Exhibit 99
NEWS RELEASE
For Immediate Release
January 25, 2005
For Further Information Contact:
Gerald R. Francis, President & CEO
(304) 769-1101
City Holding Company Announces Record 2004 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 fourth quarter of 2004 of $11.1 million, or diluted earnings per share of $0.66 compared to $10.7 million, or $0.63 per diluted share in the fourth quarter of 2003. For the quarter, the Company achieved a return on assets of 2.01%, a return on equity of 20.5%, a net interest margin of 4.27%, and an efficiency ratio of 50.3%. The Company believes that these results place it among the most profitable banks within its peer group. At December 31, 2004 the market and book value of the Company’s common stock was $36.24 and $12.99 per share compared to a market and book value of $35.06 and $11.46 per share at December 31, 2003.
For the full year 2004, the Company reported record net income of $46.3 million, or diluted earnings per share of $2.75 compared to $43.7 million, or diluted earnings per share of $2.58 during 2003. Return on assets for the full year was 2.10%, return on equity was 22.4%, the net interest margin was 4.29% and the efficiency ratio was 48.5%.
Balance Sheet Trends
Between December 31, 2003 and December 31, 2004, total loans increased $62.6 million. Specifically, home equity loan balances increased by $25.7 million, or 9.1%; commercial real estate loan balances grew by $49.5 million, or 14.1%; and residential real estate loans grew by $23.3 million, or 5.2%. Offsetting growth in these targeted loan portfolios were decreases in indirect loans of $14.4 million and decreases in consumer loans of $15.5 million. The Company also experienced continued growth in average depository balances, which were 2.4% higher in the fourth quarter of 2004 as compared to the fourth quarter of 2003, increasing from $1.622 billion to $1.661 billion. This growth occurred in average non-interest bearing deposits, which were up 4.9%; interest-bearing demand deposits, which were up 4.0%; and time deposits, which were up 2.1%.
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. At December 31, 2003, the Company had exercised its early redemption option with respect to four of these trusts. The Company exercised its early redemption option with respect to the remaining two trusts during 2004. As a result, carrying balances for “Retained Interests” at December 31, 2003 became classified as “Previously Securitized Loans”. Therefore, the combined balances of Previously Securitized Loans and Retained Interests at December 31, 2003 of $93.1 million declined by $34.7 million to $58.4 million at December 31, 2004, a reduction of 37%.
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 December 31, 2004, the contractual outstanding balances of the mortgages securitized were $75.0 million while the carrying value of these assets was $58.4 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.
Because the previously securitized loans have been experiencing faster prepayment rates than previously assumed, the Company has revised its assumptions regarding prepayment rates upward as of December 31, 2004. This has two effects. First, balances are now expected to decrease more quickly than originally anticipated which will reduce the amount of net interest income earned on these assets. Second, the difference between the carrying value and the contractual outstanding balance must be amortized over a shorter anticipated average life, which will increase the anticipated yield on these loans. Based upon its revised assumptions, the Company now expects the net carrying value of previously securitized loan balances to decrease as shown below:
| | |
December 31, 2005 | | $36 million |
December 31, 2006 | | $26 million |
December 31, 2007 | | $19 million |
December 31, 2008 | | $14 million |
While the average balances outstanding are now projected to be lower, the yield is now expected to be in the range of 18% and 20%, depending on defaults and prepayment rates experienced on these loans in the future.
Net Interest Income
Tax equivalent net interest income in the fourth quarter of 2004 was $21.9 million, as compared to tax equivalent net interest income of $22.3 million in the fourth quarter of 2003. This decrease in net interest income can be attributed to lower interest income on Previously Securitized Loans and Retained Interests, which declined by $2.2 million between the fourth quarter of 2003 and the fourth quarter of 2004. The combined average balance of Retained Interests and Previously Securitized Loans fell from $94.4 million during the fourth quarter of 2003 to average balances of $66.3 million during the fourth quarter of 2004. Further, the yield fell from a combined average of 21.2% in the fourth quarter of 2003 to 16.8% in the fourth quarter of 2004. The Company partially offset this significant decline in interest income through loan growth as previously described. Also, the Company increased average investment security balances by approximately $125 million between the fourth quarter of 2003 and the fourth quarter of 2004. This increase in investment security balances was funded using lower rate advances from the Federal Home Loan Bank of Pittsburgh. Finally, during the fourth quarter of 2003, the Company reduced the cost of long-term debt through the redemption of $57.5 million in 9.125% trust preferred securities.
The average yield on interest-earning assets decreased 47 basis points from 6.33% in the fourth quarter of 2003 to 5.86% in the fourth quarter of 2004. This decrease reflects decreased balances of Previously Securitized Loans and Retained Interests, a decrease in the yield on previously securitized loans, significant growth in balances of investment securities which carry lower yields than loans, and the impact of earning assets that repriced downward due to lower interest rates.
The cost of interest-bearing liabilities increased 2 basis points from 1.95% in the fourth quarter of 2003 to 1.97% in the fourth quarter of 2004. The increased cost of interest-bearing liabilities is primarily due to an increase in the average balances of short-term borrowings and long-term debt from the Federal Home Loan Bank of Pittsburgh that were utilized to fund the Company’s increase in investment securities.
For the full year, net interest income on a fully tax equivalent basis increased 1.6% from $86.6 million in 2003 to $88.0 million in 2004. Interest income on previously securitized loans and retained interests declined by $2.5 million overall for 2004 as compared to 2003. As previously described, most of this impact was felt in the fourth quarter of 2004 when outstanding balances were at their lowest levels compared to the prior year. For the full year, the Company also experienced compression in yields on loans due to the overall level of interest rates. As new loans were originated, or existing loans were repriced to reflect existing lower levels of market interest rates, the yield on the loan portfolio fell during 2004. These negative effects were offset by increases in average loans outstanding; by an increase in average investment security balances outstanding of $143.6 million; and by a corresponding increase in the rates earned on these securities of 30 basis points. This leverage strategy was put into place during the fourth quarter of 2003 specifically to offset anticipated reductions in net interest income from declining balances of previously securitized loans.
Credit Quality
At December 31, 2004, the Allowance for Loan Losses (“ALLL”) was $17.8 million or 1.31% of total loans outstanding and 487% of non-performing loans. Adjusting for $58.4 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 1.38% of loans net of previously securitized loans. At December 31, 2003, the ALLL was $21.4 million or 1.66% of total loans outstanding and 529% 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 December 31, 2004. The Company recorded no provision for loan losses in the fourth quarter of 2004 or for the year ended December 31, 2004.
