City Holding Company Announces Quarterly Results

City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.1 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $29.9 million and diluted earnings of $1.98 per share for the quarter ended September 30, 2023. For the third quarter of 2023, the Company achieved a return on assets of 1.94% and a return on tangible equity of 24.1%.

Net Interest Income

The Company’s net interest income increased approximately $0.1 million, or 0.2%, from $55.5 million during the second quarter of 2023 to $55.6 million during the third quarter of 2023. The Company’s tax equivalent net interest income increased $0.1 million, or 0.2%, from $55.8 million for the second quarter of 2023 to $55.9 million for the third quarter of 2023. Due to recent increases in the Federal Funds rate, net interest income increased by $2.6 million due to an increase in loan yields (net of loan fees and accretion) of 22 basis points and by $0.8 million due to an increase in the yield on investment securities of 19 basis points. In addition, net interest income increased $0.8 million due to an increase in balances of loans of $60.6 million from the quarter ended June 30, 2023. These increases were partially offset by an increase in the cost of interest bearing liabilities (26 basis points) which decreased net interest income by $2.4 million and lower balances of deposits in depository institutions of $133.1 million that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 4.00% for the second quarter of 2023 to 4.03% for the third quarter of 2023.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned declined slightly from 0.17%, or $6.5 million, at June 30, 2023 to 0.15%, or $6.0 million, at September 30, 2023. Total past due loans increased from $7.4 million, or 0.19% of total loans outstanding, at June 30, 2023, to $10.1 million, or 0.25% of total loans outstanding at September 30, 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 $0.2 million in the third quarter of 2023, compared to a provision for credit losses of $0.7 million for the comparable period in 2022, and a provision for credit losses of $0.4 million for the second quarter of 2023. The provision for credit losses in the third quarter was primarily the result of the downgrade of a commercial loan and loan growth partially offset by net recoveries during the quarter.

Non-interest Income

Non-interest income was $17.4 million during the quarter ended September 30, 2023, as compared to $18.2 million during the quarter ended September 30, 2022. During the third quarter of 2023, the Company reported $0.7 million of realized security losses.

Exclusive of the realized security loss, non-interest income decreased $0.1 million, or 0.6%, from $18.2 million for the third quarter of 2022 to $18.1 million for the third quarter of 2023. This decrease was largely attributable to a decrease of $0.4 million, or 4.8%, in service fees that was partially offset by an increase of $0.3 million, or 11.6%, in trust and investment management fee income.

Non-interest Expenses

Non-interest expenses increased $3.5 million, or 11.2%, from $31.5 million in the third quarter of 2022 to $35.0 million in the third quarter of 2023. This increase was largely due to an increase in other expenses of $1.2 million and an increase in salaries and employee benefits of $0.9 million due to the acquisition of Citizens ($0.5 million) and salary adjustments. In addition, bankcard expenses increased $0.8 million and FDIC insurance expenses increased $0.5 million.

Balance Sheet Trends

Gross loans increased $85.3 million (2.2%) from June 30, 2023 to $4.01 billion at September 30, 2023. Commercial real estate loans increased $48.0 million (3.1%) and residential real estate loans increased $21.7 million (1.2%) during the quarter ended September 30, 2023. In addition, home equity loans increased $8.6 million (5.7%) and commercial and industrial loans increased $6.8 million (1.6%).

Period-end deposit balances decreased $69.9 million from June 30, 2023, to September 30, 2023. Total average depository balances decreased $116.8 million, or 2.3%, from the quarter ended June 30, 2023 to the quarter ended September 30, 2023. Average noninterest-bearing demand deposit balances decreased $60.5 million, average savings deposit balances decreased $51.4 million, and interest-bearing demand deposit balances decreased $27.6 million. These decreases were partially offset by an increase in average time balances of $22.7 million.

Income Tax Expense

The Company’s effective income tax rate for the third quarter of 2023 was 21.1% compared to 19.8% for the year ended December 31, 2022 and 21.3% for the quarter ended September 30, 2022.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 81.0% and its loan to asset ratio was 66.0% at September 30, 2023. The Company maintained investment securities totaling 22.8% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 64.8% of assets at September 30, 2023. Time deposits fund 16.6% of assets at September 30, 2023, with only 11.7% 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. As of September 30, 2023, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, $764.7 million of City National’s investment securities were unpledged at September 30, 2023.

