City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $102.1 million and record diluted earnings of $6.80 per share for the year ended December 31, 2022. For the year ended December 31, 2022, the Company achieved a return on assets of 1.71% and a return on tangible equity of 20.3%.

Net Interest Income

The Company’s net interest income increased from $155.6 million for the year ended December 31, 2021 to $180.0 million for the year ended December 31, 2022. The Company’s tax equivalent net interest income increased $24.4 million, or 15.6%, from $156.9 million for the year ended December 31, 2021 to $181.3 million for the year ended December 31, 2022. Net interest income increased by $12.0 million, $7.3 million and $3.4 million, respectively, due to increases in the yields on loans (net of loan fees and accretion), investments, and deposits in depository institutions, of 35 basis points, 47 basis points and 94 basis points, respectively, all due primarily to increases in the Federal Funds rate during 2022. In addition, higher average investment and loan balances ($189.2 million and $37.5 million, respectively) increased net interest income by $3.9 million and $1.8 million, respectively. These increases were partially offset by a decrease in loan fees associated with PPP loans of $3.5 million from 2021 and a decrease in accretion from fair value adjustments of $1.0 million. The Company’s reported net interest margin increased from 2.89% for the year ended December 31, 2021 to 3.33% for the year ended December 31, 2022.

The Company’s net interest income increased from $48.8 million during the third quarter of 2022 to $52.0 million during the fourth quarter of 2022. During the fourth quarter of 2022, the Company’s tax equivalent net interest income increased $3.3 million, or 6.7%, to $52.4 million from $49.1 million during the third quarter of 2022. Net interest income increased by $4.3 million and $1.9 million, respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 46 basis points and 50 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 94 basis points which increased net interest income by $0.4 million. These increases were partially offset by an increase in the cost of interest bearing liabilities (27 basis points) which decreased net interest income by $2.5 million and lower average deposits in depository institution balances ($126.7 million) which decreased net interest income by $0.7 million. The Company’s reported net interest margin increased from 3.57% for the third quarter of 2022 to 3.89% for the fourth quarter of 2022.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.21%, or $7.6 million, at December 31, 2021 to 0.17%, or $6.3 million at December 31, 2022. Total past due loans increased from $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021 to $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022.

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 $0.5 million in the fourth quarter of 2022 and $0.5 million for the year ended December 31, 2022, compared to no provision for credit losses for the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for year ended December 31, 2021. The provision for the year ended December 31, 2022, was a result of net charge-offs for the year that were partially offset by the repayment of a loan from a previous acquisition and release of the associated credit mark.

Non-interest Income

Non-interest income was $72.1 million for 2022 as compared to $69.6 million for 2021. The Company reported $1.6 million of unrealized fair value losses on the Company’s equity securities during 2022 compared to $0.3 million of realized security gains on the sale of investments and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021. Exclusive of these realized and unrealized gains and losses, non-interest income increased from $68.8 million for the year ended December 31, 2021 to $73.7 million for the year ended December 31, 2022. This increase was largely attributable to an increase of $2.8 million, or 10.9%, in service charges and a $1.7 million, or 42.7%, increase in bank owned life insurance due to higher death benefit proceeds received in 2022 compared to 2021. In addition, trust and investment management fee income and bankcard revenues each increased $0.4 million from the year ended December 31, 2021. These increases were partially offset by a decrease of $0.4 million in other income.

Non-interest income was $18.5 million during the quarter ended December 31, 2022 as compared to $17.6 million during the quarter ended December 31, 2021. During the fourth quarter of 2022, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities compared to $0.1 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2021. Exclusive of these unrealized fair value gains and losses, non-interest income increased from $17.6 million for the fourth quarter of 2021 to $18.8 million for the fourth quarter of 2022. This increase was largely attributable to higher bank owned life insurance due to higher death benefit proceeds received ($1.1 million).

Non-interest Expenses

Non-interest expenses increased from $117.2 million for 2021 to $124.3 million for 2022. This increase was primarily due to an increase in salaries and employee benefit expenses ($4.7 million, due to higher salary adjustments during 2022, increased incentive compensation, and increased health insurance) and equipment and software related expenses ($1.3 million). In addition, occupancy related expenses increased $0.6 million, advertising increased $0.3 million, and merger related expenses increased $0.3 million.

Non-interest expenses increased $4.0 million (13.8%), from $28.6 million in the fourth quarter of 2021 to $32.6 million in the fourth quarter of 2022. This increase was largely due to an increase in salaries and employee benefits of $1.9 million due to increased incentive compensation, increased health insurance, and higher salary adjustments during 2022. In addition, other expenses increased $0.6 million; equipment and software related expenses increased $0.6 million; occupancy related expenses increased $0.3 million; and merger related expenses increased $0.3 million.

Balance Sheet Trends

Loans increased $102.4 million (2.9%) from December 31, 2021 to $3.64 billion at December 31, 2022. PPP loans of $6.6 million at December 31, 2021 were fully repaid during 2022. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $109.0 million, (3.1%), from December 31, 2021 to $3.64 billion at December 31, 2022. Residential real estate loans increased $144.6 million (9.3%); commercial and industrial loans increased $34.3 million (10.1%) (excluding PPP loans); home equity loans increased $12.0 million (9.8%); and consumer loans increased $7.9 million (19.3%). These increases were partially offset by decreases in commercial real estate loans ($86.6 million, or 5.9%).