During the fourth quarter of 2004, the Company had gross charge-offs of $1.334 million. These charge-offs were offset by $0.612 million in recoveries, resulting in net charge-offs of $0.722 million. These charged-off loans had been adequately considered in determining the adequacy of the allowance for loan losses in prior periods. Of the net charge-offs of $0.722 million, net charge-offs on installment loans represented $0.311 million, or 43% of total net charge-offs. Installment loans include indirect auto loans and other unsecured consumer loans that have not actively been underwritten since 2001. Net charge-offs on these loans have been steadily declining in line with the decline in outstanding balances. Also, net charge-offs on depository accounts represented $0.348 million, or 48% of total net charge-offs. While charge-offs on depository accounts are appropriately taken against the ALLL, the revenue associated with depository accounts is generally reflected in service charges, and has been steadily growing as the Company’s core base of checking accounts has grown. As a result, net charge-offs, exclusive of depository accounts and installment loans, amounted to just $0.063 million in the fourth quarter of 2004. For the full year, net charge-offs exclusive of depository accounts and installment loans amounted to only $0.819 million or 0.07% of outstanding loans exclusive of previously securitized loans, installment loans and depository accounts.
Non-performing assets were $3.903 million, representing 0.29% of total loans and other real estate owned. This ratio has been very stable over the last two years, fluctuating between 0.29% and 0.38%. A significant portion of the non-performing assets are previously securitized loans representing 21% of all non-performing assets at December 31, 2004. Charge-offs of these particular loans do not run through the ALLL, but are reflected through the yield on the loans as previously described.
Non-Interest Income
Non-interest income in the fourth quarter of 2004 was $11.9 million as compared to $10.2 million in the fourth quarter of 2003, representing an increase of 16.4%. The largest source of non-interest income is fee income from depository accounts, which increased from $7.8 million during the fourth quarter of 2003 to $8.7 million during the fourth quarter of 2004, or 11.8%, reflecting growth in new customers and services provided to the Company’s depository customers. The Company also experienced a 48% increase in insurance revenues and 23% increase in trust revenues in the fourth quarter of 2004 as compared to the fourth quarter of 2003. During the fourth quarter of 2004, the Company recorded additional income of $0.6 million from bank-owned life insurance, from the settlement of an insured claim.
For the full year, non-interest income increased from $38.7 million in 2003 to $50.0 million in 2004. Service charges increased from $28.4 million in 2003 to $32.6 million in 2004, an increase of 14.7%. Insurance revenues increased by 10.8% and trust revenues increased by 28.6% between 2003 and 2004. During 2004, the Company recorded income of $5.5 million associated with the settlement of litigation brought on December 31, 2001 in a derivative action against certain current and former directors and former executive officers of the Company and City National Bank seeking to recover alleged damages on behalf of the Company and City National Bank. The Company previously disclosed a dispute with its insurer, regarding certain legal fees and costs associated with the litigation. During the fourth quarter of 2004, the Company received a reimbursement of $0.4 million from its insurer for previously paid legal fees in settlement of this dispute. As previously discussed, the Company benefited from an increase in income on bank-owned life insurance in 2004 of $0.6 million. The Company has also benefited during 2004 from gains on the sale of certain securities totaling $1.2 million as compared to losses of $0.1 million in 2003. In 2003, the Company benefited from a $1.6 million legal settlement with the FDIC. Total non-interest income net of security gains, litigation proceeds, and bank-owned life insurance increased from $36.0 million in 2003 to $40.5 million in 2004, representing an increase of 12.6%.
Non-Interest Expenses
Non-interest expense decreased from $17.9 million in the fourth quarter of 2003 to $17.1 million in the fourth quarter of 2004. This decrease was principally caused by a charge of $2.246 million associated with the early redemption of $57.5 million in 9.125% trust preferred securities during the fourth quarter of 2003. Net of this charge, non-interest expense increased by $1.5 million, or about 9.7%. This increase was principally in compensation expense, which increased by $1.7 million from $7.9 million in the fourth quarter of 2003 to $9.6 million in the fourth quarter of 2004. The Company incurred $1.9 million for executive severances in the fourth quarter of 2004 as compared to $0.4 million in the fourth quarter of 2003. At December 31, 2004 the Company has accrued its estimated obligation to five executive officers for severance payments as provided for under their respective employment agreements.
For the full year, expenses increased by $1.8 million, or 2.9%, from $64.5 million in 2003 to $66.3 million in 2004. Compensation expense was up from $31.1 million in 2003 to $34.3 million in 2004, representing an increase of $3.2 million, or 10.2%. This increase is firstly attributable to executive severance costs of $3.3 million in 2004 as compared to $1.7 million in 2003 Secondly, the increase in compensation expense in 2004 as compared to 2003 can also be attributed to higher levels of heath care expense for the Company’s employees.
In 2003, the Company reported a charge of $2.388 million associated with the early redemption of $57.5 million in 9.125% trust preferred securities during the fourth quarter. In 2004 however, the Company reported a charge of only $0.263 million associated with the repurchase of $2 million of its outstanding 9.15% trust preferred securities in the open market. In 2003, the Company reported gains on repossessed assets totaling $0.691 million as compared to gains of $0.077 million in 2004. Non-interest expenses net of gains on repossessed assets, expenses associated with early extinguishment of debt, and executive severance costs, increased from $61.1 million in 2003 to $62.9 million, or an increase of $1.8 million or 3.0%.
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 81.0% and the loan to asset ratio was 61.2% at December 31, 2004. The Company maintained investment securities totaling 30.7% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 45.7% of assets at December 31, 2004. Time deposits fund 29.9% 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 9.8% of total assets, leaving only 14.6% 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 9.81% at December 31, 2004 as a result of the Company’s strong earnings. The Company’s tangible equity ratio is 9.51% at December 31, 2004. With respect to regulatory capital, at December 31, 2004, the Company’s Leverage Ratio is 10.74%, the Tier I Capital ratio is 15.47%, and the Total Risk-Based Capital ratio is 16.64%. 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 fourth quarter of 2004, the Company repurchased no common shares. For the full year, the Company repurchased 197,040 shares at a weighted average price of $29.72 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 December 31, 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 customers with convenient access to City services and staff in two of the state’s most popular shopping areas. Based upon the Company’s success with these stores, in October, the Company announced plans to open two additional banking offices in 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.
On December 29, 2004 the Company announced that it had executed a definitive agreement to acquire Classic Bancshares, Inc. of Ashland, Kentucky, and its principal banking subsidiary, Classic Bank. The transaction is expected to close in the second quarter of 2005. As a result of this business combination, the Company will have the largest market share in the Huntington WV/Ashland, KY MSA.
On January 18, 2005, the Company announced that David L. Bumgarner had joined City Holding Company as Senior Vice President and Controller.
The Company has declared a first quarter dividend of $0.22 per common share payable on January 31, 2005, to shareholders of record on January 15, 2005, representing a 10% increase over the first quarter of 2004.
