Exhibit 99
NEWS RELEASE
For Immediate Release
July 20, 2005
For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102
City Holding Company Announces Second Quarter Earnings
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $2.5 billion bank holding company headquartered in Charleston, today announced net income for the second quarter of $12.3 million, or diluted earnings per share of $0.71 compared to $13.3 million, or $0.79 per diluted share in the second quarter of 2004. The second quarter of 2004 included income of $3.2 million net of expenses and taxes, or $0.19 per diluted share, recognized in connection with the settlement of a derivative action brought against certain current and former directors and former executive officers of City Holding Company and City National Bank seeking to recover alleged damages on behalf of City Holding Company and City National Bank. After considering the effect of this settlement, net income for the second quarter of 2005 increased 21.8% and diluted earnings per share increased 18.3% compared to the second quarter of 2004. For the quarter, the Company achieved a return on assets of 2.09%, a return on equity of 19.76%, a net interest margin of 4.42%, and an efficiency ratio of 46.9%, placing the Company among the most profitable banks for the quarter. The market value of the Company’s stock increased 15.6% to $36.52 at June 30, 2005 compared to $31.58 at June 30, 2004. Based on the most recent 12-month earnings per diluted share and the stock price at June 30, 2005, City’s price/earnings ratio was 13.48.
During the second quarter of 2005, the Company successfully completed its acquisition and integration of Classic Bancshares, Inc. (Classic), parent company of Classic Bank. The acquisition of Classic was consummated by the exchange of a combination of approximately 1,580,000 shares of City stock and cash valued at $79.2 million. Classic had approximately $332 million in assets at the time of the merger and operated 10 banking offices in Eastern Kentucky and Southeastern Ohio. With the acquisition of Classic, City is now the largest commercial banking franchise in the Huntington/Ashland WV-KY-OH MSA with $361 million in deposits and 13 branches.
Based on the latest available deposit balance data, City also has the 1st largest commercial banking franchise in the Beckley/Lewisburg market (the West Virginia counties of Fayette, Greenbrier, Raleigh, and Summers) and has the 2nd largest commercial banking franchise in the Charleston, WV MSA. Additionally, City has a significant presence in the West Virginia counties of Berkeley, Jefferson, and Morgan. These counties are located in one of the fastest growing suburban areas surrounding Washington, D.C. and Baltimore, Maryland.
The Company continues to perform solidly across all measures. Primarily as a result of the acquisition of Classic, targeted loan balances grew significantly. Average quarterly commercial real estate loans were up 19.2% since June 30, 2004, average quarterly residential real estate balances were up 16.2% and average quarterly home equity loan balances were up 2.3% over the same period. Exclusive of the acquisition, targeted loan balances still continued to reflect favorable increases with average commercial real estate loans increasing 14.5%, average residential real estate loans up 5.0% and average home equity loans up 1.4% from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. Average non-interest and interest bearing demand deposits grew 7.2% from the quarter ended June 30, 2004 to the quarter ended June 30, 2005 with the Classic acquisition representing 4.6% of this increase. Although the average balance of previously securitized loans and retained interests (which yielded 25.0% during the second quarter of 2005) decreased by $45.7 million compared to the second quarter of 2004, the Company was able to improve the level of net interest income through loan and deposit growth and by focusing on the origination of variable rate loans to benefit from rising interest rates. Of further note, between the second quarter of 2004 and the second quarter of 2005, service charge income grew 19.4% while non-interest expenses decreased slightly.
Balance Sheet Trends
As compared to June 30, 2004, loans have increased $250.4 million at June 30, 2005. The principal factor for this increase was the acquisition of Classic which added approximately $256.2 million in loans. Exclusive of the Classic acquisition, loans decreased $5.8 million from June 30, 2004 to June 30, 2005. The primary reasons for this decrease were decreases in previously securitized loans of $41.7 million (see discussion below) and continued decreases in loan portfolios that the Company has de-emphasized, including a decrease in unsecured consumer loans of $10.8 million and a decrease in indirect loans of $10.1 million. These decreases were offset by growth in targeted areas such as commercial real estate and residential real estate, which grew by $32.9 million and $22.3 million, respectively. Total average depository balances increased $109.3 million, or 6.6%, from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. This growth was primarily attributable to the Classic acquisition, which increased total average depository balances by $102.6 million. Additionally, City has continued to focus on increasing its level of non-interest bearing deposit accounts. To that end and exclusive of the Classic transaction, the Company was able to increase average non-interest balances by 4.7% from the second quarter of 2004 to the second quarter of 2005.
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. 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 notes that were subject to redemption under certain circumstances. When the notes were redeemed during 2003 and 2004, the Company became the beneficial owner of the mortgage loans and recorded the loans as “Previously Securitized Loans” within the loan portfolio. At June 30, 2005, the Company reported “Previously Securitized Loans” of $41.7 million compared to $83.4 million and $58.4 million at June 30, 2004 and December 31, 2004, respectively,
representing a decrease of 50.0% and 28.7%, respectively. As a result of this decrease, interest income associated with previously securitized loans and retained interests decreased by $1.0 million from the second quarter of 2004 to the second quarter of 2005. This decrease in interest income was offset by targeted loan growth in the commercial real estate and residential real estate loan portfolios and by an increase net interest margin yield due to the Company’s positioning of its balance sheet to benefit from rising interest rates.
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 June 30, 2005, the contractual outstanding balances of the mortgages securitized were $59.4 million while the carrying value of these assets was $41.7 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. An impairment charge on previously securitized loans would be provided through the Company’s provision and allowance for loan losses if the discounted present value of estimated future cash flows decline below the recorded value of previously securitized loans.
The Company estimates the net carrying value of previously securitized loan balances to decrease as shown below:
December 31, 2005 | $ | 34 million | |
December 31, 2006 | $ | 23 million | |
December 31, 2007 | $ | 17 million | |
December 31, 2008 | $ | 13 million |
The yield on the previously securitized loans was 24.95% for the quarter ended June 30, 2005 compared to 22.44% for the quarter ended March 31, 2005 and 16.79% for the quarter ended December 31, 2004. The yield on the previously securitized loans has increased due to default rates being less than previously estimated and balances prepaying faster than previously estimated. In addition, the Company has now assumed the servicing of all of the pool balances. This has also favorably impacted the yield realized on the previously securitized loans due to the elimination of the servicing fees previously being paid to the external servicing agent and increased collection efforts. As a result, the yield is now estimated to be in the range of 24% and 27%, depending on defaults and prepayment rates experienced on these loans in the future.
