Published:
City Holding Company Announces Record Quarterly Earnings Per Share
CHARLESTON, W.Va., April 25 /PRNewswire-FirstCall/ -- City Holding
Company, "the Company" (Nasdaq: CHCO), a $2.5 billion bank holding company
headquartered inCharleston, today announced record net income per diluted
share for the first quarter of $0.80 compared to $0.76 per diluted share in
the first quarter of 2007, or a 5.3% increase. Net income for the first
quarter of 2008 was $13.0 million, a decrease of 1.5% from $13.2 million in
the first quarter of 2007. For the first quarter of 2008, the Company
achieved a return on assets of 2.09%, a return on tangible equity of 21.6%, a
net interest margin of 4.40%, and an efficiency ratio of 48.2%. This
compares with a return on assets of 2.10%, a return on equity of 21.2%, a net
interest margin of 4.41%, and an efficiency ratio of 44.9% for the comparable
period of 2007.
As previously announced during the first quarter of 2008, the Company
recognized a $3.3 million gain as a result of the partial redemption of its
equity interest in Visa, Inc. ("Visa"). In addition, the Company incurred
charges of $1.2 million for the early redemption of all of the Company's
outstanding 9.15% trust preferred securities in the amount of $16.0 million.
Net Interest Income
The Company's tax equivalent net interest income decreased $0.6 million,
or 2.2%, from $24.7 million during the first quarter of 2007 to $24.1 million
during the first quarter of 2008. This decrease is primarily attributable to
two factors. First, the Company experienced a decrease of $0.2 million in
interest income from previously securitized loans in the first quarter of 2008
as compared to the first quarter of 2007 as the average balance of these loans
decreased 55.3%. The decrease in average balances was partially mitigated by
an increase in the yield on these loans from 49.5% for the first quarter of
2007 and 93.2% for the fourth quarter of 2007 to 98.8% for the first quarter
of 2008 (see Previously Securitized Loans). The remaining decrease in net
interest income of $0.4 million occurred as interest income from loans
(excluding Previously Securitized loans) and investments decreased more
quickly than the interest expense on deposits and other interest-bearing
liabilities. The Company's net interest margin was 4.40% in the first quarter
of 2008 as compared to 4.41% in the first quarter of 2007. Excluding the
previously securitized loans, the Company's net interest margin decreased 3
basis points from 4.18% during the first quarter of 2007 to 4.15% for the
first quarter of 2008.
Credit Quality
At March 31, 2008, the Allowance for Loan Losses ("ALLL") was $18.6
million or 1.09% of total loans outstanding and 114% of non-performing loans
compared to $16.1 million or 0.95% of loans outstanding and 236% of non-
performing loans at March 31, 2007, and $17.6 million or 1.00% of loans
outstanding and 103% of non-performing loans at December 31, 2007.
As a result of the Company's quarterly analysis of the adequacy of the
ALLL, the Company recorded a provision for loan losses of $1.6 million in the
first quarter of 2008 compared to $0.9 million for the comparable period in
2007 and $1.65 million in the fourth quarter of 2007. The provision for loan
losses recorded during the first quarter of 2008 reflects the difficulties of
certain commercial borrowers of the Company during the quarter, 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 methodology and are directionally consistent with growth and 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.
The Company's ratio of non-performing assets to total loans and other real
estate owned increased slightly from 1.20% at December 31, 2007 to 1.21% at
March 31, 2008. Based on our analysis, the Company believes that the reserves
allocated to the substandard and nonperforming loans after considering the
value of the collateral securing such loans are adequate to cover losses that
may result from these loans. The Company's ratio of non-performing assets to
total loans and other real estate owned is 26 basis points lower than that of
our peer group (bank holding companies with total assets between $1 and $5
billion), which reported average non-performing assets as a percentage of
loans and other real estate owned of 1.47% for the most recently reported
quarter ended December 31, 2007.
