Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K, CHCO 4Q2013 EARNINGS RELEASE - CITY HOLDING CO | form8-k.htm |
| 8-K - PRINTABLE COPY OF FORM 8-K, CHCO 4Q2013 EARNINGS RELEASE AND EXHIBIT - CITY HOLDING CO | submissionpdf.pdf |
Exhibit 99.1
NEWS RELEASE
For Immediate Release
January 28, 2014
For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102
City Holding Company Announces Record Annual Earnings
Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $3.4 billion bank holding company headquartered in Charleston, today announced net income of $48.7 million, or $3.06 per diluted share, for the year ended December 31, 2013. City’s net income increased $9.7 million from 2012 due primarily to the acquisitions of Virginia Savings Bank in the second quarter of 2012 and Community Financial Corporation (“Community Bank”) in the first quarter of 2013. For 2013, the Company achieved a return on assets of 1.44%, a return on tangible equity of 16.4%, a net interest margin of 4.33%, and an efficiency ratio of 55.5%. Despite $5.5 million of merger-related expenses, 2013’s financial performance outpaced 2012’s results.
For the fourth quarter of 2013 the Company reported net income of $13.7 million, or $0.86 per diluted share. The Company achieved a return on assets of 1.61%, a return on tangible equity of 17.7%, a net interest margin of 4.33%, and an efficiency ratio of 51.7% in the fourth quarter of 2013.
City’s CEO Charles Hageboeck stated that, “2013 was a record year for City with reported earnings of $3.06 per diluted share despite merger-related expenses of $5.5 million ($0.23 per diluted share on an after tax basis). While the results from our acquisitions of Virginia Savings Bancorp and Community Bank have been in line with our expectations, the results of resolving problem loans associated with these acquisitions have exceeded our expectations. This has largely been due our credit and lending teams’ ability to effectively workout a number of problem loans. As a result of these efforts, our nonperforming loans, past due loans, and other asset quality measures continue to show improvement. Although our work is not yet complete in regards to acquired problem assets, particularly those related to Community Bank, we expect to have less efforts concentrated in these endeavors during 2014.”
“During 2013, our reported net interest margin increased from 3.96% in 2012 to 4.33% for 2013. Excluding the positive impact of accretion relating to our acquisitions, our net interest margin only dropped from 3.85% for 2012 to 3.83% for 2013 despite the loss of over $50 million of high yielding trust preferred securities and continued historically low interest rates. Excluding the acquisition of Community Bank, our loans grew $87.7 million, or 4.1%, from December 31, 2012. This growth was fueled by an increase of $59.4 million (5.8%) in residential real estate loans and $42.9 million in commercial loans (4.6%).”
“I am also excited that in less than one year, the Company’s tangible capital rebounded after dropping to 8.6% following the Community Bank acquisition to 9.5% at December 31, 2013. At City, we are excited about our future and are poised to take advantage of the opportunities ahead.”
Net Interest Income
The Company’s tax equivalent net interest income increased $27.4 million, or 27.8%, from $98.5 million in 2012 to $125.9 million in 2013. This increase is due primarily to loan growth from the acquisition of Community Bank as of January 9, 2013 and accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bank and Community Bank. The Company’s reported net interest margin increased from 3.96% for the year ended December 31, 2012 to 4.33% for the year ended December 31, 2013. Excluding the favorable impact of the accretion from the fair value adjustments ($14.6 million for the year ended December 31, 2013 and $2.6 million for the year ended December 31, 2012), the net interest margin would have been 3.83% for the year ended December 31, 2013 and 3.85% for the year ended December 31, 2012.
During the fourth quarter of 2013, the Company’s tax equivalent net interest income decreased $0.3 million, or 1.1%, from $32.5 million during the third quarter of 2013 to $32.2 million. The Company’s reported net interest margin decreased from 4.47% for the third quarter of 2013 to 4.33% for the fourth quarter of 2013. Excluding the favorable impact of the accretion from the fair value adjustments ($3.9 million for the quarter ended December 31, 2013 and $5.0 million for the quarter ended September 30, 2013), the net interest margin would have been 3.81% for the quarter ended December 31, 2013 and 3.78% for the quarter ended September 30, 2013.
2
Credit Quality
The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased slightly from 1.28% at December 31, 2012 to 1.20% at December 31, 2013. Excluded from this ratio are purchased credit-impaired loans in which the Company estimated cash flows and estimated a credit mark. These loans are considered performing loans provided that the loan is performing in accordance with the estimated expectations. Such loans would be considered nonperforming loans if the loan’s performance deteriorates below the initial expectations. Total past due loans increased from $13.0 million, or 0.60% of total loans outstanding, at December 31, 2012 to $19.5 million, or 0.75% of total loans outstanding, at December 31, 2013. Acquired past due loans represent approximately 64% of total past due loans and have declined $4.0 million, or 24.2%, since March 31, 2013. In accordance with regulatory guidance issued in the third quarter of 2012, the Company classifies loans in which the borrower has filed Chapter 7 bankruptcy with the debt discharged by the bankruptcy court and the loan not reaffirmed by the borrower to be troubled debt restructured loans (“TDR’s”). Since the time of this change, TDR’s have increased from $21.5 million at September 30, 2012 to $25.1 million at December 31, 2013. More than 90% of these loans are current with interest and principal payments.
As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.9 million in the fourth quarter of 2013 and $6.8 million for the year ended December 31, 2013 compared to $1.8 million and $6.4 million of the comparable periods in 2012. During the fourth quarter of 2013 the Company re-estimated the expected cash flows from its purchased credit impaired loans, which resulted in a $0.5 million addition to the ALLL. The provision for loan losses recorded during 2013 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. 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 2013, the Company realized investment gains of $0.7 million associated with the calls of trust preferred securities. In addition, the Company also recognized gains of $0.1 million from the sale of certain equity positions related to community banks and bank holding companies.
Non-interest Income
Exclusive of net investment securities gains, non-interest income increased $2.9 million to $57.2 million for the year ended December 31, 2013 as compared to $54.3 million for the year ended December 31, 2012. Service charges increased $1.2 million, or 4.5%, to $27.6 million and bankcard revenues increased $1.1 million, or 9.0%, to $13.5 million for the year ended December 31, 2013. These increases were primarily due to the acquisition of Community Bank.
3
Exclusive of net investment securities gains, total non-interest income was flat for the fourth quarter of 2013 as compared to the fourth quarter of 2012. A decrease of $0.4 million in other income was essentially offset by an increase of $0.3 million in bankcard revenue during the fourth quarter of 2013.