Total average depository balances for the year ended December 31, 2022 increased $141.0 million, or 2.9%, as compared to the year ended December 31, 2021. Average savings deposits increased $123.5 million, average noninterest bearing demand deposits increased $113.6 million, and average interest bearing demand deposits increased $78.4 million. These increases were partially offset by a decrease in average time deposits of $174.5 million.

Income Tax Expense

The Company’s effective income tax rate for the quarter and year ended December 31, 2022 was 18.2% and 19.8%, respectively, compared to 21.1% and 20.8% for the comparable periods in 2021.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 74.9% and the loan to asset ratio was 62.0% at December 31, 2022. The Company maintained investment securities totaling 26.0% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 67.7% of assets at December 31, 2022. Time deposits fund 15.1% of assets at December 31, 2022, but very few of these deposits are in accounts that have balances of more than $250,000.

The Company continues to be strongly capitalized with tangible equity of $462 million at December 31, 2022. Due primarily to unrealized security losses during the year ended December 31, 2022, the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 8.0% at December 30, 2022. However, unrealized security losses are not incorporated into measures of regulatory capital. At December 31, 2022, City National Bank’s Leverage Ratio was 8.55%, its Common Equity Tier I ratio was 13.88%, its Tier I Capital ratio was 13.88%, and its Total Risk-Based Capital ratio was 14.28%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On November 15, 2022, the Board approved a quarterly cash dividend of $0.65 cents per share payable January 31, 2023, to shareholders of record as of January 13, 2022. During the year ended December 31, 2022, the Company repurchased 325,000 common shares at a weighted average price of $81.50 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2022, the Company could repurchase approximately 817,000 shares under the current plan.

City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 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, 2021 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) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the 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; (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 December 31, 2022 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2022 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 
Three Months EndedTwelve Months Ended
December 31, 2022September 30, 2022June 30,
2022		March 31,
2022		December 31, 2021December 31, 2022December 31, 2021
 
Earnings
Net Interest Income (fully taxable equivalent)

$

52,381

 

$

49,108

 

$

41,611

 

$

38,239

 

$

40,956

 

$

181,339

 

$

156,906

 

Net Income available to common shareholders

 

30,672

 

 

27,374

 

 

22,683

 

 

21,342

 

 

23,386

 

 

102,071

 

 

88,080

 

 
Per Share Data
Earnings per share available to common shareholders:
Basic

$

2.06

 

$

1.84

 

$

1.51

 

$

1.41

 

$

1.54

 

$

6.81

 

$

5.67

 

Diluted

 

2.05

 

 

1.83

 

 

1.51

 

 

1.41

 

 

1.54

 

 

6.80

 

 

5.66

 

Weighted average number of shares (in thousands):
Basic

 

14,756

 

 

14,776

 

 

14,888

 

 

14,974

 

 

15,026

 

 

14,847

 

 

15,381

 

Diluted

 

14,785

 

 

14,800

 

 

14,909

 

 

15,002

 

 

15,056

 

 

14,873

 

 

15,407

 

Period-end number of shares (in thousands)

 

14,788

 

 

14,856

 

 

14,864

 

 

15,045

 

 

15,062

 

 

14,788

 

 

15,062

 

Cash dividends declared

$

0.65

 

$

0.65

 

$

0.60

 

$

0.60

 

$

0.60

 

$

2.50

 

$

2.34

 

Book value per share (period-end)

$

39.08

 

$

36.91

 

$

39.83

 

$

42.03

 

$

45.22

 

$

39.08

 

$

45.22

 

Tangible book value per share (period-end)

 

31.25

 

 

29.09

 

 

31.99

 

 

34.27

 

 

37.44

 

 

31.25

 

 

37.44

 

Market data:
High closing price

$

101.94

 

$

90.24

 

$

83.07

 

$

85.99

 

$

83.14

 

$

101.94

 

$

87.41

 

Low closing price

 

89.32

 

 

78.40

 

 

73.88

 

 

76.82

 

 

76.52

 

 

73.88

 

 

69.05

 

Period-end closing price

 

93.09

 

 

88.69

 

 

79.88

 

 

78.70

 

 

81.79

 

 

93.09

 

 

81.79

 

Average daily volume (in thousands)

 

75

 

 

58

 

 

87

 

 

59

 

 

52

 

 

70

 

 

57

 

Treasury share activity:
Treasury shares repurchased (in thousands)

 

69

 

 

9

 

 

208

 

 

38

 

 

131

 

 

325

 

 

760

 

Average treasury share repurchase price

$

93.12

 

$

80.24

 

$

78.33

 

$

78.09

 

$

78.93

 

$

81.50

 

$

77.21

 

 
Key Ratios (percent)
Return on average assets

 

2.08

%

 

1.83

%

 

1.51

%

 

1.42

%

 

1.56

%

 

1.71

%

 

1.49

%

Return on average tangible equity

 

27.3

%

 

21.8

%

 

18.1

%

 

15.3

%

 

16.7

%

 

20.3

%

 

15.3

%

Yield on interest earning assets

 

4.23

%

 

3.72

%

 

3.15

%

 

2.94

%

 

3.08

%

 

3.51

%

 

3.07

%

Cost of interest bearing liabilities

 

0.48

%

 

0.21

%

 

0.15

%

 

