City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2
billion bank holding company headquartered in Charleston, West
Virginia, today announced quarterly net income of $24.3 million and
diluted earnings of $1.63 per share for the quarter ended March 31,
2023. During the first quarter of 2023, the Company completed its
acquisition of Citizens Commerce Bancshares, Inc. (“Citizens”) and
its principal banking subsidiary, Citizens Commerce Bank of
Versailles, Kentucky, on March 10, 2023. The results for the
quarter ended March 31, 2023, include $2.0 million of credit loss
expense associated with loans acquired from Citizens in its total
provision for credit losses and $5.6 million of acquisition and
integration expenses related to the acquisition. These expenses
reduced diluted earnings per share on an after-tax-basis by
$0.40.
Net Interest Income
The Company’s net interest income increased approximately $1.4
million, or 2.7%, from $52.0 million during the fourth quarter of
2022 to $53.5 million during the first quarter of 2023. The
Company’s tax equivalent net interest income increased $1.4
million, or 2.6%, from $52.4 million for the fourth quarter of 2022
to $53.8 million for the first quarter of 2023. The acquisition of
Citizens added $0.5 million of net interest income during the
quarter ended March 31, 2023. Due to recent increases in the
Federal Funds rate, net interest income increased by $3.0 million
due to an increase in loan yields (net of loan fees and accretion)
of 43 basis points and by $0.5 million due to an increase in
investment yields of 21 basis points. In addition, loan fees
increased $0.6 million and an increase of 99 basis points in the
yield on deposits in depository institutions increased net interest
income by $0.4 million from the quarter ended December 31, 2022.
These increases were partially offset by an increase in the cost of
interest bearing liabilities (38 basis points) which decreased net
interest income by $3.5 million. The Company’s reported net
interest margin increased from 3.89% for the fourth quarter of 2022
to 4.05% for the first quarter of 2023.
Credit Quality
The Company’s ratio of nonperforming assets to total loans and
other real estate owned remained stable at 0.17%, or $6.3 million,
at December 31, 2022 and 0.17%, or $6.5 million, at March 31, 2023.
Total past due loans decreased from $9.2 million, or 0.25% of total
loans outstanding, at December 31, 2022, to $5.9 million, or 0.15%
of total loans outstanding at March 31, 2023.
As a result of the Company’s quarterly analysis of the adequacy
of the allowance for credit losses, the Company recorded a
provision for credit losses of $2.9 million in the first quarter of
2023, compared to a recovery of credit losses of $0.8 million for
the comparable period in 2022, and a provision for credit losses of
$0.5 million for the fourth quarter of 2022. In connection with the
completion of our acquisition of Citizens during the quarter ended
March 31, 2023, the Company recorded $2.0 million of credit loss
expense associated with loans acquired from Citizens in its total
provision for credit losses. In addition, the provision for credit
losses included $0.9 million that was primarily related to the
downgrade of two commercial loans.
Non-interest Income
Non-interest income was $18.7 million during the quarter ended
March 31, 2023, as compared to $17.5 million during the quarter
ended March 31, 2022. During the first quarter of 2023, the Company
reported $0.8 million of realized gains from the sale of investment
securities and $0.4 million of unrealized fair value gains on the
Company’s equity securities compared to $0.7 million of unrealized
fair value losses on the Company’s equity securities during the
first quarter of 2022. The gain from the sale of securities in the
first quarter of 2023 was primarily due to the sale of Citizens
investment portfolio of approximately $41 million shortly after the
acquisition date. These securities were marked to market in
accordance with purchase accounting rules and due to a change in
market conditions and an opportunity to increase the yield on the
portfolio, the Company elected to liquidate those securities. The
proceeds also enabled the Company an opportunity to enhance its
liquidity position.
Exclusive of these items, non-interest income decreased $0.6
million, or 3.4%, from $18.2 million for the first quarter of 2022
to $17.5 million for the first quarter of 2023. This decrease was
largely attributable to a decrease of $1.2 million in bank owned
life insurance due to a decrease in death benefit proceeds and a
decrease of $0.2 million, or 2.4%, in service charges. These
decreases were partially offset by an increase in other income of
$0.5 million. Citizens’ contribution to noninterest income for the
quarter ended March 31, 2023, was less than $0.1 million.
Non-interest Expenses
Non-interest expenses increased $9.1 million, or 30.8%, from
$29.5 million in the first quarter of 2022 to $38.6 million in the
first quarter of 2023. During the quarter ended March 31, 2023, the
Company recognized $5.6 million of acquisition and integration
expenses associated with the completed acquisition of Citizens.
