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 Record Annual Earnings By: City Holding Company via Business Wire January 24, 2023 at 07:30 AM EST City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $102.1 million and record diluted earnings of $6.80 per share for the year ended December 31, 2022. For the year ended December 31, 2022, the Company achieved a return on assets of 1.71% and a return on tangible equity of 20.3%. Net Interest Income The Company’s net interest income increased from $155.6 million for the year ended December 31, 2021 to $180.0 million for the year ended December 31, 2022. The Company’s tax equivalent net interest income increased $24.4 million, or 15.6%, from $156.9 million for the year ended December 31, 2021 to $181.3 million for the year ended December 31, 2022. Net interest income increased by $12.0 million, $7.3 million and $3.4 million, respectively, due to increases in the yields on loans (net of loan fees and accretion), investments, and deposits in depository institutions, of 35 basis points, 47 basis points and 94 basis points, respectively, all due primarily to increases in the Federal Funds rate during 2022. In addition, higher average investment and loan balances ($189.2 million and $37.5 million, respectively) increased net interest income by $3.9 million and $1.8 million, respectively. These increases were partially offset by a decrease in loan fees associated with PPP loans of $3.5 million from 2021 and a decrease in accretion from fair value adjustments of $1.0 million. The Company’s reported net interest margin increased from 2.89% for the year ended December 31, 2021 to 3.33% for the year ended December 31, 2022. The Company’s net interest income increased from $48.8 million during the third quarter of 2022 to $52.0 million during the fourth quarter of 2022. During the fourth quarter of 2022, the Company’s tax equivalent net interest income increased $3.3 million, or 6.7%, to $52.4 million from $49.1 million during the third quarter of 2022. Net interest income increased by $4.3 million and $1.9 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 46 basis points and 50 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 94 basis points which increased net interest income by $0.4 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (27 basis points) which decreased net interest income by $2.5 million and lower average deposits in depository institution balances ($126.7 million) which decreased net interest income by $0.7 million. The Company’s reported net interest margin increased from 3.57% for the third quarter of 2022 to 3.89% for the fourth quarter of 2022. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.21%, or $7.6 million, at December 31, 2021 to 0.17%, or $6.3 million at December 31, 2022. Total past due loans increased from $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021 to $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a provision for credit losses of $0.5 million in the fourth quarter of 2022 and $0.5 million for the year ended December 31, 2022, compared to no provision for credit losses for the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for year ended December 31, 2021. The provision for the year ended December 31, 2022, was a result of net charge-offs for the year that were partially offset by the repayment of a loan from a previous acquisition and release of the associated credit mark. Non-interest Income Non-interest income was $72.1 million for 2022 as compared to $69.6 million for 2021. The Company reported $1.6 million of unrealized fair value losses on the Company’s equity securities during 2022 compared to $0.3 million of realized security gains on the sale of investments and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021. Exclusive of these realized and unrealized gains and losses, non-interest income increased from $68.8 million for the year ended December 31, 2021 to $73.7 million for the year ended December 31, 2022. This increase was largely attributable to an increase of $2.8 million, or 10.9%, in service charges and a $1.7 million, or 42.7%, increase in bank owned life insurance due to higher death benefit proceeds received in 2022 compared to 2021. In addition, trust and investment management fee income and bankcard revenues each increased $0.4 million from the year ended December 31, 2021. These increases were partially offset by a decrease of $0.4 million in other income. Non-interest income was $18.5 million during the quarter ended December 31, 2022 as compared to $17.6 million during the quarter ended December 31, 2021. During the fourth quarter of 2022, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities compared to $0.1 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2021. Exclusive of these unrealized fair value gains and losses, non-interest income increased from $17.6 million for the fourth quarter of 2021 to $18.8 million for the fourth quarter of 2022. This increase was largely attributable to higher bank owned life insurance due to higher death benefit proceeds received ($1.1 million). Non-interest Expenses Non-interest expenses increased from $117.2 million for 2021 to $124.3 million for 2022. This increase was primarily due to an increase in salaries and employee benefit expenses ($4.7 million, due to higher salary adjustments during 2022, increased incentive compensation, and increased health insurance) and equipment and software related expenses ($1.3 million). In addition, occupancy related expenses increased $0.6 million, advertising increased $0.3 million, and merger related expenses increased $0.3 million. Non-interest expenses increased $4.0 million (13.8%), from $28.6 million in the fourth quarter of 2021 to $32.6 million in the fourth quarter of 2022. This increase was largely due to an increase in salaries and employee benefits of $1.9 million due to increased incentive compensation, increased health insurance, and higher salary adjustments during 2022. In addition, other expenses increased $0.6 million; equipment and software related expenses increased $0.6 million; occupancy related expenses increased $0.3 million; and merger related expenses increased $0.3 million. Balance Sheet Trends Loans increased $102.4 million (2.9%) from December 31, 2021 to $3.64 billion at December 31, 2022. PPP loans of $6.6 million at December 31, 2021 were fully repaid during 2022. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $109.0 million, (3.1%), from December 31, 2021 to $3.64 billion at December 31, 2022. Residential real estate loans increased $144.6 million (9.3%); commercial and industrial loans increased $34.3 million (10.1%) (excluding PPP loans); home equity loans increased $12.0 million (9.8%); and consumer loans increased $7.9 million (19.3%). These increases were partially offset by decreases in commercial real estate loans ($86.6 million, or 5.9%). Total average depository balances for the year ended December 31, 2022 increased $141.0 million, or 2.9%, as compared to the year ended December 31, 2021. Average savings deposits increased $123.5 million, average noninterest bearing demand deposits increased $113.6 million, and average interest bearing demand deposits increased $78.4 million. These increases were partially offset by a decrease in average time deposits of $174.5 million. Income Tax Expense The Company’s effective income tax rate for the quarter and year ended December 31, 2022 was 18.2% and 19.8%, respectively, compared to 21.1% and 20.8% for the comparable periods in 2021. Capitalization and Liquidity The Company’s loan to deposit ratio was 74.9% and the loan to asset ratio was 62.0% at December 31, 2022. The Company maintained investment securities totaling 26.0% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 67.7% of assets at December 31, 2022. Time deposits fund 15.1% of assets at December 31, 2022, but very few of these deposits are in accounts that have balances of more than $250,000. The Company continues to be strongly capitalized with tangible equity of $462 million at December 31, 2022. Due primarily to unrealized security losses during the year ended December 31, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 8.0% at December 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At December 31, 2022, City National Bank’s Leverage Ratio was 8.55%, its Common Equity Tier I ratio was 13.88%, its Tier I Capital ratio was 13.88%, and its Total Risk-Based Capital ratio was 14.28%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 15, 2022, the Board approved a quarterly cash dividend of $0.65 cents per share payable January 31, 2023, to shareholders of record as of January 13, 2022. During the year ended December 31, 2022, the Company repurchased 325,000 common shares at a weighted average price of $81.50 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2022, the Company could repurchase approximately 817,000 shares under the current plan. