City Holding Co 8-K, filed Oct 23, 2020

City Holding Co (CHCO)

8-K 2020-10-23 For: 2020-10-23

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Added on April 11, 2026

About this 8-K

City Holding Co filed this 8-K on October 23, 2020.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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West Virginia			55-0619957
(State or Other Jurisdiction of			(I.R.S. Employer
Incorporation or Organization)			Identification No.)


☐			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. ☐


Dated: October 23, 2020			City Holding Company


By:			/s/ David L. Bumgarner
			David L. Bumgarner
			Senior Vice President & Chief Financial Officer


	Three Months Ended																					Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2020			2020			2020			2019			2019			2020			2019

Earnings
Net Interest Income (FTE)	$	38,278		$	38,287		$	40,603		$	40,036		$	40,729		$	117,168		$	122,118
Net Income available to common shareholders	20,126			18,251			29,000			22,611			22,371			67,374			66,741

Per Share Data
Earnings per share available to common shareholders:
Basic	$	1.25		$	1.12		$	1.79		$	1.38		$	1.36		$	4.15		$	4.05
Diluted	1.25			1.12			1.78			1.38			1.36			4.15			4.04
Weighted average number of shares:
Basic	15,950			16,081			16,080			16,207			16,271			16,065			16,350
Diluted	15,970			16,097			16,101			16,230			16,289			16,084			16,368
Period-end number of shares	15,848			16,077			16,140			16,303			16,302			15,848			16,302
Cash dividends declared	$	0.57		$	0.57		$	0.57		$	0.57		$	0.57		$	1.71		$	1.63
Book value per share (period-end)	43.62			43.15			42.45			40.36			39.85			43.62			39.85
Tangible book value per share (period-end)	36.11			35.72			35.03			32.98			32.44			36.11			32.44
Market data:
High closing price	$	67.98		$	71.19		$	82.40		$	82.72		$	78.30		$	82.40		$	82.56
Low closing price	55.37			55.18			57.11			74.33			72.35			55.18			67.58
Period-end closing price	57.61			65.17			66.53			81.95			76.25			57.61			76.25
Average daily volume	67			89			69			54			62			75			56
Treasury share activity:
Treasury shares repurchased	231			79			182			—			99			492			261
Average treasury share repurchase price	$	59.49		$	61.75		$	71.31		$	—		$	74.17		$	64.23		$	74.54

Key Ratios (percent)
Return on average assets	1.46		%	1.35		%	2.29		%	1.80		%	1.81		%	1.68		%	1.81		%
Return on average tangible equity	13.8		%	12.6		%	20.6		%	16.8		%	17.0		%	15.6		%	17.5		%
Yield on interest earning assets	3.43		%	3.64		%	4.22		%	4.22		%	4.42		%	3.75		%	4.46		%
Cost of interest bearing liabilities	0.58		%	0.71		%	0.91		%	1.00		%	1.10		%	0.73		%	1.08		%
Net Interest Margin	3.02		%	3.13		%	3.54		%	3.46		%	3.59		%	3.22		%	3.64		%
Non-interest income as a percent of total revenue	30.3		%	27.4		%	30.6		%	31.2		%	29.2		%	35.8		%	29.3		%
Efficiency Ratio	51.6		%	53.3		%	49.7		%	50.0		%	48.2		%	51.5		%	50.0		%
Price/Earnings Ratio (a)	11.53			14.50			17.63			14.82			13.98			10.40			14.13



Capital (period-end)
Average Shareholders' Equity to Average Assets	12.71		%	12.91		%	13.50		%	13.12		%	13.12		%
Tangible equity to tangible assets	10.61		%	10.62		%	11.38		%	10.98		%	10.93		%
Consolidated City Holding Company risk based capital ratios (b):
CET I	15.93		%	16.10		%	16.02		%	16.05		%	15.62		%
Tier I	15.93		%	16.10		%	16.02		%	16.05		%	15.74		%
Total	16.50		%	16.69		%	16.46		%	16.40		%	16.14		%
Leverage	10.19		%	10.45		%	11.10		%	10.90		%	10.87		%
City National Bank risk based capital ratios (b):
CET I	14.46		%	14.55		%	14.32		%	13.92		%	14.00		%
Tier I	14.46		%	14.55		%	14.32		%	13.92		%	14.00		%
Total	15.04		%	15.15		%	14.82		%	14.28		%	14.40		%
Leverage	9.32		%	9.29		%	9.98		%	9.51		%	9.72		%