Net Interest Income
The Company’s tax equivalent net interest income increased $2.2 million, or 10.1%, from $21.7 million during the second quarter of 2004 to $23.9 million during the second quarter of 2005. The increase was primarily the result of the acquisition of Classic and increased interest income from the Company’s traditional loan portfolio. As a result of the Classic acquisition, net interest income increased $1.4 million during the quarter ended June 30, 2005. Interest income from traditional loan products increased $2.4 million, or 13.4%, from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. This increase was due to an increase in the average balances outstanding of $64.4 million, or 4.8%, and as a result of increased yields on such loans of approximately 26 basis points. The yield realized on loans increased as a result of the increases by the Federal Reserve in the Federal Funds rate and the Company’s positioning of its balance sheet to benefit from such an increased interest rate environment.
These increases were partially offset by decreased income associated with the previously securitized loans and increased interest expense. Decreasing balances of previously securitized loans and retained interests with high yields reduced the amount of interest income reported. Average balances of previously securitized loans and retained interests decreased from $91.3 million for the quarter ended June 30, 2004 to $45.6 million for the quarter ended June 30, 2005. As a result of the decrease in balances of $45.7 million, interest income related to previously securitized loans and retained interests decreased $1.0 million from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. Due to the Classic acquisition and the increasing interest rate environment, interest expense increased $1.2 million from the second quarter of 2004 to the second quarter of 2005.
The net interest margin for the second quarter of 2005 of 4.42% represented a 20 basis point increase from the second quarter of 2004 net interest margin of 4.22% and approximated the net interest margin of 4.40% for the quarter ended March 31, 2005. In order to offset the decreasing balances of high yielding previously securitized loans and resultant lower levels of interest income from these assets, the Company positioned its balance sheet to benefit from rising interest rates by focusing on the origination of variable rate loans in its traditional lending areas of residential real estate, home equity and commercial real estate loans. Since June 2004, the Federal funds rate has increased 225 basis points from 1.00% to 3.25% in June 2005. As a result of this increase in rates and excluding the impact of previously securitized loans, retained interests, and the acquisition of Classic, the Company’s net interest margin increased 33 basis points, or $1.8 million, from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. Because of the Company’s strong core deposit base of checking accounts and savings accounts, management believes that an increasing interest rate environment will continue to beneficially impact the Company’s net interest income excluding the impact of previously securitized loans. However, due to the continued decrease in high yielding balances of previously securitized loans, the Company’s ability to report positive net interest margin trends will be dependent upon its ability to increase loan balances and/or a continued rising interest rate environment.
Credit Quality
At June 30, 2005, the Allowance for Loan Losses (“ALLL”) was $18.3 million or 1.14% of total loans outstanding and 464% of non-performing loans compared to $17.8 million or 1.31% of loans outstanding and 487% of non-performing loans at December 31, 2004, and $19.8 million or 1.47% of loans outstanding and 493% of non-performing loans at June 30, 2004. While the Company recorded no provision for loan losses in the second quarter of 2005 and has not recorded a provision for loan losses since the second quarter of 2002, the Company’s ALLL increased from March 31, 2005 to June 30, 2005, due to the acquisition of Classic. During the last three years, management has implemented a number of strategic initiatives to strengthen the loan portfolio including tightening credit standards, changing the overall mix of the portfolio to include a higher proportion of real estate secured loans, and identifying and charging-off or resolving problem loans. As a result of these initiatives, the quality of the Company’s loan portfolio has increased significantly as evidenced by the improvement in its ratio of non-
performing assets to total loans and other real estate owned from 1.38% at June 30, 2002 to 0.28% at June 30, 2005. As the Company’s asset quality has improved, the ALLL has decreased. However, given the relatively stable credit profile achieved over the last several years, the Company expects that it may begin to record a provision for loan losses within the next three to six months. Future provisions for loan losses will be dependent upon trends in loan balances including the composition of the loan portfolio, changes in loan quality and loss experience trends, and potential recoveries of previously charged-off loans. The Company believes that its methodology for determining its ALLL adequately provides for probable losses inherent in the loan portfolio at June 30, 2005.
The Company had net charge-offs of $1.3 million for the second quarter of 2005. During the second quarter, the Company sold a commercial real estate loan, which had been originated in 1999, to a third party resulting in a $0.6 million charge-off. The Company’s ALLL included $0.7 million that had previously been allocated specifically for this credit. Although the ratio of ALLL to loans outstanding decreased from 1.22% at March 31, 2005 to 1.14% at June 30, 2005, the Company believes that the ALLL remains adequate at June 30, 2005 to provide for probable losses inherent in the loan portfolio. The Company also recovered approximately $0.3 million associated with a commercial real estate loan that had been charged-off in the first quarter of 2005.
Net charge-offs on depository accounts were $0.6 million, or 46% of total net charge-offs. While charge-offs on depository accounts are appropriately taken against the ALLL, the revenue associated with depository accounts is reflected in service charges, and has been steadily growing as the Company’s core base of checking accounts has grown.
Non-performing assets were $4.4 million at June 30, 2005, representing 0.28% of total loans and other real estate owned. This ratio has been very stable over the last two years, fluctuating between 0.28% at June 30, 2005, and 0.38% at September 30, 2003.
Non-interest Income
Net of investment securities gains and legal settlement, non-interest income increased $1.3 million, or 11.7%, to $12.1 million in the second quarter of 2005 as compared to $10.8 million in the second quarter of 2004. The largest source of non-interest income is service charges from depository accounts, which increased $1.6 million or 19.4%, from $8.1 million during the second quarter of 2004 to $9.7 million during the second quarter of 2005. The increase during the second quarter was primarily a reflection of an increase in the number of customers that the Company is serving while the Classic acquisition accounted for $0.3 million, or 3.9%, of this increase. Trust fee and insurance commissions decreased $0.2 million and $0.2 million, respectively, from the second quarter of 2004 to the second quarter of 2005 as both areas of business experienced items of a non-recurring nature during the second quarter of 2004. In total, non-interest income represented approximately 34% of total revenues (net interest income plus non-interest income), for the quarter ended June 30, 2005 compared to other similarly sized banking companies which average approximately 24% of total revenues derived from non-interest income.
Non-interest Expenses
Non-interest expenses decreased from $17.0 million in the second quarter of 2004 to $16.8 million in the second quarter of 2005. The Classic acquisition increased non-interest expenses by $0.5 million during the second quarter of 2005. Excluding the impact of Classic non-interest expenses decreased $0.7 million primarily due to litigation expense of $0.6 million incurred during the second quarter of 2004 associated with the resolution of the Company’s derivative lawsuit. Aside from these two issues, the Company essentially held non-interest expenses flat in the second quarter of 2005 versus the second quarter of 2004.
The Company’s efficiency ratio was 46.9% for the quarter ended June 30, 2005, versus 44.9% for the quarter ended June 30, 2004. After considering the effect of income and expenses associated with the settlement of the derivative lawsuit, the efficiency ratio improved from 50.7% for the quarter ended June 30, 2004 to 46.9% for the quarter ended June 30, 2005. This decrease is a result of the Company’s ability to control its non-interest expenses. The average efficiency ratio for the Company’s peer group for the most recently reported quarter was 55.6%.
