City Holding Company Announces First Quarter Results

CHARLESTON, W. Va.--()--City Holding Company (“Company” or “City”) (NASDAQ: CHCO), a $4.1 billion bank holding company headquartered in Charleston, today announced quarterly net income of $16.0 million and diluted earnings of $1.04 per share.

Highlights of the Company’s first quarter performance and results included the following:

  • Return on assets and return on tangible equity of 1.60% and 16.5%, respectively.
  • Net interest income increased $1.9 million from the quarter ended March 31, 2016 (excluding accretion from fair value adjustments).
  • Realized $4.3 million of investment gains from the sales of pooled trust preferred securities during the quarter ended March 31, 2017.
  • Total loan growth of $27.9 million (3.7% annualized) from December 31, 2016 to March 31, 2017.
  • Average total deposit balances grew $82.7 million, or 2.6%, from the quarter ended December 31, 2016 to the quarter ended March 31, 2017.
  • Sold 441,000 shares of common stock at a weighted average price of $64.48 per share, net of broker fees.
  • Increased our quarterly dividend from $0.43 per quarter to $0.44 per quarter.

Net Interest Income

The Company’s tax equivalent net interest income increased $0.2 million, or 0.5%, from $30.6 million for the fourth quarter of 2016 to $30.8 million for the first quarter of 2017. Investment interest income increased $0.4 million from the quarter ended December 31, 2016. This increase was partially offset by increased interest expense on interest bearing liabilities ($0.3 million). The Company’s reported net interest margin increased from 3.42% for the fourth quarter of 2016 to 3.45% for the first quarter of 2017. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 3.42% for the quarter ended March 31, 2017 and 3.37% for the quarter ended December 31, 2016.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned improved from 0.61% at December 31, 2016 to 0.52% at March 31, 2017. Total nonperforming assets decreased from $18.7 million at December 31, 2016 to $15.9 million at March 31, 2017. Excluded from this ratio are purchased credit-impaired loans for which the Company estimated cash flows and estimated a credit mark. Such loans would be considered nonperforming loans if the loan’s performance deteriorates below the initial expectations. Total past due loans decreased from $8.6 million, or 0.28% of total loans outstanding, at December 31, 2016 to $6.2 million, or 0.20% of total loans outstanding, at March 31, 2017.

As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $0.7 million in the first quarter of 2017, compared to $0.5 million for the comparable period in 2016 and $1.3 million for the fourth quarter of 2016. The provision for loan losses recorded in the first quarter of 2017 reflects the growth in the loan portfolio, changes in the quality of the portfolio, and general improvement in the Company’s historical loss rates used to compute the allowance not specifically allocated to individual credits. 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.

Non-interest Income

During the first quarter of 2017, the Company realized $4.3 million of investment gains. These gains represented partial recoveries of impairment charges previously recognized on pooled trust preferred securities. As a result of these sales, the Company no longer holds any pooled trust preferred securities in its investment portfolio. Exclusive of this gain, non-interest income increased from $13.1 million for the first quarter of 2016 to $14.2 million for the first quarter of 2017. This increase was mainly due to an increase of $0.5 million in bank owned life insurance revenues due to death benefit proceeds, an increase of $0.4 million, or 6.8%, in service charges, and an increase of $0.2 million, or 4.4%, in bankcard revenues.

Non-interest Expenses

Non-interest expenses increased $0.5 million (1.9% increase), from $24.2 million in the first quarter of 2016 to $24.6 million in the first quarter of 2017. This increase was primarily due to an increase in salaries and employee benefits of $0.4 million due primarily to salary increases.

Balance Sheet Trends

Loans increased $27.9 million (0.9%) from December 31, 2016 to $3.07 billion at March 31, 2017. Commercial real estate loans increased $20.6 million (1.7%) and commercial and industrial loans increased $19.3 million (10.4%). These increases were partially offset by decreases in residential real estate loans ($6.7 million) and home equity junior lien loans ($2.8 million).

Total average depository balances increased $82.7 million, or 2.6%, from the quarter ended December 31, 2016 to the quarter ended March 31, 2017. The Company experienced increases in savings deposits ($38.3 million), interest-bearing deposits ($18.7 million), time deposits ($16.1 million) and noninterest-bearing demand deposits ($9.6 million).