Non-interest Expenses
During 2013, the Company recognized $5.5 million of acquisition and integration expenses associated with the completed acquisition of Community Bank. In comparison, during 2012, the Company recorded $4.7 million of acquisition and integration expenses associated with the completed acquisition of Virginia Savings Bancorp and the impending acquisition of Community Bank. Excluding these expenses, noninterest expenses increased $14.0 million from $82.7 million for the year ended December 31, 2012 to $96.7 million for the year ended December 31, 2013. Salaries and employee benefits increased $7.9 million due primarily to additional employees associated with the acquisition of Community Bank. Normal annual salary increases, increased pension costs, and increased incentive compensation accruals also contributed to the increase in salaries and employee benefits. In addition, other expenses increased $2.0 million, occupancy and equipment expenses increased $1.7 million, and depreciation expense increased $1.1 million. These increases were primarily attributable to the acquisition of Community Bank and were in line with the Company’s expectations. These increases were partially offset by a decrease in repossessed asset losses as a result of losses recognized in 2012.
For the fourth quarter of 2013, total non-interest expenses increased $2.9 million, from $21.3 million for the fourth quarter of 2012 to $24.2 million. Salaries and employee benefit expenses increased $1.6 million, primarily associated with the acquisition of Community Bank and increased pension costs. In addition, other expenses increased $0.7 million, occupancy and equipment expenses increased $0.4 million, legal and professional expenses increased $0.3 million, and depreciation expense increased $0.2 million from the fourth quarter of 2012. These increases were partially offset by decreases in merger related expenses ($0.3 million), repossessed asset losses ($0.2 million), and advertising expenses ($0.2 million).
4
Balance Sheet Trends
Loans increased $458.4 million (21.4%) from December 31, 2012 to $2.60 billion at December 31, 2013, primarily due to the Company’s acquisition of Community Bank ($370.8 million). Excluding the Community Bank acquisition, loans increased $87.7 million (4.1%) from December 31, 2012 to $2.23 billion at December 31, 2013. Increases in residential real estate loans of $59.4 million (5.8%), commercial real estate loans of $32.9 million (4.0%), and commercial and industrial (“C&I”) loans of $10.0 million (9.2%) were partially offset by a decrease in consumer loans ($14.1 million). The majority of this decrease is attributable to the Company’s decision to strategically reduce the portfolio of indirect auto loans with unsatisfactory credit quality metrics associated with the Community Bank acquisition.
Total average depository balances increased $413.5 million, or 17.3%, from the quarter ended December 31, 2012 to the quarter ended December 31, 2013. This growth was primarily attributable to deposits acquired from Community Bank ($337.3 million). Exclusive of this contribution, the Company experienced increases in noninterest-bearing demand deposits ($43.9 million), savings deposits ($39.6 million), and interest-bearing demand deposits ($14.9 million) that were partially offset by a decrease in time deposits ($22.5 million).
Income Tax Expense
The Company’s effective income tax rate for the quarter and year ended December 31, 2013 was 34.2% and 34.4%, respectively, compared to 34.9% and 34.3% for the quarter and year ended December 31, 2012, respectively.
Capitalization and Liquidity
The Company’s loan to deposit ratio was 93.5% and the loan to asset ratio was 77.3% at December 31, 2013. The Company maintained investment securities totaling 11.0% of assets as of this date. The Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 50.7% of assets at December 31, 2013. Time deposits fund 32.0% of assets at December 31, 2013, 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. Although the Company’s acquisition of Community Bank lowered its tangible equity ratio from 9.4% at December 31, 2012 to 8.6% at March 31, 2013, our tangible equity ratio has returned to 9.5% at December 31, 2013. At December 31, 2013, City National Bank’s leverage ratio is 8.54%, its tier I capital ratio is 11.35%, and its total risk-based capital ratio is 12.18%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On December 18, 2013, the Board approved a quarterly cash dividend of 37 cents per share payable January 31, 2014, to shareholders of record as of January 15, 2014.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 82 branches across West Virginia, Virginia, Kentucky, and Ohio.
5
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; and (13) the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) recently adopted by the United States Congress. 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, 2013 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2013 results and will adjust the amounts if necessary.
6
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Financial Highlights
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||||||||||||||||||||||||
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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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||||||||||||||||||||||||
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Book Value per Share
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Range per Share
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|||||||||||||||||||||||
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March 31
|
June 30
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September 30
|
December 31
|
Low
|
High
|
|||||||||||||||||||
|
2007
|
