City Holding Company Announces Third Quarter Results

Rhea-AI Summary

City Holding Company (CHCO) reported a net income of $22.7 million for Q3 2021, equating to diluted earnings of $1.47 per share. Year-to-date, the company achieved net income of $64.7 million or $4.13 per share. Key metrics include a return on assets of 1.53% and a return on tangible equity of 15.7%. The firm experienced growth in commercial loans and net interest income, which rose to $39.5 million, attributed to PPP loan fees. Nonperforming assets decreased to $9 million, showcasing improved asset quality. A quarterly dividend of $0.58 per share was announced, payable on October 29, 2021.

Positive

• Quarterly net income of $22.7 million (diluted EPS of $1.47).
• Year-to-date net income reached $64.7 million (diluted EPS of $4.13).
• Return on assets at 1.53% and return on tangible equity at 15.7%.
• Net interest income increased to $39.5 million, up from $37.9 million in Q2 2021.
• Nonperforming assets decreased to $9 million (0.26% of total loans).
• Commercial loans grew by $36 million (2%) excluding PPP balances.
• Quarterly dividend of $0.58 per share approved.

Negative

• Overall financial performance remains below pre-COVID levels.
• Total loans decreased by $7.5 million from the previous quarter.
• Non-interest expenses rose by $0.5 million (1.6%).

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 quarterly net income of $22.7 million and diluted earnings of $1.47 per share for the quarter ended September 30, 2021. For the third quarter of 2021, the Company achieved a return on assets of 1.53% and a return on tangible equity of 15.7%. For the nine months ended September 30, 2021, City reported net income of $64.7 million, or diluted earnings per share of $4.13.

Charles R. (“Skip”) Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: “While our financial performance is not quite back to pre-COVID levels, City’s financial performance continued on an upward swing in the third quarter of 2021. Net interest income, largely on the strength of fee income related to Government sponsored Paycheck Protection Program (“PPP”) loans, increased $1.6 million from the quarter ended June 30, 2021 and noninterest income, exclusive of security items, was up $1.3 million from the quarter ended September 30, 2020.”

“Asset quality continues to be a hallmark for City with nonperforming assets dropping to below $10 million ($9.0 million or just 0.26% of total loans and other real estate owned). Past due loans and troubled debt restructurings also declined during the quarter ended September 30, 2021. Deferrals on commercial loans have also declined significantly during the quarter to just $15 million and are solely related to hotel and lodging customers.”

“While consumer related lending continues to be challenging with the current interest rate environment, commercial loans grew $36 million, or 2% (8.1% annualized), during the quarter ended September 30, 2021, exclusive of PPP balances. As of September 30, 2021, our PPP balances have declined to $26 million with less than $1 million remaining outstanding from PPP loans originated in 2020 and approximately 45% of loans originated in 2021 already forgiven.”

Net Interest Income

The Company’s net interest income increased from $37.9 million during the second quarter of 2021 to $39.5 million during the third quarter of 2021. The Company’s tax equivalent net interest income increased from $38.3 million for the second quarter of 2021 to $39.8 million for the third quarter of 2021. An increase in loan fees related to PPP loan forgiveness increased net interest income by $0.6 million. In addition, a modest increase in loan yields, due to interest recoveries on previously charged-off loans, increased net interest income by $0.6 million and lower rates paid on time deposits (16 basis points) increased net interest income by $0.4 million. The Company’s reported net interest margin increased from 2.81% for the second quarter of 2021 to 2.89% for the third quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.86% for the quarter ended September 30, 2021 and 2.76% for the quarter ended June 30, 2021.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.32% at June 30, 2021 to 0.26% at September 30, 2021. Total nonperforming assets decreased from $11.4 million at June 30, 2021 to $9.0 million at September 30, 2021. Total past due loans decreased slightly from $7.6 million, or 0.22% of total loans outstanding, at June 30, 2021 to $7.3 million, or 0.21% of total loans outstanding, at September 30, 2021.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses (“ACL”), the Company recorded a recovery of credit losses of $0.7 million in the third quarter of 2021, compared to a provision for credit losses of $1.0 million for the comparable period in 2020 and a recovery of credit losses of $2.0 million for the second quarter of 2021. Due to adjustments to other qualitative and other factors, the Company partially recovered a portion of the provision for credit losses incurred in the quarter ended March 31, 2020.

