City Holding Company Announces Record Annual Earnings

Rhea-AI Summary

City Holding Company (NASDAQ:CHCO) reported record financial results for the year ending December 31, 2022, with net income of $102.1 million and diluted earnings of $6.80 per share. The company's return on assets was 1.71% and return on tangible equity 20.3%. Net interest income rose 15.6% to $180.0 million, driven by higher loan and investment yields as Federal Funds rates increased. Non-interest income increased to $72.1 million, while non-interest expenses also rose to $124.3 million. The company maintained a strong capital position with a tangible equity ratio of 8.0% despite unrealized losses, and announced a quarterly dividend of $0.65.

Positive

• Record net income of $102.1 million and EPS of $6.80 for 2022.
• Net interest income increased by 15.6% to $180.0 million.
• Return on assets at 1.71% and return on tangible equity at 20.3%.
• Non-interest income rose to $72.1 million, up from $69.6 million.
• Strong capital position with a tangible equity ratio of 8.0%.

Negative

• Non-interest expenses increased to $124.3 million, up from $117.2 million.
• Total past due loans rose to $9.2 million, or 0.25% of total loans.

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

FAQ

What were City Holding Company's earnings results for 2022?

City Holding Company reported record net income of $102.1 million and diluted earnings of $6.80 per share for the year ended December 31, 2022.

How did City Holding's net interest income perform in 2022?

Net interest income increased by 15.6% to $180.0 million for the year ending December 31, 2022.

What is the current dividend of City Holding Company?

The company approved a quarterly dividend of $0.65 per share payable on January 31, 2023.

What is City Holding Company's return on assets for 2022?

The return on assets for City Holding Company was 1.71% for the year ended December 31, 2022.

What is the status of City Holding Company's non-performing assets?

The ratio of nonperforming assets to total loans decreased to 0.17% at December 31, 2022.