Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries City Holding Company Announces Quarterly Results By: City Holding Company via Business Wire October 24, 2023 at 07:30 AM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $29.9 million and diluted earnings of $1.98 per share for the quarter ended September 30, 2023. For the third quarter of 2023, the Company achieved a return on assets of 1.94% and a return on tangible equity of 24.1%. Net Interest Income The Company’s net interest income increased approximately $0.1 million, or 0.2%, from $55.5 million during the second quarter of 2023 to $55.6 million during the third quarter of 2023. The Company’s tax equivalent net interest income increased $0.1 million, or 0.2%, from $55.8 million for the second quarter of 2023 to $55.9 million for the third quarter of 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $2.6 million due to an increase in loan yields (net of loan fees and accretion) of 22 basis points and by $0.8 million due to an increase in the yield on investment securities of 19 basis points. In addition, net interest income increased $0.8 million due to an increase in balances of loans of $60.6 million from the quarter ended June 30, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (26 basis points) which decreased net interest income by $2.4 million and lower balances of deposits in depository institutions of $133.1 million that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 4.00% for the second quarter of 2023 to 4.03% for the third quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned declined slightly from 0.17%, or $6.5 million, at June 30, 2023 to 0.15%, or $6.0 million, at September 30, 2023. Total past due loans increased from $7.4 million, or 0.19% of total loans outstanding, at June 30, 2023, to $10.1 million, or 0.25% of total loans outstanding at September 30, 2023. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.2 million in the third quarter of 2023, compared to a provision for credit losses of $0.7 million for the comparable period in 2022, and a provision for credit losses of $0.4 million for the second quarter of 2023. The provision for credit losses in the third quarter was primarily the result of the downgrade of a commercial loan and loan growth partially offset by net recoveries during the quarter. Non-interest Income Non-interest income was $17.4 million during the quarter ended September 30, 2023, as compared to $18.2 million during the quarter ended September 30, 2022. During the third quarter of 2023, the Company reported $0.7 million of realized security losses. Exclusive of the realized security loss, non-interest income decreased $0.1 million, or 0.6%, from $18.2 million for the third quarter of 2022 to $18.1 million for the third quarter of 2023. This decrease was largely attributable to a decrease of $0.4 million, or 4.8%, in service fees that was partially offset by an increase of $0.3 million, or 11.6%, in trust and investment management fee income. Non-interest Expenses Non-interest expenses increased $3.5 million, or 11.2%, from $31.5 million in the third quarter of 2022 to $35.0 million in the third quarter of 2023. This increase was largely due to an increase in other expenses of $1.2 million and an increase in salaries and employee benefits of $0.9 million due to the acquisition of Citizens ($0.5 million) and salary adjustments. In addition, bankcard expenses increased $0.8 million and FDIC insurance expenses increased $0.5 million. Balance Sheet Trends Gross loans increased $85.3 million (2.2%) from June 30, 2023 to $4.01 billion at September 30, 2023. Commercial real estate loans increased $48.0 million (3.1%) and residential real estate loans increased $21.7 million (1.2%) during the quarter ended September 30, 2023. In addition, home equity loans increased $8.6 million (5.7%) and commercial and industrial loans increased $6.8 million (1.6%). Period-end deposit balances decreased $69.9 million from June 30, 2023, to September 30, 2023. Total average depository balances decreased $116.8 million, or 2.3%, from the quarter ended June 30, 2023 to the quarter ended September 30, 2023. Average noninterest-bearing demand deposit balances decreased $60.5 million, average savings deposit balances decreased $51.4 million, and interest-bearing demand deposit balances decreased $27.6 million. These decreases were partially offset by an increase in average time balances of $22.7 million. Income Tax Expense The Company’s effective income tax rate for the third quarter of 2023 was 21.1% compared to 19.8% for the year ended December 31, 2022 and 21.3% for the quarter ended September 30, 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 81.0% and its loan to asset ratio was 66.0% at September 30, 2023. The Company maintained investment securities totaling 22.8% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 64.8% of assets at September 30, 2023. Time deposits fund 16.6% of assets at September 30, 2023, with only 11.7% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company. City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of September 30, 2023, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, $764.7 million of City National’s investment securities were unpledged at September 30, 2023. The Company continues to be strongly capitalized with tangible equity of $447 million at September 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.6% at September 30, 2023. At September 30, 2023, City National’s Leverage Ratio was 9.6%, its Common Equity Tier I ratio was 14.7%, its Tier I Capital ratio was 14.7%, and its Total Risk-Based Capital ratio was 15.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On September 27, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.715 per share payable October 31, 2023, to shareholders of record as of October 13, 2023. This represents a 10.0% increase from the $0.65 per share dividend paid on July 31, 2023. During the quarter ended September 30, 2023, the Company repurchased 109,000 common shares at a weighted average price of $89.33 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2023, the Company could repurchase 220,000 additional shares under the current program. City National operates 99 branches across West Virginia, Kentucky, Virginia, and Ohio. On October 20, 2023, City National closed one of the two branches located in Nicholasville, Kentucky due to the proximity (less than one mile) from an existing City National branch. 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, 2022 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) 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; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) 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; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) 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 September 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 55,855 $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 165,379 $ 128,961 Net Income available to common shareholders 29,839 32,733 24,341 30,672 27,374 86,913 71,408 Per Share Data Earnings per share available to common shareholders: Basic $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 5.78 $ 4.75 Diluted 1.98 2.16 1.63 2.05 1.83 5.77 4.75 Weighted average number of shares (in thousands): Basic 14,922 14,994 14,818 14,756 14,776 14,906 14,878 Diluted 14,945 15,012 14,844 14,785 14,800 14,928 14,901 Period-end number of shares (in thousands) 14,901 15,007 15,260 14,788 14,856 14,901 14,856 Cash dividends declared $ 0.72 $ 0.65 $ 0.65 $ 0.65 $ 0.65 $ 2.02 $ 1.85 Book value per share (period-end) $ 40.94 $ 42.39 $ 42.66 $ 39.08 $ 36.91 $ 40.94 $ 36.91 Tangible book value per share (period-end) 29.98 31.50 31.91 31.25 29.09 29.98 29.09 Market data: High closing price $ 99.49 $ 97.92 $ 100.27 $ 101.94 $ 90.24 $ 100.27 $ 90.24 Low closing price 87.51 83.57 89.17 89.32 78.40 83.57 73.88 Period-end closing price 90.35 89.99 90.88 93.09 88.69 90.35 88.69 Average daily volume (in thousands) 62 80 84 75 58 76 68 Treasury share activity: Treasury shares repurchased (in thousands) 109 269 218 69 9 597 255 Average treasury share repurchase price $ 89.33 $ 88.93 $ 92.10 $ 93.12 $ 80.24 $ 90.16 $ 78.36 Key Ratios (percent) Return on average assets 1.94 % 2.12 % 1.63 % 2.08 % 1.83 % 1.91 % 1.59 % Return on average tangible equity 24.1 % 27.4 % 19.9 % 27.3 % 21.8 % 23.9 % 18.3 % Yield on interest earning assets 5.08 % 4.87 % 4.66 % 4.23 % 3.72 % 4.87 % 3.27 % Cost of interest bearing liabilities 1.46 % 1.22 % 0.86 % 0.48 % 0.21 % 1.18 % 0.18 % Net Interest Margin 4.03 % 4.00 % 4.05 % 3.89 % 3.57 % 4.02 % 3.14 % Non-interest income as a percent of total revenue 24.6 % 27.1 % 24.7 % 26.5 % 27.2 % 25.5 % 29.5 % Efficiency Ratio 46.4 % 44.6 % 45.7 % 45.3 % 46.3 % 45.6 % 49.2 % Price/Earnings Ratio (a) 11.40 10.40 13.95 11.30 12.08 11.73 13.99 Capital (period-end) Average Shareholders' Equity to Average Assets 10.73 % 10.38 % 10.31 % 9.57 % 10.32 % Tangible equity to tangible assets 7.55 % 7.90 % 8.05 % 8.02 % 7.41 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.36 % 15.47 % 15.64 % 16.23 % 15.82 % Tier I 15.36 % 15.47 % 15.64 % 16.23 % 15.82 % Total 15.89 % 16.01 % 16.18 % 16.62 % 16.22 % Leverage 10.05 % 9.80 % 10.20 % 10.01 % 9.74 % City National Bank risk based capital ratios (b): CET I 14.73 % 14.82 % 14.08 % 13.88 % 14.68 % Tier I 14.73 % 14.82 % 14.08 % 13.88 % 14.68 % Total 15.27 % 15.36 % 14.63 % 14.28 % 15.07 % Leverage 9.61 % 9.36 % 9.18 % 8.55 % 9.05 % Other (period-end) Branches 99 99 99 94 94 FTE 966 963 958 909 903 Assets per FTE (in thousands) $ 6,291 $ 6,383 $ 6,483 $ 6,467 $ 6,588 Deposits per FTE (in thousands) 5,120 5,208 5,362 5,357 5,492 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) September 30, 2023 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 Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Interest Income Interest and fees on loans $ 55,582 $ 52,352 $ 47,004 $ 42,963 $ 38,493 $ 154,939 $ 103,575 Interest on investment securities: Taxable 12,432 11,794 11,773 11,119 9,556 35,999 23,327 Tax-exempt 910 950 1,162 1,262 1,228 3,022 3,650 Interest on deposits in depository institutions 1,265 2,585 1,591 1,244 1,530 5,440 2,549 Total Interest Income 70,189 67,681 61,530 56,588 50,807 