,265 | | | | 9,908 | | | 9,914 | | | 11,156 | |
Investment security gains (losses) | | | 4 | | | 124 | | | | 1,012 | | | 287 | | | (810 | ) |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
|
|
Total Non-Interest Income | | $ | 10,856 | | $ | 16,389 | | | $ | 10,920 | | $ | 10,201 | | $ | 10,346 | |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
|
|
Non-Interest Expense: | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | $ | 8,150 | | $ | 8,390 | | | $ | 8,127 | | $ | 7,916 | | $ | 7,787 | |
Occupancy and equipment | | | 1,472 | | | 1,459 | | | | 1,494 | | | 1,550 | | | 1,431 | |
Depreciation | | | 972 | | | 974 | | | | 1,006 | | | 1,056 | | | 1,055 | |
Professional fees and litigation expense | | | 668 | | | 1,181 | | | | 844 | | | 542 | | | 519 | |
Postage, delivery, and statement mailings | | | 601 | | | 598 | | | | 685 | | | 584 | | | 538 | |
Advertising | | | 459 | | | 651 | | | | 656 | | | 578 | | | 555 | |
Telecommunications | | | 488 | | | 463 | | | | 466 | | | 466 | | | 485 | |
Insurance and regulatory | | | 342 | | | 320 | | | | 331 | | | 297 | | | 318 | |
Office supplies | | | 252 | | | 273 | | | | 312 | | | 278 | | | 310 | |
Repossessed asset (gains) losses and expenses | | | 5 | | | (108 | ) | | | 57 | | | 19 | | | 28 | |
Loss on early exinguishment of debt | | | — | | | 263 | | | | — | | | 2,246 | | | — | |
Other expenses | | | 2,374 | | | 2,521 | | | | 2,455 | | | 2,335 | | | 2,086 | |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
|
|
Total Non-Interest Expense | | $ | 15,783 | | $ | 16,985 | | | $ | 16,433 | | $ | 17,867 | | $ | 15,112 | |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
|
|
Employees (Full Time Equivalent) | | | 692 | | | 692 | | | | 690 | | | 701 | | | 709 | |
Branch Locations | | | 56 | | | 54 | | | | 54 | | | 54 | | | 55 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
| | | | | | | | |
| | | September 30 2004
| | | December 31 2003
| |
| | | (Unaudited) | | | | |
Assets | | | | | | | | |
Cash and due from banks | | $ | 44,745 | | | $ | 58,216 | |
Interest-bearing deposits in depository institutions | | | 3,855 | | | | 5,122 | |
Federal funds sold | | | — | | | | — | |
| | |
|
|
| |
|
|
|
Cash and cash equivalents | | | 48,600 | | | | 63,338 | |
Investment securities available-for-sale, at fair value | | | 641,577 | | | | 645,663 | |
Investment securities held-to-maturity, at amortized cost | | | 61,195 | | | | 59,298 | |
| | |
|
|
| |
|
|
|
Total investment securities | | | 702,772 | | | | 704,961 | |
Loans: | | | | | | | | |
Residential real estate | | | 468,372 | | | | 446,134 | |
Home equity | | | 304,934 | | | | 282,481 | |
Commercial real estate | | | 377,742 | | | | 351,284 | |
Other commercial | | | 70,745 | | | | 76,167 | |
Installment | | | 20,221 | | | | 33,651 | |
Indirect | | | 13,020 | | | | 24,707 | |
Credit card | | | 17,893 | | | | 18,979 | |
Previously securitized loans | | | 70,970 | | | | 58,788 | |
| | |
|
|
| |
|
|
|
Gross Loans | | | 1,343,897 | | | | 1,292,191 | |
Allowance for loan losses | | | (18,537 | ) | | | (21,426 | ) |
| | |
|
|
| |
|
|
|
Net loans | | | 1,325,360 | | | | 1,270,765 | |
| | |
Retained interests | | | — | | | | 34,320 | |
Bank owned life insurance | | | 50,961 | | | | 49,214 | |
Premises and equipment | | | 34,705 | | | | 35,338 | |
Accrued interest receivable | | | 10,088 | | | | 10,216 | |
Net deferred tax assets | | | 22,740 | | | | 29,339 | |
Other assets | | | 18,423 | | | | 16,939 | |
| | |
|
|
| |
|
|
|
Total Assets | | $ | 2,213,649 | | | $ | 2,214,430 | |
| | |
|
|
| |
|
|
|
