City Holding Company Announces Record Annual Earnings

CHARLESTON, W. Va.--()--City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $5.8 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $89.6 million and diluted earnings of $5.55 per share for the year ended December 31, 2020.

City’s CEO Charles Hageboeck stated that, “2020 was a year unlike any before for City Holding Company, City National Bank, the financial industry, and the world. COVID-19 has impacted all facets of our lives from personal to professional. As a result of disruptions to our communities and the economy, City’s staff was presented with many unusual and unforeseen challenges during 2020. While the task at hand for our Company and employees was more difficult, our employees rose to the occasion and not only persevered, but excelled at providing outstanding service to our customers. For the third year in a row, City was recognized by the JD Power organization as the “Highest in Customer Satisfaction” in the North Central US. I applaud our employees for this achievement, particularly in the midst of a world-wide pandemic.”

“The COVID-19 crisis also created pressure on financial results. As a result of the pandemic, the Federal Reserve slashed interest rates to nearly zero in mid-March. Consequently, both loan and deposit rates fell and net interest margins for financial institutions contracted significantly in 2020. City’s net interest margin declined by 43 basis points and our reported net interest income decreased $6.8 million. While deposit rates dropped precipitously, deposit balances at banks increased dramatically, with total deposits at City increasing $576 million, or 14.1%, from December 31, 2019 to December 31, 2020. As the economy flattened during 2020, commercial loan demand for the majority of 2020 was weak, except for Government-sponsored Paycheck Protection Program (“PPP”) loans administered by the Small Business Administration (“SBA”). During the fourth quarter however, City had commercial loan growth of $32 million, or approximately 7.3%, on an annualized basis, exclusive of PPP loan repayments.”

“Asset quality remains in the forefront for those in the investment community focused on financial institutions. City’s asset quality remains stellar at December 31, 2020. Nonperforming assets, past due loans, and troubled debt restructurings at December 31, 2020, are all below the levels reported at December 31,2019. City has also continued to see a decline in deferred loans as of the quarter ended December 31, 2020. Commercial loan deferrals have dropped from $180 million at September 30, 2020 to $99 million at December 31, 2020. Of that, $88 million of the commercial deferrals at December 31, 2020 were for hotel and lodging related loans. While occupancy levels for our loan customers in this industry are still below pre-pandemic levels, our loan customers are continuing to see occupancy levels continue to slowly increase. Residential mortgage deferrals at December 31, 2020 were approximately $9 million.”

“In summary, 2020 presented a myriad of obstacles for all of us to overcome and I am pleased with how City and our employees managed these obstacles and are moving into 2021 from a position of strength.”

Net Interest Income

The Company’s net interest income decreased from $161.4 million for the year ended December 31, 2019 to $154.6 million for the year ended December 31, 2020. The Company’s tax equivalent net interest income decreased $6.5 million, or 4.0%, from $162.2 million for the year ended December 31, 2019 to $155.7 million for the year ended December 31, 2020. Lower loan yields (68 basis points) and investment yields (48 basis points) decreased net interest income by $24.5 million and $5.4 million, respectively. These decreases were partially offset by lower rates paid on interest bearing liabilities (40 basis points), higher investment balances ($195.9 million), and higher commercial loan balances ($99.3 million, driven largely by PPP loans) which increased net interest income by $13.1 million, $6.5 million, and $4.7 million, respectively. In addition, the Company recognized $1.6 million of loan fees associated with PPP loans during 2020. The Company’s reported net interest margin declined from 3.59% for the year ended December 31, 2019 to 3.16% for the year ended December 31, 2020. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 3.08% for the year ended December 31, 2020 and 3.51% for the year ended December 31, 2019.

The Company’s net interest income increased from $38.0 million during the third quarter of 2020 to $38.2 million during the fourth quarter of 2020. During the fourth quarter of 2020, the Company’s tax equivalent net interest income increased $0.2 million, or 0.6%, to $38.5 million from $38.3 million during the third quarter of 2020. Higher investment balances ($133.3 million) and lower rates on interest bearing deposits (12 basis points) increased net interest income by $0.9 million and $0.8 million, respectively. In addition, loan fees increased $0.8 million due to an increase in PPP loan fees recognized as $33.1 million of PPP loans were fully repaid by the SBA during the quarter ended December 31, 2020. These increases were partially offset by lower investment yields (51 basis points) and lower loan yields (7 basis points) which decreased net interest income by $1.6 million and $0.7 million, respectively. The Company’s reported net interest margin declined from 3.02% for the third quarter of 2020 to 2.99% for the fourth quarter of 2020. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 2.94% for the quarter ended December 31, 2020 and 2.97% for the quarter ended September 30, 2020.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.45% at December 31, 2019 to 0.38% at December 31, 2020. Total nonperforming assets decreased from $16.4 million at December 31, 2019 to $13.9 million at December 31, 2020. Excluded from this ratio are purchased credit-impaired loans in which the Company estimated cash flows and estimated a credit mark. Such loans would be considered nonperforming loans if the loan’s performance deteriorates below the Company’s initial expectations. Total past due loans decreased from $11.4 million, or 0.32% of total loans outstanding, at December 31, 2019 to $8.9 million, or 0.25% of total loans outstanding, at December 31, 2020.

The Company adopted ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” effective January 1, 2020 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet credit exposures. ASU No. 2016-16 replaced the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new current expected credit losses model (“CECL”) will apply to the allowance for loan losses, available-for-sale and held-to-maturity debt securities, purchased financial assets with credit deterioration and certain off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2020 are presented under ASU No. 2016-13, while prior period amounts continue to be reported in accordance with previously applicable GAAP. As a result of adopting ASU No. 2016-13, the Company increased its allowance for credit losses (“ACL”) by $3.0 million and decreased retained earnings by $2.3 million on January 1, 2020. In addition, the adoption of ASU No. 2016-13 required the Company to “gross up” its previously purchased credit impaired loans through the allowance at January 1, 2020. As a result, the Company increased its ACL and loan balances as of January 1, 2020, by $2.7 million.

