City Holding Company Announces Record Annual Earnings
01/24/2023 - 07:30 AM
CHARLESTON, W.Va. --(BUSINESS WIRE)--
City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia , today announced record net income of $102.1 million and record diluted earnings of $6.80 per share for the year ended December 31, 2022 . For the year ended December 31, 2022 , the Company achieved a return on assets of 1.71% and a return on tangible equity of 20.3% .
Net Interest Income
The Company’s net interest income increased from $155.6 million for the year ended December 31, 2021 to $180.0 million for the year ended December 31, 2022 . The Company’s tax equivalent net interest income increased $24.4 million , or 15.6% , from $156.9 million for the year ended December 31, 2021 to $181.3 million for the year ended December 31, 2022 . Net interest income increased by $12.0 million , $7.3 million and $3.4 million , respectively, due to increases in the yields on loans (net of loan fees and accretion), investments, and deposits in depository institutions, of 35 basis points, 47 basis points and 94 basis points, respectively, all due primarily to increases in the Federal Funds rate during 2022. In addition, higher average investment and loan balances ($189.2 million and $37.5 million , respectively) increased net interest income by $3.9 million and $1.8 million , respectively. These increases were partially offset by a decrease in loan fees associated with PPP loans of $3.5 million from 2021 and a decrease in accretion from fair value adjustments of $1.0 million . The Company’s reported net interest margin increased from 2.89% for the year ended December 31, 2021 to 3.33% for the year ended December 31, 2022 .
The Company’s net interest income increased from $48.8 million during the third quarter of 2022 to $52.0 million during the fourth quarter of 2022. During the fourth quarter of 2022, the Company’s tax equivalent net interest income increased $3.3 million , or 6.7% , to $52.4 million from $49.1 million during the third quarter of 2022. Net interest income increased by $4.3 million and $1.9 million , respectively, due to an increase in loan (net of loan fees and accretion) and investment yields of 46 basis points and 50 basis points, respectively, due to recent increases in the Federal Funds rate. In addition, the yield on deposits in depository institutions also increased by 94 basis points which increased net interest income by $0.4 million . These increases were partially offset by an increase in the cost of interest bearing liabilities (27 basis points) which decreased net interest income by $2.5 million and lower average deposits in depository institution balances ($126.7 million ) which decreased net interest income by $0.7 million . The Company’s reported net interest margin increased from 3.57% for the third quarter of 2022 to 3.89% for the fourth quarter of 2022.
Credit Quality
The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.21% , or $7.6 million , at December 31, 2021 to 0.17% , or $6.3 million at December 31, 2022 . Total past due loans increased from $6.8 million , or 0.19% of total loans outstanding, at December 31, 2021 to $9.2 million , or 0.25% of total loans outstanding, at December 31, 2022 .
As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a provision for credit losses of $0.5 million in the fourth quarter of 2022 and $0.5 million for the year ended December 31, 2022 , compared to no provision for credit losses for the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for year ended December 31, 2021 . The provision for the year ended December 31, 2022 , was a result of net charge-offs for the year that were partially offset by the repayment of a loan from a previous acquisition and release of the associated credit mark.
Non-interest Income
Non-interest income was $72.1 million for 2022 as compared to $69.6 million for 2021. The Company reported $1.6 million of unrealized fair value losses on the Company’s equity securities during 2022 compared to $0.3 million of realized security gains on the sale of investments and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021. Exclusive of these realized and unrealized gains and losses, non-interest income increased from $68.8 million for the year ended December 31, 2021 to $73.7 million for the year ended December 31, 2022 . This increase was largely attributable to an increase of $2.8 million , or 10.9% , in service charges and a $1.7 million , or 42.7% , increase in bank owned life insurance due to higher death benefit proceeds received in 2022 compared to 2021. In addition, trust and investment management fee income and bankcard revenues each increased $0.4 million from the year ended December 31, 2021 . These increases were partially offset by a decrease of $0.4 million in other income.
Non-interest income was $18.5 million during the quarter ended December 31, 2022 as compared to $17.6 million during the quarter ended December 31, 2021 . During the fourth quarter of 2022, the Company reported $0.3 million of unrealized fair value losses on the Company’s equity securities compared to $0.1 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2021. Exclusive of these unrealized fair value gains and losses, non-interest income increased from $17.6 million for the fourth quarter of 2021 to $18.8 million for the fourth quarter of 2022. This increase was largely attributable to higher bank owned life insurance due to higher death benefit proceeds received ($1.1 million ).