The Company had net charge-offs of $0.6 million for the first quarter of
2008. Net charge-offs on commercial and residential loans were $0.4 and $0.2
million, respectively, for the first quarter. Charge-offs for commercial
loans were primarily related to a specific credit that had been appropriately
considered in establishing the allowance for loans losses in prior periods.
Non-interest Income
During the first quarter of 2008, the Company recognized a $3.3 million
gain in connection with Visa's successful initial public offering ("IPO")
completed in March 2008. The Company received approximately $2.3 million on
the partial redemption of its equity interest in Visa. The Company's
remaining Class B shares will be converted to Class A shares on the third
anniversary of Visa's IPO or upon Visa's settlement of certain litigation
matters, whichever is later. The unconverted Class B shares are not reflected
in the Company's balance sheet at March 31, 2008 as the Company has no
historical basis in these shares. Visa also escrowed a portion of the
proceeds from the IPO to satisfy approximately $1.0 million of liabilities
that represented the Company's proportionate share of legal judgments and
settlements related to Visa litigation with American Express and Discover
Financial Services.
Exclusive of investment gains, the gain from the Visa IPO, and the gain
from the sale of the Company's merchant credit card portfolio in the first
quarter of 2007, non-interest income increased $0.8 million to $13.7 million
in the first quarter of 2008 as compared to $12.9 million in the first quarter
of 2007. The largest source of non-interest income is service charges from
depository accounts, which increased $0.9 million, or 9.2%, from $10.1 million
during the first quarter of 2007 to $11.0 million during the first quarter of
2008.
Non-interest Expenses
During the first quarter of 2008, the Company fully redeemed $16.0 million
of 9.15% trust preferred securities that had been issued in 1998. As a result
of this redemption, the Company incurred charges of $1.2 million to fully
amortize issuance costs incurred in 1998 and for the early redemption premium.
Excluding the loss on the early redemption of the trust preferred securities,
non-interest expenses increased $1.1 million from $17.6 million in the first
quarter of 2007 to $18.7 million in the first quarter of 2008. Salaries and
employee benefits increased $0.3 million, or 3.4%, from the first quarter of
2007 due in part to additional staffing for new retail locations. Other
expenses also include increased charitable contributions of approximately $0.5
million. The Company anticipates charitable contributions of up to an
additional $0.5 million during the remainder of 2008. This increase in
charitable contributions for 2008 reflects the Company's exceptionally strong
financial performance between 2002 and 2007. This special charitable giving
for 2008, which is above normal levels, is given in appreciation of our
employees who have led City to the pinnacle of financial performance during
that period and our loyal customers throughout each community in which we
operate.
Balance Sheet Trends
As compared to December 31, 2007, loans have decreased $62.2 million
(3.5%) at March 31, 2008 due to decreases in loans to depository institutions
of $60.0 million (100.0%), commercial loans of $8.3 million (1.2%),
installment loans of $2.7 million (5.6%), and previously securitized loans of
$0.9 million (12.6%). These decreases were partially offset by increases in
home equity loans of $6.2 million (1.8%) and residential real estate loans of
$3.5 million (0.6%).
Total average depository balances increased $36.5 million, or 1.8%, from
the quarter ended December 31, 2007 to the quarter ended March 31, 2008. This
growth was primarily in savings and time deposits, which have increased $13.6
million and $11.9 million, respectively.
During the first quarter of 2008, the Company completed a private
placement of $16.0 million trust preferred securities through its City Holding
Capital Trust III subsidiary. Distributions on the Trust Preferred Securities
are cumulative and will be payable quarterly at an interest rate of 3.50% over
the three-month LIBOR Rate, reset quarterly. Interest payments are due in
March, June, September, and December. The securities mature in 30 years and
are redeemable at par by the Company after five years. The proceeds of the
capital securities were used to fund the redemption of all the Company's
outstanding 9.15% trust preferred securities in the amount of $16.0 million
during the first quarter.