$ | 17.62 | $ | 17.40 | $ | 17.68 | $ | 18.14 | $ | 31.16 | $ | 41.54 | ||||||||||||
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2008
|
18.92 | 18.72 | 17.61 | 17.58 | 29.08 | 42.88 | ||||||||||||||||||
|
2009
|
17.69 | 18.24 | 18.95 | 19.37 | 20.88 | 34.34 | ||||||||||||||||||
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2010
|
19.71 | 20.02 | 20.31 | 20.31 | 26.87 | 38.03 | ||||||||||||||||||
|
2011
|
20.39 | 20.58 | 20.86 | 21.05 | 26.06 | 37.22 | ||||||||||||||||||
|
2012
|
21.46 | 21.63 | 22.14 | 22.47 | 30.96 | 37.16 | ||||||||||||||||||
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2013
|
23.27 | 23.52 | 24.03 | 24.64 | 36.07 | 49.21 | ||||||||||||||||||
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Earnings per Basic Share
|
||||||||||||||||||||||||
|
Quarter Ended
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||||||||||||||||||||||||
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March 31
|
June 30
|
September 30
|
December 31
|
Year-to-Date
|
||||||||||||||||||||
|
2007
|
$ | 0.76 | $ | 0.72 | $ | 0.76 | $ | 0.78 | $ | 3.02 | ||||||||||||||
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2008
|
0.81 | 0.83 | (0.16 | ) | 0.26 | 1.74 | ||||||||||||||||||
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2009
|
0.69 | 0.64 | 0.66 | 0.70 | 2.69 | |||||||||||||||||||
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2010
|
0.59 | 0.68 | 0.58 | 0.64 | 2.48 | |||||||||||||||||||
|
2011
|
0.62 | 0.65 | 0.77 | 0.65 | 2.68 | |||||||||||||||||||
|
2012
|
0.68 | 0.50 | 0.71 | 0.73 | 2.63 | |||||||||||||||||||
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2013
|
0.51 | 0.83 | 0.89 | 0.87 | 3.10 | |||||||||||||||||||
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Earnings per Diluted Share
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||||||||||||||||||||||||
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Quarter Ended
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||||||||||||||||||||||||
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March 31
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June 30
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September 30
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December 31
|
Year-to-Date
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||||||||||||||||||||
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2007
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$ | 0.76 | $ | 0.72 | $ | 0.76 | $ | 0.78 | $ | 3.01 | ||||||||||||||
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2008
|
0.80 | 0.83 | (0.16 | ) | 0.26 | 1.74 | ||||||||||||||||||
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2009
|
0.69 | 0.64 | 0.66 | 0.70 | 2.68 | |||||||||||||||||||
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2010
|
0.58 | 0.68 | 0.58 | 0.64 | 2.47 | |||||||||||||||||||
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2011
|
0.62 | 0.64 | 0.76 | 0.65 | 2.67 | |||||||||||||||||||
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2012
|
0.67 | 0.50 | 0.71 | 0.73 | 2.61 | |||||||||||||||||||
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2013
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0.51 | 0.82 | 0.88 | 0.86 | 3.06 | |||||||||||||||||||
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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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||||||||
|
2013
|
2012
|
|||||||
|
Interest Income
|
||||||||
|
Interest and fees on loans
|
$ | 31,901 | $ | 25,588 | ||||
|
Interest on investment securities:
|
||||||||
|
Taxable
|
2,924 | 2,940 | ||||||
|
Tax-exempt
|
291 | 341 | ||||||
|
Interest on federal funds sold
|
- | 15 | ||||||
|
Total Interest Income
|
35,116 | 28,884 | ||||||
|
Interest Expense
|
||||||||
|
Interest on deposits
|
2,868 | 3,114 | ||||||
|
Interest on short-term borrowings
|
94 | 83 | ||||||
|
Interest on long-term debt
|
153 | 163 | ||||||
|
Total Interest Expense
|
3,115 | 3,360 | ||||||
|
Net Interest Income
|
32,001 | 25,524 | ||||||
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Provision for loan losses
|
1,945 | 1,775 | ||||||
|
Net Interest Income After Provision for Loan Losses
|
30,056 | 23,749 | ||||||
|
Non-Interest Income
|
||||||||
|
Total investment securities impairment losses
|
- | - | ||||||
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Noncredit impairment losses recognized in other comprehensive income
|
- | - | ||||||
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Net investment securities impairment losses
|
- | - | ||||||
|
Gains on sale of investment securities
|
671 | - | ||||||
|
Net investment securities gains
|
671 | - | ||||||
|
Service charges
|
6,995 | 7,113 | ||||||
|
Bankcard revenue
|
3,403 | 3,101 | ||||||
|
Insurance commissions
|
1,269 | 1,289 | ||||||
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Trust and investment management fee income
|
1,093 | 1,112 | ||||||
|
Bank owned life insurance
|
976 | 754 | ||||||
|
Other income
|
541 | 897 | ||||||
|
Total Non-Interest Income
|
14,948 | 14,266 | ||||||
|
Non-Interest Expense
|
||||||||
|
Salaries and employee benefits
|
12,910 | 11,301 | ||||||
|
Occupancy and equipment
|
2,529 | 2,147 | ||||||
|
Depreciation
|
1,468 | 1,234 | ||||||
|
FDIC insurance expense
|
500 | 407 | ||||||
|
Advertising
|
408 | 596 | ||||||
|
Bankcard expenses
|
697 | 628 | ||||||
|
Postage, delivery, and statement mailings
|
521 | 514 | ||||||
|
Office supplies
|
408 | 412 | ||||||
|
Legal and professional fees
|
778 | 437 | ||||||
|
Telecommunications
|
581 | 405 | ||||||
|
Repossessed asset (gains)/losses, net of expenses
|
(72 | ) | 146 | |||||
|
Merger related expenses
|
72 | 373 | ||||||
|
Other expenses
|
3,390 | 2,673 | ||||||
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Total Non-Interest Expense
|
24,190 | 21,273 | ||||||
