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27.07.2012 15:35
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PR Newswire
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City Holding Company Announces Second Quarter Results
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PR Newswire
CHARLESTON, W.Va., July 27, 2012
CHARLESTON, W.Va., July 27, 2012 /PRNewswire/ -- City Holding Company, "the Company" (NASDAQ:CHCO), a $2.9 billion bank holding company headquartered in Charleston, today announced second quarter net income per diluted share of $0.50 and net income of $7.4 million. The results for the second quarter of 2012 include $4.0 million, or $0.18 diluted per share on an after tax basis, of acquisition and integration expenses related to the acquisition of Virginia Savings Bancorp, Inc. For the second quarter of 2012, the Company achieved a return on assets of 1.06%, a return on tangible equity of 11.2%, a net interest margin of 3.91%, and an efficiency ratio of 66.5%. Excluding the acquisition and integration expenses, the Company would have reported net income of $10.0 million, a return on assets of 1.44%, a return on tangible equity of 15.3%, and an efficiency ratio of 55.6% for the second quarter of 2012.
City's CEO Charles Hageboeck stated that, "During the second quarter of 2012, we successfully completed the acquisition of Virginia Savings Bancorp, Inc., which expanded our footprint into Virginia. After purchase accounting adjustments, the five branches of Virginia Savings Bancorp, Inc. added approximately $123 million in deposits and $72 million in loans. Average loan balances have increased $119 million from the second quarter of 2011 exclusive of the loans acquired in the Virginia Savings Bancorp, Inc. acquisition. Net interest income increased $1.3 million from the second quarter of 2011 primarily on the strength of loan growth and lower rates paid on interest-bearing deposits. Loan growth and the impact of the low interest rate environment on deposit pricing improved our net margin from 3.78% for the second quarter of 2011 to 3.91% for the second quarter of 2012. While our margin has remained strong in recent quarters, new regulatory capital rules will cause some higher yielding trust preferred securities to be called early by issuers as these securities will no longer be treated as regulatory capital for certain issuers. At June 30, 2012 the Company owned approximately $77 million of these higher yielding securities and we were notified that approximately $38 million of securities will be called in the third quarter of 2012. Although we don't anticipate our entire portfolio being called, our margin will be adversely impacted by such calls.
"Our asset quality remains strong and steady. Non-performing assets stood at 1.47% of total loans and other real estate owned. Charge-offs for the second quarter of 2012 declined from prior quarters to $0.85 million and our provision expense for the quarter was $1.7 million."
"Service fee revenues declined only $0.2 million from the second quarter of 2011 despite a change in check processing order implemented during the fourth quarter of 2011. Additionally, our trust and investment management fee income grew $0.2 million, or 29%, from the second quarter of 2011 due to assets under management increasing from $580 million at December 31, 2011 to $700 million at June 30, 2012," Hageboeck concluded.
Net Interest Income
The Company's tax equivalent net interest income increased $0.3 million, or 1.3%, from $23.7 million during the first quarter of 2012 to $24.0 million during the second quarter of 2012. This increase is due to the acquisition of Virginia Savings Bancorp, Inc. as of May 31, 2012. The Company's reported net interest margin decreased from 3.98% for the quarter ended March 31, 2012 to 3.91% for the quarter ended June 30, 2012.
Credit Quality
The Company's ratio of non-performing assets to total loans and other real estate owned remained stable at 1.47% at June 30, 2012 as compared to the prior quarter. Past due loans were $10.7 million at June 30, 2011 (0.56% of total loans outstanding) and $11.6 million at June 30, 2012 (0.56% of total loans outstanding). Past due residential real estate loans were $5.6 million or 0.80% of residential real estate loans outstanding at June 30, 2012; past due home equity loans were $1.9 million or 0.42% of home equity loans outstanding at June 30, 2012; and past due commercial real estate loans were $3.1 million or 0.41% of commercial real estate loans outstanding at June 30, 2012.
The Company had net charge-offs of $0.9 million for the second quarter of 2012, which primarily consists of net charge-offs on residential real estate loans of $0.3 million and home equity loans of $0.3 million.
