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 Quarterly Results By: City Holding Company via Business Wire July 25, 2023 at 08:29 AM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced record quarterly net income of $32.7 million and diluted earnings of $2.16 per share for the quarter ended June 30, 2023. For the second quarter of 2023, the Company achieved a return on assets of 2.12% and a return on tangible equity of 27.4%. Net Interest Income The Company’s net interest income increased approximately $2.0 million, or 3.8%, from $53.5 million during the first quarter of 2023 to $55.5 million during the second quarter of 2023. The Company’s tax equivalent net interest income increased $2.0 million, or 3.7%, from $53.8 million for the first quarter of 2023 to $55.8 million for the second quarter of 2023. The acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank, (“Citizens”), during the first quarter of 2023 added $2.9 million of net interest income during the quarter ended June 30, 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $1.7 million due to an increase in loan yields (net of loan fees and accretion) of 13 basis points and by $0.4 million due to an increase in the yield on deposits in depository institutions of 60 basis points. In addition, net interest income increased $0.6 million due to an increase in balances of deposits in depository institutions from the quarter ended March 31, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (40 basis points) which decreased net interest income by $3.8 million. The Company’s reported net interest margin decreased from 4.05% for the first quarter of 2023 to 4.00% for the second quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned remained stable at 0.17%, or $6.5 million, at both March 31, 2023 and June 30, 2023. Total past due loans increased from $5.9 million, or 0.15% of total loans outstanding, at March 31, 2023, to $7.4 million, or 0.19% of total loans outstanding at June 30, 2023. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.4 million in the second quarter of 2023, compared to no provision for credit losses for the comparable period in 2022, and a provision for credit losses of $2.9 million for the first quarter of 2023. The provision for credit losses in the second quarter was primarily the result of net charge-offs. Non-interest Income Non-interest income was $20.3 million during the quarter ended June 30, 2023, as compared to $17.9 million during the quarter ended June 30, 2022. During the second quarter of 2023, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities as compared to $0.6 million of unrealized fair value losses on the Company’s equity securities during the second quarter of 2022. Exclusive of these items, non-interest income increased $2.1 million, or 11.6%, from $18.5 million for the second quarter of 2022 to $20.6 million for the second quarter of 2023. This increase was largely attributable to an increase of $2.2 million in bank owned life insurance due to higher death benefit proceeds and an increase of $0.2 million, or 11.4%, in trust and investment management fee income. These increases were partially offset by a decrease in other income of $0.3 million and a decrease in service fees of $0.2 million, or 2.3%. Citizens’ contribution to non-interest income for the quarter ended June 30, 2023 was less than $0.1 million. Non-interest Expenses Non-interest expenses increased $4.1 million, or 13.3%, from $30.7 million in the second quarter of 2022 to $34.8 million in the second quarter of 2023. This increase was largely due to an increase in salaries and employee benefits of $2.0 million due to the acquisition of Citizens ($0.6 million), salary adjustments, and increased health insurance cost. In addition, other expenses increased $1.2 million, and FDIC insurance expenses increased $0.3 million. Balance Sheet Trends Loans increased $27.5 million (0.7%) from March 31, 2023 to $3.92 billion at June 30, 2023. Commercial and industrial loans increased $27.0 million (6.9%) and residential real estate loans increased $9.0 million (0.5%) during the quarter ended June 30, 2023. These increases were partially offset by a decrease in commercial real estate loans of $7.8 million. Period-end deposit balances decreased $121.7 million from March 31, 2023, to June 30, 2023. Total average depository balances increased $141.9 million, or 2.9%, from the quarter ended March 31, 2023 to the quarter ended June 30, 2023. This growth was primarily attributable to deposits acquired from Citizens ($226.5 million). Exclusive of these contributions, average depository balances declined $84.6 million, or 1.7%, from the quarter ended March 31, 2023. Average savings deposit balances decreased $64.0 million and average non-interest bearing demand deposit balances decreased $44.8 million. These decreases were partially offset by increases in average interest bearing demand deposit balances of $15.4 million and average time balances of $12.4 million. Income Tax Expense The Company’s effective income tax rate for the second quarter of 2023 was 19.4% compared to 19.8% for the year ended December 31, 2022, and 20.3%, for the quarter ended June 30, 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 78.2% and its loan to asset ratio was 63.8% at June 30, 2023. The Company maintained investment securities totaling 23.6% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 66.0% of assets at June 30, 2023. Time deposits fund 15.6% of assets at June 30, 2023, with only 11.4% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company. City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of June 30, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, $826.3 million of City National’s investment securities were unpledged at June 30, 2023. The Company continues to be strongly capitalized with tangible equity of $473 million at June 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.9% at June 30, 2023. At June 30, 2023, City National’s Leverage Ratio was 9.36%, its Common Equity Tier I ratio was 14.82%, its Tier I Capital ratio was 14.82%, and its Total Risk-Based Capital ratio was 15.36%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On May 31, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable July 31, 2023, to shareholders of record as of July 14, 2023. During the quarter ended June 30, 2023, the Company repurchased 269,000 common shares at a weighted average price of $88.93 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of June 30, 2023, the Company could repurchase 329,000 additional shares under the current program. City National operates 99 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, 2022 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) ongoing uncertainties on the Company’s business, results of operations and financial condition caused by the scope of the recovery of the COVID-19 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; and (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 June 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary June 30, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 41,611 $ 109,524 $ 79,850 Net Income available to common shareholders 32,733 24,341 30,672 27,374 22,683 57,074 44,025 Per Share Data Earnings per share available to common shareholders: Basic $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 1.51 $ 3.80 $ 2.92 Diluted 2.16 1.63 2.05 1.83 1.51 3.79 2.92 Weighted average number of shares (in thousands): Basic 14,994 14,818 14,756 14,776 14,888 14,897 14,930 Diluted 15,012 14,844 14,785 14,800 14,909 14,919 14,954 Period-end number of shares (in thousands) 15,007 15,260 14,788 14,856 14,864 15,007 14,864 Cash dividends declared $ 0.65 $ 0.65 $ 0.65 $ 0.65 $ 0.60 $ 1.30 $ 1.20 Book value per share (period-end) $ 42.39 $ 42.66 $ 39.08 $ 36.91 $ 39.83 $ 42.39 $ 39.83 Tangible book value per share (period-end) 31.50 31.91 31.25 29.09 31.99 31.50 31.99 Market data: High closing price $ 97.92 $ 100.27 $ 101.94 $ 90.24 $ 83.07 $ 100.27 $ 85.99 Low closing price 83.57 89.17 89.32 78.40 73.88 83.57 73.88 Period-end closing price 89.99 90.88 93.09 88.69 79.88 89.99 79.88 Average daily volume (in thousands) 80 84 75 58 87 82 73 Treasury share activity: Treasury shares repurchased (in thousands) 269 218 69 9 208 488 246 Average treasury share repurchase price $ 88.93 $ 92.10 $ 93.12 $ 80.24 $ 78.33 $ 90.35 $ 78.29 Key Ratios (percent) Return on average assets 2.12 % 1.63 % 2.08 % 1.83 % 1.51 % 1.89 % 1.47 % Return on average tangible equity 27.4 % 19.9 % 27.3 % 21.8 % 18.1 % 23.7 % 16.6 % Yield on interest earning assets 4.87 % 4.66 % 4.23 % 3.72 % 3.15 % 4.76 % 3.04 % Cost of interest bearing liabilities 1.22 % 0.86 % 0.48 % 0.21 % 0.15 % 1.05 % 0.16 % Net Interest Margin 4.00 % 4.05 % 3.89 % 3.57 % 3.04 % 4.02 % 2.93 % Non-interest income as a percent of total revenue 27.1 % 24.7 % 26.5 % 27.2 % 30.9 % 26.0 % 30.8 % Efficiency Ratio 44.6 % 45.7 % 45.3 % 46.3 % 50.5 % 49.0 % 51.1 % Price/Earnings Ratio (a) 10.40 13.95 11.30 12.08 13.23 11.85 13.67 Capital (period-end) Average Shareholders' Equity to Average Assets 10.38 % 10.31 % 9.57 % 10.32 % 10.26 % Tangible equity to tangible assets 7.90 % 8.05 % 8.02 % 7.41 % 7.76 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.47 % 15.64 % 16.23 % 15.82 % 15.85 % Tier I 15.47 % 15.64 % 16.23 % 15.82 % 15.85 % Total 16.01 % 16.18 % 16.62 % 16.22 % 16.26 % Leverage 9.80 % 10.20 % 10.01 % 9.74 % 9.42 % City National Bank risk based capital ratios (b): CET I 14.82 % 14.08 % 13.88 % 14.68 % 14.80 % Tier I 14.82 % 14.08 % 13.88 % 14.68 % 14.80 % Total 15.36 % 14.63 % 14.28 % 15.07 % 15.21 % Leverage 9.36 % 9.18 % 8.55 % 9.05 % 8.81 % Other (period-end) Branches 99 99 94 94 94 FTE 963 958 909 903 915 Assets per FTE (in thousands) $ 6,383 $ 6,483 $ 6,467 $ 6,588 $ 6,825 Deposits per FTE (in thousands) 5,208 5,362 5,357 5,492 5,621 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) June 30, 2023 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Interest Income Interest and fees on loans $ 52,352 $ 47,004 $ 42,963 $ 38,493 $ 33,208 $ 99,356 $ 65,082 Interest on investment securities: Taxable 11,794 11,773 11,119 9,556 7,547 23,567 13,770 Tax-exempt 950 1,162 1,262 1,228 1,205 2,112 2,421 Interest on deposits in depository institutions 2,585 1,591 1,244 1,530 782 4,176 1,020 Total Interest Income 67,681 61,530 56,588 50,807 42,742 129,211 82,293 Interest Expense Interest on deposits 8,567 5,690 3,010 1,585 1,328 14,257 2,849 Interest on short-term