CHCO City Holding Company

City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.3 billion bank holding company headquartered in Charleston, West Virginia, today announced net income of $29.5 million and diluted earnings of $1.97 per share for the quarter ended March 31, 2024. For the quarter ended March 31, 2024, the Company achieved a return on assets of 1.92% and a return on tangible equity of 22.7%.

Net Interest Income

The Company’s net interest income decreased approximately $0.2 million, or 0.4%, from $54.7 million during the fourth quarter of 2023 to $54.4 million during the first quarter of 2024. The Company’s tax equivalent net interest income decreased approximately $0.2 million, or 0.4%, from $54.9 million for the fourth quarter of 2023 to $54.6 million for the first quarter of 2024. Due to an increase in the cost of interest bearing liabilities (20 basis points), net interest income declined $1.7 million. Additionally, lower yields on investment securities lowered net interest income by $0.4 million and an increase in the average balance of interest bearing liabilities ($48.4 million) decreased net interest income by $0.2 million. These decreases were partially offset by an increase in average loan balances of $46.6 million, which increased net interest income by $0.7 million, an increase of 15 basis points on loans yields which increased net interest income by $0.7 million, and an increase of 23 basis points on deposits in depository institutions yield which increased net interest income by $0.6 million. The Company’s reported net interest margin declined from 3.98% for the fourth quarter of 2023 to 3.95% for the first quarter of 2024.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.21%, or $8.6 million, at December 31, 2023 to 0.28%, or $11.5 million, at March 31, 2024. Total past due loans decreased from $10.9 million, or 0.27% of total loans outstanding, at December 31, 2023, to $6.7 million, or 0.16% of total loans outstanding, at March 31, 2024.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a recovery of credit losses of $0.2 million in the first quarter of 2024, compared to a provision for credit losses of $2.9 million for the comparable period in 2023, and a recovery of credit losses of $0.3 million for the fourth quarter of 2023. The recovery of credit losses was primarily related to a decline in loan balances from the fourth quarter of 2023 and a reduction in the loss rate of residential real estate loans that were partially offset by net charge-offs during the first quarter of 2024.

Non-interest Income

Non-interest income was $17.9 million during the quarter ended March 31, 2024, as compared to $18.7 million during the quarter ended March 31, 2023. During the first quarter of 2024, the Company reported $0.2 million of unrealized fair value gains on the Company’s equity securities compared to $0.8 million of realized gains from the sale of investment securities and $0.4 million of unrealized fair value gains on the Company’s equity securities during the first quarter of 2023.

Exclusive of these items, non-interest income increased $0.6 million, or 2.9%, from $17.5 million for the first quarter of 2023 to $18.1 million for the first quarter of 2024. This increase was largely attributable to an increase of $0.5 million, or 7.2%, in service charges, an increase of $0.4 million, or 16.4%, in trust and investment management fee income, and a $0.2 million, or 3.0%, increase in bankcard revenues. These increases were partially offset by a decrease in other income of $0.6 million.

Non-interest Expenses

Non-interest expenses decreased $2.7 million, or 7.1%, from $38.6 million in the first quarter of 2023 to $35.9 million in the first quarter of 2024. During the quarter ended March 31, 2023, the Company recognized $5.6 million of acquisition and integration expenses (included in other expenses) associated with the completed acquisition of Citizens Commerce Bancshares, Inc. (“Citizens”) and its principal banking subsidiary, Citizens Commerce Bank, on March 10, 2023. Excluding these expenses, non-interest expenses increased $2.9 million from $33.0 million in the quarter ended March 31, 2023 to $35.9 million in the quarter ended March 31, 2024. This increase was largely due to an increase in salaries and employee benefits of $1.2 million due to salary adjustments and increased health insurance costs. In addition, bankcard expenses increased $0.5 million, other expenses increased $0.5 million, and FDIC insurance expense increased $0.3 million.

Balance Sheet Trends

Loans declined $34.1 million (0.8%) from December 31, 2023 to $4.09 billion at March 31, 2024. Commercial and industrial loans decreased $19.2 million and commercial real estate loans decreased $14.6 million during the quarter ended March 31, 2024. These decreases were partially offset by an increase in home equity loans of $4.1 million (2.5%).

Period-end deposit balances increased $121.5 million from December 31, 2023, to March 31, 2024. Total average depository balances remained flat from the quarter ended December 31, 2023 to the quarter ended March 31, 2024, at $4.93 billion. Average savings deposit balances decreased $20.5 million, average interest-bearing demand deposit balances decreased $15.8 million, and average noninterest-bearing demand deposit balances decreased $11.5 million. These decreases were essentially offset by an increase in average time deposit balances of $47.2 million.

