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City Holding Company Announces Third Quarter Results

City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $27.4 million and diluted earnings of $1.83 per share for the quarter ended September 30, 2022. For the third quarter of 2022, the Company achieved a return on assets of 1.83% and a return on tangible equity of 21.8%.

Net Interest Income

The Company’s net interest income increased from $41.3 million during the second quarter of 2022 to $48.8 million during the third quarter of 2022. The Company’s tax equivalent net interest income increased from $41.6 million for the second quarter of 2022 to $49.1 million for the third quarter of 2022. Net interest income increased by $4.7 million and $1.5 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 47 basis points and 35 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 139 basis points which increased net interest income by $1.0 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (6 basis points) which decreased net interest income by $0.6 million. The Company’s reported net interest margin increased from 3.04% for the second quarter of 2022 to 3.57% for the third quarter of 2022.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased modestly from 0.19%, or $6.8 million, at June 30, 2022 to 0.18%, or $6.4 million, at September 30, 2022. Total past due loans decreased from $6.2 million, or 0.17% of total loans outstanding, at June 30, 2022 to $5.0 million, or 0.14% of total loans outstanding, at September 30, 2022.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a provision for credit losses of $0.7 million in the third quarter of 2022, compared to a recovery of credit losses of $0.7 million for the comparable period in 2021 and no provision for credit losses for the second quarter of 2022. The provision for credit losses in the third quarter was a result of net charge-offs and loan growth.

Non-interest Income

Non-interest income was $18.2 million for the third quarter of 2022 as compared to $17.9 million for the third quarter of 2021. During the third quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities. Exclusive of these gains, non-interest income increased from $17.8 million for the third quarter of 2021 to $18.2 million for the third quarter of 2022. This increase was largely attributable to higher service charges ($0.8 million, or 11.6%) and bankcard revenues ($0.3 million, or 3.8%). These increases were partially offset by a decrease in other income ($0.6 million).

Non-interest Expenses

Non-interest expenses increased $2.3 million (8.0%), from $29.2 million in the third quarter of 2021 to $31.5 million in the third quarter of 2022. This increase was primarily due to an increase in salaries and employee benefits of $2.1 million due to increased health insurance, increased incentive compensation and higher salary adjustments during 2022.

Balance Sheet Trends

Loans increased $62.0 million (1.7%) from June 30, 2022 to September 30, 2022, to $3.63 billion. Residential real estate loans increased $27.8 million (1.7%), commercial real estate loans increased $16.2 million (1.2%), commercial and industrial loans increased $15.3 million (4.2%), and home equity loans increased $5.1 million (4.1%). These increases were partially offset by a decrease in consumer loans of $2.7 million.

Total average depository balances decreased $23.7 million, or 0.5%, from the quarter ended June 30, 2022 to the quarter ended September 30, 2022. Average time deposit balances decreased $39.9 million and average interest-bearing demand deposit balances decreased $5.1 million. These increases were partially offset by an increase in noninterest-bearing demand deposit balances of $19.9 million.

Income Tax Expense

The Company’s effective income tax rate for the third quarter of 2022 was 21.3% compared to 20.8% for the year ended December 31, 2021, and 21.6% for the quarter ended September 30, 2021.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 73.2% and the loan to asset ratio was 61.0% at September 30, 2022. The Company maintained investment securities totaling 25.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 67.6% of assets at September 30, 2022. Time deposits fund 15.8% of assets at September 30, 2022, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.

The Company continues to be strongly capitalized with tangible equity of $432 million at September 30, 2022. Due primarily to unrealized security losses during the nine months ended September 30, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 7.4% at September 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At September 30, 2022, City National Bank’s Leverage Ratio was 9.05%, its Common Equity Tier I ratio was 14.68%, its Tier I Capital ratio was 14.68%, and its Total Risk-Based Capital ratio was 15.07%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On September 28, 2022, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable October 31, 2022, to shareholders of record as of October 14, 2022. This represents an 8.3% increase from the $0.60 per share dividend paid on July 29, 2022. During the quarter ended September 30, 2022, the Company repurchased 9,000 common shares at a weighted average price of $80.24 as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2022, the Company could repurchase approximately 886,000 additional shares under the plan.

City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio.