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 84.5% and the loan to asset ratio was 63.8% at June 30, 2005. The Company maintained investment securities totaling 26.0% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 44.4% of assets at June 30, 2005. Time deposits fund 31.2% of assets at June 30, 2005, but very few of these deposits are in accounts that have balances of more than $150,000, reflecting the core retail orientation of the Company. Equity represents 11.1% of total assets, leaving only 13.3% 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 10.57% for the quarter ended June 30, 2005 as a result of the Company’s strong earnings. The Company’s tangible equity ratio was 8.83% at June 30, 2005 compared with a tangible equity ratio of 8.71% at June 30, 2004. The Company was able to maintain this ratio despite the completion of an acquisition that was funded by cash of approximately 25% due to its continued strong earnings performance. With respect to regulatory capital, at June 30, 2005, the Company’s Leverage Ratio is 10.59%, the Tier I Capital ratio is 14.27%, and the Total Risk-Based Capital ratio is 15.32%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
During the second quarter of 2005, the Company repurchased 137,476 common shares at a weighted average price of $33.65 as part of a 1 million share repurchase plan authorized by the Board of Directors in June 2002. On June 29, 2005, the Company announced that the Board of Directors authorized the Company to buy back up to 1,000,000 shares of its common shares (approximately 5% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders. No time limit was placed on the duration of
the share repurchase program. As part of this authorization, the Company rescinded the previous share repurchase program plan approved in June 2002. The Company had repurchased 755,216 shares under the June 2002 Stock Repurchase Plan.
Other Events of Interest
On July 11, 2005, the Company announced that Greg Shrewsbury had been named Senior Vice President and Director of Human Resources.
On July 19, 2005, the Company announced plans to open a new branch location in the Potomac Marketplace in Ranson, West Virginia. Ranson is located in Jefferson County, one of the state’s fastest growing counties. This branch is expected to open in the first quarter of 2006.
During the second quarter City opened a new branch in the Wal-Mart Supercenter located in Mac Arthur, West Virginia and will be opening a branch in the Ashland, Kentucky Wal-Mart Supercenter in the third quarter. These are the third and fourth branches to be opened by City in Wal-Mart’s in the last year. The Company has been pleased with the initial success of its partnership with Wal-Mart.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 67 branches across West Virginia, Eastern Kentucky and Southern Ohio.
Forward Looking Information
This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company’s actual results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may 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 that would result in impairment losses or lower the yield on such loans, (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 | |||||||||||
| June 30 2005 | June 30 2004 | Percent Change | |||||||||
Earnings ($000s, except per share data): | |||||||||||
Net Interest Income (FTE) | $ | 23,863 | $ | 21,679 | 10.07 | % | |||||
Net Income | 12,349 | 13,298 | (7.14 | )% | |||||||
Earnings per Basic Share | 0.72 | 0.80 | (10.00 | )% | |||||||
Earnings per Diluted Share | 0.71 | 0.79 | (10.13 | )% | |||||||
Key Ratios (percent): | |||||||||||
Return on Average Assets | 2.09 | % | 2.39 | % | (12.65 | )% | |||||
Return on Average Equity | 19.76 | % | 25.64 | % | (22.92 | )% | |||||
Net Interest Margin | 4.42 | % | 4.22 | % | 4.74 | % | |||||
Efficiency Ratio | 46.90 | % | 44.92 | % | 4.41 | % | |||||
Average Shareholders’ Equity to Average Assets | 10.57 | % | 9.33 | % | 13.32 | % | |||||
Risk-Based Capital Ratios (a): | |||||||||||
Tier I | 14.27 | % | 14.43 | % | (1.11 | )% | |||||
Total | 15.32 | % | 15.68 | % | (2.30 | )% | |||||
Common Stock Data: | |||||||||||
Cash Dividends Declared per Share | $ | 0.25 | $ | 0.22 | 13.64 | % | |||||
Book Value per Share | 15.56 | 11.89 | 30.87 | % | |||||||
Market Value per Share: | |||||||||||
High | 37.00 | 35.71 | 3.61 | % | |||||||
Low | 27.57 | 27.30 | 0.99 | % | |||||||
End of Period | 36.52 | 31.58 | 15.64 | % | |||||||
Price/Earnings Ratio (b) | 12.68 | 9.87 | 28.49 | % | |||||||
| Six Months Ended | |||||||||||
| June 30 2005 | June 30 2004 | Percent Change | |||||||||
Earnings ($000s, except per share data): | |||||||||||
Net Interest Income (FTE) | $ | 46,360 | $ | 44,248 | 4.77 | % | |||||
Net Income | 24,027 | 24,301 | (1.13 | )% | |||||||
Earnings per Basic Share | 1.42 | 1.46 | (2.74 | )% | |||||||
Earnings per Diluted Share | 1.40 | 1.43 | (2.10 | )% | |||||||
Key Ratios (percent): | |||||||||||
Return on Average Assets | 2.10 | % | 2.19 | % | (4.34 | )% | |||||
Return on Average Equity | 20.30 | % | 23.99 | % | (15.37 | )% | |||||
Net Interest Margin | 4.44 | % | 4.33 | % | 2.47 | % | |||||
Efficiency Ratio | 47.12 | % | 47.65 | % | (1.11 | )% | |||||
Average Shareholders’ Equity to Average Assets | 10.33 | % | 9.14 | % | 12.98 | % | |||||
Common Stock Data: | |||||||||||
Cash Dividends Declared per Share | $ | 0.50 | $ | 0.44 | 13.64 | % | |||||
Market Value per Share: | |||||||||||
