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 Annual Earnings By: City Holding Company via Business Wire January 25, 2022 at 07:30 AM EST City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.0 billion bank holding company headquartered in Charleston, West Virginia, today announced net income of $88.1 million and record diluted earnings of $5.66 per share for the year ended December 31, 2021. Net Interest Income The Company’s net interest income increased from $154.6 million for the year ended December 31, 2020 to $155.6 million for the year ended December 31, 2021. The Company’s tax equivalent net interest income increased $1.2 million, or 0.8%, from $155.7 million for the year ended December 31, 2020 to $156.9 million for the year ended December 31, 2021. The Company recognized $4.0 million of loan fees associated with PPP loans during 2021 as compared to $1.6 million during 2020. However, lower loan yields (which fell 29 basis points) decreased net interest income by $10.0 million. Additionally, lower average loan balances ($95.6 million) lowered net interest income by $4.2 million and a decrease in accretion from fair value adjustments decreased interest income by $1.7 million. Higher investment balances (which increased $262.2 million) increased net interest income by $7.2 million, while investment yields (which decreased by 45 basis points) decreased net interest income by $6.0 million. Lower rates paid on interest bearing liabilities (40 basis points) and lower average time deposit balances (down $172.3 million) increased net interest income by $11.7 million and $2.6 million, respectively. The Company’s reported net interest margin declined from 3.16% for the year ended December 31, 2020 to 2.89% for the year ended December 31, 2021. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 2.85% for the year ended December 31, 2021 and 3.08% for the year ended December 31, 2020. The Company’s net interest income increased from $39.5 million during the third quarter of 2021 to $40.6 million during the fourth quarter of 2021. During the fourth quarter of 2021, the Company’s tax equivalent net interest income increased $1.1 million, or 2.8%, to $40.9 million from $39.8 million during the third quarter of 2021. An increase in loan yields (which increased 16 basis points), largely due to interest recoveries on a loan that previously had been classified as a nonperforming loan, increased net interest income by $1.4 million, and lower rates paid on time deposits (which decreased 7 basis points) increased overall net interest income by $0.2 million. These increases were partially offset by lower investment yields (17 basis points) which lowered net interest income by $0.6 million. The Company’s reported net interest margin increased from 2.89% for the third quarter of 2021 to 2.94% for the fourth quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.91% for the quarter ended December 31, 2021 and 2.86% for the quarter ended September 30, 2021. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.38% at December 31, 2020 to 0.21% at December 31, 2021. Total nonperforming assets decreased from $13.9 million at December 31, 2020 to $7.6 million at December 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021. As a result of the Company’s quarterly analysis of the adequacy of the ACL, the Company did not record a provision for credit losses in the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for the year ended December 31, 2021, compared to a provision for credit losses of $0.5 million and $10.7 million for the comparable periods in 2020. The determination of the Company’s allowance for credit losses is largely dependent on expected unemployment ranges. Due to improvements in the outlook for unemployment ranges utilized by the Company and adjustments to other qualitative and other factors, during 2021 the Company partially recovered a portion of the provision for credit losses incurred in the quarter ended March 31, 2020 related to the COVID-19 pandemic. Non-interest Income Non-interest income was $69.6 million for 2021 as compared to $82.7 million for 2020. During 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605 shares) in a cash transaction that 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 $0.3 million of realized security gains on the sale of investment securities and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021 compared to $0.9 million of unrealized fair value losses on the Company’s equity securities during 2020. Exclusive of these items, non-interest income increased from $65.6 million for the year ended December 31, 2020 to $68.8 million for the year ended December 31, 2021. This increase was largely attributable to an increase of $3.9 million, or 17.0%, in bankcard revenues and a $0.7 million, or 8.8%, increase in trust and investment management fee income. These increases were partially offset by a decrease of $0.7 million, or 15.0%, in other income and a decrease of $0.5 million in bank owned life insurance due to lower death benefit proceeds received during 2021 compared to 2020. Non-interest income was $17.6 million during the quarter ended December 31, 2021 as compared to $17.7 million during the quarter ended December 31, 2020. During the fourth quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.8 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2020. Exclusive of these unrealized fair value gains, non-interest income increased from $16.9 million for the fourth quarter of 2020 to $17.6 million for the fourth quarter of 2021. This increase was largely attributable to higher bankcard revenues ($0.8 million, or 12.9%) and service charges ($0.3 million, or 4.2%). These increases were partially offset by a decrease in other income ($0.3 million). Non-interest Expenses Non-interest expenses increased from $115.3 million for 2020 to $117.2 million for 2021. This increase was primarily due to an increase in telecommunication expenses ($0.7 million), FDIC insurance expense ($0.7 million), bankcard expenses ($0.6 million), occupancy related expenses ($0.3 million), advertising expenses ($0.3 million), and equipment and software related expense ($0.3 million). These increases were partially offset by a decrease in other expenses ($0.6 million) and repossessed asset gains ($0.3 million). Non-interest expenses remained level at $28.6 million for both the quarter ended December 31, 2020 and the quarter ended December 31, 2021. A decrease in salaries and employee benefits expense of $0.7 million was essentially offset by increases in other expenses ($0.2 million), telecommunication expense ($0.2 million), and bankcard expenses ($0.1 million). Balance Sheet Trends Loans decreased $78.3 million (2.2%) from December 31, 2020 to $3.54 billion at December 31, 2021. PPP loans decreased $48.9 million from $55.4 million at December 31, 2020 to $6.6 million at December 31, 2021. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $29.4 million, (0.8%), from December 31, 2020 to $3.54 billion at December 31, 2021. Residential real estate loans decreased $38.7 million (2.4%); home equity loans decreased $14.1 million (10.4%); and consumer loans decreased $6.8 million (14.2%). These decreases were partially offset by increases in commercial and industrial loans ($22.1 million, or 7.5%) (excluding PPP loans). Total average depository balances for the year ended December 31, 2021 increased $486.5 million, or 11.2%, as compared to the year ended December 31, 2020. Average noninterest bearing demand deposits increased $280.0 million, average savings deposits increased $219.5 million, and average interest bearing demand deposits increased $159.3 million. These increases were partially offset by a decrease in average time deposits of $172.3 million. From December 31, 2020, to December 31, 2021, total demand deposit account households increased 2.6% and total demand deposit accounts increased 2.5%. Income Tax Expense The Company’s effective income tax rate for the quarter and year ended December 31, 2021 was 21.1% and 20.8%, respectively, compared to 17.0% and 19.5% for the comparable periods in 2020. Capitalization and Liquidity The Company’s loan to deposit ratio was 72.0% and the loan to asset ratio was 59.0% at December 31, 2021. The Company maintained investment securities totaling 23.9% of assets as of the same date. Because interest rates remain extremely low, at December 31, 2021 the company maintained significant cash and cash equivalent assets which totaled 10.5% of assets. The Company’s deposit mix is weighted toward checking and saving accounts that fund 64.2% of assets at December 31, 2021. Time deposits fund 17.8% of assets at December 31, 2021, but very few of these deposits are in accounts that have balances of more than $250,000. The Company continues to be strongly capitalized with tangible equity of $564 million at December 31, 2021. Due to the continued influx of deposits during 2021, the Company’s tangible equity ratio decreased from 10.3% at December 31, 2020 to 9.6% at December 31, 2021. At December 31, 2021, City National Bank’s Leverage Ratio was 8.45%, its Common Equity Tier I ratio was 14.35%, its Tier I Capital ratio was 14.35%, and its Total Risk-Based Capital ratio was 14.78%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 19, 2021, the Board approved a quarterly cash dividend of $0.60 cents per share payable January 31, 2022, to shareholders of record as of January 14, 2022. This represents a 3.45% increase from the $0.58 per share dividend paid on October 29, 2021. During the year ended December 31, 2021, the Company repurchased 760,000 common shares at a weighted average price of $77.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of December 31, 2021, the Company could repurchase approximately 315,000 shares under the current plan. 