As a result of the Company’s quarterly analysis of the adequacy of the ACL, the Company recorded a provision for credit losses of $0.5 million in the fourth quarter of 2020 and $10.7 million for the year ended December 31, 2020, compared to a recovery of credit losses of $0.1 million and $1.3 million for the comparable periods in 2019. The provision for credit losses recorded during 2020 largely reflects the expected economic impact from the COVID-19 pandemic. The Company’s estimate of future economic conditions used in its CECL estimates is primarily dependent on expected unemployment ranges. As a result of COVID-19, expected unemployment ranges have significantly increased and resulted in an increase in the Company’s ACL of $4.1 million. Additionally, adjustments in qualitative and other factors due to COVID-19 added $3.4 million. Due to changes in the Company’s loan portfolio and their associated loss rates, exclusive of COVID-19, the Company’s ACL increased by $3.1 million during 2020, while downgrades of certain credit relationships resulted in an increase in the ACL of $2.9 million during 2020. Partially offsetting these increases in the ACL, was a decrease in the ACL due to the upgrade of a specific credit that was downgraded in 2017, but has since seen improved financial performance. This upgrade released $2.2 million of ACL reserves during 2020.

Non-interest Income

Non-interest income was $82.7 million for 2020 as compared to $68.5 million for 2019. During 2020, the Company sold the entirety of its Visa Inc. Class B common shares (86,605 shares) in a cash transaction which 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 $0.9 million of unrealized fair value losses on the Company’s equity securities compared to $0.9 million of unrealized fair value gains on the Company’s equity securities during 2019. Exclusive of these items, non-interest income decreased from $67.5 million for the year ended December 31, 2019 to $65.6 million for the year ended December 31, 2020. This decrease was largely attributable to a decrease of $5.8 million, or 18.3%, in service charges as average deposit balances have increased during the COVID-19 pandemic. This decrease was partially offset by an increase of $2.0 million, or 9.3%, in bankcard revenues, an increase of $0.7 million, or 17.3%, in other income (largely due to fees from loan interest rate swap originations), an increase of $0.7 million in bank owned life insurance due to higher death benefit proceeds received during 2020 compared to 2019, and an increase of $0.6 million in trust and investment management fee income.

Non-interest income was $17.7 million during the quarter ended December 31, 2020 as compared to $18.0 million during the quarter ended December 31, 2019. During the fourth quarter of 2020, the Company reported $0.8 million of unrealized fair value gains on the Company’s equity securities compared to $0.9 million of unrealized fair value gains on the Company’s equity securities during the fourth quarter of 2019. Exclusive of these unrealized fair value gains, non-interest income decreased from $17.1 million for the fourth quarter of 2019 to $16.9 million for the fourth quarter of 2020. This decrease was largely attributable to a decrease of $1.5 million, or 17.8%, in service charges as average deposit balances have increased during the COVID-19 pandemic. This decrease was partially offset by increases in our bankcard revenues ($0.8 million) and other income due primarily to fees from loan interest rate swap originations ($0.3 million).

Non-interest Expenses

During 2019, the Company recognized $0.8 million of acquisition and integration expenses associated with the completed acquisitions of Poage Bankshares, Inc. (“Poage”) and Farmers Deposit Bancorp, Inc. (“Farmers”). Excluding these expenses, non-interest expenses decreased from $116.8 million for 2019 to $115.3 million for 2020. This decrease was primarily due to a decrease in occupancy related expense of $0.8 million, other expenses of $0.8 million (largely on the strength of a gain from the sale of a branch bank location acquired in connection with the acquisition of Farmers), advertising of $0.6 million, repossessed asset losses of $0.4 million, and telecommunication expense of $0.3 million. These decreases were partially offset by an increase in equipment and software related expenses ($1.2 million), bankcard expenses ($0.3 million), and FDIC insurance expense ($0.2 million).

Non-interest expenses decreased $0.4 million from $29.0 million in the quarter ended December 31, 2019 to $28.6 million in the quarter ended December 31, 2020. This decrease was primarily due to a decrease in other expenses of $0.5 million, repossessed asset losses of $0.3 million, and legal and professional fees of $0.3 million. These decreases were partially offset by increases in FDIC insurance expense ($0.4 million) and equipment and software related expense ($0.4 million).

Balance Sheet Trends

Loans increased $6.0 million (0.2%) from December 31, 2019 to $3.62 billion at December 31, 2020. Largely as a result of the Company’s participation in the PPP loans administered by the SBA, commercial and industrial loans increased $65.0 million. The Company originated $88.5 million of PPP loans, with $33.1 million of these loans being repaid by the SBA as of December 31, 2020. Excluding outstanding PPP loans, total loans decreased $49.4 million, (1.4%), from December 31, 2019 to $3.57 billion at December 31, 2020. Residential real estate loans decreased $52.7 million (3.2%), home equity loans decreased $12.5 million (8.4%) and consumer loans decreased $6.6 million (12.1%). These decreases were partially offset by an increase in commercial real estate loans of $15.0 million (1.0%) and commercial and industrial loans of $9.5 million (3.1%) (excluding PPP loans). Decreases in loan outstandings are reflective of the low-interest rate environment driving residential mortgage originations toward fixed rate loans.

Total average depository balances for the year ended December 31, 2020 increased $306.7 million, or 7.6%, as compared to the year ended December 31, 2019. Average noninterest bearing demand deposits increased $217.6 million, average savings deposits increased $94.4 million, and average interest bearing demand deposits increased $33.6 million. These increases were partially offset by a decrease in average time deposits of $38.9 million. These increases were likely associated with the infusion of government transfer payments for unemployment insurance, PPP loans and stimulus checks issued early in the second quarter of 2020 and again in December 2020.