High | 37.00 | 36.18 | 2.27 | % | |||||||
Low | 27.57 | 27.30 | 0.99 | % | |||||||
| (a) | June 30, 2005 risk-based capital ratios are estimated. |
| (b) | June 30, 2005 price/earnings ratio computed based on annualized second quarter 2005 earnings. |
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 | |||||||||||||
2001 | $ | 8.82 | $ | 8.70 | $ | 8.37 | $ | 8.67 | $ | 5.13 | $ | 13.94 | ||||||
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 | 13.03 | 27.30 | 37.58 | ||||||||||||
2005 | 13.20 | 15.56 | 27.57 | 37.00 | ||||||||||||||
Earnings per Basic Share
| Quarter Ended | |||||||||||||||||||
| March 31 | June 30 | September 30 | December 31 | Year-to-Date | |||||||||||||||
2001 | $ | (0.34 | ) | $ | (1.19 | ) | $ | (0.46 | ) | $ | 0.45 | $ | (1.54 | ) | |||||
2002 | 0.38 | 0.45 | 0.53 | 0.56 | 1.92 | ||||||||||||||
2003 | 0.56 | 0.73 | 0.69 | 0.64 | 2.62 | ||||||||||||||
2004 | 0.66 | 0.80 | 0.66 | 0.67 | 2.79 | ||||||||||||||
2005 | 0.70 | 0.72 | 1.42 | ||||||||||||||||
Earnings per Diluted Share
| Quarter Ended | |||||||||||||||||||
| March 31 | June 30 | September 30 | December 31 | Year-to-Date | |||||||||||||||
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 | ||||||||||||||
2005 | 0.69 | 0.71 | 1.40 | ||||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| Three Months Ended June 30, | ||||||||
| 2005 | 2004 | |||||||
Interest Income | ||||||||
Interest and fees on loans | $ | 24,523 | $ | 21,384 | ||||
Interest on investment securities: | ||||||||
Taxable | 7,682 | 7,374 | ||||||
Tax-exempt | 447 | 457 | ||||||
Interest on retained interests | — | 67 | ||||||
Interest on deposits in depository institutions | 24 | 11 | ||||||
Interest on federal funds sold | — | — | ||||||
Total Interest Income | 32,676 | 29,293 | ||||||
Interest Expense | ||||||||
Interest on deposits | 6,605 | 5,715 | ||||||
Interest on short-term borrowings | 787 | 195 | ||||||
Interest on long-term debt | 1,662 | 1,950 | ||||||
Total Interest Expense | 9,054 | 7,860 | ||||||
Net Interest Income | 23,622 | 21,433 | ||||||
Provision for loan losses | — | — | ||||||
Net Interest Income After Provision for Loan Losses | 23,622 | 21,433 | ||||||
Non-Interest Income | ||||||||
Investment securities gains | 18 | 124 | ||||||
Service charges | 9,685 | 8,110 | ||||||
Insurance commissions | 545 | 718 | ||||||
Trust fee income | 462 | 627 | ||||||
Bank owned life insurance | 545 | 591 | ||||||
Mortgage banking income | 106 | 71 | ||||||
Legal settlement | — | 5,453 | ||||||
Other income | 737 | 695 | ||||||
Total Non-Interest Income | 12,098 | 16,389 | ||||||
Non-Interest Expense | ||||||||
Salaries and employee benefits | 8,404 | 8,390 | ||||||
Occupancy and equipment | 1,564 | 1,459 | ||||||
Depreciation | 994 | 974 | ||||||
Professional fees and litigation expense | 514 | 1,181 | ||||||
Postage, delivery, and statement mailings | 615 | 598 | ||||||
Advertising | 762 | 651 | ||||||
Telecommunications | 513 | 463 | ||||||
Insurance and regulatory | 365 | 320 | ||||||
Office supplies | 275 | 273 | ||||||
Repossessed asset (gains) losses, net of expenses | (16 | ) | (108 | ) | ||||
Loss on early extinguishment of debt | — | 263 | ||||||
Other expenses | 2,849 | 2,521 | ||||||
Total Non-Interest Expense | 16,839 | 16,985 | ||||||
Income Before Income Taxes | 18,881 | 20,837 | ||||||
Income tax expense | 6,532 | 7,539 | ||||||
Net Income | $ | 12,349 | $ | 13,298 | ||||
Basic earnings per share | $ | 0.72 | $ | 0.80 | ||||
Diluted earnings per share | $ | 0.71 | $ | 0.79 | ||||
Average Common Shares Outstanding: | ||||||||
Basic | 17,268 | 16,694 | ||||||
Diluted | 17,475 | 16,935 | ||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
| Six Months Ended June 30, | ||||||||
| 2005 | 2004 | |||||||
Interest Income | ||||||||
Interest and fees on loans | $ | 46,713 | $ | 43,107 | ||||
Interest on investment securities: | ||||||||
Taxable | 15,328 | 14,598 | ||||||
Tax-exempt | 882 | 934 | ||||||
Interest on retained interests | — | 807 | ||||||
Interest on deposits in depository institutions | 42 | 22 | ||||||
Interest on federal funds sold | 4 | — | ||||||
Total Interest Income | 62,969 | 59,468 | ||||||
Interest Expense | ||||||||
Interest on deposits | 12,473 | 11,407 | ||||||
Interest on short-term borrowings | 1,364 | 361 | ||||||
Interest on long-term debt | 3,247 | 3,955 | ||||||
Total Interest Expense | 17,084 | 15,723 | ||||||
Net Interest Income | 45,885 | 43,745 | ||||||
Provision for loan losses | — | — | ||||||
Net Interest Income After Provision for Loan Losses | 45,885 | 43,745 | ||||||
Non-Interest Income | ||||||||
Investment securities gains | 21 | 1,136 | ||||||
Service charges | 18,128 | 15,491 | ||||||
Insurance commissions | 1,137 | 1,378 | ||||||
Trust fee income | 1,053 | 1,114 | ||||||
Bank owned life insurance | 1,536 | 1,172 | ||||||
Mortgage banking income | 224 | 139 | ||||||
Legal settlement | — | 5,453 | ||||||
Other income | 1,443 | 1,427 | ||||||
Total Non-Interest Income | 23,542 | 27,310 | ||||||
Non-Interest Expense | ||||||||
Salaries and employee benefits | 16,324 | 16,517 | ||||||
Occupancy and equipment | 3,039 | 2,953 | ||||||
Depreciation | 1,938 | 1,980 | ||||||
Professional fees and litigation expense | 1,079 | 2,025 | ||||||
Postage, delivery, and statement mailings | 1,268 | 1,283 | ||||||
Advertising | 1,467 | 1,307 | ||||||
Telecommunications | 986 | 929 | ||||||
Insurance and regulatory | 731 | 651 | ||||||
Office supplies | 478 | 585 | ||||||
