City Holding Company Announces Quarterly Results

City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $24.3 million and diluted earnings of $1.63 per share for the quarter ended March 31, 2023. During the first quarter of 2023, the Company completed its acquisition of Citizens Commerce Bancshares, Inc. (“Citizens”) and its principal banking subsidiary, Citizens Commerce Bank of Versailles, Kentucky, on March 10, 2023. The results for the quarter ended March 31, 2023, include $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses and $5.6 million of acquisition and integration expenses related to the acquisition. These expenses reduced diluted earnings per share on an after-tax-basis by $0.40.

Net Interest Income

The Company’s net interest income increased approximately $1.4 million, or 2.7%, from $52.0 million during the fourth quarter of 2022 to $53.5 million during the first quarter of 2023. The Company’s tax equivalent net interest income increased $1.4 million, or 2.6%, from $52.4 million for the fourth quarter of 2022 to $53.8 million for the first quarter of 2023. The acquisition of Citizens added $0.5 million of net interest income during the quarter ended March 31, 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $3.0 million due to an increase in loan yields (net of loan fees and accretion) of 43 basis points and by $0.5 million due to an increase in investment yields of 21 basis points. In addition, loan fees increased $0.6 million and an increase of 99 basis points in the yield on deposits in depository institutions increased net interest income by $0.4 million from the quarter ended December 31, 2022. These increases were partially offset by an increase in the cost of interest bearing liabilities (38 basis points) which decreased net interest income by $3.5 million. The Company’s reported net interest margin increased from 3.89% for the fourth quarter of 2022 to 4.05% for the first quarter of 2023.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned remained stable at 0.17%, or $6.3 million, at December 31, 2022 and 0.17%, or $6.5 million, at March 31, 2023. Total past due loans decreased from $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022, to $5.9 million, or 0.15% of total loans outstanding at March 31, 2023.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $2.9 million in the first quarter of 2023, compared to a recovery of credit losses of $0.8 million for the comparable period in 2022, and a provision for credit losses of $0.5 million for the fourth quarter of 2022. In connection with the completion of our acquisition of Citizens during the quarter ended March 31, 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses. In addition, the provision for credit losses included $0.9 million that was primarily related to the downgrade of two commercial loans.

Non-interest Income

Non-interest income was $18.7 million during the quarter ended March 31, 2023, as compared to $17.5 million during the quarter ended March 31, 2022. During the first quarter of 2023, the Company reported $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 compared to $0.7 million of unrealized fair value losses on the Company’s equity securities during the first quarter of 2022. The gain from the sale of securities in the first quarter of 2023 was primarily due to the sale of Citizens investment portfolio of approximately $41 million shortly after the acquisition date. These securities were marked to market in accordance with purchase accounting rules and due to a change in market conditions and an opportunity to increase the yield on the portfolio, the Company elected to liquidate those securities. The proceeds also enabled the Company an opportunity to enhance its liquidity position.

Exclusive of these items, non-interest income decreased $0.6 million, or 3.4%, from $18.2 million for the first quarter of 2022 to $17.5 million for the first quarter of 2023. This decrease was largely attributable to a decrease of $1.2 million in bank owned life insurance due to a decrease in death benefit proceeds and a decrease of $0.2 million, or 2.4%, in service charges. These decreases were partially offset by an increase in other income of $0.5 million. Citizens’ contribution to noninterest income for the quarter ended March 31, 2023, was less than $0.1 million.

Non-interest Expenses

Non-interest expenses increased $9.1 million, or 30.8%, from $29.5 million in the first quarter of 2022 to $38.6 million in the first quarter of 2023. During the quarter ended March 31, 2023, the Company recognized $5.6 million of acquisition and integration expenses associated with the completed acquisition of Citizens. Excluding these expenses, non-interest expenses increased $3.5 million from $29.5 million in the quarter ended March 31, 2022 to $33.0 million in the quarter ended March 31, 2023. This increase was largely due to an increase in salaries and employee benefits of $2.1 million due to higher salary adjustments, increased incentive compensation, and increased health insurance cost. In addition, other expenses increased $1.3 million and equipment and software-related expenses increased $0.3 million. The acquisition of Citizens increased noninterest expenses by approximately $0.2 million during the quarter ended March 31, 2023.

