City Holding Company Announces Record Annual Earnings

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 assets						4.01	%						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			Percentage
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/20240122746389/en/

The City Holding Stock at the time of publication of the news with a fall of -0,87 % to 106,6USD on Nasdaq stock exchange (24. Januar 2024, 02:00 Uhr).