Liabilities | | | | | | | | |
Deposits: | | | | | | | | |
Noninterest-bearing | | $ | 299,293 | | | $ | 309,706 | |
Interest-bearing: | | | | | | | | |
Demand deposits | | | 413,525 | | | | 393,443 | |
Savings deposits | | | 278,928 | | | | 278,117 | |
Time deposits | | | 660,313 | | | | 655,496 | |
| | |
|
|
| |
|
|
|
Total deposits | | | 1,652,059 | | | | 1,636,762 | |
Short-term borrowings | | | 133,480 | | | | 168,403 | |
Long-term debt | | | 193,836 | | | | 190,836 | |
Other liabilities | | | 23,989 | | | | 27,739 | |
| | |
|
|
| |
|
|
|
Total Liabilities | | | 2,003,364 | | | | 2,023,740 | |
| | |
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 September 30, 2004 and December 31, 2003, including 357,518 and 274,881 shares in treasury | | | 42,298 | | | | 42,298 | |
Capital surplus | | | 55,652 | | | | 57,364 | |
Retained earnings | | | 120,738 | | | | 96,460 | |
Cost of common stock in treasury | | | (9,548 | ) | | | (6,803 | ) |
Accumulated other comprehensive income: | | | | | | | | |
Unrealized gain on securities available-for-sale | | | 3,536 | | | | 3,762 | |
Underfunded pension liability | | | (2,391 | ) | | | (2,391 | ) |
| | |
|
|
| |
|
|
|
Total Accumulated Other Comprehensive Income | | | 1,145 | | | | 1,371 | |
| | |
|
|
| |
|
|
|
Total Stockholders’ Equity | | | 210,285 | | | | 190,690 | |
| | |
|
|
| |
|
|
|
Total Liabilities and Stockholders’ Equity | | $ | 2,213,649 | | | $ | 2,214,430 | |
| | |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | |
| | | September 30 2004
| | June 30 2004
| | March 31 2004
| | Dec. 31 2003
| | Sept. 30 2003
|
Residential real estate | | $ | 468,372 | | $ | 459,759 | | $ | 439,643 | | $ | 446,134 | | $ | 448,455 |
Home equity | | | 304,934 | | | 301,231 | | | 292,192 | | | 282,481 | | | 272,091 |
Commercial real estate | | | 377,742 | | | 374,292 | | | 347,724 | | | 351,284 | | | 317,549 |
Other commercial | | | 70,745 | | | 73,139 | | | 74,743 | | | 76,167 | | | 79,090 |
Loans to depository institutions | | | — | | | — | | | 20,000 | | | — | | | — |
Installment | | | 20,221 | | | 24,722 | | | 28,351 | | | 33,651 | | | 39,466 |
Indirect | | | 13,020 | | | 16,140 | | | 20,006 | | | 24,707 | | | 29,074 |
Credit card | | | 17,893 | | | 17,961 | | | 18,119 | | | 18,979 | | | 19,133 |
Previously securitized loans | | | 70,970 | | | 83,385 | | | 92,954 | | | 58,788 | | | 37,339 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Gross Loans | | $ | 1,343,897 | | $ | 1,350,629 | | $ | 1,333,732 | | $ | 1,292,191 | | $ | 1,242,197 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| |
| | | 2004
| | | 2003
| |
| | | Average Balance
| | | Interest
| | Yield/ Rate
| | | Average Balance
| | | Interest
| | Yield/ Rate
| |
Assets: | | | | | | | | | | | | | | | | | | | | |
Loan portfolio: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 459,439 | | | $ | 6,652 | | 5.79 | % | | $ | 450,184 | | | $ | 7,343 | | 6.52 | % |
Home equity | | | 303,057 | | | | 3,594 | | 4.74 | % | | | 262,532 | | | | 2,815 | | 4.29 | % |
Commercial real estate | | | 379,450 | | | | 5,312 | | 5.60 | % | | | 308,922 | | | | 4,673 | | 6.05 | % |
Other commercial | | | 71,897 | | | | 980 | | 5.45 | % | | | 80,977 | | | | 1,137 | | 5.62 | % |
Loans to depository institutions | | | — | | | | — | | — | | | | — | | | | — | | — | |
Installment | | | 23,229 | | | | 670 | | 11.54 | % | | | 43,241 | | | | 1,203 | | 11.13 | % |
Indirect | | | 14,485 | | | | 400 | | 11.05 | % | | | 31,887 | | | | 878 | | 11.01 | % |
Credit card | | | 17,841 | | | | 537 | | 12.04 | % | | | 19,074 | | | | 569 | | 11.93 | % |