Balance Sheet Trends

Loans increased $248.4 million (6.8%) from December 31, 2022 to $3.89 billion at March 31, 2023, primarily due to the Company’s acquisition of Citizens ($254.7 million). Excluding the acquisition, total loans decreased $6.3 million (0.2%), from December 31, 2022 to $3.64 billion at March 31, 2023. Commercial real estate loans decreased $27.6 million during the quarter ended March 31, 2023. This decrease was partially offset by increases in consumer loans of $15.1 million (31.0%), home equity loans of $3.3 million (2.4%), and commercial and industrial loans of $2.3 million (0.6%).

Period-end deposit balances increased $266.9 million from December 31, 2022, to March 31, 2023, due to the Company’s acquisition of Citizens ($298.7 million). Total average depository balances increased $27.1 million, or 0.6%, from the quarter ended December 31, 2022 to the quarter ended March 31, 2023. This growth was primarily attributable to deposits acquired from Citizens ($73.0 million). Exclusive of these contributions, average depository balances declined $45.9 million, or 0.9%, from the quarter ended December 31, 2022. Average savings deposit balances decreased $53.2 million, average time deposit balances decreased $30.7 million, and average noninterest-bearing demand deposit balances decreased $21.5 million. These decreases were partially offset by an increase in average interest-bearing demand deposit balances of $59.5 million.

Income Tax Expense

The Company’s effective income tax rate for the first quarter of 2023 was 20.5% compared to 19.8% for the year ended December 31, 2022, and 19.7%, for the quarter ended March 31, 2022.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 75.8% and the loan to asset ratio was 62.7% at March 31, 2023. The Company maintained investment securities totaling 23.8% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 67.2% of assets at March 31, 2023. Time deposits fund 15.5% of assets at March 31, 2023, with only 10.9% 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 Board and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. As of March 31, 2023, City National had the capacity to borrow an additional $1.6 billion from these existing borrowing facilities. In addition, $803.2 million of City National’s investment securities were unpledged at March 31, 2023.

The Company continues to be strongly capitalized with tangible equity of $487 million at March 31, 2023. The Company’s tangible equity ratio increased slightly from 8.0% at December 31, 2022 to 8.1% at March 31, 2023. At March 31, 2023, City National’s Leverage Ratio was 9.18%, its Common Equity Tier I ratio was 14.08%, its Tier I Capital ratio was 14.08%, and its Total Risk-Based Capital ratio was 14.63%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On March 29, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.65 per share payable April 28, 2023, to shareholders of record as of April 14, 2023. During the quarter ended March 31, 2023, the Company repurchased 218,000 common shares at a weighted average price of $92.10 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of March 31, 2023, the Company could repurchase 599,000 additional shares under the current program. In connection with the acquisition of Citizens, the Company issued 667,000 shares of common stock on March 10, 2023.

City National operates 99 branches across West Virginia, Kentucky, Virginia, and Ohio.