Excluding these expenses, non-interest expenses increased $3.5
million from $29.5 million in the quarter ended March 31, 2022 to
$33.0 million in the quarter ended March 31, 2023. This increase
was largely due to an increase in salaries and employee benefits of
$2.1 million due to higher salary adjustments, increased incentive
compensation, and increased health insurance cost. In addition,
other expenses increased $1.3 million and equipment and
software-related expenses increased $0.3 million. The acquisition
of Citizens increased noninterest expenses by approximately $0.2
million during the quarter ended March 31, 2023.
Balance Sheet Trends
Loans increased $248.4 million (6.8%) from December 31, 2022 to
$3.89 billion at March 31, 2023, primarily due to the Company’s
acquisition of Citizens ($254.7 million). Excluding the
acquisition, total loans decreased $6.3 million (0.2%), from
December 31, 2022 to $3.64 billion at March 31, 2023. Commercial
real estate loans decreased $27.6 million during the quarter ended
March 31, 2023. This decrease was partially offset by increases in
consumer loans of $15.1 million (31.0%), home equity loans of $3.3
million (2.4%), and commercial and industrial loans of $2.3 million
(0.6%).
Period-end deposit balances increased $266.9 million from
December 31, 2022, to March 31, 2023, due to the Company’s
acquisition of Citizens ($298.7 million). Total average depository
balances increased $27.1 million, or 0.6%, from the quarter ended
December 31, 2022 to the quarter ended March 31, 2023. This growth
was primarily attributable to deposits acquired from Citizens
($73.0 million). Exclusive of these contributions, average
depository balances declined $45.9 million, or 0.9%, from the
quarter ended December 31, 2022. Average savings deposit balances
decreased $53.2 million, average time deposit balances decreased
$30.7 million, and average noninterest-bearing demand deposit
balances decreased $21.5 million. These decreases were partially
offset by an increase in average interest-bearing demand deposit
balances of $59.5 million.
Income Tax Expense
The Company’s effective income tax rate for the first quarter of
2023 was 20.5% compared to 19.8% for the year ended December 31,
2022, and 19.7%, for the quarter ended March 31, 2022.
Capitalization and Liquidity
The Company’s loan to deposit ratio was 75.8% and the loan to
asset ratio was 62.7% at March 31, 2023. The Company maintained
investment securities totaling 23.8% of assets as of the same date.
The Company’s deposit mix is weighted heavily toward checking and
saving accounts, which fund 67.2% of assets at March 31, 2023. Time
deposits fund 15.5% of assets at March 31, 2023, with only 10.9% of
time deposits having balances of more than $250,000, reflecting the
core retail orientation of the Company.
City Holding Company is the parent company of City National Bank
of West Virginia (“City National”). City National has borrowing
facilities with the Federal Reserve Board and the Federal Home Loan
Bank that can be accessed as necessary to fund operations and to
provide contingency funding. As of March 31, 2023, City National
had the capacity to borrow an additional $1.6 billion from these
existing borrowing facilities. In addition, $803.2 million of City
National’s investment securities were unpledged at March 31,
2023.
The Company continues to be strongly capitalized with tangible
equity of $487 million at March 31, 2023. The Company’s tangible
equity ratio increased slightly from 8.0% at December 31, 2022 to
8.1% at March 31, 2023. At March 31, 2023, City National’s Leverage
Ratio was 9.18%, its Common Equity Tier I ratio was 14.08%, its
Tier I Capital ratio was 14.08%, and its Total Risk-Based Capital
ratio was 14.63%. These regulatory capital ratios are significantly
above levels required to be considered “well capitalized,” which is
the highest possible regulatory designation.
On March 29, 2023, the Board of Directors of the Company
approved a quarterly cash dividend of $0.65 per share payable April
28, 2023, to shareholders of record as of April 14, 2023. During
the quarter ended March 31, 2023, the Company repurchased 218,000
common shares at a weighted average price of $92.10 per share as
part of a one million share repurchase plan authorized by the Board
of Directors in May 2022. As of March 31, 2023, the Company could
repurchase 599,000 additional shares under the current program. In
connection with the acquisition of Citizens, the Company issued
667,000 shares of common stock on March 10, 2023.
City National operates 99 branches across West Virginia,
Kentucky, Virginia, and Ohio.