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. Forward-Looking Information This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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 December 31, 2022 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2022 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Earnings Net Interest Income (fully taxable equivalent) $ 52,381 $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 181,339 $ 156,906 Net Income available to common shareholders 30,672 27,374 22,683 21,342 23,386 102,071 88,080 Per Share Data Earnings per share available to common shareholders: Basic $ 2.06 $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 6.81 $ 5.67 Diluted 2.05 1.83 1.51 1.41 1.54 6.80 5.66 Weighted average number of shares (in thousands): Basic 14,756 14,776 14,888 14,974 15,026 14,847 15,381 Diluted 14,785 14,800 14,909 15,002 15,056 14,873 15,407 Period-end number of shares (in thousands) 14,788 14,856 14,864 15,045 15,062 14,788 15,062 Cash dividends declared $ 0.65 $ 0.65 $ 0.60 $ 0.60 $ 0.60 $ 2.50 $ 2.34 Book value per share (period-end) $ 39.08 $ 36.91 $ 39.83 $ 42.03 $ 45.22 $ 39.08 $ 45.22 Tangible book value per share (period-end) 31.25 29.09 31.99 34.27 37.44 31.25 37.44 Market data: High closing price $ 101.94 $ 90.24 $ 83.07 $ 85.99 $ 83.14 $ 101.94 $ 87.41 Low closing price 89.32 78.40 73.88 76.82 76.52 73.88 69.05 Period-end closing price 93.09 88.69 79.88 78.70 81.79 93.09 81.79 Average daily volume (in thousands) 75 58 87 59 52 70 57 Treasury share activity: Treasury shares repurchased (in thousands) 69 9 208 38 131 325 760 Average treasury share repurchase price $ 93.12 $ 80.24 $ 78.33 $ 78.09 $ 78.93 $ 81.50 $ 77.21 Key Ratios (percent) Return on average assets 2.08 % 1.83 % 1.51 % 1.42 % 1.56 % 1.71 % 1.49 % Return on average tangible equity 27.3 % 21.8 % 18.1 % 15.3 % 16.7 % 20.3 % 15.3 % Yield on interest earning assets 4.23 % 3.72 % 3.15 % 2.94 % 3.08 % 3.51 % 3.07 % Cost of interest bearing liabilities 0.48 % 0.21 % 0.15 % 0.17 % 0.19 % 0.25 % 0.26 % Net Interest Margin 3.89 % 3.57 % 3.04 % 2.82 % 2.94 % 3.33 % 2.89 % Non-interest income as a percent of total revenue 26.5 % 27.2 % 30.9 % 32.4 % 30.2 % 28.6 % 30.8 % Efficiency Ratio 45.3 % 46.3 % 50.5 % 51.7 % 48.3 % 48.2 % 51.3 % Price/Earnings Ratio (a) 11.30 12.08 13.23 13.93 13.27 13.67 14.42 Capital (period-end) Average Shareholders' Equity to Average Assets 9.57 % 10.32 % 10.26 % 11.25 % 11.25 % Tangible equity to tangible assets 8.02 % 7.41 % 7.76 % 8.75 % 9.58 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.23 % 15.82 % 15.85 % 16.18 % 16.08 % Tier I 16.23 % 15.82 % 15.85 % 16.18 % 16.08 % Total 16.62 % 16.22 % 16.26 % 16.60 % 16.51 % Leverage 10.01 % 9.74 % 9.42 % 9.58 % 9.44 % City National Bank risk based capital ratios (b): CET I 13.88 % 14.68 % 14.80 % 14.82 % 14.35 % Tier I 13.88 % 14.68 % 14.80 % 14.82 % 14.35 % Total 14.28 % 15.07 % 15.21 % 15.24 % 14.78 % Leverage 8.55 % 9.05 % 8.81 % 8.80 % 8.45 % Other (period-end) Branches 94 94 94 94 94 FTE 909 903 915 897 905 Assets per FTE (in thousands) $ 6,467 $ 6,588 $ 6,825 $ 6,703 $ 6,637 Deposits per FTE (in thousands) 5,357 5,492 5,621 5,574 5,445 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Interest Income Interest and fees on loans $ 42,963 $ 38,493 $ 33,208 $ 31,874 $ 35,277 $ 146,538 $ 136,676 Interest on investment securities: Taxable 11,119 9,556 7,547 6,223 5,753 34,445 23,071 Tax-exempt 1,262 1,228 1,205 1,216 1,226 4,911 5,027 Interest on deposits in depository institutions 1,244 1,530 782 238 217 3,794 693 Total Interest Income 56,588 50,807 42,742 39,551 42,473 189,688 165,467 Interest Expense Interest on deposits 3,010 1,585 1,328 1,521 1,710 7,444 9,405 Interest on short-term borrowings 1,533 440 124 114 132 2,211 489 Total Interest Expense 4,543 2,025 1,452 1,635 1,842 9,655 9,894 Net Interest Income 52,045 48,782 41,290 37,916 40,631 180,033 155,573 Provision for (Recovery of) credit losses 500 730 - (756 ) - 474 (3,165 ) Net Interest Income After Provision for (Recovery of) Credit Losses 51,545 48,052 41,290 38,672 40,631 179,559 158,738 Non-Interest Income Net gains on sale of investment securities 4 - - - - 4 312 Unrealized (losses) gains recognized on equity securities still held (262 ) 1 (601 ) (723 ) 52 (1,585 ) 504 Service charges 7,056 7,487 7,067 6,725 7,057 28,335 25,539 Bankcard revenue 6,791 7,052 7,062 6,444 6,762 27,349 26,987 Trust and investment management fee income 2,343 2,158 2,100 2,197 2,198 8,798 8,415 Bank owned life insurance 1,813 754 978 2,014 748 5,559 3,895 Other income 791 792 1,243 791 799 3,617 3,989 Total Non-Interest Income 18,536 18,244 17,849 17,448 17,616 72,077 69,641 Non-Interest Expense Salaries and employee benefits 17,148 17,398 16,413 15,577 15,299 66,536 61,850 Occupancy related expense 2,725 2,664 2,620 2,709 2,429 10,718 10,083 Equipment and software related expense 3,341 2,949 2,732 2,769 2,733 11,791 10,486 FDIC insurance expense 413 416 409 435 400 1,673 1,583 Advertising 802 854 951 798 582 3,405 3,091 Bankcard expenses 1,356 1,405 1,665 1,606 1,576 6,032 6,455 Postage, delivery, and statement mailings 597 578 551 636 590 2,362 2,323 Office supplies 441 466 427 410 378 1,744 1,547 Legal and professional fees 610 532 525 527 405 2,194 2,279 Telecommunications 627 651 754 584 702 2,616 2,858 Repossessed asset losses (gains), net of expenses 54 (3 ) (32 ) 40 (29 ) 59 (57 ) Merger related expenses 268 - - - - 268 - Other expenses 4,203 3,591 3,674 3,436 3,559 14,904 14,687 Total Non-Interest Expense 32,585 31,501 30,689 29,527 28,624 124,302 117,185 Income Before Income Taxes 37,496 34,795 28,450 26,593 29,623 127,334 111,194 Income tax expense 6,824 7,421 5,767 5,251 6,237 25,263 23,114 Net Income Available to Common Shareholders $ 30,672 $ 27,374 $ 22,683 $ 21,342 $ 23,386 $ 102,071 $ 88,080 Distributed earnings allocated to common shareholders $ 9,521 $ 9,564 $ 8,837 $ 8,943 $ 8,949 $ 36,619 $ 34,901 Undistributed earnings allocated to common shareholders 20,857 17,555 13,643 12,199 14,211 64,494 52,336 Net earnings allocated to common shareholders $ 30,378 $ 27,119 $ 22,480 $ 21,142 $ 23,160 $ 101,113 $ 87,237 Average common shares outstanding 14,756 14,776 14,888 14,974 15,026 14,847 15,381 Shares for diluted earnings per share 14,785 14,800 14,909 15,002 15,056 14,873 15,407 Basic earnings per common share $ 2.06 $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 6.81 $ 5.67 Diluted earnings per common share $ 2.05 $ 1.83 $ 1.51 $ 1.41 $ 1.54 $ 6.80 $ 5.66 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 Assets Cash and due from banks $ 68,333 $ 65,051 $ 90,449 $ 100,877 $ 101,804 Interest-bearing deposits in depository institutions 131,667 233,302 606,530 497,171 532,827 Cash and cash equivalents 200,000 298,353 696,979 598,048 634,631 Investment securities available-for-sale, at fair value 1,505,520 1,489,392 1,497,227 1,409,513 1,408,165 Other securities 23,807 24,372 24,383 24,785 25,531 Total investment securities 1,529,327 1,513,764 1,521,610 1,434,298 1,433,696 Gross loans 3,646,258 3,628,752 3,566,758 3,559,905 3,543,814 Allowance for credit losses (17,108 ) (17,011 ) (17,015 ) (17,280 ) (18,166 ) Net loans 3,629,150 3,611,741 3,549,743 3,542,625 3,525,648 Bank owned life insurance 120,674 121,283 120,528 120,522 120,978 Premises and equipment, net 70,786 71,686 72,388 73,067 74,071 Accrued interest receivable 18,287 17,256 16,342 16,101 15,627 Net deferred tax assets 44,884 49,888 30,802 18,001 63 Intangible assets 115,735 116,081 116,428 116,774 117,121 Other assets 149,263 147,716 118,375 92,331 81,860 Total Assets $ 5,878,106 $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 Liabilities Deposits: Noninterest-bearing $ 1,351,415 $ 1,429,281 $ 1,531,660 $ 1,357,266 $ 1,373,125 Interest-bearing: Demand deposits 1,233,482 1,160,970 1,189,056 1,191,492 1,135,848 Savings deposits 1,396,869 1,427,785 1,435,645 1,425,528 1,347,448 Time deposits 888,100 939,769 985,567 1,024,559 1,068,915 Total deposits 4,869,866 4,957,805 5,141,928 4,998,845 4,925,336 Short-term borrowings Customer repurchase agreements 290,964 304,807 402,368 288,483 312,458 Other liabilities 139,424 136,868 106,906 92,009 84,796 Total Liabilities 5,300,254 5,399,480 5,651,202 5,379,337 5,322,590 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,980 170,138 169,557 170,206 170,942 Retained earnings 706,696 685,657 667,933 654,138 641,826 Cost of common stock in treasury (215,955 ) (209,644 ) (209,133 ) (194,819 ) (193,542 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (128,066 ) (141,997 ) (80,498 ) (41,229 ) 17,745 Underfunded pension liability (3,422 ) (3,485 ) (3,485 ) (3,485 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (131,488 ) (145,482 ) (83,983 ) (44,714 ) 14,260 Total Stockholders' Equity 577,852 548,288 591,993 632,430 681,105 Total Liabilities and Stockholders' Equity $ 5,878,106 $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 Regulatory Capital Total CET 1 capital $ 598,068 $ 582,213 $ 564,158 $ 565,048 $ 555,532 Total tier 1 capital 598,068 582,213 564,158 565,048 555,532 Total risk-based capital 612,654 596,708 578,657 579,807 570,336 Total risk-weighted assets 3,685,207 3,679,511 3,558,249 3,492,920 3,453,893 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 Commercial and industrial $ 373,890 $ 375,735 $ 360,481 $ 337,384 $ 346,184 1-4 Family 116,192 109,710 108,765 108,424 107,873 Hotels 340,404 355,001 337,910 314,902 311,315 Multi-family 174,786 186,440 203,856 209,359 215,677 Non Residential Non-Owner Occupied 585,964 569,369 551,240 637,092 639,818 Non Residential Owner Occupied 174,961 177,673 180,188 200,180 204,233 Commercial real estate (1) 1,392,307 1,398,193 1,381,959 1,469,957 1,478,916 Residential real estate (2) 1,693,523 1,678,770 1,651,005 1,588,860 1,548,965 Home equity 134,317 130,837 125,742 121,460 122,345 Consumer 48,806 41,902 44,580 39,778 40,901 DDA overdrafts 3,415 3,315 2,991 2,466 6,503 Gross Loans $ 3,646,258 $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 Construction loans included in: (1) - Commercial real estate loans $ 4,130 $ 4,125 $ 6,767 $ 14,877 $ 11,783 (2) - Residential real estate loans 21,122 19,333 18,751 16,253 17,252 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Allowance for Credit Losses Balance at beginning of period $ 17,011 $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 18,166 $ 24,549 Charge-offs: Commercial and industrial (120 ) (408 ) - (34 ) - (562 ) (245 ) Commercial real estate (31 ) - (24 ) - (276 ) (55 ) (2,387 ) Residential real estate (66 ) (93 ) (56 ) (50 ) (68 ) (265 ) (265 ) Home equity (189 ) (71 ) (19 ) - (58 ) (279 ) (177 ) Consumer (15 ) (16 ) (9 ) (23 ) (13 ) (63 ) (242 ) DDA overdrafts (670 ) (719 ) (604 ) (631 ) (635 ) (2,624 ) (2,151 ) Total charge-offs (1,091 ) (1,307 ) (712 ) (738 ) (1,050 ) (3,848 ) (5,467 ) Recoveries: Commercial and industrial 94 149 32 59 31 334 171 Commercial real estate 120 9 25 53 27 207 224 Residential real estate 49 1 4 45 7 99 127 Home equity 34 2 3 17 6 56 90 Consumer 31 29 19 28 40 107 255 DDA overdrafts 360 383 364 406 354 1,513 1,382 Total recoveries 688 573 447 608 465 2,316 2,249 Net charge-offs (403 ) (734 ) (265 ) (130 ) (585 ) (1,532 ) (3,218 ) Provision for (recovery of) credit losses 500 730 - (756 ) - 474 (3,165 ) Balance at end of period $ 17,108 $ 17,011 $ 17,015 $ 17,280 $ 18,166 $ 17,108 $ 18,166 Loans outstanding $ 3,646,258 $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 Allowance as a percent of loans outstanding 0.47 % 0.47 % 0.48 % 0.49 % 0.51 % Allowance as a percent of non-performing loans 317.3 % 320.5 % 292.6 % 331.3 % 290.1 % Average loans outstanding $ 3,648,996 $ 3,596,523 $ 3,559,713 $ 3,527,393 $ 3,522,272 $ 3,583,526 $ 3,545,978 Net charge-offs (annualized) as a percent of average loans outstanding 