Non-interest Income

Non-interest income was $17.9 million for the third quarter of 2021 as compared to $17.0 million for the third quarter of 2020. During the third quarter of 2021, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities compared to $0.5 million of unrealized fair value gains on the Company’s equity securities in the third quarter of 2020. Exclusive of these gains, non-interest income increased from $16.5 million for the third quarter of 2020 to $17.8 million for the third quarter of 2021. This increase was largely attributable to higher bankcard revenues ($0.7 million, or 12.0%) and service charges ($0.4 million, or 6.5%). In addition, trust and investment management fee income increased $0.3 million and other income increased $0.2 million from the quarter ended September 30, 2020. These increases were partially offset by a decrease in bank owned life insurance revenues due to lower death benefit proceeds ($0.3 million).

Non-interest Expenses

Non-interest expenses increased $0.5 million (1.6%), from $28.7 million in the third quarter of 2020 to $29.2 million in the third quarter of 2021. This increase was primarily due to an increase in advertising expenses of $0.3 million and telecommunication expenses of $0.2 million.

Balance Sheet Trends

Loans decreased $7.5 million from June 30, 2021 to September 30, 2021, to $3.52 billion. PPP loans decreased $23.5 million from $49.8 million at June 30, 2021 to $26.3 million at September 30, 2021. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans increased $16.0 million, (0.5%), from June 30, 2021 to $3.50 billion at September 30, 2021. Commercial real estate loans increased $18.2 million (1.2%) and commercial and industrial loans increased $18.0 million (5.8%) (excluding PPP loans). These increases were partially offset by decreases in residential real estate loans ($14.5 million or 1.0%); home equity loans ($2.8 million or 2.2%); and consumer loans ($1.9 million or 4.2%).

Total average depository balances increased $40.8 million, or 0.8%, from the quarter ended June 30, 2021 to the quarter ended September 30, 2021. Average noninterest-bearing demand deposit balances increased $45.4 million, average savings deposit balances increased $27.5 million, and average interest-bearing demand deposit balances increased $23.3 million. These increases were partially offset by a decrease in time deposit balances of $55.4 million.

Income Tax Expense

The Company’s effective income tax rate for the third quarter of 2021 was 21.6% compared to 19.5% for the year ended December 31, 2020, and 20.2% for the quarter ended September 30, 2020.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 72.1% and the loan to asset ratio was 59.2% at September 30, 2021. The Company maintained investment securities totaling 23.5% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 63.6% of assets at September 30, 2021. Time deposits fund 18.5% of assets at September 30, 2021, but very few of these deposits are in accounts that have balances of more than $250,000, reflecting the core retail orientation of the Company.

The Company continues to be strongly capitalized with tangible equity of $560 million at September 30, 2021. Due primarily to the influx of deposits and share repurchases during the nine months ended September 30, 2021, the Company’s tangible equity ratio decreased from 10.3% at December 31, 2020 to 9.6% at September 30, 2021. At September 30, 2021, City National Bank’s Leverage Ratio was 8.73%, its Common Equity Tier I ratio was 14.61%, its Tier I Capital ratio was 14.61%, and its Total Risk-Based Capital ratio was 15.06%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On September 29, 2021, the Board of Directors of the Company approved a quarterly cash dividend of $0.58 per share payable October 29, 2021, to shareholders of record as of October 15, 2021. During the quarter ended September 30, 2021, the Company repurchased 337,000 common shares at a weighted average price of $75.65 as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of September 30, 2021, the Company could repurchase approximately 446,000 additional shares under the plan.

City Holding Company is the parent company of City National Bank of West Virginia. City National Bank operates 94 branches across West Virginia, Kentucky, Virginia, and Ohio.

