Enhanced Investments - Financial Portal

Published: 2024-01-24 14:56:02 ET

<<< go to CHCO company page

EX-99.1 2 chco12-31x23exhibit991.htm EX-99.1 Document

Filed by City Holding Company

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934

NEWS RELEASE

For Immediate Release

January 24, 2024

For Further Information Contact:

David L. Bumgarner, Executive Vice President and Chief Financial Officer

(304) 769-1169

City Holding Company Announces Record Annual Earnings

Charleston, West Virginia – City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.2 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $114.4 million and record diluted earnings of $7.61 per share for the year ended December 31, 2023. For the year ended December 31, 2023, the Company achieved a return on assets of 1.87% and a return on tangible equity of 23.8%.

“2023 was a challenging year for the banking industry, but a great year for City”, said City’s President and CEO Charles Hageboeck. “City’s strong performance during the year highlights the value of the Company's deep customer base and conservative operating principles. During 2023, City completed the acquisition of Citizens Commerce Bancshares, Inc., and its subsidiary, Citizens Commerce Bank (“Citizens”) of Versailles, Kentucky, that enhanced our market position in central Kentucky.

“Net of loans acquired from Citizens, City grew loans over 6% during 2023, and asset quality remained strong with City only needing to take a relatively small provision for the year (excluding the provision established as part of the acquisition of Citizens). The number of checking accounts grew approximately 2% in 2023, and City saw checking accounts increase in many slow growth regions where City already has a dominant market position. We believe this growth resulted from a combination excellent service, strong products and technology, coupled with less competition than may be present in more urban markets.

“After adjusting for security gains and losses and one-time merger costs, City’s earnings per share remained essentially flat on a quarterly basis throughout 2023 – at approximately $2.00 per share. During the year, the cost of City’s deposits rose by 60 basis points, while interest earning asset yields rose by 145 basis points. City’s average deposits in the fourth quarter of 2023 declined 5.5% from average deposits in the fourth quarter of 2022 (net of deposits acquired from Citizens), but declined only 0.5% from the third quarter of 2023 that reflects an attractive customer mix which is dependent on many, small retail deposit customers.

“City issued 667,000 shares in its acquisition of Citizens in the first quarter of 2023, but was able to repurchase essentially all of those shares during the year. As a result, the number of City’s shares outstanding at the end of 2023 only grew marginally from the end of 2022 (due to shares issued for employee and director compensation) – and City’s tangible common equity ratio increased from 8.0% at December 31, 2022, to over 8.6% at December 31, 2023 despite the large number of shares purchased.

“As a result, City begins 2024 exceptionally positioned with an extremely strong customer franchise, an exceptional team, an enviable cost of funds, strong asset quality, and competitors who seem focused on making their customers banking experiences more difficult.”

Net Interest Income

The Company’s net interest income increased from $180.0 million for the year ended December 31, 2022 to $219.2 million for the year ended December 31, 2023. The Company’s tax equivalent net interest income increased $39.0 million, or 21.5%, from $181.3 million for the year ended December 31, 2022 to $220.3 million for the year ended December 31, 2023. The acquisition of Citizens during the first quarter of 2023 added $10.6 million of net interest income during the year ended December 31, 2023. Due to increases in market rates, net interest income increased by $47.2 million due to an increase in loan yields (net of loan fees and accretion) of 127 basis points, by $14.2 million due to an increase in the yield on investment securities of 97 basis points, and by $4.9 million due to a 342 basis point increase on deposits in depository institutions. In addition, net interest income increased $4.4 million due to an increase in balances of loans of $110.2 million and by $2.0 million due to additional accretion from the year ended December 31, 2022.

These increases were partially offset by an increase in the cost of interest bearing liabilities (110 basis points) which decreased net interest income by $41.6 million, lower balances of deposits in depository institutions ($214.9 million) that lowered net interest income by $2.3 million, and lower investment balances ($57.8 million) that lowered net interest income by $1.6 million. The Company’s reported net interest margin increased from 3.33% for the year ended December 31, 2022 to 4.01% for the year ended December 31, 2023.

During the fourth quarter of 2023, the Company’s net interest income decreased from $55.6 million during the third quarter of 2023 to $54.7 million. During the fourth quarter of 2023, the Company’s tax equivalent net interest income decreased $1.0 million, or 1.7%, to $54.9 million from $55.9 million during the third quarter of 2023. Due to an increase in the cost of interest bearing liabilities (22 basis points), net interest income decreased $1.8 million. Additionally, lower investment balances ($100.4 million) decreased net interest income by $0.9 million and an increase in balances of interest bearing liabilities ($40.2 million) decreased net interest income by $0.6 million. These decreases were partially offset by an increase in loan balances of $89.0 million which increased net interest income by $1.3 million, an increase of 18 basis points on investment security yields which increased net interest income by $0.7 million, and an increase of one basis point on loans yields which increased net interest income by $0.6 million. The Company’s reported net interest margin decreased from 4.03% for the third quarter of 2023 to 3.98% for the fourth quarter of 2023.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned increased from 0.17%, or $6.3 million, at December 31, 2022 to 0.21%, or $8.6 million at December 31, 2023 primarily as a result of the acquisition of Citizens. Total past due loans increased from $9.2 million, or 0.25% of total loans outstanding, at December 31, 2022 to $10.9 million, or 0.27% of total loans outstanding, at December 31, 2023.