Non-interest Expenses
Non-interest expenses increased from $117.2 million for 2021 to $124.3 million for 2022. This increase was primarily due to an increase in salaries and employee benefit expenses ($4.7 million , due to higher salary adjustments during 2022, increased incentive compensation, and increased health insurance) and equipment and software related expenses ($1.3 million ). In addition, occupancy related expenses increased $0.6 million , advertising increased $0.3 million , and merger related expenses increased $0.3 million .
Non-interest expenses increased $4.0 million (13.8% ), from $28.6 million in the fourth quarter of 2021 to $32.6 million in the fourth quarter of 2022. This increase was largely due to an increase in salaries and employee benefits of $1.9 million due to increased incentive compensation, increased health insurance, and higher salary adjustments during 2022. In addition, other expenses increased $0.6 million ; equipment and software related expenses increased $0.6 million ; occupancy related expenses increased $0.3 million ; and merger related expenses increased $0.3 million .
Balance Sheet Trends
Loans increased $102.4 million (2.9% ) from December 31, 2021 to $3.64 billion at December 31, 2022 . PPP loans of $6.6 million at December 31, 2021 were fully repaid during 2022. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $109.0 million , (3.1% ), from December 31, 2021 to $3.64 billion at December 31, 2022 . Residential real estate loans increased $144.6 million (9.3% ); commercial and industrial loans increased $34.3 million (10.1% ) (excluding PPP loans); home equity loans increased $12.0 million (9.8% ); and consumer loans increased $7.9 million (19.3% ). These increases were partially offset by decreases in commercial real estate loans ($86.6 million , or 5.9% ).
Total average depository balances for the year ended December 31, 2022 increased $141.0 million , or 2.9% , as compared to the year ended December 31, 2021 . Average savings deposits increased $123.5 million , average noninterest bearing demand deposits increased $113.6 million , and average interest bearing demand deposits increased $78.4 million . These increases were partially offset by a decrease in average time deposits of $174.5 million .
Income Tax Expense
The Company’s effective income tax rate for the quarter and year ended December 31, 2022 was 18.2% and 19.8% , respectively, compared to 21.1% and 20.8% for the comparable periods in 2021.
Capitalization and Liquidity
The Company’s loan to deposit ratio was 74.9% and the loan to asset ratio was 62.0% at December 31, 2022 . The Company maintained investment securities totaling 26.0% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 67.7% of assets at December 31, 2022 . Time deposits fund 15.1% of assets at December 31, 2022 , but very few of these deposits are in accounts that have balances of more than $250,000 .
The Company continues to be strongly capitalized with tangible equity of $462 million at December 31, 2022 . Due primarily to unrealized security losses during the year ended December 31, 2022 , the Company’s tangible equity ratio decreased from 9.6% at December 31, 2021 to 8.0% at December 30, 2022 . However, unrealized security losses are not incorporated into measures of regulatory capital. At December 31, 2022 , City National Bank’s Leverage Ratio was 8.55% , its Common Equity Tier I ratio was 13.88% , its Tier I Capital ratio was 13.88% , and its Total Risk-Based Capital ratio was 14.28% . These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
On November 15, 2022 , the Board approved a quarterly cash dividend of $0.65 cents per share payable January 31, 2023 , to shareholders of record as of January 13, 2022 . During the year ended December 31, 2022 , the Company repurchased 325,000 common shares at a weighted average price of $81.50 per share as part of a one million share repurchase plan authorized by the Board of Directors in May 2022 . As of December 31, 2022 , the Company could repurchase approximately 817,000 shares under the current plan.
City Holding Company is the parent company of City National Bank of West Virginia . City National Bank operates 94 branches across West Virginia , Kentucky , Virginia , and Ohio .
Forward-Looking Information
This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management’s beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management’s control. Uncertainty, risks, changes in circumstances and other factors could cause the Company’s actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its December 31, 2022 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2022 results and will adjust the amounts if necessary .
CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2022
September 30, 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
December 31, 2022
December 31, 2021
Earnings
Net Interest Income (fully taxable equivalent)
$
52,381
$
49,108
$
41,611
$
38,239
$
40,956
$
181,339
$
156,906
Net Income available to common shareholders
30,672
27,374
22,683
21,342
23,386
102,071
88,080
Per Share Data
Earnings per share available to common shareholders:
Basic
$
2.06
$
1.84
$
1.51
$
1.41
$
1.54
$
6.81
$
5.67
Diluted
2.05
1.83
1.51
1.41
1.54
6.80
5.66
Weighted average number of shares (in thousands):
Basic
14,756
14,776
14,888
14,974
15,026
14,847
15,381
Diluted
14,785
14,800
14,909
15,002
15,056
14,873
15,407
Period-end number of shares (in thousands)
14,788
14,856
14,864
15,045
15,062
14,788
15,062
Cash dividends declared
$
0.65
$
0.65
$
0.60
$
0.60
$
0.60
$
2.50
$
2.34
Book value per share (period-end)
$
39.08
$
36.91
$
39.83
$
42.03
$
45.22
$
39.08
$
45.22
Tangible book value per share (period-end)
31.25
29.09
31.99
34.27
37.44
31.25
37.44
Market data:
High closing price
$
101.94
$
90.24
$
83.07
$
85.99
$
83.14
$
101.94
$
87.41
Low closing price
89.32
78.40
73.88
76.82
76.52
73.88
69.05
Period-end closing price
93.09
88.69
79.88
78.70
81.79
93.09
81.79
Average daily volume (in thousands)
75
58
87
59
52
70
57
Treasury share activity:
Treasury shares repurchased (in thousands)
69
9
208
38
131
325
760
Average treasury share repurchase price
$
93.12
$
80.24
$
78.33
$
78.09
$
78.93
$
81.50
$
77.21
Key Ratios (percent)
Return on average assets
2.08
%
1.83
%
1.51
%
1.42
%
1.56
%
1.71
%
1.49
%
Return on average tangible equity
27.3
%
21.8
%
18.1
%
15.3
%
16.7
%
20.3
%
15.3
%
Yield on interest earning assets
4.23
%
3.72
%
3.15
%
2.94
%
3.08
%
3.51
%
3.07
%
Cost of interest bearing liabilities
0.48
%
0.21
%
0.15
%
0.17
%
0.19
%
0.25
%
0.26
%
Net Interest Margin
3.89
%
3.57
%
3.04
%
2.82
%
2.94
%
3.33
%
2.89
%
Non-interest income as a percent of total revenue
26.5
%
27.2
%
30.9
%
32.4
%
30.2
%
28.6
%
30.8
%
Efficiency Ratio
45.3
%
46.3
%
50.5
%
51.7
%
48.3
%
48.2
%
51.3
%
Price/Earnings Ratio (a)
11.30
12.08
13.23
13.93
13.27
13.67
14.42
Capital (period-end)
Average Shareholders' Equity to Average Assets
9.57
%
10.32
%
10.26
%
11.25
%
11.25
%
Tangible equity to tangible assets
8.02
%
7.41
%
7.76
%
8.75
%
9.58
%
Consolidated City Holding Company risk based capital ratios (b):
CET I
16.23
%
15.82
%
15.85
%
16.18
%
16.08
%
Tier I
16.23
%
15.82
%
15.85
%
16.18
%
16.08
%
Total
16.62
%
16.22
%
16.26
%
16.60
%
16.51
%
Leverage
10.01
%
9.74
%
9.42
%
9.58
%
9.44
%
City National Bank risk based capital ratios (b):
CET I
13.88
%
14.68
%
14.80
%
14.82
%
14.35
%
Tier I
13.88
%
14.68
%
14.80
%
14.82
%
14.35
%
Total
14.28
%
15.07
%
15.21
%
15.24
%
14.78
%
Leverage
8.55
%
9.05
%
8.81
%
8.80
%
8.45
%
Other (period-end)
Branches
94
94
94
94
94
FTE
909
903
915
897
905
Assets per FTE (in thousands)
$
6,467
$
6,588
$
6,825
$
6,703
$
6,637
Deposits per FTE (in thousands)
5,357
5,492
5,621
5,574
5,445
(a) The price/earnings ratio is computed based on annualized quarterly earnings.
