SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File Number
September 30, 1995 0-11733
CITY HOLDING COMPANY
(Exact name of registrant as specified in its charter)
West Virginia 55-0619957
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3601 MacCorkle Avenue, Southeast
Charleston, West Virginia 25304
(Address of principal offices)
Registrant's telephone number, including area code: (304) 925-6611
Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
Yes xx No
The number of shares outstanding of the issuer's common stock as of November 10,
1995:
Common Stock, $2.50 Par Value -- 5,072,153 shares
THIS REPORT CONTAINS 33 PAGES.
EXHIBIT INDEX IS LOCATED ON PAGE 31 .
PAGE 1 OF 33
<PAGE>
Index
City Holding Company and Subsidiaries
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated balance sheets -- September 30, 1995
(unaudited) and December 31, 1994
Consolidated Statements of Income (unaudited) -- Nine
months ended September 30, 1995 and 1994 and three
months ended September 30, 1995 and 1994
Consolidated Statements of Changes in Stockholders'
Equity (unaudited) -- Nine months ended September 30,
1995
Consolidated Statements of Cash Flows (unaudited)
--Nine months ended September 30, 1995 and 1994
Notes to Consolidated Financial Statements (unaudited) --
September 30, 1995
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
PAGE 2 OF 33
<PAGE>
PART I. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Item I. SEPTEMBER 30 DECEMBER 31
1995 1994
------------ --------
(unaudited)
<S>
ASSETS <C> <C>
Cash and due from banks $ 27,263,000 $ 32,803,000
Federal funds sold 600,000 810,000
Interest earning assets with other banks 0 671,000
Securities available for sale, at fair value 77,577,000 82,809,000
Investment securities (approximate market values:
September 30, 1995--$134,187,000; December 31, 1994--$152,299,000) 133,219,000 157,105,000
Loans
Gross loans 654,995,000 563,971,000
Unearned income (8,621,000) (9,685,000)
Allowance for possible loan losses (6,494,000) (6,477,000)
--------- ---------
NET LOANS 639,880,000 547,809,000
Loans held for sale 101,971,000 30,227,000
Bank premises and equipment 22,161,000 21,130,000
Accrued interest receivable 7,745,000 6,903,000
Other assets 15,401,000 15,550,000
------------ -----------
TOTAL ASSETS $ 1,025,817,000 $ 895,817,000
============= ===========
LIABILITIES
Deposits:
Noninterest-bearing $ 117,129,000 $ 94,368,000
Interest-bearing 677,218,000 652,437,000
----------- -----------
TOTAL DEPOSITS 794,347,000 746,805,000
Short-term borrowings 137,184,000 66,627,000
Long-term debt 15,000,000 6,875,000
Other liabilities 8,550,000 9,179,000
------------ ------------
TOTAL LIABILITIES 955,081,000 829,486,000
STOCKHOLDERS' EQUITY Preferred stock, par value $25 a share:
Authorized-500,000 shares; none issued
Common stock, par value $2.50 a share: authorized
20,000,000 shares; issued and outstanding 5,095,246 shares as of September 30,
1995 and 4,702,244 as of December 31, 1994, including 23,092 shares in
treasury at September 30, 1995. 12,738,000 11,745,000
Capital Surplus 25,987,000 18,374,000
Retained Earnings 32,884,000 39,075,000
Cost of common stock in treasury (558,000) NONE
Net unrealized gain/(loss) on securities available for sale,
net of deferred income taxes (315,000) (2,863,000)
---------------- -------------
TOTAL STOCKHOLDERS' EQUITY 70,736,000 66,331,000
--------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,025,817,000 $ 895,817,000
============== ============
</TABLE>
See notes to consolidated financial statements
PAGE 3 OF 33
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTH PERIOD ENDED
September 30
1995 1994
---------- -------
<S>
INTEREST INCOME <C> <C>
Interest and fees on loans $ 43,447,000 $ 33,138,000
Interest and dividends on securities:
Taxable 9,002,000 10,595,000
Tax-exempt 1,751,000 1,902,000
Other interest income 70,000 275,000
------------ -----------
TOTAL INTEREST INCOME 54,270,000 45,910,000
INTEREST EXPENSE
Interest on deposits 19,818,000 16,922,000
Interest on short-term borrowings 3,811,000 939,000
Interest on long-term debt 459,000 310,000
------------ ------------
TOTAL INTEREST EXPENSE 24,088,000 18,171,000
NET INTEREST INCOME 30,182,000 27,739,000
PROVISION FOR POSSIBLE LOAN LOSSES 711,000 697,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 29,471,000 27,042,000
OTHER INCOME
Securities gains 9,000 79,000
Service charges 2,444,000 1,961,000
Other 2,182,000 1,276,000
----------- ----------
TOTAL OTHER INCOME 4,635,000 3,316,000
OTHER EXPENSES
Salaries and employee benefits 12,958,000 11,031,000
Net occupancy expense 3,754,000 3,527,000
Other 8,175,000 7,367,000
----------- -----------
TOTAL OTHER EXPENSES 24,887,000 21,925,000
INCOME BEFORE INCOME TAXES 9,219,000 8,433,000
INCOME TAXES 2,911,000 2,602,000
----------- ------------
NET INCOME $ 6,308,000 $ 5,831,000
========== ==========
Net income per common share $ 1.22 $ 1.13
============ ============
Average common shares outstanding 5,156,488 5,158,098
========== ==========
</TABLE>
See notes to consolidated financial statements
PAGE 4 OF 33
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
September 30
1995 1994
---------- -------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 15,827,000 $ 11,984,000
Interest and dividends on securities:
Taxable 2,829,000 3,554,000
Tax-exempt 595,000 607,000
Other interest income 5,000 67,000
------------ -----------
TOTAL INTEREST INCOME 19,256,000 16,212,000
INTEREST EXPENSE
Interest on deposits 7,065,000 5,740,000
Interest on short-term borrowings 1,546,000 566,000
Interest on long-term debt 231,000 101,000
------------ ------------
TOTAL INTEREST EXPENSE 8,842,000 6,407,000
NET INTEREST INCOME 10,414,000 9,805,000
PROVISION FOR POSSIBLE LOAN LOSSES 302,000 230,000
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 10,112,000 9,575,000
OTHER INCOME
Securities gains 7,000 (1,000)
Service charges 945,000 690,000
Other 762,000 497,000
----------- ----------
TOTAL OTHER INCOME 1,714,000 1,186,000
OTHER EXPENSES
Salaries and employee benefits 4,541,000 3,902,000
Net occupancy expense 1,217,000 1,291,000
Other 2,886,000 2,621,000
----------- -----------
TOTAL OTHER EXPENSES 8,644,000 7,814,000
INCOME BEFORE INCOME TAXES 3,182,000 2,947,000
INCOME TAXES 1,040,000 924,000
----------- ------------
NET INCOME $ 2,142,000 $ 2,023,000
