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Section 1: 8-K (8-K, CHCO 1Q2019 EARNINGS)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported)
April 17, 2019

397559574_chcologoa32.jpg

CITY HOLDING COMPANY
(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 0-11733

West Virginia
55-0619957
(State or Other Jurisdiction of
(I.R.S. Employer
Incorporation or Organization)
Identification No.)
 
25 Gatewater Road, Cross Lanes, WV 25313
(Address of Principal Executive Offices, Including Zip Code)
 
304-769-1100
(Registrant’s Telephone Number, Including Area Code)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
x
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨





 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨






Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On April 17, 2019, City Holding Company (“the Company”) issued a news release, attached as Exhibit 99.1, announcing the Company’s earnings results for the first quarter ended March 31, 2019. Furnished as Exhibit 99.1 and incorporated herein by reference is the news release issued by the Company.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1News Release issued April 17, 2019

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the Undersigned hereunto duly authorized.


 
City Holding Company
 
 
 
 
By: 
/s/ David L. Bumgarner
 
David L. Bumgarner
 
Chief Financial Officer

Date: April 17, 2019


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1, PRESS RELEASE CHCO 1Q2019 EARNINGS)

Exhibit











NEWS RELEASE

For Immediate Release
April 17, 2019

For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102

City Holding Company Announces First Quarter Results

Charleston, West Virginia - City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $4.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $21.6 million and diluted earnings of $1.30 per share for the quarter ended March 31, 2019. For the first quarter of 2019, the Company achieved a return on assets of 1.76% and a return on tangible equity of 17.7%. In addition, reported net interest income increased $7.4 million (22.7%) from the quarter ended March 31, 2018, while net interest income exclusive of accretion from fair value adjustments from acquisitions increased $7.2 million (22.2%) from the quarter ended March 31, 2018.

Net Interest Income

The Company’s net interest income increased from $36.4 million during the fourth quarter of 2018 to $40.1 million during the first quarter of 2019. During the first quarter of 2019, the Company’s tax equivalent net interest income increased $3.6 million, or 10.0%, from $36.6 million for the fourth quarter of 2018 to $40.3 million for the first quarter of 2019. The acquisitions of Poage and Farmers Deposit accounted for $3.0 million of this increase. In addition, higher loan yields (22 basis points) increased net interest income by $1.1 million while higher average loan balances ($59.1 million) increased net interest income by $0.6 million. These increases were partially offset by an increase in rates paid on deposits ($0.5 million) and decreased income from deposits in depository institutions ($0.4 million). The Company’s reported net interest margin increased from 3.55% for the fourth quarter of 2018 to 3.66% for the first quarter of 2019. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 3.61% for the quarter ended March 31, 2019 and 3.50% for the quarter ended December 31, 2018.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned improved from 0.54% at December 31, 2018 to 0.43% at March 31, 2019. Total nonperforming assets decreased from $19.4 million at December 31, 2018 to $15.4 million at March 31, 2019. 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 Company’s initial





expectations. Total past due loans decreased from $13.1 million, or 0.37% of total loans outstanding, at December 31, 2018 to $11.0 million, or 0.31% of total loans outstanding, at March 31, 2019.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for loan losses (“ALLL”), the Company recorded a recovery of loan loss provision of $0.8 million in the first quarter of 2019, compared to a provision for loan loss provision of $0.2 million for the comparable period in 2018 and a recovery of loan loss provision of $0.4 million for the fourth quarter of 2018. The recovery of loan loss provision recorded in the first quarter of 2019 reflects a general improvement in the Company’s historical loss rates used to compute the allowance not specifically allocated to individual credits and a modest decline in loans outstanding from December 31, 2018. 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