Other (period-end)
Branches	94			94			95			95			95
FTE	921			913			921			918			916

Assets per FTE	$	5,984		$	6,058		$	5,525		$	5,467		$	5,412
Deposits per FTE	4,799			4,834			4,400			4,440			4,399

(a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes).
(b) September 30, 2020 risk-based capital ratios are estimated.


Bankcard expenses	1,517		1,498		1,435		1,285		1,554		4,450		4,270
Postage, delivery, and statement mailings	513		592		616		588		659		1,721		1,828
Office supplies	396		353		394		392		382		1,143		1,167
Legal and professional fees	548		589		601		706		539		1,738		1,665
Telecommunications	547		531		511		563		569		1,589		1,892
Repossessed asset losses (gains), net of expenses	39		76		198		224		(59)		313		410
Merger related expenses	—		—		—		—		—		—		797
Other expenses	3,939		3,950		4,102		3,822		3,709		11,992		12,326
Total Non-Interest Expense	28,712		28,468		29,468		29,034		28,397		86,649		88,581
Income Before Income Taxes	25,224		22,983		36,322		28,930		28,564		84,525		84,557
Income tax expense	5,098		4,732		7,322		6,319		6,193		17,151		17,816
Net Income Available to Common Shareholders	$	20,126	$	18,251	$	29,000	$	22,611	$	22,371	$	67,374	$	66,741

Distributed earnings allocated to common shareholders	$	8,944	$	9,073	$	9,117	$	9,209	$	9,213	$	26,832	$	26,346
Undistributed earnings allocated to common shareholders	10,984		8,998		19,620		13,200		12,966		39,884		39,828
Net earnings allocated to common shareholders	$	19,928	$	18,071	$	28,737	$	22,409	$	22,179	$	66,716	$	66,174


Average common shares outstanding	15,950		16,081		16,080		16,207		16,271		16,065		16,350
Shares for diluted earnings per share	15,970		16,097		16,101		16,230		16,289		16,084		16,368

Basic earnings per common share	$	1.25	$	1.12	$	1.79	$	1.38	$	1.36	$	4.15	$	4.05
Diluted earnings per common share	$	1.25	$	1.12	$	1.78	$	1.38	$	1.36	$	4.15	$	4.04


	(Unaudited)		(Unaudited)		(Unaudited)				(Unaudited)
	September 30,		June 30,		March 31,		December 31,		September 30,
	2020		2020		2020		2019		2019
Assets
Cash and due from banks	$	76,451	$	87,658	$	92,365	$	88,658	$	71,332
Interest-bearing deposits in depository institutions	176,267		285,596		18,271		51,486		44,862
Cash and cash equivalents	252,718		373,254		110,636		140,144		116,194

Investment securities available-for-sale, at fair value	1,157,399		1,055,185		934,113		810,106		798,930
Investment securities held-to-maturity, at amortized cost	—		—		—		49,036		51,211
Other securities	26,548		26,144		26,827		28,490		28,070
Total investment securities	1,183,947		1,081,329		960,940		887,632		878,211

Gross loans	3,663,966		3,665,596		3,613,050		3,616,099		3,582,571
Allowance for credit losses	(24,867)		(25,199)		(24,393)		(11,589)		(13,186)
Net loans	3,639,099		3,640,397		3,588,657		3,604,510		3,569,385