Forward-Looking Information

This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its September 30, 2022 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2022 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
September 30,

2022
September 30,

2021
 
Earnings
Net Interest Income (fully taxable equivalent)

$

49,108

 

$

41,611

$

38,239

 

$

40,956

 

$

39,822

 

$

128,961

$

115,950

 

Net Income available to common shareholders

 

27,374

 

 

22,683

 

 

21,342

 

 

23,386

 

 

22,732

 

 

71,408

 

 

64,694

 

 
Per Share Data
Earnings per share available to common shareholders:
Basic

$

1.84

 

$

1.51

 

$

1.41

 

$

1.54

 

$

1.47

 

$

4.75

 

$

4.13

 

Diluted

 

1.83

 

 

1.51

 

 

1.41

 

 

1.54

 

 

1.47

 

 

4.75

 

 

4.13

 

Weighted average number of shares (in thousands):
Basic

 

14,776

 

 

14,888

 

 

14,974

 

 

15,026

 

 

15,279

 

 

14,878

 

 

15,501

 

Diluted

 

14,800

 

 

14,909

 

 

15,002

 

 

15,056

 

 

15,302

 

 

14,901

 

 

15,526

 

Period-end number of shares (in thousands)

 

14,856

 

 

14,864

 

 

15,045

 

 

15,062

 

 

15,192

 

 

14,856

 

 

15,192

 

Cash dividends declared

$

0.65

 

$

0.60

 

$

0.60

 

$

0.60

 

$

0.58

 

$

1.85

 

$

1.74

 

Book value per share (period-end)

$

36.91

 

$

39.83

 

$

42.03

 

$

45.22

 

$

44.58

 

$

36.91

 

$

44.58

 

Tangible book value per share (period-end)

 

29.09

 

 

31.99

 

 

34.27

 

 

37.44

 

 

36.85

 

 

29.09

 

 

36.85

 

Market data:
High closing price

$

90.24

 

$

83.07

 

$

85.99

 

$

83.14

 

$

79.99

 

$

90.24

 

$

87.41

 

Low closing price

 

78.40

 

 

73.88

 

 

76.82

 

 

76.52

 

 

72.29

 

 

73.88

 

 

69.05

 

Period-end closing price

 

88.69

 

 

79.88

 

 

78.70

 

 

81.79

 

 

77.91

 

 

88.69

 

 

77.91

 

Average daily volume (in thousands)

 

58

 

 

87

 

 

59

 

 

52

 

 

53

 

 

68

 

 

59

 

Treasury share activity:
Treasury shares repurchased (in thousands)

 

9

 

 

208

 

 

38

 

 

131

 

 

337

 

 

255

 

 

629

 

Average treasury share repurchase price

$

80.24

 

$

78.33

 

$

78.09

 

$

78.93

 

$

75.65

 

$

78.36

 

$

76.85

 

 
Key Ratios (percent)
Return on average assets

 

1.83

%

 

1.51

%

 

1.42

%

 

1.56

%

 

1.53

%

 

1.59

%

 

1.47

%

Return on average tangible equity

 

21.8

%

 

18.1

%

 

15.3

%

 

16.7

%

 

15.7

%

 

18.3

%

 

14.8

%

Yield on interest earning assets

 

3.72

%

 

3.15

%

 

2.94

%

 

3.08

%

 

3.04

%

 

3.27

%

 

3.07

%

Cost of interest bearing liabilities

 

0.21

%

 

0.15

%

 

0.17

%

 

0.19

%

 

0.22

%

 

0.18

%

 

0.28

%

Net Interest Margin

 

3.57

%

 

3.04

%

 

2.82

%

 

2.94

%

 

2.89

%

 

3.14

%

 

2.87

%

Non-interest income as a percent of total revenue

 

27.2

%

 

30.9

%

 

32.4

%

 

30.2

%

 

31.1

%

 

29.5

%

 

31.0

%

Efficiency Ratio

 

46.3

%

 

50.5

%

 

51.7

%

 

48.3

%

 

50.0

%

 

49.3

%

 

52.3

%

Price/Earnings Ratio (a)

 

12.08

 

 

13.23

 

 

13.93

 

 

13.27

 

 

13.22

 

 

13.99

 

 

14.14

 

 
Capital (period-end)
Average Shareholders' Equity to Average Assets

 

10.32

%

 

10.26

%

 

11.25

%

 

11.25

%

 

11.69

%

Tangible equity to tangible assets

 

7.41

%

 

7.76

%

 

8.75

%

 

9.58

%

 

9.59

%

Consolidated City Holding Company risk based capital ratios (b):
CET I

 

15.82

%

 

15.85

%

 

16.18

%

 

16.08

%

 

16.11

%

Tier I

 

15.82

%

 

15.85

%

 

16.18

%

 

16.08

%

 

16.11

%

Total

 

16.22

%

 

16.26

%

 

16.60

%

 

16.51

%

 

16.56

%

Leverage

 

9.74

%

 

9.42

%

 

9.58

%

 

9.44

%

 

9.46

%

City National Bank risk based capital ratios (b):
CET I

 

14.68

%

 

14.80

%

 

14.82

%

 

14.35

%

 

14.76

%

Tier I

 

14.68

%

 

14.80

%

 

14.82

%

 

14.35

%

 

14.76

%

Total

 

15.07

%

 

15.21

%

 

15.24

%

 

14.78

%

 

15.21

%

Leverage

 

9.05

%

 

8.81

%

 

8.80

%

 

8.45

%

 

8.73

%

 
Other (period-end)
Branches

 

94

 

 

94

 

 

94

 