Income Tax Expense

The Company’s effective income tax rate for the quarter and year ended December 31, 2020 was 17.0% and 19.5%, respectively, compared to 21.8% and 21.3% for the comparable periods in 2019. The Company’s effective tax rate declined for the year ended December 31, 2020 due to higher tax exempt loan interest income, an increase in bank owned life insurance death benefit proceeds, an increase in low income housing tax credits due to growth in such investments, and the ability to utilize a net operating loss obtained from an acquisition via the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

Capitalization and Liquidity

The Company’s loan to deposit ratio was 77.9% and the loan to asset ratio was 62.9% at December 31, 2020. The Company maintained investment securities totaling 20.9% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 58.9% of assets at December 31, 2020. Time deposits fund 21.9% of assets at December 31, 2020, 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 growing from $538 million at December 31, 2019 to $583 million at December 31, 2020. Due to the influx of deposits during 2020, the Company’s tangible equity ratio decreased from 11.0% at December 31, 2019 to 10.3% at December 31, 2020. At December 31, 2020, City National Bank’s Leverage Ratio was 8.97%, its Common Equity Tier I ratio was 14.10%, its Tier I Capital ratio was 14.10%, and its Total Risk-Based Capital ratio was 14.68%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On December 16, 2020, the Board approved a quarterly cash dividend of $0.58 cents per share payable January 29, 2021, to shareholders of record as of January 15, 2021. This dividend increase represents a 1.75% increase from the $0.57 per share paid on October 30, 2020. During the year ended December 31, 2020, the Company repurchased 573,000 common shares at a weighted average price of $63.68 per share as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of December 31, 2020, the Company could repurchase approximately 166,000 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, 2019 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 loan 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, 2020 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2020 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
 

Three Months Ended

 

Twelve Months Ended

December 31,
2020

 

September 30,
2020

 

June 30,
2020

 

March 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

 
Earnings
Net Interest Income (fully taxable equivalent)

$

38,514

 

$

38,278

 

$

38,287

 

$

40,603

 

$

40,036

 

$

155,683

 

$

162,151

 

Net Income available to common shareholders

 

22,222

 

 

20,126

 

 

18,251

 

 

29,000

 

 

22,611

 

 

89,595

 

 

89,352

 

 
Per Share Data
Earnings per share available to common shareholders:
Basic

$

1.40

 

$

1.25

 

$

1.12

 

$

1.79

 

$

1.38

 

$

5.55

 

$

5.43

 

Diluted

 

1.40

 

 

1.25

 

 

1.12

 

 

1.78

 

 

1.38

 

 

5.55

 

 

5.42

 

Weighted average number of shares (in thousands):
Basic

 

15,708

 

 

15,950

 

 

16,081

 

 

16,080

 

 

16,207

 

 

15,975

 

 

16,314

 

Diluted

 

15,733

 

 

15,970

 

 

16,097

 

 

16,101

 

 

16,230

 

 

15,995

 

 

16,333

 

Period-end number of shares (in thousands)

 

15,768

 

 

15,848

 

 

16,077

 

 

16,140

 

 

16,303

 

 

15,768

 

 

16,303

 

Cash dividends declared

$

0.58

 

$

0.57

 

$

0.57

 

$

0.57

 

$

0.57

 

$

2.29

 

$

2.20

 

Book value per share (period-end)

$

44.47

 

$

43.62

 

$

43.15

 

$

42.45

 

$

40.36

 

$

44.47

 

$

40.36

 

Tangible book value per share (period-end)

 

36.94

 

 

36.11

 

 

35.72

 

 

35.03

 

 

32.98

 

 

36.94

 

 

32.98

 

Market data:
High closing price

$

70.77

 

$

67.98

 

$

71.19

 

$

82.40

 

$

82.72

 

$

82.40

 

$

82.72

 

Low closing price

 

56.98

 

 

55.37

 

 

55.18

 

 

57.11

 

 

74.33

 

 

55.18

 

 

67.58

 

Period-end closing price

 

69.55

 

 

57.61

 

 

65.17

 

 

66.53

 

 

81.95

 

 

69.55

 

 

81.95

 

Average daily volume (in thousands)

 

56

 

 

67

 

 

89

 

 

69

 

 

54

 

 

70

 

 

56

 

Treasury share activity:
Treasury shares repurchased (in thousands)

 

81

 

 

231

 

 

79

 

 

182

 

 

-

 

 

573

 

 

261

 

Average treasury share repurchase price

$

60.32

 

$

59.49

 

$

61.75

 

$

71.31

 

$

-

 

$

63.68

 

$

74.54

 

 
Key Ratios (percent)
Return on average assets

 

1.59

%

 

1.46

%

 

1.35

%

 

2.29

%

 

1.80

%

 

1.66

%

 

1.80

%

Return on average tangible equity

 

15.3

%

 

13.8

%

 

12.6

%

 

20.6

%

 

16.8

%

 

15.6

%

 

17.3

%

Yield on interest earning assets

 

3.32

%

 

3.43

%

 

3.64

%

 

4.22

%

 

4.22

%

 

3.64

%

 

4.40

%

Cost of interest bearing liabilities

 

0.47

%

 

0.58

%

 

0.71

%

 

0.91

%

 

1.00

%

 

0.66

%

 

1.06

%

Net Interest Margin

 

2.99

%

 

3.02

%

 

3.13

%

 

3.54

%

 

3.46

%

 

3.16

%

 

3.59

%

Non-interest income as a percent of total revenue

 

30.7

%

 

30.3

%

 

27.4

%

 

30.6

%

 

31.2

%

 

34.8

%

 

29.8

%

Efficiency Ratio

 

51.0

%

 

51.6

%

 

53.3

%

 

49.7

%

 

50.0

%

 

51.3

%

 

50.0

%

Price/Earnings Ratio (a)

 

12.41

 

 

11.53

 

 

14.50

 

 

17.63

 

 

14.82

 

 

12.52

 

 

15.10

 

 
Capital (period-end)
Average Shareholders' Equity to Average Assets

 

12.46

%

 

12.71

%

 

12.91

%

 

13.50

%

 

13.12

%

Tangible equity to tangible assets

 

10.33

%

 

10.61

%

 

10.62

%

 

11.38

%

 

10.98

%

Consolidated City Holding Company risk based capital ratios (b):
CET I

 

16.18

%

 

15.93

%

 

16.10

%

 

16.02

%

 

16.05

%

Tier I

 

16.18

%

 

15.93

%

 

16.10

%

 

16.02

%

 

16.05

%

Total

 

16.75

%

 

16.50

%

 

16.69

%

 

16.46

%

 

16.40

%

Leverage

 

10.22

%

 

10.19

%

 

10.45

%

 

11.10

%

 

10.90

%

City National Bank risk based capital ratios (b):
CET I

 

14.10

%

 

14.46

%

 

14.55

%

 

14.32

%

 

13.92

%

Tier I

 

14.10

%

 

14.46

%

 

14.55

%

 

14.32

%

 

13.92

%

Total

 

14.68

%

 

15.04

%

 

15.15

%

 

