Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries City Holding Company Announces Third Quarter Results By: City Holding Company via Business Wire October 18, 2022 at 16:00 PM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $27.4 million and diluted earnings of $1.83 per share for the quarter ended September 30, 2022. For the third quarter of 2022, the Company achieved a return on assets of 1.83% and a return on tangible equity of 21.8%. Net Interest Income The Company’s net interest income increased from $41.3 million during the second quarter of 2022 to $48.8 million during the third quarter of 2022. The Company’s tax equivalent net interest income increased from $41.6 million for the second quarter of 2022 to $49.1 million for the third quarter of 2022. Net interest income increased by $4.7 million and $1.5 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 47 basis points and 35 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 139 basis points which increased net interest income by $1.0 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (6 basis points) which decreased net interest income by $0.6 million. The Company’s reported net interest margin increased from 3.04% for the second quarter of 2022 to 3.57% for the third quarter of 2022. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased modestly from 0.19%, or $6.8 million, at June 30, 2022 to 0.18%, or $6.4 million, at September 30, 2022. Total past due loans decreased from $6.2 million, or 0.17% of total loans outstanding, at June 30, 2022 to $5.0 million, or 0.14% of total loans outstanding, at September 30, 2022. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a provision for credit losses of $0.7 million in the third quarter of 2022, compared to a recovery of credit losses of $0.7 million for the comparable period in 2021 and no provision for credit losses for the second quarter of 2022. The provision for credit losses in the third quarter was a result of net charge-offs and loan growth. Non-interest Income Non-interest income was $18.2 million for the third quarter of 2022 as compared to $17.9 million for the third quarter of 2021. During the third quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities. Exclusive of these gains, non-interest income increased from $17.8 million for the third quarter of 2021 to $18.2 million for the third quarter of 2022. This increase was largely attributable to higher service charges ($0.8 million, or 11.6%) and bankcard revenues ($0.3 million, or 3.8%). These increases were partially offset by a decrease in other income ($0.6 million). Non-interest Expenses Non-interest expenses increased $2.3 million (8.0%), from $29.2 million in the third quarter of 2021 to $31.5 million in the third quarter of 2022. This increase was primarily due to an increase in salaries and employee benefits of $2.1 million due to increased health insurance, increased incentive compensation and higher salary adjustments during 2022. Balance Sheet Trends Loans increased $62.0 million (1.7%) from June 30, 2022 to September 30, 2022, to $3.63 billion. Residential real estate loans increased $27.8 million (1.7%), commercial real estate loans increased $16.2 million (1.2%), commercial and industrial loans increased $15.3 million (4.2%), and home equity loans increased $5.1 million (4.1%). These increases were partially offset by a decrease in consumer loans of $2.7 million. Total average depository balances decreased $23.7 million, or 0.5%, from the quarter ended June 30, 2022 to the quarter ended September 30, 2022. Average time deposit balances decreased $39.9 million and average interest-bearing demand deposit balances decreased $5.1 million. These increases were partially offset by an increase in noninterest-bearing demand deposit balances of $19.9 million. Income Tax Expense The Company’s effective income tax rate for the third quarter of 2022 was 21.3% compared to 20.8% for the year ended December 31, 2021, and 21.6% for the quarter ended September 30, 2021. Capitalization and Liquidity The Company’s loan to deposit ratio was 73.2% and the loan to asset ratio was 61.0% at September 30, 2022. The Company maintained investment securities totaling 25.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 67.6% of assets at September 30, 2022. Time deposits fund 15.8% of assets at September 30, 2022, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company. The Company continues to be strongly capitalized with tangible equity of $432 million at September 30, 2022. Due primarily to unrealized security losses during the nine months ended September 30, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 7.4% at September 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At September 30, 2022, City National Bank’s Leverage Ratio was 9.05%, its Common Equity Tier I ratio was 14.68%, its Tier I Capital ratio was 14.68%, and its Total Risk-Based Capital ratio was 15.07%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On September 28, 2022, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable October 31, 2022, to shareholders of record as of October 14, 2022. This represents an 8.3% increase from the $0.60 per share dividend paid on July 29, 2022. During the quarter ended September 30, 2022, the Company repurchased 9,000 common shares at a weighted average price of $80.24 as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2022, the Company could repurchase approximately 886,000 additional shares under the plan. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. Forward-Looking Information This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its September 30, 2022 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2022 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Earnings Net Interest Income (fully taxable equivalent) $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 39,822 $ 128,961 $ 115,950 Net Income available to common shareholders 27,374 22,683 21,342 23,386 22,732 71,408 64,694 Per Share Data Earnings per share available to common shareholders: Basic $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 Diluted 1.83 1.51 1.41 1.54 1.47 4.75 4.13 Weighted average number of shares (in thousands): Basic 14,776 14,888 14,974 15,026 15,279 14,878 15,501 Diluted 14,800 14,909 15,002 15,056 15,302 14,901 15,526 Period-end number of shares (in thousands) 14,856 14,864 15,045 15,062 15,192 14,856 15,192 Cash dividends declared $ 0.65 $ 0.60 $ 0.60 $ 0.60 $ 0.58 $ 1.85 $ 1.74 Book value per share (period-end) $ 36.91 $ 39.83 $ 42.03 $ 45.22 $ 44.58 $ 36.91 $ 44.58 Tangible book value per share (period-end) 29.09 31.99 34.27 37.44 36.85 29.09 36.85 Market data: High closing price $ 90.24 $ 83.07 $ 85.99 $ 83.14 $ 79.99 $ 90.24 $ 87.41 Low closing price 78.40 73.88 76.82 76.52 72.29 73.88 69.05 Period-end closing price 88.69 79.88 78.70 81.79 77.91 88.69 77.91 Average daily volume (in thousands) 58 87 59 52 53 68 59 Treasury share activity: Treasury shares repurchased (in thousands) 9 208 38 131 337 255 629 Average treasury share repurchase price $ 80.24 $ 78.33 $ 78.09 $ 78.93 $ 75.65 $ 78.36 $ 76.85 Key Ratios (percent) Return on average assets 1.83 % 1.51 % 1.42 % 1.56 % 1.53 % 1.59 % 1.47 % Return on average tangible equity 21.8 % 18.1 % 15.3 % 16.7 % 15.7 % 18.3 % 14.8 % Yield on interest earning assets 3.72 % 3.15 % 2.94 % 3.08 % 3.04 % 3.27 % 3.07 % Cost of interest bearing liabilities 0.21 % 0.15 % 0.17 % 0.19 % 0.22 % 0.18 % 0.28 % Net Interest Margin 3.57 % 3.04 % 2.82 % 2.94 % 2.89 % 3.14 % 2.87 % Non-interest income as a percent of total revenue 27.2 % 30.9 % 32.4 % 30.2 % 31.1 % 29.5 % 31.0 % Efficiency Ratio 46.3 % 50.5 % 51.7 % 48.3 % 50.0 % 49.3 % 52.3 % Price/Earnings Ratio (a) 12.08 13.23 13.93 13.27 13.22 13.99 14.14 Capital (period-end) Average Shareholders' Equity to Average Assets 10.32 % 10.26 % 11.25 % 11.25 % 11.69 % Tangible equity to tangible assets 7.41 % 7.76 % 8.75 % 9.58 % 9.59 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.82 % 15.85 % 16.18 % 16.08 % 16.11 % Tier I 15.82 % 15.85 % 16.18 % 16.08 % 16.11 % Total 16.22 % 16.26 % 16.60 % 16.51 % 16.56 % Leverage 9.74 % 9.42 % 9.58 % 9.44 % 9.46 % City National Bank risk based capital ratios (b): CET I 14.68 % 14.80 % 14.82 % 14.35 % 14.76 % Tier I 14.68 % 14.80 % 14.82 % 14.35 % 14.76 % Total 15.07 % 15.21 % 15.24 % 14.78 % 15.21 % Leverage 9.05 % 8.81 % 8.80 % 8.45 % 8.73 % Other (period-end) Branches 94 94 94 94 94 FTE 903 915 897 905 921 Assets per FTE (in thousands) $ 6,588 $ 6,825 $ 6,703 $ 6,637 $ 6,463 Deposits per FTE (in thousands) 5,492 5,621 5,574 5,445 5,308 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) September 30, 2022 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Interest Income Interest and fees on loans $ 38,493 $ 33,208 $ 31,874 $ 35,277 $ 33,961 $ 103,575 $ 101,399 Interest on investment securities: Taxable 9,556 7,547 6,223 5,753 6,144 23,327 17,318 Tax-exempt 1,228 1,205 1,216 1,226 1,257 3,650 3,801 Interest on deposits in depository institutions 1,530 782 238 217 196 2,549 476 