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 Record Annual Earnings By: City Holding Company via Business Wire January 24, 2024 at 07:30 AM EST City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $114.4 million and record diluted earnings of $7.61 per share for the year ended December 31, 2023. For the year ended December 31, 2023, the Company achieved a return on assets of 1.87% and a return on tangible equity of 23.8%. “2023 was a challenging year for the banking industry, but a great year for City”, said City’s President and CEO Charles Hageboeck. “City’s strong performance during the year highlights the value of the Company’s deep customer base and conservative operating principles. During 2023, City completed the acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank (“Citizens”) of Versailles, Kentucky, that enhanced our market position in central Kentucky. “Net of loans acquired from Citizens, City grew loans over 6% during 2023, and asset quality remained strong with City only needing to take a relatively small provision for the year (excluding the provision established as part of the acquisition of Citizens). The number of checking accounts grew approximately 2% in 2023, and City saw checking accounts increase in many slow growth regions where City already has a dominant market position. We believe this growth resulted from a combination of excellent service, strong products and technology, coupled with less competition than may be present in more urban markets. “After adjusting for security gains and losses and one-time merger costs, City’s earnings per share remained essentially flat on a quarterly basis throughout 2023 – at approximately $2.00 per share. During the year, the cost of City’s deposits rose by 60 basis points, while interest earning asset yields rose by 145 basis points. City’s average deposits in the fourth quarter of 2023 declined 5.5% from average deposits in the fourth quarter of 2022 (net of deposits acquired from Citizens), but declined only 0.5% from the third quarter of 2023 that reflects an attractive customer mix which is dependent on many, small retail deposit customers. “City issued 667,000 shares in its acquisition of Citizens in the first quarter of 2023, but was able to repurchase essentially all of those shares during the year. As a result, the number of City’s shares outstanding at the end of 2023 only grew marginally from the end of 2022 (due to shares issued for employee and director compensation) – and City’s tangible common equity ratio increased from 8.0% at December 31, 2022, to over 8.6% at December 31, 2023 despite the large number of shares purchased. “As a result, City begins 2024 exceptionally positioned with an extremely strong customer franchise, an exceptional team, an enviable cost of funds, strong asset quality, and competitors who seem focused on making their customers banking experiences more difficult.” Net Interest Income The Company’s net interest income increased from $180.0 million for the year ended December 31, 2022 to $219.2 million for the year ended December 31, 2023. The Company’s tax equivalent net interest income increased $39.0 million, or 21.5%, from $181.3 million for the year ended December 31, 2022 to $220.3 million for the year ended December 31, 2023. The acquisition of Citizens during the first quarter of 2023 added $10.6 million of net interest income during the year ended December 31, 2023. Due to increases in market rates, net interest income increased by $47.2 million due to an increase in loan yields (net of loan fees and accretion) of 127 basis points, by $14.2 million due to an increase in the yield on investment securities of 97 basis points, and by $4.9 million due to a 342 basis point increase on deposits in depository institutions. In addition, net interest income increased $4.4 million due to an increase in balances of loans of $110.2 million and by $2.0 million due to additional accretion from the year ended December 31, 2022. These increases were partially offset by an increase in the cost of interest bearing liabilities (110 basis points) which decreased net interest income by $41.6 million, lower balances of deposits in depository institutions ($214.9 million) that lowered net interest income by $2.3 million, and lower investment balances ($57.8 million) that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 3.33% for the year ended December 31, 2022 to 4.01% for the year ended December 31, 2023. During the fourth quarter of 2023, the Company’s net interest income decreased from $55.6 million during the third quarter of 2023 to $54.7 million. During the fourth quarter of 2023, the Company’s tax equivalent net interest income decreased $1.0 million, or 1.7%, to $54.9 million from $55.9 million during the third quarter of 2023. Due to an increase in the cost of interest bearing liabilities (22 basis points), net interest income decreased $1.8 million. Additionally, lower investment balances ($100.4 million) decreased net interest income by $0.9 million and an increase in balances of interest bearing liabilities ($40.2 million) decreased net interest income by $0.6 million. These decreases were partially offset by an increase in loan balances of $89.0 million which increased net interest income by $1.3 million, an increase of 18 basis points on investment security yields which increased net interest income by $0.7 million, and an increase of one basis point on loans yields which increased net interest income by $0.6 million. The Company’s reported net interest margin decreased from 4.03% for the third quarter of 2023 to 3.98% for the fourth quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.17%, or $6.3 million, at December 31, 2022 to 0.21%, or $8.6 million at December 31, 2023 primarily as a result of the acquisition of Citizens. Total past due loans increased from $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022 to $10.9 million, or 0.27% of total loans outstanding, at December 31, 2023. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a recovery of credit losses of $0.3 million in the fourth quarter of 2023 and a provision for credit losses of $3.2 million for the year ended December 31, 2023, compared to a $0.5 million provision for credit losses for the fourth quarter and for the year ended December 31, 2022. In connection with the completion of our acquisition of Citizens during 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses. Additionally, the provision for the year ended December 31, 2023 was a result of loan growth and credit downgrades that were partially offset by lower historical loss rates in the loan portfolio. Non-interest Income Non-interest income was $70.6 million for the year ended December 31, 2023, as compared to $72.1 million for the year ended December 31, 2022. In 2023, the Company reported $4.9 million of realized security losses and $0.4 million of unrealized security gains on the Company’s equity securities as compared to $1.6 million of unrealized security losses on the Company’s equity securities in 2022. The realized security losses during 2023, which lowered diluted earnings per share by $0.25, were executed to reposition a portion of our investment securities. Exclusive of these realized and unrealized gains and losses, non-interest income increased $1.4 million, or 2.0%, from $73.7 million for 2022 to $75.1 million for 2023. This increase was largely attributable to an increase of $0.8 million, or 8.7%, in trust and investment management fee income and a $0.6 million, or 2.2%, increase in bankcard revenue. In addition, death benefits from bank owned life insurance increased $0.5 million from the year ended December 31, 2022. These increases were partially offset by a decrease of $0.6 million in service charges. During the quarter ended December 31, 2023, non-interest income was $14.2 million as compared to $18.5 million during the quarter ended December 31, 2022. During the fourth quarter of 2023, the Company reported $5.0 million of realized security losses and $0.4 million of unrealized fair value gains on the Company’s equity securities as compared to $0.3 million of unrealized fair value losses on the Company’s equity securities during the fourth quarter of 2022. Exclusive of these realized and unrealized gains and losses, non-interest income remained consistent at $18.8 million for both the fourth quarter of 2022 and for the fourth quarter of 2023. Lower death benefits from bank owned life insurance of $0.6 million was essentially offset by higher bankcard revenue, $0.3 million or 4.7%, and trust and investment management fee income, $0.2 million or 9.4%. Non-interest Expenses Non-interest expenses increased $19.2 million, or 15.5%, from $124.3 million for 2022 to $143.5 million for 2023. This increase was primarily due to an increase in other expenses ($9.8 million, due primarily to higher acquisition and integration expenses associated with the completed acquisition of Citizens ($5.2 million)) and salaries and employee benefit expenses ($6.6 million due to salary adjustments, Citizens personnel ($1.9 million), and increased health insurance). In addition, bankcard expense increased $1.4 million, FDIC expense increased $1.2 million and occupancy related expenses increased $0.6 million. In the fourth quarter of 2023, non-interest expenses increased $2.5 million (7.7%) from $32.6 million in the fourth quarter of 2022 to $35.1 million. This increase was largely due to an increase in salaries and employee benefits of $1.6 million (salary adjustments, Citizens personnel ($0.6 million), and increased health insurance) and bankcard expenses of $0.7 million. In addition, other expenses increased $0.5 million and FDIC expense increased $0.5 million. These increases were partially offset by lower equipment and software related expense ($0.5 million). Balance Sheet Trends Loans increased $479.7 million (13.2%) from December 31, 2022 to $4.13 billion at December 31, 2023. The Company’s acquisition of Citizens increased total loans by $254.7 million. Excluding the acquisition, total loans increased $225.0 million (6.2%) from December 31, 2022. Commercial real estate loans increased $101.4 million (7.3%); residential real estate loans increased $51.3 million (3.0%); commercial and industrial loans increased $38.4 million (10.3%); home equity loans increased $19.1 million (14.3%); and consumer loans increased $13.4 million (27.4%). Average depository balances for the year ended December 31, 2023 approximated those for the year ended December 31, 2022 at $4.98 billion. The acquisition of Citizens increased average deposits by $243.0 million during 2023. Excluding the acquisition of Citizens, average deposits declined $237.9 million. Average savings deposits decreased $139.7 million, average noninterest bearing demand deposits decreased $87.3 million, and average time deposits decreased $68.3 million. These decreases were partially offset by an increase in average interest bearing demand deposits of $57.3 million. Income Tax Expense The Company’s effective income tax rates for the quarter and year ended December 31, 2023 were 19.5% and 20.1%, respectively, compared to 18.2% and 19.8% for the comparable periods in 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 83.6% and the loan to asset ratio was 66.9% at December 31, 2023. The Company maintained investment securities totaling 22.2% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 63.1% of assets at December 31, 2023. Time deposits fund 16.9% of assets at December 31, 2023, with only 12.6% 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. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of December 31, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, approximately $690 million of City’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $680 million of City’s investment securities unpledged at December 31, 2023. The Company continues to be strongly capitalized with tangible equity of $514 million at December 31, 2023. The Company’s tangible equity ratio increased from 8.0% at December 31, 2022 to 8.6% at December 30, 2023. This increase was attributable to the Company’s net income for 2023 less dividends and a decrease in unrealized losses on securities available for sale due to the impact of lower interest rates at the end of 2023. At December 31, 2023, City National’s Leverage Ratio was 8.9%, its Common Equity Tier I ratio was 13.8%, its Tier I Capital ratio was 13.8%, and its Total Risk-Based Capital ratio was 14.