14.82

%

 

14.28

%

Leverage

 

8.97

%

 

9.32

%

 

9.29

%

 

9.98

%

 

9.51

%

 
Other (period-end)
Branches

 

94

 

 

94

 

 

94

 

 

95

 

 

95

 

FTE

 

926

 

 

925

 

 

911

 

 

922

 

 

922

 

 
Assets per FTE (in thousands)

$

6,219

 

$

5,984

 

$

6,058

 

$

5,525

 

$

5,467

 

Deposits per FTE (in thousands)

 

5,024

 

 

4,799

 

 

4,834

 

 

4,400

 

 

4,440

 

 
 
(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, 2020 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,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
December 31,
2020
December 31,
2019
 
Interest Income
Interest and fees on loans

$

35,685

 

$

35,761

$

37,718

 

$

41,335

 

$

41,615

 

$

150,498

 

$

170,012

 

Interest on investment securities:
Taxable

 

5,500

 

 

6,266

 

5,718

 

 

5,871

 

 

5,924

 

 

23,355

 

 

23,389

 

Tax-exempt

 

1,254

 

 

1,132

 

821

 

 

707

 

 

711

 

 

3,914

 

 

2,967

 

Interest on deposits in depository institutions

 

60

 

 

72

 

55

 

 

304

 

 

298

 

 

492

 

 

1,332

 

Total Interest Income

 

42,499

 

 

43,231

 

44,312

 

 

48,217

 

 

48,548

 

 

178,259

 

 

197,700

 

 
Interest Expense
Interest on deposits

 

4,198

 

 

5,123

 

5,963

 

 

7,238

 

 

7,897

 

 

22,522

 

 

32,666

 

Interest on short-term borrowings

 

120

 

 

131

 

279

 

 

464

 

 

762

 

 

993

 

 

3,491

 

Interest on long-term debt

 

-

 

 

-

 

-

 

 

100

 

 

42

 

 

100

 

 

182

 

Total Interest Expense

 

4,318

 

 

5,254

 

6,242

 

 

7,802

 

 

8,701

 

 

23,615

 

 

36,339

 

Net Interest Income

 

38,181

 

 

37,977

 

38,070

 

 

40,415

 

 

39,847

 

 

154,644

 

 

161,361

 

Provision for (recovery of) credit losses

 

474

 

 

1,026

 

1,250

 

 

7,972

 

 

(75

)

 

10,722

 

 

(1,250

)

Net Interest Income After Provision for (Recovery of) Credit Losses

 

37,707

 

 

36,951

 

36,820

 

 

32,443

 

 

39,922

 

 

143,922

 

 

162,611

 

 
Non-Interest Income
Net gains (losses) on sale of investment securities

 

6

 

 

-

 

(6

)

 

63

 

 

-

 

 

62

 

 

69

 

Unrealized gains (losses) recognized on equity securities still held

 

835

 

 

461

 

242

 

 

(2,402

)

 

914

 

 

(863

)

 

888

 

Service charges

 

6,771

 

 

6,295

 

4,945

 

 

7,723

 

 

8,233

 

 

25,733

 

 

31,515

 

Bankcard revenue

 

5,991

 

 

6,065

 

5,888

 

 

5,115

 

 

5,162

 

 

23,059

 

 

21,093

 

Trust and investment management fee income

 

2,162

 

 

1,844

 

1,931

 

 

1,799

 

 

2,016

 

 

7,736

 

 

7,159

 

Bank owned life insurance

 

813

 

 

1,088

 

848

 

 

1,676

 

 

856

 

 

4,424

 

 

3,766

 

Sale of VISA shares

 

-

 

 

-

 

-

 

 

17,837

 

 

-

 

 

17,837

 

 

-

 

Other income

 

1,143

 

 

1,232

 

783

 

 

1,536

 

 

861

 

 

4,692

 

 

4,000

 

Total Non-Interest Income

 

17,721

 

 

16,985

 

14,631

 

 

33,347

 

 

18,042

 

 

82,680

 

 

68,490

 

 
Non-Interest Expense
Salaries and employee benefits

 

15,989

 

 

15,361

 

14,873

 

 

15,851

 

 

15,918

 

 

62,074

 

 

62,138

 

Occupancy related expense

 

2,447

 

 

2,428

 

2,402

 

 

2,488

 

 

2,540

 

 

9,765

 

 

10,595

 

Equipment and software related expense

 

2,660

 

 

2,607

 

2,504

 

 

2,429

 

 

2,302

 

 

10,200

 

 

8,964

 

FDIC insurance expense

 

363

 

 

355

 

167

 

 

-

 

 

-

 

 

884

 

 

638

 

Advertising

 

538

 

 

462

 

933

 

 

843

 

 

694

 

 

2,776

 

 

3,344

 

Bankcard expenses

 

1,443

 

 

1,517

 

1,498

 

 

1,435

 

 

1,285

 

 

5,893

 

 

5,555

 

Postage, delivery, and statement mailings

 

546

 

 

513

 

592

 

 

616

 

 

588

 

 

2,268

 

 

2,416

 

Office supplies

 

413

 

 

396

 

353

 

 

394

 

 

392

 

 

1,556

 

 

1,559

 

Legal and professional fees

 

438

 

 

548

 

589

 

 

601

 

 

706

 

 

2,176

 

 

2,371

 

Telecommunications

 

540

 

 

547

 

531

 

 

511

 

 

563

 

 

2,129

 

 

2,455

 

Repossessed asset (gains) losses, net of expenses

 

(68

)

 

39

 

76

 

 

198

 

 

224

 

 

245

 

 

634

 

Merger related expenses

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

 

797

 

Other expenses

 

3,332

 

 

3,939

 

3,950

 

 

4,102

 

 

3,822

 

 

15,324

 

 

16,148

 

Total Non-Interest Expense

 

28,641

 

 

28,712

 

28,468

 

 

29,468

 

 

29,034

 

 

115,290

 

 

117,614

 

Income Before Income Taxes

 

26,787

 

 

25,224

 

22,983

 

 

36,322

 

 

28,930

 

 

111,312

 

 

113,487

 

Income tax expense

 

4,565

 

 

5,098

 

4,732

 

 

7,322

 

 

6,319

 

 

21,717

 

 

24,135

 