Repossessed asset (gains) losses, net of expenses | (15 | ) | (51 | ) | ||||
Loss on early extinguishment of debt | — | 263 | ||||||
Other expenses | 5,557 | 4,977 | ||||||
Total Non-Interest Expense | 32,852 | 33,419 | ||||||
Income Before Income Taxes | 36,575 | 37,636 | ||||||
Income tax expense | 12,548 | 13,335 | ||||||
Net Income | $ | 24,027 | $ | 24,301 | ||||
Basic earnings per share | $ | 1.42 | $ | 1.46 | ||||
Diluted earnings per share | $ | 1.40 | $ | 1.43 | ||||
Average Common Shares Outstanding: | ||||||||
Basic | 16,938 | 16,687 | ||||||
Diluted | 17,145 | 16,954 | ||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited) ($ in 000s)
| Three Months Ended | ||||||||
| June 30, 2005 | June 30, 2004 | |||||||
Balance at April 1 | $ | 219,302 | $ | 202,204 | ||||
Net income | 12,349 | 13,298 | ||||||
Other comprehensive income: | ||||||||
Change in unrealized gain on securities available-for-sale | 2,660 | (11,196 | ) | |||||
Change in unrealized loss on interest rate swaps | (104 | ) | — | |||||
Cash dividends declared ($0.25/share) | (4,497 | ) | — | |||||
Cash dividends declared ($0.22/share) | — | (3,657 | ) | |||||
Issuance of 1,580,034 shares for acquisition of Classic Bancshares, net 108,173 owned and transferred to treasury | 54,339 | — | ||||||
Exercise of 15,018 stock options | 200 | — | ||||||
Exercise of 10,325 stock options | — | 149 | ||||||
Purchase of 139,776 common shares of treasury | (4,625 | ) | — | |||||
Purchase of 109,300 common shares of treasury | — | (3,229 | ) | |||||
Balance at June 30 | $ | 279,624 | $ | 197,569 | ||||
| Six Months Ended | ||||||||
| June 30, 2005 | June 30, 2004 | |||||||
Balance at January 1 | $ | 216,080 | $ | 190,690 | ||||
Net income | 24,027 | 24,301 | ||||||
Other comprehensive income: | ||||||||
Change in unrealized gain on securities available-for-sale | (2,086 | ) | (7,825 | ) | ||||
Change in unrealized loss on interest rate swaps | (104 | ) | — | |||||
Cash dividends declared ($0.50/share) | (8,651 | ) | — | |||||
Cash dividends declared ($0.44/share) | — | (7,335 | ) | |||||
Issuance of 1,580,034 shares for acquisition of Classic Bancshares, net 108,173 owned and transferred to treasury | 54,339 | — | ||||||
Issuance of 4,800 stock award shares | 147 | — | ||||||
Exercise of 38,368 stock options | 497 | — | ||||||
Exercise of 84,803 stock options | — | 967 | ||||||
Purchase of 139,776 common shares for treasury | (4,625 | ) | — | |||||
Purchase of 109,300 common shares for treasury | — | (3,229 | ) | |||||
Balance at June 30 | $ | 279,624 | $ | 197,569 | ||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
| Quarter Ended | ||||||||||||||||||||
| June 30 2005 | March 31 2005 | Dec. 31 2004 | Sept. 30 2004 | June 30 2004 | ||||||||||||||||
Interest income | $ | 32,676 | $ | 30,293 | $ | 29,746 | $ | 29,667 | $ | 29,293 | ||||||||||
Taxable equivalent adjustment | 241 | 233 | 236 | 236 | 246 | |||||||||||||||
Interest income (FTE) | 32,917 | 30,526 | 29,982 | 29,903 | 29,539 | |||||||||||||||
Interest expense | 9,054 | 8,030 | 8,112 | 8,035 | 7,860 | |||||||||||||||
Net interest income | 23,863 | 22,496 | 21,870 | 21,868 | 21,679 | |||||||||||||||
Provision for loan losses | — | — | — | — | — | |||||||||||||||
Net interest income after provision for loan losses | 23,863 | 22,496 | 21,870 | 21,868 | 21,679 | |||||||||||||||
Noninterest income | 12,098 | 11,444 | 11,869 | 10,856 | 16,389 | |||||||||||||||
Noninterest expense | 16,839 | 16,013 | 17,131 | 15,783 | 16,985 | |||||||||||||||
Income before income taxes | 19,122 | 17,927 | 16,608 | 16,941 | 21,083 | |||||||||||||||
Income tax expense | 6,532 | 6,016 | 5,285 | 5,749 | 7,539 | |||||||||||||||
Taxable equivalent adjustment | 241 | 233 | 236 | 236 | 246 | |||||||||||||||
Net income | $ | 12,349 | $ | 11,678 | $ | 11,087 | $ | 10,956 | $ | 13,298 | ||||||||||
Basic earnings per share | $ | 0.72 | $ | 0.70 | $ | 0.67 | $ | 0.66 | $ | 0.80 | ||||||||||
Diluted earnings per share | 0.71 | 0.69 | 0.66 | 0.65 | 0.79 | |||||||||||||||
Cash dividends declared per share | 0.25 | 0.25 | 0.22 | 0.22 | 0.22 | |||||||||||||||
Average Common Share (000s): | ||||||||||||||||||||
Outstanding | 17,268 | 16,605 | 16,572 | 16,584 | 16,694 | |||||||||||||||
Diluted | 17,475 | 16,812 | 16,810 | 16,812 | 16,935 | |||||||||||||||
Net Interest Margin | 4.42 | % | 4.40 | % | 4.27 | % | 4.27 | % | 4.20 | % | ||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
| Quarter Ended | ||||||||||||||||||
| June 30 2005 | March 31 2005 | Dec. 31 2004 | Sept. 30 2004 | June 30 2004 | ||||||||||||||
Non-Interest Income: | ||||||||||||||||||
Service charges | $ | 9,685 | $ | 8,443 | $ | 8,678 | $ | 8,440 | $ | 8,110 | ||||||||
Insurance commissions | 545 | 592 | 754 | 600 | 718 | |||||||||||||
Trust fee income | 462 | 591 | 466 | 446 | 627 | |||||||||||||
Bank owned life insurance | 545 | 991 | 1,184 | 575 | 591 | |||||||||||||
Mortgage banking income | 106 | 118 | 70 | 72 | 71 | |||||||||||||
Other income | 737 | 706 | 685 | 719 | 695 | |||||||||||||
Subtotal | 12,080 | 11,441 | 11,837 | 10,852 | 10,812 | |||||||||||||
Investment security gains | 18 | 3 | 32 | 4 | 124 | |||||||||||||
Net proceeds from litigation settlement | — | — | — | — | 5,453 | |||||||||||||
Total Non-Interest Income | $ | 12,098 | $ | 11,444 | $ | 11,869 | $ | 10,856 | $ | 16,389 | ||||||||
Non-Interest Expense: | ||||||||||||||||||
Salaries and employee benefits | $ | 8,404 | $ | 7,920 | $ | 9,578 | $ | 8,150 | $ | 8,390 | ||||||||
