City Holding Company Announces Third Quarter Results

City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.0 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $22.7 million and diluted earnings of $1.47 per share for the quarter ended September 30, 2021. For the third quarter of 2021, the Company achieved a return on assets of 1.53% and a return on tangible equity of 15.7%. For the nine months ended September 30, 2021, City reported net income of $64.7 million, or diluted earnings per share of $4.13.

Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “While our financial performance is not quite back to pre-COVID levels, City’s financial performance continued on an upward swing in the third quarter of 2021. Net interest income, largely on the strength of fee income related to Government sponsored Paycheck Protection Program (“PPP”) loans, increased $1.6 million from the quarter ended June 30, 2021 and noninterest income, exclusive of security items, was up $1.3 million from the quarter ended September 30, 2020.”

“Asset quality continues to be a hallmark for City with nonperforming assets dropping to below $10 million ($9.0 million or just 0.26% of total loans and other real estate owned). Past due loans and troubled debt restructurings also declined during the quarter ended September 30, 2021. Deferrals on commercial loans have also declined significantly during the quarter to just $15 million and are solely related to hotel and lodging customers.”

“While consumer related lending continues to be challenging with the current interest rate environment, commercial loans grew $36 million, or 2% (8.1% annualized), during the quarter ended September 30, 2021, exclusive of PPP balances. As of September 30, 2021, our PPP balances have declined to $26 million with less than $1 million remaining outstanding from PPP loans originated in 2020 and approximately 45% of loans originated in 2021 already forgiven.”

Net Interest Income

The Company’s net interest income increased from $37.9 million during the second quarter of 2021 to $39.5 million during the third quarter of 2021. The Company’s tax equivalent net interest income increased from $38.3 million for the second quarter of 2021 to $39.8 million for the third quarter of 2021. An increase in loan fees related to PPP loan forgiveness increased net interest income by $0.6 million. In addition, a modest increase in loan yields, due to interest recoveries on previously charged-off loans, increased net interest income by $0.6 million and lower rates paid on time deposits (16 basis points) increased net interest income by $0.4 million. The Company’s reported net interest margin increased from 2.81% for the second quarter of 2021 to 2.89% for the third quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.86% for the quarter ended September 30, 2021 and 2.76% for the quarter ended June 30, 2021.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.32% at June 30, 2021 to 0.26% at September 30, 2021. Total nonperforming assets decreased from $11.4 million at June 30, 2021 to $9.0 million at September 30, 2021. Total past due loans decreased slightly from $7.6 million, or 0.22% of total loans outstanding, at June 30, 2021 to $7.3 million, or 0.21% of total loans outstanding, at September 30, 2021.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a recovery of credit losses of $0.7 million in the third quarter of 2021, compared to a provision for credit losses of $1.0 million for the comparable period in 2020 and a recovery of credit losses of $2.0 million for the second quarter of 2021. Due to adjustments to other qualitative and other factors, the Company partially recovered a portion of the provision for credit losses incurred in the quarter ended March 31, 2020.

Non-interest Income

Non-interest income was $17.9 million for the third quarter of 2021 as compared to $17.0 million for the third quarter of 2020. During the third quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.5 million of unrealized fair value gains on the Company’s equity securities in the third quarter of 2020. Exclusive of these gains, non-interest income increased from $16.5 million for the third quarter of 2020 to $17.8 million for the third quarter of 2021. This increase was largely attributable to higher bankcard revenues ($0.7 million, or 12.0%) and service charges ($0.4 million, or 6.5%). In addition, trust and investment management fee income increased $0.3 million and other income increased $0.2 million from the quarter ended September 30, 2020. These increases were partially offset by a decrease in bank owned life insurance revenues due to lower death benefit proceeds ($0.3 million).

Non-interest Expenses

Non-interest expenses increased $0.5 million (1.6%), from $28.7 million in the third quarter of 2020 to $29.2 million in the third quarter of 2021. This increase was primarily due to an increase in advertising expenses of $0.3 million and telecommunication expenses of $0.2 million.

Balance Sheet Trends

Loans decreased $7.5 million from June 30, 2021 to September 30, 2021, to $3.52 billion. PPP loans decreased $23.5 million from $49.8 million at June 30, 2021 to $26.3 million at September 30, 2021. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $16.0 million, (0.5%), from June 30, 2021 to $3.50 billion at September 30, 2021. Commercial real estate loans increased $18.2 million (1.2%) and commercial and industrial loans increased $18.0 million (5.8%) (excluding PPP loans). These increases were partially offset by decreases in residential real estate loans ($14.5 million or 1.0%); home equity loans ($2.8 million or 2.2%); and consumer loans ($1.9 million or 4.2%).

Total average depository balances increased $40.8 million, or 0.8%, from the quarter ended June 30, 2021 to the quarter ended September 30, 2021. Average noninterest-bearing demand deposit balances increased $45.4 million, average savings deposit balances increased $27.5 million, and average interest-bearing demand deposit balances increased $23.3 million. These increases were partially offset by a decrease in time deposit balances of $55.4 million.