 

94

 

 

94

 

FTE

 

903

 

 

915

 

 

897

 

 

905

 

 

921

 

 
Assets per FTE (in thousands)

$

6,588

 

$

6,825

 

$

6,703

 

$

6,637

 

$

6,463

 

Deposits per FTE (in thousands)

 

5,492

 

 

5,621

 

 

5,574

 

 

5,445

 

 

5,308

 

 
 
(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) September 30, 2022 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
 
Three Months Ended Nine Months Ended
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
September 30,

2022
September 30,

2021
 
Interest Income
Interest and fees on loans

$

38,493

 

$

33,208

 

$

31,874

 

$

35,277

 

$

33,961

 

$

103,575

 

$

101,399

 

Interest on investment securities:
Taxable

 

9,556

 

 

7,547

 

 

6,223

 

 

5,753

 

 

6,144

 

 

23,327

 

 

17,318

 

Tax-exempt

 

1,228

 

 

1,205

 

 

1,216

 

 

1,226

 

 

1,257

 

 

3,650

 

 

3,801

 

Interest on deposits in depository institutions

 

1,530

 

 

782

 

 

238

 

 

217

 

 

196

 

 

2,549

 

 

476

 

Total Interest Income

 

50,807

 

 

42,742

 

 

39,551

 

 

42,473

 

 

41,558

 

 

133,101

 

 

122,994

 

 
Interest Expense
Interest on deposits

 

1,585

 

 

1,328

 

 

1,521

 

 

1,710

 

 

1,955

 

 

4,433

 

 

7,695

 

Interest on short-term borrowings

 

440

 

 

124

 

 

114

 

 

132

 

 

115

 

 

677

 

 

357

 

Total Interest Expense

 

2,025

 

 

1,452

 

 

1,635

 

 

1,842

 

 

2,070

 

 

5,110

 

 

8,052

 

Net Interest Income

 

48,782

 

 

41,290

 

 

37,916

 

 

40,631

 

 

39,488

 

 

127,991

 

 

114,942

 

Provision for (Recovery of) credit losses

 

730

 

 

-

 

 

(756

)

 

-

 

 

(725

)

 

(26

)

 

(3,165

)

Net Interest Income After Provision for (Recovery of) Credit Losses

 

48,052

 

 

41,290

 

 

38,672

 

 

40,631

 

 

40,213

 

 

128,017

 

 

118,107

 

 
Non-Interest Income
Net gains on sale of investment securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

312

 

Unrealized gains (losses) recognized on equity securities still held

 

1

 

 

(601

)

 

(723

)

 

52

 

 

93

 

 

(1,322

)

 

452

 

Service charges

 

7,487

 

 

7,067

 

 

6,725

 

 

7,057

 

 

6,706

 

 

21,281

 

 

18,482

 

Bankcard revenue

 

7,052

 

 

7,062

 

 

6,444

 

 

6,762

 

 

6,791

 

 

20,558

 

 

20,225

 

Trust and investment management fee income

 

2,158

 

 

2,100

 

 

2,197

 

 

2,198

 

 

2,172

 

 

6,455

 

 

6,217

 

Bank owned life insurance

 

754

 

 

978

 

 

2,014

 

 

748

 

 

747

 

 

3,746

 

 

3,147

 

Other income

 

792

 

 

1,243

 

 

791

 

 

799

 

 

1,438

 

 

2,825

 

 

3,190

 

Total Non-Interest Income

 

18,244

 

 

17,849

 

 

17,448

 

 

17,616

 

 

17,947

 

 

53,543

 

 

52,025

 

 
Non-Interest Expense
Salaries and employee benefits

 

17,398

 

 

16,413

 

 

15,577

 

 

15,299

 

 

15,321

 

 

49,386

 

 

46,551

 

Occupancy related expense

 

2,664

 

 

2,620

 

 

2,709

 

 

2,429

 

 

2,507

 

 

7,993

 

 

7,654

 

Equipment and software related expense

 

2,949

 

 

2,732

 

 

2,769

 

 

2,733

 

 

2,554

 

 

8,452

 

 

7,753

 

FDIC insurance expense

 

416

 

 

409

 

 

435

 

 

400

 

 

396

 

 

1,259

 

 

1,183

 

Advertising

 

854

 

 

951

 

 

798

 

 

582

 

 

804

 

 

2,603

 

 

2,509

 

Bankcard expenses

 

1,405

 

 

1,665

 

 

1,606

 

 

1,576

 

 

1,549

 

 

4,676

 

 

4,879

 

Postage, delivery, and statement mailings

 

578

 

 

551

 

 

636

 

 

590

 

 

573

 

 

1,765

 

 

1,733

 

Office supplies

 

466

 

 

427

 

 

410

 

 

378

 

 

406

 

 

1,303

 

 

1,169

 

Legal and professional fees

 

532

 

 

525

 

 

527

 

 

405

 

 

610

 

