Attached files
| file | filename |
|---|---|
| 8-K - PRINTABLE COPY OF CHCO FORM 8-K AND EARNINGS RELEASE 4Q2012 - CITY HOLDING CO | submissionpdf.pdf |
| 8-K - FORM 8-K, CHCO 4TH QUARTER 2012 EARNINGS - CITY HOLDING CO | form8-k.htm |
Exhibit 99.1
NEWS RELEASE
For Immediate Release
January 29, 2013
For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102
City Holding Company Announces 2012 Earnings
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $2.9 billion bank holding company headquartered in Charleston, today announced net income of $38.9 million, or $2.61 per diluted share for the year ended December 31, 2012. During 2012, City’s net interest income increased $5.6 million from 2011, loan balances increased $173 million, and noninterest income (exclusive of investment security gains) increased $1.9 million. For 2012, the Company achieved a return on assets of 1.37%, a return on tangible equity of 14.7%, a net interest margin of 3.96%, and an efficiency ratio of 57.2%. City’s results for 2012 are down slightly compared to 2011 as a result of merger-related expenses of $4.7 million. Exclusive of the acquisition and integration expenses, 2012’s results compared to 2011 were quite favorable.
For the fourth quarter of 2012 the Company reported net income of $10.9 million, or $0.73 per diluted share. The Company also achieved a return on assets of 1.49%, a return on tangible equity of 16.2%, a net interest margin of 3.99%, and an efficiency ratio of 53.1% in the fourth quarter of 2012.
City’s CEO Charles Hageboeck stated that, “2012 was an exciting and important year for City. The acquisition of Virginia Savings Bancorp marked our first acquisition in seven years and earlier this month, we completed our acquisition of Community Financial Corporation. With these acquisitions, City now has total assets of $3.4 billion, and 15 branch locations in Virginia. We look forward to continuing the development of our presence in Virginia.”
“Net interest income in 2012 was up $5.6 million due to the acquisition of Virginia Savings Bancorp, core loan growth of $101 million, and lower deposit pricing. As a result, our net interest margin increased from 3.89% for 2011 to 3.96% for 2012.”
“Our asset quality continues to remain strong with stable and relatively low levels of past due loans. The ratio of non-performing assets to total loans and other real estate owned of 1.41% at December 31, 2012 was down compared to the prior quarter’s ratio of 1.53%. Provision expense was higher for 2012 due to loan growth throughout the year, particularly in the fourth quarter, rather than due to deteriorating asset quality.”
“During 2012, our bankcard interchange fee income increased $1.3 million, or about 11%, due to increased transaction volumes. Trust and investment management fee income increased $0.7 million, or 21.5%, from 2011 due to assets under management increasing from $580 million at December 31, 2011 to $750 million at December 31, 2012. This increase was the result of core growth, as Virginia Savings Bancorp did not offer these services. In addition, an increase in mortgage-related lending activity led to an increase of $0.6 million in other income.”
“In summary, 2012 was another successful year for City both from a financial performance perspective and from a growth perspective. We expanded our footprint into Virginia while maintaining solid financial results. We look forward to 2013 and the opportunities to continue meeting the expectations of our shareholders and customers.”
Net Interest Income
The Company’s tax equivalent net interest income increased $5.5 million, or 5.9%, from $93.0 million in 2011 to $98.5 million in 2012. This increase is due primarily to the acquisition of Virginia Savings Bancorp as of May 31, 2012, an increase in loan balances outstanding, and a decline in the average rate paid on interest bearing deposits. The acquisition of Virginia Savings Bancorp increased our net interest income by $4.5 million, which included $2.6 million of accretion related to the fair value adjustments recorded as a result of the acquisition. Excluding the Virginia Savings Bancorp acquisition, the average balance of loans outstanding increased $71 million, or 3.73%, from the year ended December 31, 2011. The average rate paid on interest bearing deposits decreased from 1.07% during 2011 to 0.70% during 2012 and was largely attributable to the average rate paid on time deposits declining from 1.93% during 2011 to 1.32% during 2012. These increases were partially offset by a decrease in investment interest income as approximately $38 million of higher yielding trust preferred securities were called during the third quarter of 2012. The Company’s reported net interest margin increased from 3.89% for the year ended December 31, 2011 to 3.96% for the year ended December 31, 2012. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin for the year ended December 31, 2012 would have been 3.85%.
During the fourth quarter of 2012, the Company’s tax equivalent net interest income increased $0.6 million, or 2.6%, from $25.1 million during the third quarter of 2012 to $25.7 million. This increase is due to an increase in the accretion related to the accounting fair value adjustments recorded as a result of the acquisition of Virginia Savings Bancorp. The Company’s reported net interest margin increased from 3.95% for the third quarter of 2012 to 3.99% for the fourth quarter of 2012. Excluding the favorable impact of the accretion from the fair value adjustments ($1.7 million for the quarter ended December 31, 2012 and $0.9 million for the quarter ended September 30, 2012), the net interest margin would have been 3.73% for the quarter ended December 31, 2012 and 3.80% for the quarter ended September 30, 2012.
2
Credit Quality
As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.8 million in the fourth quarter of 2012 and $6.4 million for the year ended December 31, 2012 compared to $2.2 million and $4.6 million of the comparable periods in 2011. During the fourth quarter of 2012 the Company’s loan portfolio increased $61.1 million from September 30, 2012 which resulted in a $0.5 million addition to the ALLL. The provision for loan losses recorded during 2012 reflects difficulties encountered by certain commercial borrowers of the Company during the year, the downgrade of their related credits and management’s assessment of the impact of these difficulties on the ultimate collectability of the loans. In addition, the Company received life insurance proceeds as the beneficiary of a life insurance policy carried by a commercial borrower during the third quarter of 2012 that enabled the Company to reduce the ALLL by approximately $0.6 million for amounts previously included in the ALLL. Changes in the amount of the provision and related allowance are based on the Company’s detailed systematic methodology and are directionally consistent with changes in the composition and quality of the Company’s loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.
Investment Securities Gains/(Losses)
During 2012, the Company realized investment gains of $1.2 million from the sale of certain equity positions related to community banks and bank holding companies. In addition, the Company also recognized gains of $0.3 million associated with the calls of trust preferred securities.
These gains were partially offset by $0.6 million of credit-related net investment impairment losses that were recorded by the Company in 2012. The charges deemed to be other than temporary were related to pooled bank trust preferreds with a remaining carrying value of $3.5 million at December 31, 2012. The credit-related net impairment charges related to the pooled bank trust preferred securities were based on the Company’s quarterly reviews of its investment securities for indications of losses considered to be other than temporary.