Forward-Looking Information
This news release contains certain forward-looking statements
that are included pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements express only management’s beliefs regarding future
results or events and are subject to inherent uncertainty, risks,
and changes in circumstances, many of which are outside of
management’s control. Uncertainty, risks, changes in circumstances
and other factors could cause the Company’s actual results to
differ materially from those projected in the forward-looking
statements. Factors that could cause actual results to differ from
those discussed in such forward-looking statements include, but are
not limited to those set forth in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2022 under “ITEM
1A Risk Factors” and the following: (1) general economic
conditions, especially in the communities and markets in which we
conduct our business; (2) ongoing uncertainties on the Company’s
business, results of operations and financial condition caused by
the scope of the recovery of the COVID-19 pandemic; (3) credit
risk, including risk that negative credit quality trends may lead
to a deterioration of asset quality, risk that our allowance for
credit losses may not be sufficient to absorb actual losses in our
loan portfolio, and risk from concentrations in our loan portfolio;
(4) changes in the real estate market, including the value of
collateral securing portions of our loan portfolio; (5) changes in
the interest rate environment; (6) operational risk, including
cybersecurity risk and risk of fraud, data processing system
failures, and network breaches; (7) changes in technology and
increased competition, including competition from non-bank
financial institutions; (8) changes in consumer preferences,
spending and borrowing habits, demand for our products and
services, and customers’ performance and creditworthiness; (9)
difficulty growing loan and deposit balances; (10) our ability to
effectively execute our business plan, including with respect to
future acquisitions; (11) changes in regulations, laws, taxes,
government policies, monetary policies and accounting policies
affecting bank holding companies and their subsidiaries; (12)
deterioration in the financial condition of the U.S. banking system
may impact the valuations of investments the Company has made in
the securities of other financial institutions; (13) regulatory
enforcement actions and adverse legal actions; (14) difficulty
attracting and retaining key employees; and (15) other economic,
competitive, technological, operational, governmental, regulatory,
and market factors affecting our operations. Forward-looking
statements made herein reflect management's expectations as of the
date such statements are made. Such information is provided to
assist stockholders and potential investors in understanding
current and anticipated financial operations of the Company and is
included pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The Company undertakes no
obligation to update any forward-looking statement to reflect
events or circumstances that arise after the date such statements
are made. Further, the Company is required to evaluate subsequent
events through the filing of its March 31, 2023 Form 10-Q. The
Company will continue to evaluate the impact of any subsequent
events on the preliminary March 31, 2023 results and will adjust
the amounts if necessary.
CITY HOLDING COMPANY AND
SUBSIDIARIES
Financial Highlights (Unaudited) Three
Months Ended March 31, 2023 December 31, 2022
September 30, 2022 June 30, 2022 March 31,
2022 Earnings Net Interest Income (fully taxable
equivalent)
$
53,767
$
52,381
$
49,108
$
41,611
$
38,239
Net Income available to common shareholders
24,341
30,672
27,374
22,683
21,342
Per Share Data Earnings per share available to common
shareholders: Basic
$
1.63
$
2.06
$
1.84
$
1.51
$
1.41
Diluted
1.63
2.05
1.83
1.51
1.41
Weighted average number of shares (in thousands): Basic
14,818
14,756
14,776
14,888
14,974
Diluted
14,844
14,785
14,800
14,909
15,002
Period-end number of shares (in thousands)
15,260
14,788
14,856
14,864
15,045
Cash dividends declared
$
0.65
$
0.65
$
0.65
$
0.60
$
0.60
Book value per share (period-end)
$
42.66
$
39.08
$
36.91
$
39.83
$
42.03
Tangible book value per share (period-end)
31.91
31.25
29.09
31.99
34.27
Market data: High closing price
$
100.27
$
101.94
$
90.24
$
83.07
$
85.99
Low closing price
89.17
89.32
78.40
73.88
76.82
Period-end closing price
90.88
93.09
88.69
79.88
78.70
Average daily volume (in thousands)
84
75
58
87
59
Treasury share activity: Treasury shares repurchased (in thousands)
218
69
9
208
38
Average treasury share repurchase price
$
92.10
$
93.12
$
80.24
$
78.33
$
78.09
Key Ratios (percent) Return on average assets
1.63
%
2.08
%
1.83
%
1.51
%
1.42
%
Return on average tangible equity
19.9
%
27.3
%
21.8
%
18.1
%
15.3
%
Yield on interest earning assets
4.66
%
4.23
%
3.72
%
3.15
%
2.94
%
Cost of interest bearing liabilities
0.86
%
0.48
%
0.21
%
0.15
%
0.17
%
Net Interest Margin
4.05
%
3.89
%
3.57
%
3.04
%
2.82
%
Non-interest income as a percent of total revenue
24.7
%
26.5
%
27.2
%
30.9
%
32.4
%
Efficiency Ratio
45.7
%
45.3
%
46.3
%
50.5
%
51.7
%
Price/Earnings Ratio (a)
13.95
11.30
12.08
13.23
13.93
Capital (period-end) Average Shareholders' Equity to
Average Assets
10.31
%
9.57
%
10.32
%
10.26
%
11.25
%
Tangible equity to tangible assets
8.05
%
8.02
%
7.41
%
7.76
%
8.75
%
Consolidated City Holding Company risk based capital ratios (b):
CET I
15.64
%
16.23
%
15.82
%
15.85
%
16.18
%
Tier I
15.64
%
16.23
%
15.82
%
15.85
%
16.18
%
Total
16.18
%
16.62
%
16.22
%
16.26
%
16.60
%
Leverage
10.20
%
10.01
%
9.74
%
9.42
%
9.58
%
City National Bank risk based capital ratios (b): CET I
14.08
%
13.88
%
14.68
%
14.80
%
14.82
%
Tier I
14.08
%
13.88
%
14.68
%
14.80
%
14.82
%
Total
14.63
%
14.28
%
15.07
%
15.21
%
15.24
%
Leverage
9.18
%
8.55
%
9.05
%
8.81
%
8.80
%
Other (period-end) Branches
99
94
94
94
94
FTE
958
909
903
915
897
Assets per FTE (in thousands)
$
6,483
$
6,467
$
6,588
$
6,825
$
6,703
Deposits per FTE (in thousands)
5,362
5,357
5,492
5,621
5,574
(a) The price/earnings ratio is computed based on
annualized quarterly earnings. (b) March 31, 2023 risk-based
capital ratios are estimated.