 

1,584

 

 

1,874

 

Telecommunications

 

651

 

 

754

 

 

584

 

 

702

 

 

790

 

 

1,988

 

 

2,156

 

Repossessed asset (gains) losses, net of expenses

 

(3

)

 

(32

)

 

40

 

 

(29

)

 

(108

)

 

4

 

 

(28

)

Other expenses

 

3,591

 

 

3,674

 

 

3,436

 

 

3,559

 

 

3,776

 

 

10,701

 

 

11,128

 

Total Non-Interest Expense

 

31,501

 

 

30,689

 

 

29,527

 

 

28,624

 

 

29,178

 

 

91,714

 

 

88,561

 

Income Before Income Taxes

 

34,795

 

 

28,450

 

 

26,593

 

 

29,623

 

 

28,982

 

 

89,846

 

 

81,571

 

Income tax expense

 

7,421

 

 

5,767

 

 

5,251

 

 

6,237

 

 

6,250

 

 

18,438

 

 

16,877

 

Net Income Available to Common Shareholders

$

27,374

 

$

22,683

 

$

21,342

 

$

23,386

 

$

22,732

 

$

71,408

 

$

64,694

 

 
Distributed earnings allocated to common shareholders

$

9,564

 

$

8,837

 

$

8,943

 

$

8,949

 

$

8,726

 

$

27,220

 

$

26,177

 

Undistributed earnings allocated to common shareholders

 

17,555

 

 

13,643

 

 

12,199

 

 

14,211

 

 

13,786

 

 

43,509

 

 

37,899

 

Net earnings allocated to common shareholders

$

27,119

 

$

22,480

 

$

21,142

 

$

23,160

 

$

22,512

 

$

70,729

 

$

64,076

 

 
Average common shares outstanding

 

14,776

 

 

14,888

 

 

14,974

 

 

15,026

 

 

15,279

 

 

14,878

 

 

15,501

 

Shares for diluted earnings per share

 

14,800

 

 

14,909

 

 

15,002

 

 

15,056

 

 

15,302

 

 

14,901

 

 

15,526

 

 
Basic earnings per common share

$

1.84

 

$

1.51

 

$

1.41

 

$

1.54

 

$

1.47

 

$

4.75

 

$

4.13

 

Diluted earnings per common share

$

1.83

 

$

1.51

 

$

1.41

 

$

1.54

 

$

1.47

 

$

4.75

 

$

4.13

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
 
Assets
Cash and due from banks

$

65,051

 

$

90,449

 

$

100,877

 

$

101,804

 

$

103,841

 

Interest-bearing deposits in depository institutions

 

233,302

 

 

606,530

 

 

497,171

 

 

532,827

 

 

535,708

 

Cash and cash equivalents

 

298,353

 

 

696,979

 

 

598,048

 

 

634,631

 

 

639,549

 

 
Investment securities available-for-sale, at fair value

 

1,489,392

 

 

1,497,227

 

 

1,409,513

 

 

1,408,165

 

 

1,372,077

 

Other securities

 

24,372

 

 

24,383

 

 

24,785

 

 

25,531

 

 

25,497

 

Total investment securities

 

1,513,764

 

 

1,521,610

 

 

1,434,298

 

 

1,433,696

 

 

1,397,574

 

 
Gross loans

 

3,628,752

 

 

3,566,758

 

 

3,559,905

 

 

3,543,814

 

 

3,521,925

 

Allowance for credit losses

 

(17,011

)

 

(17,015

)

 

(17,280

)

 

(18,166

)

 

(18,751

)

Net loans

 

3,611,741

 

 

3,549,743

 

 

3,542,625

 

 

3,525,648

 

 

3,503,174

 

 
Bank owned life insurance

 

121,283

 

 

120,528

 

 

120,522

 

 

120,978

 

 

120,238

 

Premises and equipment, net

 

71,686

 

 

72,388

 

 

73,067

 

 

74,071

 

 

75,156

 

Accrued interest receivable

 

17,256

 

 

16,342

 

 

16,101

 

 

15,627

 

 

16,224

 

Net deferred tax assets

 

49,888

 

 

30,802

 

 

18,001

 

 

63

 

 

90

 

Intangible assets

 

116,081

 

 

116,428

 

 

116,774

 

 

117,121

 

 

117,489

 

Other assets

 

147,716

 

 

118,375

 

 

92,331

 

 

81,860

 

 

82,419

 

Total Assets

$

5,947,768

 

$

6,243,195

 

$

6,011,767

 

$

6,003,695

 

$

5,951,913

 

 
Liabilities
Deposits:
Noninterest-bearing

$

1,429,281

 

$

1,531,660

 

$

1,357,266

 

$

1,373,125

 

$

1,311,464

 

Interest-bearing:
Demand deposits

 

1,160,970

 

 

1,189,056

 

 

1,191,492

 

 

1,135,848

 

 

1,139,033

 