========== ==========
Net income per common share $ .42 $ .39
============= =============
Average common shares outstanding 5,137,053 5,161,201
========== ==========
</TABLE>
See notes to consolidated financial statements
PAGE 5 OF 33
<PAGE>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
CITY HOLDING COMPANY AND SUBSIDIARIES
Nine months Ended September 30, 1995
<TABLE>
<CAPTION>
NET
UNREALIZED
GAIN/(LOSS)
SECURITIES TOTAL
COMMON CAPITAL RETAINED AVAILABLE TREASURY STOCKHOLDERS'
STOCK SURPLUS EARNINGS FOR SALE STOCK EQUITY
----- ------- -------- -------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balances
at December 31, 1994 $11,745,000 $18,374,000 $39,075,000 ($2,863,000) 0 $66,331,000
Net income 6,308,000 6,308,000
Cash dividends
declared ($.45/share) (1,990,000) (1,990,000)
Cash dividends of acquired sub (150,000) (150,000)
Change in unrealized gain/(loss)
net of income taxes of $1,719,000 2,548,000 2,548,000
Cost of 89,864 shares of
common stock acquired
for treasury (2,318,000) (2,318,000)
Sale of 233 shares
of treasury stock 7,000 7,000
Retirement of 66,539 shares of
common stock held in treasury (158,000) (1,595,000) 1,753,000 0
Issuance of 10% stock dividend 1,151,000 9,208,000 (10,359,000)
--------- --------- ------------ ---------- ---------- -----------
Balances
at September 30, 1995 $12,738,000 $25,987,000 $32,884,000 ($315,000) ($558,000) $70,736,000
----------- ----------- ------------ ---------- ---------- -----------
<CAPTION>
NET
UNREALIZED
Nine months Ended September 30, 1994 GAIN/(LOSS)
SECURITIES TOTAL
COMMON CAPITAL RETAINED AVAILABLE TREASURY STOCKHOLDERS'
STOCK SURPLUS EARNINGS FOR SALE STOCK EQUITY
----- ------- -------- -------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balances
at December 31, 1993 $11,143,000 $13,503,000 $42,887,000 $282,000 ($2,210,000) $65,605,000
Net income 5,831,000 5,831,000
Cash dividends
declared ($.40/share) (1,425,000) (1,425,000)
Cash dividends of acquired
subsidiary (495,000) (495,000)
Adjustment to beginning balance
of unrealized gain on securities
for change in accounting method,
net of income taxes of $704,000 1,055,000 1,055,000
Changes in net unrealized
gain/(loss), net of income
taxes of $1,597,000 (3,597,000) (3,597,000)
Cost of 7,001 shares of common
stock acquired for treasury (193,000) (193,000)
Sale of 12,184 shares of
treasury stock 62,000 313,000 375,000
----------- ------------ ----------- ------------ ------------ -----------
Balances
at September 30, 1994 $11,143,000 $13,565,000 $46,798,000 $(2,260,000) ($2,090,000) $67,156,000
----------- ----------- ----------- ------------ ------------ -----------
</TABLE>
See notes to consolidated financial statements
PAGE 6 OF 33
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
CITY HOLDING COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTH PERIOD ENDED
September 30
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $6,308,000 $5,741,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Net amortization 828,000 845,000
Provision for depreciation 1,823,000 1,467,000
Provision for loan losses 711,000 697,000
Realized securities gains (9,000) (79,000)
Loan originated for sale (50,104,000) (12,349,000)
Purchases of loans held for sale (386,586,000) (133,382,000)
Proceeds from loans sold 365,111,000 96,011,000
Realized gains on loans sold (165,000) 0
Minority interest in income of subsidiary 0 27,000
Decrease (increase) in accrued interest receivable (842,000) (589,000)
Increase in other assets (2,135,000) (3,300,000)
Decrease (increase) in other liabilities (629,000) 104,000
----------- ------------
NET CASH USED IN OPERATING ACTIVITIES (65,689,000) (44,807,000)
INVESTING ACTIVITIES
Proceeds from sales of securities available for sale 8,047,000 12,483,000
Proceeds from maturities of securities available for sale 36,272,000 12,745,000
Purchases of securities available for sale (34,637,000) (19,360,000)
Proceeds from sales of securities 0 0
Proceeds from maturities of securities 26,687,000 71,606,000
Purchases of securities (3,238,000) (58,613,000)
Net increase in loans (92,782,000) (60,805,000)
Purchases of premises and equipment (2,854,000) (3,153,000)
Cash paid for acquired subsidiary, net of
cash and cash equivalents 0 (410,000)
--------------- --------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (62,505,000) (45,507,000)
FINANCING ACTIVITIES
Net increase in noninterest bearing deposits 22,761,000 10,818,000
Net increase in interest-bearing deposits 24,781,000 17,545,000
Net increase (decrease) in short-term borrowings 70,557,000 55,631,000
Proceeds from long-term-debt 12,525,000 2,500,000
Repayment of long-term debt (4,400,000) 0
Purchases of treasury stock (2,318,000) (193,000)
Proceeds from sales of treasury stock 7,000 297,000
Cash dividends paid (2,140,000) (1,920,000)
------------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 121,773,000 84,678,000
------------- ----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (6,421,000) (5,636,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 34,284,000 33,798,000
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $27,863,000 $28,162,000
============ ===========
</TABLE>
See notes to consolidated financial statement
PAGE 7 OF 33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying consolidated financial statements, which are
unaudited, include all the accounts of City Holding Company (the Parent Company)
and its wholly owned subsidiaries (collectively, the Company). All material
intercompany transactions have been eliminated. The consolidated financial
statements include all adjustments which, in the opinion of management, are
necessary for a fair presentation of the results of operations and financial
condition for each of the periods presented. Such adjustments are of a normal
recurring nature. The results of operations for the nine months ended September
30, 1995, are not necessarily indicative of the results of operations that can
be expected for the year ending December 31, 1995. The Company's accounting and
reporting policies conform with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. For further information, refer to the consolidated
financial statements and footnotes thereto included in the City Holding Company
annual report on Form 10-K for the year ended December 31, 1994.