Bank owned life insurance	117,501		116,746		116,000		115,261		114,616
Premises and equipment, net	77,031		77,991		78,948		76,965		76,929
Accrued interest receivable	16,627		14,200		12,570		11,569		12,929
Net deferred tax assets	—		—		2,159		6,669		6,432
Intangible assets	119,004		119,417		119,829		120,241		120,773
Other assets	105,361		105,438		98,710		55,765		62,248
Total Assets	$	5,511,288	$	5,528,772	$	5,088,449	$	5,018,756	$	4,957,717

Liabilities
Deposits:
Noninterest-bearing	$	1,061,310	$	1,079,469	$	857,501	$	805,087	$	795,548
Interest-bearing:
Demand deposits	940,791		921,761		837,966		896,465		898,704
Savings deposits	1,117,684		1,067,254		989,609		1,009,771		980,539
Time deposits	1,300,291		1,342,631		1,366,977		1,364,571		1,354,787
Total deposits	4,420,076		4,411,115		4,052,053		4,075,894		4,029,578
Short-term borrowings
Federal Funds purchased	—		—		9,900		—		—
Customer repurchase agreements	279,866		282,676		224,247		211,255		202,622
Long-term debt	—		—		—		4,056		4,055
Net deferred tax liabilities	1,601		2,598		—		—		—
Other liabilities	118,386		138,633		117,021		69,568		71,859
Total Liabilities	4,819,929		4,835,022		4,403,221		4,360,773		4,308,114



Stockholders' Equity
Preferred stock	—		—		—		—		—
Common stock	47,619		47,619		47,619		47,619		47,619
Capital surplus	170,526		169,881		170,096		170,309		169,794
Retained earnings	576,901		565,804		556,718		539,253		525,933
Cost of common stock in treasury	(134,177)		(120,583)		(116,665)		(105,038)		(105,138)
Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale	36,760		37,299		33,730		12,110		17,266
Underfunded pension liability	(6,270)		(6,270)		(6,270)		(6,270)		(5,871)
Total Accumulated Other Comprehensive Income	30,490		31,029		27,460		5,840		11,395
Total Stockholders' Equity	691,359		693,750		685,228		657,983		649,603
Total Liabilities and Stockholders' Equity	$	5,511,288	$	5,528,772	$	5,088,449	$	5,018,756	$	4,957,717

Regulatory Capital
Total CET 1 capital	$	548,269	$	548,972	$	547,040	$	532,829	$	518,175
Total tier 1 capital	548,269		548,972		547,040		532,829		522,175
Total risk-based capital	568,153		569,213		561,944		544,479		535,441
Total risk-weighted assets	3,442,629		3,410,589		3,412,591		3,319,998		3,318,386


	Three Months Ended
	September 30, 2020										June 30, 2020								September 30, 2019
	Average				Yield/		Average				Yield/		Average				Yield/
	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Assets:
Loan portfolio ⁽¹⁾:
Residential real estate ⁽²⁾	$	1,766,796	$	17,899	4.03	%	$	1,785,631	$	19,048	4.29	%	$	1,794,068	$	20,564	4.55	%
Commercial, financial, and agriculture ⁽²⁾	1,839,939		16,910		3.66	%	1,818,344		17,665		3.91	%	1,692,000		21,293		4.99	%
Installment loans to individuals ^{(2), (3)}	54,834		804		5.83	%	56,199		852		6.10	%	58,480		928		6.30	%
Previously securitized loans ⁽⁴⁾	***		148		***		***		152		***		***		159		***
Total loans	3,661,569		35,761		3.89	%	3,660,174		37,717		4.14	%	3,544,548		42,944		4.81	%
Securities:
Taxable	877,623		6,266		2.84	%	896,997		5,718		2.56	%	790,207		6,044		3.03	%
Tax-exempt ⁽⁵⁾	204,178		1,433		2.79	%	120,751		1,039		3.46	%	96,011		914		3.78	%
Total securities	1,081,801		7,699		2.83	%	1,017,748		6,757		2.67	%	886,218		6,958		3.11	%
Deposits in depository institutions	304,498		72		0.09	%	236,320		55		0.09	%	72,736		271		1.48	%
Total interest-earning assets	5,047,868		43,532		3.43	%	4,914,242		44,529		3.64	%	4,503,502		50,173		4.42	%
Cash and due from banks	80,505						79,501						67,106
Premises and equipment, net	77,647						78,717						78,091
Goodwill and intangible assets	119,267						119,681						121,124
Other assets	229,667						230,423						188,206
Less: Allowance for loan losses	(25,311)						(24,700)						(13,786)
Total assets	$	5,529,643					$	5,397,864					$	4,944,243