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; (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) the Company may have difficulty retaining key employees; (8) 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; (9) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (10) 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 (11) the Company may experience difficulties growing loan and deposit balances. Forward-looking statements made herein reflect management’s expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
| | | | | | | | | | | |
| | | Three Months Ended
| | | Percent
Change
| |
| | | December 31 2004
| | | December 31 2003
| | |
Earnings ($000s, except per share data): | | | | | | | | | | | |
Net Interest Income (FTE) | | $ | 21,870 | | | $ | 22,341 | | | (2.11 | )% |
Net Income | | | 11,087 | | | | 10,672 | | | 3.89 | % |
Earnings per Basic Share | | | 0.67 | | | | 0.64 | | | 4.69 | % |
Earnings per Diluted Share | | | 0.66 | | | | 0.63 | | | 4.76 | % |
| | | |
Key Ratios (percent): | | | | | | | | | | | |
Return on Average Assets | | | 2.01 | % | | | 2.08 | % | | (3.35 | )% |
Return on Average Equity | | | 20.50 | % | | | 22.79 | % | | (10.05 | )% |
Net Interest Margin | | | 4.27 | % | | | 4.74 | % | | (9.84 | )% |
Efficiency Ratio | | | 50.28 | % | | | 56.22 | % | | (10.57 | )% |
Average Shareholders’ Equity to Average Assets | | | 9.81 | % | | | 9.12 | % | | 7.53 | % |
| | | |
Risk-Based Capital Ratios (a): | | | | | | | | | | | |
Tier I | | | 15.47 | % | | | 11.93 | % | | 29.67 | % |
Total | | | 16.64 | % | | | 13.17 | % | | 26.35 | % |
| | | |
Common Stock Data: | | | | | | | | | | | |
Cash Dividends Declared per Share | | $ | 0.22 | | | $ | 0.20 | | | 10.00 | % |
Book Value per Share | | | 12.99 | | | | 11.46 | | | 13.37 | % |
Market Value per Share: | | | | | | | | | | | |
High | | | 37.58 | | | | 37.15 | | | 1.16 | % |
Low | | | 31.85 | | | | 31.50 | | | 1.11 | % |
End of Period | | | 36.24 | | | | 35.06 | | | 3.37 | % |
| | | |
Price/Earnings Ratio (b) | | | 13.52 | | | | 13.70 | | | (1.31 | )% |
| (a) | December 31, 2004 risk-based capital ratios are estimated. |
| (b) | December 31, 2004 price/earnings ratio computed based on annualized fourth quarter 2004 earnings. |
| | | | | | | | | | | |
| | | Twelve Months Ended
| | | Percent
Change
| |
| | | December 31 2004
| | | December 31 2003
| | |
Earnings ($000s, except per share data): | | | | | | | | | | | |
Net Interest Income (FTE) | | $ | 87,985 | | | $ | 86,641 | | | 1.55 | % |
Net Income | | | 46,344 | | | | 43,694 | | | 6.06 | % |
Earnings per Basic Share | | | 2.79 | | | | 2.63 | | | 6.08 | % |
Earnings per Diluted Share | | | 2.75 | | | | 2.58 | | | 6.59 | % |
| | | |
Key Ratios (percent): | | | | | | | | | | | |
Return on Average Assets | | | 2.10 | % | | | 2.18 | % | | (3.89 | )% |
Return on Average Equity | | | 22.43 | % | | | 24.50 | % | | (8.43 | )% |
Net Interest Margin | | | 4.29 | % | | | 4.65 | % | | (7.75 | )% |
Efficiency Ratio | | | 48.49 | % | | | 52.09 | % | | (6.91 | )% |
Average Shareholders’ Equity to Average Assets | | | 9.34 | % | | | 8.89 | % | | 5.05 | % |
| | | |
Common Stock Data: | | | | | | | | | | | |
Cash Dividends Declared per Share | | $ | 0.88 | | | $ | 0.80 | | | 10.00 | % |
Market Value per Share: | | | | | | | | | | | |
High | | | 37.58 | | | | 37.15 | | | 1.16 | % |
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 | | 11.46 | | 25.50 | | 37.15 |
2004 | | 12.09 | | 11.89 | | 12.70 | | 12.99 | | 27.30 | | 37.58 |
Earnings per Basic Share | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | Quarter Ended
| |
| | | March 31
| | | June 30
| | | 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 | | | 0.67 | | | 2.79 | |
Earnings per Diluted Share | | | | | | | | | | | | | | | |
| | | Quarter Ended
| |
| | | March 31
| | | June 30
| | | 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 | | | 0.66 | | | 2.75 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | | | | | | |
| | | Three Months Ended December 31
| |
| | | 2004
| | | 2003
| |
Interest Income | | | | | | | | |
Interest and fees on loans | | $ | 21,511 | | | $ | 21,331 | |
Interest on investment securities: | | | | | | | | |
Taxable | | | 7,779 | | | | 5,760 | |
Tax-exempt | | | 437 | | | | 479 | |
Interest on retained interests | | | — | | | | 2,000 | |
Interest on deposits in depository institutions | | | 16 | | | | 11 | |
Interest on federal funds sold | | | 3 | | | | — | |
| | |
|
|
| |
|
|
|
Total Interest Income | | | 29,746 | | | | 29,581 | |
| | |
Interest Expense | | | | | | | | |
Interest on deposits | | | 5,932 | | | | 5,653 | |
Interest on short-term borrowings | | | 424 | | | | 133 | |
Interest on long-term debt | | | 1,756 | | | | 1,711 | |
| | |
|
|
| |
|
|
|
Total Interest Expense | | | 8,112 | | | | 7,497 | |
| | |
|
|
| |
|
|
|
Net Interest Income | | | 21,634 | | | | 22,084 | |
Provision for (recovery of) loan losses | | | — | | | | (1,000 | ) |
| | |
|
|
| |
|
|
|
Net Interest Income After Provision for Loan Losses | | | 21,634 | | | | 23,084 | |
| | |
Non-Interest Income | | | | | | | | |
Investment securities gains (losses) | | | 32 | | | | 287 | |
Service charges | | | 8,678 | | | | 7,762 | |
Insurance commissions | | | 754 | | | | 510 | |
Trust fee income | | | 466 | | | | 379 | |
Bank owned life insurance | | | 1,184 | | | | 593 | |
Mortgage banking income | | | 70 | | | | 60 | |
Other income | | | 685 | | | | 610 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Income | | | 11,869 | | | | 10,201 | |
| | |
Non-Interest Expense | | | | | | | | |
Salaries and employee benefits | | | 9,578 | | | | 7,916 | |
Occupancy and equipment | | | 1,560 | | | | 1,550 | |
Depreciation | | | 981 | | | | 1,056 | |
Professional fees and litigation expense | | | 571 | | | | 542 | |
Postage, delivery, and statement mailings | | | 589 | | | | 584 | |