Income Tax Expense
The Company's effective income tax rate for the first quarter of 2008 was
33.0% compared to 33.6% for the year ended December 31 2007 and 34.8% for the
quarter ended March 31, 2007. The effective rate is based upon the Company's
expected tax rate for the year ending December 31, 2008.
Previously Securitized Loans
At March 31, 2008, the Company reported "Previously Securitized Loans" of
$6.0 million compared to $6.9 million at December 31, 2007 and $12.7 million
at March 31, 2007, respectively, representing a decrease of 12.6% and 52.7%,
respectively. The yield on the previously securitized loans was 98.8% for the
quarter ended March 31, 2008, compared to 93.2% for the quarter ended December
31, 2007, and 49.5% for the quarter ended March 31, 2007. The yield on the
previously securitized loans has increased due to improved cash flows as net
default rates have been less than previously estimated. The default rates
have decreased as a result of the Company's assumption of the servicing of all
of the pool balances during the second quarter of 2005. Subsequent to our
assumption of the servicing of these loans, the Company has averaged net
recoveries, but does not believe that continued net recoveries can be
sustained indefinitely.
Capitalization and Liquidity
One of the Company's strengths is that it is highly profitable while
maintaining strong liquidity and capital. With respect to liquidity, the
Company's loan to deposit ratio was 84.5% and the loan to asset ratio was
67.5% at March 31, 2008. The Company maintained investment securities
totaling 19.7% of assets as of this date. Further, the Company's deposit mix
is weighted heavily toward checking and saving accounts that fund 43.3% of
assets at March 31, 2008. Time deposits fund 36.7% of assets at March 31,
2008, but very few of these deposits are in accounts that have balances of
more than $150,000, reflecting the core retail orientation of the Company.
The Company is also strongly capitalized. With respect to regulatory
capital, at March 31, 2008, the Company's Leverage Ratio is 10.47%, the Tier I
Capital ratio is 13.96%, and the Total Risk-Based Capital ratio is 14.97%.
These regulatory capital ratios are significantly above levels required to be
considered "well capitalized," which is the highest possible regulatory
designation.
On February 27, 2008 the Board approved a 10% increase in the quarterly
cash dividend to 34 cents per share payable April 30, 2008 to shareholders of
record as of April 15, 2008. During the quarter ended March 31, 2008, the
Company repurchased 104,960 common shares at a weighted average price of
$35.37 as part of a one million share repurchase plan authorized by the Board
of Directors in August 2007. The Company's tangible equity ratio was 10.0% at
March 31, 2008 compared with a tangible equity ratio of 9.7% at December 31,
2007.
City Holding Company is the parent company of City National Bank of West
Virginia. City National operates 69 branches acrossWest Virginia,Eastern
Kentucky andSouthern 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 may
experience increases in the default rates on previously securitized loans that
would result in impairment losses or lower the yield on such loans; (4) the
Company may continue to benefit from strong recovery efforts on previously
securitized loans resulting in improved yields on these assets; (5) the
Company could have adverse legal actions of a material nature; (6) the Company
may face competitive loss of customers; (7) the Company may be unable to
manage its expense levels; (8) the Company may have difficulty retaining key
employees; (9) 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; (10) changes in general economic
conditions and increased competition could adversely affect the Company's
operating results; (11) changes in other regulations and government policies
affecting bank holding companies and their subsidiaries, including changes in
monetary policies, could negatively impact the Company's operating results;
and (12) the Company may experience difficulties growing loan and deposit
balances. Forward-looking statements made herein reflect management's
expectations as of the date such statements are made. Such information is
provided to assist stockholders and potential investors in understanding
current and anticipated financial operations of the Company and is included
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The Company undertakes no obligation to update any
forward-looking statement to reflect events or circumstances that arise after
the date such statements are made.