NOTE B - PER SHARE INFORMATION
On September 11, 1995, the Company declared a special 10% stock
dividend payable on November 30, 1995, to shareholders of record as of November
1, 1995. All per share information for the current quarter and prior periods has
been adjusted accordingly to reflect this stock dividend. An amount equal to the
fair value of the additional shares issued was transferred from retained
earnings to the common stock and capital accounts.
PAGE 8 OF 33
<PAGE>
NOTE C - INCOME TAXES
The consolidated provision for income taxes is based upon
financial statement earnings. The effective tax rate for the nine months ended
September 30, 1995, of 31.58% varied from the statutory federal income tax rate
primarily due to state income taxes and the tax effects of nontaxable interest
income and the amortization of goodwill.
NOTE D - COMMITMENTS AND CONTINGENT LIABILITIES
In the normal course of business, there are various
commitments and contingent liabilities, such as commitments to extend credit and
standby letters of credit, that are not included in the consolidated financial
statements. These commitments approximate $72,752,000 at September 30, 1995.
These arrangements, consisting principally of unused lines of credit issued in
the normal course of business, have credit risks essentially the same as that
involved in extending loans to customers and are subject to the Company's
standard credit policies. Standby letters of credit, which total $3,338,000,
have historically expired unfunded.
NOTE E - STOCKHOLDERS' EQUITY
In April 1994, the Company announced the implementation of an
Open Market Stock Purchase Plan (the Plan). The Board of Directors allocated $5
million to be used over the next two years to purchase shares of the Company's
common stock. The Plan was authorized to commence May 1, 1994. The Plan as of
September 30, 1995 has reacquired approximately 87,000 shares at market prices
ranging from $25.63 to $26.49 per share for total purchases of approximately
$2,286,000.
PAGE 9 OF 33
<PAGE>
NOTE F - NEW ACCOUNTING PRONOUNCEMENT
On January 1, 1995, the Company adopted Statement of Financial
Accounting Standards (FAS) No. 114, "Accounting by Creditors for Impairment of a
Loan", which requires that impaired loans be identified and measured based on
the present value of expected future cash flows discounted at the loan's
effective interest rate on the fair value of the collateral if the loan is
collateral dependent. FAS No. 114 did not have a material impact on the
Company's financial position or results of operations.
The Financial Accounting Standards Board (FASB) has issued SFAS No.
122, "Accounting for Mortgage Servicing Rights." The provisions of SFAS No. 122
are effective for fiscal years beginning after December 31, 1995. SFAS No. 122
requires that companies involved in mortgage banking activities recognize as
assets the rights to service mortgage loans for others, regardless of how those
rights are obtained. Currently, it is the Company's practice to not retain
servicing rights on mortgage loans sold in the secondary market. Accordingly,
SFAS No. 122 is not expected to have a significant impact on the Company's
financial statements. However, management has not yet completed the complex
analysis required to estimate the impact of the new rules and does not expect to
implement SFAS No. 122 prior to its first quarter 1996 effective date.
NOTE G - SFAS 115 "HOLIDAY"
In October 1995, the FASB approved a one-time "holiday" from SFAS No.
115, "Accounting for Investments in Debt and Equity Securities," restrictions
over held-to-maturity securities. Companies will have a one time opportunity to
restructure their portfolios prior to December 31, 1995. Specifically, the FASB
decided that companies may sell or transfer securities from their
held-to-maturity portfolio without calling into question their intent to hold
PAGE 10 OF 33
<PAGE>
other debt securities to maturity in the future or their past financial
reporting. Management has not yet completed its analysis of the potential impact
of the SFAS No. 115 "holiday", however, the Compay may take advantage of this
provision if it will favorably impact its interest rate risk management
strategy.
