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Share Name | Share Symbol | Market | Type |
---|---|---|---|
City Holding Company | NASDAQ:CHCO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.65 | -0.64% | 101.31 | 40.53 | 104.27 | 101.46 | 100.45 | 100.87 | 49,059 | 22:39:55 |
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $114.4 million and record diluted earnings of $7.61 per share for the year ended December 31, 2023. For the year ended December 31, 2023, the Company achieved a return on assets of 1.87% and a return on tangible equity of 23.8%.
“2023 was a challenging year for the banking industry, but a great year for City”, said City’s President and CEO Charles Hageboeck. “City’s strong performance during the year highlights the value of the Company’s deep customer base and conservative operating principles. During 2023, City completed the acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank (“Citizens”) of Versailles, Kentucky, that enhanced our market position in central Kentucky.
“Net of loans acquired from Citizens, City grew loans over 6% during 2023, and asset quality remained strong with City only needing to take a relatively small provision for the year (excluding the provision established as part of the acquisition of Citizens). The number of checking accounts grew approximately 2% in 2023, and City saw checking accounts increase in many slow growth regions where City already has a dominant market position. We believe this growth resulted from a combination of excellent service, strong products and technology, coupled with less competition than may be present in more urban markets.
“After adjusting for security gains and losses and one-time merger costs, City’s earnings per share remained essentially flat on a quarterly basis throughout 2023 – at approximately $2.00 per share. During the year, the cost of City’s deposits rose by 60 basis points, while interest earning asset yields rose by 145 basis points. City’s average deposits in the fourth quarter of 2023 declined 5.5% from average deposits in the fourth quarter of 2022 (net of deposits acquired from Citizens), but declined only 0.5% from the third quarter of 2023 that reflects an attractive customer mix which is dependent on many, small retail deposit customers.
“City issued 667,000 shares in its acquisition of Citizens in the first quarter of 2023, but was able to repurchase essentially all of those shares during the year. As a result, the number of City’s shares outstanding at the end of 2023 only grew marginally from the end of 2022 (due to shares issued for employee and director compensation) – and City’s tangible common equity ratio increased from 8.0% at December 31, 2022, to over 8.6% at December 31, 2023 despite the large number of shares purchased.
“As a result, City begins 2024 exceptionally positioned with an extremely strong customer franchise, an exceptional team, an enviable cost of funds, strong asset quality, and competitors who seem focused on making their customers banking experiences more difficult.”
Net Interest Income
The Company’s net interest income increased from $180.0 million for the year ended December 31, 2022 to $219.2 million for the year ended December 31, 2023. The Company’s tax equivalent net interest income increased $39.0 million, or 21.5%, from $181.3 million for the year ended December 31, 2022 to $220.3 million for the year ended December 31, 2023. The acquisition of Citizens during the first quarter of 2023 added $10.6 million of net interest income during the year ended December 31, 2023. Due to increases in market rates, net interest income increased by $47.2 million due to an increase in loan yields (net of loan fees and accretion) of 127 basis points, by $14.2 million due to an increase in the yield on investment securities of 97 basis points, and by $4.9 million due to a 342 basis point increase on deposits in depository institutions. In addition, net interest income increased $4.4 million due to an increase in balances of loans of $110.2 million and by $2.0 million due to additional accretion from the year ended December 31, 2022.
These increases were partially offset by an increase in the cost of interest bearing liabilities (110 basis points) which decreased net interest income by $41.6 million, lower balances of deposits in depository institutions ($214.9 million) that lowered net interest income by $2.3 million, and lower investment balances ($57.8 million) that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 3.33% for the year ended December 31, 2022 to 4.01% for the year ended December 31, 2023.
During the fourth quarter of 2023, the Company’s net interest income decreased from $55.6 million during the third quarter of 2023 to $54.7 million. During the fourth quarter of 2023, the Company’s tax equivalent net interest income decreased $1.0 million, or 1.7%, to $54.9 million from $55.9 million during the third quarter of 2023. Due to an increase in the cost of interest bearing liabilities (22 basis points), net interest income decreased $1.8 million. Additionally, lower investment balances ($100.4 million) decreased net interest income by $0.9 million and an increase in balances of interest bearing liabilities ($40.2 million) decreased net interest income by $0.6 million. These decreases were partially offset by an increase in loan balances of $89.0 million which increased net interest income by $1.3 million, an increase of 18 basis points on investment security yields which increased net interest income by $0.7 million, and an increase of one basis point on loans yields which increased net interest income by $0.6 million. The Company’s reported net interest margin decreased from 4.03% for the third quarter of 2023 to 3.98% for the fourth quarter of 2023.