Non-interest Income
Exclusive of net investment securities gains and losses, non-interest income increased $1.9 million to $54.3 million for the year ended December 31, 2012 as compared to $52.4 million for the year ended December 31, 2011. Bankcard interchange fees increased $1.3 million, or 11.3%, to $12.4 million for the year ended December 31, 2012. This increase was primarily due to increased transaction volumes. In addition, trust and investment management fee income increased $0.7 million, or 21.5%, to $3.8 million due to core growth as Virginia Savings Bancorp did not offer these services. Other income increased $0.6 million, or 30.8%, to $2.7 million due largely to an increase in mortgage related lending activity.
3
Exclusive of other than temporary investment impairment losses and investment losses, total non-interest income increased $1.2 million to $14.3 million for the fourth quarter of 2012 as compared to the fourth quarter of 2011. This increase was due primarily to an increase in service charges from depository accounts of $0.6 million, an increase of $0.3 million in other income, and an increase of $0.2 million in trust and investment management fee income.
Non-interest Expenses
During 2012, the Company recognized $4.7 million of acquisition and integration expenses associated with the completed acquisition of Virginia Savings Bancorp and the upcoming acquisition of Community Financial Corporation. In comparison, during 2011, the Company recorded a $3.0 million litigation reserve accrual. Excluding these expenses, noninterest expenses increased $4.6 million from $78.1 million for the year ended December 31, 2011 to $82.7 million for the year ended December 31, 2012. Included in this increase are expenses of $1.8 million related to the operation of the acquired Virginia Savings Bancorp facilities. Salaries and employee benefits increased $2.8 million due primarily to additional employees associated with the acquisition of Virginia Savings Bancorp ($1.0 million) and increased health insurance costs ($1.0 million). Repossessed asset losses increased $1.1 million due to the decline in estimated fair values of several residential properties located in the eastern panhandle of West Virginia and at the Greenbrier Resort located in southern West Virginia. The Company continually reevaluates the estimated fair value of properties that it has repossessed by obtaining updated appraisals on at least an annual basis. In addition, other expenses increased $0.8 million, advertising expenses increased $0.6 million, and bankcard expenses increased $0.4 million. These increases were partially offset by a decrease in FDIC insurance expense of $1.0 million due to a change in the assessment base methodology during the third quarter of 2011.
For the fourth quarter of 2012, total non-interest expenses increased $2.6 million, from $18.7 million for the fourth quarter of 2011 to $21.3 million. Salaries and employee benefit expense increased $1.0 million, primarily associated with the acquisition of Virginia Savings Bancorp and increased health insurance costs. In addition, advertising expense increased $0.4 million, merger related expenses increased $0.3 million, occupancy and equipment expenses increased $0.2 million, and repossessed asset losses increased $0.2 million from the fourth quarter of 2011.
Balance Sheet Trends
Loans increased $173.3 million (8.8%) from December 31, 2011 to $2.15 billion at December 31, 2012, in part due to the Company’s acquisition of Virginia Savings Bancorp, Inc. ($72.0 million). Excluding the Virginia Savings Bancorp, Inc. acquisition, loans increased $101.3 million (5.1%) from December 31, 2011 to $2.07 billion at December 31, 2012. Increases in residential real estate loans of $69.7 million (7.5%) and commercial real estate loans of $57.6 million (7.9%) were partially offset by a decline in commercial and industrial (“C&I”) loans of $23.9 million.
4
Total average depository balances increased $186.9 million, or 8.5%, from the quarter ended December 31, 2011 to the quarter ended December 31, 2012. This growth was primarily attributable to deposits acquired from Virginia Savings Bancorp, Inc. ($122.7 million). Exclusive of this contribution, the Company experienced increases in noninterest-bearing demand deposits ($35.2 million), savings deposits ($31.5 million), and interest-bearing demand deposits ($20.3 million) that were partially offset by a decrease in time deposits ($22.9 million).
Income Tax Expense
The Company’s effective income tax rate for the quarter and year ended December 31, 2012 was 34.9% and 34.3%, respectively, compared to 33.2% and 33.6% for the quarter and year ended December 31, 2011, respectively.
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 89.1% and the loan to asset ratio was 73.6% at December 31, 2012. The Company maintained investment securities totaling 13.8% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 51.1% of assets at December 31, 2012. Time deposits fund 31.5% of assets at December 31, 2012, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.
The Company is also strongly capitalized. The Company’s tangible equity ratio was 9.4% at both December 31, 2012 and at December 31, 2011. At December 31, 2012, City National Bank’s leverage ratio is 8.72%, its tier I capital ratio is 11.51%, and its total risk-based capital ratio is 12.40%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On December 19, 2012, the Board approved a quarterly cash dividend of 35 cents per share payable January 31, 2013, to shareholders of record as of January 15, 2013. During the year ended December 31, 2012, the Company repurchased 237,535 common shares at a weighted average price of $33.32 as part of a one million share repurchase plan authorized by the Board of Directors in July 2011. At December 31, 2012, the Company could repurchase approximately 454,000 shares under the July 2011 authorization.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 73 branches across West Virginia, Kentucky, Virginia, and Ohio.
City completed the acquisition of Staunton, Virginia-based Community Financial Corporation (“Community”) and its wholly owned banking subsidiary, Community Bank effective January 10, 2013 at 12:01 a.m. The merger, which was announced in August 2012, received the approval of all required regulatory agencies in December 2012 and Community’s shareholders on January 8, 2013. Community shareholders received 0.1753 shares of City stock for each share of Community common stock, resulting in the issuance of 766,849 shares of City Holding Company. In connection with the acquisition, City repaid Community’s borrowings under the U.S. Troubled Asset Relief Program (TARP) of $12.6 million on January 9, 2013.
5
At December 31, 2012, Community had total assets of approximately $460 million, with stockholders’ equity of approximately $53 million, loans of approximately $410 million, and deposits of approximately $380 million. In addition, nonperforming assets at December 31, 2012 totaled $27 million. During the quarter ended December 31, 2012, Community had net interest income of $5.1 million, noninterest income of $0.85 million, and noninterest expenses of $4.3 million. Included in the noninterest expenses for the quarter ending December 31, 2012 were compensation and benefit costs of $2.0 million, repossessed asset losses of $0.8 million, data processing expenses of $0.25 million, and professional expenses of $0.2 million. City expects to reduce compensation and benefit expenses by approximately 25% based on employees retained after January 2013. During the fourth quarter of 2012, City recognized approximately $0.2 million, after taxes, of one-time merger related expenses for the Community acquisition and anticipates that between $4.0 million and $4.6 million, after taxes, will be recognized in the first quarter of 2013. Additionally, the credit mark originally estimated at $55 million is now anticipated to be in the range of $46 million to $51 million.
