City Holding Company Announces Annual Earnings

Rhea-AI Summary

City Holding Company (NASDAQ:CHCO) reported net income of $88.1 million and record diluted earnings of $5.66 per share for the year ended December 31, 2021. Net interest income increased slightly to $155.6 million, but a decline in net interest margin from 3.16% to 2.89% raised concerns. Non-interest income fell to $69.6 million from $82.7 million, largely due to a one-time gain in 2020. However, credit quality improved with a decrease in nonperforming assets to 0.21% of total loans. The company also announced a 3.45% dividend increase, reflecting ongoing shareholder returns.

Positive

• Record diluted earnings of $5.66 per share.
• Credit quality improved with nonperforming assets decreasing to 0.21%.
• Increased average depository balances by $486.5 million (11.2%).
• 3.45% increase in quarterly cash dividend to $0.60 per share.

Negative

• Net interest margin declined to 2.89%, down from 3.16%.
• Non-interest income decreased to $69.6 million from $82.7 million, impacted by prior year one-time gains.
• Total loans decreased by $78.3 million (2.2%), with declines in several loan categories.

CHARLESTON, W. Va.--(BUSINESS WIRE)-- City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.0 billion bank holding company headquartered in Charleston, West Virginia, today announced net income of $88.1 million and record diluted earnings of $5.66 per share for the year ended December 31, 2021.

Net Interest Income

The Company’s net interest income increased from $154.6 million for the year ended December 31, 2020 to $155.6 million for the year ended December 31, 2021. The Company’s tax equivalent net interest income increased $1.2 million, or 0.8%, from $155.7 million for the year ended December 31, 2020 to $156.9 million for the year ended December 31, 2021. The Company recognized $4.0 million of loan fees associated with PPP loans during 2021 as compared to $1.6 million during 2020. However, lower loan yields (which fell 29 basis points) decreased net interest income by $10.0 million. Additionally, lower average loan balances ($95.6 million) lowered net interest income by $4.2 million and a decrease in accretion from fair value adjustments decreased interest income by $1.7 million. Higher investment balances (which increased $262.2 million) increased net interest income by $7.2 million, while investment yields (which decreased by 45 basis points) decreased net interest income by $6.0 million. Lower rates paid on interest bearing liabilities (40 basis points) and lower average time deposit balances (down $172.3 million) increased net interest income by $11.7 million and $2.6 million, respectively. The Company’s reported net interest margin declined from 3.16% for the year ended December 31, 2020 to 2.89% for the year ended December 31, 2021. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 2.85% for the year ended December 31, 2021 and 3.08% for the year ended December 31, 2020.

The Company’s net interest income increased from $39.5 million during the third quarter of 2021 to $40.6 million during the fourth quarter of 2021. During the fourth quarter of 2021, the Company’s tax equivalent net interest income increased $1.1 million, or 2.8%, to $40.9 million from $39.8 million during the third quarter of 2021. An increase in loan yields (which increased 16 basis points), largely due to interest recoveries on a loan that previously had been classified as a nonperforming loan, increased net interest income by $1.4 million, and lower rates paid on time deposits (which decreased 7 basis points) increased overall net interest income by $0.2 million. These increases were partially offset by lower investment yields (17 basis points) which lowered net interest income by $0.6 million. The Company’s reported net interest margin increased from 2.89% for the third quarter of 2021 to 2.94% for the fourth quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.91% for the quarter ended December 31, 2021 and 2.86% for the quarter ended September 30, 2021.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.38% at December 31, 2020 to 0.21% at December 31, 2021. Total nonperforming assets decreased from $13.9 million at December 31, 2020 to $7.6 million at December 31, 2021. Total past due loans decreased from $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020 to $6.8 million, or 0.19% of total loans outstanding, at December 31, 2021.

As a result of the Company’s quarterly analysis of the adequacy of the ACL, the Company did not record a provision for credit losses in the fourth quarter of 2021 and a recovery of credit losses of $3.2 million for the year ended December 31, 2021, compared to a provision for credit losses of $0.5 million and $10.7 million for the comparable periods in 2020. The determination of the Company’s allowance for credit losses is largely dependent on expected unemployment ranges. Due to improvements in the outlook for unemployment ranges utilized by the Company and adjustments to other qualitative and other factors, during 2021 the Company partially recovered a portion of the provision for credit losses incurred in the quarter ended March 31, 2020 related to the COVID-19 pandemic.