Income Tax Expense

The Company’s effective income tax rate for the third quarter of 2021 was 21.6% compared to 19.5% for the year ended December 31, 2020, and 20.2% for the quarter ended September 30, 2020.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 72.1% and the loan to asset ratio was 59.2% at September 30, 2021. The Company maintained investment securities totaling 23.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 63.6% of assets at September 30, 2021. Time deposits fund 18.5% of assets at September 30, 2021, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.

The Company continues to be strongly capitalized with tangible equity of $560 million at September 30, 2021. Due primarily to the influx of deposits and share repurchases during the nine months ended September 30, 2021, the Company’s tangible equity ratio decreased from 10.3% at December 31, 2020 to 9.6% at September 30, 2021. At September 30, 2021, City National Bank’s Leverage Ratio was 8.73%, its Common Equity Tier I ratio was 14.61%, its Tier I Capital ratio was 14.61%, and its Total Risk-Based Capital ratio was 15.06%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On September 29, 2021, the Board of Directors of the Company approved a quarterly cash dividend of $0.58 per share payable October 29, 2021, to shareholders of record as of October 15, 2021. During the quarter ended September 30, 2021, the Company repurchased 337,000 common shares at a weighted average price of $75.65 as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of September 30, 2021, the Company could repurchase approximately 446,000 additional shares under the 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, 2020 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 September 30, 2021 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2021 results and will adjust the amounts if necessary.
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
September 30,

2021
September 30,

2020
 
Earnings
Net Interest Income (fully taxable equivalent)

$

39,822

$

38,257

$

37,871

$

38,514

$

38,278

$

115,950

$

117,168

Net Income available to common shareholders

 

22,732

 

22,148

 

19,814

 

22,222

 

20,126

 

64,694

 

67,374

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

$

1.47

$

1.41

$

1.25

$

1.40

$

1.25

$

4.13

$

4.15

Diluted

 

1.47

 

1.41

 

1.25

 

1.40

 

1.25

 

4.13

 

4.15

Weighted average number of shares (in thousands):
Basic

 

15,279

 

15,573

 

15,656

 

15,708

 

15,950

 

15,501

 

16,065

Diluted

 

15,302

 

15,594

 

15,687

 

15,733

 

15,970

 

15,526

 

16,084

Period-end number of shares (in thousands)

 

15,192

 

15,527

 

15,724

 

15,768

 

15,848

 

15,192

 

15,848

Cash dividends declared

$

0.58

$

0.58

$

0.58

$

0.58

$

0.57

$

1.74

$

1.71

Book value per share (period-end)

$

44.58

$

44.79

$

43.99

$

44.47

$

43.62

$

44.58

$

43.62

Tangible book value per share (period-end)

 

36.85

 

37.20

 

36.47

 

36.94

 

36.11

 

36.85

 

36.11

Market data:
High closing price

$

79.99

$

83.85

$

87.41

$

70.77

$

67.98

$

87.41

$

82.40

Low closing price

 

72.29

 

74.44

 

69.05

 

56.98

 

55.37

 

69.05

 

55.18

Period-end closing price

 

77.91

 

75.24

 

81.78

 

69.55

 

57.61

 

77.91

 

57.61

Average daily volume (in thousands)

 

53

 

61

 

63

 

56

 

67

 

59

 

75

Treasury share activity:
Treasury shares repurchased (in thousands)

 

337

 

217

 

75

 

81

 

231

 

629

 

492

Average treasury share repurchase price

$

75.65

$

78.75

$

76.71

$

60.32

$

59.49

$

76.85

$

64.23

 
Key Ratios (percent)
Return on average assets

 

1.53%

 

1.49%

 

1.38%

 

1.59%

 

1.46%

 

1.47%

 

1.68%

Return on average tangible equity

 

15.7%

 

15.2%

 

13.5%

 

15.3%

 

13.8%

 

14.8%

 

15.6%

Yield on interest earning assets

 

3.04%

 

3.00%

 

3.17%

 

3.32%

 

3.43%

 

3.07%

 

3.75%

Cost of interest bearing liabilities

 

0.22%

 

0.27%

 

0.37%

 

0.47%

 

0.58%

 

0.28%

 

0.73%

Net Interest Margin

 

2.89%

 

2.81%

 

2.91%

 

2.99%

 

3.02%

 

2.87%

 

3.22%

Non-interest income as a percent of total revenue

 

31.1%

 

31.0%

 

30.4%

 

30.7%

 

30.3%

 

31.0%

 

35.8%

Efficiency Ratio

 

50.0%

 

52.8%

 

54.3%

 

51.0%

 

51.6%

 

52.3%

 

51.5%

Price/Earnings Ratio (a)

 

13.22

 

13.35

 

16.30

 

12.41

 

11.53

 

14.14

 

10.40

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

 

11.69%

 

11.81%

 

12.30%

 

12.46%

 

12.71%

Tangible equity to tangible assets

 

9.59%

 

9.98%

 

9.93%

 

10.33%

 

10.61%

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

 

15.95%

 

16.40%

 

16.76%

 

16.18%

 

15.93%

Tier I

 

15.95%

 

16.40%

 

16.76%

 