As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a recovery of credit losses of $0.3 million in the fourth quarter of 2023 and a provision for credit losses of $3.2 million for the year ended December 31, 2023, compared to a $0.5 million provision for credit losses for the fourth quarter and for the year ended December 31, 2022. In connection with the completion of our acquisition of Citizens during 2023, the Company recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses. Additionally, the provision for the year ended December 31, 2023 was a result of loan growth and credit downgrades that were partially offset by lower historical loss rates in the loan portfolio.

Non-interest Income

Non-interest income was $70.6 million for the year ended December 31, 2023, as compared to $72.1 million for the year ended December 31, 2022. In 2023, the Company reported $4.9 million of realized security losses and $0.4 million of unrealized security gains on the Company’s equity securities as compared to $1.6 million of unrealized security losses on the Company’s equity securities in 2022. The realized security losses during 2023, which lowered diluted earnings per share by $0.25, were executed to reposition a portion of our investment securities.

Exclusive of these realized and unrealized gains and losses, non-interest income increased $1.4 million, or 2.0%, from $73.7 million for 2022 to $75.1 million for 2023. This increase was largely attributable to an increase of $0.8 million, or 8.7%, in trust and investment management fee income and a $0.6 million, or 2.2%, increase in bankcard revenue. In addition, death benefits from bank owned life insurance increased $0.5 million from the year ended December 31, 2022. These increases were partially offset by a decrease of $0.6 million in service charges.

During the quarter ended December 31, 2023, non-interest income was $14.2 million as compared to $18.5 million during the quarter ended December 31, 2022. During the fourth quarter of 2023, the Company reported $5.0 million of realized security losses and $0.4 million of unrealized fair value gains on the Company’s equity securities as compared to $0.3 million of unrealized fair value losses on the Company’s equity securities during the fourth quarter of 2022.

Exclusive of these realized and unrealized gains and losses, non-interest income remained consistent at $18.8 million for both the fourth quarter of 2022 and for the fourth quarter of 2023. Lower death benefits from bank owned life insurance of $0.6 million was essentially offset by higher bankcard revenue, $0.3 million or 4.7%, and trust and investment management fee income, $0.2 million or 9.4%.

Non-interest Expenses

Non-interest expenses increased $19.2 million, or 15.5%, from $124.3 million for 2022 to $143.5 million for 2023. This increase was primarily due to an increase in other expenses ($9.8 million, due primarily to higher acquisition and integration expenses associated with the completed acquisition of Citizens ($5.2 million)) and salaries and employee benefit expenses ($6.6 million due to salary adjustments, Citizens personnel ($1.9 million), and increased health insurance). In addition, bankcard expense increased $1.4 million, FDIC expense increased $1.2 million and occupancy related expenses increased $0.6 million.

In the fourth quarter of 2023, non-interest expenses increased $2.5 million (7.7%) from $32.6 million in the fourth quarter of 2022 to $35.1 million. This increase was largely due to an increase in salaries and employee benefits of $1.6 million (salary adjustments, Citizens personnel ($0.6 million), and increased health insurance) and bankcard expenses of $0.7 million. In addition, other expenses increased $0.5 million and FDIC expense increased $0.5 million. These increases were partially offset by lower equipment and software related expense ($0.5 million).

Balance Sheet Trends

Loans increased $479.7 million (13.2%) from December 31, 2022 to $4.13 billion at December 31, 2023. The Company’s acquisition of Citizens increased total loans by $254.7 million. Excluding the acquisition, total loans increased $225.0 million (6.2%) from December 31, 2022. Commercial real estate loans increased $101.4 million (7.3%); residential real estate loans increased $51.3 million (3.0%); commercial and industrial loans increased $38.4 million (10.3%); home equity loans increased $19.1 million (14.3%); and consumer loans increased $13.4 million (27.4%).

Average depository balances for the year ended December 31, 2023 approximated those for the year ended December 31, 2022 at $4.98 billion. The acquisition of Citizens increased average deposits by $243.0 million during 2023. Excluding the acquisition of Citizens, average deposits declined $237.9 million. Average savings deposits decreased $139.7 million, average noninterest bearing demand deposits decreased $87.3 million, and average time deposits decreased $68.3 million. These decreases were partially offset by an increase in average interest bearing demand deposits of $57.3 million.