0.04 % 0.08 % 0.03 % 0.01 % 0.07 % 0.04 % 0.09 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 Nonaccrual Loans Residential real estate $ 1,969 $ 2,089 $ 1,561 $ 1,786 $ 2,809 Home equity 55 140 54 99 40 Commercial and industrial 1,015 785 1,360 1,069 996 Commercial real estate 2,166 2,293 2,783 2,241 2,373 Consumer - - - - - Total nonaccrual loans 5,205 5,307 5,758 5,195 6,218 Accruing loans past due 90 days or more 187 - 58 21 43 Total non-performing loans 5,392 5,307 5,816 5,216 6,261 Other real estate owned 909 1,071 946 1,099 1,319 Total non-performing assets $ 6,301 $ 6,378 $ 6,762 $ 6,315 $ 7,580 Non-performing assets as a percent of loans and other real estate owned 0.17 % 0.18 % 0.19 % 0.18 % 0.21 % Past Due Loans Residential real estate $ 7,091 $ 3,452 $ 5,298 $ 4,976 $ 5,321 Home equity 650 521 282 505 618 Commercial and industrial 234 221 130 56 336 Commercial real estate 710 221 46 744 22 Consumer 100 27 49 32 60 DDA overdrafts 391 561 430 392 489 Total past due loans $ 9,176 $ 5,003 $ 6,235 $ 6,705 $ 6,846 Total past due loans as a percent of loans outstanding 0.25 % 0.14 % 0.17 % 0.19 % 0.19 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 15,857 $ 15,657 $ 16,022 $ 16,182 $ 16,943 Home equity 1,286 1,614 1,649 1,694 1,784 Commercial and industrial 333 354 381 397 414 Commercial real estate 102 104 107 1,890 1,914 Consumer 64 68 80 194 225 Total TDRs $ 17,642 $ 17,797 $ 18,239 $ 20,357 $ 21,280 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2022 September 30, 2022 December 31, 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,824,327 $ 18,910 4.11 % $ 1,792,365 $ 17,640 3.90 % $ 1,645,167 $ 15,692 3.78 % Commercial, financial, and agriculture (2) 1,773,937 23,346 5.22 % 1,759,567 20,092 4.53 % 1,831,461 18,740 4.06 % Installment loans to individuals (2), (3) 50,732 646 5.05 % 44,591 683 6.08 % 45,644 691 6.01 % Previously securitized loans (4) *** 63 *** *** 78 *** *** 154 *** Total loans 3,648,996 42,965 4.67 % 3,596,523 38,493 4.25 % 3,522,272 35,277 3.97 % Securities: Taxable 1,315,453 11,118 3.35 % 1,359,207 9,557 2.79 % 1,171,340 5,753 1.95 % Tax-exempt (5) 211,326 1,597 3.00 % 215,219 1,555 2.87 % 239,096 1,551 2.57 % Total securities 1,526,779 12,715 3.30 % 1,574,426 11,112 2.80 % 1,410,436 7,304 2.05 % Deposits in depository institutions 162,732 1,245 3.04 % 289,460 1,529 2.10 % 588,678 217 0.15 % Total interest-earning assets 5,338,507 56,925 4.23 % 5,460,409 51,134 3.72 % 5,521,386 42,798 3.08 % Cash and due from banks 69,223 81,202 98,111 Premises and equipment, net 71,482 72,196 74,847 Goodwill and intangible assets 115,952 116,297 117,349 Other assets 332,855 278,527 216,780 Less: Allowance for credit losses (17,332 ) (17,224 ) (18,756 ) Total assets $ 5,910,687 $ 5,991,407 $ 6,009,717 Liabilities: Interest-bearing demand deposits $ 1,150,327 $ 684 0.24 % $ 1,151,122 $ 272 0.09 % $ 1,113,693 $ 131 0.05 % Savings deposits 1,412,246 829 0.23 % 1,431,591 358 0.10 % 1,338,747 173 0.05 % Time deposits (2) 916,845 1,497 0.65 % 964,447 956 0.39 % 1,087,280 1,406 0.51 % Short-term borrowings 303,599 1,534 2.00 % 270,310 440 0.65 % 314,937 132 0.17 % Total interest-bearing liabilities 3,783,017 4,544 0.48 % 3,817,470 2,026 0.21 % 3,854,657 1,842 0.19 % Noninterest-bearing demand deposits 1,428,013 1,455,123 1,394,599 Other liabilities 134,075 100,303 84,071 Stockholders' equity 565,582 618,511 676,390 Total liabilities and stockholders' equity $ 5,910,687 $ 5,991,407 $ 6,009,717 Net interest income $ 52,381 $ 49,108 $ 40,956 Net yield on earning assets 3.89 % 3.57 % 2.94 % (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) $ (41 ) $ 308 $ 1,106 (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 $ 67 $ 64 $ 149 Commercial, financial, and agriculture 135 103 243 Installment loans to individuals 4 7 15 Time deposits 21 21 48 $ 227 $ 195 $ 455 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Twelve Months Ended December 31, 2022 December 31, 2021 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,755,772 $ 68,208 3.88 % $ 1,658,710 $ 64,492 3.89 % Commercial, financial, and agriculture (2) 1,781,132 75,390 4.23 % 1,838,560 68,784 3.74 % Installment loans to individuals (2), (3) 46,622 2,567 5.51 % 48,708 2,831 5.81 % Previously securitized loans (4) *** 373 *** *** 568 *** Total loans 3,583,526 146,538 4.09 % 3,545,978 136,675 3.85 % Securities: Taxable 1,288,252 34,445 2.67 % 1,075,550 23,071 2.15 % Tax-exempt (5) 218,588 6,217 2.84 % 242,125 6,362 2.63 % Total securities 1,506,840 40,662 2.70 % 1,317,675 29,433 2.23 % Deposits in depository institutions 357,184 3,794 1.06 % 568,928 693 0.12 % Total interest-earning assets 5,447,550 190,994 3.51 % 5,432,581 166,801 3.07 % Cash and due from banks 88,581 92,847 Premises and equipment, net 72,590 76,069 Goodwill and intangible assets 116,469 117,899 Other assets 271,685 216,493 Less: Allowance for credit losses (17,687 ) (21,922 ) Total assets $ 5,979,188 $ 5,913,967 Liabilities: Interest-bearing demand deposits $ 1,150,007 $ 1,234 0.11 % $ 1,071,628 $ 504 0.05 % Savings deposits 1,414,727 1,544 0.11 % 1,291,225 689 0.05 % Time deposits (2) 983,046 4,666 0.47 % 1,157,502 8,213 0.71 % Short-term borrowings 284,611 2,211 0.78 % 298,413 489 0.16 % Total interest-bearing liabilities 3,832,391 9,655 0.25 % 3,818,768 9,895 0.26 % Noninterest-bearing demand deposits 1,429,415 1,315,801 Other liabilities 98,553 84,377 Stockholders' equity 618,829 695,021 Total liabilities and stockholders' equity $ 5,979,188 $ 5,913,967 Net interest income $ 181,339 $ 156,906 Net yield on earning assets 3.33 % 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) $ 568 $ 3,550 (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 $ 298 $ 620 Commercial, financial, and agriculture 642 1,198 Installment loans to individuals 45 87 Time deposits 83 193 $ 1,068 $ 2,098 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Net Interest Income/Margin Net interest income ("GAAP") $ 52,045 $ 48,782 $ 41,290 $ 37,916 $ 40,631 $ 180,033 $ 155,573 Taxable equivalent adjustment 336 326 321 323 325 1,306 1,333 Net interest income, fully taxable equivalent $ 52,381 $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 181,339 $ 156,906 Average interest earning assets $ 5,338,507 $ 5,460,409 $ 5,485,604 $ 5,507,397 $ 5,521,386 $ 5,447,550 $ 5,432,581 Net Interest Margin 3.89 % 3.57 % 3.04 % 2.82 % 2.94 % 3.33 % 2.89 % Accretion related to fair value adjustments -0.02 % -0.01 % -0.02 % -0.03 % -0.03 % -0.02 % -0.04 % Net Interest Margin (excluding accretion) 3.87 % 3.56 % 3.02 % 2.79 % 2.91 % 3.31 % 2.85 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 9.83 % 9.22 % 9.48 % 10.52 % 11.34 % Effect of goodwill and other intangibles, net -1.81 % -1.81 % -1.72 % -1.77 % -1.76 % Tangible common equity to tangible assets 8.02 % 7.41 % 7.76 % 8.75 % 9.58 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230120005336/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
City Holding Company Announces Record Annual Earnings By: City Holding Company via Business Wire January 24, 2023 at 07:30 AM EST City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $102.1 million and record diluted earnings of $6.80 per share for the year ended December 31, 2022. For the year ended December 31, 2022, the Company achieved a return on assets of 1.71% and a return on tangible equity of 20.3%. Net Interest Income The Company’s net interest income increased from $155.6 million for the year ended December 31, 2021 to $180.0 million for the year ended December 31, 2022. The Company’s tax equivalent net interest income increased $24.4 million, or 15.6%, from $156.9 million for the year ended December 31, 2021 to $181.3 million for the year ended December 31, 2022. Net interest income increased by $12.0 million, $7.3 million and $3.4 million, respectively, due to increases in the yields on loans (net of loan fees and accretion), investments, and deposits in depository institutions, of 35 basis points, 47 basis points and 94 basis points, respectively, all due primarily to increases in the Federal Funds rate during 2022. In addition, higher average investment and loan balances ($189.2 million and $37.5 million, respectively) increased net interest income by $3.9 million and $1.8 million, respectively. These increases were partially offset by a decrease in loan fees associated with PPP loans of $3.5 million from 2021 and a decrease in accretion from fair value adjustments of $1.0 million. The Company’s reported net interest margin increased from 2.89% for the year ended December 31, 2021 to 3.33% for the year ended December 31, 2022. The Company’s net interest income increased from $48.8 million during the third quarter of 2022 to $52.0 million during the fourth quarter of 2022. During the fourth quarter of 2022, the Company’s tax equivalent net interest income increased $3.3 million, or 6.7%, to $52.4 million from $49.1 million during the third quarter of 2022. Net interest income increased by $4.3 million and $1.9 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 46 basis points and 50 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 94 basis points which increased net interest income by $0.4 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (27 basis points) which decreased net interest income by $2.5 million and lower average deposits in depository institution balances ($126.7 million) which decreased net interest income by $0.7 million. The Company’s reported net interest margin increased from 3.57% for the third quarter of 2022 to 3.89% for the fourth quarter of 2022. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.21%, or $7.6 million, at December 31, 2021 to 0.17%, or $6.3 million at December 31, 2022. Total past due loans increased from $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021 to $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a provision for credit losses of $0.5 million in the fourth quarter of 2022 and $0.5 million for the year ended December 31, 2022, compared to no provision for credit losses for the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for year ended December 31, 2021. The provision for the year ended December 31, 2022, was a result of net charge-offs for the year that were partially offset by the repayment of a loan from a previous acquisition and release of the associated credit mark. Non-interest Income Non-interest income was $72.1 million for 2022 as compared to $69.6 million for 2021. The Company reported $1.6 million of unrealized fair value losses on the Company’s equity securities during 2022 compared to $0.3 million of realized security gains on the sale of investments and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021. Exclusive of these realized and unrealized gains and losses, non-interest income increased from $68.8 million for the year ended December 31, 2021 to $73.7 million for the year ended December 31, 2022. This increase was largely attributable to an increase of $2.8 million, or 10.9%, in service charges and a $1.7 million, or 42.7%, increase in bank owned life insurance due to higher death benefit proceeds received in 2022 compared to 2021. In addition, trust and investment management fee income and bankcard revenues each increased $0.4 million from the year ended December 31, 2021. These increases were partially offset by a decrease of $0.4 million in other income. Non-interest income was $18.5 million during the quarter ended December 31, 2022 as compared to $17.6 million during the quarter ended December 31, 2021. During the fourth quarter of 2022, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities compared to $0.1 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2021. Exclusive of these unrealized fair value gains and losses, non-interest income increased from $17.6 million for the fourth quarter of 2021 to $18.8 million for the fourth quarter of 2022. This increase was largely attributable to higher bank owned life insurance due to higher death benefit proceeds received ($1.1 million). Non-interest Expenses Non-interest expenses increased from $117.2 million for 2021 to $124.3 million for 2022. This increase was primarily due to an increase in salaries and employee benefit expenses ($4.7 million, due to higher salary adjustments during 2022, increased incentive compensation, and increased health insurance) and equipment and software related expenses ($1.3 million). In addition, occupancy related expenses increased $0.6 million, advertising increased $0.3 million, and merger related expenses increased $0.3 million. Non-interest expenses increased $4.0 million (13.8%), from $28.6 million in the fourth quarter of 2021 to $32.6 million in the fourth quarter of 2022. This increase was largely due to an increase in salaries and employee benefits of $1.9 million due to increased incentive compensation, increased health insurance, and higher salary adjustments during 2022. In addition, other expenses increased $0.6 million; equipment and software related expenses increased $0.6 million; occupancy related expenses increased $0.3 million; and merger related expenses increased $0.3 million. Balance Sheet Trends Loans increased $102.4 million (2.9%) from December 31, 2021 to $3.64 billion at December 31, 2022. PPP loans of $6.6 million at December 31, 2021 were fully repaid during 2022. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $109.0 million, (3.1%), from December 31, 2021 to $3.64 billion at December 31, 2022. Residential real estate loans increased $144.6 million (9.3%); commercial and industrial loans increased $34.3 million (10.1%) (excluding PPP loans); home equity loans increased $12.0 million (9.8%); and consumer loans increased $7.9 million (19.3%). These increases were partially offset by decreases in commercial real estate loans ($86.6 million, or 5.9%). Total average depository balances for the year ended December 31, 2022 increased $141.0 million, or 2.9%, as compared to the year ended December 31, 2021. Average savings deposits increased $123.5 million, average noninterest bearing demand deposits increased $113.6 million, and average interest bearing demand deposits increased $78.4 million. These increases were partially offset by a decrease in average time deposits of $174.5 million. Income Tax Expense The Company’s effective income tax rate for the quarter and year ended December 31, 2022 was 18.2% and 19.8%, respectively, compared to 21.1% and 20.8% for the comparable periods in 2021. Capitalization and Liquidity The Company’s loan to deposit ratio was 74.9% and the loan to asset ratio was 62.0% at December 31, 2022. The Company maintained investment securities totaling 26.0% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 67.7% of assets at December 31, 2022. Time deposits fund 15.1% of assets at December 31, 2022, but very few of these deposits are in accounts that have balances of more than $250,000. The Company continues to be strongly capitalized with tangible equity of $462 million at December 31, 2022. Due primarily to unrealized security losses during the year ended December 31, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 8.0% at December 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At December 31, 2022, City National Bank’s Leverage Ratio was 8.55%, its Common Equity Tier I ratio was 13.88%, its Tier I Capital ratio was 13.88%, and its Total Risk-Based Capital ratio was 14.28%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 15, 2022, the Board approved a quarterly cash dividend of $0.65 cents per share payable January 31, 2023, to shareholders of record as of January 13, 2022. During the year ended December 31, 2022, the Company repurchased 325,000 common shares at a weighted average price of $81.50 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2022, the Company could repurchase approximately 817,000 shares under the current plan. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. Forward-Looking Information This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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 December 31, 2022 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2022 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Earnings Net Interest Income (fully taxable equivalent) $ 52,381 $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 181,339 $ 156,906 Net Income available to common shareholders 30,672 27,374 22,683 21,342 23,386 102,071 88,080 Per Share Data Earnings per share available to common shareholders: Basic $ 2.06 $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 6.81 $ 5.67 Diluted 2.05 1.83 1.51 1.41 1.54 6.80 5.66 Weighted average number of shares (in thousands): Basic 14,756 14,776 14,888 14,974 15,026 14,847 15,381 Diluted 14,785 14,800 14,909 15,002 15,056 14,873 15,407 Period-end number of shares (in thousands) 14,788 14,856 14,864 15,045 15,062 14,788 15,062 Cash dividends declared $ 0.65 $ 0.65 $ 0.60 $ 0.60 $ 0.60 $ 2.50 $ 2.34 Book value per share (period-end) $ 39.08 $ 36.91 $ 39.83 $ 42.03 $ 45.22 $ 39.08 $ 45.22 Tangible book value per share (period-end) 31.25 29.09 31.99 34.27 37.44 31.25 37.44 Market data: High closing price $ 101.94 $ 90.24 $ 83.07 $ 85.99 $ 83.14 $ 101.94 $ 87.41 Low closing price 89.32 78.40 73.88 76.82 76.52 73.88 69.05 Period-end closing price 93.09 88.69 79.88 78.70 81.79 93.09 81.79 Average daily volume (in thousands) 75 58 87 59 52 70 57 Treasury share activity: Treasury shares repurchased (in thousands) 69 9 208 38 131 325 760 Average treasury share repurchase price $ 93.12 $ 80.24 $ 78.33 $ 78.09 $ 78.93 $ 81.50 $ 77.21 Key Ratios (percent) Return on average assets 2.08 % 1.83 % 1.51 % 1.42 % 1.56 % 1.71 % 1.49 % Return on average tangible equity 27.3 % 21.8 % 18.1 % 15.3 % 16.7 % 20.3 % 15.3 % Yield on interest earning assets 4.23 % 3.72 % 3.15 % 2.94 % 3.08 % 3.51 % 3.07 % Cost of interest bearing liabilities 0.48 % 0.21 % 0.15 % 0.17 % 0.19 % 0.25 % 0.26 % Net Interest Margin 3.89 % 3.57 % 3.04 % 2.82 % 2.94 % 3.33 % 2.89 % Non-interest income as a percent of total revenue 26.5 % 27.2 % 30.9 % 32.4 % 30.2 % 28.6 % 30.8 % Efficiency Ratio 45.3 % 46.3 % 50.5 % 51.7 % 48.3 % 48.2 % 51.3 % Price/Earnings Ratio (a) 11.30 12.08 13.23 13.93 13.27 13.67 14.42 Capital (period-end) Average Shareholders' Equity to Average Assets 9.57 % 10.32 % 10.26 % 11.25 % 11.25 % Tangible equity to tangible assets 8.02 % 7.41 % 7.76 % 8.75 % 9.58 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.23 % 15.82 % 15.85 % 16.18 % 16.08 % Tier I 16.23 % 15.82 % 15.85 % 16.18 % 16.08 % Total 16.62 % 16.22 % 16.26 % 16.60 % 16.51 % Leverage 10.01 % 9.74 % 9.42 % 9.58 % 9.44 % City National Bank risk based capital ratios (b): CET I 13.88 % 14.68 % 14.80 % 14.82 % 14.35 % Tier I 13.88 % 14.68 % 14.80 % 14.82 % 14.35 % Total 14.28 % 15.07 % 15.21 % 15.24 % 14.78 % Leverage 8.55 % 9.05 % 8.81 % 8.80 % 8.45 % Other (period-end) Branches 94 94 94 94 94 FTE 909 903 915 897 905 Assets per FTE (in thousands) $ 6,467 $ 6,588 $ 6,825 $ 6,703 $ 6,637 Deposits per FTE (in thousands) 5,357 5,492 5,621 5,574 5,445 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Interest Income Interest and fees on loans $ 42,963 $ 38,493 $ 33,208 $ 31,874 $ 35,277 $ 146,538 $ 136,676 Interest on investment securities: Taxable 11,119 9,556 7,547 6,223 5,753 34,445 23,071 Tax-exempt 1,262 1,228 1,205 1,216 1,226 4,911 5,027 Interest on deposits in depository institutions 1,244 1,530 782 238 217 3,794 693 Total Interest Income 56,588 50,807 42,742 39,551 42,473 189,688 165,467 Interest Expense Interest on deposits 3,010 1,585 1,328 1,521 1,710 7,444 9,405 Interest on short-term borrowings 1,533 440 124 114 132 2,211 489 Total Interest Expense 4,543 2,025 1,452 1,635 1,842 9,655 9,894 Net Interest Income 52,045 48,782 41,290 37,916 40,631 180,033 155,573 Provision for (Recovery of) credit losses 500 730 - (756 ) - 474 (3,165 ) Net Interest Income After Provision for (Recovery of) Credit Losses 51,545 48,052 41,290 38,672 40,631 179,559 158,738 Non-Interest Income Net gains on sale of investment securities 4 - - - - 4 312 Unrealized (losses) gains recognized on equity securities still held (262 ) 1 (601 ) (723 ) 52 (1,585 ) 504 Service charges 7,056 7,487 7,067 6,725 7,057 28,335 25,539 Bankcard revenue 6,791 7,052 7,062 6,444 6,762 27,349 26,987 Trust and investment management fee income 2,343 2,158 2,100 2,197 2,198 8,798 8,415 Bank owned life insurance 1,813 754 978 2,014 748 5,559 3,895 Other income 791 792 1,243 791 799 3,617 3,989 Total Non-Interest Income 18,536 18,244 17,849 17,448 17,616 72,077 69,641 Non-Interest Expense Salaries and employee benefits 17,148 17,398 16,413 15,577 15,299 66,536 61,850 Occupancy related expense 2,725 2,664 2,620 2,709 2,429 10,718 10,083 Equipment and software related expense 3,341 2,949 2,732 