Credit Quality
The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.17%, or $6.3 million, at December 31, 2022 to 0.21%, or $8.6 million at December 31, 2023 primarily as a result of the acquisition of Citizens. Total past due loans increased from $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022 to $10.9 million, or 0.27% of total loans outstanding, at December 31, 2023.
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 $0.3 million in the fourth quarter of 2023 and a provision for credit losses of $3.2 million for the year ended December 31, 2023, compared to a $0.5 million provision for credit losses for the fourth quarter and for the year ended December 31, 2022. In connection with the completion of our acquisition of Citizens during 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses. Additionally, the provision for the year ended December 31, 2023 was a result of loan growth and credit downgrades that were partially offset by lower historical loss rates in the loan portfolio.
Non-interest Income
Non-interest income was $70.6 million for the year ended December 31, 2023, as compared to $72.1 million for the year ended December 31, 2022. In 2023, the Company reported $4.9 million of realized security losses and $0.4 million of unrealized security gains on the Company’s equity securities as compared to $1.6 million of unrealized security losses on the Company’s equity securities in 2022. The realized security losses during 2023, which lowered diluted earnings per share by $0.25, were executed to reposition a portion of our investment securities.
Exclusive of these realized and unrealized gains and losses, non-interest income increased $1.4 million, or 2.0%, from $73.7 million for 2022 to $75.1 million for 2023. This increase was largely attributable to an increase of $0.8 million, or 8.7%, in trust and investment management fee income and a $0.6 million, or 2.2%, increase in bankcard revenue. In addition, death benefits from bank owned life insurance increased $0.5 million from the year ended December 31, 2022. These increases were partially offset by a decrease of $0.6 million in service charges.
During the quarter ended December 31, 2023, non-interest income was $14.2 million as compared to $18.5 million during the quarter ended December 31, 2022. During the fourth quarter of 2023, the Company reported $5.0 million of realized security losses and $0.4 million of unrealized fair value gains on the Company’s equity securities as compared to $0.3 million of unrealized fair value losses on the Company’s equity securities during the fourth quarter of 2022.
Exclusive of these realized and unrealized gains and losses, non-interest income remained consistent at $18.8 million for both the fourth quarter of 2022 and for the fourth quarter of 2023. Lower death benefits from bank owned life insurance of $0.6 million was essentially offset by higher bankcard revenue, $0.3 million or 4.7%, and trust and investment management fee income, $0.2 million or 9.4%.
Non-interest Expenses
Non-interest expenses increased $19.2 million, or 15.5%, from $124.3 million for 2022 to $143.5 million for 2023. This increase was primarily due to an increase in other expenses ($9.8 million, due primarily to higher acquisition and integration expenses associated with the completed acquisition of Citizens ($5.2 million)) and salaries and employee benefit expenses ($6.6 million due to salary adjustments, Citizens personnel ($1.9 million), and increased health insurance). In addition, bankcard expense increased $1.4 million, FDIC expense increased $1.2 million and occupancy related expenses increased $0.6 million.
In the fourth quarter of 2023, non-interest expenses increased $2.5 million (7.7%) from $32.6 million in the fourth quarter of 2022 to $35.1 million. This increase was largely due to an increase in salaries and employee benefits of $1.6 million (salary adjustments, Citizens personnel ($0.6 million), and increased health insurance) and bankcard expenses of $0.7 million. In addition, other expenses increased $0.5 million and FDIC expense increased $0.5 million. These increases were partially offset by lower equipment and software related expense ($0.5 million).
Balance Sheet Trends
Loans increased $479.7 million (13.2%) from December 31, 2022 to $4.13 billion at December 31, 2023. The Company’s acquisition of Citizens increased total loans by $254.7 million. Excluding the acquisition, total loans increased $225.0 million (6.2%) from December 31, 2022. Commercial real estate loans increased $101.4 million (7.3%); residential real estate loans increased $51.3 million (3.0%); commercial and industrial loans increased $38.4 million (10.3%); home equity loans increased $19.1 million (14.3%); and consumer loans increased $13.4 million (27.4%).
Average depository balances for the year ended December 31, 2023 approximated those for the year ended December 31, 2022 at $4.98 billion. The acquisition of Citizens increased average deposits by $243.0 million during 2023. Excluding the acquisition of Citizens, average deposits declined $237.9 million. Average savings deposits decreased $139.7 million, average noninterest bearing demand deposits decreased $87.3 million, and average time deposits decreased $68.3 million. These decreases were partially offset by an increase in average interest bearing demand deposits of $57.3 million.
Income Tax Expense
The Company’s effective income tax rates for the quarter and year ended December 31, 2023 were 19.5% and 20.1%, respectively, compared to 18.2% and 19.8% for the comparable periods in 2022.