The Company continues to be strongly capitalized with tangible equity of $447 million at September 30, 2023. The Company’s tangible equity ratio decreased slightly from 8.0% at December 31, 2022 to 7.6% at September 30, 2023. At September 30, 2023, City National’s Leverage Ratio was 9.6%, its Common Equity Tier I ratio was 14.7%, its Tier I Capital ratio was 14.7%, and its Total Risk-Based Capital ratio was 15.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On September 27, 2023, the Board of Directors of the Company approved a quarterly cash dividend of $0.715 per share payable October 31, 2023, to shareholders of record as of October 13, 2023. This represents a 10.0% increase from the $0.65 per share dividend paid on July 31, 2023. During the quarter ended September 30, 2023, the Company repurchased 109,000 common shares at a weighted average price of $89.33 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of September 30, 2023, the Company could repurchase 220,000 additional shares under the current program.

City National operates 99 branches across West Virginia, Kentucky, Virginia, and Ohio. On October 20, 2023, City National closed one of the two branches located in Nicholasville, Kentucky due to the proximity (less than one mile) from an existing City National branch.

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 September 30, 2023 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2023 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
	Three Months Ended																Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022				September 30, 2023			September 30, 2022
Earnings
Net Interest Income (fully taxable equivalent)	$	55,855		$	55,757		$	53,767		$	52,381		$	49,108			$	165,379		$	128,961
Net Income available to common shareholders		29,839			32,733			24,341			30,672			27,374				86,913			71,408
Per Share Data
Earnings per share available to common shareholders:
Basic	$	1.98		$	2.16		$	1.63		$	2.06		$	1.84			$	5.78		$	4.75
Diluted		1.98			2.16			1.63			2.05			1.83				5.77			4.75
Weighted average number of shares (in thousands):
Basic		14,922			14,994			14,818			14,756			14,776				14,906			14,878
Diluted		14,945			15,012			14,844			14,785			14,800				14,928			14,901
Period-end number of shares (in thousands)		14,901			15,007			15,260			14,788			14,856				14,901			14,856
Cash dividends declared	$	0.72		$	0.65		$	0.65		$	0.65		$	0.65			$	2.02		$	1.85
Book value per share (period-end)	$	40.94		$	42.39		$	42.66		$	39.08		$	36.91			$	40.94		$	36.91
Tangible book value per share (period-end)		29.98			31.50			31.91			31.25			29.09				29.98			29.09
Market data:
High closing price	$	99.49		$	97.92		$	100.27		$	101.94		$	90.24			$	100.27		$	90.24
Low closing price		87.51			83.57			89.17			89.32			78.40				83.57			73.88
Period-end closing price		90.35			89.99			90.88			93.09			88.69				90.35			88.69
Average daily volume (in thousands)		62			80			84			75			58				76			68
Treasury share activity:
Treasury shares repurchased (in thousands)		109			269			218			69			9				597			255
Average treasury share repurchase price	$	89.33		$	88.93		$	92.10		$	93.12		$	80.24			$	90.16		$	78.36
Key Ratios (percent)
Return on average assets		1.94	%		2.12	%		1.63	%		2.08	%		1.83	%			1.91	%		1.59	%
Return on average tangible equity		24.1	%		27.4	%		19.9	%		27.3	%		21.8	%			23.9	%		18.3	%
Yield on interest earning assets		5.08	%		4.87	%		4.66	%		4.23	%		3.72	%			4.87	%		3.27	%
Cost of interest bearing liabilities		1.46	%		1.22	%		0.86	%		0.48	%		0.21	%			1.18	%		0.18	%
Net Interest Margin		4.03	%		4.00	%		4.05	%		3.89	%		3.57	%			4.02	%		3.14	%
Non-interest income as a percent of total revenue		24.6	%		27.1	%		24.7	%		26.5	%		27.2	%			25.5	%		29.5	%
Efficiency Ratio		46.4	%		44.6	%		45.7	%		45.3	%		46.3	%			45.6	%		49.2	%
Price/Earnings Ratio (a)		11.40			10.40			13.95			11.30			12.08				11.73			13.99
Capital (period-end)
Average Shareholders' Equity to Average Assets		10.73	%		10.38	%		10.31	%		9.57	%		10.32	%
Tangible equity to tangible assets		7.55	%		7.90	%		8.05	%		8.02	%		7.41	%
Consolidated City Holding Company risk based capital ratios (b):
CET I		15.36	%		15.47	%		15.64	%		16.23	%		15.82	%
Tier I		15.36	%		15.47	%		15.64	%		16.23	%		15.82	%
Total		15.89	%		16.01	%		16.18	%		16.62	%		16.22	%
Leverage		10.05	%		9.80	%		10.20	%		10.01	%		9.74	%
City National Bank risk based capital ratios (b):
CET I		14.73	%		14.82	%		14.08	%		13.88	%		14.68	%
Tier I		14.73	%		14.82	%		14.08	%		13.88	%		14.68	%