This acquisition further expands City’s presence in Virginia by adding ten branches and City grows to $3.4 billion in assets with 83 banking offices in West Virginia, Virginia, Kentucky, and 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 incur increased charge-offs in the future; (3) the Company could have adverse legal actions of a material nature; (4) the Company may face competitive loss of customers; (5) the Company may be unable to manage its expense levels; (6) the Company may have difficulty retaining key employees; (7) changes in the interest rate environment may have results on the Company’s operations materially different from those anticipated by the Company’s market risk management functions; (8) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (9) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company’s operating results; (10) the Company may experience difficulties growing loan and deposit balances; (11) the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; (12) continued deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; (13) the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) recently adopted by the United States Congress and (14) the integration of the operations of City Holding and Community Financial may be more difficult than anticipated.
6
Forward-looking statements made herein reflect management’s expectations as of the date such statements are made. 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. Further, the Company is required to evaluate subsequent events through the filing of its December 31, 2012 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2012 results and will adjust the amounts if necessary.
7
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Financial Highlights
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(Unaudited)
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Book Value and Market Price Range per Share
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Market Price
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Book Value per Share
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Range per Share
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March 31
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June 30
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September 30
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December 31
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Low
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High
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2008
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$ | 18.92 | $ | 18.72 | $ | 17.61 | $ | 17.58 | $ | 29.08 | $ | 42.88 | ||||||||||||
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2009
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17.69 | 18.24 | 18.95 | 19.37 | 20.88 | 34.34 | ||||||||||||||||||
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2010
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19.71 | 20.02 | 20.31 | 20.31 | 26.87 | 38.03 | ||||||||||||||||||
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2011
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20.39 | 20.58 | 20.86 | 21.05 | 26.06 | 37.22 | ||||||||||||||||||
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2012
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21.46 | 21.63 | 22.14 | 22.47 | 30.96 | 37.16 | ||||||||||||||||||
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Earnings per Basic Share
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Quarter Ended
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March 31
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June 30
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September 30
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December 31
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Year-to-Date
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2008
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$ | 0.81 | $ | 0.83 | $ | (0.16 | ) | $ | 0.26 | $ | 1.74 | |||||||||||||
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2009
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0.69 | 0.64 | 0.66 | 0.70 | 2.69 | |||||||||||||||||||
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2010
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0.59 | 0.68 | 0.58 | 0.64 | 2.48 | |||||||||||||||||||
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2011
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0.62 | 0.65 | 0.77 | 0.65 | 2.68 | |||||||||||||||||||
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2012
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0.68 | 0.50 | 0.71 | 0.73 | 2.63 | |||||||||||||||||||
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Earnings per Diluted Share
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Quarter Ended
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March 31
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June 30
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September 30
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December 31
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Year-to-Date
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||||||||||||||||||||
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2008
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$ | 0.80 | $ | 0.83 | $ | (0.16 | ) | $ | 0.26 | $ | 1.74 | |||||||||||||
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2009
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0.69 | 0.64 | 0.66 | 0.70 | 2.68 | |||||||||||||||||||
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2010
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0.58 | 0.68 | 0.58 | 0.64 | 2.47 | |||||||||||||||||||
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2011
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0.62 | 0.64 | 0.76 | 0.65 | 2.67 | |||||||||||||||||||
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2012
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0.67 | 0.50 | 0.71 | 0.73 | 2.61 | |||||||||||||||||||
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Consolidated Statements of Income
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(Unaudited) ($ in 000s, except per share data)
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Three Months Ended December 31,
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2012
|
2011
|
|||||||
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Interest Income
|
||||||||
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Interest and fees on loans
|
$ | 25,588 | $ | 22,998 | ||||
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Interest on investment securities:
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||||||||
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Taxable
|
2,940 | 4,036 | ||||||
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Tax-exempt
|
341 | 398 | ||||||
|
Interest on federal funds sold
|
15 | 9 | ||||||
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Total Interest Income
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28,884 | 27,441 | ||||||
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Interest Expense
|
||||||||
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Interest on deposits
|
3,114 | 3,965 | ||||||
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Interest on short-term borrowings
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83 | 86 | ||||||
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Interest on long-term debt
|
163 | 165 | ||||||
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Total Interest Expense
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3,360 | 4,216 | ||||||
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Net Interest Income
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25,524 | 23,225 | ||||||
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Provision for loan losses
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1,775 | 2,229 | ||||||
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Net Interest Income After Provision for Loan Losses
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23,749 | 20,996 | ||||||