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 15, 2023, the Company’s Board of Directors approved a quarterly cash dividend of $0.715 cents per share payable January 31, 2024, to shareholders of record as of January 15, 2024. During the year ended December 31, 2023, the Company repurchased 667,000 common shares at a weighted average price of $90.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2023, the Company could repurchase an additional approximately 150,000 shares under the current plan. City National Bank operates 98 branches across West Virginia, Kentucky, Virginia, and Ohio. City National will be closing its Nichols Park branch located in Lexington, Kentucky on February 9, 2024, due to its proximity to three existing City National branches. 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 December 31, 2023 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 54,889 $ 55,855 $ 55,757 $ 53,767 $ 52,381 $ 220,266 $ 181,339 Net Income available to common shareholders 27,452 29,839 32,733 24,341 30,672 114,365 102,071 Per Share Data Earnings per share available to common shareholders: Basic $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 7.62 $ 6.81 Diluted 1.84 1.98 2.16 1.63 2.05 7.61 6.80 Weighted average number of shares (in thousands): Basic 14,758 14,922 14,994 14,818 14,756 14,868 14,847 Diluted 14,785 14,945 15,012 14,844 14,785 14,891 14,873 Period-end number of shares (in thousands) 14,832 14,901 15,007 15,260 14,788 14,832 14,788 Cash dividends declared $ 0.72 $ 0.72 $ 0.65 $ 0.65 $ 0.65 $ 2.73 $ 2.50 Book value per share (period-end) $ 45.65 $ 40.94 $ 42.39 $ 42.66 $ 39.08 $ 45.65 $ 39.08 Tangible book value per share (period-end) 34.69 29.98 31.50 31.91 31.25 34.69 31.25 Market data: High closing price $ 115.77 $ 99.49 $ 97.92 $ 100.27 $ 101.94 $ 115.77 $ 101.94 Low closing price 87.43 87.51 83.57 89.17 89.32 83.57 73.88 Period-end closing price 110.26 90.35 89.99 90.88 93.09 110.26 93.09 Average daily volume (in thousands) 62 62 80 84 75 72 70 Treasury share activity: Treasury shares repurchased (in thousands) 70 109 269 218 69 667 325 Average treasury share repurchase price $ 90.61 $ 89.33 $ 88.93 $ 92.10 $ 93.12 $ 90.21 $ 81.50 Key Ratios (percent) Return on average assets 1.78 % 1.94 % 2.12 % 1.63 % 2.08 % 1.87 % 1.71 % Return on average tangible equity 23.5 % 24.1 % 27.4 % 19.9 % 27.3 % 23.8 % 20.3 % Yield on interest earning assets 5.23 % 5.08 % 4.87 % 4.66 % 4.23 % 4.96 % 3.51 % Cost of interest bearing liabilities 1.70 % 1.46 % 1.22 % 0.86 % 0.48 % 1.32 % 0.25 % Net Interest Margin 3.98 % 4.03 % 4.00 % 4.05 % 3.89 % 4.01 % 3.33 % Non-interest income as a percent of total revenue 25.6 % 24.6 % 27.1 % 24.7 % 26.5 % 25.6 % 28.6 % Efficiency Ratio 47.4 % 46.4 % 44.6 % 45.7 % 45.3 % 46.0 % 48.2 % Price/Earnings Ratio (a) 14.95 11.40 10.40 13.95 11.30 14.47 13.67 Capital (period-end) Average Shareholders' Equity to Average Assets 10.27 % 10.73 % 10.38 % 10.31 % 9.57 % Tangible equity to tangible assets 8.57 % 7.55 % 7.90 % 8.05 % 8.02 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.70 % 15.36 % 15.47 % 15.64 % 16.23 % Tier I 15.70 % 15.36 % 15.47 % 15.64 % 16.23 % Total 16.23 % 15.89 % 16.01 % 16.18 % 16.62 % Leverage 10.23 % 10.05 % 9.80 % 10.20 % 10.01 % City National Bank risk based capital ratios (b): CET I 13.79 % 14.73 % 14.82 % 14.08 % 13.88 % Tier I 13.79 % 14.73 % 14.82 % 14.08 % 13.88 % Total 14.32 % 15.27 % 15.36 % 14.63 % 14.28 % Leverage 8.94 % 9.61 % 9.36 % 9.18 % 8.55 % Other (period-end) Branches 98 99 99 99 94 FTE 957 966 963 958 909 Assets per FTE (in thousands) $ 6,447 $ 6,291 $ 6,383 $ 6,483 $ 6,467 Deposits per FTE (in thousands) 5,157 5,120 5,208 5,362 5,357 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Interest Income Interest and fees on loans $ 57,755 $ 55,582 $ 52,352 $ 47,004 $ 42,963 $ 212,693 $ 146,538 Interest on investment securities: Taxable 12,336 12,432 11,794 11,773 11,119 48,335 34,445 Tax-exempt 832 910 950 1,162 1,262 3,854 4,911 Interest on deposits in depository institutions 941 1,265 2,585 1,591 1,244 6,382 3,794 Total Interest Income 71,864 70,189 67,681 61,530 56,588 271,264 189,688 Interest Expense Interest on deposits 12,479 10,551 8,567 5,690 3,010 37,287 7,444 Interest on short-term borrowings 3,693 2,990 2,963 2,381 1,533 12,027 2,211 Interest on FHLB long-term advances 1,026 1,034 649 - - 2,709 - Total Interest Expense 17,198 14,575 12,179 8,071 4,543 52,023 9,655 Net Interest Income 54,666 55,614 55,502 53,459 52,045 219,241 180,033 (Recovery of) Provision for credit losses (300 ) 200 425 2,918 500 3,243 474 Net Interest Income After Provision for (Recovery of) Credit Losses 54,966 55,414 55,077 50,541 51,545 215,998 179,559 Non-Interest Income Net (losses) gains on sale of investment securities (4,951 ) (730 ) - 773 4 (4,908 ) 4 Unrealized gains/(losses) recognized on equity securities still held 365 - (294 ) 361 (262 ) 432 (1,585 ) Service charges 7,158 7,124 6,906 6,563 7,056 27,751 28,335 Bankcard revenue 7,109 7,058 7,190 6,603 6,791 27,960 27,349 Trust and investment management fee income 2,563 2,409 2,339 2,252 2,343 9,563 8,798 Bank owned life insurance 1,218 807 3,208 804 1,813 6,037 5,559 Other income 774 742 952 1,326 791 3,794 3,617 Total Non-Interest Income 14,236 17,410 20,301 18,682 18,536 70,629 72,077 Non-Interest Expense Salaries and employee benefits 18,772 18,289 18,429 17,673 17,148 73,163 66,536 Occupancy related expense 2,917 2,950 2,811 2,640 2,725 11,318 10,718 Equipment and software related expense 2,824 2,830 2,883 3,092 3,341 11,629 11,791 FDIC insurance expense 868 919 690 445 413 2,922 1,673 Advertising 588 790 974 760 802 3,112 3,405 Bankcard expenses 2,014 2,188 1,736 1,509 1,356 7,447 6,032 Postage, delivery, and statement mailings 615 668 596 647 597 2,526 2,362 Office supplies 477 457 591 420 441 1,945 1,744 Legal and professional fees 478 529 558 470 610 2,035 2,194 Telecommunications 614 568 623 606 627 2,411 2,616 Repossessed asset (gains)/losses, net of expenses (50 ) 40 22 16 54 28 59 Other expenses 4,992 4,800 4,848 10,345 4,471 24,985 15,172 Total Non-Interest Expense 35,109 35,028 34,761 38,623 32,585 143,521 124,302 Income Before Income Taxes 34,093 37,796 40,617 30,600 37,496 143,106 127,334 Income tax expense 6,641 7,957 7,884 6,259 6,824 28,741 25,263 Net Income Available to Common Shareholders $ 27,452 $ 29,839 $ 32,733 $ 24,341 $ 30,672 $ 114,365 $ 102,071 Distributed earnings allocated to common shareholders $ 10,508 $ 10,554 $ 9,668 $ 9,833 $ 9,521 $ 40,121 $ 36,619 Undistributed earnings allocated to common shareholders 16,696 19,004 22,774 14,294 20,857 73,208 64,494 Net earnings allocated to common shareholders $ 27,204 $ 29,558 $ 32,442 $ 24,127 $ 30,378 $ 113,329 $ 101,113 Average common shares outstanding 14,758 14,922 14,994 14,818 14,756 14,868 14,847 Shares for diluted earnings per share 14,785 14,945 15,012 14,844 14,785 14,891 14,873 Basic earnings per common share $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 7.62 $ 6.81 Diluted earnings per common share $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.05 $ 7.61 $ 6.80 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Assets Cash and due from banks $ 123,033 $ 67,402 $ 69,622 $ 76,223 $ 70,257 Interest-bearing deposits in depository institutions 33,243 43,314 161,659 226,587 129,743 Cash and cash equivalents 156,276 110,716 231,281 302,810 200,000 Investment securities available-for-sale, at fair value 1,338,137 1,358,219 1,419,933 1,456,259 1,505,520 Other securities 30,966 29,022 29,262 24,728 23,807 Total investment securities 1,369,103 1,387,241 1,449,195 1,480,987 1,529,327 Gross loans 4,125,923 4,007,482 3,922,142 3,894,686 3,646,258 Allowance for credit losses (22,745 ) (23,128 ) (22,751 ) (22,724 ) (17,108 ) Net loans 4,103,178 3,984,354 3,899,391 3,871,962 3,629,150 Bank owned life insurance 118,122 117,979 117,173 124,238 120,674 Premises and equipment, net 72,146 72,682 73,118 73,430 70,786 Accrued interest receivable 20,290 19,223 17,973 18,395 18,287 Net deferred tax assets 42,216 58,811 46,944 42,146 44,884 Goodwill and intangible assets 162,568 163,461 163,426 164,099 115,735 Other assets 124,153 161,659 148,333 132,715 149,263 Total Assets $ 6,168,052 $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 Liabilities Deposits: Noninterest-bearing $ 1,342,804 $ 1,333,474 $ 1,373,106 $ 1,420,990 $ 1,351,415 Interest-bearing: Demand deposits 1,291,011 1,319,783 1,337,445 1,356,017 1,233,482 Savings deposits 1,259,457 1,282,642 1,343,571 1,397,523 1,396,869 Time deposits 1,040,990 1,009,235 960,941 962,235 888,100 Total deposits 4,934,262 4,945,134 5,015,063 5,136,765 4,869,866 Short-term borrowings FHLB short-term advances 25,000 - - - - Customer repurchase agreements 309,856 278,671 271,714 293,256 290,964 FHLB long-term advances 100,000 100,000 100,000 - - Other liabilities 121,868 142,187 123,865 129,711 139,424 Total Liabilities 5,490,986 5,465,992 5,510,642 5,559,732 5,300,254 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 177,424 177,113 176,746 177,529 170,980 Retained earnings 780,299 763,425 744,248 721,727 706,696 Cost of common stock in treasury (217,737 ) (211,430 ) (201,973 ) (179,436 ) (215,955 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (107,958 ) (163,171 ) (127,026 ) (112,967 ) (128,066 ) Underfunded pension liability (2,581 ) (3,422 ) (3,422 ) (3,422 ) (3,422 ) Total Accumulated Other Comprehensive (Loss) Income (110,539 ) (166,593 ) (130,448 ) (116,389 ) (131,488 ) Total Stockholders' Equity 677,066 610,134 636,192 651,050 577,852 Total Liabilities and Stockholders' Equity $ 6,168,052 $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 Regulatory Capital Total CET 1 capital $ 627,579 $ 615,798 $ 605,661 $ 606,675 $ 598,068 Total tier 1 capital 627,579 615,798 605,661 606,675 598,068 Total risk-based capital 648,646 637,245 626,730 627,718 612,654 Total risk-weighted assets 3,996,688 4,009,798 3,913,870 3,878,994 3,685,207 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Commercial and industrial $ 426,950 $ 424,647 $ 417,847 $ 390,861 $ 373,890 1-4 Family 206,237 135,226 123,701 119,017 116,192 Hotels 357,142 321,236 324,745 327,554 340,404 Multi-family 189,165 192,329 191,483 195,042 174,786 Non Residential Non-Owner Occupied 680,590 713,353 673,921 679,782 585,964 Non Residential Owner Occupied 240,328 222,544 222,852 223,096 174,961 Commercial real estate (1) 1,673,462 1,584,688 1,536,702 1,544,491 1,392,307 Residential real estate (2) 1,788,150 1,768,358 1,746,618 1,737,604 1,693,523 Home equity 167,201 159,630 151,012 151,341 134,317 Consumer 65,246 65,586 65,201 66,994 48,806 DDA overdrafts 4,914 4,573 4,762 3,395 3,415 Gross Loans $ 4,125,923 $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 Construction loans included in: (1) - Commercial real estate loans $ 2,459 $ 2,533 $ 3,361 $ 4,715 $ 4,130 (2) - Residential real estate loans 23,066 20,056 20,470 25,224 21,122 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Allowance for Credit Losses Balance at beginning of period $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial (84 ) - (69 ) - (120 ) (153 ) (562 ) Commercial real estate (5 ) (256 ) (117 ) (3 ) (31 ) (381 ) (55 ) Residential real estate (68 ) (88 ) (20 ) (32 ) (66 ) (208 ) (265 ) Home equity (21 ) (112 ) (200 ) (67 ) (189 ) (400 ) (279 ) Consumer (6 ) (10 ) (109 ) (62 ) (15 ) (187 ) (63 ) DDA overdrafts (416 ) (422 ) (357 ) (450 ) (670 ) (1,645 ) (2,624 ) Total charge-offs (600 ) (888 ) (872 ) (614 ) (1,091 ) (2,974 ) (3,848 ) Recoveries: Commercial and industrial 70 597 86 83 94 836 334 Commercial real estate 17 74 28 158 120 277 207 Residential real estate 4 28 5 10 49 47 99 Home equity 13 18 12 4 34 47 56 Consumer 45 27 28 23 31 123 107 DDA overdrafts 368 321 315 398 360 1,402 1,513 Total recoveries 517 1,065 474 676 688 2,732 2,316 Net (charge-offs) recoveries (83 ) 177 (398 ) 62 (403 ) (242 ) (1,532 ) (Recovery of) provision for credit losses (300 ) 200 425 2,918 500 3,243 474 PCD Loan Reserves - - - 2,811 - 2,811 - Adoption of ASU 2022-02 - - - (175 ) - (175 ) - Balance at end of period $ 22,745 $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 22,745 $ 17,108 Loans outstanding $ 4,125,923 $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 Allowance as a percent of loans outstanding 0.55 % 0.58 % 0.58 % 0.58 % 0.47 % Allowance as a percent of non-performing loans 290.6 % 440.1 % 405.5 % 400.1 % 317.3 % Average loans outstanding $ 4,045,889 $ 3,956,871 $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,900,913 $ 3,583,526 Net (recoveries)/charge-offs (annualized) as a percent of average loans outstanding 0.01 % (0.02 )% 0.04 % (0.01 )% 0.04 % 0.01 % 0.