City Holding Company announces second quarter results

City Holding Company (NASDAQ:CHCO), a $3.8 billion bank holding company headquartered in Charleston, this week announced quarterly net income of $12.5 million and diluted earnings of $0.83 per share.
Highlights of the company’s second quarter performance and results included the following:
• Return on assets and return on tangible equity of 1.31 percent and 14.5 percent, respectively.
• Reported net interest income increased $0.9 million from the quarter ended June 30, 2015, while net interest income exclusive of accretion from fair value adjustments increased $1.5 million from the quarter ended June 30, 2015.
• Total net loan growth of $26.3 million from Mar. 31, 2016 to June 30, 2016.
• Average total deposit balances grew $95.9 million from the quarter ended Mar. 31, 2016 to the quarter ended June 30, 2016.
• Asset quality continues to remain strong with nonperforming assets declining to $21.3 million, or 0.73 percent of total loans and other real estate owned. Past due loans remained steady at just 0.30 percent of total loans outstanding.
Charles R. “Skip” Hageboeck, president and chief executive officer of City Holding Company, commented: “Our results for the second quarter of 2016 once again continue to be very positive despite the headwinds of a sustained low interest environment and weak economic conditions. Our net interest margin improved modestly compared to the first quarter of 2016 and we continued to achieve steady loan growth. Credit quality continues to be a source of strength for City and our credit metrics remain very strong at June 30, 2016. City’s tangible capital grew 35 basis points during the second quarter of 2016 and is now above our reported tangible capital level at Dec. 31, 2015 even though we increased our dividend to shareholders over 2 percent and have repurchased in excess of 230,000 shares of our common stock in 2016.”
“I would be remiss not to address the devastating and tragic flooding that occurred in parts of West Virginia in June. Sadly, the state sustained more than 20 deaths and substantial property damage was incurred. Areas served by City that were hardest hit were Greenbrier County (and most particularly the community of White Sulphur Springs) and the Elkview/Clendenin communities within Kanawha County. Our personnel responded by organizing collection drives for flood victims and volunteering as part of flood relief teams.
City has established special loan programs for flood victims and has donated to flood relief efforts. Further, upon review of our loan balances in those communities impacted, we estimate that we have approximately $40 million of loans outstanding, with 90 percent being residential real estate loans located out of floodplains.
Within zip codes where the flooding occurred, we have approximately 900 loans – mostly residential mortgages – with an average balance of under $43,000. It is still early in the recovery process, and while we did not recognize any losses related to the flooding in the second quarter of 2016, the exact extent of any future loan losses remains unknown. However, with the limited information currently available, we do not expect to incur significant loan losses associated with the recent flooding in West Virginia – but will need several additional months to ascertain what the impact to our loan portfolio might be. We will work closely with our customers to help ensure the best possible outcomes for all parties.
Although it will take years to fully rebuild the personal and public infrastructure that was damaged or destroyed during this flood, all West Virginian’s are thankful for the quick and generous response to the devastation.”

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