Non-interest Income

Non-interest income was $69.6 million for 2021 as compared to $82.7 million for 2020. During 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605 shares) in a cash transaction that resulted in a pre-tax gain of $17.8 million, or $0.84 diluted per share on an after-tax basis. Additionally, the Company reported $0.3 million of realized security gains on the sale of investment securities and $0.5 million of unrealized fair value gains on the Company’s equity securities during 2021 compared to $0.9 million of unrealized fair value losses on the Company’s equity securities during 2020. Exclusive of these items, non-interest income increased from $65.6 million for the year ended December 31, 2020 to $68.8 million for the year ended December 31, 2021. This increase was largely attributable to an increase of $3.9 million, or 17.0%, in bankcard revenues and a $0.7 million, or 8.8%, increase in trust and investment management fee income. These increases were partially offset by a decrease of $0.7 million, or 15.0%, in other income and a decrease of $0.5 million in bank owned life insurance due to lower death benefit proceeds received during 2021 compared to 2020.

Non-interest income was $17.6 million during the quarter ended December 31, 2021 as compared to $17.7 million during the quarter ended December 31, 2020. During the fourth quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.8 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2020. Exclusive of these unrealized fair value gains, non-interest income increased from $16.9 million for the fourth quarter of 2020 to $17.6 million for the fourth quarter of 2021. This increase was largely attributable to higher bankcard revenues ($0.8 million, or 12.9%) and service charges ($0.3 million, or 4.2%). These increases were partially offset by a decrease in other income ($0.3 million).

Non-interest Expenses

Non-interest expenses increased from $115.3 million for 2020 to $117.2 million for 2021. This increase was primarily due to an increase in telecommunication expenses ($0.7 million), FDIC insurance expense ($0.7 million), bankcard expenses ($0.6 million), occupancy related expenses ($0.3 million), advertising expenses ($0.3 million), and equipment and software related expense ($0.3 million). These increases were partially offset by a decrease in other expenses ($0.6 million) and repossessed asset gains ($0.3 million).

Non-interest expenses remained level at $28.6 million for both the quarter ended December 31, 2020 and the quarter ended December 31, 2021. A decrease in salaries and employee benefits expense of $0.7 million was essentially offset by increases in other expenses ($0.2 million), telecommunication expense ($0.2 million), and bankcard expenses ($0.1 million).

Balance Sheet Trends

Loans decreased $78.3 million (2.2%) from December 31, 2020 to $3.54 billion at December 31, 2021. PPP loans decreased $48.9 million from $55.4 million at December 31, 2020 to $6.6 million at December 31, 2021. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $29.4 million, (0.8%), from December 31, 2020 to $3.54 billion at December 31, 2021. Residential real estate loans decreased $38.7 million (2.4%); home equity loans decreased $14.1 million (10.4%); and consumer loans decreased $6.8 million (14.2%). These decreases were partially offset by increases in commercial and industrial loans ($22.1 million, or 7.5%) (excluding PPP loans).

Total average depository balances for the year ended December 31, 2021 increased $486.5 million, or 11.2%, as compared to the year ended December 31, 2020. Average noninterest bearing demand deposits increased $280.0 million, average savings deposits increased $219.5 million, and average interest bearing demand deposits increased $159.3 million. These increases were partially offset by a decrease in average time deposits of $172.3 million. From December 31, 2020, to December 31, 2021, total demand deposit account households increased 2.6% and total demand deposit accounts increased 2.5%.

