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City Holding Company Announces 2012 Earnings

Stocks in this article: CHCO

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. 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.

 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
     
             
Three Months Ended December 31, Percent
  2012       2011     Change
 
Earnings ($000s, except per share data):
Net Interest Income (FTE) $ 25,707 $ 23,440 9.67 %
Net Income available to common shareholders 10,894 9,652 12.87 %
Earnings per Basic Share 0.73 0.65 12.71 %
Earnings per Diluted Share 0.73 0.65 12.63 %
             
 
Key Ratios (percent):
Return on Average Assets 1.49 % 1.43 % 4.64 %
Return on Average Tangible Equity 16.15 % 14.93 % 8.21 %
Net Interest Margin 3.99 % 3.90 % 2.30 %
Efficiency Ratio 53.12 % 51.24 % 3.69 %
Average Shareholders' Equity to Average Assets 11.49 % 11.65 % (1.39 )%
 
Consolidated Risk Based Capital Ratios (a):
Tier I 12.97 % 13.12 % (1.14 )%
Total 13.85 % 14.07 % (1.56 )%
 
Tangible Equity to Tangible Assets 9.40 % 9.37 % 0.35 %
             
 
Common Stock Data:
Cash Dividends Declared per Share $ 0.35 $ 0.35 -
Book Value per Share 22.47 21.05 6.74 %
Tangible Book Value per Share 18.08 17.25 4.83 %
Market Value per Share:
High 36.45 35.10 3.85 %
Low 31.78 26.06 21.95 %
End of Period 34.85 33.89 2.83 %
 
Price/Earnings Ratio (b) 11.89 13.04 (8.77 )%
             
Twelve Months Ended December 31, Percent
  2012       2011     Change
 
Earnings ($000s, except per share data):
Net Interest Income (FTE) $ 98,538 $ 93,044 5.90 %
Net Income available to common shareholders 38,945 40,678 (4.26 )%
Earnings per Basic Share 2.63 2.68 (2.10 )%
Earnings per Diluted Share 2.61 2.67 (2.16 )%
             
 
Key Ratios (percent):
Return on Average Assets 1.37 % 1.51 % (8.83 )%
Return on Average Tangible Equity 14.74 % 15.66 % (5.84 )%
Net Interest Margin 3.96 % 3.89 % 1.75 %
Efficiency Ratio 57.16 % 55.87 % 2.32 %
Average Shareholders' Equity to Average Assets 11.46 % 11.70 % (2.09 )%
             
 
Common Stock Data:
Cash Dividends Declared per Share $ 1.40 $ 1.37 2.19 %
Market Value per Share:
High 37.16 37.22 (0.16 )%
Low 30.96 26.06 18.80 %
 
Price/Earnings Ratio (b) 13.27 12.63 5.04 %
 
 
(a) December 31, 2012 risk-based capital ratios are estimated
(b) December 31, 2012 price/earnings ratio computed based on annualized fourth quarter 2012 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
 
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
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
                         
 
Earnings per Basic Share
 
Quarter Ended
March 31   June 30   September 30   December 31   Year-to-Date
 
2008 $ 0.81 $ 0.83 $ (0.16 ) $ 0.26 $ 1.74
2009 0.69 0.64 0.66 0.70 2.69
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
                         
 
Earnings per Diluted Share
 
Quarter Ended
March 31   June 30   September 30   December 31   Year-to-Date
 
2008 $ 0.80 $ 0.83 $ (0.16 ) $ 0.26 $ 1.74
2009 0.69 0.64 0.66 0.70 2.68
2010 0.58 0.68 0.58 0.64 2.47
2011 0.62 0.64 0.76 0.65 2.67
2012 0.67 0.50 0.71 0.73 2.61
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
 
Three Months Ended December 31,
2012   2011
 
Interest Income
Interest and fees on loans $ 25,588 $ 22,998
Interest on investment securities:
Taxable 2,940 4,036
Tax-exempt 341 398
Interest on federal funds sold   15   9  
Total Interest Income 28,884 27,441
 
Interest Expense
Interest on deposits 3,114 3,965
Interest on short-term borrowings 83 86
Interest on long-term debt   163   165  
Total Interest Expense   3,360   4,216  
Net Interest Income 25,524 23,225
Provision for loan losses   1,775   2,229  
Net Interest Income After Provision for Loan Losses 23,749 20,996
 