Total		15.27	%		15.36	%		14.63	%		14.28	%		15.07	%
Leverage		9.61	%		9.36	%		9.18	%		8.55	%		9.05	%
Other (period-end)
Branches		99			99			99			94			94
FTE		966			963			958			909			903
Assets per FTE (in thousands)	$	6,291		$	6,383		$	6,483		$	6,467		$	6,588
Deposits per FTE (in thousands)		5,120			5,208			5,362			5,357			5,492
(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) September 30, 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															Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023		December 31, 2022			September 30, 2022				September 30, 2023		September 30, 2022
Interest Income
Interest and fees on loans	$	55,582		$	52,352		$	47,004	$	42,963		$	38,493			$	154,939	$	103,575
Interest on investment securities:
Taxable		12,432			11,794			11,773		11,119			9,556				35,999		23,327
Tax-exempt		910			950			1,162		1,262			1,228				3,022		3,650
Interest on deposits in depository institutions		1,265			2,585			1,591		1,244			1,530				5,440		2,549
Total Interest Income		70,189			67,681			61,530		56,588			50,807				199,400		133,101
Interest Expense
Interest on deposits		10,551			8,567			5,690		3,010			1,585				24,808		4,433
Interest on short-term borrowings		2,990			2,963			2,381		1,533			440				8,334		677
Interest on long-term debt		1,034			649			-		-			-				1,683		-
Total Interest Expense		14,575			12,179			8,071		4,543			2,025				34,825		5,110
Net Interest Income		55,614			55,502			53,459		52,045			48,782				164,575		127,991
Provision for (Recovery of) credit losses		200			425			2,918		500			730				3,543		(26	)
Net Interest Income After Provision for (Recovery of) Credit Losses		55,414			55,077			50,541		51,545			48,052				161,032		128,017
Non-Interest Income
Net (losses) gains on sale of investment securities		(730	)		-			773		4			-				43		-
Unrealized (losses) gains recognized on equity securities still held		-			(294	)		361		(262	)		1				67		(1,322	)
Service charges		7,124			6,906			6,563		7,056			7,487				20,593		21,281
Bankcard revenue		7,058			7,190			6,603		6,791			7,052				20,851		20,558
Trust and investment management fee income		2,409			2,339			2,252		2,343			2,158				7,000		6,455
Bank owned life insurance		807			3,208			804		1,813			754				4,819		3,746
Other income		742			952			1,326		791			792				3,020		2,825
Total Non-Interest Income		17,410			20,301			18,682		18,536			18,244				56,393		53,543
Non-Interest Expense
Salaries and employee benefits		18,289			18,429			17,673		17,148			17,398				54,391		49,386
Occupancy related expense		2,950			2,811			2,640		2,725			2,664				8,401		7,993
Equipment and software related expense		2,830			2,883			3,092		3,341			2,949				8,805		8,452
FDIC insurance expense		919			690			445		413			416				2,054		1,259
Advertising		790			974			760		802			854				2,524		2,603
Bankcard expenses		2,188			1,736			1,509		1,356			1,405				5,433		4,676
Postage, delivery, and statement mailings		668			596			647		597			578				1,911		1,765
Office supplies		457			591			420		441			466				1,468		1,303
Legal and professional fees		529			558			470		610			532				1,557		1,584
Telecommunications		568			623			606		627			651				1,797		1,988
Repossessed asset losses (gains), net of expenses		40			22			16		54			(3	)			78		4
Merger related expenses		2			-			5,645		268			-				5,647		-
Other expenses		4,798			4,848			4,700		4,203			3,591				14,346		10,701
Total Non-Interest Expense		35,028			34,761			38,623		32,585			31,501				108,412		91,714
Income Before Income Taxes		37,796			40,617			30,600		37,496			34,795				109,013		89,846
Income tax expense		7,957			7,884			6,259		6,824			7,421				22,100		18,438
Net Income Available to Common Shareholders	$	29,839		$	32,733		$	24,341	$	30,672		$	27,374			$	86,913	$	71,408
Distributed earnings allocated to common shareholders	$	10,554		$	9,668		$	9,833	$	9,521		$	9,564			$	29,744	$	27,220
Undistributed earnings allocated to common shareholders		19,004			22,774			14,294		20,857			17,555				56,356		43,509
Net earnings allocated to common shareholders	$	29,558		$	32,442		$	24,127	$	30,378		$	27,119			$	86,100	$	70,729
Average common shares outstanding		14,922			14,994			14,818		14,756			14,776				14,906		14,878
Shares for diluted earnings per share		14,945			15,012			14,844		14,785			14,800				14,928		14,901
Basic earnings per common share	$	1.98		$	2.16		$	1.63	$	2.06		$	1.84			$	5.78	$	4.75
Diluted earnings per common share	$	1.98		$	2.16		$	1.63	$	2.05		$	1.83			$	5.77	$	4.75