Income Tax Expense

The Company’s effective income tax rate for the first quarter of 2017 was 32.3% compared to 32.5% for the year ended December 31, 2016, and 33.4% for the quarter ended March 31, 2016.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 90.6% and the loan to asset ratio was 74.5% at March 31, 2017. The Company maintained investment securities totaling 13.4% of assets as of the same date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 56.5% of assets at March 31, 2017. Time deposits fund 25.7% of assets at March 31, 2017, 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 due in part to the sale of additional common shares in the fourth quarter of 2016 and the first quarter of 2017 discussed below. The Company’s tangible equity ratio increased from 9.3% at December 31, 2016 to 10.0% at March 31, 2017. At March 31, 2017, City National Bank’s Leverage Ratio was 8.40%, its Common Equity Tier I ratio was 11.74%, its Tier I Capital ratio was 11.74%, and its Total Risk-Based Capital ratio was 12.44%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On March 29, 2017, the Board approved a quarterly cash dividend of $0.44 per share payable April 28, 2017, to shareholders of record as of April 14, 2017. This increase represented a 2.3% increase from the $0.43 per share cash dividend paid in the fourth quarter of 2016. During the quarter ended March 31, 2017, the Company sold 441,000 common shares at a weighted average price of $64.48 per share, net of broker fees pursuant to an at-the-market common stock offering. Through April 21, 2017, the Company has sold approximately 548,000 shares under the at-the-market offering at a weighted average price of $64.82 per share, net of broker fees.

City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 85 branches across 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 materially 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 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) 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”) and the regulations promulgated and to be promulgated thereunder, which may subject the Company and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses; (14) the impact of new minimum capital thresholds established as a part of the implementation of Basel III; and (15) other risk factors relating to the banking industry or the Company as detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission, including those risk factors included in the disclosures under the heading “ITEM 1A Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. 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 March 31, 2017 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2017 results and will adjust the amounts if necessary.

       
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 
Three Months Ended
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
 
Earnings
Net Interest Income (FTE) $ 30,804 $ 30,638 $ 30,002 $ 29,863 $ 29,312
Net Income available to common shareholders 16,026 14,656 13,232 12,541 11,702
 
Per Share Data
Earnings per share available to common shareholders:
Basic $ 1.04 $ 0.97 $ 0.88 $ 0.83 $ 0.78
Diluted 1.04 0.97 0.88 0.83 0.78
Weighted average number of shares (in thousands):
Basic 15,252 14,894 14,899 14,889 14,916
Diluted 15,277 14,914 14,909 14,902 14,927
Period-end number of shares (in thousands) 15,586 15,128 15,007 15,005 14,971
Cash dividends declared $ 0.44 $ 0.43 $ 0.43 $ 0.43 $ 0.43
Book value per share (period-end) $ 30.90 $ 29.25 $ 28.97 $ 28.60 $ 27.93
Tangible book value per share (period-end) 25.83 24.01 23.69 23.30 22.61
Market data:
High closing price $ 67.93 $ 68.29 $ 50.60 $ 50.14 $ 47.78
Low closing price 60.86 48.49 44.53 43.06 40.82
Period-end closing price 64.48 67.60 50.29 45.47 47.78
Average daily volume (in thousands) 57 57 61 63 71
Treasury share activity:
Treasury shares repurchased (in thousands) - - - 2 229
Average treasury share repurchase price $ - $ - $ - $ 46.65 $ 43.31
Common share issuance:
Common shares issued (in thousands) 441 108 - - -
Average common share issue price (a) $ 64.48 $ 66.21 $ - $ - $ -
 