16.18%

 

15.93%

Total

 

16.39%

 

16.88%

 

17.33%

 

16.75%

 

16.50%

Leverage

 

9.46%

 

9.70%

 

10.06%

 

10.22%

 

10.19%

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

 

14.61%

 

14.82%

 

14.75%

 

14.10%

 

14.46%

Tier I

 

14.61%

 

14.82%

 

14.75%

 

14.10%

 

14.46%

Total

 

15.06%

 

15.30%

 

15.33%

 

14.68%

 

15.04%

Leverage

 

8.73%

 

8.80%

 

8.91%

 

8.97%

 

9.32%

 
Other (period-end)
Branches

 

94

 

94

 

94

 

94

 

94

FTE

 

921

 

912

 

916

 

926

 

925

 
Assets per FTE (in thousands)

$

6,463

$

6,477

$

6,434

$

6,219

$

5,984

Deposits per FTE (in thousands)

 

5,308

 

5,271

 

5,236

 

5,024

 

4,799

 
 
(a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes).
(b) September 30, 2021 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,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
September 30,

2021
September 30,

2020
 
Interest Income
Interest and fees on loans

$

33,961

 

$

33,114

 

$

34,324

 

$

35,685

 

$

35,761

$

101,399

 

$

114,813

 

Interest on investment securities:
Taxable

 

6,144

 

 

5,932

 

 

5,242

 

 

5,500

 

 

6,266

 

17,318

 

 

17,855

 

Tax-exempt

 

1,257

 

 

1,291

 

 

1,253

 

 

1,254

 

 

1,132

 

3,801

 

 

2,659

 

Interest on deposits in depository institutions

 

196

 

 

162

 

 

118

 

 

60

 

 

72

 

476

 

 

432

 

Total Interest Income

 

41,558

 

 

40,499

 

 

40,937

 

 

42,499

 

 

43,231

 

122,994

 

 

135,759

 

 
Interest Expense
Interest on deposits

 

1,955

 

 

2,460

 

 

3,280

 

 

4,198

 

 

5,123

 

7,695

 

 

18,324

 

Interest on short-term borrowings

 

115

 

 

125

 

 

117

 

 

120

 

 

131

 

357

 

 

873

 

Interest on long-term debt

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

 

100

 

Total Interest Expense

 

2,070

 

 

2,585

 

 

3,397

 

 

4,318

 

 

5,254

 

8,052

 

 

19,297

 

Net Interest Income

 

39,488

 

 

37,914

 

 

37,540

 

 

38,181

 

 

37,977

 

114,942

 

 

116,462

 

(Recovery of) provision for credit losses

 

(725

)

 

(2,000

)

 

(440

)

 

474

 

 

1,026

 

(3,165

)

 

10,248

 

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

 

40,213

 

 

39,914

 

 

37,980

 

 

37,707

 

 

36,951

 

118,107

 

 

106,214

 

 
Non-Interest Income
Net gains on sale of investment securities

 

-

 

 

29

 

 

283

 

 

6

 

 

-

 

312

 

 

56

 

Unrealized gains (losses) recognized on equity securities still held

 

93

 

 

410

 

 

(51

)

 

835

 

 

461

 

452

 

 

(1,698

)

Service charges

 

6,706

 

 

5,895

 

 

5,881

 

 

6,771

 

 

6,295

 

18,482

 

 

18,962

 

Bankcard revenue

 

6,791

 

 

7,221

 

 

6,213

 

 

5,991

 

 

6,065

 

20,225

 

 

17,068

 

Trust and investment management fee income

 

2,172

 

 

2,012

 

 

2,033

 

 

2,162

 

 

1,844

 

6,217

 

 

5,574

 

Bank owned life insurance

 

747

 

 

940

 

 

1,460

 

 

813

 

 

1,088

 

3,147

 

 

3,611

 

Sale of VISA shares

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

 

17,837

 

Other income

 

1,438

 

 

941

 

 

811

 

 

1,143

 

 

1,232

 

3,190

 

 

3,550

 

Total Non-Interest Income

 

17,947

 

 

17,448

 

 

16,630

 

 

17,721

 

 

16,985

 

52,025

 

 

64,960

 

 
Non-Interest Expense
Salaries and employee benefits

 

15,321

 

 

15,559

 

 

15,671

 

 

15,989

 

 

15,361

 

46,551

 

 

46,085

 

Occupancy related expense

 

2,507

 

 

2,525

 

 

2,622

 

 

2,447

 

 

2,428

 

7,654

 

 

7,318

 

Equipment and software related expense

 

2,554

 

 

2,655

 

 

2,544

 

 

2,660

 

 

2,607

 

7,753

 

 

7,540

 

FDIC insurance expense

 

396

 

 

382

 

 

405

 

 

363

 

 

355

 

1,183

 

 

522

 

Advertising

 

804

 

 

824

 

 

881

 

 

538

 

 

462

 

2,509

 

 

2,238

 

Bankcard expenses

 

1,549

 

 

1,746

 

 

1,584

 

 

1,443

 

 

1,517

 

4,879

 

 

4,450

 