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 September 30, 2021 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2021 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
		Three Months Ended															Nine Months Ended
		September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020			September 30, 2021			September 30, 2020
Earnings
Net Interest Income (fully taxable equivalent)		$	39,822		$	38,257		$	37,871		$	38,514		$	38,278		$	115,950		$	117,168
Net Income available to common shareholders			22,732			22,148			19,814			22,222			20,126			64,694			67,374
Per Share Data
Earnings per share available to common shareholders:
Basic		$	1.47		$	1.41		$	1.25		$	1.40		$	1.25		$	4.13		$	4.15
Diluted			1.47			1.41			1.25			1.40			1.25			4.13			4.15
Weighted average number of shares (in thousands):
Basic			15,279			15,573			15,656			15,708			15,950			15,501			16,065
Diluted			15,302			15,594			15,687			15,733			15,970			15,526			16,084
Period-end number of shares (in thousands)			15,192			15,527			15,724			15,768			15,848			15,192			15,848
Cash dividends declared		$	0.58		$	0.58		$	0.58		$	0.58		$	0.57		$	1.74		$	1.71
Book value per share (period-end)		$	44.58		$	44.79		$	43.99		$	44.47		$	43.62		$	44.58		$	43.62
Tangible book value per share (period-end)			36.85			37.20			36.47			36.94			36.11			36.85			36.11
Market data:
High closing price		$	79.99		$	83.85		$	87.41		$	70.77		$	67.98		$	87.41		$	82.40
Low closing price			72.29			74.44			69.05			56.98			55.37			69.05			55.18
Period-end closing price			77.91			75.24			81.78			69.55			57.61			77.91			57.61
Average daily volume (in thousands)			53			61			63			56			67			59			75
Treasury share activity:
Treasury shares repurchased (in thousands)			337			217			75			81			231			629			492
Average treasury share repurchase price		$	75.65		$	78.75		$	76.71		$	60.32		$	59.49		$	76.85		$	64.23
Key Ratios (percent)
Return on average assets			1.53%			1.49%			1.38%			1.59%			1.46%			1.47%			1.68%
Return on average tangible equity			15.7%			15.2%			13.5%			15.3%			13.8%			14.8%			15.6%
Yield on interest earning assets			3.04%			3.00%			3.17%			3.32%			3.43%			3.07%			3.75%
Cost of interest bearing liabilities			0.22%			0.27%			0.37%			0.47%			0.58%			0.28%			0.73%
Net Interest Margin			2.89%			2.81%			2.91%			2.99%			3.02%			2.87%			3.22%
Non-interest income as a percent of total revenue			31.1%			31.0%			30.4%			30.7%			30.3%			31.0%			35.8%
Efficiency Ratio			50.0%			52.8%			54.3%			51.0%			51.6%			52.3%			51.5%
Price/Earnings Ratio (a)			13.22			13.35			16.30			12.41			11.53			14.14			10.40
Capital (period-end)
Average Shareholders' Equity to Average Assets			11.69%			11.81%			12.30%			12.46%			12.71%
Tangible equity to tangible assets			9.59%			9.98%			9.93%			10.33%			10.61%
Consolidated City Holding Company risk based capital ratios (b):
CET I			15.95%			16.40%			16.76%			16.18%			15.93%
Tier I			15.95%			16.40%			16.76%			16.18%			15.93%
Total			16.39%			16.88%			17.33%			16.75%			16.50%
Leverage			9.46%			9.70%			10.06%			10.22%			10.19%
City National Bank risk based capital ratios (b):
CET I			14.61%			14.82%			14.75%			14.10%			14.46%
Tier I			14.61%			14.82%			14.75%			14.10%			14.46%
Total			15.06%			15.30%			15.33%			14.68%			15.04%
Leverage			8.73%			8.80%			8.91%			8.97%			9.32%
Other (period-end)
Branches			94			94			94			94			94
FTE			921			912			916			926			925
Assets per FTE (in thousands)		$	6,463		$	6,477		$	6,434		$	6,219		$	5,984
Deposits per FTE (in thousands)			5,308			5,271			5,236			5,024			4,799
(a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes).
(b) September 30, 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																			Nine Months Ended
		September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020			September 30, 2021				September 30, 2020
Interest Income
Interest and fees on loans		$	33,961			$	33,114			$	34,324			$	35,685			$	35,761		$	101,399			$	114,813
Interest on investment securities:
Taxable			6,144				5,932				5,242				5,500				6,266			17,318				17,855
Tax-exempt			1,257				1,291				1,253				1,254				1,132			3,801				2,659
Interest on deposits in depository institutions			196				162				118				60				72			476				432
Total Interest Income			41,558				40,499				40,937				42,499				43,231			122,994				135,759
Interest Expense
Interest on deposits			1,955				2,460				3,280				4,198				5,123			7,695				18,324
Interest on short-term borrowings			115				125				117				120				131			357				873
Interest on long-term debt			-				-				-				-				-			-				100
Total Interest Expense			2,070				2,585				3,397				4,318				5,254			8,052				19,297
Net Interest Income			39,488				37,914				37,540				38,181				37,977			114,942				116,462
(Recovery of) provision for credit losses			(725	)			(2,000	)			(440	)			474				1,026			(3,165	)			10,248
Net Interest Income After (Recovery of) Provision for Credit Losses			40,213				39,914				37,980				37,707				36,951			118,107				106,214
Non-Interest Income
Net gains on sale of investment securities			-				29				283				6				-			312				56
Unrealized gains (losses) recognized on equity securities still held			93				410				(51	)			835				461			452				(1,698	)
Service charges			6,706				5,895				5,881				6,771				6,295			18,482				18,962
Bankcard revenue			6,791				7,221				6,213				5,991				6,065			20,225				17,068
Trust and investment management fee income			2,172				2,012				2,033				2,162				1,844			6,217				5,574
Bank owned life insurance			747				940				1,460				813				1,088			3,147				3,611
Sale of VISA shares			-				-				-				-				-			-				17,837
Other income			1,438				941				811				1,143				1,232			3,190				3,550
Total Non-Interest Income			17,947				17,448				16,630				17,721				16,985			52,025				64,960
Non-Interest Expense
Salaries and employee benefits			15,321				15,559				15,671				15,989				15,361			46,551				46,085
Occupancy related expense			2,507				2,525				2,622				2,447				2,428			7,654				7,318
Equipment and software related expense			2,554				2,655				2,544				2,660				2,607			7,753				7,540
FDIC insurance expense			396				382				405				363				355			1,183				522
Advertising			804				824				881				538				462			2,509				2,238
Bankcard expenses			1,549				1,746				1,584				1,443				1,517			4,879				4,450
Postage, delivery, and statement mailings			573				568				592				546				513			1,733				1,721
Office supplies			406				371				392				413				396			1,169				1,143
Legal and professional fees			610				589				675				438				548			1,874				1,738
Telecommunications			790				676				690				540				547			2,156				1,589
Repossessed asset (gains) losses, net of expenses			(108	)			1				79				(68	)			39			(28	)			313
Other expenses			3,776				3,678				3,674				3,332				3,939			11,128				11,992
Total Non-Interest Expense			29,178				29,574				29,809				28,641				28,712			88,561				86,649
Income Before Income Taxes			28,982				27,788				24,801				26,787				25,224			81,571				84,525
Income tax expense			6,250				5,640				4,987				4,565				5,098			16,877				17,151
Net Income Available to Common Shareholders		$	22,732			$	22,148			$	19,814			$	22,222			$	20,126		$	64,694			$	67,374
Distributed earnings allocated to common shareholders		$	8,726			$	8,921			$	9,037			$	9,053			$	8,944		$	26,177			$	26,832
Undistributed earnings allocated to common shareholders			13,786				13,021				10,598				12,947				10,984			37,899				39,884
Net earnings allocated to common shareholders		$	22,512			$	21,942			$	19,635			$	22,000			$	19,928		$	64,076			$	66,716
Average common shares outstanding			15,279				15,573				15,656				15,708				15,950			15,501				16,065
Shares for diluted earnings per share			15,302				15,594				15,687				15,733				15,970			15,526				16,084
Basic earnings per common share		$	1.47			$	1.41			$	1.25			$	1.40			$	1.25		$	4.13			$	4.15
Diluted earnings per common share		$	1.47			$	1.41			$	1.25			$	1.40			$	1.25		$	4.13			$	4.15