0.17

%

 

0.19

%

 

0.25

%

 

0.26

%

Net Interest Margin

 

3.89

%

 

3.57

%

 

3.04

%

 

2.82

%

 

2.94

%

 

3.33

%

 

2.89

%

Non-interest income as a percent of total revenue

 

26.5

%

 

27.2

%

 

30.9

%

 

32.4

%

 

30.2

%

 

28.6

%

 

30.8

%

Efficiency Ratio

 

45.3

%

 

46.3

%

 

50.5

%

 

51.7

%

 

48.3

%

 

48.2

%

 

51.3

%

Price/Earnings Ratio (a)

 

11.30

 

 

12.08

 

 

13.23

 

 

13.93

 

 

13.27

 

 

13.67

 

 

14.42

 

 
Capital (period-end)
Average Shareholders' Equity to Average Assets

 

9.57

%

 

10.32

%

 

10.26

%

 

11.25

%

 

11.25

%

Tangible equity to tangible assets

 

8.02

%

 

7.41

%

 

7.76

%

 

8.75

%

 

9.58

%

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

 

16.23

%

 

15.82

%

 

15.85

%

 

16.18

%

 

16.08

%

Tier I

 

16.23

%

 

15.82

%

 

15.85

%

 

16.18

%

 

16.08

%

Total

 

16.62

%

 

16.22

%

 

16.26

%

 

16.60

%

 

16.51

%

Leverage

 

10.01

%

 

9.74

%

 

9.42

%

 

9.58

%

 

9.44

%

City National Bank risk based capital ratios (b):
CET I

 

13.88

%

 

14.68

%

 

14.80

%

 

14.82

%

 

14.35

%

Tier I

 

13.88

%

 

14.68

%

 

14.80

%

 

14.82

%

 

14.35

%

Total

 

14.28

%

 

15.07

%

 

15.21

%

 

15.24

%

 

14.78

%

Leverage

 

8.55

%

 

9.05

%

 

8.81

%

 

8.80

%

 

8.45

%

 
Other (period-end)
Branches

 

94

 

 

94

 

 

94

 

 

94

 

 

94

 

FTE

 

909

 

 

903

 

 

915

 

 

897

 

 

905

 

 
Assets per FTE (in thousands)

$

6,467

 

$

6,588

 

$

6,825

 

$

6,703

 

$

6,637

 

Deposits per FTE (in thousands)

 

5,357

 

 

5,492

 

 

5,621

 

 

5,574

 

 

5,445

 

 
(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) December 31, 2022 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
 
Three Months EndedTwelve Months Ended
December 31, 2022September 30, 2022June 30,
2022		March 31,
2022		December 31, 2021December 31, 2022December 31, 2021
 
Interest Income
Interest and fees on loans

$

42,963

 

$

38,493

 

$

33,208

 

$

31,874

 

$

35,277

 

$

146,538

 

$

136,676

 

Interest on investment securities:
Taxable

 

11,119

 

 

9,556

 

 

7,547

 

 

6,223

 

 

5,753

 

 

34,445

 

 

23,071

 

Tax-exempt

 

1,262

 

 

1,228

 

 

1,205

 

 

1,216

 

 

1,226

 

 

4,911

 

 

5,027

 

Interest on deposits in depository institutions

 

1,244

 

 

1,530

 

 

782

 

 

238

 

 

217

 

 

3,794

 

 

693

 

Total Interest Income

 

56,588

 

 

50,807

 

 

42,742

 

 

39,551

 

 

42,473

 

 

189,688

 

 

165,467

 

 
Interest Expense
Interest on deposits

 

3,010

 

 

1,585

 

 

1,328

 

 

1,521

 

 

1,710

 

 

7,444

 

 

9,405

 

Interest on short-term borrowings

 

1,533

 

 

440

 

 

124

 

 

114

 

 

132

 

 

2,211

 

 

489

 

Total Interest Expense

 

4,543

 

 

2,025

 

 

1,452

 

 

1,635

 

 

1,842

 

 

9,655

 

 

9,894

 

Net Interest Income

 

52,045

 

 

48,782

 

 

41,290

 

 

37,916

 

 

40,631

 

 

180,033

 

 

155,573

 

Provision for (Recovery of) credit losses

 

500

 

 

730

 

 

-

 

 

(756

)

 

-

 

 

474

 

 

(3,165

)

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

 

51,545

 

 

48,052

 

 

41,290

 

 

38,672

 

 

40,631

 

 

179,559

 

 

158,738

 

 
Non-Interest Income
Net gains on sale of investment securities

 

4

 

 

-

 

 

-

 

 

-

 

 

-

 

 

4

 

 

312

 

Unrealized (losses) gains recognized on equity securities still held

 

(262

)

 

1

 

 

(601

)

 

(723

)

 

52

 

 

(1,585

)

 

504

 

Service charges

 

7,056

 

 

7,487

 

 

7,067

 

 

6,725

 

 

7,057

 

 

28,335

 

 

25,539

 

Bankcard revenue

 

6,791

 

 

7,052

 

 

7,062

 

 

6,444

 

 

6,762

 

 

27,349

 

 

26,987

 

Trust and investment management fee income

 

2,343

 

 

2,158

 

 

2,100

 

 

2,197

 

 

2,198

 

 

8,798

 

 

8,415

 

Bank owned life insurance

 