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Three Months Ended March 31, Percent
2008 2007 Change
Earnings ($000s, except per
share data):
Net Interest Income (FTE) $24,133 $24,671 (2.18)%
Net Income 13,038 13,231 (1.46)%
Earnings per Basic Share 0.81 0.76 6.58%
Earnings per Diluted Share 0.80 0.76 5.26%
Key Ratios (percent):
Return on Average Assets 2.09% 2.10% (0.54)%
Return on Average Tangible
Equity
21.55% 21.15% 1.92%
Net Interest Margin 4.40% 4.41% (0.21)%
Efficiency Ratio 48.17% 44.93% 7.21%
Average Shareholders' Equity
to Average Assets 12.03% 12.27% (1.99)%
Consolidated Risk Based
Capital Ratios (a):
Tier I 13.96% 15.31% (8.82)%
Total 14.97% 16.25% (7.88)%
Tangible Equity to Tangible
Assets 10.00% 9.79% 2.23%
Common Stock Data:
Cash Dividends Declared
per Share $0.34 $0.31 9.68%
Book Value per Share 18.92 17.62 7.40%
Tangible Book Value per Share 15.32 14.21 7.79%
Market Value per Share:
High 41.37 41.54 (0.41)%
Low 32.51 38.04 (14.54)%
End of Period 39.90 40.45 (1.36)%
Price/Earnings Ratio (b) 12.31 13.31 (7.45)%
(a) March 31, 2008 risk-based capital ratios are estimated
(b) March 31, 2008 price/earnings ratio computed based on annualized
first quarter 2008 earnings
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Book Value and Market Price Range per Share
Market Price
Book Value per Share Range per Share
March 31 June 30 September 30 December 31 Low High
2004 $12.09 $11.89 $12.70 $13.03 $27.30 $37.58
2005 13.20 15.56 15.99 16.14 27.57 39.21
2006 16.17 16.17 16.99 17.46 34.53 41.87
2007 17.62 17.40 17.68 18.14 31.16 41.54
2008 18.92 32.51 41.37
Earnings per Basic Share
Quarter Ended
March 31 June 30 September 30 December 31 Year-to-Date
2004 $0.66 $0.80 $0.66 $0.67 $2.79
2005 0.70 0.72 0.73 0.72 2.87
2006 0.71 0.78 0.78 0.74 3.00
2007 0.76 0.72 0.76 0.78 3.02
2008 0.81 0.81
Earnings per Diluted Share
Quarter Ended
March 31 June 30 September 30 December 31 Year-to-Date
2004 $0.65 $0.79 $0.65 $0.66 $2.75
2005 0.69 0.71 0.72 0.72 2.84
2006 0.71 0.77 0.77 0.74 2.99
2007 0.76 0.72 0.76 0.78 3.01
2008 0.80 0.80
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
Three Months Ended March 31,
2008 2007
Interest Income
Interest and fees on loans $30,992 $31,464
Interest on investment securities:
Taxable 6,064 6,933
Tax-exempt 399 427
Interest on deposits in depository
institutions 65 117
Interest on federal funds sold - 257
Total Interest Income 37,520 39,198
Interest Expense
Interest on deposits 12,015 12,712
Interest on short-term borrowings 1,145 1,513
Interest on long-term debt 441 531
Total Interest Expense 13,601 14,756
Net Interest Income 23,919 24,442
Provision for loan losses 1,600 900
Net Interest Income After Provision
for Loan Losses 22,319 23,542
Non-Interest Income
Investment securities gains 2 -
Service charges 10,991 10,063
Insurance commissions 1,038 1,012
Trust and investment management fee income 632 568
Bank owned life insurance 676 696
Gain on sale of credit card merchant
agreements - 1,500
VISA IPO Gain 3,289 -
Other income 407 532
Total Non-Interest Income 17,035 14,371
Non-Interest Expense
Salaries and employee benefits 9,363 9,057
Occupancy and equipment 1,597 1,637
Depreciation 1,133 1,070
Professional fees 367 403
Postage, delivery, and statement mailings 654 777
Advertising 617 852
Telecommunications 418 455
Bankcard expenses 621 518
Insurance and regulatory 338 385