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Nonaccrual Loans Residential real estate $ 2,849 $ 2,839 $ 2,774 $ 2,700 $ 1,969 Home equity 111 75 24 35 55 Commercial and industrial 2,211 716 741 994 1,015 Commercial real estate 2,387 1,355 1,821 1,931 2,166 Consumer - 1 36 19 - Total nonaccrual loans 7,558 4,986 5,396 5,679 5,205 Accruing loans past due 90 days or more 270 269 215 - 187 Total non-performing loans 7,828 5,255 5,611 5,679 5,392 Other real estate owned 731 720 874 843 909 Total non-performing assets $ 8,559 $ 5,975 $ 6,485 $ 6,522 $ 6,301 Non-performing assets as a percent of loans and other real estate owned 0.21 % 0.15 % 0.17 % 0.17 % 0.17 % Past Due Loans Residential real estate $ 8,059 $ 6,247 $ 5,884 $ 4,783 $ 7,091 Home equity 1,235 1,278 784 551 650 Commercial and industrial 435 568 142 98 234 Commercial real estate 715 1,478 238 148 710 Consumer 129 84 57 3 100 DDA overdrafts 364 398 341 276 391 Total past due loans $ 10,937 $ 10,053 $ 7,446 $ 5,859 $ 9,176 Total past due loans as a percent of loans outstanding 0.27 % 0.25 % 0.19 % 0.15 % 0.25 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,945,185 $ 23,673 4.83 % $ 1,910,876 $ 22,702 4.71 % $ 1,824,327 $ 18,973 4.13 % Commercial, financial, and agriculture (2) 2,031,089 33,038 6.45 % 1,975,463 31,743 6.38 % 1,773,937 23,346 5.22 % Installment loans to individuals (2), (3) 69,615 1,046 5.96 % 70,532 1,138 6.40 % 50,732 646 5.05 % Total loans 4,045,889 57,757 5.66 % 3,956,871 55,583 5.57 % 3,648,996 42,965 4.67 % Securities: Taxable 1,194,448 12,336 4.10 % 1,277,265 12,432 3.86 % 1,315,453 11,118 3.35 % Tax-exempt (4) 153,204 1,053 2.73 % 170,806 1,152 2.68 % 211,326 1,597 3.00 % Total securities 1,347,652 13,389 3.94 % 1,448,071 13,584 3.72 % 1,526,779 12,715 3.30 % Deposits in depository institutions 71,624 941 5.21 % 90,994 1,265 5.52 % 162,732 1,245 3.04 % Total interest-earning assets 5,465,165 72,087 5.23 % 5,495,936 70,432 5.08 % 5,338,507 56,925 4.23 % Cash and due from banks 87,633 69,348 69,223 Premises and equipment, net 72,435 73,004 71,482 Goodwill and intangible assets 163,220 163,602 115,952 Other assets 342,669 332,551 332,855 Less: Allowance for credit losses (23,532 ) (23,558 ) (17,332 ) Total assets $ 6,107,590 $ 6,110,883 $ 5,910,687 Liabilities: Interest-bearing demand deposits $ 1,299,683 $ 3,467 1.06 % $ 1,300,936 $ 3,068 0.94 % $ 1,150,327 $ 684 0.24 % Savings deposits 1,274,726 2,369 0.74 % 1,314,484 2,319 0.70 % 1,412,246 829 0.23 % Time deposits (2) 1,025,870 6,644 2.57 % 985,038 5,163 2.08 % 916,845 1,497 0.65 % Short-term borrowings 312,941 3,693 4.68 % 272,558 2,990 4.35 % 303,599 1,534 2.00 % FHLB long-term advances 100,000 1,026 4.07 % 100,000 1,035 4.11 % - - - Total interest-bearing liabilities 4,013,220 17,199 1.70 % 3,973,016 14,575 1.46 % 3,783,017 4,544 0.48 % Noninterest-bearing demand deposits 1,334,021 1,359,268 1,428,013 Other liabilities 132,862 123,137 134,075 Stockholders' equity 627,487 655,462 565,582 Total liabilities and stockholders' equity $ 6,107,590 $ 6,110,883 $ 5,910,687 Net interest income $ 54,888 $ 55,857 $ 52,381 Net yield on earning assets 3.98 % 4.03 % 3.89 % (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 $ 201 $ 254 $ (41 ) (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 $ 78 $ 47 $ 67 Commercial, financial, and agriculture 702 720 135 Installment loans to individuals 26 4 4 Time deposits 131 240 21 $ 937 $ 1,011 $ 227 (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) Twelve Months Ended December 31, 2023 December 31, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,899,239 $ 88,083 4.64 % $ 1,755,772 $ 68,581 3.91 % Commercial, financial, and agriculture (2) 1,935,038 120,783 6.24 % 1,781,132 75,390 4.23 % Installment loans to individuals (2), (3) 66,636 3,828 5.74 % 46,622 2,567 5.51 % Total loans 3,900,913 212,694 5.45 % 3,583,526 146,538 4.09 % Securities: Taxable 1,273,674 48,335 3.79 % 1,288,252 34,445 2.67 % Tax-exempt (4) 175,383 4,878 2.78 % 218,588 6,217 2.84 % Total securities 1,449,057 53,213 3.67 % 1,506,840 40,662 2.70 % Deposits in depository institutions 142,299 6,382 4.48 % 357,184 3,794 1.06 % Total interest-earning assets 5,492,269 272,289 4.96 % 5,447,550 190,994 3.51 % Cash and due from banks 74,443 88,581 Premises and equipment, net 72,582 72,590 Goodwill and intangible assets 153,937 116,469 Other assets 329,198 271,685 Less: Allowance for credit losses (22,089 ) (17,687 ) Total assets $ 6,100,340 $ 5,979,188 Liabilities: Interest-bearing demand deposits $ 1,291,234 $ 11,048 0.86 % $ 1,150,007 $ 1,234 0.11 % Savings deposits 1,332,527 7,979 0.60 % 1,414,727 1,544 0.11 % Time deposits (2) 969,329 18,260 1.88 % 983,046 4,666 0.47 % Short-term borrowings 290,440 12,027 4.14 % 284,611 2,211 0.78 % FHLB long-term advances 66,849 2,709 4.05 % - - - Total interest-bearing liabilities 3,950,379 52,023 1.32 % 3,832,391 9,655 0.25 % Noninterest-bearing demand deposits 1,389,295 1,429,415 Other liabilities 125,377 98,553 Stockholders' equity 635,289 618,829 Total liabilities and stockholders' equity $ 6,100,340 $ 5,979,188 Net interest income $ 220,266 $ 181,339 Net yield on earning assets 4.01 % 3.33 % (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 $ 1,366 $ 568 (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 $ 243 $ 298 Commercial, financial, and agriculture 2,276 642 Installment loans to individuals 41 45 Time deposits 535 83 $ 3,095 $ 1,068 (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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 54,666 $ 55,614 $ 55,502 $ 53,459 $ 52,045 $ 219,241 $ 180,033 Taxable equivalent adjustment 223 243 255 308 336 1,025 1,306 Net interest income, fully taxable equivalent $ 54,889 $ 55,857 $ 55,757 $ 53,767 $ 52,381 $ 220,266 $ 181,339 Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.98 % 10.04 % 10.35 % 10.48 % 9.83 % Effect of goodwill and other intangibles, net (2.41 )% (2.49 )% (2.45 )% (2.43 )% (1.81 )% Tangible common equity to tangible assets 8.57 % 7.55 % 7.90 % 8.05 % 8.02 % Return on Average Tangible Equity and Return on Assets Ratios (period end) Return on average tangible equity ("GAAP") 23.8 % 20.3 % Impact of merger related expenses 0.8 % - % Impact of merger related provision 0.3 % - % Return on tangible equity, excluding merger related expenses and provision 24.9 % 20.3 % Return on assets ("GAAP") 1.87 % 1.71 % Impact of merger related expenses 0.07 % - % Impact of merger related provision 0.03 % - % Return on assets, excluding merger related expenses and provision 1.97 % 1.71 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 23,743 0.58 % 3.68 N/A Natural Gas Distribution 20,000 0.49 % 2.61 N/A Masonry Contractors 24,190 0.59 % 1.13 84 % Sheet Metal Work Manufacturing 25,887 0.63 % 1.57 68 % Beer & Ale Merchant Wholesalers 25,672 0.62 % 3.28 N/A Gasoline Stations with Convenience Stores 45,945 1.11 % 4.19 65 % Lessors of Residential Buildings & Dwellings 433,506 10.52 % 1.89 66 % 1-4 Family 186,341 4.52 % 2.97 68 % Multi-Family 179,822 4.36 % 1.84 66 % Lessors of Nonresidential Buildings 611,108 14.83 % 1.70 65 % Office Buildings 43,735 1.06 % 1.64 63 % Lessors of Mini-Warehouses & Self-Storage Units 50,898 1.23 % 1.62 61 % Assisted Living Facilities 27,620 0.67 % 1.38 57 % Hotels & Motels 357,572 8.68 % 1.43 62 % Average Balance Median Balance Commercial, Financial, and Agriculture Loans $ 456 $ 93 Commercial Real Estate Loans 517 120 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type December 31, 2023 September 30, 2023 Noninterest-Bearing Demand Deposits 16 % 17 % Interest-Bearing Deposits Demand Deposits 7 % 11 % Savings Deposits 11 % 11 % Time Deposits 13 % 14 % Total Deposits 12 % 13 % 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* 31,745 4,768 1.9 % 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/20240122746389/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 Record Annual Earnings By: City Holding Company via Business Wire January 24, 2024 at 07:30 AM EST City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $114.4 million and record diluted earnings of $7.61 per share for the year ended December 31, 2023. For the year ended December 31, 2023, the Company achieved a return on assets of 1.87% and a return on tangible equity of 23.8%. “2023 was a challenging year for the banking industry, but a great year for City”, said City’s President and CEO Charles Hageboeck. “City’s strong performance during the year highlights the value of the Company’s deep customer base and conservative operating principles. During 2023, City completed the acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank (“Citizens”) of Versailles, Kentucky, that enhanced our market position in central Kentucky. “Net of loans acquired from Citizens, City grew loans over 6% during 2023, and asset quality remained strong with City only needing to take a relatively small provision for the year (excluding the provision established as part of the acquisition of Citizens). The number of checking accounts grew approximately 2% in 2023, and City saw checking accounts increase in many slow growth regions where City already has a dominant market position. We believe this growth resulted from a combination of excellent service, strong products and technology, coupled with less competition than may be present in more urban markets. “After adjusting for security gains and losses and one-time merger costs, City’s earnings per share remained essentially flat on a quarterly basis throughout 2023 – at approximately $2.00 per share. During the year, the cost of City’s deposits rose by 60 basis points, while interest earning asset yields rose by 145 basis points. City’s average deposits in the fourth quarter of 2023 declined 5.5% from average deposits in the fourth quarter of 2022 (net of deposits acquired from Citizens), but declined only 0.5% from the third quarter of 2023 that reflects an attractive customer mix which is dependent on many, small retail deposit customers. “City issued 667,000 shares in its acquisition of Citizens in the first quarter of 2023, but was able to repurchase essentially all of those shares during the year. As a result, the number of City’s shares outstanding at the end of 2023 only grew marginally from the end of 2022 (due to shares issued for employee and director compensation) – and City’s tangible common equity ratio increased from 8.0% at December 31, 2022, to over 8.6% at December 31, 2023 despite the large number of shares purchased. “As a result, City begins 2024 exceptionally positioned with an extremely strong customer franchise, an exceptional team, an enviable cost of funds, strong asset quality, and competitors who seem focused on making their customers banking experiences more difficult.” Net Interest Income The Company’s net interest income increased from $180.0 million for the year ended December 31, 2022 to $219.2 million for the year ended December 31, 2023. The Company’s tax equivalent net interest income increased $39.0 million, or 21.5%, from $181.3 million for the year ended December 31, 2022 to $220.3 million for the year ended December 31, 2023. The acquisition of Citizens during the first quarter of 2023 added $10.6 million of net interest income during the year ended December 31, 2023. Due to increases in market rates, net interest income increased by $47.2 million due to an increase in loan yields (net of loan fees and accretion) of 127 basis points, by $14.2 million due to an increase in the yield on investment securities of 97 basis points, and by $4.9 million due to a 342 basis point increase on deposits in depository institutions. In addition, net interest income increased $4.4 million due to an increase in balances of loans of $110.2 million and by $2.0 million due to additional accretion from the year ended December 31, 2022. These increases were partially offset by an increase in the