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Non-Interest Income
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Total investment securities impairment losses
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- | (918 | ) | |||||
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Noncredit impairment losses recognized in other comprehensive income
|
- | - | ||||||
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Net investment securities impairment losses
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- | (918 | ) | |||||
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Gains on sale of investment securities
|
- | 1 | ||||||
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Net investment securities losses
|
- | (917 | ) | |||||
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Service charges
|
7,113 | 6,511 | ||||||
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Bankcard interchange fees
|
3,101 | 2,849 | ||||||
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Insurance commissions
|
1,289 | 1,433 | ||||||
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Trust and investment management fee income
|
1,112 | 925 | ||||||
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Bank owned life insurance
|
754 | 728 | ||||||
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Other income
|
897 | 599 | ||||||
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Total Non-Interest Income
|
14,266 | 12,128 | ||||||
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Non-Interest Expense
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Salaries and employee benefits
|
11,301 | 10,320 | ||||||
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Occupancy and equipment
|
2,147 | 1,929 | ||||||
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Depreciation
|
1,234 | 1,100 | ||||||
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FDIC insurance expense
|
407 | 300 | ||||||
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Advertising
|
596 | 153 | ||||||
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Bankcard expenses
|
628 | 566 | ||||||
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Postage, delivery, and statement mailings
|
514 | 484 | ||||||
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Office supplies
|
412 | 429 | ||||||
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Legal and professional fees
|
437 | 366 | ||||||
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Telecommunications
|
405 | 388 | ||||||
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Repossessed asset (gains)/losses, net of expenses
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146 | (27 | ) | |||||
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Merger related expenses
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373 | - | ||||||
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Other expenses
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2,673 | 2,677 | ||||||
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Total Non-Interest Expense
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21,273 | 18,685 | ||||||
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Income Before Income Taxes
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16,742 | 14,439 | ||||||
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Income tax expense
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5,848 | 4,787 | ||||||
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Net Income Available to Common Shareholders
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$ | 10,894 | $ | 9,652 | ||||
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Distributed earnings allocated to common shareholders
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$ | 5,151 | $ | 5,136 | ||||
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Undistributed earnings allocated to common shareholders
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5,658 | 4,446 | ||||||
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Net earnings allocated to common shareholders
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$ | 10,809 | $ | 9,582 | ||||
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Average common shares outstanding
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14,755 | 14,743 | ||||||
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Effect of dilutive securities:
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Employee stock options
|
82 | 71 | ||||||
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Shares for diluted earnings per share
|
14,837 | 14,814 | ||||||
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Basic earnings per common share
|
$ | 0.73 | $ | 0.65 | ||||
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Diluted earnings per common share
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$ | 0.73 | $ | 0.65 | ||||
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Dividends declared per common share
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$ | 0.35 | $ | 0.35 | ||||
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Comprehensive Income
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$ | 9,837 | $ | 8,446 | ||||
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Consolidated Statements of Income
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(Unaudited) ($ in 000s, except per share data)
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Twelve months ended December 31,
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2012
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2011
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Interest Income
|
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|
Interest and fees on loans
|
$ | 96,432 | $ | 93,414 | ||||
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Interest on investment securities:
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||||||||
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Taxable
|
14,285 | 17,729 | ||||||
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Tax-exempt
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1,442 | 1,697 | ||||||
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Interest on federal funds sold
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53 | 48 | ||||||
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Total Interest Income
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112,212 | 112,888 | ||||||
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Interest Expense
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||||||||
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Interest on deposits
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13,477 | 19,794 | ||||||
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Interest on short-term borrowings
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312 | 325 | ||||||
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Interest on long-term debt
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661 | 639 | ||||||
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Total Interest Expense
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14,450 | 20,758 | ||||||
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Net Interest Income
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97,762 | 92,130 | ||||||
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Provision for loan losses
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6,375 | 4,600 | ||||||
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Net Interest Income After Provision for Loan Losses
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91,387 | 87,530 | ||||||
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Non-Interest Income
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Total investment securities impairment losses
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(878 | ) | (2,767 | ) | ||||
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Noncredit impairment losses recognized in other comprehensive income
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302 | 1,494 | ||||||
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Net investment securities impairment losses