Non-interest income was $15.9 million for the first quarter of 2019 as compared to $14.5 million for the first quarter of 2018. During the first quarter of 2019, the Company realized a security gain of $0.1 million due to the call of a security and $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.3 million of unrealized fair value gains on the Company’s equity securities in the first quarter of 2018. The Company’s portfolio of equity securities is comprised primarily of equity investments in community bank holding companies and perpetual preferred securities of national bank holding companies. As of April 17, 2019, the Company’s portfolio of community bank holding company equities consists primarily of the following: First National Corporation (FXNC) (4.0% ownership); Eagle Financial Services, Inc. (EFSI) (1.5% ownership); Summit Financial Corporation (SMMF) (<1% ownership); Potomac Bancshares, Inc. (PTBS) (<1% ownership). Exclusive of these gains, non-interest income increased from $14.2 million for the first quarter of 2018 to $15.8 million for the first quarter of 2019. This increase was largely attributable to an increase of $0.6 million, or 14.7%, in bankcard revenues and an increase of $0.5 million, or 6.7%, in service charges, with $0.4 million and $0.3 million, respectively, attributable to the acquisitions of Poage and Farmers Deposit. In addition, bank owned life insurance revenues increased $0.2 million due to death benefit proceeds received in the first quarter of 2019 and other income increased $0.2 million.
  
Non-interest Expenses

During the quarter ended March 31, 2019, the Company incurred an additional $0.3 million of acquisition and integration expenses associated with the acquisitions of Poage and Farmers Deposit. Excluding this expense, non-interest expenses increased $4.2 million (16.9% increase), from $24.9 million in the first quarter of 2018 to $29.2 million in the first quarter of 2019. This increase was primarily due to an increase in salaries and employee benefits of $2.0 million due primarily to the acquisitions of Poage and Farmers Deposit ($0.9 million) and annual salary adjustments ($0.7 million). In addition, other expenses increased $1.1 million, equipment and software related expenses increased $0.4 million and occupancy related expenses increased $0.3 million. These increases were primarily attributable to the acquisitions of Poage and Farmers Deposit.
 





Balance Sheet Trends

Loans decreased $28.3 million (0.8%) from December 31, 2018 to $3.56 billion at March 31, 2019. Commercial real estate loans decreased $18.8 million (1.3%), residential real estate loans decreased $9.7 million (0.6%), and home equity loans decreased $1.2 million (0.8%). These decreases were partially offset by an increase in commercial and industrial loans of $3.0 million (1.1%).

Total average depository balances increased $380.0 million, or 10.5%, from the quarter ended December 31, 2018 to the quarter ended March 31, 2019. This growth was primarily attributable to deposits acquired from Poage and Farmers Deposit ($472.0 million) that were outstanding for the entire quarter ended March 31, 2019, as compared to less than one month during the quarter ended December 31, 2018. Exclusive of this contribution, average time deposit balances increased $28.5 million, and average savings deposit balances increased $15.1 million. These increases were partially offset by lower noninterest-bearing demand deposit balances of $12.6 million.

Income Tax Expense

The Company’s effective income tax rate for the first quarter of 2019 was 21.2% compared to 20.5% for the year ended December 31, 2018, and 20.0% for the quarter ended March 31, 2018.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 88.0% and the loan to asset ratio was 72.4% at March 31, 2019. The Company maintained investment securities totaling 17.0% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 54.1% of assets at March 31, 2019. Time deposits fund 28.1% of assets at March 31, 2019, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.

The Company is also strongly capitalized. The Company’s tangible equity ratio increased from 10.0% at December 31, 2018 to 10.4% at March 31, 2019. At March 31, 2019, City National Bank’s Leverage Ratio was 9.45%, its Common Equity Tier I ratio was 13.89%, its Tier I Capital ratio was 13.89%, and its Total Risk-Based Capital ratio was 14.36%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On March 27, 2019, the Board of Directors of the Company approved a quarterly cash dividend of $0.53 per share payable April 30, 2019, to shareholders of record as of April 15, 2019. On February 27, 2019, the Company announced that the Board of Directors authorized the Company to buy back up to 1,000,000 shares of its common stock (approximately 6% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders. No time limit was placed on the duration of the share repurchase program. As part of this authorization, the Company terminated its previous repurchase program that was approved in September 2014. The Company had repurchased 888,243 shares under the 2014 program. During the quarter ended March 31, 2019, the Company repurchased 55,000 common shares at a weighted average price of $74.69. As of March 31, 2019, the Company could repurchase approximately 945,000 additional shares under the current program.