Capitalization and Liquidity
The Company’s loan to deposit ratio was 83.6% and the loan to asset ratio was 66.9% at December 31, 2023. The Company maintained investment securities totaling 22.2% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 63.1% of assets at December 31, 2023. Time deposits fund 16.9% of assets at December 31, 2023, with only 12.6% 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 December 31, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, approximately $690 million of City’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $680 million of City’s investment securities unpledged at December 31, 2023.
The Company continues to be strongly capitalized with tangible equity of $514 million at December 31, 2023. The Company’s tangible equity ratio increased from 8.0% at December 31, 2022 to 8.6% at December 30, 2023. This increase was attributable to the Company’s net income for 2023 less dividends and a decrease in unrealized losses on securities available for sale due to the impact of lower interest rates at the end of 2023.
At December 31, 2023, City National’s Leverage Ratio was 8.9%, its Common Equity Tier I ratio was 13.8%, its Tier I Capital ratio was 13.8%, and its Total Risk-Based Capital ratio was 14.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On November 15, 2023, the Company’s Board of Directors approved a quarterly cash dividend of $0.715 cents per share payable January 31, 2024, to shareholders of record as of January 15, 2024. During the year ended December 31, 2023, the Company repurchased 667,000 common shares at a weighted average price of $90.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2023, the Company could repurchase an additional approximately 150,000 shares under the current plan.
City National Bank operates 98 branches across West Virginia, Kentucky, Virginia, and Ohio. City National will be closing its Nichols Park branch located in Lexington, Kentucky on February 9, 2024, due to its proximity to three existing City National branches.
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) 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 December 31, 2023 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2023 results and will adjust the amounts if necessary.
CITY HOLDING COMPANY AND SUBSIDIARIES Financial Highlights (Unaudited) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Earnings Net Interest Income (fully taxable equivalent)$
54,889
$
55,855
$
55,757
$
53,767
$
52,381
$
220,266
$
181,339
Net Income available to common shareholders
27,452
29,839
32,733
24,341
30,672
114,365
102,071
Per Share Data Earnings per share available to common shareholders: Basic
$
1.84
$
1.98
$
2.16
$
1.63
$
2.06
$
7.62
$
6.81
Diluted
1.84
1.98
2.16
1.63
2.05
7.61
6.80
Weighted average number of shares (in thousands): Basic
14,758
14,922
14,994
14,818
14,756
14,868
14,847
Diluted
14,785
14,945
15,012
14,844
14,785
14,891
14,873
Period-end number of shares (in thousands)
14,832
14,901
15,007
15,260
14,788
14,832
14,788
Cash dividends declared
$
0.72
$
0.72
$
0.65
$
0.65
$
0.65
$
2.73
$
2.50
Book value per share (period-end)
$
45.65
$
40.94
$
42.39
$
42.66
$
39.08
$
45.65
$
39.08
Tangible book value per share (period-end)
34.69
29.98
31.50
31.91
31.25
34.69
31.25
Market data: High closing price
$
115.77
$
99.49
$
97.92
$
100.27
$
101.94
$
115.77
$
101.94
Low closing price
87.43
87.51
83.57
89.17
89.32
83.57
73.88
Period-end closing price
110.26
90.35
89.99
90.88
93.09
110.26
93.09
Average daily volume (in thousands)
62
62
80
84
75
72
70
Treasury share activity: Treasury shares repurchased (in thousands)
70
109
269
218
69
667
325
Average treasury share repurchase price
$
90.61
$
89.33
$
88.93
$
92.10
$
93.12
$
90.21
$
81.50
Key Ratios (percent) Return on average assets
1.78
%
1.94
%
2.12
%
1.63
%
2.08
%
1.87
%
1.71
%
Return on average tangible equity
23.5
%
24.1