Key Ratios (percent)
Return on average assets 1.60 % 1.49 % 1.38 % 1.31 % 1.25 %
Return on average tangible equity 16.5 % 16.1 % 14.9 % 14.5 % 13.8 %
Yield on interest earning assets 3.88 % 3.81 % 3.85 % 3.95 % 3.91 %
Cost of interest bearing liabilities 0.54 % 0.50 % 0.49 % 0.49 % 0.48 %
Net Interest Margin 3.45 % 3.42 % 3.48 % 3.56 % 3.53 %
Non-interest income as a percent of total revenue 31.9 % 32.1 % 32.1 % 31.6 % 31.1 %
Efficiency Ratio 53.8 % 48.9 % 56.3 % 55.6 % 56.8 %
Price/Earnings Ratio (b) 15.51 17.38 14.33 13.66 15.40
 
Capital (period-end)
Average Shareholders' Equity to Average Assets 11.66 % 11.25 % 11.35 % 11.13 % 11.23 %
Tangible equity to tangible assets 9.95 % 9.30 % 9.39 % 9.38 % 9.03 %
Consolidated risk based capital ratios (c):
CET I 14.61 % 13.41 % 13.00 % 13.21 % 13.38 %
Tier I 15.18 % 13.98 % 13.59 % 13.82 % 14.00 %
Total 15.91 % 14.73 % 14.33 % 14.57 % 14.78 %
Leverage 10.83 % 10.08 % 9.92 % 9.74 % 9.78 %
 
Other
Branches 85 85 85 85 85
FTE 833 847 834 852 854
 
Assets per FTE (in thousands) $ 4,951 $ 4,704 $ 4,636 $ 4,468 $ 4,484
Deposits per FTE (in thousands) 4,073 3,815 3,812 3,688 3,732
 
 
(a) The common share issue price is presented net of commissions and excludes one-time offering costs of approximately $265,000.
(b) The price/earnings ratio is computed based on annualized quarterly earnings.
(c) March 31, 2017 risk-based capital ratios are estimated.
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
         
Three Months Ended
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
 
Interest Income
Interest and fees on loans $ 30,104 $ 30,126 $ 29,444 $ 29,640 $ 28,927
Interest on investment securities:
Taxable 3,444 3,277 3,183 2,927 3,005
Tax-exempt 663 481 419 365 357
Interest on deposits in depository institutions   3     -     -     -     -
Total Interest Income 34,214 33,884 33,046 32,932 32,289
 
Interest Expense
Interest on deposits 3,429 3,137 3,006 3,011 2,898
Interest on short-term borrowings 157 188 90 86 107
Interest on long-term debt   181     179     172     167     164
Total Interest Expense   3,767     3,504     3,268     3,264     3,169
Net Interest Income 30,447 30,380 29,778 29,668 29,120
Provision for loan losses   681     1,301     1,432     1,122     539
Net Interest Income After Provision for Loan Losses 29,766 29,079 28,346 28,546 28,581
 
Non-Interest Income
Net gains on sale of investment securities 4,276 - 2,668 845 -
Service charges 6,730 6,995 6,842 6,564 6,303
Bankcard revenue 4,140 4,142 4,216 4,190 3,967
Trust and investment management fee income 1,386 1,597 1,329 1,371 1,276
Bank owned life insurance 1,229 952 846 768 760
Other income   746     685     846     843     821
Total Non-Interest Income 18,507 14,371 16,747 14,581 13,127
 
Non-Interest Expense
Salaries and employee benefits 13,078 12,427 12,993 12,790 12,673
Occupancy and equipment 2,838 2,792 2,759 2,708 2,836
Depreciation 1,525 1,516 1,585 1,567 1,567
FDIC insurance expense 375 137 508 512 465
Advertising 733 445 667 778 716
Bankcard expenses 943 1,011 1,188 1,016 938
Postage, delivery, and statement mailings 555 492 517 506 565
Office supplies 361 320 325 366 353
Legal and professional fees 449 515 869 437 366
Telecommunications 484 494 459 431 428
Repossessed asset losses, net of expenses 336 244 305 53 288
Other expenses   2,923     2,063     3,109     3,119     2,945
Total Non-Interest Expense   24,600     22,456     25,284     24,283     24,140
Income Before Income Taxes 23,673 20,994 19,809 18,844 17,568
Income tax expense   7,647     6,338     6,577     6,303     5,866
Net Income Available to Common Shareholders $ 16,026   $ 14,656   $ 13,232   $ 12,541   $ 11,702
 