Income Tax Expense

The Company’s effective income tax rates for the quarter and year ended December 31, 2023 were 19.5% and 20.1%, respectively, compared to 18.2% and 19.8% for the comparable periods in 2022.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 83.6% and the loan to asset ratio was 66.9% at December 31, 2023. The Company maintained investment securities totaling 22.2% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 63.1% of assets at December 31, 2023. Time deposits fund 16.9% of assets at December 31, 2023, with only 12.6% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company.

City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of December 31, 2023, City National had the capacity to borrow an additional $2.0 billion from these existing borrowing facilities. In addition, approximately $690 million of City’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $680 million of City’s investment securities unpledged at December 31, 2023.

The Company continues to be strongly capitalized with tangible equity of $514 million at December 31, 2023. The Company’s tangible equity ratio increased from 8.0% at December 31, 2022 to 8.6% at December 30, 2023. This increase was attributable to the Company’s net income for 2023 less dividends and a decrease in unrealized losses on securities available for sale due to the impact of lower interest rates at the end of 2023.

At December 31, 2023, City National’s Leverage Ratio was 8.9%, its Common Equity Tier I ratio was 13.8%, its Tier I Capital ratio was 13.8%, and its Total Risk-Based Capital ratio was 14.3%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On November 15, 2023, the Company's Board of Directors approved a quarterly cash dividend of $0.715 cents per share payable January 31, 2024, to shareholders of record as of January 15, 2024. During the year ended December 31, 2023, the Company repurchased 667,000 common shares at a weighted average

price of $90.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022. As of December 31, 2023, the Company could repurchase an additional approximately 150,000 shares under the current plan.

City National Bank operates 98 branches across West Virginia, Kentucky, Virginia, and Ohio. City National will be closing its Nichols Park branch located in Lexington, Kentucky on February 9, 2024, due to its proximity to three existing City National branches.

Forward-Looking Information

This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its December 31, 2023 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2023 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES

Financial Highlights

(Unaudited)


	Three Months Ended															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
	2023			2023			2023			2023			2022			2023			2022

Earnings
Net Interest Income (fully taxable equivalent)	$	54,889		$	55,855		$	55,757		$	53,767		$	52,381		$	220,266		$	181,339
Net Income available to common shareholders	27,452			29,839			32,733			24,341			30,672			114,365			102,071

Per Share Data
Earnings per share available to common shareholders:
Basic	$	1.84		$	1.98		$	2.16		$	1.63		$	2.06		$	7.62		$	6.81
Diluted	1.84			1.98			2.16			1.63			2.05			7.61			6.80
Weighted average number of shares (in thousands):
Basic	14,758			14,922			14,994			14,818			14,756			14,868			14,847
Diluted	14,785			14,945			15,012			14,844			14,785			14,891			14,873
Period-end number of shares (in thousands)	14,832			14,901			15,007			15,260			14,788			14,832			14,788
Cash dividends declared	$	0.72		$	0.72		$	0.65		$	0.65		$	0.65		$	2.73		$	2.50
Book value per share (period-end)	45.65			40.94			42.39			42.66			39.08			45.65			39.08
Tangible book value per share (period-end)	34.69			29.98			31.50			31.91			31.25			34.69			31.25
Market data:
High closing price	$	115.77		$	99.49		$	97.92		$	100.27		$	101.94		$	115.77		$	101.94
Low closing price	87.43			87.51			83.57			89.17			89.32			83.57			73.88
Period-end closing price	110.26			90.35			89.99			90.88			93.09			110.26			93.09
Average daily volume (in thousands)	62			62			80			84			75			72			70
Treasury share activity:
Treasury shares repurchased (in thousands)	70			109			269			218			69			667			325
Average treasury share repurchase price	$	90.61		$	89.33		$	88.93		$	92.1		$	93.12		$	90.21		$	81.5

Key Ratios (percent)
Return on average assets	1.78		%	1.94		%	2.12		%	1.63		%	2.08		%	1.87		%	1.71		%
Return on average tangible equity	23.5		%	24.1		%	27.4		%	19.9		%	27.3		%	23.8		%	20.3		%
Yield on interest earning assets	5.23		%	5.08		%	4.87		%	4.66		%	4.23		%	4.96		%	3.51		%
Cost of interest bearing liabilities	1.70		%	1.46		%	1.22		%	0.86		%	0.48		%	1.32		%	0.25		%
Net Interest Margin	3.98		%	4.03		%	4.00		%	4.05		%	3.89		%	4.01		%	3.33		%
Non-interest income as a percent of total revenue	25.6		%	24.6		%	27.1		%	24.7		%	26.5		%	25.6		%	28.6		%
Efficiency Ratio	47.4		%	46.4		%	44.6		%	45.7		%	45.3		%	46.0		%	48.2		%
Price/Earnings Ratio (a)	14.95			11.40			10.40			13.95			11.30			14.47			13.67