Total Interest Income 50,807 42,742 39,551 42,473 41,558 133,101 122,994 Interest Expense Interest on deposits 1,585 1,328 1,521 1,710 1,955 4,433 7,695 Interest on short-term borrowings 440 124 114 132 115 677 357 Total Interest Expense 2,025 1,452 1,635 1,842 2,070 5,110 8,052 Net Interest Income 48,782 41,290 37,916 40,631 39,488 127,991 114,942 Provision for (Recovery of) credit losses 730 - (756 ) - (725 ) (26 ) (3,165 ) Net Interest Income After Provision for (Recovery of) Credit Losses 48,052 41,290 38,672 40,631 40,213 128,017 118,107 Non-Interest Income Net gains on sale of investment securities - - - - - - 312 Unrealized gains (losses) recognized on equity securities still held 1 (601 ) (723 ) 52 93 (1,322 ) 452 Service charges 7,487 7,067 6,725 7,057 6,706 21,281 18,482 Bankcard revenue 7,052 7,062 6,444 6,762 6,791 20,558 20,225 Trust and investment management fee income 2,158 2,100 2,197 2,198 2,172 6,455 6,217 Bank owned life insurance 754 978 2,014 748 747 3,746 3,147 Other income 792 1,243 791 799 1,438 2,825 3,190 Total Non-Interest Income 18,244 17,849 17,448 17,616 17,947 53,543 52,025 Non-Interest Expense Salaries and employee benefits 17,398 16,413 15,577 15,299 15,321 49,386 46,551 Occupancy related expense 2,664 2,620 2,709 2,429 2,507 7,993 7,654 Equipment and software related expense 2,949 2,732 2,769 2,733 2,554 8,452 7,753 FDIC insurance expense 416 409 435 400 396 1,259 1,183 Advertising 854 951 798 582 804 2,603 2,509 Bankcard expenses 1,405 1,665 1,606 1,576 1,549 4,676 4,879 Postage, delivery, and statement mailings 578 551 636 590 573 1,765 1,733 Office supplies 466 427 410 378 406 1,303 1,169 Legal and professional fees 532 525 527 405 610 1,584 1,874 Telecommunications 651 754 584 702 790 1,988 2,156 Repossessed asset (gains) losses, net of expenses (3 ) (32 ) 40 (29 ) (108 ) 4 (28 ) Other expenses 3,591 3,674 3,436 3,559 3,776 10,701 11,128 Total Non-Interest Expense 31,501 30,689 29,527 28,624 29,178 91,714 88,561 Income Before Income Taxes 34,795 28,450 26,593 29,623 28,982 89,846 81,571 Income tax expense 7,421 5,767 5,251 6,237 6,250 18,438 16,877 Net Income Available to Common Shareholders $ 27,374 $ 22,683 $ 21,342 $ 23,386 $ 22,732 $ 71,408 $ 64,694 Distributed earnings allocated to common shareholders $ 9,564 $ 8,837 $ 8,943 $ 8,949 $ 8,726 $ 27,220 $ 26,177 Undistributed earnings allocated to common shareholders 17,555 13,643 12,199 14,211 13,786 43,509 37,899 Net earnings allocated to common shareholders $ 27,119 $ 22,480 $ 21,142 $ 23,160 $ 22,512 $ 70,729 $ 64,076 Average common shares outstanding 14,776 14,888 14,974 15,026 15,279 14,878 15,501 Shares for diluted earnings per share 14,800 14,909 15,002 15,056 15,302 14,901 15,526 Basic earnings per common share $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 Diluted earnings per common share $ 1.83 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Assets Cash and due from banks $ 65,051 $ 90,449 $ 100,877 $ 101,804 $ 103,841 Interest-bearing deposits in depository institutions 233,302 606,530 497,171 532,827 535,708 Cash and cash equivalents 298,353 696,979 598,048 634,631 639,549 Investment securities available-for-sale, at fair value 1,489,392 1,497,227 1,409,513 1,408,165 1,372,077 Other securities 24,372 24,383 24,785 25,531 25,497 Total investment securities 1,513,764 1,521,610 1,434,298 1,433,696 1,397,574 Gross loans 3,628,752 3,566,758 3,559,905 3,543,814 3,521,925 Allowance for credit losses (17,011 ) (17,015 ) (17,280 ) (18,166 ) (18,751 ) Net loans 3,611,741 3,549,743 3,542,625 3,525,648 3,503,174 Bank owned life insurance 121,283 120,528 120,522 120,978 120,238 Premises and equipment, net 71,686 72,388 73,067 74,071 75,156 Accrued interest receivable 17,256 16,342 16,101 15,627 16,224 Net deferred tax assets 49,888 30,802 18,001 63 90 Intangible assets 116,081 116,428 116,774 117,121 117,489 Other assets 147,716 118,375 92,331 81,860 82,419 Total Assets $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 $ 5,951,913 Liabilities Deposits: Noninterest-bearing $ 1,429,281 $ 1,531,660 $ 1,357,266 $ 1,373,125 $ 1,311,464 Interest-bearing: Demand deposits 1,160,970 1,189,056 1,191,492 1,135,848 1,139,033 Savings deposits 1,427,785 1,435,645 1,425,528 1,347,448 1,332,910 Time deposits 939,769 985,567 1,024,559 1,068,915 1,104,069 Total deposits 4,957,805 5,141,928 4,998,845 4,925,336 4,887,476 Short-term borrowings Customer repurchase agreements 304,807 402,368 288,483 312,458 296,642 Net deferred tax liabilities - - - - - Other liabilities 136,868 106,906 92,009 84,796 90,499 Total Liabilities 5,399,480 5,651,202 5,379,337 5,322,590 5,274,617 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,138 169,557 170,206 170,942 170,300 Retained earnings 685,657 667,933 654,138 641,826 627,463 Cost of common stock in treasury (209,644 ) (209,133 ) (194,819 ) (193,542 ) (183,303 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (141,997 ) (80,498 ) (41,229 ) 17,745 20,878 Underfunded pension liability (3,485 ) (3,485 ) (3,485 ) (3,485 ) (5,661 ) Total Accumulated Other Comprehensive (Loss) Income (145,482 ) (83,983 ) (44,714 ) 14,260 15,217 Total Stockholders' Equity 548,288 591,993 632,430 681,105 677,296 Total Liabilities and Stockholders' Equity $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 $ 5,951,913 Regulatory Capital Total CET 1 capital $ 582,213 $ 564,158 $ 565,048 $ 555,532 $ 550,426 Total tier 1 capital 582,213 564,158 565,048 555,532 550,426 Total risk-based capital 596,708 578,657 579,807 570,336 565,712 Total risk-weighted assets 3,679,511 3,558,249 3,492,920 3,453,893 3,417,020 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Commercial and industrial $ 375,735 $ 360,481 $ 337,384 $ 346,184 $ 353,046 1-4 Family 109,710 108,765 108,424 107,873 108,913 Hotels 355,001 337,910 314,902 311,315 297,341 Multi-family 186,440 203,856 209,359 215,677 215,307 Non Residential Non-Owner Occupied 569,369 551,240 637,092 639,818 664,365 Non Residential Owner Occupied 177,673 180,188 200,180 204,233 205,579 Commercial real estate (1) 1,398,193 1,381,959 1,469,957 1,478,916 1,491,505 Residential real estate (2) 1,678,770 1,651,005 1,588,860 1,548,965 1,506,572 Home equity 130,837 125,742 121,460 122,345 124,806 Consumer 41,902 44,580 39,778 40,901 43,296 DDA overdrafts 3,315 2,991 2,466 6,503 2,700 Gross Loans $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 $ 3,521,925 Construction loans included in: (1) - Commercial real estate loans $ 4,125 $ 6,767 $ 14,877 $ 11,783 $ 19,360 (2) - Residential real estate loans 19,333 18,751 16,253 17,252 19,059 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Allowance for Credit Losses Balance at beginning of period $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 20,016 $ 18,166 $ 24,549 Charge-offs: Commercial and industrial (411 ) - (34 ) - - (445 ) (245 ) Commercial real estate - (24 ) - (276 ) (392 ) (24 ) (2,111 ) Residential real estate (93 ) (56 ) (50 ) (68 ) (18 ) (199 ) (197 ) Home equity (71 ) (19 ) - (58 ) (47 ) (90 ) (119 ) Consumer (16 ) (9 ) (23 ) (13 ) (3 ) (48 ) (229 ) DDA overdrafts (719 ) (604 ) (631 ) (635 ) (633 ) (1,954 ) (1,516 ) Total charge-offs (1,310 ) (712 ) (738 ) (1,050 ) (1,093 ) (2,760 ) (4,417 ) Recoveries: Commercial and industrial 149 32 59 31 69 240 140 Commercial real estate 9 25 53 27 18 87 197 Residential real estate 1 4 45 7 29 50 120 Home equity 2 3 17 6 58 22 84 Consumer 29 19 28 40 72 76 215 DDA overdrafts 383 364 406 354 307 1,153 1,028 Total recoveries 573 447 608 465 553 1,628 1,784 Net charge-offs (737 ) (265 ) (130 ) (585 ) (540 ) (1,132 ) (2,633 ) Provision for (recovery of) credit losses 730 - (756 ) - (725 ) (26 ) (3,165 ) Balance at end of period $ 17,008 $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 17,008 $ 18,751 Loans outstanding $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 $ 3,521,925 Allowance as a percent of loans outstanding 0.47 % 0.48 % 0.49 % 0.51 % 0.53 % Allowance as a percent of non-performing loans 320.5 % 292.6 % 331.3 % 290.1 % 243.1 % Average loans outstanding $ 3,596,523 $ 3,559,713 $ 3,527,393 $ 3,522,272 $ 3,535,497 $ 3,561,463 $ 3,553,966 Net charge-offs (annualized) as a percent of average loans outstanding 0.08 % 0.03 % 0.01 % 0.07 % 0.06 % 0.04 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Nonaccrual Loans Residential real estate $ 2,089 $ 1,561 $ 1,786 $ 2,809 $ 3,634 Home equity 140 54 99 40 67 Commercial and industrial 785 1,360 1,069 996 531 Commercial real estate 2,293 2,783 2,241 2,373 3,355 Consumer - - - - - Total nonaccrual loans 5,307 5,758 5,195 6,218 7,587 Accruing loans past due 90 days or more - 58 21 43 127 Total non-performing loans 5,307 5,816 5,216 6,261 7,714 Other real estate owned 1,071 946 1,099 1,319 1,335 Total non-performing assets $ 6,378 $ 6,762 $ 6,315 $ 7,580 $ 9,049 Non-performing assets as a percent of loans and other real estate owned 0.18 % 0.19 % 0.18 % 0.21 % 0.26 % Past Due Loans Residential real estate $ 3,452 $ 5,298 $ 4,976 $ 5,321 $ 5,258 Home equity 521 282 505 618 688 Commercial and industrial 221 130 56 336 455 