Income Tax Expense

The Company’s effective income tax rate for the quarter and year ended December 31, 2021 was 21.1% and 20.8%, respectively, compared to 17.0% and 19.5% for the comparable periods in 2020.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 72.0% and the loan to asset ratio was 59.0% at December 31, 2021. The Company maintained investment securities totaling 23.9% of assets as of the same date. Because interest rates remain extremely low, at December 31, 2021 the company maintained significant cash and cash equivalent assets which totaled 10.5% of assets. The Company’s deposit mix is weighted toward checking and saving accounts that fund 64.2% of assets at December 31, 2021. Time deposits fund 17.8% of assets at December 31, 2021, 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 $564 million at December 31, 2021. Due to the continued influx of deposits during 2021, the Company’s tangible equity ratio decreased from 10.3% at December 31, 2020 to 9.6% at December 31, 2021. At December 31, 2021, City National Bank’s Leverage Ratio was 8.45%, its Common Equity Tier I ratio was 14.35%, its Tier I Capital ratio was 14.35%, and its Total Risk-Based Capital ratio was 14.78%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On November 19, 2021, the Board approved a quarterly cash dividend of $0.60 cents per share payable January 31, 2022, to shareholders of record as of January 14, 2022. This represents a 3.45% increase from the $0.58 per share dividend paid on October 29, 2021. During the year ended December 31, 2021, the Company repurchased 760,000 common shares at a weighted average price of $77.21 per share as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of December 31, 2021, the Company could repurchase approximately 315,000 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, 2020 under “ITEM 1A Risk Factors” and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company’s business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company’s work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers’ performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its December 31, 2021 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2021 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
		Three Months Ended																				Twelve Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Earnings
Net Interest Income (fully taxable equivalent)		$	40,956			$	39,822			$	38,257			$	37,871			$	38,514			$	156,906			$	155,683
Net Income available to common shareholders			23,386				22,732				22,148				19,814				22,222				88,080				89,595
Per Share Data
Earnings per share available to common shareholders:
Basic		$	1.54			$	1.47			$	1.41			$	1.25			$	1.40			$	5.67			$	5.55
Diluted			1.54				1.47				1.41				1.25				1.40				5.66				5.55
Weighted average number of shares (in thousands):
Basic			15,026				15,279				15,573				15,656				15,708				15,381				15,975
Diluted			15,056				15,302				15,594				15,687				15,733				15,407				15,995
Period-end number of shares (in thousands)			15,062				15,192				15,527				15,724				15,768				15,062				15,768
Cash dividends declared		$	0.60			$	0.58			$	0.58			$	0.58			$	0.58			$	2.34			$	2.29
Book value per share (period-end)		$	45.22			$	44.58			$	44.79			$	43.99			$	44.47			$	45.22			$	44.47
Tangible book value per share (period-end)			37.44				36.85				37.20				36.47				36.94				37.44				36.94
Market data:
High closing price		$	83.14			$	79.99			$	83.85			$	87.41			$	70.77			$	87.41			$	82.40
Low closing price			76.52				72.29				74.44				69.05				56.98				69.05				55.18
Period-end closing price			81.79				77.91				75.24				81.78				69.55				81.79				69.55
Average daily volume (in thousands)			52				53				61				63				56				57				70
Treasury share activity:
Treasury shares repurchased (in thousands)			131				337				217				75				81				760				573
Average treasury share repurchase price		$	78.93			$	75.65			$	78.75			$	76.71			$	60.32			$	77.21			$	63.68
Key Ratios (percent)
Return on average assets			1.56	%			1.53	%			1.49	%			1.38	%			1.59	%			1.49	%			1.66	%
Return on average tangible equity			16.7	%			15.7	%			15.2	%			13.5	%			15.3	%			15.3	%			15.6	%
Yield on interest earning assets			3.08	%			3.04	%			3.00	%			3.17	%			3.32	%			3.07	%			3.64	%
Cost of interest bearing liabilities			0.19	%			0.22	%			0.27	%			0.37	%			0.47	%			0.26	%			0.66	%
Net Interest Margin			2.94	%			2.89	%			2.81	%			2.91	%			2.99	%			2.89	%			3.16	%
Non-interest income as a percent of total revenue			30.2	%			31.1	%			31.0	%			30.4	%			30.7	%			30.8	%			34.8	%
Efficiency Ratio			48.3	%			50.0	%			52.8	%			54.3	%			51.0	%			51.3	%			51.3	%
Price/Earnings Ratio (a)			13.27				13.22				13.35				16.30				12.41				14.42				12.52
Capital (period-end)
Average Shareholders' Equity to Average Assets			11.25	%			11.69	%			11.81	%			12.30	%			12.46	%
Tangible equity to tangible assets			9.58	%			9.59	%			9.98	%			9.93	%			10.33	%
Consolidated City Holding Company risk based capital ratios (b):
CET I			16.08	%			16.11	%			16.40	%			16.76	%			16.18	%
Tier I			16.08	%			16.11	%			16.40	%			16.76	%			16.18	%
Total			16.51	%			16.56	%			16.88	%			17.33	%			16.75	%
Leverage			9.44	%			9.46	%			9.70	%			10.06	%			10.22	%
City National Bank risk based capital ratios (b):
CET I			14.35	%			14.76	%			14.82	%			14.75	%			14.10	%
Tier I			14.35	%			14.76	%			14.82	%			14.75	%			14.10	%
Total			14.78	%			15.21	%			15.30	%			15.33	%			14.68	%
Leverage			8.45	%			8.73	%			8.80	%			8.91	%			8.97	%
Other (period-end)
Branches			94				94				94				94				94
FTE			905				921				912				916				926
Assets per FTE (in thousands)		$	6,637			$	6,463			$	6,477			$	6,434			$	6,219
Deposits per FTE (in thousands)			5,445				5,308				5,271				5,236				5,024
(a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes).
(b) December 31, 2021 risk-based capital ratios are estimated.