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
	(Unaudited)			(Unaudited)			(Unaudited)						(Unaudited)
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Assets
Cash and due from banks	$	62,085		$	66,350		$	69,804		$	68,333		$	65,051
Interest-bearing deposits in depository institutions		48,631			164,931			233,006			131,667			233,302
Cash and cash equivalents		110,716			231,281			302,810			200,000			298,353
Investment securities available-for-sale, at fair value		1,358,219			1,419,933			1,456,259			1,505,520			1,489,392
Other securities		29,022			29,262			24,728			23,807			24,372
Total investment securities		1,387,241			1,449,195			1,480,987			1,529,327			1,513,764
Gross loans		4,007,482			3,922,142			3,894,686			3,646,258			3,628,752
Allowance for credit losses		(23,128	)		(22,751	)		(22,724	)		(17,108	)		(17,011	)
Net loans		3,984,354			3,899,391			3,871,962			3,629,150			3,611,741
Bank owned life insurance		117,979			117,173			124,238			120,674			121,283
Premises and equipment, net		72,682			73,118			73,430			70,786			71,686
Accrued interest receivable		19,223			17,973			18,395			18,287			17,256
Net deferred tax assets		58,811			46,944			42,146			44,884			49,888
Goodwill and intangible assets		163,461			163,426			164,099			115,735			116,081
Other assets		161,659			148,333			132,715			149,263			147,716
Total Assets	$	6,076,126		$	6,146,834		$	6,210,782		$	5,878,106		$	5,947,768
Liabilities
Deposits:
Noninterest-bearing	$	1,333,474		$	1,373,106		$	1,420,990		$	1,351,415		$	1,429,281
Interest-bearing:
Demand deposits		1,319,783			1,337,445			1,356,017			1,233,482			1,160,970
Savings deposits		1,282,642			1,343,571			1,397,523			1,396,869			1,427,785
Time deposits		1,009,235			960,941			962,235			888,100			939,769
Total deposits		4,945,134			5,015,063			5,136,765			4,869,866			4,957,805
Short-term borrowings
Customer repurchase agreements		278,671			271,714			293,256			290,964			304,807
Long-term debt		100,000			100,000			-			-			-
Other liabilities		142,187			123,865			129,711			139,424			136,868
Total Liabilities		5,465,992			5,510,642			5,559,732			5,300,254			5,399,480
Stockholders' Equity
Preferred stock		-			-			-			-			-
Common stock		47,619			47,619			47,619			47,619			47,619
Capital surplus		177,113			176,746			177,529			170,980			170,138
Retained earnings		763,425			744,248			721,727			706,696			685,657
Cost of common stock in treasury		(211,430	)		(201,973	)		(179,436	)		(215,955	)		(209,644	)
Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale		(163,171	)		(127,026	)		(112,967	)		(128,066	)		(141,997	)
Underfunded pension liability		(3,422	)		(3,422	)		(3,422	)		(3,422	)		(3,485	)
Total Accumulated Other Comprehensive (Loss) Income		(166,593	)		(130,448	)		(116,389	)		(131,488	)		(145,482	)
Total Stockholders' Equity		610,134			636,192			651,050			577,852			548,288
Total Liabilities and Stockholders' Equity	$	6,076,126		$	6,146,834		$	6,210,782		$	5,878,106		$	5,947,768
Regulatory Capital
Total CET 1 capital	$	615,798		$	605,661		$	606,675		$	598,068		$	582,213
Total tier 1 capital		615,798			605,661			606,675			598,068			582,213
Total risk-based capital		637,245			626,730			627,718			612,654			596,708
Total risk-weighted assets		4,009,798			3,913,870			3,878,994			3,685,207			3,679,511