borrowings 2,963 2,381 1,533 440 124 5,344 238 Interest on long-term debt 649 - - - - 649 - Total Interest Expense 12,179 8,071 4,543 2,025 1,452 20,250 3,087 Net Interest Income 55,502 53,459 52,045 48,782 41,290 108,961 79,206 Provision for (Recovery of) credit losses 425 2,918 500 730 - 3,343 (756 ) Net Interest Income After Provision for (Recovery of) Credit Losses 55,077 50,541 51,545 48,052 41,290 105,618 79,962 Non-Interest Income Net gains on sale of investment securities - 773 4 - - 773 - Unrealized gains (losses) recognized on equity securities still held (294 ) 361 (262 ) 1 (601 ) 67 (1,324 ) Service charges 6,906 6,563 7,056 7,487 7,067 13,469 13,792 Bankcard revenue 7,190 6,603 6,791 7,052 7,062 13,793 13,506 Trust and investment management fee income 2,339 2,252 2,343 2,158 2,100 4,591 4,297 Bank owned life insurance 3,208 804 1,813 754 978 4,012 2,992 Other income 952 1,326 791 792 1,243 2,278 2,034 Total Non-Interest Income 20,301 18,682 18,536 18,244 17,849 38,983 35,297 Non-Interest Expense Salaries and employee benefits 18,429 17,673 17,148 17,398 16,413 36,102 31,990 Occupancy related expense 2,811 2,640 2,725 2,664 2,620 5,451 5,329 Equipment and software related expense 2,883 3,092 3,341 2,949 2,732 5,975 5,501 FDIC insurance expense 690 445 413 416 409 1,135 844 Advertising 974 760 802 854 951 1,734 1,749 Bankcard expenses 1,736 1,509 1,356 1,405 1,665 3,245 3,271 Postage, delivery, and statement mailings 596 647 597 578 551 1,243 1,187 Office supplies 591 420 441 466 427 1,011 837 Legal and professional fees 558 470 610 532 525 1,028 1,052 Telecommunications 623 606 627 651 754 1,229 1,338 Repossessed asset losses (gains), net of expenses 22 16 54 (3 ) (32 ) 38 8 Merger related expenses - 5,645 268 - - 5,645 - Other expenses 4,848 4,700 4,203 3,591 3,674 9,548 7,110 Total Non-Interest Expense 34,761 38,623 32,585 31,501 30,689 73,384 60,216 Income Before Income Taxes 40,617 30,600 37,496 34,795 28,450 71,217 55,043 Income tax expense 7,884 6,259 6,824 7,421 5,767 14,143 11,018 Net Income Available to Common Shareholders $ 32,733 $ 24,341 $ 30,672 $ 27,374 $ 22,683 $ 57,074 $ 44,025 Distributed earnings allocated to common shareholders $ 9,668 $ 9,833 $ 9,521 $ 9,564 $ 8,837 $ 19,336 $ 17,671 Undistributed earnings allocated to common shareholders 22,774 14,294 20,857 17,555 13,643 37,233 25,951 Net earnings allocated to common shareholders $ 32,442 $ 24,127 $ 30,378 $ 27,119 $ 22,480 $ 56,569 $ 43,622 Average common shares outstanding 14,994 14,818 14,756 14,776 14,888 14,897 14,930 Shares for diluted earnings per share 15,012 14,844 14,785 14,800 14,909 14,919 14,954 Basic earnings per common share $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 1.51 $ 3.80 $ 2.92 Diluted earnings per common share $ 2.16 $ 1.63 $ 2.05 $ 1.83 $ 1.51 $ 3.79 $ 2.92 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Assets Cash and due from banks $ 66,350 $ 69,804 $ 68,333 $ 65,051 $ 90,449 Interest-bearing deposits in depository institutions 164,931 233,006 131,667 233,302 606,530 Cash and cash equivalents 231,281 302,810 200,000 298,353 696,979 Investment securities available-for-sale, at fair value 1,419,933 1,456,259 1,505,520 1,489,392 1,497,227 Other securities 29,262 24,728 23,807 24,372 24,383 Total investment securities 1,449,195 1,480,987 1,529,327 1,513,764 1,521,610 Gross loans 3,922,142 3,894,686 3,646,258 3,628,752 3,566,758 Allowance for credit losses (22,751 ) (22,724 ) (17,108 ) (17,011 ) (17,015 ) Net loans 3,899,391 3,871,962 3,629,150 3,611,741 3,549,743 Bank owned life insurance 117,173 124,238 120,674 121,283 120,528 Premises and equipment, net 73,118 73,430 70,786 71,686 72,388 Accrued interest receivable 17,973 18,395 18,287 17,256 16,342 Net deferred tax assets 46,944 42,146 44,884 49,888 30,802 Goodwill and intangible assets 163,426 164,099 115,735 116,081 116,428 Other assets 148,333 132,715 149,263 147,716 118,375 Total Assets $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 $ 6,243,195 Liabilities Deposits: Noninterest-bearing $ 1,373,106 $ 1,420,990 $ 1,351,415 $ 1,429,281 $ 1,531,660 Interest-bearing: Demand deposits 1,337,445 1,356,017 1,233,482 1,160,970 1,189,056 Savings deposits 1,343,571 1,397,523 1,396,869 1,427,785 1,435,645 Time deposits 960,941 962,235 888,100 939,769 985,567 Total deposits 5,015,063 5,136,765 4,869,866 4,957,805 5,141,928 Short-term borrowings Customer repurchase agreements 271,714 293,256 290,964 304,807 402,368 Long-term debt 100,000 - - - - Other liabilities 123,865 129,711 139,424 136,868 106,906 Total Liabilities 5,510,642 5,559,732 5,300,254 5,399,480 5,651,202 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 176,746 177,529 170,980 170,138 169,557 Retained earnings 744,248 721,727 706,696 685,657 667,933 Cost of common stock in treasury (201,973 ) (179,436 ) (215,955 ) (209,644 ) (209,133 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (127,026 ) (112,967 ) (128,066 ) (141,997 ) (80,498 ) Underfunded pension liability (3,422 ) (3,422 ) (3,422 ) (3,485 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (130,448 ) (116,389 ) (131,488 ) (145,482 ) (83,983 ) Total Stockholders' Equity 636,192 651,050 577,852 548,288 591,993 Total Liabilities and Stockholders' Equity $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 $ 6,243,195 Regulatory Capital Total CET 1 capital $ 605,661 $ 606,675 $ 598,068 $ 582,213 $ 564,158 Total tier 1 capital 605,661 606,675 598,068 582,213 564,158 Total risk-based capital 626,730 627,718 612,654 596,708 578,657 Total risk-weighted assets 3,913,870 3,878,994 3,685,207 3,679,511 3,558,249 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Commercial and industrial $ 417,847 $ 390,861 $ 373,890 $ 375,735 $ 360,481 1-4 Family 123,701 119,017 116,192 109,710 108,765 Hotels 324,745 327,554 340,404 355,001 337,910 Multi-family 191,483 195,042 174,786 186,440 203,856 Non Residential Non-Owner Occupied 673,921 679,782 585,964 569,369 551,240 Non Residential Owner Occupied 222,852 223,096 174,961 177,673 180,188 Commercial real estate (1) 1,536,702 1,544,491 1,392,307 1,398,193 1,381,959 Residential real estate (2) 1,746,618 1,737,604 1,693,523 1,678,770 1,651,005 Home equity 151,012 151,341 134,317 130,837 125,742 Consumer 65,201 66,994 48,806 41,902 44,580 DDA overdrafts 4,762 3,395 3,415 3,315 2,991 Gross Loans $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 $ 3,566,758 Construction loans included in: (1) - Commercial real estate loans $ 3,361 $ 4,715 $ 4,130 $ 4,125 $ 6,767 (2) - Residential real estate loans 20,470 25,224 21,122 19,333 18,751 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Allowance for Credit Losses Balance at beginning of period $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 17,280 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial (69 ) - (120 ) (408 ) - (69 ) (34 ) Commercial real estate (117 ) (3 ) (31 ) - (24 ) (120 ) (24 ) Residential real estate (20 ) (32 ) (66 ) (93 ) (56 ) (52 ) (106 ) Home equity (200 ) (67 ) (189 ) (71 ) (19 ) (267 ) (19 ) Consumer (109 ) (62 ) (15 ) (16 ) (9 ) (171 ) (32 ) DDA overdrafts (357 ) (450 ) (670 ) (719 ) (604 ) (807 ) (1,235 ) Total charge-offs (872 ) (614 ) (1,091 ) (1,307 ) (712 ) (1,486 ) (1,450 ) Recoveries: Commercial and industrial 86 83 94 149 32 169 91 Commercial real estate 28 158 120 9 25 186 78 Residential real estate 5 10 49 1 4 15 49 Home equity 12 4 34 2 3 16 20 Consumer 28 23 31 29 19 51 47 DDA overdrafts 315 398 360 383 364 713 770 Total recoveries 474 676 688 573 447 1,150 1,055 Net recoveries (charge-offs) (398 ) 62 (403 ) (734 ) (265 ) (336 ) (395 ) Provision for (recovery of) credit losses 425 2,918 500 730 - 3,343 (756 ) PCD Loan Reserves - 2,811 - - - 2,811 - Adoption of ASU 2022-02 - (175 ) - - - (175 ) - Balance at end of period $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 22,751 $ 17,015 Loans outstanding $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 $ 3,566,758 Allowance as a percent of loans outstanding 0.58 % 0.58 % 0.47 % 0.47 % 0.48 % Allowance as a percent of non-performing loans 405.5 % 400.1 % 317.3 % 320.5 % 292.6 % Average loans outstanding $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,596,523 $ 3,559,713 $ 3,798,781 $ 3,543,642 Net charge-offs (annualized) as a percent of average loans outstanding 0.04 % -0.01 % 0.04 % 0.08 % 0.03 % 0.02 % 0.02 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Nonaccrual Loans Residential real estate $ 2,774 $ 2,700 $ 1,969 $ 2,089 $ 1,561 Home equity 24 35 55 140 54 Commercial and industrial 741 994 1,015 785 1,360 Commercial real estate 1,821 1,931 2,166 2,293 2,783 Consumer 36 19 - - - Total nonaccrual loans 5,396 5,679 5,205 5,307 5,758 Accruing loans past due 90 days or more 215 - 187 - 58 Total non-performing loans 5,611 5,679 5,392 5,307 5,816 Other real estate owned 874 843 909 1,071 946 Total non-performing assets $ 6,485 $ 6,522 $ 6,301 $ 6,378 $ 6,762 Non-performing assets as a percent of loans and other real estate owned 0.17 % 0.17 % 0.17 % 0.18 % 0.19 % Past Due Loans Residential real estate $ 5,884 $ 4,783 $ 7,091 $ 3,452 $ 5,298 Home equity 784 551 650 521 282 Commercial and industrial 142 98 234 221 130 Commercial real estate 238 148 710 221 46 Consumer 57 3 100 27 49 DDA overdrafts 341 276 391 561 430 Total past due loans $ 7,446 $ 5,859 $ 9,176 $ 5,003 $ 6,235 Total past due loans as a percent of loans outstanding 0.19 % 0.15 % 0.25 % 0.14 % 0.17 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended June 30, 2023 March 31, 2023 June 30, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,894,269 $ 21,702 4.60 % $ 1,840,828 $ 20,007 4.41 % $ 1,730,617 $ 16,156 3.74 % Commercial, financial, and agriculture (2) 1,933,238 29,754 6.17 % 1,795,309 26,248 5.93 % 1,785,511 16,421 3.69 % Installment loans to individuals (2), (3) 68,777 898 5.24 % 64,057 749 4.74 % 43,585 631 5.81 % Total loans 3,896,284 52,354 5.39 % 3,700,194 47,004 5.15 % 3,559,713 33,208 3.74 % Securities: Taxable 1,301,063 11,794 3.64 % 1,322,060 11,773 3.61 % 1,269,049 7,548 2.39 % Tax-exempt (4) 174,410 1,203 2.77 % 204,957 1,471 2.91 % 215,603 1,526 2.84 % Total securities 1,475,473 12,997 3.53 % 1,527,017 13,244 3.52 % 1,484,652 9,074 2.45 % Deposits in depository institutions 224,064 2,585 4.63 % 160,115 1,590 4.03 % 441,239 781 0.71 % Total interest-earning assets 5,595,821 67,936 4.87 % 5,387,326 61,838 4.66 % 5,485,604 43,063 3.15 % Cash and due from banks 71,949 67,891 102,532 Premises and equipment, net 73,450 71,422 72,887 Goodwill and intangible assets 