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
		Three Months Ended																				Twelve Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Interest Income
Interest and fees on loans		$	35,277			$	33,961			$	33,114			$	34,324			$	35,685			$	136,676			$	150,498
Interest on investment securities:
Taxable			5,753				6,144				5,932				5,242				5,500				23,071				23,355
Tax-exempt			1,226				1,257				1,291				1,253				1,254				5,027				3,914
Interest on deposits in depository institutions			217				196				162				118				60				693				492
Total Interest Income			42,473				41,558				40,499				40,937				42,499				165,467				178,259
Interest Expense
Interest on deposits			1,710				1,955				2,460				3,280				4,198				9,405				22,522
Interest on short-term borrowings			132				115				125				117				120				489				993
Interest on long-term debt			-				-				-				-				-				-				100
Total Interest Expense			1,842				2,070				2,585				3,397				4,318				9,894				23,615
Net Interest Income			40,631				39,488				37,914				37,540				38,181				155,573				154,644
(Recovery of) provision for credit losses			-				(725	)			(2,000	)			(440	)			474				(3,165	)			10,722
Net Interest Income After (Recovery of) Provision for Credit Losses			40,631				40,213				39,914				37,980				37,707				158,738				143,922
Non-Interest Income
Net gains on sale of investment securities			-				-				29				283				6				312				62
Unrealized gains (losses) recognized on equity securities still held			52				93				410				(51	)			835				504				(863	)
Service charges			7,057				6,706				5,895				5,881				6,771				25,539				25,733
Bankcard revenue			6,762				6,791				7,221				6,213				5,991				26,987				23,059
Trust and investment management fee income			2,198				2,172				2,012				2,033				2,162				8,415				7,736
Bank owned life insurance			748				747				940				1,460				813				3,895				4,424
Sale of VISA shares			-				-				-				-				-				-				17,837
Other income			799				1,438				941				811				1,143				3,989				4,692
Total Non-Interest Income			17,616				17,947				17,448				16,630				17,721				69,641				82,680
Non-Interest Expense
Salaries and employee benefits			15,299				15,321				15,559				15,671				15,989				61,850				62,074
Occupancy related expense			2,429				2,507				2,525				2,622				2,447				10,083				9,765
Equipment and software related expense			2,733				2,554				2,655				2,544				2,660				10,486				10,200
FDIC insurance expense			400				396				382				405				363				1,583				884
Advertising			582				804				824				881				538				3,091				2,776
Bankcard expenses			1,576				1,549				1,746				1,584				1,443				6,455				5,893
Postage, delivery, and statement mailings			590				573				568				592				546				2,323				2,268
Office supplies			378				406				371				392				413				1,547				1,556
Legal and professional fees			405				610				589				675				438				2,279				2,176
Telecommunications			702				790				676				690				540				2,858				2,129
Repossessed asset (gains) losses, net of expenses			(29	)			(108	)			1				79				(68	)			(57	)			245
Other expenses			3,559				3,776				3,678				3,674				3,332				14,687				15,324
Total Non-Interest Expense			28,624				29,178				29,574				29,809				28,641				117,185				115,290
Income Before Income Taxes			29,623				28,982				27,788				24,801				26,787				111,194				111,312
Income tax expense			6,237				6,250				5,640				4,987				4,565				23,114				21,717
Net Income Available to Common Shareholders		$	23,386			$	22,732			$	22,148			$	19,814			$	22,222			$	88,080			$	89,595
Distributed earnings allocated to common shareholders		$	8,949			$	8,726			$	8,921			$	9,037			$	9,053			$	34,901			$	35,745
Undistributed earnings allocated to common shareholders			14,211				13,786				13,021				10,598				12,947				52,336				52,963
Net earnings allocated to common shareholders		$	23,160			$	22,512			$	21,942			$	19,635			$	22,000			$	87,237			$	88,708
Average common shares outstanding			15,026				15,279				15,573				15,656				15,708				15,381				15,975
Shares for diluted earnings per share			15,056				15,302				15,594				15,687				15,733				15,407				15,995
Basic earnings per common share		$	1.54			$	1.47			$	1.41			$	1.25			$	1.40			$	5.67			$	5.55
Diluted earnings per common share		$	1.54			$	1.47			$	1.41			$	1.25			$	1.40			$	5.66			$	5.55