%
27.4
%
19.9
%
27.3
%
23.8
%
20.3
%
Yield on interest earning assets
5.23
%
5.08
%
4.87
%
4.66
%
4.23
%
4.96
%
3.51
%
Cost of interest bearing liabilities
1.70
%
1.46
%
1.22
%
0.86
%
0.48
%
1.32
%
0.25
%
Net Interest Margin
3.98
%
4.03
%
4.00
%
4.05
%
3.89
%
4.01
%
3.33
%
Non-interest income as a percent of total revenue
25.6
%
24.6
%
27.1
%
24.7
%
26.5
%
25.6
%
28.6
%
Efficiency Ratio
47.4
%
46.4
%
44.6
%
45.7
%
45.3
%
46.0
%
48.2
%
Price/Earnings Ratio (a)
14.95
11.40
10.40
13.95
11.30
14.47
13.67
Capital (period-end) Average Shareholders' Equity to Average Assets
10.27
%
10.73
%
10.38
%
10.31
%
9.57
%
Tangible equity to tangible assets
8.57
%
7.55
%
7.90
%
8.05
%
8.02
%
Consolidated City Holding Company risk based capital ratios (b): CET I
15.70
%
15.36
%
15.47
%
15.64
%
16.23
%
Tier I
15.70
%
15.36
%
15.47
%
15.64
%
16.23
%
Total
16.23
%
15.89
%
16.01
%
16.18
%
16.62
%
Leverage
10.23
%
10.05
%
9.80
%
10.20
%
10.01
%
City National Bank risk based capital ratios (b): CET I
13.79
%
14.73
%
14.82
%
14.08
%
13.88
%
Tier I
13.79
%
14.73
%
14.82
%
14.08
%
13.88
%
Total
14.32
%
15.27
%
15.36
%
14.63
%
14.28
%
Leverage
8.94
%
9.61
%
9.36
%
9.18
%
8.55
%
Other (period-end) Branches
98
99
99
99
94
FTE
957
966
963
958
909
Assets per FTE (in thousands)
$
6,447
$
6,291
$
6,383
$
6,483
$
6,467
Deposits per FTE (in thousands)
5,157
5,120
5,208
5,362
5,357
(a) The price/earnings ratio is computed based on annualized quarterly earnings. (b) December 31, 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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Interest Income Interest and fees on loans
$
57,755
$
55,582
$
52,352
$
47,004
$
42,963
$
212,693
$
146,538
Interest on investment securities: Taxable
12,336
12,432
11,794
11,773
11,119
48,335
34,445
Tax-exempt
832
910
950
1,162
1,262
3,854
4,911
Interest on deposits in depository institutions
941
1,265
2,585
1,591
1,244
6,382
3,794
Total Interest Income
71,864
70,189
67,681
61,530
56,588
271,264
189,688
Interest Expense Interest on deposits
12,479
10,551
8,567
5,690
3,010
37,287
7,444
Interest on short-term borrowings
3,693
2,990
2,963
2,381
1,533
12,027
2,211
Interest on FHLB long-term advances
1,026
1,034
649
-
-
2,709
-
Total Interest Expense
17,198
14,575
12,179
8,071
4,543
52,023
9,655
Net Interest Income
54,666
55,614
55,502
53,459
52,045
219,241
180,033
(Recovery of) Provision for credit losses
(300
)
200
425
2,918
500
3,243
474
Net Interest Income After Provision for (Recovery of) Credit Losses
54,966
55,414
55,077
50,541
51,545
215,998
179,559
Non-Interest Income Net (losses) gains on sale of investment securities
(4,951
)
(730
)
-
773
4
(4,908
)
4
Unrealized gains/(losses) recognized on equity securities still held
365
-
(294
)
361
(262
)
432
(1,585
)
Service charges
7,158
7,124
6,906
6,563
7,056
27,751
28,335
Bankcard revenue
7,109
7,058
7,190
6,603
6,791
27,960
27,349
Trust and investment management fee income
2,563
2,409
2,339
2,252
2,343
9,563
8,798
Bank owned life insurance
1,218
807
3,208
804
1,813
6,037
5,559
Other income
774
742
952
1,326
791
3,794
3,617
Total Non-Interest Income
14,236
17,410
20,301
18,682
18,536
70,629
72,077
Non-Interest Expense Salaries and employee benefits
18,772
18,289
18,429
17,673
17,148
73,163
66,536
Occupancy related expense
2,917
2,950
2,811
2,640
2,725
11,318
10,718
Equipment and software related expense
2,824
2,830
2,883
3,092
3,341
11,629
11,791
FDIC insurance expense
868
919
690
445
413
2,922
1,673
Advertising
588
790
974
760
802
3,112
3,405
Bankcard expenses
2,014
2,188
1,736
1,509
1,356
7,447
6,032
Postage, delivery, and statement mailings
615
668
596
647
597
2,526
2,362
Office supplies
477
457
591
420
441
1,945
1,744
Legal and professional fees
478
529
558
470
610
2,035
2,194
Telecommunications
614
568
623
606
627
2,411
2,616
Repossessed asset (gains)/losses, net of expenses
(50
)
40
22
16
54
28
59
Other expenses
4,992
4,800