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Income Before Income Taxes
|
20,814 | 16,742 | ||||||
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Income tax expense
|
7,115 | 5,848 | ||||||
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Net Income Available to Common Shareholders
|
$ | 13,699 | $ | 10,894 | ||||
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Distributed earnings allocated to common shareholders
|
$ | 5,775 | $ | 5,151 | ||||
|
Undistributed earnings allocated to common shareholders
|
7,800 | 5,658 | ||||||
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Net earnings allocated to common shareholders
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$ | 13,575 | $ | 10,809 | ||||
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Average common shares outstanding
|
15,636 | 14,755 | ||||||
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Effect of dilutive securities:
|
||||||||
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Employee stock options and warrants
|
187 | 82 | ||||||
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Shares for diluted earnings per share
|
15,823 | 14,837 | ||||||
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Basic earnings per common share
|
$ | 0.87 | $ | 0.73 | ||||
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Diluted earnings per common share
|
$ | 0.86 | $ | 0.73 | ||||
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Dividends declared per common share
|
$ | 0.37 | $ | 0.35 | ||||
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Comprehensive Income
|
$ | 14,882 | $ | 9,837 | ||||
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Consolidated Statements of Income
|
||||||||
|
(Unaudited) ($ in 000s, except per share data)
|
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|
Twelve months ended December 31,
|
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2013
|
2012
|
|||||||
|
Interest Income
|
||||||||
|
Interest and fees on loans
|
$ | 126,594 | $ | 96,432 | ||||
|
Interest on investment securities:
|
||||||||
|
Taxable
|
10,697 | 14,285 | ||||||
|
Tax-exempt
|
1,226 | 1,442 | ||||||
|
Interest on federal funds sold
|
22 | 53 | ||||||
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Total Interest Income
|
138,539 | 112,212 | ||||||
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Interest Expense
|
||||||||
|
Interest on deposits
|
12,358 | 13,477 | ||||||
|
Interest on short-term borrowings
|
325 | 312 | ||||||
|
Interest on long-term debt
|
618 | 661 | ||||||
|
Total Interest Expense
|
13,301 | 14,450 | ||||||
|
Net Interest Income
|
125,238 | 97,762 | ||||||
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Provision for loan losses
|
6,848 | 6,375 | ||||||
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Net Interest Income After Provision for Loan Losses
|
118,390 | 91,387 | ||||||
|
Non-Interest Income
|
||||||||
|
Total investment securities impairment losses
|
- | (878 | ) | |||||
|
Noncredit impairment losses recognized in other comprehensive income
|
- | 302 | ||||||
|
Net investment securities impairment losses
|
- | (576 | ) | |||||
|
Gains on sale of investment securities
|
764 | 1,530 | ||||||
|
Net investment securities gains
|
764 | 954 | ||||||
|
Service charges
|
27,596 | 26,409 | ||||||
|
Bankcard revenue
|
13,521 | 12,406 | ||||||
|
Insurance commissions
|
5,832 | 6,071 | ||||||
|
Trust and investment management fee income
|
3,986 | 3,774 | ||||||
|
Bank owned life insurance
|
3,391 | 2,983 | ||||||
|
Other income
|
2,916 | 2,660 | ||||||
|
Total Non-Interest Income
|
58,006 | 55,257 | ||||||
|
Non-Interest Expense
|
||||||||
|
Salaries and employee benefits
|
51,430 | 43,509 | ||||||
|
Occupancy and equipment
|
9,910 | 8,186 | ||||||
|
Depreciation
|
5,757 | 4,605 | ||||||
|
FDIC insurance expense
|
1,852 | 1,590 | ||||||
|
Advertising
|
2,673 | 2,589 | ||||||
|
Bankcard expenses
|
2,870 | 2,662 | ||||||
|
Postage, delivery, and statement mailings
|
2,220 | 2,079 | ||||||
|
Office supplies
|
1,728 | 1,669 | ||||||
|
Legal and professional fees
|
2,338 | 1,786 | ||||||
|
Telecommunications
|
2,212 | 1,614 | ||||||
|
Repossessed asset losses, net of expenses
|
646 | 1,346 | ||||||
|
Merger related expenses
|
5,526 | 4,708 | ||||||
|
Other expenses
|
13,054 | 11,058 | ||||||
|
Total Non-Interest Expense
|
102,216 | 87,401 | ||||||
|
Income Before Income Taxes
|
74,180 | 59,243 | ||||||
|
Income tax expense
|
25,513 | 20,298 | ||||||
|
Net Income Available to Common Shareholders
|
$ | 48,667 | $ | 38,945 | ||||
|
Distributed earnings allocated to common shareholders
|
$ | 23,100 | $ | 20,603 | ||||
|
Undistributed earnings allocated to common shareholders
|
25,127 | 18,034 | ||||||
|
Net earnings allocated to common shareholders
|
$ | 48,227 | $ | 38,637 | ||||
|
Average common shares outstanding
|
15,564 | 14,714 | ||||||
|
Effect of dilutive securities:
|
||||||||
|
Employee stock options and warrants
|
171 | 82 | ||||||
|
Shares for diluted earnings per share
|
15,735 | 14,796 | ||||||
|
Basic earnings per common share
|
$ | 3.10 | $ | 2.63 | ||||
|
Diluted earnings per common share
|
$ | 3.06 | $ | 2.61 | ||||
|
Dividends declared per common share
|
$ | 1.48 | $ | 1.40 | ||||
|
Comprehensive Income
|
$ | 45,099 | $ | 41,430 | ||||
|
Consolidated Statements of Changes in Stockholders' Equity
|
||||||||
|
(Unaudited) ($ in 000s)
|
||||||||
|
Three Months Ended
|
||||||||
|
December 31, 2013
|
December 31, 2012
|
|||||||
|
Balance at October 1
|
$ | 378,042 | $ | 328,415 | ||||
|
Net income
|
13,699 | 10,894 | ||||||
|
Other comprehensive income:
|
||||||||
|
Change in unrealized loss on securities available-for-sale
|
(932 | ) | (794 | ) | ||||
|
Change in underfunded pension liability
|
2,115 | (263 | ) | |||||
|
Cash dividends declared ($0.37/share) and ($0.35/share), respectively
|