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Assets
Cash and due from banks		$	101,804			$	103,841			$	97,523			$	97,709			$	77,412
Interest-bearing deposits in depository institutions			532,827				535,708				512,367				659,090				451,247
Cash and cash equivalents			634,631				639,549				609,890				756,799				528,659
Investment securities available-for-sale, at fair value			1,408,165				1,372,077				1,339,436				1,183,253				1,176,797
Other securities			25,531				25,497				25,793				29,174				29,364
Total investment securities			1,433,696				1,397,574				1,365,229				1,212,427				1,206,161
Gross loans			3,543,814				3,521,925				3,529,416				3,546,723				3,622,119
Allowance for credit losses			(18,166	)			(18,751	)			(20,016	)			(24,076	)			(24,549	)
Net loans			3,525,648				3,503,174				3,509,400				3,522,647				3,597,570
Bank owned life insurance			120,978				120,238				119,491				118,976				118,243
Premises and equipment, net			74,071				75,156				76,263				76,529				76,925
Accrued interest receivable			15,627				16,224				15,967				16,231				15,793
Net deferred tax assets			63				90				-				1,395				-
Intangible assets			117,121				117,489				117,857				118,224				118,592
Other assets			81,860				82,419				89,958				71,142				96,697
Total Assets		$	6,003,695			$	5,951,913			$	5,904,055			$	5,894,370			$	5,758,640
Liabilities
Deposits:
Noninterest-bearing		$	1,373,125			$	1,311,464			$	1,279,932			$	1,244,175			$	1,176,990
Interest-bearing:
Demand deposits			1,135,848				1,139,033				1,070,004				1,077,749				1,027,201
Savings deposits			1,347,448				1,332,910				1,301,219				1,265,038				1,188,003
Time deposits			1,068,915				1,104,069				1,153,391				1,209,873				1,260,022
Total deposits			4,925,336				4,887,476				4,804,546				4,796,835				4,652,216
Short-term borrowings
Customer repurchase agreements			312,458				296,642				311,316				316,003				295,956
Net deferred tax liabilities			-				-				2,310				-				3,202
Other liabilities			84,796				90,499				90,407				89,847				106,160
Total Liabilities			5,322,590				5,274,617				5,208,579				5,202,685				5,057,534
Stockholders' Equity
Preferred stock			-				-				-				-				-
Common stock			47,619				47,619				47,619				47,619				47,619
Capital surplus			170,942				170,300				169,674				170,526				171,304
Retained earnings			641,826				627,463				613,553				600,396				589,988
Cost of common stock in treasury			(193,542	)			(183,303	)			(157,936	)			(142,484	)			(139,038	)
Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale			17,745				20,878				28,227				21,289				36,894
Underfunded pension liability			(3,485	)			(5,661	)			(5,661	)			(5,661	)			(5,661	)
Total Accumulated Other Comprehensive Income			14,260				15,217				22,566				15,628				31,233
Total Stockholders' Equity			681,105				677,296				695,476				691,685				701,106
Total Liabilities and Stockholders' Equity		$	6,003,695			$	5,951,913			$	5,904,055			$	5,894,370			$	5,758,640
Regulatory Capital
Total CET 1 capital		$	555,532			$	550,426			$	561,317			$	563,523			$	557,641
Total tier 1 capital			555,532				550,426				561,317				563,523				557,641
Total risk-based capital			570,336				565,712				577,543				582,816				577,292
Total risk-weighted assets			3,453,893				3,417,020				3,421,764				3,362,595				3,446,774

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
		December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Commercial and industrial		$	346,184		$	353,046		$	358,583		$	371,195		$	372,989
1-4 Family			107,873			108,913			108,079			108,131			109,812
Hotels			311,315			297,341			290,119			293,176			294,464
Multi-family			215,677			215,307			212,715			212,561			215,671
Non Residential Non-Owner Occupied			639,818			664,365			653,264			649,683			641,351
Non Residential Owner Occupied			204,233			205,579			209,100			199,130			213,484
Commercial real estate (1)			1,478,916			1,491,505			1,473,277			1,462,681			1,474,782
Residential real estate (2)			1,548,965			1,506,572			1,521,102			1,532,907			1,587,694
Home equity			122,345			124,806			127,608			130,009			136,469
Consumer			40,901			43,296			45,184			47,224			47,688
DDA overdrafts			6,503			2,700			3,662			2,707			2,497
Gross Loans		$	3,543,814		$	3,521,925		$	3,529,416		$	3,546,723		$	3,622,119
Construction loans included in:
(1) - Commercial real estate loans		$	11,783		$	19,360		$	43,904		$	39,101		$	40,449
(2) - Residential real estate loans			17,252			19,059			20,838			22,129			27,078