163,847 124,546 116,645 Other assets 313,925 327,442 256,354 Less: Allowance for credit losses (23,046 ) (18,143 ) (17,755 ) Total assets $ 6,195,946 $ 5,960,484 $ 6,016,267 Liabilities: Interest-bearing demand deposits $ 1,328,520 $ 2,773 0.84 % $ 1,234,981 $ 1,741 0.57 % $ 1,156,200 $ 148 0.05 % Savings deposits 1,365,894 1,942 0.57 % 1,376,317 1,348 0.40 % 1,430,121 182 0.05 % Time deposits (2) 962,299 3,852 1.61 % 902,583 2,601 1.17 % 1,004,356 999 0.40 % Customer repurchase agreements 294,255 2,963 4.04 % 281,861 2,381 3.43 % 288,031 123 0.17 % Long-term debt 65,934 649 3.95 % - - - - - - Total interest-bearing liabilities 4,016,902 12,179 1.22 % 3,795,742 8,071 0.86 % 3,878,708 1,452 0.15 % Noninterest-bearing demand deposits 1,419,771 1,420,676 1,435,256 Other liabilities 116,083 129,411 85,075 Stockholders' equity 643,190 614,655 617,228 Total liabilities and stockholders' equity $ 6,195,946 $ 5,960,484 $ 6,016,267 Net interest income $ 55,757 $ 53,767 $ 41,611 Net yield on earning assets 4.00 % 4.05 % 3.04 % (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 $ 393 $ 518 $ 3 (2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions: Residential real estate $ 78 $ 39 $ 77 Commercial, financial, and agriculture 709 146 118 Installment loans to individuals 8 3 15 Time deposits 154 9 21 $ 949 $ 198 $ 231 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Six Months Ended June 30, 2023 June 30, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,869,375 $ 41,707 4.50 % $ 1,697,727 $ 31,892 3.79 % Commercial, financial, and agriculture (2) 1,866,177 56,001 6.05 % 1,801,999 31,952 3.58 % Installment loans to individuals (2), (3) 63,229 1,648 5.26 % 43,916 1,238 5.68 % Total loans 3,798,781 99,356 5.27 % 3,543,642 65,082 3.70 % Securities: Taxable 1,312,118 23,567 3.62 % 1,238,361 13,770 2.24 % Tax-exempt (4) 188,984 2,674 2.85 % 223,992 3,065 2.76 % Total securities 1,501,102 26,241 3.53 % 1,462,353 16,835 2.32 % Deposits in depository institutions 192,266 4,176 4.38 % 490,445 1,020 0.42 % Total interest-earning assets 5,492,149 129,773 4.76 % 5,496,440 82,937 3.04 % Cash and due from banks 69,931 102,171 Premises and equipment, net 72,441 73,354 Goodwill and intangible assets 144,305 116,818 Other assets 320,646 237,115 Less: Allowance for credit losses (20,608 ) (18,103 ) Total assets $ 6,078,864 $ 6,007,795 Liabilities: Interest-bearing demand deposits $ 1,282,009 $ 4,513 0.71 % $ 1,149,277 $ 278 0.05 % Savings deposits 1,371,077 3,290 0.48 % 1,407,416 357 0.05 % Time deposits (2) 932,606 6,453 1.40 % 1,026,149 2,214 0.44 % Customer repurchase agreements 288,092 5,344 3.74 % 282,228 238 0.17 % Long-term debt 33,149 649 3.95 % - - - Total interest-bearing liabilities 3,906,933 20,249 1.05 % 3,865,070 3,087 0.16 % Noninterest-bearing demand deposits 1,420,221 1,417,060 Other liabilities 122,709 79,610 Stockholders' equity 629,001 646,055 Total liabilities and stockholders' equity $ 6,078,864 $ 6,007,795 Net interest income $ 109,524 $ 79,850 Net yield on earning assets 4.02 % 2.93 % (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 $ 911 $ 301 (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 $ 117 $ 167 Commercial, financial, and agriculture 855 404 Installment loans to individuals 11 34 Time deposits 164 41 $ 1,147 $ 646 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 55,502 $ 53,459 $ 52,045 $ 48,782 $ 41,290 $ 108,961 $ 79,206 Taxable equivalent adjustment 255 308 336 326 321 563 644 Net interest income, fully taxable equivalent $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 41,611 $ 109,524 $ 79,850 Average interest earning assets $ 5,595,821 $ 5,387,326 $ 5,338,507 $ 5,460,409 $ 5,485,604 $ 5,492,149 $ 5,496,440 Net Interest Margin 4.00 % 4.05 % 3.89 % 3.57 % 3.04 % 4.02 % 2.93 % Accretion related to fair value adjustments -0.07 % -0.02 % -0.02 % -0.01 % -0.02 % -0.04 % -0.02 % Net Interest Margin (excluding accretion) 3.93 % 4.03 % 3.87 % 3.56 % 3.02 % 3.98 % 2.91 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.35 % 10.48 % 9.83 % 9.22 % 9.48 % Effect of goodwill and other intangibles, net -2.45 % -2.43 % -1.81 % -1.81 % -1.72 % Tangible common equity to tangible assets 7.90 % 8.05 % 8.02 % 7.41 % 7.76 % Return on average tangible equity ("GAAP") 27.4 % 19.9 % 27.3 % 21.8 % 18.1 % 23.7 % 16.6 % Impact of merger related expenses - 3.6 % - - - 1.8 % - Impact of merger related provision - 1.3 % - - - 0.6 % - Return on tangible equity, excluding merger related expenses and provision 27.4 % 24.8 % 27.3 % 21.8 % 18.1 % 26.2 % 16.6 % Return on assets ("GAAP") 2.12 % 1.63 % 1.63 % 2.08 % 1.83 % 1.89 % 1.47 % Impact of merger related expenses - 0.30 % - - - 0.15 % - Impact of merger related provision - 0.10 % - - - 0.05 % - Return on assets, excluding merger related expenses and provision 2.12 % 2.04 % 2.08 % 1.83 % 1.51 % 2.09 % 1.47 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 21,842 0.56 % 3.68 N/A Natural Gas Distribution 15,798 0.40 % 2.61 N/A Masonry Contractors 25,917 0.66 % 1.13 84 % Sheet Metal Work Manufacturing 24,039 0.61 % 1.57 68 % Beer & Ale Merchant Wholesalers 26,239 0.67 % 3.28 N/A Gasoline Stations with Convenience Stores 52,045 1.33 % 4.19 65 % Lessors of Residential Buildings & Dwellings 378,040 9.64 % 1.89 66 % 1-4 Family 118,752 3.03 % 2.97 72 % Multi-Family 182,374 4.65 % 1.84 66 % Lessors of Nonresidential Buildings 531,263 13.55 % 1.70 65 % Office Buildings 44,593 1.14 % 1.64 62 % Lessors of Mini-Warehouses & Self-Storage Units 48,563 1.24 % 1.62 62 % Assisted Living Facilities 28,554 0.73 % 1.38 57 % Hotels & Motels 312,639 7.98 % 1.43 61 % Average Balance Median Balance Commercial Loans $ 458 $ 100 Commercial Real Estate Loans 497 121 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type June 30, 2023 March 31, 2023 December 31, 2022 Noninterest-Bearing Demand Deposits 17 % 19 % 20 % Interest-Bearing Deposits Demand Deposits 7 % 8 % 10 % Savings Deposits 11 % 11 % 14 % Time Deposits 14 % 14 % 13 % Total Deposits 12 % 13 % 14 % Retail Deposits Noninterest-Bearing 3 % 4 % 5 % Interest-Bearing 10 % 11 % 11 % Total Retail Deposits 9 % 9 % 10 % Commercial Deposits Noninterest-Bearing Deposits 29 % 31 % 32 % Interest-Bearing Deposits 11 % 13 % 16 % Total Commercial Deposits 21 % 23 % 26 % The amounts listed above represent management's best estimate as of the respective period shown. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage 2023 YTD* 16,226 2,989 1.2 % 2022 28,442 4,544 1.9 % 2021 32,800 8,860 3.8 % 2020 30,360 6,740 3.0 % 2019 32,040 3,717 1.7 % 2018* 30,400 4,310 2.2 % 2017 28,525 2,711 1.4 % 2016 28,650 2,820 1.5 % * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018),Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023). View source version on businesswire.com: https://www.businesswire.com/news/home/20230721005652/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 Quarterly Results By: City Holding Company via Business Wire July 25, 2023 at 08:29 AM EDT City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced record quarterly net income of $32.7 million and diluted earnings of $2.16 per share for the quarter ended June 30, 2023. For the second quarter of 2023, the Company achieved a return on assets of 2.12% and a return on tangible equity of 27.4%. Net Interest Income The Company’s net interest income increased approximately $2.0 million, or 3.8%, from $53.5 million during the first quarter of 2023 to $55.5 million during the second quarter of 2023. The Company’s tax equivalent net interest income increased $2.0 million, or 3.7%, from $53.8 million for the first quarter of 2023 to $55.8 million for the second quarter of 2023. The acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank, (“Citizens”), during the first quarter of 2023 added $2.9 million of net interest income during the quarter ended June 30, 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $1.7 million due to an increase in loan yields (net of loan fees and accretion) of 13 basis points and by $0.4 million due to an increase in the yield on deposits in depository institutions of 60 basis points. In addition, net interest income increased $0.6 million due to an increase in balances of deposits in depository institutions from the quarter ended March 31, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (40 basis points) which decreased net interest income by $3.8 million. The Company’s reported net interest margin decreased from 4.05% for the first quarter of 2023 to 4.00% for the second quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned remained stable at 0.17%, or $6.5 million, at both March 31, 2023 and June 30, 2023. Total past due loans increased from $5.9 million, or 0.15% of total loans outstanding, at March 31, 2023, to $7.4 million, or 0.19% of total loans outstanding at June 30, 2023. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.4 million in the second quarter of 2023, compared to no provision for credit losses for the comparable period in 2022, and a provision for credit losses of $2.9 million for the first quarter of 2023. The provision for credit losses in the second quarter was primarily the result of net charge-offs. Non-interest Income Non-interest income was $20.3 million during the quarter ended June 30, 2023, as compared to $17.9 million during the quarter ended June 30, 2022. During the second quarter of 2023, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities as compared to $0.6 million of unrealized fair value losses on the Company’s equity securities during the second quarter of 2022. Exclusive of these items, non-interest income increased $2.1 million, or 11.6%, from $18.5 million for the second quarter of 2022 to $20.6 million for the second quarter of 2023. This increase was largely attributable to an increase of $2.2 million in bank owned life insurance due to higher death benefit proceeds and an increase of $0.2 million, or 11.4%, in trust and investment management fee income. These increases were partially offset by a decrease in other income of $0.3 million and a decrease in service fees of $0.2 million, or 2.3%. Citizens’ contribution to non-interest income for the quarter ended June 30, 2023 was less than $0.1 million. Non-interest Expenses Non-interest expenses increased $4.1 million, or 13.3%, from $30.7 million in the second quarter of 2022 to $34.8 million in the second quarter of 2023. This increase was largely due to an increase in salaries and employee benefits of $2.0 million due to the acquisition of Citizens ($0.6 