Postage, delivery, and statement mailings

 

573

 

 

568

 

 

592

 

 

546

 

 

513

 

1,733

 

 

1,721

 

Office supplies

 

406

 

 

371

 

 

392

 

 

413

 

 

396

 

1,169

 

 

1,143

 

Legal and professional fees

 

610

 

 

589

 

 

675

 

 

438

 

 

548

 

1,874

 

 

1,738

 

Telecommunications

 

790

 

 

676

 

 

690

 

 

540

 

 

547

 

2,156

 

 

1,589

 

Repossessed asset (gains) losses, net of expenses

 

(108

)

 

1

 

 

79

 

 

(68

)

 

39

 

(28

)

 

313

 

Other expenses

 

3,776

 

 

3,678

 

 

3,674

 

 

3,332

 

 

3,939

 

11,128

 

 

11,992

 

Total Non-Interest Expense

 

29,178

 

 

29,574

 

 

29,809

 

 

28,641

 

 

28,712

 

88,561

 

 

86,649

 

Income Before Income Taxes

 

28,982

 

 

27,788

 

 

24,801

 

 

26,787

 

 

25,224

 

81,571

 

 

84,525

 

Income tax expense

 

6,250

 

 

5,640

 

 

4,987

 

 

4,565

 

 

5,098

 

16,877

 

 

17,151

 

Net Income Available to Common Shareholders

$

22,732

 

$

22,148

 

$

19,814

 

$

22,222

 

$

20,126

$

64,694

 

$

67,374

 

 
Distributed earnings allocated to common shareholders

$

8,726

 

$

8,921

 

$

9,037

 

$

9,053

 

$

8,944

$

26,177

 

$

26,832

 

Undistributed earnings allocated to common shareholders

 

13,786

 

 

13,021

 

 

10,598

 

 

12,947

 

 

10,984

 

37,899

 

 

39,884

 

Net earnings allocated to common shareholders

$

22,512

 

$

21,942

 

$

19,635

 

$

22,000

 

$

19,928

$

64,076

 

$

66,716

 

 
Average common shares outstanding

 

15,279

 

 

15,573

 

 

15,656

 

 

15,708

 

 

15,950

 

15,501

 

 

16,065

 

Shares for diluted earnings per share

 

15,302

 

 

15,594

 

 

15,687

 

 

15,733

 

 

15,970

 

15,526

 

 

16,084

 

 
Basic earnings per common share

$

1.47

 

$

1.41

 

$

1.25

 

$

1.40

 

$

1.25

$

4.13

 

$

4.15

 

Diluted earnings per common share

$

1.47

 

$

1.41

 

$

1.25

 

$

1.40

 

$

1.25

$

4.13

 

$

4.15

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
September 30,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
 
Assets
Cash and due from banks

$

103,841

 

$

97,523

 

$

97,709

 

$

77,412

 

$

76,451

 

Interest-bearing deposits in depository institutions

 

535,708

 

 

512,367

 

 

659,090

 

 

451,247

 

 

176,267

 

Cash and cash equivalents

 

639,549

 

 

609,890

 

 

756,799

 

 

528,659

 

 

252,718

 

 
Investment securities available-for-sale, at fair value

 

1,373,073

 

 

1,340,681

 

 

1,185,245

 

 

1,178,789

 

 

1,157,399

 

Other securities

 

24,501

 

 

24,548

 

 

27,182

 

 

27,372

 

 

26,548

 

Total investment securities

 

1,397,574

 

 

1,365,229

 

 

1,212,427

 

 

1,206,161

 

 

1,183,947

 

 
Gross loans

 

3,521,925

 

 

3,529,416

 

 

3,546,723

 

 

3,622,119

 

 

3,663,966

 

Allowance for credit losses

 

(18,751

)

 

(20,016

)

 

(24,076

)

 

(24,549

)

 

(24,867

)

Net loans

 

3,503,174

 

 

3,509,400

 

 

3,522,647

 

 

3,597,570

 

 

3,639,099

 

 
Bank owned life insurance

 

120,238

 

 

119,491

 

 

118,976

 

 

118,243

 

 

117,501

 

Premises and equipment, net

 

75,156

 

 

76,263

 

 

76,529

 

 

76,925

 

 

77,031

 

Accrued interest receivable

 

16,224

 

 

15,967

 

 

16,231

 

 

15,793

 

 

16,627

 

Net deferred tax assets

 

90

 

 

-

 

 

1,395

 

 

-

 

 

-

 

Intangible assets

 

117,489

 

 

117,857

 

 

118,224

 

 

118,592

 

 

119,004

 

Other assets

 

82,419

 

 

89,958

 

 

71,142

 

 

96,697

 

 

105,361

 

Total Assets

$

5,951,913

 

$

5,904,055

 

$

5,894,370

 

$

5,758,640

 

$

5,511,288

 

 
Liabilities
Deposits:
Noninterest-bearing

$

1,311,464

 

$

1,279,932

 

$

1,244,175

 

$

1,176,990

 

$

1,061,310

 

Interest-bearing:
Demand deposits

 

1,139,033

 

 

1,070,004

 

 