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
		Three Months Ended																				Twelve Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Allowance for Credit Losses
Balance at beginning of period		$	18,751			$	20,016			$	24,076			$	24,549			$	24,867			$	24,549			$	11,589
Charge-offs:
Commercial and industrial			-				-				(211	)			(34	)			(9	)			(245	)			(843	)
Commercial real estate			(276	)			(392	)			(1,718	)			(1	)			(616	)			(2,387	)			(1,113	)
Residential real estate			(68	)			(18	)			(86	)			(93	)			(139	)			(265	)			(1,250	)
Home equity			(58	)			(47	)			(8	)			(64	)			(88	)			(177	)			(420	)
Consumer			(13	)			(3	)			(79	)			(147	)			(27	)			(242	)			(192	)
DDA overdrafts			(635	)			(633	)			(430	)			(453	)			(629	)			(2,151	)			(2,345	)
Total charge-offs			(1,050	)			(1,093	)			(2,532	)			(792	)			(1,508	)			(5,467	)			(6,163	)
Recoveries:
Commercial and industrial			31				69				25				46				74				171				91
Commercial real estate			27				18				15				164				150				224				525
Residential real estate			7				29				17				74				57				127				184
Home equity			6				58				3				23				47				90				136
Consumer			40				72				104				39				55				255				238
DDA overdrafts			354				307				308				413				333				1,382				1,467
Total recoveries			465				553				472				759				716				2,249				2,641
Net charge-offs			(585	)			(540	)			(2,060	)			(33	)			(792	)			(3,218	)			(3,522	)
(Recovery of) provision for credit losses			-				(725	)			(2,000	)			(440	)			474				(3,165	)			10,722
Impact of Adopting ASC 326			-				-				-				-				-				-				5,760
Balance at end of period		$	18,166			$	18,751			$	20,016			$	24,076			$	24,549			$	18,166			$	24,549
Loans outstanding		$	3,543,814			$	3,521,925			$	3,529,416			$	3,546,723			$	3,622,119
Allowance as a percent of loans outstanding			0.51	%			0.53	%			0.57	%			0.68	%			0.68	%
Allowance as a percent of non-performing loans			290.1	%			243.1	%			199.3	%			194.5	%			200.7	%
Average loans outstanding		$	3,522,272			$	3,535,497			$	3,541,165			$	3,585,790			$	3,635,673			$	3,545,978			$	3,641,610
Net charge-offs (annualized) as a percent of average loans outstanding			0.07	%			0.06	%			0.23	%			0.00	%			0.09	%			0.09	%			0.10	%
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Nonaccrual Loans
Residential real estate		$	2,809			$	3,634			$	2,482			$	3,004			$	2,968
Home equity			40				67				81				88				95
Commercial and industrial			996				531				820				1,200				768
Commercial real estate			2,373				3,355				6,383				7,792				8,401
Consumer			-				-				-				-				-
Total nonaccrual loans			6,218				7,587				9,766				12,084				12,232
Accruing loans past due 90 days or more			43				127				278				295				-
Total non-performing loans			6,261				7,714				10,044				12,379				12,232
Other real estate owned			1,319				1,335				1,309				1,625				1,650
Total non-performing assets		$	7,580			$	9,049			$	11,353			$	14,004			$	13,882
Non-performing assets as a percent of loans and other real estate owned			0.21	%			0.26	%			0.32	%			0.39	%			0.38	%
Past Due Loans
Residential real estate		$	5,321			$	5,258			$	5,453			$	4,092			$	5,993
Home equity			618				688				523				449				575
Commercial and industrial			336				455				721				1,358				1,241
Commercial real estate			22				441				498				508				625
Consumer			60				35				12				10				113
DDA overdrafts			489				390				417				212				341
Total past due loans		$	6,846			$	7,267			$	7,624			$	6,629			$	8,888
Total past due loans as a percent of loans outstanding			0.19	%			0.21	%			0.22	%			0.19	%			0.25	%
Troubled Debt Restructurings ("TDRs")
Residential real estate		$	16,943			$	16,910			$	17,788			$	18,572			$	19,226
Home equity			1,784				1,822				1,920				1,956				2,001
Commercial and industrial			414				430				-				-				-
Commercial real estate			1,914				1,937				3,076				4,615				4,638
Consumer			225				221				203				211				277
Total TDRs		$	21,280			$	21,320			$	22,987			$	25,354			$	26,142