Advertising | | | 600 | | | | 578 | |
Telecommunications | | | 403 | | | | 466 | |
Insurance and regulatory | | | 330 | | | | 297 | |
Office supplies | | | 210 | | | | 278 | |
Repossessed asset (gains) losses and expenses | | | (31 | ) | | | 19 | |
Loss on early extinguishment of debt | | | — | | | | 2,246 | |
Other expenses | | | 2,340 | | | | 2,335 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Expense | | | 17,131 | | | | 17,867 | |
| | |
|
|
| |
|
|
|
Income Before Income Taxes | | | 16,372 | | | | 15,418 | |
Income Tax Expense | | | 5,285 | | | | 4,746 | |
| | |
|
|
| |
|
|
|
Net Income | | $ | 11,087 | | | $ | 10,672 | |
| | |
|
|
| |
|
|
|
Basic Earnings per Share | | $ | 0.67 | | | $ | 0.64 | |
Diluted Earnings per Share | | $ | 0.66 | | | $ | 0.63 | |
Average Common Shares Outstanding: | | | | | | | | |
Basic | | | 16,572 | | | | 16,641 | |
Diluted | | | 16,810 | | | | 16,961 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | | | | | | |
| | | Twelve Months Ended December 31
| |
| | | 2004
| | | 2003
| |
Interest Income | | | | | | | | |
Interest and fees on loans | | $ | 86,099 | | | $ | 81,296 | |
Interest on investment securities: | | | | | | | | |
Taxable | | | 30,110 | | | | 21,267 | |
Tax-exempt | | | 1,809 | | | | 2,112 | |
Interest on retained interests | | | 808 | | | | 12,465 | |
Interest on deposits in depository institutions | | | 52 | | | | 114 | |
Interest on federal funds sold | | | 3 | | | | 36 | |
| | |
|
|
| |
|
|
|
Total Interest Income | | | 118,881 | | | | 117,290 | |
| | |
Interest Expense | | | | | | | | |
Interest on deposits | | | 23,207 | | | | 22,537 | |
Interest on short-term borrowings | | | 1,082 | | | | 792 | |
Interest on long-term debt | | | 7,582 | | | | 8,456 | |
| | |
|
|
| |
|
|
|
Total Interest Expense | | | 31,871 | | | | 31,785 | |
| | |
|
|
| |
|
|
|
Net Interest Income | | | 87,010 | | | | 85,505 | |
Provision for (recovery of) loan losses | | | — | | | | (6,200 | ) |
| | |
|
|
| |
|
|
|
Net Interest Income After Provision for Loan Losses | | | 87,010 | | | | 91,705 | |
| | |
Non-Interest Income | | | | | | | | |
Investment securities gains (losses) | | | 1,173 | | | | (148 | ) |
Service charges | | | 32,609 | | | | 28,422 | |
Insurance commissions | | | 2,733 | | | | 2,467 | |
Trust fee income | | | 2,026 | | | | 1,575 | |
Bank owned life insurance | | | 2,931 | | | | 1,320 | |
Mortgage banking income | | | 282 | | | | 517 | |
Net proceeds from litigation settlement | | | 5,453 | | | | 1,600 | |
Other income | | | 2,829 | | | | 2,985 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Income | | | 50,036 | | | | 38,738 | |
| | |
Non-Interest Expense | | | | | | | | |
Salaries and employee benefits | | | 34,245 | | | | 31,070 | |
Occupancy and equipment | | | 5,984 | | | | 6,015 | |
Depreciation | | | 3,932 | | | | 4,411 | |
Professional fees and litigation expense | | | 3,265 | | | | 2,879 | |
Postage, delivery, and statement mailings | | | 2,474 | | | | 2,646 | |
Advertising | | | 2,366 | | | | 2,340 | |
Telecommunications | | | 1,820 | | | | 1,874 | |
Insurance and regulatory | | | 1,323 | | | | 1,266 | |
Office supplies | | | 1,048 | | | | 1,428 | |
Repossessed asset (gains) losses and expenses | | | (77 | ) | | | (691 | ) |
Loss on early extinguishment of debt | | | 263 | | | | 2,388 | |
Other expenses | | | 9,690 | | | | 8,872 | |
| | |
|
|
| |
|
|
|
Total Non-Interest Expense | | | 66,333 | | | | 64,498 | |
| | |
|
|
| |
|
|
|
Income Before Income Taxes | | | 70,713 | | | | 65,945 | |
Income Tax Expense | | | 24,369 | | | | 22,251 | |
| | |
|
|
| |
|
|
|
Net Income | | $ | 46,344 | | | $ | 43,694 | |
| | |
|
|
| |
|
|
|
Basic Earnings per Share | | $ | 2.79 | | | $ | 2.63 | |
Diluted Earnings per Share | | $ | 2.75 | | | $ | 2.58 | |
Average Common Shares Outstanding: | | | | | | | | |
Basic | | | 16,632 | | | | 16,634 | |
Diluted | | | 16,882 | | | | 16,947 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited) ($ in 000s)
| | | | | | | | |
| | | Three Months Ended
| |
| | | December 31, 2004
| | | December 31, 2003
| |
Balance at September 30 | | $ | 210,285 | | | $ | 183,463 | |
| | |
Net income | | | 11,087 | | | | 10,672 | |
Other comprehensive income: | | | | | | | | |
Change in unrealized gain on securities available-for-sale | | | (2,255 | ) | | | 545 | |
Change in underfunded pension liability | | | (35 | ) | | | (847 | ) |
Cash dividends declared ($0.22/share) | | | (3,650 | ) | | | — | |
Cash dividends declared ($0.20/share) | | | — | | | | (3,328 | ) |
Exercise of 26,327 stock options | | | 648 | | | | — | |
Exercise of 5,000 stock options | | | — | | | | 185 | |
| | |
|
|
| |
|
|
|
Balance at December 31 | | $ | 216,080 | | | $ | 190,690 | |
| | |
|
|
| |
|
|
|
| | | Twelve Months Ended
| |
| | | December 31, 2004
| | | December 31, 2003
| |
Balance at January 1 | | $ | 190,690 | | | $ | 165,393 | |
| | |
Net income | | | 46,344 | | | | 43,694 | |
Other comprehensive income: | | | | | | | | |
Change in unrealized gain on securities available-for-sale | | | (2,481 | ) | | | (2,198 | ) |
Change in underfunded pension liability | | | (35 | ) | | | (847 | ) |
Cash dividends declared ($0.88/share) | | | (14,629 | ) | | | — | |
Cash dividends declared ($0.80/share) | | | — | | | | (13,310 | ) |
Exercise of 140,730 stock options | | | 2,048 | | | | — | |
Exercise of 104,982 stock options | | | — | | | | 1,216 | |
Purchase of 197,040 common shares for treasury | | | (5,857 | ) | | | — | |
Purchase of 118,300 common shares for treasury | | | — | | | | (3,258 | ) |
| | |
|
|
| |
|
|
|
Balance at December 31 | | $ | 216,080 | | | $ | 190,690 | |
| | |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended
| |
| | | Dec. 31 2004
| | | Sept. 30 2004
| | | June 30 2004
| | | March 31
2004
| | | Dec. 31 2003
| |
Interest income | | $ | 29,746 | | | $ | 29,667 | | | $ | 29,293 | | | $ | 30,175 | | | $ | 29,581 | |