Net Income Available to Common Shareholders

$

22,222

 

$

20,126

$

18,251

 

$

29,000

 

$

22,611

 

$

89,595

 

$

89,352

 

 
Distributed earnings allocated to common shareholders

$

9,053

 

$

8,944

$

9,073

 

$

9,117

 

$

9,209

 

$

35,745

 

$

35,542

 

Undistributed earnings allocated to common shareholders

 

12,947

 

 

10,984

 

8,998

 

 

19,620

 

 

13,200

 

 

52,963

 

 

53,003

 

Net earnings allocated to common shareholders

$

22,000

 

$

19,928

$

18,071

 

$

28,737

 

$

22,409

 

$

88,708

 

$

88,545

 

 
Average common shares outstanding

 

15,708

 

 

15,950

 

16,081

 

 

16,080

 

 

16,207

 

 

15,975

 

 

16,314

 

Shares for diluted earnings per share

 

15,733

 

 

15,970

 

16,097

 

 

16,101

 

 

16,230

 

 

15,995

 

 

16,333

 

 
Basic earnings per common share

$

1.40

 

$

1.25

$

1.12

 

$

1.79

 

$

1.38

 

$

5.55

 

$

5.43

 

Diluted earnings per common share

$

1.40

 

$

1.25

$

1.12

 

$

1.78

 

$

1.38

 

$

5.55

 

$

5.42

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
 
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
 
Assets
Cash and due from banks

$

77,412

 

$

76,451

 

$

87,658

 

$

92,365

 

$

88,658

 

Interest-bearing deposits in depository institutions

 

451,247

 

 

176,267

 

 

285,596

 

 

18,271

 

 

51,486

 

Cash and cash equivalents

 

528,659

 

 

252,718

 

 

373,254

 

 

110,636

 

 

140,144

 

 
Investment securities available-for-sale, at fair value

 

1,178,789

 

 

1,157,399

 

 

1,055,185

 

 

934,113

 

 

810,106

 

Investment securities held-to-maturity, at amortized cost

 

-

 

 

-

 

 

-

 

 

-

 

 

49,036

 

Other securities

 

27,372

 

 

26,548

 

 

26,144

 

 

26,827

 

 

28,490

 

Total investment securities

 

1,206,161

 

 

1,183,947

 

 

1,081,329

 

 

960,940

 

 

887,632

 

 
Gross loans

 

3,622,119

 

 

3,663,966

 

 

3,665,596

 

 

3,613,050

 

 

3,616,099

 

Allowance for credit losses

 

(24,549

)

 

(24,867

)

 

(25,199

)

 

(24,393

)

 

(11,589

)

Net loans

 

3,597,570

 

 

3,639,099

 

 

3,640,397

 

 

3,588,657

 

 

3,604,510

 

 
Bank owned life insurance

 

118,243

 

 

117,501

 

 

116,746

 

 

116,000

 

 

115,261

 

Premises and equipment, net

 

76,925

 

 

77,031

 

 

77,991

 

 

78,948

 

 

76,965

 

Accrued interest receivable

 

15,793

 

 

16,627

 

 

14,200

 

 

12,570

 

 

11,569

 

Net deferred tax assets

 

-

 

 

-

 

 

-

 

 

2,159

 

 

6,669

 

Intangible assets

 

118,592

 

 

119,004

 

 

119,417

 

 

119,829

 

 

120,241

 

Other assets

 

96,697

 

 

105,361

 

 

105,438

 

 

98,710

 

 

55,765

 

Total Assets

$

5,758,640

 

$

5,511,288

 

$

5,528,772

 

$

5,088,449

 

$

5,018,756

 

 
Liabilities
Deposits:
Noninterest-bearing

$

1,176,990

 

$

1,061,310

 

$

1,079,469

 

$

857,501

 

$

805,087

 

Interest-bearing:
Demand deposits

 

1,027,201

 

 

940,791

 

 

921,761

 

 

837,966

 

 

896,465

 

Savings deposits

 

1,188,003

 

 

1,117,684

 

 

1,067,254

 

 

989,609

 

 

1,009,771

 

Time deposits

 

1,260,022

 

 

1,300,291

 

 

1,342,631

 

 

1,366,977

 

 

1,364,571

 

Total deposits

 

4,652,216

 

 

4,420,076

 

 

4,411,115

 

 

4,052,053

 

 

4,075,894

 

Short-term borrowings
Federal Funds purchased

 

-

 

 

-

 

 

-

 

 

9,900

 

 

-

 

Customer repurchase agreements

 

295,956

 

 

279,866

 

 

282,676

 

 

224,247

 

 

211,255

 

Long-term debt

 

-

 

 

-

 

 

-

 

 

-

 

 

4,056

 

Net deferred tax liabilities

 

3,202

 

 

1,601

 

 

2,598

 

 

-

 

 

-

 

Other liabilities

 

106,160

 

 

118,386

 

 

138,633

 

 

117,021

 

 

69,568

 

Total Liabilities

 

5,057,534

 

 

4,819,929

 

 

4,835,022

 

 

4,403,221

 

 

4,360,773

 

 
Stockholders' Equity
Preferred stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Common stock

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

 

47,619

 

Capital surplus

 

171,304

 

 

170,526

 

 

169,881

 

 

170,096

 

 

170,309

 

Retained earnings

 

589,988

 

 

576,901

 

 

565,804

 

 

556,718

 

 

539,253

 

Cost of common stock in treasury

 

(139,038

)

 

(134,177

)

 

(120,583

)

 

(116,665

)

 

(105,038

)

Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale

 

36,894

 

 

36,760

 

 

37,299

 

 

33,730

 

 

12,110

 

Underfunded pension liability

 

(5,661

)

 

(6,270

)

 

(6,270

)

 

(6,270

)

 

(6,270

)

Total Accumulated Other Comprehensive Income

 

31,233

 

 

30,490

 

 

31,029

 

 

27,460

 

 

5,840

 

Total Stockholders' Equity

 

701,106

 

 

691,359

 

 

693,750

 

 

685,228

 

 

657,983

 

Total Liabilities and Stockholders' Equity

$

5,758,640

 

$

5,511,288

 

$

5,528,772

 

$

5,088,449

 

$

5,018,756

 

 
Regulatory Capital
Total CET 1 capital

$

557,641

 