Forward-Looking Information

This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) ongoing uncertainties on the Company’s business, results of operations and financial condition caused by the scope of the recovery of the COVID-19 pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; and (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its March 31, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary March 31, 2023 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
	Three Months Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Earnings
Net Interest Income (fully taxable equivalent)	$	53,767		$	52,381		$	49,108		$	41,611		$	38,239
Net Income available to common shareholders		24,341			30,672			27,374			22,683			21,342
Per Share Data
Earnings per share available to common shareholders:
Basic	$	1.63		$	2.06		$	1.84		$	1.51		$	1.41
Diluted		1.63			2.05			1.83			1.51			1.41
Weighted average number of shares (in thousands):
Basic		14,818			14,756			14,776			14,888			14,974
Diluted		14,844			14,785			14,800			14,909			15,002
Period-end number of shares (in thousands)		15,260			14,788			14,856			14,864			15,045
Cash dividends declared	$	0.65		$	0.65		$	0.65		$	0.60		$	0.60
Book value per share (period-end)	$	42.66		$	39.08		$	36.91		$	39.83		$	42.03
Tangible book value per share (period-end)		31.91			31.25			29.09			31.99			34.27
Market data:
High closing price	$	100.27		$	101.94		$	90.24		$	83.07		$	85.99
Low closing price		89.17			89.32			78.40			73.88			76.82
Period-end closing price		90.88			93.09			88.69			79.88			78.70
Average daily volume (in thousands)		84			75			58			87			59
Treasury share activity:
Treasury shares repurchased (in thousands)		218			69			9			208			38
Average treasury share repurchase price	$	92.10		$	93.12		$	80.24		$	78.33		$	78.09
Key Ratios (percent)
Return on average assets		1.63	%		2.08	%		1.83	%		1.51	%		1.42	%
Return on average tangible equity		19.9	%		27.3	%		21.8	%		18.1	%		15.3	%
Yield on interest earning assets		4.66	%		4.23	%		3.72	%		3.15	%		2.94	%
Cost of interest bearing liabilities		0.86	%		0.48	%		0.21	%		0.15	%		0.17	%
Net Interest Margin		4.05	%		3.89	%		3.57	%		3.04	%		2.82	%
Non-interest income as a percent of total revenue		24.7	%		26.5	%		27.2	%		30.9	%		32.4	%
Efficiency Ratio		45.7	%		45.3	%		46.3	%		50.5	%		51.7	%
Price/Earnings Ratio (a)		13.95			11.30			12.08			13.23			13.93
Capital (period-end)
Average Shareholders' Equity to Average Assets		10.31	%		9.57	%		10.32	%		10.26	%		11.25	%
Tangible equity to tangible assets		8.05	%		8.02	%		7.41	%		7.76	%		8.75	%
Consolidated City Holding Company risk based capital ratios (b):
CET I		15.64	%		16.23	%		15.82	%		15.85	%		16.18	%
Tier I		15.64	%		16.23	%		15.82	%		15.85	%		16.18	%
Total		16.18	%		16.62	%		16.22	%		16.26	%		16.60	%
Leverage		10.20	%		10.01	%		9.74	%		9.42	%		9.58	%
City National Bank risk based capital ratios (b):
CET I		14.08	%		13.88	%		14.68	%		14.80	%		14.82	%
Tier I		14.08	%		13.88	%		14.68	%		14.80	%		14.82	%
Total		14.63	%		14.28	%		15.07	%		15.21	%		15.24	%
Leverage		9.18	%		8.55	%		9.05	%		8.81	%		8.80	%
Other (period-end)
Branches		99			94			94			94			94
FTE		958			909			903			915			897
Assets per FTE (in thousands)	$	6,483		$	6,467		$	6,588		$	6,825		$	6,703
Deposits per FTE (in thousands)		5,362			5,357			5,492			5,621			5,574
(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) March 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
	March 31, 2023		December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Interest Income
Interest and fees on loans	$	47,004	$	42,963		$	38,493		$	33,208		$	31,874
Interest on investment securities:
Taxable		11,773		11,119			9,556			7,547			6,223
Tax-exempt		1,162		1,262			1,228			1,205			1,216
Interest on deposits in depository institutions		1,591		1,244			1,530			782			238
Total Interest Income		61,530		56,588			50,807			42,742			39,551
Interest Expense
Interest on deposits		5,690		3,010			1,585			1,328			1,521
Interest on short-term borrowings		2,381		1,533			440			124			114
Total Interest Expense		8,071		4,543			2,025			1,452			1,635
Net Interest Income		53,459		52,045			48,782			41,290			37,916
Provision for (Recovery of) credit losses		2,918		500			730			-			(756	)
Net Interest Income After Provision for (Recovery of) Credit Losses		50,541		51,545			48,052			41,290			38,672
Non-Interest Income
Net gains on sale of investment securities		773		4			-			-			-
Unrealized gains (losses) recognized on equity securities still held		361		(262	)		1			(601	)		(723	)
Service charges		6,563		7,056			7,487			7,067			6,725
Bankcard revenue		6,603		6,791			7,052			7,062			6,444
Trust and investment management fee income		2,252		2,343			2,158			2,100			2,197
Bank owned life insurance		804		1,813			754			978			2,014
Other income		1,326		791			792			1,243			791
Total Non-Interest Income		18,682		18,536			18,244			17,849			17,448
Non-Interest Expense
Salaries and employee benefits		17,673		17,148			17,398			16,413			15,577
Occupancy related expense		2,640		2,725			2,664			2,620			2,709
Equipment and software related expense		3,092		3,341			2,949			2,732			2,769
FDIC insurance expense		445		413			416			409			435
Advertising		760		802			854			951			798
Bankcard expenses		1,509		1,356			1,405			1,665			1,606
Postage, delivery, and statement mailings		647		597			578			551			636
Office supplies		420		441			466			427			410
Legal and professional fees		470		610			532			525			527
Telecommunications		606		627			651			754			584
Repossessed asset losses (gains), net of expenses		16		54			(3	)		(32	)		40
Merger related expenses		5,645		268			-			-			-
Other expenses		4,700		4,203			3,591			3,674			3,436
Total Non-Interest Expense		38,623		32,585			31,501			30,689			29,527
Income Before Income Taxes		30,600		37,496			34,795			28,450			26,593
Income tax expense		6,259		6,824			7,421			5,767			5,251
Net Income Available to Common Shareholders	$	24,341	$	30,672		$	27,374		$	22,683		$	21,342
Distributed earnings allocated to common shareholders	$	9,833	$	9,521		$	9,564		$	8,837		$	8,943
Undistributed earnings allocated to common shareholders		14,294		20,857			17,555			13,643			12,199
Net earnings allocated to common shareholders	$	24,127	$	30,378		$	27,119		$	22,480		$	21,142
Average common shares outstanding		14,818		14,756			14,776			14,888			14,974
Shares for diluted earnings per share		14,844		14,785			14,800			14,909			15,002
Basic earnings per common share	$	1.63	$	2.06		$	1.84		$	1.51		$	1.41
Diluted earnings per common share	$	1.63	$	2.05		$	1.83		$	1.51		$	1.41