Office supplies 457 455
Repossessed asset losses (gains),
net of expenses 32 (14)
Loss on early extinguishment of debt 1,208 -
Other expenses 3,094 2,021
Total Non-Interest Expense 19,899 17,616
Income Before Income Taxes 19,455 20,297
Income tax expense 6,417 7,066
Net Income $13,038 $13,231
Basic earnings per share $0.81 $0.76
Diluted earnings per share $0.80 $0.76
Average Common Shares Outstanding:
Basic 16,147 17,369
Diluted 16,205 17,424
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) ($ in 000s)
Three Months Ended
March 31, 2008 March 31, 2007
Balance at January 1 $293,994 $305,307
Cumulative effect of adopting FIN 48 - (125)
Net income 13,038 13,231
Other comprehensive income:
Change in unrealized gain on
securities available-for-sale 1,748 723
Change in unrealized gain on interest
rate floors 4,899 122
Cash dividends declared ($0.34/share) (5,476) -
Cash dividends declared ($0.31/share) - (5,342)
Issuance of stock award shares, net 273 264
Exercise of 5,700 stock options 76 -
Exercise of 5,300 stock options - 82
Excess tax benefits on stock compensation 6 -
Purchase of 104,960 common shares of treasury (3,717) -
Purchase of 274,300 common shares of treasury - (10,908)
Balance at March 31 $304,841 $303,354
CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)
Quarter Ended
March 31 Dec. 31 Sept. 30 June 30 March 31
2008 2007 2007 2007 2007
Interest income $37,520 $38,989 $39,597 $39,530 $39,198
Taxable
equivalent
adjustment 214 226 224 231 230
Interest income
(FTE) 37,734 39,215 39,821 39,761 39,428
Interest expense 13,601 14,950 15,374 15,196 14,756
Net interest
income 24,133 24,265 24,447 24,565 24,672
Provision for
loan losses 1,600 1,650 1,200 1,600 900
Net interest
income after
provision for
loan losses 22,533 22,615 23,247 22,965 23,772
Noninterest
income 17,035 14,281 13,814 13,689 14,371
Noninterest
expense 19,899 17,861 18,031 17,525 17,616
Income before
income taxes 19,669 19,035 19,030 19,129 20,527
Income tax
expense 6,417 6,051 6,092 6,576 7,066
Taxable
equivalent
adjustment 214 226 224 231 230
Net income $13,038 $12,758 $12,714 $12,322 $13,231
Basic earnings
per share $0.81 $0.78 $0.76 $0.72 $0.76
Diluted earnings
per share 0.80 0.78 0.76 0.72 0.76
Cash dividends
declared per
share 0.34 0.31 0.31 0.31 0.31
Average Common
Share (000s):
Outstanding 16,147 16,359 16,714 17,100 17,369
Diluted 16,205 16,414 16,767 17,158 17,424
Net Interest
Margin 4.40% 4.32% 4.32% 4.32% 4.41%
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
Quarter Ended
March 31 Dec. 31 Sept. 30 June 30 Mar 31
2008 2007 2007 2007 2007
Non-Interest Income:
Service charges $10,991 $11,735 $11,192 $11,426 $10,063
Insurance
commissions 1,038 1,119 1,127 832 1,012
Trust and investment
management fee
income 632 514 523 437 568
Bank owned life
insurance 676 600 596 585 696
Other income 407 312 377 364 532
Subtotal 13,744 14,280 13,815 13,644 12,871
Investment
securities gains
(losses) 2 1 (1) 45 -
VISA IPO Gain 3,289 - - - -
Gain on sale of
credit card
merchant agreements - - - - 1,500
Total Non-Interest
Income $17,035 $14,281 $13,814 $13,689 $14,371
Non-Interest Expense:
Salaries and
employee benefits $9,363 $8,759 $9,307 $8,912 $9,057
Occupancy and
equipment 1,597 1,604 1,600 1,525 1,637
Depreciation 1,133 1,133 1,160 1,109 1,070
Professional fees 367 424 416 385 403
Postage, delivery,
and statement
mailings 654 601 641 569 777