(b) December 31, 2022 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
Three Months Ended
Twelve Months Ended
December 31, 2022
September 30, 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
December 31, 2022
December 31, 2021
Interest Income
Interest and fees on loans
$
42,963
$
38,493
$
33,208
$
31,874
$
35,277
$
146,538
$
136,676
Interest on investment securities:
Taxable
11,119
9,556
7,547
6,223
5,753
34,445
23,071
Tax-exempt
1,262
1,228
1,205
1,216
1,226
4,911
5,027
Interest on deposits in depository institutions
1,244
1,530
782
238
217
3,794
693
Total Interest Income
56,588
50,807
42,742
39,551
42,473
189,688
165,467
Interest Expense
Interest on deposits
3,010
1,585
1,328
1,521
1,710
7,444
9,405
Interest on short-term borrowings
1,533
440
124
114
132
2,211
489
Total Interest Expense
4,543
2,025
1,452
1,635
1,842
9,655
9,894
Net Interest Income
52,045
48,782
41,290
37,916
40,631
180,033
155,573
Provision for (Recovery of) credit losses
500
730
-
(756
)
-
474
(3,165
)
Net Interest Income After Provision for (Recovery of) Credit Losses
51,545
48,052
41,290
38,672
40,631
179,559
158,738
Non-Interest Income
Net gains on sale of investment securities
4
-
-
-
-
4
312
Unrealized (losses) gains recognized on equity securities still held
(262
)
1
(601
)
(723
)
52
(1,585
)
504
Service charges
7,056
7,487
7,067
6,725
7,057
28,335
25,539
Bankcard revenue
6,791
7,052
7,062
6,444
6,762
27,349
26,987
Trust and investment management fee income
2,343
2,158
2,100
2,197
2,198
8,798
8,415
Bank owned life insurance
1,813
754
978
2,014
748
5,559
3,895
Other income
791
792
1,243
791
799
3,617
3,989
Total Non-Interest Income
18,536
18,244
17,849
17,448
17,616
72,077
69,641
Non-Interest Expense
Salaries and employee benefits
17,148
17,398
16,413
15,577
15,299
66,536
61,850
Occupancy related expense
2,725
2,664
2,620
2,709
2,429
10,718
10,083
Equipment and software related expense
3,341
2,949
2,732
2,769
2,733
11,791
10,486
FDIC insurance expense
413
416
409
435
400
1,673
1,583
Advertising
802
854
951
798
582
3,405
3,091
Bankcard expenses
1,356
1,405
1,665
1,606
1,576
6,032
6,455
Postage, delivery, and statement mailings
597
578
551
636
590
2,362
2,323
Office supplies
441
466
427
410
378
1,744
1,547
Legal and professional fees
610
532
525
527
405
2,194
2,279
Telecommunications
627
651
754
584
702
2,616
2,858
Repossessed asset losses (gains), net of expenses
54
(3
)
(32
)
40
(29
)
59
(57
)
Merger related expenses
268
-
-
-
-
268
-
Other expenses
4,203
3,591
3,674
3,436
3,559
14,904
14,687
Total Non-Interest Expense
32,585
31,501
30,689
29,527
28,624
124,302
117,185
Income Before Income Taxes
37,496
34,795
28,450
26,593
29,623
127,334
111,194
Income tax expense
6,824
7,421
5,767
5,251
6,237
25,263
23,114
Net Income Available to Common Shareholders
$
30,672
$
27,374
$
22,683
$
21,342
$
23,386
$
102,071
$
88,080
Distributed earnings allocated to common shareholders
$
9,521
$
9,564
$
8,837
$
8,943
$
8,949
$
36,619
$
34,901
Undistributed earnings allocated to common shareholders
20,857
17,555
13,643
12,199
14,211
64,494
52,336
Net earnings allocated to common shareholders
$
30,378
$
27,119
$
22,480
$
21,142
$
23,160
$
101,113
$
87,237
Average common shares outstanding
14,756
14,776
14,888
14,974
15,026
14,847
15,381
Shares for diluted earnings per share
14,785
14,800
14,909
15,002
15,056
14,873
15,407
Basic earnings per common share
$
2.06
$
1.84