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
		(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)
		September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020
Assets
Cash and due from banks		$	103,841			$	97,523			$	97,709			$	77,412			$	76,451
Interest-bearing deposits in depository institutions			535,708				512,367				659,090				451,247				176,267
Cash and cash equivalents			639,549				609,890				756,799				528,659				252,718
Investment securities available-for-sale, at fair value			1,373,073				1,340,681				1,185,245				1,178,789				1,157,399
Other securities			24,501				24,548				27,182				27,372				26,548
Total investment securities			1,397,574				1,365,229				1,212,427				1,206,161				1,183,947
Gross loans			3,521,925				3,529,416				3,546,723				3,622,119				3,663,966
Allowance for credit losses			(18,751	)			(20,016	)			(24,076	)			(24,549	)			(24,867	)
Net loans			3,503,174				3,509,400				3,522,647				3,597,570				3,639,099
Bank owned life insurance			120,238				119,491				118,976				118,243				117,501
Premises and equipment, net			75,156				76,263				76,529				76,925				77,031
Accrued interest receivable			16,224				15,967				16,231				15,793				16,627
Net deferred tax assets			90				-				1,395				-				-
Intangible assets			117,489				117,857				118,224				118,592				119,004
Other assets			82,419				89,958				71,142				96,697				105,361
Total Assets		$	5,951,913			$	5,904,055			$	5,894,370			$	5,758,640			$	5,511,288
Liabilities
Deposits:
Noninterest-bearing		$	1,311,464			$	1,279,932			$	1,244,175			$	1,176,990			$	1,061,310
Interest-bearing:
Demand deposits			1,139,033				1,070,004				1,077,749				1,027,201				940,791
Savings deposits			1,332,910				1,301,219				1,265,038				1,188,003				1,117,684
Time deposits			1,104,069				1,153,391				1,209,873				1,260,022				1,300,291
Total deposits			4,887,476				4,804,546				4,796,835				4,652,216				4,420,076
Short-term borrowings
Customer repurchase agreements			296,642				311,316				316,003				295,956				279,866
Net deferred tax liabilities			-				2,310				-				3,202				1,601
Other liabilities			90,499				90,407				89,847				106,160				118,386
Total Liabilities			5,274,617				5,208,579				5,202,685				5,057,534				4,819,929
Stockholders' Equity
Preferred stock			-				-				-				-				-
Common stock			47,619				47,619				47,619				47,619				47,619
Capital surplus			170,300				169,674				170,526				171,304				170,526
Retained earnings			627,463				613,553				600,396				589,988				576,901
Cost of common stock in treasury			(183,303	)			(157,936	)			(142,484	)			(139,038	)			(134,177	)
Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale			20,878				28,227				21,289				36,894				36,760
Underfunded pension liability			(5,661	)			(5,661	)			(5,661	)			(5,661	)			(6,270	)
Total Accumulated Other Comprehensive Income			15,217				22,566				15,628				31,233				30,490
Total Stockholders' Equity			677,296				695,476				691,685				701,106				691,359
Total Liabilities and Stockholders' Equity		$	5,951,913			$	5,904,055			$	5,894,370			$	5,758,640			$	5,511,288
Regulatory Capital
Total CET 1 capital		$	550,426			$	561,317			$	563,523			$	557,641			$	548,269
Total tier 1 capital			550,426				561,317				563,523				557,641				548,269
Total risk-based capital			565,712				577,543				582,816				577,292				568,153
Total risk-weighted assets			3,451,018				3,421,764				3,362,595				3,446,774				3,442,629