4,848
10,345
4,471
24,985
15,172
Total Non-Interest Expense
35,109
35,028
34,761
38,623
32,585
143,521
124,302
Income Before Income Taxes
34,093
37,796
40,617
30,600
37,496
143,106
127,334
Income tax expense
6,641
7,957
7,884
6,259
6,824
28,741
25,263
Net Income Available to Common Shareholders
$
27,452
$
29,839
$
32,733
$
24,341
$
30,672
$
114,365
$
102,071
Distributed earnings allocated to common shareholders
$
10,508
$
10,554
$
9,668
$
9,833
$
9,521
$
40,121
$
36,619
Undistributed earnings allocated to common shareholders
16,696
19,004
22,774
14,294
20,857
73,208
64,494
Net earnings allocated to common shareholders
$
27,204
$
29,558
$
32,442
$
24,127
$
30,378
$
113,329
$
101,113
Average common shares outstanding
14,758
14,922
14,994
14,818
14,756
14,868
14,847
Shares for diluted earnings per share
14,785
14,945
15,012
14,844
14,785
14,891
14,873
Basic earnings per common share
$
1.84
$
1.98
$
2.16
$
1.63
$
2.06
$
7.62
$
6.81
Diluted earnings per common share
$
1.84
$
1.98
$
2.16
$
1.63
$
2.05
$
7.61
$
6.80
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Balance Sheets ($ in 000s) (Unaudited) (Unaudited) (Unaudited) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Assets Cash and due from banks
$
123,033
$
67,402
$
69,622
$
76,223
$
70,257
Interest-bearing deposits in depository institutions
33,243
43,314
161,659
226,587
129,743
Cash and cash equivalents
156,276
110,716
231,281
302,810
200,000
Investment securities available-for-sale, at fair value
1,338,137
1,358,219
1,419,933
1,456,259
1,505,520
Other securities
30,966
29,022
29,262
24,728
23,807
Total investment securities
1,369,103
1,387,241
1,449,195
1,480,987
1,529,327
Gross loans
4,125,923
4,007,482
3,922,142
3,894,686
3,646,258
Allowance for credit losses
(22,745
)
(23,128
)
(22,751
)
(22,724
)
(17,108
)
Net loans
4,103,178
3,984,354
3,899,391
3,871,962
3,629,150
Bank owned life insurance
118,122
117,979
117,173
124,238
120,674
Premises and equipment, net
72,146
72,682
73,118
73,430
70,786
Accrued interest receivable
20,290
19,223
17,973
18,395
18,287
Net deferred tax assets
42,216
58,811
46,944
42,146
44,884
Goodwill and intangible assets
162,568
163,461
163,426
164,099
115,735
Other assets
124,153
161,659
148,333
132,715
149,263
Total Assets
$
6,168,052
$
6,076,126
$
6,146,834
$
6,210,782
$
5,878,106
Liabilities Deposits: Noninterest-bearing
$
1,342,804
$
1,333,474
$
1,373,106
$
1,420,990
$
1,351,415
Interest-bearing: Demand deposits
1,291,011
1,319,783
1,337,445
1,356,017
1,233,482
Savings deposits
1,259,457
1,282,642
1,343,571
1,397,523
1,396,869
Time deposits
1,040,990
1,009,235
960,941
962,235
888,100
Total deposits
4,934,262
4,945,134
5,015,063
5,136,765
4,869,866
Short-term borrowings FHLB short-term advances
25,000
-
-
-
-
Customer repurchase agreements
309,856
278,671
271,714
293,256
290,964
FHLB long-term advances
100,000
100,000
100,000
-
-
Other liabilities
121,868
142,187
123,865
129,711
139,424
Total Liabilities
5,490,986
5,465,992
5,510,642
5,559,732
5,300,254
Stockholders' Equity Preferred stock
-
-
-
-
-
Common stock
47,619
47,619
47,619
47,619
47,619
Capital surplus
177,424
177,113
176,746
177,529
170,980
Retained earnings
780,299
763,425
744,248
721,727
706,696
Cost of common stock in treasury
(217,737
)
(211,430
)
(201,973
)
(179,436
)
(215,955
)
Accumulated other comprehensive (loss) income: Unrealized (loss) gain on securities available-for-sale
(107,958
)
(163,171
)
(127,026
)
(112,967
)
(128,066
)
Underfunded pension liability
(2,581
)
(3,422
)
(3,422
)
(3,422
)
(3,422
)
Total Accumulated Other Comprehensive (Loss) Income
(110,539
)
(166,593
)
(130,448
)
(116,389
)
(131,488
)
Total Stockholders' Equity
677,066
610,134
636,192
651,050
577,852
Total Liabilities and Stockholders' Equity
$
6,168,052
$
6,076,126
$
6,146,834
$
6,210,782
$
5,878,106
Regulatory Capital Total CET 1 capital
$
627,579
$
615,798
$
605,661
$
606,675
$
598,068
