City Holding Company Announces Second Quarter Results

·12 min read

CHARLESTON, W. Va., July 22, 2021--(BUSINESS WIRE)--City Holding Company ("Company" or "City") (NASDAQ:CHCO), a $5.9 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $22.1 million and diluted earnings of $1.41 per share for the quarter ended June 30, 2021. For the second quarter of 2021, the Company achieved a return on assets of 1.49% and a return on tangible equity of 15.2%.

Charles R. ("Skip") Hageboeck, the President and Chief Executive Officer of City, commented: "As the impacts of the COVID-19 pandemic continue to diminish and economic activity continues to rebound to customary levels, City’s financial performance also trended upward in the second quarter of 2021. Net interest income increased $0.4 million from the quarter ended March 31, 2021 and noninterest income improved significantly ($2.8 million or 19.3%) as compared to the quarter ended June 30, 2020. Net interest income improved as a portion of our excess liquidity was used to purchase investment securities and improve interest income and interest bearing deposits continue to migrate to lower rate or noninterest-bearing deposit options. Debit card usage by our customers continued to hit new highs in the second quarter of 2021 as we saw our bankcard revenues increase almost 23% compared to the quarter ended June 30, 2020."

"As the economic outlook improved during the second quarter of 2021 and unemployment forecasts improved, City was able to release $2.0 million of its allowance for credit losses at June 30, 2021. Asset quality remains impeccable with nonperforming assets at historical low levels and both past dues and troubled debt restructurings are below December 31, 2020 levels. Loan deferrals have also declined to very low levels at June 30, 2021 with commercial loan deferrals at $92 million, or 5% of total commercial balances. Hotel and lodging customers comprise essentially all of these deferrals and based on current occupancy levels, we expect these deferrals to continue to decline. Residential mortgages deferrals are now less than 0.1% of total residential real estate balances at June 30, 2021."

"While loan growth continues to be difficult, we were able to grow commercial loan balances, net of government-sponsored Paycheck Protection Program ("PPP") loans administered by the Small Business Administration ("SBA"), approximately 2.5% on an annualized basis during the second quarter of 2021. As of June 30, 2021, approximately $50 million of PPP loans were outstanding with 95% of the PPP loans originated in 2020 having been forgiven."

Net Interest Income

The Company’s net interest income increased from $37.5 million during the first quarter of 2021 to $37.9 million during the second quarter of 2021. During the second quarter of 2021, the Company’s tax equivalent net interest income increased $0.4 million, or 1.0%, from $37.9 million for the first quarter of 2021 to $38.3 million for the second quarter of 2021. Lower rates paid on deposits (11 basis points) and lower time deposit balances ($54.2 million) increased net interest income by $0.7 million and $0.1 million, respectively. Additionally, primarily on the strength of higher balances ($105.5 million), investment securities contributed $0.7 million in additional net interest income as compared to the quarter ended March 31, 2021. These increases were partially offset by lower loan balances ($44.6 million) and decreased loan yields (11 basis points) that decreased net interest income by $0.6 million and $0.4 million, respectively. The Company’s reported net interest margin decreased from 2.91% for the first quarter of 2021 to 2.81% for the second quarter of 2021. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.76% for the quarter ended June 30, 2021 and 2.87% for the quarter ended March 31, 2021.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.39% at March 31, 2021 to 0.32% at June 30, 2021. Total nonperforming assets decreased from $14.0 million at March 31, 2021 to $11.4 million at June 30, 2021. Total past due loans increased from $6.6 million, or 0.19% of total loans outstanding, at March 31, 2021 to $7.6 million, or 0.22% of total loans outstanding, at June 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 $2.0 million in the second quarter of 2021, compared to a provision for credit losses of $1.3 million for the comparable period in 2020 and a recovery of credit losses of $0.4 million for the first quarter of 2021. The determination of the Company’s allowance for credit losses is largely dependent on expected unemployment ranges. Due to improvements in the outlook for unemployment ranges utilized by the Company and partial 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 $17.4 million for the second quarter of 2021 as compared to $14.6 million for the second quarter of 2020. During the second quarter of 2021, the Company reported $0.4 million of unrealized fair value gains on the Company’s equity securities compared to $0.2 million of unrealized fair value gains on the Company’s equity securities in the second quarter of 2020. Exclusive of these gains, non-interest income increased from $14.4 million for the second quarter of 2020 to $17.0 million for the second quarter of 2021. This increase was primarily due to higher bankcard revenue ($1.3 million, or 22.6%) and service charges ($1.0 million, or 19.2%). For the second consecutive quarter, bankcard revenues of $7.2 million for the quarter ended June 30, 2021 established a new quarterly high for the Company as customer spending via their debit cards continued to increase.