cost of interest bearing liabilities (110 basis points) which decreased net interest income by $41.6 million, lower balances of deposits in depository institutions ($214.9 million) that lowered net interest income by $2.3 million, and lower investment balances ($57.8 million) that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 3.33% for the year ended December 31, 2022 to 4.01% for the year ended December 31, 2023. During the fourth quarter of 2023, the Company’s net interest income decreased from $55.6 million during the third quarter of 2023 to $54.7 million. During the fourth quarter of 2023, the Company’s tax equivalent net interest income decreased $1.0 million, or 1.7%, to $54.9 million from $55.9 million during the third quarter of 2023. Due to an increase in the cost of interest bearing liabilities (22 basis points), net interest income decreased $1.8 million. Additionally, lower investment balances ($100.4 million) decreased net interest income by $0.9 million and an increase in balances of interest bearing liabilities ($40.2 million) decreased net interest income by $0.6 million. These decreases were partially offset by an increase in loan balances of $89.0 million which increased net interest income by $1.3 million, an increase of 18 basis points on investment security yields which increased net interest income by $0.7 million, and an increase of one basis point on loans yields which increased net interest income by $0.6 million. The Company’s reported net interest margin decreased from 4.03% for the third quarter of 2023 to 3.98% for the fourth quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.17%, or $6.3 million, at December 31, 2022 to 0.21%, or $8.6 million at December 31, 2023 primarily as a result of the acquisition of Citizens. Total past due loans increased from $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022 to $10.9 million, or 0.27% of total loans outstanding, at December 31, 2023. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a recovery of credit losses of $0.3 million in the fourth quarter of 2023 and a provision for credit losses of $3.2 million for the year ended December 31, 2023, compared to a $0.5 million provision for credit losses for the fourth quarter and for the year ended December 31, 2022. In connection with the completion of our acquisition of Citizens during 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses. Additionally, the provision for the year ended December 31, 2023 was a result of loan growth and credit downgrades that were partially offset by lower historical loss rates in the loan portfolio. Non-interest Income Non-interest income was $70.6 million for the year ended December 31, 2023, as compared to $72.1 million for the year ended December 31, 2022. In 2023, the Company reported $4.9 million of realized security losses and $0.4 million of unrealized security gains on the Company’s equity securities as compared to $1.6 million of unrealized security losses on the Company’s equity securities in 2022. The realized security losses during 2023, which lowered diluted earnings per share by $0.25, were executed to reposition a portion of our investment securities. Exclusive of these realized and unrealized gains and losses, non-interest income increased $1.4 million, or 2.0%, from $73.7 million for 2022 to $75.1 million for 2023. This increase was largely attributable to an increase of $0.8 million, or 8.7%, in trust and investment management fee income and a $0.6 million, or 2.2%, increase in bankcard revenue. In addition, death benefits from bank owned life insurance increased $0.5 million from the year ended December 31, 2022. These increases were partially offset by a decrease of $0.6 million in service charges. During the quarter ended December 31, 2023, non-interest income was $14.2 million as compared to $18.5 million during the quarter ended December 31, 2022. During the fourth quarter of 2023, the Company reported $5.0 million of realized security losses and $0.4 million of unrealized fair value gains on the Company’s equity securities as compared to $0.3 million of unrealized fair value losses on the Company’s equity securities during the fourth quarter of 2022. Exclusive of these realized and unrealized gains and losses, non-interest income remained consistent at $18.8 million for both the fourth quarter of 2022 and for the fourth quarter of 2023. Lower death benefits from bank owned life insurance of $0.6 million was essentially offset by higher bankcard revenue, $0.3 million or 4.7%, and trust and investment management fee income, $0.2 million or 9.4%. Non-interest Expenses Non-interest expenses increased $19.2 million, or 15.5%, from $124.3 million for 2022 to $143.5 million for 2023. This increase was primarily due to an increase in other expenses ($9.8 million, due primarily to higher acquisition and integration expenses associated with the completed acquisition of Citizens ($5.2 million)) and salaries and employee benefit expenses ($6.6 million due to salary adjustments, Citizens personnel ($1.9 million), and increased health insurance). In addition, bankcard expense increased $1.4 million, FDIC expense increased $1.2 million and occupancy related expenses increased $0.6 million. In the fourth quarter of 2023, non-interest expenses increased $2.5 million (7.7%) from $32.6 million in the fourth quarter of 2022 to $35.1 million. This increase was largely due to an increase in salaries and employee benefits of $1.6 million (salary adjustments, Citizens personnel ($0.6 million), and increased health insurance) and bankcard expenses of $0.7 million. In addition, other expenses increased $0.5 million and FDIC expense increased $0.5 million. These increases were partially offset by lower equipment and software related expense ($0.5 million). Balance Sheet Trends Loans increased $479.7 million (13.2%) from December 31, 2022 to $4.13 billion at December 31, 2023. The Company’s acquisition of Citizens increased total loans by $254.7 million. Excluding the acquisition, total loans increased $225.0 million (6.2%) from December 31, 2022. Commercial real estate loans increased $101.4 million (7.3%); residential real estate loans increased $51.3 million (3.0%); commercial and industrial loans increased $38.4 million (10.3%); home equity loans increased $19.1 million (14.3%); and consumer loans increased $13.4 million (27.4%). Average depository balances for the year ended December 31, 2023 approximated those for the year ended December 31, 2022 at $4.98 billion. The acquisition of Citizens increased average deposits by $243.0 million during 2023. Excluding the acquisition of Citizens, average deposits declined $237.9 million. Average savings deposits decreased $139.7 million, average noninterest bearing demand deposits decreased $87.3 million, and average time deposits decreased $68.3 million. These decreases were partially offset by an increase in average interest bearing demand deposits of $57.3 million. Income Tax Expense The Company’s effective income tax rates for the quarter and year ended December 31, 2023 were 19.5% and 20.1%, respectively, compared to 18.2% and 19.8% for the comparable periods in 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 83.6% and the loan to asset ratio was 66.9% at December 31, 2023. The Company maintained investment securities totaling 22.2% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 63.1% of assets at December 31, 2023. Time deposits fund 16.9% of assets at December 31, 2023, with only 12.6% 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. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of December 31, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, approximately $690 million of City’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $680 million of City’s investment securities unpledged at December 31, 2023. The Company continues to be strongly capitalized with tangible equity of $514 million at December 31, 2023. The Company’s tangible equity ratio increased from 8.0% at December 31, 2022 to 8.6% at December 30, 2023. This increase was attributable to the Company’s net income for 2023 less dividends and a decrease in unrealized losses on securities available for sale due to the impact of lower interest rates at the end of 2023. At December 31, 2023, City National’s Leverage Ratio was 8.9%, its Common Equity Tier I ratio was 13.8%, its Tier I Capital ratio was 13.8%, and its Total Risk-Based Capital ratio was 14.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 15, 2023, the Company’s Board of Directors approved a quarterly cash dividend of $0.715 cents per share payable January 31, 2024, to shareholders of record as of January 15, 2024. During the year ended December 31, 2023, the Company repurchased 667,000 common shares at a weighted average price of $90.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2023, the Company could repurchase an additional approximately 150,000 shares under the current plan. City National Bank operates 98 branches across West Virginia, Kentucky, Virginia, and Ohio. City National will be closing its Nichols Park branch located in Lexington, Kentucky on February 9, 2024, due to its proximity to three existing City National branches. 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 December 31, 2023 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 54,889 $ 55,855 $ 55,757 $ 53,767 $ 52,381 $ 220,266 $ 181,339 Net Income available to common shareholders 27,452 29,839 32,733 24,341 30,672 114,365 102,071 Per Share Data Earnings per share available to common shareholders: Basic $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 7.62 $ 6.81 Diluted 1.84 1.98 2.16 1.63 2.05 7.61 6.80 Weighted average number of shares (in thousands): Basic 14,758 14,922 14,994 14,818 14,756 14,868 14,847 Diluted 14,785 14,945 15,012 14,844 14,785 14,891 14,873 Period-end number of shares (in thousands) 14,832 14,901 15,007 15,260 14,788 14,832 14,788 Cash dividends declared $ 0.72 $ 0.72 $ 0.65 $ 0.65 $ 0.65 $ 2.73 $ 2.50 Book value per share (period-end) $ 45.65 $ 40.94 $ 42.39 $ 42.66 $ 39.08 $ 45.65 $ 39.08 Tangible book value per share (period-end) 34.69 29.98 31.50 31.91 31.25 34.69 31.25 Market data: High closing price $ 115.77 $ 99.49 $ 97.92 $ 100.27 $ 101.94 $ 115.77 $ 101.94 Low closing price 87.43 87.51 83.57 89.17 89.32 83.57 73.88 Period-end closing price 110.26 90.35 89.99 90.88 93.09 110.26 93.09 Average daily volume (in thousands) 62 62 80 84 75 72 70 Treasury share activity: Treasury shares repurchased (in thousands) 70 109 269 218 69 667 325 Average treasury share repurchase price $ 90.61 $ 89.33 $ 88.93 $ 92.10 $ 93.12 $ 90.21 $ 81.50 Key Ratios (percent) Return on average assets 1.78 % 1.94 % 2.12 % 1.63 % 2.08 % 1.87 % 1.71 % Return on average tangible equity 23.5 % 24.1 % 27.4 % 19.9 % 27.3 % 23.8 % 20.3 % Yield on interest earning assets 5.23 % 5.08 % 4.87 % 4.66 % 4.23 % 4.96 % 3.51 % Cost of interest bearing liabilities 1.70 % 1.46 % 1.22 % 0.86 % 0.48 % 1.32 % 0.25 % Net Interest Margin 3.98 % 4.03 % 4.00 % 4.05 % 3.89 % 4.01 % 3.33 % Non-interest income as a percent of total revenue 25.6 % 24.6 % 27.1 % 24.7 % 26.5 % 25.6 % 28.6 % Efficiency Ratio 47.4 % 46.4 % 44.6 % 45.7 % 45.3 % 46.0 % 48.2 % Price/Earnings Ratio (a) 14.95 11.40 10.40 13.95 11.30 14.47 13.67 Capital (period-end) Average Shareholders' Equity to Average Assets 10.27 % 10.73 % 10.38 % 10.31 % 9.57 % Tangible equity to tangible assets 8.57 % 7.55 % 7.90 % 8.05 % 8.02 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.70 % 15.36 % 15.47 % 15.64 % 16.23 % Tier I 15.70 % 15.36 % 15.47 % 15.64 % 16.23 % Total 16.23 % 15.89 % 16.01 % 16.18 % 16.62 % Leverage 10.23 % 10.05 % 9.80 % 10.20 % 10.01 % City National Bank risk based capital ratios (b): CET I 13.79 % 14.73 % 14.82 % 14.08 % 13.88 % Tier I 13.79 % 14.73 % 14.82 % 14.08 % 13.88 % Total 14.32 % 15.27 % 15.36 % 14.63 % 14.28 % Leverage 8.94 % 9.61 % 9.36 % 9.18 % 8.55 % Other (period-end) Branches 98 99 99 99 94 FTE 957 966 963 958 909 Assets per FTE (in thousands) $ 6,447 $ 6,291 $ 6,383 $ 6,483 $ 6,467 Deposits per FTE (in thousands) 5,157 5,120 5,208 5,362 5,357 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Interest Income Interest and fees on loans $ 57,755 $ 55,582 $ 52,352 $ 47,004 $ 42,963 $ 212,693 $ 146,538 Interest on investment securities: Taxable 