million), salary adjustments, and increased health insurance cost. In addition, other expenses increased $1.2 million, and FDIC insurance expenses increased $0.3 million. Balance Sheet Trends Loans increased $27.5 million (0.7%) from March 31, 2023 to $3.92 billion at June 30, 2023. Commercial and industrial loans increased $27.0 million (6.9%) and residential real estate loans increased $9.0 million (0.5%) during the quarter ended June 30, 2023. These increases were partially offset by a decrease in commercial real estate loans of $7.8 million. Period-end deposit balances decreased $121.7 million from March 31, 2023, to June 30, 2023. Total average depository balances increased $141.9 million, or 2.9%, from the quarter ended March 31, 2023 to the quarter ended June 30, 2023. This growth was primarily attributable to deposits acquired from Citizens ($226.5 million). Exclusive of these contributions, average depository balances declined $84.6 million, or 1.7%, from the quarter ended March 31, 2023. Average savings deposit balances decreased $64.0 million and average non-interest bearing demand deposit balances decreased $44.8 million. These decreases were partially offset by increases in average interest bearing demand deposit balances of $15.4 million and average time balances of $12.4 million. Income Tax Expense The Company’s effective income tax rate for the second quarter of 2023 was 19.4% compared to 19.8% for the year ended December 31, 2022, and 20.3%, for the quarter ended June 30, 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 78.2% and its loan to asset ratio was 63.8% at June 30, 2023. The Company maintained investment securities totaling 23.6% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 66.0% of assets at June 30, 2023. Time deposits fund 15.6% of assets at June 30, 2023, with only 11.4% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company. City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of June 30, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, $826.3 million of City National’s investment securities were unpledged at June 30, 2023. The Company continues to be strongly capitalized with tangible equity of $473 million at June 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.9% at June 30, 2023. At June 30, 2023, City National’s Leverage Ratio was 9.36%, its Common Equity Tier I ratio was 14.82%, its Tier I Capital ratio was 14.82%, and its Total Risk-Based Capital ratio was 15.36%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On May 31, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable July 31, 2023, to shareholders of record as of July 14, 2023. During the quarter ended June 30, 2023, the Company repurchased 269,000 common shares at a weighted average price of $88.93 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of June 30, 2023, the Company could repurchase 329,000 additional shares under the current program. City National operates 99 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, 2022 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) ongoing uncertainties on the Company’s business, results of operations and financial condition caused by the scope of the recovery of the COVID-19 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; and (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 June 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary June 30, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 41,611 $ 109,524 $ 79,850 Net Income available to common shareholders 32,733 24,341 30,672 27,374 22,683 57,074 44,025 Per Share Data Earnings per share available to common shareholders: Basic $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 1.51 $ 3.80 $ 2.92 Diluted 2.16 1.63 2.05 1.83 1.51 3.79 2.92 Weighted average number of shares (in thousands): Basic 14,994 14,818 14,756 14,776 14,888 14,897 14,930 Diluted 15,012 14,844 14,785 14,800 14,909 14,919 14,954 Period-end number of shares (in thousands) 15,007 15,260 14,788 14,856 14,864 15,007 14,864 Cash dividends declared $ 0.65 $ 0.65 $ 0.65 $ 0.65 $ 0.60 $ 1.30 $ 1.20 Book value per share (period-end) $ 42.39 $ 42.66 $ 39.08 $ 36.91 $ 39.83 $ 42.39 $ 39.83 Tangible book value per share (period-end) 31.50 31.91 31.25 29.09 31.99 31.50 31.99 Market data: High closing price $ 97.92 $ 100.27 $ 101.94 $ 90.24 $ 83.07 $ 100.27 $ 85.99 Low closing price 83.57 89.17 89.32 78.40 73.88 83.57 73.88 Period-end closing price 89.99 90.88 93.09 88.69 79.88 89.99 79.88 Average daily volume (in thousands) 80 84 75 58 87 82 73 Treasury share activity: Treasury shares repurchased (in thousands) 269 218 69 9 208 488 246 Average treasury share repurchase price $ 88.93 $ 92.10 $ 93.12 $ 80.24 $ 78.33 $ 90.35 $ 78.29 Key Ratios (percent) Return on average assets 2.12 % 1.63 % 2.08 % 1.83 % 1.51 % 1.89 % 1.47 % Return on average tangible equity 27.4 % 19.9 % 27.3 % 21.8 % 18.1 % 23.7 % 16.6 % Yield on interest earning assets 4.87 % 4.66 % 4.23 % 3.72 % 3.15 % 4.76 % 3.04 % Cost of interest bearing liabilities 1.22 % 0.86 % 0.48 % 0.21 % 0.15 % 1.05 % 0.16 % Net Interest Margin 4.00 % 4.05 % 3.89 % 3.57 % 3.04 % 4.02 % 2.93 % Non-interest income as a percent of total revenue 27.1 % 24.7 % 26.5 % 27.2 % 30.9 % 26.0 % 30.8 % Efficiency Ratio 44.6 % 45.7 % 45.3 % 46.3 % 50.5 % 49.0 % 51.1 % Price/Earnings Ratio (a) 10.40 13.95 11.30 12.08 13.23 11.85 13.67 Capital (period-end) Average Shareholders' Equity to Average Assets 10.38 % 10.31 % 9.57 % 10.32 % 10.26 % Tangible equity to tangible assets 7.90 % 8.05 % 8.02 % 7.41 % 7.76 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.47 % 15.64 % 16.23 % 15.82 % 15.85 % Tier I 15.47 % 15.64 % 16.23 % 15.82 % 15.85 % Total 16.01 % 16.18 % 16.62 % 16.22 % 16.26 % Leverage 9.80 % 10.20 % 10.01 % 9.74 % 9.42 % City National Bank risk based capital ratios (b): CET I 14.82 % 14.08 % 13.88 % 14.68 % 14.80 % Tier I 14.82 % 14.08 % 13.88 % 14.68 % 14.80 % Total 15.36 % 14.63 % 14.28 % 15.07 % 15.21 % Leverage 9.36 % 9.18 % 8.55 % 9.05 % 8.81 % Other (period-end) Branches 99 99 94 94 94 FTE 963 958 909 903 915 Assets per FTE (in thousands) $ 6,383 $ 6,483 $ 6,467 $ 6,588 $ 6,825 Deposits per FTE (in thousands) 5,208 5,362 5,357 5,492 5,621 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) June 30, 2023 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Interest Income Interest and fees on loans $ 52,352 $ 47,004 $ 42,963 $ 38,493 $ 33,208 $ 99,356 $ 65,082 Interest on investment securities: Taxable 11,794 11,773 11,119 9,556 7,547 23,567 13,770 Tax-exempt 950 1,162 1,262 1,228 1,205 2,112 2,421 Interest on deposits in depository institutions 2,585 1,591 1,244 1,530 782 4,176 1,020 Total Interest Income 67,681 61,530 56,588 50,807 42,742 129,211 82,293 Interest Expense Interest on deposits 8,567 5,690 3,010 1,585 1,328 14,257 2,849 Interest on short-term borrowings 2,963 2,381 1,533 440 124 5,344 238 Interest on long-term debt 649 - - - - 649 - Total Interest Expense 12,179 8,071 4,543 2,025 1,452 20,250 3,087 Net Interest Income 55,502 53,459 52,045 48,782 41,290 108,961 79,206 Provision for (Recovery of) credit losses 425 2,918 500 730 - 3,343 (756 ) Net Interest Income After Provision for (Recovery of) Credit Losses 55,077 50,541 51,545 48,052 41,290 105,618 79,962 Non-Interest Income Net gains on sale of investment securities - 773 4 - - 773 - Unrealized gains (losses) recognized on equity securities still held (294 ) 361 (262 ) 1 (601 ) 67 (1,324 ) Service charges 6,906 6,563 7,056 7,487 7,067 13,469 13,792 Bankcard revenue 7,190 6,603 6,791 7,052 7,062 13,793 13,506 Trust and investment management fee income 2,339 2,252 2,343 2,158 2,100 4,591 4,297 Bank owned life insurance 3,208 804 1,813 754 978 4,012 2,992 Other income 952 1,326 791 792 1,243 2,278 2,034 Total Non-Interest Income 20,301 18,682 18,536 18,244 17,849 38,983 35,297 Non-Interest Expense Salaries and employee benefits 18,429 17,673 17,148 17,398 16,413 36,102 31,990 Occupancy related expense 2,811 2,640 2,725 2,664 2,620 5,451 5,329 Equipment and software related expense 2,883 3,092 3,341 2,949 2,732 5,975 5,501 FDIC insurance expense 690 445 413 416 409 1,135 844 Advertising 974 760 802 854 951 1,734 1,749 Bankcard expenses 1,736 1,509 1,356 1,405 1,665 3,245 3,271 Postage, delivery, and statement mailings 596 647 597 578 551 1,243 1,187 Office supplies 591 420 441 466 427 1,011 837 Legal and professional fees 558 470 610 532 525 1,028 1,052 Telecommunications 623 606 627 651 754 1,229 1,338 Repossessed asset losses (gains), net of expenses 22 16 54 (3 ) (32 ) 38 8 Merger related expenses - 5,645 268 - - 5,645 - Other expenses 4,848 4,700 4,203 3,591 3,674 9,548 7,110 Total Non-Interest Expense 34,761 38,623 32,585 31,501 30,689 73,384 60,216 Income Before Income Taxes 40,617 30,600 37,496 34,795 28,450 71,217 55,043 Income tax expense 7,884 6,259 6,824 7,421 5,767 14,143 11,018 Net Income Available to Common Shareholders $ 32,733 $ 24,341 $ 30,672 $ 27,374 $ 22,683 $ 57,074 $ 44,025 Distributed earnings allocated to common shareholders $ 9,668 $ 9,833 $ 9,521 $ 9,564 $ 8,837 $ 19,336 $ 17,671 Undistributed earnings allocated to common shareholders 22,774 14,294 20,857 17,555 13,643 37,233 25,951 Net earnings allocated to common shareholders $ 32,442 $ 24,127 $ 30,378 $ 27,119 $ 22,480 $ 56,569 $ 43,622 Average common shares outstanding 14,994 14,818 14,756 14,776 14,888 14,897 14,930 Shares for diluted earnings per share 15,012 14,844 14,785 14,800 14,909 14,919 14,954 Basic earnings per common share $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 1.51 $ 3.80 $ 2.92 Diluted earnings per common share $ 2.16 $ 1.63 $ 2.05 $ 1.83 $ 1.51 $ 3.79 $ 2.92 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Assets Cash and due from banks $ 66,350 $ 69,804 $ 68,333 $ 65,051 $ 90,449 Interest-bearing deposits in depository institutions 164,931 233,006 131,667 233,302 606,530 Cash and cash equivalents 231,281 302,810 200,000 298,353 696,979 Investment securities available-for-sale, at fair value 1,419,933 1,456,259 1,505,520 1,489,392 1,497,227 Other securities 29,262 24,728 23,807 24,372 24,383 Total investment securities 1,449,195 1,480,987 1,529,327 1,513,764 1,521,610 Gross loans 3,922,142 3,894,686 3,646,258 3,628,752 3,566,758 Allowance for credit losses (22,751 ) (22,724 ) (17,108 ) (17,011 ) (17,015 ) Net loans 3,899,391 3,871,962 3,629,150 3,611,741 3,549,743 Bank owned life insurance 117,173 124,238 120,674 121,283 120,528 Premises and equipment, net 73,118 73,430 70,786 71,686 72,388 Accrued interest