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Assets
Cash and due from banks	$	69,804		$	68,333		$	65,051		$	90,449		$	100,877
Interest-bearing deposits in depository institutions		233,006			131,667			233,302			606,530			497,171
Cash and cash equivalents		302,810			200,000			298,353			696,979			598,048
Investment securities available-for-sale, at fair value		1,456,259			1,505,520			1,489,392			1,497,227			1,409,513
Other securities		24,728			23,807			24,372			24,383			24,785
Total investment securities		1,480,987			1,529,327			1,513,764			1,521,610			1,434,298
Gross loans		3,894,686			3,646,258			3,628,752			3,566,758			3,559,905
Allowance for credit losses		(22,724	)		(17,108	)		(17,011	)		(17,015	)		(17,280	)
Net loans		3,871,962			3,629,150			3,611,741			3,549,743			3,542,625
Bank owned life insurance		124,238			120,674			121,283			120,528			120,522
Premises and equipment, net		73,430			70,786			71,686			72,388			73,067
Accrued interest receivable		18,395			18,287			17,256			16,342			16,101
Net deferred tax assets		42,146			44,884			49,888			30,802			18,001
Goodwill and intangible assets		164,099			115,735			116,081			116,428			116,774
Other assets		132,715			149,263			147,716			118,375			92,331
Total Assets	$	6,210,782		$	5,878,106		$	5,947,768		$	6,243,195		$	6,011,767
Liabilities
Deposits:
Noninterest-bearing	$	1,420,990		$	1,351,415		$	1,429,281		$	1,531,660		$	1,357,266
Interest-bearing:
Demand deposits		1,356,017			1,233,482			1,160,970			1,189,056			1,191,492
Savings deposits		1,397,523			1,396,869			1,427,785			1,435,645			1,425,528
Time deposits		962,235			888,100			939,769			985,567			1,024,559
Total deposits		5,136,765			4,869,866			4,957,805			5,141,928			4,998,845
Short-term borrowings
Customer repurchase agreements		293,256			290,964			304,807			402,368			288,483
Other liabilities		129,711			139,424			136,868			106,906			92,009
Total Liabilities		5,559,732			5,300,254			5,399,480			5,651,202			5,379,337
Stockholders' Equity
Preferred stock		-			-			-			-			-
Common stock		47,619			47,619			47,619			47,619			47,619
Capital surplus		177,529			170,980			170,138			169,557			170,206
Retained earnings		721,727			706,696			685,657			667,933			654,138
Cost of common stock in treasury		(179,436	)		(215,955	)		(209,644	)		(209,133	)		(194,819	)
Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale		(112,967	)		(128,066	)		(141,997	)		(80,498	)		(41,229	)
Underfunded pension liability		(3,422	)		(3,422	)		(3,485	)		(3,485	)		(3,485	)
Total Accumulated Other Comprehensive (Loss) Income		(116,389	)		(131,488	)		(145,482	)		(83,983	)		(44,714	)
Total Stockholders' Equity		651,050			577,852			548,288			591,993			632,430
Total Liabilities and Stockholders' Equity	$	6,210,782		$	5,878,106		$	5,947,768		$	6,243,195		$	6,011,767
Regulatory Capital
Total CET 1 capital	$	606,675		$	598,068		$	582,213		$	564,158		$	565,048
Total tier 1 capital		606,675			598,068			582,213			564,158			565,048
Total risk-based capital		627,718			612,654			596,708			578,657			579,807
Total risk-weighted assets		3,878,994			3,685,207			3,679,511			3,558,249			3,492,920