Taxable equivalent adjustment | | | 236 | | | | 236 | | | | 246 | | | | 257 | | | | 257 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Interest income (FTE) | | | 29,982 | | | | 29,903 | | | | 29,539 | | | | 30,432 | | | | 29,838 | |
Interest expense | | | 8,112 | | | | 8,035 | | | | 7,860 | | | | 7,863 | | | | 7,497 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net interest income | | | 21,870 | | | | 21,868 | | | | 21,679 | | | | 22,569 | | | | 22,341 | |
Provision for loan losses | | | — | | | | — | | | | — | | | | — | | | | (1,000 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net interest income after provision for loan losses | | | 21,870 | | | | 21,868 | | | | 21,679 | | | | 22,569 | | | | 23,341 | |
| | | | | |
Noninterest income | | | 11,869 | | | | 10,856 | | | | 16,389 | | | | 10,920 | | | | 10,201 | |
Noninterest expense | | | 17,131 | | | | 15,783 | | | | 16,985 | | | | 16,433 | | | | 17,867 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income taxes | | | 16,608 | | | | 16,941 | | | | 21,083 | | | | 17,056 | | | | 15,675 | |
Income tax expense | | | 5,285 | | | | 5,749 | | | | 7,539 | | | | 5,796 | | | | 4,746 | |
Taxable equivalent adjustment | | | 236 | | | | 236 | | | | 246 | | | | 257 | | | | 257 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 11,087 | | | $ | 10,956 | | | $ | 13,298 | | | $ | 11,003 | | | $ | 10,672 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | |
Basic earnings per share | | $ | 0.67 | | | $ | 0.66 | | | $ | 0.80 | | | $ | 0.66 | | | $ | 0.64 | |
Diluted earnings per share | | | 0.66 | | | | 0.65 | | | | 0.79 | | | | 0.65 | | | | 0.63 | |
Cash dividends declared per share | | | 0.22 | | | | 0.22 | | | | 0.22 | | | | 0.22 | | | | 0.20 | |
| | | | | |
Average Common Share (000s): | | | | | | | | | | | | | | | | | | | | |
Outstanding | | | 16,572 | | | | 16,584 | | | | 16,694 | | | | 16,681 | | | | 16,641 | |
Diluted | | | 16,810 | | | | 16,812 | | | | 16,935 | | | | 16,972 | | | | 16,961 | |
| | | | | |
Net Interest Margin | | | 4.27 | % | | | 4.27 | % | | | 4.20 | % | | | 4.42 | % | | | 4.74 | % |
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | |
| | | Quarter Ended
|
| | | Dec. 31 2004
| | | Sept. 30 2004
| | June 30 2004
| | | March 31 2004
| | Dec. 31 2003
|
Non-Interest Income: | | | | | | | | | | | | | | | | | |
Service charges | | $ | 8,678 | | | $ | 8,440 | | $ | 8,110 | | | $ | 7,381 | | $ | 7,762 |
Insurance commissions | | | 754 | | | | 600 | | | 718 | | | | 660 | | | 510 |
Trust fee income | | | 466 | | | | 446 | | | 627 | | | | 487 | | | 379 |
Bank owned life insurance | | | 1,184 | | | | 575 | | | 591 | | | | 581 | | | 593 |
Mortgage banking income | | | 70 | | | | 72 | | | 71 | | | | 69 | | | 60 |
Net proceeds from litigation settlement | | | — | | | | — | | | 5,453 | | | | — | | | — |
Other income | | | 685 | | | | 719 | | | 695 | | | | 730 | | | 610 |
| | |
|
|
| |
|
| |
|
|
| |
|
| |
|
|
Subtotal | | | 11,837 | | | | 10,852 | | | 16,265 | | | | 9,908 | | | 9,914 |
Investment security gains (losses) | | | 32 | | | | 4 | | | 124 | | | | 1,012 | | | 287 |
| | |
|
|
| |
|
| |
|
|
| |
|
| |
|
|
Total Non-Interest Income | | $ | 11,869 | | | $ | 10,856 | | $ | 16,389 | | | $ | 10,920 | | $ | 10,201 |
| | |
|
|
| |
|
| |
|
|
| |
|
| |
|
|
Non-Interest Expense: | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | $ | 9,578 | | | $ | 8,150 | | $ | 8,390 | | | $ | 8,127 | | $ | 7,916 |
Occupancy and equipment | | | 1,560 | | | | 1,472 | | | 1,459 | | | | 1,494 | | | 1,550 |
Depreciation | | | 981 | | | | 972 | | | 974 | | | | 1,006 | | | 1,056 |
Professional fees and litigation expense | | | 571 | | | | 668 | | | 1,181 | | | | 844 | | | 542 |
Postage, delivery, and statement mailings | | | 589 | | | | 601 | | | 598 | | | | 685 | | | 584 |
Advertising | | | 600 | | | | 459 | | | 651 | | | | 656 | | | 578 |
Telecommunications | | | 403 | | | | 488 | | | 463 | | | | 466 | | | 466 |
Insurance and regulatory | | | 330 | | | | 342 | | | 320 | | | | 331 | | | 297 |
Office supplies | | | 210 | | | | 252 | | | 273 | | | | 312 | | | 278 |
Repossessed asset (gains) losses and expenses | | | (31 | ) | | | 5 | | | (108 | ) | | | 57 | | | 19 |
Loss on early exinguishment of debt | | | — | | | | — | | | 263 | | | | — | | | 2,246 |
Other expenses | | | 2,340 | | | | 2,374 | | | 2,521 | | | | 2,455 | | | 2,335 |
| | |
|
|
| |
|
| |
|
|
| |
|
| |
|
|
Total Non-Interest Expense | | $ | 17,131 | | | $ | 15,783 | | $ | 16,985 | | | $ | 16,433 | | $ | 17,867 |
| | |
|
|
| |
|
| |
|
|
| |
|
| |
|
|
Employees (Full Time Equivalent) | | | 691 | | | | 692 | | | 692 | | | | 690 | | | 701 |
Branch Locations | | | 56 | | | | 56 | | | 54 | | | | 54 | | | 54 |
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
| | | | | | | | |
| | | December 31 2004
| | | December 31 2003
| |
| | | (Unaudited) | | | | |
Assets | | | | | | | | |
Cash and due from banks | | $ | 52,854 | | | $ | 58,216 | |
Interest-bearing deposits in depository institutions | | | 3,230 | | | | 5,122 | |
| | |
|
|
| |
|
|
|
Cash and cash equivalents | | | 56,084 | | | | 63,338 | |
| | |
Investment securities available-for-sale, at fair value | | | 620,034 | | | | 645,663 | |
Investment securities held-to-maturity, at amortized cost | | | 59,740 | | | | 59,298 | |
| | |
|
|
| |
|
|
|
Total investment securities | | | 679,774 | | | | 704,961 | |
Loans: | | | | | | | | |
Residential real estate | | | 469,458 | | | | 446,134 | |
Home equity | | | 308,173 | | | | 282,481 | |
Commercial real estate | | | 400,801 | | | | 351,284 | |
Other commercial | | | 71,311 | | | | 76,167 | |
Installment | | | 18,145 | | | | 33,651 | |
Indirect | | | 10,324 | | | | 24,707 | |
Credit card | | | 18,126 | | | | 18,979 | |
Previously securitized loans | | | 58,436 | | | | 58,788 | |
| | |
|
|
| |
