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Published: 2020-10-23 15:16:21 ET
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EX-99.1 2 chco09-30x20exhibit991.htm EX-99.1, PRESS RELEASE CHCO 3Q2020 EARNINGS Document











NEWS RELEASE

For Immediate Release
October 22, 2020

For Further Information Contact:
Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102

City Holding Company Announces Third Quarter Results

Charleston, West Virginia – City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.5 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $20.1 million and diluted earnings of $1.25 per share for the quarter ended September 30, 2020. For the third quarter of 2020, the Company achieved a return on assets of 1.46% and a return on tangible equity of 13.8%.

Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “Like all of the world, City Holding Company and City National Bank have experienced repercussions from the economic slow-down that has accompanied COVID-19. As an essential business, our company has focused on continuing to provide our customers safe access to banking products and services consistent with our reputation for exceptional customer service. In 2020, City was recognized for the third consecutive year by the JD Power organization as the “Highest in Customer Satisfaction” in the North Central US. We have also been highly focused on protecting the health of our employees and customers. Branches were open by appointment only during the initial months of the pandemic, but by the end of the third quarter of 2020, all 94 of our locations were fully open to customers. We are pleased that while many businesses in our nation have had to implement layoffs, we have been fortunate not to have to consider such painful changes, and City’s family of dedicated employees have continued to demonstrate their exceptional commitment to each other, our customers, our communities, and to our company. I thank all of them for their brave and hard work during a very stressful time.”

“The COVID crisis caused the Federal Reserve to lower short-term interest rates to nearly zero during the second quarter of 2020. As a result, deposit rates are very low across all financial institutions. And yet, deposits at banks have ballooned this year. At City, deposits are up nearly $350 million since December 31, 2019 – or about 8%. While the economy continued to recover in the third quarter of 2020, the drop-off in the second quarter of 2020 was extraordinarily steep and thus loan demand outside of the Government sponsored Paycheck Protection Program (“PPP”) remains very weak. Despite these lingering effects of COVID-19, City was again able to produce strong results during the third quarter of 2020. Net interest income for the third quarter of 2020 was about flat with the linked quarter. Provision expense was low. Fee income was solid and expenses continue to be well managed. These successes are attributable to the hard working team of City professionals, and I thank them for their dedication and effort.”



“Asset quality seems to be the top concern for analysts who follow banking organizations. In our opinion, City’s asset quality continues to remain solid. As compared to pre-COVID asset quality levels at December 31, 2019, nonperforming assets have improved; past-due loans have improved and troubled-debt restructured loans have improved! Further, the amount of loans in deferment status dropped dramatically during the quarter ended September 30, 2020. As of September 30, 2020, approximately $180 million of commercial loans have been granted deferrals as compared to approximately $430 million as of June 30, 2020. Nearly $160 million of the commercial loan deferments were for hotel and lodging related loans at September 30, 2020. While reduced business and personal travel have lowered occupancy rates for our hotel and lodging loan customers, occupancy rates continued to improve during the third quarter of 2020. As of September 30, 2020, approximately $15 million of mortgage loans have been granted deferrals as compared to approximately $125 million at June 30, 2020.”

Net Interest Income

The Company’s net interest income decreased slightly from $38.1 million during the second quarter of 2020 to $38.0 million during the third quarter of 2020. The Company’s tax equivalent net interest income remained level at $38.3 million for both the second and third quarters of 2020. Lower loan yields (21 basis points) decreased net interest income by $1.5 million and a decrease in accretion fair value adjustments lowered net interest income by $0.5 million. These decreases were essentially offset by an increase in investment income due to higher yields and an increase in balances and a decrease in rates paid on deposits (13 basis points) which increased net interest income by $0.9 million and $0.8 million, respectively. The Company’s reported net interest margin decreased from 3.13% for the second quarter of 2020 to 3.02% for the third quarter of 2020. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.97% for the quarter ended September 30, 2020 and 3.05% for the quarter ended June 30, 2020.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.48% at June 30, 2020 to 0.43% at September 30, 2020. Total nonperforming assets decreased from $17.6 million at June 30, 2020 to $15.7 million at September 30, 2020. Total past due loans increased marginally from $7.1 million, or 0.19% of total loans outstanding, at June 30, 2020 to $7.4 million, or 0.20% of total loans outstanding, at September 30, 2020.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a provision for credit losses of $1.0 million in the third quarter of 2020, compared to a provision for loan losses of $0.3 million for the comparable period in 2019 and a provision for credit losses of $1.25 million for the second quarter of 2020. The provision for credit losses recognized in the third quarter of 2020 primarily relates to changes in outstanding balances in the Company’s loan portfolio and their associated loss rates and downgrades of certain hotel/motel credits during the quarter based on current market conditions which increased the Company’s ACL by $2.0 million and $1.2 million. Partially offsetting these increases in the ACL was a decrease in the ACL due to the upgrade of a specific credit that was downgraded in 2017, but has since seen improved financial performance. This upgrade released $2.2 million of ACL reserves.