City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 97 branches across West Virginia, Kentucky, Virginia, 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.  Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for loan losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (11) 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; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; (14) the expected cost savings and any revenue synergies from the merger of City Holding Company, City National Bank of West Virginia, Poage Bankshares, Inc., Town Square Bank, Farmers Deposit Bancorp, Inc. and Farmers Deposit Bank may not be fully realized within the expected time frames; (15) the disruption from the merger of City Holding Company, City National Bank of West Virginia, Poage Bankshares, Inc., Town Square Bank, Farmers Deposit Bancorp, Inc. and Farmers Deposit Bank may make it more difficult to maintain relationships with clients, associates, or suppliers; and (16) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations.  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, 2019 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2019 results and will adjust the amounts if necessary.










CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 
Three Months Ended
 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
 
 
 
 
 
 
Earnings
 
 
 
 
 
Net Interest Income (FTE)
$
40,274

$
36,625

$
35,745

$
33,760

$
32,834

Net Income available to common shareholders
21,619

10,713

20,692

20,979

17,616

 
 
 
 
 
 
Per Share Data
 
 
 
 
 
Earnings per share available to common shareholders:
 
 
 
 
 
   Basic
$
1.31

$
0.68

$
1.34

$
1.36

$
1.13

   Diluted
1.30

0.68

1.33

1.35

1.13

Weighted average number of shares:
 
 
 
 
 
   Basic
16,411

15,603

15,340

15,326

15,414

   Diluted
16,429

15,618

15,358

15,345

15,436

Period-end number of shares
16,484

16,555

15,449

15,452

15,439

Cash dividends declared
$
0.53

$
0.53

$
0.53

$
0.46

$
0.46

Book value per share (period-end)
37.57

36.29

33.14

32.60

31.86

Tangible book value per share (period-end)
30.18

28.87

28.08

27.53

26.78

Market data:
 
 
 
 
 
   High closing price
$
80.21

$
77.94

$
82.79

$
78.44

$
72.87

   Low closing price
67.58

66.36

75.54

67.95

65.03

   Period-end closing price
76.19

67.59

76.80

75.23

68.56

   Average daily volume
54

66

54

60

56

Treasury share activity:
 
 
 
 
 
      Treasury shares repurchased
55

69

7

10

204

      Average treasury share repurchase price
$
74.69

$
72.89

$
77.18

$
69.26

$
68.50

 
 
 
 
 
 
Key Ratios (percent)
 
 
 
 
 
Return on average assets
1.76
%
0.96
%
1.90
%
2.00
%
1.69
%
Return on average tangible equity
17.7
%
9.6
%
18.9
%
19.9
%
16.7
%
Yield on interest earning assets
4.46
%
4.32
%
4.25
%
4.15
%
4.05
%
Cost of interest bearing liabilities
1.04
%
1.00
%
0.92
%
0.76
%
0.69
%
Net Interest Margin
3.66
%
3.55
%
3.54
%
3.52
%
3.51
%
Non-interest income as a percent of total revenue
28.3
%
28.8
%
30.7
%
31.7
%
30.7
%
Efficiency Ratio
51.2
%
47.6
%
48.3
%
50.7
%
52.7
%
Price/Earnings Ratio (a)
14.58

24.82

14.37

13.88

15.17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





Capital (period-end)
 
 
 
 
 
Average Shareholders' Equity to Average Assets
12.49
%
12.05
%
11.81
%
11.88
%
12.05
%
Tangible equity to tangible assets
10.37
%
10.01
%
9.99
%
9.90
%
10.03
%
Consolidated City Holding Company risk based capital ratios (b):
 
 
 
 
 
   CET I
15.55
%
15.07
%
15.94
%
15.49
%
15.08
%
   Tier I
15.67
%
15.20
%
16.49
%
16.05
%
15.64
%
   Total
16.13
%
15.69
%
17.08
%
16.65
%
16.31
%
   Leverage
10.62
%
11.36
%
11.01
%
11.13
%
10.90
%
City National Bank risk based capital ratios (b):
 
 
 
 
 
   CET I
13.89
%
13.05
%
14.00
%
13.26
%
12.59
%
   Tier I
13.89
%
13.05
%
14.00
%
13.26
%
12.59
%
   Total
14.36
%
13.55
%
14.59
%
13.87
%
13.25
%
   Leverage
9.45
%
9.81
%
9.39
%
9.24
%
8.81
%
 