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(576 | ) | (1,273 | ) | ||||
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Gains on sale of investment securities
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1,530 | 3,756 | ||||||
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Net investment securities gains
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954 | 2,483 | ||||||
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Service charges
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26,409 | 26,959 | ||||||
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Bankcard interchange fees
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12,406 | 11,150 | ||||||
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Insurance commissions
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6,071 | 5,946 | ||||||
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Trust and investment management fee income
|
3,774 | 3,106 | ||||||
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Bank owned life insurance
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2,983 | 3,183 | ||||||
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Other income
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2,660 | 2,033 | ||||||
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Total Non-Interest Income
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55,257 | 54,860 | ||||||
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Non-Interest Expense
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Salaries and employee benefits
|
43,509 | 40,717 | ||||||
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Occupancy and equipment
|
8,186 | 8,013 | ||||||
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Depreciation
|
4,605 | 4,508 | ||||||
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FDIC insurance expense
|
1,590 | 2,576 | ||||||
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Advertising
|
2,589 | 2,007 | ||||||
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Bankcard expenses
|
2,662 | 2,258 | ||||||
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Postage, delivery, and statement mailings
|
2,079 | 2,099 | ||||||
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Office supplies
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1,669 | 1,911 | ||||||
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Legal and professional fees
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1,786 | 4,913 | ||||||
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Telecommunications
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1,614 | 1,605 | ||||||
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Repossessed asset losses, net of expenses
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1,346 | 272 | ||||||
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Merger related expenses
|
4,708 | - | ||||||
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Other expenses
|
11,058 | 10,262 | ||||||
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Total Non-Interest Expense
|
87,401 | 81,141 | ||||||
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Income Before Income Taxes
|
59,243 | 61,249 | ||||||
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Income tax expense
|
20,298 | 20,571 | ||||||
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Net Income Available to Common Shareholders
|
$ | 38,945 | $ | 40,678 | ||||
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Distributed earnings allocated to common shareholders
|
$ | 20,603 | $ | 20,102 | ||||
|
Undistributed earnings allocated to common shareholders
|
18,034 | 20,280 | ||||||
|
Net earnings allocated to common shareholders
|
$ | 38,637 | $ | 40,382 | ||||
|
Average common shares outstanding
|
14,714 | 15,055 | ||||||
|
Effect of dilutive securities:
|
||||||||
|
Employee stock options
|
82 | 75 | ||||||
|
Shares for diluted earnings per share
|
14,796 | 15,130 | ||||||
|
Basic earnings per common share
|
$ | 2.63 | $ | 2.68 | ||||
|
Diluted earnings per common share
|
$ | 2.61 | $ | 2.67 | ||||
|
Dividends declared per common share
|
$ | 1.40 | $ | 1.37 | ||||
|
Comprehensive Income
|
$ | 41,430 | $ | 39,268 | ||||
|
Consolidated Statements of Changes in Stockholders' Equity
|
||||||||
|
(Unaudited) ($ in 000s)
|
||||||||
|
Three Months Ended
|
||||||||
|
December 31, 2012
|
December 31, 2011
|
|||||||
|
Balance at October 1
|
$ | 328,415 | $ | 309,892 | ||||
|
Net income
|
10,894 | 9,652 | ||||||
|
Other comprehensive income:
|
||||||||
|
Change in unrealized loss on securities available-for-sale
|
(794 | ) | (288 | ) | ||||
|
Change in underfunded pension liability
|
(263 | ) | (918 | ) | ||||
|
Cash dividends declared ($0.35/share) and ($0.35/share), respectively
|
(5,192 | ) | (5,137 | ) | ||||
|
Issuance of stock award shares, net
|
214 | 201 | ||||||
|
Exercise of 3,000 stock options
|
- | 94 | ||||||
|
Purchase of 80,000 common shares of treasury
|
- | (2,362 | ) | |||||
|
Balance at December 31
|
$ | 333,274 | $ | 311,134 | ||||
|
Twelve Months Ended
|
||||||||
|
December 31, 2012
|
December 31, 2011
|
|||||||
|
Balance at January 1
|
$ | 311,134 | $ | 314,861 | ||||
|
Net income
|
38,945 | 40,678 | ||||||
|
Other comprehensive income:
|
||||||||
|
Change in unrealized gain (loss) on securities available-for-sale
|
2,749 | (196 | ) | |||||
|
Change in unrealized (loss) on interest rate floors
|
- | (295 | ) | |||||
|
Change in underfunded pension liability
|
(264 | ) | (919 | ) | ||||
|
Cash dividends declared ($1.40/share) and ($1.37/share), respectively
|
(20,725 | ) | (20,533 | ) | ||||
|
Issuance of stock award shares, net
|
1,083 | 1,066 | ||||||
|
Acquisition of Virgina Savings Bancorp
|
7,723 | - | ||||||
|
Exercise of 18,899 stock options
|
544 | - | ||||||
|
Exercise of 9,576 stock options
|
- | 262 | ||||||
|
Purchase of 237,535 common shares of treasury
|
(7,915 | ) | - | |||||
|
Purchase of 755,501 common shares of treasury
|
- | (23,790 | ) | |||||
|
Balance at December 31
|
$ | 333,274 | $ | 311,134 | ||||
|
Condensed Consolidated Quarterly Statements of Income
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s, except per share data)
|
||||||||||||||||||||
|
Quarter Ended
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2011
|
||||||||||||||||
|
Interest income
|
$ | 28,884 | $ | 28,432 | $ | 27,466 | $ | 27,430 | $ | 27,441 | ||||||||||
|
Taxable equivalent adjustment
|
183 | 185 | 198 | 208 | 215 | |||||||||||||||
|
Interest income (FTE)
|
29,067 | 28,617 | 27,664 | 27,638 | 27,656 | |||||||||||||||
|
Interest expense
|
3,360 | 3,557 | 3,625 | 3,908 | 4,216 | |||||||||||||||
|
Net interest income
|
25,707 | 25,060 | 24,039 | 23,730 | 23,440 | |||||||||||||||
|
Provision for loan losses
|
1,775 | 975 | 1,675 | 1,950 | 2,229 | |||||||||||||||
|
Net interest income after provision
|
||||||||||||||||||||
|
for loan losses
|
23,932 | 24,085 | 22,364 | 21,780 | 21,211 | |||||||||||||||
|
Noninterest income
|
14,266 | 14,079 | 13,790 | 13,118 | 12,128 | |||||||||||||||
|
Noninterest expense
|
21,273 | 21,846 | 24,763 | 19,515 | 18,685 | |||||||||||||||
|
Income before income taxes
|
16,925 | 16,318 | 11,391 | 15,383 | 14,654 | |||||||||||||||
|
Income tax expense
|
5,848 | 5,526 | 3,780 | 5,144 | 4,787 | |||||||||||||||
|
Taxable equivalent adjustment
|
183 | 185 | 198 | 208 | 215 | |||||||||||||||
|
Net income available to common shareholders
|
$ | 10,894 | $ | 10,607 | $ | 7,413 | $ | 10,031 | $ | 9,652 | ||||||||||
|
Distributed earnings allocated to common shareholders
|
$ | 5,151 | $ | 5,150 | $ | 5,146 | $ | 5,118 | $ | 5,136 | ||||||||||
|
Undistributed earnings allocated to common shareholders
|
5,658 | 5,373 | 2,208 | 4,837 | 4,446 | |||||||||||||||
|
Net earnings allocated to common shareholders
|
$ | 10,809 | $ | 10,523 | $ | 7,354 | $ | 9,955 | $ | 9,582 | ||||||||||
|
Average common shares outstanding
|
14,755 | 14,751 | 14,680 | 14,679 | 14,743 | |||||||||||||||
|
Effect of dilutive securities:
|
||||||||||||||||||||
|
Employee stock options
|
82 | 83 | 79 | 80 | 71 | |||||||||||||||
|
Shares for diluted earnings per share
|
14,837 | 14,834 | 14,759 | 14,759 | 14,814 | |||||||||||||||
|
Basic earnings per common share