Savings deposits

 

1,427,785

 

 

1,435,645

 

 

1,425,528

 

 

1,347,448

 

 

1,332,910

 

Time deposits

 

939,769

 

 

985,567

 

 

1,024,559

 

 

1,068,915

 

 

1,104,069

 

Total deposits

 

4,957,805

 

 

5,141,928

 

 

4,998,845

 

 

4,925,336

 

 

4,887,476

 

Short-term borrowings
Customer repurchase agreements

 

304,807

 

 

402,368

 

 

288,483

 

 

312,458

 

 

296,642

 

Net deferred tax liabilities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Other liabilities

 

136,868

 

 

106,906

 

 

92,009

 

 

84,796

 

 

90,499

 

Total Liabilities

 

5,399,480

 

 

5,651,202

 

 

5,379,337

 

 

5,322,590

 

 

5,274,617

 

 
Stockholders' Equity
Preferred stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Common stock

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

Capital surplus

 

170,138

 

 

169,557

 

 

170,206

 

 

170,942

 

 

170,300

 

Retained earnings

 

685,657

 

 

667,933

 

 

654,138

 

 

641,826

 

 

627,463

 

Cost of common stock in treasury

 

(209,644

)

 

(209,133

)

 

(194,819

)

 

(193,542

)

 

(183,303

)

Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale

 

(141,997

)

 

(80,498

)

 

(41,229

)

 

17,745

 

 

20,878

 

Underfunded pension liability

 

(3,485

)

 

(3,485

)

 

(3,485

)

 

(3,485

)

 

(5,661

)

Total Accumulated Other Comprehensive (Loss) Income

 

(145,482

)

 

(83,983

)

 

(44,714

)

 

14,260

 

 

15,217

 

Total Stockholders' Equity

 

548,288

 

 

591,993

 

 

632,430

 

 

681,105

 

 

677,296

 

Total Liabilities and Stockholders' Equity

$

5,947,768

 

$

6,243,195

 

$

6,011,767

 

$

6,003,695

 

$

5,951,913

 

 
Regulatory Capital
Total CET 1 capital

$

582,213

 

$

564,158

 

$

565,048

 

$

555,532

 

$

550,426

 

Total tier 1 capital

 

582,213

 

 

564,158

 

 

565,048

 

 

555,532

 

 

550,426

 

Total risk-based capital

 

596,708

 

 

578,657

 

 

579,807

 

 

570,336

 

 

565,712

 

Total risk-weighted assets

 

3,679,511

 

 

3,558,249

 

 

3,492,920

 

 

3,453,893

 

 

3,417,020

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
 
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
 
Commercial and industrial

$

375,735

$

360,481

$

337,384

$

346,184

$

353,046

 
1-4 Family

 

109,710

 

108,765

 

108,424

 

107,873

 

108,913

Hotels

 

355,001

 

337,910

 

314,902

 

311,315

 

297,341

Multi-family

 

186,440

 

203,856

 

209,359

 

215,677

 

215,307

Non Residential Non-Owner Occupied

 

569,369

 

551,240

 

637,092

 

639,818

 

664,365

Non Residential Owner Occupied

 

177,673

 

180,188

 

200,180

 

204,233

 

205,579

Commercial real estate (1)

 

1,398,193

 

1,381,959

 

1,469,957

 

1,478,916

 

1,491,505

 
Residential real estate (2)

 

1,678,770

 

1,651,005

 

1,588,860

 

1,548,965

 

1,506,572

Home equity

 

130,837

 

125,742

 

121,460

 

122,345

 

124,806

Consumer

 

41,902

 

44,580

 

39,778

 

40,901

 

43,296

DDA overdrafts

 

3,315

 

2,991

 

2,466

 

6,503

 

2,700

Gross Loans

$

3,628,752

$

3,566,758

$

3,559,905

$

3,543,814

$

3,521,925

 
Construction loans included in:
(1) - Commercial real estate loans

$

4,125

$

6,767

$

14,877

$

11,783

$

19,360

(2) - Residential real estate loans

 

19,333

 

18,751

 

16,253

 

17,252

 

19,059

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
 
Three Months Ended Nine Months Ended
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
September 30,

2022
September 30,

2021
Allowance for Credit Losses
Balance at beginning of period

$

17,015

 

$

17,280

 

$

18,166

 

$

18,751

 

$

20,016

 

$

18,166

 

$

24,549

 

 
Charge-offs:
Commercial and industrial

 

(411

)

 

-

 

 

(34

)

 

-

 

 

-

 

 

(445

)

 

(245

)

Commercial real estate

 

-

 

 

(24

)

 

-

 

 

(276

)

 

(392

)

 

(24

)

 

(2,111

)

Residential real estate

 

(93

)

 

(56

)

 

(50

)

 

(68

)

 

(18

)

 

(199

)

 

(197

)

Home equity

 

(71

)

 

(19

)

 

-

 

 

(58

)