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
Commercial and industrial	$	390,861	$	373,890	$	375,735	$	360,481	$	337,384
1-4 Family		119,017		116,192		109,710		108,765		108,424
Hotels		327,554		340,404		355,001		337,910		314,902
Multi-family		195,042		174,786		186,440		203,856		209,359
Non Residential Non-Owner Occupied		679,782		585,964		569,369		551,240		637,092
Non Residential Owner Occupied		223,096		174,961		177,673		180,188		200,180
Commercial real estate (1)		1,544,491		1,392,307		1,398,193		1,381,959		1,469,957
Residential real estate (2)		1,737,604		1,693,523		1,678,770		1,651,005		1,588,860
Home equity		151,341		134,317		130,837		125,742		121,460
Consumer		66,994		48,806		41,902		44,580		39,778
DDA overdrafts		3,395		3,415		3,315		2,991		2,466
Gross Loans	$	3,894,686	$	3,646,258	$	3,628,752	$	3,566,758	$	3,559,905
Construction loans included in:
(1) - Commercial real estate loans	$	4,715	$	4,130	$	4,125	$	6,767	$	14,877
(2) - Residential real estate loans		25,224		21,122		19,333		18,751		16,253

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
	Three Months Ended
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Allowance for Credit Losses
Balance at beginning of period	$	17,108		$	17,011		$	17,015		$	17,280		$	18,166
Charge-offs:
Commercial and industrial		-			(120	)		(408	)		-			(34	)
Commercial real estate		(3	)		(31	)		-			(24	)		-
Residential real estate		(32	)		(66	)		(93	)		(56	)		(50	)
Home equity		(67	)		(189	)		(71	)		(19	)		-
Consumer		(62	)		(15	)		(16	)		(9	)		(23	)
DDA overdrafts		(450	)		(670	)		(719	)		(604	)		(631	)
Total charge-offs		(614	)		(1,091	)		(1,307	)		(712	)		(738	)
Recoveries:
Commercial and industrial		83			94			149			32			59
Commercial real estate		158			120			9			25			53
Residential real estate		10			49			1			4			45
Home equity		4			34			2			3			17
Consumer		23			31			29			19			28
DDA overdrafts		398			360			383			364			406
Total recoveries		676			688			573			447			608
Net recoveries (charge-offs)		62			(403	)		(734	)		(265	)		(130	)
Provision for (recovery of) credit losses		2,918			500			730			-			(756	)
PCD Loan Reserves		2,811			-			-			-			-
Adoption of ASU 2022-02		(175	)		-			-			-			-
Balance at end of period	$	22,724		$	17,108		$	17,011		$	17,015		$	17,280
Loans outstanding	$	3,894,686		$	3,646,258		$	3,628,752		$	3,566,758		$	3,559,905
Allowance as a percent of loans outstanding		0.58	%		0.47	%		0.47	%		0.48	%		0.49	%
Allowance as a percent of non-performing loans		400.1	%		317.3	%		320.5	%		292.6	%		331.3	%
Average loans outstanding	$	3,700,194		$	3,648,996		$	3,596,523		$	3,559,713		$	3,527,393
Net charge-offs (annualized) as a percent of average loans outstanding		-0.01	%		0.04	%		0.08	%		0.03	%		0.01	%
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Nonaccrual Loans
Residential real estate	$	2,700		$	1,969		$	2,089		$	1,561		$	1,786
Home equity		35			55			140			54			99
Commercial and industrial		994			1,015			785			1,360			1,069
Commercial real estate		1,931			2,166			2,293			2,783			2,241
Consumer		19			-			-			-			-
Total nonaccrual loans		5,679			5,205			5,307			5,758			5,195
Accruing loans past due 90 days or more		-			187			-			58			21
Total non-performing loans		5,679			5,392			5,307			5,816			5,216
Other real estate owned		843			909			1,071			946			1,099
Total non-performing assets	$	6,522		$	6,301		$	6,378		$	6,762		$	6,315
Non-performing assets as a percent of loans and other real estate owned		0.17	%		0.17	%		0.18	%		0.19	%		0.18	%
Past Due Loans
Residential real estate	$	4,783		$	7,091		$	3,452		$	5,298		$	4,976
Home equity		551			650			521			282			505
Commercial and industrial		98			234			221			130			56
Commercial real estate		148			710			221			46			744
Consumer		3			100			27			49			32
DDA overdrafts		276			391			561			430			392
Total past due loans	$	5,859		$	9,176		$	5,003		$	6,235		$	6,705
Total past due loans as a percent of loans outstanding		0.15	%		0.25	%		0.14	%		0.17	%		0.19	%