12,336 12,432 11,794 11,773 11,119 48,335 34,445 Tax-exempt 832 910 950 1,162 1,262 3,854 4,911 Interest on deposits in depository institutions 941 1,265 2,585 1,591 1,244 6,382 3,794 Total Interest Income 71,864 70,189 67,681 61,530 56,588 271,264 189,688 Interest Expense Interest on deposits 12,479 10,551 8,567 5,690 3,010 37,287 7,444 Interest on short-term borrowings 3,693 2,990 2,963 2,381 1,533 12,027 2,211 Interest on FHLB long-term advances 1,026 1,034 649 - - 2,709 - Total Interest Expense 17,198 14,575 12,179 8,071 4,543 52,023 9,655 Net Interest Income 54,666 55,614 55,502 53,459 52,045 219,241 180,033 (Recovery of) Provision for credit losses (300 ) 200 425 2,918 500 3,243 474 Net Interest Income After Provision for (Recovery of) Credit Losses 54,966 55,414 55,077 50,541 51,545 215,998 179,559 Non-Interest Income Net (losses) gains on sale of investment securities (4,951 ) (730 ) - 773 4 (4,908 ) 4 Unrealized gains/(losses) recognized on equity securities still held 365 - (294 ) 361 (262 ) 432 (1,585 ) Service charges 7,158 7,124 6,906 6,563 7,056 27,751 28,335 Bankcard revenue 7,109 7,058 7,190 6,603 6,791 27,960 27,349 Trust and investment management fee income 2,563 2,409 2,339 2,252 2,343 9,563 8,798 Bank owned life insurance 1,218 807 3,208 804 1,813 6,037 5,559 Other income 774 742 952 1,326 791 3,794 3,617 Total Non-Interest Income 14,236 17,410 20,301 18,682 18,536 70,629 72,077 Non-Interest Expense Salaries and employee benefits 18,772 18,289 18,429 17,673 17,148 73,163 66,536 Occupancy related expense 2,917 2,950 2,811 2,640 2,725 11,318 10,718 Equipment and software related expense 2,824 2,830 2,883 3,092 3,341 11,629 11,791 FDIC insurance expense 868 919 690 445 413 2,922 1,673 Advertising 588 790 974 760 802 3,112 3,405 Bankcard expenses 2,014 2,188 1,736 1,509 1,356 7,447 6,032 Postage, delivery, and statement mailings 615 668 596 647 597 2,526 2,362 Office supplies 477 457 591 420 441 1,945 1,744 Legal and professional fees 478 529 558 470 610 2,035 2,194 Telecommunications 614 568 623 606 627 2,411 2,616 Repossessed asset (gains)/losses, net of expenses (50 ) 40 22 16 54 28 59 Other expenses 4,992 4,800 4,848 10,345 4,471 24,985 15,172 Total Non-Interest Expense 35,109 35,028 34,761 38,623 32,585 143,521 124,302 Income Before Income Taxes 34,093 37,796 40,617 30,600 37,496 143,106 127,334 Income tax expense 6,641 7,957 7,884 6,259 6,824 28,741 25,263 Net Income Available to Common Shareholders $ 27,452 $ 29,839 $ 32,733 $ 24,341 $ 30,672 $ 114,365 $ 102,071 Distributed earnings allocated to common shareholders $ 10,508 $ 10,554 $ 9,668 $ 9,833 $ 9,521 $ 40,121 $ 36,619 Undistributed earnings allocated to common shareholders 16,696 19,004 22,774 14,294 20,857 73,208 64,494 Net earnings allocated to common shareholders $ 27,204 $ 29,558 $ 32,442 $ 24,127 $ 30,378 $ 113,329 $ 101,113 Average common shares outstanding 14,758 14,922 14,994 14,818 14,756 14,868 14,847 Shares for diluted earnings per share 14,785 14,945 15,012 14,844 14,785 14,891 14,873 Basic earnings per common share $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 7.62 $ 6.81 Diluted earnings per common share $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.05 $ 7.61 $ 6.80 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Assets Cash and due from banks $ 123,033 $ 67,402 $ 69,622 $ 76,223 $ 70,257 Interest-bearing deposits in depository institutions 33,243 43,314 161,659 226,587 129,743 Cash and cash equivalents 156,276 110,716 231,281 302,810 200,000 Investment securities available-for-sale, at fair value 1,338,137 1,358,219 1,419,933 1,456,259 1,505,520 Other securities 30,966 29,022 29,262 24,728 23,807 Total investment securities 1,369,103 1,387,241 1,449,195 1,480,987 1,529,327 Gross loans 4,125,923 4,007,482 3,922,142 3,894,686 3,646,258 Allowance for credit losses (22,745 ) (23,128 ) (22,751 ) (22,724 ) (17,108 ) Net loans 4,103,178 3,984,354 3,899,391 3,871,962 3,629,150 Bank owned life insurance 118,122 117,979 117,173 124,238 120,674 Premises and equipment, net 72,146 72,682 73,118 73,430 70,786 Accrued interest receivable 20,290 19,223 17,973 18,395 18,287 Net deferred tax assets 42,216 58,811 46,944 42,146 44,884 Goodwill and intangible assets 162,568 163,461 163,426 164,099 115,735 Other assets 124,153 161,659 148,333 132,715 149,263 Total Assets $ 6,168,052 $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 Liabilities Deposits: Noninterest-bearing $ 1,342,804 $ 1,333,474 $ 1,373,106 $ 1,420,990 $ 1,351,415 Interest-bearing: Demand deposits 1,291,011 1,319,783 1,337,445 1,356,017 1,233,482 Savings deposits 1,259,457 1,282,642 1,343,571 1,397,523 1,396,869 Time deposits 1,040,990 1,009,235 960,941 962,235 888,100 Total deposits 4,934,262 4,945,134 5,015,063 5,136,765 4,869,866 Short-term borrowings FHLB short-term advances 25,000 - - - - Customer repurchase agreements 309,856 278,671 271,714 293,256 290,964 FHLB long-term advances 100,000 100,000 100,000 - - Other liabilities 121,868 142,187 123,865 129,711 139,424 Total Liabilities 5,490,986 5,465,992 5,510,642 5,559,732 5,300,254 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 177,424 177,113 176,746 177,529 170,980 Retained earnings 780,299 763,425 744,248 721,727 706,696 Cost of common stock in treasury (217,737 ) (211,430 ) (201,973 ) (179,436 ) (215,955 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (107,958 ) (163,171 ) (127,026 ) (112,967 ) (128,066 ) Underfunded pension liability (2,581 ) (3,422 ) (3,422 ) (3,422 ) (3,422 ) Total Accumulated Other Comprehensive (Loss) Income (110,539 ) (166,593 ) (130,448 ) (116,389 ) (131,488 ) Total Stockholders' Equity 677,066 610,134 636,192 651,050 577,852 Total Liabilities and Stockholders' Equity $ 6,168,052 $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 Regulatory Capital Total CET 1 capital $ 627,579 $ 615,798 $ 605,661 $ 606,675 $ 598,068 Total tier 1 capital 627,579 615,798 605,661 606,675 598,068 Total risk-based capital 648,646 637,245 626,730 627,718 612,654 Total risk-weighted assets 3,996,688 4,009,798 3,913,870 3,878,994 3,685,207 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Commercial and industrial $ 426,950 $ 424,647 $ 417,847 $ 390,861 $ 373,890 1-4 Family 206,237 135,226 123,701 119,017 116,192 Hotels 357,142 321,236 324,745 327,554 340,404 Multi-family 189,165 192,329 191,483 195,042 174,786 Non Residential Non-Owner Occupied 680,590 713,353 673,921 679,782 585,964 Non Residential Owner Occupied 240,328 222,544 222,852 223,096 174,961 Commercial real estate (1) 1,673,462 1,584,688 1,536,702 1,544,491 1,392,307 Residential real estate (2) 1,788,150 1,768,358 1,746,618 1,737,604 1,693,523 Home equity 167,201 159,630 151,012 151,341 134,317 Consumer 65,246 65,586 65,201 66,994 48,806 DDA overdrafts 4,914 4,573 4,762 3,395 3,415 Gross Loans $ 4,125,923 $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 Construction loans included in: (1) - Commercial real estate loans $ 2,459 $ 2,533 $ 3,361 $ 4,715 $ 4,130 (2) - Residential real estate loans 23,066 20,056 20,470 25,224 21,122 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Allowance for Credit Losses Balance at beginning of period $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial (84 ) - (69 ) - (120 ) (153 ) (562 ) Commercial real estate (5 ) (256 ) (117 ) (3 ) (31 ) (381 ) (55 ) Residential real estate (68 ) (88 ) (20 ) (32 ) (66 ) (208 ) (265 ) Home equity (21 ) (112 ) (200 ) (67 ) (189 ) (400 ) (279 ) Consumer (6 ) (10 ) (109 ) (62 ) (15 ) (187 ) (63 ) DDA overdrafts (416 ) (422 ) (357 ) (450 ) (670 ) (1,645 ) (2,624 ) Total charge-offs (600 ) (888 ) (872 ) (614 ) (1,091 ) (2,974 ) (3,848 ) Recoveries: Commercial and industrial 70 597 86 83 94 836 334 Commercial real estate 17 74 28 158 120 277 207 Residential real estate 4 28 5 10 49 47 99 Home equity 13 18 12 4 34 47 56 Consumer 45 27 28 23 31 123 107 DDA overdrafts 368 321 315 398 360 1,402 1,513 Total recoveries 517 1,065 474 676 688 2,732 2,316 Net (charge-offs) recoveries (83 ) 177 (398 ) 62 (403 ) (242 ) (1,532 ) (Recovery of) provision for credit losses (300 ) 200 425 2,918 500 3,243 474 PCD Loan Reserves - - - 2,811 - 2,811 - Adoption of ASU 2022-02 - - - (175 ) - (175 ) - Balance at end of period $ 22,745 $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 22,745 $ 17,108 Loans outstanding $ 4,125,923 $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 Allowance as a percent of loans outstanding 0.55 % 0.58 % 0.58 % 0.58 % 0.47 % Allowance as a percent of non-performing loans 290.6 % 440.1 % 405.5 % 400.1 % 317.3 % Average loans outstanding $ 4,045,889 $ 3,956,871 $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,900,913 $ 3,583,526 Net (recoveries)/charge-offs (annualized) as a percent of average loans outstanding 0.01 % (0.02 )% 0.04 % (0.01 )% 0.04 % 0.01 % 0.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Nonaccrual Loans Residential real estate $ 2,849 $ 2,839 $ 2,774 $ 2,700 $ 1,969 Home equity 111 75 24 35 55 Commercial and industrial 2,211 716 741 994 1,015 Commercial real estate 2,387 1,355 1,821 1,931 2,166 Consumer - 1 36 19 - Total nonaccrual loans 7,558 4,986 5,396 5,679 5,205 Accruing loans past due 90 days or more 270 269 215 - 187 Total non-performing loans 7,828 5,255 5,611 5,679 5,392 Other real estate owned 731 720 874 843 909 Total non-performing assets $ 8,559 $ 5,975 $ 6,485 $ 6,522 $ 6,301 Non-performing assets as a percent of loans and other real estate owned 0.21 % 0.15 % 0.17 % 0.17 % 0.17 % Past Due Loans Residential real estate $ 8,059 $ 6,247 $ 5,884 $ 4,783 $ 7,091 Home equity 1,235 1,278 784 551 650 Commercial and industrial 435 568 142 98 234 Commercial real estate 715 1,478 238 148 710 Consumer 129 84 57 3 100 DDA overdrafts 364 398 341 276 391 Total past due loans $ 10,937 $ 10,053 $ 7,446 $ 5,859 $ 9,176 Total past due loans as a percent of loans outstanding 0.27 % 0.25 % 0.19 % 0.15 % 0.25 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,945,185 $ 23,673 4.83 % $ 1,910,876 $ 22,702 4.71 % $ 1,824,327 $ 18,973 4.13 % Commercial, financial, and agriculture (2) 2,031,089 33,038 6.45 % 1,975,463 31,743 6.38 % 1,773,937 23,346 5.22 % Installment loans to individuals (2), (3) 69,615 1,046 5.96 % 70,532 1,138 6.40 % 50,732 646 5.05 % Total loans 4,045,889 57,757 5.66 % 3,956,871 55,583 5.57 % 3,648,996 42,965 4.67 % Securities: Taxable 1,194,448 12,336 4.10 % 1,277,265 12,432 3.86 % 1,315,453 11,118 3.35 % Tax-exempt (4) 153,204 1,053 2.73 % 170,806 1,152 2.68 % 211,326 1,597 3.00 % Total securities 1,347,652 13,389 3.94 % 1,448,071 13,584 3.72 % 1,526,779 12,715 3.30 % Deposits in depository institutions 71,624 941 5.21 % 90,994 1,265 5.52 % 162,732 1,245 3.04 % Total interest-earning assets 5,465,165 72,087 5.23 % 5,495,936 70,432 5.08 % 5,338,507 56,925 4.23 % Cash and due from banks 87,633 69,348 69,223 Premises and equipment, net 72,435 73,004 71,482 Goodwill and intangible assets 163,220 163,602 115,952 Other assets 342,669 332,551 332,855 Less: Allowance for credit losses (23,532 ) (23,558 ) (17,332 ) Total assets $ 6,107,590 $ 6,110,883 $ 5,910,687 Liabilities: Interest-bearing demand deposits $ 1,299,683 $ 3,467 1.06 % $ 1,300,936 $ 3,068 0.94 % $ 1,150,327 $ 684 0.24 % Savings deposits 1,274,726 2,369 0.74 % 1,314,484 2,319 0.70 % 1,412,246 829 0.23 % Time deposits (2) 1,025,870 6,644 2.57 % 985,038 5,163 2.08 % 916,845 1,497 0.65 % Short-term borrowings 312,941 3,693 4.68 % 272,558 2,990 4.35 % 303,599 1,534 2.00 % FHLB long-term advances 100,000 1,026 4.07 % 100,000 1,035 4.11 % - - - Total interest-bearing liabilities 4,013,220 17,199 1.70 % 3,973,016 14,575 1.46 % 3,783,017 4,544 0.48 % Noninterest-bearing demand deposits 1,334,021 1,359,268 1,428,013 Other liabilities 132,862 123,137 134,075 Stockholders' equity 627,487 655,462 565,582 Total liabilities and stockholders' equity $ 6,107,590 $ 6,110,883 $ 5,910,687 Net interest income $ 54,888 $ 55,857 $ 52,381 Net yield on earning assets 3.98 % 4.03 % 3.89 % (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 $ 201 $ 254 $ (41 ) (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 $ 78 $ 47 $ 67 Commercial, financial, and agriculture 702 720 135 Installment loans to individuals 26 4 4 Time deposits 131 240 21 $ 937 $ 1,011 $ 227 (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) Twelve Months Ended December 31, 2023 December 31, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,899,239 $ 88,083 4.64 % $ 1,755,772 $ 68,581 3.91 % Commercial, financial, and agriculture (2) 1,935,038 120,783 6.24 % 1,781,132 75,390 4.23 % Installment loans to individuals (2), (3) 66,636 3,828 5.74 % 46,622 2,567 5.51 % Total loans 3,900,913 212,694 5.45 % 3,583,526 146,538 4.09 % Securities: Taxable 1,273,674 48,335 3.79 % 1,288,252 34,445 2.67 % Tax-exempt (4) 175,383 4,878 2.78 % 218,588 6,217 2.84 % Total securities 1,449,057 53,213 3.67 % 1,506,840 40,662 2.70 % Deposits in depository institutions 142,299 6,382 4.48 % 357,184 3,794 1.06 % Total interest-earning assets 5,492,269 272,289 4.96 % 5,447,550 190,994 3.51 % Cash and due from banks 74,443 88,581 Premises and equipment, net 72,582 72,590 Goodwill and intangible assets 153,937 116,469 Other assets 329,198 271,685 Less: Allowance for credit losses (22,089 ) (17,687 ) Total assets $ 6,100,340 $ 5,979,188 Liabilities: Interest-bearing demand deposits $ 1,291,234 $ 11,048 0.86 % $ 1,150,007 $ 1,234 0.11 % Savings deposits 1,332,527 7,979 0.60 % 1,414,727 1,544 0.11 % Time deposits (2) 969,329 18,260 1.88 % 983,046 4,666 0.47 % Short-term borrowings 290,440 12,027 4.14 % 284,611 2,211 0.78 % FHLB long-term advances 66,849 2,709 4.05 % - - - Total interest-bearing liabilities 3,950,379 52,023 1.32 % 3,832,391 9,655 0.25 % Noninterest-bearing demand deposits 1,389,295 1,429,415 Other liabilities 125,377 98,553 Stockholders' equity 635,289 618,829 Total liabilities and stockholders' equity $ 6,100,340 $ 5,979,188 Net interest income $ 220,266 $ 181,339 Net yield on earning assets 4.01 % 3.33 % (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 $ 1,366 $ 568 (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 $ 243 $ 298 Commercial, financial, and agriculture 2,276 642 Installment loans to individuals 41 45 Time deposits 535 83 $ 3,095 $ 1,068 (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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 54,666 $ 55,614 $ 55,502 $ 53,459 $ 52,045 $ 219,241 $ 180,033 Taxable equivalent adjustment 223 243 255 308 336 1,025 1,306 Net interest income, fully taxable equivalent $ 54,889 $ 55,857 $ 55,757 $ 53,767 $ 52,381 $ 220,266 $ 181,339 Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.98 % 10.04 % 10.35 % 10.48 % 9.83 % Effect of goodwill and other intangibles, net (2.41 )% (2.49 )% (2.45 )% (2.43 )% (1.81 )% Tangible common equity to tangible assets 8.57 % 7.55 % 7.90 % 8.05 % 8.02 % Return on Average Tangible Equity and Return on Assets Ratios (period end) Return on average tangible equity ("GAAP") 23.8 % 20.3 % Impact of merger related expenses 0.8 % - % Impact of merger related provision 0.3 % - % Return on tangible equity, excluding merger related expenses and provision 24.9 % 20.3 % Return on assets ("GAAP") 1.87 % 1.71 % Impact of merger related expenses 0.07 % - % Impact of merger related provision 0.03 % - % Return on assets, excluding merger related expenses and provision 1.97 % 1.71 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 23,743 0.58 % 3.68 N/A Natural Gas Distribution 20,000 0.49 % 2.61 N/A Masonry Contractors 24,190 0.59 % 1.13 84 % Sheet Metal Work Manufacturing 25,887 0.63 % 1.57 68 % Beer & Ale Merchant Wholesalers 25,672 0.62 % 3.28 N/A Gasoline Stations with Convenience Stores 45,945 1.11 % 4.19 65 % Lessors of Residential Buildings & Dwellings 433,506 10.52 % 1.89 66 % 1-4 Family 186,341 4.52 % 2.97 68 % Multi-Family 179,822 4.36 % 1.84 66 % Lessors of Nonresidential Buildings 611,108 14.83 % 1.70 65 % Office Buildings 43,735 1.06 % 1.64 63 % Lessors of Mini-Warehouses & Self-Storage Units 50,898 1.23 % 1.62 61 % Assisted Living Facilities 27,620 0.67 % 1.38 57 % Hotels & Motels 357,572 8.68 % 1.43 62 % Average Balance Median Balance Commercial, Financial, and Agriculture Loans $ 456 $ 93 Commercial Real Estate Loans 517 120 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type December 31, 2023 September 30, 2023 Noninterest-Bearing Demand Deposits 16 % 17 % Interest-Bearing Deposits Demand Deposits 7 % 11 % Savings Deposits 11 % 11 % Time Deposits 13 % 14 % Total Deposits 12 % 13 % 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* 31,745 4,768 1.9 % 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/20240122746389/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $114.4 million and record diluted earnings of $7.61 per share for the year ended December 31, 2023. For the year ended December 31, 2023, the Company achieved a return on assets of 1.87% and a return on tangible equity of 23.8%. “2023 was a challenging year for the banking industry, but a great year for City”, said City’s President and CEO Charles Hageboeck. “City’s strong performance during the year highlights the value of the Company’s deep customer base and conservative operating principles. During 2023, City completed the acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank (“Citizens”) of Versailles, Kentucky, that enhanced our market position in central Kentucky. “Net of loans acquired from Citizens, City grew loans over 6% during 2023, and asset quality remained strong with City only needing to take a relatively small provision for the year (excluding the provision established as part of the acquisition of Citizens). The number of checking accounts grew approximately 2% in 2023, and City saw checking accounts increase in many slow growth regions where City already has a dominant market position. We believe this growth resulted from a combination of excellent service, strong products and technology, coupled with less competition than may be present in more urban markets. “After adjusting for security gains and losses and one-time merger costs, City’s earnings per share remained essentially flat on a quarterly basis throughout 2023 – at approximately $2.00 per share. During the year, the cost of City’s deposits rose by 60 basis points, while interest earning asset yields rose by 145 basis points. City’s average deposits in the fourth quarter of 2023 declined 5.5% from average deposits in the fourth quarter of 2022 (net of deposits acquired from Citizens), but declined only 0.5% from the third quarter of 2023 that reflects an attractive customer mix which is dependent on many, small retail deposit customers. “City issued 667,000 shares in its acquisition of Citizens in the first quarter of 2023, but was able to repurchase essentially all of those shares during the year. As a result, the number of City’s shares outstanding at the end of 2023 only grew marginally from the end of 2022 (due to shares issued for employee and director compensation) – and City’s tangible common equity ratio increased from 8.0% at December 31, 2022, to over 8.6% at December 31, 2023 despite the large number of shares purchased. “As a result, City begins 2024 exceptionally positioned with an extremely strong customer franchise, an exceptional team, an enviable cost of funds, strong asset quality, and competitors who seem focused on making their customers banking experiences more difficult.” Net Interest Income The Company’s net interest income increased from $180.0 million for the year ended December 31, 2022 to $219.2 million for the year ended December 31, 2023. The Company’s tax equivalent net interest income increased $39.0 million, or 21.5%, from $181.3 million for the year ended December 31, 2022 to $220.3 million for the year ended December 31, 2023. The acquisition of Citizens during the first quarter of 2023 added $10.6 million of net interest income during the year ended December 31, 2023. Due to increases in market rates, net interest income increased by $47.2 million due to an increase in loan yields (net of loan fees and accretion) of 127 basis points, by $14.2 million due to an increase in the yield on investment securities of 97 basis points, and by $4.9 million due to a 342 basis point increase on deposits in depository institutions. In addition, net interest income increased $4.4 million due to an increase in balances of loans of $110.2 million and by $2.0 million due to additional accretion from the year ended December 31, 2022. These increases were partially offset by an increase in the cost of interest bearing liabilities (110 basis points) which decreased net interest income by $41.6 million, lower balances of deposits in depository institutions ($214.9 million) that lowered net interest income by $2.3 million, and lower investment balances ($57.8 million) that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 3.33% for the year ended December 31, 2022 to 4.01% for the year ended December 31, 2023. During the fourth quarter of 2023, the Company’s net interest income decreased from $55.6 million during the third quarter of 2023 to $54.7 million. During the fourth quarter of 2023, the Company’s tax equivalent net interest income decreased $1.0 million, or 1.7%, to $54.9 million from $55.9 million during the third quarter of 2023. Due to an increase in the cost of interest bearing liabilities (22 basis points), net interest income decreased $1.8 million. Additionally, lower investment balances ($100.4 million) decreased net interest income by $0.9 million and an increase in balances of interest bearing liabilities ($40.2 million) decreased net interest income by $0.6 million. These decreases were partially offset by an increase in loan balances of $89.0 million which increased net interest income by $1.3 million, an increase of 18 basis points on investment security yields which increased net interest income by $0.7 million, and an increase of one basis point on loans yields which increased net interest income by $0.6 million. The Company’s reported net interest margin decreased from 4.03% for the third quarter of 2023 to 3.98% for the fourth quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.17%, or $6.3 million, at December 31, 2022 to 0.21%, or $8.6 million at December 31, 2023 primarily as a result of the acquisition of Citizens. Total past due loans increased from $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022 to $10.9 million, or 0.27% of total loans outstanding, at December 31, 2023. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a recovery of credit losses of $0.3 million in the fourth quarter of 2023 and a provision for credit losses of $3.2 million for the year ended December 31, 2023, compared to a $0.5 million provision for credit losses for the fourth quarter and for the year ended December 31, 2022. In connection with the completion of our acquisition of Citizens during 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses. Additionally, the provision for the year ended December 31, 2023 was a result of loan growth and credit downgrades that were partially offset by lower historical loss rates in the loan portfolio. Non-interest Income Non-interest income was $70.6 million for the year ended December 31, 2023, as compared to $72.1 million for the year ended December 31, 2022. In 2023, the Company reported $4.9 million of realized security losses and $0.4 million of unrealized security gains on the Company’s equity securities as compared to $1.6 million of unrealized security losses on the Company’s equity securities in 2022. The realized security losses during 2023, which lowered diluted earnings per share by $0.25, were executed to reposition a portion of our investment securities. Exclusive of these realized and unrealized gains and losses, non-interest income increased $1.4 million, or 2.0%, from $73.7 million for 2022 to $75.1 million for 2023. This increase was largely attributable to an increase of $0.8 million, or 8.7%, in trust and investment management fee income and a $0.6 million, or 2.2%, increase in bankcard revenue. In addition, death benefits from bank owned life insurance increased $0.5 million from the year ended December 31, 2022. These increases were partially offset by a decrease of $0.6 million in service charges. During the quarter ended December 31, 2023, non-interest income was $14.2 million as compared to $18.5 million during the quarter ended December 31, 2022. During the fourth quarter of 2023, the Company reported $5.0 million of realized security losses and $0.4 million of unrealized fair value gains on the Company’s equity securities as compared to $0.3 million of unrealized fair value losses on the Company’s equity securities during the fourth quarter of 2022. Exclusive