 
 
 
 
 
Other
 
 
 
 
 
Branches
97

100

87

86

86

FTE
927

939

846

849

832

 
 
 
 
 
 
   Assets per FTE
$
5,305

$
5,498

$
5,226

$
5,152

$
5,048

   Deposits per FTE
4,361

4,462

4,070

4,030

4,143

 
 
 
 
 
 
(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) March 31, 2019 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,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
Interest Income
 
 
 
 
 
   Interest and fees on loans
$
42,279

$
37,973

$
36,872

$
34,292

$
32,918

   Interest on investment securities:
 
 
 
 
 
     Taxable
5,689

5,023

4,216

4,117

3,981

     Tax-exempt
779

729

701

710

703

   Interest on deposits in depository institutions
186

623

940

61

42

Total Interest Income
48,933

44,348

42,729

39,180

37,644

 
 
 
 
 
 
Interest Expense
 
 
 
 
 
   Interest on deposits
7,767

6,656

5,497

4,918

4,326

   Interest on short-term borrowings
1,052

1,061

1,435

459

460

   Interest on long-term debt
48

200

239

230

211

Total Interest Expense
8,867

7,917

7,171

5,607

4,997

Net Interest Income
40,066

36,431

35,558

33,573

32,647

(Recovery of) provision for loan losses
(849
)
(400
)
(27
)
(2,064
)
181

Net Interest Income After (Recovery of) Provision for Loan Losses
40,915

36,831

35,585

35,637

32,466

 
 
 
 
 
 
Non-Interest Income
 
 
 
 
 
Net gains on sale of investment securities
88





Unrealized gains (losses) recognized on securities still held
75

(1,246
)
384

492

280

   Service charges
7,321

7,921

7,598

7,323

6,862

   Bankcard revenue
4,969

4,826

4,677

4,532

4,334

   Trust and investment management fee income
1,642

1,737

1,579

1,645

1,568

   Bank owned life insurance
1,016

734

813

722

821

   Other income
814

734

702

897

627

Total Non-Interest Income
15,925

14,706

15,753

15,611

14,492

 
 
 
 
 
 
Non-Interest Expense
 
 
 
 
 
   Salaries and employee benefits
15,243

14,017

13,576

13,551

13,241

   Occupancy related expense
2,732

2,250

2,323

2,346

2,404

   Equipment and software related expense
2,191

2,038

1,965

1,895

1,831

   FDIC insurance expense
291

308

315

313

315

   Advertising
869

530

808

849

787

   Bankcard expenses
1,182

1,229

1,134

1,064

1,076

   Postage, delivery, and statement mailings
624

527

537

515

578

   Office supplies
386

313

364

329

313

   Legal and professional fees
521

469

453

475

450

   Telecommunications
726

401

408

441

500






   Repossessed asset losses, net of expenses
216

207

156

112

370

   Merger related expenses
250

13,015

242



   Other expenses
4,180

2,874

2,759

3,021

3,072

Total Non-Interest Expense
29,411

38,178

25,040

24,911

24,937

Income Before Income Taxes
27,429

13,359

26,298

26,337

22,021

   Income tax expense
5,810

2,646

5,606

5,358

4,405

Net Income Available to Common Shareholders
$
21,619

$
10,713

$
20,692

$
20,979

$
17,616

 
 
 
 
 
 
Distributed earnings allocated to common shareholders
$
8,661

$
8,695

$
8,109

$
7,039

$
7,023

Undistributed earnings allocated to common shareholders
12,772

1,928

12,382

13,729

10,398

Net earnings allocated to common shareholders
$
21,433

$
10,623

$
20,491

$
20,768

$
17,421

 
 
 
 
 
 
 
 
 
 
 
 
Average common shares outstanding
16,411

15,603

15,340

15,326

15,414

Shares for diluted earnings per share
16,429

15,618

15,358

15,345

15,436

 
 
 
 
 
 
Basic earnings per common share
$
1.31

$
0.68

$
1.34

$
1.36

$
1.13

Diluted earnings per common share
$
1.30

$
0.68

$
1.33

$
1.35

$
1.13







CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
 
(Unaudited)
 
(Unaudited)
(Unaudited)
(Unaudited)
 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
Assets
 