Non-interest Expenses

Non-interest expenses increased $1.1 million (3.9%), from $28.5 million in the second quarter of 2020 to $29.6 million in the second quarter of 2021. This increase was largely due to increased salary and employee benefits of $0.7 million, bankcard expenses of $0.2 million, and FDIC insurance expense of $0.2 million. Salary and employee benefits increased due to an uptick in health insurance and customary salary increases. Bankcard expenses increased due to higher activity, while the increase in FDIC insurance expense reflects a credit utilized in the quarter ended June 30, 2020.

Balance Sheet Trends

Loans decreased $17.3 million from March 31, 2021 to June 30, 2021, to $3.53 billion. PPP loans decreased $13.3 million from March 31, 2021, as loans forgiven of $21 million were partially offset by the Company’s participation in the second round of the PPP lending. Excluding outstanding PPP loans (included in the commercial and industrial loan category), total loans decreased $4.3 million, (0.1%), from March 31, 2021 to $3.48 billion at June 30, 2021. Residential real estate loans decreased $11.8 million (0.8%); home equity loans decreased $2.4 million (1.8%); and consumer loans decreased $2.0 million (4.3%). These decreases were partially offset by increases in commercial real estate loans ($10.6 million or 0.7%) and commercial and industrial loans ($0.4 million or 0.1%) (excluding PPP loans).

Total average depository balances increased $187.6 million, or 4.0%, from the quarter ended March 31, 2021 to the quarter ended June 30, 2021. Average noninterest-bearing demand deposit balances increased $113.4 million, average savings deposit balances increased $66.8 million, and average interest-bearing demand deposit balances increased $61.6 million. We believe that these increases were largely attributable to the third round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (approximately $180 million received late in the quarter ended March 31, 2021) and proceeds from PPP loans (approximately $50 million). These increases were partially offset by a decrease in time deposit balances of $54.2 million.

Income Tax Expense

The Company’s effective income tax rate for the second quarter of 2021 was 20.3% compared to 19.5% for the year ended December 31, 2020, and 20.6% for the quarter ended June 30, 2020.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 73.5% and the loan to asset ratio was 59.8% at June 30, 2021. The Company maintained investment securities totaling 23.1% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and saving accounts, which fund 61.8% of assets at June 30, 2021. Time deposits fund 19.5% of assets at June 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 $578 million at June 30, 2021. Due primarily to the influx of deposits and unrealized security losses during the six months ended June 30, 2021, the Company’s tangible equity ratio decreased modestly from 10.3% at December 31, 2020 to 10.0% at June 30, 2021. At June 30, 2021, City National Bank’s Leverage Ratio was 8.80%, its Common Equity Tier I ratio was 14.82%, its Tier I Capital ratio was 14.82%, and its Total Risk-Based Capital ratio was 15.30%. These regulatory capital ratios are significantly above levels required to be considered "well capitalized," which is the highest possible regulatory designation.

On June 30, 2021, the Board of Directors of the Company approved a quarterly cash dividend of $0.58 per share payable July 30, 2021, to shareholders of record as of July 15, 2021. During the quarter ended June 30, 2021, the Company repurchased 217,000 common shares at a weighted average price of $78.75 per share as part of a one million share repurchase plan authorized by the Board of Directors in March 2021. As of June 30, 2021, the Company could repurchase 783,000 additional shares under the current program.