$
1.51
$
1.41
$
1.54
$
6.81
$
5.67
Diluted earnings per common share
$
2.05
$
1.83
$
1.51
$
1.41
$
1.54
$
6.80
$
5.66
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
December 31, 2022
September 30 , 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
Assets
Cash and due from banks
$
68,333
$
65,051
$
90,449
$
100,877
$
101,804
Interest-bearing deposits in depository institutions
131,667
233,302
606,530
497,171
532,827
Cash and cash equivalents
200,000
298,353
696,979
598,048
634,631
Investment securities available-for-sale, at fair value
1,505,520
1,489,392
1,497,227
1,409,513
1,408,165
Other securities
23,807
24,372
24,383
24,785
25,531
Total investment securities
1,529,327
1,513,764
1,521,610
1,434,298
1,433,696
Gross loans
3,646,258
3,628,752
3,566,758
3,559,905
3,543,814
Allowance for credit losses
(17,108
)
(17,011
)
(17,015
)
(17,280
)
(18,166
)
Net loans
3,629,150
3,611,741
3,549,743
3,542,625
3,525,648
Bank owned life insurance
120,674
121,283
120,528
120,522
120,978
Premises and equipment, net
70,786
71,686
72,388
73,067
74,071
Accrued interest receivable
18,287
17,256
16,342
16,101
15,627
Net deferred tax assets
44,884
49,888
30,802
18,001
63
Intangible assets
115,735
116,081
116,428
116,774
117,121
Other assets
149,263
147,716
118,375
92,331
81,860
Total Assets
$
5,878,106
$
5,947,768
$
6,243,195
$
6,011,767
$
6,003,695
Liabilities
Deposits:
Noninterest-bearing
$
1,351,415
$
1,429,281
$
1,531,660
$
1,357,266
$
1,373,125
Interest-bearing:
Demand deposits
1,233,482
1,160,970
1,189,056
1,191,492
1,135,848
Savings deposits
1,396,869
1,427,785
1,435,645
1,425,528
1,347,448
Time deposits
888,100
939,769
985,567
1,024,559
1,068,915
Total deposits
4,869,866
4,957,805
5,141,928
4,998,845
4,925,336
Short-term borrowings
Customer repurchase agreements
290,964
304,807
402,368
288,483
312,458
Other liabilities
139,424
136,868
106,906
92,009
84,796
Total Liabilities
5,300,254
5,399,480
5,651,202
5,379,337
5,322,590
Stockholders' Equity
Preferred stock
-
-
-
-
-
Common stock
47,619
47,619
47,619
47,619
47,619
Capital surplus
170,980
170,138
169,557
170,206
170,942
Retained earnings
706,696
685,657
667,933
654,138
641,826
Cost of common stock in treasury
(215,955
)
(209,644
)
(209,133
)
(194,819
)
(193,542
)
Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale
(128,066
)
(141,997
)
(80,498
)
(41,229
)
17,745
Underfunded pension liability
(3,422
)
(3,485
)
(3,485
)
(3,485
)
(3,485
)
Total Accumulated Other Comprehensive (Loss) Income
(131,488
)
(145,482
)
(83,983
)
(44,714
)
14,260
Total Stockholders' Equity
577,852
548,288
591,993
632,430
681,105
Total Liabilities and Stockholders' Equity
$
5,878,106
$
5,947,768
$
6,243,195
$
6,011,767
$
6,003,695
Regulatory Capital
Total CET 1 capital
$
598,068
$
582,213
$
564,158
$
565,048
$
555,532
Total tier 1 capital
598,068
582,213
564,158
565,048
555,532
Total risk-based capital
612,654
596,708
578,657
579,807
570,336
Total risk-weighted assets
3,685,207
3,679,511
3,558,249
3,492,920
3,453,893
CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
December 31, 2022
September 30 , 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
Commercial and industrial
$
373,890
$
375,735
$
360,481
$
337,384
$
346,184
1-4 Family
116,192
109,710
108,765
108,424
107,873
Hotels
340,404
355,001
337,910
314,902
311,315
Multi-family
174,786
186,440
203,856
209,359
215,677
Non Residential Non-Owner Occupied