Previously securitized loans | | | 78,867 | | | | 3,336 | | 16.92 | % | | | 25,195 | | | | 1,468 | | 23.31 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total loans | | | 1,348,265 | | | | 21,481 | | 6.37 | % | | | 1,222,012 | | | | 20,086 | | 6.57 | % |
Securities: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 656,878 | | | | 7,733 | | 4.71 | % | | | 511,885 | | | | 4,631 | | 3.62 | % |
Tax-exempt | | | 37,050 | | | | 674 | | 7.28 | % | | | 41,506 | | | | 774 | | 7.46 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total securities | | | 693,928 | | | | 8,407 | | 4.85 | % | | | 553,391 | | | | 5,405 | | 3.91 | % |
Retained interest in securitized loans | | | — | | | | — | | — | | | | 63,778 | | | | 3,100 | | 19.44 | % |
Deposits in depository institutions | | | 5,531 | | | | 15 | | 1.08 | % | | | 10,150 | | | | 21 | | 0.83 | % |
Federal funds sold | | | — | | | | — | | — | | | | — | | | | — | | — | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-earning assets | | | 2,047,724 | | | | 29,903 | | 5.84 | % | | | 1,849,331 | | | | 28,612 | | 6.19 | % |
Cash and due from banks | | | 43,361 | | | | | | | | | | 43,464 | | | | | | | |
Bank premises and equipment | | | 34,766 | | | | | | | | | | 35,614 | | | | | | | |
Other assets | | | 104,027 | | | | | | | | | | 93,766 | | | | | | | |
Less: Allowance for loan losses | | | (19,573 | ) | | | | | | | | | (25,937 | ) | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Total assets | | $ | 2,210,305 | | | | | | | | | $ | 1,996,238 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 412,051 | | | $ | 683 | | 0.66 | % | | $ | 388,179 | | | $ | 540 | | 0.56 | % |
Savings deposits | | | 278,947 | | | | 365 | | 0.52 | % | | | 287,305 | | | | 385 | | 0.54 | % |
Time deposits | | | 662,803 | | | | 4,819 | | 2.91 | % | | | 622,185 | | | | 4,594 | | 2.95 | % |
Short-term borrowings | | | 122,301 | | | | 297 | | 0.97 | % | | | 91,518 | | | | 93 | | 0.41 | % |
Long-term debt | | | 193,836 | | | | 1,871 | | 3.86 | % | | | 102,500 | | | | 2,200 | | 8.59 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-bearing liabilities | | | 1,669,938 | | | | 8,035 | | 1.92 | % | | | 1,491,687 | | | | 7,812 | | 2.09 | % |
Noninterest-bearing demand deposits | | | 311,333 | | | | | | | | | | 297,195 | | | | | | | |
Other liabilities | | | 24,314 | | | | | | | | | | 23,090 | | | | | | | |
Stockholders’ equity | | | 204,720 | | | | | | | | | | 184,266 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,210,305 | | | | | | | | | $ | 1,996,238 | | | | | | | |
| | |
|
|
| |
|
| | | | |
|
|
| |
|
| | | |
Net interest income | | | | | | $ | 21,868 | | | | | | | | | $ | 20,800 | | | |
| | | | | | |
|
| |
|
| | | | | |
|
| |
|
|
Net yield on earning assets | | | | | | | | | 4.27 | % | | | | | | | | | 4.50 | % |
| | | | | | | | | |
|
| | | | | | | | |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Nine Months Ended September 30,
| |
| | | 2004
| | | 2003
| |
| | | Average Balance
| | | Interest
| | Yield/ Rate
| | | Average Balance
| | | Interest
| | Yield/ Rate
| |
Assets: | | | | | | | | | | | | | | | | | | | | |
Loan portfolio: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 450,366 | | | $ | 20,223 | | 5.99 | % | | $ | 457,791 | | | $ | 23,456 | | 6.83 | % |
Home equity | | | 295,678 | | | | 10,038 | | 4.53 | % | | | 242,170 | | | | 8,159 | | 4.49 | % |
Commercial real estate | | | 361,222 | | | | 15,043 | | 5.55 | % | | | 292,220 | | | | 13,664 | | 6.23 | % |
Other commercial | | | 74,171 | | | | 2,897 | | 5.21 | % | | | 86,714 | | | | 3,931 | | 6.04 | % |