2,769 2,733 11,791 10,486 FDIC insurance expense 413 416 409 435 400 1,673 1,583 Advertising 802 854 951 798 582 3,405 3,091 Bankcard expenses 1,356 1,405 1,665 1,606 1,576 6,032 6,455 Postage, delivery, and statement mailings 597 578 551 636 590 2,362 2,323 Office supplies 441 466 427 410 378 1,744 1,547 Legal and professional fees 610 532 525 527 405 2,194 2,279 Telecommunications 627 651 754 584 702 2,616 2,858 Repossessed asset losses (gains), net of expenses 54 (3 ) (32 ) 40 (29 ) 59 (57 ) Merger related expenses 268 - - - - 268 - Other expenses 4,203 3,591 3,674 3,436 3,559 14,904 14,687 Total Non-Interest Expense 32,585 31,501 30,689 29,527 28,624 124,302 117,185 Income Before Income Taxes 37,496 34,795 28,450 26,593 29,623 127,334 111,194 Income tax expense 6,824 7,421 5,767 5,251 6,237 25,263 23,114 Net Income Available to Common Shareholders $ 30,672 $ 27,374 $ 22,683 $ 21,342 $ 23,386 $ 102,071 $ 88,080 Distributed earnings allocated to common shareholders $ 9,521 $ 9,564 $ 8,837 $ 8,943 $ 8,949 $ 36,619 $ 34,901 Undistributed earnings allocated to common shareholders 20,857 17,555 13,643 12,199 14,211 64,494 52,336 Net earnings allocated to common shareholders $ 30,378 $ 27,119 $ 22,480 $ 21,142 $ 23,160 $ 101,113 $ 87,237 Average common shares outstanding 14,756 14,776 14,888 14,974 15,026 14,847 15,381 Shares for diluted earnings per share 14,785 14,800 14,909 15,002 15,056 14,873 15,407 Basic earnings per common share $ 2.06 $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 6.81 $ 5.67 Diluted earnings per common share $ 2.05 $ 1.83 $ 1.51 $ 1.41 $ 1.54 $ 6.80 $ 5.66 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 Assets Cash and due from banks $ 68,333 $ 65,051 $ 90,449 $ 100,877 $ 101,804 Interest-bearing deposits in depository institutions 131,667 233,302 606,530 497,171 532,827 Cash and cash equivalents 200,000 298,353 696,979 598,048 634,631 Investment securities available-for-sale, at fair value 1,505,520 1,489,392 1,497,227 1,409,513 1,408,165 Other securities 23,807 24,372 24,383 24,785 25,531 Total investment securities 1,529,327 1,513,764 1,521,610 1,434,298 1,433,696 Gross loans 3,646,258 3,628,752 3,566,758 3,559,905 3,543,814 Allowance for credit losses (17,108 ) (17,011 ) (17,015 ) (17,280 ) (18,166 ) Net loans 3,629,150 3,611,741 3,549,743 3,542,625 3,525,648 Bank owned life insurance 120,674 121,283 120,528 120,522 120,978 Premises and equipment, net 70,786 71,686 72,388 73,067 74,071 Accrued interest receivable 18,287 17,256 16,342 16,101 15,627 Net deferred tax assets 44,884 49,888 30,802 18,001 63 Intangible assets 115,735 116,081 116,428 116,774 117,121 Other assets 149,263 147,716 118,375 92,331 81,860 Total Assets $ 5,878,106 $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 Liabilities Deposits: Noninterest-bearing $ 1,351,415 $ 1,429,281 $ 1,531,660 $ 1,357,266 $ 1,373,125 Interest-bearing: Demand deposits 1,233,482 1,160,970 1,189,056 1,191,492 1,135,848 Savings deposits 1,396,869 1,427,785 1,435,645 1,425,528 1,347,448 Time deposits 888,100 939,769 985,567 1,024,559 1,068,915 Total deposits 4,869,866 4,957,805 5,141,928 4,998,845 4,925,336 Short-term borrowings Customer repurchase agreements 290,964 304,807 402,368 288,483 312,458 Other liabilities 139,424 136,868 106,906 92,009 84,796 Total Liabilities 5,300,254 5,399,480 5,651,202 5,379,337 5,322,590 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,980 170,138 169,557 170,206 170,942 Retained earnings 706,696 685,657 667,933 654,138 641,826 Cost of common stock in treasury (215,955 ) (209,644 ) (209,133 ) (194,819 ) (193,542 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (128,066 ) (141,997 ) (80,498 ) (41,229 ) 17,745 Underfunded pension liability (3,422 ) (3,485 ) (3,485 ) (3,485 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (131,488 ) (145,482 ) (83,983 ) (44,714 ) 14,260 Total Stockholders' Equity 577,852 548,288 591,993 632,430 681,105 Total Liabilities and Stockholders' Equity $ 5,878,106 $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 Regulatory Capital Total CET 1 capital $ 598,068 $ 582,213 $ 564,158 $ 565,048 $ 555,532 Total tier 1 capital 598,068 582,213 564,158 565,048 555,532 Total risk-based capital 612,654 596,708 578,657 579,807 570,336 Total risk-weighted assets 3,685,207 3,679,511 3,558,249 3,492,920 3,453,893 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 Commercial and industrial $ 373,890 $ 375,735 $ 360,481 $ 337,384 $ 346,184 1-4 Family 116,192 109,710 108,765 108,424 107,873 Hotels 340,404 355,001 337,910 314,902 311,315 Multi-family 174,786 186,440 203,856 209,359 215,677 Non Residential Non-Owner Occupied 585,964 569,369 551,240 637,092 639,818 Non Residential Owner Occupied 174,961 177,673 180,188 200,180 204,233 Commercial real estate (1) 1,392,307 1,398,193 1,381,959 1,469,957 1,478,916 Residential real estate (2) 1,693,523 1,678,770 1,651,005 1,588,860 1,548,965 Home equity 134,317 130,837 125,742 121,460 122,345 Consumer 48,806 41,902 44,580 39,778 40,901 DDA overdrafts 3,415 3,315 2,991 2,466 6,503 Gross Loans $ 3,646,258 $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 Construction loans included in: (1) - Commercial real estate loans $ 4,130 $ 4,125 $ 6,767 $ 14,877 $ 11,783 (2) - Residential real estate loans 21,122 19,333 18,751 16,253 17,252 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Allowance for Credit Losses Balance at beginning of period $ 17,011 $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 18,166 $ 24,549 Charge-offs: Commercial and industrial (120 ) (408 ) - (34 ) - (562 ) (245 ) Commercial real estate (31 ) - (24 ) - (276 ) (55 ) (2,387 ) Residential real estate (66 ) (93 ) (56 ) (50 ) (68 ) (265 ) (265 ) Home equity (189 ) (71 ) (19 ) - (58 ) (279 ) (177 ) Consumer (15 ) (16 ) (9 ) (23 ) (13 ) (63 ) (242 ) DDA overdrafts (670 ) (719 ) (604 ) (631 ) (635 ) (2,624 ) (2,151 ) Total charge-offs (1,091 ) (1,307 ) (712 ) (738 ) (1,050 ) (3,848 ) (5,467 ) Recoveries: Commercial and industrial 94 149 32 59 31 334 171 Commercial real estate 120 9 25 53 27 207 224 Residential real estate 49 1 4 45 7 99 127 Home equity 34 2 3 17 6 56 90 Consumer 31 29 19 28 40 107 255 DDA overdrafts 360 383 364 406 354 1,513 1,382 Total recoveries 688 573 447 608 465 2,316 2,249 Net charge-offs (403 ) (734 ) (265 ) (130 ) (585 ) (1,532 ) (3,218 ) Provision for (recovery of) credit losses 500 730 - (756 ) - 474 (3,165 ) Balance at end of period $ 17,108 $ 17,011 $ 17,015 $ 17,280 $ 18,166 $ 17,108 $ 18,166 Loans outstanding $ 3,646,258 $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 Allowance as a percent of loans outstanding 0.47 % 0.47 % 0.48 % 0.49 % 0.51 % Allowance as a percent of non-performing loans 317.3 % 320.5 % 292.6 % 331.3 % 290.1 % Average loans outstanding $ 3,648,996 $ 3,596,523 $ 3,559,713 $ 3,527,393 $ 3,522,272 $ 3,583,526 $ 3,545,978 Net charge-offs (annualized) as a percent of average loans outstanding 0.04 % 0.08 % 0.03 % 0.01 % 0.07 % 0.04 % 0.09 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 Nonaccrual Loans Residential real estate $ 1,969 $ 2,089 $ 1,561 $ 1,786 $ 2,809 Home equity 55 140 54 99 40 Commercial and industrial 1,015 785 1,360 1,069 996 Commercial real estate 2,166 2,293 2,783 2,241 2,373 Consumer - - - - - Total nonaccrual loans 5,205 5,307 5,758 5,195 6,218 Accruing loans past due 90 days or more 187 - 58 21 43 Total non-performing loans 5,392 5,307 5,816 5,216 6,261 Other real estate owned 909 1,071 946 1,099 1,319 Total non-performing assets $ 6,301 $ 6,378 $ 6,762 $ 6,315 $ 7,580 Non-performing assets as a percent of loans and other real estate owned 0.17 % 0.18 % 0.19 % 0.18 % 0.21 % Past Due Loans Residential real estate $ 7,091 $ 3,452 $ 5,298 $ 4,976 $ 5,321 Home equity 650 521 282 505 618 Commercial and industrial 234 221 130 56 336 Commercial real estate 710 221 46 744 22 Consumer 100 27 49 32 60 DDA overdrafts 391 561 430 392 489 Total past due loans $ 9,176 $ 5,003 $ 6,235 $ 6,705 $ 6,846 Total past due loans as a percent of loans outstanding 0.25 % 0.14 % 0.17 % 0.19 % 0.19 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 15,857 $ 15,657 $ 16,022 $ 16,182 $ 16,943 Home equity 1,286 1,614 1,649 1,694 1,784 Commercial and industrial 333 354 381 397 414 Commercial real estate 102 104 107 1,890 1,914 Consumer 64 68 80 194 225 Total TDRs $ 17,642 $ 17,797 $ 18,239 $ 20,357 $ 21,280 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2022 September 30, 2022 December 31, 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,824,327 $ 18,910 4.11 % $ 1,792,365 $ 17,640 3.90 % $ 1,645,167 $ 15,692 3.78 % Commercial, financial, and agriculture (2) 1,773,937 23,346 5.22 % 1,759,567 20,092 4.53 % 1,831,461 18,740 4.06 % Installment loans to individuals (2), (3) 50,732 646 5.05 % 44,591 683 6.08 % 45,644 691 6.01 % Previously securitized loans (4) *** 63 *** *** 78 *** *** 154 *** Total loans 3,648,996 42,965 4.67 % 3,596,523 38,493 4.25 % 3,522,272 35,277 3.97 % Securities: Taxable 1,315,453 11,118 3.35 % 1,359,207 9,557 2.79 % 1,171,340 5,753 1.95 % Tax-exempt (5) 211,326 1,597 3.00 % 215,219 1,555 2.87 % 239,096 1,551 2.57 % Total securities 1,526,779 12,715 3.30 % 1,574,426 11,112 2.80 % 1,410,436 7,304 2.05 % Deposits in depository institutions 162,732 1,245 3.04 % 289,460 1,529 2.10 % 588,678 217 0.15 % Total interest-earning assets 5,338,507 56,925 4.23 % 5,460,409 51,134 3.72 % 5,521,386 42,798 3.08 % Cash and due from banks 69,223 81,202 98,111 Premises and equipment, net 71,482 72,196 74,847 Goodwill and intangible assets 115,952 116,297 117,349 Other assets 332,855 278,527 216,780 Less: Allowance for credit losses (17,332 ) (17,224 ) (18,756 ) Total assets $ 5,910,687 $ 5,991,407 $ 6,009,717 Liabilities: Interest-bearing demand deposits $ 1,150,327 $ 684 0.24 % $ 1,151,122 $ 272 0.09 % $ 1,113,693 $ 131 0.05 % Savings deposits 1,412,246 829 0.23 % 1,431,591 358 0.10 % 1,338,747 173 0.05 % Time deposits (2) 916,845 1,497 0.65 % 964,447 956 0.39 % 1,087,280 1,406 0.51 % Short-term borrowings 303,599 1,534 2.00 % 270,310 440 0.65 % 314,937 132 0.17 % Total interest-bearing liabilities 3,783,017 4,544 0.48 % 3,817,470 2,026 0.21 % 3,854,657 1,842 0.19 % Noninterest-bearing demand deposits 1,428,013 1,455,123 1,394,599 Other liabilities 134,075 100,303 84,071 Stockholders' equity 565,582 618,511 676,390 Total liabilities and stockholders' equity $ 5,910,687 $ 5,991,407 $ 6,009,717 Net interest