Capital (period-end)
Average Shareholders' Equity to Average Assets	10.27		%	10.73		%	10.38		%	10.31		%	9.57		%
Tangible equity to tangible assets	8.57		%	7.55		%	7.90		%	8.05		%	8.02		%
Consolidated City Holding Company risk based capital ratios (b):
CET I	15.70		%	15.36		%	15.47		%	15.64		%	16.23		%
Tier I	15.70		%	15.36		%	15.47		%	15.64		%	16.23		%
Total	16.23		%	15.89		%	16.01		%	16.18		%	16.62		%
Leverage	10.23		%	10.05		%	9.80		%	10.20		%	10.01		%
City National Bank risk based capital ratios (b):
CET I	13.79		%	14.73		%	14.82		%	14.08		%	13.88		%
Tier I	13.79		%	14.73		%	14.82		%	14.08		%	13.88		%
Total	14.32		%	15.27		%	15.36		%	14.63		%	14.28		%
Leverage	8.94		%	9.61		%	9.36		%	9.18		%	8.55		%

Other (period-end)
Branches	98			99			99			99			94
FTE	957			966			963			958			909

Assets per FTE (in thousands)	$	6,447		$	6,291		$	6,383		$	6,483		$	6,467
Deposits per FTE (in thousands)	5,157			5,120			5,208			5,362			5,357

(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) December 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										Twelve Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,		December 31,		December 31,
	2023		2023		2023		2023		2022		2023		2022
Interest Income
Interest and fees on loans	$	57,755	$	55,582	$	52,352	$	47,004	$	42,963	$	212,693	$	146,538
Interest on investment securities:
Taxable	12,336		12,432		11,794		11,773		11,119		48,335		34,445
Tax-exempt	832		910		950		1,162		1,262		3,854		4,911
Interest on deposits in depository institutions	941		1,265		2,585		1,591		1,244		6,382		3,794
Total Interest Income	71,864		70,189		67,681		61,530		56,588		271,264		189,688

Interest Expense
Interest on deposits	12,479		10,551		8,567		5,690		3,010		37,287		7,444
Interest on short-term borrowings	3,693		2,990		2,963		2,381		1,533		12,027		2,211
Interest on FHLB long-term advances	1,026		1,034		649		—		—		2,709		—
Total Interest Expense	17,198		14,575		12,179		8,071		4,543		52,023		9,655
Net Interest Income	54,666		55,614		55,502		53,459		52,045		219,241		180,033
Provision for (recovery of) credit losses	(300)		200		425		2,918		500		3,243		474
Net Interest Income After Provision for (Recovery of) Credit Losses	54,966		55,414		55,077		50,541		51,545		215,998		179,559

Non-Interest Income
Net gains on sale of investment securities	(4,951)		(730)		—		773		4		(4,908)		4
Unrealized (losses) gains recognized on securities still held	365		—		(294)		361		(262)		432		(1,585)
Service charges	7,158		7,124		6,906		6,563		7,056		27,751		28,335
Bankcard revenue	7,109		7,058		7,190		6,603		6,791		27,960		27,349
Trust and investment management fee income	2,563		2,409		2,339		2,252		2,343		9,563		8,798
Bank owned life insurance	1,218		807		3,208		804		1,813		6,037		5,559
Other income	774		742		952		1,326		791		3,794		3,617
Total Non-Interest Income	14,236		17,410		20,301		18,682		18,536		70,629		72,077

Non-Interest Expense
Salaries and employee benefits	18,772		18,289		18,429		17,673		17,148		73,163		66,536
Occupancy related expense	2,917		2,950		2,811		2,640		2,725		11,318		10,718
Equipment and software related expense	2,824		2,830		2,883		3,092		3,341		11,629		11,791
FDIC insurance expense	868		919		690		445		413		2,922		1,673
Advertising	588		790		974		760		802		3,112		3,405


Bankcard expenses	2,014		2,188		1,736		1,509		1,356		7,447		6,032
Postage, delivery, and statement mailings	615		668		596		647		597		2,526		2,362
Office supplies	477		457		591		420		441		1,945		1,744
Legal and professional fees	478		529		558		470		610		2,035		2,194
Telecommunications	614		568		623		606		627		2,411		2,616
Repossessed asset losses (gains), net of expenses	(50)		40		22		16		54		28		59
Other expenses	4,992		4,800		4,848		10,345		4,471		24,985		15,172
Total Non-Interest Expense	35,109		35,028		34,761		38,623		32,585		143,521		124,302
Income Before Income Taxes	34,093		37,796		40,617		30,600		37,496		143,106		127,334
Income tax expense	6,641		7,957		7,884		6,259		6,824		28,741		25,263
Net Income Available to Common Shareholders	$	27,452	$	29,839	$	32,733	$	24,341	$	30,672	$	114,365	$	102,071

Distributed earnings allocated to common shareholders	$	10,508	$	10,554	$	9,668	$	9,833	$	9,521	$	40,121	$	36,619
Undistributed earnings allocated to common shareholders	16,696		19,004		22,774		14,294		20,857		73,208		64,494
Net earnings allocated to common shareholders	$	27,204	$	29,558	$	32,442	$	24,127	$	30,378	$	113,329	$	101,113