1,813

 

 

754

 

 

978

 

 

2,014

 

 

748

 

 

5,559

 

 

3,895

 

Other income

 

791

 

 

792

 

 

1,243

 

 

791

 

 

799

 

 

3,617

 

 

3,989

 

Total Non-Interest Income

 

18,536

 

 

18,244

 

 

17,849

 

 

17,448

 

 

17,616

 

 

72,077

 

 

69,641

 

 
Non-Interest Expense
Salaries and employee benefits

 

17,148

 

 

17,398

 

 

16,413

 

 

15,577

 

 

15,299

 

 

66,536

 

 

61,850

 

Occupancy related expense

 

2,725

 

 

2,664

 

 

2,620

 

 

2,709

 

 

2,429

 

 

10,718

 

 

10,083

 

Equipment and software related expense

 

3,341

 

 

2,949

 

 

2,732

 

 

2,769

 

 

2,733

 

 

11,791

 

 

10,486

 

FDIC insurance expense

 

413

 

 

416

 

 

409

 

 

435

 

 

400

 

 

1,673

 

 

1,583

 

Advertising

 

802

 

 

854

 

 

951

 

 

798

 

 

582

 

 

3,405

 

 

3,091

 

Bankcard expenses

 

1,356

 

 

1,405

 

 

1,665

 

 

1,606

 

 

1,576

 

 

6,032

 

 

6,455

 

Postage, delivery, and statement mailings

 

597

 

 

578

 

 

551

 

 

636

 

 

590

 

 

2,362

 

 

2,323

 

Office supplies

 

441

 

 

466

 

 

427

 

 

410

 

 

378

 

 

1,744

 

 

1,547

 

Legal and professional fees

 

610

 

 

532

 

 

525

 

 

527

 

 

405

 

 

2,194

 

 

2,279

 

Telecommunications

 

627

 

 

651

 

 

754

 

 

584

 

 

702

 

 

2,616

 

 

2,858

 

Repossessed asset losses (gains), net of expenses

 

54

 

 

(3

)

 

(32

)

 

40

 

 

(29

)

 

59

 

 

(57

)

Merger related expenses

 

268

 

 

-

 

 

-

 

 

-

 

 

-

 

 

268

 

 

-

 

Other expenses

 

4,203

 

 

3,591

 

 

3,674

 

 

3,436

 

 

3,559

 

 

14,904

 

 

14,687

 

Total Non-Interest Expense

 

32,585

 

 

31,501

 

 

30,689

 

 

29,527

 

 

28,624

 

 

124,302

 

 

117,185

 

Income Before Income Taxes

 

37,496

 

 

34,795

 

 

28,450

 

 

26,593

 

 

29,623

 

 

127,334

 

 

111,194

 

Income tax expense

 

6,824

 

 

7,421

 

 

5,767

 

 

5,251

 

 

6,237

 

 

25,263

 

 

23,114

 

Net Income Available to Common Shareholders

$

30,672

 

$

27,374

 

$

22,683

 

$

21,342

 

$

23,386

 

$

102,071

 

$

88,080

 

 
Distributed earnings allocated to common shareholders

$

9,521

 

$

9,564

 

$

8,837

 

$

8,943

 

$

8,949

 

$

36,619

 

$

34,901

 

Undistributed earnings allocated to common shareholders

 

20,857

 

 

17,555

 

 

13,643

 

 

12,199

 

 

14,211

 

 

64,494

 

 

52,336

 

Net earnings allocated to common shareholders

$

30,378

 

$

27,119

 

$

22,480

 

$

21,142

 

$

23,160

 

$

101,113

 

$

87,237

 

 
Average common shares outstanding

 

14,756

 

 

14,776

 

 

14,888

 

 

14,974

 

 

15,026

 

 

14,847

 

 

15,381

 

Shares for diluted earnings per share

 

14,785

 

 

14,800

 

 

14,909

 

 

15,002

 

 

15,056

 

 

14,873

 

 

15,407

 

 
Basic earnings per common share

$

2.06

 

$

1.84

 

$

1.51

 

$

1.41

 

$

1.54

 

$

6.81

 

$

5.67

 

Diluted earnings per common share

$

2.05

 

$

1.83

 

$

1.51

 

$

1.41

 

$

1.54

 

$

6.80

 

$

5.66

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
December 31, 2022September 30,
2022		June 30,
2022		March 31,
2022		December 31, 2021
 
Assets
Cash and due from banks

$

68,333

 

$

65,051

 

$

90,449

 

$

100,877

 

$

101,804

 

Interest-bearing deposits in depository institutions

 

131,667

 

 

233,302

 

 

606,530

 

 

497,171

 

 

532,827

 

Cash and cash equivalents

 

200,000

 

 

298,353

 

 

696,979

 

 

598,048

 

 

634,631

 

 
Investment securities available-for-sale, at fair value

 

1,505,520

 

 

1,489,392

 

 

1,497,227

 

 

1,409,513

 

 

1,408,165

 

Other securities

 

23,807

 

 

24,372

 

 

24,383

 

 

24,785

 

 

25,531

 

Total investment securities

 

1,529,327

 

 

1,513,764

 

 

1,521,610

 

 

1,434,298

 

 

1,433,696

 

 
Gross loans

 

3,646,258

 

 

3,628,752

 

 

3,566,758

 

 

3,559,905

 