Commercial real estate 221 46 744 22 441 Consumer 27 49 32 60 35 DDA overdrafts 561 430 392 489 390 Total past due loans $ 5,003 $ 6,235 $ 6,705 $ 6,846 $ 7,267 Total past due loans as a percent of loans outstanding 0.14 % 0.17 % 0.19 % 0.19 % 0.21 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 15,657 $ 16,022 $ 16,182 $ 16,943 $ 16,910 Home equity 1,614 1,649 1,694 1,784 1,822 Commercial and industrial 354 381 397 414 430 Commercial real estate 104 107 1,890 1,914 1,937 Consumer 68 80 194 225 221 Total TDRs $ 17,797 $ 18,239 $ 20,357 $ 21,280 $ 21,320 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2022 June 30, 2022 September 30, 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,792,365 $ 17,640 3.90 % $ 1,730,617 $ 16,063 3.72 % $ 1,648,921 $ 15,813 3.80 % Commercial, financial, and agriculture (2) 1,759,567 20,092 4.53 % 1,785,511 16,421 3.69 % 1,836,604 17,344 3.75 % Installment loans to individuals (2), (3) 44,591 683 6.08 % 43,585 631 5.81 % 49,972 714 5.67 % Previously securitized loans (4) *** 78 *** *** 93 *** *** 91 *** Total loans 3,596,523 38,493 4.25 % 3,559,713 33,208 3.74 % 3,535,497 33,962 3.81 % Securities: Taxable 1,359,207 9,557 2.79 % 1,269,049 7,548 2.39 % 1,136,519 6,144 2.14 % Tax-exempt (5) 215,219 1,555 2.87 % 215,603 1,526 2.84 % 245,551 1,590 2.57 % Total securities 1,574,426 11,112 2.80 % 1,484,652 9,074 2.45 % 1,382,070 7,734 2.22 % Deposits in depository institutions 289,460 1,529 2.10 % 441,239 781 0.71 % 544,843 196 0.14 % Total interest-earning assets 5,460,409 51,134 3.72 % 5,485,604 43,063 3.15 % 5,462,410 41,892 3.04 % Cash and due from banks 81,202 102,532 101,058 Premises and equipment, net 72,196 72,887 75,956 Goodwill and intangible assets 116,297 116,645 117,719 Other assets 278,527 256,354 220,420 Less: Allowance for credit losses (17,224 ) (17,755 ) (20,407 ) Total assets $ 5,991,407 $ 6,016,267 $ 5,957,156 Liabilities: Interest-bearing demand deposits $ 1,151,122 $ 272 0.09 % $ 1,156,200 $ 148 0.05 % $ 1,093,243 $ 127 0.05 % Savings deposits 1,431,591 358 0.10 % 1,430,121 182 0.05 % 1,315,462 169 0.05 % Time deposits (2) 964,447 956 0.39 % 1,004,356 999 0.40 % 1,126,553 1,659 0.58 % Short-term borrowings 270,310 440 0.65 % 288,031 123 0.17 % 282,722 115 0.16 % Total interest-bearing liabilities 3,817,470 2,026 0.21 % 3,878,708 1,452 0.15 % 3,817,980 2,070 0.22 % Noninterest-bearing demand deposits 1,455,123 1,435,256 1,356,745 Other liabilities 100,303 85,075 86,263 Stockholders' equity 618,511 617,228 696,168 Total liabilities and stockholders' equity $ 5,991,407 $ 6,016,267 $ 5,957,156 Net interest income $ 49,108 $ 41,611 $ 39,822 Net yield on earning assets 3.57 % 3.04 % 2.89 % (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 (includes PPP fees) $ 308 $ 3 $ 1,120 (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 $ 64 $ 77 $ 154 Commercial, financial, and agriculture 103 118 265 Installment loans to individuals 7 15 21 Time deposits 21 21 48 $ 195 $ 231 $ 488 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Nine Months Ended September 30, 2022 September 30, 2021 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,728,557 $ 49,299 3.81 % $ 1,669,324 $ 48,801 3.91 % Commercial, financial, and agriculture (2) 1,788,784 52,044 3.89 % 1,833,744 50,044 3.65 % Installment loans to individuals (2), (3) 44,122 1,921 5.82 % 50,898 2,140 5.62 % Previously securitized loans (4) *** 311 *** *** 414 *** Total loans 3,561,463 103,575 3.89 % 3,553,966 101,399 3.81 % Securities: Taxable 1,279,086 23,327 2.44 % 1,043,269 17,318 2.22 % Tax-exempt (5) 221,035 4,620 2.79 % 243,146 4,811 2.65 % Total securities 1,500,121 27,947 2.49 % 1,286,415 22,129 2.30 % Deposits in depository institutions 422,714 2,549 0.81 % 562,272 474 0.11 % Total interest-earning assets 5,484,298 134,071 3.27 % 5,402,653 124,002 3.07 % Cash and due from banks 95,105 91,073 Premises and equipment, net 72,964 76,481 Goodwill and intangible assets 116,643 118,084 Other assets 251,071 214,872 Less: Allowance for credit losses (17,807 ) (22,989 ) Total assets $ 6,002,274 $ 5,880,174 Liabilities: Interest-bearing demand deposits $ 1,149,899 $ 550 0.06 % $ 1,057,452 $ 373 0.05 % Savings deposits 1,415,563 715 0.07 % 1,275,211 516 0.05 % Time deposits (2) 1,005,356 3,168 0.42 % 1,181,166 6,806 0.77 % Short-term borrowings 278,211 677 0.33 % 292,845 357 0.16 % Total interest-bearing liabilities 3,849,029 5,110 0.18 % 3,806,674 8,052 0.28 % Noninterest-bearing demand deposits 1,429,887 1,289,247 Other liabilities 86,585 82,953 Stockholders' equity 636,773 701,300 Total liabilities and stockholders' equity $ 6,002,274 $ 5,880,174 Net interest income $ 128,961 $ 115,950 Net yield on earning assets 3.14 % 2.87 % (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 (includes PPP fees) $ 609 $ 2,443 (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 $ 231 $ 472 Commercial, financial, and agriculture 507 956 Installment loans to individuals 41 72 Time deposits 62 145 $ 841 $ 1,645 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Net Interest Income/Margin Net interest income ("GAAP") $ 48,782 $ 41,290 $ 37,916 $ 40,631 $ 39,488 $ 127,991 $ 114,942 Taxable equivalent adjustment 326 321 323 325 334 970 1,008 Net interest income, fully taxable equivalent $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 39,822 $ 128,961 $ 115,950 Average interest earning assets $ 5,460,409 $ 5,485,604 $ 5,507,397 $ 5,521,386 $ 5,462,410 $ 5,484,298 $ 5,402,653 Net Interest Margin 3.57 % 3.04 % 2.82 % 2.94 % 2.89 % 3.14 % 2.87 % Accretion related to fair value adjustments -0.01 % -0.02 % -0.03 % -0.03 % -0.04 % -0.02 % -0.04 % Net Interest Margin (excluding accretion) 3.56 % 3.02 % 2.79 % 2.91 % 2.85 % 3.12 % 2.83 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 9.22 % 9.48 % 10.52 % 11.34 % 11.37 % Effect of goodwill and other intangibles, net -1.81 % -1.72 % -1.77 % -1.76 % -1.78 % Tangible common equity to tangible assets 7.41 % 7.76 % 8.75 % 9.58 % 9.59 % View source version on businesswire.com: https://www.businesswire.com/news/home/20221017005627/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 Third Quarter Results By: City Holding Company via Business Wire October 18, 2022 at 16:00 PM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $27.4 million and diluted earnings of $1.83 per share for the quarter ended September 30, 2022. For the third quarter of 2022, the Company achieved a return on assets of 1.83% and a return on tangible equity of 21.8%. Net Interest Income The Company’s net interest income increased from $41.3 million during the second quarter of 2022 to $48.8 million during the third quarter of 2022. The Company’s tax equivalent net interest income increased from $41.6 million for the second quarter of 2022 to $49.1 million for the third quarter of 2022. Net interest income increased by $4.7 million and $1.5 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 47 basis points and 35 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 139 basis points which increased net interest income by $1.0 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (6 basis points) which decreased net interest income by $0.6 million. The Company’s reported net interest margin increased from 3.04% for the second quarter of 2022 to 3.57% for the third quarter of 2022. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased modestly from 0.19%, or $6.8 million, at June 30, 2022 to 0.18%, or $6.4 million, at September 30, 2022. Total past due loans decreased from $6.2 million, or 0.17% of total loans outstanding, at June 30, 2022 to $5.0 million, or 0.14% of total loans outstanding, at September 30, 2022. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a provision for credit losses of $0.7 million in the third quarter of 2022, compared to a recovery of credit losses of $0.7 million for the comparable period in 2021 and no provision for credit losses for the second quarter of 2022. The provision for credit losses in the third quarter was a result of net charge-offs and loan growth. Non-interest Income Non-interest income was $18.2 million for the third quarter of 2022 as compared to $17.9 million for the third quarter of 2021. During the third quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities. Exclusive of these gains, non-interest income increased from $17.8 million for the third quarter of 2021 to $18.2 million for the third quarter of 2022. This increase was largely attributable to higher service charges ($0.8 million, or 11.6%) and bankcard revenues ($0.3 million, or 3.8%). These increases were partially offset by a decrease in other income ($0.6 million). Non-interest Expenses Non-interest expenses increased $2.3 million (8.0%), from $29.2 million in the third quarter of 2021 to $31.5 million in the third quarter of 2022. This increase was primarily due to an increase in salaries and employee benefits of $2.1 million due to increased health insurance, increased incentive compensation and higher salary adjustments during 2022. Balance Sheet Trends Loans increased $62.0 million (1.7%) from June 30, 2022 to September 30, 2022, to $3.63 billion. Residential real estate loans increased $27.8 million (1.7%), commercial real estate loans increased $16.2 million (1.2%), commercial and industrial loans increased $15.3 million (4.2%), and home equity loans increased $5.1 million (4.1%). These increases were partially offset by a decrease in consumer loans of $2.7 million. Total average depository balances decreased $23.7 million, or 0.5%, from the quarter ended June 30, 2022 to the quarter ended September 30, 2022. Average time deposit balances decreased $39.9 million and average interest-bearing demand deposit balances decreased $5.1 million. These increases were partially offset by an increase in noninterest-bearing demand deposit balances of $19.9 million. Income Tax Expense The Company’s effective income tax rate for the third quarter of 2022 was 21.3% compared to 20.8% for the year ended December 31, 2021, and 21.6% for the quarter ended September 30, 2021. Capitalization and Liquidity The Company’s loan to deposit ratio was 73.2% and the loan to asset ratio was 61.0% at September 30, 2022. The Company maintained investment securities totaling 25.