Distributed earnings allocated to common shareholders $ 6,782 $ 6,428 $ 6,376 $ 6,375 $ 6,365
Undistributed earnings allocated to common shareholders   9,067     8,051     6,699     6,016     5,206
Net earnings allocated to common shareholders $ 15,849   $ 14,479   $ 13,075   $ 12,391   $ 11,571
 
Average common shares outstanding 15,252 14,894 14,899 14,889 14,916
Shares for diluted earnings per share 15,277 14,914 14,909 14,902 14,927
 
Basic earnings per common share $ 1.04 $ 0.97 $ 0.88 $ 0.83 $ 0.78
Diluted earnings per common share $ 1.04 $ 0.97 $ 0.88 $ 0.83 $ 0.78
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
 
  (Unaudited)     (Unaudited)   (Unaudited)   (Unaudited)
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
 
Assets
Cash and due from banks $ 164,887 $ 62,263 $ 57,233 $ 69,933 $ 165,134
Interest-bearing deposits in depository institutions   25,925       25,876       7,576       8,643       10,031  
Cash and cash equivalents 190,812 88,139 64,809 78,576 175,165
 
Investment securities available-for-sale, at fair value 470,098 450,083 434,717 409,039 362,282
Investment securities held-to-maturity, at amortized cost 72,308 75,169 79,499 83,208 86,518
Other securities   10,240       14,352       11,895       10,203       9,960  
Total investment securities 552,646 539,604 526,111 502,450 458,760
 
Gross loans 3,074,173 3,046,226 2,957,912 2,903,398 2,877,117
Allowance for loan losses   (19,209 )     (19,730 )     (19,550 )     (19,139 )     (19,315 )
Net loans 3,054,964 3,026,496 2,938,362 2,884,259 2,857,802
 
Bank owned life insurance 101,481 100,732 100,293 99,446 98,679
Premises and equipment, net 73,805 75,165 75,589 75,040 75,965
Accrued interest receivable 8,644 8,408 7,986 8,428 8,517
Net deferred tax assets 24,606 28,043 23,179 23,995 27,541
Intangible assets 79,000 79,135 79,284 79,433 79,581
Other assets   38,029       38,681       50,748       55,234       47,656  
Total Assets $ 4,123,987     $ 3,984,403     $ 3,866,361     $ 3,806,861     $ 3,829,666  
 
Liabilities
Deposits:
Noninterest-bearing $ 714,791 $ 672,286 $ 669,865 $ 651,867 $ 666,523
Interest-bearing:
Demand deposits 743,246 695,891 713,642 701,248 711,366
Savings deposits 874,031 822,057 765,195 758,323 780,982
Time deposits   1,060,690       1,041,419       1,030,584       1,030,841       1,028,400  
Total deposits 3,392,758 3,231,653 3,179,286 3,142,279 3,187,271
Short-term borrowings
Federal Funds purchased - 64,100 6,000 - -
Customer repurchase agreements 186,686 184,205 173,384 153,674 156,714
Long-term debt 16,495 16,495 16,495 16,495 16,495
Other liabilities   46,402       45,512       56,412       66,054       51,068  
Total Liabilities 3,642,341 3,541,965 3,431,577 3,378,502 3,411,548
 
Stockholders' Equity
Preferred stock - - - - -
Common stock 47,619 46,518 46,249 46,249 46,249
Capital surplus 140,305 112,873 105,996 105,648 106,137
Retained earnings 426,126 417,017 408,823 402,044 395,963
Cost of common stock in treasury (126,265 ) (126,958 ) (127,538 ) (127,619 ) (129,142 )
Accumulated other comprehensive loss:
Unrealized gain (loss) on securities available-for-sale (1,479 ) (2,352 ) 6,013 6,796 3,670
Underfunded pension liability   (4,660 )     (4,660 )     (4,759 )     (4,759 )     (4,759 )
Total Accumulated Other Comprehensive Loss   (6,139 )     (7,012 )     1,254       2,037       (1,089 )
Total Stockholders' Equity   481,646       442,438       434,784       428,359       418,118  
Total Liabilities and Stockholders' Equity $ 4,123,987     $ 3,984,403     $ 3,866,361     $ 3,806,861     $ 3,829,666  
 