|
$ | 0.73 | $ | 0.71 | $ | 0.50 | $ | 0.68 | $ | 0.65 | ||||||||||
|
Diluted earnings per common share
|
0.73 | 0.71 | 0.50 | 0.67 | 0.65 | |||||||||||||||
|
Cash dividends declared per share
|
0.35 | 0.35 | 0.35 | 0.35 | 0.35 | |||||||||||||||
|
Net Interest Margin
|
3.99 | % | 3.95 | % | 3.91 | % | 3.98 | % | 3.90 | % | ||||||||||
|
Interest Income from Accretion Related to Fair Value Adjusments Recorded as a Result of Acquisition
|
$ | 1,658 | $ | 936 | $ | - | $ | - | $ | - | ||||||||||
|
Non-Interest Income and Non-Interest Expense
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
Quarter Ended
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2011
|
||||||||||||||||
|
Non-Interest Income:
|
||||||||||||||||||||
|
Service charges
|
$ | 7,113 | $ | 6,750 | $ | 6,497 | $ | 6,048 | $ | 6,511 | ||||||||||
|
Bankcard interchange fees
|
3,101 | 3,111 | 3,152 | 3,042 | 2,849 | |||||||||||||||
|
Insurance commissions
|
1,289 | 1,439 | 1,347 | 1,996 | 1,433 | |||||||||||||||
|
Trust and investment management fee income
|
1,112 | 912 | 942 | 807 | 925 | |||||||||||||||
|
Bank owned life insurance
|
754 | 738 | 766 | 723 | 728 | |||||||||||||||
|
Other income
|
897 | 671 | 558 | 533 | 599 | |||||||||||||||
|
Subtotal
|
14,266 | 13,621 | 13,262 | 13,149 | 13,045 | |||||||||||||||
|
Total investment securities impairment losses
|
- | (272 | ) | (606 | ) | - | (918 | ) | ||||||||||||
|
Noncredit impairment losses recognized in other
|
||||||||||||||||||||
|
comprehensive income
|
- | - | 302 | - | - | |||||||||||||||
|
Net investment securities impairment losses
|
- | (272 | ) | (304 | ) | - | (918 | ) | ||||||||||||
|
Gain (loss) on sale of investment securities
|
- | 730 | 832 | (31 | ) | 1 | ||||||||||||||
|
Total Non-Interest Income
|
$ | 14,266 | $ | 14,079 | $ | 13,790 | $ | 13,118 | $ | 12,128 | ||||||||||
|
Non-Interest Expense:
|
||||||||||||||||||||
|
Salaries and employee benefits
|
$ | 11,301 | $ | 11,295 | $ | 10,668 | $ | 10,245 | $ | 10,320 | ||||||||||
|
Occupancy and equipment
|
2,147 | 2,126 | 1,978 | 1,935 | 1,929 | |||||||||||||||
|
Depreciation
|
1,234 | 1,175 | 1,109 | 1,086 | 1,100 | |||||||||||||||
|
FDIC insurance expense
|
407 | 405 | 394 | 385 | 300 | |||||||||||||||
|
Advertising
|
596 | 674 | 675 | 644 | 153 | |||||||||||||||
|
Bankcard expenses
|
628 | 720 | 694 | 620 | 566 | |||||||||||||||
|
Postage, delivery and statement mailings
|
514 | 529 | 488 | 548 | 484 | |||||||||||||||
|
Office supplies
|
412 | 407 | 396 | 455 | 429 | |||||||||||||||
|
Legal and professional fees
|
437 | 611 | 421 | 317 | 366 | |||||||||||||||
|
Telecommunications
|
405 | 433 | 387 | 389 | 388 | |||||||||||||||
|
Repossessed asset (gains) losses, net of expenses
|
146 | 429 | 650 | 121 | (27 | ) | ||||||||||||||
|
Merger related expenses
|
373 | 157 | 4,042 | 135 | - | |||||||||||||||
|
Other expenses
|
2,673 | 2,885 | 2,861 | 2,635 | 2,677 | |||||||||||||||
|
Total Non-Interest Expense
|
$ | 21,273 | $ | 21,846 | $ | 24,763 | $ | 19,515 | $ | 18,685 | ||||||||||
|
Employees (Full Time Equivalent)
|
843 | 836 | 831 | 797 | 795 | |||||||||||||||
|
Branch Locations
|
73 | 73 | 73 | 68 | 68 | |||||||||||||||
|
Consolidated Balance Sheets
|
||||||||
|
($ in 000s)
|
||||||||
|
December 31
|
December 31
|
|||||||
|
2012
|
2011
|
|||||||
|
(Unaudited)
|
||||||||
|
Assets
|
||||||||
|
Cash and due from banks
|
$ | 58,718 | $ | 140,873 | ||||
|
Interest-bearing deposits in depository institutions
|
16,276 | 5,526 | ||||||
|
Federal funds sold
|
10,000 | - | ||||||
|
Cash and cash equivalents
|
84,994 | 146,399 | ||||||
|
Investment securities available-for-sale, at fair value
|
377,122 | 360,783 | ||||||
|
Investment securities held-to-maturity, at amortized cost
|
13,454 | 23,458 | ||||||
|
Other securities
|
11,463 | 11,934 | ||||||
|
Total investment securities
|
402,039 | 396,175 | ||||||
|
Gross loans
|
2,146,369 | 1,973,103 | ||||||
|
Allowance for loan losses
|
(18,809 | ) | (19,409 | ) | ||||
|
Net loans
|
2,127,560 | 1,953,694 | ||||||
|
Bank owned life insurance
|
81,901 | 78,961 | ||||||
|
Premises and equipment, net
|
72,728 | 64,612 | ||||||
|
Accrued interest receivable
|
6,692 | 7,093 | ||||||
|
Net deferred tax assets
|
32,737 | 32,219 | ||||||
|
Intangible assets
|
65,057 | 56,164 | ||||||
|
Other assets
|
43,758 | 41,792 | ||||||
|
Total Assets
|
$ | 2,917,466 | $ | 2,777,109 | ||||
|
Liabilities
|
||||||||
|
Deposits:
|
||||||||
|
Noninterest-bearing
|
$ | 429,969 | $ | 369,025 | ||||
|
Interest-bearing:
|
||||||||
|
Demand deposits
|
553,132 | 526,824 | ||||||
|
Savings deposits
|
506,869 | 439,823 | ||||||
|
Time deposits
|
919,346 | 885,596 | ||||||
|
Total deposits
|
2,409,316 | 2,221,268 | ||||||
|
Short-term borrowings
|
||||||||
|
Federal Funds purchased
|
- | 75,000 | ||||||
|
Customer repurchase agreements
|
114,646 | 114,050 | ||||||
|
Long-term debt
|
16,495 | 16,495 | ||||||
|
Other liabilities
|
43,735 | 39,162 | ||||||
|
Total Liabilities
|
2,584,192 | 2,465,975 | ||||||
|
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 shares issued at December 31, 2012 and December 31, 2011
|
||||||||
|
less 3,665,999 and 3,717,993 shares in treasury, respectively
|
46,249 | 46,249 | ||||||
|
Capital surplus
|
103,524 | 103,335 | ||||||
|
Retained earnings
|
309,270 | 291,050 | ||||||
|
Cost of common stock in treasury
|
(124,347 | ) | (125,593 | ) | ||||
|
Accumulated other comprehensive loss:
|
||||||||
|
Unrealized gain on securities available-for-sale
|
3,573 | 825 | ||||||
|
Underfunded pension liability
|
(4,995 | ) | (4,732 | ) | ||||
|
Total Accumulated Other Comprehensive Loss
|
(1,422 | ) | (3,907 | ) | ||||
|
Total Stockholders' Equity
|
333,274 | 311,134 | ||||||
|
Total Liabilities and Stockholders' Equity
|
$ | 2,917,466 | $ | 2,777,109 | ||||
|
Investment Portfolio
|
||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||
|
Original Cost
|
Credit-Related Net Investment Impairment Losses through December 31, 2012
|
Unrealized Gains (Losses)
|
Carrying Value
|
|||||||||||||
|
US Government Agencies
|
$ | 3,792 | $ | - | $ | 96 | $ | 3,888 | ||||||||
|
Mortgage Backed Securities
|
282,572 | - | 7,182 | 289,754 | ||||||||||||
|
Municipal Bonds
|
47,293 | - | 1,636 | 48,929 | ||||||||||||
|
Pooled Bank Trust Preferreds
|
26,917 | (20,171 | ) | (3,206 | ) | 3,540 | ||||||||||
|
Single Issuer Bank Trust Preferreds,
|
||||||||||||||||
|
Subdebt of Financial Institutions, and
|
||||||||||||||||
|
Bank Holding Company Preferred Stocks
|
40,401 | (1,015 | ) | (880 | ) | 38,506 | ||||||||||
|
Money Markets and Mutual Funds
|
1,724 | - | 50 | 1,774 | ||||||||||||
|
Federal Reserve Bank and FHLB stock
|
11,463 | - | - | 11,463 | ||||||||||||
|
Community Bank Equity Positions
|
8,194 | (4,813 | ) | 804 | 4,185 | |||||||||||
|
Total Investments
|
$ | 422,356 | $ | (25,999 | ) | $ | 5,682 | $ | 402,039 | |||||||
|
Loan Portfolio
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2011
|
||||||||||||||||
|
Residential real estate (1)
|
$ | 1,031,435 | $ | 1,008,305 | $ | 997,016 | $ | 939,611 | $ | 929,788 | ||||||||||
|
Home equity - junior liens
|
143,110 | 143,058 | 143,400 | 139,764 | 141,797 | |||||||||||||||
|
Commercial and industrial
|
108,739 | 105,027 | 116,288 | 108,707 | 130,899 | |||||||||||||||
|
Commercial real estate (2)
|
821,970 | 787,887 | 768,176 | 745,586 | 732,146 | |||||||||||||||
|
Consumer
|
36,564 | 38,285 | 37,383 | 35,448 | 35,845 | |||||||||||||||
|
DDA overdrafts
|
4,551 | 2,670 | 3,326 | 2,848 | 2,628 | |||||||||||||||
|
Gross Loans
|
$ | 2,146,369 | $ | 2,085,232 | $ | 2,065,589 | $ | 1,971,964 | $ | 1,973,103 | ||||||||||
|
Construction loans included in:
|
||||||||||||||||||||
|
(1) - Residential real estate loans
|
$ | 15,408 | $ | 12,787 | $ | 11,919 | $ | 11,613 | $ | 9,287 | ||||||||||
|
(2) - Commercial real estate loans
|
$ | 15,352 | $ | 17,072 | $ | 18,544 | $ | 20,661 | $ | 20,201 | ||||||||||
|
CITY HOLDING COMPANY AND SUBSIDIARIES
|
||||||||||||||||||||
|
Acquisition Activity - Accretion
|
||||||||||||||||||||
|
(Unaudited) ($ in millions)
|
||||||||||||||||||||
|
The following table presents the accretion related to the fair value adjustments on net interest income recorded as a result of the Virginia Savings Bancorp acquisition completed on May 31, 2012.