Advertising 617 590 801 880 852
Telecommunications 418 456 438 460 455
Bankcard expenses 621 617 623 597 518
Insurance and
regulatory 338 422 364 383 385
Office supplies 457 469 472 442 455
Repossessed asset
losses (gains),
net of expenses 32 (105) (47) 9 (14)
Loss on early
extinguishment
of debt 1,208 - - - -
Other expenses 3,094 2,891 2,256 2,254 2,021
Total Non-Interest
Expense $19,899 $17,861 $18,031 $17,525 $17,616
Employees (Full Time
Equivalent) 821 811 808 807 791
Branch Locations 69 69 68 68 68
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
March 31 December 31
2008 2007
(Unaudited)
Assets
Cash and due from banks $65,705 $64,726
Interest-bearing deposits in depository
institutions 11,252 9,792
Cash and cash equivalents 76,957 74,518
Investment securities available-for-sale,
at fair value 464,215 382,098
Investment securities held-to-maturity,
at amortized cost 33,748 34,918
Total investment securities 497,963 417,016
Gross loans 1,704,800 1,767,021
Allowance for loan losses (18,567) (17,581)
Net loans 1,686,233 1,749,440
Bank owned life insurance 68,143 64,467
Premises and equipment 54,144 54,635
Accrued interest receivable 10,562 11,254
Net deferred tax assets 16,019 20,633
Intangible assets 58,065 58,238
Other assets 56,842 32,566
Total Assets $2,524,928 $2,482,767
Liabilities
Deposits:
Noninterest-bearing $310,646 $314,231
Interest-bearing:
Demand deposits 420,328 397,510
Savings deposits 362,041 350,607
Time deposits 925,630 927,733
Total deposits 2,018,645 1,990,081
Short-term borrowings 139,378 161,916
Long-term debt 21,425 4,973
Other liabilities 40,639 31,803
Total Liabilities 2,220,087 2,188,773
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 March 31, 2008 and
December 31, 2007 less 2,383,242 and
2,292,357 shares in treasury, respectively 46,249 46,249
Capital surplus 103,276 103,390
Retained earnings 231,948 224,386
Cost of common stock in treasury (83,912) (80,664)
Accumulated other comprehensive income:
Unrealized loss on securities
available-for-sale (35) (1,783)
Unrealized gain on derivative instruments 9,289 4,390
Underfunded pension liability (1,974) (1,974)
Total Accumulated Other
Comprehensive Income 7,280 633
Total Stockholders' Equity 304,841 293,994
Total Liabilities and Stockholders'
Equity $2,524,928 $2,482,767
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
March 31 Dec 31 Sept 30 June 30 March 31
2008 2007 2007 2007 2007
Residential
real estate $605,579 $602,057 $600,094 $601,045 $596,412
Home equity 347,986 341,818 338,161 330,203 324,653
Commercial,
financial, and
agriculture 699,653 707,987 666,960 681,388 663,183
Loans to
depository
institutions - 60,000 60,000 60,000 50,000
Installment
loans to
individuals 45,557 48,267 46,244 47,397 44,756
Previously
securitized
loans 6,025 6,892 8,317 10,321 12,744
Gross Loans $1,704,800 $1,767,021 $1,719,776 $1,730,354 $1,691,748
CITY HOLDING COMPANY AND SUBSIDIARIES
Previously Securitized Loans
(Unaudited) ($ in millions)
Annualized Effective
December 31 Interest Annualized
Year Ended: Balance (a) Income (a) Yield (a)
2007 $6.9 $7.3 69%
2008 4.8 5.7 98%
2009 3.5 4.1 98%
2010 3.0 3.2 98%
2011 2.4 2.7 98%
a - 2007 amounts are based on actual results. 2008 amounts are based on
actual results through March 31, 2008 and estimated amounts for the
remainder of the year. 2009, 2010, and 2011 amounts are based on
estimated amounts.