Average common shares outstanding	14,758		14,922		14,994		14,818		14,756		14,868		14,847
Shares for diluted earnings per share	14,785		14,945		15,012		14,844		14,785		14,891		14,873

Basic earnings per common share	$	1.84	$	1.98	$	2.16	$	1.63	$	2.06	$	7.62	$	6.81
Diluted earnings per common share	$	1.84	$	1.98	$	2.16	$	1.63	$	2.05	$	7.61	$	6.80

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

($ in 000s)


			(Unaudited)		(Unaudited)		(Unaudited)
	December 31,		September 30,		June 30,		March 31,		December 31,
	2023		2023		2023		2023		2022
Assets
Cash and due from banks	$	123,033	$	67,402	$	69,622	$	76,223	$	70,257
Interest-bearing deposits in depository institutions	33,243		43,314		161,659		226,587		129,743
Cash and cash equivalents	156,276		110,716		231,281		302,810		200,000

Investment securities available-for-sale, at fair value	1,338,137		1,358,219		1,419,933		1,456,259		1,505,520
Other securities	30,966		29,022		29,262		24,728		23,807
Total investment securities	1,369,103		1,387,241		1,449,195		1,480,987		1,529,327

Gross loans	4,125,923		4,007,482		3,922,142		3,894,686		3,646,258
Allowance for credit losses	(22,745)		(23,128)		(22,751)		(22,724)		(17,108)
Net loans	4,103,178		3,984,354		3,899,391		3,871,962		3,629,150

Bank owned life insurance	118,122		117,979		117,173		124,238		120,674
Premises and equipment, net	72,146		72,682		73,118		73,430		70,786
Accrued interest receivable	20,290		19,223		17,973		18,395		18,287
Net deferred tax assets	42,216		58,811		46,944		42,146		44,884
Intangible assets	162,568		163,461		163,426		164,099		115,735
Other assets	124,153		161,659		148,333		132,715		149,263
Total Assets	$	6,168,052	$	6,076,126	$	6,146,834	$	6,210,782	$	5,878,106

Liabilities
Deposits:
Noninterest-bearing	$	1,342,804	$	1,333,474	$	1,373,106	$	1,420,990	$	1,351,415
Interest-bearing:
Demand deposits	1,291,011		1,319,783		1,337,445		1,356,017		1,233,482
Savings deposits	1,259,457		1,282,642		1,343,571		1,397,523		1,396,869
Time deposits	1,040,990		1,009,235		960,941		962,235		888,100
Total deposits	4,934,262		4,945,134		5,015,063		5,136,765		4,869,866
Short-term borrowings
FHLB short-term advances	25,000		—		—		—		—
Customer repurchase agreements	309,856		278,671		271,714		293,256		290,964
FHLB long-term advances	100,000		100,000		100,000		—		—
Other liabilities	121,868		142,187		123,865		129,711		139,424
Total Liabilities	5,490,986		5,465,992		5,510,642		5,559,732		5,300,254




Stockholders' Equity
Preferred stock	—		—		—		—		—
Common stock	47,619		47,619		47,619		47,619		47,619
Capital surplus	177,424		177,113		176,746		177,529		170,980
Retained earnings	780,299		763,425		744,248		721,727		706,696
Cost of common stock in treasury	(217,737)		(211,430)		(201,973)		(179,436)		(215,955)
Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale	(107,958)		(163,171)		(127,026)		(112,967)		(128,066)
Underfunded pension liability	(2,581)		(3,422)		(3,422)		(3,422)		(3,422)
Total Accumulated Other Comprehensive Income	(110,539)		(166,593)		(130,448)		(116,389)		(131,488)
Total Stockholders' Equity	677,066		610,134		636,192		651,050		577,852
Total Liabilities and Stockholders' Equity	$	6,168,052	$	6,076,126	$	6,146,834	$	6,210,782	$	5,878,106

Regulatory Capital
Total CET 1 capital	$	627,579	$	615,798	$	605,661	$	606,675	$	598,068
Total tier 1 capital	627,579		615,798		605,661		606,675		598,068
Total risk-based capital	648,646		637,245		626,730		627,718		612,654
Total risk-weighted assets	3,996,688		4,009,798		3,913,870		3,878,994		3,685,207

CITY HOLDING COMPANY AND SUBSIDIARIES

Loan Portfolio

(Unaudited) ($ in 000s)


	December 31,		September 30,		June 30,		March 31,		December 31,
	2023		2023		2023		2023		2022

Commercial and industrial	$	426,950	$	424,647	$	417,847	$	390,861	$	373,890

1-4 Family	206,237		135,226		123,701		119,017		116,192
Hotels	357,142		321,236		324,745		327,554		340,404
Multi-family	189,165		192,329		191,483		195,042		174,786
Non Residential Non-Owner Occupied	680,590		713,353		673,921		679,782		585,964
Non Residential Owner Occupied	240,328		222,544		222,852		223,096		174,961
Commercial real estate (1)	1,673,462		1,584,688		1,536,702		1,544,491		1,392,307