585,964
569,369
551,240
637,092
639,818
Non Residential Owner Occupied
174,961
177,673
180,188
200,180
204,233
Commercial real estate (1)
1,392,307
1,398,193
1,381,959
1,469,957
1,478,916
Residential real estate (2)
1,693,523
1,678,770
1,651,005
1,588,860
1,548,965
Home equity
134,317
130,837
125,742
121,460
122,345
Consumer
48,806
41,902
44,580
39,778
40,901
DDA overdrafts
3,415
3,315
2,991
2,466
6,503
Gross Loans
$
3,646,258
$
3,628,752
$
3,566,758
$
3,559,905
$
3,543,814
Construction loans included in:
(1) - Commercial real estate loans
$
4,130
$
4,125
$
6,767
$
14,877
$
11,783
(2) - Residential real estate loans
21,122
19,333
18,751
16,253
17,252
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
Three Months Ended
Twelve Months Ended
December 31, 2022
September 30 , 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
December 31, 2022
December 31, 2021
Allowance for Credit Losses
Balance at beginning of period
$
17,011
$
17,015
$
17,280
$
18,166
$
18,751
$
18,166
$
24,549
Charge-offs:
Commercial and industrial
(120
)
(408
)
-
(34
)
-
(562
)
(245
)
Commercial real estate
(31
)
-
(24
)
-
(276
)
(55
)
(2,387
)
Residential real estate
(66
)
(93
)
(56
)
(50
)
(68
)
(265
)
(265
)
Home equity
(189
)
(71
)
(19
)
-
(58
)
(279
)
(177
)
Consumer
(15
)
(16
)
(9
)
(23
)
(13
)
(63
)
(242
)
DDA overdrafts
(670
)
(719
)
(604
)
(631
)
(635
)
(2,624
)
(2,151
)
Total charge-offs
(1,091
)
(1,307
)
(712
)
(738
)
(1,050
)
(3,848
)
(5,467
)
Recoveries:
Commercial and industrial
94
149
32
59
31
334
171
Commercial real estate
120
9
25
53
27
207
224
Residential real estate
49
1
4
45
7
99
127
Home equity
34
2
3
17
6
56
90
Consumer
31
29
19
28
40
107
255
DDA overdrafts
360
383
364
406
354
1,513
1,382
Total recoveries
688
573
447
608
465
2,316
2,249
Net charge-offs
(403
)
(734
)
(265
)
(130
)
(585
)
(1,532
)
(3,218
)
Provision for (recovery of) credit losses
500
730
-
(756
)
-
474
(3,165
)
Balance at end of period
$
17,108
$
17,011
$
17,015
$
17,280
$
18,166
$
17,108
$
18,166
Loans outstanding
$
3,646,258
$
3,628,752
$
3,566,758
$
3,559,905
$
3,543,814
Allowance as a percent of loans outstanding
0.47
%
0.47
%
0.48
%
0.49
%
0.51
%
Allowance as a percent of non-performing loans
317.3
%
320.5
%
292.6
%
331.3
%
290.1
%
Average loans outstanding
$
3,648,996
$
3,596,523
$
3,559,713
$
3,527,393
$
3,522,272
$
3,583,526
$
3,545,978
Net charge-offs (annualized) as a percent of average loans outstanding
0.04
%
0.08
%
0.03
%
0.01
%
0.07
%
0.04
%
0.09
%
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
December 31, 2022
September 30, 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
Nonaccrual Loans
Residential real estate
$
1,969
$
2,089
$
1,561
$
1,786
$
2,809
Home equity
55
140
54
99
40
Commercial and industrial
1,015
785
1,360
1,069
996
Commercial real estate
2,166
2,293
2,783
2,241
2,373
Consumer
-
-
-
-
-
Total nonaccrual loans
5,205
5,307
5,758
5,195
6,218
Accruing loans past due 90 days or more
187
-
58
21
43
Total non-performing loans
5,392
5,307
5,816
5,216
6,261
Other real estate owned
909
1,071
946
1,099
1,319
Total non-performing assets
$
6,301
$
6,378
$
6,762
$
6,315
$
7,580
Non-performing assets as a percent of loans and other real estate owned
0.17
%
0.18
%
0.19
%
0.18
%
0.21
%
Past Due Loans
Residential real estate
$
7,091
$
3,452
$
5,298
$
4,976
$
5,321
Home equity
650
521
282
505
618
Commercial and industrial
234
221
130
56
336