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

CITY HOLDING COMPANY AND SUBSIDIARIES

Financial Highlights

(Unaudited)

Three Months Ended

Six Months Ended

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

June 30,
2021

June 30,
2020

Earnings

Net Interest Income (fully taxable equivalent)

$

38,257

$

37,871

$

38,514

$

38,278

$

38,287

$

76,128

$

78,892

Net Income available to common shareholders

22,148

19,814

22,222

20,126

18,251

41,962

47,249

Per Share Data

Earnings per share available to common shareholders:

Basic

$

1.41

$

1.25

$

1.40

$

1.25

$

1.12

$

2.66

$

2.90

Diluted

1.41

1.25

1.40

1.25

1.12

2.66

2.90

Weighted average number of shares (in thousands):

Basic

15,573

15,656

15,708

15,950

16,081

15,614

16,123

Diluted

15,594

15,687

15,733

15,970

16,097

15,640

16,142

Period-end number of shares (in thousands)

15,527

15,724

15,768

15,848

16,077

15,527

16,077

Cash dividends declared

$

0.58

$

0.58

$

0.58

$

0.57

$

0.57

$

1.16

$

1.14

Book value per share (period-end)

$

44.79

$

43.99

$

44.47

$

43.62

$

43.15

$

44.79

$

43.15

Tangible book value per share (period-end)

37.20

36.47

36.94

36.11

35.72

37.20

35.72

Market data:

High closing price

$

83.85

$

87.41

$

70.77

$

67.98

$

71.19

$

87.41

$

82.40

Low closing price

74.44

69.05

56.98

55.37

55.18

69.05

55.18

Period-end closing price

75.24

81.78

69.55

57.61

65.17

75.24

65.17

Average daily volume (in thousands)

61

63

56

67

89

62

79

Treasury share activity:

Treasury shares repurchased (in thousands)

217

75

81

231

79

292

261

Average treasury share repurchase price

$

78.75

$

76.71

$

60.32

$

59.49

$

61.75

$

78.22

$

68.41

Key Ratios (percent)

Return on average assets

1.49

%

1.38

%

1.59

%

1.46

%

1.35

%

1.44

%

1.81

%

Return on average tangible equity

15.2

%

13.5

%

15.3

%

13.8

%

12.6

%

14.3

%

16.6

%

Yield on interest earning assets

3.00

%

3.17

%

3.32

%

3.43

%

3.64

%

3.08

%

3.92

%

Cost of interest bearing liabilities

0.27

%

0.37

%

0.47

%

0.58

%

0.71

%

0.32

%

0.81

%

Net Interest Margin

2.81

%

2.91

%

2.99

%

3.02

%

3.13

%

2.86

%

3.33

%

Non-interest income as a percent of total revenue

31.0

%

30.4

%

30.7

%

30.3

%

27.4

%

30.9

%

37.9

%

Efficiency Ratio

52.8

%

54.3

%

51.0

%

51.6

%

53.3

%

53.5

%

51.4

%

Price/Earnings Ratio (a)

13.35

16.30

12.41

11.53

14.50

14.13

11.23

Capital (period-end)

Average Shareholders' Equity to Average Assets

11.81

%

12.30

%

12.46

%

12.71

%

12.91

%

Tangible equity to tangible assets

9.98

%

9.93

%

10.33

%

10.61

%

10.62

%

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

CET I

16.40

%

16.76

%

16.18

%

15.93

16.10

%

Tier I

16.40

%

16.76

%

16.18

%

15.93

%

16.10

%

Total

16.88

%

17.33

%

16.75

%

16.50

%

16.69

%

Leverage

9.70

%

10.06

%

10.22

%

10.19

%

10.45

%

City National Bank risk based capital ratios (b):

CET I

14.82

%

14.75

%

14.10

%

14.46

%

14.55

%

Tier I

14.82

%

14.75

%

14.10

%

14.46

%

14.55

%

Total

15.30

%

15.33

%

14.68

%

15.04

%

15.15

%

Leverage

8.80

%

8.91

%

8.97

%

9.32

%

9.29

%

Other (period-end)

Branches

94

94

94

94

94

FTE

912

916

926

925

911

Assets per FTE (in thousands)

$

6,477

$

6,434

$

6,219

$

5,984

$

6,058

Deposits per FTE (in thousands)

5,271

5,236

5,024

4,799

4,834

(a) The price/earnings ratio is computed based on annualized quarterly earnings (excludes gain for sale of VISA shares, net of taxes).