(5,827 | ) | (5,192 | ) | ||||
|
Issuance of stock award shares, net
|
318 | 214 | ||||||
|
Exercise of 19,028 stock options
|
661 | - | ||||||
|
Balance at December 31
|
$ | 388,076 | $ | 333,274 | ||||
|
Twelve Months Ended
|
||||||||
|
December 31, 2013
|
December 31, 2012
|
|||||||
|
Balance at January 1
|
$ | 333,274 | $ | 311,134 | ||||
|
Net income
|
48,667 | 38,945 | ||||||
|
Other comprehensive income:
|
||||||||
|
Change in unrealized gain (loss) on securities available-for-sale
|
(5,683 | ) | 2,749 | |||||
|
Change in underfunded pension liability
|
2,115 | (264 | ) | |||||
|
Cash dividends declared ($1.48/share) and ($1.40/share), respectively
|
(23,513 | ) | (20,725 | ) | ||||
|
Issuance of stock award shares, net
|
1,281 | 1,083 | ||||||
|
Acquisition of Community Financial Corporation
|
28,508 | - | ||||||
|
Acquisition of Virginia Savings Bancorp
|
- | 7,723 | ||||||
|
Exercise of 126,168 stock options
|
3,427 | - | ||||||
|
Exercise of 18,899 stock options
|
- | 544 | ||||||
|
Purchase of 237,535 common shares of treasury
|
- | (7,915 | ) | |||||
|
Balance at December 31
|
$ | 388,076 | $ | 333,274 | ||||
|
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
|
||||||||||||||||
|
2013
|
2013
|
2013
|
2013
|
2012
|
||||||||||||||||
|
Interest income
|
$ | 35,116 | $ | 35,674 | $ | 34,724 | $ | 33,026 | $ | 28,884 | ||||||||||
|
Taxable equivalent adjustment
|
158 | 161 | 167 | 174 | 183 | |||||||||||||||
|
Interest income (FTE)
|
35,274 | 35,835 | 34,891 | 33,200 | 29,067 | |||||||||||||||
|
Interest expense
|
3,115 | 3,304 | 3,427 | 3,455 | 3,360 | |||||||||||||||
|
Net interest income
|
32,159 | 32,531 | 31,464 | 29,745 | 25,707 | |||||||||||||||
|
Provision for loan losses
|
1,945 | 1,154 | 2,011 | 1,738 | 1,775 | |||||||||||||||
|
Net interest income after provision
|
||||||||||||||||||||
|
for loan losses
|
30,214 | 31,377 | 29,453 | 28,007 | 23,932 | |||||||||||||||
|
Noninterest income
|
14,948 | 14,480 | 14,252 | 14,326 | 14,266 | |||||||||||||||
|
Noninterest expense
|
24,190 | 24,665 | 23,959 | 29,403 | 21,273 | |||||||||||||||
|
Income before income taxes
|
20,972 | 21,192 | 19,746 | 12,930 | 16,925 | |||||||||||||||
|
Income tax expense
|
7,115 | 7,056 | 6,573 | 4,769 | 5,848 | |||||||||||||||
|
Taxable equivalent adjustment
|
158 | 161 | 167 | 174 | 183 | |||||||||||||||
|
Net income available to common shareholders
|
$ | 13,699 | $ | 13,975 | $ | 13,006 | $ | 7,987 | $ | 10,894 | ||||||||||
|
Distributed earnings allocated to common shareholders
|
$ | 5,775 | $ | 5,767 | $ | 5,751 | $ | 5,747 | $ | 5,151 | ||||||||||
|
Undistributed earnings allocated to common shareholders
|
7,800 | 8,081 | 7,139 | 2,175 | 5,658 | |||||||||||||||
|
Net earnings allocated to common shareholders
|
$ | 13,575 | $ | 13,848 | $ | 12,890 | $ | 7,922 | $ | 10,809 | ||||||||||
|
Average common shares outstanding
|
15,636 | 15,608 | 15,582 | 15,473 | 14,755 | |||||||||||||||
|
Effect of dilutive securities:
|
||||||||||||||||||||
|
Employee stock options and warrants
|
187 | 182 | 170 | 154 | 82 | |||||||||||||||
|
Shares for diluted earnings per share
|
15,823 | 15,790 | 15,752 | 15,627 | 14,837 | |||||||||||||||
|
Basic earnings per common share
|
$ | 0.87 | $ | 0.89 | $ | 0.83 | $ | 0.51 | $ | 0.73 | ||||||||||
|
Diluted earnings per common share
|
0.86 | 0.88 | 0.82 | 0.51 | 0.73 | |||||||||||||||
|
Cash dividends declared per share
|
0.37 | 0.37 | 0.37 | 0.37 | 0.35 | |||||||||||||||
|
Net Interest Margin
|
4.33 | % | 4.47 | % | 4.35 | % | 4.18 | % | 3.99 | % | ||||||||||
|
Interest Income from Accretion Related to Fair Value Adjustments Recorded as a Result of Acquisition
|
$ | 3,899 | $ | 5,046 | $ | 3,517 | $ | 2,181 | $ | 1,658 | ||||||||||
|
Non-Interest Income and Non-Interest Expense
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
Quarter Ended
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2013
|
2013
|
2013
|
2013
|
2012
|
||||||||||||||||
|
Non-Interest Income:
|
||||||||||||||||||||
|
Service charges
|
$ | 6,995 | $ | 7,169 | $ | 6,897 | $ | 6,535 | $ | 7,113 | ||||||||||
|
Bankcard revenue
|
3,403 | 3,468 | 3,450 | 3,199 | 3,101 | |||||||||||||||
|
Insurance commissions
|
1,269 | 1,365 | 1,358 | 1,840 | 1,289 | |||||||||||||||
|
Trust and investment management fee income
|
1,093 | 939 | 964 | 990 | 1,112 | |||||||||||||||
|
Bank owned life insurance
|
976 | 805 | 799 | 812 | 754 | |||||||||||||||
|
Other income
|
541 | 734 | 775 | 866 | 897 | |||||||||||||||
|
Subtotal
|
14,277 | 14,480 | 14,243 | 14,242 | 14,266 | |||||||||||||||
|
Total investment securities impairment losses
|
- | - | - | - | - | |||||||||||||||
|
Noncredit impairment losses recognized in other
|
||||||||||||||||||||
|
comprehensive income
|
- | - | - | - | - | |||||||||||||||
|
Net investment securities impairment losses
|
- | - | - | - | - | |||||||||||||||
|
Gain (loss) on sale of investment securities
|
671 | - | 9 | 84 | - | |||||||||||||||
|
Total Non-Interest Income
|
$ | 14,948 | $ | 14,480 | $ | 14,252 | $ | 14,326 | $ | 14,266 | ||||||||||
|
Non-Interest Expense:
|
||||||||||||||||||||
|
Salaries and employee benefits
|
$ | 12,910 | $ | 12,930 | $ | 12,640 | $ | 12,949 | $ | 11,301 | ||||||||||
|
Occupancy and equipment
|
2,529 | 2,409 | 2,500 | 2,472 | 2,147 | |||||||||||||||
|
Depreciation
|
1,468 | 1,437 | 1,453 | 1,399 | 1,234 | |||||||||||||||
|
FDIC insurance expense
|
500 | 500 | 341 | 511 | 407 | |||||||||||||||
|
Advertising
|
408 | 712 | 819 | 735 | 596 | |||||||||||||||
|
Bankcard expenses
|
697 | 680 | 766 | 727 | 628 | |||||||||||||||
|
Postage, delivery and statement mailings
|
521 | 541 | 552 | 605 | 514 | |||||||||||||||
|
Office supplies
|
408 | 416 | 463 | 441 | 412 | |||||||||||||||
|
Legal and professional fees
|
778 | 591 | 535 | 435 | 437 | |||||||||||||||
|
Telecommunications
|
581 | 721 | 465 | 445 | 405 | |||||||||||||||
|