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 credit 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 December 31, 2021 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2021 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Earnings Net Interest Income (fully taxable equivalent) $ 40,956 $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 156,906 $ 155,683 Net Income available to common shareholders 23,386 22,732 22,148 19,814 22,222 88,080 89,595 Per Share Data Earnings per share available to common shareholders: Basic $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.67 $ 5.55 Diluted 1.54 1.47 1.41 1.25 1.40 5.66 5.55 Weighted average number of shares (in thousands): Basic 15,026 15,279 15,573 15,656 15,708 15,381 15,975 Diluted 15,056 15,302 15,594 15,687 15,733 15,407 15,995 Period-end number of shares (in thousands) 15,062 15,192 15,527 15,724 15,768 15,062 15,768 Cash dividends declared $ 0.60 $ 0.58 $ 0.58 $ 0.58 $ 0.58 $ 2.34 $ 2.29 Book value per share (period-end) $ 45.22 $ 44.58 $ 44.79 $ 43.99 $ 44.47 $ 45.22 $ 44.47 Tangible book value per share (period-end) 37.44 36.85 37.20 36.47 36.94 37.44 36.94 Market data: High closing price $ 83.14 $ 79.99 $ 83.85 $ 87.41 $ 70.77 $ 87.41 $ 82.40 Low closing price 76.52 72.29 74.44 69.05 56.98 69.05 55.18 Period-end closing price 81.79 77.91 75.24 81.78 69.55 81.79 69.55 Average daily volume (in thousands) 52 53 61 63 56 57 70 Treasury share activity: Treasury shares repurchased (in thousands) 131 337 217 75 81 760 573 Average treasury share repurchase price $ 78.93 $ 75.65 $ 78.75 $ 76.71 $ 60.32 $ 77.21 $ 63.68 Key Ratios (percent) Return on average assets 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.66 % Return on average tangible equity 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 15.6 % Yield on interest earning assets 3.08 % 3.04 % 3.00 % 3.17 % 3.32 % 3.07 % 3.64 % Cost of interest bearing liabilities 0.19 % 0.22 % 0.27 % 0.37 % 0.47 % 0.26 % 0.66 % Net Interest Margin 2.94 % 2.89 % 2.81 % 2.91 % 2.99 % 2.89 % 3.16 % Non-interest income as a percent of total revenue 30.2 % 31.1 % 31.0 % 30.4 % 30.7 % 30.8 % 34.8 % Efficiency Ratio 48.3 % 50.0 % 52.8 % 54.3 % 51.0 % 51.3 % 51.3 % Price/Earnings Ratio (a) 13.27 13.22 13.35 16.30 12.41 14.42 12.52 Capital (period-end) Average Shareholders' Equity to Average Assets 11.25 % 11.69 % 11.81 % 12.30 % 12.46 % Tangible equity to tangible assets 9.58 % 9.59 % 9.98 % 9.93 % 10.33 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.08 % 16.11 % 16.40 % 16.76 % 16.18 % Tier I 16.08 % 16.11 % 16.40 % 16.76 % 16.18 % Total 16.51 % 16.56 % 16.88 % 17.33 % 16.75 % Leverage 9.44 % 9.46 % 9.70 % 10.06 % 10.22 % City National Bank risk based capital ratios (b): CET I 14.35 % 14.76 % 14.82 % 14.75 % 14.10 % Tier I 14.35 % 14.76 % 14.82 % 14.75 % 14.10 % Total 14.78 % 15.21 % 15.30 % 15.33 % 14.68 % Leverage 8.45 % 8.73 % 8.80 % 8.91 % 8.97 % Other (period-end) Branches 94 94 94 94 94 FTE 905 921 912 916 926 Assets per FTE (in thousands) $ 6,637 $ 6,463 $ 6,477 $ 6,434 $ 6,219 Deposits per FTE (in thousands) 5,445 5,308 5,271 5,236 5,024 (a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes). (b) December 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 Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Interest Income Interest and fees on loans $ 35,277 $ 33,961 $ 33,114 $ 34,324 $ 35,685 $ 136,676 $ 150,498 Interest on investment securities: Taxable 5,753 6,144 5,932 5,242 5,500 23,071 23,355 Tax-exempt 1,226 1,257 1,291 1,253 1,254 5,027 3,914 Interest on deposits in depository institutions 217 196 162 118 60 693 492 Total Interest Income 42,473 41,558 40,499 40,937 42,499 165,467 178,259 Interest Expense Interest on deposits 1,710 1,955 2,460 3,280 4,198 9,405 22,522 Interest on short-term borrowings 132 115 125 117 120 489 993 Interest on long-term debt - - - - - - 100 Total Interest Expense 1,842 2,070 2,585 3,397 4,318 9,894 23,615 Net Interest Income 40,631 39,488 37,914 37,540 38,181 155,573 154,644 (Recovery of) provision for credit losses - (725 ) (2,000 ) (440 ) 474 (3,165 ) 10,722 Net Interest Income After (Recovery of) Provision for Credit Losses 40,631 40,213 39,914 37,980 37,707 158,738 143,922 Non-Interest Income Net gains on sale of investment securities - - 29 283 6 312 62 Unrealized gains (losses) recognized on equity securities still held 52 93 410 (51 ) 835 504 (863 ) Service charges 7,057 6,706 5,895 5,881 6,771 25,539 25,733 Bankcard revenue 6,762 6,791 7,221 6,213 5,991 26,987 23,059 Trust and investment management fee income 2,198 2,172 2,012 2,033 2,162 8,415 7,736 Bank owned life insurance 748 747 940 1,460 813 3,895 4,424 Sale of VISA shares - - - - - - 17,837 Other income 799 1,438 941 811 1,143 3,989 4,692 Total Non-Interest Income 17,616 17,947 17,448 16,630 17,721 69,641 82,680 Non-Interest Expense Salaries and employee benefits 15,299 15,321 15,559 15,671 15,989 61,850 62,074 Occupancy related expense 2,429 2,507 2,525 2,622 2,447 10,083 9,765 Equipment and software related expense 2,733 2,554 2,655 2,544 2,660 10,486 10,200 FDIC insurance expense 400 396 382 405 363 1,583 884 Advertising 582 804 824 881 538 3,091 2,776 Bankcard expenses 1,576 1,549 1,746 1,584 1,443 6,455 5,893 Postage, delivery, and statement mailings 590 573 568 592 546 2,323 2,268 Office supplies 378 406 371 392 413 1,547 1,556 Legal and professional fees 405 610 589 675 438 2,279 2,176 Telecommunications 702 790 676 690 540 2,858 2,129 Repossessed asset (gains) losses, net of expenses (29 ) (108 ) 1 79 (68 ) (57 ) 245 Other expenses 3,559 3,776 3,678 3,674 3,332 14,687 15,324 Total Non-Interest Expense 28,624 29,178 29,574 29,809 28,641 117,185 115,290 Income Before Income Taxes 29,623 28,982 27,788 24,801 26,787 111,194 111,312 Income tax expense 6,237 6,250 5,640 4,987 4,565 23,114 21,717 Net Income Available to Common Shareholders $ 23,386 $ 22,732 $ 22,148 $ 19,814 $ 22,222 $ 88,080 $ 89,595 Distributed earnings allocated to common shareholders $ 8,949 $ 8,726 $ 8,921 $ 9,037 $ 9,053 $ 34,901 $ 35,745 Undistributed earnings allocated to common shareholders 14,211 13,786 13,021 10,598 12,947 52,336 52,963 Net earnings allocated to common shareholders $ 23,160 $ 22,512 $ 21,942 $ 19,635 $ 22,000 $ 87,237 $ 88,708 Average common shares outstanding 15,026 15,279 15,573 15,656 15,708 15,381 15,975 Shares for diluted earnings per share 15,056 15,302 15,594 15,687 15,733 15,407 15,995 Basic earnings per common share $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.67 $ 5.55 Diluted earnings per common share $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.66 $ 5.55 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Assets Cash and due from banks $ 101,804 $ 103,841 $ 97,523 $ 97,709 $ 77,412 Interest-bearing deposits in depository institutions 532,827 535,708 512,367 659,090 451,247 Cash and cash equivalents 634,631 639,549 609,890 756,799 528,659 Investment securities available-for-sale, at fair value 1,408,165 1,372,077 1,339,436 1,183,253 1,176,797 Other securities 25,531 25,497 25,793 29,174 29,364 Total investment securities 1,433,696 1,397,574 1,365,229 1,212,427 1,206,161 Gross loans 3,543,814 3,521,925 3,529,416 3,546,723 3,622,119 Allowance for credit losses (18,166 ) (18,751 ) (20,016 ) (24,076 ) (24,549 ) Net loans 3,525,648 3,503,174 3,509,400 3,522,647 3,597,570 Bank owned life insurance 120,978 120,238 119,491 118,976 118,243 Premises and equipment, net 74,071 75,156 76,263 76,529 76,925 Accrued interest receivable 15,627 16,224 15,967 16,231 15,793 Net deferred tax assets 63 90 - 1,395 - Intangible assets 117,121 117,489 117,857 118,224 118,592 Other assets 81,860 82,419 89,958 71,142 96,697 Total Assets $ 6,003,695 $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 Liabilities Deposits: Noninterest-bearing $ 1,373,125 $ 1,311,464 $ 1,279,932 $ 1,244,175 $ 1,176,990 Interest-bearing: Demand deposits 1,135,848 1,139,033 1,070,004 1,077,749 1,027,201 Savings deposits 1,347,448 1,332,910 1,301,219 1,265,038 1,188,003 Time deposits 1,068,915 1,104,069 1,153,391 1,209,873 1,260,022 Total deposits 4,925,336 4,887,476 4,804,546 4,796,835 4,652,216 Short-term borrowings Customer repurchase agreements 312,458 296,642 311,316 316,003 295,956 Net deferred tax liabilities - - 2,310 - 3,202 Other liabilities 84,796 90,499 90,407 89,847 106,160 Total Liabilities 5,322,590 5,274,617 5,208,579 5,202,685 5,057,534 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,942 170,300 169,674 170,526 171,304 Retained earnings 641,826 627,463 613,553 600,396 589,988 Cost of common stock in treasury (193,542 ) (183,303 ) (157,936 ) (142,484 ) (139,038 ) Accumulated other comprehensive income: Unrealized gain on securities available-for-sale 17,745 20,878 28,227 21,289 36,894 Underfunded pension liability (3,485 ) (5,661 ) (5,661 ) (5,661 ) (5,661 ) Total Accumulated Other Comprehensive Income 14,260 15,217 22,566 15,628 31,233 Total Stockholders' Equity 681,105 677,296 695,476 691,685 701,106 Total Liabilities and Stockholders' Equity $ 6,003,695 $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 Regulatory Capital Total CET 1 capital $ 555,532 $ 550,426 $ 561,317 $ 563,523 $ 557,641 Total tier 1 capital 555,532 550,426 561,317 563,523 557,641 Total risk-based capital 570,336 565,712 577,543 582,816 577,292 Total risk-weighted assets 3,453,893 3,417,020 3,421,764 3,362,595 3,446,774 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Commercial and industrial $ 346,184 $ 353,046 $ 358,583 $ 371,195 $ 372,989 1-4 Family 107,873 108,913 108,079 108,131 109,812 Hotels 311,315 297,341 290,119 293,176 294,464 Multi-family 215,677 215,307 212,715 212,561 215,671 Non Residential Non-Owner Occupied 639,818 664,365 653,264 649,683 641,351 Non Residential Owner Occupied 204,233 205,579 209,100 199,130 213,484 Commercial real estate (1) 1,478,916 1,491,505 1,473,277 1,462,681 1,474,782 Residential real estate (2) 1,548,965 1,506,572 1,521,102 1,532,907 1,587,694 Home equity 122,345 124,806 127,608 130,009 136,469 Consumer 40,901 43,296 45,184 47,224 47,688 DDA overdrafts 6,503 2,700 3,662 2,707 2,497 Gross Loans $ 3,543,814 $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 Construction loans included in: (1) - Commercial real estate loans $ 11,783 $ 19,360 $ 43,904 $ 39,101 $ 40,449 (2) - Residential real estate loans 17,252 19,059 20,838 22,129 27,078 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Allowance for Credit Losses Balance at beginning of period $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 24,867 $ 24,549 $ 11,589 Charge-offs: Commercial and industrial - - (211 ) (34 ) (9 ) (245 ) (843 ) Commercial real estate (276 ) (392 ) (1,718 ) (1 ) (616 ) (2,387 ) (1,113 ) Residential real estate (68 ) (18 ) (86 ) (93 ) (139 ) (265 ) (1,250 ) Home equity (58 ) (47 ) (8 ) (64 ) (88 ) (177 ) (420 ) Consumer (13 ) (3 ) (79 ) (147 ) (27 ) (242 ) (192 ) DDA overdrafts (635 ) (633 ) (430 ) (453 ) (629 ) (2,151 ) (2,345 ) Total charge-offs (1,050 ) (1,093 ) (2,532 ) (792 ) (1,508 ) (5,467 ) (6,163 ) Recoveries: Commercial and industrial 31 69 25 46 74 171 91 Commercial real estate 27 18 15 164 150 224 525 Residential real estate 7 29 17 74 57 127 184 Home equity 6 58 3 23 47 90 136 Consumer 40 72 104 39 55 255 238 DDA overdrafts 354 307 308 413 333 1,382 1,467 Total recoveries 465 553 472 759 716 2,249 2,641 Net charge-offs (585 ) (540 ) (2,060 ) (33 ) (792 ) (3,218 ) (3,522 ) (Recovery of) provision for credit losses - (725 ) (2,000 ) (440 ) 474 (3,165 ) 10,722 Impact of Adopting ASC 326 - - - - - - 5,760 Balance at end of period $ 18,166 $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 18,166 $ 24,549 Loans outstanding $ 3,543,814 $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 Allowance as a percent of loans outstanding 0.51 % 0.53 % 0.57 % 0.68 % 0.68 % Allowance as a percent of non-performing loans 290.1 % 243.1 % 199.3 % 194.5 % 200.7 % Average loans outstanding $ 3,522,272 $ 3,535,497 $ 3,541,165 $ 3,585,790 $ 3,635,673 $ 3,545,978 $ 3,641,610 Net charge-offs (annualized) as a percent of average loans outstanding 0.07 % 0.06 % 0.23 % 0.00 % 0.09 % 0.09 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Nonaccrual Loans Residential real estate $ 2,809 $ 3,634 $ 2,482 $ 3,004 $ 2,968 Home equity 40 67 81 88 95 Commercial