of these realized and unrealized gains and losses, non-interest income remained consistent at $18.8 million for both the fourth quarter of 2022 and for the fourth quarter of 2023. Lower death benefits from bank owned life insurance of $0.6 million was essentially offset by higher bankcard revenue, $0.3 million or 4.7%, and trust and investment management fee income, $0.2 million or 9.4%. Non-interest Expenses Non-interest expenses increased $19.2 million, or 15.5%, from $124.3 million for 2022 to $143.5 million for 2023. This increase was primarily due to an increase in other expenses ($9.8 million, due primarily to higher acquisition and integration expenses associated with the completed acquisition of Citizens ($5.2 million)) and salaries and employee benefit expenses ($6.6 million due to salary adjustments, Citizens personnel ($1.9 million), and increased health insurance). In addition, bankcard expense increased $1.4 million, FDIC expense increased $1.2 million and occupancy related expenses increased $0.6 million. In the fourth quarter of 2023, non-interest expenses increased $2.5 million (7.7%) from $32.6 million in the fourth quarter of 2022 to $35.1 million. This increase was largely due to an increase in salaries and employee benefits of $1.6 million (salary adjustments, Citizens personnel ($0.6 million), and increased health insurance) and bankcard expenses of $0.7 million. In addition, other expenses increased $0.5 million and FDIC expense increased $0.5 million. These increases were partially offset by lower equipment and software related expense ($0.5 million). Balance Sheet Trends Loans increased $479.7 million (13.2%) from December 31, 2022 to $4.13 billion at December 31, 2023. The Company’s acquisition of Citizens increased total loans by $254.7 million. Excluding the acquisition, total loans increased $225.0 million (6.2%) from December 31, 2022. Commercial real estate loans increased $101.4 million (7.3%); residential real estate loans increased $51.3 million (3.0%); commercial and industrial loans increased $38.4 million (10.3%); home equity loans increased $19.1 million (14.3%); and consumer loans increased $13.4 million (27.4%). Average depository balances for the year ended December 31, 2023 approximated those for the year ended December 31, 2022 at $4.98 billion. The acquisition of Citizens increased average deposits by $243.0 million during 2023. Excluding the acquisition of Citizens, average deposits declined $237.9 million. Average savings deposits decreased $139.7 million, average noninterest bearing demand deposits decreased $87.3 million, and average time deposits decreased $68.3 million. These decreases were partially offset by an increase in average interest bearing demand deposits of $57.3 million. Income Tax Expense The Company’s effective income tax rates for the quarter and year ended December 31, 2023 were 19.5% and 20.1%, respectively, compared to 18.2% and 19.8% for the comparable periods in 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 83.6% and the loan to asset ratio was 66.9% at December 31, 2023. The Company maintained investment securities totaling 22.2% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 63.1% of assets at December 31, 2023. Time deposits fund 16.9% of assets at December 31, 2023, with only 12.6% 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. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of December 31, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, approximately $690 million of City’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $680 million of City’s investment securities unpledged at December 31, 2023. The Company continues to be strongly capitalized with tangible equity of $514 million at December 31, 2023. The Company’s tangible equity ratio increased from 8.0% at December 31, 2022 to 8.6% at December 30, 2023. This increase was attributable to the Company’s net income for 2023 less dividends and a decrease in unrealized losses on securities available for sale due to the impact of lower interest rates at the end of 2023. At December 31, 2023, City National’s Leverage Ratio was 8.9%, its Common Equity Tier I ratio was 13.8%, its Tier I Capital ratio was 13.8%, and its Total Risk-Based Capital ratio was 14.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 15, 2023, the Company’s Board of Directors approved a quarterly cash dividend of $0.715 cents per share payable January 31, 2024, to shareholders of record as of January 15, 2024. During the year ended December 31, 2023, the Company repurchased 667,000 common shares at a weighted average price of $90.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2023, the Company could repurchase an additional approximately 150,000 shares under the current plan. City National Bank operates 98 branches across West Virginia, Kentucky, Virginia, and Ohio. City National will be closing its Nichols Park branch located in Lexington, Kentucky on February 9, 2024, due to its proximity to three existing City National branches. 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 December 31, 2023 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 54,889 $ 55,855 $ 55,757 $ 53,767 $ 52,381 $ 220,266 $ 181,339 Net Income available to common shareholders 27,452 29,839 32,733 24,341 30,672 114,365 102,071 Per Share Data Earnings per share available to common shareholders: Basic $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 7.62 $ 6.81 Diluted 1.84 1.98 2.16 1.63 2.05 7.61 6.80 Weighted average number of shares (in thousands): Basic 14,758 14,922 14,994 14,818 14,756 14,868 14,847 Diluted 14,785 14,945 15,012 14,844 14,785 14,891 14,873 Period-end number of shares (in thousands) 14,832 14,901 15,007 15,260 14,788 14,832 14,788 Cash dividends declared $ 0.72 $ 0.72 $ 0.65 $ 0.65 $ 0.65 $ 2.73 $ 2.50 Book value per share (period-end) $ 45.65 $ 40.94 $ 42.39 $ 42.66 $ 39.08 $ 45.65 $ 39.08 Tangible book value per share (period-end) 34.69 29.98 31.50 31.91 31.25 34.69 31.25 Market data: High closing price $ 115.77 $ 99.49 $ 97.92 $ 100.27 $ 101.94 $ 115.77 $ 101.94 Low closing price 87.43 87.51 83.57 89.17 89.32 83.57 73.88 Period-end closing price 110.26 90.35 89.99 90.88 93.09 110.26 93.09 Average daily volume (in thousands) 62 62 80 84 75 72 70 Treasury share activity: Treasury shares repurchased (in thousands) 70 109 269 218 69 667 325 Average treasury share repurchase price $ 90.61 $ 89.33 $ 88.93 $ 92.10 $ 93.12 $ 90.21 $ 81.50 Key Ratios (percent) Return on average assets 1.78 % 1.94 % 2.12 % 1.63 % 2.08 % 1.87 % 1.71 % Return on average tangible equity 23.5 % 24.1 % 27.4 % 19.9 % 27.3 % 23.8 % 20.3 % Yield on interest earning assets 5.23 % 5.08 % 4.87 % 4.66 % 4.23 % 4.96 % 3.51 % Cost of interest bearing liabilities 1.70 % 1.46 % 1.22 % 0.86 % 0.48 % 1.32 % 0.25 % Net Interest Margin 3.98 % 4.03 % 4.00 % 4.05 % 3.89 % 4.01 % 3.33 % Non-interest income as a percent of total revenue 25.6 % 24.6 % 27.1 % 24.7 % 26.5 % 25.6 % 28.6 % Efficiency Ratio 47.4 % 46.4 % 44.6 % 45.7 % 45.3 % 46.0 % 48.2 % Price/Earnings Ratio (a) 14.95 11.40 10.40 13.95 11.30 14.47 13.67 Capital (period-end) Average Shareholders' Equity to Average Assets 10.27 % 10.73 % 10.38 % 10.31 % 9.57 % Tangible equity to tangible assets 8.57 % 7.55 % 7.90 % 8.05 % 8.02 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.70 % 15.36 % 15.47 % 15.64 % 16.23 % Tier I 15.70 % 15.36 % 15.47 % 15.64 % 16.23 % Total 16.23 % 15.89 % 16.01 % 16.18 % 16.62 % Leverage 10.23 % 10.05 % 9.80 % 10.20 % 10.01 % City National Bank risk based capital ratios (b): CET I 13.79 % 14.73 % 14.82 % 14.08 % 13.88 % Tier I 13.79 % 14.73 % 14.82 % 14.08 % 13.88 % Total 14.32 % 15.27 % 15.36 % 14.63 % 14.28 % Leverage 8.94 % 9.61 % 9.36 % 9.18 % 8.55 % Other (period-end) Branches 98 99 99 99 94 FTE 957 966 963 958 909 Assets per FTE (in thousands) $ 6,447 $ 6,291 $ 6,383 $ 6,483 $ 6,467 Deposits per FTE (in thousands) 5,157 5,120 5,208 5,362 5,357 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Interest Income Interest and fees on loans $ 57,755 $ 55,582 $ 52,352 $ 47,004 $ 42,963 $ 212,693 $ 146,538 Interest on investment securities: Taxable 12,336 12,432 11,794 11,773 11,119 48,335 34,445 Tax-exempt 832 910 950 1,162 1,262 3,854 4,911 Interest on deposits in depository institutions 941 1,265 2,585 1,591 1,244 6,382 3,794 Total Interest Income 71,864 70,189 67,681 61,530 56,588 271,264 189,688 Interest Expense Interest on deposits 12,479 10,551 8,567 5,690 3,010 37,287 7,444 Interest on short-term borrowings 3,693 2,990 2,963 2,381 1,533 12,027 2,211 Interest on FHLB long-term advances 1,026 1,034 649 - - 2,709 - Total Interest Expense 17,198 14,575 12,179 8,071 4,543 52,023 9,655 Net Interest Income 54,666 55,614 55,502 53,459 52,045 219,241 180,033 (Recovery of) Provision for credit losses (300 ) 200 425 2,918 500 3,243 474 Net Interest Income After Provision for (Recovery of) Credit Losses 54,966 55,414 55,077 50,541 51,545 215,998 179,559 Non-Interest Income Net (losses) gains on sale of investment securities (4,951 ) (730 ) - 773 4 (4,908 ) 4 Unrealized gains/(losses) recognized on equity securities still held 365 - (294 ) 361 (262 ) 432 (1,585 ) Service charges 7,158 7,124 6,906 6,563 7,056 27,751 28,335 Bankcard revenue 7,109 7,058 7,190 6,603 6,791 27,960 27,349 Trust and investment management fee income 2,563 2,409 2,339 2,252 2,343 9,563 8,798 Bank owned life insurance 1,218 807 3,208 804 1,813 6,037 5,559 Other income 774 742 952 1,326 791 3,794 3,617 Total Non-Interest Income 14,236 17,410 20,301 18,682 18,536 70,629 72,077 Non-Interest Expense Salaries and employee benefits 18,772 18,289 18,429 17,673 17,148 73,163 66,536 Occupancy related expense 2,917 2,950 2,811 2,640 2,725 11,318 10,718 Equipment and software related expense 2,824 2,830 2,883 3,092 3,341 11,629 11,791 FDIC insurance expense 868 919 690 445 413 2,922 1,673 Advertising 588 790 974 760 802 3,112 3,405 Bankcard expenses 2,014 2,188 1,736 1,509 1,356 7,447 6,032 Postage, delivery, and statement mailings 615 668 596 647 597 2,526 2,362 Office supplies 477 457 591 420 441 1,945 1,744 Legal and professional fees 478 529 558 470 610 2,035 2,194 Telecommunications 614 568 623 606 627 2,411 2,616 Repossessed asset (gains)/losses, net of expenses (50 ) 40 22 16 54 28 59 Other expenses 4,992 4,800 4,848 10,345 4,471 24,985 15,172 Total Non-Interest Expense 35,109 35,028 34,761 38,623 32,585 143,521 124,302 Income Before Income Taxes 34,093 37,796 40,617 30,600 37,496 143,106 127,334 Income tax expense 6,641 7,957 7,884 6,259 6,824 28,741 25,263 Net Income Available to Common Shareholders $ 27,452 $ 29,839 $ 32,733 $ 24,341 $ 30,672 $ 114,365 $ 102,071 Distributed earnings allocated to common shareholders $ 10,508 $ 10,554 $ 9,668 $ 9,833 $ 9,521 $ 40,121 $ 36,619 Undistributed earnings allocated to common shareholders 16,696 19,004 22,774 14,294 20,857 73,208 64,494 Net earnings allocated to common shareholders $ 27,204 $ 29,558 $ 32,442 $ 24,127 $ 30,378 $ 113,329 $ 101,113 Average common shares outstanding 14,758 14,922 14,994 14,818 14,756 14,868 14,847 Shares for diluted earnings per share 14,785 14,945 15,012 14,844 14,785 14,891 14,873 Basic earnings per common share $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.06 $ 7.62 $ 6.81 Diluted earnings per common share $ 1.84 $ 1.98 $ 2.16 $ 1.63 $ 2.05 $ 7.61 $ 6.80 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Assets Cash and due from banks $ 123,033 $ 67,402 $ 69,622 $ 76,223 $ 70,257 Interest-bearing deposits in depository institutions 33,243 43,314 161,659 226,587 129,743 Cash and cash equivalents 156,276 110,716 231,281 302,810 200,000 Investment securities available-for-sale, at fair value 1,338,137 1,358,219 1,419,933 1,456,259 1,505,520 Other securities 30,966 29,022 29,262 24,728 23,807 Total investment securities 1,369,103 1,387,241 1,449,195 1,480,987 1,529,327 Gross loans 4,125,923 4,007,482 3,922,142 3,894,686 3,646,258 Allowance for credit losses (22,745 ) (23,128 ) (22,751 ) (22,724 ) (17,108 ) Net loans 4,103,178 3,984,354 3,899,391 3,871,962 3,629,150 Bank owned life insurance 118,122 117,979 117,173 124,238 120,674 Premises and equipment, net 72,146 72,682 73,118 73,430 70,786 Accrued interest receivable 20,290 19,223 17,973 18,395 18,287 Net deferred tax assets 42,216 58,811 46,944 42,146 44,884 Goodwill and intangible assets 162,568 