Regulatory Capital
Total CET 1 capital $ 409,533 $ 371,677 $ 355,934 $ 349,100 $ 341,165
Total tier 1 capital 425,533 387,677 371,934 365,100 357,165
Total risk-based capital 445,938 408,406 392,258 384,855 377,003
Total risk-weighted assets 2,807,347 2,772,456 2,737,721 2,642,040 2,550,739
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
         
 
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
 
Residential real estate (1) $ 1,444,795 $ 1,451,461 $ 1,445,242 $ 1,417,137 $ 1,395,670
Home equity - junior liens 139,165 141,965 141,616 142,827 142,694
Commercial and industrial 205,011 185,667 176,387 171,362 165,549
Commercial real estate (2) 1,250,106 1,229,516 1,158,088 1,135,493 1,135,625
Consumer 32,043 32,545 33,614 33,799 34,754
DDA overdrafts   3,053     5,071     2,965     2,780     2,825
Gross Loans $ 3,074,173   $ 3,046,225   $ 2,957,912   $ 2,903,398   $ 2,877,117
 
Construction loans included in:
(1) - Residential real estate loans $ 9,777 $ 14,182 $ 12,284 $ 12,344 $ 13,966
(2) - Commercial real estate loans 18,499 12,840 7,309 2,237 15,172
 
 
Secondary Mortgage Loan Activity
Mortgage loans originated $ 3,951 $ 6,444 $ 5,624 $ 3,103 $ 2,809
Mortgage loans sold 6,118 4,936 5,836 3,183 3,107
Mortgage loans gain on loans sold 167 107 129 80 58
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
         
Three Months Ended
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
Allowance for Loan Losses
Balance at beginning of period $ 19,730 $ 19,550 $ 19,139 $ 19,315 $ 19,251
 
Charge-offs:
Commercial and industrial (53 ) - (103 ) (44 ) (1 )
Commercial real estate (180 ) (463 ) (142 ) (769 ) (302 )
Residential real estate (626 ) (453 ) (539 ) (337 ) (405 )
Home equity (121 ) (90 ) (125 ) (69 ) (106 )
Consumer (6 ) (24 ) (20 ) (44 ) (38 )
DDA overdrafts   (636 )     (395 )     (378 )     (321 )     (318 )
Total charge-offs (1,622 ) (1,425 ) (1,307 ) (1,584 ) (1,170 )
 
Recoveries:
Commercial and industrial 2 1 9 3 1
Commercial real estate 11 40 43 20 384
Residential real estate 25 74 23 51 39
Home equity - - - - -
Consumer 11 9 28 52 29
DDA overdrafts   371       180       183       160       242  
Total recoveries 420 304 286 286 695
                 
Net charge-offs (1,202 ) (1,121 ) (1,021 ) (1,298 ) (475 )
Provision for (recovery of) acquired loans (19 ) (1 ) (4 ) 128 40
Provision for loan losses   700       1,302       1,436       994       499  
Balance at end of period $ 19,209     $ 19,730     $ 19,550     $ 19,139     $ 19,315  
 
Loans outstanding $ 3,074,173 $ 3,046,226 $ 2,957,912 $ 2,903,398 $ 2,877,117
Allowance as a percent of loans outstanding 0.62 % 0.65 % 0.66 % 0.66 % 0.67 %
Allowance as a percent of non-performing loans 167.7 % 140.1 % 129.0 % 124.0 % 120.4 %
 
Average loans outstanding $ 3,055,979 $ 3,006,426 $ 2,919,756 $ 2,891,292 $ 2,864,943
Net charge-offs (annualized) as a percent of average loans outstanding 0.16 % 0.15 % 0.14 % 0.18 % 0.07 %
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
         