$

548,269

 

$

548,972

 

$

547,040

 

$

532,829

 

Total tier 1 capital

 

557,641

 

 

548,269

 

 

548,972

 

 

547,040

 

 

532,829

 

Total risk-based capital

 

577,292

 

 

568,153

 

 

569,213

 

 

561,944

 

 

544,479

 

Total risk-weighted assets

 

3,446,774

 

 

3,442,629

 

 

3,410,589

 

 

3,412,591

 

 

3,319,998

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
 
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
 
Residential real estate (1)

$

1,587,694

$

1,621,265

$

1,631,151

$

1,629,578

$

1,640,396

Home equity - junior liens

 

136,469

 

140,135

 

142,672

 

146,034

 

148,928

Commercial and industrial

 

372,989

 

383,980

 

369,122

 

308,567

 

308,015

Commercial real estate (2)

 

1,474,782

 

1,464,701

 

1,467,673

 

1,470,949

 

1,459,737

Consumer

 

47,688

 

50,541

 

52,278

 

54,749

 

54,263

DDA overdrafts

 

2,497

 

3,344

 

2,700

 

3,173

 

4,760

Gross Loans

$

3,622,119

$

3,663,966

$

3,665,596

$

3,613,050

$

3,616,099

 
Construction loans included in:
(1) - Residential real estate loans

$

27,078

$

28,947

$

28,252

$

28,870

$

29,033

(2) - Commercial real estate loans

 

40,449

 

42,449

 

42,092

 

44,453

 

64,049

CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information
(Unaudited) ($ in 000s)
 
Three Months Ended Twelve Months Ended
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
December 31,
2020
December 31,
2019
Allowance for Credit Losses
Balance at beginning of period

$

24,867

 

$

25,199

 

$

24,393

 

$

11,589

 

$

13,186

 

$

11,589

 

$

15,966

 

 
Charge-offs:
Commercial and industrial

 

(9

)

 

(757

)

 

-

 

 

(77

)

 

(193

)

 

(843

)

 

(261

)

Commercial real estate

 

(616

)

 

(75

)

 

(39

)

 

(383

)

 

(964

)

 

(1,113

)

 

(1,358

)

Residential real estate

 

(139

)

 

(252

)

 

(376

)

 

(483

)

 

(226

)

 

(1,250

)

 

(787

)

Home equity

 

(88

)

 

(126

)

 

(161

)

 

(45

)

 

(134

)

 

(420

)

 

(294

)

Consumer

 

(27

)

 

(74

)

 

(36

)

 

(55

)

 

(338

)

 

(192

)

 

(1,177

)

DDA overdrafts

 

(629

)

 

(554

)

 

(459

)

 

(703

)

 

(792

)

 

(2,345

)

 

(2,777

)

Total charge-offs

 

(1,508

)

 

(1,838

)

 

(1,071

)

 

(1,746

)

 

(2,647

)

 

(6,163

)

 

(6,654

)

 
Recoveries:
Commercial and industrial

 

74

 

 

3

 

 

5

 

 

9

 

 

581

 

 

91

 

 

764

 

Commercial real estate

 

150

 

 

44

 

 

128

 

 

203

 

 

10

 

 

525

 

 

624

 

Residential real estate

 

57

 

 

24

 

 

8

 

 

95

 

 

87

 

 

184

 

 

369

 

Home equity

 

47

 

 

33

 

 

9

 

 

47

 

 

-

 

 

136

 

 

-

 

Consumer

 

55

 

 

42

 

 

128

 

 

13

 

 

54

 

 

238

 

 

265

 

DDA overdrafts

 

333

 

 

334

 

 

349

 

 

451

 

 

393

 

 

1,467

 

 

1,505

 

Total recoveries

 

716

 

 

480

 

 

627

 

 

818

 

 

1,125

 

 

2,641

 

 

3,527

 

 
Net charge-offs

 

(792

)

 

(1,358

)

 

(444

)

 

(928

)

 

(1,522

)

 

(3,522

)

 

(3,127

)

Provision for (recovery of) credit losses

 

474

 

 

1,026

 

 

1,250

 

 

7,972

 

 

(75

)

 

10,722

 

 

(1,250

)

Impact of Adopting ASC 326

 

-

 

 

-

 

 

-

 

 

5,760

 

 

-

 

 

5,760

 

 

-

 

Balance at end of period

$

24,549

 

$

24,867

 

$

25,199

 

$

24,393

 

$

11,589

 

$

24,549

 

$

11,589

 

 
Loans outstanding

$

3,622,119

 

$

3,663,966

 

$

3,665,596

 

$

3,613,050

 

$

3,616,099

 

Allowance as a percent of loans outstanding

 

0.68

%

 

0.68

%

 

0.69

%

 

0.68

%

 

0.32

%

Allowance as a percent of non-performing loans

 

200.7

%

 

182.7

%

 

185.1

%

 

202.2

%

 

98.6

%

 
Average loans outstanding

$

3,635,673

 

$

3,661,569

 

$

3,660,174

 

$

3,608,868

 

$

3,607,864

 

$

3,641,610

 

$

3,567,143

 

Net charge-offs (annualized) as a percent of average loans outstanding

 

0.09

%

 

0.15

%

 

0.05

%

 

0.10

%

 

0.17

%

 

0.10

%

 

0.09

%

 
 
CITY HOLDING COMPANY AND SUBSIDIARIES
Asset Quality Information, continued
(Unaudited) ($ in 000s)
 
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
Nonaccrual Loans
Residential real estate

$

2,968

 

$

3,983

 

$

3,477

 

$

2,750

 

$

3,393

 

Home equity

 

95

 

 

74

 

 

265

 

 

249

 

 

531

 

Commercial and industrial

 

768

 

 

728

 

 

1,087

 

 

1,175

 

 

1,182

 

Commercial real estate

 

8,401

 

 

8,479

 

 

8,715

 

 

7,865

 

 

6,384

 

Consumer

 

-

 

 

-

 

 

-

 

 

1

 

 

-

 

Total nonaccrual loans

 

12,232

 

 

13,264

 

 

13,544

 

 

12,040

 

 

11,490

 

Accruing loans past due 90 days or more

 

-

 

 

345

 

 

68

 

 

26

 

 

267

 

Total non-performing loans

 