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
		Three Months Ended
		December 31, 2021										September 30, 2021										December 31, 2020
		Average							Yield/			Average							Yield/			Average							Yield/
		Balance				Interest			Rate			Balance				Interest			Rate			Balance				Interest			Rate
Assets:
Loan portfolio (1):
Residential real estate (2)		$	1,645,167			$	15,692		3.78	%		$	1,648,921			$	15,813		3.80	%		$	1,744,952			$	17,623		4.02	%
Commercial, financial, and agriculture (2)			1,831,461				18,740		4.06	%			1,836,604				17,344		3.75	%			1,837,044				17,077		3.70	%
Installment loans to individuals (2), (3)			45,644				691		6.01	%			49,972				714		5.67	%			53,677				800		5.93	%
Previously securitized loans (4)		***					154		***			***					91		***			***					184		***
Total loans			3,522,272				35,277		3.97	%			3,535,497				33,962		3.81	%			3,635,673				35,684		3.90	%
Securities:
Taxable			1,171,340				5,753		1.95	%			1,136,519				6,144		2.14	%			976,897				5,500		2.24	%
Tax-exempt (5)			239,096				1,551		2.57	%			245,551				1,590		2.57	%			238,198				1,587		2.65	%
Total securities			1,410,436				7,304		2.05	%			1,382,070				7,734		2.22	%			1,215,095				7,087		2.32	%
Deposits in depository institutions			588,678				217		0.15	%			544,843				196		0.14	%			275,106				60		0.09	%
Total interest-earning assets			5,521,386				42,798		3.08	%			5,462,410				41,892		3.04	%			5,125,874				42,831		3.32	%
Cash and due from banks			98,111										101,058										73,900
Premises and equipment, net			74,847										75,956										76,956
Goodwill and intangible assets			117,349										117,719										118,855
Other assets			216,780										220,420										231,309
Less: Allowance for credit losses			(18,756	)									(20,407	)									(25,112	)
Total assets		$	6,009,717									$	5,957,156									$	5,601,782
Liabilities:
Interest-bearing demand deposits		$	1,113,693			$	131		0.05	%		$	1,093,243			$	127		0.05	%		$	953,604			$	171		0.07	%
Savings deposits			1,338,747				173		0.05	%			1,315,462				169		0.05	%			1,148,717				225		0.08	%
Time deposits (2)			1,087,280				1,406		0.51	%			1,126,553				1,659		0.58	%			1,278,698				3,801		1.18	%
Short-term borrowings			314,937				132		0.17	%			282,722				115		0.16	%			287,059				120		0.17	%
Total interest-bearing liabilities			3,854,657				1,842		0.19	%			3,817,980				2,070		0.22	%			3,668,078				4,317		0.47	%
Noninterest-bearing demand deposits			1,394,599										1,356,745										1,130,084
Other liabilities			84,071										86,263										105,445
Stockholders' equity			676,390										696,168										698,175
Total liabilities and
stockholders' equity		$	6,009,717									$	5,957,156									$	5,601,782
Net interest income						$	40,956									$	39,822									$	38,514
Net yield on earning assets									2.94	%									2.89	%									2.99	%
(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of net loan fees have been included in interest income:
Loan fees, net						$	1,106									$	1,120									$	962
(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						$	149									$	154									$	153
Commercial, financial, and agriculture							243										265										304
Installment loans to individuals							15										21										29
Time deposits							48										48										155
						$	455									$	488									$	641
(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, 2021										December 31, 2020
		Average							Yield/			Average							Yield/
		Balance				Interest			Rate			Balance				Interest			Rate
Assets:
Loan portfolio (1):
Residential real estate (2)		$	1,658,710			$	64,492		3.89	%		$	1,768,789			$	74,452		4.21	%
Commercial, financial, and agriculture (2)			1,838,560				68,784		3.74	%			1,816,658				72,128		3.97	%
Installment loans to individuals (2), (3)			48,708				2,831		5.81	%			56,163				3,319		5.91	%
Previously securitized loans (4)		***					568		***			***					599		***
Total loans			3,545,978				136,675		3.85	%			3,641,610				150,498		4.13	%
Securities:
Taxable			1,075,550				23,071		2.15	%			890,771				23,355		2.62	%
Tax-exempt (5)			242,125				6,362		2.63	%			164,740				4,954		3.01	%
Total securities			1,317,675				29,433		2.23	%			1,055,511				28,309		2.68	%
Deposits in depository institutions			568,928				693		0.12	%			230,043				492		0.21	%