Repossessed asset (gains) losses, net of expenses
|
(72 | ) | 896 | (23 | ) | (155 | ) | 146 | ||||||||||||
|
Merger related expenses
|
72 | (150 | ) | 65 | 5,540 | 373 | ||||||||||||||
|
Other expenses
|
3,390 | 2,982 | 3,383 | 3,299 | 2,673 | |||||||||||||||
|
Total Non-Interest Expense
|
$ | 24,190 | $ | 24,665 | $ | 23,959 | $ | 29,403 | $ | 21,273 | ||||||||||
|
Employees (Full Time Equivalent)
|
923 | 924 | 931 | 932 | 843 | |||||||||||||||
|
Branch Locations
|
83 | 83 | 83 | 83 | 73 | |||||||||||||||
|
CITY HOLDING COMPANY AND SUBSIDIARIES
|
||||||||
|
Consolidated Balance Sheets
|
||||||||
|
($ in 000s)
|
||||||||
|
December 31
|
December 31
|
|||||||
|
2013
|
2012
|
|||||||
|
(Unaudited)
|
||||||||
|
Assets
|
||||||||
|
Cash and due from banks
|
$ | 75,999 | $ | 58,718 | ||||
|
Interest-bearing deposits in depository institutions
|
9,877 | 16,276 | ||||||
|
Federal funds sold
|
- | 10,000 | ||||||
|
Cash and cash equivalents
|
85,876 | 84,994 | ||||||
|
Investment securities available-for-sale, at fair value
|
352,660 | 377,122 | ||||||
|
Investment securities held-to-maturity, at amortized cost
|
4,117 | 13,454 | ||||||
|
Other securities
|
13,343 | 11,463 | ||||||
|
Total investment securities
|
370,120 | 402,039 | ||||||
|
Gross loans
|
2,604,782 | 2,146,369 | ||||||
|
Allowance for loan losses
|
(20,575 | ) | (18,809 | ) | ||||
|
Net loans
|
2,584,207 | 2,127,560 | ||||||
|
Bank owned life insurance
|
92,047 | 81,901 | ||||||
|
Premises and equipment, net
|
82,548 | 72,728 | ||||||
|
Accrued interest receivable
|
6,866 | 6,692 | ||||||
|
Net deferred tax assets
|
42,165 | 32,737 | ||||||
|
Intangible assets
|
76,557 | 65,057 | ||||||
|
Other assets
|
27,852 | 43,758 | ||||||
|
Total Assets
|
$ | 3,368,238 | $ | 2,917,466 | ||||
|
Liabilities
|
||||||||
|
Deposits:
|
||||||||
|
Noninterest-bearing
|
$ | 493,228 | $ | 429,969 | ||||
|
Interest-bearing:
|
||||||||
|
Demand deposits
|
601,527 | 553,132 | ||||||
|
Savings deposits
|
612,772 | 506,869 | ||||||
|
Time deposits
|
1,077,606 | 919,346 | ||||||
|
Total deposits
|
2,785,133 | 2,409,316 | ||||||
|
Short-term borrowings
|
||||||||
|
Customer repurchase agreements
|
137,798 | 114,646 | ||||||
|
Long-term debt
|
16,495 | 16,495 | ||||||
|
Other liabilities
|
40,736 | 43,735 | ||||||
|
Total Liabilities
|
2,980,162 | 2,584,192 | ||||||
|
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, 2013 and December 31, 2012
|
||||||||
|
less 2,748,922 and 3,665,999 shares in treasury, respectively
|
46,249 | 46,249 | ||||||
|
Capital surplus
|
107,596 | 103,524 | ||||||
|
Retained earnings
|
334,423 | 309,270 | ||||||
|
Cost of common stock in treasury
|
(95,202 | ) | (124,347 | ) | ||||
|
Accumulated other comprehensive loss:
|
||||||||
|
Unrealized gain on securities available-for-sale
|
(2,110 | ) | 3,573 | |||||
|
Underfunded pension liability
|
(2,880 | ) | (4,995 | ) | ||||
|
Total Accumulated Other Comprehensive Loss
|
(4,990 | ) | (1,422 | ) | ||||
|
Total Stockholders' Equity
|
388,076 | 333,274 | ||||||
|
Total Liabilities and Stockholders' Equity
|
$ | 3,368,238 | $ | 2,917,466 | ||||
|
CITY HOLDING COMPANY AND SUBSIDIARIES
|
||||||||||||||||
|
Investment Portfolio
|
||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||
|
Original Cost
|
Credit-Related Net Investment Impairment Losses through December 31, 2013
|
Unrealized Gains (Losses)
|
Carrying Value
|
|||||||||||||
|
US Government Agencies
|
$ | 2,317 | $ | - | $ | 48 | $ | 2,365 | ||||||||
|
Mortgage Backed Securities
|
284,837 | - | (4,531 | ) | 280,306 | |||||||||||
|
Municipal Bonds
|
41,027 | - | 520 | 41,547 | ||||||||||||
|
Pooled Bank Trust Preferreds
|
23,358 | (20,171 | ) | 512 | 3,699 | |||||||||||
|
Single Issuer Bank Trust Preferreds,
|
||||||||||||||||
|
Subdebt of Financial Institutions, and
|
||||||||||||||||
|
Bank Holding Company Preferred Stocks
|
24,910 | (1,015 | ) | (1,193 | ) | 22,702 | ||||||||||
|
Money Markets and Mutual Funds
|
1,525 | - | (40 | ) | 1,485 | |||||||||||
|
Federal Reserve Bank and FHLB stock
|
13,343 | - | - | 13,343 | ||||||||||||
|
Community Bank Equity Positions
|
8,032 | (4,698 | ) | 1,339 | 4,673 | |||||||||||
|
Total Investments
|
$ | 399,349 | $ | (25,884 | ) | $ | (3,345 | ) | $ | 370,120 | ||||||
|
CITY HOLDING COMPANY AND SUBSIDIARIES
|
||||||||||||||||||||||
|
Loan Portfolio
|
||||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||||
|
2013
|
2013
|
2013
|
2013
|
2012
|
||||||||||||||||||
|
Residential real estate (1)
|
$ | 1,207,150 | $ | 1,188,841 | $ | 1,170,123 | $ | 1,149,411 | $ | 1,031,435 | ||||||||||||
|
Home equity - junior liens
|
143,390 | 140,887 | 138,367 | 138,333 | 143,110 | |||||||||||||||||
|
Commercial and industrial
|
164,484 | 151,185 | 138,299 | 149,677 | 108,739 | |||||||||||||||||
|
Commercial real estate (2)
|
1,039,451 | 1,022,278 | 1,023,311 | 1,001,453 | 821,970 | |||||||||||||||||
|
Consumer
|
46,402 | 50,757 | 54,242 | 55,274 | 36,564 | |||||||||||||||||
|
DDA overdrafts
|
3,905 | 4,508 | 3,103 | 2,876 | 4,551 | |||||||||||||||||
|
Gross Loans
|
$ | 2,604,782 | $ | 2,558,456 | $ | 2,527,445 | $ | 2,497,024 | $ | 2,146,369 | ||||||||||||
|
Construction loans included in:
|
||||||||||||||||||||||
|
(1) - Residential real estate loans
|
$ | 17,337 | $ | 14,808 | $ | 15,889 | $ | 16,884 | $ | 15,408 | ||||||||||||
|
(2) - Commercial real estate loans
|
$ | 24,026 | $ | 17,391 | $ | 24,726 | $ | 26,163 | $ | 15,352 | ||||||||||||
|
CITY HOLDING COMPANY AND SUBSIDIARIES
|
||||||||||||||||||||||
|
Acquisition Activity - Accretion
|
||||||||||||||||||||||
|
(Unaudited) ($ in millions)
|
||||||||||||||||||||||
|
The following table presents the actual and forecasted accretion related to the fair value adjustments on net interest income recorded as a result of the Virginia Savings Bancorp (VSB) and Community Financial Corporation (Community) acquisitions.