CITY HOLDING COMPANY AND
SUBSIDIARIES Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
Three Months Ended March 31, 2023 December 31,
2022 September 30, 2022 June 30, 2022 March
31, 2022 Interest Income Interest and fees on
loans
$
47,004
$
42,963
$
38,493
$
33,208
$
31,874
Interest on investment securities: Taxable
11,773
11,119
9,556
7,547
6,223
Tax-exempt
1,162
1,262
1,228
1,205
1,216
Interest on deposits in depository institutions
1,591
1,244
1,530
782
238
Total Interest Income
61,530
56,588
50,807
42,742
39,551
Interest Expense Interest on deposits
5,690
3,010
1,585
1,328
1,521
Interest on short-term borrowings
2,381
1,533
440
124
114
Total Interest Expense
8,071
4,543
2,025
1,452
1,635
Net Interest Income
53,459
52,045
48,782
41,290
37,916
Provision for (Recovery of) credit losses
2,918
500
730
-
(756
)
Net Interest Income After Provision for (Recovery of) Credit
Losses
50,541
51,545
48,052
41,290
38,672
Non-Interest Income Net gains on sale of investment
securities
773
4
-
-
-
Unrealized gains (losses) recognized on equity securities still
held
361
(262
)
1
(601
)
(723
)
Service charges
6,563
7,056
7,487
7,067
6,725
Bankcard revenue
6,603
6,791
7,052
7,062
6,444
Trust and investment management fee income
2,252
2,343
2,158
2,100
2,197
Bank owned life insurance
804
1,813
754
978
2,014
Other income
1,326
791
792
1,243
791
Total Non-Interest Income
18,682
18,536
18,244
17,849
17,448
Non-Interest Expense Salaries and employee benefits
17,673
17,148
17,398
16,413
15,577
Occupancy related expense
2,640
2,725
2,664
2,620
2,709
Equipment and software related expense
3,092
3,341
2,949
2,732
2,769
FDIC insurance expense
445
413
416
409
435
Advertising
760
802
854
951
798
Bankcard expenses
1,509
1,356
1,405
1,665
1,606
Postage, delivery, and statement mailings
647
597
578
551
636
Office supplies
420
441
466
427
410
Legal and professional fees
470
610
532
525
527
Telecommunications
606
627
651
754
584
Repossessed asset losses (gains), net of expenses
16
54
(3
)
(32
)
40
Merger related expenses
5,645
268
-
-
-
Other expenses
4,700
4,203
3,591
3,674
3,436
Total Non-Interest Expense
38,623
32,585
31,501
30,689
29,527
Income Before Income Taxes
30,600
37,496
34,795
28,450
26,593
Income tax expense
6,259
6,824
7,421
5,767
5,251
Net Income Available to Common Shareholders
$
24,341
$
30,672
$
27,374
$
22,683
$
21,342
Distributed earnings allocated to common shareholders
$
9,833
$
9,521
$
9,564
$
8,837
$
8,943
Undistributed earnings allocated to common shareholders
14,294
20,857
17,555
13,643
12,199
Net earnings allocated to common shareholders
$
24,127
$
30,378
$
27,119
$
22,480
$
21,142
Average common shares outstanding
14,818
14,756
14,776
14,888
14,974
Shares for diluted earnings per share
14,844
14,785
14,800
14,909
15,002
Basic earnings per common share
$
1.63
$
2.06
$
1.84
$
1.51
$
1.41
Diluted earnings per common share
$
1.63
$
2.05
$
1.83
$
1.51
$
1.41
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated
Balance Sheets ($ in 000s) (Unaudited)
(Unaudited) (Unaudited) (Unaudited) March
31, 2023 December 31, 2022 September 30, 2022
June 30, 2022 March 31, 2022 Assets
Cash and due from banks
$
69,804
$
68,333
$
65,051
$
90,449
$
100,877