199,400 133,101 Interest Expense Interest on deposits 10,551 8,567 5,690 3,010 1,585 24,808 4,433 Interest on short-term borrowings 2,990 2,963 2,381 1,533 440 8,334 677 Interest on long-term debt 1,034 649 - - - 1,683 - Total Interest Expense 14,575 12,179 8,071 4,543 2,025 34,825 5,110 Net Interest Income 55,614 55,502 53,459 52,045 48,782 164,575 127,991 Provision for (Recovery of) credit losses 200 425 2,918 500 730 3,543 (26 ) Net Interest Income After Provision for (Recovery of) Credit Losses 55,414 55,077 50,541 51,545 48,052 161,032 128,017 Non-Interest Income Net (losses) gains on sale of investment securities (730 ) - 773 4 - 43 - Unrealized (losses) gains recognized on equity securities still held - (294 ) 361 (262 ) 1 67 (1,322 ) Service charges 7,124 6,906 6,563 7,056 7,487 20,593 21,281 Bankcard revenue 7,058 7,190 6,603 6,791 7,052 20,851 20,558 Trust and investment management fee income 2,409 2,339 2,252 2,343 2,158 7,000 6,455 Bank owned life insurance 807 3,208 804 1,813 754 4,819 3,746 Other income 742 952 1,326 791 792 3,020 2,825 Total Non-Interest Income 17,410 20,301 18,682 18,536 18,244 56,393 53,543 Non-Interest Expense Salaries and employee benefits 18,289 18,429 17,673 17,148 17,398 54,391 49,386 Occupancy related expense 2,950 2,811 2,640 2,725 2,664 8,401 7,993 Equipment and software related expense 2,830 2,883 3,092 3,341 2,949 8,805 8,452 FDIC insurance expense 919 690 445 413 416 2,054 1,259 Advertising 790 974 760 802 854 2,524 2,603 Bankcard expenses 2,188 1,736 1,509 1,356 1,405 5,433 4,676 Postage, delivery, and statement mailings 668 596 647 597 578 1,911 1,765 Office supplies 457 591 420 441 466 1,468 1,303 Legal and professional fees 529 558 470 610 532 1,557 1,584 Telecommunications 568 623 606 627 651 1,797 1,988 Repossessed asset losses (gains), net of expenses 40 22 16 54 (3 ) 78 4 Merger related expenses 2 - 5,645 268 - 5,647 - Other expenses 4,798 4,848 4,700 4,203 3,591 14,346 10,701 Total Non-Interest Expense 35,028 34,761 38,623 32,585 31,501 108,412 91,714 Income Before Income Taxes 37,796 40,617 30,600 37,496 34,795 109,013 89,846 Income tax expense 7,957 7,884 6,259 6,824 7,421 22,100 18,438 Net Income Available to Common Shareholders $ 29,839 $ 32,733 $ 24,341 $ 30,672 $ 27,374 $ 86,913 $ 71,408 Distributed earnings allocated to common shareholders $ 10,554 $ 9,668 $ 9,833 $ 9,521 $ 9,564 $ 29,744 $ 27,220 Undistributed earnings allocated to common shareholders 19,004 22,774 14,294 20,857 17,555 56,356 43,509 Net earnings allocated to common shareholders $ 29,558 $ 32,442 $ 24,127 $ 30,378 $ 27,119 $ 86,100 $ 70,729 Average common shares outstanding 14,922 14,994 14,818 14,756 14,776 14,906 14,878 Shares for diluted earnings per share 14,945 15,012 14,844 14,785 14,800 14,928 14,901 Basic earnings per common share $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 5.78 $ 4.75 Diluted earnings per common share $ 1.98 $ 2.16 $ 1.63 $ 2.05 $ 1.83 $ 5.77 $ 4.75 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Assets Cash and due from banks $ 62,085 $ 66,350 $ 69,804 $ 68,333 $ 65,051 Interest-bearing deposits in depository institutions 48,631 164,931 233,006 131,667 233,302 Cash and cash equivalents 110,716 231,281 302,810 200,000 298,353 Investment securities available-for-sale, at fair value 1,358,219 1,419,933 1,456,259 1,505,520 1,489,392 Other securities 29,022 29,262 24,728 23,807 24,372 Total investment securities 1,387,241 1,449,195 1,480,987 1,529,327 1,513,764 Gross loans 4,007,482 3,922,142 3,894,686 3,646,258 3,628,752 Allowance for credit losses (23,128 ) (22,751 ) (22,724 ) (17,108 ) (17,011 ) Net loans 3,984,354 3,899,391 3,871,962 3,629,150 3,611,741 Bank owned life insurance 117,979 117,173 124,238 120,674 121,283 Premises and equipment, net 72,682 73,118 73,430 70,786 71,686 Accrued interest receivable 19,223 17,973 18,395 18,287 17,256 Net deferred tax assets 58,811 46,944 42,146 44,884 49,888 Goodwill and intangible assets 163,461 163,426 164,099 115,735 116,081 Other assets 161,659 148,333 132,715 149,263 147,716 Total Assets $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 Liabilities Deposits: Noninterest-bearing $ 1,333,474 $ 1,373,106 $ 1,420,990 $ 1,351,415 $ 1,429,281 Interest-bearing: Demand deposits 1,319,783 1,337,445 1,356,017 1,233,482 1,160,970 Savings deposits 1,282,642 1,343,571 1,397,523 1,396,869 1,427,785 Time deposits 1,009,235 960,941 962,235 888,100 939,769 Total deposits 4,945,134 5,015,063 5,136,765 4,869,866 4,957,805 Short-term borrowings Customer repurchase agreements 278,671 271,714 293,256 290,964 304,807 Long-term debt 100,000 100,000 - - - Other liabilities 142,187 123,865 129,711 139,424 136,868 Total Liabilities 5,465,992 5,510,642 5,559,732 5,300,254 5,399,480 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 177,113 176,746 177,529 170,980 170,138 Retained earnings 763,425 744,248 721,727 706,696 685,657 Cost of common stock in treasury (211,430 ) (201,973 ) (179,436 ) (215,955 ) (209,644 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (163,171 ) (127,026 ) (112,967 ) (128,066 ) (141,997 ) Underfunded pension liability (3,422 ) (3,422 ) (3,422 ) (3,422 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (166,593 ) (130,448 ) (116,389 ) (131,488 ) (145,482 ) Total Stockholders' Equity 610,134 636,192 651,050 577,852 548,288 Total Liabilities and Stockholders' Equity $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 Regulatory Capital Total CET 1 capital $ 615,798 $ 605,661 $ 606,675 $ 598,068 $ 582,213 Total tier 1 capital 615,798 605,661 606,675 598,068 582,213 Total risk-based capital 637,245 626,730 627,718 612,654 596,708 Total risk-weighted assets 4,009,798 3,913,870 3,878,994 3,685,207 3,679,511 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Commercial and industrial $ 424,647 $ 417,847 $ 390,861 $ 373,890 $ 375,735 1-4 Family 135,226 123,701 119,017 116,192 109,710 Hotels 321,236 324,745 327,554 340,404 355,001 Multi-family 192,329 191,483 195,042 174,786 186,440 Non Residential Non-Owner Occupied 713,353 673,921 679,782 585,964 569,369 Non Residential Owner Occupied 222,544 222,852 223,096 174,961 177,673 Commercial real estate (1) 1,584,688 1,536,702 1,544,491 1,392,307 1,398,193 Residential real estate (2) 1,768,358 1,746,618 1,737,604 1,693,523 1,678,770 Home equity 159,630 151,012 151,341 134,317 130,837 Consumer 65,586 65,201 66,994 48,806 41,902 DDA overdrafts 4,573 4,762 3,395 3,415 3,315 Gross Loans $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 Construction loans included in: (1) - Commercial real estate loans $ 2,533 $ 3,361 $ 4,715 $ 4,130 $ 4,125 (2) - Residential real estate loans 20,056 20,470 25,224 21,122 19,333 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Allowance for Credit Losses Balance at beginning of period $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial - (69 ) - (120 ) (408 ) (69 ) (442 ) Commercial real estate (256 ) (117 ) (3 ) (31 ) - (376 ) (24 ) Residential real estate (88 ) (20 ) (32 ) (66 ) (93 ) (140 ) (199 ) Home equity (112 ) (200 ) (67 ) (189 ) (71 ) (379 ) (90 ) Consumer (10 ) (109 ) (62 ) (15 ) (16 ) (181 ) (48 ) DDA overdrafts (422 ) (357 ) (450 ) (670 ) (719 ) (1,229 ) (1,954 ) Total charge-offs (888 ) (872 ) (614 ) (1,091 ) (1,307 ) (2,374 ) (2,757 ) Recoveries: Commercial and industrial 597 86 83 94 149 766 240 Commercial real estate 74 28 158 120 9 260 87 Residential real estate 28 5 10 49 1 43 50 Home equity 18 12 4 34 2 34 22 Consumer 27 28 23 31 29 78 76 DDA overdrafts 321 315 398 360 383 1,034 1,153 Total recoveries 1,065 474 676 688 573 2,215 1,628 Net recoveries (charge-offs) 177 (398 ) 62 (403 ) (734 ) (159 ) (1,129 ) Provision for (recovery of) credit losses 200 425 2,918 500 730 3,543 (26 ) PCD Loan Reserves - - 2,811 - - 2,811 - Adoption of ASU 2022-02 - - (175 ) - - (175 ) - Balance at end of period $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 23,128 $ 17,011 Loans outstanding $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 Allowance as a percent of loans outstanding 0.58 % 0.58 % 0.58 % 0.47 % 0.47 % Allowance as a percent of non-performing loans 440.1 % 405.5 % 400.1 % 317.3 % 320.5 % Average loans outstanding $ 3,956,871 $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,596,523 $ 3,852,057 $ 3,561,463 Net charge-offs (annualized) as a percent of average loans outstanding (0.02 )% 0.04 % (0.01 )% 0.04 % 0.08 % 0.01 % 0.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Nonaccrual Loans Residential real estate $ 2,839 $ 2,774 $ 2,700 $ 1,969 $ 2,089 Home equity 75 24 35 55 140 Commercial and industrial 716 741 994 1,015 785 Commercial real estate 1,355 1,821 1,931 2,166 2,293 Consumer 1 36 19 - - Total nonaccrual loans 4,986 5,396 5,679 5,205 5,307 Accruing loans past due 90 days or more 269 215 - 187 - Total non-performing loans 5,255 5,611 5,679 5,392 5,307 Other real estate owned 720 874 843 909 1,071 Total non-performing assets $ 5,975 $ 6,485 $ 6,522 $ 6,301 $ 6,378 Non-performing assets as a percent of loans and other real estate owned 0.15 % 0.17 % 0.17 % 0.17 % 0.18 % Past Due Loans Residential real estate $ 6,247 $ 5,884 $ 4,783 $ 7,091 $ 3,452 Home equity 1,278 784 551 650 521 Commercial and industrial 568 142 98 234 221 Commercial real estate 1,478 238 148 710 221 Consumer 84 57 3 100 27 DDA overdrafts 398 341 276 391 561 Total past due loans $ 10,053 $ 7,446 $ 5,859 $ 9,176 $ 5,003 Total past due loans as a percent of loans outstanding 0.25 % 0.19 % 0.15 % 0.25 % 0.14 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2023 June 30, 2023 September 30, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,910,876 $ 22,702 4.71 % $ 1,894,269 $ 21,702 4.60 % $ 1,792,365 $ 17,718 3.92 % Commercial, financial, and agriculture (2) 1,975,463 31,743 6.38 % 1,933,238 29,754 6.17 % 1,759,567 20,092 4.53 % Installment loans to individuals (2), (3) 70,532 1,138 6.40 % 68,777 898 5.24 % 44,591 683 6.08 % Total loans 3,956,871 55,583 5.57 % 3,896,284 52,354 5.39 % 3,596,523 38,493 4.25 % Securities: Taxable 1,277,265 12,432 3.86 % 1,301,063 11,794 3.64 % 1,359,207 9,557 2.79 % Tax-exempt (4) 170,806 1,152 2.68 % 174,410 1,203 2.77 % 215,219 1,555 2.87 % Total securities 1,448,071 13,584 3.72 % 1,475,473 12,997 3.53 % 1,574,426 11,112 2.80 % Deposits in depository institutions 90,994 1,265 5.52 % 224,064 2,585 4.63 % 289,460 