Residential real estate (2)	1,788,150		1,768,358		1,746,618		1,737,604		1,693,523
Home equity	167,201		159,630		151,012		151,341		134,317
Consumer	65,246		65,586		65,201		66,994		48,806
DDA overdrafts	4,914		4,573		4,762		3,395		3,415
Gross Loans	$	4,125,923	$	4,007,482	$	3,922,142	$	3,894,686	$	3,646,258

Construction loans included in:
(1) - Commercial real estate loans	$	2,459	$	2,533	$	3,361	$	4,715	$	4,130
(2) - Residential real estate loans	23,066		20,056		20,470		25,224		21,122

CITY HOLDING COMPANY AND SUBSIDIARIES

Asset Quality Information

(Unaudited) ($ in 000s)


	Three Months Ended															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
	2023			2023			2023			2023			2022			2023			2022
Allowance for Loan Losses
Balance at beginning of period	$	23,128		$	22,751		$	22,724		$	17,108		$	17,011		$	17,108		$	18,166

Charge-offs:
Commercial and industrial	(84)			—			(69)			—			(120)			(153)			(562)
Commercial real estate	(5)			(256)			(117)			(3)			(31)			(381)			(55)
Residential real estate	(68)			(88)			(20)			(32)			(66)			(208)			(265)
Home equity	(21)			(112)			(200)			(67)			(189)			(400)			(279)
Consumer	(6)			(10)			(109)			(62)			(15)			(187)			(63)
DDA overdrafts	(416)			(422)			(357)			(450)			(670)			(1,645)			(2,624)
Total charge-offs	(600)			(888)			(872)			(614)			(1,091)			(2,974)			(3,848)

Recoveries:
Commercial and industrial	70			597			86			83			94			836			334
Commercial real estate	17			74			28			158			120			277			207
Residential real estate	4			28			5			10			49			47			99
Home equity	13			18			12			4			34			47			56
Consumer	45			27			28			23			31			123			107
DDA overdrafts	368			321			315			398			360			1,402			1,513
Total recoveries	517			1,065			474			676			688			2,732			2,316

Net charge-offs	(83)			177			(398)			62			(403)			(242)			(1,532)
Provision for (recovery of) credit losses	(300)			200			425			2,918			500			3,243			474
PCD Loan Reserves	—			—			—			2,811			—			2,811			—
Adoption of ASU 2022-02	—			—			—			(175)			—			(175)			—
Balance at end of period	$	22,745		$	23,128		$	22,751		$	22,724		$	17,108		$	22,745		$	17,108

Loans outstanding	$	4,125,923		$	4,007,482		$	3,922,142		$	3,894,686		$	3,646,258
Allowance as a percent of loans outstanding	0.55		%	0.58		%	0.58		%	0.58		%	0.47		%
Allowance as a percent of non-performing loans	290.6		%	440.1		%	405.5		%	400.1		%	317.3		%

Average loans outstanding	$	4,045,889		$	3,956,871		$	3,896,284		$	3,700,194		$	3,648,996		$	3,900,913		$	3,583,526
Net charge-offs (annualized) as a percent of average loans outstanding	0.01		%	(0.02)		%	0.04		%	(0.01)		%	0.04		%	0.01		%	0.04		%

CITY HOLDING COMPANY AND SUBSIDIARIES

Asset Quality Information, Continued

(Unaudited) ($ in 000s)


	December 31,			September 30,			June 30,			March 31,			December 31,
	2023			2023			2023			2023			2022
Nonaccrual Loans
Residential real estate	$	2,849		$	2,839		$	2,774		$	2,700		$	1,969
Home equity	111			75			24			35			55
Commercial and industrial	2,211			716			741			994			1,015
Commercial real estate	2,387			1,355			1,821			1,931			2,166
Consumer	—			1			36			19			—
Total nonaccrual loans	7,558			4,986			5,396			5,679			5,205
Accruing loans past due 90 days or more	270			269			215			—			187
Total non-performing loans	7,828			5,255			5,611			5,679			5,392
Other real estate owned	731			720			874			843			909
Total non-performing assets	$	8,559		$	5,975		$	6,485		$	6,522		$	6,301

Non-performing assets as a percent of loans and other real estate owned	0.21		%	0.15		%	0.17		%	0.17		%	0.17		%

Past Due Loans
Residential real estate	$	8,059		$	6,247		$	5,884		$	4,783		$	7,091
Home equity	1,235			1,278			784			551			650
Commercial and industrial	435			568			142			98			234
Commercial real estate	715			1,478			238			148			710
Consumer	129			84			57			3			100
DDA overdrafts	364			398			341			276			391
Total past due loans	$	10,937		$	10,053		$	7,446		$	5,859		$	9,176