1,077,749

 

 

1,027,201

 

 

940,791

 

Savings deposits

 

1,332,910

 

 

1,301,219

 

 

1,265,038

 

 

1,188,003

 

 

1,117,684

 

Time deposits

 

1,104,069

 

 

1,153,391

 

 

1,209,873

 

 

1,260,022

 

 

1,300,291

 

Total deposits

 

4,887,476

 

 

4,804,546

 

 

4,796,835

 

 

4,652,216

 

 

4,420,076

 

Short-term borrowings
Customer repurchase agreements

 

296,642

 

 

311,316

 

 

316,003

 

 

295,956

 

 

279,866

 

Net deferred tax liabilities

 

-

 

 

2,310

 

 

-

 

 

3,202

 

 

1,601

 

Other liabilities

 

90,499

 

 

90,407

 

 

89,847

 

 

106,160

 

 

118,386

 

Total Liabilities

 

5,274,617

 

 

5,208,579

 

 

5,202,685

 

 

5,057,534

 

 

4,819,929

 

 
Stockholders' Equity
Preferred stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Common stock

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

Capital surplus

 

170,300

 

 

169,674

 

 

170,526

 

 

171,304

 

 

170,526

 

Retained earnings

 

627,463

 

 

613,553

 

 

600,396

 

 

589,988

 

 

576,901

 

Cost of common stock in treasury

 

(183,303

)

 

(157,936

)

 

(142,484

)

 

(139,038

)

 

(134,177

)

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

 

20,878

 

 

28,227

 

 

21,289

 

 

36,894

 

 

36,760

 

Underfunded pension liability

 

(5,661

)

 

(5,661

)

 

(5,661

)

 

(5,661

)

 

(6,270

)

Total Accumulated Other Comprehensive Income

 

15,217

 

 

22,566

 

 

15,628

 

 

31,233

 

 

30,490

 

Total Stockholders' Equity

 

677,296

 

 

695,476

 

 

691,685

 

 

701,106

 

 

691,359

 

Total Liabilities and Stockholders' Equity

$

5,951,913

 

$

5,904,055

 

$

5,894,370

 

$

5,758,640

 

$

5,511,288

 

 
Regulatory Capital
Total CET 1 capital

$

550,426

 

$

561,317

 

$

563,523

 

$

557,641

 

$

548,269

 

Total tier 1 capital

 

550,426

 

 

561,317

 

 

563,523

 

 

557,641

 

 

548,269

 

Total risk-based capital

 

565,712

 

 

577,543

 

 

582,816

 

 

577,292

 

 

568,153

 

Total risk-weighted assets

 

3,451,018

 

 

3,421,764

 

 

3,362,595

 

 

3,446,774

 

 

3,442,629

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
 
 
September 30,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
 
Commercial and industrial

$

353,046

$

358,583

$

371,195

$

372,989

$

383,980

 
1-4 Family

 

108,913

 

108,079

 

108,131

 

109,812

 

114,071

Hotels

 

297,341

 

290,119

 

293,176

 

294,464

 

295,989

Multi-family

 

215,307

 

212,715

 

212,561

 

215,671

 

214,394

Non Residential Non-Owner Occupied

 

664,365

 

653,264

 

649,683

 

641,351

 

628,814

Non Residential Owner Occupied

 

205,579

 

209,100

 

199,130

 

213,484

 

211,433

Commercial real estate (1)

 

1,491,505

 

1,473,277

 

1,462,681

 

1,474,782

 

1,464,701

 
Residential real estate (2)

 

1,506,572

 

1,521,102

 

1,532,907

 

1,587,694

 

1,621,265

Home equity

 

124,806

 

127,608

 

130,009

 

136,469

 

140,135

Consumer

 

43,296

 

45,184

 

47,224

 

47,688

 

50,541

DDA overdrafts

 

2,700

 

3,662

 

2,707

 

2,497

 

3,344

Gross Loans

$

3,521,925

$

3,529,416

$

3,546,723

$

3,622,119

$

3,663,966

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

$

19,360

$

43,904

$

39,101

$

40,449

$

42,449

(2) - Residential real estate loans

 

19,059

 

20,838

 

22,129

 

27,078

 

28,947

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
 
Three Months Ended Nine Months Ended
September 30,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
September 30,

2021
September 30,

2020
Allowance for Credit Losses
Balance at beginning of period

$

20,016

 

$

24,076

 

$

24,549

 

$

24,867

 

$

25,199

 

$

24,549

 

$

11,589

 

 
Charge-offs:
Commercial and industrial

 

-

 

 

(211

)

 

(34

)

 

(9

)

 

(757

)

 

(245

)

 

(834

)

Commercial real estate

 

(392

)

 

(1,718

)

 

(1

)

 

(616

)

 

(75

)

 

(2,111

)

 

(497

)

Residential real estate

 

(18

)

 

(86

)

 

(93

)

 

(139

)

 

(252

)

 

(197

)

 

(1,111

)

Home equity

 

(47

)

 

(8

)

 

(64

)

 

(88

)

 

(126

)

 

(119

)

 

(332

)

Consumer

 