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
	Three Months Ended
	March 31, 2023							December 31, 2022								March 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)	$	1,840,828		$	20,007	4.41	%	$	1,824,327		$	18,973		4.11	%	$	1,667,683		$	15,735	3.83	%
Commercial, financial, and agriculture (2)		1,795,309			26,248	5.93	%		1,773,937			23,346		5.22	%		1,815,549			15,532	3.47	%
Installment loans to individuals (2), (3)		64,057			749	4.74	%		50,732			646		5.05	%		44,161			607	5.57	%
Total loans		3,700,194			47,004	5.15	%		3,648,996			42,965		4.67	%		3,527,393			31,874	3.66	%
Securities:
Taxable		1,322,060			11,773	3.61	%		1,315,453			11,118		3.35	%		1,207,333			6,223	2.09	%
Tax-exempt (4)		204,957			1,471	2.91	%		211,326			1,597		3.00	%		232,474			1,539	2.68	%
Total securities		1,527,017			13,244	3.52	%		1,526,779			12,715		3.30	%		1,439,807			7,762	2.19	%
Deposits in depository institutions		160,115			1,590	4.03	%		162,732			1,245		3.04	%		540,197			238	0.18	%
Total interest-earning assets		5,387,326			61,838	4.66	%		5,338,507			56,925		4.23	%		5,507,397			39,874	2.94	%
Cash and due from banks		67,891							69,223								101,806
Premises and equipment, net		71,422							71,482								73,827
Goodwill and intangible assets		124,546							115,952								116,994
Other assets		327,442							332,855								217,662
Less: Allowance for credit losses		(18,143	)						(17,332	)							(18,454	)
Total assets	$	5,960,484						$	5,910,687							$	5,999,232
Liabilities:
Interest-bearing demand deposits	$	1,234,981		$	1,741	0.57	%	$	1,150,327		$	684		0.24	%	$	1,142,278		$	130	0.05	%
Savings deposits		1,376,317			1,348	0.40	%		1,412,246			829		0.23	%		1,384,460			175	0.05	%
Time deposits (2)		902,583			2,601	1.17	%		916,845			1,497		0.65	%		1,048,185			1,216	0.47	%
Customer repurchase agreements		281,861			2,381	3.43	%		303,599			1,534		2.00	%		276,360			114	0.17	%
Total interest-bearing liabilities		3,795,742			8,071	0.86	%		3,783,017			4,544		0.48	%		3,851,283			1,635	0.17	%
Noninterest-bearing demand deposits		1,420,676							1,428,013								1,398,663
Other liabilities		129,411							134,075								74,084
Stockholders' equity		614,655							565,582								675,202
Total liabilities and
stockholders' equity	$	5,960,484						$	5,910,687							$	5,999,232
Net interest income				$	53,767						$	52,381							$	38,239
Net yield on earning assets						4.05	%							3.89	%						2.82	%
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
Loan fees, net (includes PPP fees)				$	518						$	(41	)						$	298
(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				$	76						$	67							$	90
Commercial, financial, and agriculture					177							135								286
Installment loans to individuals					4							4								19
Time deposits					9							21								21
				$	266						$	227							$	416
(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, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Net Interest Income/Margin
Net interest income ("GAAP")	$	53,459		$	52,045		$	48,782		$	41,290		$	37,916
Taxable equivalent adjustment		308			336			326			321			323
Net interest income, fully taxable equivalent	$	53,767		$	52,381		$	49,108		$	41,611		$	38,239
Average interest earning assets	$	5,387,326		$	5,338,507		$	5,460,409		$	5,485,604		$	5,507,397
Net Interest Margin		4.05	%		3.89	%		3.57	%		3.04	%		2.82	%
Accretion related to fair value adjustments		-0.02	%		-0.02	%		-0.01	%		-0.02	%		-0.03	%
Net Interest Margin (excluding accretion)		4.03	%		3.87	%		3.56	%		3.02	%		2.79	%
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")		10.48	%		9.83	%		9.22	%		9.48	%		10.52	%