and industrial 996 531 820 1,200 768 Commercial real estate 2,373 3,355 6,383 7,792 8,401 Consumer - - - - - Total nonaccrual loans 6,218 7,587 9,766 12,084 12,232 Accruing loans past due 90 days or more 43 127 278 295 - Total non-performing loans 6,261 7,714 10,044 12,379 12,232 Other real estate owned 1,319 1,335 1,309 1,625 1,650 Total non-performing assets $ 7,580 $ 9,049 $ 11,353 $ 14,004 $ 13,882 Non-performing assets as a percent of loans and other real estate owned 0.21 % 0.26 % 0.32 % 0.39 % 0.38 % Past Due Loans Residential real estate $ 5,321 $ 5,258 $ 5,453 $ 4,092 $ 5,993 Home equity 618 688 523 449 575 Commercial and industrial 336 455 721 1,358 1,241 Commercial real estate 22 441 498 508 625 Consumer 60 35 12 10 113 DDA overdrafts 489 390 417 212 341 Total past due loans $ 6,846 $ 7,267 $ 7,624 $ 6,629 $ 8,888 Total past due loans as a percent of loans outstanding 0.19 % 0.21 % 0.22 % 0.19 % 0.25 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 16,943 $ 16,910 $ 17,788 $ 18,572 $ 19,226 Home equity 1,784 1,822 1,920 1,956 2,001 Commercial and industrial 414 430 - - - Commercial real estate 1,914 1,937 3,076 4,615 4,638 Consumer 225 221 203 211 277 Total TDRs $ 21,280 $ 21,320 $ 22,987 $ 25,354 $ 26,142 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2021 September 30, 2021 December 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) $ 1,645,167 $ 15,692 3.78 % $ 1,648,921 $ 15,813 3.80 % $ 1,744,952 $ 17,623 4.02 % Commercial, financial, and agriculture (2) 1,831,461 18,740 4.06 % 1,836,604 17,344 3.75 % 1,837,044 17,077 3.70 % Installment loans to individuals (2), (3) 45,644 691 6.01 % 49,972 714 5.67 % 53,677 800 5.93 % Previously securitized loans (4) *** 154 *** *** 91 *** *** 184 *** Total loans 3,522,272 35,277 3.97 % 3,535,497 33,962 3.81 % 3,635,673 35,684 3.90 % Securities: Taxable 1,171,340 5,753 1.95 % 1,136,519 6,144 2.14 % 976,897 5,500 2.24 % Tax-exempt (5) 239,096 1,551 2.57 % 245,551 1,590 2.57 % 238,198 1,587 2.65 % Total securities 1,410,436 7,304 2.05 % 1,382,070 7,734 2.22 % 1,215,095 7,087 2.32 % Deposits in depository institutions 588,678 217 0.15 % 544,843 196 0.14 % 275,106 60 0.09 % Total interest-earning assets 5,521,386 42,798 3.08 % 5,462,410 41,892 3.04 % 5,125,874 42,831 3.32 % Cash and due from banks 98,111 101,058 73,900 Premises and equipment, net 74,847 75,956 76,956 Goodwill and intangible assets 117,349 117,719 118,855 Other assets 216,780 220,420 231,309 Less: Allowance for credit losses (18,756 ) (20,407 ) (25,112 ) Total assets $ 6,009,717 $ 5,957,156 $ 5,601,782 Liabilities: Interest-bearing demand deposits $ 1,113,693 $ 131 0.05 % $ 1,093,243 $ 127 0.05 % $ 953,604 $ 171 0.07 % Savings deposits 1,338,747 173 0.05 % 1,315,462 169 0.05 % 1,148,717 225 0.08 % Time deposits (2) 1,087,280 1,406 0.51 % 1,126,553 1,659 0.58 % 1,278,698 3,801 1.18 % Short-term borrowings 314,937 132 0.17 % 282,722 115 0.16 % 287,059 120 0.17 % Total interest-bearing liabilities 3,854,657 1,842 0.19 % 3,817,980 2,070 0.22 % 3,668,078 4,317 0.47 % Noninterest-bearing demand deposits 1,394,599 1,356,745 1,130,084 Other liabilities 84,071 86,263 105,445 Stockholders' equity 676,390 696,168 698,175 Total liabilities and stockholders' equity $ 6,009,717 $ 5,957,156 $ 5,601,782 Net interest income $ 40,956 $ 39,822 $ 38,514 Net yield on earning assets 2.94 % 2.89 % 2.99 % (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 $ 1,106 $ 1,120 $ 962 (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 $ 149 $ 154 $ 153 Commercial, financial, and agriculture 243 265 304 Installment loans to individuals 15 21 29 Time deposits 48 48 155 $ 455 $ 488 $ 641 (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 $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Twelve Months Ended December 31, 2021 December 31, 2020 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,658,710 $ 64,492 3.89 % $ 1,768,789 $ 74,452 4.21 % Commercial, financial, and agriculture (2) 1,838,560 68,784 3.74 % 1,816,658 72,128 3.97 % Installment loans to individuals (2), (3) 48,708 2,831 5.81 % 56,163 3,319 5.91 % Previously securitized loans (4) *** 568 *** *** 599 *** Total loans 3,545,978 136,675 3.85 % 3,641,610 150,498 4.13 % Securities: Taxable 1,075,550 23,071 2.15 % 890,771 23,355 2.62 % Tax-exempt (5) 242,125 6,362 2.63 % 164,740 4,954 3.01 % Total securities 1,317,675 29,433 2.23 % 1,055,511 28,309 2.68 % Deposits in depository institutions 568,928 693 0.12 % 230,043 492 0.21 % Total interest-earning assets 5,432,581 166,801 3.07 % 4,927,164 179,299 3.64 % Cash and due from banks 92,847 76,173 Premises and equipment, net 76,069 77,670 Goodwill and intangible assets 117,899 119,471 Other assets 216,493 221,864 Less: Allowance for credit losses (21,922 ) (22,770 ) Total assets $ 5,913,967 $ 5,399,572 Liabilities: Interest-bearing demand deposits $ 1,071,628 $ 504 0.05 % $ 912,306 $ 1,005 0.11 % Savings deposits 1,291,225 689 0.05 % 1,071,727 1,591 0.15 % Time deposits (2) 1,157,502 8,213 0.71 % 1,329,841 19,927 1.50 % Short-term borrowings 298,413 489 0.16 % 253,456 993 0.39 % Long-term debt - - - 830 100 12.05 % Total interest-bearing liabilities 3,818,768 9,895 0.26 % 3,568,160 23,616 0.66 % Noninterest-bearing demand deposits 1,315,801 1,035,801 Other liabilities 84,377 100,166 Stockholders' equity 695,021 695,445 Total liabilities and stockholders' equity $ 5,913,967 $ 5,399,572 Net interest income $ 156,906 $ 155,683 Net yield on earning assets 2.89 % 3.16 % (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 $ 3,550 $ 1,842 (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 $ 620 $ 630 Commercial, financial, and agriculture 1,198 2,445 Installment loans to individuals 87 143 Time deposits 193 622 $ 2,098 $ 3,840 (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 Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Net Interest Income/Margin Net interest income ("GAAP") $ 40,631 $ 39,488 $ 37,914 $ 37,540 $ 38,181 $ 155,573 $ 154,644 Taxable equivalent adjustment 325 334 343 331 333 1,333 1,039 Net interest income, fully taxable equivalent $ 40,956 $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 156,906 $ 155,683 Average interest earning assets $ 5,521,386 $ 5,462,410 $ 5,459,564 $ 5,284,025 $ 5,125,874 $ 5,432,581 $ 4,927,164 Net Interest Margin 2.94 % 2.89 % 2.81 % 2.91 % 2.99 % 2.89 % 3.16 % Accretion related to fair value adjustments -0.03 % -0.04 % -0.05 % -0.04 % -0.05 % -0.04 % -0.08 % Net Interest Margin (excluding accretion) 2.91 % 2.85 % 2.76 % 2.87 % 2.94 % 2.85 % 3.08 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 11.34 % 11.37 % 11.78 % 11.74 % 12.18 % Effect of goodwill and other intangibles, net -1.76 % -1.78 % -1.80 % -1.81 % -1.85 % Tangible common equity to tangible assets 9.58 % 9.59 % 9.98 % 9.93 % 10.33 % Return on Tangible Equity Return on tangible equity ("GAAP") 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 15.6 % Impact of sale of VISA shares - - - - - - -2.4 % Return on tangible equity, excluding sale of VISA shares 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 13.2 % Return on Assets Return on assets ("GAAP") 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.66 % Impact of sale of VISA shares - - - - - - -0.24 % Return on assets, excluding sale of VISA shares 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.41 % View source version on businesswire.com: https://www.businesswire.com/news/home/20220125005036/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169 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 Annual Earnings By: City Holding Company via Business Wire January 25, 2022 at 07:30 AM EST City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.0 billion bank holding company headquartered in Charleston, West Virginia, today announced net income of $88.1 million and record diluted earnings of $5.66 per share for the year ended December 31, 2021. Net Interest Income The Company’s net interest income increased from $154.6 million for the year ended December 31, 2020 to $155.6 million for the year ended December 31, 2021. The Company’s tax equivalent net interest income increased $1.2 million, or 0.8%, from $155.7 million for the year ended December 31, 2020 to $156.9 million for the year ended December 31, 2021. The Company recognized $4.0 million of loan fees associated with PPP loans during 2021 as compared to $1.6 million during 2020. However, lower loan yields (which fell 29 basis points) decreased net interest income by $10.0 million. Additionally, lower average loan balances ($95.6 million) lowered net interest income by $4.2 million and a decrease in accretion from fair value adjustments decreased interest income by $1.7 million. Higher investment balances (which increased $262.2 million) increased net interest income by $7.2 million, while investment yields (which decreased by 45 basis points) decreased net interest income by $6.0 million. Lower rates paid on interest bearing liabilities (40 basis points) and lower average time deposit balances (down $172.3 million) increased net interest income by $11.7 million and $2.6 million, respectively. The Company’s reported net interest margin declined from 3.16% for the year ended December 31, 2020 to 2.89% for the year ended December 31, 2021. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 2.85% for the year ended December 31, 2021 and 3.08% for the year ended December 31, 2020. The Company’s net interest income increased from $39.5 million during the third quarter of 2021 to $40.6 million during the fourth quarter of 2021. During the fourth quarter of 2021, the Company’s tax equivalent net interest income increased $1.1 million, or 2.8%, to $40.9 million from $39.8 million during the third quarter of 2021. An increase in loan yields (which increased 16 basis points), largely due to interest recoveries on a loan that previously had been classified as a nonperforming loan, increased net interest income by $1.4 million, and lower rates paid on time deposits (which decreased 7 basis points) increased overall net interest income by $0.2 million. These increases were partially offset by lower investment yields (17 basis points) which lowered net interest income by $0.6 million. The Company’s reported net interest margin increased from 2.89% for the third quarter of 2021 to 2.94% for the fourth quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.91% for the quarter ended December 31, 2021 and 2.86% for the quarter ended September 30, 2021. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.38% at December 31, 2020 to 0.21% at December 31, 2021. Total nonperforming assets decreased from $13.9 million at December 31, 2020 to $7.6 million at December 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021. As a result of the Company’s quarterly analysis of the adequacy of the ACL, the Company did not record a provision for credit losses in the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for the year ended December 31, 2021, compared to a provision for credit losses of $0.5 million and $10.7 million for the comparable periods in 2020. The determination of the Company’s allowance for credit losses is largely dependent on expected unemployment ranges. Due to improvements in the outlook for unemployment ranges utilized by the Company and adjustments to other qualitative and other factors, during 2021 the Company partially recovered a portion of the provision for credit losses incurred in the quarter ended March 31, 2020 related to the COVID-19 pandemic. Non-interest Income Non-interest income was $69.6 million for 2021 as compared to $82.7 million for 2020. During 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605 shares) in a cash transaction that 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 $0.3 million of realized security gains on the sale of investment securities and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021 compared to $0.9 million of unrealized fair value losses on the Company’s equity securities during 2020. Exclusive of these items, non-interest income increased from $65.6 million for the year ended December 31, 2020 to $68.8 million for the year ended December 31, 2021. This increase was largely attributable to an increase of $3.9 million, or 17.0%, in bankcard revenues and a $0.7 million, or 8.8%, increase in trust and investment management fee income. These increases were partially offset by a decrease of $0.7 million, or 15.0%, in other income and a decrease of $0.5 million in bank owned life insurance due to lower death benefit proceeds received during 2021 compared to 2020. Non-interest income was $17.6 million during the quarter ended December 31, 2021 as compared to $17.7 million during the quarter ended December 31, 2020. During the fourth quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.8 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2020. Exclusive of these unrealized fair value gains, non-interest income increased from $16.9 million for the fourth quarter of 2020 to $17.6 million for the fourth quarter of 2021. This increase was largely attributable to higher bankcard revenues ($0.8 million, or 12.9%) and service charges ($0.3 million, or 4.2%). These increases were partially offset by a decrease in other income ($0.3 million). Non-interest Expenses Non-interest expenses increased from $115.3 million for 2020 to $117.2 million for 2021. This increase was primarily due to an increase in telecommunication expenses ($0.7 million), FDIC insurance expense ($0.7 million), bankcard expenses ($0.6 million), occupancy related expenses ($0.3 million), advertising expenses ($0.3 million), and equipment and software related expense ($0.3 million). These increases were partially offset by a decrease in other expenses ($0.6 million) and repossessed asset gains ($0.3 million). Non-interest expenses remained level at $28.6 million for both the quarter ended December 31, 2020 and the quarter ended December 31, 2021. A decrease in salaries and employee benefits expense of $0.7 million was essentially offset by increases in other expenses ($0.2 million), telecommunication expense ($0.2 million), and bankcard expenses ($0.1 million). Balance Sheet Trends Loans decreased $78.3 million (2.2%) from December 31, 2020 to $3.54 billion at December 31, 2021. PPP loans decreased $48.9 million from $55.4 million at December 31, 2020 to $6.6 million at December 31, 2021. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $29.4 million, (0.8%), from December 31, 2020 to $3.54 billion at December 31, 2021. Residential real estate loans decreased $38.7 million (2.4%); home equity loans decreased $14.1 million (10.4%); and consumer loans decreased $6.8 million (14.2%). These decreases were partially offset by increases in commercial and industrial loans ($22.1 million, or 7.5%) (excluding PPP loans). Total average depository balances for the year ended December 31, 2021 increased $486.5 million, or 11.2%, as compared to the year ended December 31, 2020. Average noninterest bearing demand deposits increased $280.0 million, average savings deposits increased $219.5 million, and average interest bearing demand deposits increased $159.3 million. These increases were partially offset by a decrease in average time deposits of $172.3 million. From December 31, 2020, to December 31, 2021, total demand deposit account households increased 2.6% and total demand deposit accounts increased 2.5%. Income Tax Expense The Company’s effective income tax rate for the quarter and year ended December 31, 2021 was 21.1% and 20.8%, respectively, compared to 17.0% and 19.5% for the comparable periods in 2020. Capitalization and Liquidity The Company’s loan to deposit ratio was 72.0% and the loan to asset ratio was 59.0% at December 31, 2021. The Company maintained investment securities totaling 23.9% of assets as of the same date. Because interest rates remain extremely low, at December 31, 2021 the company maintained significant cash and cash equivalent assets which totaled 10.5% of assets. The Company’s deposit mix is weighted toward checking and saving accounts that fund 64.2% of assets at December 31, 2021. Time deposits fund 17.8% of assets at December 31, 2021, but very few of these deposits are in accounts that have balances of more than $250,000. The Company continues to be strongly capitalized with tangible equity of $564 million at December 31, 2021. Due to the continued influx of deposits during 2021, the Company’s tangible equity ratio decreased from 10.3% at December 31, 2020 to 9.6% at December 31, 2021. At December 31, 2021, City National Bank’s Leverage Ratio was 8.45%, its Common Equity Tier I ratio was 14.35%, its Tier I Capital ratio was 14.35%, and its Total Risk-Based Capital ratio was 14.78%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 19, 2021, the Board approved a quarterly cash dividend of $0.60 cents per share payable January 31, 2022, to shareholders of record as of January 14, 2022. This represents a 3.45% increase from the $0.58 per share dividend paid on October 29, 2021. During the year ended December 31, 2021, the Company repurchased 760,000 common shares at a weighted average price of $77.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of December 31, 2021, the Company could repurchase approximately 315,000 shares under the current plan. 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 credit 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 December 31, 2021 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2021 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Earnings Net Interest Income (fully taxable equivalent) $ 40,956 $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 156,906 $ 155,683 Net Income available to common shareholders 23,386 22,732 22,148 19,814 22,222 88,080 89,595 Per Share Data Earnings per share available to common shareholders: Basic $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.67 $ 5.55 Diluted 1.54 1.47 1.41 1.25 1.40 5.66 5.55 Weighted average number of shares (in thousands): Basic 15,026 15,279 15,573 15,656 15,708 15,381 15,975 Diluted 15,056 15,302 15,594 15,687 15,733 15,407 15,995 Period-end number of shares (in thousands) 15,062 15,192 15,527 15,724 15,768 15,062 15,768 Cash dividends declared $ 0.60 $ 0.58 $ 0.58 $ 0.58 $ 0.58 $ 2.34 $ 2.29 Book value per share (period-end) $ 45.22 $ 44.58 $ 44.79 $ 43.99 $ 44.47 $ 45.22 $ 44.47 Tangible book value per share (period-end) 37.44 36.85 37.20 36.47 36.94 37.44 36.94 Market data: High closing price $ 83.14 $ 79.99 $ 83.85 $ 87.41 $ 70.77 $ 87.41 $ 82.40 Low closing price 76.52 72.29 74.44 69.05 56.98 69.05 55.18 Period-end closing price 81.79 77.91 75.24 81.78 69.55 81.79 69.55 Average daily volume (in thousands) 52 53 61 63 56 57 70 Treasury share activity: Treasury shares repurchased (in thousands) 131 337 217 75 81 760 573 Average treasury share repurchase price $ 78.93 $ 75.65 $ 78.75 $ 76.71 $ 60.32 $ 77.21 $ 63.68 Key Ratios (percent) Return on average assets 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.66 % Return on average tangible equity 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 15.6 % Yield on interest earning assets 3.08 % 3.04 % 3.00 % 3.17 % 3.32 % 3.07 % 3.64 % Cost of interest bearing liabilities 0.19 % 0.22 % 0.27 % 0.37 % 0.47 % 0.26 % 0.66 % Net Interest Margin 2.94 % 2.89 % 2.81 % 2.91 % 2.99 % 2.89 % 3.16 % Non-interest income as a percent of total revenue 30.2 % 31.1 % 31.0 % 30.4 % 30.7 % 30.8 % 34.8 % Efficiency Ratio 48.3 % 50.0 % 52.8 % 54.3 % 51.0 % 51.3 % 51.3 % Price/Earnings Ratio (a) 13.27 13.22 13.35 16.30 12.41 14.42 12.52 Capital (period-end) Average Shareholders' Equity to Average Assets 11.25 % 11.69 % 11.81 % 12.30 % 12.46 % Tangible equity to tangible assets 9.58 % 9.59 % 9.98 % 9.93 % 10.33 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.08 % 16.11 % 16.40 % 16.76 % 16.18 % Tier I 16.08 % 16.11 % 16.40 % 16.76 % 16.18 % Total 16.51 % 16.56 % 16.88 % 17.33 % 16.75 % Leverage 9.44 % 9.46 % 9.70 % 10.06 % 10.22 % City National Bank risk based capital ratios (b): CET I 14.35 % 14.76 % 14.82 % 14.75 % 14.10 % Tier I 14.35 % 14.76 % 14.82 % 14.75 % 14.10 % Total 14.78 % 15.21 % 15.30 % 15.33 % 14.68 % Leverage 8.45 % 8.73 % 8.80 % 8.91 % 8.97 % Other (period-end) Branches 94 94 94 94 94 FTE 905 921 912 916 926 Assets per FTE (in thousands) $ 6,637 $ 6,463 $ 6,477 $ 6,434 $ 6,219 Deposits per FTE (in thousands) 5,445 5,308 5,271 5,236 5,024 (a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes). (b) December 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 Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Interest Income Interest and fees on loans $ 35,277 $ 33,961 $ 33,114 $ 34,324 $ 35,685 $ 136,676 $ 150,498 Interest on investment securities: Taxable 5,753 6,144 5,932 5,242 5,500 23,071 23,355 Tax-exempt 1,226 1,257 1,291 1,253 1,254 5,027 3,914 Interest on deposits in depository institutions 217 196 162 118 60 693 492 Total Interest Income 42,473 41,558 40,499 40,937 42,499 165,467 178,259 Interest Expense Interest on deposits 1,710 1,955 2,460 3,280 4,198 9,405 22,522 Interest on short-term borrowings 132 115 125 117 120 489 993 Interest on long-term debt - - - - - - 100 Total Interest Expense 1,842 2,070 2,585 3,397 4,318 9,894 23,615 Net Interest Income 40,631 39,488 37,914 37,540 38,181 155,573 154,644 (Recovery of) provision for credit losses - (725 ) (2,000 ) (440 ) 474 (3,165 ) 10,722 Net Interest Income After (Recovery of) Provision for Credit Losses 40,631 40,213 39,914 37,980 37,707 158,738 143,922 Non-Interest Income Net gains on sale of investment securities - - 29 283 6 312 62 Unrealized gains (losses) recognized on equity securities still held 52 93 410 (51 ) 835 504 (863 ) Service charges 7,057 6,706 5,895 5,881 6,771 25,539 25,733 Bankcard revenue 6,762 6,791 7,221 6,213 5,991 26,987 23,059 Trust and investment management fee income 2,198 2,172 2,012 2,033 2,162 8,415 7,736 Bank owned life insurance 748 747 940 1,460 813 3,895 4,424 Sale of VISA shares - - - - - - 17,837 Other income 799 1,438 941 811 1,143 3,989 4,692 Total Non-Interest Income 17,616 17,947 17,448 16,630 17,721 69,641 