12,232

 

 

13,609

 

 

13,612

 

 

12,066

 

 

11,757

 

Other real estate owned

 

1,650

 

 

2,080

 

 

3,997

 

 

3,922

 

 

4,670

 

Total non-performing assets

$

13,882

 

$

15,689

 

$

17,609

 

$

15,988

 

$

16,427

 

 
Non-performing assets as a percent of loans and other real estate owned

 

0.38

%

 

0.43

%

 

0.48

%

 

0.44

%

 

0.45

%

 
Past Due Loans
Residential real estate

$

5,993

 

$

5,153

 

$

5,261

 

$

7,815

 

$

7,485

 

Home equity

 

575

 

 

474

 

 

393

 

 

430

 

 

956

 

Commercial and industrial

 

1,241

 

 

691

 

 

160

 

 

71

 

 

458

 

Commercial real estate

 

625

 

 

602

 

 

917

 

 

1,021

 

 

1,580

 

Consumer

 

113

 

 

121

 

 

67

 

 

177

 

 

187

 

DDA overdrafts

 

341

 

 

379

 

 

273

 

 

467

 

 

730

 

Total past due loans

$

8,888

 

$

7,420

 

$

7,071

 

$

9,981

 

$

11,396

 

 
Total past due loans as a percent of loans outstanding

 

0.25

%

 

0.20

%

 

0.19

%

 

0.28

%

 

0.32

%

 
Troubled Debt Restructurings ("TDRs")
Residential real estate

$

19,226

 

$

20,398

 

$

20,631

 

$

21,413

 

$

21,029

 

Home equity

 

2,001

 

 

2,100

 

 

2,138

 

 

2,294

 

 

3,628

 

Commercial and industrial

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Commercial real estate

 

4,638

 

 

4,894

 

 

4,915

 

 

5,163

 

 

4,973

 

Consumer

 

277

 

 

260

 

 

185

 

 

184

 

 

-

 

Total TDRs

$

26,142

 

$

27,652

 

$

27,869

 

$

29,054

 

$

29,630

 

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
Three Months Ended
December 31, 2020 September 30, 2020 December 31, 2019
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,744,952

 

$

17,623

4.02

%

$

1,766,796

 

$

17,899

4.03

%

$

1,792,186

 

$

20,135

4.46

%

Commercial, financial, and agriculture (2)

 

1,837,044

 

 

17,077

3.70

%

 

1,839,939

 

 

16,910

3.66

%

 

1,755,775

 

 

20,371

4.60

%

Installment loans to individuals (2), (3)

 

53,677

 

 

800

5.93

%

 

54,834

 

 

804

5.83

%

 

59,903

 

 

902

5.97

%

Previously securitized loans (4) ***

 

184

*** ***

 

148

*** ***

 

207

***
Total loans

 

3,635,673

 

 

35,684

3.90

%

 

3,661,569

 

 

35,761

3.89

%

 

3,607,864

 

 

41,615

4.58

%

Securities:
Taxable

 

976,897

 

 

5,500

2.24

%

 

877,623

 

 

6,266

2.84

%

 

790,317

 

 

5,925

2.97

%

Tax-exempt (5)

 

238,198

 

 

1,587

2.65

%

 

204,178

 

 

1,433

2.79

%

 

94,248

 

 

900

3.79

%

Total securities

 

1,215,095

 

 

7,087

2.32

%

 

1,081,801

 

 

7,699

2.83

%

 

884,565

 

 

6,825

3.06

%

Deposits in depository institutions

 

275,106

 

 

60

0.09

%

 

304,498

 

 

72

0.09

%

 

92,579

 

 

298

1.28

%

Total interest-earning assets

 

5,125,874

 

 

42,831

3.32

%

 

5,047,868

 

 

43,532

3.43

%

 

4,585,008

 

 

48,738

4.22

%

Cash and due from banks

 

73,900

 

 

80,505

 

 

66,351

 

Premises and equipment, net

 

76,956

 

 

77,647

 

 

76,998

 

Goodwill and intangible assets

 

118,855

 

 

119,267

 

 

120,510

 

Other assets

 

231,309

 

 

229,667

 

 

191,991

 

Less: Allowance for credit losses

 

(25,112

)

 

(25,311

)

 

(12,881

)

Total assets

$

5,601,782

 

$

5,529,643

 

$

5,027,977

 

 
Liabilities:
Interest-bearing demand deposits

$

953,604

 

$

171

0.07

%

$

931,152

 

$

187

0.08

%

$

872,639

 

$

694

0.32

%

Savings deposits

 

1,148,717

 

 

225

0.08

%

 

1,093,886

 

 

303

0.11

%

 

1,003,063

 

 

944

0.37

%

Time deposits (2)

 

1,278,698

 

 

3,801

1.18

%

 

1,322,423

 

 

4,633

1.39

%

 

1,362,277

 

 

6,260

1.82

%

Short-term borrowings

 

287,059

 

 

120

0.17

%

 

260,518

 

 

131

0.20

%

 

221,685

 

 

762

1.36

%

Long-term debt

 

-

 

 

-

-

 

-

 

 

-

-

 

4,055

 

 

42

4.11

%

Total interest-bearing liabilities

 

3,668,078

 

 

4,317

0.47

%

 

3,607,979

 

 

5,254

0.58

%

 

3,463,719

 

 

8,702

1.00

%

Noninterest-bearing demand deposits

 

1,130,084

 

 

1,114,822

 

 

838,192

 

Other liabilities

 

105,445

 

 

104,084

 

 

66,232

 

Stockholders' equity

 

698,175

 

 

702,758

 

 

659,834

 

Total liabilities and stockholders' equity

$

5,601,782

 

$

5,529,643

 

$

5,027,977

 

Net interest income

$

38,514

$

38,278

$

40,036

Net yield on earning assets

2.99

%

3.02

%

3.46

%

 
(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

$

962

$

156

$

152

 
(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

$

153

$

132

$

159

Commercial, financial, and agriculture

 

304

 

250

 

398

Installment loans to individuals

 

29

 

38

 

46

Time deposits

 

155

 

155

 

316

$

641

$

575

$

919

 
(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, 2020 December 31, 2019
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
 
Assets:
Loan portfolio (1):
Residential real estate (2)

$

1,768,789

 