Income Tax Expense

The Company’s effective income tax rate for the first quarter of 2024 was 19.5% compared to 20.1% for the year ended December 31, 2023, and 20.5%, for the quarter ended March 31, 2023.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 80.9% and the loan to asset ratio was 64.8% at March 31, 2024. The Company maintained investment securities totaling 21.8% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 62.6% of assets at March 31, 2024. Time deposits fund 17.4% of assets at March 31, 2024, with only 13.0% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company.

City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of March 31, 2024, City National had the capacity to borrow an additional $1.5 billion from these existing borrowing facilities. In addition, approximately $660 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $720 million of City National’s investment securities unpledged at March 31, 2024.

The Company continues to be strongly capitalized with tangible equity of $520 million at March 31, 2024. The Company’s tangible equity ratio declined slightly from 8.6% at December 31, 2023 to 8.5% at March 31, 2024. At March 31, 2024, City National’s Leverage Ratio was 9.4%, its Common Equity Tier I ratio was 14.6%, its Tier I Capital ratio was 14.6%, and its Total Risk-Based Capital ratio was 15.1%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On March 27, 2024, the Board of Directors of the Company approved a quarterly cash dividend of $0.715 per share payable April 30, 2024, to shareholders of record as of April 15, 2024. On January 31, 2024, the Company announced that the Board of Directors authorized the Company to buy back up to 1,000,000 shares of its common stock (approximately 7% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders (the “2024 Program”). No time limit was placed on the duration of the share repurchase program. As part of this authorization, the Company terminated its previous repurchase program that was approved in May 2022. The Company had repurchased 849,681 shares under the 2022 program. During the quarter ended March 31, 2024, the Company repurchased 36,000 common shares at a weighted average price of $100.24 per share as part of 2024 Program. As of March 31, 2024, the Company could repurchase 964,000 additional shares under the 2024 program.

City National operates 97 branches across West Virginia, Kentucky, Virginia, and Ohio.

On April 8, 2024, City National announced that it had been ranked #1 in customer satisfaction for consumer banking in the North Central Region in the J.D. Power 2024 U.S. Retail Banking Satisfaction Study. City National has claimed the top honor in five of the last seven years and outscored all other banks in West Virginia, Kentucky, Ohio, Indiana, and Michigan.

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, 2023 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its March 31, 2024 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2024 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES

Financial Highlights

(Unaudited)

 

 

Three Months Ended

 

March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023

 

Earnings

Net Interest Income (fully taxable equivalent)

$

54,647

 

$

54,889

 

$

55,855

 

$

55,757

 

$

53,767

 

Net Income available to common shareholders

 

29,523

 

 

27,452

 

 

29,839

 

 

32,733

 

 

24,341

 

 

Per Share Data

Earnings per share available to common shareholders:

Basic

$

1.98

 

$

1.84

 

$

1.98

 

$

2.16

 

$

1.63

 

Diluted

 

1.97

 

 

1.84

 

 

1.98

 

 

2.16

 

 

1.63

 

Weighted average number of shares (in thousands):

Basic

 

14,795

 

 

14,758

 

 

14,922

 

 

14,994

 

 

14,818

 

Diluted

 

14,819

 

 

14,785

 

 

14,945

 

 

15,012

 

 

14,844

 

Period-end number of shares (in thousands)

 

14,825

 

 

14,832

 

 

14,901

 

 

15,007

 

 

15,260

 

Cash dividends declared

$

0.72

 

$

0.72

 

$

0.72

 

$

0.65

 

$

0.65

 

Book value per share (period-end)

$

46.02

 

$

45.65

 

$

40.94

 

$

42.39

 

$

42.66

 

Tangible book value per share (period-end)

 

35.10

 

 

34.69

 

 

29.98

 

 

31.50

 

 

31.91

 

Market data:

High closing price

$

111.40

 

$

115.77

 

$

99.49

 

$

97.92

 

$

100.27

 

Low closing price

 

99.28

 

 

87.43

 

 

87.51

 

 

83.57

 

 

89.17

 

Period-end closing price

 

104.22

 

 

110.26

 

 

90.35

 

 

89.99

 

 

90.88

 

Average daily volume (in thousands)

 

63

 

 

62

 

 

62

 

 

80

 

 

84

 

Treasury share activity:

Treasury shares repurchased (in thousands)

 

36

 

 

70

 

 

109

 

 

269

 

 

218

 

Average treasury share repurchase price

$

100.24

 

$

90.61

 

$

89.33

 

$

88.93

 

$

92.10

 

 

Key Ratios (percent)