 
 
 
 
Cash and due from banks
$
50,522

$
55,016

$
49,806

$
43,466

$
39,340

Interest-bearing deposits in depository institutions
93,328

67,975

256,104

222,058

84,438

Cash and cash equivalents
143,850

122,991

305,910

265,524

123,778

 
 
 
 
 
 
Investment securities available-for-sale, at fair value
755,081

723,254

563,003

552,603

545,628

Investment securities held-to-maturity, at amortized cost
55,326

60,827

57,812

60,030

62,277

Other securities
26,182

28,810

28,875

28,920

22,165

Total investment securities
836,589

812,891

649,690

641,553

630,070

 
 
 
 
 
 
Gross loans
3,559,322

3,587,608

3,146,697

3,155,468

3,137,681

Allowance for loan losses
(14,646
)
(15,966
)
(16,311
)
(16,876
)
(18,381
)
Net loans
3,544,676

3,571,642

3,130,386

3,138,592

3,119,300

 
 
 
 
 
 
Bank owned life insurance
114,256

113,544

105,372

104,773

104,052

Premises and equipment, net
78,747

78,383

72,484

72,482

72,920

Accrued interest receivable
13,657

12,424

11,449

9,348

9,528

Net deferred tax assets
12,734

17,338

15,653

14,528

14,467

Intangible assets
121,790

122,848

78,215

78,342

78,468

Other assets
51,309

46,951

51,643

49,241

47,432

Total Assets
$
4,917,608

$
4,899,012

$
4,420,802

$
4,374,383

$
4,200,015

 
 
 
 
 
 
Liabilities
 
 
 
 
 
Deposits:
 
 
 
 
 
   Noninterest-bearing
$
793,633

$
789,119

$
672,042

$
684,614

$
703,209

   Interest-bearing:
 
 
 
 
 
   Demand deposits
879,279

899,568

802,490

785,933

816,976

   Savings deposits
988,182

934,218

821,390

817,547

816,245

   Time deposits
1,381,913

1,352,654

1,147,709

1,133,684

1,110,532

Total deposits
4,043,007

3,975,559

3,443,631

3,421,778

3,446,962

Short-term borrowings
 
 
 
 
 
Federal Funds purchased

40,000

170,000

181,375


Customer repurchase agreements
194,683

221,911

220,124

196,635

195,375

Long-term debt
4,053

4,053

16,495

16,495

16,495

Other liabilities
56,624

56,725

58,526

54,346

49,306

Total Liabilities
4,298,367

4,298,248

3,908,776

3,870,629

3,708,138

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





Stockholders' Equity
 
 
 
 
 
Preferred stock





Common stock
47,619

47,619

47,619

47,619

47,619

Capital surplus
170,215

169,555

140,450

140,091

140,547

Retained earnings
498,847

485,967

484,017

471,515

457,650

Cost of common stock in treasury
(91,589
)
(87,895
)
(136,783
)
(136,520
)
(137,420
)
Accumulated other comprehensive loss:
 
 
 
 
 
Unrealized gain (loss) on securities available-for-sale
20

(8,611
)
(18,244
)
(13,918
)
(11,486
)
Underfunded pension liability
(5,871
)
(5,871
)
(5,033
)
(5,033
)
(5,033
)
Total Accumulated Other Comprehensive Loss
(5,851
)
(14,482
)
(23,277
)
(18,951
)
(16,519
)
Total Stockholders' Equity
619,241

600,764

512,026

503,754

491,877

Total Liabilities and Stockholders' Equity
$
4,917,608

$
4,899,012

$
4,420,802

$
4,374,383

$
4,200,015

 
 
 
 
 
 
Regulatory Capital
 
 
 
 
 
Total CET 1 capital
$
504,148

$
492,526

$
457,580

$
444,869

$
430,044

Total tier 1 capital
508,148

496,526

473,580

460,869

446,044

Total risk-based capital
523,053

512,801

490,307

478,255

464,936

Total risk-weighted assets
3,241,989

3,267,357

2,871,241

2,871,561

2,851,330








CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
 
 
 
 
 