Non-Interest Income
Total investment securities impairment losses - (918 )
Noncredit impairment losses recognized in other comprehensive income   -   -  
Net investment securities impairment losses - (918 )
Gains on sale of investment securities   -   1  
Net investment securities losses - (917 )
 
Service charges 7,113 6,511
Bankcard interchange fees 3,101 2,849
Insurance commissions 1,289 1,433
Trust and investment management fee income 1,112 925
Bank owned life insurance 754 728
Other income   897   599  
Total Non-Interest Income 14,266 12,128
 
Non-Interest Expense
Salaries and employee benefits 11,301 10,320
Occupancy and equipment 2,147 1,929
Depreciation 1,234 1,100
FDIC insurance expense 407 300
Advertising 596 153
Bankcard expenses 628 566
Postage, delivery, and statement mailings 514 484
Office supplies 412 429
Legal and professional fees 437 366
Telecommunications 405 388
Repossessed asset (gains)/losses, net of expenses 146 (27 )
Merger related expenses 373 -
Other expenses   2,673   2,677  
Total Non-Interest Expense   21,273   18,685  
Income Before Income Taxes 16,742 14,439
Income tax expense   5,848   4,787  
Net Income Available to Common Shareholders $ 10,894 $ 9,652  
 
 
Distributed earnings allocated to common shareholders $ 5,151 $ 5,136
Undistributed earnings allocated to common shareholders   5,658   4,446  
Net earnings allocated to common shareholders $ 10,809 $ 9,582  
 
Average common shares outstanding 14,755 14,743
Effect of dilutive securities:
Employee stock options   82   71  
Shares for diluted earnings per share   14,837   14,814  
 
Basic earnings per common share $ 0.73 $ 0.65
Diluted earnings per common share $ 0.73 $ 0.65
Dividends declared per common share $ 0.35 $ 0.35
 
Comprehensive Income $ 9,837 $ 8,446
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
   
Twelve months ended December 31,
2012   2011
 
Interest Income
Interest and fees on loans $ 96,432 $ 93,414
Interest on investment securities:
Taxable 14,285 17,729
Tax-exempt 1,442 1,697
Interest on federal funds sold   53     48  
Total Interest Income 112,212 112,888
 
Interest Expense
Interest on deposits 13,477 19,794
Interest on short-term borrowings 312 325
Interest on long-term debt   661     639  
Total Interest Expense   14,450     20,758  
Net Interest Income 97,762 92,130
Provision for loan losses   6,375     4,600  
Net Interest Income After Provision for Loan Losses 91,387 87,530
 
Non-Interest Income
Total investment securities impairment losses (878 ) (2,767 )
Noncredit impairment losses recognized in other comprehensive income   302     1,494  
Net investment securities impairment losses (576 ) (1,273 )
Gains on sale of investment securities   1,530     3,756  
Net investment securities gains 954 2,483
 
Service charges 26,409 26,959
Bankcard interchange fees 12,406 11,150
Insurance commissions 6,071 5,946
Trust and investment management fee income 3,774 3,106
Bank owned life insurance 2,983 3,183
Other income   2,660     2,033  
Total Non-Interest Income 55,257 54,860
 
Non-Interest Expense
Salaries and employee benefits 43,509 40,717
Occupancy and equipment 8,186 8,013
Depreciation 4,605 4,508
FDIC insurance expense 1,590 2,576
Advertising 2,589 2,007
Bankcard expenses 2,662 2,258
Postage, delivery, and statement mailings 2,079 2,099
Office supplies 1,669 1,911
Legal and professional fees 1,786 4,913
Telecommunications 1,614 1,605
Repossessed asset losses, net of expenses 1,346 272
Merger related expenses 4,708 -
Other expenses   11,058     10,262  
Total Non-Interest Expense   87,401     81,141  
Income Before Income Taxes 59,243 61,249
Income tax expense   20,298     20,571  
Net Income Available to Common Shareholders $ 38,945   $ 40,678  
 
 
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
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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  
       
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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 $ - $ - $ -
       
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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  
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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.