82,680 Non-Interest Expense Salaries and employee benefits 15,299 15,321 15,559 15,671 15,989 61,850 62,074 Occupancy related expense 2,429 2,507 2,525 2,622 2,447 10,083 9,765 Equipment and software related expense 2,733 2,554 2,655 2,544 2,660 10,486 10,200 FDIC insurance expense 400 396 382 405 363 1,583 884 Advertising 582 804 824 881 538 3,091 2,776 Bankcard expenses 1,576 1,549 1,746 1,584 1,443 6,455 5,893 Postage, delivery, and statement mailings 590 573 568 592 546 2,323 2,268 Office supplies 378 406 371 392 413 1,547 1,556 Legal and professional fees 405 610 589 675 438 2,279 2,176 Telecommunications 702 790 676 690 540 2,858 2,129 Repossessed asset (gains) losses, net of expenses (29 ) (108 ) 1 79 (68 ) (57 ) 245 Other expenses 3,559 3,776 3,678 3,674 3,332 14,687 15,324 Total Non-Interest Expense 28,624 29,178 29,574 29,809 28,641 117,185 115,290 Income Before Income Taxes 29,623 28,982 27,788 24,801 26,787 111,194 111,312 Income tax expense 6,237 6,250 5,640 4,987 4,565 23,114 21,717 Net Income Available to Common Shareholders $ 23,386 $ 22,732 $ 22,148 $ 19,814 $ 22,222 $ 88,080 $ 89,595 Distributed earnings allocated to common shareholders $ 8,949 $ 8,726 $ 8,921 $ 9,037 $ 9,053 $ 34,901 $ 35,745 Undistributed earnings allocated to common shareholders 14,211 13,786 13,021 10,598 12,947 52,336 52,963 Net earnings allocated to common shareholders $ 23,160 $ 22,512 $ 21,942 $ 19,635 $ 22,000 $ 87,237 $ 88,708 Average common shares outstanding 15,026 15,279 15,573 15,656 15,708 15,381 15,975 Shares for diluted earnings per share 15,056 15,302 15,594 15,687 15,733 15,407 15,995 Basic earnings per common share $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.67 $ 5.55 Diluted earnings per common share $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.66 $ 5.55 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Assets Cash and due from banks $ 101,804 $ 103,841 $ 97,523 $ 97,709 $ 77,412 Interest-bearing deposits in depository institutions 532,827 535,708 512,367 659,090 451,247 Cash and cash equivalents 634,631 639,549 609,890 756,799 528,659 Investment securities available-for-sale, at fair value 1,408,165 1,372,077 1,339,436 1,183,253 1,176,797 Other securities 25,531 25,497 25,793 29,174 29,364 Total investment securities 1,433,696 1,397,574 1,365,229 1,212,427 1,206,161 Gross loans 3,543,814 3,521,925 3,529,416 3,546,723 3,622,119 Allowance for credit losses (18,166 ) (18,751 ) (20,016 ) (24,076 ) (24,549 ) Net loans 3,525,648 3,503,174 3,509,400 3,522,647 3,597,570 Bank owned life insurance 120,978 120,238 119,491 118,976 118,243 Premises and equipment, net 74,071 75,156 76,263 76,529 76,925 Accrued interest receivable 15,627 16,224 15,967 16,231 15,793 Net deferred tax assets 63 90 - 1,395 - Intangible assets 117,121 117,489 117,857 118,224 118,592 Other assets 81,860 82,419 89,958 71,142 96,697 Total Assets $ 6,003,695 $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 Liabilities Deposits: Noninterest-bearing $ 1,373,125 $ 1,311,464 $ 1,279,932 $ 1,244,175 $ 1,176,990 Interest-bearing: Demand deposits 1,135,848 1,139,033 1,070,004 1,077,749 1,027,201 Savings deposits 1,347,448 1,332,910 1,301,219 1,265,038 1,188,003 Time deposits 1,068,915 1,104,069 1,153,391 1,209,873 1,260,022 Total deposits 4,925,336 4,887,476 4,804,546 4,796,835 4,652,216 Short-term borrowings Customer repurchase agreements 312,458 296,642 311,316 316,003 295,956 Net deferred tax liabilities - - 2,310 - 3,202 Other liabilities 84,796 90,499 90,407 89,847 106,160 Total Liabilities 5,322,590 5,274,617 5,208,579 5,202,685 5,057,534 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,942 170,300 169,674 170,526 171,304 Retained earnings 641,826 627,463 613,553 600,396 589,988 Cost of common stock in treasury (193,542 ) (183,303 ) (157,936 ) (142,484 ) (139,038 ) Accumulated other comprehensive income: Unrealized gain on securities available-for-sale 17,745 20,878 28,227 21,289 36,894 Underfunded pension liability (3,485 ) (5,661 ) (5,661 ) (5,661 ) (5,661 ) Total Accumulated Other Comprehensive Income 14,260 15,217 22,566 15,628 31,233 Total Stockholders' Equity 681,105 677,296 695,476 691,685 701,106 Total Liabilities and Stockholders' Equity $ 6,003,695 $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 Regulatory Capital Total CET 1 capital $ 555,532 $ 550,426 $ 561,317 $ 563,523 $ 557,641 Total tier 1 capital 555,532 550,426 561,317 563,523 557,641 Total risk-based capital 570,336 565,712 577,543 582,816 577,292 Total risk-weighted assets 3,453,893 3,417,020 3,421,764 3,362,595 3,446,774 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Commercial and industrial $ 346,184 $ 353,046 $ 358,583 $ 371,195 $ 372,989 1-4 Family 107,873 108,913 108,079 108,131 109,812 Hotels 311,315 297,341 290,119 293,176 294,464 Multi-family 215,677 215,307 212,715 212,561 215,671 Non Residential Non-Owner Occupied 639,818 664,365 653,264 649,683 641,351 Non Residential Owner Occupied 204,233 205,579 209,100 199,130 213,484 Commercial real estate (1) 1,478,916 1,491,505 1,473,277 1,462,681 1,474,782 Residential real estate (2) 1,548,965 1,506,572 1,521,102 1,532,907 1,587,694 Home equity 122,345 124,806 127,608 130,009 136,469 Consumer 40,901 43,296 45,184 47,224 47,688 DDA overdrafts 6,503 2,700 3,662 2,707 2,497 Gross Loans $ 3,543,814 $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 Construction loans included in: (1) - Commercial real estate loans $ 11,783 $ 19,360 $ 43,904 $ 39,101 $ 40,449 (2) - Residential real estate loans 17,252 19,059 20,838 22,129 27,078 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Allowance for Credit Losses Balance at beginning of period $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 24,867 $ 24,549 $ 11,589 Charge-offs: Commercial and industrial - - (211 ) (34 ) (9 ) (245 ) (843 ) Commercial real estate (276 ) (392 ) (1,718 ) (1 ) (616 ) (2,387 ) (1,113 ) Residential real estate (68 ) (18 ) (86 ) (93 ) (139 ) (265 ) (1,250 ) Home equity (58 ) (47 ) (8 ) (64 ) (88 ) (177 ) (420 ) Consumer (13 ) (3 ) (79 ) (147 ) (27 ) (242 ) (192 ) DDA overdrafts (635 ) (633 ) (430 ) (453 ) (629 ) (2,151 ) (2,345 ) Total charge-offs (1,050 ) (1,093 ) (2,532 ) (792 ) (1,508 ) (5,467 ) (6,163 ) Recoveries: Commercial and industrial 31 69 25 46 74 171 91 Commercial real estate 27 18 15 164 150 224 525 Residential real estate 7 29 17 74 57 127 184 Home equity 6 58 3 23 47 90 136 Consumer 40 72 104 39 55 255 238 DDA overdrafts 354 307 308 413 333 1,382 1,467 Total recoveries 465 553 472 759 716 2,249 2,641 Net charge-offs (585 ) (540 ) (2,060 ) (33 ) (792 ) (3,218 ) (3,522 ) (Recovery of) provision for credit losses - (725 ) (2,000 ) (440 ) 474 (3,165 ) 10,722 Impact of Adopting ASC 326 - - - - - - 5,760 Balance at end of period $ 18,166 $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 18,166 $ 24,549 Loans outstanding $ 3,543,814 $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 Allowance as a percent of loans outstanding 0.51 % 0.53 % 0.57 % 0.68 % 0.68 % Allowance as a percent of non-performing loans 290.1 % 243.1 % 199.3 % 194.5 % 200.7 % Average loans outstanding $ 3,522,272 $ 3,535,497 $ 3,541,165 $ 3,585,790 $ 3,635,673 $ 3,545,978 $ 3,641,610 Net charge-offs (annualized) as a percent of average loans outstanding 0.07 % 0.06 % 0.23 % 0.00 % 0.09 % 0.09 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Nonaccrual Loans Residential real estate $ 2,809 $ 3,634 $ 2,482 $ 3,004 $ 2,968 Home equity 40 67 81 88 95 Commercial and industrial 996 531 820 1,200 768 Commercial real estate 2,373 3,355 6,383 7,792 8,401 Consumer - - - - - Total nonaccrual loans 6,218 7,587 9,766 12,084 12,232 Accruing loans past due 90 days or more 43 127 278 295 - Total non-performing loans 6,261 7,714 10,044 12,379 12,232 Other real estate owned 1,319 1,335 1,309 1,625 1,650 Total non-performing assets $ 7,580 $ 9,049 $ 11,353 $ 14,004 $ 13,882 Non-performing assets as a percent of loans and other real estate owned 0.21 % 0.26 % 0.32 % 0.39 % 0.38 % Past Due Loans Residential real estate $ 5,321 $ 5,258 $ 5,453 $ 4,092 $ 5,993 Home equity 618 688 523 449 575 Commercial and industrial 336 455 721 1,358 1,241 Commercial real estate 22 441 498 508 625 Consumer 60 35 12 10 113 DDA overdrafts 489 390 417 212 341 Total past due loans $ 6,846 $ 7,267 $ 7,624 $ 6,629 $ 8,888 Total past due loans as a percent of loans outstanding 0.19 % 0.21 % 0.22 % 0.19 % 0.25 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 16,943 $ 16,910 $ 17,788 $ 18,572 $ 19,226 Home equity 1,784 1,822 1,920 1,956 2,001 Commercial and industrial 414 430 - - - Commercial real estate 1,914 1,937 3,076 4,615 4,638 Consumer 225 221 203 211 277 Total TDRs $ 21,280 $ 21,320 $ 22,987 $ 25,354 $ 26,142 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2021 September 30, 2021 December 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) $ 1,645,167 $ 15,692 3.78 % $ 1,648,921 $ 15,813 3.80 % $ 1,744,952 $ 17,623 4.02 % Commercial, financial, and agriculture (2) 1,831,461 18,740 4.06 % 1,836,604 17,344 3.75 % 1,837,044 17,077 3.70 % Installment loans to individuals (2), (3) 45,644 691 6.01 % 49,972 714 5.67 % 53,677 800 5.93 % Previously securitized loans (4) *** 154 *** *** 91 *** *** 184 *** Total loans 3,522,272 35,277 3.97 % 3,535,497 33,962 3.81 % 3,635,673 35,684 3.90 % Securities: Taxable 1,171,340 5,753 1.95 % 1,136,519 6,144 2.14 % 976,897 5,500 2.24 % Tax-exempt (5) 239,096 1,551 2.57 % 245,551 1,590 2.57 % 238,198 1,587 2.65 % Total securities 1,410,436 7,304 2.05 % 1,382,070 7,734 2.22 % 1,215,095 7,087 2.32 % Deposits in depository institutions 588,678 217 0.15 % 544,843 196 0.14 % 275,106 60 0.09 % Total interest-earning assets 5,521,386 42,798 3.08 % 5,462,410 41,892 3.04 % 5,125,874 42,831 3.32 % Cash and due from banks 98,111 101,058 73,900 Premises and equipment, net 74,847 75,956 76,956 Goodwill and intangible assets 117,349 117,719 118,855 Other assets 216,780 220,420 231,309 Less: Allowance for credit losses (18,756 ) (20,407 ) (25,112 ) Total assets $ 6,009,717 $ 5,957,156 $ 5,601,782 Liabilities: Interest-bearing demand deposits $ 1,113,693 $ 131 0.05 % $ 1,093,243 $ 127 0.05 % $ 953,604 $ 171 0.07 % Savings deposits 1,338,747 173 0.05 % 1,315,462 169 0.05 % 1,148,717 225 0.08 % Time deposits (2) 1,087,280 1,406 0.51 % 1,126,553 1,659 0.58 % 1,278,698 3,801 1.18 % Short-term borrowings 314,937 132 0.17 % 282,722 115 0.16 % 287,059 120 0.17 % Total interest-bearing liabilities 3,854,657 1,842 0.19 % 3,817,980 2,070 0.22 % 3,668,078 4,317 0.47 % Noninterest-bearing demand deposits 1,394,599 1,356,745 1,130,084 Other liabilities 84,071 86,263 105,445 Stockholders' equity 676,390 696,168 698,175 Total liabilities and stockholders' equity $ 6,009,717 $ 5,957,156 $ 5,601,782 Net interest income $ 40,956 $ 39,822 $ 38,514 Net yield on earning assets 2.94 % 2.89 % 2.99 % (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 $ 1,106 $ 1,120 $ 962 (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 $ 149 $ 154 $ 153 Commercial, financial, and agriculture 243 265 304 Installment loans to individuals 15 21 29 Time