1,529 2.10 % Total interest-earning assets 5,495,936 70,432 5.08 % 5,595,821 67,936 4.87 % 5,460,409 51,134 3.72 % Cash and due from banks 69,348 71,949 81,202 Premises and equipment, net 73,004 73,450 72,196 Goodwill and intangible assets 163,602 163,847 116,297 Other assets 332,551 313,925 278,527 Less: Allowance for credit losses (23,558 ) (23,046 ) (17,224 ) Total assets $ 6,110,883 $ 6,195,946 $ 5,991,407 Liabilities: Interest-bearing demand deposits $ 1,300,936 $ 3,068 0.94 % $ 1,328,520 $ 2,773 0.84 % $ 1,151,122 $ 272 0.09 % Savings deposits 1,314,484 2,319 0.70 % 1,365,894 1,942 0.57 % 1,431,591 358 0.10 % Time deposits (2) 985,038 5,163 2.08 % 962,299 3,852 1.61 % 964,447 956 0.39 % Customer repurchase agreements 272,558 2,990 4.35 % 294,255 2,963 4.04 % 270,310 440 0.65 % Long-term debt 100,000 1,035 4.11 % 65,934 649 3.95 % - - - Total interest-bearing liabilities 3,973,016 14,575 1.46 % 4,016,902 12,179 1.22 % 3,817,470 2,026 0.21 % Noninterest-bearing demand deposits 1,359,268 1,419,771 1,455,123 Other liabilities 123,137 116,083 100,303 Stockholders' equity 655,462 643,190 618,511 Total liabilities and stockholders' equity $ 6,110,883 $ 6,195,946 $ 5,991,407 Net interest income $ 55,857 $ 55,757 $ 49,108 Net yield on earning assets 4.03 % 4.00 % 3.57 % (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 $ 254 $ 393 $ 308 (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 $ 47 $ 78 $ 64 Commercial, financial, and agriculture 720 709 103 Installment loans to individuals 4 8 7 Time deposits 240 154 21 $ 1,011 $ 949 $ 195 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) 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) Nine Months Ended September 30, 2023 September 30, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,882,397 $ 64,410 4.57 % $ 1,728,557 $ 49,610 3.84 % Commercial, financial, and agriculture (2) 1,904,001 87,745 6.16 % 1,788,784 52,044 3.89 % Installment loans to individuals (2), (3) 65,659 2,784 5.67 % 44,122 1,921 5.82 % Total loans 3,852,057 154,939 5.38 % 3,561,463 103,575 3.89 % Securities: Taxable 1,300,373 35,999 3.70 % 1,279,086 23,327 2.44 % Tax-exempt (4) 182,858 3,826 2.80 % 221,035 4,620 2.79 % Total securities 1,483,231 39,825 3.59 % 1,500,121 27,947 2.49 % Deposits in depository institutions 166,379 5,440 4.37 % 422,714 2,549 0.81 % Total interest-earning assets 5,501,667 200,204 4.87 % 5,484,298 134,071 3.27 % Cash and due from banks 69,735 95,105 Premises and equipment, net 72,631 72,964 Goodwill and intangible assets 150,808 116,643 Other assets 324,658 251,071 Less: Allowance for credit losses (21,602 ) (17,807 ) Total assets $ 6,097,897 $ 6,002,274 Liabilities: Interest-bearing demand deposits $ 1,288,387 $ 7,582 0.79 % $ 1,149,899 $ 550 0.06 % Savings deposits 1,352,005 5,610 0.55 % 1,415,563 715 0.07 % Time deposits (2) 950,276 11,616 1.63 % 1,005,356 3,168 0.42 % Customer repurchase agreements 282,857 8,334 3.94 % 278,211 677 0.33 % Long-term debt 55,678 1,683 4.04 % - - - Total interest-bearing liabilities 3,929,203 34,825 1.18 % 3,849,029 5,110 0.18 % Noninterest-bearing demand deposits 1,407,922 1,429,887 Other liabilities 122,854 86,585 Stockholders' equity 637,918 636,773 Total liabilities and stockholders' equity $ 6,097,897 $ 6,002,274 Net interest income $ 165,379 $ 128,961 Net yield on earning assets 4.02 % 3.14 % (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 $ 1,165 $ 609 (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 $ 165 $ 231 Commercial, financial, and agriculture 1,575 507 Installment loans to individuals 15 41 Time deposits 403 62 $ 2,158 $ 841 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) 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 Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 55,614 $ 55,502 $ 53,459 $ 52,045 $ 48,782 $ 164,575 $ 127,991 Taxable equivalent adjustment 243 255 308 336 326 804 970 Net interest income, fully taxable equivalent $ 55,857 $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 165,379 $ 128,961 Average interest earning assets $ 5,495,936 $ 5,595,821 $ 5,387,326 $ 5,338,507 $ 5,460,409 $ 5,501,667 $ 5,484,298 Net Interest Margin 4.03 % 4.00 % 4.05 % 3.89 % 3.57 % 4.02 % 3.14 % Accretion related to fair value adjustments (0.07 )% (0.07 )% (0.02 )% (0.02 )% (0.01 )% (0.05 )% (0.02 )% Net Interest Margin (excluding accretion) 3.96 % 3.93 % 4.03 % 3.87 % 3.56 % 3.97 % 3.12 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.04 % 10.35 % 10.48 % 9.83 % 9.22 % Effect of goodwill and other intangibles, net (2.49 )% (2.45 )% (2.43 )% (1.81 )% (1.81 )% Tangible common equity to tangible assets 7.55 % 7.90 % 8.05 % 8.02 % 7.41 % Return on average tangible equity ("GAAP") 24.1 % 27.4 % 19.9 % 27.3 % 21.8 % 23.9 % 18.3 % Impact of merger related expenses - - 3.6 % - - 1.2 % - Impact of merger related provision - - 1.3 % - - 0.4 % - Return on tangible equity, excluding merger related expenses and provision 24.1 % 27.4 % 24.8 % 27.3 % 21.8 % 25.5 % 18.3 % Return on assets ("GAAP") 1.94 % 2.12 % 1.63 % 2.08 % 1.83 % 1.91 % 1.59 % Impact of merger related expenses - - 0.30 % - - 0.10 % - Impact of merger related provision - - 0.10 % - - 0.03 % - Return on assets, excluding merger related expenses and provision 1.94 % 2.12 % 2.04 % 2.08 % 1.83 % 2.04 % 1.59 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 22,768 0.57 % 3.68 N/A Natural Gas Distribution 22,048 0.55 % 2.61 N/A Masonry Contractors 27,675 0.69 % 1.13 84 % Sheet Metal Work Manufacturing 24,974 0.62 % 1.57 68 % Beer & Ale Merchant Wholesalers 25,981 0.65 % 3.28 N/A Gasoline Stations with Convenience Stores 47,215 1.18 % 4.19 66 % Lessors of Residential Buildings & Dwellings 436,789 10.92 % 1.89 66 % 1-4 Family 125,929 3.15 % 2.97 68 % Multi-Family 182,785 4.57 % 1.84 66 % Lessors of Nonresidential Buildings 567,746 14.20 % 1.70 65 % Office Buildings 44,129 1.10 % 1.64 63 % Lessors of Mini-Warehouses & Self-Storage Units 40,769 1.02 % 1.62 61 % Assisted Living Facilities 27,955 0.70 % 1.38 57 % Hotels & Motels 321,623 8.04 % 1.43 62 % Average Balance Median Balance Commercial Loans $ 439 $ 92 Commercial Real Estate Loans 493 118 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type September 30, 2023 June 30, 2023 Noninterest-Bearing Demand Deposits 17 % 17 % Interest-Bearing Deposits Demand Deposits 11 % 7 % Savings Deposits 11 % 11 % Time Deposits 14 % 14 % Total Deposits 13 % 12 % The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities). CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage 2023 YTD* 24,518 4,450 1.8 % 2022 28,442 4,544 1.9 % 2021 32,800 8,860 3.8 % 2020 30,360 6,740 3.0 % 2019 32,040 3,717 1.7 % 2018* 30,400 4,310 2.2 % 2017 28,525 2,711 1.4 % 2016 28,650 2,820 1.5 % * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018), Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023). View source version on businesswire.com: https://www.businesswire.com/news/home/20231020891918/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 Quarterly Results By: City Holding Company via Business Wire October 24, 2023 at 07:30 AM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $29.9 million and diluted earnings of $1.98 per share for the quarter ended September 30, 2023. For the third quarter of 2023, the Company achieved a return on assets of 1.94% and a return on tangible equity of 24.1%. Net Interest Income The Company’s net interest income increased approximately $0.1 million, or 0.2%, from $55.5 million during the second quarter of 2023 to $55.6 million during the third quarter of 2023. The Company’s tax equivalent net interest income increased $0.1 million, or 0.2%, from $55.8 million for the second quarter of 2023 to $55.9 million for the third quarter of 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $2.6 million due to an increase in loan yields (net of loan fees and accretion) of 22 basis points and by $0.8 million due to an increase in the yield on investment securities of 19 basis points. In addition, net interest income increased $0.8 million due to an increase in balances of loans of $60.6 million from the quarter ended June 30, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (26 basis points) which decreased net interest income by $2.4 million and lower balances of deposits in depository institutions of $133.1 million that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 4.00% for the second quarter of 2023 to 4.03% for the third quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned declined slightly from 0.17%, or $6.5 million, at June 30, 2023 to 0.15%, or $6.0 million, at September 30, 2023. Total past due loans increased from $7.4 million, or 0.19% of total loans outstanding, at June 30, 2023, to $10.1 million, or 0.25% of total loans outstanding at September 30, 2023. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.2 million in the third quarter of 2023, compared to a provision for credit losses of $0.7 million for the comparable period in 2022, and a provision for credit losses of $0.4 million for the second quarter of 2023. The provision for credit losses in the third quarter was primarily the result of the downgrade of a commercial loan and loan growth partially offset by net recoveries during the quarter. Non-interest Income Non-interest income was $17.4 million during the quarter ended September 30, 2023, as compared to $18.2 million during the quarter ended September 30, 2022. During the third quarter of 2023, the Company reported $0.7 million of realized security losses. Exclusive of the realized security loss, non-interest income decreased $0.1 million, or 0.6%, from $18.2 million for the third quarter of 2022 to $18.1 million for the third quarter of 2023. This decrease was largely attributable to a decrease of $0.4 million, or 4.8%, in service fees that was partially offset by an increase of $0.3 million, or 11.6%, in trust and investment management fee income. Non-interest Expenses Non-interest expenses increased $3.5 million, or 11.2%, from $31.5 million in the third quarter of 2022 to $35.0 million in the third quarter of 2023. This increase was largely due to an increase in other expenses of $1.2 million and an increase in salaries and employee benefits of $0.9 million due to the acquisition of Citizens ($0.5 million) and salary adjustments. In addition, bankcard expenses increased $0.8 million and FDIC insurance expenses increased $0.5 million. Balance Sheet Trends Gross loans increased $85.3 million (2.2%) from June 30, 2023 to $4.01 billion at September 30, 2023. Commercial real estate loans increased $48.0 million (3.1%) and residential real estate loans increased $21.7 million (1.2%) during the quarter ended September 30, 2023. In addition, home equity loans increased $8.6 million (5.7%) and commercial and industrial loans increased $6.8 million (1.6%). Period-end deposit balances decreased $69.9 million from June 30, 2023, to September 30, 2023. Total average depository balances decreased $116.8 million, or 2.3%, from the quarter ended June 30, 2023 to the quarter ended September 30, 2023. Average noninterest-bearing demand deposit balances decreased $60.5 million, average savings deposit balances decreased $51.4 million, and interest-bearing demand deposit balances decreased $27.6 million. These decreases were partially offset by an increase in average time balances of $22.7 million. Income Tax Expense The Company’s effective income tax rate for the third quarter of 2023 was 21.1% compared to 19.8% for the year ended December 31, 2022 and 21.3% for the quarter ended September 30, 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 81.0% and its loan to asset ratio was 66.0% at September 30, 2023. The Company maintained investment securities totaling 22.8% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 64.8% of assets at September 30, 2023. Time deposits fund 16.6% of assets at September 30, 2023, with only 11.7% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company. City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of September 30, 2023, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, $764.7 million of City National’s investment securities were unpledged at September 30, 2023. The Company continues to be strongly capitalized with tangible equity of $447 million at September 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.6% at September 30, 2023. At September 30, 2023, City National’s Leverage Ratio was 9.6%, its Common Equity Tier I ratio was 14.7%, its Tier I Capital ratio was 14.7%, and its Total Risk-Based Capital ratio was 15.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On September 27, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.715 per share payable October 31, 2023, to shareholders of record as of October 13, 2023. This represents a 10.0% increase from the $0.65 per share dividend paid on July 31, 2023. During the quarter ended September 30, 2023, the Company repurchased 109,000 common shares at a weighted average price of $89.33 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2023, the Company could repurchase 220,000 additional shares under the current program. City National operates 99 branches across West Virginia, Kentucky, Virginia, and Ohio. On October 20, 2023, City National closed one of the two branches located in Nicholasville, Kentucky due to the proximity (less than one mile) from an existing City National branch. 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, 2022 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) 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; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) 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; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) 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 September 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 55,855 $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 165,379 $ 128,961 Net Income available to common shareholders 29,839 32,733 24,341 30,672 27,374 86,913 71,408 Per Share Data Earnings per share available to common shareholders: Basic $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 5.78 $ 4.75 Diluted 1.98 2.16 1.63 2.05 1.83 5.77 4.75 Weighted average number of shares (in thousands): Basic 14,922 14,994 14,818 14,756 14,776 14,906 14,878 Diluted 14,945 15,012 14,844 14,785 14,800 14,928 14,901 Period-end number of shares (in thousands) 14,901 15,007 15,260 14,788 14,856 14,901 14,856 Cash dividends declared $ 0.72 $ 0.65 $ 0.65 $ 0.65 $ 0.65 $ 2.02 $ 1.85 Book value per share (period-end) $ 40.94 $ 42.39 $ 42.66 $ 39.08 $ 36.91 $ 40.94 $ 36.91 Tangible book value per share (period-end) 29.98 31.50 31.91 31.25 29.09 29.98 29.09 Market data: High closing price $ 99.49 $ 97.92 $ 100.27 $ 101.94 $ 90.24 $ 100.27 $ 90.24 Low closing price 87.51 83.57 89.17 89.32 78.40 83.57 73.88 Period-end closing price 90.35 89.99 90.88 93.09 88.69 90.35 88.69 Average daily volume (in thousands) 62 80 84 75 58 76 68 Treasury share activity: Treasury shares repurchased (in thousands) 109 269 218 69 9 597 255 Average treasury share repurchase price $ 89.33 $ 88.93 $ 92.10 $ 93.12 $ 80.24 $ 90.16 $ 78.36 Key Ratios (percent) Return on average assets 1.94 % 2.12 % 1.63 % 2.08 % 1.83 % 1.91 % 1.59 % Return on average tangible equity 24.1 % 27.4 % 19.9 % 27.3 % 21.8 % 23.9 % 18.3 % Yield on interest earning assets 5.08 % 4.87 % 4.66 % 4.23 % 3.72 % 4.87 % 3.27 % Cost of interest bearing liabilities 1.46 % 1.22 % 0.86 % 0.48 % 0.21 % 1.18 % 0.18 % Net Interest Margin 4.03 % 4.00 % 4.05 % 3.89 % 3.57 % 4.02 % 3.14 % Non-interest income as a percent of total revenue 24.6 % 27.1 % 24.7 % 26.5 % 27.2 % 25.5 % 29.5 % Efficiency Ratio 46.4 % 44.6 % 45.7 % 45.3 % 46.3 % 45.6 % 49.2 % Price/Earnings Ratio (a) 11.40 10.40 13.95 11.30 12.08 11.73 13.99 Capital (period-end) Average Shareholders' Equity to Average Assets 10.73 % 10.38 % 10.31 % 9.57 % 10.32 % Tangible equity to tangible assets 7.55 % 7.90 % 8.05 % 8.02 % 7.41 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.36 % 15.47 % 15.64 % 16.23 % 15.82 % Tier I 15.36 % 15.47 % 15.64 % 16.23 % 15.82 % Total 15.89 % 16.01 % 16.18 % 16.62 % 16.22 % Leverage 10.05 % 9.80 % 10.20 % 10.01 % 9.74 % City National Bank risk based capital ratios (b): CET I 14.73 % 14.82 % 14.08 % 13.88 % 14.68 % Tier I 14.73 % 14.82 % 14.08 % 13.88 % 14.68 % Total 15.27 % 15.36 % 14.63 % 14.28 % 15.07 % Leverage 9.61 % 9.36 % 9.18 % 8.55 % 9.05 % Other (period-end) Branches 99 99 99 94 94 FTE 966 963 958 909 903 Assets per FTE (in thousands) $ 6,291 $ 6,383 $ 6,483 $ 6,467 $ 6,588 Deposits per FTE (in thousands) 5,120 5,208 5,362 5,357 5,492 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) September 30, 2023 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 Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Interest Income Interest and fees on loans $ 55,582 $ 52,352 $ 47,004 $ 42,963 $ 38,493 $ 154,939 $ 103,575 Interest on investment securities: Taxable 12,432 11,794 11,773 11,119 9,556 35,999 23,327 Tax-exempt 910 950 1,162 1,262 1,228 3,022 3,650 Interest on deposits in depository institutions 1,265 2,585 1,591 1,244 1,530 5,440 2,549 Total Interest Income 70,189 67,681 61,530 56,588 50,807 199,400 133,101 Interest Expense Interest on deposits 10,551 8,567 5,690 3,010 1,585 24,808 4,433 Interest on short-term borrowings 2,990 2,963 2,381 1,533 440 8,334 677 Interest on long-term debt 1,034 649 - - - 1,683 - Total Interest Expense 14,575 12,179 8,071 4,543 2,025 34,825 5,110 Net Interest Income 55,614 55,502 53,459 52,045 48,782 164,575 127,991 Provision for (Recovery of) credit losses 200 425 2,918 500 730 3,543 (26 ) Net Interest Income After Provision for (Recovery of) Credit Losses 55,414 55,077 50,541 51,545 48,052 161,032 128,017 Non-Interest Income Net (losses) gains on sale of investment securities (730 ) - 773 4 - 43 - Unrealized (losses) gains recognized on equity securities still held - (294 ) 361 (262 ) 1 67 (1,322 ) Service charges 7,124 6,906 6,563 7,056 7,487 20,593 21,281 Bankcard revenue 7,058 7,190 6,603 6,791 7,052 20,851 20,558 Trust and investment management fee income 2,409 2,339 2,252 2,343 2,158 7,000 6,455 Bank owned life insurance 807 3,208 804 1,813 754 4,819 3,746 Other income 742 952 1,326 791 792 3,020 2,825 Total Non-Interest Income 17,410 20,301 18,682 18,536 18,244 56,393 53,543 Non-Interest Expense Salaries and employee benefits 18,289 18,429 17,673 17,148 17,398 54,391 49,386 Occupancy related expense 2,950 2,811 2,640 2,725 2,664 8,401 7,993 Equipment and software related expense 2,830 2,883 3,092 3,341 2,949 8,805 8,452 FDIC insurance expense 919 690 445 413 416 2,054 1,259 Advertising 790 974 760 802 854 2,524 2,603 Bankcard expenses 2,188 1,736 1,509 1,356 1,405 5,433 4,676 Postage, delivery, and statement mailings 668 596 647 597 578 1,911 1,765 Office supplies 457 591 420 441 466 1,468 1,303 Legal and professional fees 529 558 470 610 532 1,557 1,584 Telecommunications 568 623 606 627 651 1,797 1,988 Repossessed asset losses (gains), net of expenses 40 22 16 54 (3 ) 78 4 Merger related expenses 2 - 5,645 268 - 5,647 - Other expenses 4,798 4,848 4,700 4,203 3,591 14,346 10,701 Total Non-Interest Expense 35,028 34,761 38,623 32,585 31,501 108,412 91,714 Income Before Income Taxes 37,796 40,617 30,600 37,496 34,795 109,013 89,846 Income tax expense 7,957 7,884 6,259 6,824 7,421 22,100 18,438 Net Income Available to Common Shareholders $ 29,839 $ 32,733 $ 24,341 $ 30,672 $ 27,374 $ 86,913 $ 71,408 Distributed earnings allocated to common shareholders $ 10,554 $ 9,668 $ 9,833 $ 9,521 $ 9,564 $ 29,744 $ 27,220 Undistributed earnings allocated to common shareholders 19,004 22,774 14,294 20,857 17,555 56,356 43,509 Net earnings allocated to common shareholders $ 29,558 $ 32,442 $ 24,127 $ 30,378 $ 27,119 $ 86,100 $ 70,729 Average common shares outstanding 14,922 14,994 14,818 14,756 14,776 14,906 14,878 Shares for diluted earnings per share 14,945 15,012 14,844 14,785 14,800 14,928 14,901 Basic earnings per common share $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 5.78 $ 4.75 Diluted earnings per common share $ 1.98 $ 2.16 $ 1.63 $ 2.05 $ 1.83 $ 5.77 $ 4.75 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Assets Cash and due from banks $ 62,085 $ 66,350 $ 69,804 $ 68,333 $ 65,051 Interest-bearing deposits in depository institutions 48,631 164,931 233,006 131,667 233,302 Cash and cash equivalents 110,716 231,281 302,810 200,000 298,353 Investment securities available-for-sale, at fair value 1,358,219 1,419,933 1,456,259 1,505,520 1,489,392 Other securities 29,022 29,262 24,728 23,807 24,372 Total investment securities 1,387,241 1,449,195 