Total interest-earning assets			5,432,581				166,801		3.07	%			4,927,164				179,299		3.64	%
Cash and due from banks			92,847										76,173
Premises and equipment, net			76,069										77,670
Goodwill and intangible assets			117,899										119,471
Other assets			216,493										221,864
Less: Allowance for credit losses			(21,922	)									(22,770	)
Total assets		$	5,913,967									$	5,399,572
Liabilities:
Interest-bearing demand deposits		$	1,071,628			$	504		0.05	%		$	912,306			$	1,005		0.11	%
Savings deposits			1,291,225				689		0.05	%			1,071,727				1,591		0.15	%
Time deposits (2)			1,157,502				8,213		0.71	%			1,329,841				19,927		1.50	%
Short-term borrowings			298,413				489		0.16	%			253,456				993		0.39	%
Long-term debt			-				-		-				830				100		12.05	%
Total interest-bearing liabilities			3,818,768				9,895		0.26	%			3,568,160				23,616		0.66	%
Noninterest-bearing demand deposits			1,315,801										1,035,801
Other liabilities			84,377										100,166
Stockholders' equity			695,021										695,445
Total liabilities and
stockholders' equity		$	5,913,967									$	5,399,572
Net interest income						$	156,906									$	155,683
Net yield on earning assets									2.89	%									3.16	%
(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						$	3,550									$	1,842
(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						$	620									$	630
Commercial, financial, and agriculture							1,198										2,445
Installment loans to individuals							87										143
Time deposits							193										622
						$	2,098									$	3,840
(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, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Net Interest Income/Margin
Net interest income ("GAAP")		$	40,631			$	39,488			$	37,914			$	37,540			$	38,181			$	155,573			$	154,644
Taxable equivalent adjustment			325				334				343				331				333				1,333				1,039
Net interest income, fully taxable equivalent		$	40,956			$	39,822			$	38,257			$	37,871			$	38,514			$	156,906			$	155,683
Average interest earning assets		$	5,521,386			$	5,462,410			$	5,459,564			$	5,284,025			$	5,125,874			$	5,432,581			$	4,927,164
Net Interest Margin			2.94	%			2.89	%			2.81	%			2.91	%			2.99	%			2.89	%			3.16	%
Accretion related to fair value adjustments			-0.03	%			-0.04	%			-0.05	%			-0.04	%			-0.05	%			-0.04	%			-0.08	%
Net Interest Margin (excluding accretion)			2.91	%			2.85	%			2.76	%			2.87	%			2.94	%			2.85	%			3.08	%
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")			11.34	%			11.37	%			11.78	%			11.74	%			12.18	%
Effect of goodwill and other intangibles, net			-1.76	%			-1.78	%			-1.80	%			-1.81	%			-1.85	%
Tangible common equity to tangible assets			9.58	%			9.59	%			9.98	%			9.93	%			10.33	%
Return on Tangible Equity
Return on tangible equity ("GAAP")			16.7	%			15.7	%			15.2	%			13.5	%			15.3	%			15.3	%			15.6	%
Impact of sale of VISA shares			-				-				-				-				-				-				-2.4	%
Return on tangible equity, excluding sale of VISA shares			16.7	%			15.7	%			15.2	%			13.5	%			15.3	%			15.3	%			13.2	%
Return on Assets
Return on assets ("GAAP")			1.56	%			1.53	%			1.49	%			1.38	%			1.59	%			1.49	%			1.66	%
Impact of sale of VISA shares			-				-				-				-				-				-				-0.24	%
Return on assets, excluding sale of VISA shares			1.56	%			1.53	%			1.49	%			1.38	%			1.59	%			1.49	%			1.41	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220125005036/en/

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

(304) 769-1169

Source: City Holding Company

FAQ

What are City Holding Company's earnings for 2021?

City Holding Company reported net income of $88.1 million for the year ended December 31, 2021.

What was the diluted earnings per share for City Holding Company in 2021?

The diluted earnings per share for City Holding Company in 2021 was $5.66.

How did City Holding Company's net interest income perform in 2021?

Net interest income increased slightly to $155.6 million in 2021.

What is the status of City Holding Company's loan portfolio?

City Holding Company's total loans decreased by $78.3 million, or 2.2%, in 2021.

What is the dividend announcement for City Holding Company?

City Holding Company announced a quarterly cash dividend of $0.60 per share, a 3.45% increase from the previous dividend.