|
||||||||||||||||||||||
|
VSB
|
Community
|
|||||||||||||||||||||
|
Loan
|
Certificates of
|
Loan
|
Certificates of
|
|||||||||||||||||||
|
Year Ended:
|
Accretion(a)
|
Deposit(a)
|
Accretion(a)
|
Deposit(a)
|
Total
|
|||||||||||||||||
| 1Q 2013 | $ | 985 | $ | 178 | $ | 858 | $ | 160 | $ | 2,181 | ||||||||||||
| 2Q 2013 | 1,334 | 122 | 1,887 | 174 | 3,517 | |||||||||||||||||
| 3Q 2013 | 632 | 121 | 4,119 | 174 | 5,046 | |||||||||||||||||
| 4Q 2013 | 561 | 121 | 3,043 | 174 | 3,899 | |||||||||||||||||
| 2014 | 922 | 536 | 4,104 | 250 | 5,812 | |||||||||||||||||
| 2015 | 564 | 518 | 3,040 | 160 | 4,282 | |||||||||||||||||
| 2016 | 325 | 497 | 1,477 | 44 | 2,343 | |||||||||||||||||
|
a - 2013 amounts are based on actual results. 2014, 2015 and 2016 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,
|
||||||||||||||||||||||||
|
|
|
2013
|
|
|
2012
|
|
||||||||||||||||||
|
|
Average
|
|
Yield/
|
Average
|
|
Yield/
|
||||||||||||||||||
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
|
Assets:
|
||||||||||||||||||||||||
|
Loan portfolio (1):
|
||||||||||||||||||||||||
|
Residential real estate (2)
|
$ | 1,304,741 | $ | 55,165 | 4.23 | % | $ | 1,114,653 | $ | 49,000 | 4.40 | % | ||||||||||||
|
Commercial, financial, and agriculture (3)
|
1,154,637 | 62,679 | 5.43 | % | 880,502 | 40,815 | 4.64 | % | ||||||||||||||||
|
Installment loans to individuals (4), (5)
|
64,377 | 6,219 | 9.66 | % | 46,721 | 3,311 | 7.09 | % | ||||||||||||||||
|
Previously securitized loans (6)
|
*** | 2,531 | *** | *** | 3,306 | *** | ||||||||||||||||||
|
Total loans
|
2,523,755 | 126,594 | 5.02 | % | 2,041,876 | 96,432 | 4.72 | % | ||||||||||||||||
|
Securities:
|
||||||||||||||||||||||||
|
Taxable
|
330,225 | 10,697 | 3.24 | % | 371,092 | 14,285 | 3.85 | % | ||||||||||||||||
|
Tax-exempt (7)
|
30,635 | 1,885 | 6.15 | % | 38,339 | 2,218 | 5.79 | % | ||||||||||||||||
|
Total securities
|
360,860 | 12,582 | 3.49 | % | 409,431 | 16,503 | 4.03 | % | ||||||||||||||||
|
Deposits in depository institutions
|
8,116 | - | - | 7,258 | - | - | ||||||||||||||||||
|
Federal funds sold
|
13,052 | 22 | 0.17 | % | 30,507 | 53 | 0.17 | % | ||||||||||||||||
|
Total interest-earning assets
|
2,905,783 | 139,198 | 4.79 | % | 2,489,072 | 112,988 | 4.54 | % | ||||||||||||||||
|
Cash and due from banks
|
154,983 | 74,193 | ||||||||||||||||||||||
|
Bank premises and equipment
|
82,168 | 69,772 | ||||||||||||||||||||||
|
Other assets
|
255,544 | 223,783 | ||||||||||||||||||||||
|
Less: Allowance for loan losses
|
(20,127 | ) | (19,586 | ) | ||||||||||||||||||||
|
Total assets
|
$ | 3,378,351 | $ | 2,837,234 | ||||||||||||||||||||
|
Liabilities:
|
||||||||||||||||||||||||
|
Interest-bearing demand deposits
|
603,844 | 712 | 0.12 | % | 534,211 | 697 | 0.13 | % | ||||||||||||||||
|
Savings deposits
|
599,574 | 864 | 0.14 | % | 479,760 | 759 | 0.16 | % | ||||||||||||||||
|
Time deposits (8)
|
1,103,945 | 10,782 | 0.98 | % | 909,951 | 12,021 | 1.32 | % | ||||||||||||||||
|
Short-term borrowings
|
127,679 | 325 | 0.25 | % | 121,780 | 312 | 0.26 | % | ||||||||||||||||
|
Long-term debt
|
16,495 | 618 | 3.75 | % | 16,495 | 661 | 4.01 | % | ||||||||||||||||
|
Total interest-bearing liabilities
|
2,451,537 | 13,301 | 0.54 | % | 2,062,197 | 14,450 | 0.70 | % | ||||||||||||||||
|
Noninterest-bearing demand deposits
|
514,210 | 414,969 | ||||||||||||||||||||||
|
Other liabilities
|
39,502 | 34,995 | ||||||||||||||||||||||
|
Stockholders' equity
|
373,102 | 325,073 | ||||||||||||||||||||||
|
Total liabilities and
|
||||||||||||||||||||||||
|
stockholders' equity
|
$ | 3,378,351 | $ | 2,837,234 | ||||||||||||||||||||
|
Net interest income
|
$ | 125,897 | $ | 98,538 | ||||||||||||||||||||
|
Net yield on earning assets
|
4.33 | % | 3.96 | % | ||||||||||||||||||||
|
(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) For 2013, interest income on residential real estate loans includes $1.0 million and $0.8 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. For 2012, interest income on residential real estate loans includes $0.7 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings Bancorp, Inc.
|
||||||||||||||||||||||||
|
(3) For 2013, interest income on commercial, financial, and agriculture loans includes $2.4 million and $7.9 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. For 2012, interest income on commercial, financial and agricultural loans includes $1.6 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings Bancorp, Inc.
|
||||||||||||||||||||||||
|
(4) Includes the Company’s consumer and DDA overdrafts loan categories.
|
||||||||||||||||||||||||
|
(5) For 2013, interest income on installment loans to individuals includes $0.1 million and $1.2 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. For 2012, interest income on installment loans to individuals includes $0.1 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings Bancorp, Inc.
|
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|
(6) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
|
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|
(7) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
|
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|
(8) For 2013, interest expense on time deposits includes $0.5 million and $0.7 million in accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bancorp, Inc. and Community Financial Corporation, respectively. For 2012, interest expense on time deposits includes $0.2 million in accretion of the fair value adjustments related to the acquisition of Virginia Savings Bancorp, Inc.