Total past due loans as a percent of loans outstanding	0.27		%	0.25		%	0.19		%	0.15		%	0.25		%

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)


	Three Months Ended
	December 31, 2023						September 30, 2023						December 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)	$	1,945,185	$	23,673	4.83	%	$	1,910,876	$	22,702	4.71	%	$	1,824,327	$	18,973	4.13	%
Commercial, financial, and agriculture (2)	2,031,089		33,038		6.45	%	1,975,463		31,743		6.38	%	1,773,937		23,346		5.22	%
Installment loans to individuals (2), (3)	69,615		1,046		5.96	%	70,532		1,138		6.40	%	50,732		646		5.05	%

Total loans	4,045,889		57,757		5.66	%	3,956,871		55,583		5.57	%	3,648,996		42,965		4.67	%
Securities:
Taxable	1,194,448		12,336		4.10	%	1,277,265		12,432		3.86	%	1,315,453		11,118		3.35	%
Tax-exempt (4)	153,204		1,053		2.73	%	170,806		1,152		2.68	%	211,326		1,597		3.00	%
Total securities	1,347,652		13,389		3.94	%	1,448,071		13,584		3.72	%	1,526,779		12,715		3.30	%
Deposits in depository institutions	71,624		941		5.21	%	90,994		1,265		5.52	%	162,732		1,245		3.04	%
Total interest-earning assets	5,465,165		72,087		5.23	%	5,495,936		70,432		5.08	%	5,338,507		56,925		4.23	%
Cash and due from banks	87,633						69,348						69,223
Premises and equipment, net	72,435						73,004						71,482
Goodwill and intangible assets	163,220						163,602						115,952
Other assets	342,669						332,551						332,855
Less: Allowance for loan losses	(23,532)						(23,558)						(17,332)
Total assets	$	6,107,590					$	6,110,883					$	5,910,687

Liabilities:
Interest-bearing demand deposits	$	1,299,683	$	3,467	1.06	%	$	1,300,936	$	3,068	0.94	%	$	1,150,327	$	684	0.24	%
Savings deposits	1,274,726		2,369		0.74	%	1,314,484		2,319		0.70	%	1,412,246		829		0.23	%
Time deposits (2)	1,025,870		6,644		2.57	%	985,038		5,163		2.08	%	916,845		1,497		0.65	%
Short-term borrowings	312,941		3,693		4.68	%	272,558		2,990		4.35	%	303,599		1,534		2.00	%
FHLB long-term advances	100,000		1,026		4.07	%	100,000		1,035		4.11	%	—		—		—	%
Total interest-bearing liabilities	4,013,220		17,199		1.70	%	3,973,016		14,575		1.46	%	3,783,017		4,544		0.48	%
Noninterest-bearing demand deposits	1,334,021						1,359,268						1,428,013
Other liabilities	132,862						123,137						134,075
Stockholders' equity	627,487						655,462						565,582
Total liabilities and
stockholders' equity	$	6,107,590					$	6,110,883					$	5,910,687
Net interest income			$	54,888					$	55,857					$	52,381
Net yield on earning assets					3.98	%					4.03	%					3.89	%

(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:

Loan fees, net (includes PPP fees)			$	201					$	254					$	(41)


(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	$	78	$	47	$	67
Commercial, financial, and agriculture	702		720		$	135
Installment loans to individuals	26		4		$	4
Time deposits	131		240		$	21
	$	937	$	1,011	$	227

(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)


	Twelve Months Ended
	December 31, 2023						December 31, 2022
	Average				Yield/		Average				Yield/
	Balance		Interest		Rate		Balance		Interest		Rate
Assets:
Loan portfolio (1):
Residential real estate (2)	$	1,899,239	$	88,083	4.64	%	$	1,755,772	$	68,581	3.91	%
Commercial, financial, and agriculture (2)	1,935,038		120,783		6.24	%	1,781,132		75,390		4.23	%
Installment loans to individuals (2), (3)	66,636		3,828		5.74	%	46,622		2,567		5.51	%

Total loans	3,900,913		212,694		5.45	%	3,583,526		146,538		4.09	%
Securities:
Taxable	1,273,674		48,335		3.79	%	1,288,252		34,445		2.67	%
Tax-exempt (4)	175,383		4,878		2.78	%	218,588		6,217		2.84	%
Total securities	1,449,057		53,213		3.67	%	1,506,840		40,662		2.70	%
Deposits in depository institutions	142,299		6,382		4.48	%	357,184		3,794		1.06	%
Total interest-earning assets	5,492,269		272,289		4.96	%	5,447,550		190,994		3.51	%
Cash and due from banks	74,443						88,581
Premises and equipment, net	72,582						72,590
Goodwill and intangible assets	153,937						116,469
Other assets	329,198						271,685
Less: Allowance for loan losses	(22,089)						(17,687)
Total assets	$	6,100,340					$	5,979,188