|
|
|
Gross Loans | | | 1,354,774 | | | | 1,292,191 | |
Allowance for loan losses | | | (17,815 | ) | | | (21,426 | ) |
| | |
|
|
| |
|
|
|
Net loans | | | 1,336,959 | | | | 1,270,765 | |
| | |
Retained interests | | | — | | | | 34,320 | |
Bank owned life insurance | | | 50,845 | | | | 49,214 | |
Premises and equipment | | | 34,607 | | | | 35,338 | |
Accrued interest receivable | | | 9,868 | | | | 10,216 | |
Net deferred tax assets | | | 27,025 | | | | 29,339 | |
Other assets | | | 18,068 | | | | 16,939 | |
| | |
|
|
| |
|
|
|
Total Assets | | $ | 2,213,230 | | | $ | 2,214,430 | |
| | |
|
|
| |
|
|
|
Liabilities | | | | | | | | |
Deposits: | | | | | | | | |
Noninterest-bearing | | $ | 319,425 | | | $ | 309,706 | |
Interest-bearing: | | | | | | | | |
Demand deposits | | | 411,127 | | | | 393,443 | |
Savings deposits | | | 281,466 | | | | 278,117 | |
Time deposits | | | 660,705 | | | | 655,496 | |
| | |
|
|
| |
|
|
|
Total deposits | | | 1,672,723 | | | | 1,636,762 | |
Short-term borrowings | | | 145,183 | | | | 168,403 | |
Long-term debt | | | 148,836 | | | | 190,836 | |
Other liabilities | | | 30,408 | | | | 27,739 | |
| | |
|
|
| |
|
|
|
Total Liabilities | | | 1,997,150 | | | | 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 December 31, 2004 and December 31, 2003, including 331,191 and 274,881 shares in treasury | | | 42,298 | | | | 42,298 | |
Capital surplus | | | 55,512 | | | | 57,364 | |
Retained earnings | | | 128,175 | | | | 96,460 | |
Cost of common stock in treasury | | | (8,761 | ) | | | (6,803 | ) |
Accumulated other comprehensive (loss) income: | | | | | | | | |
Unrealized gain on securities available-for-sale | | | 1,281 | | | | 3,762 | |
Underfunded pension liability | | | (2,425 | ) | | | (2,391 | ) |
| | |
|
|
| |
|
|
|
Total Accumulated Other Comprehensive (Loss) Income | | | (1,144 | ) | | | 1,371 | |
| | |
|
|
| |
|
|
|
Total Stockholders’ Equity | | | 216,080 | | | | 190,690 | |
| | |
|
|
| |
|
|
|
Total Liabilities and Stockholders’ Equity | | $ | 2,213,230 | | | $ | 2,214,430 | |
| | |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | |
| | | December 31 2004
| | September 30 2004
| | June 30 2004
| | March 31 2004
| | Dec. 31 2003
|
Residential real estate | | $ | 469,458 | | $ | 468,372 | | $ | 459,759 | | $ | 439,643 | | $ | 446,134 |
Home equity | | | 308,173 | | | 304,934 | | | 301,231 | | | 292,192 | | | 282,481 |
Commercial real estate | | | 400,801 | | | 377,742 | | | 374,292 | | | 347,724 | | | 351,284 |
Other commercial | | | 71,311 | | | 70,745 | | | 73,139 | | | 74,743 | | | 76,167 |
Loans to depository institutions | | | — | | | — | | | — | | | 20,000 | | | — |
Installment | | | 18,145 | | | 20,221 | | | 24,722 | | | 28,351 | | | 33,651 |
Indirect | | | 10,324 | | | 13,020 | | | 16,140 | | | 20,006 | | | 24,707 |
Credit card | | | 18,126 | | | 17,893 | | | 17,961 | | | 18,119 | | | 18,979 |
Previously securitized loans | | | 58,436 | | | 70,970 | | | 83,385 | | | 92,954 | | | 58,788 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Gross Loans | | $ | 1,354,774 | | $ | 1,343,897 | | $ | 1,350,629 | | $ | 1,333,732 | | $ | 1,292,191 |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31,
| |
| | | 2004
| | | 2003
| |
| | | Average
Balance
| | | Interest
| | Yield/
Rate
| | | Average
Balance
| | | Interest
| | Yield/
Rate
| |
Assets: | | | | | | | | | | | | | | | | | | | | |
Loan portfolio: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 468,362 | | | $ | 6,646 | | 5.68 | % | | $ | 449,765 | | | $ | 7,127 | | 6.34 | % |
Home equity | | | 307,712 | | | | 3,966 | | 5.16 | % | | | 277,736 | | | | 3,006 | | 4.33 | % |
Commercial real estate | | | 386,592 | | | | 5,641 | | 5.84 | % | | | 329,013 | | | | 4,784 | | 5.82 | % |
Other commercial | | | 68,816 | | | | 1,015 | | 5.90 | % | | | 78,875 | | | | 1,057 | | 5.36 | % |
Installment | | | 20,168 | | | | 604 | | 11.98 | % | | | 36,475 | | | | 1,064 | | 11.67 | % |
Indirect | | | 11,584 | | | | 321 | | 11.08 | % | | | 26,785 | | | | 742 | | 11.08 | % |
Credit card | | | 17,756 | | | | 534 | | 12.03 | % | | | 18,791 | | | | 558 | | 11.88 | % |
Previously securitized loans | | | 66,307 | | | | 2,784 | | 16.79 | % | | | 54,141 | | | | 2,993 | | 22.11 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total loans | | | 1,347,297 | | | | 21,511 | | 6.39 | % | | | 1,271,581 | | | | 21,331 | | 6.71 | % |
Securities: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 656,511 | | | | 7,779 | | 4.74 | % | | | 531,308 | | | | 5,760 | | 4.34 | % |
Tax-exempt | | | 37,573 | | | | 673 | | 7.16 | % | | | 39,292 | | | | 736 | | 7.49 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total securities | | | 694,084 | | | | 8,452 | | 4.87 | % | | | 570,600 | | | | 6,496 | | 4.55 | % |
Retained interest in securitized loans | | | — | | | | — | | — | | | | 40,287 | | | | 2,000 | | 19.86 | % |
Deposits in depository institutions | | | 4,753 | | | | 16 | | 1.35 | % | | | 4,465 | | | | 11 | | 0.99 | % |
Federal funds sold | | | 766 | | | | 3 | | 1.57 | % | | | — | | | | — | | — | |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-earning assets | | | 2,046,900 | | | | 29,982 | | 5.86 | % | | | 1,886,933 | | | | 29,838 | | 6.33 | % |
Cash and due from banks | | | 42,920 | | | | | | | | | | 47,190 | | | | | | | |
Bank premises and equipment | | | 34,859 | | | | | | | | | | 35,817 | | | | | | | |
Other assets | | | 99,641 | | | | | | | | | | 107,409 | | | | | | | |
Less: Allowance for loan losses | | | (18,332 | ) | | | | | | | | | (23,153 | ) | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Total assets | | $ | 2,205,988 | | | | | | | | | $ | 2,054,196 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 408,038 | | | $ | 675 | | 0.66 | % | | $ | 392,314 | | | $ | 583 | | 0.59 | % |
Savings deposits | | | 275,776 | | | | 361 | | 0.52 | % | | | 281,689 | | | | 375 | | 0.53 | % |