Occupancy and equipment | 1,564 | 1,475 | 1,560 | 1,472 | 1,459 | |||||||||||||
Depreciation | 994 | 944 | 981 | 972 | 974 | |||||||||||||
Professional fees and litigation expense | 514 | 565 | 571 | 668 | 1,181 | |||||||||||||
Postage, delivery, and statement mailings | 615 | 653 | 589 | 601 | 598 | |||||||||||||
Advertising | 762 | 705 | 600 | 459 | 651 | |||||||||||||
Telecommunications | 513 | 473 | 403 | 488 | 463 | |||||||||||||
Insurance and regulatory | 365 | 366 | 330 | 342 | 320 | |||||||||||||
Office supplies | 275 | 203 | 210 | 252 | 273 | |||||||||||||
Repossessed asset (gains) losses, net of expenses | (16 | ) | 1 | (31 | ) | 5 | (108 | ) | ||||||||||
Loss on early exinguishment of debt | — | — | — | — | 263 | |||||||||||||
Other expenses | 2,849 | 2,708 | 2,340 | 2,374 | 2,521 | |||||||||||||
Total Non-Interest Expense | $ | 16,839 | $ | 16,013 | $ | 17,131 | $ | 15,783 | $ | 16,985 | ||||||||
Employees (Full Time Equivalent) | 767 | 689 | 691 | 692 | 692 | |||||||||||||
Branch Locations | 67 | 56 | 56 | 56 | 54 | |||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
June 30 2005 | December 31 2004 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 59,647 | $ | 52,854 | ||||
Interest-bearing deposits in depository institutions | 3,302 | 3,230 | ||||||
Cash and cash equivalents | 62,949 | 56,084 | ||||||
Investment securities available-for-sale, at fair value | 594,729 | 620,034 | ||||||
Investment securities held-to-maturity, at amortized cost | 56,764 | 59,740 | ||||||
Total investment securities | 651,493 | 679,774 | ||||||
Loans: | ||||||||
Residential real estate | 596,893 | 469,458 | ||||||
Home equity | 307,354 | 308,173 | ||||||
Commercial real estate | 445,241 | 400,801 | ||||||
Other commercial | 138,923 | 71,311 | ||||||
Installment | 48,668 | 18,145 | ||||||
Indirect | 6,048 | 10,324 | ||||||
Credit card | 16,188 | 18,126 | ||||||
Previously securitized loans | 41,670 | 58,436 | ||||||
Gross Loans | 1,600,985 | 1,354,774 | ||||||
Allowance for loan losses | (18,298 | ) | (17,815 | ) | ||||
Net loans | 1,582,687 | 1,336,959 | ||||||
Bank owned life insurance | 51,925 | 50,845 | ||||||
Premises and equipment | 41,390 | 34,607 | ||||||
Accrued interest receivable | 12,141 | 9,868 | ||||||
Net deferred tax assets | 24,280 | 27,025 | ||||||
Other assets | 82,161 | 18,068 | ||||||
Total Assets | $ | 2,509,026 | $ | 2,213,230 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 344,567 | $ | 319,425 | ||||
Interest-bearing: | ||||||||
Demand deposits | 458,753 | 411,127 | ||||||
Savings deposits | 309,489 | 281,466 | ||||||
Time deposits | 782,775 | 660,705 | ||||||
Total deposits | 1,895,584 | 1,672,723 | ||||||
Short-term borrowings | 156,770 | 145,183 | ||||||
Long-term debt | 145,787 | 148,836 | ||||||
Other liabilities | 31,261 | 30,408 | ||||||
Total Liabilities | 2,229,402 | 1,997,150 | ||||||
Stockholders’ Equity | ||||||||
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued | — | — | ||||||
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 18,499,282 and 16,919,248 shares issued at June 30, 2005 and December 31, 2004 less 523,172 and 331,191 shares in treasury, respectively | 46,249 | 42,298 | ||||||
Capital surplus | 108,269 | 55,512 | ||||||
Retained earnings | 143,551 | 128,175 | ||||||
Cost of common stock in treasury | (15,111 | ) | (8,761 | ) | ||||
Accumulated other comprehensive (loss) income: | ||||||||
Unrealized (loss) gain on securities available-for-sale | (805 | ) | 1,281 | |||||
Unrealized (loss) on interest rate swaps | (104 | ) | — | |||||
Underfunded pension liability | (2,425 | ) | (2,425 | ) | ||||
Total Accumulated Other Comprehensive (Loss) Income | (3,334 | ) | (1,144 | ) | ||||
Total Stockholders’ Equity | 279,624 | 216,080 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 2,509,026 | $ | 2,213,230 | ||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
June 30 2005 | March 31 2005 | December 31 2004 | September 30 2004 | June 30 2004 | |||||||||||
Residential real estate | $ | 596,893 | $ | 463,869 | $ | 469,458 | $ | 468,372 | $ | 459,759 | |||||
Home equity | 307,354 | 302,262 | 308,173 | 304,934 | 301,231 | ||||||||||
Commercial real estate | 445,241 | 409,064 | 400,801 | 377,742 | 374,292 | ||||||||||
Other commercial | 138,923 | 66,485 | 71,311 | 70,745 | 73,139 | ||||||||||
Loans to depository institutions | — | 10,000 | — | — | — | ||||||||||
Installment | 48,668 | 16,065 | 18,145 | 20,221 | 24,722 | ||||||||||
Indirect | 6,048 | 7,960 | 10,324 | 13,020 | 16,140 | ||||||||||
Credit card | 16,188 | 16,954 | 18,126 | 17,893 | 17,961 | ||||||||||
Previously securitized loans | 41,670 | 50,588 | 58,436 | 70,970 | 83,385 | ||||||||||
Gross Loans | $ | 1,600,985 | $ | 1,343,247 | $ | 1,354,774 | $ | 1,343,897 | $ | 1,350,629 | |||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($in 000s)
| Three Months Ended June 30, | ||||||||||||||||||||
| 2005 | 2004 | |||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||
Assets: | ||||||||||||||||||||
Loan portfolio: | ||||||||||||||||||||
Residential real estate | $ | 523,607 | $ | 7,290 | 5.58 | % | $ | 450,436 | $ | 6,719 | 6.00 | % | ||||||||
Home equity | 304,475 | 4,602 | 6.06 | % | 297,628 | 3,268 | 4.42 | % | ||||||||||||
Commercial real estate | 423,254 | 6,584 | 6.24 | % | 355,144 | 4,864 | 5.51 | % | ||||||||||||
Other commercial | 100,301 | 1,510 | 6.04 | % | 76,047 | 955 | 5.05 | % | ||||||||||||
Loans to depository institutions | 21,956 | 164 | 3.00 | % | 9,011 | 26 | 1.16 | % | ||||||||||||