Loans to depository institutions | | | 4,087 | | | | 35 | | 1.14 | % | | | 6,228 | | | | 78 | | 1.67 | % |
Installment | | | 27,081 | | | | 2,291 | | 11.28 | % | | | 50,709 | | | | 4,285 | | 11.27 | % |
Indirect | | | 18,283 | | | | 1,503 | | 10.96 | % | | | 38,369 | | | | 3,126 | | 10.86 | % |
Credit card | | | 18,085 | | | | 1,630 | | 12.02 | % | | | 18,971 | | | | 1,710 | | 12.02 | % |
Previously securitized loans | | | 84,799 | | | | 10,928 | | 17.18 | % | | | 9,064 | | | | 1,556 | | 22.89 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total loans | | | 1,333,772 | | | | 64,588 | | 6.46 | % | | | 1,202,236 | | | | 59,965 | | 6.65 | % |
Securities: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 670,339 | | | | 22,331 | | 4.44 | % | | | 513,654 | | | | 15,507 | | 4.03 | % |
Tax-exempt | | | 38,370 | | | | 2,111 | | 7.34 | % | | | 44,696 | | | | 2,512 | | 7.49 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total securities | | | 708,709 | | | | 24,442 | | 4.60 | % | | | 558,350 | | | | 18,019 | | 4.30 | % |
Retained interest in securitized loans | | | 4,408 | | | | 808 | | 24.44 | % | | | 75,551 | | | | 10,465 | | 18.47 | % |
Deposits in depository institutions | | | 5,546 | | | | 36 | | 0.87 | % | | | 12,905 | | | | 103 | | 1.06 | % |
Federal funds sold | | | — | | | | — | | — | | | | 4,553 | | | | 36 | | 1.05 | % |
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Total interest-earning assets | | | 2,052,435 | | | | 89,874 | | 5.84 | % | | | 1,853,595 | | | | 88,588 | | 6.37 | % |
Cash and due from banks | | | 43,850 | | | | | | | | | | 45,467 | | | | | | | |
Bank premises and equipment | | | 34,786 | | | | | | | | | | 36,448 | | | | | | | |
Other assets | | | 103,025 | | | | | | | | | | 83,802 | | | | | | | |
Less: Allowance for loan losses | | | (20,280 | ) | | | | | | | | | (28,132 | ) | | | | | | |
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Total assets | | $ | 2,213,816 | | | | | | | | | $ | 1,991,180 | | | | | | | |
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Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 405,135 | | | $ | 1,924 | | 0.63 | % | | $ | 383,715 | | | $ | 1,591 | | 0.55 | % |
Savings deposits | | | 280,315 | | | | 1,094 | | 0.52 | % | | | 289,890 | | | | 1,231 | | 0.57 | % |
Time deposits | | | 662,383 | | | | 14,256 | | 2.87 | % | | | 621,064 | | | | 14,062 | | 3.02 | % |
Short-term borrowings | | | 117,372 | | | | 658 | | 0.75 | % | | | 97,930 | | | | 659 | | 0.90 | % |
Long-term debt | | | 210,047 | | | | 5,826 | | 3.70 | % | | | 108,178 | | | | 6,745 | | 8.31 | % |
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Total interest-bearing liabilities | | | 1,675,252 | | | | 23,758 | | 1.89 | % | | | 1,500,777 | | | | 24,288 | | 2.16 | % |
Noninterest-bearing demand deposits | | | 310,786 | | | | | | | | | | 289,099 | | | | | | | |
Other liabilities | | | 24,483 | | | | | | | | | | 25,945 | | | | | | | |
Stockholders’ equity | | | 203,295 | | | | | | | | | | 175,359 | | | | | | | |
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Total liabilities and stockholders’ equity | | $ | 2,213,816 | | | | | | | | | $ | 1,991,180 | | | | | | | |
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Net interest income | | | | | | $ | 66,116 | | | | | | | | | $ | 64,300 | | | |
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Net yield on earning assets | | | | | | | | | 4.30 | % | | | | | | | | | 4.63 | % |
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CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Sept. 30 2004(a)
| | | June 30 2004