deposits 48 48 155 $ 455 $ 488 $ 641 (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 $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Twelve Months Ended December 31, 2021 December 31, 2020 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,658,710 $ 64,492 3.89 % $ 1,768,789 $ 74,452 4.21 % Commercial, financial, and agriculture (2) 1,838,560 68,784 3.74 % 1,816,658 72,128 3.97 % Installment loans to individuals (2), (3) 48,708 2,831 5.81 % 56,163 3,319 5.91 % Previously securitized loans (4) *** 568 *** *** 599 *** Total loans 3,545,978 136,675 3.85 % 3,641,610 150,498 4.13 % Securities: Taxable 1,075,550 23,071 2.15 % 890,771 23,355 2.62 % Tax-exempt (5) 242,125 6,362 2.63 % 164,740 4,954 3.01 % Total securities 1,317,675 29,433 2.23 % 1,055,511 28,309 2.68 % Deposits in depository institutions 568,928 693 0.12 % 230,043 492 0.21 % Total interest-earning assets 5,432,581 166,801 3.07 % 4,927,164 179,299 3.64 % Cash and due from banks 92,847 76,173 Premises and equipment, net 76,069 77,670 Goodwill and intangible assets 117,899 119,471 Other assets 216,493 221,864 Less: Allowance for credit losses (21,922 ) (22,770 ) Total assets $ 5,913,967 $ 5,399,572 Liabilities: Interest-bearing demand deposits $ 1,071,628 $ 504 0.05 % $ 912,306 $ 1,005 0.11 % Savings deposits 1,291,225 689 0.05 % 1,071,727 1,591 0.15 % Time deposits (2) 1,157,502 8,213 0.71 % 1,329,841 19,927 1.50 % Short-term borrowings 298,413 489 0.16 % 253,456 993 0.39 % Long-term debt - - - 830 100 12.05 % Total interest-bearing liabilities 3,818,768 9,895 0.26 % 3,568,160 23,616 0.66 % Noninterest-bearing demand deposits 1,315,801 1,035,801 Other liabilities 84,377 100,166 Stockholders' equity 695,021 695,445 Total liabilities and stockholders' equity $ 5,913,967 $ 5,399,572 Net interest income $ 156,906 $ 155,683 Net yield on earning assets 2.89 % 3.16 % (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 $ 3,550 $ 1,842 (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 $ 620 $ 630 Commercial, financial, and agriculture 1,198 2,445 Installment loans to individuals 87 143 Time deposits 193 622 $ 2,098 $ 3,840 (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 Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Net Interest Income/Margin Net interest income ("GAAP") $ 40,631 $ 39,488 $ 37,914 $ 37,540 $ 38,181 $ 155,573 $ 154,644 Taxable equivalent adjustment 325 334 343 331 333 1,333 1,039 Net interest income, fully taxable equivalent $ 40,956 $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 156,906 $ 155,683 Average interest earning assets $ 5,521,386 $ 5,462,410 $ 5,459,564 $ 5,284,025 $ 5,125,874 $ 5,432,581 $ 4,927,164 Net Interest Margin 2.94 % 2.89 % 2.81 % 2.91 % 2.99 % 2.89 % 3.16 % Accretion related to fair value adjustments -0.03 % -0.04 % -0.05 % -0.04 % -0.05 % -0.04 % -0.08 % Net Interest Margin (excluding accretion) 2.91 % 2.85 % 2.76 % 2.87 % 2.94 % 2.85 % 3.08 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 11.34 % 11.37 % 11.78 % 11.74 % 12.18 % Effect of goodwill and other intangibles, net -1.76 % -1.78 % -1.80 % -1.81 % -1.85 % Tangible common equity to tangible assets 9.58 % 9.59 % 9.98 % 9.93 % 10.33 % Return on Tangible Equity Return on tangible equity ("GAAP") 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 15.6 % Impact of sale of VISA shares - - - - - - -2.4 % Return on tangible equity, excluding sale of VISA shares 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 13.2 % Return on Assets Return on assets ("GAAP") 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.66 % Impact of sale of VISA shares - - - - - - -0.24 % Return on assets, excluding sale of VISA shares 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.41 % View source version on businesswire.com: https://www.businesswire.com/news/home/20220125005036/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.0 billion bank holding company headquartered in Charleston, West Virginia, today announced net income of $88.1 million and record diluted earnings of $5.66 per share for the year ended December 31, 2021. Net Interest Income The Company’s net interest income increased from $154.6 million for the year ended December 31, 2020 to $155.6 million for the year ended December 31, 2021. The Company’s tax equivalent net interest income increased $1.2 million, or 0.8%, from $155.7 million for the year ended December 31, 2020 to $156.9 million for the year ended December 31, 2021. The Company recognized $4.0 million of loan fees associated with PPP loans during 2021 as compared to $1.6 million during 2020. However, lower loan yields (which fell 29 basis points) decreased net interest income by $10.0 million. Additionally, lower average loan balances ($95.6 million) lowered net interest income by $4.2 million and a decrease in accretion from fair value adjustments decreased interest income by $1.7 million. Higher investment balances (which increased $262.2 million) increased net interest income by $7.2 million, while investment yields (which decreased by 45 basis points) decreased net interest income by $6.0 million. Lower rates paid on interest bearing liabilities (40 basis points) and lower average time deposit balances (down $172.3 million) increased net interest income by $11.7 million and $2.6 million, respectively. The Company’s reported net interest margin declined from 3.16% for the year ended December 31, 2020 to 2.89% for the year ended December 31, 2021. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 2.85% for the year ended December 31, 2021 and 3.08% for the year ended December 31, 2020. The Company’s net interest income increased from $39.5 million during the third quarter of 2021 to $40.6 million during the fourth quarter of 2021. During the fourth quarter of 2021, the Company’s tax equivalent net interest income increased $1.1 million, or 2.8%, to $40.9 million from $39.8 million during the third quarter of 2021. An increase in loan yields (which increased 16 basis points), largely due to interest recoveries on a loan that previously had been classified as a nonperforming loan, increased net interest income by $1.4 million, and lower rates paid on time deposits (which decreased 7 basis points) increased overall net interest income by $0.2 million. These increases were partially offset by lower investment yields (17 basis points) which lowered net interest income by $0.6 million. The Company’s reported net interest margin increased from 2.89% for the third quarter of 2021 to 2.94% for the fourth quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.91% for the quarter ended December 31, 2021 and 2.86% for the quarter ended September 30, 2021. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.38% at December 31, 2020 to 0.21% at December 31, 2021. Total nonperforming assets decreased from $13.9 million at December 31, 2020 to $7.6 million at December 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021. As a result of the Company’s quarterly analysis of the adequacy of the ACL, the Company did not record a provision for credit losses in the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for the year ended December 31, 2021, compared to a provision for credit losses of $0.5 million and $10.7 million for the comparable periods in 2020. The determination of the Company’s allowance for credit losses is largely dependent on expected unemployment ranges. Due to improvements in the outlook for unemployment ranges utilized by the Company and adjustments to other qualitative and other factors, during 2021 the Company partially recovered a portion of the provision for credit losses incurred in the quarter ended March 31, 2020 related to the COVID-19 pandemic. Non-interest Income Non-interest income was $69.6 million for 2021 as compared to $82.7 million for 2020. During 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605 shares) in a cash transaction that 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 $0.3 million of realized security gains on the sale of investment securities and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021 compared to $0.9 million of unrealized fair value losses on the Company’s equity securities during 2020. Exclusive of these items, non-interest income increased from $65.6 million for the year ended December 31, 2020 to $68.8 million for the year ended December 31, 2021. This increase was largely attributable to an increase of $3.9 million, or 17.0%, in bankcard revenues and a $0.7 million, or 8.8%, increase in trust and investment management fee income. These increases were partially offset by a decrease of $0.7 million, or 15.0%, in other income and a decrease of $0.5 million in bank owned life insurance due to lower death benefit proceeds received during 2021 compared to 2020. Non-interest income was $17.6 million during the quarter ended December 31, 2021 as compared to $17.7 million during the quarter ended December 31, 2020. During the fourth quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.8 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2020. Exclusive of these unrealized fair value gains, non-interest income increased from $16.9 million for the fourth quarter of 2020 to $17.6 million for the fourth quarter of 2021. This increase was largely attributable to higher bankcard revenues ($0.8 million, or 12.9%) and service charges ($0.3 million, or 4.2%). These increases were partially offset by a decrease in other income ($0.3 million). Non-interest Expenses Non-interest expenses increased from $115.3 million for 2020 to $117.2 million for 2021. This increase was primarily due to an increase in telecommunication expenses ($0.7 million), FDIC insurance expense ($0.7 million), bankcard expenses ($0.6 million), occupancy related expenses ($0.3 million), advertising expenses ($0.3 million), and equipment and software related expense ($0.3 million). These increases were partially offset by a decrease in other expenses ($0.6 million) and repossessed asset gains ($0.3 million). Non-interest expenses remained level at $28.6 million for both the quarter ended December 31, 2020 and the quarter ended December 31, 2021. A decrease in salaries and employee benefits expense of $0.7 million was essentially offset by increases in other expenses ($0.2 million), telecommunication expense ($0.2 million), and bankcard expenses ($0.1 million). Balance Sheet Trends Loans decreased $78.3 million (2.2%) from December 31, 2020 to $3.54 billion at December 31, 2021. PPP loans decreased $48.9 million from $55.4 million at December 31, 2020 to $6.6 million at December 31, 2021. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $29.4 million, (0.8%), from December 31, 2020 to $3.54 billion at December 31, 2021. Residential real estate loans decreased $38.7 million (2.4%); home equity loans decreased $14.1 million (10.4%); and consumer loans decreased $6.8 million (14.2%). These decreases were partially offset by increases in commercial and industrial loans ($22.1 million, or 7.5%) (excluding PPP loans). Total average depository balances for the year ended December 31, 2021 increased $486.5 million, or 11.2%, as compared to the year ended December 31, 2020. Average noninterest bearing demand deposits increased $280.0 million, average savings deposits increased $219.5 million, and average interest bearing demand deposits increased $159.3 million. These increases were partially offset by a decrease in average time deposits of $172.3 million. From December 31, 2020, to December 31, 2021, total demand deposit account households increased 2.6% and total demand deposit accounts increased 2.5%. Income Tax Expense The Company’s effective income tax rate for the quarter and year ended December 31, 2021 was 21.1% and 20.8%, respectively, compared to 17.0% and 19.5% for the comparable periods in 2020. Capitalization and Liquidity The Company’s loan to deposit ratio was 72.0% and the loan to asset ratio was 59.0% at December 31, 2021. The Company maintained investment securities totaling 23.9% of assets as of the same date. Because interest rates remain extremely low, at December 31, 2021 the company maintained significant cash and cash equivalent assets which totaled 10.5% of assets. The Company’s deposit mix is weighted toward checking and saving accounts that fund 64.2% of assets at December 31, 2021. Time deposits fund 17.8% of assets at December 31, 2021, but very few of these deposits are in accounts that have balances of more than $250,000. The Company continues to be strongly capitalized with tangible equity of $564 million at December 31, 2021. Due to the continued influx of deposits during 2021, the Company’s tangible equity ratio decreased from 10.3% at December 31, 2020 to 9.6% at December 31, 2021. At December 31, 2021, City National Bank’s Leverage Ratio was 8.45%, its Common Equity Tier I ratio was 14.35%, its Tier I Capital ratio was 14.35%, and its Total Risk-Based Capital ratio was 14.78%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 19, 2021, the Board approved a quarterly cash dividend of $0.60 cents per share payable January 31, 2022, to shareholders of record as of January 14, 2022. This represents a 3.45% increase from the $0.58 per share dividend paid on October 29, 2021. During the year ended December 31, 2021, the Company repurchased 760,000 common shares at a weighted average price of $77.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of December 31, 2021, the Company could repurchase approximately 315,000 shares under the current plan. 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 credit 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 December 31, 2021 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2021 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Earnings Net Interest Income (fully taxable equivalent) $ 40,956 $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 156,906 $ 155,683 Net Income available to common shareholders 23,386 22,732 22,148 19,814 22,222 88,080 89,595 Per Share Data Earnings per share available to common shareholders: Basic $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.67 $ 5.55 Diluted 1.54 1.47 1.41 1.25 1.40 5.66 5.55 Weighted average number of shares (in thousands): Basic 15,026 15,279 15,573 15,656 15,708 15,381 15,975 Diluted 15,056 15,302 15,594 15,687 15,733 15,407 15,995 Period-end number of shares (in thousands) 15,062 15,192 15,527 15,724 15,768 15,062 15,768 Cash dividends declared $ 0.60 $ 0.58 $ 0.58 $ 0.58 $ 0.58 $ 2.34 $ 2.29 Book value per share (period-end) $ 45.22 $ 44.58 $ 44.79 $ 43.99 $ 44.47 $ 45.22 $ 44.47 Tangible book value per share (period-end) 37.44 36.85 37.20 36.47 36.94 37.44 36.94 Market data: High closing price $ 83.14 $ 79.99 $ 83.85 $ 87.41 $ 70.77 $ 87.41 $ 82.40 Low closing price 76.52 72.29 74.44 69.05 56.98 69.05 55.18 Period-end closing price 81.79 77.91 75.24 81.78 69.55 81.79 69.55 Average daily volume (in thousands) 52 53 61 63 56 57 70 Treasury share activity: Treasury shares repurchased (in thousands) 131 337 217 75 81 760 573 Average treasury share repurchase price $ 78.93 $ 75.65 $ 78.75 $ 76.71 $ 60.32 $ 77.21 $ 63.68 Key Ratios (percent) Return on average assets 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.66 % Return on average tangible equity 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 15.6 % Yield on interest earning assets 3.08 % 3.04 % 3.00 % 3.17 % 3.32 % 3.07 % 3.64 % Cost of interest bearing liabilities 0.19 % 0.22 % 0.27 % 0.37 % 0.47 % 0.26 % 0.66 % Net Interest Margin 2.94 % 2.89 % 2.81 % 2.91 % 2.99 % 2.89 % 3.16 % Non-interest income as a percent of total revenue 30.2 % 31.1 % 31.0 % 30.4 % 30.7 % 30.8 % 34.8 % Efficiency Ratio 48.3 % 50.0 % 52.8 % 54.3 % 51.0 % 51.3 % 51.3 % Price/Earnings Ratio (a) 13.27 13.22 13.35 16.30 12.41 14.42 12.52 Capital (period-end) Average Shareholders' Equity to Average Assets 11.25 % 11.69 % 11.81 % 12.30 % 12.46 % Tangible equity to tangible assets 9.58 % 9.59 % 9.98 % 9.93 % 10.33 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.08 % 16.11 % 16.40 % 16.76 % 16.18 % Tier I 16.08 % 16.11 % 16.40 % 16.76 % 16.18 % Total 16.51 % 16.56 % 16.88 % 17.33 % 16.75 % Leverage 9.44 % 9.46 % 9.70 % 10.06 % 10.22 % City National Bank risk based capital ratios (b): CET I 14.35 % 14.76 % 14.82 % 14.75 % 14.10 % Tier I 14.35 % 14.76 % 14.82 % 14.75 % 14.10 % Total 14.78 % 15.21 % 15.30 % 15.33 % 14.68 % Leverage 8.45 % 8.73 % 8.80 % 8.91 % 8.97 % Other (period-end) Branches 94 94 94 94 94 FTE 905 921 912 916 926 Assets per FTE (in thousands) $ 6,637 $ 6,463 $ 6,477 $ 6,434 $ 6,219 Deposits per FTE (in thousands) 5,445 5,308 5,271 5,236 5,024 (a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes). (b) December 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 Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Interest Income Interest and fees on loans $ 35,277 $ 33,961 $ 33,114 $ 34,324 $ 35,685 $ 136,676 $ 150,498 Interest on investment securities: Taxable 5,753 6,144 5,932 5,242 5,500 23,071 23,355 Tax-exempt 1,226 1,257 1,291 1,253 1,254 5,027 3,914 Interest on deposits in depository institutions 217 196 162 118 60 693 492 Total Interest Income 42,473 41,558 40,499 40,937 42,499 165,467 178,259 Interest Expense Interest on deposits 1,710 1,955 2,460 3,280 4,198 9,405 22,522 Interest on short-term borrowings 132 115 125 117 120 489 993 Interest on long-term debt - - - - - - 100 Total Interest Expense 1,842 2,070 2,585 3,397 4,318 9,894 23,615 Net Interest Income 40,631 39,488 37,914 37,540 38,181 155,573 154,644 (Recovery of) provision for credit losses - (725 ) (2,000 ) (440 ) 474 (3,165 ) 10,722 Net Interest Income After (Recovery of) Provision for Credit Losses 40,631 40,213 39,914 37,980 37,707 158,738 143,922 Non-Interest Income Net gains on sale of investment securities - - 29 283 6 312 62 Unrealized gains (losses) recognized on equity securities still held 52 93 410 (51 ) 835 504 (863 ) Service charges 7,057 6,706 5,895 5,881 6,771 25,539 25,733 Bankcard revenue 6,762 6,791 7,221 6,213 5,991 26,987 23,059 Trust and investment management fee income 2,198 2,172 2,012 2,033 2,162 8,415 7,736 Bank owned life insurance 748 747 940 1,460 813 3,895 4,424 Sale of VISA shares - - - - - - 17,837 Other income 799 1,438 941 811 1,143 3,989 4,692 Total Non-Interest Income 17,616 17,947 17,448 16,630 17,721 69,641 82,680 Non-Interest Expense Salaries and employee benefits 15,299 15,321 15,559 15,671 15,989 61,850 62,074 Occupancy related expense 2,429 2,507 2,525 2,622 2,447 10,083 9,765 Equipment and software related expense 2,733 2,554 2,655 2,544 2,660 10,486 10,200 FDIC insurance expense 400 396 382 405 363 1,583 884 Advertising 582 804 824 881 538 3,091 2,776 Bankcard expenses 1,576 1,549 1,746 1,584 1,443 6,455 5,893 Postage, delivery, and statement mailings 590 573 568 592 546 2,323 2,268 Office supplies 378 406 371 392 413 1,547 1,556 Legal and professional fees 405 610 589 675 438 2,279 2,176 Telecommunications 702 790 676 690 540 2,858 2,129 Repossessed asset (gains) losses, net of expenses (29 ) (108 ) 1 79 (68 ) (57 ) 245 Other expenses 3,559 3,776 3,678 3,674 3,332 14,687 15,324 Total Non-Interest Expense 28,624 29,178 29,574 29,809 28,641 117,185 115,290 Income Before Income Taxes 29,623 28,982 27,788 24,801 26,787 111,194 111,312 Income tax expense 6,237 6,250 5,640 4,987 4,565 23,114 21,717 Net Income Available to Common Shareholders $ 23,386 $ 22,732 $ 22,148 $ 19,814 $ 22,222 $ 88,080 $ 89,595 Distributed earnings allocated to common shareholders $ 8,949 $ 8,726 $ 8,921 $ 9,037 $ 9,053 $ 34,901 $ 35,745 Undistributed earnings allocated to common shareholders 14,211 13,786 13,021 10,598 12,947 52,336 52,963 Net earnings allocated to common shareholders $ 23,160 $ 22,512 $ 21,942 $ 19,635 $ 22,000 $ 87,237 $ 88,708 Average common shares outstanding 15,026 15,279 15,573 15,656 15,708 15,381 15,975 Shares for diluted earnings per share 15,056 15,302 15,594 15,687 15,733 15,407 15,995 Basic earnings per common share $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.67 $ 5.55 Diluted earnings per common share $ 1.54 $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 5.66 $ 5.55 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Assets Cash and due from banks $ 101,804 $ 103,841 $ 97,523 $ 97,709 $ 77,412 Interest-bearing deposits in depository institutions 532,827 535,708 512,367 659,090 451,247 Cash and cash equivalents 634,631 639,549 609,890 756,799 528,659 Investment securities available-for-sale, at fair value 1,408,165 1,372,077 1,339,436 1,183,253 1,176,797 Other securities 25,531 25,497 25,793 29,174 29,364 Total investment securities 1,433,696 1,397,574 1,365,229 1,212,427 1,206,161 Gross loans 3,543,814 3,521,925 3,529,416 3,546,723 3,622,119 Allowance for credit losses (18,166 ) (18,751 ) (20,016 ) (24,076 ) (24,549 ) Net loans 3,525,648 3,503,174 3,509,400 3,522,647 3,597,570 Bank owned life insurance 120,978 120,238 119,491 118,976 118,243 Premises and equipment, net 74,071 75,156 76,263 76,529 76,925 Accrued interest receivable 15,627 16,224 15,967 16,231 15,793 Net deferred tax assets 63 90 - 1,395 - Intangible assets 117,121 117,489 117,857 118,224 118,592 Other assets 81,860 82,419 89,958 71,142 96,697 Total Assets $ 6,003,695 $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 Liabilities Deposits: Noninterest-bearing $ 1,373,125 $ 1,311,464 $ 1,279,932 $ 1,244,175 $ 1,176,990 Interest-bearing: Demand deposits 1,135,848 1,139,033 1,070,004 1,077,749 1,027,201 Savings deposits 1,347,448 1,332,910 1,301,219 1,265,038 1,188,003 Time deposits 1,068,915 1,104,069 1,153,391 1,209,873 1,260,022 Total deposits 4,925,336 4,887,476 4,804,546 4,796,835 4,652,216 Short-term borrowings Customer repurchase agreements 312,458 296,642 311,316 316,003 295,956 Net deferred tax liabilities - - 2,310 - 3,202 Other liabilities 84,796 90,499 90,407 89,847 106,160 Total Liabilities 5,322,590 5,274,617 5,208,579 5,202,685 5,057,534 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,942 170,300 169,674 170,526 171,304 Retained earnings 641,826 627,463 613,553 600,396 589,988 Cost of common stock in treasury (193,542 ) (183,303 ) (157,936 ) (142,484 ) (139,038 ) Accumulated other comprehensive income: Unrealized gain on securities available-for-sale 17,745 20,878 28,227 21,289 36,894 Underfunded pension liability (3,485 ) (5,661 ) (5,661 ) (5,661 ) (5,661 ) Total Accumulated Other Comprehensive Income 14,260 15,217 22,566 15,628 31,233 Total Stockholders' Equity 681,105 677,296 695,476 691,685 701,106 Total Liabilities and Stockholders' Equity $ 6,003,695 $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 Regulatory Capital Total CET 1 capital $ 555,532 $ 550,426 $ 561,317 $ 563,523 $ 557,641 Total tier 1 capital 555,532 550,426 561,317 563,523 557,641 Total risk-based capital 570,336 565,712 577,543 582,816 577,292 Total risk-weighted assets 3,453,893 3,417,020 3,421,764 3,362,595 3,446,774 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Commercial and industrial $ 346,184 $ 353,046 $ 358,583 $ 371,195 $ 372,989 1-4 Family 107,873 108,913 108,079 108,131 109,812 Hotels 311,315 297,341 290,119 293,176 294,464 Multi-family 215,677 215,307 212,715 212,561 215,671 Non Residential Non-Owner Occupied 639,818 664,365 653,264 649,683 641,351 Non Residential Owner Occupied 204,233 205,579 209,100 199,130 213,484 Commercial real estate (1) 1,478,916 1,491,505 1,473,277 1,462,681 1,474,782 Residential real estate (2) 1,548,965 1,506,572 1,521,102 1,532,907 1,587,694 Home equity 122,345 124,806 127,608 130,009 136,469 Consumer 40,901 43,296 45,184 47,224 47,688 DDA overdrafts 6,503 2,700 3,662 2,707 2,497 Gross Loans $ 3,543,814 $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 Construction loans included in: (1) - Commercial real estate loans $ 11,783 $ 19,360 $ 43,904 $ 39,101 $ 40,449 (2) - Residential real estate loans 17,252 19,059 20,838 22,129 27,078 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Allowance for Credit Losses Balance at beginning of period $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 24,867 $ 24,549 $ 11,589 Charge-offs: Commercial and industrial - - (211 ) (34 ) (9 ) (245 ) (843 ) Commercial real estate (276 ) (392 ) (1,718 ) (1 ) (616 ) (2,387 ) (1,113 ) Residential real estate (68 ) (18 ) (86 ) (93 ) (139 ) (265 ) (1,250 ) Home equity (58 ) (47 ) (8 ) (64 ) (88 ) (177 ) (420 ) Consumer (13 ) (3 ) (79 ) (147 ) (27 ) (242 ) (192 ) DDA overdrafts (635 ) (633 ) (430 ) (453 ) (629 ) (2,151 ) (2,345 ) Total charge-offs (1,050 ) (1,093 ) (2,532 ) (792 ) (1,508 ) (5,467 ) (6,163 ) Recoveries: Commercial and industrial 31 69 25 46 74 171 91 Commercial real estate 27 18 15 164 150 224 525 Residential real estate 7 29 17 74 57 127 184 Home equity 6 58 3 23 47 90 136 Consumer 40 72 104 39 55 255 238 DDA overdrafts 354 307 308 413 333 1,382 1,467 Total recoveries 465 553 472 759 716 2,249 2,641 Net charge-offs (585 ) (540 ) (2,060 ) (33 ) (792 ) (3,218 ) (3,522 ) (Recovery of) provision for credit losses - (725 ) (2,000 ) (440 ) 474 (3,165 ) 10,722 Impact of Adopting ASC 326 - - - - - - 5,760 Balance at end of period $ 18,166 $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 18,166 $ 24,549 Loans outstanding $ 3,543,814 $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 Allowance as a percent of loans outstanding 0.51 % 0.53 % 0.57 % 0.68 % 0.68 % Allowance as a percent of non-performing loans 290.1 % 243.1 % 199.3 % 194.5 % 200.7 % Average loans outstanding $ 3,522,272 $ 3,535,497 $ 3,541,165 $ 3,585,790 $ 3,635,673 $ 3,545,978 $ 3,641,610 Net charge-offs (annualized) as a percent of average loans outstanding 0.07 % 0.06 % 0.23 % 0.00 % 0.09 % 0.09 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Nonaccrual Loans Residential real estate $ 2,809 $ 3,634 $ 2,482 $ 3,004 $ 2,968 Home equity 40 67 81 88 95 Commercial and industrial 996 531 820 1,200 768 Commercial real estate 2,373 3,355 6,383 7,792 8,401 Consumer - - - - - Total nonaccrual loans 6,218 7,587 9,766 12,084 12,232 Accruing loans past due 90 days or more 43 127 278 295 - Total non-performing loans 6,261 7,714 10,044 12,379 12,232 Other real estate owned 1,319 1,335 1,309 1,625 1,650 Total non-performing assets $ 7,580 $ 9,049 $ 11,353 $ 14,004 $ 13,882 Non-performing assets as a percent of loans and other real estate owned 0.21 % 0.26 % 0.32 % 0.39 % 0.38 % Past Due Loans Residential real estate $ 5,321 $ 5,258 $ 5,453 $ 4,092 $ 5,993 Home equity 618 688 523 449 575 Commercial and industrial 336 455 721 1,358 1,241 Commercial real estate 22 441 498 508 625 Consumer 60 35 12 10 113 DDA overdrafts 489 390 417 212 341 Total past due loans $ 6,846 $ 7,267 $ 7,624 $ 6,629 $ 8,888 Total past due loans as a percent of loans outstanding 0.19 % 0.21 % 0.22 % 0.19 % 0.25 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 16,943 $ 16,910 $ 17,788 $ 18,572 $ 19,226 Home equity 1,784 1,822 1,920 1,956 2,001 Commercial and industrial 414 430 - - - Commercial real estate 1,914 1,937 3,076 4,615 4,638 Consumer 225 221 203 211 277 Total TDRs $ 21,280 $ 21,320 $ 22,987 $ 25,354 $ 26,142 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2021 September 30, 2021 December 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) $ 1,645,167 $ 15,692 3.78 % $ 1,648,921 $ 15,813 3.80 % $ 1,744,952 $ 17,623 4.02 % Commercial, financial, and agriculture (2) 1,831,461 18,740 4.06 % 1,836,604 17,344 3.75 % 1,837,044 17,077 3.70 % Installment loans to individuals (2), (3) 45,644 691 6.01 % 49,972 714 5.67 % 53,677 800 5.93 % Previously securitized loans (4) *** 154 *** *** 91 *** *** 184 *** Total loans 3,522,272 35,277 3.97 % 3,535,497 33,962 3.81 % 3,635,673 35,684 3.90 % Securities: Taxable 1,171,340 5,753 1.95 % 1,136,519 6,144 2.14 % 976,897 5,500 2.24 % Tax-exempt (5) 239,096 1,551 2.57 % 245,551 1,590 2.57 % 238,198 1,587 2.65 % Total securities 1,410,436 7,304 2.05 % 1,382,070 7,734 2.22 % 1,215,095 7,087 2.32 % Deposits in depository institutions 588,678 217 0.15 % 544,843 196 0.14 % 275,106 60 0.09 % Total interest-earning assets 5,521,386 42,798 3.08 % 5,462,410 41,892 3.04 % 5,125,874 42,831 3.32 % Cash and due from banks 98,111 101,058 73,900 Premises and equipment, net 74,847 75,956 76,956 Goodwill and intangible assets 117,349 117,719 118,855 Other assets 216,780 220,420 231,309 Less: Allowance for credit losses (18,756 ) (20,407 ) (25,112 ) Total assets $ 6,009,717 $ 5,957,156 $ 5,601,782 Liabilities: Interest-bearing demand deposits $ 1,113,693 $ 131 0.05 % $ 1,093,243 $ 127 0.05 % $ 953,604 $ 171 0.07 % Savings deposits 1,338,747 173 0.05 % 1,315,462 169 0.05 % 1,148,717 225 0.08 % Time deposits (2) 1,087,280 1,406 0.51 % 1,126,553 1,659 0.58 % 1,278,698 3,801 1.18 % Short-term borrowings 314,937 132 0.17 % 282,722 115 0.16 % 287,059 120 0.17 % Total interest-bearing liabilities 3,854,657 1,842 0.19 % 3,817,980 2,070 0.22 % 3,668,078 4,317 0.47 % Noninterest-bearing demand deposits 1,394,599 1,356,745 1,130,084 Other liabilities 84,071 86,263 105,445 Stockholders' equity 676,390 696,168 698,175 Total liabilities and stockholders' equity $ 6,009,717 $ 5,957,156 $ 5,601,782 Net interest income $ 40,956 $ 39,822 $ 38,514 Net yield on earning assets 2.94 % 2.89 % 2.99 % (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 $ 1,106 $ 1,120 $ 962 (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 $ 149 $ 154 $ 153 Commercial, financial, and agriculture 243 265 304 Installment loans to individuals 15 21 29 Time deposits 48 48 155 $ 455 $ 488 $ 641 (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 $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Twelve Months Ended December 31, 2021 December 31, 2020 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,658,710 $ 64,492 3.89 % $ 1,768,789 $ 74,452 4.21 % Commercial, financial, and agriculture (2) 1,838,560 68,784 3.74 % 1,816,658 72,128 3.97 % Installment loans to individuals (2), (3) 48,708 2,831 5.81 % 56,163 3,319 5.91 % Previously securitized loans (4) *** 568 *** *** 599 *** Total loans 3,545,978 136,675 3.85 % 3,641,610 150,498 4.13 % Securities: Taxable 1,075,550 23,071 2.15 % 890,771 23,355 2.62 % Tax-exempt (5) 242,125 6,362 2.63 % 164,740 4,954 3.01 % Total securities 1,317,675 29,433 2.23 % 1,055,511 28,309 2.68 % Deposits in depository institutions 568,928 693 0.12 % 230,043 492 0.21 % Total interest-earning assets 5,432,581 166,801 3.07 % 4,927,164 179,299 3.64 % Cash and due from banks 92,847 76,173 Premises and equipment, net 76,069 77,670 Goodwill and intangible assets 117,899 119,471 Other assets 216,493 221,864 Less: Allowance for credit losses (21,922 ) (22,770 ) Total assets $ 5,913,967 $ 5,399,572 Liabilities: Interest-bearing demand deposits $ 1,071,628 $ 504 0.05 % $ 912,306 $ 1,005 0.11 % Savings deposits 1,291,225 689 0.05 % 1,071,727 1,591 0.15 % Time deposits (2) 1,157,502 8,213 0.71 % 1,329,841 19,927 1.50 % Short-term borrowings 298,413 489 0.16 % 253,456 993 0.39 % Long-term debt - - - 830 100 12.05 % Total interest-bearing liabilities 3,818,768 9,895 0.26 % 3,568,160 23,616 0.66 % Noninterest-bearing demand deposits 1,315,801 1,035,801 Other liabilities 84,377 100,166 Stockholders' equity 695,021 695,445 Total liabilities and stockholders' equity $ 5,913,967 $ 5,399,572 Net interest income $ 156,906 $ 155,683 Net yield on earning assets 2.89 % 3.16 % (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 $ 3,550 $ 1,842 (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 $ 620 $ 630 Commercial, financial, and agriculture 1,198 2,445 Installment loans to individuals 87 143 Time deposits 193 622 $ 2,098 $ 3,840 (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 Twelve Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Net Interest Income/Margin Net interest income ("GAAP") $ 40,631 $ 39,488 $ 37,914 $ 37,540 $ 38,181 $ 155,573 $ 154,644 Taxable equivalent adjustment 325 334 343 331 333 1,333 1,039 Net interest income, fully taxable equivalent $ 40,956 $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 156,906 $ 155,683 Average interest earning assets $ 5,521,386 $ 5,462,410 $ 5,459,564 $ 5,284,025 $ 5,125,874 $ 5,432,581 $ 4,927,164 Net Interest Margin 2.94 % 2.89 % 2.81 % 2.91 % 2.99 % 2.89 % 3.16 % Accretion related to fair value adjustments -0.03 % -0.04 % -0.05 % -0.04 % -0.05 % -0.04 % -0.08 % Net Interest Margin (excluding accretion) 2.91 % 2.85 % 2.76 % 2.87 % 2.94 % 2.85 % 3.08 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 11.34 % 11.37 % 11.78 % 11.74 % 12.18 % Effect of goodwill and other intangibles, net -1.76 % -1.78 % -1.80 % -1.81 % -1.85 % Tangible common equity to tangible assets 9.58 % 9.59 % 9.98 % 9.93 % 10.33 % Return on Tangible Equity Return on tangible equity ("GAAP") 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 15.6 % Impact of sale of VISA shares - - - - - - -2.4 % Return on tangible equity, excluding sale of VISA shares 16.7 % 15.7 % 15.2 % 13.5 % 15.3 % 15.3 % 13.2 % Return on Assets Return on assets ("GAAP") 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.66 % Impact of sale of VISA shares - - - - - - -0.24 % Return on assets, excluding sale of VISA shares 1.56 % 1.53 % 1.49 % 1.38 % 1.59 % 1.49 % 1.41 % View source version on businesswire.com: https://www.businesswire.com/news/home/20220125005036/en/