Total tier 1 capital
627,579
615,798
605,661
606,675
598,068
Total risk-based capital
648,646
637,245
626,730
627,718
612,654
Total risk-weighted assets
3,996,688
4,009,798
3,913,870
3,878,994
3,685,207
CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Commercial and industrial
$
426,950
$
424,647
$
417,847
$
390,861
$
373,890
1-4 Family
206,237
135,226
123,701
119,017
116,192
Hotels
357,142
321,236
324,745
327,554
340,404
Multi-family
189,165
192,329
191,483
195,042
174,786
Non Residential Non-Owner Occupied
680,590
713,353
673,921
679,782
585,964
Non Residential Owner Occupied
240,328
222,544
222,852
223,096
174,961
Commercial real estate (1)
1,673,462
1,584,688
1,536,702
1,544,491
1,392,307
Residential real estate (2)
1,788,150
1,768,358
1,746,618
1,737,604
1,693,523
Home equity
167,201
159,630
151,012
151,341
134,317
Consumer
65,246
65,586
65,201
66,994
48,806
DDA overdrafts
4,914
4,573
4,762
3,395
3,415
Gross Loans$
4,125,923
$
4,007,482
$
3,922,142
$
3,894,686
$
3,646,258
Construction loans included in: (1) - Commercial real estate loans$
2,459
$
2,533
$
3,361
$
4,715
$
4,130
(2) - Residential real estate loans
23,066
20,056
20,470
25,224
21,122
CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information (Unaudited) ($ in 000s) Three Months Ended Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Allowance for Credit Losses Balance at beginning of period$
23,128
$
22,751
$
22,724
$
17,108
$
17,011
$
17,108
$
18,166
Charge-offs: Commercial and industrial
(84
)
-
(69
)
-
(120
)
(153
)
(562
)
Commercial real estate
(5
)
(256
)
(117
)
(3
)
(31
)
(381
)
(55
)
Residential real estate
(68
)
(88
)
(20
)
(32
)
(66
)
(208
)
(265
)
Home equity
(21
)
(112
)
(200
)
(67
)
(189
)
(400
)
(279
)
Consumer
(6
)
(10
)
(109
)
(62
)
(15
)
(187
)
(63
)
DDA overdrafts
(416
)
(422
)
(357
)
(450
)
(670
)
(1,645
)
(2,624
)
Total charge-offs
(600
)
(888
)
(872
)
(614
)
(1,091
)
(2,974
)
(3,848
)
Recoveries: Commercial and industrial
70
597
86
83
94
836
334
Commercial real estate
17
74
28
158
120
277
207
Residential real estate
4
28
5
10
49
47
99
Home equity
13
18
12
4
34
47
56
Consumer
45
27
28
23
31
123
107
DDA overdrafts
368
321
315
398
360
1,402
1,513
Total recoveries
517
1,065
474
676
688
2,732
2,316
Net (charge-offs) recoveries
(83
)
177
(398
)
62
(403
)
(242
)
(1,532
)
(Recovery of) provision for credit losses
(300
)
200
425
2,918
500
3,243
474
PCD Loan Reserves
-
-
-
2,811
-
2,811
-
Adoption of ASU 2022-02
-
-
-
(175
)
-
(175
)
-
Balance at end of period
$
22,745
$
23,128
$
22,751
$
22,724
$
17,108
$
22,745
$
17,108
Loans outstanding
$
4,125,923
$
4,007,482
$
3,922,142
$
3,894,686
$
3,646,258
Allowance as a percent of loans outstanding
0.55
%
0.58
%
0.58
%
0.58
%
0.47
%
Allowance as a percent of non-performing loans
290.6
%
440.1
%
405.5
%
400.1
%
317.3
%
Average loans outstanding$
4,045,889
$
3,956,871
$
3,896,284
$
3,700,194
$
3,648,996
$
3,900,913
$
3,583,526
Net (recoveries)/charge-offs (annualized) as a percent of average loans outstanding
0.01
%
(0.02
)%
0.04
%
(0.01
)%
0.04
%
0.01
%
0.04
%
CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality Information, continued (Unaudited) ($ in 000s) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Nonaccrual Loans Residential real estate$
2,849
$
2,839
$
2,774
$
2,700
$
1,969
Home equity
111
75
24
35
55
Commercial and industrial
2,211
716
741
994
1,015
Commercial real estate
2,387
1,355
1,821
1,931
2,166
Consumer
-
1
36
19
-
Total nonaccrual loans
7,558
4,986
5,396
5,679
5,205
Accruing loans past due 90 days or more
270
269
215
-
187
Total non-performing loans
7,828
5,255
5,611
5,679
5,392
Other real estate owned
731
720
874
843
909
Total non-performing assets
$
8,559
$
5,975
$
6,485
$
6,522
$
6,301
Non-performing assets as a percent of loans and other real estate owned
0.21
%
0.15
%
0.17
%
0.17
%
0.17
%
Past Due Loans Residential real estate$
8,059
$
6,247
$
5,884
$