Return on average assets

 

1.92

%

 

1.78

%

 

1.94

%

 

2.12

%

 

1.63

%

Return on average tangible equity

 

22.7

%

 

23.5

%

 

24.1

%

 

27.4

%

 

19.9

%

Yield on interest earning assets

 

5.33

%

 

5.23

%

 

5.08

%

 

4.87

%

 

4.66

%

Cost of interest bearing liabilities

 

1.90

%

 

1.70

%

 

1.46

%

 

1.22

%

 

0.86

%

Net Interest Margin

 

3.95

%

 

3.98

%

 

4.03

%

 

4.00

%

 

4.05

%

Non-interest income as a percent of total revenue

 

25.0

%

 

25.6

%

 

24.6

%

 

27.1

%

 

24.7

%

Efficiency Ratio

 

48.5

%

 

47.4

%

 

46.4

%

 

44.6

%

 

45.7

%

Price/Earnings Ratio (a)

 

13.17

 

 

14.95

 

 

11.40

 

 

10.40

 

 

13.95

 

 

Capital (period-end)

Average Shareholders' Equity to Average Assets

 

11.09

%

 

10.27

%

 

10.73

%

 

10.38

%

 

10.31

%

Tangible equity to tangible assets

 

8.46

%

 

8.57

%

 

7.55

%

 

7.90

%

 

8.05

%

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

CET I

 

16.15

%

 

15.70

%

 

15.36

%

 

15.47

%

 

15.64

%

Tier I

 

16.15

%

 

15.70

%

 

15.36

%

 

15.47

%

 

15.64

%

Total

 

16.69

%

 

16.23

%

 

15.89

%

 

16.01

%

 

16.18

%

Leverage

 

10.45

%

 

10.23

%

 

10.05

%

 

9.80

%

 

10.20

%

City National Bank risk based capital ratios (b):

CET I

 

14.60

%

 

13.79

%

 

14.73

%

 

14.82

%

 

14.08

%

Tier I

 

14.60

%

 

13.79

%

 

14.73

%

 

14.82

%

 

14.08

%

Total

 

15.14

%

 

14.32

%

 

15.27

%

 

15.36

%

 

14.63

%

Leverage

 

9.42

%

 

8.94

%

 

9.61

%

 

9.36

%

 

9.18

%

 

Other (period-end)

Branches

 

97

 

 

98

 

 

99

 

 

99

 

 

99

 

FTE

 

953

 

 

957

 

 

966

 

 

963

 

 

958

 

 

Assets per FTE (in thousands)

$

6,625

 

$

6,447

 

$

6,291

 

$

6,383

 

$

6,483

 

Deposits per FTE (in thousands)

 

5,304

 

 

5,157

 

 

5,120

 

 

5,208

 

 

5,362

 

 

 

(a) The price/earnings ratio is computed based on annualized quarterly earnings.

(b) March 31, 2024 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 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023   Interest Income Interest and fees on loans

$

59,128

 

$

57,755

 

$

55,582

 

$

52,352

 

$

47,004

Interest on investment securities: Taxable

 

12,040

 

 

12,336

 

 

12,432

 

 

11,794

 

 

11,773

Tax-exempt

 

830

 

 

832

 

 

910

 

 

950

 

 

1,162

Interest on deposits in depository institutions

 

1,570

 

 

941

 

 

1,265

 

 

2,585

 

 

1,591

Total Interest Income

 

73,568

 

 

71,864

 

 

70,189

 

 

67,681

 

 

61,530

  Interest Expense Interest on deposits

 

14,097

 

 

12,479

 

 

10,551

 

 

8,567

 

 

5,690

Interest on short-term borrowings

 

3,621

 

 

3,693

 

 

2,990

 

 

2,963

 

 

2,381

Interest on FHLB long-term advances

 

1,423

 

 

1,026

 

 

1,034

 

 

649

 

 

-

Total Interest Expense

 

19,141

 

 

17,198

 

 

14,575

 

 

12,179

 

 

8,071

Net Interest Income

 

54,427

 

 

54,666

 

 

55,614

 

 

55,502

 

 

53,459

(Recovery of) Provision for credit losses

 

(180

)

 

(300

)

 

200

 

 

425

 

 

2,918

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

 

54,607

 

 

54,966

 

 

55,414

 

 

55,077

 

 

50,541

  Non-Interest Income Net (losses) gains on sale of investment securities

 

(1

)

 

(4,951

)

 

(730

)

 

-

 

 

773

Unrealized (losses)/gains recognized on equity securities still held

 

(152

)

 

365

 

 

-

 

 

(294

)

 

361

Service charges

 