 

(47

)

 

(90

)

 

(119

)

Consumer

 

(16

)

 

(9

)

 

(23

)

 

(13

)

 

(3

)

 

(48

)

 

(229

)

DDA overdrafts

 

(719

)

 

(604

)

 

(631

)

 

(635

)

 

(633

)

 

(1,954

)

 

(1,516

)

Total charge-offs

 

(1,310

)

 

(712

)

 

(738

)

 

(1,050

)

 

(1,093

)

 

(2,760

)

 

(4,417

)

 
Recoveries:
Commercial and industrial

 

149

 

 

32

 

 

59

 

 

31

 

 

69

 

 

240

 

 

140

 

Commercial real estate

 

9

 

 

25

 

 

53

 

 

27

 

 

18

 

 

87

 

 

197

 

Residential real estate

 

1

 

 

4

 

 

45

 

 

7

 

 

29

 

 

50

 

 

120

 

Home equity

 

2

 

 

3

 

 

17

 

 

6

 

 

58

 

 

22

 

 

84

 

Consumer

 

29

 

 

19

 

 

28

 

 

40

 

 

72

 

 

76

 

 

215

 

DDA overdrafts

 

383

 

 

364

 

 

406

 

 

354

 

 

307

 

 

1,153

 

 

1,028

 

Total recoveries

 

573

 

 

447

 

 

608

 

 

465

 

 

553

 

 

1,628

 

 

1,784

 

 
Net charge-offs

 

(737

)

 

(265

)

 

(130

)

 

(585

)

 

(540

)

 

(1,132

)

 

(2,633

)

Provision for (recovery of) credit losses

 

730

 

 

-

 

 

(756

)

 

-

 

 

(725

)

 

(26

)

 

(3,165

)

Balance at end of period

$

17,008

 

$

17,015

 

$

17,280

 

$

18,166

 

$

18,751

 

$

17,008

 

$

18,751

 

 
Loans outstanding

$

3,628,752

 

$

3,566,758

 

$

3,559,905

 

$

3,543,814

 

$

3,521,925

 

Allowance as a percent of loans outstanding

 

0.47

%

 

0.48

%

 

0.49

%

 

0.51

%

 

0.53

%

Allowance as a percent of non-performing loans

 

320.5

%

 

292.6

%

 

331.3

%

 

290.1

%

 

243.1

%

 
Average loans outstanding

$

3,596,523

 

$

3,559,713

 

$

3,527,393

 

$

3,522,272

 

$

3,535,497

 

$

3,561,463

 

$

3,553,966

 

Net charge-offs (annualized) as a percent of average loans outstanding

 

0.08

%

 

0.03

%

 

0.01

%

 

0.07

%

 

0.06

%

 

0.04

%

 

0.10

%

 
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
 
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
Nonaccrual Loans
Residential real estate

$

2,089

 

$

1,561

 

$

1,786

 

$

2,809

 

$

3,634

 

Home equity

 

140

 

 

54

 

 

99

 

 

40

 

 

67

 

Commercial and industrial

 

785

 

 

1,360

 

 

1,069

 

 

996

 

 

531

 

Commercial real estate

 

2,293

 

 

2,783

 

 

2,241

 

 

2,373

 

 

3,355

 

Consumer

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonaccrual loans

 

5,307

 

 

5,758

 

 

5,195

 

 

6,218

 

 

7,587

 

Accruing loans past due 90 days or more

 

-

 

 

58

 

 

21

 

 

43

 

 

127

 

Total non-performing loans

 

5,307

 

 

5,816

 

 

5,216

 

 

6,261

 

 

7,714

 

Other real estate owned

 

1,071

 

 

946

 

 

1,099

 

 

1,319

 

 

1,335

 

Total non-performing assets

$

6,378

 

$

6,762

 

$

6,315

 

$

7,580

 

$

9,049

 

 
Non-performing assets as a percent of loans and other real estate owned

 

0.18

%

 

0.19

%

 

0.18

%

 

0.21

%

 

0.26

%

 
Past Due Loans
Residential real estate

$

3,452

 

$

5,298

 

$

4,976

 

$

5,321

 

$

5,258

 

Home equity

 

521

 

 

282

 

 

505

 

 

618

 

 

688

 

Commercial and industrial

 

221

 

 

130

 

 

56

 

 

336

 

 

455

 

Commercial real estate

 

221

 

 

46

 

 

744

 

 

22

 

 

441

 

Consumer

 

27

 

 

49

 

 

32

 

 

60

 

 

35

 

DDA overdrafts

 

561

 

 

430

 

 

392

 

 

489

 

 

390

 

Total past due loans

$

5,003

 

$

6,235

 

$

6,705

 

$

6,846

 

$

7,267

 

 
Total past due loans as a percent of loans outstanding

 

0.14

%

 

0.17

%

 

0.19

%

 

0.19

%

 