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
		September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020
Commercial and industrial		$	353,046		$	358,583		$	371,195		$	372,989		$	383,980
1-4 Family			108,913			108,079			108,131			109,812			114,071
Hotels			297,341			290,119			293,176			294,464			295,989
Multi-family			215,307			212,715			212,561			215,671			214,394
Non Residential Non-Owner Occupied			664,365			653,264			649,683			641,351			628,814
Non Residential Owner Occupied			205,579			209,100			199,130			213,484			211,433
Commercial real estate (1)			1,491,505			1,473,277			1,462,681			1,474,782			1,464,701
Residential real estate (2)			1,506,572			1,521,102			1,532,907			1,587,694			1,621,265
Home equity			124,806			127,608			130,009			136,469			140,135
Consumer			43,296			45,184			47,224			47,688			50,541
DDA overdrafts			2,700			3,662			2,707			2,497			3,344
Gross Loans		$	3,521,925		$	3,529,416		$	3,546,723		$	3,622,119		$	3,663,966
Construction loans included in:
(1) - Commercial real estate loans		$	19,360		$	43,904		$	39,101		$	40,449		$	42,449
(2) - Residential real estate loans			19,059			20,838			22,129			27,078			28,947

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
		Three Months Ended																				Nine Months Ended
		September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020				September 30, 2021				September 30, 2020
Allowance for Credit Losses
Balance at beginning of period		$	20,016			$	24,076			$	24,549			$	24,867			$	25,199			$	24,549			$	11,589
Charge-offs:
Commercial and industrial			-				(211	)			(34	)			(9	)			(757	)			(245	)			(834	)
Commercial real estate			(392	)			(1,718	)			(1	)			(616	)			(75	)			(2,111	)			(497	)
Residential real estate			(18	)			(86	)			(93	)			(139	)			(252	)			(197	)			(1,111	)
Home equity			(47	)			(8	)			(64	)			(88	)			(126	)			(119	)			(332	)
Consumer			(3	)			(79	)			(147	)			(27	)			(74	)			(229	)			(165	)
DDA overdrafts			(633	)			(430	)			(453	)			(629	)			(554	)			(1,516	)			(1,716	)
Total charge-offs			(1,093	)			(2,532	)			(792	)			(1,508	)			(1,838	)			(4,417	)			(4,655	)
Recoveries:
Commercial and industrial			69				25				46				74				3				140				17
Commercial real estate			18				15				164				150				44				197				375
Residential real estate			29				17				74				57				24				120				127
Home equity			58				3				23				47				33				84				89
Consumer			72				104				39				55				42				215				183
DDA overdrafts			307				308				413				333				334				1,028				1,134
Total recoveries			553				472				759				716				480				1,784				1,925
Net charge-offs			(540	)			(2,060	)			(33	)			(792	)			(1,358	)			(2,633	)			(2,730	)
(Recovery of) provision for credit losses			(725	)			(2,000	)			(440	)			474				1,026				(3,165	)			10,248
Impact of Adopting ASC 326			-				-				-				-				-				-				5,760
Balance at end of period		$	18,751			$	20,016			$	24,076			$	24,549			$	24,867			$	18,751			$	24,867
Loans outstanding		$	3,521,925			$	3,529,416			$	3,546,723			$	3,622,119			$	3,663,966
Allowance as a percent of loans outstanding			0.53	%			0.57	%			0.68	%			0.68	%			0.68	%
Allowance as a percent of non-performing loans			243.1	%			199.3	%			194.5	%			200.7	%			182.7	%
Average loans outstanding		$	3,535,497			$	3,541,165			$	3,585,790			$	3,635,673			$	3,661,569			$	3,553,966			$	3,643,603
Net charge-offs (annualized) as a percent of average loans outstanding			0.06	%			0.23	%			0.00	%			0.09	%			0.15	%			0.10	%			0.10	%
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
		September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020
Nonaccrual Loans
Residential real estate		$	3,634			$	2,482			$	3,004			$	2,968			$	3,983
Home equity			67				81				88				95				74
Commercial and industrial			531				820				1,200				768				728
Commercial real estate			3,355				6,383				7,792				8,401				8,479
Consumer			-				-				-				-				-
Total nonaccrual loans			7,587				9,766				12,084				12,232				13,264
Accruing loans past due 90 days or more			127				278				295				-				345
Total non-performing loans			7,714				10,044				12,379				12,232				13,609
Other real estate owned			1,335				1,309				1,625				1,650				2,080
Total non-performing assets		$	9,049			$	11,353			$	14,004			$	13,882			$	15,689
Non-performing assets as a percent of loans and other real estate owned			0.26	%			0.32	%			0.39	%			0.38	%			0.43	%
Past Due Loans
Residential real estate		$	5,258			$	5,453			$	4,092			$	5,993			$	5,153
Home equity			688				523				449				575				474
Commercial and industrial			455				721				1,358				1,241				691
Commercial real estate			441				498				508				625				602
Consumer			35				12				10				113				121
DDA overdrafts			390				417				212				341				379
Total past due loans		$	7,267			$	7,624			$	6,629			$	8,888			$	7,420
Total past due loans as a percent of loans outstanding			0.21	%			0.22	%			0.19	%			0.25	%			0.20	%
Troubled Debt Restructurings ("TDRs")
Residential real estate		$	16,910			$	17,788			$	18,572			$	19,226			$	20,398
Home equity			1,822				1,920				1,956				2,001				2,100
Commercial and industrial			430				-				-				-				-
Commercial real estate			1,937				3,076				4,615				4,638				4,894
Consumer			221				203				211				277				260
Total TDRs		$	21,320			$	22,987			$	25,354			$	26,142			$	27,652