Note: The amounts reflected in the table above require management to make
significant assumptions based on estimated future default,
prepayment, and discount rates. Actual performance could be
significantly different from that assumed, which could result in
the actual results being materially different from the amounts
estimated above.
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
Three Months Ended March 31,
2008 2007
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
Assets:
Loan portfolio:
Residential real
estate $601,600 $9,886 6.61% $594,504 $8,854 6.04%
Home equity 343,658 5,912 6.92% 322,647 6,242 7.85%
Commercial,
financial, and
agriculture 700,155 12,234 7.03% 667,073 12,689 7.71%
Loans to
depository
institutions 4,670 35 3.01% 49,444 654 5.36%
Installment loans
to individuals 47,629 1,346 11.37% 42,903 1,269 12.00%
Previously
securitized
loans 6,421 1,578 98.84% 14,375 1,756 49.54%
Total loans 1,704,133 30,991 7.31% 1,690,946 31,464 7.55%
Securities:
Taxable 455,663 6,064 5.35% 505,585 6,933 5.56%
Tax-exempt 37,723 614 6.55% 40,413 658 6.60%
Total
securities 493,386 6,678 5.44% 545,998 7,591 5.64%
Deposits in
depository
institutions 8,697 65 3.01% 13,033 117 3.64%
Federal funds sold - - - 19,533 256 5.32%
Total
interest-
earning
assets 2,206,216 37,734 6.88% 2,269,510 39,428 7.05%
Cash and due
from banks 65,442 50,129
Bank premises
and equipment 54,709 44,968
Other assets 186,273 169,046
Less: Allowance
for loan losses (17,837) (15,636)
Total assets $2,494,803 $2,518,017
Liabilities:
Interest-bearing
demand deposits 409,745 712 0.70% 430,201 1,332 1.26%
Savings deposits 360,587 1,104 1.23% 330,023 1,307 1.61%
Time deposits 933,502 10,199 4.39% 921,937 10,074 4.43%
Short-term
borrowings 127,793 1,145 3.60% 146,455 1,512 4.19%
Long-term debt 22,505 441 7.88% 32,434 532 6.65%
Total interest-
bearing
liabilities 1,854,132 13,601 2.95% 1,861,050 14,757 3.22%
Noninterest-
bearing demand
deposits 311,885 316,716
Other liabilities 28,770 31,234
Stockholders'
equity 300,016 309,017
Total liabilities
and
stockholders'
equity $2,494,803 $2,518,017
Net interest
income $24,133 $24,671
Net yield on
earning assets 4.40% 4.41%
CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)
March 31 Dec 31 Sept 30 June 30 March 31
2008 (a) 2007 2007 2007 2007
Tier I Capital:
Stockholders'
equity $304,841 $293,994 $291,720 $294,783 $303,354
Goodwill and other
intangibles (58,065) (58,238) (58,328) (58,504) (58,681)
Accumulated other
comprehensive
(income) loss (7,280) (633) 4,396 8,647 2,014
Qualifying trust
preferred stock 16,000 16,000 16,000 16,000 16,000
Unrealized Loss on
AFS securities (275) (247) (94) (97) -
Excess deferred tax
assets - - - (342) -
Total tier I capital $255,221 $250,876 $253,694 $260,486 $262,374
Total Risk-Based
Capital:
Tier I capital $255,221 $250,876 $253,694 $260,486 $262,687
Qualifying
allowance for
loan losses 18,567 17,581 16,980 16,616 16,082
Total risk-based
capital $273,788 $268,457 $270,674 $277,102 $278,456
Net risk-weighted
assets $1,828,559 $1,776,158 $1,709,486 $1,719,540 $1,715,664
Ratios:
Average
stockholders'
equity to average
assets 12.03% 11.84% 11.82% 12.11% 12.27%
Tangible capital
ratio 10.00% 9.72% 9.59% 9.58% 9.79%
Risk-based capital
ratios:
Tier I capital 13.96% 14.12% 14.84% 15.15% 15.31%
Total risk-based
capital 14.97% 15.11% 15.83% 16.11% 16.25%