Liabilities:
Interest-bearing demand deposits	$	931,152	$	187	0.08	%	$	893,832	$	178	0.08	%	$	881,476	$	954	0.43	%
Savings deposits	1,093,886		303		0.11	%	1,037,387		363		0.14	%	978,198		1,159		0.47	%
Time deposits ⁽²⁾	1,322,423		4,633		1.39	%	1,353,619		5,422		1.61	%	1,360,409		6,472		1.89	%
Short-term borrowings	260,518		131		0.20	%	256,790		279		0.44	%	187,301		814		1.72	%
Long-term debt	—		—		—	%	—		—		—	%	4,054		45		4.40	%
Total interest-bearing liabilities	3,607,979		5,254		0.58	%	3,541,628		6,242		0.71	%	3,411,438		9,444		1.10	%
Noninterest-bearing demand deposits	1,114,822						1,044,009						825,029
Other liabilities	104,084						115,110						58,857
Stockholders' equity	702,758						697,117						648,919
Total liabilities and
stockholders' equity	$	5,529,643					$	5,397,864					$	4,944,243
Net interest income			$	38,278					$	38,287					$	40,729
Net yield on earning assets					3.02	%					3.13	%					3.59	%

(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			$	156					$	609					$	96



(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	$	132	$	194	$	50
Commercial, financial, and agriculture	250		651		1,110
Installment loans to individuals	38		37		13
Time deposits	155		155		75
	$	575	$	1,037	$	1,248

(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%.


99.1			News Release issued October 22, 2020


	Three Months Ended														Nine Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
	2020		2020		2020		2019		2019		2020		2019
Interest Income
Interest and fees on loans	$	35,761	$	37,718	$	41,335	$	41,615	$	42,944	$	114,813	$	128,397
Interest on investment securities:
Taxable	6,266		5,718		5,871		5,924		6,044		17,855		17,465
Tax-exempt	1,132		821		707		711		722		2,659		2,257
Interest on deposits in depository institutions	72		55		304		298		271		432		1,034
Total Interest Income	43,231		44,312		48,217		48,548		49,981		135,759		149,153

Interest Expense
Interest on deposits	5,123		5,963		7,238		7,897		8,585		18,324		24,768
Interest on short-term borrowings	131		279		464		762		814		873		2,729
Interest on long-term debt	—		—		100		42		45		100		140
Total Interest Expense	5,254		6,242		7,802		8,701		9,444		19,297		27,637
Net Interest Income	37,977		38,070		40,415		39,847		40,537		116,462		121,516
Provision for (recovery of) credit losses	1,026		1,250		7,972		(75)		274		10,248		(1,175)
Net Interest Income After Provision for (Recovery of) Credit Losses	36,951		36,820		32,443		39,922		40,263		106,214		122,691

Non-Interest Income
Net (losses) gains on sale of investment securities	—		(6)		63		—		(40)		56		69
Unrealized gains (losses) recognized on securities still held	461		242		(2,402)		914		(214)		(1,698)		(27)
Service charges	6,295		4,945		7,723		8,233		8,183		18,962		23,281
Bankcard revenue	6,065		5,888		5,115		5,162		5,440		17,068		15,931
Trust and investment management fee income	1,844		1,931		1,799		2,016		1,802		5,574		5,144
Bank owned life insurance	1,088		848		1,676		856		762		3,611		2,910
Sale of VISA shares	—		—		17,837		—		—		17,837		—
Other income	1,232		783		1,536		861		765		3,550		3,139
Total Non-Interest Income	16,985		14,631		33,347		18,042		16,698		64,960		50,447