 

3,543,814

 

Allowance for credit losses

 

(17,108

)

 

(17,011

)

 

(17,015

)

 

(17,280

)

 

(18,166

)

Net loans

 

3,629,150

 

 

3,611,741

 

 

3,549,743

 

 

3,542,625

 

 

3,525,648

 

 
Bank owned life insurance

 

120,674

 

 

121,283

 

 

120,528

 

 

120,522

 

 

120,978

 

Premises and equipment, net

 

70,786

 

 

71,686

 

 

72,388

 

 

73,067

 

 

74,071

 

Accrued interest receivable

 

18,287

 

 

17,256

 

 

16,342

 

 

16,101

 

 

15,627

 

Net deferred tax assets

 

44,884

 

 

49,888

 

 

30,802

 

 

18,001

 

 

63

 

Intangible assets

 

115,735

 

 

116,081

 

 

116,428

 

 

116,774

 

 

117,121

 

Other assets

 

149,263

 

 

147,716

 

 

118,375

 

 

92,331

 

 

81,860

 

Total Assets

$

5,878,106

 

$

5,947,768

 

$

6,243,195

 

$

6,011,767

 

$

6,003,695

 

 
Liabilities
Deposits:
Noninterest-bearing

$

1,351,415

 

$

1,429,281

 

$

1,531,660

 

$

1,357,266

 

$

1,373,125

 

Interest-bearing:
Demand deposits

 

1,233,482

 

 

1,160,970

 

 

1,189,056

 

 

1,191,492

 

 

1,135,848

 

Savings deposits

 

1,396,869

 

 

1,427,785

 

 

1,435,645

 

 

1,425,528

 

 

1,347,448

 

Time deposits

 

888,100

 

 

939,769

 

 

985,567

 

 

1,024,559

 

 

1,068,915

 

Total deposits

 

4,869,866

 

 

4,957,805

 

 

5,141,928

 

 

4,998,845

 

 

4,925,336

 

Short-term borrowings
Customer repurchase agreements

 

290,964

 

 

304,807

 

 

402,368

 

 

288,483

 

 

312,458

 

Other liabilities

 

139,424

 

 

136,868

 

 

106,906

 

 

92,009

 

 

84,796

 

Total Liabilities

 

5,300,254

 

 

5,399,480

 

 

5,651,202

 

 

5,379,337

 

 

5,322,590

 

 
Stockholders' Equity
Preferred stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Common stock

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

Capital surplus

 

170,980

 

 

170,138

 

 

169,557

 

 

170,206

 

 

170,942

 

Retained earnings

 

706,696

 

 

685,657

 

 

667,933

 

 

654,138

 

 

641,826

 

Cost of common stock in treasury

 

(215,955

)

 

(209,644

)

 

(209,133

)

 

(194,819

)

 

(193,542

)

Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale

 

(128,066

)

 

(141,997

)

 

(80,498

)

 

(41,229

)

 

17,745

 

Underfunded pension liability

 

(3,422

)

 

(3,485

)

 

(3,485

)

 

(3,485

)

 

(3,485

)

Total Accumulated Other Comprehensive (Loss) Income

 

(131,488

)

 

(145,482

)

 

(83,983

)

 

(44,714

)

 

14,260

 

Total Stockholders' Equity

 

577,852

 

 

548,288

 

 

591,993

 

 

632,430

 

 

681,105

 

Total Liabilities and Stockholders' Equity

$

5,878,106

 

$

5,947,768

 

$

6,243,195

 

$

6,011,767

 

$

6,003,695

 

 
Regulatory Capital
Total CET 1 capital

$

598,068

 

$

582,213

 

$

564,158

 

$

565,048

 

$

555,532

 

Total tier 1 capital

 

598,068

 

 

582,213

 

 

564,158

 

 

565,048

 

 

555,532

 

Total risk-based capital

 

612,654

 

 

596,708

 

 

578,657

 

 

579,807

 

 

570,336

 

Total risk-weighted assets

 

3,685,207

 

 

3,679,511

 

 

3,558,249

 

 

3,492,920

 

 

3,453,893

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
 
December 31, 2022September 30,
2022		June 30,
2022		March 31,
2022		December 31, 2021
 
Commercial and industrial

$

373,890

$

375,735

$

360,481

$

337,384

$

346,184

 
1-4 Family

 

116,192

 

109,710

 

108,765

 

108,424

 

107,873

Hotels

 

340,404

 

355,001

 

337,910

 

314,902

 

311,315

Multi-family

 

174,786

 

186,440

 

203,856

 

209,359

 

215,677

Non Residential Non-Owner Occupied

 

585,964

 

569,369

 

551,240

 

637,092

 

639,818

Non Residential Owner Occupied

 

174,961

 

177,673

 

180,188

 

200,180

 

204,233

Commercial real estate (1)

 

1,392,307

 

1,398,193

 

1,381,959

 

1,469,957

 

1,478,916

 
Residential real estate (2)

 

1,693,523

 

1,678,770

 

1,651,005

 

1,588,860

 

1,548,965

Home equity

 

134,317

 

130,837

 

125,742

 

121,460

 

122,345

Consumer

 

48,806

 

41,902

 

44,580

 

39,778

 

40,901

DDA overdrafts

 

3,415

 

3,315

 

2,991

 

2,466

 