NOTE H - ACQUISITION
On August 31, 1995, the Company acquired 100% of the common
stock of First Merchants Bancorp, Inc. and subsidiary (Merchants) in exchange
for 921,567 shares of the Company's common stock. The transaction has been
accounted for as a pooling of interests and, accordingly, the consolidated
financial statements for all periods presented have been restated to include the
accounts of Merchants. Previously reported results of the Company have been
restated as follows: Summary of Operations
<TABLE>
<CAPTION>
Year Ended Six Months Ended Six Months Ended
December 31, 1994 June 30, 1995 June 30, 1994
-----------------------------------------------------------------
<S> <C> <C> <C>
Net Interest income as previously
reported by the Company $32,906,000 $17,297,000 $15,670,000
Merchants' previosly reported results 4,688,000 2,471,000 2,265,000
------------------------------------------------------------
Restated net interest income $37,594,000 $19,768,000 $17,935,000
Net income as previously reported
by the Company $6,959,000 $3,554,000 $ 3,302,000
Merchants' previously reported results 1,183,000 611,000 506,000
------------------------------------------------------------
Restated net income $8,142,000 $ 4,165,000 $ 3,808,000
Net income per common shares as
previously reported by the Company
as adjusted for the 10% stock
dividend in 1995 $ 1.68 $ .85 $ .80
Effect of Merchants' restatement (.10) (.04) (.06)
-------------------------------------------------------------
Restated net income per common share $ 1.58 $ .81 $ .74
</TABLE>
PAGE 11 OF 33
<PAGE>
NOTE I - LONG-TERM BORROWINGS
Long-term debt consists of a $15,000,000 revolving line of credit of the
Parent Company with a variable rate based on the lesser of the adjusted LIBOR
rate plus 1.875% per annum or the lender's base rate less .25% per annum (7.75%
at September 30, 1995) due on June 30, 1996. The lender has the option to extend
the maturity date for an additional twelve months. As of September 30, 1995, the
outstanding balance was equal to $15,000,000. Interest on this obligation is
payable quarterly, and the Parent Company has pledged the common stock of The
City National Bank of Charleston and the Peoples Bank of Point Pleasant as
security for the loan.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
HIGHLIGHTS
FINANCIAL POSITION
Total assets increased $130.0 million or approximately 14.5% during the
first nine months of 1995. Net loans increased $92.1 million or 16.8%. Loans
held for sale, consisting primarily of loans received through the Company's
participation in a short-term whole loan bulk purchasing program, increased
$71.7 million or 237%. As of September 30, 1995, program loans owned by the
Company had an outstanding principal balance of approximately $84 million. See
LOAN PORTFOLIO. The Company earned interest income of approximately $2.46
million on program loans during the nine months ended September 30, 1995. See
NET INTEREST
PAGE 12 OF 33
<PAGE>
INCOME. The increases in net loans and loans held for sale were funded by an
increase in deposits and short-term borrowings of $47.5 million and $70.6
million, respectively. Net stockholders' equity increased $4.4 million during
the first nine months of 1995 representing the Company's retained net profits,
plus the $2.5 million change in the net unrealized gain on securities available
for sale.
QUARTER ENDED SEPTEMBER 30, 1995, COMPARED TO QUARTER ENDED
SEPTEMBER 30, 1994.
The Company reported net income of $2,142,000 for the three months ended
September 30, 1995 compared to net income of $2,023,000 for the quarter ended
September 30, 1994. This increase of $119,000, or 5.88%, was primarily due to an
increase of $225,000 in the Company's fee income earned on loans originated for
sale and/or sold during the third quarter of 1995 as compared to the same period
of 1994. However, the increase in fee income did not translate into a
corresponding increase in net income because of the level of non-interest
expense associated with Company expansion, which increased $830,000 or 10.6%
during the third quarter of 1995 as compared to the same period of 1994. Also in
the third quarter, the Company recognized approximatley $480,000 in merger
expenses associated with the Merchants acquisition. These expenses were offset
by the FDIC insurance rebate of approximately $436,000 which was recognized in
the third quarter, also. Earnings per share were $.42 and $.39 for the third
quarter of 1995 and 1994, respectively.
Net income for the third quarter also benefitted from an increase of
$609,000 in the Company's net interest income during the third quarter of 1995
as compared to the same period of 1994. See NET INTEREST INCOME for further
discussion.
PAGE 13 OF 33
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1995, COMPARED TO NINE MONTHS
ENDED SEPTEMBER 30, 1994.
The Company reported net income of $6,308,000 for the nine months ended
September 30, 1995 compared to net income of $5,831,000 for the nine months
ended September 30, 1994. This increase of $477,000 or 8.18%, was primarily due
to an increase in the Company's fee income earned on loans originated for sale
and/or sold during the first nine months of 1995 as compared to the same period
of 1994 as discussed above. Total non-interest expense increased $3.0 million or
13.5% during the first nine months of 1995 as compared to the same period of
1994, due to increases in salaries and employee benefits related to the
Company's growth. Earnings per share were $1.22 and $1.13 for the nine months
ended September 30, 1995 and 1994, respectively.
SELECTED RATIOS
The return on average assets (ROA) for the third quarter of 1995 was
.87% compared to .92% in the third quarter of 1994. The return on average
shareholder's equity (ROE) for the third quarter of 1995 was 12.02% compared to
12.00% ROE for the third quarter of 1994. For the first nine months of 1995 and
1994, ROA was .90%. ROE was 12.18% and 11.68% for the first nine months of 1995
and 1994, respectively.
The dividend payout ratio of 35.71% for the quarter ended September 30,
1995 represents a slight decrease of .53% from the quarter ended September 30,
1994. The dividend payout ratio was 36.89% and 35.40% for the nine months ended
September 30, 1995 and 1994, respectively. The dividend payout ratios for the
quarter and nine months ended September 30, 1995 and 1994 are based on
historical results of the Company and do not include cash dividends
PAGE 14 OF 33
<PAGE>
of the acquired subsidiaries prior to the dates of acquisition. Since 1988, the
Company has paid dividends on a quarterly basis, and expects to continue to do
so in the future.
LOAN PORTFOLIO
The composition of the Company's loan portfolio is presented in the
following table:
LOAN PORTFOLIO BY TYPE
(Dollars in Thousands)
September 30 December 31
1995 1994
-------- -------
Commercial, financial and
agricultural $206,928 $164,351
Real Estate-Mortgage 272,119 243,792
Real Estate-Construction 27,160 15,118
Installment and other 148,788 140,710
Unearned Income (8,621) (9,685)
-------- --------
TOTAL $646,374 $554,286
======== ========
Loans Held for Sale
Program loans $ 84,000 $ 22,379
Loans Originated for Sale 17,971 7,848
-------- --------
TOTAL $ 101,971 $ 30,227
======== =======
The Company grants loans to customers generally within the
market areas of its subsidiaries. Loans have been trending up significantly over
the past two years primarily due to the Company's more active solicitation of
commercial business, introduction of new loan products, and continued expansion.
There have been no significant changes in the Company's loan policy or credit
standards. The Company continues to shift its marketing efforts more towards
direct loan business. There are no significant concentrations of credit and
speculative or highly leveraged transactions are insignificant. Also, in order
to increase the repricing frequency of the loan portfolio, the Company has
significantly increased its portfolio of variable rate commercial and
residential mortgage loans.