Installment | 31,032 | 818 | 10.57 | % | 26,964 | 744 | 11.10 | % | ||||||||||||
Indirect | 6,966 | 193 | 11.11 | % | 18,015 | 491 | 10.96 | % | ||||||||||||
Credit card | 16,706 | 526 | 12.63 | % | 18,004 | 539 | 12.04 | % | ||||||||||||
Previously securitized loans | 45,583 | 2,836 | 24.95 | % | 90,752 | 3,778 | 16.74 | % | ||||||||||||
Total loans | 1,473,880 | 24,523 | 6.67 | % | 1,342,001 | 21,384 | 6.41 | % | ||||||||||||
Securities: | ||||||||||||||||||||
Taxable | 645,375 | 7,682 | 4.77 | % | 680,100 | 7,374 | 4.36 | % | ||||||||||||
Tax-exempt | 41,209 | 688 | 6.70 | % | 38,100 | 703 | 7.42 | % | ||||||||||||
Total securities | 686,584 | 8,370 | 4.89 | % | 718,200 | 8,077 | 4.52 | % | ||||||||||||
Retained interest in securitized loans | — | — | — | 547 | 67 | 49.26 | % | |||||||||||||
Deposits in depository institutions | 5,061 | 24 | 1.90 | % | 5,461 | 11 | 0.81 | % | ||||||||||||
Federal funds sold | — | — | — | — | — | — | ||||||||||||||
Total interest-earning assets | 2,165,525 | 32,917 | 6.10 | % | 2,066,209 | 29,539 | 5.75 | % | ||||||||||||
Cash and due from banks | 38,292 | 43,485 | ||||||||||||||||||
Bank premises and equipment | 38,104 | 34,588 | ||||||||||||||||||
Other assets | 140,308 | 99,983 | ||||||||||||||||||
Less: Allowance for loan losses | (17,489 | ) | (20,053 | ) | ||||||||||||||||
Total assets | $ | 2,364,740 | $ | 2,224,212 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Interest-bearing demand deposits | 428,700 | 845 | 0.79 | % | 405,824 | 637 | 0.63 | % | ||||||||||||
Savings deposits | 289,332 | 468 | 0.65 | % | 282,620 | 366 | 0.52 | % | ||||||||||||
Time deposits | 713,383 | 5,292 | 2.98 | % | 662,611 | 4,712 | 2.86 | % | ||||||||||||
Short-term borrowings | 158,170 | 787 | 2.00 | % | 112,548 | 195 | 0.70 | % | ||||||||||||
Long-term debt | 154,723 | 1,662 | 4.31 | % | 215,264 | 1,950 | 3.64 | % | ||||||||||||
Total interest-bearing liabilities | 1,744,308 | 9,054 | 2.08 | % | 1,678,867 | 7,860 | 1.88 | % | ||||||||||||
Noninterest-bearing demand deposits | 342,376 | 313,410 | ||||||||||||||||||
Other liabilities | 28,105 | 24,476 | ||||||||||||||||||
Stockholders’ equity | 249,951 | 207,459 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,364,740 | $ | 2,224,212 | ||||||||||||||||
Net interest income | $ | 23,863 | $ | 21,679 | ||||||||||||||||
Net yield on earning assets | 4.42 | % | 4.22 | % | ||||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
| Six Months Ended June 30, | ||||||||||||||||||||
| 2005 | 2004 | |||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||
Assets: | ||||||||||||||||||||
Loan portfolio: | ||||||||||||||||||||
Residential real estate | $ | 494,968 | $ | 13,809 | 5.63 | % | $ | 445,780 | $ | 13,571 | 6.12 | % | ||||||||
Home equity | 305,410 | 8,876 | 5.86 | % | 291,947 | 6,444 | 4.44 | % | ||||||||||||
Commercial real estate | 412,335 | 12,514 | 6.12 | % | 352,008 | 9,731 | 5.56 | % | ||||||||||||
Other commercial | 84,378 | 2,514 | 6.01 | % | 75,320 | 1,917 | 5.12 | % | ||||||||||||
Loans to depository institutions | 14,961 | 213 | 2.87 | % | 6,154 | 35 | 1.14 | % | ||||||||||||
Installment | 24,102 | 1,359 | 11.37 | % | 29,028 | 1,621 | 11.23 | % | ||||||||||||
Indirect | 8,025 | 441 | 11.08 | % | 20,204 | 1,103 | 10.98 | % | ||||||||||||
Credit card | 17,122 | 1,070 | 12.60 | % | 18,209 | 1,093 | 12.07 | % | ||||||||||||
Previously securitized loans | 50,230 | 5,917 | 23.75 | % | 87,797 | 7,592 | 17.39 | % | ||||||||||||
Total loans | 1,411,531 | 46,713 | 6.67 | % | 1,326,447 | 43,107 | 6.54 | % | ||||||||||||
Securities: | ||||||||||||||||||||
Taxable | 651,275 | 15,328 | 4.75 | % | 677,143 | 14,598 | 4.34 | % | ||||||||||||
Tax-exempt | 39,269 | 1,357 | 6.97 | % | 39,037 | 1,437 | 7.40 | % | ||||||||||||
Total securities | 690,544 | 16,685 | 4.87 | % | 716,180 | 16,035 | 4.50 | % | ||||||||||||
Retained interest in securitized loans | — | — | — | 6,636 | 807 | 24.46 | % | |||||||||||||
Deposits in depository institutions | 4,391 | 42 | 1.93 | % | 5,554 | 22 | 0.80 | % | ||||||||||||
Federal funds sold | 290 | 4 | 2.78 | % | — | — | — | |||||||||||||
Total interest-earning assets | 2,106,756 | 63,444 | 6.07 | % | 2,054,817 | 59,971 | 5.87 | % | ||||||||||||
Cash and due from banks | 41,063 | 44,097 | ||||||||||||||||||
Bank premises and equipment | 36,229 | 34,796 | ||||||||||||||||||
Other assets | 123,541 | 102,519 | ||||||||||||||||||
Less: Allowance for loan losses | (17,485 | ) | (20,637 | ) | ||||||||||||||||
Total assets | $ | 2,290,104 | $ | 2,215,592 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||
Interest-bearing demand deposits | 421,005 | 1,561 | 0.75 | % | 401,639 | 1,241 | 0.62 | % | ||||||||||||
Savings deposits | 283,258 | 823 | 0.59 | % | 281,006 | 729 | 0.52 | % | ||||||||||||
Time deposits | 685,619 | 10,089 | 2.97 | % | 662,171 | 9,437 | 2.87 | % | ||||||||||||
Short-term borrowings | 151,158 | 1,364 | 1.82 | % | 114,881 | 361 | 0.63 | % | ||||||||||||
Long-term debt | 151,796 | 3,247 | 4.31 | % | 218,242 | 3,955 | 3.64 | % | ||||||||||||
Total interest-bearing liabilities | 1,692,836 | 17,084 | 2.04 | % | 1,677,939 | 15,723 | 1.88 | % | ||||||||||||
Noninterest-bearing demand deposits | 332,069 | 310,509 | ||||||||||||||||||
Other liabilities | 28,525 | 24,569 | ||||||||||||||||||
Stockholders’ equity | 236,674 | 202,575 | ||||||||||||||||||
Total liabilities andstockholders’ equity | $ | 2,290,104 | $ | 2,215,592 | ||||||||||||||||