6,503

Gross Loans

$

3,646,258

$

3,628,752

$

3,566,758

$

3,559,905

$

3,543,814

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

$

4,130

$

4,125

$

6,767

$

14,877

$

11,783

(2) - Residential real estate loans

 

21,122

 

19,333

 

18,751

 

16,253

 

17,252

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
 
Three Months EndedTwelve Months Ended
December 31, 2022September 30,
2022		June 30,
2022		March 31,
2022		December 31, 2021December 31, 2022December 31, 2021
Allowance for Credit Losses
Balance at beginning of period

$

17,011

 

$

17,015

 

$

17,280

 

$

18,166

 

$

18,751

 

$

18,166

 

$

24,549

 

 
Charge-offs:
Commercial and industrial

 

(120

)

 

(408

)

 

-

 

 

(34

)

 

-

 

 

(562

)

 

(245

)

Commercial real estate

 

(31

)

 

-

 

 

(24

)

 

-

 

 

(276

)

 

(55

)

 

(2,387

)

Residential real estate

 

(66

)

 

(93

)

 

(56

)

 

(50

)

 

(68

)

 

(265

)

 

(265

)

Home equity

 

(189

)

 

(71

)

 

(19

)

 

-

 

 

(58

)

 

(279

)

 

(177

)

Consumer

 

(15

)

 

(16

)

 

(9

)

 

(23

)

 

(13

)

 

(63

)

 

(242

)

DDA overdrafts

 

(670

)

 

(719

)

 

(604

)

 

(631

)

 

(635

)

 

(2,624

)

 

(2,151

)

Total charge-offs

 

(1,091

)

 

(1,307

)

 

(712

)

 

(738

)

 

(1,050

)

 

(3,848

)

 

(5,467

)

 
Recoveries:
Commercial and industrial

 

94

 

 

149

 

 

32

 

 

59

 

 

31

 

 

334

 

 

171

 

Commercial real estate

 

120

 

 

9

 

 

25

 

 

53

 

 

27

 

 

207

 

 

224

 

Residential real estate

 

49

 

 

1

 

 

4

 

 

45

 

 

7

 

 

99

 

 

127

 

Home equity

 

34

 

 

2

 

 

3

 

 

17

 

 

6

 

 

56

 

 

90

 

Consumer

 

31

 

 

29

 

 

19

 

 

28

 

 

40

 

 

107

 

 

255

 

DDA overdrafts

 

360

 

 

383

 

 

364

 

 

406

 

 

354

 

 

1,513

 

 

1,382

 

Total recoveries

 

688

 

 

573

 

 

447

 

 

608

 

 

465

 

 

2,316

 

 

2,249

 

 
Net charge-offs

 

(403

)

 

(734

)

 

(265

)

 

(130

)

 

(585

)

 

(1,532

)

 

(3,218

)

Provision for (recovery of) credit losses

 

500

 

 

730

 

 

-

 

 

(756

)

 

-

 

 

474

 

 

(3,165

)

Balance at end of period

$

17,108

 

$

17,011

 

$

17,015

 

$

17,280

 

$

18,166

 

$

17,108

 

$

18,166

 

 
Loans outstanding

$

3,646,258

 

$

3,628,752

 

$

3,566,758

 

$

3,559,905

 

$

3,543,814

 

Allowance as a percent of loans outstanding

 

0.47

%

 

0.47

%

 

0.48

%

 

0.49

%

 

0.51

%

Allowance as a percent of non-performing loans

 

317.3

%

 

320.5

%

 

292.6

%

 

331.3

%

 

290.1

%

 
Average loans outstanding

$

3,648,996

 

$

3,596,523

 

$

3,559,713

 

$

3,527,393

 

$

3,522,272

 

$

3,583,526

 

$

3,545,978

 

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

 

0.04

%

 

0.08

%

 

0.03

%

 

0.01

%

 

0.07

%

 

0.04

%

 

0.09

%

 
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
 
December 31, 2022September 30, 2022June 30,
2022		March 31,
2022		December 31, 2021
Nonaccrual Loans
Residential real estate

$

1,969

 

$

2,089

 

$

1,561

 

$

1,786

 

$

2,809

 

Home equity

 

55

 

 

140

 

 

54

 

 

99

 

 

40

 

Commercial and industrial

 

1,015

 

 

785

 

 

1,360

 

 

1,069

 

 

996

 

Commercial real estate

 

2,166

 

 

2,293

 

 

2,783

 

 

2,241

 

 

2,373

 

Consumer

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonaccrual loans

 

5,205

 

 

5,307

 

 

5,758

 

 

5,195

 

 

6,218

 

Accruing loans past due 90 days or more

 

187

 

 

-

 

 

58

 

 

21

 

 

43

 

Total non-performing loans

 

5,392

 

 

5,307

 

 

5,816

 

 

5,216

 

 

6,261

 

Other real estate owned

 

909

 

 

1,071

 

 

946

 

 

1,099

 

 

1,319

 

Total non-performing assets

$

6,301

 

$

6,378

 

$

6,762

 

$

6,315

 

$

7,580

 

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

 

0.17

%

 

0.18

%

 

0.19

%

 

0.18

%

 

0.21

%

 
Past Due Loans
Residential real estate

$

7,091

 

$

3,452

 

$

5,298

 

$

4,976

 

$

5,321

 

Home equity

 

650

 

 

521

 

 