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 67.6% of assets at September 30, 2022. Time deposits fund 15.8% of assets at September 30, 2022, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company. The Company continues to be strongly capitalized with tangible equity of $432 million at September 30, 2022. Due primarily to unrealized security losses during the nine months ended September 30, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 7.4% at September 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At September 30, 2022, City National Bank’s Leverage Ratio was 9.05%, its Common Equity Tier I ratio was 14.68%, its Tier I Capital ratio was 14.68%, and its Total Risk-Based Capital ratio was 15.07%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On September 28, 2022, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable October 31, 2022, to shareholders of record as of October 14, 2022. This represents an 8.3% increase from the $0.60 per share dividend paid on July 29, 2022. During the quarter ended September 30, 2022, the Company repurchased 9,000 common shares at a weighted average price of $80.24 as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2022, the Company could repurchase approximately 886,000 additional shares under the plan. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. Forward-Looking Information This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its September 30, 2022 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2022 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Earnings Net Interest Income (fully taxable equivalent) $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 39,822 $ 128,961 $ 115,950 Net Income available to common shareholders 27,374 22,683 21,342 23,386 22,732 71,408 64,694 Per Share Data Earnings per share available to common shareholders: Basic $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 Diluted 1.83 1.51 1.41 1.54 1.47 4.75 4.13 Weighted average number of shares (in thousands): Basic 14,776 14,888 14,974 15,026 15,279 14,878 15,501 Diluted 14,800 14,909 15,002 15,056 15,302 14,901 15,526 Period-end number of shares (in thousands) 14,856 14,864 15,045 15,062 15,192 14,856 15,192 Cash dividends declared $ 0.65 $ 0.60 $ 0.60 $ 0.60 $ 0.58 $ 1.85 $ 1.74 Book value per share (period-end) $ 36.91 $ 39.83 $ 42.03 $ 45.22 $ 44.58 $ 36.91 $ 44.58 Tangible book value per share (period-end) 29.09 31.99 34.27 37.44 36.85 29.09 36.85 Market data: High closing price $ 90.24 $ 83.07 $ 85.99 $ 83.14 $ 79.99 $ 90.24 $ 87.41 Low closing price 78.40 73.88 76.82 76.52 72.29 73.88 69.05 Period-end closing price 88.69 79.88 78.70 81.79 77.91 88.69 77.91 Average daily volume (in thousands) 58 87 59 52 53 68 59 Treasury share activity: Treasury shares repurchased (in thousands) 9 208 38 131 337 255 629 Average treasury share repurchase price $ 80.24 $ 78.33 $ 78.09 $ 78.93 $ 75.65 $ 78.36 $ 76.85 Key Ratios (percent) Return on average assets 1.83 % 1.51 % 1.42 % 1.56 % 1.53 % 1.59 % 1.47 % Return on average tangible equity 21.8 % 18.1 % 15.3 % 16.7 % 15.7 % 18.3 % 14.8 % Yield on interest earning assets 3.72 % 3.15 % 2.94 % 3.08 % 3.04 % 3.27 % 3.07 % Cost of interest bearing liabilities 0.21 % 0.15 % 0.17 % 0.19 % 0.22 % 0.18 % 0.28 % Net Interest Margin 3.57 % 3.04 % 2.82 % 2.94 % 2.89 % 3.14 % 2.87 % Non-interest income as a percent of total revenue 27.2 % 30.9 % 32.4 % 30.2 % 31.1 % 29.5 % 31.0 % Efficiency Ratio 46.3 % 50.5 % 51.7 % 48.3 % 50.0 % 49.3 % 52.3 % Price/Earnings Ratio (a) 12.08 13.23 13.93 13.27 13.22 13.99 14.14 Capital (period-end) Average Shareholders' Equity to Average Assets 10.32 % 10.26 % 11.25 % 11.25 % 11.69 % Tangible equity to tangible assets 7.41 % 7.76 % 8.75 % 9.58 % 9.59 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.82 % 15.85 % 16.18 % 16.08 % 16.11 % Tier I 15.82 % 15.85 % 16.18 % 16.08 % 16.11 % Total 16.22 % 16.26 % 16.60 % 16.51 % 16.56 % Leverage 9.74 % 9.42 % 9.58 % 9.44 % 9.46 % City National Bank risk based capital ratios (b): CET I 14.68 % 14.80 % 14.82 % 14.35 % 14.76 % Tier I 14.68 % 14.80 % 14.82 % 14.35 % 14.76 % Total 15.07 % 15.21 % 15.24 % 14.78 % 15.21 % Leverage 9.05 % 8.81 % 8.80 % 8.45 % 8.73 % Other (period-end) Branches 94 94 94 94 94 FTE 903 915 897 905 921 Assets per FTE (in thousands) $ 6,588 $ 6,825 $ 6,703 $ 6,637 $ 6,463 Deposits per FTE (in thousands) 5,492 5,621 5,574 5,445 5,308 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) September 30, 2022 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Interest Income Interest and fees on loans $ 38,493 $ 33,208 $ 31,874 $ 35,277 $ 33,961 $ 103,575 $ 101,399 Interest on investment securities: Taxable 9,556 7,547 6,223 5,753 6,144 23,327 17,318 Tax-exempt 1,228 1,205 1,216 1,226 1,257 3,650 3,801 Interest on deposits in depository institutions 1,530 782 238 217 196 2,549 476 Total Interest Income 50,807 42,742 39,551 42,473 41,558 133,101 122,994 Interest Expense Interest on deposits 1,585 1,328 1,521 1,710 1,955 4,433 7,695 Interest on short-term borrowings 440 124 114 132 115 677 357 Total Interest Expense 2,025 1,452 1,635 1,842 2,070 5,110 8,052 Net Interest Income 48,782 41,290 37,916 40,631 39,488 127,991 114,942 Provision for (Recovery of) credit losses 730 - (756 ) - (725 ) (26 ) (3,165 ) Net Interest Income After Provision for (Recovery of) Credit Losses 48,052 41,290 38,672 40,631 40,213 128,017 118,107 Non-Interest Income Net gains on sale of investment securities - - - - - - 312 Unrealized gains (losses) recognized on equity securities still held 1 (601 ) (723 ) 52 93 (1,322 ) 452 Service charges 7,487 7,067 6,725 7,057 6,706 21,281 18,482 Bankcard revenue 7,052 7,062 6,444 6,762 6,791 20,558 20,225 Trust and investment management fee income 2,158 2,100 2,197 2,198 2,172 6,455 6,217 Bank owned life insurance 754 978 2,014 748 747 3,746 3,147 Other income 792 1,243 791 799 1,438 2,825 3,190 Total Non-Interest Income 18,244 17,849 17,448 17,616 17,947 53,543 52,025 Non-Interest Expense Salaries and employee benefits 17,398 16,413 15,577 15,299 15,321 49,386 46,551 Occupancy related expense 2,664 2,620 2,709 2,429 2,507 7,993 7,654 Equipment and software related expense 2,949 2,732 2,769 2,733 2,554 8,452 7,753 FDIC insurance expense 416 409 435 400 396 1,259 1,183 Advertising 854 951 798 582 804 2,603 2,509 Bankcard expenses 1,405 1,665 1,606 1,576 1,549 4,676 4,879 Postage, delivery, and statement mailings 578 551 636 590 573 1,765 1,733 Office supplies 466 427 410 378 406 1,303 1,169 Legal and professional fees 532 525 527 405 610 1,584 1,874 Telecommunications 651 754 584 702 790 1,988 2,156 Repossessed asset (gains) losses, net of expenses (3 ) (32 ) 40 (29 ) (108 ) 4 (28 ) Other expenses 3,591 3,674 3,436 3,559 3,776 10,701 11,128 Total Non-Interest Expense 31,501 30,689 29,527 28,624 29,178 91,714 88,561 Income Before Income Taxes 34,795 28,450 26,593 29,623 28,982 89,846 81,571 Income tax expense 7,421 5,767 5,251 6,237 6,250 18,438 16,877 Net Income Available to Common Shareholders $ 27,374 $ 22,683 $ 21,342 $ 23,386 $ 22,732 $ 71,408 $ 64,694 Distributed earnings allocated to common shareholders $ 9,564 $ 8,837 $ 8,943 $ 8,949 $ 8,726 $ 27,220 $ 26,177 Undistributed earnings allocated to common shareholders 17,555 13,643 12,199 14,211 13,786 43,509 37,899 Net earnings allocated to common shareholders $ 27,119 $ 22,480 $ 21,142 $ 23,160 $ 22,512 $ 70,729 $ 64,076 Average common shares outstanding 14,776 14,888 14,974 15,026 15,279 14,878 15,501 Shares for diluted earnings per share 14,800 14,909 15,002 15,056 15,302 14,901 15,526 Basic earnings per common share $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 Diluted earnings per common share $ 1.83 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Assets Cash and due from banks $ 65,051 $ 90,449 $ 100,877 $ 101,804 $ 103,841 Interest-bearing deposits in depository institutions 233,302 606,530 497,171 