Interest-bearing deposits in depository institutions
233,006
131,667
233,302
606,530
497,171
Cash and cash equivalents
302,810
200,000
298,353
696,979
598,048
Investment securities available-for-sale, at fair value
1,456,259
1,505,520
1,489,392
1,497,227
1,409,513
Other securities
24,728
23,807
24,372
24,383
24,785
Total investment securities
1,480,987
1,529,327
1,513,764
1,521,610
1,434,298
Gross loans
3,894,686
3,646,258
3,628,752
3,566,758
3,559,905
Allowance for credit losses
(22,724
)
(17,108
)
(17,011
)
(17,015
)
(17,280
)
Net loans
3,871,962
3,629,150
3,611,741
3,549,743
3,542,625
Bank owned life insurance
124,238
120,674
121,283
120,528
120,522
Premises and equipment, net
73,430
70,786
71,686
72,388
73,067
Accrued interest receivable
18,395
18,287
17,256
16,342
16,101
Net deferred tax assets
42,146
44,884
49,888
30,802
18,001
Goodwill and intangible assets
164,099
115,735
116,081
116,428
116,774
Other assets
132,715
149,263
147,716
118,375
92,331
Total Assets
$
6,210,782
$
5,878,106
$
5,947,768
$
6,243,195
$
6,011,767
Liabilities Deposits: Noninterest-bearing
$
1,420,990
$
1,351,415
$
1,429,281
$
1,531,660
$
1,357,266
Interest-bearing: Demand deposits
1,356,017
1,233,482
1,160,970
1,189,056
1,191,492
Savings deposits
1,397,523
1,396,869
1,427,785
1,435,645
1,425,528
Time deposits
962,235
888,100
939,769
985,567
1,024,559
Total deposits
5,136,765
4,869,866
4,957,805
5,141,928
4,998,845
Short-term borrowings Customer repurchase agreements
293,256
290,964
304,807
402,368
288,483
Other liabilities
129,711
139,424
136,868
106,906
92,009
Total Liabilities
5,559,732
5,300,254
5,399,480
5,651,202
5,379,337
Stockholders' Equity Preferred stock
-
-
-
-
-
Common stock
47,619
47,619
47,619
47,619
47,619
Capital surplus
177,529
170,980
170,138
169,557
170,206
Retained earnings
721,727
706,696
685,657
667,933
654,138
Cost of common stock in treasury
(179,436
)
(215,955
)
(209,644
)
(209,133
)
(194,819
)
Accumulated other comprehensive (loss) income: Unrealized (loss)
gain on securities available-for-sale
(112,967
)
(128,066
)
(141,997
)
(80,498
)
(41,229
)
Underfunded pension liability
(3,422
)
(3,422
)
(3,485
)
(3,485
)
(3,485
)
Total Accumulated Other Comprehensive (Loss) Income
(116,389
)
(131,488
)
(145,482
)
(83,983
)
(44,714
)
Total Stockholders' Equity
651,050
577,852
548,288
591,993
632,430
Total Liabilities and Stockholders' Equity
$
6,210,782
$
5,878,106
$
5,947,768
$
6,243,195
$
6,011,767
Regulatory Capital Total CET 1 capital
$
606,675
$
598,068
$
582,213
$
564,158
$
565,048
Total tier 1 capital
606,675
598,068
582,213
564,158
565,048
Total risk-based capital
627,718
612,654
596,708
578,657
579,807
Total risk-weighted assets
3,878,994
3,685,207
3,679,511
3,558,249
3,492,920
CITY HOLDING COMPANY AND SUBSIDIARIES Loan Portfolio
(Unaudited) ($ in 000s) March 31, 2023
December 31, 2022 September 30, 2022 June 30,
2022 March 31, 2022 Commercial and industrial
$
390,861
$
373,890
$
375,735
$
360,481
$
337,384
1-4 Family
119,017
116,192
109,710
108,765
108,424
Hotels
327,554
340,404
355,001
337,910
314,902
Multi-family
195,042
174,786
186,440
203,856
209,359
Non Residential Non-Owner Occupied
679,782
585,964
569,369
551,240
637,092
Non Residential Owner Occupied