At June 30, 2012, the Allowance for Loan Losses ("ALLL") was $19.5 million or 0.94% of total loans outstanding and 89% of non-performing loans compared to $18.9 million or 1.00% of loans outstanding and 81% of non-performing loans at June 30, 2011, and $19.4 million or 0.98% of loans outstanding and 88% of non-performing loans at December 31, 2011.
As a result of the Company's quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.7 million in the second quarter of 2012, compared to the $1.3 million for the comparable period in 2011 and $2.0 million for the first quarter of 2012. Changes in the amount of the provision and related allowance are based on the Company's detailed systematic methodology and are directionally consistent with changes in the composition and quality of the Company's loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.
Investment Securities Gains/(Losses)
During the second quarter of 2012, the Company sold certain equity positions related to community banks and bank holding companies and realized a $0.8 million gain. This gain was partially offset by $0.3 million of credit-related net investment impairment losses recorded by the Company during the second quarter of 2012. The charges deemed to be other than temporary were related to pooled bank trust preferreds with a remaining carrying value of $3.3 million at June 30, 2012. The credit-related net impairment charges were based on the Company's quarterly reviews of its investment securities for indications of losses considered to be other than temporary.
Non-interest Income
Exclusive of net investment gains, non-interest income decreased $0.1 million to $13.3 million in the second quarter of 2012 as compared to $13.4 million in the second quarter of 2011. This decrease was primarily the result of service charges decreasing $0.2 million, or 2.1%, to $9.6 million and insurance commissions decreasing $0.2 million, or 10.4%, to $1.3 million for the quarter ended June 30, 2012. These decreases were partially offset by an increase of $0.2 million in trust and investment management fee income to $0.9 for the quarter ended June 30, 2012 and $0.1 million due to the acquisition of Virginia Savings Bancorp, Inc.
Non-interest Expenses
During the second quarter of 2012, the Company completed its acquisition of Virginia Savings Bancorp, Inc. and recognized $4.0 million of acquisition and integration expenses. In comparison, the Company recorded a $3.0 million litigation reserve accrual during the second quarter of 2011. Excluding these expenses, non-interest expenses increased $0.8 million from $19.9 million in the second quarter of 2011 to $20.7 million in the second quarter of 2012. Repossessed asset losses increased $0.7 million due to the decline in estimated fair value of a foreclosed property located in eastern panhandle of West Virginia. The Company continually reevaluates the estimated fair value of properties that it has repossessed by obtaining updated appraisals on at least an annual basis. As a result of this write-down, this foreclosed property is now valued at approximately one half of its original cost. In addition, salaries and employee benefits increased $0.5 million, other expenses increased $0.3 million and $0.2 million due to the acquisition of Virginia Savings Bancorp, Inc. These increases were partially offset by a decrease of $0.5 million due to lower FDIC insurance expense as a result of a change in the assessment base methodology.
Balance Sheet Trends
Loans have increased $92.5 million (4.7%) from December 31, 2011 to $2.07 billion at June 30, 2012, primarily due to the Company's acquisition of Virginia Savings Bancorp, Inc. ($72.0 million). Excluding the Virginia Savings Bancorp, Inc. acquisition, loans have increased $20.5 million (1.0%) from December 31, 2011 to $1.99 billion at June 30, 2012. Increases in residential real estate loans of $25.3 million (2.7%) and commercial real estate loans of $14.8 million (2.0%) were partially offset by a decline in commercial and industrial ("C&I") loans of $17.1 million.
Total average depository balances increased $64.1 million, or 2.8%, from the quarter ended March 31, 2012 to the quarter ended June 30, 2012. This growth was primarily attributable to deposits acquired from Virginia Savings Bancorp, Inc. ($40.9 million). Exclusive of this contribution, increases in savings deposits ($15.5 million), noninterest-bearing deposits ($16.9 million) and interest-bearing deposits ($3.8 million), were partially offset by a decrease in time deposits ($13.1 million).