Liabilities:
Interest-bearing demand deposits	$	1,291,234	$	11,048	0.86	%	$	1,150,007	$	1,234	0.11	%
Savings deposits	1,332,527		7,979		0.60	%	1,414,727		1,544		0.11	%
Time deposits (2)	969,329		18,260		1.88	%	983,046		4,666		0.47	%
Short-term borrowings	290,440		12,027		4.14	%	284,611		2,211		0.78	%
FHLB long-term advances	66,849		2,709		4.05	%	—		—		—	%
Total interest-bearing liabilities	3,950,379		52,023		1.32	%	3,832,391		9,655		0.25	%
Noninterest-bearing demand deposits	1,389,295						1,429,415
Other liabilities	125,377						98,553
Stockholders' equity	635,289						618,829
Total liabilities and
Stockholders' equity	$	6,100,340					$	5,979,188
Net interest income			$	220,266					$	181,339
Net yield on earning assets					4.01	%					3.33	%

(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)			$	1,366					$	568


(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	$	243	$	298
Commercial, financial, and agriculture	2,276		642
Installment loans to individuals	41		45
Time deposits	535		83
	$	3,095	$	1,068

(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															Twelve Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
	2023			2023			2023			2023			2022			2023			2022
Net Interest Income/Margin
Net interest income ("GAAP")	$	54,666		$	55,614		$	55,502		$	53,459		$	52,045		$	219,241		$	180,033
Taxable equivalent adjustment	223			243			255			308			336			1,025			1,306
Net interest income, fully taxable equivalent	$	54,889		$	55,857		$	55,757		$	53,767		$	52,381		$	220,266		$	181,339

Tangible Equity Ratio (period end)
Equity to assets ("GAAP")	10.98		%	10.04		%	10.35		%	10.48		%	9.83		%
Effect of goodwill and other intangibles, net	(2.41)		%	(2.49)		%	(2.45)		%	(2.43)		%	(1.81)		%
Tangible common equity to tangible assets	8.57		%	7.55		%	7.9		%	8.05		%	8.02		%

Return on Average Tangible Equity and Return on Assets Ratios (period end)
Return on average tangible equity ("GAAP")																23.8		%	20.3		%
Impact of merger related expenses																0.8		%	—		%
Impact of merger related provision																0.3		%	—		%
Return on tangible equity, excluding merger related expenses and provision																24.9		%	20.3		%

Return on assets ("GAAP")																1.87		%	1.71		%
Impact of merger related expenses																0.07		%	—		%
Impact of merger related provision																0.03		%	—		%
Return on assets, excluding merger related expenses and provision																1.97		%	1.71		%


Commercial Loan Information (period end)

Commercial Sector	Total		% of Total Loans		Average DSC	Average LTV

Natural Gas Extraction	$	23,743	0.58%		3.68	N/A
Natural Gas Distribution	20,000		0.49%		2.61	N/A
Masonry Contractors	24,190		0.59%		1.13	84%
Sheet Metal Work Manufacturing	25,887		0.63%		1.57	68%
Beer & Ale Merchant Wholesalers	25,672		0.62%		3.28	N/A
Gasoline Stations with Convenience Stores	45,945		1.11%		4.19	65%
Lessors of Residential Builidings & Dwellings	433,506		10.52%		1.89	66%
1-4 Family	186,341		4.52%		2.97	68%
Multi-Family	179,822		4.36%		1.84	66%
Lessors of Nonresidential Buildings	611,108		14.83%		1.70	65%
Office Buildings	43,735		1.06%		1.64	63%
Lessors of Mini-Warehouses & Self-Storage Units	50,898		1.23%		1.62	61%
Assisted Living Facilities	27,620		0.67%		1.38	57%
Hotels & Motels	357,572		8.68%		1.43	62%

	Average Balance		Median Balance
Commercial Loans	$	456	$	93
Commercial Real Estate Loans	517		120


CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued
(Unaudited) ($ in 000s, except per share data)


Estimated Uninsured Deposits by Deposit Type
	December 31, 2023		September 30, 2023
Noninterest-Bearing Demand Deposits	16	%	17	%

Interest-Bearing Deposits
Demand Deposits	7	%	11	%
Savings Deposits	11	%	11	%
Time Deposits	13	%	14	%
Total Deposits	12	%	13	%


The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities).


CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations, continued
(Unaudited) ($ in 000s, except per share data)

Net Growth in DDA Accounts
Year	New DDA Accounts	Net Number of New Accounts	Percentage

2023*	31,745	4,768	1.9	%
2022	28,442	4,544	1.9	%
2021	32,800	8,860	3.8	%
2020	30,360	6,740	3.0	%
2019	32,040	3,717	1.7	%
2018*	30,400	4,310	2.2	%
2017	28,525	2,711	1.4	%
2016	28,650	2,820	1.5	%


* - amounts exclude accounts added in connection with the acquisitions of Poage Bankshares, Inc. (2018), Farmers Deposit Bancorp, Inc.(2018) and Citizens Commerce Bancshares, Inc. (2023).