7,035

 

 

7,158

 

 

7,124

 

 

6,906

 

 

6,563

Bankcard revenue

 

6,800

 

 

7,109

 

 

7,058

 

 

7,190

 

 

6,603

Trust and investment management fee income

 

2,623

 

 

2,563

 

 

2,409

 

 

2,339

 

 

2,252

Bank owned life insurance

 

927

 

 

1,218

 

 

807

 

 

3,208

 

 

804

Other income

 

716

 

 

774

 

 

742

 

 

952

 

 

1,326

Total Non-Interest Income

 

17,948

 

 

14,236

 

 

17,410

 

 

20,301

 

 

18,682

  Non-Interest Expense Salaries and employee benefits

 

18,878

 

 

18,772

 

 

18,289

 

 

18,429

 

 

17,673

Occupancy related expense

 

2,840

 

 

2,917

 

 

2,950

 

 

2,811

 

 

2,640

Equipment and software related expense

 

2,929

 

 

2,824

 

 

2,830

 

 

2,883

 

 

3,092

FDIC insurance expense

 

711

 

 

868

 

 

919

 

 

690

 

 

445

Advertising

 

867

 

 

588

 

 

790

 

 

974

 

 

760

Bankcard expenses

 

2,039

 

 

2,014

 

 

2,188

 

 

1,736

 

 

1,509

Postage, delivery, and statement mailings

 

666

 

 

615

 

 

668

 

 

596

 

 

647

Office supplies

 

453

 

 

477

 

 

457

 

 

591

 

 

420

Legal and professional fees

 

482

 

 

478

 

 

529

 

 

558

 

 

470

Telecommunications

 

600

 

 

614

 

 

568

 

 

623

 

 

606

Repossessed asset losses/(gains), net of expenses

 

229

 

 

(50

)

 

40

 

 

22

 

 

16

Other expenses

 

5,206

 

 

4,992

 

 

4,800

 

 

4,848

 

 

10,345

Total Non-Interest Expense

 

35,900

 

 

35,109

 

 

35,028

 

 

34,761

 

 

38,623

Income Before Income Taxes

 

36,655

 

 

34,093

 

 

37,796

 

 

40,617

 

 

30,600

Income tax expense

 

7,132

 

 

6,641

 

 

7,957

 

 

7,884

 

 

6,259

Net Income Available to Common Shareholders

$

29,523

 

$

27,452

 

$

29,839

 

$

32,733

 

$

24,341

  Distributed earnings allocated to common shareholders

$

10,505

 

$

10,508

 

$

10,554

 

$

9,668

 

$

9,833

Undistributed earnings allocated to common shareholders

 

18,757

 

 

16,696

 

 

19,004

 

 

22,774

 

 

14,294

Net earnings allocated to common shareholders

$

29,262

 

$

27,204

 

$

29,558

 

$

32,442

 

$

24,127

  Average common shares outstanding

 

14,795

 

 

14,758

 

 

14,922

 

 

14,994

 

 

14,818

Shares for diluted earnings per share

 

14,819

 

 

14,785

 

 

14,945

 

 

15,012

 

 

14,844

  Basic earnings per common share

$

1.98

 

$

1.84

 

$

1.98

 

$

2.16

 

$

1.63

Diluted earnings per common share

$

1.97

 

$

1.84

 

$

1.98

 

$

2.16

 

$

1.63

CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023   Assets Cash and due from banks

$

121,853

 

$

123,033

 

$

67,402

 

$

69,622

 

$

76,223

 

Interest-bearing deposits in depository institutions

 

196,829

 

 

33,243

 

 

43,314

 

 

161,659

 

 

226,587

 

Cash and cash equivalents

 

318,682

 

 

156,276

 

 

110,716

 

 

231,281

 

 

302,810

 

  Investment securities available-for-sale, at fair value

 

1,347,657

 

 

1,338,137

 

 

1,358,219

 

 

1,419,933

 

 

1,456,259

 

Other securities

 

30,681

 

 

30,966

 

 

29,022

 

 

29,262

 

 

24,728

 

Total investment securities

 

1,378,338

 

 

1,369,103

 

 

1,387,241

 

 

1,449,195

 

 

1,480,987

 

  Gross loans

 

4,091,788

 

 

4,125,923

 

 

4,007,482

 

 

3,922,142

 

 

3,894,686

 

Allowance for credit losses

 

(22,310

)

 

(22,745

)

 

(23,128

)

 

(22,751

)

 

(22,724

)

Net loans

 

4,069,478

 

 

4,103,178

 

 

3,984,354

 

 

3,899,391

 

 

3,871,962

 