Non-interest Income

Non-interest income was $17.0 million for the third quarter of 2020 as compared to $16.7 million for the third quarter of 2019. During the third quarter of 2020, the Company reported $0.5 million of unrealized fair value gains on the Company’s equity securities compared to $0.3 million of unrealized fair value


losses on the Company’s equity securities in the third quarter of 2019. Exclusive of these gains, non-interest income decreased from $17.0 million for the third quarter of 2019 to $16.5 million for the third quarter of 2020. This decrease was largely attributable to a decrease of $1.9 million, or 23.1%, in service charges as average deposit balances have increased during the COVID-19 pandemic. This decrease was partially offset by increases in our bankcard revenues ($0.6 million), other income due to fees from loan interest rate swap originations ($0.5 million), and bank owned life insurance revenues due to death benefit proceeds ($0.3 million).

Non-interest Expenses

Non-interest expenses increased $0.3 million (1.1%), from $28.4 million in the third quarter of 2019 to $28.7 million in the third quarter of 2020. This increase was primarily due to an increase in equipment and software related expenses of $0.4 million, FDIC insurance expense of $0.4 million, and other expenses of $0.2 million. These increases were partially offset by decreases in advertising expenses ($0.4 million) and occupancy related expenses ($0.3 million).

Balance Sheet Trends

Loans increased $47.9 million (1.3%) from December 31, 2019 to $3.66 billion at September 30, 2020. As a result of the Company’s participation in the PPP loans administered by the SBA, commercial and industrial loans increased $88.5 million. Excluding PPP loans, total loans decreased $40.6 million, (1.1%), from December 31, 2019 to $3.58 billion at September 30, 2020. Residential real estate loans decreased $19.1 million (1.2%), commercial and industrial loans decreased $12.5 million (4.1%) (excluding PPP loans), home equity loans decreased $8.8 million (5.9%) and consumer loans decreased $3.7 million (6.9%). These decreases were partially offset by an increase in commercial real estate loans of $5.0 million (0.3%). Decreases in loan outstandings are reflective of the low-interest rate environment driving residential mortgage originations toward fixed rate loans and a general lack of borrowing for commercial loans.

Total average depository balances increased $133.4 million, or 3.1%, from the quarter ended June 30, 2020 to the quarter ended September 30, 2020. Average noninterest-bearing demand deposit balances increased $70.8 million, average savings deposit balances increased $56.5 million, and average interest-bearing demand deposit balances increased $37.3 million. These increases were partially offset by a decrease in time deposit balances of $31.2 million. Since December 31, 2019, depository balances have increased $344.2 million (8.4%) due to the infusion of government transfer payments for unemployment insurance, PPP loans and stimulus checks. Additionally, due to very low interest rates across a wide array of investment alternatives, it appears that customers are stockpiling cash in banking institutions.

Income Tax Expense

The Company’s effective income tax rate for the third quarter of 2020 was 20.2% compared to 21.3% for the year ended December 31, 2019, and 21.7% for the quarter ended September 30, 2019.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 82.9% and the loan to asset ratio was 66.5% at September 30, 2020. The Company maintained investment securities totaling 21.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 56.6% of assets at September 30, 2020. Time deposits fund 23.6% of assets at September 30, 2020, 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. The Company’s tangible equity ratio decreased from 11.0% at December 31, 2019 to 10.6% at September 30, 2020. At September 30, 2020, City National Bank’s Leverage Ratio was 9.32%, its Common Equity Tier I ratio was 14.46%, its Tier I Capital ratio was 14.46%, and its Total Risk-Based Capital ratio was 15.04%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On September 30, 2020, the Board of Directors of the Company approved a quarterly cash dividend of $0.57 per share payable October 30, 2020, to shareholders of record as of October 15, 2020. During the quarter ended September 30, 2020, the Company repurchased 231,000 common shares at a weighted average price of $59.49 as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of September 30, 2020, the Company could repurchase approximately 247,000 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. The Company recently commenced construction of a new branch in Spring Mills, WV. Located in Berkeley County, the branch will serve one of West Virginia’s fastest growing markets in the second-most populous of West Virginia’s 55 counties.