Effect of goodwill and other intangibles, net		-2.43	%		-1.81	%		-1.81	%		-1.72	%		-1.77	%
Tangible common equity to tangible assets		8.05	%		8.02	%		7.41	%		7.76	%		8.75	%
Return on average tangible equity ("GAAP")		19.9	%		27.3	%		21.8	%		18.1	%		15.3	%
Impact of merger related expenses		3.6	%		-			-			-			-
Impact of merger related provision		1.3	%		-			-			-			-
Return on tangible equity, excluding merger related expenses and provision		24.8	%		27.3	%		21.8	%		18.1	%		15.3	%
Return on assets ("GAAP")		1.63	%		2.08	%		1.83	%		1.51	%		1.42	%
Impact of merger related expenses		0.31	%		-			-			-			-
Impact of merger related provision		0.10	%		-			-			-			-
Return on assets, excluding merger related expenses and provision		2.04	%		2.08	%		1.83	%		1.51	%		1.42	%
Commercial Loan Information (period end)
Commercial Sector	Total			% of Total Loans			Average DSC			Average LTV
Natural Gas Extraction	$	25,179			0.65	%		3.68			64	%
Natural Gas Distribution		23,711			0.61	%		2.61			N/A
Masonry Contractors		23,017			0.59	%		1.13			84	%
Sheet Metal Work Manufacturing		23,491			0.60	%		1.57			68	%
Beer & Ale Merchant Wholesalers		26,766			0.69	%		3.28			N/A
Gasoline Stations with Convenience Stores		53,556			1.38	%		4.19			65	%
Lessors of Residential Buildings & Dwellings		303,311			7.79	%		1.89			66	%
1-4 Family		114,768			2.95	%		2.97			68	%
Multi-Family		160,664			4.13	%		1.84			66	%
Lessors of Nonresidential Buildings		468,836			12.05	%		1.70			65	%
Office Buildings		44,926			1.15	%		1.64			64	%
Lessors of Mini-Warehouses & Self-Storage Units		44,510			1.15	%		1.62			62	%
Assisted Living Facilities		28,944			0.74	%		1.38			57	%
Hotels & Motels		335,086			8.61	%		1.43			52	%
	Average Balance			Median Balance
Commercial Loans	$	453		$	92
Commercial Real Estate Loans		498			119
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued
(Unaudited) ($ in 000s, except per share data)
Estimated Uninsured Deposits by Deposit Type
	March 31, 2023			December 31, 2022
Noninterest-Bearing Demand Deposits		19	%		20	%
Interest-Bearing Deposits
Demand Deposits		8	%		10	%
Savings Deposits		11	%		14	%
Time Deposits		14	%		13	%
Total Deposits		13	%		14	%
Retail Deposits
Noninterest-Bearing		4	%		5	%
Interest-Bearing		11	%		11	%
Total Retail Deposits		9	%		10	%
Commercial Deposits
Noninterest-Bearing Deposits		31	%		32	%
Interest-Bearing Deposits		13	%		16	%
Total Commercial Deposits		23	%		26	%
The amounts listed above represent management's best estimate as of the respective period shown.
Average Deposits by Category	March 31, 2023			December 31, 2022
Retail Deposits
Noninterest-Bearing	$	619,889		$	637,368
Interest-Bearing		3,125,132			3,012,999
Total Average Retail Deposits	$	3,745,021		$	3,650,367
Commercial Deposits
Noninterest-Bearing Deposits	$	800,787		$	790,645
Interest-Bearing Deposits		388,749			466,419
Total Average Commercial Deposits	$	1,189,536		$	1,257,064
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued
(Unaudited) ($ in 000s, except per share data)
Net Growth in DDA Accounts
Year	New DDA Accounts			Net Number of New Accounts			Percentage
2023 YTD*		8,467			1,644			0.7	%
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	%
* - 2023 YTD amounts exclude accounts added in connection with the acquisitions of Citizens Commerce Bancshares, Inc., Poage Bankshares, Inc. and Farmers Deposit Bancorp, Inc.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230424005615/en/

The City Holding Stock at the time of publication of the news with a raise of +0,31 % to 89,95USD on Nasdaq stock exchange (25. April 2023, 02:00 Uhr).