  Bank owned life insurance

 

118,875

 

 

118,122

 

 

117,979

 

 

117,173

 

 

124,238

 

Premises and equipment, net

 

71,623

 

 

72,146

 

 

72,682

 

 

73,118

 

 

73,430

 

Accrued interest receivable

 

21,759

 

 

20,290

 

 

19,223

 

 

17,973

 

 

18,395

 

Net deferred tax assets

 

43,969

 

 

42,216

 

 

58,811

 

 

46,944

 

 

42,146

 

Goodwill and intangible assets

 

161,832

 

 

162,568

 

 

163,461

 

 

163,426

 

 

164,099

 

Other assets

 

129,627

 

 

124,153

 

 

161,659

 

 

148,333

 

 

132,715

 

Total Assets

$

6,314,183

 

$

6,168,052

 

$

6,076,126

 

$

6,146,834

 

$

6,210,782

 

  Liabilities Deposits: Noninterest-bearing

$

1,359,072

 

$

1,342,804

 

$

1,333,474

 

$

1,373,106

 

$

1,420,990

 

Interest-bearing: Demand deposits

 

1,330,268

 

 

1,291,011

 

 

1,319,783

 

 

1,337,445

 

 

1,356,017

 

Savings deposits

 

1,266,211

 

 

1,259,457

 

 

1,282,642

 

 

1,343,571

 

 

1,397,523

 

Time deposits

 

1,100,250

 

 

1,040,990

 

 

1,009,235

 

 

960,941

 

 

962,235

 

Total deposits

 

5,055,801

 

 

4,934,262

 

 

4,945,134

 

 

5,015,063

 

 

5,136,765

 

Short-term borrowings FHLB short-term advances

 

-

 

 

25,000

 

 

-

 

 

-

 

 

-

 

Customer repurchase agreements

 

304,941

 

 

309,856

 

 

278,671

 

 

271,714

 

 

293,256

 

FHLB long-term advances

 

150,000

 

 

100,000

 

 

100,000

 

 

100,000

 

 

-

 

Other liabilities

 

121,210

 

 

121,868

 

 

142,187

 

 

123,865

 

 

129,711

 

Total Liabilities

 

5,631,952

 

 

5,490,986

 

 

5,465,992

 

 

5,510,642

 

 

5,559,732

 

  Stockholders' Equity Preferred stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Common stock

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

Capital surplus

 

175,747

 

 

177,424

 

 

177,113

 

 

176,746

 

 

177,529

 

Retained earnings

 

799,024

 

 

780,299

 

 

763,425

 

 

744,248

 

 

721,727

 

Cost of common stock in treasury

 

(218,555

)

 

(217,737

)

 

(211,430

)

 

(201,973

)

 

(179,436

)

Accumulated other comprehensive loss: Unrealized loss on securities available-for-sale

 

(119,023

)

 

(107,958

)

 

(163,171

)

 

(127,026

)

 

(112,967

)

Underfunded pension liability

 

(2,581

)

 

(2,581

)

 

(3,422

)

 

(3,422

)

 

(3,422

)

Total Accumulated Other Comprehensive Loss

 

(121,604

)

 

(110,539

)

 

(166,593

)

 

(130,448

)

 

(116,389

)

Total Stockholders' Equity

 

682,231

 

 

677,066

 

 

610,134

 

 

636,192

 

 

651,050

 

Total Liabilities and Stockholders' Equity

$

6,314,183

 

$

6,168,052

 

$

6,076,126

 

$

6,146,834

 

$

6,210,782

 

  Regulatory Capital Total CET 1 capital

$

644,235

 

$

627,579

 

$

615,798

 

$

605,661

 

$

606,675

 

Total tier 1 capital

 

644,235

 

 

627,579

 

 

615,798

 

 

605,661

 

 

606,675

 

Total risk-based capital

 

665,707

 

 

648,646

 

 

637,245

 

 

626,730

 

 

627,718

 

Total risk-weighted assets

 

3,989,171

 

 

3,996,688

 

 

4,009,798

 

 

3,913,870

 

 

3,878,994

 

CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s)     March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023   Commercial and industrial

$

407,770

$

426,950

$

424,647

$

417,847

$

390,861

  1-4 Family

 

202,378

 

206,237

 

197,081

 

184,919

 

181,442

Hotels

 

354,929

 

357,142

 

321,236

 

324,745

 

327,554

Multi-family

 

186,555

 

189,165

 

192,329

 

191,483

 

195,042

Non Residential Non-Owner Occupied

 

682,609

 

680,590

 

651,498

 

612,703

 

617,357

Non Residential Owner Occupied

 