PAGE 15 OF 33
<PAGE>
ASSET QUALITY AND ALLOWANCE FOR LOAN LOSSES
The following table summarizes the Company's risk elements for
the periods ending September 30, 1995 and December 31, 1994. The Company's
coverage ratio of nonperforming assets and potential problem loans continues to
be strong in comparison to the Company's peer group, at 128% as of September 30,
1995.
Management is of the opinion that the allowance for loan
losses is adequate to provide for probable future losses inherent in the
portfolio.
PAGE 16 OF 33
<PAGE>
RISK ELEMENTS
(in thousands)
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30 December 31
1995 1994
---- ----
<S> <C> <C>
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period $6,477 $ 6,209
Charge-offs (961) (1,180)
Recoveries 267 408
----------------------------
Net charge-offs (694) (772)
Provision for loan possible losses 711 1,040
------ ------
Balance at end of period $6,494 $6,477
===== =====
AS A PERCENT OF AVERAGE TOTAL LOANS
Net charge-offs 0.12% 0.15%
Provision for possible loan losses 0.12% 0.21%
Allowance for loan losses 1.09% 1.28%
<CAPTION>
September 30 December 31
1995 1994
---- ----
NON -PERFORMING ASSETS
Other real estate owned $1,084 $696
Non-accrual loans 2,203 2,614
Accruing loans past due 90 days
or more 1,173 1,420
Restructured loans 109 472
---------------------------
Total Non-performing Assets $4,569 $5,202
POTENTIAL PROBLEM LOANS $509 $529
AS A PERCENT OF NON-PERFORMING ASSETS
AND POTENTIAL PROBLEM LOANS
Allowance for loan losses 127.88% 113.02%
ACCRUING LOANS PAST DUE 90 DAYS OR MORE
AS A PERCENT OF AVERAGE TOTAL LOANS 0.20% 0.28%
</TABLE>
PAGE 17 OF 33
<PAGE>
LIQUIDITY AND INTEREST RATE SENSITIVITY
The Company's cash and cash equivalents, represented by cash
and due from banks and overnight federal funds sold, is a product of its
operating, investing and financing activities. These activities are set forth in
the City Holding Company Consolidated Statements of Cash Flows included
elsewhere herein. Cash was used in operating activities in each period
presented, primarily from loans originated for sale and purchase of loans held
for sale. Net cash was used in investing activities during the third quarter of
1995 and 1994 funding the Company's loan growth. The net cash provided by
financing activities in the respective periods is a result of an increase in
interest-bearing deposits and short-term borrowings.
The Company seeks to maintain a strong liquidity position to
reduce interest rate risk, which is the susceptibility of assets and liabilities
to decline in value as a result of changes in general market interest rates. The
Company minimizes this risk through asset and liability management, where the
goal is to optimize earnings while managing interest rate risk. The Company
measures this interest rate risk through interest sensitivity gap analysis as
illustrated in the following table. At September 30, 1995, the one year period
shows a negative gap (liability sensitive) of $314 million. This analysis is a
"static gap" presentation and movements in deposit rates offered by the
Company's subsidiary banks lag behind movements in the prime rate. Such time
lags affect the repricing frequency of many items on the Company's balance
sheet. Accordingly, the sensitivity of deposits to changes in market rates may
differ significantly from the related contractual terms. The table is first
presented without adjustment for expected repricing behavior. Then, as presented
in the "management adjustment" line, these balances have been notionally
distributed over the first three periods to reflect those portions of such
accounts that are expected to reprice fully with market rates over the
respective periods. The distribution of the balances over the repricing periods
PAGE 18 OF 33
<PAGE>
represents an aggregation of such allocations by each of the affiliate banks,
and is based upon historical experience with their individual markets and
customers. Management expects to continue the same pricing methodology in
response to future market rate changes; however, management adjustments may
change as customer preferences, competitive market conditions, liquidity, and
loan growth change. Also presented in the management adjustment line are loan
prepayment assumptions which may differ from the related contractual term of the
loans. These balances have been distributed over the four periods to reflect
those loans that are expected to be repaid in full prior to their maturity date
over the respected periods. After management adjustments, the table shows a
negative gap in the one year period of $114 million. A negative gap position is
advantageous when interest rates are falling because interest-bearing
liabilities are being repriced at lower rates and in greater volume, which has a
positive effect on net interest income. Consequently, the Company has
experienced a decline in its net interest margin during the past year as
interest rates have risen and is somewhat vulnerable to a rapid rise in interest
rates during 1995. These declines in net interest margin did not translate into
declines in net interest income because of increases in the volume of
interest-earning assets.
There are no known trends, demands, commitments or
uncertainties that have resulted or are reasonably likely to result in material
changes in liquidity.
PAGE 19 OF 33
<PAGE>
INTEREST RATE SENSITIVITY GAPS
(in thousands)
<TABLE>
<CAPTION>
1 to 3 3 to 12 1 to 5 Over 5
Months Months Years Years Total
------ ------ ----- ----- -----
<S> <C> <C> <C> <C> <C>
ASSETS
Gross loans $155,633 $94,295 $316,138 $86,726 $652,792
Loans Held for Sale 101,971 0 0 0 101,971
Securities 26,497 23,533 104,989 55,777 210,796
Federal funds sold 600 600
--------- -------- -------- -------- --------
Total Interest earning assets 284,701 117,828 421,127 142,503 966,159
---------------------------------------------------------------------------
LIABILITIES
Savings and NOW Accounts 320,427 0 0 0 320,427
All other interest bearing deposits 84,547 158,910 112,845 489 356,791
Short term and other borrowings 137,184 0 0 0 137,184
Long term borrowings 15,000 0 0 0 15,000
--------------------------------------------------------------------------
Total interest bearing liabilities $557,158 $ 158,910 $112,845 $ 489 $829,402
------- -------- ------- ------- -------
Interest sensitivity gap ($272,457) ($ 41,082) $308,282 $142,014 $136,757
------- -------- ------- ------- -------
Cumulative sensitivity gap ($272,457) ($313,539) ($ 5,257) $136,757
======= ======= ======= =======
Management adjustments $286,899 ($ 87,647) ($189,647) ($ 9,605)
------- ------- ------- ------
Cumulative management adjusted gap $ 14,442 ($114,287) $ 4,348 $136,757
======= ======= ======= =======
</TABLE>
The table above includes various assumptions and estimates by management as to
maturity and repricing patterns. Future interest margins will be impacted by
balances and rates which are subject to change periodically throughout the year.