282

 

 

505

 

 

618

 

Commercial and industrial

 

234

 

 

221

 

 

130

 

 

56

 

 

336

 

Commercial real estate

 

710

 

 

221

 

 

46

 

 

744

 

 

22

 

Consumer

 

100

 

 

27

 

 

49

 

 

32

 

 

60

 

DDA overdrafts

 

391

 

 

561

 

 

430

 

 

392

 

 

489

 

Total past due loans

$

9,176

 

$

5,003

 

$

6,235

 

$

6,705

 

$

6,846

 

 
Total past due loans as a percent of loans outstanding

 

0.25

%

 

0.14

%

 

0.17

%

 

0.19

%

 

0.19

%

 
Troubled Debt Restructurings ("TDRs")
Residential real estate

$

15,857

 

$

15,657

 

$

16,022

 

$

16,182

 

$

16,943

 

Home equity

 

1,286

 

 

1,614

 

 

1,649

 

 

1,694

 

 

1,784

 

Commercial and industrial

 

333

 

 

354

 

 

381

 

 

397

 

 

414

 

Commercial real estate

 

102

 

 

104

 

 

107

 

 

1,890

 

 

1,914

 

Consumer

 

64

 

 

68

 

 

80

 

 

194

 

 

225

 

Total TDRs

$

17,642

 

$

17,797

 

$

18,239

 

$

20,357

 

$

21,280

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
Three Months Ended
December 31, 2022September 30, 2022December 31, 2021
AverageYield/AverageYield/AverageYield/
BalanceInterestRateBalanceInterestRateBalanceInterestRate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,824,327

 

$

18,910

 

4.11

%

$

1,792,365

 

$

17,640

3.90

%

$

1,645,167

 

$

15,692

3.78

%

Commercial, financial, and agriculture (2)

 

1,773,937

 

 

23,346

 

5.22

%

 

1,759,567

 

 

20,092

4.53

%

 

1,831,461

 

 

18,740

4.06

%

Installment loans to individuals (2), (3)

 

50,732

 

 

646

 

5.05

%

 

44,591

 

 

683

6.08

%

 

45,644

 

 

691

6.01

%

Previously securitized loans (4) ***

 

63

 

*** ***

 

78

*** ***

 

154

***
Total loans

 

3,648,996

 

 

42,965

 

4.67

%

 

3,596,523

 

 

38,493

4.25

%

 

3,522,272

 

 

35,277

3.97

%

Securities:
Taxable

 

1,315,453

 

 

11,118

 

3.35

%

 

1,359,207

 

 

9,557

2.79

%

 

1,171,340

 

 

5,753

1.95

%

Tax-exempt (5)

 

211,326

 

 

1,597

 

3.00

%

 

215,219

 

 

1,555

2.87

%

 

239,096

 

 

1,551

2.57

%

Total securities

 

1,526,779

 

 

12,715

 

3.30

%

 

1,574,426

 

 

11,112

2.80

%

 

1,410,436

 

 

7,304

2.05

%

Deposits in depository institutions

 

162,732

 

 

1,245

 

3.04

%

 

289,460

 

 

1,529

2.10

%

 

588,678

 

 

217

0.15

%

Total interest-earning assets

 

5,338,507

 

 

56,925

 

4.23

%

 

5,460,409

 

 

51,134

3.72

%

 

5,521,386

 

 

42,798

3.08

%

Cash and due from banks

 

69,223

 

 

81,202

 

 

98,111

 

Premises and equipment, net

 

71,482

 

 

72,196

 

 

74,847

 

Goodwill and intangible assets

 

115,952

 

 

116,297

 

 

117,349

 

Other assets

 

332,855

 

 

278,527

 

 

216,780

 

Less: Allowance for credit losses

 

(17,332

)

 

(17,224

)

 

(18,756

)

Total assets

$

5,910,687

 

$

5,991,407

 

$

6,009,717

 

 
Liabilities:
Interest-bearing demand deposits

$

1,150,327

 

$

684

 

0.24

%

$

1,151,122

 

$

272

0.09

%

$

1,113,693

 

$

131

0.05

%

Savings deposits

 

1,412,246

 

 

829

 

0.23

%

 

1,431,591

 

 

358

0.10

%

 

1,338,747

 

 

173

0.05

%

Time deposits (2)

 

916,845

 

 

1,497

 

0.65

%

 

964,447

 

 

956

0.39

%

 

1,087,280

 

 

1,406

0.51

%

Short-term borrowings

 

303,599

 

 

1,534

 

2.00

%

 

270,310

 

 

440

0.65

%

 

314,937

 

 

132

0.17

%

Total interest-bearing liabilities

 

3,783,017

 

 

4,544

 

0.48

%

 

3,817,470

 

 

2,026

0.21

%

 

3,854,657

 

 

1,842

0.19

%

Noninterest-bearing demand deposits

 

1,428,013

 

 

1,455,123

 

 

1,394,599

 

Other liabilities

 

134,075

 

 

100,303

 

 

84,071

 

Stockholders' equity

 

565,582

 

 

618,511

 

 

676,390

 

Total liabilities and
stockholders' equity

$

5,910,687

 

$

5,991,407

 

$

6,009,717

 

Net interest income

$

52,381

 

$

49,108

$

40,956

Net yield on earning assets

3.89

%

3.57

%

2.94

%

 
(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)