223,096
174,961
177,673
180,188
200,180
Commercial real estate (1)
1,544,491
1,392,307
1,398,193
1,381,959
1,469,957
Residential real estate (2)
1,737,604
1,693,523
1,678,770
1,651,005
1,588,860
Home equity
151,341
134,317
130,837
125,742
121,460
Consumer
66,994
48,806
41,902
44,580
39,778
DDA overdrafts
3,395
3,415
3,315
2,991
2,466
Gross Loans
$
3,894,686
$
3,646,258
$
3,628,752
$
3,566,758
$
3,559,905
Construction loans included in: (1) - Commercial real estate
loans
$
4,715
$
4,130
$
4,125
$
6,767
$
14,877
(2) - Residential real estate loans
25,224
21,122
19,333
18,751
16,253
CITY HOLDING COMPANY AND SUBSIDIARIES Asset Quality
Information (Unaudited) ($ in 000s) Three
Months Ended March 31, 2023 December 31, 2022
September 30, 2022 June 30, 2022 March 31,
2022 Allowance for Credit Losses Balance at beginning of
period
$
17,108
$
17,011
$
17,015
$
17,280
$
18,166
Charge-offs: Commercial and industrial
-
(120
)
(408
)
-
(34
)
Commercial real estate
(3
)
(31
)
-
(24
)
-
Residential real estate
(32
)
(66
)
(93
)
(56
)
(50
)
Home equity
(67
)
(189
)
(71
)
(19
)
-
Consumer
(62
)
(15
)
(16
)
(9
)
(23
)
DDA overdrafts
(450
)
(670
)
(719
)
(604
)
(631
)
Total charge-offs
(614
)
(1,091
)
(1,307
)
(712
)
(738
)
Recoveries: Commercial and industrial
83
94
149
32
59
Commercial real estate
158
120
9
25
53
Residential real estate
10
49
1
4
45
Home equity
4
34
2
3
17
Consumer
23
31
29
19
28
DDA overdrafts
398
360
383
364
406
Total recoveries
676
688
573
447
608
Net recoveries (charge-offs)
62
(403
)
(734
)
(265
)
(130
)
Provision for (recovery of) credit losses
2,918
500
730
-
(756
)
PCD Loan Reserves
2,811
-
-
-
-
Adoption of ASU 2022-02
(175
)
-
-
-
-
Balance at end of period
$
22,724
$
17,108
$
17,011
$
17,015
$
17,280
Loans outstanding
$
3,894,686
$
3,646,258
$
3,628,752
$
3,566,758
$
3,559,905
Allowance as a percent of loans outstanding
0.58
%
0.47
%
0.47
%
0.48
%
0.49
%
Allowance as a percent of non-performing loans
400.1
%
317.3
%
320.5
%
292.6
%
331.3
%
Average loans outstanding
$
3,700,194
$
3,648,996
$
3,596,523
$
3,559,713
$
3,527,393
Net charge-offs (annualized) as a percent of average loans
outstanding
-0.01
%
0.04
%
0.08
%
0.03
%
0.01
%
CITY HOLDING COMPANY AND SUBSIDIARIES Asset
Quality Information, continued (Unaudited) ($ in 000s)
March 31, 2023 December 31, 2022 September
30, 2022 June 30, 2022 March 31, 2022
Nonaccrual Loans Residential real estate
$
2,700
$
1,969
$
2,089
$
1,561
$
1,786
Home equity
35
55
140
54
99
Commercial and industrial
994
1,015
785
1,360
1,069
Commercial real estate
1,931
2,166
2,293
2,783
2,241
Consumer
19
-
-
-
-
Total nonaccrual loans
5,679
5,205
5,307
5,758
5,195
Accruing loans past due 90 days or more
-
187
-
58
21
Total non-performing loans
5,679
5,392
5,307
5,816
5,216
Other real estate owned
843
909
1,071
946
1,099
Total non-performing assets
$
6,522
$
6,301
$
6,378
$
6,762
$
6,315
Non-performing assets as a percent of loans and other real
estate owned
0.17
%
0.17
%
0.18
%
0.19
%
0.18
%
Past Due Loans Residential real estate
$
4,783
$
7,091
$
3,452
$
5,298
$
4,976
Home equity
551
650
521
282
505
Commercial and industrial
98
234
221
130
56
Commercial real estate
148
710
221
46
744
Consumer
3
100
27
49
32
DDA overdrafts