Income Tax Expense
The Company's effective income tax rate for the second quarter of 2012 was 33.8% compared to 33.6% for the year ended December 31, 2011, and 33.8% for the quarter ended June 30, 2011. The effective rate is based upon the Company's expected tax rate for the year ending December 31, 2012.
Capitalization and Liquidity
The Company's loan to deposit ratio was 86.2% and the loan to asset ratio was 71.4% at June 30, 2012. The Company maintained investment securities totaling 14.1% of assets as of this date. The Company's deposit mix is weighted heavily toward checking and saving accounts that fund 50.6% of assets at June 30, 2012. Time deposits fund 32.2% of assets at June 30, 2012, 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.
At June 30, 2012 the Company was strongly capitalized. The Company's tangible equity ratio was 9.0% at June 30, 2012 compared to 9.4% at December 31, 2011. At June 30, 2012, City National Bank's Leverage Ratio was 8.95%, its Tier I Capital ratio was 11.45%, and its Total Risk-Based Capital ratio was 12.38%. These regulatory capital ratios are significantly above levels required to be considered "well capitalized," which is the highest possible regulatory designation.
On June 27, 2012, the Board approved a quarterly cash dividend of $0.35 cents per share payable July 31, 2012, to shareholders of record as of July 13, 2012. During the quarter ended June 30, 2012, the Company repurchased 149,535 common shares at a weighted average price of $32.40 as part of a one million share repurchase plan authorized by the Board of Directors in July 2011. At June 30, 2012, the Company could repurchase approximately 454,000 shares under the July 2011 authorization.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 73 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. Such information involves risks and uncertainties that could result in the Company's actual results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may incur increased charge-offs in the future; (3) the Company could have adverse legal actions of a material nature; (4) the Company may face competitive loss of customers; (5) the Company may be unable to manage its expense levels; (6) the Company may have difficulty retaining key employees; (7) changes in the interest rate environment may have results on the Company's operations materially different from those anticipated by the Company's market risk management functions; (8) changes in general economic conditions and increased competition could adversely affect the Company's operating results; (9) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company's operating results; (10) the Company may experience difficulties growing loan and deposit balances; (11) the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; (12) continued deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; and (13)the effects of the Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") recently adopted by the United States Congress. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its June 30, 2012 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary June 30, 2012 results and will adjust the amounts if necessary.
| CITY HOLDING COMPANY AND SUBSIDIARIES | |||
| Financial Highlights | |||
| (Unaudited) | |||
| | | | |
| | | | |
| | Three Months Ended June 30, | Percent | |
| | 2012 | 2011 | Change |
| | | | |
| Earnings ($000s, except per share data): | | | |
| Net Interest Income (FTE) | $ 24,039 | $ 22,760 | 5.62% |
| Net Income available to common shareholders | 7,413 | 9,830 | (24.59)% |
| Earnings per Basic Share | 0.50 | 0.65 | (22.40)% |
| Earnings per Diluted Share | 0.50 | 0.64 | (22.45)% |
| | | | |
| | | | |
| Key Ratios (percent): | | | |
| Return on Average Assets | 1.06% | 1.45% | (26.98)% |
| Return on Average Tangible Equity | 11.20% | 15.21% | (26.33)% |
| Net Interest Margin | 3.91% | 3.78% | 3.57% |
| Efficiency Ratio | 66.45% | 63.49% | 4.66% |
| Average Shareholders' Equity to Average Assets | 11.47% | 11.59% | (1.04)% |
| | | | |
| Consolidated Risk Based Capital Ratios (a): | | | |
| Tier I | 12.46% | 13.42% | (7.15)% |
| Total | 13.38% | 14.37% | (6.89)% |
| | | | |
| Tangible Equity to Tangible Assets | 9.03% | 9.56% | (5.50)% |
| | | | |
| | | | |
| Common Stock Data: | | | |
| Cash Dividends Declared per Share | $ 0.35 | $ 0.34 | 2.94% |
| Book Value per Share | 21.63 | 20.58 | 5.14% Werbung Mehr Nachrichten zur City Holding Company Aktie kostenlos abonnieren
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