Leverage capital 10.47% 10.31% 10.38% 10.52% 10.68%
(a) March 31, 2008 risk-based capital ratios are estimated
CITY HOLDING COMPANY AND SUBSIDIARIES
Intangibles
(Unaudited) ($ in 000s)
As of and for the Quarter Ended
March 31 Dec 31 Sept 30 June 30 March 31
2008 2007 2007 2007 2006
Intangibles, net $58,065 $58,238 $58,328 $58,504 $58,681
Intangibles
amortization expense 173 177 176 177 176
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)
Quarter Ended
March 31 Dec 31 Sept 30 June 30 March 31
2008 2007 2007 2007 2007
Balance at
beginning of
period $17,581 $16,980 $16,616 $16,083 $15,405
Charge-offs:
Commercial,
financial, and
agricultural 406 359 - 120 35
Real estate-
mortgage 274 203 240 452 111
Installment loans
to individuals 75 108 91 60 84
Overdraft deposit
accounts 622 938 1,035 956 860
Total charge-
offs 1,377 1,608 1,366 1,588 1,090
Recoveries:
Commercial,
financial, and
agricultural 13 23 19 41 148
Real estate-
mortgage 27 35 22 15 15
Installment loans
to individuals 108 97 89 98 132
Overdraft deposit
accounts 615 404 400 367 573
Total recoveries 763 559 530 521 868
Net charge-offs 614 1,049 836 1,067 222
Provision for
loan losses 1,600 1,650 1,200 1,600 900
Balance at end
of period $18,567 $17,581 $16,980 $16,616 $16,083
Loans
outstanding $1,704,800 $1,767,021 $1,719,776 $1,730,354 $1,691,748
Average loans
outstanding 1,704,133 1,739,166 1,729,267 1,710,989 1,690,946
Allowance as
a percent of
loans
outstanding 1.09% 1.00% 0.99% 0.96% 0.95%
Allowance as
a percent of
non-performing
loans 113.55% 103.28% 86.47% 145.11% 35.75%
Net charge-offs
(annualized) as
a percent of
average loans
outstanding 0.14% 0.24% 0.19% 0.25% 0.05%
Net charge-offs,
excluding
overdraft
deposit accounts,
(annualized) as
a percent of
average loans
outstanding 0.14% 0.12% 0.05% 0.11% (0.02)%
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
March 31 Dec 31 Sept 30 June 30 March 31
2008 2007 2007 2007 2007
Nonaccrual loans $15,840 $16,437 $18,896 $11,194 $6,714
Accruing loans
past due 90 days
or more 257 390 566 212 108
Previously
securitized loans
past due 90 days
or more 255 198 176 45 -
Total non-
performing loans 16,352 17,025 19,638 11,451 6,822
Other real estate
owned, excluding
property associated
with previously
securitized loans 4,192 4,163 1,091 624 290
Other real estate
owned associated
with previously
securitized loans 148 - 405 231 252
Other real estate
owned 4,340 4,163 1,496 855 542
Total non-
performing
assets $20,692 $21,188 $21,134 $12,306 $7,364
Non-performing
assets as a
percent of loans
and other real
estate owned 1.21% 1.20% 1.23% 0.71% 0.44%
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Total Past Due Loans
(Unaudited) ($ in 000s)
March 31 Dec 31 Sept 30 June 30 March 31
2008 2007 2007 2007 2007
Residential real
estate $3,763 $5,480 $4,500 $3,354 $2,372
Home equity 1,344 2,141 1,075 879 999
Commercial,
financial, and
agriculture 806 1,506 311 2,248 1,185
Loans to
depository
institutions - - - - -
Installment loans
to individuals 360 385 279 370 283
Previously
securitized loans 897 1,099 948 799 596
Overdraft deposit
accounts 568 612 575 692 500
Total past due
loans $7,738 $11,223 $7,688 $8,342 $5,935
SOURCE City Holding Company
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Copyright © 2009, NewsBlaze,
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