(3

)

 

(79

)

 

(147

)

 

(27

)

 

(74

)

 

(229

)

 

(165

)

DDA overdrafts

 

(633

)

 

(430

)

 

(453

)

 

(629

)

 

(554

)

 

(1,516

)

 

(1,716

)

Total charge-offs

 

(1,093

)

 

(2,532

)

 

(792

)

 

(1,508

)

 

(1,838

)

 

(4,417

)

 

(4,655

)

 
Recoveries:
Commercial and industrial

 

69

 

 

25

 

 

46

 

 

74

 

 

3

 

 

140

 

 

17

 

Commercial real estate

 

18

 

 

15

 

 

164

 

 

150

 

 

44

 

 

197

 

 

375

 

Residential real estate

 

29

 

 

17

 

 

74

 

 

57

 

 

24

 

 

120

 

 

127

 

Home equity

 

58

 

 

3

 

 

23

 

 

47

 

 

33

 

 

84

 

 

89

 

Consumer

 

72

 

 

104

 

 

39

 

 

55

 

 

42

 

 

215

 

 

183

 

DDA overdrafts

 

307

 

 

308

 

 

413

 

 

333

 

 

334

 

 

1,028

 

 

1,134

 

Total recoveries

 

553

 

 

472

 

 

759

 

 

716

 

 

480

 

 

1,784

 

 

1,925

 

 
Net charge-offs

 

(540

)

 

(2,060

)

 

(33

)

 

(792

)

 

(1,358

)

 

(2,633

)

 

(2,730

)

(Recovery of) provision for credit losses

 

(725

)

 

(2,000

)

 

(440

)

 

474

 

 

1,026

 

 

(3,165

)

 

10,248

 

Impact of Adopting ASC 326

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

5,760

 

Balance at end of period

$

18,751

 

$

20,016

 

$

24,076

 

$

24,549

 

$

24,867

 

$

18,751

 

$

24,867

 

 
Loans outstanding

$

3,521,925

 

$

3,529,416

 

$

3,546,723

 

$

3,622,119

 

$

3,663,966

 

Allowance as a percent of loans outstanding

 

0.53

%

 

0.57

%

 

0.68

%

 

0.68

%

 

0.68

%

Allowance as a percent of non-performing loans

 

243.1

%

 

199.3

%

 

194.5

%

 

200.7

%

 

182.7

%

 
Average loans outstanding

$

3,535,497

 

$

3,541,165

 

$

3,585,790

 

$

3,635,673

 

$

3,661,569

 

$

3,553,966

 

$

3,643,603

 

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

 

0.06

%

 

0.23

%

 

0.00

%

 

0.09

%

 

0.15

%

 

0.10

%

 

0.10

%

 
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
 
September 30,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
Nonaccrual Loans
Residential real estate

$

3,634

 

$

2,482

 

$

3,004

 

$

2,968

 

$

3,983

 

Home equity

 

67

 

 

81

 

 

88

 

 

95

 

 

74

 

Commercial and industrial

 

531

 

 

820

 

 

1,200

 

 

768

 

 

728

 

Commercial real estate

 

3,355

 

 

6,383

 

 

7,792

 

 

8,401

 

 

8,479

 

Consumer

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonaccrual loans

 

7,587

 

 

9,766

 

 

12,084

 

 

12,232

 

 

13,264

 

Accruing loans past due 90 days or more

 

127

 

 

278

 

 

295

 

 

-

 

 

345

 

Total non-performing loans

 

7,714

 

 

10,044

 

 

12,379

 

 

12,232

 

 

13,609

 

Other real estate owned

 

1,335

 

 

1,309

 

 

1,625

 

 

1,650

 

 

2,080

 

Total non-performing assets

$

9,049

 

$

11,353

 

$

14,004

 

$

13,882

 

$

15,689

 

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

 

0.26

%

 

0.32

%

 

0.39

%

 

0.38

%

 

0.43

%

 
Past Due Loans
Residential real estate

$

5,258

 

$

5,453

 

$

4,092

 

$

5,993

 

$

5,153

 

Home equity

 

688

 

 

523

 

 

449

 

 

575

 

 

474

 

Commercial and industrial

 

455

 

 

721

 

 

1,358

 

 

1,241

 

 

691

 

Commercial real estate

 

441

 

 

498

 

 

508

 

 

625

 

 

602

 

Consumer

 

35

 

 

12

 

 

10

 

 

113

 

 

121

 

DDA overdrafts

 

390

 

 

417

 

 

212

 

 

341

 

 

379

 

Total past due loans

$

7,267

 

$

7,624

 

$

6,629

 

$

8,888

 

$

7,420

 

 
Total past due loans as a percent of loans outstanding

 

0.21

%

 

0.22

%

 

0.19

%

 

0.25

%

 

0.20

%

 
Troubled Debt Restructurings ("TDRs")
Residential real estate

$

16,910

 

$

17,788

 

$

18,572

 

$

19,226

 

$

20,398

 

Home equity

 

1,822

 

 

1,920

 

 

1,956

 

 

2,001

 

 

2,100

 

Commercial and industrial

 