163,461 163,426 164,099 115,735 Other assets 124,153 161,659 148,333 132,715 149,263 Total Assets $ 6,168,052 $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 Liabilities Deposits: Noninterest-bearing $ 1,342,804 $ 1,333,474 $ 1,373,106 $ 1,420,990 $ 1,351,415 Interest-bearing: Demand deposits 1,291,011 1,319,783 1,337,445 1,356,017 1,233,482 Savings deposits 1,259,457 1,282,642 1,343,571 1,397,523 1,396,869 Time deposits 1,040,990 1,009,235 960,941 962,235 888,100 Total deposits 4,934,262 4,945,134 5,015,063 5,136,765 4,869,866 Short-term borrowings FHLB short-term advances 25,000 - - - - Customer repurchase agreements 309,856 278,671 271,714 293,256 290,964 FHLB long-term advances 100,000 100,000 100,000 - - Other liabilities 121,868 142,187 123,865 129,711 139,424 Total Liabilities 5,490,986 5,465,992 5,510,642 5,559,732 5,300,254 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 177,424 177,113 176,746 177,529 170,980 Retained earnings 780,299 763,425 744,248 721,727 706,696 Cost of common stock in treasury (217,737 ) (211,430 ) (201,973 ) (179,436 ) (215,955 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (107,958 ) (163,171 ) (127,026 ) (112,967 ) (128,066 ) Underfunded pension liability (2,581 ) (3,422 ) (3,422 ) (3,422 ) (3,422 ) Total Accumulated Other Comprehensive (Loss) Income (110,539 ) (166,593 ) (130,448 ) (116,389 ) (131,488 ) Total Stockholders' Equity 677,066 610,134 636,192 651,050 577,852 Total Liabilities and Stockholders' Equity $ 6,168,052 $ 6,076,126 $ 6,146,834 $ 6,210,782 $ 5,878,106 Regulatory Capital Total CET 1 capital $ 627,579 $ 615,798 $ 605,661 $ 606,675 $ 598,068 Total tier 1 capital 627,579 615,798 605,661 606,675 598,068 Total risk-based capital 648,646 637,245 626,730 627,718 612,654 Total risk-weighted assets 3,996,688 4,009,798 3,913,870 3,878,994 3,685,207 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Commercial and industrial $ 426,950 $ 424,647 $ 417,847 $ 390,861 $ 373,890 1-4 Family 206,237 135,226 123,701 119,017 116,192 Hotels 357,142 321,236 324,745 327,554 340,404 Multi-family 189,165 192,329 191,483 195,042 174,786 Non Residential Non-Owner Occupied 680,590 713,353 673,921 679,782 585,964 Non Residential Owner Occupied 240,328 222,544 222,852 223,096 174,961 Commercial real estate (1) 1,673,462 1,584,688 1,536,702 1,544,491 1,392,307 Residential real estate (2) 1,788,150 1,768,358 1,746,618 1,737,604 1,693,523 Home equity 167,201 159,630 151,012 151,341 134,317 Consumer 65,246 65,586 65,201 66,994 48,806 DDA overdrafts 4,914 4,573 4,762 3,395 3,415 Gross Loans $ 4,125,923 $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 Construction loans included in: (1) - Commercial real estate loans $ 2,459 $ 2,533 $ 3,361 $ 4,715 $ 4,130 (2) - Residential real estate loans 23,066 20,056 20,470 25,224 21,122 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Allowance for Credit Losses Balance at beginning of period $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial (84 ) - (69 ) - (120 ) (153 ) (562 ) Commercial real estate (5 ) (256 ) (117 ) (3 ) (31 ) (381 ) (55 ) Residential real estate (68 ) (88 ) (20 ) (32 ) (66 ) (208 ) (265 ) Home equity (21 ) (112 ) (200 ) (67 ) (189 ) (400 ) (279 ) Consumer (6 ) (10 ) (109 ) (62 ) (15 ) (187 ) (63 ) DDA overdrafts (416 ) (422 ) (357 ) (450 ) (670 ) (1,645 ) (2,624 ) Total charge-offs (600 ) (888 ) (872 ) (614 ) (1,091 ) (2,974 ) (3,848 ) Recoveries: Commercial and industrial 70 597 86 83 94 836 334 Commercial real estate 17 74 28 158 120 277 207 Residential real estate 4 28 5 10 49 47 99 Home equity 13 18 12 4 34 47 56 Consumer 45 27 28 23 31 123 107 DDA overdrafts 368 321 315 398 360 1,402 1,513 Total recoveries 517 1,065 474 676 688 2,732 2,316 Net (charge-offs) recoveries (83 ) 177 (398 ) 62 (403 ) (242 ) (1,532 ) (Recovery of) provision for credit losses (300 ) 200 425 2,918 500 3,243 474 PCD Loan Reserves - - - 2,811 - 2,811 - Adoption of ASU 2022-02 - - - (175 ) - (175 ) - Balance at end of period $ 22,745 $ 23,128 $ 22,751 $ 22,724 $ 17,108 $ 22,745 $ 17,108 Loans outstanding $ 4,125,923 $ 4,007,482 $ 3,922,142 $ 3,894,686 $ 3,646,258 Allowance as a percent of loans outstanding 0.55 % 0.58 % 0.58 % 0.58 % 0.47 % Allowance as a percent of non-performing loans 290.6 % 440.1 % 405.5 % 400.1 % 317.3 % Average loans outstanding $ 4,045,889 $ 3,956,871 $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,900,913 $ 3,583,526 Net (recoveries)/charge-offs (annualized) as a percent of average loans outstanding 0.01 % (0.02 )% 0.04 % (0.01 )% 0.04 % 0.01 % 0.04 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Nonaccrual Loans Residential real estate $ 2,849 $ 2,839 $ 2,774 $ 2,700 $ 1,969 Home equity 111 75 24 35 55 Commercial and industrial 2,211 716 741 994 1,015 Commercial real estate 2,387 1,355 1,821 1,931 2,166 Consumer - 1 36 19 - Total nonaccrual loans 7,558 4,986 5,396 5,679 5,205 Accruing loans past due 90 days or more 270 269 215 - 187 Total non-performing loans 7,828 5,255 5,611 5,679 5,392 Other real estate owned 731 720 874 843 909 Total non-performing assets $ 8,559 $ 5,975 $ 6,485 $ 6,522 $ 6,301 Non-performing assets as a percent of loans and other real estate owned 0.21 % 0.15 % 0.17 % 0.17 % 0.17 % Past Due Loans Residential real estate $ 8,059 $ 6,247 $ 5,884 $ 4,783 $ 7,091 Home equity 1,235 1,278 784 551 650 Commercial and industrial 435 568 142 98 234 Commercial real estate 715 1,478 238 148 710 Consumer 129 84 57 3 100 DDA overdrafts 364 398 341 276 391 Total past due loans $ 10,937 $ 10,053 $ 7,446 $ 5,859 $ 9,176 Total past due loans as a percent of loans outstanding 0.27 % 0.25 % 0.19 % 0.15 % 0.25 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,945,185 $ 23,673 4.83 % $ 1,910,876 $ 22,702 4.71 % $ 1,824,327 $ 18,973 4.13 % Commercial, financial, and agriculture (2) 2,031,089 33,038 6.45 % 1,975,463 31,743 6.38 % 1,773,937 23,346 5.22 % Installment loans to individuals (2), (3) 69,615 1,046 5.96 % 70,532 1,138 6.40 % 50,732 646 5.05 % Total loans 4,045,889 57,757 5.66 % 3,956,871 55,583 5.57 % 3,648,996 42,965 4.67 % Securities: Taxable 1,194,448 12,336 4.10 % 1,277,265 12,432 3.86 % 1,315,453 11,118 3.35 % Tax-exempt (4) 153,204 1,053 2.73 % 170,806 1,152 2.68 % 211,326 1,597 3.00 % Total securities 1,347,652 13,389 3.94 % 1,448,071 13,584 3.72 % 1,526,779 12,715 3.30 % Deposits in depository institutions 71,624 941 5.21 % 90,994 1,265 5.52 % 162,732 1,245 3.04 % Total interest-earning assets 5,465,165 72,087 5.23 % 5,495,936 70,432 5.08 % 5,338,507 56,925 4.23 % Cash and due from banks 87,633 69,348 69,223 Premises and equipment, net 72,435 73,004 71,482 Goodwill and intangible assets 163,220 163,602 115,952 Other assets 342,669 332,551 332,855 Less: Allowance for credit losses (23,532 ) (23,558 ) (17,332 ) Total assets $ 6,107,590 $ 6,110,883 $ 5,910,687 Liabilities: Interest-bearing demand deposits $ 1,299,683 $ 3,467 1.06 % $ 1,300,936 $ 3,068 0.94 % $ 1,150,327 $ 684 0.24 % Savings deposits 1,274,726 2,369 0.74 % 1,314,484 2,319 0.70 % 1,412,246 829 0.23 % Time deposits (2) 1,025,870 6,644 2.57 % 985,038 5,163 2.08 % 916,845 1,497 0.65 % Short-term borrowings 312,941 3,693 4.68 % 272,558 2,990 4.35 % 303,599 1,534 2.00 % FHLB long-term advances 100,000 1,026 4.07 % 100,000 1,035 4.11 % - - - Total interest-bearing liabilities 4,013,220 17,199 1.70 % 3,973,016 14,575 1.46 % 3,783,017 4,544 0.48 % Noninterest-bearing demand deposits 1,334,021 1,359,268 1,428,013 Other liabilities 132,862 123,137 134,075 Stockholders' equity 627,487 655,462 565,582 Total liabilities and stockholders' equity $ 6,107,590 $ 6,110,883 $ 5,910,687 Net interest income $ 54,888 $ 55,857 $ 52,381 Net yield on earning assets 3.98 % 4.03 % 3.89 % (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 $ 201 $ 254 $ (41 ) (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 $ 78 $ 47 $ 67 Commercial, financial, and agriculture 702 720 135 Installment loans to individuals 26 4 4 Time deposits 131 240 21 $ 937 $ 1,011 $ 227 (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) Twelve Months Ended December 31, 2023 December 31, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,899,239 $ 88,083 4.64 % $ 1,755,772 $ 68,581 3.91 % Commercial, financial, and agriculture (2) 1,935,038 120,783 6.24 % 1,781,132 75,390 4.23 % Installment loans to individuals (2), (3) 66,636 3,828 5.74 % 46,622 2,567 5.51 % Total loans 3,900,913 212,694 5.45 % 3,583,526 146,538 4.09 % Securities: Taxable 1,273,674 48,335 3.79 % 1,288,252 34,445 2.67 % Tax-exempt (4) 175,383 4,878 2.78 % 218,588 6,217 2.84 % Total securities 1,449,057 53,213 3.67 % 1,506,840 40,662 2.70 % Deposits in depository institutions 142,299 6,382 4.48 % 357,184 3,794 1.06 % Total interest-earning assets 5,492,269 272,289 4.96 % 5,447,550 190,994 3.51 % Cash and due from banks 74,443 88,581 Premises and equipment, net 72,582 72,590 Goodwill and intangible assets 153,937 116,469 Other assets 329,198 271,685 Less: Allowance for credit losses (22,089 ) (17,687 ) Total assets $ 6,100,340 $ 5,979,188 Liabilities: Interest-bearing demand deposits $ 1,291,234 $ 11,048 0.86 % $ 1,150,007 $ 1,234 0.11 % Savings deposits 1,332,527 7,979 0.60 % 1,414,727 1,544 0.11 % Time deposits (2) 969,329 18,260 1.88 % 983,046 4,666 0.47 % Short-term borrowings 290,440 12,027 4.14 % 284,611 2,211 0.78 % FHLB long-term advances 66,849 2,709 4.05 % - - - Total interest-bearing liabilities 3,950,379 52,023 1.32 % 3,832,391 9,655 0.25 % Noninterest-bearing demand deposits 1,389,295 1,429,415 Other liabilities 125,377 98,553 Stockholders' equity 635,289 618,829 Total liabilities and stockholders' equity $ 6,100,340 $ 5,979,188 Net interest income $ 220,266 $ 181,339 Net yield on earning assets 4.01 % 3.33 % (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 $ 1,366 $ 568 (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 $ 243 $ 298 Commercial, financial, and agriculture 2,276 642 Installment loans to individuals 41 45 Time deposits 535 83 $ 3,095 $ 1,068 (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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 54,666 $ 55,614 $ 55,502 $ 53,459 $ 52,045 $ 219,241 $ 180,033 Taxable equivalent adjustment 223 243 255 308 336 1,025 1,306 Net interest income, fully taxable equivalent $ 54,889 $ 55,857 $ 55,757 $ 53,767 $ 52,381 $ 220,266 $ 181,339 Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.98 % 10.04 % 10.35 % 10.48 % 9.83 % Effect of goodwill and other intangibles, net (2.41 )% (2.49 )% (2.45 )% (2.43 )% (1.81 )% Tangible common equity to tangible assets 8.57 % 7.55 % 7.90 % 8.05 % 8.02 % Return on Average Tangible Equity and Return on Assets Ratios (period end) Return on average tangible equity ("GAAP") 23.8 % 20.3 % Impact of merger related expenses 0.8 % - % Impact of merger related provision 0.3 % - % Return on tangible equity, excluding merger related expenses and provision 24.9 % 20.3 % Return on assets ("GAAP") 1.87 % 1.71 % Impact of merger related expenses 0.07 % - % Impact of merger related provision 0.03 % - % Return on assets, excluding merger related expenses and provision 1.97 % 1.71 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 23,743 0.58 % 3.68 N/A Natural Gas Distribution 20,000 0.49 % 2.61 N/A Masonry Contractors 24,190 0.59 % 1.13 84 % Sheet Metal Work Manufacturing 25,887 0.63 % 1.57 68 % Beer & Ale Merchant Wholesalers 25,672 0.62 % 3.28 N/A Gasoline Stations with Convenience Stores 45,945 1.11 % 4.19 65 % Lessors of Residential Buildings & Dwellings 433,506 10.52 % 1.89 66 % 1-4 Family 186,341 4.52 % 2.97 68 % Multi-Family 179,822 4.36 % 1.84 66 % Lessors of Nonresidential Buildings 611,108 14.83 % 1.70 65 % Office Buildings 43,735 1.06 % 1.64 63 % Lessors of Mini-Warehouses & Self-Storage Units 50,898 1.23 % 1.62 61 % Assisted Living Facilities 27,620 0.67 % 1.38 57 % Hotels & Motels 357,572 8.68 % 1.43 62 % Average Balance Median Balance Commercial, Financial, and Agriculture Loans $ 456 $ 93 Commercial Real Estate Loans 517 120 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type December 31, 2023 September 30, 2023 Noninterest-Bearing Demand Deposits 16 % 17 % Interest-Bearing Deposits Demand Deposits 7 % 11 % Savings Deposits 11 % 11 % Time Deposits 13 % 14 % Total Deposits 12 % 13 % 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* 31,745 4,768 1.9 % 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/20240122746389/en/