1,480,987 1,529,327 1,513,764 Gross loans 4,007,482 3,922,142 3,894,686 3,646,258 3,628,752 Allowance for credit losses (23,128 ) (22,751 ) (22,724 ) (17,108 ) (17,011 ) Net loans 3,984,354 3,899,391 3,871,962 3,629,150 3,611,741 Bank owned life insurance 117,979 117,173 124,238 120,674 121,283 Premises and equipment, net 72,682 73,118 73,430 70,786 71,686 Accrued interest receivable 19,223 17,973 18,395 18,287 17,256 Net deferred tax assets 58,811 46,944 42,146 44,884 49,888 Goodwill and intangible assets 163,461 163,426 164,099 115,735 116,081 Other assets 161,659 148,333 132,715 149,263 147,716 Total Assets $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 Liabilities Deposits: Noninterest-bearing $ 1,333,474 $ 1,373,106 $ 1,420,990 $ 1,351,415 $ 1,429,281 Interest-bearing: Demand deposits 1,319,783 1,337,445 1,356,017 1,233,482 1,160,970 Savings deposits 1,282,642 1,343,571 1,397,523 1,396,869 1,427,785 Time deposits 1,009,235 960,941 962,235 888,100 939,769 Total deposits 4,945,134 5,015,063 5,136,765 4,869,866 4,957,805 Short-term borrowings Customer repurchase agreements 278,671 271,714 293,256 290,964 304,807 Long-term debt 100,000 100,000 - - - Other liabilities 142,187 123,865 129,711 139,424 136,868 Total Liabilities 5,465,992 5,510,642 5,559,732 5,300,254 5,399,480 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 177,113 176,746 177,529 170,980 170,138 Retained earnings 763,425 744,248 721,727 706,696 685,657 Cost of common stock in treasury (211,430 ) (201,973 ) (179,436 ) (215,955 ) (209,644 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (163,171 ) (127,026 ) (112,967 ) (128,066 ) (141,997 ) Underfunded pension liability (3,422 ) (3,422 ) (3,422 ) (3,422 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (166,593 ) (130,448 ) (116,389 ) (131,488 ) (145,482 ) Total Stockholders' Equity 610,134 636,192 651,050 577,852 548,288 Total Liabilities and Stockholders' Equity $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 Regulatory Capital Total CET 1 capital $ 615,798 $ 605,661 $ 606,675 $ 598,068 $ 582,213 Total tier 1 capital 615,798 605,661 606,675 598,068 582,213 Total risk-based capital 637,245 626,730 627,718 612,654 596,708 Total risk-weighted assets 4,009,798 3,913,870 3,878,994 3,685,207 3,679,511 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Commercial and industrial $ 424,647 $ 417,847 $ 390,861 $ 373,890 $ 375,735 1-4 Family 135,226 123,701 119,017 116,192 109,710 Hotels 321,236 324,745 327,554 340,404 355,001 Multi-family 192,329 191,483 195,042 174,786 186,440 Non Residential Non-Owner Occupied 713,353 673,921 679,782 585,964 569,369 Non Residential Owner Occupied 222,544 222,852 223,096 174,961 177,673 Commercial real estate (1) 1,584,688 1,536,702 1,544,491 1,392,307 1,398,193 Residential real estate (2) 1,768,358 1,746,618 1,737,604 1,693,523 1,678,770 Home equity 159,630 151,012 151,341 134,317 130,837 Consumer 65,586 65,201 66,994 48,806 41,902 DDA overdrafts 4,573 4,762 3,395 3,415 3,315 Gross Loans $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 Construction loans included in: (1) - Commercial real estate loans $ 2,533 $ 3,361 $ 4,715 $ 4,130 $ 4,125 (2) - Residential real estate loans 20,056 20,470 25,224 21,122 19,333 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Allowance for Credit Losses Balance at beginning of period $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial - (69 ) - (120 ) (408 ) (69 ) (442 ) Commercial real estate (256 ) (117 ) (3 ) (31 ) - (376 ) (24 ) Residential real estate (88 ) (20 ) (32 ) (66 ) (93 ) (140 ) (199 ) Home equity (112 ) (200 ) (67 ) (189 ) (71 ) (379 ) (90 ) Consumer (10 ) (109 ) (62 ) (15 ) (16 ) (181 ) (48 ) DDA overdrafts (422 ) (357 ) (450 ) (670 ) (719 ) (1,229 ) (1,954 ) Total charge-offs (888 ) (872 ) (614 ) (1,091 ) (1,307 ) (2,374 ) (2,757 ) Recoveries: Commercial and industrial 597 86 83 94 149 766 240 Commercial real estate 74 28 158 120 9 260 87 Residential real estate 28 5 10 49 1 43 50 Home equity 18 12 4 34 2 34 22 Consumer 27 28 23 31 29 78 76 DDA overdrafts 321 315 398 360 383 1,034 1,153 Total recoveries 1,065 474 676 688 573 2,215 1,628 Net recoveries (charge-offs) 177 (398 ) 62 (403 ) (734 ) (159 ) (1,129 ) Provision for (recovery of) credit losses 200 425 2,918 500 730 3,543 (26 ) PCD Loan Reserves - - 2,811 - - 2,811 - Adoption of ASU 2022-02 - - (175 ) - - (175 ) - Balance at end of period $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 23,128 $ 17,011 Loans outstanding $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 Allowance as a percent of loans outstanding 0.58 % 0.58 % 0.58 % 0.47 % 0.47 % Allowance as a percent of non-performing loans 440.1 % 405.5 % 400.1 % 317.3 % 320.5 % Average loans outstanding $ 3,956,871 $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,596,523 $ 3,852,057 $ 3,561,463 Net charge-offs (annualized) as a percent of average loans outstanding (0.02 )% 0.04 % (0.01 )% 0.04 % 0.08 % 0.01 % 0.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Nonaccrual Loans Residential real estate $ 2,839 $ 2,774 $ 2,700 $ 1,969 $ 2,089 Home equity 75 24 35 55 140 Commercial and industrial 716 741 994 1,015 785 Commercial real estate 1,355 1,821 1,931 2,166 2,293 Consumer 1 36 19 - - Total nonaccrual loans 4,986 5,396 5,679 5,205 5,307 Accruing loans past due 90 days or more 269 215 - 187 - Total non-performing loans 5,255 5,611 5,679 5,392 5,307 Other real estate owned 720 874 843 909 1,071 Total non-performing assets $ 5,975 $ 6,485 $ 6,522 $ 6,301 $ 6,378 Non-performing assets as a percent of loans and other real estate owned 0.15 % 0.17 % 0.17 % 0.17 % 0.18 % Past Due Loans Residential real estate $ 6,247 $ 5,884 $ 4,783 $ 7,091 $ 3,452 Home equity 1,278 784 551 650 521 Commercial and industrial 568 142 98 234 221 Commercial real estate 1,478 238 148 710 221 Consumer 84 57 3 100 27 DDA overdrafts 398 341 276 391 561 Total past due loans $ 10,053 $ 7,446 $ 5,859 $ 9,176 $ 5,003 Total past due loans as a percent of loans outstanding 0.25 % 0.19 % 0.15 % 0.25 % 0.14 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2023 June 30, 2023 September 30, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,910,876 $ 22,702 4.71 % $ 1,894,269 $ 21,702 4.60 % $ 1,792,365 $ 17,718 3.92 % Commercial, financial, and agriculture (2) 1,975,463 31,743 6.38 % 1,933,238 29,754 6.17 % 1,759,567 20,092 4.53 % Installment loans to individuals (2), (3) 70,532 1,138 6.40 % 68,777 898 5.24 % 44,591 683 6.08 % Total loans 3,956,871 55,583 5.57 % 3,896,284 52,354 5.39 % 3,596,523 38,493 4.25 % Securities: Taxable 1,277,265 12,432 3.86 % 1,301,063 11,794 3.64 % 1,359,207 9,557 2.79 % Tax-exempt (4) 170,806 1,152 2.68 % 174,410 1,203 2.77 % 215,219 1,555 2.87 % Total securities 1,448,071 13,584 3.72 % 1,475,473 12,997 3.53 % 1,574,426 11,112 2.80 % Deposits in depository institutions 90,994 1,265 5.52 % 224,064 2,585 4.63 % 289,460 1,529 2.10 % Total interest-earning assets 5,495,936 70,432 5.08 % 5,595,821 67,936 4.87 % 5,460,409 51,134 3.72 % Cash and due from banks 69,348 71,949 81,202 Premises and equipment, net 73,004 73,450 72,196 Goodwill and intangible assets 163,602 163,847 116,297 Other assets 332,551 313,925 278,527 Less: Allowance for credit losses (23,558 ) (23,046 ) (17,224 ) Total assets $ 6,110,883 $ 6,195,946 $ 5,991,407 Liabilities: Interest-bearing demand deposits $ 1,300,936 $ 3,068 0.94 % $ 1,328,520 $ 2,773 0.84 % $ 1,151,122 $ 272 0.09 % Savings deposits 1,314,484 2,319 0.70 % 1,365,894 1,942 0.57 % 1,431,591 358 0.10 % Time deposits (2) 985,038 5,163 2.08 % 962,299 3,852 1.61 % 964,447 956 0.39 % Customer repurchase agreements 272,558 2,990 4.35 % 294,255 2,963 4.04 % 270,310 440 0.65 % Long-term debt 100,000 1,035 4.11 % 65,934 649 3.95 % - - - Total interest-bearing liabilities 3,973,016 14,575 1.46 % 4,016,902 12,179 1.22 % 3,817,470 2,026 0.21 % Noninterest-bearing demand deposits 1,359,268 1,419,771 1,455,123 Other liabilities 123,137 116,083 100,303 Stockholders' equity 655,462 643,190 618,511 Total liabilities and stockholders' equity $ 6,110,883 $ 6,195,946 $ 5,991,407 Net interest income $ 55,857 $ 55,757 $ 49,108 Net yield on earning assets 4.03 % 4.00 % 3.57 % (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 $ 254 $ 393 $ 308 (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 $ 47 $ 78 $ 64 Commercial, financial, and agriculture 720 709 103 Installment loans to individuals 4 8 7 Time deposits 240 154 21 $ 1,011 $ 949 $ 195 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) 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) Nine Months Ended September 30, 2023 September 30, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,882,397 $ 64,410 4.57 % $ 1,728,557 $ 49,610 3.84 % Commercial, financial, and agriculture (2) 1,904,001 87,745 6.16 % 1,788,784 52,044 3.89 % Installment loans to individuals (2), (3) 65,659 2,784 5.67 % 44,122 1,921 5.82 % Total loans 3,852,057 154,939 5.38 % 3,561,463 103,575 3.89 % Securities: Taxable 1,300,373 35,999 3.70 % 1,279,086 23,327 2.44 % Tax-exempt (4) 182,858 3,826 2.80 % 221,035 4,620 2.79 % Total securities 1,483,231 39,825 3.59 % 1,500,121 27,947 2.49 % Deposits in depository institutions 166,379 5,440 4.37 % 422,714 2,549 0.81 % Total interest-earning assets 5,501,667 200,204 4.87 % 5,484,298 134,071 3.27 % Cash and due from banks 69,735 95,105 Premises and equipment, net 72,631 72,964 Goodwill and intangible assets 150,808 116,643 Other assets 324,658 251,071 Less: Allowance for credit losses (21,602 ) (17,807 ) Total assets $ 6,097,897 $ 6,002,274 Liabilities: Interest-bearing demand deposits $ 1,288,387 $ 7,582 0.79 % $ 1,149,899 $ 550 0.06 % Savings deposits 1,352,005 5,610 0.55 % 1,415,563 715 0.07 % Time deposits (2) 950,276 11,616 1.63 % 1,005,356 3,168 0.42 % Customer repurchase agreements 282,857 8,334 3.94 % 278,211 677 0.33 % Long-term debt 55,678 1,683 4.04 % - - - Total interest-bearing liabilities 3,929,203 34,825 1.18 % 3,849,029 5,110 0.18 % Noninterest-bearing demand deposits 1,407,922 1,429,887 Other liabilities 122,854 86,585 Stockholders' equity 637,918 636,773 Total liabilities and stockholders' equity $ 6,097,897 $ 6,002,274 Net interest income $ 165,379 $ 128,961 Net yield on earning assets 4.02 % 3.14 % (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 $ 1,165 $ 609 (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 $ 165 $ 231 Commercial, financial, and agriculture 1,575 507 Installment loans to individuals 15 41 Time deposits 403 62 $ 2,158 $ 841 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) 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 Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 55,614 $ 55,502 $ 53,459 $ 52,045 $ 48,782 $ 164,575 $ 127,991 Taxable equivalent adjustment 243 255 308 336 326 804 970 Net interest income, fully taxable equivalent $ 55,857 $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 165,379 $ 128,961 Average interest earning assets $ 5,495,936 $ 5,595,821 $ 5,387,326 $ 5,338,507 $ 5,460,409 $ 5,501,667 $ 5,484,298 Net Interest Margin 4.03 % 4.00 % 4.05 % 3.89 % 3.57 % 4.02 % 3.14 % Accretion related to fair value adjustments (0.07 )% (0.07 )% (0.02 )% (0.02 )% (0.01 )% (0.05 )% (0.02 )% Net Interest Margin (excluding accretion) 3.96 % 3.93 % 4.03 % 3.87 % 3.56 % 3.97 % 3.12 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.04 % 10.35 % 10.48 % 9.83 % 9.22 % Effect of goodwill and other intangibles, net (2.49 )% (2.45 )% (2.43 )% (1.81 )% (1.81 )% Tangible common equity to tangible assets 7.55 % 7.90 % 8.05 % 8.02 % 7.41 % Return on average tangible equity ("GAAP") 24.1 % 27.4 % 19.9 % 27.3 % 21.8 % 23.9 % 18.3 % Impact of merger related expenses - - 3.6 % - - 1.2 % - Impact of merger related provision - - 1.3 % - - 0.4 % - Return on tangible equity, excluding merger related expenses and provision 24.1 % 27.4 % 24.8 % 27.3 % 21.8 % 25.5 % 18.3 % Return on assets ("GAAP") 1.94 % 2.12 % 1.63 % 2.08 % 1.83 % 1.91 % 1.59 % Impact of merger related expenses - - 0.30 % - - 0.10 % - Impact of merger related provision - - 0.10 % - - 0.03 % - Return on assets, excluding merger related expenses and provision 1.94 % 2.12 % 2.04 % 2.08 % 1.83 % 2.04 % 1.59 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 22,768 0.57 % 3.68 N/A Natural Gas Distribution 22,048 0.55 % 2.61 N/A Masonry Contractors 27,675 0.69 % 1.13 84 % Sheet Metal Work Manufacturing 24,974 0.62 % 1.57 68 % Beer & Ale Merchant Wholesalers 25,981 0.65 % 3.28 N/A Gasoline Stations with Convenience Stores 47,215 1.18 % 4.19 66 % Lessors of Residential Buildings & Dwellings 436,789 10.92 % 1.89 66 % 1-4 Family 125,929 3.15 % 2.97 68 % Multi-Family 182,785 4.57 % 1.84 66 % Lessors of Nonresidential Buildings 567,746 14.20 % 1.70 65 % Office Buildings 44,129 1.10 % 1.64 63 % Lessors of Mini-Warehouses & Self-Storage Units 40,769 1.02 % 1.62 61 % Assisted Living Facilities 27,955 0.70 % 1.38 57 % Hotels & Motels 321,623 8.04 % 1.43 62 % Average Balance Median Balance Commercial Loans $ 439 $ 92 Commercial Real Estate Loans 493 118 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type September 30, 2023 June 30, 2023 Noninterest-Bearing Demand Deposits 17 % 17 % Interest-Bearing Deposits Demand Deposits 11 % 7 % Savings Deposits 11 % 11 % Time Deposits 14 % 14 % Total Deposits 13 % 12 % The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities). CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage 2023 YTD* 24,518 4,450 1.8 % 2022 28,442 4,544 1.9 % 2021 32,800 8,860 3.8 % 2020 30,360 6,740 3.0 % 2019 32,040 3,717 1.7 % 2018* 30,400 4,310 2.2 % 2017 28,525 2,711 1.4 % 2016 28,650 2,820 1.5 % * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018), Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023). View source version on businesswire.com: https://www.businesswire.com/news/home/20231020891918/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $29.9 million and diluted earnings of $1.98 per share for the quarter ended September 30, 2023. For the third quarter of 2023, the Company achieved a return on assets of 1.94% and a return on tangible equity of 24.1%. Net Interest Income The Company’s net interest income increased approximately $0.1 million, or 0.2%, from $55.5 million during the second quarter of 2023 to $55.6 million during the third quarter of 2023. The Company’s tax equivalent net interest income increased $0.1 million, or 0.2%, from $55.8 million for the second quarter of 2023 to $55.9 million for the third quarter of 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $2.6 million due to an increase in loan yields (net of loan fees and accretion) of 22 basis points and by $0.8 million due to an increase in the yield on investment securities of 19 basis points. In addition, net interest income increased $0.8 million due to an increase in balances of loans of $60.6 million from the quarter ended June 30, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (26 basis points) which decreased net interest income by $2.4 million and lower balances of deposits in depository institutions of $133.1 million that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 4.00% for the second quarter of 2023 to 4.03% for the third quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned declined slightly from 0.17%, or $6.5 million, at June 30, 2023 to 0.15%, or $6.0 million, at September 30, 2023. Total past due loans increased from $7.4 million, or 0.19% of total loans outstanding, at June 30, 2023, to $10.1 million, or 0.25% of total loans outstanding at September 30, 2023. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.2 million in the third quarter of 2023, compared to a provision for credit losses of $0.7 million for the comparable period in 2022, and a provision for credit losses of $0.4 million for the second quarter of 2023. The provision for credit losses in the third quarter was primarily the result of the downgrade of a commercial loan and loan growth partially offset by net recoveries during the quarter. Non-interest Income Non-interest income was $17.4 million during the quarter ended September 30, 2023, as compared to $18.2 million during the quarter ended September 30, 2022. During the third quarter of 2023, the Company reported $0.7 million of realized security losses. Exclusive of the realized security loss, non-interest income decreased $0.1 million, or 0.6%, from $18.2 million for the third quarter of 2022 to $18.1 million for the third quarter of 2023. This decrease was largely attributable to a decrease of $0.4 million, or 4.8%, in service fees that was partially offset by an increase of $0.3 million, or 11.6%, in trust and investment management fee income. Non-interest Expenses Non-interest expenses increased $3.5 million, or 11.2%, from $31.5 million in the third quarter of 2022 to $35.0 million in the third quarter of 2023. This increase was largely due to an increase in other expenses of $1.2 million and an increase in salaries and employee benefits of $0.9 million due to the acquisition of Citizens ($0.5 million) and salary adjustments. In addition, bankcard expenses increased $0.8 million and FDIC insurance expenses increased $0.5 million. Balance Sheet Trends Gross loans increased $85.3 million (2.2%) from June 30, 2023 to $4.01 billion at September 30, 2023. Commercial real estate loans increased $48.0 million (3.1%) and residential real estate loans increased $21.7 million (1.2%) during the quarter ended September 30, 2023. In addition, home equity loans increased $8.6 million (5.7%) and commercial and industrial loans increased $6.8 million (1.6%). Period-end deposit balances decreased $69.9 million from June 30, 2023, to September 30, 2023. Total average depository balances decreased $116.8 million, or 2.3%, from the quarter ended June 30, 2023 to the quarter ended September 30, 2023. Average noninterest-bearing demand deposit balances decreased $60.5 million, average savings deposit balances decreased $51.4 million, and interest-bearing demand deposit balances decreased $27.6 million. These decreases were partially offset by an increase in average time balances of $22.7 million. Income Tax Expense The Company’s effective income tax rate for the third quarter of 2023 was 21.1% compared to 19.8% for the year ended December 31, 2022 and 21.3% for the quarter ended September 30, 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 81.0% and its loan to asset ratio was 66.0% at September 30, 2023. The Company maintained investment securities totaling 22.8% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 64.8% of assets at September 30, 2023. Time deposits fund 16.6% of assets at September 30, 2023, with only 11.7% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company. City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of September 30, 2023, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, $764.7 million of City National’s investment securities were unpledged at September 30, 2023. The Company continues to be strongly capitalized with tangible equity of $447 million at September 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.6% at September 30, 2023. At September 30, 2023, City National’s Leverage Ratio was 9.6%, its Common Equity Tier I ratio was 14.7%, its Tier I Capital ratio was 14.7%, and its Total Risk-Based Capital ratio was 15.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On September 27, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.715 per share payable October 31, 2023, to shareholders of record as of October 13, 2023. This represents a 10.0% increase from the $0.65 per share dividend paid on July 31, 2023. During the quarter ended September 30, 2023, the Company repurchased 109,000 common shares at a weighted average price of $89.33 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2023, the Company could repurchase 220,000 additional shares under the current program. City National operates 99 branches across West Virginia, Kentucky, Virginia, and Ohio. On October 20, 2023, City National closed one of the two branches located in Nicholasville, Kentucky due to the proximity (less than one mile) from an existing City National branch. 