 
Residential real estate (1)
$
1,625,647

$
1,635,338

$
1,485,823

$
1,472,916

$
1,465,215

Home equity - junior liens
152,251

153,496

143,540

139,245

138,477

Commercial and industrial
289,327

286,314

213,815

213,687

204,592

Commercial real estate (2)
1,436,190

1,454,942

1,268,052

1,294,489

1,296,304

Consumer
52,483

51,190

31,869

31,137

29,570

DDA overdrafts
3,424

6,328

3,598

3,994

3,523

Gross Loans
$
3,559,322

$
3,587,608

$
3,146,697

$
3,155,468

$
3,137,681

 
 
 
 
 
 
Construction loans included in:
 
 
 
 
 
(1) - Residential real estate loans
$
22,635

$
21,834

$
17,628

$
21,662

$
26,610

(2) - Commercial real estate loans
56,282

37,869

24,110

28,567

30,857







CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)

 
Three Months Ended
 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
Allowance for Loan Losses
 
 
 
 
 
Balance at beginning of period
$
15,966

$
16,311

$
16,876

$
18,381

$
18,836

 
 
 
 
 
 
Charge-offs:
 
 
 
 
 
Commercial and industrial

(9
)

(385
)
(339
)
Commercial real estate
(45
)
(20
)
(74
)
(118
)
(157
)
Residential real estate
(328
)
(218
)
(244
)
(96
)
(124
)
Home equity
(46
)

(108
)
(33
)
(78
)
Consumer
(185
)
(209
)
(206
)
(255
)
(99
)
DDA overdrafts
(625
)
(725
)
(704
)
(636
)
(636
)
Total charge-offs
(1,229
)
(1,181
)
(1,336
)
(1,523
)
(1,433
)
 
 
 
 
 
 
Recoveries:
 
 
 
 
 
Commercial and industrial
135

528

147

1,476

2

Commercial real estate
32

194

166

149

223

Residential real estate
75

92

116

53

106

Home equity





Consumer
97

36

25

59

46

DDA overdrafts
419

386

344

345

420

Total recoveries
758

1,236

798

2,082

797

 
 
 
 
 
 
Net charge-offs
(471
)
55

(538
)
559

(636
)
(Recovery of) provision for loan losses
(849
)
(400
)
(27
)
(2,064
)
181

Balance at end of period
$
14,646

$
15,966

$
16,311

$
16,876

$
18,381

 
 
 
 
 
 
Loans outstanding
$
3,559,322

$
3,587,608

$
3,146,697

$
3,155,468

$
3,137,681

Allowance as a percent of loans outstanding
0.41
%
0.45
 %
0.52
%
0.53
 %
0.59
%
Allowance as a percent of non-performing loans
119.9
%
107.8
 %
142.1
%
127.6
 %
189.9
%
 
 
 
 
 
 
Average loans outstanding
$
3,576,984

$
3,252,939

$
3,149,320

$
3,138,146

$
3,133,804

Net charge-offs (annualized) as a percent of average loans outstanding
0.05
%
(0.01
)%
0.07
%
(0.07
)%
0.08
%









CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, Continued
(Unaudited) ($ in 000s)
 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
Nonaccrual Loans
 
 
 
 
 
Residential real estate
$
3,263

$
4,275

$
3,029

$
3,783

$
3,331

Home equity
41

138


168

135

Commercial and industrial
1,526

1,676

818

863

1,063

Commercial real estate
7,282

8,461

7,599

7,707

5,061

Consumer
1

1

1

557


   Total nonaccrual loans
12,113

14,551

11,447

13,078

9,590

Accruing loans past due 90 days or more
106

257

35

145

91

   Total non-performing loans
12,219

14,808

11,482

13,223

9,681

Other real estate owned
3,186

4,608

4,259

3,636

3,912

   Total non-performing assets
$
15,405

$
19,416

$
15,741

$
16,859

$
13,593

 
 
 
 
 
 
Non-performing assets as a percent of loans and other real estate owned
0.43
%
0.54
%
0.50
%
0.53
%
0.43
%
 
 
 
 
 
 
Past Due Loans
 
 
 
 
 