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Commercial and industrial	$	424,647	$	417,847	$	390,861	$	373,890	$	375,735
1-4 Family		135,226		123,701		119,017		116,192		109,710
Hotels		321,236		324,745		327,554		340,404		355,001
Multi-family		192,329		191,483		195,042		174,786		186,440
Non Residential Non-Owner Occupied		713,353		673,921		679,782		585,964		569,369
Non Residential Owner Occupied		222,544		222,852		223,096		174,961		177,673
Commercial real estate (1)		1,584,688		1,536,702		1,544,491		1,392,307		1,398,193
Residential real estate (2)		1,768,358		1,746,618		1,737,604		1,693,523		1,678,770
Home equity		159,630		151,012		151,341		134,317		130,837
Consumer		65,586		65,201		66,994		48,806		41,902
DDA overdrafts		4,573		4,762		3,395		3,415		3,315
Gross Loans	$	4,007,482	$	3,922,142	$	3,894,686	$	3,646,258	$	3,628,752
Construction loans included in:
(1) - Commercial real estate loans	$	2,533	$	3,361	$	4,715	$	4,130	$	4,125
(2) - Residential real estate loans		20,056		20,470		25,224		21,122		19,333

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
	Three Months Ended																Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022				September 30, 2023			September 30, 2022
Allowance for Credit Losses
Balance at beginning of period	$	22,751		$	22,724		$	17,108		$	17,011		$	17,015			$	17,108		$	18,166
Charge-offs:
Commercial and industrial		-			(69	)		-			(120	)		(408	)			(69	)		(442	)
Commercial real estate		(256	)		(117	)		(3	)		(31	)		-				(376	)		(24	)
Residential real estate		(88	)		(20	)		(32	)		(66	)		(93	)			(140	)		(199	)
Home equity		(112	)		(200	)		(67	)		(189	)		(71	)			(379	)		(90	)
Consumer		(10	)		(109	)		(62	)		(15	)		(16	)			(181	)		(48	)
DDA overdrafts		(422	)		(357	)		(450	)		(670	)		(719	)			(1,229	)		(1,954	)
Total charge-offs		(888	)		(872	)		(614	)		(1,091	)		(1,307	)			(2,374	)		(2,757	)
Recoveries:
Commercial and industrial		597			86			83			94			149				766			240
Commercial real estate		74			28			158			120			9				260			87
Residential real estate		28			5			10			49			1				43			50
Home equity		18			12			4			34			2				34			22
Consumer		27			28			23			31			29				78			76
DDA overdrafts		321			315			398			360			383				1,034			1,153
Total recoveries		1,065			474			676			688			573				2,215			1,628
Net recoveries (charge-offs)		177			(398	)		62			(403	)		(734	)			(159	)		(1,129	)
Provision for (recovery of) credit losses		200			425			2,918			500			730				3,543			(26	)
PCD Loan Reserves		-			-			2,811			-			-				2,811			-
Adoption of ASU 2022-02		-			-			(175	)		-			-				(175	)		-
Balance at end of period	$	23,128		$	22,751		$	22,724		$	17,108		$	17,011			$	23,128		$	17,011
Loans outstanding	$	4,007,482		$	3,922,142		$	3,894,686		$	3,646,258		$	3,628,752
Allowance as a percent of loans outstanding		0.58	%		0.58	%		0.58	%		0.47	%		0.47	%
Allowance as a percent of non-performing loans		440.1	%		405.5	%		400.1	%		317.3	%		320.5	%
Average loans outstanding	$	3,956,871		$	3,896,284		$	3,700,194		$	3,648,996		$	3,596,523			$	3,852,057		$	3,561,463
Net charge-offs (annualized) as a percent of average loans outstanding		(0.02	)%		0.04	%		(0.01	)%		0.04	%		0.08	%			0.01	%		0.04	%
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Nonaccrual Loans
Residential real estate	$	2,839		$	2,774		$	2,700		$	1,969		$	2,089
Home equity		75			24			35			55			140
Commercial and industrial		716			741			994			1,015			785
Commercial real estate		1,355			1,821			1,931			2,166			2,293
Consumer		1			36			19			-			-
Total nonaccrual loans		4,986			5,396			5,679			5,205			5,307
Accruing loans past due 90 days or more		269			215			-			187			-
Total non-performing loans		5,255			5,611			5,679			5,392			5,307
Other real estate owned		720			874			843			909			1,071
Total non-performing assets	$	5,975		$	6,485		$	6,522		$	6,301		$	6,378
Non-performing assets as a percent of loans and other real estate owned		0.15	%		0.17	%		0.17	%		0.17	%		0.18	%
Past Due Loans
Residential real estate	$	6,247		$	5,884		$	4,783		$	7,091		$	3,452
Home equity		1,278			784			551			650			521
Commercial and industrial		568			142			98			234			221
Commercial real estate		1,478			238			148			710			221
Consumer		84			57			3			100			27
DDA overdrafts		398			341			276			391			561
Total past due loans	$	10,053		$	7,446		$	5,859		$	9,176		$	5,003
Total past due loans as a percent of loans outstanding		0.25	%		0.19	%		0.15	%		0.25	%		0.14	%