PAGE 20 OF 33
<PAGE>
CAPITAL RESOURCES
As a bank holding company, City Holding Company is subject to
regulation by the Federal Reserve Board under the Bank Holding Company Act of
1956. The Federal Reserve has published risk-based capital guidelines applicable
to bank holding companies which define items in the calculation of risk-weighted
assets. At September 30, 1995, the regulatory minimum ratio of qualified total
capital to risk-weighted assets (including certain off-balance-sheet items, such
as standby letters of credit) was 8 percent. At least half of the total capital
is to be comprised of "Tier 1 capital", or the Company's common stockholders'
equity, and minority interest in consolidated subsidiary, net of intangibles.
The remainder ("Tier 2 capital") may consist of certain other prescribed
instruments and a limited amount of loan loss reserves.
In addition, the Federal Reserve Board has established minimum
leverage ratio (Tier 1 capital to quarterly average tangible assets) guidelines
for bank holding companies. These guidelines provide for a minimum ratio of 3
percent for bank holding companies that meet certain specified criteria,
including that they have the highest regulatory rating. All other bank holding
companies will be required to maintain a leverage ratio of 3 percent plus an
additional cushion of at least 100 to 200 basis points. The guidelines also
provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant reliance on intangible
assets.
The following table presents comparative capital ratios and
related dollar amounts of capital for the Company:
PAGE 21 OF 33
<PAGE>
<TABLE>
<CAPTION>
Dollars in Thousands
September 30 December 31
1995 1994
---- ----
<S> <C> <C>
Capital Components
Tier 1 risk-based capital $64,120 $61,431
Total risk-based capital 70,614 67,908
Capital Ratios
Tier 1 risk-based 10.89% 11.03%
Total risk-based 12.00 12.19
Leverage 6.65 6.83
Regulatory Minimum
Tier 1 risk-based (dollar/ratio) $23,548/4.00% $22,282/4.00%
Total risk-based (dollar/ratio) 47,095/8.00 44,565/8.00
Leverage (dollar/ratio) 28,919/3.00 26,989/3.00
</TABLE>
The capital position of the Company is indicative of
management's emphasis on asset quality and a history of retaining between 60%
and 70% of annual net income. The ratios have declined from those reported at
December 31, 1994, due to increased volume of the short-term whole loans
purchased during the first nine months of 1995. These loans have been assigned a
risk weight of 100%. The ratios enable the Company to continually pursue
acquisitions and other growth opportunities. Improvements in operating results
and a consistent dividend program, coupled with an effective management of
credit risk, have been, and will be, the key elements in maintaining the
Company's present capital position.
A subsidiary bank will purchase approximately $2.2 million in
equipment sometime during the fourth quarter. This purchase, however, will not
effect the Company's liquidity or ability to pay dividends to shareholders. No
other material capital expenditures are anticipated in 1995. Earnings from
subsidiary bank operations are expected to remain adequate to fund payment of
stockholders' dividends and internal growth. In management's opinion, subsidiary
banks have the capability to upstream sufficient dividends to meet the cash
requirements of the Company. As of
PAGE 22 OF 33
<PAGE>
September 30, 1995, the subsidiary banks could have paid aggregate dividends to
the Parent Company of $8.5 million without obtaining approval of their
respective regulators.
NET INTEREST INCOME
Net interest income, on a fully federal tax-equivalent basis,
improved from the third quarter of 1994 to the third quarter of 1995 by
approximately $603,000 due to an increase in net earning assets. Net yield on
earning assets decreased between periods from 4.93% to 4.72%, as earning asset
yields increased 56 basis points (100 basis points equal one percent) to 8.62%,
and the cost of interest-bearing liabilities increased 86 basis points to 4.47%.
The $133,000 decrease in net interest income due to rate, as shown in the
following table, was coupled with a $736,000 increase in net interest income due
to volume. The major component of this favorable volume change was increased
average loans.
Net interest income, on a fully federal tax-equivalent basis,
improved from the nine months ended September 30, 1994 to the nine months ended
September 30, 1995 by approximately $2.4 million due to an increase in net
earning assets. Net yield on earning assets decreased between periods from 4.83%
to 4.76%, as earning asset yields increased 56 basis points to 8.44%, and the
cost of interest-bearing liabilities increased 73 basis points to 4.25%. The
$784,000 decrease in net interest income due to rate, as shown in the following
table, was coupled with a $3.1 million increase in net interest income due to
volume. The major component of this favorable volume change was increased
average loans.
A significant part of the increase in net earning assets for
the third quarter of 1995 and the nine months ended September 30, 1995, is
attributable to the Company's participation in a short-term, whole-loan bulk
purchasing program. Under the program, the Company purchases from a third party
whole loans secured by residential mortgages and partially insured by the
Federal Housing Administration. The loans typically have balances of less than
$25,000 and are not concentrated geographically. Additionally, the program
permits the
PAGE 23 OF 33
<PAGE>
Company to require the seller to repurchase or replace certain non-conforming
loans. The loans are generally repurchased from the Company within 30 to 90
days. Although the loans usually are located outside the Company's primary
market areas, management believes that these loans pose no greater risk than
similar inmarket loans because of the Company's review of the loans, the credit
support associated with the loans, the short duration of the Company's
investment and the other terms of the program. The loans are serviced by third
parties and the Company earns a fixed rate of return on the loans. The Company
earned approximately $1.2 milion in interest income on program loans for the
quarter ended September 30, 1995, on an average balance of approximately $50.8
million. The Company earned approximately $2.46 million in interest income on an
average balance of approximately $34.9 million for the nine months ended
September 30, 1995. These loans are being funded through short-term borrowings
which consist primarily of securities sold under agreement to repurchase. This
has been the primary cause for the increase in short-term borrowing interest
expense of $980,000 for the quarter ended September 30, 1995, and $2.9 million
for the nine months ended September 30, 1995.