0.21

%

 
Troubled Debt Restructurings ("TDRs")
Residential real estate

$

15,657

 

$

16,022

 

$

16,182

 

$

16,943

 

$

16,910

 

Home equity

 

1,614

 

 

1,649

 

 

1,694

 

 

1,784

 

 

1,822

 

Commercial and industrial

 

354

 

 

381

 

 

397

 

 

414

 

 

430

 

Commercial real estate

 

104

 

 

107

 

 

1,890

 

 

1,914

 

 

1,937

 

Consumer

 

68

 

 

80

 

 

194

 

 

225

 

 

221

 

Total TDRs

$

17,797

 

$

18,239

 

$

20,357

 

$

21,280

 

$

21,320

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
Three Months Ended
September 30, 2022 June 30, 2022 September 30, 2021
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,792,365

 

$

17,640

3.90

%

$

1,730,617

 

$

16,063

3.72

%

$

1,648,921

 

$

15,813

3.80

%

Commercial, financial, and agriculture (2)

 

1,759,567

 

 

20,092

4.53

%

 

1,785,511

 

 

16,421

3.69

%

 

1,836,604

 

 

17,344

3.75

%

Installment loans to individuals (2), (3)

 

44,591

 

 

683

6.08

%

 

43,585

 

 

631

5.81

%

 

49,972

 

 

714

5.67

%

Previously securitized loans (4) ***

 

78

*** ***

 

93

*** ***

 

91

***
Total loans

 

3,596,523

 

 

38,493

4.25

%

 

3,559,713

 

 

33,208

3.74

%

 

3,535,497

 

 

33,962

3.81

%

Securities:
Taxable

 

1,359,207

 

 

9,557

2.79

%

 

1,269,049

 

 

7,548

2.39

%

 

1,136,519

 

 

6,144

2.14

%

Tax-exempt (5)

 

215,219

 

 

1,555

2.87

%

 

215,603

 

 

1,526

2.84

%

 

245,551

 

 

1,590

2.57

%

Total securities

 

1,574,426

 

 

11,112

2.80

%

 

1,484,652

 

 

9,074

2.45

%

 

1,382,070

 

 

7,734

2.22

%

Deposits in depository institutions

 

289,460

 

 

1,529

2.10

%

 

441,239

 

 

781

0.71

%

 

544,843

 

 

196

0.14

%

Total interest-earning assets

 

5,460,409

 

 

51,134

3.72

%

 

5,485,604

 

 

43,063

3.15

%

 

5,462,410

 

 

41,892

3.04

%

Cash and due from banks

 

81,202

 

 

102,532

 

 

101,058

 

Premises and equipment, net

 

72,196

 

 

72,887

 

 

75,956

 

Goodwill and intangible assets

 

116,297

 

 

116,645

 

 

117,719

 

Other assets

 

278,527

 

 

256,354

 

 

220,420

 

Less: Allowance for credit losses

 

(17,224

)

 

(17,755

)

 

(20,407

)

Total assets

$

5,991,407

 

$

6,016,267

 

$

5,957,156

 

 
Liabilities:
Interest-bearing demand deposits

$

1,151,122

 

$

272

0.09

%

$

1,156,200

 

$

148

0.05

%

$

1,093,243

 

$

127

0.05

%

Savings deposits

 

1,431,591

 

 

358

0.10

%

 

1,430,121

 

 

182

0.05

%

 

1,315,462

 

 

169

0.05

%

Time deposits (2)

 

964,447

 

 

956

0.39

%

 

1,004,356

 

 

999

0.40

%

 

1,126,553

 

 

1,659

0.58

%

Short-term borrowings

 

270,310

 

 

440

0.65

%

 

288,031

 

 

123

0.17

%

 

282,722

 

 

115

0.16

%

Total interest-bearing liabilities

 

3,817,470

 

 

2,026

0.21

%

 

3,878,708

 

 

1,452

0.15

%

 

3,817,980

 

 

2,070

0.22

%

Noninterest-bearing demand deposits

 

1,455,123

 

 

1,435,256

 

 

1,356,745

 

Other liabilities

 

100,303

 

 

85,075

 

 

86,263

 

Stockholders' equity

 

618,511

 

 

617,228

 

 

696,168

 

Total liabilities and
stockholders' equity

$

5,991,407

 

$

6,016,267

 

$

5,957,156

 

Net interest income

$

49,108

$

41,611

$

39,822

Net yield on earning assets

3.57

%

3.04

%

2.89

%

 
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
 
Loan fees, net (includes PPP fees)

$

308

$

3

$

1,120

 
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
 
Residential real estate

$

64

$

77

$

154

Commercial, financial, and agriculture

 

103

 

118

 

265

Installment loans to individuals

 

7

 

15

 

21

Time deposits

 

21

 

21

 

48

$

195

$

231

$

488

 
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
Nine Months Ended
September 30, 2022 September 30, 2021
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,728,557

 

$

49,299

3.81

%

$

1,669,324

 