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, 2022 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) 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; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) 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; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) 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 September 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 55,855 $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 165,379 $ 128,961 Net Income available to common shareholders 29,839 32,733 24,341 30,672 27,374 86,913 71,408 Per Share Data Earnings per share available to common shareholders: Basic $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 5.78 $ 4.75 Diluted 1.98 2.16 1.63 2.05 1.83 5.77 4.75 Weighted average number of shares (in thousands): Basic 14,922 14,994 14,818 14,756 14,776 14,906 14,878 Diluted 14,945 15,012 14,844 14,785 14,800 14,928 14,901 Period-end number of shares (in thousands) 14,901 15,007 15,260 14,788 14,856 14,901 14,856 Cash dividends declared $ 0.72 $ 0.65 $ 0.65 $ 0.65 $ 0.65 $ 2.02 $ 1.85 Book value per share (period-end) $ 40.94 $ 42.39 $ 42.66 $ 39.08 $ 36.91 $ 40.94 $ 36.91 Tangible book value per share (period-end) 29.98 31.50 31.91 31.25 29.09 29.98 29.09 Market data: High closing price $ 99.49 $ 97.92 $ 100.27 $ 101.94 $ 90.24 $ 100.27 $ 90.24 Low closing price 87.51 83.57 89.17 89.32 78.40 83.57 73.88 Period-end closing price 90.35 89.99 90.88 93.09 88.69 90.35 88.69 Average daily volume (in thousands) 62 80 84 75 58 76 68 Treasury share activity: Treasury shares repurchased (in thousands) 109 269 218 69 9 597 255 Average treasury share repurchase price $ 89.33 $ 88.93 $ 92.10 $ 93.12 $ 80.24 $ 90.16 $ 78.36 Key Ratios (percent) Return on average assets 1.94 % 2.12 % 1.63 % 2.08 % 1.83 % 1.91 % 1.59 % Return on average tangible equity 24.1 % 27.4 % 19.9 % 27.3 % 21.8 % 23.9 % 18.3 % Yield on interest earning assets 5.08 % 4.87 % 4.66 % 4.23 % 3.72 % 4.87 % 3.27 % Cost of interest bearing liabilities 1.46 % 1.22 % 0.86 % 0.48 % 0.21 % 1.18 % 0.18 % Net Interest Margin 4.03 % 4.00 % 4.05 % 3.89 % 3.57 % 4.02 % 3.14 % Non-interest income as a percent of total revenue 24.6 % 27.1 % 24.7 % 26.5 % 27.2 % 25.5 % 29.5 % Efficiency Ratio 46.4 % 44.6 % 45.7 % 45.3 % 46.3 % 45.6 % 49.2 % Price/Earnings Ratio (a) 11.40 10.40 13.95 11.30 12.08 11.73 13.99 Capital (period-end) Average Shareholders' Equity to Average Assets 10.73 % 10.38 % 10.31 % 9.57 % 10.32 % Tangible equity to tangible assets 7.55 % 7.90 % 8.05 % 8.02 % 7.41 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.36 % 15.47 % 15.64 % 16.23 % 15.82 % Tier I 15.36 % 15.47 % 15.64 % 16.23 % 15.82 % Total 15.89 % 16.01 % 16.18 % 16.62 % 16.22 % Leverage 10.05 % 9.80 % 10.20 % 10.01 % 9.74 % City National Bank risk based capital ratios (b): CET I 14.73 % 14.82 % 14.08 % 13.88 % 14.68 % Tier I 14.73 % 14.82 % 14.08 % 13.88 % 14.68 % Total 15.27 % 15.36 % 14.63 % 14.28 % 15.07 % Leverage 9.61 % 9.36 % 9.18 % 8.55 % 9.05 % Other (period-end) Branches 99 99 99 94 94 FTE 966 963 958 909 903 Assets per FTE (in thousands) $ 6,291 $ 6,383 $ 6,483 $ 6,467 $ 6,588 Deposits per FTE (in thousands) 5,120 5,208 5,362 5,357 5,492 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) September 30, 2023 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 Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Interest Income Interest and fees on loans $ 55,582 $ 52,352 $ 47,004 $ 42,963 $ 38,493 $ 154,939 $ 103,575 Interest on investment securities: Taxable 12,432 11,794 11,773 11,119 9,556 35,999 23,327 Tax-exempt 910 950 1,162 1,262 1,228 3,022 3,650 Interest on deposits in depository institutions 1,265 2,585 1,591 1,244 1,530 5,440 2,549 Total Interest Income 70,189 67,681 61,530 56,588 50,807 199,400 133,101 Interest Expense Interest on deposits 10,551 8,567 5,690 3,010 1,585 24,808 4,433 Interest on short-term borrowings 2,990 2,963 2,381 1,533 440 8,334 677 Interest on long-term debt 1,034 649 - - - 1,683 - Total Interest Expense 14,575 12,179 8,071 4,543 2,025 34,825 5,110 Net Interest Income 55,614 55,502 53,459 52,045 48,782 164,575 127,991 Provision for (Recovery of) credit losses 200 425 2,918 500 730 3,543 (26 ) Net Interest Income After Provision for (Recovery of) Credit Losses 55,414 55,077 50,541 51,545 48,052 161,032 128,017 Non-Interest Income Net (losses) gains on sale of investment securities (730 ) - 773 4 - 43 - Unrealized (losses) gains recognized on equity securities still held - (294 ) 361 (262 ) 1 67 (1,322 ) Service charges 7,124 6,906 6,563 7,056 7,487 20,593 21,281 Bankcard revenue 7,058 7,190 6,603 6,791 7,052 20,851 20,558 Trust and investment management fee income 2,409 2,339 2,252 2,343 2,158 7,000 6,455 Bank owned life insurance 807 3,208 804 1,813 754 4,819 3,746 Other income 742 952 1,326 791 792 3,020 2,825 Total Non-Interest Income 17,410 20,301 18,682 18,536 18,244 56,393 53,543 Non-Interest Expense Salaries and employee benefits 18,289 18,429 17,673 17,148 17,398 54,391 49,386 Occupancy related expense 2,950 2,811 2,640 2,725 2,664 8,401 7,993 Equipment and software related expense 2,830 2,883 3,092 3,341 2,949 8,805 8,452 FDIC insurance expense 919 690 445 413 416 2,054 1,259 Advertising 790 974 760 802 854 2,524 2,603 Bankcard expenses 2,188 1,736 1,509 1,356 1,405 5,433 4,676 Postage, delivery, and statement mailings 668 596 647 597 578 1,911 1,765 Office supplies 457 591 420 441 466 1,468 1,303 Legal and professional fees 529 558 470 610 532 1,557 1,584 Telecommunications 568 623 606 627 651 1,797 1,988 Repossessed asset losses (gains), net of expenses 40 22 16 54 (3 ) 78 4 Merger related expenses 2 - 5,645 268 - 5,647 - Other expenses 4,798 4,848 4,700 4,203 3,591 14,346 10,701 Total Non-Interest Expense 35,028 34,761 38,623 32,585 31,501 108,412 91,714 Income Before Income Taxes 37,796 40,617 30,600 37,496 34,795 109,013 89,846 Income tax expense 7,957 7,884 6,259 6,824 7,421 22,100 18,438 Net Income Available to Common Shareholders $ 29,839 $ 32,733 $ 24,341 $ 30,672 $ 27,374 $ 86,913 $ 71,408 Distributed earnings allocated to common shareholders $ 10,554 $ 9,668 $ 9,833 $ 9,521 $ 9,564 $ 29,744 $ 27,220 Undistributed earnings allocated to common shareholders 19,004 22,774 14,294 20,857 17,555 56,356 43,509 Net earnings allocated to common shareholders $ 29,558 $ 32,442 $ 24,127 $ 30,378 $ 27,119 $ 86,100 $ 70,729 Average common shares outstanding 14,922 14,994 14,818 14,756 14,776 14,906 14,878 Shares for diluted earnings per share 14,945 15,012 14,844 14,785 14,800 14,928 14,901 Basic earnings per common share $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 5.78 $ 4.75 Diluted earnings per common share $ 1.98 $ 2.16 $ 1.63 $ 2.05 $ 1.83 $ 5.77 $ 4.75 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Assets Cash and due from banks $ 62,085 $ 66,350 $ 69,804 $ 68,333 $ 65,051 Interest-bearing deposits in depository institutions 48,631 164,931 233,006 131,667 233,302 Cash and cash equivalents 110,716 231,281 302,810 200,000 298,353 Investment securities available-for-sale, at fair value 1,358,219 1,419,933 1,456,259 1,505,520 1,489,392 Other securities 29,022 29,262 24,728 23,807 24,372 Total investment securities 1,387,241 1,449,195 1,480,987 1,529,327 1,513,764 Gross loans 4,007,482 3,922,142 3,894,686 3,646,258 3,628,752 Allowance for credit losses (23,128 ) (22,751 ) (22,724 ) (17,108 ) (17,011 ) Net loans 3,984,354 3,899,391 3,871,962 3,629,150 3,611,741 Bank owned life insurance 117,979 117,173 124,238 120,674 121,283 Premises and equipment, net 72,682 73,118 73,430 70,786 71,686 Accrued interest receivable 19,223 17,973 18,395 18,287 17,256 Net deferred tax assets 58,811 46,944 42,146 44,884 49,888 Goodwill and intangible assets 163,461 163,426 164,099 115,735 116,081 Other assets 161,659 148,333 132,715 149,263 147,716 Total Assets $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 Liabilities Deposits: Noninterest-bearing $ 1,333,474 $ 1,373,106 $ 1,420,990 $ 1,351,415 $ 1,429,281 Interest-bearing: Demand deposits 1,319,783 1,337,445 1,356,017 1,233,482 1,160,970 Savings deposits 1,282,642 1,343,571 1,397,523 1,396,869 1,427,785 Time deposits 1,009,235 960,941 962,235 888,100 939,769 Total deposits 4,945,134 5,015,063 5,136,765 4,869,866 4,957,805 Short-term borrowings Customer repurchase agreements 278,671 271,714 293,256 290,964 304,807 Long-term debt 100,000 100,000 - - - Other liabilities 142,187 123,865 129,711 139,424 136,868 Total Liabilities 5,465,992 5,510,642 5,559,732 5,300,254 5,399,480 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 177,113 176,746 177,529 170,980 170,138 Retained earnings 763,425 744,248 721,727 706,696 685,657 Cost of common stock in treasury (211,430 ) (201,973 ) (179,436 ) (215,955 ) (209,644 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (163,171 ) (127,026 ) (112,967 ) (128,066 ) (141,997 ) Underfunded pension liability (3,422 ) (3,422 ) (3,422 ) (3,422 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (166,593 ) (130,448 ) (116,389 ) (131,488 ) (145,482 ) Total Stockholders' Equity 610,134 636,192 651,050 577,852 548,288 Total Liabilities and Stockholders' Equity $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 Regulatory Capital Total CET 1 capital $ 615,798 $ 605,661 $ 606,675 $ 598,068 $ 582,213 Total tier 1 capital 615,798 605,661 606,675 598,068 582,213 Total risk-based capital 637,245 626,730 627,718 612,654 596,708 Total risk-weighted assets 4,009,798 3,913,870 3,878,994 3,685,207 3,679,511 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Commercial and industrial $ 424,647 $ 417,847 $ 390,861 $ 373,890 $ 375,735 1-4 Family 135,226 123,701 119,017 116,192 109,710 Hotels 321,236 324,745 327,554 340,404 355,001 Multi-family 192,329 191,483 195,042 174,786 186,440 Non Residential Non-Owner Occupied 713,353 673,921 679,782 585,964 569,369 Non Residential Owner Occupied 222,544 222,852 223,096 174,961 177,673 Commercial real estate (1) 1,584,688 1,536,702 1,544,491 1,392,307 1,398,193 Residential real estate (2) 1,768,358 1,746,618 1,737,604 1,693,523 1,678,770 Home equity 159,630 151,012 151,341 134,317 130,837 Consumer 65,586 65,201 66,994 48,806 41,902 DDA overdrafts 4,573 4,762 3,395 3,415 3,315 Gross Loans $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 Construction loans included in: (1) - Commercial real estate loans $ 2,533 $ 3,361 $ 4,715 $ 4,130 $ 4,125 (2) - Residential real estate loans 20,056 20,470 25,224 21,122 19,333 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Allowance for Credit Losses Balance at beginning of period $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial - (69 ) - (120 ) (408 ) (69 ) (442 ) Commercial real estate (256 ) (117 ) (3 ) (31 ) - (376 ) (24 ) Residential real estate (88 ) (20 ) (32 ) (66 ) (93 ) (140 ) (199 ) Home equity (112 ) (200 ) (67 ) (189 ) (71 ) (379 ) (90 ) Consumer (10 ) (109 ) (62 ) (15 ) (16 ) (181 ) (48 ) DDA overdrafts (422 ) (357 ) (450 ) (670 ) (719 ) (1,229 ) (1,954 ) Total charge-offs (888 ) (872 ) (614 ) (1,091 ) (1,307 ) (2,374 ) (2,757 ) Recoveries: Commercial and industrial 597 86 83 94 149 766 240 Commercial real estate 74 28 158 120 9 260 87 Residential real estate 28 5 10 49 1 43 50 Home equity 18 12 4 34 2 34 22 Consumer 27 28 23 31 29 78 76 DDA overdrafts 321 315 398 360 383 1,034 1,153 Total recoveries 1,065 474 676 688 573 2,215 1,628 Net recoveries (charge-offs) 177 (398 ) 62 (403 ) (734 ) (159 ) (1,129 ) Provision for (recovery of) credit losses 200 425 2,918 500 730 3,543 (26 ) PCD Loan Reserves - - 2,811 - - 2,811 - Adoption of ASU 2022-02 - - (175 ) - - (175 ) - Balance at end of period $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 23,128 $ 17,011 Loans outstanding $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 Allowance as a percent of loans outstanding 0.58 % 0.58 % 0.58 % 0.47 % 0.47 % Allowance as a percent of non-performing loans 440.1 % 405.5 % 400.1 % 317.3 % 320.5 % Average loans outstanding $ 3,956,871 $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,596,523 $ 3,852,057 $ 3,561,463 Net charge-offs (annualized) as a percent of average loans outstanding (0.02 )% 0.04 % (0.01 )% 0.04 % 0.08 % 0.01 % 0.