PAGE 24 OF 33
<PAGE>
EARNING ASSETS AND INTEREST-BEARING LIABILITIES
(in thousands)
<TABLE>
<CAPTION>
Quarter Ended
September 30
1995 1994
---- ----
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS:
Loans (1)
Commercial and industrial $ 192,114 $4,527 9.43% $ 152,533 $3,297 8.65%
Real estate 291,554 6,269 8.60 239,232 4,968 8.31
Consumer obligations 141,666 3,539 9.99 121,586 2,927 9.63
-----------------------------------------------------------------------------------
Total loans 625,334 14,335 9.17 513,351 11,192 8.72
Loans held for sale 66,402 1,492 8.99 37,643 792 8.42
Securities
Taxable 179,530 2,829 6.30 222,033 3,554 6.40
Tax-exempt (2) 36,345 902 9.93 42,689 920 8.62
-----------------------------------------------------------------------------------
Total securities 215,875 3,731 6.91 264,722 4,474 6.76
Federal funds sold 333 5 6.01 4,694 67 5.71
-----------------------------------------------------------------------------------
Total earning assets 907,944 19,563 8.62 820,410 16,525 8.06
Cash and due from banks 25,800 24,348
Bank premises and equipment 22,129 19,982
Other assets 21,101 20,783
Less: allowance for possible
loan losses (6,461) (6,379)
------------------------------------------------------------------------------------
Total assets $970,513 $879,144
====================================================================================
INTEREST BEARING LIABILITIES
Demand deposits $ 104,572 $ 754 2.88% $101,562 $ 754 2.97%
Savings deposits 222,036 1,709 3.08 265,675 2,004 3.02
Time deposits 346,805 4,602 5.31 282,516 2,982 4.22
Short-term borrowings 106,546 1,546 5.80 53,438 566 4.24
Long-term debt 11,587 231 7.97 5,903 101 6.84
-------------------------------------------------------------------------------------
Total interest-bearing liabilities 791,546 8,842 4.47 709,094 6,407 3.61
Demand deposits 102,673 92,278
Other liabilities 5,005 10,317
Stockholders' equity 71,289 67,455
-------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $970,513 $879,144
=====================================================================================
Net interest income $10,721 $10,118
=====================================================================================
Net yield on earning assets 4.72% 4.93%
=====================================================================================
</TABLE>
(1) For purposes of this table, nonaccruing loans have been included in average
balances and loan fees, which are immaterial, have been included in interest
income. (2) Computed on a fully federal tax-equivalent basis assuming a tax rate
of 34% in all years.
PAGE 25 OF 33
<PAGE>
RATE VOLUME ANALYSIS OF
CHANGES IN INTEREST INCOME AND EXPENSE
(in thousands)
<TABLE>
<CAPTION>
Quarter Ended
September 30
1995 vs. 1994
Increase (Decrease)
Due to Change In:
INTEREST INCOME FROM: Volume Rate Net
-------------------------------------------------
<S> <C> <C> <C>
Loans
Commercial and industrial $ 913 $ 317 $ 1,230
Real estate 1,120 181 1,301
Consumer obligations 498 114 612
-------------------------------------------------
Total loans 2,531 612 3,143
Loans held for sale 643 57 700
Securities
Taxable (671) (54) (725)
Tax-exempt (1) (561) 543 (18)
--------------------------------------------------
Total Securities (1,232) 489 (743)
Federal funds sold (85) 23 (62)
-------------------------------------------------
Total interest-earning assets $ 1,857 $1,181 $ 3,038
INTEREST EXPENSE ON:
Demand deposits 88 (88) 0
Savings deposits (553) 258 (295)
Time deposits 761 859 1,620
Short-term borrowings 714 266 980
Long-term debt 111 19 130
--------------------------------------------------
Total interest-bearing liabilities $ 1,121 $ 1,314 $ 2,435
--------------------------------------------------
NET INTEREST INCOME $ 736 $ (133) $ 603
===================================================
</TABLE>
(1) Fully federal taxable equivalent using a tax rate of 34% in all years.
PAGE 26 OF 33
<PAGE>
EARNING ASSETS AND INTEREST-BEARING LIABILITIES
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
---- ----
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS:
Loans (1)
Commercial and industrial $ 181,771 $12,614 9.25% $ 151,000 $ 9,287 8.20%
Real estate 276,723 17,529 8.45 224,809 13,963 8.28
Consumer obligations 136,529 10,147 9.91 115,514 8,561 9.88
----------------------------------------------------------------------------------
Total loans 595,023 40,290 9.03 491,323 31,811 8.63
Loans held for sale 46,988 3,157 8.96 21,029 1,327 8.41
Securities
Taxable 187,981 9,002 6.39 227,312 10,595 6.21
Tax-exempt (2) 40,029 2,653 8.84 43,459 2,882 8.84
----------------------------------------------------------------------------------
Total securities 228,010 11,655 6.82 270,771 13,477 6.64
Federal funds sold 1,593 70 5.86 10,072 275 3.64
----------------------------------------------------------------------------------
Total earning assets 871,614 55,172 8.44 793,195 46,890 7.88
Cash and due from banks 25,302 25,418
Bank premises and equipment 22,013 19,403
Other assets 21,054 27,974
Less: allowance for possible
loan losses (6,446) (6,329)
-----------------------------------------------------------------------------------
Total assets $933,537 $859,661
===================================================================================
INTEREST BEARING LIABILITIES
Demand deposits $ 105,454 $ 2,266 2.87% $ 99,430 $ 2,142 2.87%
Savings deposits 228,719 5,256 3.06 263,577 6,010 3.04
Time deposits 327,124 12,296 5.01 281,963 8,770 4.15
Short-term borrowings 87,568 3,811 5.80 36,497 939 3.43
Long-term debt 7,095 459 8.63 5,884 310 7.02
-----------------------------------------------------------------------------------
Total interest-bearing liabilities 755,960 24,088 4.25 687,351 18,171 3.52
Demand deposits 99,386 87,246
Other liabilities 9,160 18,517
Stockholders' equity 69,031 66,547
-----------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $933,537 $859,661
===================================================================================
Net interest income $31,084 $28,719
===================================================================================
Net yield on earning assets 4.76% 4.83%
===================================================================================
</TABLE>
(1) For purposes of this table, nonaccruing loans have been included in average
balances and loan fees, which are immaterial, have been included in interest
income. (2) Computed on a fully federal tax-equivalent basis assuming a tax rate
of 34% in all years.