$

(41

)

$

308

$

1,106

 
(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

$

67

 

$

64

$

149

Commercial, financial, and agriculture

 

135

 

 

103

 

243

Installment loans to individuals

 

4

 

 

7

 

15

Time deposits

 

21

 

 

21

 

48

$

227

 

$

195

$

455

 
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
Twelve Months Ended
December 31, 2022December 31, 2021
AverageYield/AverageYield/
BalanceInterestRateBalanceInterestRate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,755,772

 

$

68,208

3.88

%

$

1,658,710

 

$

64,492

3.89

%

Commercial, financial, and agriculture (2)

 

1,781,132

 

 

75,390

4.23

%

 

1,838,560

 

 

68,784

3.74

%

Installment loans to individuals (2), (3)

 

46,622

 

 

2,567

5.51

%

 

48,708

 

 

2,831

5.81

%

Previously securitized loans (4) ***

 

373

*** ***

 

568

***
Total loans

 

3,583,526

 

 

146,538

4.09

%

 

3,545,978

 

 

136,675

3.85

%

Securities:
Taxable

 

1,288,252

 

 

34,445

2.67

%

 

1,075,550

 

 

23,071

2.15

%

Tax-exempt (5)

 

218,588

 

 

6,217

2.84

%

 

242,125

 

 

6,362

2.63

%

Total securities

 

1,506,840

 

 

40,662

2.70

%

 

1,317,675

 

 

29,433

2.23

%

Deposits in depository institutions

 

357,184

 

 

3,794

1.06

%

 

568,928

 

 

693

0.12

%

Total interest-earning assets

 

5,447,550

 

 

190,994

3.51

%

 

5,432,581

 

 

166,801

3.07

%

Cash and due from banks

 

88,581

 

 

92,847

 

Premises and equipment, net

 

72,590

 

 

76,069

 

Goodwill and intangible assets

 

116,469

 

 

117,899

 

Other assets

 

271,685

 

 

216,493

 

Less: Allowance for credit losses

 

(17,687

)

 

(21,922

)

Total assets

$

5,979,188

 

$

5,913,967

 

 
Liabilities:
Interest-bearing demand deposits

$

1,150,007

 

$

1,234

0.11

%

$

1,071,628

 

$

504

0.05

%

Savings deposits

 

1,414,727

 

 

1,544

0.11

%

 

1,291,225

 

 

689

0.05

%

Time deposits (2)

 

983,046

 

 

4,666

0.47

%

 

1,157,502

 

 

8,213

0.71

%

Short-term borrowings

 

284,611

 

 

2,211

0.78

%

 

298,413

 

 

489

0.16

%

Total interest-bearing liabilities

 

3,832,391

 

 

9,655

0.25

%

 

3,818,768

 

 

9,895

0.26

%

Noninterest-bearing demand deposits

 

1,429,415

 

 

1,315,801

 

Other liabilities

 

98,553

 

 

84,377

 

Stockholders' equity

 

618,829

 

 

695,021

 

Total liabilities and
stockholders' equity

$

5,979,188

 

$

5,913,967

 

Net interest income

$

181,339

$

156,906

Net yield on earning assets

3.33

%

2.89

%

 
(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 (includes PPP fees)

$

568

$

3,550

 
(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

$

298

$

620

Commercial, financial, and agriculture

 

642

 

1,198

Installment loans to individuals

 

45

 

87

Time deposits

 

83

 

193

$

1,068

$

2,098

 
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited) ($ in 000s, except per share data)
 
Three Months EndedTwelve Months Ended
December 31, 2022September 30, 2022June 30,
2022		March 31,
2022		December 31, 2021December 31, 2022December 31, 2021
Net Interest Income/Margin
Net interest income ("GAAP")

$

52,045

 

$

48,782

 

$

41,290

 

$

37,916

 

$

40,631

 

$

180,033

 

$

155,573

 

Taxable equivalent adjustment

 

336

 

 

326

 

 

321

 

 

323

 

 

325

 

 

1,306

 

 

1,333

 

Net interest income, fully taxable equivalent

$

52,381

 

$

49,108

 

$

41,611

 

$

38,239

 

$

40,956

 

$

181,339

 

$

156,906

 

 
Average interest earning assets

$

5,338,507

 

$

5,460,409

 

$

5,485,604

 

$

5,507,397

 

$

5,521,386

 

$

5,447,550

 

$

5,432,581

 

 
Net Interest Margin

 

3.89

%

 

3.57

%

 

3.04

%

 

2.82

%

 

2.94

%

 

3.33

%

 

2.89

%

Accretion related to fair value adjustments

 

-0.02

%

 

-0.01

%

 

-0.02

%

 

-0.03

%

 

-0.03

%

 

-0.02

%

 

-0.04

%

Net Interest Margin (excluding accretion)

 

3.87

%

 

3.56

%

 

3.02

%

 

2.79

%

 

2.91

%

 

3.31

%

 

2.85

%

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

 

9.83

%

 

9.22

%

 

9.48

%

 

10.52

%

 

11.34

%

Effect of goodwill and other intangibles, net

 

-1.81

%

 

-1.81

%

 

-1.72

%

 

-1.77

%

 

-1.76

%

Tangible common equity to tangible assets

 

8.02

%

 

7.41

%

 

7.76

%

 

8.75

%

 

9.58

%