| | | March 31 2003
| | | Dec. 31 2003
| | | Sept. 30 2003
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Tier I Capital: | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity | | $ | 210,285 | | | $ | 197,569 | | | $ | 202,204 | | | $ | 190,690 | | | $ | 183,463 | |
Goodwill and other intangibles | | | (6,306 | ) | | | (6,357 | ) | | | (6,408 | ) | | | (6,459 | ) | | | (6,510 | ) |
Accumulated other comprehensive income | | | (1,146 | ) | | | 6,454 | | | | (4,742 | ) | | | (1,372 | ) | | | (1,673 | ) |
Qualifying trust preferred stock | | | 28,000 | | | | 28,000 | | | | 30,000 | | | | 30,000 | | | | 60,597 | |
Excess deferred tax assets | | | — | | | | (6,922 | ) | | | (807 | ) | | | (8,053 | ) | | | (7,731 | ) |
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Total tier I capital | | $ | 230,833 | | | $ | 218,744 | | | $ | 220,247 | | | $ | 204,806 | | | $ | 228,146 | |
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Total Risk-Based Capital: | | | | | | | | | | | | | | | | | | | | |
Tier I capital | | $ | 230,833 | | | $ | 218,744 | | | $ | 220,247 | | | $ | 204,806 | | | $ | 228,146 | |
Qualifying allowance for loan losses | | | 18,537 | | | | 18,939 | | | | 19,169 | | | | 21,426 | | | | 23,436 | |
Qualifying trust preferred stock | | | — | | | | — | | | | — | | | | — | | | | 26,903 | |
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Total risk-based capital | | $ | 249,370 | | | $ | 237,683 | | | $ | 239,416 | | | $ | 226,232 | | | $ | 278,485 | |
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Net risk-weighted assets | | $ | 1,517,158 | | | $ | 1,514,261 | | | $ | 1,505,892 | | | $ | 1,717,206 | | | $ | 1,783,444 | |
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Ratios: | | | | | | | | | | | | | | | | | | | | |
Average stockholders’ equity to average assets | | | 9.26 | % | | | 9.33 | % | | | 8.96 | % | | | 9.12 | % | | | 9.23 | % |
Tangible capital ratio | | | 9.24 | % | | | 8.71 | % | | | 8.85 | % | | | 8.34 | % | | | 8.89 | % |
Risk-based capital ratios: | | | | | | | | | | | | | | | | | | | | |
Tier I capital | | | 15.21 | % | | | 14.43 | % | | | 14.63 | % | | | 11.93 | % | | | 12.79 | % |
Total risk-based capital | | | 16.44 | % | | | 15.68 | % | | | 15.89 | % | | | 13.17 | % | | | 15.62 | % |
Leverage capital | | | 10.47 | % | | | 9.89 | % | | | 10.01 | % | | | 10.04 | % | | | 11.50 | % |
| (a) | September 30, 2004 risk-based capital ratios are estimated. |
CITY HOLDING COMPANY AND SUBSIDIARIES
Intangibles
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | |
| | | As of and for the Quarter Ended
|
| | | Sept. 30 2004
| | June 30 2004
| | March 31 2003
| | Dec. 31 2003
| | Sept. 30 2003
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Intangibles, net | | $ | 6,306 | | $ | 6,357 | | $ | 6,408 | | $ | 6,459 | | $ | 6,510 |
Intangibles amortization expense | | | 51 | | | 51 | | | 51 | | | 51 | | | 64 |
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Sept. 30 2004
| | | June 30 2004
| | | Quarter Ended March 31 2003
| | | Dec. 31 2003
| | | Sept. 30 2003
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Balance at beginning of period | | $ | 19,833 | | | $ | 20,289 | | | $ | 21,426 | | | $ | 23,436 | | | $ | 26,092 | |
Charge-offs: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 299 | | | | 173 | | | | 217 | | | | 419 | | | | 251 | |
Home equity | | | 105 | | | | 66 | | | | 133 | | | | 18 | | | | 65 | |
Commercial real estate | | | 1,134 | | | | 44 | | | | 342 | | | | 130 | | | | 294 | |
Other commercial | | | 220 | | | | 22 | | | | 159 | | | | 28 | | | | 203 | |