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Nonaccrual Loans Residential real estate $ 2,839 $ 2,774 $ 2,700 $ 1,969 $ 2,089 Home equity 75 24 35 55 140 Commercial and industrial 716 741 994 1,015 785 Commercial real estate 1,355 1,821 1,931 2,166 2,293 Consumer 1 36 19 - - Total nonaccrual loans 4,986 5,396 5,679 5,205 5,307 Accruing loans past due 90 days or more 269 215 - 187 - Total non-performing loans 5,255 5,611 5,679 5,392 5,307 Other real estate owned 720 874 843 909 1,071 Total non-performing assets $ 5,975 $ 6,485 $ 6,522 $ 6,301 $ 6,378 Non-performing assets as a percent of loans and other real estate owned 0.15 % 0.17 % 0.17 % 0.17 % 0.18 % Past Due Loans Residential real estate $ 6,247 $ 5,884 $ 4,783 $ 7,091 $ 3,452 Home equity 1,278 784 551 650 521 Commercial and industrial 568 142 98 234 221 Commercial real estate 1,478 238 148 710 221 Consumer 84 57 3 100 27 DDA overdrafts 398 341 276 391 561 Total past due loans $ 10,053 $ 7,446 $ 5,859 $ 9,176 $ 5,003 Total past due loans as a percent of loans outstanding 0.25 % 0.19 % 0.15 % 0.25 % 0.14 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2023 June 30, 2023 September 30, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,910,876 $ 22,702 4.71 % $ 1,894,269 $ 21,702 4.60 % $ 1,792,365 $ 17,718 3.92 % Commercial, financial, and agriculture (2) 1,975,463 31,743 6.38 % 1,933,238 29,754 6.17 % 1,759,567 20,092 4.53 % Installment loans to individuals (2), (3) 70,532 1,138 6.40 % 68,777 898 5.24 % 44,591 683 6.08 % Total loans 3,956,871 55,583 5.57 % 3,896,284 52,354 5.39 % 3,596,523 38,493 4.25 % Securities: Taxable 1,277,265 12,432 3.86 % 1,301,063 11,794 3.64 % 1,359,207 9,557 2.79 % Tax-exempt (4) 170,806 1,152 2.68 % 174,410 1,203 2.77 % 215,219 1,555 2.87 % Total securities 1,448,071 13,584 3.72 % 1,475,473 12,997 3.53 % 1,574,426 11,112 2.80 % Deposits in depository institutions 90,994 1,265 5.52 % 224,064 2,585 4.63 % 289,460 1,529 2.10 % Total interest-earning assets 5,495,936 70,432 5.08 % 5,595,821 67,936 4.87 % 5,460,409 51,134 3.72 % Cash and due from banks 69,348 71,949 81,202 Premises and equipment, net 73,004 73,450 72,196 Goodwill and intangible assets 163,602 163,847 116,297 Other assets 332,551 313,925 278,527 Less: Allowance for credit losses (23,558 ) (23,046 ) (17,224 ) Total assets $ 6,110,883 $ 6,195,946 $ 5,991,407 Liabilities: Interest-bearing demand deposits $ 1,300,936 $ 3,068 0.94 % $ 1,328,520 $ 2,773 0.84 % $ 1,151,122 $ 272 0.09 % Savings deposits 1,314,484 2,319 0.70 % 1,365,894 1,942 0.57 % 1,431,591 358 0.10 % Time deposits (2) 985,038 5,163 2.08 % 962,299 3,852 1.61 % 964,447 956 0.39 % Customer repurchase agreements 272,558 2,990 4.35 % 294,255 2,963 4.04 % 270,310 440 0.65 % Long-term debt 100,000 1,035 4.11 % 65,934 649 3.95 % - - - Total interest-bearing liabilities 3,973,016 14,575 1.46 % 4,016,902 12,179 1.22 % 3,817,470 2,026 0.21 % Noninterest-bearing demand deposits 1,359,268 1,419,771 1,455,123 Other liabilities 123,137 116,083 100,303 Stockholders' equity 655,462 643,190 618,511 Total liabilities and stockholders' equity $ 6,110,883 $ 6,195,946 $ 5,991,407 Net interest income $ 55,857 $ 55,757 $ 49,108 Net yield on earning assets 4.03 % 4.00 % 3.57 % (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 $ 254 $ 393 $ 308 (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 $ 47 $ 78 $ 64 Commercial, financial, and agriculture 720 709 103 Installment loans to individuals 4 8 7 Time deposits 240 154 21 $ 1,011 $ 949 $ 195 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) 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) Nine Months Ended September 30, 2023 September 30, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,882,397 $ 64,410 4.57 % $ 1,728,557 $ 49,610 3.84 % Commercial, financial, and agriculture (2) 1,904,001 87,745 6.16 % 1,788,784 52,044 3.89 % Installment loans to individuals (2), (3) 65,659 2,784 5.67 % 44,122 1,921 5.82 % Total loans 3,852,057 154,939 5.38 % 3,561,463 103,575 3.89 % Securities: Taxable 1,300,373 35,999 3.70 % 1,279,086 23,327 2.44 % Tax-exempt (4) 182,858 3,826 2.80 % 221,035 4,620 2.79 % Total securities 1,483,231 39,825 3.59 % 1,500,121 27,947 2.49 % Deposits in depository institutions 166,379 5,440 4.37 % 422,714 2,549 0.81 % Total interest-earning assets 5,501,667 200,204 4.87 % 5,484,298 134,071 3.27 % Cash and due from banks 69,735 95,105 Premises and equipment, net 72,631 72,964 Goodwill and intangible assets 150,808 116,643 Other assets 324,658 251,071 Less: Allowance for credit losses (21,602 ) (17,807 ) Total assets $ 6,097,897 $ 6,002,274 Liabilities: Interest-bearing demand deposits $ 1,288,387 $ 7,582 0.79 % $ 1,149,899 $ 550 0.06 % Savings deposits 1,352,005 5,610 0.55 % 1,415,563 715 0.07 % Time deposits (2) 950,276 11,616 1.63 % 1,005,356 3,168 0.42 % Customer repurchase agreements 282,857 8,334 3.94 % 278,211 677 0.33 % Long-term debt 55,678 1,683 4.04 % - - - Total interest-bearing liabilities 3,929,203 34,825 1.18 % 3,849,029 5,110 0.18 % Noninterest-bearing demand deposits 1,407,922 1,429,887 Other liabilities 122,854 86,585 Stockholders' equity 637,918 636,773 Total liabilities and stockholders' equity $ 6,097,897 $ 6,002,274 Net interest income $ 165,379 $ 128,961 Net yield on earning assets 4.02 % 3.14 % (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 $ 1,165 $ 609 (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 $ 165 $ 231 Commercial, financial, and agriculture 1,575 507 Installment loans to individuals 15 41 Time deposits 403 62 $ 2,158 $ 841 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) 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 Nine Months Ended September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 September 30, 2023 September 30, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 55,614 $ 55,502 $ 53,459 $ 52,045 $ 48,782 $ 164,575 $ 127,991 Taxable equivalent adjustment 243 255 308 336 326 804 970 Net interest income, fully taxable equivalent $ 55,857 $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 165,379 $ 128,961 Average interest earning assets $ 5,495,936 $ 5,595,821 $ 5,387,326 $ 5,338,507 $ 5,460,409 $ 5,501,667 $ 5,484,298 Net Interest Margin 4.03 % 4.00 % 4.05 % 3.89 % 3.57 % 4.02 % 3.14 % Accretion related to fair value adjustments (0.07 )% (0.07 )% (0.02 )% (0.02 )% (0.01 )% (0.05 )% (0.02 )% Net Interest Margin (excluding accretion) 3.96 % 3.93 % 4.03 % 3.87 % 3.56 % 3.97 % 3.12 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.04 % 10.35 % 10.48 % 9.83 % 9.22 % Effect of goodwill and other intangibles, net (2.49 )% (2.45 )% (2.43 )% (1.81 )% (1.81 )% Tangible common equity to tangible assets 7.55 % 7.90 % 8.05 % 8.02 % 7.41 % Return on average tangible equity ("GAAP") 24.1 % 27.4 % 19.9 % 27.3 % 21.8 % 23.9 % 18.3 % Impact of merger related expenses - - 3.6 % - - 1.2 % - Impact of merger related provision - - 1.3 % - - 0.4 % - Return on tangible equity, excluding merger related expenses and provision 24.1 % 27.4 % 24.8 % 27.3 % 21.8 % 25.5 % 18.3 % Return on assets ("GAAP") 1.94 % 2.12 % 1.63 % 2.08 % 1.83 % 1.91 % 1.59 % Impact of merger related expenses - - 0.30 % - - 0.10 % - Impact of merger related provision - - 0.10 % - - 0.03 % - Return on assets, excluding merger related expenses and provision 1.94 % 2.12 % 2.04 % 2.08 % 1.83 % 2.04 % 1.59 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 22,768 0.57 % 3.68 N/A Natural Gas Distribution 22,048 0.55 % 2.61 N/A Masonry Contractors 27,675 0.69 % 1.13 84 % Sheet Metal Work Manufacturing 24,974 0.62 % 1.57 68 % Beer & Ale Merchant Wholesalers 25,981 0.65 % 3.28 N/A Gasoline Stations with Convenience Stores 47,215 1.18 % 4.19 66 % Lessors of Residential Buildings & Dwellings 436,789 10.92 % 1.89 66 % 1-4 Family 125,929 3.15 % 2.97 68 % Multi-Family 182,785 4.57 % 1.84 66 % Lessors of Nonresidential Buildings 567,746 14.20 % 1.70 65 % Office Buildings 44,129 1.10 % 1.64 63 % Lessors of Mini-Warehouses & Self-Storage Units 40,769 1.02 % 1.62 61 % Assisted Living Facilities 27,955 0.70 % 1.38 57 % Hotels & Motels 321,623 8.04 % 1.43 62 % Average Balance Median Balance Commercial Loans $ 439 $ 92 Commercial Real Estate Loans 493 118 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type September 30, 2023 June 30, 2023 Noninterest-Bearing Demand Deposits 17 % 17 % Interest-Bearing Deposits Demand Deposits 11 % 7 % Savings Deposits 11 % 11 % Time Deposits 14 % 14 % Total Deposits 13 % 12 % The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities). CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage 2023 YTD* 24,518 4,450 1.8 % 2022 28,442 4,544 1.9 % 2021 32,800 8,860 3.8 % 2020 30,360 6,740 3.0 % 2019 32,040 3,717 1.7 % 2018* 30,400 4,310 2.2 % 2017 28,525 2,711 1.4 % 2016 28,650 2,820 1.5 % * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018), Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023). View source version on businesswire.com: https://www.businesswire.com/news/home/20231020891918/en/