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, 2019 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 loan 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, 2020 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2020 results and will adjust the amounts if necessary.









CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Three Months EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,September 30,
2020202020202019201920202019
Earnings
Net Interest Income (FTE)$38,278 $38,287 $40,603 $40,036 $40,729 $117,168 $122,118 
Net Income available to common shareholders20,126 18,251 29,000 22,611 22,371 67,374 66,741 
Per Share Data
Earnings per share available to common shareholders:
   Basic$1.25 $1.12 $1.79 $1.38 $1.36 $4.15 $4.05 
   Diluted1.25 1.12 1.78 1.38 1.36 4.15 4.04 
Weighted average number of shares:
   Basic15,950 16,081 16,080 16,207 16,271 16,065 16,350 
   Diluted15,970 16,097 16,101 16,230 16,289 16,084 16,368 
Period-end number of shares15,848 16,077 16,140 16,303 16,302 15,848 16,302 
Cash dividends declared$0.57 $0.57 $0.57 $0.57 $0.57 $1.71 $1.63 
Book value per share (period-end)43.62 43.15 42.45 40.36 39.85 43.62 39.85 
Tangible book value per share (period-end)36.11 35.72 35.03 32.98 32.44 36.11 32.44 
Market data:
   High closing price$67.98 $71.19 $82.40 $82.72 $78.30 $82.40 $82.56 
   Low closing price55.37 55.18 57.11 74.33 72.35 55.18 67.58 
   Period-end closing price57.61 65.17 66.53 81.95 76.25 57.61 76.25 
   Average daily volume67 89 69 54 62 75 56 
Treasury share activity:
      Treasury shares repurchased231 79 182 — 99 492 261 
      Average treasury share repurchase price
$59.49 $61.75 $71.31 $— $74.17 $64.23 $74.54 
Key Ratios (percent)
Return on average assets1.46 %1.35 %2.29 %1.80 %1.81 %1.68 %1.81 %
Return on average tangible equity13.8 %12.6 %20.6 %16.8 %17.0 %15.6 %17.5 %
Yield on interest earning assets3.43 %3.64 %4.22 %4.22 %4.42 %3.75 %4.46 %
Cost of interest bearing liabilities0.58 %0.71 %0.91 %1.00 %1.10 %0.73 %1.08 %
Net Interest Margin3.02 %3.13 %3.54 %3.46 %3.59 %3.22 %3.64 %
Non-interest income as a percent of total revenue30.3 %27.4 %30.6 %31.2 %29.2 %35.8 %29.3 %
Efficiency Ratio51.6 %53.3 %49.7 %50.0 %48.2 %51.5 %50.0 %
Price/Earnings Ratio (a)11.53 14.50 17.63 14.82 13.98 10.40 14.13 


Capital (period-end)
Average Shareholders' Equity to Average Assets12.71 %12.91 %13.50 %13.12 %13.12 %
Tangible equity to tangible assets10.61 %10.62 %11.38 %10.98 %10.93 %
Consolidated City Holding Company risk based capital ratios (b):
   CET I15.93 %16.10 %16.02 %16.05 %15.62 %
   Tier I15.93 %16.10 %16.02 %16.05 %15.74 %
   Total16.50 %16.69 %16.46 %16.40 %16.14 %
   Leverage10.19 %10.45 %11.10 %10.90 %10.87 %
City National Bank risk based capital ratios (b):
   CET I14.46 %14.55 %14.32 %13.92 %14.00 %
   Tier I14.46 %14.55 %14.32 %13.92 %14.00 %
   Total15.04 %15.15 %14.82 %14.28 %14.40 %
   Leverage9.32 %9.29 %9.98 %9.51 %9.72 %
Other (period-end)
Branches94 94 95 95 95 
FTE921 913 921 918 916 
   Assets per FTE$5,984 $6,058 $5,525 $5,467 $5,412 
   Deposits per FTE4,799 4,834 4,400 4,440 4,399 
(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, 2020 risk-based capital ratios are estimated.




CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
Three Months EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,September 30,
2020202020202019201920202019
Interest Income
   Interest and fees on loans$35,761 $37,718 $41,335 $41,615 $42,944 $114,813 $128,397 
   Interest on investment securities:
     Taxable6,266 5,718 5,871 5,924 6,044 17,855 17,465 
     Tax-exempt1,132 821 707 711 722 2,659 2,257 
   Interest on deposits in depository institutions
72 55 304 298 271 432 1,034 
Total Interest Income43,231 44,312 48,217 48,548 49,981 135,759 149,153 
Interest Expense
   Interest on deposits5,123 5,963 7,238 7,897 8,585 18,324 24,768 
   Interest on short-term borrowings
131 279 464 762 814 873 2,729 
   Interest on long-term debt— — 100 42 45 100 140 
Total Interest Expense5,254 6,242 7,802 8,701 9,444 19,297 27,637 
Net Interest Income37,977 38,070 40,415 39,847 40,537 116,462 121,516 
Provision for (recovery of) credit losses1,026 1,250 7,972 (75)274 10,248 (1,175)
Net Interest Income After Provision for (Recovery of) Credit Losses36,951 36,820 32,443 39,922 40,263 106,214 122,691 
Non-Interest Income
Net (losses) gains on sale of investment securities
— (6)63 — (40)56 69 
Unrealized gains (losses) recognized on securities still held
461 242 (2,402)914 (214)(1,698)(27)
   Service charges6,295 4,945 7,723 8,233 8,183 18,962 23,281 
   Bankcard revenue6,065 5,888 5,115 5,162 5,440 17,068 15,931 
   Trust and investment management fee income
1,844 1,931 1,799 2,016 1,802 5,574 5,144 
   Bank owned life insurance1,088 848 1,676 856 762 3,611 2,910 
   Sale of VISA shares— — 17,837 — — 17,837 — 
   Other income1,232 783 1,536 861 765 3,550 3,139 
Total Non-Interest Income16,985 14,631 33,347 18,042 16,698 64,960 50,447 
Non-Interest Expense
   Salaries and employee benefits15,361 14,873 15,851 15,918 15,210 46,085 46,220 
   Occupancy related expense2,428 2,402 2,488 2,540 2,725 7,318 8,055 
   Equipment and software related expense
2,607 2,504 2,429 2,302 2,248 7,540 6,662 
   FDIC insurance expense355 167 — — — 522 639 
   Advertising462 933 843 694 861 2,238 2,650 


   Bankcard expenses1,517 1,498 1,435 1,285 1,554 4,450 4,270 
   Postage, delivery, and statement mailings
513 592 616 588 659 1,721 1,828 
   Office supplies396 353 394 392 382 1,143 1,167 
   Legal and professional fees548 589 601 706 539 1,738 1,665 
   Telecommunications547 531 511 563 569 1,589 1,892 
   Repossessed asset losses (gains), net of expenses
39 76 198 224 (59)313 410 
   Merger related expenses— — — — — — 797 
   Other expenses3,939 3,950 4,102 3,822 3,709 11,992 12,326 
Total Non-Interest Expense28,712 28,468 29,468 29,034 28,397 86,649 88,581 
Income Before Income Taxes25,224 22,983 36,322 28,930 28,564 84,525 84,557 
   Income tax expense5,098 4,732 7,322 6,319 6,193 17,151 17,816 
Net Income Available to Common Shareholders$20,126 $18,251 $29,000 $22,611 $22,371 $67,374 $66,741 
Distributed earnings allocated to common shareholders$8,944 $9,073 $9,117 $9,209 $9,213 $26,832 $26,346 
Undistributed earnings allocated to common shareholders10,984 8,998 19,620 13,200 12,966 39,884 39,828 
Net earnings allocated to common shareholders$19,928 $18,071 $28,737 $22,409 $22,179 $66,716 $66,174 
Average common shares outstanding15,950 16,081 16,080 16,207 16,271 16,065 16,350 
Shares for diluted earnings per share15,970 16,097 16,101 16,230 16,289 16,084 16,368 
Basic earnings per common share$1.25 $1.12 $1.79 $1.38 $1.36 $4.15 $4.05 
Diluted earnings per common share$1.25 $1.12 $1.78 $1.38 $1.36 $4.15 $4.04 



CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
September 30,June 30,March 31,December 31,September 30,
20202020202020192019
Assets
Cash and due from banks$76,451 $87,658 $92,365 $88,658 $71,332 
Interest-bearing deposits in depository institutions176,267 285,596 18,271 51,486 44,862 
Cash and cash equivalents252,718 373,254 110,636 140,144 116,194 
Investment securities available-for-sale, at fair value1,157,399 1,055,185 934,113 810,106 798,930 
Investment securities held-to-maturity, at amortized cost— — — 49,036 51,211 
Other securities26,548 26,144 26,827 28,490 28,070 
Total investment securities1,183,947 1,081,329 960,940 887,632 878,211 
Gross loans3,663,966 3,665,596 3,613,050 3,616,099 3,582,571 
Allowance for credit losses(24,867)(25,199)(24,393)(11,589)(13,186)
Net loans3,639,099 3,640,397 3,588,657 3,604,510 3,569,385 
Bank owned life insurance117,501 116,746 116,000 115,261 114,616 
Premises and equipment, net77,031 77,991 78,948 76,965 76,929 
Accrued interest receivable16,627 14,200 12,570 11,569 12,929 
Net deferred tax assets— — 2,159 6,669 6,432 
Intangible assets119,004 119,417 119,829 120,241 120,773 
Other assets105,361 105,438 98,710 55,765 62,248 
Total Assets$5,511,288 $5,528,772 $5,088,449 $5,018,756 $4,957,717 
Liabilities
Deposits:
   Noninterest-bearing$1,061,310 $1,079,469 $857,501 $805,087 $795,548 
   Interest-bearing:
   Demand deposits940,791 921,761 837,966 896,465 898,704 
   Savings deposits1,117,684 1,067,254 989,609 1,009,771 980,539 
   Time deposits1,300,291 1,342,631 1,366,977 1,364,571 1,354,787 
Total deposits4,420,076 4,411,115 4,052,053 4,075,894 4,029,578 
Short-term borrowings
   Federal Funds purchased— — 9,900 — — 
   Customer repurchase agreements279,866 282,676 224,247 211,255 202,622 
Long-term debt— — — 4,056 4,055 
Net deferred tax liabilities1,601 2,598 — — — 
Other liabilities118,386 138,633 117,021 69,568 71,859 
Total Liabilities4,819,929 4,835,022 4,403,221 4,360,773 4,308,114 


Stockholders' Equity
Preferred stock— — — — — 
Common stock47,619 47,619 47,619 47,619 47,619 
Capital surplus170,526 169,881 170,096 170,309 169,794 
Retained earnings576,901 565,804 556,718 539,253 525,933 
Cost of common stock in treasury(134,177)(120,583)(116,665)(105,038)(105,138)
Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale
36,760 37,299 33,730 12,110 17,266 
Underfunded pension liability
(6,270)(6,270)(6,270)(6,270)(5,871)
Total Accumulated Other Comprehensive Income30,490 31,029 27,460 5,840 11,395 
Total Stockholders' Equity691,359 693,750 685,228 657,983 649,603 
Total Liabilities and Stockholders' Equity$5,511,288 $5,528,772 $5,088,449 $5,018,756 $4,957,717 
Regulatory Capital
Total CET 1 capital$548,269 $548,972 $547,040 $532,829 $518,175 
Total tier 1 capital548,269 548,972 547,040 532,829 522,175 
Total risk-based capital568,153 569,213 561,944 544,479 535,441 
Total risk-weighted assets3,442,629 3,410,589 3,412,591 3,319,998 3,318,386 




CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
September 30,June 30,March 31,December 31,September 30,
20202020202020192019
Residential real estate (1)
$1,621,265 $1,631,151 $1,629,578 $1,640,396 $1,643,416 
Home equity - junior liens140,135 142,672 146,034 148,928 150,808 
Commercial and industrial383,980 369,122 308,567 308,015 296,927 
Commercial real estate (2)
1,464,701 1,467,673 1,470,949 1,459,737 1,431,983 
Consumer50,541 52,278 54,749 54,263 54,799 
DDA overdrafts3,344 2,700 3,173 4,760 4,638 
Gross Loans$3,663,966 $3,665,596 $3,613,050 $3,616,099 $3,582,571 
Construction loans included in:
(1) - Residential real estate loans$28,947 $28,252 $28,870 $29,033 $24,955 
(2) - Commercial real estate loans42,449 42,092 44,453 64,049 55,267 



CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)

Three Months EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,September 30,
2020202020202019201920202019
Allowance for Loan Losses
Balance at beginning of period$25,199 $24,393 $11,589 $13,186 $13,795 $11,589 $15,966 
Charge-offs:
Commercial and industrial(757)— (77)(193)(17)(834)(68)
Commercial real estate(75)(39)(383)(964)(216)(497)(394)
Residential real estate(252)(376)(483)(226)(194)(1,111)(922)
Home equity(126)(161)(45)(134)(43)(332)(160)
Consumer(74)(36)(55)(338)(279)(165)(478)
DDA overdrafts(554)(459)(703)(792)(772)(1,716)(1,985)
Total charge-offs(1,838)(1,071)(1,746)(2,647)(1,521)(4,655)(4,007)
Recoveries:
Commercial and industrial3 5 9 581 43 17 183 
Commercial real estate44 128 203 10 7 375 614 
Residential real estate24 8 95 87 157 127 282 
Home equity33 9 47 — — 89 — 
Consumer42 128 13 54 68 183 211 
DDA overdrafts334 349 451 393 363 1,134 1,112 
Total recoveries480 627 818 1,125 638 1,925 2,402 
Net (charge-offs)/recoveries(1,358)(444)(928)(1,522)(883)(2,730)(1,605)
Provision for (recovery of) credit losses1,026 1,250 7,972 (75)274 10,248 (1,175)
Impact of adopting ASC 326— — 5,760 — — 5,760 — 
Balance at end of period$24,867 $25,199 $24,393 $11,589 $13,186 $24,867 $13,186 
Loans outstanding$3,663,966 $3,665,596 $3,613,050 $3,616,099 $3,582,571 
Allowance as a percent of loans outstanding0.68 %0.69 %0.68 %0.32 %0.37 %
Allowance as a percent of non-performing loans182.7 %185.1 %202.2 %98.6 %84.3 %
Average loans outstanding$3,661,569 $3,660,174 $3,608,868 $3,607,864 $3,544,548 $3,643,603 $3,553,417 
Net charge-offs (recoveries) (annualized) as a percent of average loans outstanding0.15 %0.05 %0.10 %0.17 %0.10 %0.10 %0.06 %






CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, Continued
(Unaudited) ($ in 000s)
September 30,June 30,March 31,December 31,September 30,
20202020202020192019
Nonaccrual Loans
Residential real estate$3,983 $3,477 $2,750 $3,393 $2,570 
Home equity74 265 249 531 469 
Commercial and industrial728 1,087 1,175 1,182 2,059 
Commercial real estate8,479 8,715 7,865 6,384 10,099 
Consumer— — 1 — — 
   Total nonaccrual loans13,264 13,544 12,040 11,490 15,197 
Accruing loans past due 90 days or more345 68 26 267 452 
   Total non-performing loans13,609 13,612 12,066 11,757 15,649 
Other real estate owned2,080 3,997 3,922 4,670 2,326 
   Total non-performing assets$15,689 $17,609 $15,988 $16,427 $17,975 
Non-performing assets as a percent of loans and other real estate owned0.43 %0.48 %0.44 %0.45 %0.50 %
Past Due Loans
Residential real estate$5,153 $5,261 $7,815 $7,485 $6,859 
Home equity474 393 430 956 796 
Commercial and industrial691 160 71 458 526 
Commercial real estate602 917 1,021 1,580 1,276 
Consumer121 67 177 187 124 
DDA overdrafts379 273 467 730 626 
   Total past due loans$7,420 $7,071 $9,981 $11,396 $10,207 
Total past due loans as a percent of loans outstanding0.20 %0.19 %0.28 %0.32 %0.28 %
Troubled Debt Restructurings ("TDRs")
   Residential real estate$20,398 $20,631 $21,413 $21,029 $21,320 
   Home equity2,100 2,138 2,294 3,628 3,034 
   Commercial and industrial— — — — 83 
   Commercial real estate4,894 4,915 5,163 4,973 8,100 
   Consumer260 185 184 — — 
     Total TDRs$27,652 $27,869 $29,054 $29,630 $32,537 





CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)

Three Months Ended
September 30, 2020June 30, 2020September 30, 2019
AverageYield/AverageYield/AverageYield/
BalanceInterestRateBalanceInterestRateBalanceInterestRate
Assets:
Loan portfolio (1):
Residential real estate (2)
$1,766,796 $17,899 4.03 %$1,785,631 $19,048 4.29 %$1,794,068 $20,564 4.55 %
Commercial, financial, and agriculture (2)
1,839,939 16,910 3.66 %1,818,344 17,665 3.91 %1,692,000 21,293 4.99 %
Installment loans to individuals (2), (3)
54,834 804 5.83 %56,199 852 6.10 %58,480 928 6.30 %
Previously securitized loans (4)
 *** 148  ***  *** 152  ***  *** 159  ***
Total loans3,661,569 35,761 3.89 %3,660,174 37,717 4.14 %3,544,548 42,944 4.81 %
Securities:   
Taxable877,623 6,266 2.84 %896,997 5,718 2.56 %790,207 6,044 3.03 %
Tax-exempt (5)
204,178 1,433 2.79 %120,751 1,039 3.46 %96,011 914 3.78 %
Total securities1,081,801 7,699 2.83 %1,017,748 6,757 2.67 %886,218 6,958 3.11 %
Deposits in depository institutions304,498 72 0.09 %236,320 55 0.09 %72,736 271 1.48 %
Total interest-earning assets5,047,868 43,532 3.43 %4,914,242 44,529 3.64 %4,503,502 50,173 4.42 %
Cash and due from banks80,505 79,501 67,106 
Premises and equipment, net77,647 78,717 78,091 
Goodwill and intangible assets119,267 119,681 121,124 
Other assets229,667 230,423 188,206 
Less: Allowance for loan losses(25,311)(24,700)(13,786)
       Total assets$5,529,643 $5,397,864 $4,944,243 
Liabilities:
Interest-bearing demand deposits$931,152 $187 0.08 %$893,832 $178 0.08 %$881,476 $954 0.43 %
Savings deposits1,093,886 303 0.11 %1,037,387 363 0.14 %978,198 1,159 0.47 %
Time deposits (2)
1,322,423 4,633 1.39 %1,353,619 5,422 1.61 %1,360,409 6,472 1.89 %
Short-term borrowings260,518 131 0.20 %256,790 279 0.44 %187,301 814 1.72 %
Long-term debt— — — %— — — %4,054 45 4.40 %
   Total interest-bearing liabilities3,607,979 5,254 0.58 %3,541,628 6,242 0.71 %3,411,438 9,444 1.10 %
Noninterest-bearing demand deposits1,114,822 1,044,009 825,029 
Other liabilities104,084  115,110  58,857  
Stockholders' equity702,758 697,117 648,919 
Total liabilities and
stockholders' equity$5,529,643 $5,397,864 $4,944,243 
Net interest income$38,278 $38,287 $40,729 
Net yield on earning assets3.02 %3.13 %3.59 %
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income:
Loan fees$156 $609 $96 