Time deposits | | | 661,131 | | | | 4,896 | | 2.96 | % | | | 647,554 | | | | 4,694 | | 2.90 | % |
Short-term borrowings | | | 131,202 | | | | 424 | | 1.29 | % | | | 104,427 | | | | 133 | | 0.51 | % |
Long-term debt | | | 174,923 | | | | 1,756 | | 4.02 | % | | | 115,482 | | | | 1,712 | | 5.93 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-bearing liabilities | | | 1,651,070 | | | | 8,112 | | 1.97 | % | | | 1,541,466 | | | | 7,497 | | 1.95 | % |
Noninterest-bearing demand deposits | | | 315,759 | | | | | | | | | | 300,905 | | | | | | | |
Other liabilities | | | 22,829 | | | | | | | | | | 24,512 | | | | | | | |
Stockholders’ equity | | | 216,330 | | | | | | | | | | 187,313 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,205,988 | | | | | | | | | $ | 2,054,196 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Net interest income | | | | | | $ | 21,870 | | | | | | | | | $ | 22,341 | | | |
| | | | | | |
|
| | | | | | | | |
|
| | | |
Net yield on earning assets | | | | | | | | | 4.27 | % | | | | | | | | | 4.74 | % |
| | | | | | | | | |
|
| | | | | | | | |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Twelve Months Ended December 31,
| |
| | | 2004
| | | 2003
| |
| | | Average
Balance
| | | Interest
| | Yield/
Rate
| | | Average
Balance
| | | Interest
| | Yield/
Rate
| |
Assets: | | | | | | | | | | | | | | | | | | | | |
Loan portfolio: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 454,890 | | | $ | 26,869 | | 5.91 | % | | $ | 455,971 | | | $ | 30,583 | | 6.71 | % |
Home equity | | | 298,703 | | | | 14,004 | | 4.69 | % | | | 251,135 | | | | 11,165 | | 4.45 | % |
Commercial real estate | | | 367,599 | | | | 20,684 | | 5.63 | % | | | 301,494 | | | | 18,448 | | 6.12 | % |
Other commercial | | | 72,825 | | | | 3,913 | | 5.37 | % | | | 84,738 | | | | 4,988 | | 5.89 | % |
Loans to depository institutions | | | 3,060 | | | | 35 | | 1.14 | % | | | 4,658 | | | | 78 | | 1.67 | % |
Installment | | | 25,343 | | | | 2,895 | | 11.42 | % | | | 47,121 | | | | 5,349 | | 11.35 | % |
Indirect | | | 16,599 | | | | 1,823 | | 10.98 | % | | | 35,449 | | | | 3,868 | | 10.91 | % |
Credit card | | | 18,002 | | | | 2,164 | | 12.02 | % | | | 18,925 | | | | 2,268 | | 11.98 | % |
Previously securitized loans | | | 80,151 | | | | 13,712 | | 17.11 | % | | | 20,426 | | | | 4,549 | | 22.27 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total loans | | | 1,337,172 | | | | 86,099 | | 6.44 | % | | | 1,219,917 | | | | 81,296 | | 6.66 | % |
Securities: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 666,863 | | | | 30,110 | | 4.52 | % | | | 517,728 | | | | 21,267 | | 4.11 | % |
Tax-exempt | | | 38,169 | | | | 2,784 | | 7.29 | % | | | 43,709 | | | | 3,248 | | 7.43 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total securities | | | 705,032 | | | | 32,894 | | 4.67 | % | | | 561,437 | | | | 24,515 | | 4.37 | % |
Retained interest in securitized loans | | | 3,300 | | | | 808 | | 24.48 | % | | | 66,662 | | | | 12,465 | | 18.70 | % |
Deposits in depository institutions | | | 5,347 | | | | 52 | | 0.97 | % | | | 10,778 | | | | 114 | | 1.06 | % |
Federal funds sold | | | 193 | | | | 3 | | 1.55 | % | | | 3,406 | | | | 36 | | 1.06 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-earning assets | | | 2,051,044 | | | | 119,856 | | 5.84 | % | | | 1,862,200 | | | | 118,426 | | 6.36 | % |
Cash and due from banks | | | 43,616 | | | | | | | | | | 45,831 | | | | | | | |
Bank premises and equipment | | | 34,804 | | | | | | | | | | 36,289 | | | | | | | |
Other assets | | | 102,179 | | | | | | | | | | 89,549 | | | | | | | |
Less: Allowance for loan losses | | | (19,790 | ) | | | | | | | | | (26,877 | ) | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Total assets | | $ | 2,211,853 | | | | | | | | | $ | 2,006,992 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 405,865 | | | $ | 2,599 | | 0.64 | % | | $ | 385,882 | | | $ | 2,174 | | 0.56 | % |
Savings deposits | | | 279,174 | | | | 1,456 | | 0.52 | % | | | 287,823 | | | | 1,606 | | 0.56 | % |
Time deposits | | | 662,068 | | | | 19,152 | | 2.89 | % | | | 627,741 | | | | 18,756 | | 2.99 | % |
Short-term borrowings | | | 120,849 | | | | 1,082 | | 0.90 | % | | | 99,567 | | | | 792 | | 0.80 | % |
Long-term debt | | | 201,218 | | | | 7,582 | | 3.77 | % | | | 109,947 | | | | 8,457 | | 7.69 | % |
| | |
|
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
|
Total interest-bearing liabilities | | | 1,669,174 | | | | 31,871 | | 1.91 | % | | | 1,510,960 | | | | 31,785 | | 2.10 | % |
Noninterest-bearing demand deposits | | | 312,036 | | | | | | | | | | 292,075 | | | | | | | |
Other liabilities | | | 24,072 | | | | | | | | | | 25,585 | | | | | | | |
Stockholders’ equity | | | 206,571 | | | | | | | | | | 178,372 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,211,853 | | | | | | | | | $ | 2,006,992 | | | | | | | |
| | |
|
|
| | | | | | | |
|
|
| | | | | | |
Net interest income | | | | | | $ | 87,985 | | | | | | | | | $ | 86,641 | | | |
| | | | | | |
|
| | | | | | | | |
|
| | | |
Net yield on earning assets | | | | | | | | | 4.29 | % | | | | | | | | | 4.65 | % |
| | | | | | | | | |
|
| | | | | | | | |
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Dec. 31 2004(a)
| | | Sept. 30 2004
| | | June 30 2004
| | | March 31 2004
| | | Dec. 31 2003
| |
Tier I Capital: | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity | | $ | 216,080 | | | $ | 210,285 | | | $ | 197,569 | | | $ | 202,204 | | | $ | 190,690 | |
Goodwill and other intangibles | | | (6,255 | ) | | | (6,306 | ) | | | (6,357 | ) | | | (6,408 | ) | | | (6,459 | ) |
Accumulated other comprehensive income | | | 1,144 | | | | (1,146 | ) | | | 6,454 | | | | (4,742 | ) | | | (1,372 | ) |
Qualifying trust preferred stock | | | 28,000 | | | | 28,000 | | | | 28,000 | | | | 30,000 | | | | 30,000 | |