receivable 17,973 18,395 18,287 17,256 16,342 Net deferred tax assets 46,944 42,146 44,884 49,888 30,802 Goodwill and intangible assets 163,426 164,099 115,735 116,081 116,428 Other assets 148,333 132,715 149,263 147,716 118,375 Total Assets $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 $ 6,243,195 Liabilities Deposits: Noninterest-bearing $ 1,373,106 $ 1,420,990 $ 1,351,415 $ 1,429,281 $ 1,531,660 Interest-bearing: Demand deposits 1,337,445 1,356,017 1,233,482 1,160,970 1,189,056 Savings deposits 1,343,571 1,397,523 1,396,869 1,427,785 1,435,645 Time deposits 960,941 962,235 888,100 939,769 985,567 Total deposits 5,015,063 5,136,765 4,869,866 4,957,805 5,141,928 Short-term borrowings Customer repurchase agreements 271,714 293,256 290,964 304,807 402,368 Long-term debt 100,000 - - - - Other liabilities 123,865 129,711 139,424 136,868 106,906 Total Liabilities 5,510,642 5,559,732 5,300,254 5,399,480 5,651,202 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 176,746 177,529 170,980 170,138 169,557 Retained earnings 744,248 721,727 706,696 685,657 667,933 Cost of common stock in treasury (201,973 ) (179,436 ) (215,955 ) (209,644 ) (209,133 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (127,026 ) (112,967 ) (128,066 ) (141,997 ) (80,498 ) Underfunded pension liability (3,422 ) (3,422 ) (3,422 ) (3,485 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (130,448 ) (116,389 ) (131,488 ) (145,482 ) (83,983 ) Total Stockholders' Equity 636,192 651,050 577,852 548,288 591,993 Total Liabilities and Stockholders' Equity $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 $ 6,243,195 Regulatory Capital Total CET 1 capital $ 605,661 $ 606,675 $ 598,068 $ 582,213 $ 564,158 Total tier 1 capital 605,661 606,675 598,068 582,213 564,158 Total risk-based capital 626,730 627,718 612,654 596,708 578,657 Total risk-weighted assets 3,913,870 3,878,994 3,685,207 3,679,511 3,558,249 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Commercial and industrial $ 417,847 $ 390,861 $ 373,890 $ 375,735 $ 360,481 1-4 Family 123,701 119,017 116,192 109,710 108,765 Hotels 324,745 327,554 340,404 355,001 337,910 Multi-family 191,483 195,042 174,786 186,440 203,856 Non Residential Non-Owner Occupied 673,921 679,782 585,964 569,369 551,240 Non Residential Owner Occupied 222,852 223,096 174,961 177,673 180,188 Commercial real estate (1) 1,536,702 1,544,491 1,392,307 1,398,193 1,381,959 Residential real estate (2) 1,746,618 1,737,604 1,693,523 1,678,770 1,651,005 Home equity 151,012 151,341 134,317 130,837 125,742 Consumer 65,201 66,994 48,806 41,902 44,580 DDA overdrafts 4,762 3,395 3,415 3,315 2,991 Gross Loans $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 $ 3,566,758 Construction loans included in: (1) - Commercial real estate loans $ 3,361 $ 4,715 $ 4,130 $ 4,125 $ 6,767 (2) - Residential real estate loans 20,470 25,224 21,122 19,333 18,751 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Allowance for Credit Losses Balance at beginning of period $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 17,280 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial (69 ) - (120 ) (408 ) - (69 ) (34 ) Commercial real estate (117 ) (3 ) (31 ) - (24 ) (120 ) (24 ) Residential real estate (20 ) (32 ) (66 ) (93 ) (56 ) (52 ) (106 ) Home equity (200 ) (67 ) (189 ) (71 ) (19 ) (267 ) (19 ) Consumer (109 ) (62 ) (15 ) (16 ) (9 ) (171 ) (32 ) DDA overdrafts (357 ) (450 ) (670 ) (719 ) (604 ) (807 ) (1,235 ) Total charge-offs (872 ) (614 ) (1,091 ) (1,307 ) (712 ) (1,486 ) (1,450 ) Recoveries: Commercial and industrial 86 83 94 149 32 169 91 Commercial real estate 28 158 120 9 25 186 78 Residential real estate 5 10 49 1 4 15 49 Home equity 12 4 34 2 3 16 20 Consumer 28 23 31 29 19 51 47 DDA overdrafts 315 398 360 383 364 713 770 Total recoveries 474 676 688 573 447 1,150 1,055 Net recoveries (charge-offs) (398 ) 62 (403 ) (734 ) (265 ) (336 ) (395 ) Provision for (recovery of) credit losses 425 2,918 500 730 - 3,343 (756 ) PCD Loan Reserves - 2,811 - - - 2,811 - Adoption of ASU 2022-02 - (175 ) - - - (175 ) - Balance at end of period $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 22,751 $ 17,015 Loans outstanding $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 $ 3,566,758 Allowance as a percent of loans outstanding 0.58 % 0.58 % 0.47 % 0.47 % 0.48 % Allowance as a percent of non-performing loans 405.5 % 400.1 % 317.3 % 320.5 % 292.6 % Average loans outstanding $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,596,523 $ 3,559,713 $ 3,798,781 $ 3,543,642 Net charge-offs (annualized) as a percent of average loans outstanding 0.04 % -0.01 % 0.04 % 0.08 % 0.03 % 0.02 % 0.02 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Nonaccrual Loans Residential real estate $ 2,774 $ 2,700 $ 1,969 $ 2,089 $ 1,561 Home equity 24 35 55 140 54 Commercial and industrial 741 994 1,015 785 1,360 Commercial real estate 1,821 1,931 2,166 2,293 2,783 Consumer 36 19 - - - Total nonaccrual loans 5,396 5,679 5,205 5,307 5,758 Accruing loans past due 90 days or more 215 - 187 - 58 Total non-performing loans 5,611 5,679 5,392 5,307 5,816 Other real estate owned 874 843 909 1,071 946 Total non-performing assets $ 6,485 $ 6,522 $ 6,301 $ 6,378 $ 6,762 Non-performing assets as a percent of loans and other real estate owned 0.17 % 0.17 % 0.17 % 0.18 % 0.19 % Past Due Loans Residential real estate $ 5,884 $ 4,783 $ 7,091 $ 3,452 $ 5,298 Home equity 784 551 650 521 282 Commercial and industrial 142 98 234 221 130 Commercial real estate 238 148 710 221 46 Consumer 57 3 100 27 49 DDA overdrafts 341 276 391 561 430 Total past due loans $ 7,446 $ 5,859 $ 9,176 $ 5,003 $ 6,235 Total past due loans as a percent of loans outstanding 0.19 % 0.15 % 0.25 % 0.14 % 0.17 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended June 30, 2023 March 31, 2023 June 30, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,894,269 $ 21,702 4.60 % $ 1,840,828 $ 20,007 4.41 % $ 1,730,617 $ 16,156 3.74 % Commercial, financial, and agriculture (2) 1,933,238 29,754 6.17 % 1,795,309 26,248 5.93 % 1,785,511 16,421 3.69 % Installment loans to individuals (2), (3) 68,777 898 5.24 % 64,057 749 4.74 % 43,585 631 5.81 % Total loans 3,896,284 52,354 5.39 % 3,700,194 47,004 5.15 % 3,559,713 33,208 3.74 % Securities: Taxable 1,301,063 11,794 3.64 % 1,322,060 11,773 3.61 % 1,269,049 7,548 2.39 % Tax-exempt (4) 174,410 1,203 2.77 % 204,957 1,471 2.91 % 215,603 1,526 2.84 % Total securities 1,475,473 12,997 3.53 % 1,527,017 13,244 3.52 % 1,484,652 9,074 2.45 % Deposits in depository institutions 224,064 2,585 4.63 % 160,115 1,590 4.03 % 441,239 781 0.71 % Total interest-earning assets 5,595,821 67,936 4.87 % 5,387,326 61,838 4.66 % 5,485,604 43,063 3.15 % Cash and due from banks 71,949 67,891 102,532 Premises and equipment, net 73,450 71,422 72,887 Goodwill and intangible assets 163,847 124,546 116,645 Other assets 313,925 327,442 256,354 Less: Allowance for credit losses (23,046 ) (18,143 ) (17,755 ) Total assets $ 6,195,946 $ 5,960,484 $ 6,016,267 Liabilities: Interest-bearing demand deposits $ 1,328,520 $ 2,773 0.84 % $ 1,234,981 $ 1,741 0.57 % $ 1,156,200 $ 148 0.05 % Savings deposits 1,365,894 1,942 0.57 % 1,376,317 1,348 0.40 % 1,430,121 182 0.05 % Time deposits (2) 962,299 3,852 1.61 % 902,583 2,601 1.17 % 1,004,356 999 0.40 % Customer repurchase agreements 294,255 2,963 4.04 % 281,861 2,381 3.43 % 288,031 123 0.17 % Long-term debt 65,934 649 3.95 % - - - - - - Total interest-bearing liabilities 4,016,902 12,179 1.22 % 3,795,742 8,071 0.86 % 3,878,708 1,452 0.15 % Noninterest-bearing demand deposits 1,419,771 1,420,676 1,435,256 Other liabilities 116,083 129,411 85,075 Stockholders' equity 643,190 614,655 617,228 Total liabilities and stockholders' equity $ 6,195,946 $ 5,960,484 $ 6,016,267 Net interest income $ 55,757 $ 53,767 $ 41,611 Net yield on earning assets 4.00 % 4.05 % 3.04 % (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 $ 393 $ 518 $ 3 (2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions: Residential real estate $ 78 $ 39 $ 77 Commercial, financial, and agriculture 709 146 118 Installment loans to individuals 8 3 15 Time deposits 154 9 21 $ 949 $ 198 $ 231 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Six Months Ended June 30, 2023 June 30, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,869,375 $ 41,707 4.50 % $ 1,697,727 $ 31,892 3.79 % Commercial, financial, and agriculture (2) 1,866,177 56,001 6.05 % 1,801,999 31,952 3.58 % Installment loans to individuals (2), (3) 63,229 1,648 5.26 % 43,916 1,238 5.68 % Total loans 3,798,781 99,356 5.27 % 3,543,642 65,082 3.70 % Securities: Taxable 1,312,118 23,567 3.62 % 1,238,361 13,770 2.24 % Tax-exempt (4) 188,984 2,674 2.85 % 223,992 3,065 2.76 % Total securities 1,501,102 26,241 3.53 % 1,462,353 16,835 2.32 % Deposits in depository institutions 192,266 4,176 4.38 % 490,445 1,020 0.42 % Total interest-earning assets 5,492,149 129,773 4.76 % 5,496,440 82,937 3.04 % Cash and due from banks 69,931 102,171 Premises and equipment, net 72,441 73,354 Goodwill and intangible assets 144,305 116,818 Other assets 320,646 237,115 Less: Allowance for credit losses (20,608 ) (18,103 ) Total assets $ 6,078,864 $ 6,007,795 Liabilities: Interest-bearing demand deposits $ 1,282,009 $ 4,513 0.71 % $ 1,149,277 $ 278 0.05 % Savings deposits 1,371,077 3,290 0.48 % 1,407,416 357 0.05 % Time deposits (2) 932,606 6,453 1.40 % 1,026,149 2,214 0.44 % Customer repurchase agreements 288,092 5,344 3.74 % 282,228 238 0.17 % Long-term debt 33,149 649 3.95 % - - - Total interest-bearing liabilities 3,906,933 20,249 1.05 % 3,865,070 3,087 0.16 % Noninterest-bearing demand deposits 1,420,221 1,417,060 Other liabilities 122,709 79,610 Stockholders' equity 629,001 646,055 Total liabilities and stockholders' equity $ 6,078,864 $ 6,007,795 Net interest income $ 109,524 $ 79,850 Net yield on earning assets 4.02 % 2.93 % (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 $ 911 $ 301 (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 $ 117 $ 167 Commercial, financial, and agriculture 855 404 Installment loans to individuals 11 34 Time deposits 164 41 $ 1,147 $ 646 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 55,502 $ 53,459 $ 52,045 $ 48,782 $ 41,290 $ 108,961 $ 79,206 Taxable equivalent adjustment 255 308 336 326 321 563 644 Net interest income, fully taxable equivalent $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 41,611 $ 109,524 $ 79,850 Average interest earning assets $ 5,595,821 $ 5,387,326 $ 5,338,507 $ 5,460,409 $ 5,485,604 $ 5,492,149 $ 5,496,440 Net Interest Margin 4.00 % 4.05 % 3.89 % 3.57 % 3.04 % 4.02 % 2.93 % Accretion related to fair value adjustments -0.07 % -0.02 % -0.02 % -0.01 % -0.02 % -0.04 % -0.02 % Net Interest Margin (excluding accretion) 3.93 % 4.03 % 3.87 % 3.56 % 3.02 % 3.98 % 2.91 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.35 % 10.48 % 9.83 % 9.22 % 9.48 % Effect of goodwill and other intangibles, net -2.45 % -2.43 % -1.81 % -1.81 % -1.72 % Tangible common equity to tangible assets 7.90 % 8.05 % 8.02 % 7.41 % 7.76 % Return on average tangible equity ("GAAP") 27.4 % 19.9 % 27.3 % 21.8 % 18.1 % 23.7 % 16.6 % Impact of merger related expenses - 3.6 % - - - 1.8 % - Impact of merger related provision - 1.3 % - - - 0.6 % - Return on tangible equity, excluding merger related expenses and provision 27.4 % 24.8 % 27.3 % 21.8 % 18.1 % 26.2 % 16.6 % Return on assets ("GAAP") 2.12 % 1.63 % 1.63 % 2.08 % 1.83 % 1.89 % 1.47 % Impact of merger related expenses - 0.30 % - - - 0.15 % - Impact of merger related provision - 0.10 % - - - 0.05 % - Return on assets, excluding merger related expenses and provision 2.12 % 2.04 % 2.08 % 1.83 % 1.51 % 2.09 % 1.47 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 21,842 0.56 % 3.68 N/A Natural Gas Distribution 15,798 0.40 % 2.61 N/A Masonry Contractors 25,917 0.66 % 1.13 84 % Sheet Metal Work Manufacturing 24,039 0.61 % 1.57 68 % Beer & Ale Merchant Wholesalers 26,239 0.67 % 3.28 N/A Gasoline Stations with Convenience Stores 52,045 1.33 % 4.19 65 % Lessors of Residential Buildings & Dwellings 378,040 9.64 % 1.89 66 % 1-4 Family 118,752 3.03 % 2.97 72 % Multi-Family 182,374 4.65 % 1.84 66 % Lessors of Nonresidential Buildings 531,263 13.55 % 1.70 65 % Office Buildings 44,593 1.14 % 1.64 62 % Lessors of Mini-Warehouses & Self-Storage Units 48,563 1.24 % 1.62 62 % Assisted Living Facilities 28,554 0.73 % 1.38 57 % Hotels & Motels 312,639 7.98 % 1.43 61 % Average Balance Median Balance Commercial Loans $ 458 $ 100 Commercial Real Estate Loans 497 121 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type June 30, 2023 March 31, 2023 December 31, 2022 Noninterest-Bearing Demand Deposits 17 % 19 % 20 % Interest-Bearing Deposits Demand Deposits 7 % 8 % 10 % Savings Deposits 11 % 11 % 14 % Time Deposits 14 % 14 % 13 % Total Deposits 12 % 13 % 14 % Retail Deposits Noninterest-Bearing 3 % 4 % 5 % Interest-Bearing 10 % 11 % 11 % Total Retail Deposits 9 % 9 % 10 % Commercial Deposits Noninterest-Bearing Deposits 29 % 31 % 32 % Interest-Bearing Deposits 11 % 13 % 16 % Total Commercial Deposits 21 % 23 % 26 % The amounts listed above represent management's best estimate as of the respective period shown. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage 2023 YTD* 16,226 2,989 1.2 % 2022 28,442 4,544 1.9 % 2021 32,800 8,860 3.8 % 2020 30,360 6,740 3.0 % 2019 32,040 3,717 1.7 % 2018* 30,400 4,310 2.2 % 2017 28,525 2,711 1.4 % 2016 28,650 2,820 1.5 % * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018),Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023). View source version on businesswire.com: https://www.businesswire.com/news/home/20230721005652/en/Contacts David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced record quarterly net income of $32.7 million and diluted earnings of $2.16 per share for the quarter ended June 30, 2023. For the second quarter of 2023, the Company achieved a return on assets of 2.12% and a return on tangible equity of 27.4%. Net Interest Income The Company’s net interest income increased approximately $2.0 million, or 3.8%, from $53.5 million during the first quarter of 2023 to $55.5 million during the second quarter of 2023. The Company’s tax equivalent net interest income increased $2.0 million, or 3.7%, from $53.8 million for the first quarter of 2023 to $55.8 million for the second quarter of 2023. The acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank, (“Citizens”), during the first quarter of 2023 added $2.9 million of net interest income during the quarter ended June 30, 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $1.7 million due to an increase in loan yields (net of loan fees and accretion) of 13 basis points and by $0.4 million due to an increase in the yield on deposits in depository institutions of 60 basis points. In addition, net interest income increased $0.6 million due to an increase in balances of deposits in depository institutions from the quarter ended March 31, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (40 basis points) which decreased net interest income by $3.8 million. The Company’s reported net interest margin decreased from 4.05% for the first quarter of 2023 to 4.00% for the second quarter of 2023. Credit Quality The Company’s ratio of nonperforming assets to total loans and other real estate owned remained stable at 0.17%, or $6.5 million, at both March 31, 2023 and June 30, 2023. Total past due loans increased from $5.9 million, or 0.15% of total loans outstanding, at March 31, 2023, to $7.4 million, or 0.19% of total loans outstanding at June 30, 2023. As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.4 million in the second quarter of 2023, compared to no provision for credit losses for the comparable period in 2022, and a provision for credit losses of $2.9 million for the first quarter of 2023. The provision for credit losses in the second quarter was primarily the result of net charge-offs. Non-interest Income Non-interest income was $20.3 million during the quarter ended June 30, 2023, as compared to $17.9 million during the quarter ended June 30, 2022. During the second quarter of 2023, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities as compared to $0.6 million of unrealized fair value losses on the Company’s equity securities during the second quarter of 2022. Exclusive of these items, non-interest income increased $2.1 million, or 11.6%, from $18.5 million for the second quarter of 2022 to $20.6 million for the second quarter of 2023. This increase was largely attributable to an increase of $2.2 million in bank owned life insurance due to higher death benefit proceeds and an increase of $0.2 million, or 11.4%, in trust and investment management fee income. These increases were partially offset by a decrease in other income of $0.3 million and a decrease in service fees of $0.2 million, or 2.3%. Citizens’ contribution to non-interest income for the quarter ended June 30, 2023 was less than $0.1 million. Non-interest Expenses Non-interest expenses increased $4.1 million, or 13.3%, from $30.7 million in the second quarter of 2022 to $34.8 million in the second quarter of 2023. This increase was largely due to an increase in salaries and employee benefits of $2.0 million due to the acquisition of Citizens ($0.6 million), salary adjustments, and increased health insurance cost. In addition, other expenses increased $1.2 million, and FDIC insurance expenses increased $0.3 million. Balance Sheet Trends Loans increased $27.5 million (0.7%) from March 31, 2023 to $3.92 billion at June 30, 2023. Commercial and industrial loans increased $27.0 million (6.9%) and residential real estate loans increased $9.0 million (0.5%) during the quarter ended June 30, 2023. These increases were partially offset by a decrease in commercial real estate loans of $7.8 million. Period-end deposit balances decreased $121.7 million from March 31, 2023, to June 30, 2023. Total average depository balances increased $141.9 million, or 2.9%, from the quarter ended March 31, 2023 to the quarter ended June 30, 2023. This growth was primarily attributable to deposits acquired from Citizens ($226.5 million). Exclusive of these contributions, average depository balances declined $84.6 million, or 1.7%, from the quarter ended March 31, 2023. Average savings deposit balances decreased $64.0 million and average non-interest bearing demand deposit balances decreased $44.8 million. These decreases were partially offset by increases in average interest bearing demand deposit balances of $15.4 million and average time balances of $12.4 million. Income Tax Expense The Company’s effective income tax rate for the second quarter of 2023 was 19.4% compared to 19.8% for the year ended December 31, 2022, and 20.3%, for the quarter ended June 30, 2022. Capitalization and Liquidity The Company’s loan to deposit ratio was 78.2% and its loan to asset ratio was 63.8% at June 30, 2023. The Company maintained investment securities totaling 23.6% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 66.0% of assets at June 30, 2023. Time deposits fund 15.6% of assets at June 30, 2023, with only 11.4% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company. City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of June 30, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, $826.3 million of City National’s investment securities were unpledged at June 30, 2023. The Company continues to be strongly capitalized with tangible equity of $473 million at June 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.9% at June 30, 2023. At June 30, 2023, City National’s Leverage Ratio was 9.36%, its Common Equity Tier I ratio was 14.82%, its Tier I Capital ratio was 14.82%, and its Total Risk-Based Capital ratio was 15.36%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation. On May 31, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable July 31, 2023, to shareholders of record as of July 14, 2023. During the quarter ended June 30, 2023, the Company repurchased 269,000 common shares at a weighted average price of $88.93 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of June 30, 2023, the Company could repurchase 329,000 additional shares under the current program. City National operates 99 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, 2022 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) ongoing uncertainties on the Company’s business, results of operations and financial condition caused by the scope of the recovery of the COVID-19 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; and (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 June 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary June 30, 2023 results and will adjust the amounts if necessary. CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Earnings Net Interest Income (fully taxable equivalent) $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 41,611 $ 109,524 $ 79,850 Net Income available to common shareholders 32,733 24,341 30,672 27,374 22,683 57,074 