Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries City Holding Company Announces Quarterly Results By: City Holding Company via Business Wire April 21, 2021 at 16:30 PM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $19.8 million and diluted earnings of $1.25 per share for the quarter ended March 31, 2021. Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “Our country and the communities that we serve are emerging from the COVID-19 pandemic and it is encouraging to see economic activity returning to more “normal” conditions. However, the impacts of this crisis continued to impact our financial performance during the first quarter of 2021. Our reported net interest income dipped $0.7 million from the linked quarter ended December 31, 2020 and our net interest margin dropped 8 basis points to 2.91%. Deposit balances continue to grow primarily as a result of the third round of stimulus payments with average deposit balances increasing over $150 million from the quarter ended December 31, 2020. City continues to participate in the government-sponsored Paycheck Protection Program (“PPP”) loans administered by the Small Business Administration (“SBA”). Thus far, City has assisted customers in obtaining almost $40 million in new PPP loans during the second round. “A hallmark for City over the last several years has been our asset quality. Our asset quality remains very strong at March 31, 2021. Nonperforming assets, past due loans, and troubled debt restructurings remain at or below the levels reported at December 31, 2020. Deferred commercial loans remained relatively low at approximately 6% of total commercial balances at March 31, 2021. Hotel and lodging related loans comprise $105 million of the $115 million of these deferrals at March 31, 2021, and our hotel and lodging loan customers are experiencing increasing occupancy rates. Residential mortgage deferrals have dropped to approximately $3 million at March 31, 2021. “Loan growth has been a particular challenge with interest rates at historic lows. Although our residential mortgage origination levels hit record highs in 2020, balances have decreased as some mortgages were refinanced into fixed rate loans not predominately offered by City. Those trends continued in the first quarter of 2021, but we believe that as mortgage rates and fees charged by agencies increase, our mortgage balances will increase. The decline in commercial loans primarily reflects a seasonal customer, as well as pricing pressure from some competitors. As the economy continues to improve, our view is that commercial loans will regain positive momentum.” Net Interest Income The Company’s net interest income decreased from $38.2 million during the fourth quarter of 2020 to $37.5 million during the first quarter of 2021. The Company’s tax equivalent net interest income decreased $0.6 million, or 1.7%, from $38.5 million for the fourth quarter of 2020 to $37.9 million for the first quarter of 2021. Lower loan yields (2 basis points) and lower average loan balances ($50 million) decreased interest income by $0.7 million and $0.5 million, respectively, as compared to the quarter ended December 31, 2020. In addition, lower average investment balances ($30 million) decreased interest income by $0.2 million from the quarter ended December 31, 2020. These decreases were partially offset by lower rates paid on interest-bearing liabilities (primarily time deposits) that lowered interest expense by $0.9 million during the quarter ended March 31, 2021. The Company’s reported net interest margin decreased from 2.99% for the fourth quarter of 2020 to 2.91% for the first quarter of 2021. Balance Sheet Trends Loans decreased $75.4 million from December 31, 2020 to March 31, 2021, to $3.55 billion. Net of forgiveness received from the SBA of approximately $32 million of PPP loans from the first round, PPP loans increased $7.4 million as a result of the Company’s participation in the second round of the PPP lending. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $82.8 million, (2.3%), from December 31, 2020 to $3.48 billion at March 31, 2021. Residential real estate loans decreased $54.8 million (3.5%); commercial real estate loans decreased $12.1 million (0.8%); commercial and industrial loans decreased $9.2 million (2.9%) (excluding PPP loans); and home equity loans decreased $6.5 million (4.7%). Total average depository balances increased $152.5 million, or 3.4%, from the quarter ended December 31, 2020 to the quarter ended March 31, 2021. Average noninterest-bearing demand deposit balances increased $67.8 million, average savings deposit balances increased $72.5 million, and average interest-bearing demand deposit balances increased $54.7 million. These balances increased despite low average interest rates paid by the Company – 5 basis points for interest-bearing deposits and 6 basis points for savings deposits. We believe that these increases were largely attributable to the third round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (approximately $180 million). These increases were partially offset by lower average time deposit balances of $42.5 million. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned increased modestly from 0.38% at December 31, 2020 to 0.39% at March 31, 2021. Total nonperforming assets increased slightly from $13.9 million at December 31, 2020 to $14.0 million at March 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.6 million, or 0.19% of total loans outstanding, at March 31, 2021. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a recovery of credit losses of $0.4 million in the first quarter of 2021, compared to a provision for credit losses of $8.0 million for the comparable period in 2020 and a provision for credit losses of $0.5 million for the fourth quarter of 2020. The recovery of credit losses recorded in the first quarter of 2021 largely reflects the decline in loan balances ($83 million) from the quarter ended December 31, 2020 which resulted in the release of $0.5 million from the allowance for credit losses during the first quarter of 2021. As a result of an improvement in economic conditions in the Company’s footprint, net charge-offs for the quarter ended March 31, 2021 were negligible. Non-interest Income During the quarter ended March 31, 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605) in a cash transaction which resulted in a pre-tax gain of $17.8 million, or $0.84 diluted per share on an after-tax basis. Additionally, the Company reported $0.1 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2021 compared to $2.4 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2020. The Company’s portfolio of equity securities consists primarily of holdings in First National Corporation (“FXNC”) (a commercial banking company headquartered in Strasburg, VA) and Eagle Financial Services (a commercial banking company headquartered in Berryville, VA). In the first quarter of 2021, the Company sold shares of FXNC and realized a gain of $0.3 million. Exclusive of these items, non-interest income decreased from $17.9 million for the first quarter of 2020 to $16.4 million for the first quarter of 2021. This decrease was largely attributable to a decrease of $1.8 million, or 23.9%, in service charges. In addition, other income, primarily due to lower fees from loan interest rate swap originations, decreased $0.7 million. These decreases were partially offset by higher bankcard revenues ($1.1 million, or 21.5%) compared to the quarter ended March 31, 2020. Bankcard revenue of $6.2 million in the quarter ended March 31, 2021, represents the highest quarterly total in the Company’s history as spending by our customers increased significantly in the month of March. Non-interest Expenses Non-interest expenses increased $0.3 million, or 1.2%, from $29.5 million in the first quarter of 2020 to $29.8 million in the first quarter of 2021. FDIC insurance expense increased $0.4 million from the quarter ended March 31, 2020 due to credits utilized in the first quarter of 2020. Income Tax Expense The Company’s effective income tax rate for the first quarter of 2021 was 20.1% compared to 19.5% for the year ended December 31, 2020, and 20.2% for the quarter ended March 31, 2020. Capitalization and Liquidity The Company’s loan to deposit ratio was 73.9% and the loan to asset ratio was 60.2% at March 31, 2021. The Company maintained investment securities totaling 20.6% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 60.9% of assets at March 31, 2021. Time deposits fund 20.5% of assets at March 31, 2021, 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 continues to be strongly capitalized with tangible equity of $573 million at March 31, 2021. Due primarily to the influx of deposits and unrealized security losses during the quarter ended March 31, 2021, the Company’s tangible equity ratio decreased modestly from 10.3% at December 31, 2020 to 9.9% at March 31, 2021. At March 31, 2021, City National Bank’s Leverage Ratio was 8.91%, its Common Equity Tier I ratio was 14.75%, its Tier I Capital ratio was 14.75%, and its Total Risk-Based Capital ratio was 15.33%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On March 31, 2021, the Board of Directors of the Company approved a quarterly cash dividend of $0.58 per share payable April 30, 2021, to shareholders of record as of April 15, 2021. On March 31, 2021, 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 February 2019. The Company had repurchased 908,701 shares under the 2019 program. During the quarter ended March 31, 2021, the Company repurchased 75,000 common shares at a weighted average price of $76.71 per share as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of March 31, 2021, the Company could repurchase 1,000,000 additional shares under the current program. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 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, 2020 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) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) 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; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) 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; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) 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, 2021 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2021 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Earnings Net Interest Income (fully taxable equivalent) $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 40,603 Net Income available to common shareholders 19,814 22,222 20,126 18,251 29,000 Per Share Data Earnings per share available to common shareholders: Basic $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.79 Diluted 1.25 1.40 1.25 1.12 1.78 Weighted average number of shares (in thousands): Basic 15,656 15,708 15,950 16,081 16,080 Diluted 15,687 15,733 15,970 16,097 16,101 Period-end number of shares (in thousands) 15,724 15,768 15,848 16,077 16,140 Cash dividends declared $ 0.58 $ 0.58 $ 0.57 $ 0.57 $ 0.57 Book value per share (period-end) $ 43.99 $ 44.47 $ 43.62 $ 43.15 $ 42.45 Tangible book value per share (period-end) 36.47 36.94 36.11 35.72 35.03 Market data: High closing price $ 87.41 $ 70.77 $ 67.98 $ 71.19 $ 82.40 Low closing price 69.05 56.98 55.37 55.18 57.11 Period-end closing price 81.78 69.55 57.61 65.17 66.53 Average daily volume (in thousands) 63 56 67 89 69 Treasury share activity: Treasury shares repurchased (in thousands) 75 81 231 79 182 Average treasury share repurchase price $ 76.71 $ 60.32 $ 59.49 $ 61.75 $ 71.31 Key Ratios (percent) Return on average assets 1.38 % 1.59 % 1.46 % 1.35 % 2.29 % Return on average tangible equity 13.5 % 15.3 % 13.8 % 12.6 % 20.6 % Yield on interest earning assets 3.17 % 3.32 % 3.43 % 3.64 % 4.22 % Cost of interest bearing liabilities 0.37 % 0.47 % 0.58 % 0.71 % 0.91 % Net Interest Margin 2.91 % 2.99 % 3.02 % 3.13 % 3.54 % Non-interest income as a percent of total revenue 30.4 % 30.7 % 30.3 % 27.4 % 30.6 % Efficiency Ratio 54.3 % 51.0 % 51.6 % 53.3 % 49.7 % Price/Earnings Ratio (a) 16.30 12.41 11.53 14.50 17.63 Capital (period-end) Average Shareholders' Equity to Average Assets 12.30 % 12.46 % 12.71 % 12.91 % 13.50 % Tangible equity to tangible assets 9.93 % 10.33 % 10.61 % 10.62 % 11.38 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.76 % 16.18 % 15.93 % 16.10 % 16.02 % Tier I 16.76 % 16.18 % 15.93 % 16.10 % 16.02 % Total 17.33 % 16.75 % 16.50 % 16.69 % 16.46 % Leverage 10.06 % 10.22 % 10.19 % 10.45 % 11.10 % City National Bank risk based capital ratios (b): CET I 14.75 % 14.10 % 14.46 % 14.55 % 14.32 % Tier I 14.75 % 14.10 % 14.46 % 14.55 % 14.32 % Total 15.33 % 14.68 % 15.04 % 15.15 % 14.82 % Leverage 8.91 % 8.97 % 9.32 % 9.29 % 9.98 % Other (period-end) Branches 94 94 94 94 95 FTE 916 926 925 911 922 Assets per FTE (in thousands) $ 6,434 $ 6,219 $ 5,984 $ 6,058 $ 5,525 Deposits per FTE (in thousands) 5,236 5,024 4,799 4,834 4,400 (a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes). (b) March 31, 2021 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, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Interest Income Interest and fees on loans $ 34,324 $ 35,685 $ 35,761 $ 37,718 $ 41,335 Interest on investment securities: Taxable 5,242 5,500 6,266 5,718 5,871 Tax-exempt 1,253 1,254 1,132 821 707 Interest on deposits in depository institutions 118 60 72 55 304 Total Interest Income 40,937 42,499 43,231 44,312 48,217 Interest Expense Interest on deposits 3,280 4,198 5,123 5,963 7,238 Interest on short-term borrowings 117 120 131 279 464 Interest on long-term debt - - - - 100 Total Interest Expense 3,397 4,318 5,254 6,242 7,802 Net Interest Income 37,540 38,181 37,977 38,070 40,415 (Recovery of) provision for credit losses (440 ) 474 1,026 1,250 7,972 Net Interest Income After (Recovery of) Provision for Credit Losses 37,980 37,707 36,951 36,820 32,443 Non-Interest Income Net gains (losses) on sale of investment securities 283 6 - (6 ) 63 Unrealized (losses) gains recognized on equity securities still held (51 ) 835 461 242 (2,402 ) Service charges 5,881 6,771 6,295 4,945 7,723 Bankcard revenue 6,213 5,991 6,065 5,888 5,115 Trust and investment management fee income 2,033 2,162 1,844 1,931 1,799 Bank owned life insurance 1,460 813 1,088 848 1,676 Sale of VISA shares - - - - 17,837 Other income 811 1,143 1,232 783 1,536 Total Non-Interest Income 16,630 17,721 16,985 14,631 33,347 Non-Interest Expense Salaries and employee benefits 15,671 15,989 15,361 14,873 15,851 Occupancy related expense 2,622 2,447 2,428 2,402 2,488 Equipment and software related expense 2,544 2,660 2,607 2,504 2,429 FDIC insurance expense 405 363 355 167 - Advertising 881 538 462 933 843 Bankcard expenses 1,584 1,443 1,517 1,498 1,435 Postage, delivery, and statement mailings 592 546 513 592 616 Office supplies 392 413 396 353 394 Legal and professional fees 675 438 548 589 601 Telecommunications 690 540 547 531 511 Repossessed asset losses (gains), net of expenses 79 (68 ) 39 76 198 Other expenses 3,674 3,332 3,939 3,950 4,102 Total Non-Interest Expense 29,809 28,641 28,712 28,468 29,468 Income Before Income Taxes 24,801 26,787 25,224 22,983 36,322 Income tax expense 4,987 4,565 5,098 4,732 7,322 Net Income Available to Common Shareholders $ 19,814 $ 22,222 $ 20,126 $ 18,251 $ 29,000 Distributed earnings allocated to common shareholders $ 9,037 $ 9,053 $ 8,944 $ 9,073 $ 9,117 Undistributed earnings allocated to common shareholders 10,598 12,947 10,984 8,998 19,620 Net earnings allocated to common shareholders $ 19,635 $ 22,000 $ 19,928 $ 18,071 $ 28,737 Average common shares outstanding 15,656 15,708 15,950 16,081 16,080 Shares for diluted earnings per share 15,687 15,733 15,970 16,097 16,101 Basic earnings per common share $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.79 Diluted earnings per common share $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.78 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Assets Cash and due from banks $ 97,709 $ 77,412 $ 76,451 $ 87,658 $ 92,365 Interest-bearing deposits in depository institutions 659,090 451,247 176,267 285,596 18,271 Cash and cash equivalents 756,799 528,659 252,718 373,254 110,636 Investment securities available-for-sale, at fair value 1,185,245 1,178,789 1,157,399 1,055,185 934,113 Other securities 27,182 27,372 26,548 26,144 26,827 Total investment securities 1,212,427 1,206,161 1,183,947 1,081,329 960,940 Gross loans 3,546,723 3,622,119 3,663,966 3,665,596 3,613,050 Allowance for credit losses (24,076 ) (24,549 ) (24,867 ) (25,199 ) (24,393 ) Net loans 3,522,647 3,597,570 3,639,099 3,640,397 3,588,657 Bank owned life insurance 118,976 118,243 117,501 116,746 116,000 Premises and equipment, net 76,529 76,925 77,031 77,991 78,948 Accrued interest receivable 16,231 15,793 16,627 14,200 12,570 Net deferred tax assets 1,395 - - - 2,159 Intangible assets 118,224 118,592 119,004 119,417 119,829 Other assets 71,142 96,697 105,361 105,438 98,710 Total Assets $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 $ 5,088,449 Liabilities Deposits: Noninterest-bearing $ 1,244,175 $ 1,176,990 $ 1,061,310 $ 1,079,469 $ 857,501 Interest-bearing: Demand deposits 1,077,749 1,027,201 940,791 921,761 837,966 Savings deposits 1,265,038 1,188,003 1,117,684 1,067,254 989,609 Time deposits 1,209,873 1,260,022 1,300,291 1,342,631 1,366,977 Total deposits 4,796,835 4,652,216 4,420,076 4,411,115 4,052,053 Short-term borrowings Federal Funds purchased - - - - 9,900 Customer repurchase agreements 316,003 295,956 279,866 282,676 224,247 Net deferred tax liabilities - 3,202 1,601 2,598 - Other liabilities 89,847 106,160 118,386 138,633 117,021 Total Liabilities 5,202,685 5,057,534 4,819,929 4,835,022 4,403,221 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,526 171,304 170,526 169,881 170,096 Retained earnings 600,396 589,988 576,901 565,804 556,718 Cost of common stock in treasury (142,484 ) (139,038 ) (134,177 ) (120,583 ) (116,665 ) Accumulated other comprehensive income: Unrealized gain on securities available-for-sale 21,289 36,894 36,760 37,299 33,730 Underfunded pension liability (5,661 ) (5,661 ) (6,270 ) (6,270 ) (6,270 ) Total Accumulated Other Comprehensive Income 15,628 31,233 30,490 31,029 27,460 Total Stockholders' Equity 691,685 701,106 691,359 693,750 685,228 Total Liabilities and Stockholders' Equity $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 $ 5,088,449 Regulatory Capital Total CET 1 capital $ 563,523 $ 557,641 $ 548,269 $ 548,972 $ 547,040 Total tier 1 capital 563,523 557,641 548,269 548,972 547,040 Total risk-based capital 582,816 577,292 568,153 569,213 561,944 Total risk-weighted assets 3,362,595 3,446,774 3,442,629 3,410,589 3,412,591 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Commercial and industrial $ 371,195 $ 372,989 $ 383,980 $ 369,122 $ 308,567 1-4 Family 108,131 109,812 114,071 123,814 120,852 Hotels 293,176 294,464 295,989 295,179 294,072 Multi-family 212,561 215,671 214,394 204,580 205,684 Non Residential Non-Owner Occupied 649,683 641,351 628,814 628,628 627,852 Non Residential Owner Occupied 199,130 213,484 211,433 215,472 222,489 Commercial real estate (1) 1,462,681 1,474,782 1,464,701 1,467,673 1,470,949 Residential real estate (2) 1,532,907 1,587,694 1,621,265 1,631,151 1,629,578 Home equity 130,009 136,469 140,135 142,672 146,034 Consumer 47,224 47,688 50,541 52,278 54,749 DDA overdrafts 2,707 2,497 3,344 2,700 3,173 Gross Loans $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 $ 3,613,050 Construction loans included in: (1) - Commercial real estate loans 39,101 40,449 42,449 42,092 44,453 (2) - Residential real estate loans $ 22,129 $ 27,078 $ 28,947 $ 28,252 $ 28,870 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Allowance for Credit Losses Balance at beginning of period $ 24,549 $ 24,867 $ 25,199 $ 24,393 $ 11,589 Charge-offs: Commercial and industrial (34 ) (9 ) (757 ) - (77 ) Commercial real estate (1 ) (616 ) (75 ) (39 ) (383 ) Residential real estate (93 ) (139 ) (252 ) (376 ) (483 ) Home equity (64 ) (88 ) (126 ) (161 ) (45 ) Consumer (147 ) (27 ) (74 ) (36 ) (55 ) DDA overdrafts (453 ) (629 ) (554 ) (459 ) (703 ) Total charge-offs (792 ) (1,508 ) (1,838 ) (1,071 ) (1,746 ) Recoveries: Commercial and industrial 46 74 3 5 9 Commercial real estate 164 150 44 128 203 Residential real estate 74 57 24 8 95 Home equity 23 47 33 9 47 Consumer 39 55 42 128 13 DDA overdrafts 413 333 334 349 451 Total recoveries 759 716 480 627 818 Net charge-offs (33 ) (792 ) (1,358 ) (444 ) (928 ) (Recovery of) provision for credit losses (440 ) 474 1,026 1,250 7,972 Impact of Adopting ASC 326 - - - - 5,760 Balance at end of period $ 24,076 $ 24,549 $ 24,867 $ 25,199 $ 24,393 Loans outstanding $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 $ 3,613,050 Allowance as a percent of loans outstanding 0.68 % 0.68 % 0.68 % 0.69 % 0.68 % Allowance as a percent of non-performing loans 194.5 % 200.7 % 182.7 % 185.1 % 202.2 % Average loans outstanding $ 3,585,790 $ 3,635,673 $ 3,661,569 $ 3,660,174 $ 3,608,868 Net charge-offs (annualized) as a percent of average loans outstanding 0.00 % 0.09 % 0.15 % 0.05 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Nonaccrual Loans Residential real estate $ 3,004 $ 2,968 $ 3,983 $ 3,477 $ 2,750 Home equity 88 95 74 265 249 Commercial and industrial 1,200 768 728 1,087 1,175 Commercial real estate 7,792 8,401 8,479 8,715 7,865 Consumer - - - - 1 Total nonaccrual loans 12,084 12,232 13,264 13,544 12,040 Accruing loans past due 90 days or more 295 - 345 68 26 Total non-performing loans 12,379 12,232 13,609 13,612 12,066 Other real estate owned 1,625 1,650 2,080 3,997 3,922 Total non-performing assets $ 14,004 $ 13,882 $ 15,689 $ 17,609 $ 15,988 Non-performing assets as a percent of loans and other real estate owned 0.39 % 0.38 % 0.43 % 0.48 % 0.44 % Past Due Loans Residential real estate $ 4,092 $ 5,993 $ 5,153 $ 5,261 $ 7,815 Home equity 449 575 474 393 430 Commercial and industrial 1,358 1,241 691 160 71 Commercial real estate 508 625 602 917 1,021 Consumer 10 113 121 67 177 DDA overdrafts 212 341 379 273 467 Total past due loans $ 6,629 $ 8,888 $ 7,420 $ 7,071 $ 9,981 Total past due loans as a percent of loans outstanding 0.19 % 0.25 % 0.20 % 0.19 % 0.28 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 18,572 $ 19,226 $ 20,398 $ 20,631 $ 21,413 Home equity 1,956 2,001 2,100 2,138 2,294 Commercial and industrial - - - - - Commercial real estate 4,615 4,638 4,894 4,915 5,163 Consumer 211 277 260 185 184 Total TDRs $ 25,354 $ 26,142 $ 27,652 $ 27,869 $ 29,054 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended March 31, 2021 December 31, 2020 March 31, 2020 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,696,064 $ 16,853 4.03 % $ 1,744,952 $ 17,623 4.02 % $ 1,780,473 $ 19,881 4.49 % Commercial, financial, and agriculture (2) 1,838,928 16,542 3.65 % 1,837,044 17,077 3.70 % 1,770,178 20,476 4.65 % Installment loans to individuals (2), (3) 50,798 713 5.69 % 53,677 800 5.93 % 58,217 863 5.96 % Previously securitized loans (4) *** 215 *** *** 184 *** *** 115 *** Total loans 3,585,790 34,323 3.88 % 3,635,673 35,684 3.90 % 3,608,868 41,335 4.61 % Securities: Taxable 945,177 5,242 2.25 % 976,897 5,500 2.24 % 810,766 5,871 2.91 % Tax-exempt (5) 239,589 1,585 2.68 % 238,198 1,587 2.65 % 94,591 895 3.81 % Total securities 1,184,766 6,827 2.34 % 1,215,095 7,087 2.32 % 905,357 6,766 3.01 % Deposits in depository institutions 513,469 118 0.09 % 275,106 60 0.09 % 102,932 304 1.19 % Total interest-earning assets 5,284,025 41,268 3.17 % 5,125,874 42,831 3.32 % 4,617,157 48,405 4.22 % Cash and due from banks 79,683 73,900 70,763 Premises and equipment, net 76,837 76,956 77,368 Goodwill and intangible assets 118,453 118,855 120,091 Other assets 217,453 231,309 195,875 Less: Allowance for credit losses (24,909 ) (25,112 ) (15,905 ) Total assets $ 5,751,542 $ 5,601,782 $ 5,065,349 Liabilities: Interest-bearing demand deposits $ 1,008,283 $ 124 0.05 % $ 953,604 $ 171 0.07 % $ 869,976 $ 468 0.22 % Savings deposits 1,221,169 183 0.06 % 1,148,717 225 0.08 % 1,005,829 700 0.28 % Time deposits (2) 1,236,197 2,973 0.98 % 1,278,698 3,801 1.18 % 1,365,268 6,070 1.79 % Short-term borrowings 290,766 117 0.16 % 287,059 120 0.17 % 209,010 464 0.89 % Long-term debt - - - - - - 3,340 100 12.04 % Total interest-bearing liabilities 3,756,415 3,397 0.37 % 3,668,078 4,317 0.47 % 3,453,423 7,802 0.91 % Noninterest-bearing demand deposits 1,197,910 1,130,084 852,384 Other liabilities 89,695 105,445 75,922 Stockholders' equity 707,522 698,175 683,620 Total liabilities and stockholders' equity $ 5,751,542 $ 5,601,782 $ 5,065,349 Net interest income $ 37,871 $ 38,514 $ 40,603 Net yield on earning assets 2.91 % 2.99 % 3.54 % (1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income: Loan fees, net $ 835 $ 962 $ 116 (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 $ 106 $ 153 $ 151 Commercial, financial, and agriculture 325 304 1,240 Installment loans to individuals 28 29 39 Time deposits 48 155 155 $ 507 $ 641 $ 1,585 (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, except per share data) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net Interest Income/Margin Net interest income ("GAAP") $ 37,540 $ 38,181 $ 37,977 $ 38,070 $ 40,415 Taxable equivalent adjustment 331 333 301 217 188 Net interest income, fully taxable equivalent $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 40,603 Average interest earning assets $ 5,284,025 $ 5,125,874 $ 5,047,868 $ 4,914,242 $ 4,617,157 Net Interest Margin 2.91 % 2.99 % 3.02 % 3.13 % 3.54 % Accretion related to fair value adjustments -0.04 % -0.05 % -0.05 % -0.08 % -0.14 % Net Interest Margin (excluding accretion) 2.87 % 2.94 % 2.97 % 3.05 % 3.40 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 11.74 % 12.18 % 12.54 % 12.55 % 13.47 % Effect of goodwill and other intangibles, net -1.81 % -1.85 % -1.93 % -1.93 % -2.09 % Tangible common equity to tangible assets 9.93 % 10.33 % 10.61 % 10.62 % 11.38 % Return on Tangible Equity Return on tangible equity ("GAAP") 13.5 % 15.3 % 13.8 % 12.6 % 20.6 % Impact of sale of VISA shares - - - - -9.7 % Return on tangible equity, excluding sale of VISA shares 13.5 % 15.3 % 13.8 % 12.6 % 10.9 % Return on Assets Return on assets ("GAAP") 1.38 % 1.59 % 1.46 % 1.35 % 2.29 % Impact of sale of VISA shares - - - - -1.08 % Return on assets, excluding sale of VISA shares 1.38 % 1.59 % 1.46 % 1.35 % 1.21 % View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005928/en/Contacts Charles R. Hageboeck, Chief Executive Officer and President (304) 769-1102 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
City Holding Company Announces Quarterly Results By: City Holding Company via Business Wire April 21, 2021 at 16:30 PM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $19.8 million and diluted earnings of $1.25 per share for the quarter ended March 31, 2021. Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “Our country and the communities that we serve are emerging from the COVID-19 pandemic and it is encouraging to see economic activity returning to more “normal” conditions. However, the impacts of this crisis continued to impact our financial performance during the first quarter of 2021. Our reported net interest income dipped $0.7 million from the linked quarter ended December 31, 2020 and our net interest margin dropped 8 basis points to 2.91%. Deposit balances continue to grow primarily as a result of the third round of stimulus payments with average deposit balances increasing over $150 million from the quarter ended December 31, 2020. City continues to participate in the government-sponsored Paycheck Protection Program (“PPP”) loans administered by the Small Business Administration (“SBA”). Thus far, City has assisted customers in obtaining almost $40 million in new PPP loans during the second round. “A hallmark for City over the last several years has been our asset quality. Our asset quality remains very strong at March 31, 2021. Nonperforming assets, past due loans, and troubled debt restructurings remain at or below the levels reported at December 31, 2020. Deferred commercial loans remained relatively low at approximately 6% of total commercial balances at March 31, 2021. Hotel and lodging related loans comprise $105 million of the $115 million of these deferrals at March 31, 2021, and our hotel and lodging loan customers are experiencing increasing occupancy rates. Residential mortgage deferrals have dropped to approximately $3 million at March 31, 2021. “Loan growth has been a particular challenge with interest rates at historic lows. Although our residential mortgage origination levels hit record highs in 2020, balances have decreased as some mortgages were refinanced into fixed rate loans not predominately offered by City. Those trends continued in the first quarter of 2021, but we believe that as mortgage rates and fees charged by agencies increase, our mortgage balances will increase. The decline in commercial loans primarily reflects a seasonal customer, as well as pricing pressure from some competitors. As the economy continues to improve, our view is that commercial loans will regain positive momentum.” Net Interest Income The Company’s net interest income decreased from $38.2 million during the fourth quarter of 2020 to $37.5 million during the first quarter of 2021. The Company’s tax equivalent net interest income decreased $0.6 million, or 1.7%, from $38.5 million for the fourth quarter of 2020 to $37.9 million for the first quarter of 2021. Lower loan yields (2 basis points) and lower average loan balances ($50 million) decreased interest income by $0.7 million and $0.5 million, respectively, as compared to the quarter ended December 31, 2020. In addition, lower average investment balances ($30 million) decreased interest income by $0.2 million from the quarter ended December 31, 2020. These decreases were partially offset by lower rates paid on interest-bearing liabilities (primarily time deposits) that lowered interest expense by $0.9 million during the quarter ended March 31, 2021. The Company’s reported net interest margin decreased from 2.99% for the fourth quarter of 2020 to 2.91% for the first quarter of 2021. Balance Sheet Trends Loans decreased $75.4 million from December 31, 2020 to March 31, 2021, to $3.55 billion. Net of forgiveness received from the SBA of approximately $32 million of PPP loans from the first round, PPP loans increased $7.4 million as a result of the Company’s participation in the second round of the PPP lending. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $82.8 million, (2.3%), from December 31, 2020 to $3.48 billion at March 31, 2021. Residential real estate loans decreased $54.8 million (3.5%); commercial real estate loans decreased $12.1 million (0.8%); commercial and industrial loans decreased $9.2 million (2.9%) (excluding PPP loans); and home equity loans decreased $6.5 million (4.7%). Total average depository balances increased $152.5 million, or 3.4%, from the quarter ended December 31, 2020 to the quarter ended March 31, 2021. Average noninterest-bearing demand deposit balances increased $67.8 million, average savings deposit balances increased $72.5 million, and average interest-bearing demand deposit balances increased $54.7 million. These balances increased despite low average interest rates paid by the Company – 5 basis points for interest-bearing deposits and 6 basis points for savings deposits. We believe that these increases were largely attributable to the third round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (approximately $180 million). These increases were partially offset by lower average time deposit balances of $42.5 million. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned increased modestly from 0.38% at December 31, 2020 to 0.39% at March 31, 2021. Total nonperforming assets increased slightly from $13.9 million at December 31, 2020 to $14.0 million at March 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.6 million, or 0.19% of total loans outstanding, at March 31, 2021. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a recovery of credit losses of $0.4 million in the first quarter of 2021, compared to a provision for credit losses of $8.0 million for the comparable period in 2020 and a provision for credit losses of $0.5 million for the fourth quarter of 2020. The recovery of credit losses recorded in the first quarter of 2021 largely reflects the decline in loan balances ($83 million) from the quarter ended December 31, 2020 which resulted in the release of $0.5 million from the allowance for credit losses during the first quarter of 2021. As a result of an improvement in economic conditions in the Company’s footprint, net charge-offs for the quarter ended March 31, 2021 were negligible. Non-interest Income During the quarter ended March 31, 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605) in a cash transaction which resulted in a pre-tax gain of $17.8 million, or $0.84 diluted per share on an after-tax basis. Additionally, the Company reported $0.1 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2021 compared to $2.4 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2020. The Company’s portfolio of equity securities consists primarily of holdings in First National Corporation (“FXNC”) (a commercial banking company headquartered in Strasburg, VA) and Eagle Financial Services (a commercial banking company headquartered in Berryville, VA). In the first quarter of 2021, the Company sold shares of FXNC and realized a gain of $0.3 million. Exclusive of these items, non-interest income decreased from $17.9 million for the first quarter of 2020 to $16.4 million for the first quarter of 2021. This decrease was largely attributable to a decrease of $1.8 million, or 23.9%, in service charges. In addition, other income, primarily due to lower fees from loan interest rate swap originations, decreased $0.7 million. These decreases were partially offset by higher bankcard revenues ($1.1 million, or 21.5%) compared to the quarter ended March 31, 2020. Bankcard revenue of $6.2 million in the quarter ended March 31, 2021, represents the highest quarterly total in the Company’s history as spending by our customers increased significantly in the month of March. Non-interest Expenses Non-interest expenses increased $0.3 million, or 1.2%, from $29.5 million in the first quarter of 2020 to $29.8 million in the first quarter of 2021. FDIC insurance expense increased $0.4 million from the quarter ended March 31, 2020 due to credits utilized in the first quarter of 2020. Income Tax Expense The Company’s effective income tax rate for the first quarter of 2021 was 20.1% compared to 19.5% for the year ended December 31, 2020, and 20.2% for the quarter ended March 31, 2020. Capitalization and Liquidity The Company’s loan to deposit ratio was 73.9% and the loan to asset ratio was 60.2% at March 31, 2021. The Company maintained investment securities totaling 20.6% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 60.9% of assets at March 31, 2021. Time deposits fund 20.5% of assets at March 31, 2021, 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 continues to be strongly capitalized with tangible equity of $573 million at March 31, 2021. Due primarily to the influx of deposits and unrealized security losses during the quarter ended March 31, 2021, the Company’s tangible equity ratio decreased modestly from 10.3% at December 31, 2020 to 9.9% at March 31, 2021. At March 31, 2021, City National Bank’s Leverage Ratio was 8.91%, its Common Equity Tier I ratio was 14.75%, its Tier I Capital ratio was 14.75%, and its Total Risk-Based Capital ratio was 15.33%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On March 31, 2021, the Board of Directors of the Company approved a quarterly cash dividend of $0.58 per share payable April 30, 2021, to shareholders of record as of April 15, 2021. On March 31, 2021, 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 February 2019. The Company had repurchased 908,701 shares under the 2019 program. During the quarter ended March 31, 2021, the Company repurchased 75,000 common shares at a weighted average price of $76.71 per share as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of March 31, 2021, the Company could repurchase 1,000,000 additional shares under the current program. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 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, 2020 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) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) 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; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) 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; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) 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, 2021 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2021 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Earnings Net Interest Income (fully taxable equivalent) $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 40,603 Net Income available to common shareholders 19,814 22,222 20,126 18,251 29,000 Per Share Data Earnings per share available to common shareholders: Basic $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.79 Diluted 1.25 1.40 1.25 1.12 1.78 Weighted average number of shares (in thousands): Basic 15,656 15,708 15,950 16,081 16,080 Diluted 15,687 15,733 15,970 16,097 16,101 Period-end number of shares (in thousands) 15,724 15,768 15,848 16,077 16,140 Cash dividends declared $ 0.58 $ 0.58 $ 0.57 $ 0.57 $ 0.57 Book value per share (period-end) $ 43.99 $ 44.47 $ 43.62 $ 43.15 $ 42.45 Tangible book value per share (period-end) 36.47 36.94 36.11 35.72 35.03 Market data: High closing price $ 87.41 $ 70.77 $ 67.98 $ 71.19 $ 82.40 Low closing price 69.05 56.98 55.37 55.18 57.11 Period-end closing price 81.78 69.55 57.61 65.17 66.53 Average daily volume (in thousands) 63 56 67 89 69 Treasury share activity: Treasury shares repurchased (in thousands) 75 81 231 79 182 Average treasury share repurchase price $ 76.71 $ 60.32 $ 59.49 $ 61.75 $ 71.31 Key Ratios (percent) Return on average assets 1.38 % 1.59 % 1.46 % 1.35 % 2.29 % Return on average tangible equity 13.5 % 15.3 % 13.8 % 12.6 % 20.6 % Yield on interest earning assets 3.17 % 3.32 % 3.43 % 3.64 % 4.22 % Cost of interest bearing liabilities 0.37 % 0.47 % 0.58 % 0.71 % 0.91 % Net Interest Margin 2.91 % 2.99 % 3.02 % 3.13 % 3.54 % Non-interest income as a percent of total revenue 30.4 % 30.7 % 30.3 % 27.4 % 30.6 % Efficiency Ratio 54.3 % 51.0 % 51.6 % 53.3 % 49.7 % Price/Earnings Ratio (a) 16.30 12.41 11.53 14.50 17.63 Capital (period-end) Average Shareholders' Equity to Average Assets 12.30 % 12.46 % 12.71 % 12.91 % 13.50 % Tangible equity to tangible assets 9.93 % 10.33 % 10.61 % 10.62 % 11.38 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.76 % 16.18 % 15.93 % 16.10 % 16.02 % Tier I 16.76 % 16.18 % 15.93 % 16.10 % 16.02 % Total 17.33 % 16.75 % 16.50 % 16.69 % 16.46 % Leverage 10.06 % 10.22 % 10.19 % 10.45 % 11.10 % City National Bank risk based capital ratios (b): CET I 14.75 % 14.10 % 14.46 % 14.55 % 14.32 % Tier I 14.75 % 14.10 % 14.46 % 14.55 % 14.32 % Total 15.33 % 14.68 % 15.04 % 15.15 % 14.82 % Leverage 8.91 % 8.97 % 9.32 % 9.29 % 9.98 % Other (period-end) Branches 94 94 94 94 95 FTE 916 926 925 911 922 Assets per FTE (in thousands) $ 6,434 $ 6,219 $ 5,984 $ 6,058 $ 5,525 Deposits per FTE (in thousands) 5,236 5,024 4,799 4,834 4,400 (a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes). (b) March 31, 2021 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, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Interest