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
Nonaccrual Loans
Residential real estate $ 2,810 $ 4,302 $ 3,919 $ 2,531 $ 2,977
Home equity 114 100 154 165 152
Commercial and industrial 1,353 1,958 2,441 2,724 2,967
Commercial real estate 7,141 7,341 8,077 9,779 9,718
Consumer   -       -       -       -       -  
Total nonaccrual loans 11,418 13,701 14,591 15,199 15,814
Accruing loans past due 90 days or more   35       382       569       241       225  
Total non-performing loans 11,453 14,083 15,160 15,440 16,039
Other real estate owned   4,405       4,588       5,435       5,868       6,054  
Total non-performing assets $ 15,858     $ 18,671     $ 20,595     $ 21,308     $ 22,093  
 
Non-performing assets as a percent of loans and other real estate owned 0.52 % 0.61 % 0.69 % 0.73 % 0.77 %
 
Past Due Loans
Residential real estate $ 3,876 $ 6,074 $ 5,713 $ 5,490 $ 5,045
Home equity 301 673 925 595 595
Commercial and industrial 611 94 399 304 343
Commercial real estate 1,014 1,115 1,275 1,746 2,138
Consumer 38 39 104 150 82
DDA overdrafts   330       599       554       290       514  
Total past due loans $ 6,170     $ 8,594     $ 8,970     $ 8,575     $ 8,717  
 
Total past due loans as a percent of loans outstanding 0.20 % 0.28 % 0.30 % 0.30 % 0.30 %
 
Troubled Debt Restructurings ("TDRs")
Accruing:
Residential real estate $ 20,294 $ 20,643 $ 19,944 $ 19,685 $ 18,306
Home equity 3,104 3,105 3,159 2,873 2,878
Commercial and industrial 38 42 46 50 54
Commercial real estate 8,513 5,525 2,718 2,743 523
Consumer   -       -       -       -       -  
Total accruing TDRs $ 31,949     $ 29,315     $ 25,867     $ 25,351     $ 21,761  
 
Non-Accruing
Residential real estate $ 100 $ 172 $ 452 $ 390 $ 36
Home equity 30 30 85 44 -
Commercial and industrial - - - - -
Commercial real estate - - - - -
Consumer   -       -       -       -       -  
Total non-accruing TDRs $ 130     $ 202     $ 537     $ 434     $ 36  
 
Total TDRs $ 32,079     $ 29,517     $ 26,404     $ 25,785     $ 21,797  
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
                       
Three Months Ended
March 31, 2017 December 31, 2016 March 31, 2016
Average Yield/ Average Yield/ Average Yield/
Balance   Interest   Rate     Balance   Interest   Rate     Balance   Interest   Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2) $ 1,591,255 $ 15,479 3.95 % $ 1,597,711 $ 15,469 3.85 % $ 1,531,966 $ 14,918 3.92 %
Commercial, financial, and agriculture (2) 1,429,075 13,598 3.86 % 1,372,197 13,518 3.92 % 1,294,345 12,919 4.01 %
Installment loans to individuals (2), (3) 35,650 581 6.61 % 36,518 696 7.59 % 38,632 721 7.51 %
Previously securitized loans (4) ***     447   ***     ***     443   ***     ***     369   ***
Total loans 3,055,979 30,105 4.00 % 3,006,426 30,126 3.99 % 2,864,943 28,927 4.06 %
Securities:
Taxable 458,295 3,444 3.05 % 479,272 3,277 2.72 % 421,289 3,005 2.87 %
Tax-exempt (5)   84,784       1,019   4.87 %       64,351       739   4.57 %       41,898       549   5.27 %
Total securities 543,079 4,463 3.33 % 543,623 4,016 2.94 % 463,187 3,554 3.09 %
Deposits in depository institutions   16,826       3   0.07 %       11,117       -   -         10,529       -   -  
Total interest-earning assets 3,615,884 34,571 3.88 % 3,561,166 34,142 3.81 % 3,338,659 32,481 3.91 %
Cash and due from banks 81,629 68,514 81,569
Premises and equipment, net 74,768 75,744 76,945
Other assets 253,378 249,271 256,329
Less: Allowance for loan losses   (20,150 )               (20,024 )               (20,591 )        
Total assets $ 4,005,509               $ 3,934,671               $ 3,732,911          
 