276
391
561
430
392
Total past due loans
$
5,859
$
9,176
$
5,003
$
6,235
$
6,705
Total past due loans as a percent of loans outstanding
0.15
%
0.25
%
0.14
%
0.17
%
0.19
%
CITY HOLDING COMPANY AND SUBSIDIARIES Consolidated
Average Balance Sheets, Yields, and Rates (Unaudited) ($ in
000s) Three Months Ended March 31, 2023
December 31, 2022 March 31, 2022 Average
Yield/ Average Yield/ Average
Yield/ Balance Interest Rate
Balance Interest Rate Balance
Interest Rate Assets: Loan portfolio
(1): Residential real estate (2)
$
1,840,828
$
20,007
4.41
%
$
1,824,327
$
18,973
4.11
%
$
1,667,683
$
15,735
3.83
%
Commercial, financial, and agriculture (2)
1,795,309
26,248
5.93
%
1,773,937
23,346
5.22
%
1,815,549
15,532
3.47
%
Installment loans to individuals (2), (3)
64,057
749
4.74
%
50,732
646
5.05
%
44,161
607
5.57
%
Total loans
3,700,194
47,004
5.15
%
3,648,996
42,965
4.67
%
3,527,393
31,874
3.66
%
Securities: Taxable
1,322,060
11,773
3.61
%
1,315,453
11,118
3.35
%
1,207,333
6,223
2.09
%
Tax-exempt (4)
204,957
1,471
2.91
%
211,326
1,597
3.00
%
232,474
1,539
2.68
%
Total securities
1,527,017
13,244
3.52
%
1,526,779
12,715
3.30
%
1,439,807
7,762
2.19
%
Deposits in depository institutions
160,115
1,590
4.03
%
162,732
1,245
3.04
%
540,197
238
0.18
%
Total interest-earning assets
5,387,326
61,838
4.66
%
5,338,507
56,925
4.23
%
5,507,397
39,874
2.94
%
Cash and due from banks
67,891
69,223
101,806
Premises and equipment, net
71,422
71,482
73,827
Goodwill and intangible assets
124,546
115,952
116,994
Other assets
327,442
332,855
217,662
Less: Allowance for credit losses
(18,143
)
(17,332
)
(18,454
)
Total assets
$
5,960,484
$
5,910,687
$
5,999,232
Liabilities: Interest-bearing demand deposits
$
1,234,981
$
1,741
0.57
%
$
1,150,327
$
684
0.24
%
$
1,142,278
$
130
0.05
%
Savings deposits
1,376,317
1,348
0.40
%
1,412,246
829
0.23
%
1,384,460
175
0.05
%
Time deposits (2)
902,583
2,601
1.17
%
916,845
1,497
0.65
%
1,048,185
1,216
0.47
%
Customer repurchase agreements
281,861
2,381
3.43
%
303,599
1,534
2.00
%
276,360
114
0.17
%
Total interest-bearing liabilities
3,795,742
8,071
0.86
%
3,783,017
4,544
0.48
%
3,851,283
1,635
0.17
%
Noninterest-bearing demand deposits
1,420,676
1,428,013
1,398,663
Other liabilities
129,411
134,075
74,084
Stockholders' equity
614,655
565,582
675,202
Total liabilities and stockholders' equity
$
5,960,484
$
5,910,687
$
5,999,232
Net interest income
$
53,767
$
52,381
$
38,239
Net yield on earning assets
4.05
%
3.89
%
2.82
%
(1) For purposes of this table, non-accruing loans have been
included in average balances and the following amounts (in
thousands) of net loan fees have been included in interest income:
Loan fees, net (includes PPP fees)
$
518
$
(41
)
$
298
(2) Included in the above table are the following amounts
(in thousands) for the accretion of the fair value adjustments
related to the Company's acquisitions: Residential real
estate
$
76
$
67
$
90
Commercial, financial, and agriculture
177
135
286
Installment loans to individuals
4
4
19
Time deposits
9
21
21
$
266
$
227
$
416
(3) Includes the Company’s consumer and DDA overdrafts loan
categories. (4) Computed on a fully federal tax-equivalent basis
assuming a tax rate of approximately 21%.