|
||||||||||||||||||||
|
Loan
|
Certificates of
|
|||||||||||||||||||
|
Year Ended:
|
Accretion(a)
|
Deposit(a)
|
Total
|
|||||||||||||||||
| 2012 | $ | 2.4 | $ | 0.2 | $ | 2.6 | ||||||||||||||
| 2013 | 2.2 | 0.4 | 2.6 | |||||||||||||||||
| 2014 | 1.1 | 0.4 | 1.4 | |||||||||||||||||
| 2015 | 0.8 | 0.3 | 1.1 | |||||||||||||||||
|
Thereafter
|
1.5 | 1.1 | 2.5 | |||||||||||||||||
|
a - 2012 amounts are based on actual results. 2013, 2014, 2015, and Thereafter amounts are based on estimated amounts.
|
||||||||||||||||||||
|
Note: The amounts reflected in the table above require management to make significant assumptions based on
|
||||||||||||||||||||
|
estimated future default, prepayment, and discount rates. Actual performance could be significantly different from that
|
||||||||||||||||||||
|
assumed, which could result in the actual results being materially different from the amounts estimated above.
|
||||||||||||||||||||
|
Consolidated Average Balance Sheets, Yields, and Rates
|
||||||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||||||
|
Twelve Months Ended December 31,
|
||||||||||||||||||||||||
|
|
|
2012
|
|
|
2011
|
|
||||||||||||||||||
|
|
Average
|
|
Yield/
|
Average
|
|
Yield/
|
||||||||||||||||||
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
|
Assets:
|
||||||||||||||||||||||||
|
Loan portfolio (1):
|
||||||||||||||||||||||||
|
Residential real estate (2), (3)
|
$ | 1,114,653 | $ | 49,000 | 4.40 | % | $ | 1,040,460 | $ | 48,948 | 4.70 | % | ||||||||||||
|
Commercial, financial, and agriculture (4), (5)
|
880,502 | 40,815 | 4.64 | % | 812,401 | 37,955 | 4.67 | % | ||||||||||||||||
|
Installment loans to individuals (6, (7))
|
46,721 | 3,311 | 7.09 | % | 46,167 | 3,375 | 7.31 | % | ||||||||||||||||
|
Previously securitized loans (8)
|
*** | 3,306 | *** | 360 | 3,136 | 871.11 | % | |||||||||||||||||
|
Total loans
|
2,041,876 | 96,432 | 4.72 | % | 1,899,388 | 93,414 | 4.92 | % | ||||||||||||||||
|
Securities:
|
||||||||||||||||||||||||
|
Taxable
|
371,092 | 14,285 | 3.85 | % | 408,472 | 17,729 | 4.34 | % | ||||||||||||||||
|
Tax-exempt (9)
|
38,339 | 2,218 | 5.79 | % | 46,041 | 2,611 | 5.67 | % | ||||||||||||||||
|
Total securities
|
409,431 | 16,503 | 4.03 | % | 454,513 | 20,340 | 4.48 | % | ||||||||||||||||
|
Deposits in depository institutions
|
7,258 | - | - | 7,655 | - | - | ||||||||||||||||||
|
Federal funds sold
|
30,507 | 53 | 0.17 | % | 29,928 | 48 | 0.16 | % | ||||||||||||||||
|
Total interest-earning assets
|
2,489,072 | 112,988 | 4.54 | % | 2,391,484 | 113,802 | 4.76 | % | ||||||||||||||||
|
Cash and due from banks
|
74,193 | 58,247 | ||||||||||||||||||||||
|
Bank premises and equipment
|
69,772 | 64,678 | ||||||||||||||||||||||
|
Other assets
|
223,783 | 206,724 | ||||||||||||||||||||||
|
Less: Allowance for loan losses
|
(19,586 | ) | (19,413 | ) | ||||||||||||||||||||
|
Total assets
|
$ | 2,837,234 | $ | 2,701,720 | ||||||||||||||||||||
|
Liabilities:
|
||||||||||||||||||||||||
|
Interest-bearing demand deposits
|
534,211 | 697 | 0.13 | % | 493,433 | 895 | 0.18 | % | ||||||||||||||||
|
Savings deposits
|
479,760 | 759 | 0.16 | % | 420,212 | 1,023 | 0.24 | % | ||||||||||||||||
|
Time deposits (10)
|
909,951 | 12,021 | 1.32 | % | 927,789 | 17,876 | 1.93 | % | ||||||||||||||||
|
Short-term borrowings
|
121,780 | 312 | 0.26 | % | 123,569 | 325 | 0.26 | % | ||||||||||||||||
|
Long-term debt
|
16,495 | 661 | 4.01 | % | 16,495 | 639 | 3.87 | % | ||||||||||||||||
|
Total interest-bearing liabilities
|
2,062,197 | 14,450 | 0.70 | % | 1,981,498 | 20,758 | 1.05 | % | ||||||||||||||||
|
Noninterest-bearing demand deposits
|
414,969 | 379,980 | ||||||||||||||||||||||
|
Other liabilities
|
34,995 | 24,081 | ||||||||||||||||||||||
|
Stockholders' equity
|
325,073 | 316,161 | ||||||||||||||||||||||
|
Total liabilities and
|
||||||||||||||||||||||||
|
stockholders' equity
|
$ | 2,837,234 | $ | 2,701,720 | ||||||||||||||||||||
|
Net interest income
|
$ | 98,538 | $ | 93,044 | ||||||||||||||||||||
|
Net yield on earning assets
|
3.96 | % | 3.89 | % | ||||||||||||||||||||
|
(1) For purposes of this table, non-accruing loans have been included in average balances and loan fees, which are immaterial, have been included in interest income.
|
||||||||||||||||||||||||
|
(2) Interest income includes $0.6 million from interest rate floors for the twelve months ended December 31, 2011.
|
||||||||||||||||||||||||
|
(3) - Interest income on residential real estate loans includes $0.7 million of accretion related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp.
|
||||||||||||||||||||||||
|
(4) Includes the Company’s commercial and industrial and commercial real estate loan categories. Interest income includes $0.5 million from interest rate floors for the twelve months ended December 31, 2011.
|
||||||||||||||||||||||||
|
(5) - Interest income on commercial, financial, and agriculture loans includes $1.6 million of accretion related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp.
|
||||||||||||||||||||||||
|
(6) Includes the Company’s consumer and DDA overdrafts loan categories.
|
||||||||||||||||||||||||
|
(7) - Interest income on installment loans to individuals includes $0.1 million of accretion related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp.
|
||||||||||||||||||||||||
|
(8) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
|
||||||||||||||||||||||||
|
(9) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
|
||||||||||||||||||||||||
|
(10) - Interest expense on time deposits includes $0.2 million in accretion of the fair market value adjustments related to the acquisition of Virginia Savings Bancorp.