44,025 Per Share Data Earnings per share available to common shareholders: Basic $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 1.51 $ 3.80 $ 2.92 Diluted 2.16 1.63 2.05 1.83 1.51 3.79 2.92 Weighted average number of shares (in thousands): Basic 14,994 14,818 14,756 14,776 14,888 14,897 14,930 Diluted 15,012 14,844 14,785 14,800 14,909 14,919 14,954 Period-end number of shares (in thousands) 15,007 15,260 14,788 14,856 14,864 15,007 14,864 Cash dividends declared $ 0.65 $ 0.65 $ 0.65 $ 0.65 $ 0.60 $ 1.30 $ 1.20 Book value per share (period-end) $ 42.39 $ 42.66 $ 39.08 $ 36.91 $ 39.83 $ 42.39 $ 39.83 Tangible book value per share (period-end) 31.50 31.91 31.25 29.09 31.99 31.50 31.99 Market data: High closing price $ 97.92 $ 100.27 $ 101.94 $ 90.24 $ 83.07 $ 100.27 $ 85.99 Low closing price 83.57 89.17 89.32 78.40 73.88 83.57 73.88 Period-end closing price 89.99 90.88 93.09 88.69 79.88 89.99 79.88 Average daily volume (in thousands) 80 84 75 58 87 82 73 Treasury share activity: Treasury shares repurchased (in thousands) 269 218 69 9 208 488 246 Average treasury share repurchase price $ 88.93 $ 92.10 $ 93.12 $ 80.24 $ 78.33 $ 90.35 $ 78.29 Key Ratios (percent) Return on average assets 2.12 % 1.63 % 2.08 % 1.83 % 1.51 % 1.89 % 1.47 % Return on average tangible equity 27.4 % 19.9 % 27.3 % 21.8 % 18.1 % 23.7 % 16.6 % Yield on interest earning assets 4.87 % 4.66 % 4.23 % 3.72 % 3.15 % 4.76 % 3.04 % Cost of interest bearing liabilities 1.22 % 0.86 % 0.48 % 0.21 % 0.15 % 1.05 % 0.16 % Net Interest Margin 4.00 % 4.05 % 3.89 % 3.57 % 3.04 % 4.02 % 2.93 % Non-interest income as a percent of total revenue 27.1 % 24.7 % 26.5 % 27.2 % 30.9 % 26.0 % 30.8 % Efficiency Ratio 44.6 % 45.7 % 45.3 % 46.3 % 50.5 % 49.0 % 51.1 % Price/Earnings Ratio (a) 10.40 13.95 11.30 12.08 13.23 11.85 13.67 Capital (period-end) Average Shareholders' Equity to Average Assets 10.38 % 10.31 % 9.57 % 10.32 % 10.26 % Tangible equity to tangible assets 7.90 % 8.05 % 8.02 % 7.41 % 7.76 % Consolidated City Holding Company risk based capital ratios (b): CET I 15.47 % 15.64 % 16.23 % 15.82 % 15.85 % Tier I 15.47 % 15.64 % 16.23 % 15.82 % 15.85 % Total 16.01 % 16.18 % 16.62 % 16.22 % 16.26 % Leverage 9.80 % 10.20 % 10.01 % 9.74 % 9.42 % City National Bank risk based capital ratios (b): CET I 14.82 % 14.08 % 13.88 % 14.68 % 14.80 % Tier I 14.82 % 14.08 % 13.88 % 14.68 % 14.80 % Total 15.36 % 14.63 % 14.28 % 15.07 % 15.21 % Leverage 9.36 % 9.18 % 8.55 % 9.05 % 8.81 % Other (period-end) Branches 99 99 94 94 94 FTE 963 958 909 903 915 Assets per FTE (in thousands) $ 6,383 $ 6,483 $ 6,467 $ 6,588 $ 6,825 Deposits per FTE (in thousands) 5,208 5,362 5,357 5,492 5,621 (a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) June 30, 2023 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) ($ in 000s, except per share data) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Interest Income Interest and fees on loans $ 52,352 $ 47,004 $ 42,963 $ 38,493 $ 33,208 $ 99,356 $ 65,082 Interest on investment securities: Taxable 11,794 11,773 11,119 9,556 7,547 23,567 13,770 Tax-exempt 950 1,162 1,262 1,228 1,205 2,112 2,421 Interest on deposits in depository institutions 2,585 1,591 1,244 1,530 782 4,176 1,020 Total Interest Income 67,681 61,530 56,588 50,807 42,742 129,211 82,293 Interest Expense Interest on deposits 8,567 5,690 3,010 1,585 1,328 14,257 2,849 Interest on short-term borrowings 2,963 2,381 1,533 440 124 5,344 238 Interest on long-term debt 649 - - - - 649 - Total Interest Expense 12,179 8,071 4,543 2,025 1,452 20,250 3,087 Net Interest Income 55,502 53,459 52,045 48,782 41,290 108,961 79,206 Provision for (Recovery of) credit losses 425 2,918 500 730 - 3,343 (756 ) Net Interest Income After Provision for (Recovery of) Credit Losses 55,077 50,541 51,545 48,052 41,290 105,618 79,962 Non-Interest Income Net gains on sale of investment securities - 773 4 - - 773 - Unrealized gains (losses) recognized on equity securities still held (294 ) 361 (262 ) 1 (601 ) 67 (1,324 ) Service charges 6,906 6,563 7,056 7,487 7,067 13,469 13,792 Bankcard revenue 7,190 6,603 6,791 7,052 7,062 13,793 13,506 Trust and investment management fee income 2,339 2,252 2,343 2,158 2,100 4,591 4,297 Bank owned life insurance 3,208 804 1,813 754 978 4,012 2,992 Other income 952 1,326 791 792 1,243 2,278 2,034 Total Non-Interest Income 20,301 18,682 18,536 18,244 17,849 38,983 35,297 Non-Interest Expense Salaries and employee benefits 18,429 17,673 17,148 17,398 16,413 36,102 31,990 Occupancy related expense 2,811 2,640 2,725 2,664 2,620 5,451 5,329 Equipment and software related expense 2,883 3,092 3,341 2,949 2,732 5,975 5,501 FDIC insurance expense 690 445 413 416 409 1,135 844 Advertising 974 760 802 854 951 1,734 1,749 Bankcard expenses 1,736 1,509 1,356 1,405 1,665 3,245 3,271 Postage, delivery, and statement mailings 596 647 597 578 551 1,243 1,187 Office supplies 591 420 441 466 427 1,011 837 Legal and professional fees 558 470 610 532 525 1,028 1,052 Telecommunications 623 606 627 651 754 1,229 1,338 Repossessed asset losses (gains), net of expenses 22 16 54 (3 ) (32 ) 38 8 Merger related expenses - 5,645 268 - - 5,645 - Other expenses 4,848 4,700 4,203 3,591 3,674 9,548 7,110 Total Non-Interest Expense 34,761 38,623 32,585 31,501 30,689 73,384 60,216 Income Before Income Taxes 40,617 30,600 37,496 34,795 28,450 71,217 55,043 Income tax expense 7,884 6,259 6,824 7,421 5,767 14,143 11,018 Net Income Available to Common Shareholders $ 32,733 $ 24,341 $ 30,672 $ 27,374 $ 22,683 $ 57,074 $ 44,025 Distributed earnings allocated to common shareholders $ 9,668 $ 9,833 $ 9,521 $ 9,564 $ 8,837 $ 19,336 $ 17,671 Undistributed earnings allocated to common shareholders 22,774 14,294 20,857 17,555 13,643 37,233 25,951 Net earnings allocated to common shareholders $ 32,442 $ 24,127 $ 30,378 $ 27,119 $ 22,480 $ 56,569 $ 43,622 Average common shares outstanding 14,994 14,818 14,756 14,776 14,888 14,897 14,930 Shares for diluted earnings per share 15,012 14,844 14,785 14,800 14,909 14,919 14,954 Basic earnings per common share $ 2.16 $ 1.63 $ 2.06 $ 1.84 $ 1.51 $ 3.80 $ 2.92 Diluted earnings per common share $ 2.16 $ 1.63 $ 2.05 $ 1.83 $ 1.51 $ 3.79 $ 2.92 CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Assets Cash and due from banks $ 66,350 $ 69,804 $ 68,333 $ 65,051 $ 90,449 Interest-bearing deposits in depository institutions 164,931 233,006 131,667 233,302 606,530 Cash and cash equivalents 231,281 302,810 200,000 298,353 696,979 Investment securities available-for-sale, at fair value 1,419,933 1,456,259 1,505,520 1,489,392 1,497,227 Other securities 29,262 24,728 23,807 24,372 24,383 Total investment securities 1,449,195 1,480,987 1,529,327 1,513,764 1,521,610 Gross loans 3,922,142 3,894,686 3,646,258 3,628,752 3,566,758 Allowance for credit losses (22,751 ) (22,724 ) (17,108 ) (17,011 ) (17,015 ) Net loans 3,899,391 3,871,962 3,629,150 3,611,741 3,549,743 Bank owned life insurance 117,173 124,238 120,674 121,283 120,528 Premises and equipment, net 73,118 73,430 70,786 71,686 72,388 Accrued interest receivable 17,973 18,395 18,287 17,256 16,342 Net deferred tax assets 46,944 42,146 44,884 49,888 30,802 Goodwill and intangible assets 163,426 164,099 115,735 116,081 116,428 Other assets 148,333 132,715 149,263 147,716 118,375 Total Assets $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 $ 6,243,195 Liabilities Deposits: Noninterest-bearing $ 1,373,106 $ 1,420,990 $ 1,351,415 $ 1,429,281 $ 1,531,660 Interest-bearing: Demand deposits 1,337,445 1,356,017 1,233,482 1,160,970 1,189,056 Savings deposits 1,343,571 1,397,523 1,396,869 1,427,785 1,435,645 Time deposits 960,941 962,235 888,100 939,769 985,567 Total deposits 5,015,063 5,136,765 4,869,866 4,957,805 5,141,928 Short-term borrowings Customer repurchase agreements 271,714 293,256 290,964 304,807 402,368 Long-term debt 100,000 - - - - Other liabilities 123,865 129,711 139,424 136,868 106,906 Total Liabilities 5,510,642 5,559,732 5,300,254 5,399,480 5,651,202 Stockholders' Equity Preferred stock - - - - - Common stock 47,619 47,619 47,619 47,619 47,619 Capital surplus 176,746 177,529 170,980 170,138 169,557 Retained earnings 744,248 721,727 706,696 685,657 667,933 Cost of common stock in treasury (201,973 ) (179,436 ) (215,955 ) (209,644 ) (209,133 ) Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale (127,026 ) (112,967 ) (128,066 ) (141,997 ) (80,498 ) Underfunded pension liability (3,422 ) (3,422 ) (3,422 ) (3,485 ) (3,485 ) Total Accumulated Other Comprehensive (Loss) Income (130,448 ) (116,389 ) (131,488 ) (145,482 ) (83,983 ) Total Stockholders' Equity 636,192 651,050 577,852 548,288 591,993 Total Liabilities and Stockholders' Equity $ 6,146,834 $ 6,210,782 $ 5,878,106 $ 5,947,768 $ 6,243,195 Regulatory Capital Total CET 1 capital $ 605,661 $ 606,675 $ 598,068 $ 582,213 $ 564,158 Total tier 1 capital 605,661 606,675 598,068 582,213 564,158 Total risk-based capital 626,730 627,718 612,654 596,708 578,657 Total risk-weighted assets 3,913,870 3,878,994 3,685,207 3,679,511 3,558,249 CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Commercial and industrial $ 417,847 $ 390,861 $ 373,890 $ 375,735 $ 360,481 1-4 Family 123,701 119,017 116,192 109,710 108,765 Hotels 324,745 327,554 340,404 355,001 337,910 Multi-family 191,483 195,042 174,786 186,440 203,856 Non Residential Non-Owner Occupied 673,921 679,782 585,964 569,369 551,240 Non Residential Owner Occupied 222,852 223,096 174,961 177,673 180,188 Commercial real estate (1) 1,536,702 1,544,491 1,392,307 1,398,193 1,381,959 Residential real estate (2) 1,746,618 1,737,604 1,693,523 1,678,770 1,651,005 Home equity 151,012 151,341 134,317 130,837 125,742 Consumer 65,201 66,994 48,806 41,902 44,580 DDA overdrafts 4,762 3,395 3,415 3,315 2,991 Gross Loans $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 $ 3,566,758 Construction loans included in: (1) - Commercial real estate loans $ 3,361 $ 4,715 $ 4,130 $ 4,125 $ 6,767 (2) - Residential real estate loans 20,470 25,224 21,122 19,333 18,751 CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Allowance for Credit Losses Balance at beginning of period $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 17,280 $ 17,108 $ 18,166 Charge-offs: Commercial and industrial (69 ) - (120 ) (408 ) - (69 ) (34 ) Commercial real estate (117 ) (3 ) (31 ) - (24 ) (120 ) (24 ) Residential real estate (20 ) (32 ) (66 ) (93 ) (56 ) (52 ) (106 ) Home equity (200 ) (67 ) (189 ) (71 ) (19 ) (267 ) (19 ) Consumer (109 ) (62 ) (15 ) (16 ) (9 ) (171 ) (32 ) DDA overdrafts (357 ) (450 ) (670 ) (719 ) (604 ) (807 ) (1,235 ) Total charge-offs (872 ) (614 ) (1,091 ) (1,307 ) (712 ) (1,486 ) (1,450 ) Recoveries: Commercial and industrial 86 83 94 149 32 169 91 Commercial real estate 28 158 120 9 25 186 78 Residential real estate 5 10 49 1 4 15 49 Home equity 12 4 34 2 3 16 20 Consumer 28 23 31 29 19 51 47 DDA overdrafts 315 398 360 383 364 713 770 Total recoveries 474 676 688 573 447 1,150 1,055 Net recoveries (charge-offs) (398 ) 62 (403 ) (734 ) (265 ) (336 ) (395 ) Provision for (recovery of) credit losses 425 2,918 500 730 - 3,343 (756 ) PCD Loan Reserves - 2,811 - - - 2,811 - Adoption of ASU 2022-02 - (175 ) - - - (175 ) - Balance at end of period $ 22,751 $ 22,724 $ 17,108 $ 17,011 $ 17,015 $ 22,751 $ 17,015 Loans outstanding $ 3,922,142 $ 3,894,686 $ 3,646,258 $ 3,628,752 $ 3,566,758 Allowance as a percent of loans outstanding 0.58 % 0.58 % 0.47 % 0.47 % 0.48 % Allowance as a percent of non-performing loans 405.5 % 400.1 % 317.3 % 320.5 % 292.6 % Average loans outstanding $ 3,896,284 $ 3,700,194 $ 3,648,996 $ 3,596,523 $ 3,559,713 $ 3,798,781 $ 3,543,642 Net charge-offs (annualized) as a percent of average loans outstanding 0.04 % -0.01 % 0.04 % 0.08 % 0.03 % 0.02 % 0.02 % CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 Nonaccrual Loans Residential real estate $ 2,774 $ 2,700 $ 1,969 $ 2,089 $ 1,561 Home equity 24 35 55 140 54 Commercial and industrial 741 994 1,015 785 1,360 Commercial real estate 1,821 1,931 2,166 2,293 2,783 Consumer 36 19 - - - Total nonaccrual loans 5,396 5,679 5,205 5,307 5,758 Accruing loans past due 90 days or more 215 - 187 - 58 Total non-performing loans 5,611 5,679 5,392 5,307 5,816 Other real estate owned 874 843 909 1,071 946 Total non-performing assets $ 6,485 $ 6,522 $ 6,301 $ 6,378 $ 6,762 Non-performing assets as a percent of loans and other real estate owned 0.17 % 0.17 % 0.17 % 0.18 % 0.19 % Past Due Loans Residential real estate $ 5,884 $ 4,783 $ 7,091 $ 3,452 $ 5,298 Home equity 784 551 650 521 282 Commercial and industrial 142 98 234 221 130 Commercial real estate 238 148 710 221 46 Consumer 57 3 100 27 49 DDA overdrafts 341 276 391 561 430 Total past due loans $ 7,446 $ 5,859 $ 9,176 $ 5,003 $ 6,235 Total past due loans as a percent of loans outstanding 0.19 % 0.15 % 0.25 % 0.14 % 0.17 % CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended June 30, 2023 March 31, 2023 June 30, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,894,269 $ 21,702 4.60 % $ 1,840,828 $ 20,007 4.41 % $ 1,730,617 $ 16,156 3.74 % Commercial, financial, and agriculture (2) 1,933,238 29,754 6.17 % 1,795,309 26,248 5.93 % 1,785,511 16,421 3.69 % Installment loans to individuals (2), (3) 68,777 898 5.24 % 64,057 749 4.74 % 43,585 631 5.81 % Total loans 3,896,284 52,354 5.39 % 3,700,194 47,004 5.15 % 3,559,713 33,208 3.74 % Securities: Taxable 1,301,063 11,794 3.64 % 1,322,060 11,773 3.61 % 1,269,049 7,548 2.39 % Tax-exempt (4) 174,410 1,203 2.77 % 204,957 1,471 2.91 % 215,603 1,526 2.84 % Total securities 1,475,473 12,997 3.53 % 1,527,017 13,244 3.52 % 1,484,652 9,074 2.45 % Deposits in depository institutions 224,064 2,585 4.63 % 160,115 1,590 4.03 % 441,239 781 0.71 % Total interest-earning assets 5,595,821 67,936 4.87 % 5,387,326 61,838 4.66 % 5,485,604 43,063 3.15 % Cash and due from banks 71,949 67,891 102,532 Premises and equipment, net 73,450 71,422 72,887 Goodwill and intangible assets 163,847 124,546 116,645 Other assets 313,925 327,442 256,354 Less: Allowance for credit losses (23,046 ) (18,143 ) (17,755 ) Total assets $ 6,195,946 $ 5,960,484 $ 6,016,267 Liabilities: Interest-bearing demand deposits $ 1,328,520 $ 2,773 0.84 % $ 1,234,981 $ 1,741 0.57 % $ 1,156,200 $ 148 0.05 % Savings deposits 1,365,894 1,942 0.57 % 1,376,317 1,348 0.40 % 1,430,121 182 0.05 % Time deposits (2) 962,299 3,852 1.61 % 902,583 2,601 1.17 % 1,004,356 999 0.40 % Customer repurchase agreements 294,255 2,963 4.04 % 281,861 2,381 3.43 % 288,031 123 0.17 % Long-term debt 65,934 649 3.95 % - - - - - - Total interest-bearing liabilities 4,016,902 12,179 1.22 % 3,795,742 8,071 0.86 % 3,878,708 1,452 0.15 % Noninterest-bearing demand deposits 1,419,771 1,420,676 1,435,256 Other liabilities 116,083 129,411 85,075 Stockholders' equity 643,190 614,655 617,228 Total liabilities and stockholders' equity $ 6,195,946 $ 5,960,484 $ 6,016,267 Net interest income $ 55,757 $ 53,767 $ 41,611 Net yield on earning assets 4.00 % 4.05 % 3.04 % (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 $ 393 $ 518 $ 3 (2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions: Residential real estate $ 78 $ 39 $ 77 Commercial, financial, and agriculture 709 146 118 Installment loans to individuals 8 3 15 Time deposits 154 9 21 $ 949 $ 198 $ 231 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Six Months Ended June 30, 2023 June 30, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2) $ 1,869,375 $ 41,707 4.50 % $ 1,697,727 $ 31,892 3.79 % Commercial, financial, and agriculture (2) 1,866,177 56,001 6.05 % 1,801,999 31,952 3.58 % Installment loans to individuals (2), (3) 63,229 1,648 5.26 % 43,916 1,238 5.68 % Total loans 3,798,781 99,356 5.27 % 3,543,642 65,082 3.70 % Securities: Taxable 1,312,118 23,567 3.62 % 1,238,361 13,770 2.24 % Tax-exempt (4) 188,984 2,674 2.85 % 223,992 3,065 2.76 % Total securities 1,501,102 26,241 3.53 % 1,462,353 16,835 2.32 % Deposits in depository institutions 192,266 4,176 4.38 % 490,445 1,020 0.42 % Total interest-earning assets 5,492,149 129,773 4.76 % 5,496,440 82,937 3.04 % Cash and due from banks 69,931 102,171 Premises and equipment, net 72,441 73,354 Goodwill and intangible assets 144,305 116,818 Other assets 320,646 237,115 Less: Allowance for credit losses (20,608 ) (18,103 ) Total assets $ 6,078,864 $ 6,007,795 Liabilities: Interest-bearing demand deposits $ 1,282,009 $ 4,513 0.71 % $ 1,149,277 $ 278 0.05 % Savings deposits 1,371,077 3,290 0.48 % 1,407,416 357 0.05 % Time deposits (2) 932,606 6,453 1.40 % 1,026,149 2,214 0.44 % Customer repurchase agreements 288,092 5,344 3.74 % 282,228 238 0.17 % Long-term debt 33,149 649 3.95 % - - - Total interest-bearing liabilities 3,906,933 20,249 1.05 % 3,865,070 3,087 0.16 % Noninterest-bearing demand deposits 1,420,221 1,417,060 Other liabilities 122,709 79,610 Stockholders' equity 629,001 646,055 Total liabilities and stockholders' equity $ 6,078,864 $ 6,007,795 Net interest income $ 109,524 $ 79,850 Net yield on earning assets 4.02 % 2.93 % (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 $ 911 $ 301 (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 $ 117 $ 167 Commercial, financial, and agriculture 855 404 Installment loans to individuals 11 34 Time deposits 164 41 $ 1,147 $ 646 (3) Includes the Company’s consumer and DDA overdrafts loan categories. (4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited) ($ in 000s, except per share data) Three Months Ended Six Months Ended June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 June 30, 2023 June 30, 2022 Net Interest Income/Margin Net interest income ("GAAP") $ 55,502 $ 53,459 $ 52,045 $ 48,782 $ 41,290 $ 108,961 $ 79,206 Taxable equivalent adjustment 255 308 336 326 321 563 644 Net interest income, fully taxable equivalent $ 55,757 $ 53,767 $ 52,381 $ 49,108 $ 41,611 $ 109,524 $ 79,850 Average interest earning assets $ 5,595,821 $ 5,387,326 $ 5,338,507 $ 5,460,409 $ 5,485,604 $ 5,492,149 $ 5,496,440 Net Interest Margin 4.00 % 4.05 % 3.89 % 3.57 % 3.04 % 4.02 % 2.93 % Accretion related to fair value adjustments -0.07 % -0.02 % -0.02 % -0.01 % -0.02 % -0.04 % -0.02 % Net Interest Margin (excluding accretion) 3.93 % 4.03 % 3.87 % 3.56 % 3.02 % 3.98 % 2.91 % Tangible Equity Ratio (period end) Equity to assets ("GAAP") 10.35 % 10.48 % 9.83 % 9.22 % 9.48 % Effect of goodwill and other intangibles, net -2.45 % -2.43 % -1.81 % -1.81 % -1.72 % Tangible common equity to tangible assets 7.90 % 8.05 % 8.02 % 7.41 % 7.76 % Return on average tangible equity ("GAAP") 27.4 % 19.9 % 27.3 % 21.8 % 18.1 % 23.7 % 16.6 % Impact of merger related expenses - 3.6 % - - - 1.8 % - Impact of merger related provision - 1.3 % - - - 0.6 % - Return on tangible equity, excluding merger related expenses and provision 27.4 % 24.8 % 27.3 % 21.8 % 18.1 % 26.2 % 16.6 % Return on assets ("GAAP") 2.12 % 1.63 % 1.63 % 2.08 % 1.83 % 1.89 % 1.47 % Impact of merger related expenses - 0.30 % - - - 0.15 % - Impact of merger related provision - 0.10 % - - - 0.05 % - Return on assets, excluding merger related expenses and provision 2.12 % 2.04 % 2.08 % 1.83 % 1.51 % 2.09 % 1.47 % Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction $ 21,842 0.56 % 3.68 N/A Natural Gas Distribution 15,798 0.40 % 2.61 N/A Masonry Contractors 25,917 0.66 % 1.13 84 % Sheet Metal Work Manufacturing 24,039 0.61 % 1.57 68 % Beer & Ale Merchant Wholesalers 26,239 0.67 % 3.28 N/A Gasoline Stations with Convenience Stores 52,045 1.33 % 4.19 65 % Lessors of Residential Buildings & Dwellings 378,040 9.64 % 1.89 66 % 1-4 Family 118,752 3.03 % 2.97 72 % Multi-Family 182,374 4.65 % 1.84 66 % Lessors of Nonresidential Buildings 531,263 13.55 % 1.70 65 % Office Buildings 44,593 1.14 % 1.64 62 % Lessors of Mini-Warehouses & Self-Storage Units 48,563 1.24 % 1.62 62 % Assisted Living Facilities 28,554 0.73 % 1.38 57 % Hotels & Motels 312,639 7.98 % 1.43 61 % Average Balance Median Balance Commercial Loans $ 458 $ 100 Commercial Real Estate Loans 497 121 CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type June 30, 2023 March 31, 2023 December 31, 2022 Noninterest-Bearing Demand Deposits 17 % 19 % 20 % Interest-Bearing Deposits Demand Deposits 7 % 8 % 10 % Savings Deposits 11 % 11 % 14 % Time Deposits 14 % 14 % 13 % Total Deposits 12 % 13 % 14 % Retail Deposits Noninterest-Bearing 3 % 4 % 5 % Interest-Bearing 10 % 11 % 11 % Total Retail Deposits 9 % 9 % 10 % Commercial Deposits Noninterest-Bearing Deposits 29 % 31 % 32 % Interest-Bearing Deposits 11 % 13 % 16 % Total Commercial Deposits 21 % 23 % 26 % The amounts listed above represent management's best estimate as of the respective period shown. CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage 2023 YTD* 16,226 2,989 1.2 % 2022 28,442 4,544 1.9 % 2021 32,800 8,860 3.8 % 2020 30,360 6,740 3.0 % 2019 32,040 3,717 1.7 % 2018* 30,400 4,310 2.2 % 2017 28,525 2,711 1.4 % 2016 28,650 2,820 1.5 % * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018),Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023). View source version on businesswire.com: https://www.businesswire.com/news/home/20230721005652/en/