CITY HOLDING COMPANY
AND SUBSIDIARIES Non-GAAP Reconciliations (Unaudited)
($ in 000s, except per share data) Three Months
Ended March 31, 2023 December 31, 2022
September 30, 2022 June 30, 2022 March 31,
2022 Net Interest Income/Margin Net interest income
("GAAP")
$
53,459
$
52,045
$
48,782
$
41,290
$
37,916
Taxable equivalent adjustment
308
336
326
321
323
Net interest income, fully taxable equivalent
$
53,767
$
52,381
$
49,108
$
41,611
$
38,239
Average interest earning assets
$
5,387,326
$
5,338,507
$
5,460,409
$
5,485,604
$
5,507,397
Net Interest Margin
4.05
%
3.89
%
3.57
%
3.04
%
2.82
%
Accretion related to fair value adjustments
-0.02
%
-0.02
%
-0.01
%
-0.02
%
-0.03
%
Net Interest Margin (excluding accretion)
4.03
%
3.87
%
3.56
%
3.02
%
2.79
%
Tangible Equity Ratio (period end) Equity to assets
("GAAP")
10.48
%
9.83
%
9.22
%
9.48
%
10.52
%
Effect of goodwill and other intangibles, net
-2.43
%
-1.81
%
-1.81
%
-1.72
%
-1.77
%
Tangible common equity to tangible assets
8.05
%
8.02
%
7.41
%
7.76
%
8.75
%
Return on average tangible equity ("GAAP")
19.9
%
27.3
%
21.8
%
18.1
%
15.3
%
Impact of merger related expenses
3.6
%
-
-
-
-
Impact of merger related provision
1.3
%
-
-
-
-
Return on tangible equity, excluding merger related expenses and
provision
24.8
%
27.3
%
21.8
%
18.1
%
15.3
%
Return on assets ("GAAP")
1.63
%
2.08
%
1.83
%
1.51
%
1.42
%
Impact of merger related expenses
0.31
%
-
-
-
-
Impact of merger related provision
0.10
%
-
-
-
-
Return on assets, excluding merger related expenses and provision
2.04
%
2.08
%
1.83
%
1.51
%
1.42
%
Commercial Loan Information (period
end) Commercial Sector Total % of Total
Loans Average DSC Average LTV Natural Gas
Extraction
$
25,179
0.65
%
3.68
64
%
Natural Gas Distribution
23,711
0.61
%
2.61
N/A
Masonry Contractors
23,017
0.59
%
1.13
84
%
Sheet Metal Work Manufacturing
23,491
0.60
%
1.57
68
%
Beer & Ale Merchant Wholesalers
26,766
0.69
%
3.28
N/A
Gasoline Stations with Convenience Stores
53,556
1.38
%
4.19
65
%
Lessors of Residential Buildings & Dwellings
303,311
7.79
%
1.89
66
%
1-4 Family
114,768
2.95
%
2.97
68
%
Multi-Family
160,664
4.13
%
1.84
66
%
Lessors of Nonresidential Buildings
468,836
12.05
%
1.70
65
%
Office Buildings
44,926
1.15
%
1.64
64
%
Lessors of Mini-Warehouses & Self-Storage Units
44,510
1.15
%
1.62
62
%
Assisted Living Facilities
28,944
0.74
%
1.38
57
%
Hotels & Motels
335,086
8.61
%
1.43
52
%
Average Balance Median Balance Commercial
Loans
$
453
$
92
Commercial Real Estate Loans
498
119
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued (Unaudited) ($ in
000s, except per share data) Estimated
Uninsured Deposits by Deposit Type March 31, 2023
December 31, 2022 Noninterest-Bearing Demand Deposits
19
%
20
%
Interest-Bearing Deposits Demand Deposits
8
%
10
%
Savings Deposits
11
%
14
%
Time Deposits
14
%
13
%
Total Deposits
13
%
14
%
Retail Deposits Noninterest-Bearing
4
%
5
%
Interest-Bearing
11
%
11
%
Total Retail Deposits
9
%
10
%
Commercial Deposits Noninterest-Bearing Deposits
31
%
32
%
Interest-Bearing Deposits
13
%
16
%
Total Commercial Deposits
23
%
26
%
The amounts listed above represent management's best
estimate as of the respective period shown.
Average Deposits by Category March 31, 2023
December 31, 2022 Retail Deposits Noninterest-Bearing
$
619,889
$
637,368
Interest-Bearing
3,125,132
3,012,999
Total Average Retail Deposits
$
3,745,021
$
3,650,367
Commercial Deposits Noninterest-Bearing Deposits
$
800,787
$
790,645
Interest-Bearing Deposits
388,749
466,419
Total Average Commercial Deposits
$
1,189,536
$
1,257,064
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued (Unaudited) ($ in
000s, except per share data) Net Growth in DDA
Accounts Year New DDA Accounts Net Number of
New Accounts Percentage
2023 YTD*
8,467
1,644
0.7
%
2022
28,442
4,544
1.9
%
2021
32,800
8,860
3.8
%
2020
30,360
6,740
3.0
%
2019
32,040
3,717
1.7
%
2018
30,400
4,310
2.2
%
2017
28,525
2,711
1.4
%
2016
28,650
2,820
1.5
%
* - 2023 YTD amounts exclude accounts added in
connection with the acquisitions of Citizens Commerce Bancshares,
Inc., Poage Bankshares, Inc. and Farmers Deposit Bancorp, Inc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230424005615/en/
David L. Bumgarner, Executive Vice President and Chief Financial
Officer (304) 769-1169
City (NASDAQ:CHCO)
Historical Stock Chart
From Jun 2024 to Jul 2024
City (NASDAQ:CHCO)
Historical Stock Chart
From Jul 2023 to Jul 2024