income $ 52,381 $ 49,108 $ 40,956 Net yield on earning assets 3.89 % 3.57 % 2.94 % (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) $ (41 ) $ 308 $ 1,106 (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 $ 67 $ 64 $ 149 Commercial, financial, and agriculture 135 103 243 Installment loans to individuals 4 7 15 Time deposits 21 21 48 $ 227 $ 195 $ 455 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Twelve Months Ended December 31, 2022 December 31, 2021 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,755,772 $ 68,208 3.88 % $ 1,658,710 $ 64,492 3.89 % Commercial, financial, and agriculture (2) 1,781,132 75,390 4.23 % 1,838,560 68,784 3.74 % Installment loans to individuals (2), (3) 46,622 2,567 5.51 % 48,708 2,831 5.81 % Previously securitized loans (4) *** 373 *** *** 568 *** Total loans 3,583,526 146,538 4.09 % 3,545,978 136,675 3.85 % Securities: Taxable 1,288,252 34,445 2.67 % 1,075,550 23,071 2.15 % Tax-exempt (5) 218,588 6,217 2.84 % 242,125 6,362 2.63 % Total securities 1,506,840 40,662 2.70 % 1,317,675 29,433 2.23 % Deposits in depository institutions 357,184 3,794 1.06 % 568,928 693 0.12 % Total interest-earning assets 5,447,550 190,994 3.51 % 5,432,581 166,801 3.07 % Cash and due from banks 88,581 92,847 Premises and equipment, net 72,590 76,069 Goodwill and intangible assets 116,469 117,899 Other assets 271,685 216,493 Less: Allowance for credit losses (17,687 ) (21,922 ) Total assets $ 5,979,188 $ 5,913,967 Liabilities: Interest-bearing demand deposits $ 1,150,007 $ 1,234 0.11 % $ 1,071,628 $ 504 0.05 % Savings deposits 1,414,727 1,544 0.11 % 1,291,225 689 0.05 % Time deposits (2) 983,046 4,666 0.47 % 1,157,502 8,213 0.71 % Short-term borrowings 284,611 2,211 0.78 % 298,413 489 0.16 % Total interest-bearing liabilities 3,832,391 9,655 0.25 % 3,818,768 9,895 0.26 % Noninterest-bearing demand deposits 1,429,415 1,315,801 Other liabilities 98,553 84,377 Stockholders' equity 618,829 695,021 Total liabilities and stockholders' equity $ 5,979,188 $ 5,913,967 Net interest income $ 181,339 $ 156,906 Net yield on earning assets 3.33 % 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) $ 568 $ 3,550 (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 $ 298 $ 620 Commercial, financial, and agriculture 642 1,198 Installment loans to individuals 45 87 Time deposits 83 193 $ 1,068 $ 2,098 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Net Interest Income/Margin Net interest income ("GAAP") $ 52,045 $ 48,782 $ 41,290 $ 37,916 $ 40,631 $ 180,033 $ 155,573 Taxable equivalent adjustment 336 326 321 323 325 1,306 1,333 Net interest income, fully taxable equivalent $ 52,381 $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 181,339 $ 156,906 Average interest earning assets $ 5,338,507 $ 5,460,409 $ 5,485,604 $ 5,507,397 $ 5,521,386 $ 5,447,550 $ 5,432,581 Net Interest Margin 3.89 % 3.57 % 3.04 % 2.82 % 2.94 % 3.33 % 2.89 % Accretion related to fair value adjustments -0.02 % -0.01 % -0.02 % -0.03 % -0.03 % -0.02 % -0.04 % Net Interest Margin (excluding accretion) 3.87 % 3.56 % 3.02 % 2.79 % 2.91 % 3.31 % 2.85 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 9.83 % 9.22 % 9.48 % 10.52 % 11.34 % Effect of goodwill and other intangibles, net -1.81 % -1.81 % -1.72 % -1.77 % -1.76 % Tangible common equity to tangible assets 8.02 % 7.41 % 7.76 % 8.75 % 9.58 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230120005336/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 record net income of $102.1 million and record diluted earnings of $6.80 per share for the year ended December 31, 2022. For the year ended December 31, 2022, the Company achieved a return on assets of 1.71% and a return on tangible equity of 20.3%. Net Interest Income The Company’s net interest income increased from $155.6 million for the year ended December 31, 2021 to $180.0 million for the year ended December 31, 2022. The Company’s tax equivalent net interest income increased $24.4 million, or 15.6%, from $156.9 million for the year ended December 31, 2021 to $181.3 million for the year ended December 31, 2022. Net interest income increased by $12.0 million, $7.3 million and $3.4 million, respectively, due to increases in the yields on loans (net of loan fees and accretion), investments, and deposits in depository institutions, of 35 basis points, 47 basis points and 94 basis points, respectively, all due primarily to increases in the Federal Funds rate during 2022. In addition, higher average investment and loan balances ($189.2 million and $37.5 million, respectively) increased net interest income by $3.9 million and $1.8 million, respectively. These increases were partially offset by a decrease in loan fees associated with PPP loans of $3.5 million from 2021 and a decrease in accretion from fair value adjustments of $1.0 million. The Company’s reported net interest margin increased from 2.89% for the year ended December 31, 2021 to 3.33% for the year ended December 31, 2022. The Company’s net interest income increased from $48.8 million during the third quarter of 2022 to $52.0 million during the fourth quarter of 2022. During the fourth quarter of 2022, the Company’s tax equivalent net interest income increased $3.3 million, or 6.7%, to $52.4 million from $49.1 million during the third quarter of 2022. Net interest income increased by $4.3 million and $1.9 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 46 basis points and 50 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 94 basis points which increased net interest income by $0.4 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (27 basis points) which decreased net interest income by $2.5 million and lower average deposits in depository institution balances ($126.7 million) which decreased net interest income by $0.7 million. The Company’s reported net interest margin increased from 3.57% for the third quarter of 2022 to 3.89% for the fourth quarter of 2022. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.21%, or $7.6 million, at December 31, 2021 to 0.17%, or $6.3 million at December 31, 2022. Total past due loans increased from $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021 to $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a provision for credit losses of $0.5 million in the fourth quarter of 2022 and $0.5 million for the year ended December 31, 2022, compared to no provision for credit losses for the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for year ended December 31, 2021. The provision for the year ended December 31, 2022, was a result of net charge-offs for the year that were partially offset by the repayment of a loan from a previous acquisition and release of the associated credit mark. Non-interest Income Non-interest income was $72.1 million for 2022 as compared to $69.6 million for 2021. The Company reported $1.6 million of unrealized fair value losses on the Company’s equity securities during 2022 compared to $0.3 million of realized security gains on the sale of investments and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021. Exclusive of these realized and unrealized gains and losses, non-interest income increased from $68.8 million for the year ended December 31, 2021 to $73.7 million for the year ended December 31, 2022. This increase was largely attributable to an increase of $2.8 million, or 10.9%, in service charges and a $1.7 million, or 42.7%, increase in bank owned life insurance due to higher death benefit proceeds received in 2022 compared to 2021. In addition, trust and investment management fee income and bankcard revenues each increased $0.4 million from the year ended December 31, 2021. These increases were partially offset by a decrease of $0.4 million in other income. Non-interest income was $18.5 million during the quarter ended December 31, 2022 as compared to $17.6 million during the quarter ended December 31, 2021. During the fourth quarter of 2022, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities compared to $0.1 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2021. Exclusive of these unrealized fair value gains and losses, non-interest income increased from $17.6 million for the fourth quarter of 2021 to $18.8 million for the fourth quarter of 2022. This increase was largely attributable to higher bank owned life insurance due to higher death benefit proceeds received ($1.1 million). Non-interest Expenses Non-interest expenses increased from $117.2 million for 2021 to $124.3 million for 2022. This increase was primarily due to an increase in salaries and employee benefit expenses ($4.7 million, due to higher salary adjustments during 2022, increased incentive compensation, and increased health insurance) and equipment and software related expenses ($1.3 million). In addition, occupancy related expenses increased $0.6 million, advertising increased $0.3 million, and merger related expenses increased $0.3 million. Non-interest expenses increased $4.0 million (13.8%), from $28.6 million in the fourth quarter of 2021 to $32.6 million in the fourth quarter of 2022. This increase was largely due to an increase in salaries and employee benefits of $1.9 million due to increased incentive compensation, increased health insurance, and higher salary adjustments during 2022. In addition, other expenses increased $0.6 million; equipment and software related expenses increased $0.6 million; occupancy related expenses increased $0.3 million; and merger related expenses increased $0.3 million. Balance Sheet Trends Loans increased $102.4 million (2.9%) from December 31, 2021 to $3.64 billion at December 31, 2022. PPP loans of $6.6 million at December 31, 2021 were fully repaid during 2022. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $109.0 million, (3.1%), from December 31, 2021 to $3.64 billion at December 31, 2022. Residential real estate loans increased $144.6 million (9.3%); commercial and industrial loans increased $34.3 million (10.1%) (excluding PPP loans); home equity loans increased $12.0 million (9.8%); and consumer loans increased $7.9 million (19.3%). These increases were partially offset by decreases in commercial real estate loans ($86.6 million, or 5.9%). Total average depository balances for the year ended December 31, 2022 increased $141.0 million, or 2.9%, as compared to the year ended December 31, 2021. Average savings deposits increased $123.5 million, average noninterest bearing demand deposits increased $113.6 million, and average interest bearing demand deposits increased $78.4 million. These increases were partially offset by a decrease in average time deposits of $174.5 million. Income Tax Expense The Company’s effective income tax rate for the quarter and year ended December 31, 2022 was 18.2% and 19.8%, respectively, compared to 21.1% and 20.8% for the comparable periods in 2021. Capitalization and Liquidity The Company’s loan to deposit ratio was 74.9% and the loan to asset ratio was 62.0% at December 31, 2022. The Company maintained investment securities totaling 26.0% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 67.7% of assets at December 31, 2022. Time deposits fund 15.1% of assets at December 31, 2022, but very few of these deposits are in accounts that have balances of more than $250,000. The Company continues to be strongly capitalized with tangible equity of $462 million at December 31, 2022. Due primarily to unrealized security losses during the year ended December 31, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 8.0% at December 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At December 31, 2022, City National Bank’s Leverage Ratio was 8.55%, its Common Equity Tier I ratio was 13.88%, its Tier I Capital ratio was 13.88%, and its Total Risk-Based Capital ratio was 14.28%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On November 15, 2022, the Board approved a quarterly cash dividend of $0.65 cents per share payable January 31, 2023, to shareholders of record as of January 13, 2022. During the year ended December 31, 2022, the Company repurchased 325,000 common shares at a weighted average price of $81.50 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2022, the Company could repurchase approximately 817,000 shares under the current plan. City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio. Forward-Looking Information This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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 December 31, 2022 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2022 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Earnings Net Interest Income (fully taxable equivalent) $ 52,381 $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 181,339 $ 156,906 Net Income available to common shareholders 30,672 27,374 22,683 21,342 23,386 102,071 88,080 Per Share Data Earnings per share available to common shareholders: Basic $ 2.06 $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 6.81 $ 5.67 Diluted 2.05 1.83 1.51 1.41 1.54 6.80 5.66 Weighted average number of shares (in thousands): Basic 14,756 14,776 14,888 14,974 15,026 14,847 15,381 Diluted 14,785 14,800 14,909 15,002 15,056 14,873 15,407 Period-end number of shares (in thousands) 14,788 14,856 14,864 15,045 15,062 14,788 15,062 Cash dividends declared $ 0.65 $ 0.65 $ 0.60 $ 0.60 $ 0.60 $ 2.50 $ 2.34 Book value per share (period-end) $ 39.08 $ 36.91 $ 39.83 $ 42.03 $ 45.22 $ 39.08 $ 45.22 Tangible book value per share (period-end) 31.25 29.09 31.99 34.27 37.44 31.25 37.44 Market data: High closing price $ 101.94 $ 90.24 $ 83.07 $ 85.99 $ 83.14 $ 101.94 $ 87.41 Low closing price 89.32 78.40 73.88 76.82 76.52 73.88 69.05 Period-end closing price 93.09 88.69 79.88 78.70 81.79 93.09 81.79 Average daily volume (in thousands) 75 58 87 59 52 70 57 Treasury share activity: Treasury shares repurchased (in thousands) 69 9 208 38 131 325 760 Average treasury share repurchase price $ 93.12 $ 80.24 $ 78.33 $ 78.09 $ 78.93 $ 81.50 $ 77.21 Key Ratios (percent) Return on average assets 2.08 % 1.83 % 1.51 % 1.42 % 1.56 % 1.71 % 1.49 % Return on average tangible equity 27.3 % 21.8 % 18.1 % 15.3 % 16.7 % 20.3 % 15.3 % Yield on interest earning assets 4.23 % 3.72 % 3.15 % 2.94 % 3.08 % 3.51 % 3.07 % Cost of interest bearing liabilities 0.48 % 0.21 % 0.15 % 0.17 % 0.19 % 0.25 % 0.26 % Net Interest Margin 3.89 % 3.57 % 3.04 % 2.82 % 2.94 % 3.33 % 2.89 % Non-interest income as a percent of total revenue 26.5 % 27.2 % 30.9 % 32.4 % 30.2 % 28.6 % 30.8 % Efficiency Ratio 45.3 % 46.3 % 50.5 % 51.7 % 48.3 % 48.2 % 51.3 % Price/Earnings Ratio (a) 11.30 12.08 13.23 13.93 13.27 13.67 14.42 Capital (period-end) Average Shareholders' Equity to Average Assets 9.57 % 10.32 % 10.26 % 11.25 % 11.25 % Tangible equity to tangible assets 8.02 % 7.41 % 7.76 % 8.75 % 9.58 % Consolidated City Holding Company risk based capital ratios (b): CET I 16.23 % 15.82 % 15.85 % 16.18 % 16.08 % Tier I 16.23 % 15.82 % 15.85 % 16.18 % 16.08 % Total 16.62 % 16.22 % 16.26 % 16.60 % 16.51 % Leverage 10.01 % 9.74 % 9.42 % 9.58 % 9.44 % City National Bank risk based capital ratios (b): CET I 13.88 % 14.68 % 14.80 % 14.82 % 14.35 % Tier I 13.88 % 14.68 % 14.80 % 14.82 % 14.35 % Total 14.28 % 15.07 % 15.21 % 15.24 % 14.78 % Leverage 8.55 % 9.05 % 8.81 % 8.80 % 8.45 % Other (period-end) Branches 94 94 94 94 94 FTE 909 903 915 897 905 Assets per FTE (in thousands) $ 6,467 $ 6,588 $ 6,825 $ 6,703 $ 6,637 Deposits per FTE (in thousands) 5,357 5,492 5,621 5,574 5,445 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Interest Income Interest and fees on loans $ 42,963 $ 38,493 $ 33,208 $ 31,874 $ 35,277 $ 146,538 $ 136,676 Interest on investment securities: Taxable 11,119 9,556 7,547 6,223 5,753 34,445 23,071 Tax-exempt 1,262 1,228 1,205 1,216 1,226 4,911 5,027 Interest on deposits in depository institutions 1,244 1,530 782 238 217 3,794 693 Total Interest Income 56,588 50,807 42,742 39,551 42,473 189,688 165,467 Interest Expense Interest on deposits 3,010 1,585 1,328 1,521 1,710 7,444 9,405 Interest on short-term borrowings 1,533 440 124 114 132 2,211 489 Total Interest Expense 4,543 2,025 1,452 1,635 1,842 9,655 9,894 Net Interest Income 52,045 48,782 41,290 37,916 40,631 180,033 155,573 Provision for (Recovery of) credit losses 500 730 - (756 ) - 474 (3,165 ) Net Interest Income After Provision for (Recovery of) Credit Losses 51,545 48,052 41,290 38,672 40,631 179,559 158,738 Non-Interest Income Net gains on sale of investment securities 4 - - - - 4 312 Unrealized (losses) gains recognized on equity securities still held (262 ) 1 (601 ) (723 ) 52 (1,585 ) 504 Service charges 7,056 7,487 7,067 6,725 7,057 28,335 25,539 Bankcard revenue 6,791 7,052 7,062 6,444 6,762 27,349 26,987 Trust and investment management fee income 2,343 2,158 2,100 2,197 2,198 8,798 8,415 Bank owned life insurance 1,813 754 978 2,014 748 5,559 3,895 Other income 791 792 1,243 791 799 3,617 3,989 Total Non-Interest Income 18,536 18,244 17,849 17,448 17,616 72,077 69,641 Non-Interest Expense Salaries and employee benefits 17,148 17,398 16,413 15,577 15,299 66,536 61,850 Occupancy related expense 2,725 2,664 2,620 2,709 2,429 10,718 10,083 Equipment and software related expense 3,341 2,949 2,732 2,769 2,733 11,791 10,486 FDIC insurance expense 413 416 409 435 400 1,673 1,583 Advertising 802 854 951 798 582 3,405 3,091 Bankcard expenses 1,356 1,405 1,665 1,606 1,576 6,032 6,455 Postage, delivery, and statement mailings 597 578 551 636 590 2,362 2,323 Office supplies 441 466 427 410 378 1,744 1,547 Legal and professional fees 610 532 525 527 405 2,194 2,279 Telecommunications 627 651 754 584 702 2,616 2,858 Repossessed asset losses (gains), net of expenses 54 (3 ) (32 ) 40 (29 ) 59 (57 ) Merger related expenses 268 - - - - 268 - Other expenses 4,203 3,591 3,674 3,436 3,559 14,904 14,687 Total Non-Interest Expense 32,585 31,501 30,689 29,527 28,624 124,302 117,185 Income Before Income Taxes 37,496 34,795 28,450 26,593 29,623 127,334 111,194 Income tax expense 6,824 7,421 5,767 5,251 6,237 25,263 23,114 Net Income Available to Common Shareholders $ 30,672 $ 27,374 $ 22,683 $ 21,342 $ 23,386 $ 102,071 $ 88,080 Distributed earnings allocated to common shareholders $ 9,521 $ 9,564 $ 8,837 $ 8,943 $ 8,949 $ 36,619 $ 34,901 Undistributed earnings allocated to common shareholders 20,857 17,555 13,643 12,199 14,211 64,494 52,336 Net earnings allocated to common shareholders $ 30,378 $ 27,119 $ 22,480 $ 21,142 $ 23,160 $ 101,113 $ 87,237 Average common shares outstanding 14,756 14,776 14,888 14,974 15,026 14,847 15,381 Shares for diluted earnings per share 14,785 14,800 14,909 15,002 15,056 14,873 15,407 Basic earnings per common share $ 2.06 $ 1.84 $ 1.51 $ 1.41 $ 1.54 $ 6.81 $ 5.67 Diluted earnings per common share $ 2.05 $ 1.83 $ 1.51 $ 1.41 $ 1.54 $ 6.80 $ 5.66 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 Assets Cash and due from banks $ 68,333 $ 65,051 $ 90,449 $ 100,877 $ 101,804 Interest-bearing deposits in depository institutions 131,667 233,302 606,530 497,171 532,827 Cash and cash equivalents 200,000 298,353 696,979 598,048 634,631 Investment securities available-for-sale, at fair value 1,505,520 1,489,392 1,497,227 1,409,513 1,408,165 Other securities 23,807 24,372 24,383 24,785 25,531 Total investment securities 1,529,327 1,513,764 1,521,610 1,434,298 1,433,696 Gross loans 3,646,258 3,628,752 3,566,758 3,559,905 3,543,814 Allowance for credit losses (17,108 ) (17,011 ) (17,015 ) (17,280 ) (18,166 ) Net loans 3,629,150 3,611,741 3,549,743 3,542,625 3,525,648 Bank owned life insurance 120,674 121,283 120,528 120,522 120,978 Premises and equipment, net 70,786 71,686 72,388 73,067 74,071 Accrued interest receivable 18,287 17,256 16,342 16,101 15,627 Net deferred tax assets 44,884 49,888 30,802 18,001 63 Intangible assets 115,735 116,081 116,428 116,774 117,121 Other assets 149,263 147,716 118,375 92,331 81,860 Total Assets $ 5,878,106 $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 Liabilities Deposits: Noninterest-bearing $ 1,351,415 $ 1,429,281 $ 1,531,660 $ 1,357,266 $ 1,373,125 Interest-bearing: Demand deposits 1,233,482 1,160,970 1,189,056 1,191,492 1,135,848 Savings deposits 1,396,869 1,427,785 1,435,645 1,425,528 1,347,448 Time deposits 888,100 939,769 985,567 1,024,559 1,068,915 Total deposits 4,869,866 4,957,805 5,141,928 4,998,845 4,925,336 Short-term borrowings Customer repurchase agreements 290,964 304,807 402,368 288,483 312,458 Other liabilities 139,424 136,868 106,906 92,009 84,796 Total Liabilities 5,300,254 5,399,480 5,651,202 5,379,337 5,322,590 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 170,980 170,138 169,557 170,206 170,942 Retained earnings 706,696 685,657 667,933 654,138 641,826 Cost of common stock in treasury (215,955 ) (209,644 ) (209,133 ) (194,819 ) (193,542 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (128,066 ) (141,997 ) (80,498 ) (41,229 ) 17,745 Underfunded pension liability (3,422 ) (3,485 ) (3,485 ) (3,485 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (131,488 ) (145,482 ) (83,983 ) (44,714 ) 14,260 Total Stockholders' Equity 577,852 548,288 591,993 632,430 681,105 Total Liabilities and Stockholders' Equity $ 5,878,106 $ 5,947,768 $ 6,243,195 $ 6,011,767 $ 6,003,695 Regulatory Capital Total CET 1 capital $ 598,068 $ 582,213 $ 564,158 $ 565,048 $ 555,532 Total tier 1 capital 598,068 582,213 564,158 565,048 555,532 Total risk-based capital 612,654 596,708 578,657 579,807 570,336 Total risk-weighted assets 3,685,207 3,679,511 3,558,249 3,492,920 3,453,893 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 Commercial and industrial $ 373,890 $ 375,735 $ 360,481 $ 337,384 $ 346,184 1-4 Family 116,192 109,710 108,765 108,424 107,873 Hotels 340,404 355,001 337,910 314,902 311,315 Multi-family 174,786 186,440 203,856 209,359 215,677 Non Residential Non-Owner Occupied 585,964 569,369 551,240 637,092 639,818 Non Residential Owner Occupied 174,961 177,673 180,188 200,180 204,233 Commercial real estate (1) 1,392,307 1,398,193 1,381,959 1,469,957 1,478,916 Residential real estate (2) 1,693,523 1,678,770 1,651,005 1,588,860 1,548,965 Home equity 134,317 130,837 125,742 121,460 122,345 Consumer 48,806 41,902 44,580 39,778 40,901 DDA overdrafts 3,415 3,315 2,991 2,466 6,503 Gross Loans $ 3,646,258 $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 Construction loans included in: (1) - Commercial real estate loans $ 4,130 $ 4,125 $ 6,767 $ 14,877 $ 11,783 (2) - Residential real estate loans 21,122 19,333 18,751 16,253 17,252 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2022 September 30,2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Allowance for Credit Losses Balance at beginning of period $ 17,011 $ 17,015 $ 17,280 $ 18,166 $ 18,751 $ 18,166 $ 24,549 Charge-offs: Commercial and industrial (120 ) (408 ) - (34 ) - (562 ) (245 ) Commercial real estate (31 ) - (24 ) - (276 ) (55 ) (2,387 ) Residential real estate (66 ) (93 ) (56 ) (50 ) (68 ) (265 ) (265 ) Home equity (189 ) (71 ) (19 ) - (58 ) (279 ) (177 ) Consumer (15 ) (16 ) (9 ) (23 ) (13 ) (63 ) (242 ) DDA overdrafts (670 ) (719 ) (604 ) (631 ) (635 ) (2,624 ) (2,151 ) Total charge-offs (1,091 ) (1,307 ) (712 ) (738 ) (1,050 ) (3,848 ) (5,467 ) Recoveries: Commercial and industrial 94 149 32 59 31 334 171 Commercial real estate 120 9 25 53 27 207 224 Residential real estate 49 1 4 45 7 99 127 Home equity 34 2 3 17 6 56 90 Consumer 31 29 19 28 40 107 255 DDA overdrafts 360 383 364 406 354 1,513 1,382 Total recoveries 688 573 447 608 465 2,316 2,249 Net charge-offs (403 ) (734 ) (265 ) (130 ) (585 ) (1,532 ) (3,218 ) Provision for (recovery of) credit losses 500 730 - (756 ) - 474 (3,165 ) Balance at end of period $ 17,108 $ 17,011 $ 17,015 $ 17,280 $ 18,166 $ 17,108 $ 18,166 Loans outstanding $ 3,646,258 $ 3,628,752 $ 3,566,758 $ 3,559,905 $ 3,543,814 Allowance as a percent of loans outstanding 0.47 % 0.47 % 0.48 % 0.49 % 0.51 % Allowance as a percent of non-performing loans 317.3 % 320.5 % 292.6 % 331.3 % 290.1 % Average loans outstanding $ 3,648,996 $ 3,596,523 $ 3,559,713 $ 3,527,393 $ 3,522,272 $ 3,583,526 $ 3,545,978 Net charge-offs (annualized) as a percent of average loans outstanding 0.04 % 0.08 % 0.03 % 0.01 % 0.07 % 0.04 % 0.09 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 Nonaccrual Loans Residential real estate $ 1,969 $ 2,089 $ 1,561 $ 1,786 $ 2,809 Home equity 55 140 54 99 40 Commercial and industrial 1,015 785 1,360 1,069 996 Commercial real estate 2,166 2,293 2,783 2,241 2,373 Consumer - - - - - Total nonaccrual loans 5,205 5,307 5,758 5,195 6,218 Accruing loans past due 90 days or more 187 - 58 21 43 Total non-performing loans 5,392 5,307 5,816 5,216 6,261 Other real estate owned 909 1,071 946 1,099 1,319 Total non-performing assets $ 6,301 $ 6,378 $ 6,762 $ 6,315 $ 7,580 Non-performing assets as a percent of loans and other real estate owned 0.17 % 0.18 % 0.19 % 0.18 % 0.21 % Past Due Loans Residential real estate $ 7,091 $ 3,452 $ 5,298 $ 4,976 $ 5,321 Home equity 650 521 282 505 618 Commercial and industrial 234 221 130 56 336 Commercial real estate 710 221 46 744 22 Consumer 100 27 49 32 60 DDA overdrafts 391 561 430 392 489 Total past due loans $ 9,176 $ 5,003 $ 6,235 $ 6,705 $ 6,846 Total past due loans as a percent of loans outstanding 0.25 % 0.14 % 0.17 % 0.19 % 0.19 % Troubled Debt Restructurings ("TDRs") Residential real estate $ 15,857 $ 15,657 $ 16,022 $ 16,182 $ 16,943 Home equity 1,286 1,614 1,649 1,694 1,784 Commercial and industrial 333 354 381 397 414 Commercial real estate 102 104 107 1,890 1,914 Consumer 64 68 80 194 225 Total TDRs $ 17,642 $ 17,797 $ 18,239 $ 20,357 $ 21,280 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2022 September 30, 2022 December 31, 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,824,327 $ 18,910 4.11 % $ 1,792,365 $ 17,640 3.90 % $ 1,645,167 $ 15,692 3.78 % Commercial, financial, and agriculture (2) 1,773,937 23,346 5.22 % 1,759,567 20,092 4.53 % 1,831,461 18,740 4.06 % Installment loans to individuals (2), (3) 50,732 646 5.05 % 44,591 683 6.08 % 45,644 691 6.01 % Previously securitized loans (4) *** 63 *** *** 78 *** *** 154 *** Total loans 3,648,996 42,965 4.67 % 3,596,523 38,493 4.25 % 3,522,272 35,277 3.97 % Securities: Taxable 1,315,453 11,118 3.35 % 1,359,207 9,557 2.79 % 1,171,340 5,753 1.95 % Tax-exempt (5) 211,326 1,597 3.00 % 215,219 1,555 2.87 % 239,096 1,551 2.57 % Total securities 1,526,779 12,715 3.30 % 1,574,426 11,112 2.80 % 1,410,436 7,304 2.05 % Deposits in depository institutions 162,732 1,245 3.04 % 289,460 1,529 2.10 % 588,678 217 0.15 % Total interest-earning assets 5,338,507 56,925 4.23 % 5,460,409 51,134 3.72 % 5,521,386 42,798 3.08 % Cash and due from banks 69,223 81,202 98,111 Premises and equipment, net 71,482 72,196 74,847 Goodwill and intangible assets 115,952 116,297 117,349 Other assets 332,855 278,527 216,780 Less: Allowance for credit losses (17,332 ) (17,224 ) (18,756 ) Total assets $ 5,910,687 $ 5,991,407 $ 6,009,717 Liabilities: Interest-bearing demand deposits $ 1,150,327 $ 684 0.24 % $ 1,151,122 $ 272 0.09 % $ 1,113,693 $ 131 0.05 % Savings deposits 1,412,246 829 0.23 % 1,431,591 358 0.10 % 1,338,747 173 0.05 % Time deposits (2) 916,845 1,497 0.65 % 964,447 956 0.39 % 1,087,280 1,406 0.51 % Short-term borrowings 303,599 1,534 2.00 % 270,310 440 0.65 % 314,937 132 0.17 % Total interest-bearing liabilities 3,783,017 4,544 0.48 % 3,817,470 2,026 0.21 % 3,854,657 1,842 0.19 % Noninterest-bearing demand deposits 1,428,013 1,455,123 1,394,599 Other liabilities 134,075 100,303 84,071 Stockholders' equity 565,582 618,511 676,390 Total liabilities and stockholders' equity $ 5,910,687 $ 5,991,407 $ 6,009,717 Net interest income $ 52,381 $ 49,108 $ 40,956 Net yield on earning assets 3.89 % 3.57 % 2.94 % (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) $ (41 ) $ 308 $ 1,106 (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 $ 67 $ 64 $ 149 Commercial, financial, and agriculture 135 103 243 Installment loans to individuals 4 7 15 Time deposits 21 21 48 $ 227 $ 195 $ 455 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Twelve Months Ended December 31, 2022 December 31, 2021 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,755,772 $ 68,208 3.88 % $ 1,658,710 $ 64,492 3.89 % Commercial, financial, and agriculture (2) 1,781,132 75,390 4.23 % 1,838,560 68,784 3.74 % Installment loans to individuals (2), (3) 46,622 2,567 5.51 % 48,708 2,831 5.81 % Previously securitized loans (4) *** 373 *** *** 568 *** Total loans 3,583,526 146,538 4.09 % 3,545,978 136,675 3.85 % Securities: Taxable 1,288,252 34,445 2.67 % 1,075,550 23,071 2.15 % Tax-exempt (5) 218,588 6,217 2.84 % 242,125 6,362 2.63 % Total securities 1,506,840 40,662 2.70 % 1,317,675 29,433 2.23 % Deposits in depository institutions 357,184 3,794 1.06 % 568,928 693 0.12 % Total interest-earning assets 5,447,550 190,994 3.51 % 5,432,581 166,801 3.07 % Cash and due from banks 88,581 92,847 Premises and equipment, net 72,590 76,069 Goodwill and intangible assets 116,469 117,899 Other assets 271,685 216,493 Less: Allowance for credit losses (17,687 ) (21,922 ) Total assets $ 5,979,188 $ 5,913,967 Liabilities: Interest-bearing demand deposits $ 1,150,007 $ 1,234 0.11 % $ 1,071,628 $ 504 0.05 % Savings deposits 1,414,727 1,544 0.11 % 1,291,225 689 0.05 % Time deposits (2) 983,046 4,666 0.47 % 1,157,502 8,213 0.71 % Short-term borrowings 284,611 2,211 0.78 % 298,413 489 0.16 % Total interest-bearing liabilities 3,832,391 9,655 0.25 % 3,818,768 9,895 0.26 % Noninterest-bearing demand deposits 1,429,415 1,315,801 Other liabilities 98,553 84,377 Stockholders' equity 618,829 695,021 Total liabilities and stockholders' equity $ 5,979,188 $ 5,913,967 Net interest income $ 181,339 $ 156,906 Net yield on earning assets 3.33 % 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) $ 568 $ 3,550 (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 $ 298 $ 620 Commercial, financial, and agriculture 642 1,198 Installment loans to individuals 45 87 Time deposits 83 193 $ 1,068 $ 2,098 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0. (5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Twelve Months Ended December 31, 2022 September 30, 2022 June 30,2022 March 31,2022 December 31, 2021 December 31, 2022 December 31, 2021 Net Interest Income/Margin Net interest income ("GAAP") $ 52,045 $ 48,782 $ 41,290 $ 37,916 $ 40,631 $ 180,033 $ 155,573 Taxable equivalent adjustment 336 326 321 323 325 1,306 1,333 Net interest income, fully taxable equivalent $ 52,381 $ 49,108 $ 41,611 $ 38,239 $ 40,956 $ 181,339 $ 156,906 Average interest earning assets $ 5,338,507 $ 5,460,409 $ 5,485,604 $ 5,507,397 $ 5,521,386 $ 5,447,550 $ 5,432,581 Net Interest Margin 3.89 % 3.57 % 3.04 % 2.82 % 2.94 % 3.33 % 2.89 % Accretion related to fair value adjustments -0.02 % -0.01 % -0.02 % -0.03 % -0.03 % -0.02 % -0.04 % Net Interest Margin (excluding accretion) 3.87 % 3.56 % 3.02 % 2.79 % 2.91 % 3.31 % 2.85 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 9.83 % 9.22 % 9.48 % 10.52 % 11.34 % Effect of goodwill and other intangibles, net -1.81 % -1.81 % -1.72 % -1.77 % -1.76 % Tangible common equity to tangible assets 8.02 % 7.41 % 7.76 % 8.75 % 9.58 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230120005336/en/