Income Interest and fees on loans $ 34,324 $ 35,685 $ 35,761 $ 37,718 $ 41,335 Interest on investment securities: Taxable 5,242 5,500 6,266 5,718 5,871 Tax-exempt 1,253 1,254 1,132 821 707 Interest on deposits in depository institutions 118 60 72 55 304 Total Interest Income 40,937 42,499 43,231 44,312 48,217 Interest Expense Interest on deposits 3,280 4,198 5,123 5,963 7,238 Interest on short-term borrowings 117 120 131 279 464 Interest on long-term debt - - - - 100 Total Interest Expense 3,397 4,318 5,254 6,242 7,802 Net Interest Income 37,540 38,181 37,977 38,070 40,415 (Recovery of) provision for credit losses (440 ) 474 1,026 1,250 7,972 Net Interest Income After (Recovery of) Provision for Credit Losses 37,980 37,707 36,951 36,820 32,443 Non-Interest Income Net gains (losses) on sale of investment securities 283 6 - (6 ) 63 Unrealized (losses) gains recognized on equity securities still held (51 ) 835 461 242 (2,402 ) Service charges 5,881 6,771 6,295 4,945 7,723 Bankcard revenue 6,213 5,991 6,065 5,888 5,115 Trust and investment management fee income 2,033 2,162 1,844 1,931 1,799 Bank owned life insurance 1,460 813 1,088 848 1,676 Sale of VISA shares - - - - 17,837 Other income 811 1,143 1,232 783 1,536 Total Non-Interest Income 16,630 17,721 16,985 14,631 33,347 Non-Interest Expense Salaries and employee benefits 15,671 15,989 15,361 14,873 15,851 Occupancy related expense 2,622 2,447 2,428 2,402 2,488 Equipment and software related expense 2,544 2,660 2,607 2,504 2,429 FDIC insurance expense 405 363 355 167 - Advertising 881 538 462 933 843 Bankcard expenses 1,584 1,443 1,517 1,498 1,435 Postage, delivery, and statement mailings 592 546 513 592 616 Office supplies 392 413 396 353 394 Legal and professional fees 675 438 548 589 601 Telecommunications 690 540 547 531 511 Repossessed asset losses (gains), net of expenses 79 (68 ) 39 76 198 Other expenses 3,674 3,332 3,939 3,950 4,102 Total Non-Interest Expense 29,809 28,641 28,712 28,468 29,468 Income Before Income Taxes 24,801 26,787 25,224 22,983 36,322 Income tax expense 4,987 4,565 5,098 4,732 7,322 Net Income Available to Common Shareholders $ 19,814 $ 22,222 $ 20,126 $ 18,251 $ 29,000 Distributed earnings allocated to common shareholders $ 9,037 $ 9,053 $ 8,944 $ 9,073 $ 9,117 Undistributed earnings allocated to common shareholders 10,598 12,947 10,984 8,998 19,620 Net earnings allocated to common shareholders $ 19,635 $ 22,000 $ 19,928 $ 18,071 $ 28,737 Average common shares outstanding 15,656 15,708 15,950 16,081 16,080 Shares for diluted earnings per share 15,687 15,733 15,970 16,097 16,101 Basic earnings per common share $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.79 Diluted earnings per common share $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.78 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Assets Cash and due from banks $ 97,709 $ 77,412 $ 76,451 $ 87,658 $ 92,365 Interest-bearing deposits in depository institutions 659,090 451,247 176,267 285,596 18,271 Cash and cash equivalents 756,799 528,659 252,718 373,254 110,636 Investment securities available-for-sale, at fair value 1,185,245 1,178,789 1,157,399 1,055,185 934,113 Other securities 27,182 27,372 26,548 26,144 26,827 Total investment securities 1,212,427 1,206,161 1,183,947 1,081,329 960,940 Gross loans 3,546,723 3,622,119 3,663,966 3,665,596 3,613,050 Allowance for credit losses (24,076 ) (24,549 ) (24,867 ) (25,199 ) (24,393 ) Net loans 3,522,647 3,597,570 3,639,099 3,640,397 3,588,657 Bank owned life insurance 118,976 118,243 117,501 116,746 116,000 Premises and equipment, net 76,529 76,925 77,031 77,991 78,948 Accrued interest receivable 16,231 15,793 16,627 14,200 12,570 Net deferred tax assets 1,395 - - - 2,159 Intangible assets 118,224 118,592 119,004 119,417 119,829 Other assets 71,142 96,697 105,361 105,438 98,710 Total Assets $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 $ 5,088,449 Liabilities Deposits: Noninterest-bearing $ 1,244,175 $ 1,176,990 $ 1,061,310 $ 1,079,469 $ 857,501 Interest-bearing: Demand deposits 1,077,749 1,027,201 940,791 921,761 837,966 Savings deposits 1,265,038 1,188,003 1,117,684 1,067,254 989,609 Time deposits 1,209,873 1,260,022 1,300,291 1,342,631 1,366,977 Total deposits 4,796,835 4,652,216 4,420,076 4,411,115 4,052,053 Short-term borrowings Federal Funds purchased - - - - 9,900 Customer repurchase agreements 316,003 295,956 279,866 282,676 224,247 Net deferred tax liabilities - 3,202 1,601 2,598 - Other liabilities 89,847 106,160 118,386 138,633 117,021 Total Liabilities 5,202,685 5,057,534 4,819,929 4,835,022 4,403,221 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,526 171,304 170,526 169,881 170,096 Retained earnings 600,396 589,988 576,901 565,804 556,718 Cost of common stock in treasury (142,484 ) (139,038 ) (134,177 ) (120,583 ) (116,665 ) Accumulated other comprehensive income: Unrealized gain on securities available-for-sale 21,289 36,894 36,760 37,299 33,730 Underfunded pension liability (5,661 ) (5,661 ) (6,270 ) (6,270 ) (6,270 ) Total Accumulated Other Comprehensive Income 15,628 31,233 30,490 31,029 27,460 Total Stockholders' Equity 691,685 701,106 691,359 693,750 685,228 Total Liabilities and Stockholders' Equity $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 $ 5,088,449 Regulatory Capital Total CET 1 capital $ 563,523 $ 557,641 $ 548,269 $ 548,972 $ 547,040 Total tier 1 capital 563,523 557,641 548,269 548,972 547,040 Total risk-based capital 582,816 577,292 568,153 569,213 561,944 Total risk-weighted assets 3,362,595 3,446,774 3,442,629 3,410,589 3,412,591 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Commercial and industrial $ 371,195 $ 372,989 $ 383,980 $ 369,122 $ 308,567 1-4 Family 108,131 109,812 114,071 123,814 120,852 Hotels 293,176 294,464 295,989 295,179 294,072 Multi-family 212,561 215,671 214,394 204,580 205,684 Non Residential Non-Owner Occupied 649,683 641,351 628,814 628,628 627,852 Non Residential Owner Occupied 199,130 213,484 211,433 215,472 222,489 Commercial real estate (1) 1,462,681 1,474,782 1,464,701 1,467,673 1,470,949 Residential real estate (2) 1,532,907 1,587,694 1,621,265 1,631,151 1,629,578 Home equity 130,009 136,469 140,135 142,672 146,034 Consumer 47,224 47,688 50,541 52,278 54,749 DDA overdrafts 2,707 2,497 3,344 2,700 3,173 Gross Loans $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 $ 3,613,050 Construction loans included in: (1) - Commercial real estate loans 39,101 40,449 42,449 42,092 44,453 (2) - Residential real estate loans $ 22,129 $ 27,078 $ 28,947 $ 28,252 $ 28,870 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Allowance for Credit Losses Balance at beginning of period $ 24,549 $ 24,867 $ 25,199 $ 24,393 $ 11,589 Charge-offs: Commercial and industrial (34 ) (9 ) (757 ) - (77 ) Commercial real estate (1 ) (616 ) (75 ) (39 ) (383 ) Residential real estate (93 ) (139 ) (252 ) (376 ) (483 ) Home equity (64 ) (88 ) (126 ) (161 ) (45 ) Consumer (147 ) (27 ) (74 ) (36 ) (55 ) DDA overdrafts (453 ) (629 ) (554 ) (459 ) (703 ) Total charge-offs (792 ) (1,508 ) (1,838 ) (1,071 ) (1,746 ) Recoveries: Commercial and industrial 46 74 3 5 9 Commercial real estate 164 150 44 128 203 Residential real estate 74 57 24 8 95 Home equity 23 47 33 9 47 Consumer 39 55 42 128 13 DDA overdrafts 413 333 334 349 451 Total recoveries 759 716 480 627 818 Net charge-offs (33 ) (792 ) (1,358 ) (444 ) (928 ) (Recovery of) provision for credit losses (440 ) 474 1,026 1,250 7,972 Impact of Adopting ASC 326 - - - - 5,760 Balance at end of period $ 24,076 $ 24,549 $ 24,867 $ 25,199 $ 24,393 Loans outstanding $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 $ 3,613,050 Allowance as a percent of loans outstanding 0.68 % 0.68 % 0.68 % 0.69 % 0.68 % Allowance as a percent of non-performing loans 194.5 % 200.7 % 182.7 % 185.1 % 202.2 % Average loans outstanding $ 3,585,790 $ 3,635,673 $ 3,661,569 $ 3,660,174 $ 3,608,868 Net charge-offs (annualized) as a percent of average loans outstanding 0.00 % 0.09 % 0.15 % 0.05 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Nonaccrual Loans Residential real estate $ 3,004 $ 2,968 $ 3,983 $ 3,477 $ 2,750 Home equity 88 95 74 265 249 Commercial and industrial 1,200 768 728 1,087 1,175 Commercial real estate 7,792 8,401 8,479 8,715 7,865 Consumer - - - - 1 Total nonaccrual loans 12,084 12,232 13,264 13,544 12,040 Accruing loans past due 90 days or more 295 - 345 68 26 Total non-performing loans 12,379 12,232 13,609 13,612 12,066 Other real estate owned 1,625 1,650 2,080 3,997 3,922 Total non-performing assets $ 14,004 $ 13,882 $ 15,689 $ 17,609 $ 15,988 Non-performing assets as a percent of loans and other real estate owned 0.39 % 0.38 % 0.43 % 0.48 % 0.44 % Past Due Loans Residential real estate $ 4,092 $ 5,993 $ 5,153 $ 5,261 $ 7,815 Home equity 449 575 474 393 430 Commercial and industrial 1,358 1,241 691 160 71 Commercial real estate 508 625 602 917 1,021 Consumer 10 113 121 67 177 DDA overdrafts 212 341 379 273 467 Total past due loans $ 6,629 $ 8,888 $ 7,420 $ 7,071 $ 9,981 Total past due loans as a percent of loans outstanding 0.19 % 0.25 % 0.20 % 0.19 % 0.28 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 18,572 $ 19,226 $ 20,398 $ 20,631 $ 21,413 Home equity 1,956 2,001 2,100 2,138 2,294 Commercial and industrial - - - - - Commercial real estate 4,615 4,638 4,894 4,915 5,163 Consumer 211 277 260 185 184 Total TDRs $ 25,354 $ 26,142 $ 27,652 $ 27,869 $ 29,054 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended March 31, 2021 December 31, 2020 March 31, 2020 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,696,064 $ 16,853 4.03 % $ 1,744,952 $ 17,623 4.02 % $ 1,780,473 $ 19,881 4.49 % Commercial, financial, and agriculture (2) 1,838,928 16,542 3.65 % 1,837,044 17,077 3.70 % 1,770,178 20,476 4.65 % Installment loans to individuals (2), (3) 50,798 713 5.69 % 53,677 800 5.93 % 58,217 863 5.96 % Previously securitized loans (4) *** 215 *** *** 184 *** *** 115 *** Total loans 3,585,790 34,323 