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
	Three Months Ended
	September 30, 2023							June 30, 2023							September 30, 2022
	Average					Yield/		Average					Yield/		Average					Yield/
	Balance			Interest		Rate		Balance			Interest		Rate		Balance			Interest		Rate
Assets:
Loan portfolio (1):
Residential real estate (2)	$	1,910,876		$	22,702	4.71	%	$	1,894,269		$	21,702	4.60	%	$	1,792,365		$	17,718	3.92	%
Commercial, financial, and agriculture (2)		1,975,463			31,743	6.38	%		1,933,238			29,754	6.17	%		1,759,567			20,092	4.53	%
Installment loans to individuals (2), (3)		70,532			1,138	6.40	%		68,777			898	5.24	%		44,591			683	6.08	%
Total loans		3,956,871			55,583	5.57	%		3,896,284			52,354	5.39	%		3,596,523			38,493	4.25	%
Securities:
Taxable		1,277,265			12,432	3.86	%		1,301,063			11,794	3.64	%		1,359,207			9,557	2.79	%
Tax-exempt (4)		170,806			1,152	2.68	%		174,410			1,203	2.77	%		215,219			1,555	2.87	%
Total securities		1,448,071			13,584	3.72	%		1,475,473			12,997	3.53	%		1,574,426			11,112	2.80	%
Deposits in depository institutions		90,994			1,265	5.52	%		224,064			2,585	4.63	%		289,460			1,529	2.10	%
Total interest-earning assets		5,495,936			70,432	5.08	%		5,595,821			67,936	4.87	%		5,460,409			51,134	3.72	%
Cash and due from banks		69,348							71,949							81,202
Premises and equipment, net		73,004							73,450							72,196
Goodwill and intangible assets		163,602							163,847							116,297
Other assets		332,551							313,925							278,527
Less: Allowance for credit losses		(23,558	)						(23,046	)						(17,224	)
Total assets	$	6,110,883						$	6,195,946						$	5,991,407
Liabilities:
Interest-bearing demand deposits	$	1,300,936		$	3,068	0.94	%	$	1,328,520		$	2,773	0.84	%	$	1,151,122		$	272	0.09	%
Savings deposits		1,314,484			2,319	0.70	%		1,365,894			1,942	0.57	%		1,431,591			358	0.10	%
Time deposits (2)		985,038			5,163	2.08	%		962,299			3,852	1.61	%		964,447			956	0.39	%
Customer repurchase agreements		272,558			2,990	4.35	%		294,255			2,963	4.04	%		270,310			440	0.65	%
Long-term debt		100,000			1,035	4.11	%		65,934			649	3.95	%		-			-	-
Total interest-bearing liabilities		3,973,016			14,575	1.46	%		4,016,902			12,179	1.22	%		3,817,470			2,026	0.21	%
Noninterest-bearing demand deposits		1,359,268							1,419,771							1,455,123
Other liabilities		123,137							116,083							100,303
Stockholders' equity		655,462							643,190							618,511
Total liabilities and
stockholders' equity	$	6,110,883						$	6,195,946						$	5,991,407
Net interest income				$	55,857						$	55,757						$	49,108
Net yield on earning assets						4.03	%						4.00	%						3.57	%
(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				$	254						$	393						$	308
(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				$	47						$	78						$	64
Commercial, financial, and agriculture					720							709							103
Installment loans to individuals					4							8							7
Time deposits					240							154							21
				$	1,011						$	949						$	195
(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)