Residential real estate
$
7,972

$
9,991

$
4,657

$
5,998

$
5,641

Home equity
720

1,275

468

583

616

Commercial and industrial
101

497

187

624

61

Commercial real estate
1,414

585

934

402

1,520

Consumer
264

295

39

34

21

DDA overdrafts
535

488

582

525

432

   Total past due loans
$
11,006

$
13,131

$
6,867

$
8,166

$
8,291

 
 
 
 
 
 
Total past due loans as a percent of loans outstanding
0.31
%
0.37
%
0.22
%
0.26
%
0.26
%
 
 
 
 
 
 
Troubled Debt Restructurings ("TDRs") (period-end)
 
 
 
 
 
Accruing:
 
 
 
 
 
   Residential real estate
$
23,017

$
22,863

$
20,414

$
20,424

$
20,786

   Home equity
3,013

3,025

2,941

3,156

3,015

   Commercial and industrial
89

98

108

119

125

   Commercial real estate
8,164

8,205

8,231

8,279

8,324

   Consumer





     Total accruing TDRs
$
34,283

$
34,191

$
31,694

$
31,978

$
32,250







Non-Accruing
 
 
 
 
 
   Residential real estate
$
464

$
658

175

$
307

$
256

   Home equity
5

5


40

40

   Commercial and industrial





   Commercial real estate





   Consumer





     Total non-accruing TDRs
$
469

$
663

$
175

$
347

$
296

 
 
 
 
 
 
Total TDRs
$
34,752

$
34,854

$
31,869

$
32,325

$
32,546

 
 
 
 
 
 







CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)

 
Three Months Ended
 
March 31, 2019
December 31, 2018
March 31, 2018
 
Average
 
Yield/
Average
 
Yield/
Average
 
Yield/
 
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Assets:
 
 
 
 
 
 
 
 
 
Loan portfolio (1):
 
 
 
 
 
 
 
 
 
Residential real estate (2)
$
1,806,233

$
20,451

4.59
%
$
1,683,388

$
18,681

4.40
%
$
1,603,911

$
16,479

4.17
%
Commercial, financial, and agriculture (2)
1,715,524

20,845

4.93
%
1,526,658

18,335

4.76
%
1,496,817

15,608

4.23
%
Installment loans to individuals (2), (3)
55,227

840

6.17
%
42,893

745

6.89
%
33,076

504

6.18
%
Previously securitized loans (4)
 ***
144

 ***
 ***
212

 ***
 ***
327

 ***
Total loans
3,576,984

42,280

4.79
%
3,252,939

37,973

4.63
%
3,133,804

32,918

4.26
%
Securities:
 
 
 
 
 
 
 
 
 
Taxable
714,413

5,689

3.23
%
602,966

5,023

3.31
%
536,714

3,981

3.01
%
Tax-exempt (5)
102,375

986

3.91
%
92,833

922

3.94
%
91,722

890

3.94
%
Total securities
816,788

6,675

3.31
%
695,799

5,945

3.39
%
628,436

4,871

3.14
%
Deposits in depository institutions
72,723

186

1.04
%
141,246

623

1.75
%
29,648

42

0.57
%
Total interest-earning assets
4,466,495

49,141

4.46
%
4,089,984

44,541

4.32
%
3,791,888

37,831

4.05
%
Cash and due from banks
52,561

 
 
54,367

 
 
71,480

 
 
Premises and equipment, net
78,220

 
 
74,430

 
 
72,716

 
 
Goodwill and intangible assets
122,605

 
 
93,090

 
 
78,547

 
 
Other assets
195,954

 
 
181,249

 
 
167,174

 
 
Less: Allowance for loan losses
(16,182
)
 
 
(16,780
)
 
 
(19,420
)
 
 
       Total assets
$
4,899,653

 
 
$
4,476,340

 
 
$
4,162,385

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
886,833

$
933

0.43
%
$
822,087

$
787

0.38
%
$
782,499

$
357

0.19
%
Savings deposits
947,337

1,066

0.46
%
846,162

802

0.38
%
801,504

341

0.17
%
Time deposits (2)
1,368,465

5,768

1.71
%
1,208,415

5,067

1.66
%
1,096,157

3,628

1.34
%
Short-term borrowings
237,616

1,052

1.80
%
263,022

1,060

1.60
%
236,605

460

0.79
%
Long-term debt
4,053

48

4.80
%
14,743

200

5.38
%
16,495

211

5.19
%
   Total interest-bearing liabilities
3,444,304

8,867

1.04
%
3,154,429

7,916

1.00
%
2,933,260

4,997

0.69
%
Noninterest-bearing demand deposits
788,109

 
 