Installment | | | 568 | | | | 457 | | | | 588 | | | | 715 | | | | 678 | |
Overdraft deposit accounts | | | 631 | | | | 610 | | | | 787 | | | | 583 | | | | 596 | |
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Total charge-offs | | | 2,957 | | | | 1,372 | | | | 2,226 | | | | 1,893 | | | | 2,087 | |
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Recoveries: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 196 | | | | 133 | | | | 104 | | | | 135 | | | | 190 | |
Home equity | | | 1 | | | | — | | | | 5 | | | | — | | | | 1 | |
Commercial real estate | | | 922 | | | | 201 | | | | 311 | | | | 141 | | | | 424 | |
Other commercial | | | 103 | | | | 127 | | | | 55 | | | | 182 | | | | 259 | |
Installment | | | 183 | | | | 202 | | | | 260 | | | | 211 | | | | 249 | |
Overdraft deposit accounts | | | 256 | | | | 253 | | | | 354 | | | | 214 | | | | 208 | |
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Total recoveries | | | 1,661 | | | | 916 | | | | 1,089 | | | | 883 | | | | 1,331 | |
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Net charge-offs | | | 1,296 | | | | 456 | | | | 1,137 | | | | 1,010 | | | | 756 | |
(Recovery of) provision for loan losses | | | — | | | | — | | | | — | | | | (1,000 | ) | | | (1,900 | ) |
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Balance at end of period | | $ | 18,537 | | | $ | 19,833 | | | $ | 20,289 | | | $ | 21,426 | | | $ | 23,436 | |
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Loans outstanding | | $ | 1,343,897 | | | $ | 1,350,629 | | | $ | 1,333,732 | | | $ | 1,292,191 | | | $ | 1,242,197 | |
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Average loans outstanding | | | 1,348,265 | | | | 1,342,001 | | | | 1,310,894 | | | | 1,271,581 | | | | 1,222,012 | |
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Allowance as a percent of loans outstanding | | | 1.38 | % | | | 1.47 | % | | | 1.52 | % | | | 1.66 | % | | | 1.89 | % |
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Allowance as a percent of non-performing loans | | | 515 | % | | | 493 | % | | | 432 | % | | | 529 | % | | | 551 | % |
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Net charge-offs (annualized) as a percent of average loans outstanding | | | 0.38 | % | | | 0.14 | % | | | 0.35 | % | | | 0.32 | % | | | 0.25 | % |
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CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Sept. 30 2004
| | | June 30 2004
| | | March 31 2003
| | | Dec. 31 2003
| | | Sept. 30 2003
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Nonaccrual loans | | $ | 1,924 | | | $ | 1,792 | | | $ | 2,268 | | | $ | 2,140 | | | $ | 2,509 | |
Accruing loans past due 90 days or more | | | 800 | | | | 689 | | | | 1,039 | | | | 1,195 | | | | 1,229 | |
Previously securitized loans past due 90 days or more | | | 876 | | | | 1,544 | | | | 1,388 | | | | 717 | | | | 516 | |
Restructured loans | | | — | | | | — | | | | — | | | | — | | | | — | |
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Total non-performing loans | | | 3,600 | | | | 4,025 | | | | 4,695 | | | | 4,052 | | | | 4,254 | |
Other real estate owned | | | 267 | | | | 171 | | | | 296 | | | | 312 | | | | 477 | |
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Total non-performing assets | | $ | 3,867 | | | $ | 4,196 | | | $ | 4,991 | | | $ | 4,364 | | | $ | 4,731 | |
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Non-performing assets as a percent of loans and other real estate owned | | | 0.29 | % | | | 0.31 | % | | | 0.37 | % | | | 0.34 | % | | | 0.38 | % |