PAGE 27 OF 33
<PAGE>
RATE VOLUME ANALYSIS OF
CHANGES IN INTEREST INCOME AND EXPENSE
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 vs. 1994
Increase (Decrease)
Due to Change In:
INTEREST INCOME FROM: Volume Rate Net
--------------------------------------------------
<S> <C> <C> <C>
Loans
Commercial and industrial $ 2,042 $ 1,285 $ 3,327
Real estate 3,283 283 3,566
Consumer obligations 1,562 24 1,586
--------------------------------------------------
Total loans 6,887 1,592 8,479
Loans held for sale 1,739 91 1,830
Securities
Taxable (2,044) 451 (1,593)
Tax-exempt (1) (227) (2) (229)
--------------------------------------------------
Total Securities (2,271) 449 (1,822)
Federal funds sold (378) 173 (205)
--------------------------------------------------
Total interest-earning assets $ 5,977 $ 2,305 $ 8,282
INTEREST EXPENSE ON:
Demand deposits 133 (9) 124
Savings deposits (830) 76 (754)
Time deposits 1,532 1,994 3,526
Short-term borrowings 1,922 950 2,872
Long-term debt 71 78 149
--------------------------------------------------
Total interest-bearing liabilities $ 2,828 $ 3,089 $ 5,917
--------------------------------------------------
NET INTEREST INCOME $ 3,149 $ (784) $ 2,365
==================================================
</TABLE>
(1) Fully federal taxable equivalent using a tax rate of 34% in all years.
PAGE 28 OF 33
<PAGE>
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote
of Security Holders
On August 29, 1995, the Company held its Annual Meeting of Shareholders.
Three Matters were submitted to the shareholders for consideration:
1. Approval of an Agreement and Plan of Reorganization, dated as of March 14,
1995, and the Plan of Merger attached thereto, providing for the merger of
First Merchants Bancorp, Inc. into the Company;
2. Election of four Class III directors; and
3. Ratification of the Board of Directors' appointment of Ernst & Young LLP
as auditors for the Company for 1995.
The vote tabulation for each matter was as follows:
1. Approval of Agreement and Plan of Reorganization:
Broker
For Against Abstain Non-votes
--- ------- ------- ---------
2,511,248.5401 92,871.7176 18,980.0984 *
2. Election of four Class III directors:
Authority Broker
Director For Withheld Abstain Non-votes
- -------- --- -------- ------- ---------
D. K. Cales 2,580,891.9824 42,208.3137 N/A *
Jay Goldman 2,589,945.9101 33,154.3860 N/A *
C. Dallas Kayser 2,590,342.4669 N/A *
Robert D. Fisher 2,588,270.0468 34,830.2493 N/A *
Continuing directors whose terms did not expire at the annual meeting were:
Samuel M. Bowling, Steven J. Day, Jack E. Fruth, Otis L. O'Connor, Bob F.
Richmond, C. Scott Briers, Carlin K. Harmon, Dale Nibert, Mark Schaul and Van
R. Thorn.
3. Ratification of Appointment of Ernst & Young LLP:
Broker
For Against Abstain Non-votes
--- ------- ------- ---------
2,601,913.0650 8,245.0677 12,942.1634 *
* Totals do not reflect 74,141 additional shares voted on behalf of brokers for
proposal numbers 2 and 3
Item 6. Exhibits and Reports on 8-K
(a) Exhibits
27 Financial Data Schedule for the nine months ended
September 30, 1995.
(b) On September 15, 1995, the Company filed a report on Form 8-K,
Commission File No. 0-11733, regarding the acquisition of
First Merchants Bancorp, Inc.
PAGE 29 OF 33
<PAGE>
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITY HOLDING COMPANY
November 10, 1995 By /s/Dawn Woolsey
Dawn Woolsey,
Chief Accounting Officer
(Principal Accounting Officer)
PAGE 30 OF 33
<PAGE>
EXHIBIT INDEX
Exhibit Page
Index Number
- ----- ------
27 Financial Data Schedule for the Nine months ended September 30, 1995 31
PAGE 31 OF 33
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CITY HOLDING
COMPANY'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1995,
AND THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 27,263
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 77,577
<INVESTMENTS-CARRYING> 133,219
<INVESTMENTS-MARKET> 134,187
<LOANS> 748,345
<ALLOWANCE> 6,494
<TOTAL-ASSETS> 1,025,817
<DEPOSITS> 794,347
<SHORT-TERM> 137,184
<LIABILITIES-OTHER> 8,550
<LONG-TERM> 15,000
<COMMON> 12,738
0
0
<OTHER-SE> 57,998
<TOTAL-LIABILITIES-AND-EQUITY> 1,025,817
<INTEREST-LOAN> 43,447
<INTEREST-INVEST> 10,753
<INTEREST-OTHER> 70
<INTEREST-TOTAL> 54,270
<INTEREST-DEPOSIT> 19,818
<INTEREST-EXPENSE> 24,088
<INTEREST-INCOME-NET> 30,182
<LOAN-LOSSES> 711
<SECURITIES-GAINS> 9
<EXPENSE-OTHER> 24,887
<INCOME-PRETAX> 9,219
<INCOME-PRE-EXTRAORDINARY> 6,308
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,308
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
<YIELD-ACTUAL> 4.76
<LOANS-NON> 2,203
<LOANS-PAST> 1,173
<LOANS-TROUBLED> 109
<LOANS-PROBLEM> 509
<ALLOWANCE-OPEN> 6,477
<CHARGE-OFFS> 961
<RECOVERIES> 267
<ALLOWANCE-CLOSE> 6,494
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