532,827 535,708 Cash and cash equivalents 298,353 696,979 598,048 634,631 639,549 Investment securities available-for-sale, at fair value 1,489,392 1,497,227 1,409,513 1,408,165 1,372,077 Other securities 24,372 24,383 24,785 25,531 25,497 Total investment securities 1,513,764 1,521,610 1,434,298 1,433,696 1,397,574 Gross loans 3,628,752 3,566,758 3,559,905 3,543,814 3,521,925 Allowance for credit losses (17,011 ) (17,015 ) (17,280 ) (18,166 ) (18,751 ) Net loans 3,611,741 3,549,743 3,542,625 3,525,648 3,503,174 Bank owned life insurance 121,283 120,528 120,522 120,978 120,238 Premises and equipment, net 71,686 72,388 73,067 74,071 75,156 Accrued interest receivable 17,256 16,342 16,101 15,627 16,224 Net deferred tax assets 49,888 30,802 18,001 63 90 Intangible assets 116,081 116,428 116,774 117,121 117,489 Other assets 147,716 118,375 92,331 81,860 82,419 Total Assets $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 $ 5,951,913 Liabilities Deposits: Noninterest-bearing $ 1,429,281 $ 1,531,660 $ 1,357,266 $ 1,373,125 $ 1,311,464 Interest-bearing: Demand deposits 1,160,970 1,189,056 1,191,492 1,135,848 1,139,033 Savings deposits 1,427,785 1,435,645 1,425,528 1,347,448 1,332,910 Time deposits 939,769 985,567 1,024,559 1,068,915 1,104,069 Total deposits 4,957,805 5,141,928 4,998,845 4,925,336 4,887,476 Short-term borrowings Customer repurchase agreements 304,807 402,368 288,483 312,458 296,642 Net deferred tax liabilities - - - - - Other liabilities 136,868 106,906 92,009 84,796 90,499 Total Liabilities 5,399,480 5,651,202 5,379,337 5,322,590 5,274,617 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,138 169,557 170,206 170,942 170,300 Retained earnings 685,657 667,933 654,138 641,826 627,463 Cost of common stock in treasury (209,644 ) (209,133 ) (194,819 ) (193,542 ) (183,303 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (141,997 ) (80,498 ) (41,229 ) 17,745 20,878 Underfunded pension liability (3,485 ) (3,485 ) (3,485 ) (3,485 ) (5,661 ) Total Accumulated Other Comprehensive (Loss) Income (145,482 ) (83,983 ) (44,714 ) 14,260 15,217 Total Stockholders' Equity 548,288 591,993 632,430 681,105 677,296 Total Liabilities and Stockholders' Equity $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 $ 5,951,913 Regulatory Capital Total CET 1 capital $ 582,213 $ 564,158 $ 565,048 $ 555,532 $ 550,426 Total tier 1 capital 582,213 564,158 565,048 555,532 550,426 Total risk-based capital 596,708 578,657 579,807 570,336 565,712 Total risk-weighted assets 3,679,511 3,558,249 3,492,920 3,453,893 3,417,020 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Commercial and industrial $ 375,735 $ 360,481 $ 337,384 $ 346,184 $ 353,046 1-4 Family 109,710 108,765 108,424 107,873 108,913 Hotels 355,001 337,910 314,902 311,315 297,341 Multi-family 186,440 203,856 209,359 215,677 215,307 Non Residential Non-Owner Occupied 569,369 551,240 637,092 639,818 664,365 Non Residential Owner Occupied 177,673 180,188 200,180 204,233 205,579 Commercial real estate (1) 1,398,193 1,381,959 1,469,957 1,478,916 1,491,505 Residential real estate (2) 1,678,770 1,651,005 1,588,860 1,548,965 1,506,572 Home equity 130,837 125,742 121,460 122,345 124,806 Consumer 41,902 44,580 39,778 40,901 43,296 DDA overdrafts 3,315 2,991 2,466 6,503 2,700 Gross Loans $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 $ 3,521,925 Construction loans included in: (1) - Commercial real estate loans $ 4,125 $ 6,767 $ 14,877 $ 11,783 $ 19,360 (2) - Residential real estate loans 19,333 18,751 16,253 17,252 19,059 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Allowance for Credit Losses Balance at beginning of period $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 20,016 $ 18,166 $ 24,549 Charge-offs: Commercial and industrial (411 ) - (34 ) - - (445 ) (245 ) Commercial real estate - (24 ) - (276 ) (392 ) (24 ) (2,111 ) Residential real estate (93 ) (56 ) (50 ) (68 ) (18 ) (199 ) (197 ) Home equity (71 ) (19 ) - (58 ) (47 ) (90 ) (119 ) Consumer (16 ) (9 ) (23 ) (13 ) (3 ) (48 ) (229 ) DDA overdrafts (719 ) (604 ) (631 ) (635 ) (633 ) (1,954 ) (1,516 ) Total charge-offs (1,310 ) (712 ) (738 ) (1,050 ) (1,093 ) (2,760 ) (4,417 ) Recoveries: Commercial and industrial 149 32 59 31 69 240 140 Commercial real estate 9 25 53 27 18 87 197 Residential real estate 1 4 45 7 29 50 120 Home equity 2 3 17 6 58 22 84 Consumer 29 19 28 40 72 76 215 DDA overdrafts 383 364 406 354 307 1,153 1,028 Total recoveries 573 447 608 465 553 1,628 1,784 Net charge-offs (737 ) (265 ) (130 ) (585 ) (540 ) (1,132 ) (2,633 ) Provision for (recovery of) credit losses 730 - (756 ) - (725 ) (26 ) (3,165 ) Balance at end of period $ 17,008 $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 17,008 $ 18,751 Loans outstanding $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 $ 3,521,925 Allowance as a percent of loans outstanding 0.47 % 0.48 % 0.49 % 0.51 % 0.53 % Allowance as a percent of non-performing loans 320.5 % 292.6 % 331.3 % 290.1 % 243.1 % Average loans outstanding $ 3,596,523 $ 3,559,713 $ 3,527,393 $ 3,522,272 $ 3,535,497 $ 3,561,463 $ 3,553,966 Net charge-offs (annualized) as a percent of average loans outstanding 0.08 % 0.03 % 0.01 % 0.07 % 0.06 % 0.04 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Nonaccrual Loans Residential real estate $ 2,089 $ 1,561 $ 1,786 $ 2,809 $ 3,634 Home equity 140 54 99 40 67 Commercial and industrial 785 1,360 1,069 996 531 Commercial real estate 2,293 2,783 2,241 2,373 3,355 Consumer - - - - - Total nonaccrual loans 5,307 5,758 5,195 6,218 7,587 Accruing loans past due 90 days or more - 58 21 43 127 Total non-performing loans 5,307 5,816 5,216 6,261 7,714 Other real estate owned 1,071 946 1,099 1,319 1,335 Total non-performing assets $ 6,378 $ 6,762 $ 6,315 $ 7,580 $ 9,049 Non-performing assets as a percent of loans and other real estate owned 0.18 % 0.19 % 0.18 % 0.21 % 0.26 % Past Due Loans Residential real estate $ 3,452 $ 5,298 $ 4,976 $ 5,321 $ 5,258 Home equity 521 282 505 618 688 Commercial and industrial 221 130 56 336 455 Commercial real estate 221 46 744 22 441 Consumer 27 49 32 60 35 DDA overdrafts 561 430 392 489 390 Total past due loans $ 5,003 $ 6,235 $ 6,705 $ 6,846 $ 7,267 Total past due loans as a percent of loans outstanding 0.14 % 0.17 % 0.19 % 0.19 % 0.21 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 15,657 $ 16,022 $ 16,182 $ 16,943 $ 16,910 Home equity 1,614 1,649 1,694 1,784 1,822 Commercial and industrial 354 381 397 414 430 Commercial real estate 104 107 1,890 1,914 1,937 Consumer 68 80 194 225 221 Total TDRs $ 17,797 $ 18,239 $ 20,357 $ 21,280 $ 21,320 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2022 June 30, 2022 September 30, 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,792,365 $ 17,640 3.90 % $ 1,730,617 $ 16,063 3.72 % $ 1,648,921 $ 15,813 3.80 % Commercial, financial, and agriculture (2) 1,759,567 20,092 4.53 % 1,785,511 16,421 3.69 % 1,836,604 17,344 3.75 % Installment loans to individuals (2), (3) 44,591 683 6.08 % 43,585 631 5.81 % 49,972 714 5.67 % Previously securitized loans (4) *** 78 *** *** 93 *** *** 91 *** Total loans 3,596,523 38,493 4.25 % 3,559,713 33,208 3.74 % 3,535,497 33,962 3.81 % Securities: Taxable 1,359,207 9,557 2.79 % 1,269,049 7,548 2.39 % 1,136,519 6,144 2.14 % Tax-exempt (5) 215,219 1,555 2.87 % 215,603 1,526 2.84 % 245,551 1,590 2.57 % Total securities 1,574,426 11,112 2.80 % 1,484,652 9,074 2.45 % 1,382,070 7,734 2.22 % Deposits in depository institutions 289,460 1,529 2.10 % 441,239 781 0.71 % 544,843 196 0.14 % Total interest-earning assets 5,460,409 51,134 3.72 % 5,485,604 43,063 3.15 % 5,462,410 41,892 3.04 % Cash and due from banks 81,202 102,532 101,058 Premises and equipment, net 72,196 72,887 75,956 Goodwill and intangible assets 116,297 116,645 117,719 Other assets 278,527 256,354 220,420 Less: Allowance for credit losses (17,224 ) (17,755 ) (20,407 ) Total assets $ 5,991,407 $ 6,016,267 $ 5,957,156 Liabilities: Interest-bearing demand deposits $ 1,151,122 $ 272 0.09 % $ 1,156,200 $ 148 0.05 % $ 1,093,243 $ 127 0.05 % Savings deposits 1,431,591 358 0.10 % 1,430,121 182 0.05 % 1,315,462 169 0.05 % Time deposits (2) 964,447 956 0.39 % 1,004,356 999 0.40 % 1,126,553 1,659 0.58 % Short-term borrowings 270,310 440 0.65 % 288,031 123 0.17 % 282,722 115 0.16 % Total interest-bearing liabilities 3,817,470 2,026 0.21 % 3,878,708 1,452 0.15 % 3,817,980 2,070 0.22 % Noninterest-bearing demand deposits 1,455,123 1,435,256 1,356,745 Other liabilities 100,303 85,075 86,263 Stockholders' equity 618,511 617,228 696,168 Total liabilities and stockholders' equity $ 5,991,407 $ 6,016,267 $ 5,957,156 Net interest income $ 49,108 $ 41,611 $ 39,822 Net yield on earning assets 3.57 % 3.04 % 2.89 % (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 (includes PPP fees) $ 308 $ 3 $ 1,120 (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 $ 64 $ 77 $ 154 Commercial, financial, and agriculture 103 118 265 Installment loans to individuals 7 15 21 Time deposits 21 21 48 $ 195 $ 231 $ 488 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Nine Months Ended September 