734,066

 
 
681,150

 
 
Other liabilities
55,372

 
 
48,553

 
 
46,426

 
 
Stockholders' equity
611,868

 
 
539,292

 
 
501,549

 
 
Total liabilities and
 
 
 
 
 
 
 
 
 
stockholders' equity
$
4,899,653

 
 
$
4,476,340

 
 
$
4,162,385

 
 
Net interest income
 
$
40,274

 
 
$
36,625

 
 
$
32,834

 
Net yield on earning assets
 
 
3.66
%
 
 
3.55
%
 
 
3.51
%
 
 
 
 
 
 
 
 
 
 
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income:
 
 
 
 
 
 
 
 
 
 
Loan fees
 
$
96

 
 
$
221

 
 
$
118

 





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
Residential real estate
 
$
32

 
 
$
57

 
 
$
110

 
Commercial, financial, and agriculture
 
190

 
 
449

 
 
150

 
Installment loans to individuals
 
(6
)
 
 
2

 
 
10

 
Time deposits
 
256

 
 

 
 

 
 
 
$
472

 
 
$
508

 
 
$
270

 
 
 
 
 
 
 
 
 
 
 
(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 21%.






CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited) ($ in 000s)
 
Three Months Ended
 
March 31,
December 31,
September 30,
June 30,
March 31,
 
2019
2018
2018
2018
2018
Net Interest Income/Margin
 
 
 
 
 
Net interest income ("GAAP")
$
40,066

$
36,431

$
35,558

$
33,573

$
32,647

Taxable equivalent adjustment
208

194

187

187

187

Net interest income, fully taxable equivalent
$
40,274

$
36,625

$
35,745

$
33,760

$
32,834

 
 
 
 
 
 
Average interest earning assets
$
4,466,495

$
4,089,984

$
4,005,067

$
3,800,435

$
3,791,888

 
 
 
 
 
 
Net Interest Margin
3.66
 %
3.55
 %
3.54
 %
3.56
 %
3.51
 %
Accretion related to fair value adjustments
(0.05
)%
(0.05
)%
(0.03
)%
(0.04
)%
(0.03
)%
Net Interest Margin (excluding accretion)
3.61
 %
3.50
 %
3.51
 %
3.52
 %
3.48
 %
 
 
 
 
 
 
Tangible Equity Ratio (period end)
 
 
 
 
 
Equity to assets ("GAAP")
12.59
 %
12.26
 %
11.58
 %
11.52
 %
11.71
 %
Effect of goodwill and other intangibles, net
(2.22
)%
(2.26
)%
(1.59
)%
(1.61
)%
(1.68
)%
Tangible common equity to tangible assets
10.37
 %
10.01
 %
9.99
 %
9.90
 %
10.03
 %
 
 
 
 
 
 
Return on tangible equity ("GAAP")
17.67
 %
9.6
 %
18.92
 %
19.94
 %
16.66
 %
Impact of merger related expenses
0.16
 %
9.23
 %
0.29
 %
 %
 %
Return on tangible equity, excluding merger related expenses
17.84
 %
18.83
 %
19.21
 %
19.94
 %
16.66
 %
 
 
 
 
 
 
Return on assets ("GAAP")
1.76
 %
0.96
 %
1.90
 %
2.00
 %
1.69
 %
Impact of merger related expenses
0.02
 %
0.92
 %
0.02
 %
 %
 %
Return on Assets, excluding merger related expenses
1.78
 %
1.88
 %
1.92
 %
2.00
 %
1.69
 %
 
 
 
 
 
 
Effective Income Tax Rate
 
 
 
 
 
Effective tax rate ("GAAP")
21.20
 %
19.80
 %
21.30
 %
20.30
 %
20.00
 %
Impact of FIN 48 adjustments
 %
2.97
 %
 %
 %
 %
Effective tax rate, excluding FIN 48 adjustments
21.20
 %
22.80
 %
21.30
 %
20.30
 %
20.00
 %



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