Liabilities:
Interest-bearing demand deposits $ 708,434 $ 157 0.09 % $ 689,784 $ 157 0.09 % $ 677,849 $ 145 0.09 %
Savings deposits 831,639 324 0.16 % 793,362 276 0.14 % 767,262 228 0.12 %
Time deposits (2) 1,052,218 2,948 1.14 % 1,036,103 2,704 1.04 % 1,019,416 2,525 1.00 %
Short-term borrowings 195,626 157 0.33 % 233,192 188 0.32 % 162,046 107 0.27 %
Long-term debt   16,495       181   4.45 %       16,495       179   4.32 %       16,495       164   4.00 %
Total interest-bearing liabilities 2,804,412 3,767 0.54 % 2,768,936 3,504 0.50 % 2,643,068 3,169 0.48 %
Noninterest-bearing demand deposits 690,243 680,604 630,524
Other liabilities 43,655 42,354 40,198
Stockholders' equity   467,199                 442,777                 419,121          

Total liabilities and stockholders' equity

$ 4,005,509               $ 3,934,671               $ 3,732,911          
Net interest income     $ 30,804             $ 30,638             $ 29,312    
Net yield on earning assets         3.45 %             3.42 %             3.53 %
 

(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) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bancorp ("Virginia Savings"), Community Financial Corporation ("Community") and American Founders Banks, Inc. ("AFB"):
 
 
Residential real estate $ 138 $ 160 $ 181
Commercial, financial, and agriculture 176 145 394
Installment loans to individuals 9 13 54
Time deposits   17   148   148
$ 338 $ 466 $ 777
 
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited) ($ in 000s, except per share data)
         
Three Months Ended
March 31, 2017   December 31, 2016   September 30, 2016   June 30, 2016   March 31, 2016
Net Interest Income/Margin
 
Net interest income, fully taxable equivalent $ 30,804 $ 30,638 $ 30,002 $ 29,863 $ 29,312
Taxable equivalent adjustment   (357 )     (258 )     (224 )     (195 )     (192 )
Net interest income ("GAAP") $ 30,447     $ 30,380     $ 29,778     $ 29,668     $ 29,120  
 
Average interest earning assets 3,615,884 3,561,166 3,433,673 3,369,565 3,338,659
Net Interest Margin 3.45 % 3.42 % 3.48 % 3.56 % 3.53 %
 
Net interest income, fully taxable equivalent, excluding accretion $ 30,466 $ 30,172 $ 29,361 $ 28,840 $ 28,535
Taxable equivalent adjustment (357 ) (258 ) (224 ) (195 ) (192 )
Accretion related to fair value adjustments   338       466       641       1,023       777  
Net interest income ("GAAP") $ 30,447     $ 30,380     $ 29,778     $ 29,668     $ 29,120  
 
Average interest earning assets $ 3,615,884 $ 3,561,166 $ 3,433,673 $ 3,369,565 $ 3,338,659
Net Interest Margin (excluding accretion) 3.42 % 3.37 % 3.40 % 3.44 % 3.44 %
 
Tangible Equity Ratio (period end)
Tangible common equity to tangible assets 9.95 % 9.30 % 9.39 % 9.38 % 9.03 %
Effect of goodwill and other intangibles, net   1.72 %     1.80 %     1.86 %     1.89 %     1.89 %
Equity to assets ("GAAP")   11.68 %     11.10 %     11.25 %     11.27 %     10.92 %
 
Income tax expense ("GAAP") $ 7,647 $ 6,338 $ 6,577 $ 6,303 $ 5,866
FIN 48   -       554       -       -       -  
Income tax expense, excluding FIN 48 $ 7,647     $ 6,892     $ 6,577     $ 6,303     $ 5,866  
 
Income before income taxes 23,673 20,994 19,809 18,844 17,568
 
Effective tax rate, excluding FIN 48 32.3 % 32.8 % 33.2 % 33.4 % 33.4 %
Effective tax rate ("GAAP") 32.3 % 30.2 % 33.2 % 33.4 % 33.4 %

Contacts

City Holding Company
Charles R. Hageboeck, 304-769-1102
Chief Executive Officer and President

Contacts

City Holding Company
Charles R. Hageboeck, 304-769-1102
Chief Executive Officer and President