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
		Three Months Ended
		September 30, 2021										June 30, 2021										September 30, 2020
		Average							Yield/			Average							Yield/			Average							Yield/
		Balance				Interest			Rate			Balance				Interest			Rate			Balance				Interest			Rate
Assets:
Loan portfolio (1):
Residential real estate (2)		$	1,648,921			$	15,813		3.80	%		$	1,652,165			$	16,135		3.92	%		$	1,766,796			$	17,899		4.03	%
Commercial, financial, and agriculture (2)			1,836,604				17,344		3.75	%			1,839,478				16,158		3.52	%			1,839,939				16,910		3.66	%
Installment loans to individuals (2), (3)			49,972				714		5.67	%			49,522				713		5.77	%			54,834				804		5.83	%
Previously securitized loans (4)		***					91		***			***					109		***			***					148		***
Total loans			3,535,497				33,962		3.81	%			3,541,165				33,115		3.75	%			3,661,569				35,761		3.89	%
Securities:
Taxable			1,136,519				6,144		2.14	%			1,046,008				5,932		2.27	%			877,623				6,266		2.84	%
Tax-exempt (5)			245,551				1,590		2.57	%			244,233				1,633		2.68	%			204,178				1,433		2.79	%
Total securities			1,382,070				7,734		2.22	%			1,290,241				7,565		2.35	%			1,081,801				7,699		2.83	%
Deposits in depository institutions			544,843				196		0.14	%			628,158				162		0.10	%			304,498				72		0.09	%
Total interest-earning assets			5,462,410				41,892		3.04	%			5,459,564				40,842		3.00	%			5,047,868				43,532		3.43	%
Cash and due from banks			101,058										92,243										80,505
Premises and equipment, net			75,956										76,660										77,647
Goodwill and intangible assets			117,719										118,088										119,267
Other assets			220,420										206,709										229,667
Less: Allowance for credit losses			(20,407	)									(23,701	)									(25,311	)
Total assets		$	5,957,156									$	5,929,563									$	5,529,643
Liabilities:
Interest-bearing demand deposits		$	1,093,243			$	127		0.05	%		$	1,069,896			$	122		0.05	%		$	931,152			$	187		0.08	%
Savings deposits			1,315,462				169		0.05	%			1,287,966				163		0.05	%			1,093,886				303		0.11	%
Time deposits (2)			1,126,553				1,659		0.58	%			1,181,953				2,175		0.74	%			1,322,423				4,633		1.39	%
Short-term borrowings			282,722				115		0.16	%			305,134				125		0.16	%			260,518				131		0.20	%
Total interest-bearing liabilities			3,817,980				2,070		0.22	%			3,844,949				2,585		0.27	%			3,607,979				5,254		0.58	%
Noninterest-bearing demand deposits			1,356,745										1,311,340										1,114,822
Other liabilities			86,263										72,940										104,084
Stockholders' equity			696,168										700,334										702,758
Total liabilities and
stockholders' equity		$	5,957,156									$	5,929,563									$	5,529,643
Net interest income						$	39,822									$	38,257									$	38,278
Net yield on earning assets									2.89	%									2.81	%									3.02	%
(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						$	1,120									$	488									$	156
(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						$	154									$	211									$	132
Commercial, financial, and agriculture							265										365										250
Installment loans to individuals							21										23										38
Time deposits							48										48										155
						$	488									$	647									$	575
(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
		Nine Months Ended
		September 30, 2021										September 30, 2020
		Average							Yield/			Average							Yield/
		Balance				Interest			Rate			Balance				Interest			Rate
Assets:
Loan portfolio (1):
Residential real estate (2)		$	1,669,324			$	48,801		3.91	%		$	1,776,903			$	56,827		4.27	%
Commercial, financial, and agriculture (2)			1,833,744				50,044		3.65	%			1,810,165				55,051		4.06	%
Installment loans to individuals (2), (3)			50,898				2,140		5.62	%			56,535				2,519		5.95	%
Previously securitized loans (4)		***					414		***			***					415		***
Total loans			3,553,966				101,399		3.81	%			3,643,603				114,812		4.21	%
Securities:
Taxable			1,043,269				17,318		2.22	%			861,853				17,855		2.77	%
Tax-exempt (5)			243,146				4,811		2.65	%			140,075				3,366		3.21	%
Total securities			1,286,415				22,129		2.30	%			1,001,928				21,221		2.83	%
Deposits in depository institutions			562,272				474		0.11	%			214,912				432		0.27	%