	Nine Months Ended
	September 30, 2023							September 30, 2022
	Average					Yield/		Average					Yield/
	Balance			Interest		Rate		Balance			Interest		Rate
Assets:
Loan portfolio (1):
Residential real estate (2)	$	1,882,397		$	64,410	4.57	%	$	1,728,557		$	49,610	3.84	%
Commercial, financial, and agriculture (2)		1,904,001			87,745	6.16	%		1,788,784			52,044	3.89	%
Installment loans to individuals (2), (3)		65,659			2,784	5.67	%		44,122			1,921	5.82	%
Total loans		3,852,057			154,939	5.38	%		3,561,463			103,575	3.89	%
Securities:
Taxable		1,300,373			35,999	3.70	%		1,279,086			23,327	2.44	%
Tax-exempt (4)		182,858			3,826	2.80	%		221,035			4,620	2.79	%
Total securities		1,483,231			39,825	3.59	%		1,500,121			27,947	2.49	%
Deposits in depository institutions		166,379			5,440	4.37	%		422,714			2,549	0.81	%
Total interest-earning assets		5,501,667			200,204	4.87	%		5,484,298			134,071	3.27	%
Cash and due from banks		69,735							95,105
Premises and equipment, net		72,631							72,964
Goodwill and intangible assets		150,808							116,643
Other assets		324,658							251,071
Less: Allowance for credit losses		(21,602	)						(17,807	)
Total assets	$	6,097,897						$	6,002,274
Liabilities:
Interest-bearing demand deposits	$	1,288,387		$	7,582	0.79	%	$	1,149,899		$	550	0.06	%
Savings deposits		1,352,005			5,610	0.55	%		1,415,563			715	0.07	%
Time deposits (2)		950,276			11,616	1.63	%		1,005,356			3,168	0.42	%
Customer repurchase agreements		282,857			8,334	3.94	%		278,211			677	0.33	%
Long-term debt		55,678			1,683	4.04	%		-			-	-
Total interest-bearing liabilities		3,929,203			34,825	1.18	%		3,849,029			5,110	0.18	%
Noninterest-bearing demand deposits		1,407,922							1,429,887
Other liabilities		122,854							86,585
Stockholders' equity		637,918							636,773
Total liabilities and
stockholders' equity	$	6,097,897						$	6,002,274
Net interest income				$	165,379						$	128,961
Net yield on earning assets						4.02	%						3.14	%
(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				$	1,165						$	609
(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				$	165						$	231
Commercial, financial, and agriculture					1,575							507
Installment loans to individuals					15							41
Time deposits					403							62
				$	2,158						$	841
(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																Nine Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022				September 30, 2023			September 30, 2022
Net Interest Income/Margin
Net interest income ("GAAP")	$	55,614		$	55,502		$	53,459		$	52,045		$	48,782			$	164,575		$	127,991
Taxable equivalent adjustment		243			255			308			336			326				804			970
Net interest income, fully taxable equivalent	$	55,857		$	55,757		$	53,767		$	52,381		$	49,108			$	165,379		$	128,961
Average interest earning assets	$	5,495,936		$	5,595,821		$	5,387,326		$	5,338,507		$	5,460,409			$	5,501,667		$	5,484,298
Net Interest Margin		4.03	%		4.00	%		4.05	%		3.89	%		3.57	%			4.02	%		3.14	%
Accretion related to fair value adjustments		(0.07	)%		(0.07	)%		(0.02	)%		(0.02	)%		(0.01	)%			(0.05	)%		(0.02	)%