 

 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
           
Three Months Ended December 31,
2012 2011
Average Yield/ Average Yield/
Balance   Interest   Rate   Balance   Interest   Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2) $ 1,152,921 $ 12,267 4.23 % $ 1,060,133 $ 12,043 4.51 %
Commercial, financial, and agriculture (3) 901,966 11,420 5.04 % 833,217 9,463 4.51 %
Installment loans to individuals (4), (5) 49,596 1,007 8.08 % 47,515 805 6.72 %
Previously securitized loans (6) ***     894   ***     85       687   3206.59 %
Total loans 2,104,483 25,588 4.84 % 1,940,950 22,998 4.70 %
Securities:
Taxable 380,897 2,940 3.07 % 366,024 4,036 4.37 %
Tax-exempt (7)   35,847       524   5.82 %     42,968       613   5.66 %
Total securities 416,744 3,464 3.31 % 408,992 4,649 4.51 %
Deposits in depository institutions 7,431 - - 7,183 - -
Federal funds sold   32,876       15   0.18 %     25,714       9   0.14 %
Total interest-earning assets 2,561,534 29,067 4.51 % 2,382,839 27,656 4.60 %
Cash and due from banks 70,075 62,176
Bank premises and equipment 72,702 65,030
Other assets 230,098 212,106
Less: Allowance for loan losses   (19,551 )             (19,777 )        
Total assets $ 2,914,858             $ 2,702,374          
 
Liabilities:
Interest-bearing demand deposits 540,107 165 0.12 % 501,570 184 0.15 %
Savings deposits 498,027 183 0.15 % 433,480 233 0.21 %
Time deposits (8) 923,025 2,766 1.19 % 886,187 3,548 1.59 %
Short-term borrowings 128,706 83 0.26 % 130,154 86 0.26 %
Long-term debt   16,495       163   3.93 %     16,495       165   3.97 %
Total interest-bearing liabilities 2,106,360 3,360 0.63 % 1,967,886 4,216 0.85 %
Noninterest-bearing demand deposits 434,429 387,459
Other liabilities 39,120 32,134
Stockholders' equity   334,949               314,895          

Total liabilities and stockholders' equity

$ 2,914,858             $ 2,702,374          
Net interest income     $ 25,707           $ 23,440    
Net yield on earning assets         3.99 %           3.90 %
 
 
 

(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 on residential real estate loans includes $0.1 million of accretion related to the fair      value market adjustments due to the acquisition of Virginia Savings Bancorp.

(3) - Interest income on commercial, financial, and agriculture loans includes $1.4 million of accretion      related to the fair value market adjustments due to the acquisition of Virginia Savings Bancorp.

(4) - 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.

(5) - Includes the Company’s consumer and DDA overdrafts loan categories.

(6) - Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced      to $0.

(7) - Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.

(8) - Interest expense on time deposits includes $0.1 million in accretion of the fair market value adjustments      related to the acquisition of Virginia Savings Bancorp.

 

         
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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.

 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
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 %
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)
         
December 31 September 30 June 30 March 31 December 31
  2012       2012       2012       2012       2011  
 
Nonaccrual loans $ 21,935 $ 22,586 $ 21,726 $ 20,420 $ 21,951
Accruing loans past due 90 days or more   280       397       149       562       166  
Total non-performing loans 22,215 22,983 21,875 20,982 22,117
Other real estate owned   8,162       9,017       8,697       8,250       7,948  
Total non-performing assets $ 30,377     $ 32,000     $ 30,572     $ 29,232     $ 30,065  
 

Non-performing assets as a percent of loans and other real estate owned

1.41 % 1.53 % 1.47 % 1.48 % 1.52 %
                     
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Total Past Due Loans
(Unaudited) ($ in 000s)
 
December 31 September 30 June 30 March 31 December 31
  2012       2012       2012       2012       2011  
 
Residential real estate $ 5,748 $ 4,909 $ 5,575 $ 4,108 $ 5,362
Home equity 2,893 2,643 1,864 1,560 2,246
Commercial and industrial 496 25 540 63 1,243
Commercial real estate 689 1,271 3,145 2,636 3,415
Consumer 121 136 90 58 138

DDA overdrafts

  281       319       364       304       909  
Total past due loans $ 10,228     $ 9,303     $ 11,578     $ 8,729     $ 13,313  
 
Past due loans as a percent of loans outstanding 0.48 % 0.45 % 0.56 % 0.44 % 0.67 %




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