|
||||||||||||||||||||||||
|
Analysis of Risk-Based Capital
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2013 (a)
|
2013
|
2013
|
2013
|
2012
|
||||||||||||||||
|
Tier I Capital:
|
||||||||||||||||||||
|
Stockholders' equity
|
$ | 388,076 | $ | 378,042 | $ | 368,891 | $ | 365,848 | $ | 333,274 | ||||||||||
|
Goodwill and other intangibles
|
(76,370 | ) | (76,233 | ) | (74,455 | ) | (75,563 | ) | (64,866 | ) | ||||||||||
|
Accumulated other comprehensive loss
|
4,990 | 6,173 | 5,540 | 1,332 | 1,422 | |||||||||||||||
|
Qualifying trust preferred stock
|
16,000 | 16,000 | 16,000 | 16,000 | 16,000 | |||||||||||||||
|
Unrealized loss on AFS securities
|
- | (18 | ) | (11 | ) | - | - | |||||||||||||
|
Excess deferred tax assets
|
(8,896 | ) | (12,495 | ) | (13,572 | ) | (17,737 | ) | (6,577 | ) | ||||||||||
|
Total tier I capital
|
$ | 323,801 | $ | 311,470 | $ | 302,394 | $ | 289,880 | $ | 279,254 | ||||||||||
|
Total Risk-Based Capital:
|
||||||||||||||||||||
|
Tier I capital
|
$ | 323,801 | $ | 311,470 | $ | 302,394 | $ | 289,880 | $ | 279,254 | ||||||||||
|
Qualifying allowance for loan losses
|
20,575 | 20,606 | 20,069 | 19,721 | 18,809 | |||||||||||||||
|
Unrealized gain on securities
|
606 | 722 | 686 | 696 | - | |||||||||||||||
|
Total risk-based capital
|
$ | 344,982 | $ | 332,798 | $ | 323,149 | $ | 310,297 | $ | 298,063 | ||||||||||
|
Net risk-weighted assets
|
$ | 2,498,080 | $ | 2,460,895 | $ | 2,450,010 | $ | 2,436,022 | $ | 2,152,622 | ||||||||||
|
Ratios:
|
||||||||||||||||||||
|
Average stockholders' equity to average assets
|
11.35 | % | 11.14 | % | 10.94 | % | 10.74 | % | 11.49 | % | ||||||||||
|
Tangible capital ratio
|
9.46 | % | 9.08 | % | 8.90 | % | 8.61 | % | 9.40 | % | ||||||||||
|
Risk-based capital ratios:
|
||||||||||||||||||||
|
Tier I capital
|
12.96 | % | 12.66 | % | 12.34 | % | 11.90 | % | 12.97 | % | ||||||||||
|
Total risk-based capital
|
13.81 | % | 13.52 | % | 13.19 | % | 12.74 | % | 13.85 | % | ||||||||||
|
Leverage capital
|
9.77 | % | 9.43 | % | 9.12 | % | 8.98 | % | 9.82 | % | ||||||||||
|
(a) December 31, 2013 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
|
||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
|
Intangibles, net
|
$ | 76,557 | $ | 76,420 | $ | 74,642 | $ | 75,750 | $ | 65,057 | ||||||||||
|
Intangibles amortization expense
|
260 | 260 | 260 | 260 | 135 | |||||||||||||||
|
Summary of Loan Loss Experience
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
Quarter Ended
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2013
|
2013
|
2013
|
2013
|
2012
|
||||||||||||||||
|
Balance at beginning of period
|
$ | 20,606 | $ | 20,069 | $ | 19,721 | $ | 18,809 | $ | 18,986 | ||||||||||
|
Charge-offs:
|
||||||||||||||||||||
|
Commercial and industrial
|
268 | 380 | 330 | 62 | 100 | |||||||||||||||
|
Commercial real estate
|
1,384 | 181 | 419 | 203 | 1,744 | |||||||||||||||
|
Residential real estate
|
583 | 487 | 520 | 591 | 284 | |||||||||||||||
|
Home equity
|
17 | 8 | 154 | 116 | 366 | |||||||||||||||
|
Consumer
|
128 | 102 | 221 | 3 | 42 | |||||||||||||||
|
DDA overdrafts
|
381 | 415 | 348 | 339 | 394 | |||||||||||||||
|
Total charge-offs
|
2,761 | 1,573 | 1,992 | 1,314 | 2,930 | |||||||||||||||
|
Recoveries:
|
||||||||||||||||||||
|
Commercial and industrial
|
33 | 30 | 20 | 1 | 19 | |||||||||||||||
|
Commercial real estate
|
116 | 635 | 16 | 18 | 190 | |||||||||||||||
|
Residential real estate
|
97 | 69 | 20 | 48 | 7 | |||||||||||||||
|
Home equity
|
- | - | - | - | 6 | |||||||||||||||
|
Consumer
|
85 | 25 | 70 | 147 | 45 | |||||||||||||||
|
DDA overdrafts
|
454 | 197 | 203 | 274 | 711 | |||||||||||||||
|
Total recoveries
|
785 | 956 | 329 | 488 | 978 | |||||||||||||||
|
Net charge-offs
|
1,976 | 617 | 1,663 | 826 | 1,952 | |||||||||||||||
|
Provision for loan losses
|
1,438 | 1,241 | 1,834 | 1,738 | 1,775 | |||||||||||||||
|
Provision for (recovery of) acquired loans
|
507 | (87 | ) | 177 | - | - | ||||||||||||||
|
Balance at end of period
|
$ | 20,575 | $ | 20,606 | $ | 20,069 | $ | 19,721 | $ | 18,809 | ||||||||||
|
Loans outstanding
|
$ | 2,604,782 | $ | 2,558,456 | $ | 2,527,445 | $ | 2,497,023 | $ | 2,146,369 | ||||||||||
|
Average loans outstanding
|
2,577,887 | 2,536,542 | 2,513,883 | 2,465,336 | 2,104,483 | |||||||||||||||
|
Allowance as a percent of loans outstanding
|
0.79 | % | 0.81 | % | 0.79 | % | 0.79 | % | 0.88 | % | ||||||||||
|
Allowance as a percent of non-performing loans
|
90.25 | % | 93.86 | % | 87.14 | % | 82.18 | % | 96.59 | % | ||||||||||
|
Net charge-offs (annualized) as a
|
||||||||||||||||||||
|
percent of average loans outstanding
|
0.31 | % | 0.10 | % | 0.26 | % | 0.13 | % | 0.37 | % | ||||||||||
|
Net charge-offs, excluding overdraft deposit accounts,
|
||||||||||||||||||||
|
(annualized) as a percent of average loans outstanding
|
0.32 | % | 0.06 | % | 0.24 | % | 0.12 | % | 0.43 | % | ||||||||||
|
Summary of Purchased Credit Impaired Loans
|
||||||||||||||||||||
|
(Unaudited) ($ in 000s)
|
||||||||||||||||||||
|
Virginia Savings Acquisition
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
|
2013
|
2013
|
2013
|
2013
|
2012
|
||||||||||||||||
|
Contractual required principal and interest
|
3,932 | 5,253 | 7,330 | 8,789 | 10,759 | |||||||||||||||
|
Carrying value
|
3,115 | 4,248 | 5,421 | 5,886 | 7,018 | |||||||||||||||
|
Community Financial Acquisition
|
||||||||||||||||||||
|
December 31
|
September 30
|
June 30
|
March 31
|
December 31
|
||||||||||||||||
| 2013 | 2013 | 2013 | 2013 | 2012 | ||||||||||||||||
|
Contractual required principal and interest
|
40,639 | 40,896 | 47,850 | ** | - | |||||||||||||||
|
Carrying value
|
26,865 | 24,958 | 27,845 | ** | - | |||||||||||||||
|
** Comparative information was not available from the Company's third party service provider
|
||||||||||||||||||||