Net Interest Margin (excluding accretion)		3.96	%		3.93	%		4.03	%		3.87	%		3.56	%			3.97	%		3.12	%
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")		10.04	%		10.35	%		10.48	%		9.83	%		9.22	%
Effect of goodwill and other intangibles, net		(2.49	)%		(2.45	)%		(2.43	)%		(1.81	)%		(1.81	)%
Tangible common equity to tangible assets		7.55	%		7.90	%		8.05	%		8.02	%		7.41	%
Return on average tangible equity ("GAAP")		24.1	%		27.4	%		19.9	%		27.3	%		21.8	%			23.9	%		18.3	%
Impact of merger related expenses		-			-			3.6	%		-			-				1.2	%		-
Impact of merger related provision		-			-			1.3	%		-			-				0.4	%		-
Return on tangible equity, excluding merger related expenses and provision		24.1	%		27.4	%		24.8	%		27.3	%		21.8	%			25.5	%		18.3	%
Return on assets ("GAAP")		1.94	%		2.12	%		1.63	%		2.08	%		1.83	%			1.91	%		1.59	%
Impact of merger related expenses		-			-			0.30	%		-			-				0.10	%		-
Impact of merger related provision		-			-			0.10	%		-			-				0.03	%		-
Return on assets, excluding merger related expenses and provision		1.94	%		2.12	%		2.04	%		2.08	%		1.83	%			2.04	%		1.59	%
Commercial Loan Information (period end)
Commercial Sector	Total			% of Total Loans			Average DSC			Average LTV
Natural Gas Extraction	$	22,768			0.57	%		3.68			N/A
Natural Gas Distribution		22,048			0.55	%		2.61			N/A
Masonry Contractors		27,675			0.69	%		1.13			84	%
Sheet Metal Work Manufacturing		24,974			0.62	%		1.57			68	%
Beer & Ale Merchant Wholesalers		25,981			0.65	%		3.28			N/A
Gasoline Stations with Convenience Stores		47,215			1.18	%		4.19			66	%
Lessors of Residential Buildings & Dwellings		436,789			10.92	%		1.89			66	%
1-4 Family		125,929			3.15	%		2.97			68	%
Multi-Family		182,785			4.57	%		1.84			66	%
Lessors of Nonresidential Buildings		567,746			14.20	%		1.70			65	%
Office Buildings		44,129			1.10	%		1.64			63	%
Lessors of Mini-Warehouses & Self-Storage Units		40,769			1.02	%		1.62			61	%
Assisted Living Facilities		27,955			0.70	%		1.38			57	%
Hotels & Motels		321,623			8.04	%		1.43			62	%
	Average Balance			Median Balance
Commercial Loans	$	439		$	92
Commercial Real Estate Loans		493			118
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued
(Unaudited) ($ in 000s, except per share data)
Estimated Uninsured Deposits by Deposit Type
	September 30, 2023			June 30, 2023
Noninterest-Bearing Demand Deposits		17	%		17	%
Interest-Bearing Deposits
Demand Deposits		11	%		7	%
Savings Deposits		11	%		11	%
Time Deposits		14	%		14	%
Total Deposits		13	%		12	%
The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities).
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued
(Unaudited) ($ in 000s, except per share data)
Net Growth in DDA Accounts
Year	New DDA Accounts			Net Number of New Accounts			Percentage
2023 YTD*		24,518			4,450			1.8	%
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/20231020891918/en/

The City Holding Stock at the time of publication of the news with a fall of -0,28 % to 88,65USD on Nasdaq stock exchange (24. Oktober 2023, 02:00 Uhr).