232,440

 

240,328

 

222,544

 

222,852

 

223,096

Commercial real estate (1)

 

1,658,911

 

1,673,462

 

1,584,688

 

1,536,702

 

1,544,491

  Residential real estate (2)

 

1,786,764

 

1,788,150

 

1,768,358

 

1,746,618

 

1,737,604

Home equity

 

171,292

 

167,201

 

159,630

 

151,012

 

151,341

Consumer

 

63,556

 

65,246

 

65,586

 

65,201

 

66,994

DDA overdrafts

 

3,495

 

4,914

 

4,573

 

4,762

 

3,395

Gross Loans

$

4,091,788

$

4,125,923

$

4,007,482

$

3,922,142

$

3,894,686

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

$

6,651

$

2,459

$

2,533

$

3,361

$

4,715

(2) - Residential real estate loans

 

19,709

 

23,066

 

20,056

 

20,470

 

25,224

CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s)   Three Months Ended March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Allowance for Credit Losses Balance at beginning of period

$

22,745

 

$

23,128

 

$

22,751

 

$

22,724

 

$

17,108

 

  Charge-offs: Commercial and industrial

 

(306

)

 

(84

)

 

-

 

 

(69

)

 

-

 

Commercial real estate

 

(31

)

 

(5

)

 

(256

)

 

(117

)

 

(3

)

Residential real estate

 

(19

)

 

(68

)

 

(88

)

 

(20

)

 

(32

)

Home equity

 

(27

)

 

(21

)

 

(112

)

 

(200

)

 

(67

)

Consumer

 

(115

)

 

(6

)

 

(10

)

 

(109

)

 

(62

)

DDA overdrafts

 

(356

)

 

(416

)

 

(422

)

 

(357

)

 

(450

)

Total charge-offs

 

(854

)

 

(600

)

 

(888

)

 

(872

)

 

(614

)

  Recoveries: Commercial and industrial

 

25

 

 

70

 

 

597

 

 

86

 

 

83

 

Commercial real estate

 

11

 

 

17

 

 

74

 

 

28

 

 

158

 

Residential real estate

 

49

 

 

4

 

 

28

 

 

5

 

 

10

 

Home equity

 

9

 

 

13

 

 

18

 

 

12

 

 

4

 

Consumer

 

98

 

 

45

 

 

27

 

 

28

 

 

23

 

DDA overdrafts

 

407

 

 

368

 

 

321

 

 

315

 

 

398

 

Total recoveries

 

599

 

 

517

 

 

1,065

 

 

474

 

 

676

 

  Net (charge-offs) recoveries

 

(255

)

 

(83

)

 

177

 

 

(398

)

 

62

 

(Recovery of) provision for credit losses

 

(180

)

 

(300

)

 

200

 

 

425

 

 

2,918

 

PCD Loan Reserves

 

-

 

 

-

 

 

-

 

 

-

 

 

2,811

 

Adoption of ASU 2022-02

 

-

 

 

-

 

 

-

 

 

-

 

 

(175

)

Balance at end of period

$

22,310

 

$

22,745

 

$

23,128

 

$

22,751

 

$

22,724

 

  Loans outstanding

$

4,091,788

 

$

4,125,923

 

$

4,007,482

 

$

3,922,142

 

$

3,894,686

 

Allowance as a percent of loans outstanding

 

0.55

%

 

0.55

%

 

0.58

%

 

0.58

%

 

0.58

%

Allowance as a percent of non-performing loans

 

206.8

%

 

290.6

%

 

440.1

%

 

405.5

%

 

400.1

%

  Average loans outstanding

$

4,092,529

 

$

4,045,889

 

$

3,956,871

 

$

3,896,284

 

$

3,700,194

 

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

 

0.02

%

 

0.01

%

 

(0.02

)%

 

0.04

%

 

(0.01)

%

CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s)   March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Nonaccrual Loans Residential real estate

$

3,452

 

$

2,849

 

$

2,839

 

$

2,774

 

$

2,700

 

Home equity

 

121

 

 

111

 

 

75

 

 

24

 

 

35

 

Commercial and industrial

 

3,405

 

 

2,211

 

 

716

 

 

741

 

 

994

 

Commercial real estate

 

3,807

 

 

2,387

 

 

1,355

 

 

1,821

 

 

1,931

 

Consumer

 

1

 

 

-

 

 

1

 

 

36

 

 

19

 

Total nonaccrual loans

 

10,786

 

 

7,558

 

 

4,986

 

 

5,396

 

 

5,679

 

Accruing loans past due 90 days or more

 

-

 

 

270

 

 

269

 

 

215

 

 

-

 