430

 

 

-

 

 

-

 

 

-

 

 

-

 

Commercial real estate

 

1,937

 

 

3,076

 

 

4,615

 

 

4,638

 

 

4,894

 

Consumer

 

221

 

 

203

 

 

211

 

 

277

 

 

260

 

Total TDRs

$

21,320

 

$

22,987

 

$

25,354

 

$

26,142

 

$

27,652

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
Three Months Ended
September 30, 2021 June 30, 2021 September 30, 2020
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,648,921

 

$

15,813

3.80

%

$

1,652,165

 

$

16,135

3.92

%

$

1,766,796

 

$

17,899

4.03

%

Commercial, financial, and agriculture (2)

 

1,836,604

 

 

17,344

3.75

%

 

1,839,478

 

 

16,158

3.52

%

 

1,839,939

 

 

16,910

3.66

%

Installment loans to individuals (2), (3)

 

49,972

 

 

714

5.67

%

 

49,522

 

 

713

5.77

%

 

54,834

 

 

804

5.83

%

Previously securitized loans (4) ***

 

91

*** ***

 

109

*** ***

 

148

***
Total loans

 

3,535,497

 

 

33,962

3.81

%

 

3,541,165

 

 

33,115

3.75

%

 

3,661,569

 

 

35,761

3.89

%

Securities:
Taxable

 

1,136,519

 

 

6,144

2.14

%

 

1,046,008

 

 

5,932

2.27

%

 

877,623

 

 

6,266

2.84

%

Tax-exempt (5)

 

245,551

 

 

1,590

2.57

%

 

244,233

 

 

1,633

2.68

%

 

204,178

 

 

1,433

2.79

%

Total securities

 

1,382,070

 

 

7,734

2.22

%

 

1,290,241

 

 

7,565

2.35

%

 

1,081,801

 

 

7,699

2.83

%

Deposits in depository institutions

 

544,843

 

 

196

0.14

%

 

628,158

 

 

162

0.10

%

 

304,498

 

 

72

0.09

%

Total interest-earning assets

 

5,462,410

 

 

41,892

3.04

%

 

5,459,564

 

 

40,842

3.00

%

 

5,047,868

 

 

43,532

3.43

%

Cash and due from banks

 

101,058

 

 

92,243

 

 

80,505

 

Premises and equipment, net

 

75,956

 

 

76,660

 

 

77,647

 

Goodwill and intangible assets

 

117,719

 

 

118,088

 

 

119,267

 

Other assets

 

220,420

 

 

206,709

 

 

229,667

 

Less: Allowance for credit losses

 

(20,407

)

 

(23,701

)

 

(25,311

)

Total assets

$

5,957,156

 

$

5,929,563

 

$

5,529,643

 

 
Liabilities:
Interest-bearing demand deposits

$

1,093,243

 

$

127

0.05

%

$

1,069,896

 

$

122

0.05

%

$

931,152

 

$

187

0.08

%

Savings deposits

 

1,315,462

 

 

169

0.05

%

 

1,287,966

 

 

163

0.05

%

 

1,093,886

 

 

303

0.11

%

Time deposits (2)

 

1,126,553

 

 

1,659

0.58

%

 

1,181,953

 

 

2,175

0.74

%

 

1,322,423

 

 

4,633

1.39

%

Short-term borrowings

 

282,722

 

 

115

0.16

%

 

305,134

 

 

125

0.16

%

 

260,518

 

 

131

0.20

%

Total interest-bearing liabilities

 

3,817,980

 

 

2,070

0.22

%

 

3,844,949

 

 

2,585

0.27

%

 

3,607,979

 

 

5,254

0.58

%

Noninterest-bearing demand deposits

 

1,356,745

 

 

1,311,340

 

 

1,114,822

 

Other liabilities

 

86,263

 

 

72,940

 

 

104,084

 

Stockholders' equity

 

696,168

 

 

700,334

 

 

702,758

 

Total liabilities and
stockholders' equity

$

5,957,156

 

$

5,929,563

 

$

5,529,643

 

Net interest income

$

39,822

$

38,257

$

38,278

Net yield on earning assets

2.89

%

2.81

%

3.02

%

 
(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

$

1,120

$

488

$

156

 
(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

$

154

$

211

$

132

Commercial, financial, and agriculture

 

265

 

365

 

250

Installment loans to individuals

 

21

 

23

 

38

Time deposits

 

48

 

48

 

155

$

488

$

647

$

575

 
(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)
 
Nine Months Ended
September 30, 2021 September 30, 2020
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,669,324

 

$

48,801

3.91

%

$

1,776,903

 

$

56,827

4.27

%

Commercial, financial, and agriculture (2)

 

1,833,744

 

 

50,044

3.65

%

 

1,810,165

 

 

55,051

4.06

%

Installment loans to individuals (2), (3)

 

50,898

 

 

2,140

5.62

%

 

56,535

 

 

2,519

5.95

%

Previously securitized loans (4) ***

 

414

*** ***

 

415

***
Total loans

 

3,553,966

 

 

101,399

3.81

%

 

3,643,603

 

 