Excess deferred tax assets | | | (3,128 | ) | | | — | | | | (6,922 | ) | | | (807 | ) | | | (8,053 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total tier I capital | | $ | 235,841 | | | $ | 230,833 | | | $ | 218,744 | | | $ | 220,247 | | | $ | 204,806 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Risk-Based Capital: | | | | | | | | | | | | | | | | | | | | |
Tier I capital | | $ | 235,841 | | | $ | 230,833 | | | $ | 218,744 | | | $ | 220,247 | | | $ | 204,806 | |
Qualifying allowance for loan losses | | | 17,815 | | | | 18,537 | | | | 18,939 | | | | 19,169 | | | | 21,426 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total risk-based capital | | $ | 253,656 | | | $ | 249,370 | | | $ | 237,683 | | | $ | 239,416 | | | $ | 226,232 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net risk-weighted assets | | $ | 1,524,581 | | | $ | 1,517,158 | | | $ | 1,514,261 | | | $ | 1,505,892 | | | $ | 1,717,206 | |
| | | | | |
Ratios: | | | | | | | | | | | | | | | | | | | | |
Average stockholders’ equity to average assets | | | 9.81 | % | | | 9.26 | % | | | 9.33 | % | | | 8.96 | % | | | 9.12 | % |
Tangible capital ratio | | | 9.51 | % | | | 9.24 | % | | | 8.71 | % | | | 8.85 | % | | | 8.34 | % |
Risk-based capital ratios: | | | | | | | | | | | | | | | | | | | | |
Tier I capital | | | 15.47 | % | | | 15.21 | % | | | 14.43 | % | | | 14.63 | % | | | 11.93 | % |
Total risk-based capital | | | 16.64 | % | | | 16.44 | % | | | 15.68 | % | | | 15.89 | % | | | 13.17 | % |
Leverage capital | | | 10.74 | % | | | 10.47 | % | | | 9.89 | % | | | 10.01 | % | | | 10.04 | % |
(a) December 31, 2004 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Intangibles (Unaudited) ($ in 000s) | |
| | | As of and for the Quarter Ended
| |
| | | Dec. 31 2004
| | | Sept. 30 2004
| | | June 30 2004
| | | March 31 2004
| | | Dec. 31 2003
| |
Intangibles, net | | $ | 6,255 | | | $ | 6,306 | | | $ | 6,357 | | | $ | 6,408 | | | $ | 6,459 | |
Intangibles amortization expense | | | 51 | | | | 51 | | | | 51 | | | | 51 | | | | 51 | |
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended
| |
| | | Dec. 31 2004
| | | Sept. 30 2004
| | | June 30 2004
| | | March 31 2004
| | | Dec. 31 2003
| |
Balance at beginning of period | | $ | 18,537 | | | $ | 19,833 | | | $ | 20,289 | | | $ | 21,426 | | | $ | 23,436 | |
Charge-offs: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 166 | | | | 299 | | | | 173 | | | | 217 | | | | 419 | |
Home equity | | | 5 | | | | 105 | | | | 66 | | | | 133 | | | | 18 | |
Commercial real estate | | | 105 | | | | 1,134 | | | | 44 | | | | 342 | | | | 130 | |
Other commercial | | | 14 | | | | 220 | | | | 22 | | | | 159 | | | | 28 | |
Installment | | | 458 | | | | 568 | | | | 457 | | | | 588 | | | | 715 | |
Overdraft deposit accounts | | | 586 | | | | 631 | | | | 610 | | | | 787 | | | | 583 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total charge-offs | | | 1,334 | | | | 2,957 | | | | 1,372 | | | | 2,226 | | | | 1,893 | |
| | | | | |
Recoveries: | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 137 | | | | 196 | | | | 133 | | | | 104 | | | | 135 | |
Home equity | | | — | | | | 1 | | | | — | | | | 5 | | | | — | |
Commercial real estate | | | 10 | | | | 922 | | | | 201 | | | | 311 | | | | 141 | |
Other commercial | | | 80 | | | | 103 | | | | 127 | | | | 55 | | | | 182 | |
Installment | | | 147 | | | | 183 | | | | 202 | | | | 260 | | | | 211 | |
Overdraft deposit accounts | | | 238 | | | | 256 | | | | 253 | | | | 354 | | | | 214 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total recoveries | | | 612 | | | | 1,661 | | | | 916 | | | | 1,089 | | | | 883 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net charge-offs | | | 722 | | | | 1,296 | | | | 456 | | | | 1,137 | | | | 1,010 | |
(Recovery of) provision for loan losses | | | — | | | | — | | | | — | | | | — | | | | (1,000 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Balance at end of period | | $ | 17,815 | | | $ | 18,537 | | | $ | 19,833 | | | $ | 20,289 | | | $ | 21,426 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loans outstanding | | $ | 1,354,774 | | | $ | 1,343,897 | | | $ | 1,350,629 | | | $ | 1,333,732 | | | $ | 1,292,191 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Average loans outstanding | | | 1,347,297 | | | | 1,348,265 | | | | 1,342,001 | | | | 1,310,894 | | | | 1,271,581 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Allowance as a percent of loans outstanding | | | 1.31 | % | | | 1.38 | % | | | 1.47 | % | | | 1.52 | % | | | 1.66 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Allowance as a percent of non-performing loans | | | 487 | % | | | 515 | % | | | 493 | % | | | 432 | % | | | 529 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net charge-offs (annualized) as a percent of average loans outstanding | | | 0.21 | % | | | 0.38 | % | | | 0.14 | % | | | 0.35 | % | | | 0.32 | % |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
| | | | | | | | | | | | | | | |
| | | Dec. 31 2004
| | | Sept. 30 2004
| | | June 30 2004
| | | March 31 2004
| | | Dec. 31 2003
| |
Nonaccrual loans | | $2,147 | | | $1,924 | | | $1,792 | | | $2,268 | | | $2,140 | |
Accruing loans past due 90 days or more | | 677 | | | 800 | | | 689 | | | 1,039 | | | 1,195 | |
Previously securitized loans past due 90 days or more | | 832 | | | 876 | | | 1,544 | | | 1,388 | | | 717 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Total non-performing loans | | 3,656 | | | 3,600 | | | 4,025 | | | 4,695 | | | 4,052 | |
Other real estate owned | | 247 | | | 267 | | | 171 | | | 296 | | | 312 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Total non-performing assets | | $3,903 | | | $3,867 | | | $4,196 | | | $4,991 | | | $4,364 | |
| | |
|
| |
|
| |
|
| |
|
| |
|
|
Non-performing assets as a percent of loans and other real estate owned | | 0.29 | % | | 0.29 | % | | 0.31 | % | | 0.37 | % | | 0.34 | % |