Total non-performing loans

 

10,786

 

 

7,828

 

 

5,255

 

 

5,611

 

 

5,679

 

Other real estate owned

 

752

 

 

731

 

 

720

 

 

874

 

 

843

 

Total non-performing assets

$

11,538

 

$

8,559

 

$

5,975

 

$

6,485

 

$

6,522

 

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

 

0.28

%

 

0.21

%

 

0.15

%

 

0.17

%

 

0.17

%

  Past Due Loans Residential real estate

$

5,035

 

$

8,059

 

$

6,247

 

$

5,884

 

$

4,783

 

Home equity

 

1,028

 

 

1,235

 

 

1,278

 

 

784

 

 

551

 

Commercial and industrial

 

26

 

 

435

 

 

568

 

 

142

 

 

98

 

Commercial real estate

 

138

 

 

715

 

 

1,478

 

 

238

 

 

148

 

Consumer

 

75

 

 

129

 

 

84

 

 

57

 

 

3

 

DDA overdrafts

 

406

 

 

364

 

 

398

 

 

341

 

 

276

 

Total past due loans

$

6,708

 

$

10,937

 

$

10,053

 

$

7,446

 

$

5,859

 

  Total past due loans as a percent of loans outstanding

 

0.16

%

 

0.27

%

 

0.25

%

 

0.19

%

 

0.15

%

CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s)   Three Months Ended March 31, 2024 December 31, 2023 March 31, 2023 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate   Assets: Loan portfolio (1): Residential real estate (2)

$

1,953,647

 

$

24,148

4.97

%

$

1,945,185

 

$

23,673

4.83

%

$

1,840,828

 

$

20,007

4.41

%

Commercial, financial, and agriculture (2)

 

2,070,054

 

 

33,980

6.60

%

 

2,031,089

 

 

33,038

6.45

%

 

1,795,309

 

 

26,248

5.93

%

Installment loans to individuals (2), (3)

 

68,828

 

 

999

5.84

%

 

69,615

 

 

1,046

5.96

%

 

64,057

 

 

749

4.74

%

Total loans

 

4,092,529

 

 

59,127

5.81

%

 

4,045,889

 

 

57,757

5.66

%

 

3,700,194

 

 

47,004

5.15

%

Securities: Taxable

 

1,200,310

 

 

12,040

4.03

%

 

1,194,448

 

 

12,336

4.10

%

 

1,322,060

 

 

11,773

3.61

%

Tax-exempt (4)

 

160,847

 

 

1,051

2.63

%

 

153,204

 

 

1,053

2.73

%

 

204,957

 

 

1,471

2.91

%

Total securities

 

1,361,157

 

 

13,091

3.87

%

 

1,347,652

 

 

13,389

3.94

%

 

1,527,017

 

 

13,244

3.52

%

Deposits in depository institutions

 

115,953

 

 

1,570

5.45

%

 

71,624

 

 

941

5.21

%

 

160,031

 

 

1,590

4.03

%

Total interest-earning assets

 

5,569,639

 

 

73,788

5.33

%

 

5,465,165

 

 

72,087

5.23

%

 

5,387,242

 

 

61,838

4.66

%

Cash and due from banks

 

98,966

 

 

87,633

 

 

67,975

 

Premises and equipment, net

 

71,954

 

 

72,435

 

 

71,422

 

Goodwill and intangible assets

 

162,257

 

 

163,220

 

 

124,546

 

Other assets

 

306,278

 

 

342,669

 

 

327,442

 

Less: Allowance for credit losses

 

(23,142

)

 

(23,532

)

 

(18,143

)

Total assets

$

6,185,952

 

$

6,107,590

 

$

5,960,484

 

  Liabilities: Interest-bearing demand deposits

$

1,283,868

 

$

3,439

1.08

%

$

1,299,683

 

$

3,467

1.06

%

$

1,234,981

 

$

1,741

0.57

%

Savings deposits

 

1,254,253

 

 

2,273

0.73

%

 

1,274,726

 

 

2,369

0.74

%

 

1,376,317

 

 

1,348

0.40

%

Time deposits (2)

 

1,073,083

 

 

8,385

3.14

%

 

1,025,870

 

 

6,644

2.57

%

 

902,583

 

 

2,601

1.17

%

Short-term borrowings

 

313,623

 

 

3,621

4.64

%

 

312,941

 

 

3,693

4.68

%

 

281,861

 

 

2,381

3.43

%

FHLB long-term advances

 

136,813

 

 

1,423

4.18

%

 

100,000

 

 

1,026

4.07

%

 

-

 

 

-

-

% 

Total interest-bearing liabilities

 