3.88 % 3,635,673 35,684 3.90 % 3,608,868 41,335 4.61 % Securities: Taxable 945,177 5,242 2.25 % 976,897 5,500 2.24 % 810,766 5,871 2.91 % Tax-exempt (5) 239,589 1,585 2.68 % 238,198 1,587 2.65 % 94,591 895 3.81 % Total securities 1,184,766 6,827 2.34 % 1,215,095 7,087 2.32 % 905,357 6,766 3.01 % Deposits in depository institutions 513,469 118 0.09 % 275,106 60 0.09 % 102,932 304 1.19 % Total interest-earning assets 5,284,025 41,268 3.17 % 5,125,874 42,831 3.32 % 4,617,157 48,405 4.22 % Cash and due from banks 79,683 73,900 70,763 Premises and equipment, net 76,837 76,956 77,368 Goodwill and intangible assets 118,453 118,855 120,091 Other assets 217,453 231,309 195,875 Less: Allowance for credit losses (24,909 ) (25,112 ) (15,905 ) Total assets $ 5,751,542 $ 5,601,782 $ 5,065,349 Liabilities: Interest-bearing demand deposits $ 1,008,283 $ 124 0.05 % $ 953,604 $ 171 0.07 % $ 869,976 $ 468 0.22 % Savings deposits 1,221,169 183 0.06 % 1,148,717 225 0.08 % 1,005,829 700 0.28 % Time deposits (2) 1,236,197 2,973 0.98 % 1,278,698 3,801 1.18 % 1,365,268 6,070 1.79 % Short-term borrowings 290,766 117 0.16 % 287,059 120 0.17 % 209,010 464 0.89 % Long-term debt - - - - - - 3,340 100 12.04 % Total interest-bearing liabilities 3,756,415 3,397 0.37 % 3,668,078 4,317 0.47 % 3,453,423 7,802 0.91 % Noninterest-bearing demand deposits 1,197,910 1,130,084 852,384 Other liabilities 89,695 105,445 75,922 Stockholders' equity 707,522 698,175 683,620 Total liabilities and stockholders' equity $ 5,751,542 $ 5,601,782 $ 5,065,349 Net interest income $ 37,871 $ 38,514 $ 40,603 Net yield on earning assets 2.91 % 2.99 % 3.54 % (1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income: Loan fees, net $ 835 $ 962 $ 116 (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 $ 106 $ 153 $ 151 Commercial, financial, and agriculture 325 304 1,240 Installment loans to individuals 28 29 39 Time deposits 48 155 155 $ 507 $ 641 $ 1,585 (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, except per share data) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net Interest Income/Margin Net interest income ("GAAP") $ 37,540 $ 38,181 $ 37,977 $ 38,070 $ 40,415 Taxable equivalent adjustment 331 333 301 217 188 Net interest income, fully taxable equivalent $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 40,603 Average interest earning assets $ 5,284,025 $ 5,125,874 $ 5,047,868 $ 4,914,242 $ 4,617,157 Net Interest Margin 2.91 % 2.99 % 3.02 % 3.13 % 3.54 % Accretion related to fair value adjustments -0.04 % -0.05 % -0.05 % -0.08 % -0.14 % Net Interest Margin (excluding accretion) 2.87 % 2.94 % 2.97 % 3.05 % 3.40 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 11.74 % 12.18 % 12.54 % 12.55 % 13.47 % Effect of goodwill and other intangibles, net -1.81 % -1.85 % -1.93 % -1.93 % -2.09 % Tangible common equity to tangible assets 9.93 % 10.33 % 10.61 % 10.62 % 11.38 % Return on Tangible Equity Return on tangible equity ("GAAP") 13.5 % 15.3 % 13.8 % 12.6 % 20.6 % Impact of sale of VISA shares - - - - -9.7 % Return on tangible equity, excluding sale of VISA shares 13.5 % 15.3 % 13.8 % 12.6 % 10.9 % Return on Assets Return on assets ("GAAP") 1.38 % 1.59 % 1.46 % 1.35 % 2.29 % Impact of sale of VISA shares - - - - -1.08 % Return on assets, excluding sale of VISA shares 1.38 % 1.59 % 1.46 % 1.35 % 1.21 % View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005928/en/Contacts Charles R. Hageboeck, Chief Executive Officer and President (304) 769-1102
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $19.8 million and diluted earnings of $1.25 per share for the quarter ended March 31, 2021. Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “Our country and the communities that we serve are emerging from the COVID-19 pandemic and it is encouraging to see economic activity returning to more “normal” conditions. However, the impacts of this crisis continued to impact our financial performance during the first quarter of 2021. Our reported net interest income dipped $0.7 million from the linked quarter ended December 31, 2020 and our net interest margin dropped 8 basis points to 2.91%. Deposit balances continue to grow primarily as a result of the third round of stimulus payments with average deposit balances increasing over $150 million from the quarter ended December 31, 2020. City continues to participate in the government-sponsored Paycheck Protection Program (“PPP”) loans administered by the Small Business Administration (“SBA”). Thus far, City has assisted customers in obtaining almost $40 million in new PPP loans during the second round. “A hallmark for City over the last several years has been our asset quality. Our asset quality remains very strong at March 31, 2021. Nonperforming assets, past due loans, and troubled debt restructurings remain at or below the levels reported at December 31, 2020. Deferred commercial loans remained relatively low at approximately 6% of total commercial balances at March 31, 2021. Hotel and lodging related loans comprise $105 million of the $115 million of these deferrals at March 31, 2021, and our hotel and lodging loan customers are experiencing increasing occupancy rates. Residential mortgage deferrals have dropped to approximately $3 million at March 31, 2021. “Loan growth has been a particular challenge with interest rates at historic lows. Although our residential mortgage origination levels hit record highs in 2020, balances have decreased as some mortgages were refinanced into fixed rate loans not predominately offered by City. Those trends continued in the first quarter of 2021, but we believe that as mortgage rates and fees charged by agencies increase, our mortgage balances will increase. The decline in commercial loans primarily reflects a seasonal customer, as well as pricing pressure from some competitors. As the economy continues to improve, our view is that commercial loans will regain positive momentum.” Net Interest Income The Company’s net interest income decreased from $38.2 million during the fourth quarter of 2020 to $37.5 million during the first quarter of 2021. The Company’s tax equivalent net interest income decreased $0.6 million, or 1.7%, from $38.5 million for the fourth quarter of 2020 to $37.9 million for the first quarter of 2021. Lower loan yields (2 basis points) and lower average loan balances ($50 million) decreased interest income by $0.7 million and $0.5 million, respectively, as compared to the quarter ended December 31, 2020. In addition, lower average investment balances ($30 million) decreased interest income by $0.2 million from the quarter ended December 31, 2020. These decreases were partially offset by lower rates paid on interest-bearing liabilities (primarily time deposits) that lowered interest expense by $0.9 million during the quarter ended March 31, 2021. The Company’s reported net interest margin decreased from 2.99% for the fourth quarter of 2020 to 2.91% for the first quarter of 2021. Balance Sheet Trends Loans decreased $75.4 million from December 31, 2020 to March 31, 2021, to $3.55 billion. Net of forgiveness received from the SBA of approximately $32 million of PPP loans from the first round, PPP loans increased $7.4 million as a result of the Company’s participation in the second round of the PPP lending. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $82.8 million, (2.3%), from December 31, 2020 to $3.48 billion at March 31, 2021. Residential real estate loans decreased $54.8 million (3.5%); commercial real estate loans decreased $12.1 million (0.8%); commercial and industrial loans decreased $9.2 million (2.9%) (excluding PPP loans); and home equity loans decreased $6.5 million (4.7%). Total average depository balances increased $152.5 million, or 3.4%, from the quarter ended December 31, 2020 to the quarter ended March 31, 2021. Average noninterest-bearing demand deposit balances increased $67.8 million, average savings deposit balances increased $72.5 million, and average interest-bearing demand deposit balances increased $54.7 million. These balances increased despite low average interest rates paid by the Company – 5 basis points for interest-bearing deposits and 6 basis points for savings deposits. We believe that these increases were largely attributable to the third round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (approximately $180 million). These increases were partially offset by lower average time deposit balances of $42.5 million. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned increased modestly from 0.38% at December 31, 2020 to 0.39% at March 31, 2021. Total nonperforming assets increased slightly from $13.9 million at December 31, 2020 to $14.0 million at March 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.6 million, or 0.19% of total loans outstanding, at March 31, 2021. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a recovery of credit losses of $0.4 million in the first quarter of 2021, compared to a provision for credit losses of $8.0 million for the comparable period in 2020 and a provision for credit losses of $0.5 million for the fourth quarter of 2020. The recovery of credit losses recorded in the first quarter of 2021 largely reflects the decline in loan balances ($83 million) from the quarter ended December 31, 2020 which resulted in the release of $0.5 million from the allowance for credit losses during the first quarter of 2021. As a result of an improvement in economic conditions in the Company’s footprint, net charge-offs for the quarter ended March 31, 2021 were negligible. Non-interest Income During the quarter ended March 31, 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605) in a cash transaction which resulted in a pre-tax gain of $17.8 million, or $0.84 diluted per share on an after-tax basis. Additionally, the Company reported $0.1 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2021 compared to $2.4 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2020. The Company’s portfolio of equity securities consists primarily of holdings in First National Corporation (“FXNC”) (a commercial banking company headquartered in Strasburg, VA) and Eagle Financial Services (a commercial banking company headquartered in Berryville, VA). In the first quarter of 2021, the Company sold shares of FXNC and realized a gain of $0.3 million. Exclusive of these items, non-interest income decreased from $17.9 million for the first quarter of 2020 to $16.4 million for the first quarter of 2021. This decrease was largely attributable to a decrease of $1.8 million, or 23.9%, in service charges. In addition, other income, primarily due to lower fees from loan interest rate swap originations, decreased $0.7 million. These decreases were partially offset by higher bankcard revenues ($1.1 million, or 21.5%) compared to the quarter ended March 31, 2020. Bankcard revenue of $6.2 million in the quarter ended March 31, 2021, represents the highest quarterly total in the Company’s history as spending by our customers increased significantly in the month of March. Non-interest Expenses Non-interest expenses increased $0.3 million, or 1.2%, from $29.5 million in the first quarter of 2020 to $29.8 million in the first quarter of 2021. FDIC insurance expense increased $0.4 million from the quarter ended March 31, 2020 due to credits utilized in the first quarter of 2020. Income Tax Expense The Company’s effective income tax rate for the first quarter of 2021 was 20.1% compared to 19.5% for the year ended December 31, 2020, and 20.2% for the quarter ended March 31, 2020. Capitalization and Liquidity The Company’s loan to deposit ratio was 73.9% and the loan to asset ratio was 60.2% at March 31, 2021. The Company maintained investment securities totaling 20.6% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 60.9% of assets at March 31, 2021. Time deposits fund 20.5% of assets at March 31, 2021, 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 continues to be strongly capitalized with tangible equity of $573 million at March 31, 2021. Due primarily to the influx of deposits and unrealized security losses during the quarter ended March 31, 2021, the Company’s tangible equity ratio decreased modestly from 10.3% at December 31, 2020 to 9.9% at March 31, 2021. At March 31, 2021, City National Bank’s Leverage Ratio was 8.91%, its Common Equity Tier I ratio was 14.75%, its Tier I Capital ratio was 14.75%, and its Total Risk-Based Capital ratio was 15.33%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On March 31, 2021, the Board of Directors of the Company approved a quarterly cash dividend of $0.58 per share payable April 30, 2021, to shareholders of record as of April 15, 2021. On March 31, 2021, 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 February 2019. The Company had repurchased 908,701 shares under the 2019 program. During the quarter ended March 31, 2021, the Company repurchased 75,000 common shares at a weighted average price of $76.71 per share as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of March 31, 2021, the Company could repurchase 1,000,000 additional shares under the current program. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 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, 2020 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) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) 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; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) 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; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) 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, 2021 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2021 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Earnings Net Interest Income (fully taxable equivalent) $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 40,603 Net Income available to common shareholders 19,814 22,222 20,126 18,251 29,000 Per Share Data Earnings per share available to common shareholders: Basic $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.79 Diluted 1.25 1.40 1.25 1.12 1.78 Weighted average number of shares (in thousands): Basic 15,656 15,708 15,950 16,081 16,080 Diluted 15,687 15,733 15,970 16,097 16,101 Period-end number of shares (in thousands) 15,724 15,768 15,848 16,077 16,140 Cash dividends declared $ 0.58 $ 0.58 $ 0.57 $ 0.57 $ 0.57 Book value per share (period-end) $ 43.99 $ 44.47 $ 43.62 $ 43.15 $ 42.45 Tangible book value per share (period-end) 36.47 36.94 36.11 35.72 35.03 Market data: High closing price $ 87.41 $ 70.77 $ 67.98 $ 71.19 $ 82.40 Low closing price 69.05 56.98 55.37 55.18 57.11 Period-end closing price 81.78 69.55 57.61 65.17 66.53 Average daily volume (in thousands) 63 56 67 89 69 Treasury share activity: Treasury shares repurchased (in thousands) 75 81 231 79 182 Average treasury share repurchase price $ 76.71 $ 60.32 $ 59.49 $ 61.75 $ 71.31 Key Ratios (percent) Return on average assets 1.38 % 1.59 % 1.46 % 1.35 % 2.29 % Return on average tangible equity 13.5 % 15.3 % 13.8 % 12.6 % 20.6 % Yield on interest earning assets 3.17 % 3.32 % 3.43 % 3.64 % 4.22 % Cost of interest bearing liabilities 0.37 % 0.47 % 0.58 % 0.71 % 0.91 % Net Interest Margin 2.91 % 2.99 % 3.02 % 3.13 % 3.54 % Non-interest income as a percent of total revenue 30.4 % 30.7 % 30.3 % 27.4 % 30.6 % Efficiency Ratio 54.3 % 51.0 % 51.6 % 53.3 % 49.7 % Price/Earnings Ratio (a) 16.30 12.41 11.53 14.50 17.63 Capital (period-end) Average Shareholders' Equity to Average Assets 12.30 % 12.46 % 12.71 % 12.91 % 13.50 % Tangible equity to tangible assets 9.93 % 10.33 % 10.61 % 10.62 % 11.38 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.76 % 16.18 % 15.93 % 16.10 % 16.02 % Tier I 16.76 % 16.18 % 15.93 % 16.10 % 16.02 % Total 17.33 % 16.75 % 16.50 % 16.69 % 16.46 % Leverage 10.06 % 10.22 % 10.19 % 10.45 % 11.10 % City National Bank risk based capital ratios (b): CET I 14.75 % 14.10 % 14.46 % 14.55 % 14.32 % Tier I 14.75 % 14.10 % 14.46 % 14.55 % 14.32 % Total 15.33 % 14.68 % 15.04 % 15.15 % 14.82 % Leverage 8.91 % 8.97 % 9.32 % 9.29 % 9.98 % Other (period-end) Branches 94 94 94 94 95 FTE 916 926 925 911 922 Assets per FTE (in thousands) $ 6,434 $ 6,219 $ 5,984 $ 6,058 $ 5,525 Deposits per FTE (in thousands) 5,236 5,024 4,799 4,834 4,400 (a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes). (b) March 31, 2021 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, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Interest Income Interest and fees on loans $ 34,324 $ 35,685 $ 35,761 $ 37,718 $ 41,335 Interest on investment securities: Taxable 5,242 5,500 6,266 5,718 5,871 Tax-exempt 1,253 1,254 1,132 821 707 Interest on deposits in depository institutions 118 60 72 55 304 Total Interest Income 40,937 42,499 43,231 44,312 48,217 Interest Expense Interest on deposits 3,280 4,198 5,123 5,963 7,238 Interest on short-term borrowings 117 120 131 279 464 Interest on long-term debt - - - - 100 Total Interest Expense 3,397 4,318 5,254 6,242 7,802 Net Interest Income 37,540 38,181 37,977 38,070 40,415 (Recovery of) provision for credit losses (440 ) 474 1,026 1,250 7,972 Net Interest Income After (Recovery of) Provision for Credit Losses 37,980 37,707 36,951 36,820 32,443 Non-Interest Income Net gains (losses) on sale of investment securities 283 6 - (6 ) 63 Unrealized (losses) gains recognized on equity securities still held (51 ) 835 461 242 (2,402 ) Service charges 5,881 6,771 6,295 4,945 7,723 Bankcard revenue 6,213 5,991 6,065 5,888 5,115 Trust and investment management fee income 2,033 2,162 1,844 1,931 1,799 Bank owned life insurance 1,460 813 1,088 848 1,676 Sale of VISA shares - - - - 17,837 Other income 811 1,143 1,232 783 1,536 Total Non-Interest Income 16,630 17,721 16,985 14,631 33,347 Non-Interest Expense Salaries and employee benefits 15,671 15,989 15,361 14,873 15,851 Occupancy related expense 2,622 2,447 2,428 2,402 2,488 Equipment and software related expense 2,544 2,660 2,607 2,504 2,429 FDIC insurance expense 405 363 355 167 - Advertising 881 538 462 933 843 Bankcard expenses 1,584 1,443 1,517 1,498 1,435 Postage, delivery, and statement mailings 592 546 513 592 616 Office supplies 392 413 396 353 394 Legal and professional fees 675 438 548 589 601 Telecommunications 690 540 547 531 511 Repossessed asset losses (gains), net of expenses 79 (68 ) 39 76 198 Other expenses 3,674 3,332 3,939 3,950 4,102 Total Non-Interest Expense 29,809 28,641 28,712 28,468 29,468 Income Before Income Taxes 24,801 26,787 25,224 22,983 36,322 Income tax expense 4,987 4,565 5,098 4,732 7,322 Net Income Available to Common Shareholders $ 19,814 $ 22,222 $ 20,126 $ 18,251 $ 29,000 Distributed earnings allocated to common shareholders $ 9,037 $ 9,053 $ 8,944 $ 9,073 $ 9,117 Undistributed earnings allocated to common shareholders 10,598 12,947 10,984 8,998 19,620 Net earnings allocated to common shareholders $ 19,635 $ 22,000 $ 19,928 $ 18,071 $ 28,737 Average common shares outstanding 15,656 15,708 15,950 16,081 16,080 Shares for diluted earnings per share 15,687 15,733 15,970 16,097 16,101 Basic earnings per common share $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.79 Diluted earnings per common share $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 1.78 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Assets Cash and due from banks $ 97,709 $ 77,412 $ 76,451 $ 87,658 $ 92,365 Interest-bearing deposits in depository institutions 659,090 451,247 176,267 285,596 18,271 Cash and cash equivalents 756,799 528,659 252,718 373,254 110,636 Investment securities available-for-sale, at fair value 1,185,245 1,178,789 1,157,399 1,055,185 934,113 Other securities 27,182 27,372 26,548 26,144 26,827 Total investment securities 1,212,427 1,206,161 1,183,947 1,081,329 960,940 Gross loans 3,546,723 3,622,119 3,663,966 3,665,596 3,613,050 Allowance for credit losses (24,076 ) (24,549 ) (24,867 ) (25,199 ) (24,393 ) Net loans 3,522,647 3,597,570 3,639,099 3,640,397 3,588,657 Bank owned life insurance 118,976 118,243 117,501 116,746 116,000 Premises and equipment, net 76,529 76,925 77,031 77,991 78,948 Accrued interest receivable 16,231 15,793 16,627 14,200 12,570 Net deferred tax assets 1,395 - - - 2,159 Intangible assets 118,224 118,592 119,004 119,417 119,829 Other assets 71,142 96,697 105,361 105,438 98,710 Total Assets $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 $ 5,088,449 Liabilities Deposits: Noninterest-bearing $ 1,244,175 $ 1,176,990 $ 1,061,310 $ 1,079,469 $ 857,501 Interest-bearing: Demand deposits 1,077,749 1,027,201 940,791 921,761 837,966 Savings deposits 1,265,038 1,188,003 1,117,684 1,067,254 989,609 Time deposits 1,209,873 1,260,022 1,300,291 1,342,631 1,366,977 Total deposits 4,796,835 4,652,216 4,420,076 4,411,115 4,052,053 Short-term borrowings Federal Funds purchased - - - - 9,900 Customer repurchase agreements 316,003 295,956 279,866 282,676 224,247 Net deferred tax liabilities - 3,202 1,601 2,598 - Other liabilities 89,847 106,160 118,386 138,633 117,021 Total Liabilities 5,202,685 5,057,534 4,819,929 4,835,022 4,403,221 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,526 171,304 170,526 169,881 170,096 Retained earnings 600,396 589,988 576,901 565,804 556,718 Cost of common stock in treasury (142,484 ) (139,038 ) (134,177 ) (120,583 ) (116,665 ) Accumulated other comprehensive income: Unrealized gain on securities available-for-sale 21,289 36,894 36,760 37,299 33,730 Underfunded pension liability (5,661 ) (5,661 ) (6,270 ) (6,270 ) (6,270 ) Total Accumulated Other Comprehensive Income 15,628 31,233 30,490 31,029 27,460 Total Stockholders' Equity 691,685 701,106 691,359 693,750 685,228 Total Liabilities and Stockholders' Equity $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 $ 5,088,449 Regulatory Capital Total CET 1 capital $ 563,523 $ 557,641 $ 548,269 $ 548,972 $ 547,040 Total tier 1 capital 563,523 557,641 548,269 548,972 547,040 Total risk-based capital 582,816 577,292 568,153 569,213 561,944 Total risk-weighted assets 3,362,595 3,446,774 3,442,629 3,410,589 3,412,591 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Commercial and industrial $ 371,195 $ 372,989 $ 383,980 $ 369,122 $ 308,567 1-4 Family 108,131 109,812 114,071 123,814 120,852 Hotels 293,176 294,464 295,989 295,179 294,072 Multi-family 212,561 215,671 214,394 204,580 205,684 Non Residential Non-Owner Occupied 649,683 641,351 628,814 628,628 627,852 Non Residential Owner Occupied 199,130 213,484 211,433 215,472 222,489 Commercial real estate (1) 1,462,681 1,474,782 1,464,701 1,467,673 1,470,949 Residential real estate (2) 1,532,907 1,587,694 1,621,265 1,631,151 1,629,578 Home equity 130,009 136,469 140,135 142,672 146,034 Consumer 47,224 47,688 50,541 52,278 54,749 DDA overdrafts 2,707 2,497 3,344 2,700 3,173 Gross Loans $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 $ 3,613,050 Construction loans included in: (1) - Commercial real estate loans 39,101 40,449 42,449 42,092 44,453 (2) - Residential real estate loans $ 22,129 $ 27,078 $ 28,947 $ 28,252 $ 28,870 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Allowance for Credit Losses Balance at beginning of period $ 24,549 $ 24,867 $ 25,199 $ 24,393 $ 11,589 Charge-offs: Commercial and industrial (34 ) (9 ) (757 ) - (77 ) Commercial real estate (1 ) (616 ) (75 ) (39 ) (383 ) Residential real estate (93 ) (139 ) (252 ) (376 ) (483 ) Home equity (64 ) (88 ) (126 ) (161 ) (45 ) Consumer (147 ) (27 ) (74 ) (36 ) (55 ) DDA overdrafts (453 ) (629 ) (554 ) (459 ) (703 ) Total charge-offs (792 ) (1,508 ) (1,838 ) (1,071 ) (1,746 ) Recoveries: Commercial and industrial 46 74 3 5 9 Commercial real estate 164 150 44 128 203 Residential real estate 74 57 24 8 95 Home equity 23 47 33 9 47 Consumer 39 55 42 128 13 DDA overdrafts 413 333 334 349 451 Total recoveries 759 716 480 627 818 Net charge-offs (33 ) (792 ) (1,358 ) (444 ) (928 ) (Recovery of) provision for credit losses (440 ) 474 1,026 1,250 7,972 Impact of Adopting ASC 326 - - - - 5,760 Balance at end of period $ 24,076 $ 24,549 $ 24,867 $ 25,199 $ 24,393 Loans outstanding $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 $ 3,613,050 Allowance as a percent of loans outstanding 0.68 % 0.68 % 0.68 % 0.69 % 0.68 % Allowance as a percent of non-performing loans 194.5 % 200.7 % 182.7 % 185.1 % 202.2 % Average loans outstanding $ 3,585,790 $ 3,635,673 $ 3,661,569 $ 3,660,174 $ 3,608,868 Net charge-offs (annualized) as a percent of average loans outstanding 0.00 % 0.09 % 0.15 % 0.05 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Nonaccrual Loans Residential real estate $ 3,004 $ 2,968 $ 3,983 $ 3,477 $ 2,750 Home equity 88 95 74 265 249 Commercial and industrial 1,200 768 728 1,087 1,175 Commercial real estate 7,792 8,401 8,479 8,715 7,865 Consumer - - - - 1 Total nonaccrual loans 12,084 12,232 13,264 13,544 12,040 Accruing loans past due 90 days or more 295 - 345 68 26 Total non-performing loans 12,379 12,232 13,609 13,612 12,066 Other real estate owned 1,625 1,650 2,080 3,997 3,922 Total non-performing assets $ 14,004 $ 13,882 $ 15,689 $ 17,609 $ 15,988 Non-performing assets as a percent of loans and other real estate owned 0.39 % 0.38 % 0.43 % 0.48 % 0.44 % Past Due Loans Residential real estate $ 4,092 $ 5,993 $ 5,153 $ 5,261 $ 7,815 Home equity 449 575 474 393 430 Commercial and industrial 1,358 1,241 691 160 71 Commercial real estate 508 625 602 917 1,021 Consumer 10 113 121 67 177 DDA overdrafts 212 341 379 273 467 Total past due loans $ 6,629 $ 8,888 $ 7,420 $ 7,071 $ 9,981 Total past due loans as a percent of loans outstanding 0.19 % 0.25 % 0.20 % 0.19 % 0.28 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 18,572 $ 19,226 $ 20,398 $ 20,631 $ 21,413 Home equity 1,956 2,001 2,100 2,138 2,294 Commercial and industrial - - - - - Commercial real estate 4,615 4,638 4,894 4,915 5,163 Consumer 211 277 260 185 184 Total TDRs $ 25,354 $ 26,142 $ 27,652 $ 27,869 $ 29,054 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended March 31, 2021 December 31, 2020 March 31, 2020 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,696,064 $ 16,853 4.03 % $ 1,744,952 $ 17,623 4.02 % $ 1,780,473 $ 19,881 4.49 % Commercial, financial, and agriculture (2) 1,838,928 16,542 3.65 % 1,837,044 17,077 3.70 % 1,770,178 20,476 4.65 % Installment loans to individuals (2), (3) 50,798 713 5.69 % 53,677 800 5.93 % 58,217 863 5.96 % Previously securitized loans (4) *** 215 *** *** 184 *** *** 115 *** Total loans 3,585,790 34,323 3.88 % 3,635,673 35,684 3.90 % 3,608,868 41,335 4.61 % Securities: Taxable 945,177 5,242 2.25 % 976,897 5,500 2.24 % 810,766 5,871 2.91 % Tax-exempt (5) 239,589 1,585 2.68 % 238,198 1,587 2.65 % 94,591 895 3.81 % Total securities 1,184,766 6,827 2.34 % 1,215,095 7,087 2.32 % 905,357 6,766 3.01 % Deposits in depository institutions 513,469 118 0.09 % 275,106 60 0.09 % 102,932 304 1.19 % Total interest-earning assets 5,284,025 41,268 3.17 % 5,125,874 42,831 3.32 % 4,617,157 48,405 4.22 % Cash and due from banks 79,683 73,900 70,763 Premises and equipment, net 76,837 76,956 77,368 Goodwill and intangible assets 118,453 118,855 120,091 Other assets 217,453 231,309 195,875 Less: Allowance for credit losses (24,909 ) (25,112 ) (15,905 ) Total assets $ 5,751,542 $ 5,601,782 $ 5,065,349 Liabilities: Interest-bearing demand deposits $ 1,008,283 $ 124 0.05 % $ 953,604 $ 171 0.07 % $ 869,976 $ 468 0.22 % Savings deposits 1,221,169 183 0.06 % 1,148,717 225 0.08 % 1,005,829 700 0.28 % Time deposits (2) 1,236,197 2,973 0.98 % 1,278,698 3,801 1.18 % 1,365,268 6,070 1.79 % Short-term borrowings 290,766 117 0.16 % 287,059 120 0.17 % 209,010 464 0.89 % Long-term debt - - - - - - 3,340 100 12.04 % Total interest-bearing liabilities 3,756,415 3,397 0.37 % 3,668,078 4,317 0.47 % 3,453,423 7,802 0.91 % Noninterest-bearing demand deposits 1,197,910 1,130,084 852,384 Other liabilities 89,695 105,445 75,922 Stockholders' equity 707,522 698,175 683,620 Total liabilities and stockholders' equity $ 5,751,542 $ 5,601,782 $ 5,065,349 Net interest income $ 37,871 $ 38,514 $ 40,603 Net yield on earning assets 2.91 % 2.99 % 3.54 % (1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income: Loan fees, net $ 835 $ 962 $ 116 (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 $ 106 $ 153 $ 151 Commercial, financial, and agriculture 325 304 1,240 Installment loans to individuals 28 29 39 Time deposits 48 155 155 $ 507 $ 641 $ 1,585 (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, except per share data) Three Months Ended March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net Interest Income/Margin Net interest income ("GAAP") $ 37,540 $ 38,181 $ 37,977 $ 38,070 $ 40,415 Taxable equivalent adjustment 331 333 301 217 188 Net interest income, fully taxable equivalent $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 40,603 Average interest earning assets $ 5,284,025 $ 5,125,874 $ 5,047,868 $ 4,914,242 $ 4,617,157 Net Interest Margin 2.91 % 2.99 % 3.02 % 3.13 % 3.54 % Accretion related to fair value adjustments -0.04 % -0.05 % -0.05 % -0.08 % -0.14 % Net Interest Margin (excluding accretion) 2.87 % 2.94 % 2.97 % 3.05 % 3.40 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 11.74 % 12.18 % 12.54 % 12.55 % 13.47 % Effect of goodwill and other intangibles, net -1.81 % -1.85 % -1.93 % -1.93 % -2.09 % Tangible common equity to tangible assets 9.93 % 10.33 % 10.61 % 10.62 % 11.38 % Return on Tangible Equity Return on tangible equity ("GAAP") 13.5 % 15.3 % 13.8 % 12.6 % 20.6 % Impact of sale of VISA shares - - - - -9.7 % Return on tangible equity, excluding sale of VISA shares 13.5 % 15.3 % 13.8 % 12.6 % 10.9 % Return on Assets Return on assets ("GAAP") 1.38 % 1.59 % 1.46 % 1.35 % 2.29 % Impact of sale of VISA shares - - - - -1.08 % Return on assets, excluding sale of VISA shares 1.38 % 1.59 % 1.46 % 1.35 % 1.21 % View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005928/en/