|
||||||||||||||||||||||||
|
Analysis of Risk-Based Capital
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2012 (a)
|
2012
|
2012
|
2012
|
2011
|
||||||||||||||||
|
Tier I Capital:
|
||||||||||||||||||||
|
Stockholders' equity
|
$ | 333,274 | $ | 328,415 | $ | 320,622 | $ | 316,046 | $ | 311,134 | ||||||||||
|
Goodwill and other intangibles
|
(64,866 | ) | (64,912 | ) | (64,971 | ) | (55,871 | ) | (55,969 | ) | ||||||||||
|
Accumulated other comprehensive loss
|
1,422 | 365 | 2,477 | 1,737 | 3,907 | |||||||||||||||
|
Qualifying trust preferred stock
|
16,000 | 16,000 | 16,000 | 16,000 | 16,000 | |||||||||||||||
|
Unrealized loss on AFS securities
|
- | - | - | - | (448 | ) | ||||||||||||||
|
Excess deferred tax assets
|
(6,577 | ) | (7,472 | ) | (7,847 | ) | (4,020 | ) | (5,897 | ) | ||||||||||
|
Total tier I capital
|
$ | 279,254 | $ | 272,397 | $ | 266,282 | $ | 273,892 | $ | 268,727 | ||||||||||
|
Total Risk-Based Capital:
|
||||||||||||||||||||
|
Tier I capital
|
$ | 279,254 | $ | 272,397 | $ | 266,282 | $ | 273,892 | $ | 268,727 | ||||||||||
|
Qualifying allowance for loan losses
|
18,809 | 18,986 | 19,452 | 18,628 | 19,409 | |||||||||||||||
|
Total risk-based capital
|
$ | 298,063 | $ | 291,383 | $ | 285,734 | $ | 292,520 | $ | 288,136 | ||||||||||
|
Net risk-weighted assets
|
$ | 2,152,622 | $ | 2,112,581 | $ | 2,136,249 | $ | 2,050,520 | $ | 2,048,398 | ||||||||||
|
Ratios:
|
||||||||||||||||||||
|
Average stockholders' equity to average assets
|
11.49 | % | 11.32 | % | 11.47 | % | 11.55 | % | 11.65 | % | ||||||||||
|
Tangible capital ratio
|
9.40 | % | 9.29 | % | 9.03 | % | 9.54 | % | 9.37 | % | ||||||||||
|
Risk-based capital ratios:
|
||||||||||||||||||||
|
Tier I capital
|
12.97 | % | 12.89 | % | 12.46 | % | 13.36 | % | 13.12 | % | ||||||||||
|
Total risk-based capital
|
13.85 | % | 13.79 | % | 13.38 | % | 14.27 | % | 14.07 | % | ||||||||||
|
Leverage capital
|
9.82 | % | 9.67 | % | 9.74 | % | 10.23 | % | 10.18 | % | ||||||||||
|
(a) December 31, 2012 risk-based capital ratios are estimated
|
||||||||||||||||||||
|
CITY HOLDING COMPANY AND SUBSIDIARIES
|
||||||||||||||||||||
|
Intangibles
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
As of and for the Quarter Ended
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2011 | ||||||||||||||||
|
Intangibles, net
|
$ | 65,057 | $ | 65,103 | $ | 65,162 | $ | 56,066 | $ | 56,164 | ||||||||||
|
Intangibles amortization expense
|
135 | 135 | 109 | 98 | 102 | |||||||||||||||
|
Summary of Loan Loss Experience
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
Quarter Ended
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2012
|
2011
|
||||||||||||||||
|
Balance at beginning of period
|
$ | 18,986 | $ | 19,452 | $ | 18,628 | $ | 19,409 | $ | 19,848 | ||||||||||
|
Charge-offs:
|
||||||||||||||||||||
|
Commercial and industrial
|
100 | 9 | 48 | 69 | 247 | |||||||||||||||
|
Commercial real estate
|
1,744 | 845 | 26 | 1,989 | 1,650 | |||||||||||||||
|
Residential real estate
|
284 | 252 | 296 | 198 | 176 | |||||||||||||||
|
Home equity
|
366 | 133 | 347 | 509 | 475 | |||||||||||||||
|
Consumer
|
42 | 53 | 36 | 59 | 31 | |||||||||||||||
|
DDA overdrafts
|
394 | 418 | 375 | 335 | 394 | |||||||||||||||
|
Total charge-offs
|
2,930 | 1,710 | 1,128 | 3,159 | 2,973 | |||||||||||||||
|
Recoveries:
|
||||||||||||||||||||
|
Commercial and industrial
|
19 | 10 | - | 3 | 15 | |||||||||||||||
|
Commercial real estate
|
190 | 3 | - | 96 | - | |||||||||||||||
|
Residential real estate
|
7 | 8 | 3 | 4 | 10 | |||||||||||||||
|
Home equity
|
6 | 1 | 10 | 1 | 1 | |||||||||||||||
|
Consumer
|
45 | 26 | 35 | 29 | 29 | |||||||||||||||
|
DDA overdrafts
|
711 | 221 | 229 | 295 | 250 | |||||||||||||||
|
Total recoveries
|
978 | 269 | 277 | 427 | 305 | |||||||||||||||
|
Net charge-offs
|
1,952 | 1,441 | 851 | 2,731 | 2,668 | |||||||||||||||
|
Provision for loan losses
|
1,775 | 975 | 1,675 | 1,950 | 2,229 | |||||||||||||||
|
Balance at end of period
|
$ | 18,809 | $ | 18,986 | $ | 19,452 | $ | 18,628 | $ | 19,409 | ||||||||||
|
Loans outstanding
|
$ | 2,146,369 | $ | 2,085,232 | $ | 2,065,589 | $ | 1,971,964 | $ | 1,973,103 | ||||||||||
|
Average loans outstanding
|
2,104,483 | 2,070,264 | 2,019,281 | 1,972,478 | 1,940,950 | |||||||||||||||
|
Allowance as a percent of loans outstanding
|
0.88 | % | 0.91 | % | 0.94 | % | 0.94 | % | 0.98 | % | ||||||||||
|
Allowance as a percent of non-performing loans
|
84.67 | % | 82.61 | % | 88.92 | % | 88.78 | % | 87.76 | % | ||||||||||
|
Net charge-offs (annualized) as a
|
||||||||||||||||||||
|
percent of average loans outstanding
|
0.37 | % | 0.28 | % | 0.17 | % | 0.55 | % | 0.55 | % | ||||||||||
|
Net charge-offs, excluding overdraft deposit accounts,
|
||||||||||||||||||||
|
(annualized) as a percent of average loans outstanding
|
0.43 | % | 0.24 | % | 0.14 | % | 0.55 | % | 0.52 | % | ||||||||||