(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$132 $194 $50 
Commercial, financial, and agriculture250 651 1,110 
Installment loans to individuals38 37 13 
Time deposits155 155 75 
$575 $1,037 $1,248 
(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, 2020September 30, 2019
AverageYield/AverageYield/
BalanceInterestRateBalanceInterestRate
Assets:
Loan portfolio (1):
Residential real estate (2)
$1,776,903 $56,827 4.27 %$1,792,013 $61,468 4.59 %
Commercial, financial, and agriculture (2)
1,810,165 55,051 4.06 %1,704,141 63,796 5.01 %
Installment loans to individuals (2), (3)
56,535 2,519 5.95 %57,263 2,656 6.20 %
Previously securitized loans (4)
 *** 415  ***  *** 477  ***
Total loans3,643,603 114,812 4.21 %3,553,417 128,397 4.83 %
Securities:  
Taxable861,853 17,855 2.77 %751,600 17,464 3.11 %
Tax-exempt (5)
140,075 3,366 3.21 %99,555 2,856 3.84 %
Total securities1,001,928 21,221 2.83 %851,155 20,320 3.19 %
Deposits in depository institutions214,912 432 0.27 %82,214 1,038 1.69 %
Total interest-earning assets4,860,443 136,465 3.75 %4,486,786 149,755 4.46 %
Cash and due from banks76,936 65,433 
Premises and equipment, net77,910 78,475 
Goodwill and intangible assets119,678 121,780 
Other assets218,695 191,231 
Less: Allowance for loan losses(21,984)(15,000)
       Total assets$5,331,678 $4,928,705 
Liabilities:
Interest-bearing demand deposits$898,440 $833 0.12 %$880,763 $2,796 0.42 %
Savings deposits1,045,877 1,366 0.17 %968,655 3,461 0.48 %
Time deposits (2)
1,347,013 16,125 1.60 %1,370,934 18,511 1.81 %
Short-term borrowings242,173 873 0.48 %208,004 2,729 1.75 %
Long-term debt1,109 100 12.04 %4,053 140 4.62 %
   Total interest-bearing liabilities3,534,612 19,297 0.73 %3,432,409 27,637 1.08 %
Noninterest-bearing demand deposits1,004,144 811,411 
Other liabilities98,393  54,356  
Stockholders' equity694,529 630,529 
Total liabilities and
Stockholders' equity$5,331,678 $4,928,705 
Net interest income$117,168 $122,118 
Net yield on earning assets3.22 %3.64 %
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income:
Loan fees$881 $711 


(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$477 $165 
Commercial, financial, and agriculture2,141 1,968 
Installment loans to individuals114 1 
Time deposits466 527 
$3,198 $2,661 
(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)
Three Months EndedNine Months Ended
September 30,June 30,March 31,December 31,September 30,September 30,September 30,
2020202020202019201920202019
Net Interest Income/Margin
Net interest income ("GAAP")$37,977 $38,070 $40,415 $39,847 $40,537 $116,462 $121,516 
Taxable equivalent adjustment301 217 188 189 192 706 602 
Net interest income, fully taxable equivalent
$38,278 $38,287 $40,603 $40,036 $40,729 $117,168 $122,118 
Average interest earning assets$5,047,868 $4,914,242 $4,617,157 $4,585,008 $4,503,502 $4,860,443 $4,486,786 
Net Interest Margin3.02 %3.13 %3.54 %3.46 %3.59 %3.22 %3.64 %
Accretion related to fair value adjustments(0.05)%(0.08)%(0.14)%(0.08)%(0.11)%(0.09)%(0.08)%
Net Interest Margin (excluding accretion)
2.97 %3.05 %3.40 %3.38 %3.48 %3.13 %3.56 %
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")12.54 %12.55 %13.47 %13.11 %13.10 %
Effect of goodwill and other intangibles, net(1.93)%(1.93)%(2.09)%(2.13)%(2.17)%
Tangible common equity to tangible assets
10.61 %10.62 %11.38 %10.98 %10.93 %
Return on Tangible Equity
Return on tangible equity ("GAAP")13.8 %12.6 %20.6 %16.8 %17.0 %15.6 %17.5 %
Impact of merger related expenses— %— %— %— %— %— %0.2 %
Impact of sale of VISA shares— %— %(9.7)%— %— %(3.1)%— %
Return on tangible equity, excluding merger related expenses and sale of VISA shares
13.8 %12.6 %10.9 %16.8 %17.0 %12.5 %17.7 %
Return on Assets
Return on assets ("GAAP")1.46 %1.35 %2.29 %1.80 %1.81 %1.68 %1.81 %
Impact of merger related expenses— %— %— %— %— %— %0.02 %
Impact of sale of VISA shares— %— %(1.08)%— %— %(0.33)%— %
Return on assets, excluding merger related expenses and sale of VISA shares
1.46 %1.35 %1.21 %1.80 %1.81 %1.35 %1.83 %