4,061,640

 

 

19,141

1.90

%

 

4,013,220

 

 

17,199

1.70

%

 

3,795,742

 

 

8,071

0.86

%

Noninterest-bearing demand deposits

 

1,322,540

 

 

1,334,021

 

 

1,420,676

 

Other liabilities

 

115,589

 

 

132,862

 

 

129,411

 

Stockholders' equity

 

686,183

 

 

627,487

 

 

614,655

 

Total liabilities and stockholders' equity

$

6,185,952

 

$

6,107,590

 

$

5,960,484

 

Net interest income

$

54,647

$

54,888

$

53,767

Net yield on earning assets

3.95

%

3.98

%

4.05

%

  (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

$

133

$

201

$

518

  (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

$

45

$

78

$

76

Commercial, financial, and agriculture

 

1,065

 

702

 

177

Installment loans to individuals

 

6

 

26

 

4

Time deposits

 

63

 

131

 

9

$

1,179

$

937

$

266

  (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 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Net Interest Income/Margin Net interest income ("GAAP")

$

54,427

 

$

54,666

 

$

55,614

 

$

55,502

 

$

53,459

 

Taxable equivalent adjustment

 

220

 

 

223

 

 

243

 

 

255

 

 

308

 

Net interest income, fully taxable equivalent

$

54,647

 

$

54,889

 

$

55,857

 

$

55,757

 

$

53,767

 

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

 

10.81

%

 

10.98

%

 

10.04

%

 

10.35

%

 

10.48

%

Effect of goodwill and other intangibles, net

 

(2.35

)%

 

(2.41

)%

 

(2.49

)%

 

(2.45

)%

 

(2.43

)%

Tangible common equity to tangible assets

 

8.46

%

 

8.57

%

 

7.55

%

 

7.90

%

 

8.05

%

  Commercial Loan Information (period end)   Commercial Sector Total % of Total Loans Average DSC Average LTV   Natural Gas Extraction

$

25,143

 

0.61%

 

3.71

 

N/A

Natural Gas Distribution

 

12,800

 

0.31%

 

5.46

 

N/A

Masonry Contractors

 

22,804

 

0.55 %

 

1.04

 

84%

Sheet Metal Work Manufacturing

 

25,887

 

0.63%

 

1.22

 

68%

Beer & Ale Merchant Wholesalers

 

25,414

 

0.62%

 

3.28

 

N/A

Gasoline Stations with Convenience Stores

 

43,985

 

1.07%

 

4.76

 

65%

Lessors of Residential Buildings & Dwellings

 

429,615

 

10.42%

 

1.89

 

66%

1-4 Family

 

185,436

 

4.50%

 

2.97

 

67%

Multi-Family

 

177,726

 

4.31%

 

1.84

 

64%

Lessors of Nonresidential Buildings

 

600,853

 

14.58%

 

1.70

 

65%

Office Buildings

 

125,922

 

3.05%

 

1.64

 

62%

Lessors of Mini-Warehouses & Self-Storage Units

 

50,920

 

1.24%

 

1.43

 

61%

Assisted Living Facilities

 

27,273

 

0.66%

 

1.38

 

61%

Hotels & Motels

 

355,343

 

8.62%

 

1.45

 

63%

  Average Balance Median Balance Commercial, Financial, and Agriculture Loans

$

446

 

$

93

 

Commercial Real Estate Loans

 

511

 

 

120

 

    CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data)     Estimated Uninsured Deposits by Deposit Type March 31, 2024 December 31, 2023 Noninterest-Bearing Demand Deposits

 

16

%

 

16

%

  Interest-Bearing Deposits Demand Deposits

 

12

%

 

7

%

Savings Deposits

 

12

%

 

11

%

Time Deposits

 

15

%

 

13

%

Total Deposits

 

14

%

 

12

%

    The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities).     CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data)   Net Growth in DDA Accounts Year New DDA Accounts Net Number of New Accounts Percentage  

2024 YTD

 

7,935

 

 

1,121

 

 

0.4

%

2023*

 

31,745

 

 

4,768

 

 

1.9

%

2022

 

28,442

 

 

4,544

 

 

1.9

%

2021

 

32,800

 

 

8,860

 

 

3.8

%

2020

 

30,360

 

 

6,740

 

 

3.0

%

2019

 

32,040

 

 

3,717

 

 

1.7

%

2018*

 

30,400

 

 

4,310

 

 

2.2

%

2017

 

28,525

 

 

2,711

 

 

1.4

%

2016

 

28,650

 

 

2,820

 

 

1.5

%

    * - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018), Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023).

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240423491883/en/

David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169