4,783
$
7,091
Home equity
1,235
1,278
784
551
650
Commercial and industrial
435
568
142
98
234
Commercial real estate
715
1,478
238
148
710
Consumer
129
84
57
3
100
DDA overdrafts
364
398
341
276
391
Total past due loans
$
10,937
$
10,053
$
7,446
$
5,859
$
9,176
Total past due loans as a percent of loans outstanding
0.27
%
0.25
%
0.19
%
0.15
%
0.25
%
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated Average Balance Sheets, Yields, and Rates (Unaudited) ($ in 000s) Three Months Ended December 31, 2023 September 30, 2023 December 31, 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2)$
1,945,185
$
23,673
4.83
%
$
1,910,876
$
22,702
4.71
%
$
1,824,327
$
18,973
4.13
%
Commercial, financial, and agriculture (2)
2,031,089
33,038
6.45
%
1,975,463
31,743
6.38
%
1,773,937
23,346
5.22
%
Installment loans to individuals (2), (3)
69,615
1,046
5.96
%
70,532
1,138
6.40
%
50,732
646
5.05
%
Total loans
4,045,889
57,757
5.66
%
3,956,871
55,583
5.57
%
3,648,996
42,965
4.67
%
Securities: Taxable
1,194,448
12,336
4.10
%
1,277,265
12,432
3.86
%
1,315,453
11,118
3.35
%
Tax-exempt (4)
153,204
1,053
2.73
%
170,806
1,152
2.68
%
211,326
1,597
3.00
%
Total securities
1,347,652
13,389
3.94
%
1,448,071
13,584
3.72
%
1,526,779
12,715
3.30
%
Deposits in depository institutions
71,624
941
5.21
%
90,994
1,265
5.52
%
162,732
1,245
3.04
%
Total interest-earning assets
5,465,165
72,087
5.23
%
5,495,936
70,432
5.08
%
5,338,507
56,925
4.23
%
Cash and due from banks
87,633
69,348
69,223
Premises and equipment, net
72,435
73,004
71,482
Goodwill and intangible assets
163,220
163,602
115,952
Other assets
342,669
332,551
332,855
Less: Allowance for credit losses
(23,532
)
(23,558
)
(17,332
)
Total assets$
6,107,590
$
6,110,883
$
5,910,687
Liabilities: Interest-bearing demand deposits
$
1,299,683
$
3,467
1.06
%
$
1,300,936
$
3,068
0.94
%
$
1,150,327
$
684
0.24
%
Savings deposits
1,274,726
2,369
0.74
%
1,314,484
2,319
0.70
%
1,412,246
829
0.23
%
Time deposits (2)
1,025,870
6,644
2.57
%
985,038
5,163
2.08
%
916,845
1,497
0.65
%
Short-term borrowings
312,941
3,693
4.68
%
272,558
2,990
4.35
%
303,599
1,534
2.00
%
FHLB long-term advances
100,000
1,026
4.07
%
100,000
1,035
4.11
%
-
-
-
Total interest-bearing liabilities
4,013,220
17,199
1.70
%
3,973,016
14,575
1.46
%
3,783,017
4,544
0.48
%
Noninterest-bearing demand deposits
1,334,021
1,359,268
1,428,013
Other liabilities
132,862
123,137
134,075
Stockholders' equity
627,487
655,462
565,582
Total liabilities and stockholders' equity
$
6,107,590
$
6,110,883
$
5,910,687
Net interest income
$
54,888
$
55,857
$
52,381
Net yield on earning assets
3.98
%
4.03
%
3.89
%
(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$
201
$
254
$
(41
)
(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
$
47
$
67
Commercial, financial, and agriculture
702
720
135
Installment loans to individuals
26
4
4
Time deposits
131
240
21
$
937
$
1,011
$
227
(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) Twelve Months Ended December 31, 2023 December 31, 2022 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets: Loan portfolio (1): Residential real estate (2)
$
1,899,239
$
88,083
4.64
%
$
1,755,772
$
68,581
3.91
%
Commercial, financial, and agriculture (2)
1,935,038
120,783
6.24
%
1,781,132
75,390
4.23
%
Installment loans to individuals (2), (3)
66,636
3,828
5.74
%
46,622
2,567
5.51
%
Total loans
3,900,913
212,694
5.45
%
3,583,526
146,538
4.09
%
Securities: Taxable
1,273,674
48,335
3.79
%
1,288,252
34,445
2.67
%
Tax-exempt (4)
175,383
4,878
2.78
%
218,588
6,217
2.84
%
Total securities
1,449,057
53,213
3.67
%
1,506,840
40,662
2.70
%
Deposits in depository institutions
142,299
6,382
4.48
%
357,184
3,794
1.06
%
Total interest-earning assets
5,492,269
272,289
4.96
%
5,447,550
190,994
3.51
%
Cash and due from banks
74,443
88,581
Premises and equipment, net
72,582
72,590
Goodwill and intangible assets
153,937
116,469
Other assets