Net interest income | $ | 46,360 | $ | 44,248 | ||||||||||||||||
Net yield on earning assets | 4.44 | % | 4.33 | % | ||||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)
June 30 2005 (a) | March 31 2005 | Dec. 31 2004 | Sept. 30 2004 | June 30 2004 | ||||||||||||||||
Tier I Capital: | ||||||||||||||||||||
Stockholders’ equity | $ | 279,624 | $ | 219,302 | $ | 216,080 | $ | 210,285 | $ | 197,569 | ||||||||||
Goodwill and other intangibles | (63,833 | ) | (6,204 | ) | (6,255 | ) | (6,306 | ) | (6,357 | ) | ||||||||||
Accumulated other comprehensive income | 3,334 | 5,890 | 1,144 | (1,146 | ) | 6,454 | ||||||||||||||
Qualifying trust preferred stock | 28,000 | 28,000 | 28,000 | 28,000 | 28,000 | |||||||||||||||
Excess deferred tax assets | — | (4,524 | ) | (3,129 | ) | — | (6,922 | ) | ||||||||||||
Total tier I capital | $ | 247,125 | $ | 242,464 | $ | 235,840 | $ | 230,833 | $ | 218,744 | ||||||||||
Total Risk-Based Capital: | ||||||||||||||||||||
Tier I capital | $ | 247,125 | $ | 242,464 | $ | 235,840 | $ | 230,833 | $ | 218,744 | ||||||||||
Qualifying allowance for loan losses | 18,298 | 16,325 | 17,815 | 18,537 | 18,939 | |||||||||||||||
Total risk-based capital | $ | 265,423 | $ | 258,789 | $ | 253,655 | $ | 249,370 | $ | 237,683 | ||||||||||
Net risk-weighted assets | $ | 1,732,341 | $ | 1,522,881 | $ | 1,524,581 | $ | 1,517,158 | $ | 1,514,261 | ||||||||||
Ratios: | ||||||||||||||||||||
Average stockholders’ equity to average assets | 10.57 | % | 10.08 | % | 9.81 | % | 9.26 | % | 9.33 | % | ||||||||||
Tangible capital ratio | 8.83 | % | 9.52 | % | 9.51 | % | 9.24 | % | 8.71 | % | ||||||||||
Risk-based capital ratios: | ||||||||||||||||||||
Tier I capital | 14.27 | % | 15.92 | % | 15.47 | % | 15.21 | % | 14.43 | % | ||||||||||
Total risk-based capital | 15.32 | % | 16.99 | % | 16.64 | % | 16.44 | % | 15.68 | % | ||||||||||
Leverage capital | 10.59 | % | 11.00 | % | 10.74 | % | 10.47 | % | 9.89 | % | ||||||||||
(a) June 30, 2005 risk-based capital ratios are estimated. |
| |||||||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES Intangibles (Unaudited) ($ in 000s) |
| |||||||||||||||||||
| As of and for the Quarter Ended | ||||||||||||||||||||
| June 30 2005 | March 31 2005 | Dec. 31 2004 | Sept. 30 2004 | June 30 2004 | ||||||||||||||||
Intangibles, net | $ | 63,833 | $ | 6,204 | $ | 6,255 | $ | 6,306 | $ | 6,357 | ||||||||||
Intangibles amortization expense | 95 | 51 | 51 | 51 | 51 | |||||||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)
| Quarter Ended | ||||||||||||||||||||
June 30 2005 | March 31 2005 | Dec. 31 2004 | Sept. 30 2004 | June 30 2004 | ||||||||||||||||
Balance at beginning of period | $ | 16,325 | $ | 17,815 | $ | 18,537 | $ | 19,833 | $ | 20,289 | ||||||||||
Allowance acquired through acquisition | 3,265 | — | — | — | — | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Residential real estate | 97 | 237 | 166 | 299 | 173 | |||||||||||||||
Home equity | 226 | 421 | 5 | 105 | 66 | |||||||||||||||
Commercial real estate | 653 | 393 | 105 | 1,134 | 44 | |||||||||||||||
Other commercial | 10 | 36 | 14 | 220 | 22 | |||||||||||||||
Installment | 263 | 308 | 458 | 568 | 457 | |||||||||||||||
Overdraft deposit accounts | 832 | 744 | 586 | 631 | 610 | |||||||||||||||
Total charge-offs | 2,081 | 2,139 | 1,334 | 2,957 | 1,372 | |||||||||||||||
Recoveries: | ||||||||||||||||||||
Residential real estate | 16 | 37 | 137 | 196 | 133 | |||||||||||||||
Home equity | 9 | — | — | 1 | — | |||||||||||||||
Commercial real estate | 311 | 50 | 10 | 922 | 201 | |||||||||||||||
Other commercial | 34 | 45 | 80 | 103 | 127 | |||||||||||||||
Installment | 175 | 205 | 147 | 183 | 202 | |||||||||||||||
Overdraft deposit accounts | 244 | 312 | 238 | 256 | 253 | |||||||||||||||
Total recoveries | 789 | 649 | 612 | 1,661 | 916 | |||||||||||||||
Net charge-offs | 1,292 | 1,490 | 722 | 1,296 | 456 | |||||||||||||||
Provision for loan losses | — | — | — | — | — | |||||||||||||||
Balance at end of period | $ | 18,298 | $ | 16,325 | $ | 17,815 | $ | 18,537 | $ | 19,833 | ||||||||||
Loans outstanding | $ | 1,600,985 | $ | 1,343,247 | $ | 1,354,774 | $ | 1,343,897 | $ | 1,350,629 | ||||||||||
Average loans outstanding | 1,473,880 | 1,348,489 | 1,347,297 | 1,348,265 | 1,342,001 | |||||||||||||||
Allowance as a percent of loans outstanding | 1.14 | % | 1.22 | % | 1.31 | % | 1.38 | % | 1.47 | % | ||||||||||
Allowance as a percent of non-performing loans | 464 | % | 490 | % | 487 | % | 515 | % | 493 | % | ||||||||||
Net charge-offs (annualized) as a percent of average loans outstanding | 0.35 | % | 0.44 | % | 0.21 | % | 0.38 | % | 0.14 | % | ||||||||||
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
| June 30 2005 | March 31 2005 | Dec. 31 2004 | Sept. 30 2004 | June 30 2004 | ||||||||||||||||
Nonaccrual loans | $ | 2,709 | $ | 2,641 | $ | 2,147 | $ | 1,924 | $ | 1,792 | ||||||||||
Accruing loans past due 90 days or more | 936 | 322 | 677 | 800 | 689 | |||||||||||||||
Previously securitized loans past due 90 days or more | 299 | 372 | 832 | 876 | 1,544 | |||||||||||||||
Total non-performing loans | 3,944 | 3,335 | 3,656 | 3,600 | 4,025 | |||||||||||||||
Other real estate owned | 471 | 463 | 247 | 267 | 171 | |||||||||||||||
Total non-performing assets | $ | 4,415 | $ | 3,798 | $ | 3,903 | $ | 3,867 | $ | 4,196 | ||||||||||
Non-performing assets as a percent of loans and other real estate owned | 0.28 | % | 0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | ||||||||||