(b) June 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

Six Months Ended

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

June 30,
2021

June 30,
2020

Interest Income

Interest and fees on loans

$

33,114

$

34,324

$

35,685

$

35,761

$

37,718

$

67,438

$

79,053

Interest on investment securities:

Taxable

5,932

5,242

5,500

6,266

5,718

11,174

11,589

Tax-exempt

1,291

1,253

1,254

1,132

821

2,544

1,528

Interest on deposits in depository institutions

162

118

60

72

55

280

360

Total Interest Income

40,499

40,937

42,499

43,231

44,312

81,436

92,530

Interest Expense

Interest on deposits

2,460

3,280

4,198

5,123

5,963

5,740

13,201

Interest on short-term borrowings

125

117

120

131

279

242

743

Interest on long-term debt

-

-

-

-

-

-

100

Total Interest Expense

2,585

3,397

4,318

5,254

6,242

5,982

14,044

Net Interest Income

37,914

37,540

38,181

37,977

38,070

75,454

78,486

(Recovery of) provision for credit losses

(2,000

)

(440

)

474

1,026

1,250

(2,440

)

9,222

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

39,914

37,980

37,707

36,951

36,820

77,894

69,264

Non-Interest Income

Net gains (losses) on sale of investment securities

29

283

6

-

(6

)

312

56

Unrealized gains (losses) recognized on equity securities still held

410

(51

)

835

461

242

359

(2,159

)

Service charges

5,895

5,881

6,771

6,295

4,945

11,776

12,667

Bankcard revenue

7,221

6,213

5,991

6,065

5,888

13,434

11,003

Trust and investment management fee income

2,012

2,033

2,162

1,844

1,931

4,045

3,730

Bank owned life insurance

940

1,460

813

1,088

848

2,400

2,523

Sale of VISA shares

-

-

-

-

-

-

17,837

Other income

941

811

1,143

1,232

783

1,752

2,318

Total Non-Interest Income

17,448

16,630

17,721

16,985

14,631

34,078

47,975

Non-Interest Expense

Salaries and employee benefits

15,559

15,671

15,989

15,361

14,873

31,230

30,724

Occupancy related expense

2,525

2,622

2,447

2,428

2,402

5,147

4,890

Equipment and software related expense

2,655

2,544

2,660

2,607

2,504

5,199

4,933

FDIC insurance expense

382

405

363

355

167

787

167

Advertising

824

881

538

462

933

1,705

1,776

Bankcard expenses

1,746

1,584

1,443

1,517

1,498

3,330

2,933

Postage, delivery, and statement mailings

568

592

546

513

592

1,160

1,208

Office supplies

371

392

413

396

353

763

747

Legal and professional fees

589

675

438

548

589

1,264

1,190

Telecommunications

676

690

540

547

531

1,366

1,042

Repossessed asset losses (gains), net of expenses

1

79

(68

)