30, 2022 September 30, 2021 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,728,557 $ 49,299 3.81 % $ 1,669,324 $ 48,801 3.91 % Commercial, financial, and agriculture (2) 1,788,784 52,044 3.89 % 1,833,744 50,044 3.65 % Installment loans to individuals (2), (3) 44,122 1,921 5.82 % 50,898 2,140 5.62 % Previously securitized loans (4) *** 311 *** *** 414 *** Total loans 3,561,463 103,575 3.89 % 3,553,966 101,399 3.81 % Securities: Taxable 1,279,086 23,327 2.44 % 1,043,269 17,318 2.22 % Tax-exempt (5) 221,035 4,620 2.79 % 243,146 4,811 2.65 % Total securities 1,500,121 27,947 2.49 % 1,286,415 22,129 2.30 % Deposits in depository institutions 422,714 2,549 0.81 % 562,272 474 0.11 % Total interest-earning assets 5,484,298 134,071 3.27 % 5,402,653 124,002 3.07 % Cash and due from banks 95,105 91,073 Premises and equipment, net 72,964 76,481 Goodwill and intangible assets 116,643 118,084 Other assets 251,071 214,872 Less: Allowance for credit losses (17,807 ) (22,989 ) Total assets $ 6,002,274 $ 5,880,174 Liabilities: Interest-bearing demand deposits $ 1,149,899 $ 550 0.06 % $ 1,057,452 $ 373 0.05 % Savings deposits 1,415,563 715 0.07 % 1,275,211 516 0.05 % Time deposits (2) 1,005,356 3,168 0.42 % 1,181,166 6,806 0.77 % Short-term borrowings 278,211 677 0.33 % 292,845 357 0.16 % Total interest-bearing liabilities 3,849,029 5,110 0.18 % 3,806,674 8,052 0.28 % Noninterest-bearing demand deposits 1,429,887 1,289,247 Other liabilities 86,585 82,953 Stockholders' equity 636,773 701,300 Total liabilities and stockholders' equity $ 6,002,274 $ 5,880,174 Net interest income $ 128,961 $ 115,950 Net yield on earning assets 3.14 % 2.87 % (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 (includes PPP fees) $ 609 $ 2,443 (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 $ 231 $ 472 Commercial, financial, and agriculture 507 956 Installment loans to individuals 41 72 Time deposits 62 145 $ 841 $ 1,645 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Net Interest Income/Margin Net interest income ("GAAP") $ 48,782 $ 41,290 $ 37,916 $ 40,631 $ 39,488 $ 127,991 $ 114,942 Taxable equivalent adjustment 326 321 323 325 334 970 1,008 Net interest income, fully taxable equivalent $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 39,822 $ 128,961 $ 115,950 Average interest earning assets $ 5,460,409 $ 5,485,604 $ 5,507,397 $ 5,521,386 $ 5,462,410 $ 5,484,298 $ 5,402,653 Net Interest Margin 3.57 % 3.04 % 2.82 % 2.94 % 2.89 % 3.14 % 2.87 % Accretion related to fair value adjustments -0.01 % -0.02 % -0.03 % -0.03 % -0.04 % -0.02 % -0.04 % Net Interest Margin (excluding accretion) 3.56 % 3.02 % 2.79 % 2.91 % 2.85 % 3.12 % 2.83 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 9.22 % 9.48 % 10.52 % 11.34 % 11.37 % Effect of goodwill and other intangibles, net -1.81 % -1.72 % -1.77 % -1.76 % -1.78 % Tangible common equity to tangible assets 7.41 % 7.76 % 8.75 % 9.58 % 9.59 % View source version on businesswire.com: https://www.businesswire.com/news/home/20221017005627/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $27.4 million and diluted earnings of $1.83 per share for the quarter ended September 30, 2022. For the third quarter of 2022, the Company achieved a return on assets of 1.83% and a return on tangible equity of 21.8%. Net Interest Income The Company’s net interest income increased from $41.3 million during the second quarter of 2022 to $48.8 million during the third quarter of 2022. The Company’s tax equivalent net interest income increased from $41.6 million for the second quarter of 2022 to $49.1 million for the third quarter of 2022. Net interest income increased by $4.7 million and $1.5 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 47 basis points and 35 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 139 basis points which increased net interest income by $1.0 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (6 basis points) which decreased net interest income by $0.6 million. The Company’s reported net interest margin increased from 3.04% for the second quarter of 2022 to 3.57% for the third quarter of 2022. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased modestly from 0.19%, or $6.8 million, at June 30, 2022 to 0.18%, or $6.4 million, at September 30, 2022. Total past due loans decreased from $6.2 million, or 0.17% of total loans outstanding, at June 30, 2022 to $5.0 million, or 0.14% of total loans outstanding, at September 30, 2022. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a provision for credit losses of $0.7 million in the third quarter of 2022, compared to a recovery of credit losses of $0.7 million for the comparable period in 2021 and no provision for credit losses for the second quarter of 2022. The provision for credit losses in the third quarter was a result of net charge-offs and loan growth. Non-interest Income Non-interest income was $18.2 million for the third quarter of 2022 as compared to $17.9 million for the third quarter of 2021. During the third quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities. Exclusive of these gains, non-interest income increased from $17.8 million for the third quarter of 2021 to $18.2 million for the third quarter of 2022. This increase was largely attributable to higher service charges ($0.8 million, or 11.6%) and bankcard revenues ($0.3 million, or 3.8%). These increases were partially offset by a decrease in other income ($0.6 million). Non-interest Expenses Non-interest expenses increased $2.3 million (8.0%), from $29.2 million in the third quarter of 2021 to $31.5 million in the third quarter of 2022. This increase was primarily due to an increase in salaries and employee benefits of $2.1 million due to increased health insurance, increased incentive compensation and higher salary adjustments during 2022. Balance Sheet Trends Loans increased $62.0 million (1.7%) from June 30, 2022 to September 30, 2022, to $3.63 billion. Residential real estate loans increased $27.8 million (1.7%), commercial real estate loans increased $16.2 million (1.2%), commercial and industrial loans increased $15.3 million (4.2%), and home equity loans increased $5.1 million (4.1%). These increases were partially offset by a decrease in consumer loans of $2.7 million. Total average depository balances decreased $23.7 million, or 0.5%, from the quarter ended June 30, 2022 to the quarter ended September 30, 2022. Average time deposit balances decreased $39.9 million and average interest-bearing demand deposit balances decreased $5.1 million. These increases were partially offset by an increase in noninterest-bearing demand deposit balances of $19.9 million. Income Tax Expense The Company’s effective income tax rate for the third quarter of 2022 was 21.3% compared to 20.8% for the year ended December 31, 2021, and 21.6% for the quarter ended September 30, 2021. Capitalization and Liquidity The Company’s loan to deposit ratio was 73.2% and the loan to asset ratio was 61.0% at September 30, 2022. The Company maintained investment securities totaling 25.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 67.6% of assets at September 30, 2022. Time deposits fund 15.8% of assets at September 30, 2022, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company. The Company continues to be strongly capitalized with tangible equity of $432 million at September 30, 2022. Due primarily to unrealized security losses during the nine months ended September 30, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 7.4% at September 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At September 30, 2022, City National Bank’s Leverage Ratio was 9.05%, its Common Equity Tier I ratio was 14.68%, its Tier I Capital ratio was 14.68%, and its Total Risk-Based Capital ratio was 15.07%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On September 28, 2022, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable October 31, 2022, to shareholders of record as of October 14, 2022. This represents an 8.3% increase from the $0.60 per share dividend paid on July 29, 2022. During the quarter ended September 30, 2022, the Company repurchased 9,000 common shares at a weighted average price of $80.24 as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2022, the Company could repurchase approximately 886,000 additional shares under the plan. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. Forward-Looking Information This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its September 30, 2022 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2022 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Earnings Net Interest Income (fully taxable equivalent) $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 39,822 $ 128,961 $ 115,950 Net Income available to common shareholders 27,374 22,683 21,342 23,386 22,732 71,408 64,694 Per Share Data Earnings per share available to common shareholders: Basic $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 Diluted 1.83 1.51 1.41 1.54 1.47 4.75 4.13 Weighted average number of shares (in thousands): Basic 14,776 14,888 14,974 15,026 15,279 14,878 15,501 Diluted 14,800 14,909 15,002 15,056 15,302 14,901 15,526 Period-end number of shares (in thousands) 14,856 14,864 15,045 15,062 15,192 14,856 15,192 Cash dividends declared $ 0.65 $ 0.60 $ 0.60 $ 0.60 $ 0.58 $ 1.85 $ 1.74 Book value per share (period-end) $ 36.91 $ 39.83 $ 42.03 $ 45.22 $ 44.58 $ 36.91 $ 44.58 Tangible book value per share (period-end) 29.09 31.99 34.27 37.44 36.85 29.09 36.85 Market data: High closing price $ 90.24 $ 83.07 $ 85.99 $ 83.14 $ 79.99 $ 90.24 $ 87.41 Low closing price 78.40 73.88 76.82 76.52 72.29 73.88 69.05 Period-end closing price 88.69 79.88 78.70 81.79 77.91 88.69 77.91 Average daily volume (in thousands) 58 87 59 52 53 68 59 Treasury share activity: Treasury shares repurchased (in thousands) 9 208 38 131 337 255 629 Average treasury share repurchase price $ 80.24 $ 78.33 $ 78.09 $ 78.93 $ 75.65 $ 78.36 $ 76.85 Key Ratios (percent) Return on average assets 1.83 % 1.51 % 1.42 % 1.56 % 1.53 % 1.59 % 1.47 % Return on average tangible equity 21.8 % 18.1 % 15.3 % 16.7 % 15.7 % 18.3 % 14.8 % Yield on interest earning assets 3.72 % 3.15 % 2.94 % 3.08 % 3.04 % 3.27 % 3.07 % Cost of interest bearing liabilities 0.21 % 0.15 % 0.17 % 0.19 % 0.22 % 0.18 % 0.28 % Net Interest Margin 3.57 % 3.04 % 2.82 % 2.94 % 2.89 % 3.14 % 2.87 % Non-interest income as a percent of total revenue 27.2 % 30.9 % 32.4 % 30.2 % 31.1 % 29.5 % 31.0 % Efficiency Ratio 46.3 % 50.5 % 51.7 % 48.3 % 50.0 % 49.3 % 52.3 % Price/Earnings Ratio (a) 12.08 13.23 13.93 13.27 13.22 13.99 14.14 Capital (period-end) Average Shareholders' Equity to Average Assets 10.32 % 10.26 % 11.25 % 11.25 % 11.69 % Tangible equity to tangible assets 7.41 % 7.76 % 8.75 % 9.58 % 9.59 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.82 % 15.85 % 16.18 % 16.08 % 16.11 % Tier I 15.82 % 15.85 % 16.18 % 16.08 % 16.11 % Total 16.22 % 16.26 % 16.60 % 16.51 % 16.56 % Leverage 9.74 % 9.42 % 9.58 % 9.44 % 9.46 % City National Bank risk based capital ratios (b): CET I 14.68 % 14.80 % 14.82 % 14.35 % 14.76 % Tier I 14.68 % 14.80 % 14.82 % 14.35 % 14.76 % Total 15.07 % 15.21 % 15.24 % 14.78 % 15.21 % Leverage 9.05 % 8.81 % 8.80 % 8.45 % 8.73 % Other (period-end) Branches 94 94 94 94 94 FTE 903 915 897 905 921 Assets per FTE (in thousands) $ 6,588 $ 6,825 $ 6,703 $ 6,637 $ 6,463 Deposits per FTE (in thousands) 5,492 5,621 5,574 5,445 5,308 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) September 30, 2022 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Interest Income Interest and fees on loans $ 38,493 $ 33,208 $ 31,874 $ 35,277 $ 33,961 $ 103,575 $ 101,399 Interest on investment securities: Taxable 9,556 7,547 6,223 5,753 6,144 23,327 17,318 Tax-exempt 1,228 1,205 1,216 1,226 1,257 3,650 3,801 Interest on deposits in depository institutions 1,530 782 238 217 196 2,549 476 Total Interest Income 50,807 42,742 39,551 42,473 41,558 133,101 122,994 Interest Expense Interest on deposits 1,585 1,328 1,521 1,710 1,955 4,433 7,695 Interest on short-term borrowings 440 124 114 132 115 677 357 Total Interest Expense 2,025 1,452 1,635 1,842 2,070 5,110 8,052 Net Interest Income 48,782 41,290 37,916 40,631 39,488 127,991 114,942 Provision for (Recovery of) credit losses 730 - (756 ) - (725 ) (26 ) (3,165 ) Net Interest Income After Provision for (Recovery of) Credit Losses 48,052 41,290 38,672 40,631 40,213 128,017 118,107 Non-Interest Income Net gains on sale of investment securities - - - - - - 312 Unrealized gains (losses) recognized on equity securities still held 1 (601 ) (723 ) 52 93 (1,322 ) 452 Service charges 7,487 7,067 6,725 7,057 6,706 21,281 18,482 Bankcard revenue 7,052 7,062 6,444 6,762 6,791 20,558 20,225 Trust and investment management fee income 2,158 2,100 2,197 2,198 2,172 6,455 6,217 Bank owned life insurance 754 978 2,014 748 747 3,746 3,147 Other income 792 1,243 791 799 1,438 2,825 3,190 Total Non-Interest Income 18,244 17,849 17,448 17,616 17,947 53,543 52,025 Non-Interest Expense Salaries and employee benefits 17,398 16,413 15,577 15,299 15,321 49,386 46,551 Occupancy related expense 2,664 2,620 2,709 2,429 2,507 7,993 7,654 Equipment and software related expense 2,949 2,732 2,769 2,733 2,554 8,452 7,753 FDIC insurance expense 416 409 435 400 396 1,259 1,183 Advertising 854 951 798 582 804 2,603 2,509 Bankcard expenses 1,405 1,665 1,606 1,576 1,549 4,676 4,879 Postage, delivery, and statement mailings 578 551 636 590 573 1,765 1,733 Office supplies 466 427 410 378 406 1,303 1,169 Legal and professional fees 532 525 527 405 610 1,584 1,874 Telecommunications 651 754 584 702 790 1,988 2,156 Repossessed asset (gains) losses, net of expenses (3 ) (32 ) 40 (29 ) (108 ) 4 (28 ) Other expenses 3,591 3,674 3,436 3,559 3,776 10,701 11,128 Total Non-Interest Expense 31,501 30,689 29,527 28,624 29,178 91,714 88,561 Income Before Income Taxes 34,795 28,450 26,593 29,623 28,982 89,846 81,571 Income tax expense 7,421 5,767 5,251 6,237 6,250 18,438 16,877 Net Income Available to Common Shareholders $ 27,374 $ 22,683 $ 21,342 $ 23,386 $ 22,732 $ 71,408 $ 64,694 Distributed earnings allocated to common shareholders $ 9,564 $ 8,837 $ 8,943 $ 8,949 $ 8,726 $ 27,220 $ 26,177 Undistributed earnings allocated to common shareholders 17,555 13,643 12,199 14,211 13,786 43,509 37,899 Net earnings allocated to common shareholders $ 27,119 $ 22,480 $ 21,142 $ 23,160 $ 22,512 $ 70,729 $ 64,076 Average common shares outstanding 14,776 14,888 14,974 15,026 15,279 14,878 15,501 Shares for diluted earnings per share 14,800 14,909 15,002 15,056 15,302 14,901 15,526 Basic earnings per common share $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 Diluted earnings per common share $ 1.83 $ 1.51 $ 1.41 $ 1.54 $ 1.47 $ 4.75 $ 4.13 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Assets Cash and due from banks $ 65,051 $ 90,449 $ 100,877 $ 101,804 $ 103,841 Interest-bearing deposits in depository institutions 233,302 606,530 497,171 532,827 535,708 Cash and cash equivalents 298,353 696,979 598,048 634,631 639,549 Investment securities available-for-sale, at fair value 1,489,392 1,497,227 1,409,513 1,408,165 1,372,077 Other securities 24,372 24,383 24,785 25,531 25,497 Total investment securities 1,513,764 1,521,610 1,434,298 1,433,696 1,397,574 Gross loans 3,628,752 3,566,758 3,559,905 3,543,814 3,521,925 Allowance for credit losses (17,011 ) (17,015 ) (17,280 ) (18,166 ) (18,751 ) Net loans 3,611,741 3,549,743 3,542,625 3,525,648 3,503,174 Bank owned life insurance 121,283 120,528 120,522 120,978 120,238 Premises and equipment, net 71,686 72,388 73,067 74,071 75,156 Accrued interest receivable 17,256 16,342 16,101 15,627 16,224 Net deferred tax assets 49,888 30,802 18,001 63 90 Intangible assets 116,081 116,428 116,774 117,121 117,489 Other assets 147,716 118,375 92,331 81,860 82,419 Total Assets $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 $ 5,951,913 Liabilities Deposits: Noninterest-bearing $ 1,429,281 $ 1,531,660 $ 1,357,266 $ 1,373,125 $ 1,311,464 Interest-bearing: Demand deposits 1,160,970 1,189,056 1,191,492 1,135,848 1,139,033 Savings deposits 1,427,785 1,435,645 1,425,528 1,347,448 1,332,910 Time deposits 939,769 985,567 1,024,559 1,068,915 1,104,069 Total deposits 4,957,805 5,141,928 4,998,845 4,925,336 4,887,476 Short-term borrowings Customer repurchase agreements 304,807 402,368 288,483 312,458 296,642 Net deferred tax liabilities - - - - - Other liabilities 136,868 106,906 92,009 84,796 90,499 Total Liabilities 5,399,480 5,651,202 5,379,337 5,322,590 5,274,617 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,138 169,557 170,206 170,942 170,300 Retained earnings 685,657 667,933 654,138 641,826 627,463 Cost of common stock in treasury (209,644 ) (209,133 ) (194,819 ) (193,542 ) (183,303 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (141,997 ) (80,498 ) (41,229 ) 17,745 20,878 Underfunded pension liability (3,485 ) (3,485 ) (3,485 ) (3,485 ) (5,661 ) Total Accumulated Other Comprehensive (Loss) Income (145,482 ) (83,983 ) (44,714 ) 14,260 15,217 Total Stockholders' Equity 548,288 591,993 632,430 681,105 677,296 Total Liabilities and Stockholders' Equity $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 $ 5,951,913 Regulatory Capital Total CET 1 capital $ 582,213 $ 564,158 $ 565,048 $ 555,532 $ 550,426 Total tier 1 capital 582,213 564,158 565,048 555,532 550,426 Total risk-based capital 596,708 578,657 579,807 570,336 565,712 Total risk-weighted assets 3,679,511 3,558,249 3,492,920 3,453,893 3,417,020 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Commercial and industrial $ 375,735 $ 360,481 $ 337,384 $ 346,184 $ 353,046 1-4 Family 109,710 108,765 108,424 107,873 108,913 Hotels 355,001 337,910 314,902 311,315 297,341 Multi-family 186,440 203,856 209,359 215,677 215,307 Non Residential Non-Owner Occupied 569,369 551,240 637,092 639,818 664,365 Non Residential Owner Occupied 177,673 180,188 200,180 204,233 205,579 Commercial real estate (1) 1,398,193 1,381,959 1,469,957 1,478,916 1,491,505 Residential real estate (2) 1,678,770 1,651,005 1,588,860 1,548,965 1,506,572 Home equity 130,837 125,742 