329,198
271,685
Less: Allowance for credit losses
(22,089
)
(17,687
)
Total assets$
6,100,340
$
5,979,188
Liabilities: Interest-bearing demand deposits
$
1,291,234
$
11,048
0.86
%
$
1,150,007
$
1,234
0.11
%
Savings deposits
1,332,527
7,979
0.60
%
1,414,727
1,544
0.11
%
Time deposits (2)
969,329
18,260
1.88
%
983,046
4,666
0.47
%
Short-term borrowings
290,440
12,027
4.14
%
284,611
2,211
0.78
%
FHLB long-term advances
66,849
2,709
4.05
%
-
-
-
Total interest-bearing liabilities
3,950,379
52,023
1.32
%
3,832,391
9,655
0.25
%
Noninterest-bearing demand deposits
1,389,295
1,429,415
Other liabilities
125,377
98,553
Stockholders' equity
635,289
618,829
Total liabilities and stockholders' equity
$
6,100,340
$
5,979,188
Net interest income
$
220,266
$
181,339
Net yield on earning assets4.01
%
3.33
%
(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$
1,366
$
568
(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$
243
$
298
Commercial, financial, and agriculture
2,276
642
Installment loans to individuals
41
45
Time deposits
535
83
$
3,095
$
1,068
(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 Twelve Months Ended December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net Interest Income/Margin Net interest income ("GAAP")$
54,666
$
55,614
$
55,502
$
53,459
$
52,045
$
219,241
$
180,033
Taxable equivalent adjustment
223
243
255
308
336
1,025
1,306
Net interest income, fully taxable equivalent
$
54,889
$
55,857
$
55,757
$
53,767
$
52,381
$
220,266
$
181,339
Tangible Equity Ratio (period end) Equity to assets ("GAAP")
10.98
%
10.04
%
10.35
%
10.48
%
9.83
%
Effect of goodwill and other intangibles, net
(2.41
)%
(2.49
)%
(2.45
)%
(2.43
)%
(1.81
)%
Tangible common equity to tangible assets
8.57
%
7.55
%
7.90
%
8.05
%
8.02
%
Return on Average Tangible Equity and Return on Assets Ratios (period end) Return on average tangible equity ("GAAP")
23.8
%
20.3
%
Impact of merger related expenses
0.8
%
-
%
Impact of merger related provision
0.3
%
-
%
Return on tangible equity, excluding merger related expenses and provision
24.9
%
20.3
%
Return on assets ("GAAP")
1.87
%
1.71
%
Impact of merger related expenses
0.07
%
-
%
Impact of merger related provision
0.03
%
-
%
Return on assets, excluding merger related expenses and provision
1.97
%
1.71
%
Commercial Loan Information (period end) Commercial Sector Total % of Total Loans Average DSC Average LTV Natural Gas Extraction$
23,743
0.58
%
3.68
N/A
Natural Gas Distribution
20,000
0.49
%
2.61
N/A
Masonry Contractors
24,190
0.59
%
1.13
84
%
Sheet Metal Work Manufacturing
25,887
0.63
%
1.57
68
%
Beer & Ale Merchant Wholesalers
25,672
0.62
%
3.28
N/A
Gasoline Stations with Convenience Stores
45,945
1.11
%
4.19
65
%
Lessors of Residential Buildings & Dwellings
433,506
10.52
%
1.89
66
%
1-4 Family
186,341
4.52
%
2.97
68
%
Multi-Family
179,822
4.36
%
1.84
66
%
Lessors of Nonresidential Buildings
611,108
14.83
%
1.70
65
%
Office Buildings
43,735
1.06
%
1.64
63
%
Lessors of Mini-Warehouses & Self-Storage Units
50,898
1.23
%
1.62
61
%
Assisted Living Facilities
27,620
0.67
%
1.38
57
%
Hotels & Motels
357,572
8.68
%
1.43
62
%
Average Balance Median Balance Commercial, Financial, and Agriculture Loans$
456
$
93
Commercial Real Estate Loans
517
120
CITY HOLDING COMPANY AND SUBSIDIARIES Non-GAAP Reconciliations, continued (Unaudited) ($ in 000s, except per share data) Estimated Uninsured Deposits by Deposit Type December 31, 2023 September 30, 2023 Noninterest-Bearing Demand Deposits
16
%
17
%
Interest-Bearing Deposits Demand Deposits
7
%
11
%
Savings Deposits
11
%
11
%
Time Deposits
13
%
14
%
Total Deposits
12
%
13
%
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 Percentage2023*
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/20240122746389/en/
David L. Bumgarner, Executive Vice President and Chief Financial Officer (304) 769-1169
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