Commercial real estate
710
221
46
744
22
Consumer
100
27
49
32
60
DDA overdrafts
391
561
430
392
489
Total past due loans
$
9,176
$
5,003
$
6,235
$
6,705
$
6,846
Total past due loans as a percent of loans outstanding
0.25
%
0.14
%
0.17
%
0.19
%
0.19
%
Troubled Debt Restructurings ("TDRs")
Residential real estate
$
15,857
$
15,657
$
16,022
$
16,182
$
16,943
Home equity
1,286
1,614
1,649
1,694
1,784
Commercial and industrial
333
354
381
397
414
Commercial real estate
102
104
107
1,890
1,914
Consumer
64
68
80
194
225
Total TDRs
$
17,642
$
17,797
$
18,239
$
20,357
$
21,280
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
Three Months Ended
December 31, 2022
September 30, 2022
December 31, 2021
Average
Yield/
Average
Yield/
Average
Yield/
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Assets:
Loan portfolio (1) :
Residential real estate (2)
$
1,824,327
$
18,910
4.11
%
$
1,792,365
$
17,640
3.90
%
$
1,645,167
$
15,692
3.78
%
Commercial, financial, and agriculture (2)
1,773,937
23,346
5.22
%
1,759,567
20,092
4.53
%
1,831,461
18,740
4.06
%
Installment loans to individuals (2), (3)
50,732
646
5.05
%
44,591
683
6.08
%
45,644
691
6.01
%
Previously securitized loans (4)
***
63
***
***
78
***
***
154
***
Total loans
3,648,996
42,965
4.67
%
3,596,523
38,493
4.25
%
3,522,272
35,277
3.97
%
Securities:
Taxable
1,315,453
11,118
3.35
%
1,359,207
9,557
2.79
%
1,171,340
5,753
1.95
%
Tax-exempt (5)
211,326
1,597
3.00
%
215,219
1,555
2.87
%
239,096
1,551
2.57
%
Total securities
1,526,779
12,715
3.30
%
1,574,426
11,112
2.80
%
1,410,436
7,304
2.05
%
Deposits in depository institutions
162,732
1,245
3.04
%
289,460
1,529
2.10
%
588,678
217
0.15
%
Total interest-earning assets
5,338,507
56,925
4.23
%
5,460,409
51,134
3.72
%
5,521,386
42,798
3.08
%
Cash and due from banks
69,223
81,202
98,111
Premises and equipment, net
71,482
72,196
74,847
Goodwill and intangible assets
115,952
116,297
117,349
Other assets
332,855
278,527
216,780
Less: Allowance for credit losses
(17,332
)
(17,224
)
(18,756
)
Total assets
$
5,910,687
$
5,991,407
$
6,009,717
Liabilities:
Interest-bearing demand deposits
$
1,150,327
$
684
0.24
%
$
1,151,122
$
272
0.09
%
$
1,113,693
$
131
0.05
%
Savings deposits
1,412,246
829
0.23
%
1,431,591
358
0.10
%
1,338,747
173
0.05
%
Time deposits (2)
916,845
1,497
0.65
%
964,447
956
0.39
%
1,087,280
1,406
0.51
%
Short-term borrowings
303,599
1,534
2.00
%
270,310
440
0.65
%
314,937
132
0.17
%
Total interest-bearing liabilities
3,783,017
4,544
0.48
%
3,817,470
2,026
0.21
%
3,854,657
1,842
0.19
%
Noninterest-bearing demand deposits
1,428,013
1,455,123
1,394,599
Other liabilities
134,075
100,303
84,071
Stockholders' equity
565,582
618,511
676,390
Total liabilities and
stockholders' equity
$
5,910,687
$
5,991,407
$
6,009,717
Net interest income
$
52,381
$
49,108
$
40,956
Net yield on earning assets
3.89
%
3.57
%
2.94
%
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
Loan fees, net (includes PPP fees)
$
(41
)
$
308
$
1,106
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
Residential real estate
$
67
$
64
$
149
Commercial, financial, and agriculture
135
103
243
Installment loans to individuals
4
7
15
Time deposits
21
21
48
$
227
$
195
$
455
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012 , the carrying value of the Company's previously securitized loans was reduced to $0 .
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21% .