$

74,452

4.21

%

$

1,791,636

 

$

81,603

4.55

%

Commercial, financial, and agriculture (2)

 

1,816,658

 

 

72,128

3.97

%

 

1,717,381

 

 

84,167

4.90

%

Installment loans to individuals (2), (3)

 

56,163

 

 

3,319

5.91

%

 

58,126

 

 

3,559

6.12

%

Previously securitized loans (4) ***

 

599

*** ***

 

684

***
Total loans

 

3,641,610

 

 

150,498

4.13

%

 

3,567,143

 

 

170,013

4.77

%

Securities:
Taxable

 

890,771

 

 

23,355

2.62

%

 

761,358

 

 

23,389

3.07

%

Tax-exempt (5)

 

164,740

 

 

4,954

3.01

%

 

98,217

 

 

3,756

3.82

%

Total securities

 

1,055,511

 

 

28,309

2.68

%

 

859,575

 

 

27,145

3.16

%

Deposits in depository institutions

 

230,043

 

 

492

0.21

%

 

84,826

 

 

1,332

1.57

%

Total interest-earning assets

 

4,927,164

 

 

179,299

3.64

%

 

4,511,544

 

 

198,490

4.40

%

Cash and due from banks

 

76,173

 

 

65,664

 

Premises and equipment, net

 

77,670

 

 

78,103

 

Goodwill and intangible assets

 

119,471

 

 

121,460

 

Other assets

 

221,864

 

 

191,422

 

Less: Allowance for credit losses

 

(22,770

)

 

(14,466

)

Total assets

$

5,399,572

 

$

4,953,727

 

 
Liabilities:
Interest-bearing demand deposits

$

912,306

 

$

1,005

0.11

%

$

878,716

 

$

3,490

0.40

%

Savings deposits

 

1,071,727

 

 

1,591

0.15

%

 

977,327

 

 

4,405

0.45

%

Time deposits (2)

 

1,329,841

 

 

19,927

1.50

%

 

1,368,752

 

 

24,771

1.81

%

Short-term borrowings

 

253,456

 

 

993

0.39

%

 

211,452

 

 

3,491

1.65

%

Long-term debt

 

830

 

 

100

12.05

%

 

4,054

 

 

182

4.49

%

Total interest-bearing liabilities

 

3,568,160

 

 

23,616

0.66

%

 

3,440,301

 

 

36,339

1.06

%

Noninterest-bearing demand deposits

 

1,035,801

 

 

818,161

 

Other liabilities

 

100,166

 

 

57,350

 

Stockholders' equity

 

695,445

 

 

637,915

 

Total liabilities and stockholders' equity

$

5,399,572

 

$

4,953,727

 

Net interest income

$

155,683

$

162,151

Net yield on earning assets

3.16

%

3.59

%

 
(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

$

1,842

$

863

 
(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

$

630

$

323

Commercial, financial, and agriculture

 

2,445

 

2,366

Installment loans to individuals

 

143

 

47

Time deposits

 

622

 

843

$

3,840

$

3,579

 
(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,
2020
September 30,
2020
June 30,
2020
March 31,
2020
December 31,
2019
December 31,
2020
December 31,
2019
Net Interest Income/Margin
Net interest income ("GAAP")

$

38,181

 

$

37,977

 

$

38,070

 

$

40,415

 

$

39,847

 

$

154,644

 

$

161,361

 

Taxable equivalent adjustment

 

333

 

 

301

 

 

217

 

 

188

 

 

189

 

 

1,039

 

 

790

 

Net interest income, fully taxable equivalent

$

38,514

 

$

38,278

 

$

38,287

 

$

40,603

 

$

40,036

 

$

155,683

 

$

162,151

 

 
Average interest earning assets

$

5,125,874

 

$

5,047,868

 

$

4,914,242

 

$

4,617,157

 

$

4,585,008

 

$

4,927,164

 

$

4,511,544

 

 
Net Interest Margin

 

2.99

%

 

3.02

%

 

3.13

%

 

3.54

%

 

3.46

%

 

3.16

%

 

3.59

%

Accretion related to fair value adjustments

 

-0.05

%

 

-0.05

%

 

-0.08

%

 

-0.14

%

 

-0.08

%

 

-0.08

%

 

-0.08

%

Net Interest Margin (excluding accretion)

 

2.94

%

 

2.97

%

 

3.05

%

 

3.40

%

 

3.38

%

 

3.08

%

 

3.51

%

 
Tangible Equity Ratio (period end)
Equity to assets ("GAAP")

 

12.18

%

 

12.54

%

 

12.55

%

 

13.47

%

 

13.11

%

Effect of goodwill and other intangibles, net

 

-1.85

%

 

-1.93

%

 

-1.93

%

 

-2.09

%

 

-2.13

%

Tangible common equity to tangible assets

 

10.33

%

 

10.61

%

 

10.62

%

 

11.38

%

 

10.98

%

 
Return on Tangible Equity
Return on tangible equity ("GAAP")

 

15.3

%

 

13.8

%

 

12.6

%

 

20.6

%

 

16.8

%

 

15.6

%

 

17.3

%

Impact of merger related expenses

 

-

 

-

 

-

 

-

 

-

 

-

 

0.1

%

Impact of sale of VISA shares

 

-

 

-

 

-

 

-9.7

%

 

-

 

-2.4

%

 

-
Return on tangible equity, excluding merger related expenses and sale of VISA shares

 

15.3

%

 

13.8

%

 

12.6

%

 

10.9

%

 

16.8

%

 

13.2

%

 

17.4

%

 
Return on Assets
Return on assets ("GAAP")

 

1.59

%

 

1.46

%

 

1.35

%

 

2.29

%

 

1.80

%

 

1.66

%

 

1.80

%

Impact of merger related expenses

 

-

 

-

 

-

 

-

 

-

 

-

 

0.01

%

Impact of sale of VISA shares

 

-

 

-

 

-

 

-1.08

%

 

-

 

-0.24

%

 

-
Return on assets, excluding merger related expenses and sale of VISA shares

 

1.59

%

 

1.46

%

 

1.35

%

 

1.21

%

 

1.80

%

 

1.41

%

 

1.81

%

 

Contacts

Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102

Contacts

Charles R. Hageboeck, Chief Executive Officer and President
(304) 769-1102