$

48,801

3.91

%

Commercial, financial, and agriculture (2)

 

1,788,784

 

 

52,044

3.89

%

 

1,833,744

 

 

50,044

3.65

%

Installment loans to individuals (2), (3)

 

44,122

 

 

1,921

5.82

%

 

50,898

 

 

2,140

5.62

%

Previously securitized loans (4) ***

 

311

*** ***

 

414

***
Total loans

 

3,561,463

 

 

103,575

3.89

%

 

3,553,966

 

 

101,399

3.81

%

Securities:
Taxable

 

1,279,086

 

 

23,327

2.44

%

 

1,043,269

 

 

17,318

2.22

%

Tax-exempt (5)

 

221,035

 

 

4,620

2.79

%

 

243,146

 

 

4,811

2.65

%

Total securities

 

1,500,121

 

 

27,947

2.49

%

 

1,286,415

 

 

22,129

2.30

%

Deposits in depository institutions

 

422,714

 

 

2,549

0.81

%

 

562,272

 

 

474

0.11

%

Total interest-earning assets

 

5,484,298

 

 

134,071

3.27

%

 

5,402,653

 

 

124,002

3.07

%

Cash and due from banks

 

95,105

 

 

91,073

 

Premises and equipment, net

 

72,964

 

 

76,481

 

Goodwill and intangible assets

 

116,643

 

 

118,084

 

Other assets

 

251,071

 

 

214,872

 

Less: Allowance for credit losses

 

(17,807

)

 

(22,989

)

Total assets

$

6,002,274

 

$

5,880,174

 

 
Liabilities:
Interest-bearing demand deposits

$

1,149,899

 

$

550

0.06

%

$

1,057,452

 

$

373

0.05

%

Savings deposits

 

1,415,563

 

 

715

0.07

%

 

1,275,211

 

 

516

0.05

%

Time deposits (2)

 

1,005,356

 

 

3,168

0.42

%

 

1,181,166

 

 

6,806

0.77

%

Short-term borrowings

 

278,211

 

 

677

0.33

%

 

292,845

 

 

357

0.16

%

Total interest-bearing liabilities

 

3,849,029

 

 

5,110

0.18

%

 

3,806,674

 

 

8,052

0.28

%

Noninterest-bearing demand deposits

 

1,429,887

 

 

1,289,247

 

Other liabilities

 

86,585

 

 

82,953

 

Stockholders' equity

 

636,773

 

 

701,300

 

Total liabilities and
stockholders' equity

$

6,002,274

 

$

5,880,174

 

Net interest income

$

128,961

$

115,950

Net yield on earning assets

3.14

%

2.87

%

 
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
 
Loan fees, net (includes PPP fees)

$

609

$

2,443

 
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
 
 
Residential real estate

$

231

$

472

Commercial, financial, and agriculture

 

507

 

956

Installment loans to individuals

 

41

 

72

Time deposits

 

62

 

145

$

841

$

1,645

 
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited) ($ in 000s, except per share data)
 
Three Months Ended Nine Months Ended
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
September 30,

2021
September 30,

2022
September 30,

2021
Net Interest Income/Margin
Net interest income ("GAAP")

$

48,782

 

$

41,290

 

$

37,916

 

$

40,631

 

$

39,488

 

$

127,991

 

$

114,942

 

Taxable equivalent adjustment

 

326

 

 

321

 

 

323

 

 

325

 

 

334

 

 

970

 

 

1,008

 

Net interest income, fully taxable equivalent

$

49,108

 

$

41,611

 

$

38,239

 

$

40,956

 

$

39,822

 

$

128,961

 

$

115,950

 

 
Average interest earning assets

$

5,460,409

 

$

5,485,604

 

$

5,507,397

 

$

5,521,386

 

$

5,462,410

 

$

5,484,298

 

$

5,402,653

 

 
Net Interest Margin

 

3.57

%

 

3.04

%

 

2.82

%

 

2.94

%

 

2.89

%

 

3.14

%

 

2.87

%

Accretion related to fair value adjustments

 

-0.01

%

 

-0.02

%

 

-0.03

%

 

-0.03

%

 

-0.04

%

 

-0.02

%

 

-0.04

%

Net Interest Margin (excluding accretion)

 

3.56

%

 

3.02

%

 

2.79

%

 

2.91

%

 

2.85

%

 

3.12

%

 

2.83

%

 
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")

 

9.22

%

 

9.48

%

 

10.52

%

 

11.34

%

 

11.37

%

Effect of goodwill and other intangibles, net

 

-1.81

%

 

-1.72

%

 

-1.77

%

 

-1.76

%

 

-1.78

%

Tangible common equity to tangible assets

 

7.41

%

 

7.76

%

 

8.75

%

 

9.58

%

 

9.59

%

 

Contacts

David L. Bumgarner, Executive Vice President and Chief Financial Officer

(304) 769-1169

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