121,460 122,345 124,806 Consumer 41,902 44,580 39,778 40,901 43,296 DDA overdrafts 3,315 2,991 2,466 6,503 2,700 Gross Loans $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 $ 3,521,925 Construction loans included in: (1) - Commercial real estate loans $ 4,125 $ 6,767 $ 14,877 $ 11,783 $ 19,360 (2) - Residential real estate loans 19,333 18,751 16,253 17,252 19,059 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Allowance for Credit Losses Balance at beginning of period $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 20,016 $ 18,166 $ 24,549 Charge-offs: Commercial and industrial (411 ) - (34 ) - - (445 ) (245 ) Commercial real estate - (24 ) - (276 ) (392 ) (24 ) (2,111 ) Residential real estate (93 ) (56 ) (50 ) (68 ) (18 ) (199 ) (197 ) Home equity (71 ) (19 ) - (58 ) (47 ) (90 ) (119 ) Consumer (16 ) (9 ) (23 ) (13 ) (3 ) (48 ) (229 ) DDA overdrafts (719 ) (604 ) (631 ) (635 ) (633 ) (1,954 ) (1,516 ) Total charge-offs (1,310 ) (712 ) (738 ) (1,050 ) (1,093 ) (2,760 ) (4,417 ) Recoveries: Commercial and industrial 149 32 59 31 69 240 140 Commercial real estate 9 25 53 27 18 87 197 Residential real estate 1 4 45 7 29 50 120 Home equity 2 3 17 6 58 22 84 Consumer 29 19 28 40 72 76 215 DDA overdrafts 383 364 406 354 307 1,153 1,028 Total recoveries 573 447 608 465 553 1,628 1,784 Net charge-offs (737 ) (265 ) (130 ) (585 ) (540 ) (1,132 ) (2,633 ) Provision for (recovery of) credit losses 730 - (756 ) - (725 ) (26 ) (3,165 ) Balance at end of period $ 17,008 $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 17,008 $ 18,751 Loans outstanding $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 $ 3,521,925 Allowance as a percent of loans outstanding 0.47 % 0.48 % 0.49 % 0.51 % 0.53 % Allowance as a percent of non-performing loans 320.5 % 292.6 % 331.3 % 290.1 % 243.1 % Average loans outstanding $ 3,596,523 $ 3,559,713 $ 3,527,393 $ 3,522,272 $ 3,535,497 $ 3,561,463 $ 3,553,966 Net charge-offs (annualized) as a percent of average loans outstanding 0.08 % 0.03 % 0.01 % 0.07 % 0.06 % 0.04 % 0.10 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 Nonaccrual Loans Residential real estate $ 2,089 $ 1,561 $ 1,786 $ 2,809 $ 3,634 Home equity 140 54 99 40 67 Commercial and industrial 785 1,360 1,069 996 531 Commercial real estate 2,293 2,783 2,241 2,373 3,355 Consumer - - - - - Total nonaccrual loans 5,307 5,758 5,195 6,218 7,587 Accruing loans past due 90 days or more - 58 21 43 127 Total non-performing loans 5,307 5,816 5,216 6,261 7,714 Other real estate owned 1,071 946 1,099 1,319 1,335 Total non-performing assets $ 6,378 $ 6,762 $ 6,315 $ 7,580 $ 9,049 Non-performing assets as a percent of loans and other real estate owned 0.18 % 0.19 % 0.18 % 0.21 % 0.26 % Past Due Loans Residential real estate $ 3,452 $ 5,298 $ 4,976 $ 5,321 $ 5,258 Home equity 521 282 505 618 688 Commercial and industrial 221 130 56 336 455 Commercial real estate 221 46 744 22 441 Consumer 27 49 32 60 35 DDA overdrafts 561 430 392 489 390 Total past due loans $ 5,003 $ 6,235 $ 6,705 $ 6,846 $ 7,267 Total past due loans as a percent of loans outstanding 0.14 % 0.17 % 0.19 % 0.19 % 0.21 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 15,657 $ 16,022 $ 16,182 $ 16,943 $ 16,910 Home equity 1,614 1,649 1,694 1,784 1,822 Commercial and industrial 354 381 397 414 430 Commercial real estate 104 107 1,890 1,914 1,937 Consumer 68 80 194 225 221 Total TDRs $ 17,797 $ 18,239 $ 20,357 $ 21,280 $ 21,320 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended September 30, 2022 June 30, 2022 September 30, 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,792,365 $ 17,640 3.90 % $ 1,730,617 $ 16,063 3.72 % $ 1,648,921 $ 15,813 3.80 % Commercial, financial, and agriculture (2) 1,759,567 20,092 4.53 % 1,785,511 16,421 3.69 % 1,836,604 17,344 3.75 % Installment loans to individuals (2), (3) 44,591 683 6.08 % 43,585 631 5.81 % 49,972 714 5.67 % Previously securitized loans (4) *** 78 *** *** 93 *** *** 91 *** Total loans 3,596,523 38,493 4.25 % 3,559,713 33,208 3.74 % 3,535,497 33,962 3.81 % Securities: Taxable 1,359,207 9,557 2.79 % 1,269,049 7,548 2.39 % 1,136,519 6,144 2.14 % Tax-exempt (5) 215,219 1,555 2.87 % 215,603 1,526 2.84 % 245,551 1,590 2.57 % Total securities 1,574,426 11,112 2.80 % 1,484,652 9,074 2.45 % 1,382,070 7,734 2.22 % Deposits in depository institutions 289,460 1,529 2.10 % 441,239 781 0.71 % 544,843 196 0.14 % Total interest-earning assets 5,460,409 51,134 3.72 % 5,485,604 43,063 3.15 % 5,462,410 41,892 3.04 % Cash and due from banks 81,202 102,532 101,058 Premises and equipment, net 72,196 72,887 75,956 Goodwill and intangible assets 116,297 116,645 117,719 Other assets 278,527 256,354 220,420 Less: Allowance for credit losses (17,224 ) (17,755 ) (20,407 ) Total assets $ 5,991,407 $ 6,016,267 $ 5,957,156 Liabilities: Interest-bearing demand deposits $ 1,151,122 $ 272 0.09 % $ 1,156,200 $ 148 0.05 % $ 1,093,243 $ 127 0.05 % Savings deposits 1,431,591 358 0.10 % 1,430,121 182 0.05 % 1,315,462 169 0.05 % Time deposits (2) 964,447 956 0.39 % 1,004,356 999 0.40 % 1,126,553 1,659 0.58 % Short-term borrowings 270,310 440 0.65 % 288,031 123 0.17 % 282,722 115 0.16 % Total interest-bearing liabilities 3,817,470 2,026 0.21 % 3,878,708 1,452 0.15 % 3,817,980 2,070 0.22 % Noninterest-bearing demand deposits 1,455,123 1,435,256 1,356,745 Other liabilities 100,303 85,075 86,263 Stockholders' equity 618,511 617,228 696,168 Total liabilities and stockholders' equity $ 5,991,407 $ 6,016,267 $ 5,957,156 Net interest income $ 49,108 $ 41,611 $ 39,822 Net yield on earning assets 3.57 % 3.04 % 2.89 % (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 (includes PPP fees) $ 308 $ 3 $ 1,120 (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 $ 64 $ 77 $ 154 Commercial, financial, and agriculture 103 118 265 Installment loans to individuals 7 15 21 Time deposits 21 21 48 $ 195 $ 231 $ 488 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Nine Months Ended September 30, 2022 September 30, 2021 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,728,557 $ 49,299 3.81 % $ 1,669,324 $ 48,801 3.91 % Commercial, financial, and agriculture (2) 1,788,784 52,044 3.89 % 1,833,744 50,044 3.65 % Installment loans to individuals (2), (3) 44,122 1,921 5.82 % 50,898 2,140 5.62 % Previously securitized loans (4) *** 311 *** *** 414 *** Total loans 3,561,463 103,575 3.89 % 3,553,966 101,399 3.81 % Securities: Taxable 1,279,086 23,327 2.44 % 1,043,269 17,318 2.22 % Tax-exempt (5) 221,035 4,620 2.79 % 243,146 4,811 2.65 % Total securities 1,500,121 27,947 2.49 % 1,286,415 22,129 2.30 % Deposits in depository institutions 422,714 2,549 0.81 % 562,272 474 0.11 % Total interest-earning assets 5,484,298 134,071 3.27 % 5,402,653 124,002 3.07 % Cash and due from banks 95,105 91,073 Premises and equipment, net 72,964 76,481 Goodwill and intangible assets 116,643 118,084 Other assets 251,071 214,872 Less: Allowance for credit losses (17,807 ) (22,989 ) Total assets $ 6,002,274 $ 5,880,174 Liabilities: Interest-bearing demand deposits $ 1,149,899 $ 550 0.06 % $ 1,057,452 $ 373 0.05 % Savings deposits 1,415,563 715 0.07 % 1,275,211 516 0.05 % Time deposits (2) 1,005,356 3,168 0.42 % 1,181,166 6,806 0.77 % Short-term borrowings 278,211 677 0.33 % 292,845 357 0.16 % Total interest-bearing liabilities 3,849,029 5,110 0.18 % 3,806,674 8,052 0.28 % Noninterest-bearing demand deposits 1,429,887 1,289,247 Other liabilities 86,585 82,953 Stockholders' equity 636,773 701,300 Total liabilities and stockholders' equity $ 6,002,274 $ 5,880,174 Net interest income $ 128,961 $ 115,950 Net yield on earning assets 3.14 % 2.87 % (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 (includes PPP fees) $ 609 $ 2,443 (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 $ 231 $ 472 Commercial, financial, and agriculture 507 956 Installment loans to individuals 41 72 Time deposits 62 145 $ 841 $ 1,645 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September 30,2022 June 30,2022 March 31,2022 December 31,2021 September 30,2021 September 30,2022 September 30,2021 Net Interest Income/Margin Net interest income ("GAAP") $ 48,782 $ 41,290 $ 37,916 $ 40,631 $ 39,488 $ 127,991 $ 114,942 Taxable equivalent adjustment 326 321 323 325 334 970 1,008 Net interest income, fully taxable equivalent $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 39,822 $ 128,961 $ 115,950 Average interest earning assets $ 5,460,409 $ 5,485,604 $ 5,507,397 $ 5,521,386 $ 5,462,410 $ 5,484,298 $ 5,402,653 Net Interest Margin 3.57 % 3.04 % 2.82 % 2.94 % 2.89 % 3.14 % 2.87 % Accretion related to fair value adjustments -0.01 % -0.02 % -0.03 % -0.03 % -0.04 % -0.02 % -0.04 % Net Interest Margin (excluding accretion) 3.56 % 3.02 % 2.79 % 2.91 % 2.85 % 3.12 % 2.83 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 9.22 % 9.48 % 10.52 % 11.34 % 11.37 % Effect of goodwill and other intangibles, net -1.81 % -1.72 % -1.77 % -1.76 % -1.78 % Tangible common equity to tangible assets 7.41 % 7.76 % 8.75 % 9.58 % 9.59 % View source version on businesswire.com: https://www.businesswire.com/news/home/20221017005627/en/