114,812

4.21

%

Securities:
Taxable

 

1,043,269

 

 

17,318

2.22

%

 

861,853

 

 

17,855

2.77

%

Tax-exempt (5)

 

243,146

 

 

4,811

2.65

%

 

140,075

 

 

3,366

3.21

%

Total securities

 

1,286,415

 

 

22,129

2.30

%

 

1,001,928

 

 

21,221

2.83

%

Deposits in depository institutions

 

562,272

 

 

474

0.11

%

 

214,912

 

 

432

0.27

%

Total interest-earning assets

 

5,402,653

 

 

124,002

3.07

%

 

4,860,443

 

 

136,465

3.75

%

Cash and due from banks

 

91,073

 

 

76,936

 

Premises and equipment, net

 

76,481

 

 

77,910

 

Goodwill and intangible assets

 

118,084

 

 

119,678

 

Other assets

 

214,872

 

 

218,695

 

Less: Allowance for credit losses

 

(22,989

)

 

(21,984

)

Total assets

$

5,880,174

 

$

5,331,678

 

 
Liabilities:
Interest-bearing demand deposits

$

1,057,452

 

$

373

0.05

%

$

898,440

 

$

833

0.12

%

Savings deposits

 

1,275,211

 

 

516

0.05

%

 

1,045,877

 

 

1,366

0.17

%

Time deposits (2)

 

1,181,166

 

 

6,806

0.77

%

 

1,347,013

 

 

16,125

1.60

%

Short-term borrowings

 

292,845

 

 

357

0.16

%

 

242,173

 

 

873

0.48

%

Long-term debt

 

-

 

 

-

-

 

 

1,109

 

 

100

12.04

%

Total interest-bearing liabilities

 

3,806,674

 

 

8,052

0.28

%

 

3,534,612

 

 

19,297

0.73

%

Noninterest-bearing demand deposits

 

1,289,247

 

 

1,004,144

 

Other liabilities

 

82,953

 

 

98,393

 

Stockholders' equity

 

701,300

 

 

694,529

 

Total liabilities and
stockholders' equity

$

5,880,174

 

$

5,331,678

 

Net interest income

$

115,950

$

117,168

Net yield on earning assets

2.87

%

3.22

%

 
(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

$

2,443

$

881

 
(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

$

472

$

477

Commercial, financial, and agriculture

 

956

 

2,141

Installment loans to individuals

 

72

 

114

Time deposits

 

145

 

466

$

1,645

$

3,198

 
(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 Ended Nine Months Ended
September 30,

2021
June 30,

2021
March 31,

2021
December 31,

2020
September 30,

2020
September 30,

2021
September 30,

2020
Net Interest Income/Margin
Net interest income ("GAAP")

$

39,488

$

37,914

$

37,540

$

38,181

$

37,977

$

114,942

$

116,462

Taxable equivalent adjustment

 

334

 

343

 

331

 

333

 

301

 

1,008

 

706

Net interest income, fully taxable equivalent

$

39,822

$

38,257

$

37,871

$

38,514

$

38,278

$

115,950

$

117,168

 
Average interest earning assets

$

5,462,410

$

5,459,564

$

5,284,025

$

5,125,874

$

5,047,868

$

5,402,653

$

4,860,443

 
Net Interest Margin

 

2.89%

 

2.81%

 

2.91%

 

2.99%

 

3.02%

 

2.87%

 

3.22%

Accretion related to fair value adjustments

 

-0.04%

 

-0.05%

 

-0.04%

 

-0.05%

 

-0.05%

 

-0.04%

 

-0.09%

Net Interest Margin (excluding accretion)

 

2.85%

 

2.76%

 

2.87%

 

2.94%

 

2.97%

 

2.83%

 

3.13%

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

 

11.37%

 

11.78%

 

11.74%

 

12.18%

 

12.54%

Effect of goodwill and other intangibles, net

 

-1.78%

 

-1.80%

 

-1.81%

 

-1.85%

 

-1.93%

Tangible common equity to tangible assets

 

9.59%

 

9.98%

 

9.93%

 

10.33%

 

10.61%

 
Return on Tangible Equity
Return on tangible equity ("GAAP")

 

15.7%

 

15.2%

 

13.5%

 

15.3%

 

13.8%

 

14.8%

 

15.6%

Impact of sale of VISA shares

 

-

 

-

 

-

 

-

 

-

 

-

 

-3.1%

Return on tangible equity, excluding sale of VISA shares

 

15.7%

 

15.2%

 

13.5%

 

15.3%

 

13.8%

 

14.8%

 

12.5%

 
Return on Assets
Return on assets ("GAAP")

 

1.53%

 

1.49%

 

1.38%

 

1.59%

 

1.46%

 

1.47%

 

1.68%

Impact of sale of VISA shares

 

-

 

-

 

-

 

-

 

-

 

-

 

-0.33%

Return on assets, excluding sale of VISA shares

 

1.53%

 

1.49%

 

1.38%

 

1.59%

 

1.46%

 

1.47%

 

1.35%

 

Contacts

Charles R. Hageboeck, Chief Executive Officer and President

(304) 769-1102

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