Total interest-earning assets			5,402,653				124,002		3.07	%			4,860,443				136,465		3.75	%
Cash and due from banks			91,073										76,936
Premises and equipment, net			76,481										77,910
Goodwill and intangible assets			118,084										119,678
Other assets			214,872										218,695
Less: Allowance for credit losses			(22,989	)									(21,984	)
Total assets		$	5,880,174									$	5,331,678
Liabilities:
Interest-bearing demand deposits		$	1,057,452			$	373		0.05	%		$	898,440			$	833		0.12	%
Savings deposits			1,275,211				516		0.05	%			1,045,877				1,366		0.17	%
Time deposits (2)			1,181,166				6,806		0.77	%			1,347,013				16,125		1.60	%
Short-term borrowings			292,845				357		0.16	%			242,173				873		0.48	%
Long-term debt			-				-		-				1,109				100		12.04	%
Total interest-bearing liabilities			3,806,674				8,052		0.28	%			3,534,612				19,297		0.73	%
Noninterest-bearing demand deposits			1,289,247										1,004,144
Other liabilities			82,953										98,393
Stockholders' equity			701,300										694,529
Total liabilities and
stockholders' equity		$	5,880,174									$	5,331,678
Net interest income						$	115,950									$	117,168
Net yield on earning assets									2.87	%									3.22	%
(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						$	2,443									$	881
(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						$	472									$	477
Commercial, financial, and agriculture							956										2,141
Installment loans to individuals							72										114
Time deposits							145										466
						$	1,645									$	3,198
(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															Nine Months Ended
		September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020			September 30, 2021			September 30, 2020
Net Interest Income/Margin
Net interest income ("GAAP")		$	39,488		$	37,914		$	37,540		$	38,181		$	37,977		$	114,942		$	116,462
Taxable equivalent adjustment			334			343			331			333			301			1,008			706
Net interest income, fully taxable equivalent		$	39,822		$	38,257		$	37,871		$	38,514		$	38,278		$	115,950		$	117,168
Average interest earning assets		$	5,462,410		$	5,459,564		$	5,284,025		$	5,125,874		$	5,047,868		$	5,402,653		$	4,860,443
Net Interest Margin			2.89%			2.81%			2.91%			2.99%			3.02%			2.87%			3.22%
Accretion related to fair value adjustments			-0.04%			-0.05%			-0.04%			-0.05%			-0.05%			-0.04%			-0.09%
Net Interest Margin (excluding accretion)			2.85%			2.76%			2.87%			2.94%			2.97%			2.83%			3.13%
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")			11.37%			11.78%			11.74%			12.18%			12.54%
Effect of goodwill and other intangibles, net			-1.78%			-1.80%			-1.81%			-1.85%			-1.93%
Tangible common equity to tangible assets			9.59%			9.98%			9.93%			10.33%			10.61%
Return on Tangible Equity
Return on tangible equity ("GAAP")			15.7%			15.2%			13.5%			15.3%			13.8%			14.8%			15.6%
Impact of sale of VISA shares			-			-			-			-			-			-			-3.1%
Return on tangible equity, excluding sale of VISA shares			15.7%			15.2%			13.5%			15.3%			13.8%			14.8%			12.5%
Return on Assets
Return on assets ("GAAP")			1.53%			1.49%			1.38%			1.59%			1.46%			1.47%			1.68%
Impact of sale of VISA shares			-			-			-			-			-			-			-0.33%
Return on assets, excluding sale of VISA shares			1.53%			1.49%			1.38%			1.59%			1.46%			1.47%			1.35%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211021005137/en/

Charles R. Hageboeck, Chief Executive Officer and President

(304) 769-1102

Source: City Holding Company

FAQ

What was City Holding Company's net income for Q3 2021?

City Holding Company reported a net income of $22.7 million for Q3 2021.

What is the diluted earnings per share for CHCO in Q3 2021?

The diluted earnings per share for City Holding Company in Q3 2021 was $1.47.

How did City Holding Company perform in terms of asset quality?

City Holding Company saw nonperforming assets drop to $9 million, or 0.26% of total loans.

What was the return on assets for CHCO in Q3 2021?

The return on assets for City Holding Company in Q3 2021 was 1.53%.

When is the dividend payout for City Holding Company scheduled?

The quarterly dividend of $0.58 per share is payable on October 29, 2021.