Non-Interest Expense
Salaries and employee benefits	15,361		14,873		15,851		15,918		15,210		46,085		46,220
Occupancy related expense	2,428		2,402		2,488		2,540		2,725		7,318		8,055
Equipment and software related expense	2,607		2,504		2,429		2,302		2,248		7,540		6,662
FDIC insurance expense	355		167		—		—		—		522		639
Advertising	462		933		843		694		861		2,238		2,650


	September 30,		June 30,		March 31,		December 31,		September 30,
	2020		2020		2020		2019		2019

Residential real estate ⁽¹⁾	$	1,621,265	$	1,631,151	$	1,629,578	$	1,640,396	$	1,643,416
Home equity - junior liens	140,135		142,672		146,034		148,928		150,808
Commercial and industrial	383,980		369,122		308,567		308,015		296,927
Commercial real estate ⁽²⁾	1,464,701		1,467,673		1,470,949		1,459,737		1,431,983
Consumer	50,541		52,278		54,749		54,263		54,799
DDA overdrafts	3,344		2,700		3,173		4,760		4,638
Gross Loans	$	3,663,966	$	3,665,596	$	3,613,050	$	3,616,099	$	3,582,571

Construction loans included in:
(1) - Residential real estate loans	$	28,947	$	28,252	$	28,870	$	29,033	$	24,955
(2) - Commercial real estate loans	42,449		42,092		44,453		64,049		55,267


	Three Months Ended																					Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2020			2020			2020			2019			2019			2020			2019
Allowance for Loan Losses
Balance at beginning of period	$	25,199		$	24,393		$	11,589		$	13,186		$	13,795		$	11,589		$	15,966

Charge-offs:
Commercial and industrial	(757)			—			(77)			(193)			(17)			(834)			(68)
Commercial real estate	(75)			(39)			(383)			(964)			(216)			(497)			(394)
Residential real estate	(252)			(376)			(483)			(226)			(194)			(1,111)			(922)
Home equity	(126)			(161)			(45)			(134)			(43)			(332)			(160)
Consumer	(74)			(36)			(55)			(338)			(279)			(165)			(478)
DDA overdrafts	(554)			(459)			(703)			(792)			(772)			(1,716)			(1,985)
Total charge-offs	(1,838)			(1,071)			(1,746)			(2,647)			(1,521)			(4,655)			(4,007)

Recoveries:
Commercial and industrial	3			5			9			581			43			17			183
Commercial real estate	44			128			203			10			7			375			614
Residential real estate	24			8			95			87			157			127			282
Home equity	33			9			47			—			—			89			—
Consumer	42			128			13			54			68			183			211
DDA overdrafts	334			349			451			393			363			1,134			1,112
Total recoveries	480			627			818			1,125			638			1,925			2,402

Net (charge-offs)/recoveries	(1,358)			(444)			(928)			(1,522)			(883)			(2,730)			(1,605)
Provision for (recovery of) credit losses	1,026			1,250			7,972			(75)			274			10,248			(1,175)
Impact of adopting ASC 326	—			—			5,760			—			—			5,760			—
Balance at end of period	$	24,867		$	25,199		$	24,393		$	11,589		$	13,186		$	24,867		$	13,186

Loans outstanding	$	3,663,966		$	3,665,596		$	3,613,050		$	3,616,099		$	3,582,571
Allowance as a percent of loans outstanding	0.68		%	0.69		%	0.68		%	0.32		%	0.37		%
Allowance as a percent of non-performing loans	182.7		%	185.1		%	202.2		%	98.6		%	84.3		%

Average loans outstanding	$	3,661,569		$	3,660,174		$	3,608,868		$	3,607,864		$	3,544,548		$	3,643,603		$	3,553,417
Net charge-offs (recoveries) (annualized) as a percent of average loans outstanding	0.15		%	0.05		%	0.10		%	0.17		%	0.10		%	0.10		%	0.06		%