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
Twelve Months Ended
December 31, 2022
December 31, 2021
Average
Yield/
Average
Yield/
Balance
Interest
Rate
Balance
Interest
Rate
Assets:
Loan portfolio (1) :
Residential real estate (2)
$
1,755,772
$
68,208
3.88
%
$
1,658,710
$
64,492
3.89
%
Commercial, financial, and agriculture (2)
1,781,132
75,390
4.23
%
1,838,560
68,784
3.74
%
Installment loans to individuals (2), (3)
46,622
2,567
5.51
%
48,708
2,831
5.81
%
Previously securitized loans (4)
***
373
***
***
568
***
Total loans
3,583,526
146,538
4.09
%
3,545,978
136,675
3.85
%
Securities:
Taxable
1,288,252
34,445
2.67
%
1,075,550
23,071
2.15
%
Tax-exempt (5)
218,588
6,217
2.84
%
242,125
6,362
2.63
%
Total securities
1,506,840
40,662
2.70
%
1,317,675
29,433
2.23
%
Deposits in depository institutions
357,184
3,794
1.06
%
568,928
693
0.12
%
Total interest-earning assets
5,447,550
190,994
3.51
%
5,432,581
166,801
3.07
%
Cash and due from banks
88,581
92,847
Premises and equipment, net
72,590
76,069
Goodwill and intangible assets
116,469
117,899
Other assets
271,685
216,493
Less: Allowance for credit losses
(17,687
)
(21,922
)
Total assets
$
5,979,188
$
5,913,967
Liabilities:
Interest-bearing demand deposits
$
1,150,007
$
1,234
0.11
%
$
1,071,628
$
504
0.05
%
Savings deposits
1,414,727
1,544
0.11
%
1,291,225
689
0.05
%
Time deposits (2)
983,046
4,666
0.47
%
1,157,502
8,213
0.71
%
Short-term borrowings
284,611
2,211
0.78
%
298,413
489
0.16
%
Total interest-bearing liabilities
3,832,391
9,655
0.25
%
3,818,768
9,895
0.26
%
Noninterest-bearing demand deposits
1,429,415
1,315,801
Other liabilities
98,553
84,377
Stockholders' equity
618,829
695,021
Total liabilities and
stockholders' equity
$
5,979,188
$
5,913,967
Net interest income
$
181,339
$
156,906
Net yield on earning assets
3.33
%
2.89
%
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
Loan fees, net (includes PPP fees)
$
568
$
3,550
(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:
Residential real estate
$
298
$
620
Commercial, financial, and agriculture
642
1,198
Installment loans to individuals
45
87
Time deposits
83
193
$
1,068
$
2,098
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012 , the carrying value of the Company's previously securitized loans was reduced to $0 .
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21% .
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited) ($ in 000s, except per share data)
Three Months Ended
Twelve Months Ended
December 31, 2022
September 30, 2022
June 30 , 2022
March 31 , 2022
December 31, 2021
December 31, 2022
December 31, 2021
Net Interest Income/Margin
Net interest income ("GAAP")
$
52,045
$
48,782
$
41,290
$
37,916
$
40,631
$
180,033
$
155,573
Taxable equivalent adjustment
336
326
321
323
325
1,306
1,333
Net interest income, fully taxable equivalent
$
52,381
$
49,108
$
41,611
$
38,239
$
40,956
$
181,339
$
156,906
Average interest earning assets
$
5,338,507
$
5,460,409
$
5,485,604
$
5,507,397
$
5,521,386
$
5,447,550
$
5,432,581
Net Interest Margin
3.89
%
3.57
%
3.04
%
2.82
%
2.94
%
3.33
%
2.89
%
Accretion related to fair value adjustments
-0.02
%
-0.01
%
-0.02
%
-0.03
%
-0.03
%
-0.02
%
-0.04
%
Net Interest Margin (excluding accretion)
3.87
%
3.56
%
3.02
%
2.79
%
2.91
%
3.31
%
2.85
%
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")
9.83
%
9.22
%
9.48
%
10.52
%
11.34
%
Effect of goodwill and other intangibles, net
-1.81
%
-1.81
%
-1.72
%
-1.77
%
-1.76
%
Tangible common equity to tangible assets
8.02
%
7.41
%
7.76
%
8.75
%
9.58
%
View source version on businesswire.com : https://www.businesswire.com/news/home/20230120005336/en/
David L. Bumgarner , Executive Vice President and Chief Financial Officer
(304) 769-1169
Source: City Holding Company