39

76

80

274

Other expenses

3,678

3,674

3,332

3,939

3,950

7,352

8,052

Total Non-Interest Expense

29,574

29,809

28,641

28,712

28,468

59,383

57,936

Income Before Income Taxes

27,788

24,801

26,787

25,224

22,983

52,589

59,303

Income tax expense

5,640

4,987

4,565

5,098

4,732

10,627

12,054

Net Income Available to Common Shareholders

$

22,148

$

19,814

$

22,222

$

20,126

$

18,251

$

41,962

$

47,249

Distributed earnings allocated to common shareholders

$

8,921

$

9,037

$

9,053

$

8,944

$

9,073

$

17,845

$

18,147

Undistributed earnings allocated to common shareholders

13,021

10,598

12,947

10,984

8,998

23,732

28,639

Net earnings allocated to common shareholders

$

21,942

$

19,635

$

22,000

$

19,928

$

18,071

$

41,577

$

46,786

Average common shares outstanding

15,573

15,656

15,708

15,950

16,081

15,614

16,123

Shares for diluted earnings per share

15,594

15,687

15,733

15,970

16,097

15,640

16,142

Basic earnings per common share

$

1.41

$

1.25

$

1.40

$

1.25

$

1.12

$

2.66

$

2.90

Diluted earnings per common share

$

1.41

$

1.25

$

1.40

$

1.25

$

1.12

$

2.66

$

2.90

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

($ in 000s)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

Assets

Cash and due from banks

$

97,523

$

97,709

$

77,412

$

76,451

$

87,658

Interest-bearing deposits in depository institutions

512,367

659,090

451,247

176,267

285,596

Cash and cash equivalents

609,890

756,799

528,659

252,718

373,254

Investment securities available-for-sale, at fair value

1,340,681

1,185,245

1,178,789

1,157,399

1,055,185

Other securities

24,548

27,182

27,372

26,548

26,144

Total investment securities

1,365,229

1,212,427

1,206,161

1,183,947

1,081,329

Gross loans

3,529,416

3,546,723

3,622,119

3,663,966

3,665,596

Allowance for credit losses

(20,016

)

(24,076

)

(24,549

)

(24,867

)

(25,199

)

Net loans

3,509,400

3,522,647

3,597,570

3,639,099

3,640,397

Bank owned life insurance

119,491

118,976

118,243

117,501

116,746

Premises and equipment, net

76,263

76,529

76,925

77,031

77,991

Accrued interest receivable

15,967

16,231

15,793

16,627

14,200

Net deferred tax assets

-

1,395

-

-

-

Intangible assets

117,857

118,224

118,592

119,004

119,417

Other assets

89,958

71,142

96,697

105,361

105,438

Total Assets

$

5,904,055

$

5,894,370

$

5,758,640

$

5,511,288

$

5,528,772

Liabilities

Deposits:

Noninterest-bearing

$

1,279,932

$

1,244,175

$

1,176,990

$

1,061,310

$

1,079,469

Interest-bearing:

Demand deposits

1,070,004

1,077,749

1,027,201

940,791

921,761

Savings deposits

1,301,219

1,265,038

1,188,003

1,117,684

1,067,254

Time deposits

1,153,391

1,209,873

1,260,022

1,300,291

1,342,631

Total deposits

4,804,546

4,796,835

4,652,216

4,420,076

4,411,115

Short-term borrowings

Customer repurchase agreements

311,316

316,003

295,956

279,866

282,676

Net deferred tax liabilities

2,310

-

3,202

1,601

2,598

Other liabilities

90,407

89,847

106,160

118,386

138,633

Total Liabilities

5,208,579

5,202,685

5,057,534

4,819,929

4,835,022

Stockholders' Equity

Preferred stock

-

-

-

-

-

Common stock

47,619

47,619

47,619

47,619

47,619

Capital surplus

169,674

170,526

171,304

170,526

169,881

Retained earnings

613,553

600,396

589,988

576,901

565,804

Cost of common stock in treasury

(157,936

)

(142,484

)

(139,038

)

(134,177

)

(120,583

)

Accumulated other comprehensive income:

Unrealized gain on securities available-for-sale

28,227

21,289

36,894

36,760

37,299

Underfunded pension liability

(5,661

)

(5,661

)

(5,661

)

(6,270

)

(6,270

)

Total Accumulated Other Comprehensive Income

22,566

15,628

31,233

30,490

31,029

Total Stockholders' Equity

695,476

691,685

701,106

691,359

693,750

Total Liabilities and Stockholders' Equity

$

5,904,055

$

5,894,370

$

5,758,640

$

5,511,288

$

5,528,772

Regulatory Capital

Total CET 1 capital

$

561,317

$

563,523

$

557,641

$

548,269

$

548,972

Total tier 1 capital

561,317

563,523

557,641

548,269

548,972

Total risk-based capital

577,543

582,816

577,292

568,153

569,213

Total risk-weighted assets

3,421,764

3,362,595

3,446,774

3,442,629

3,410,589

CITY HOLDING COMPANY AND SUBSIDIARIES

Loan Portfolio

(Unaudited) ($ in 000s)

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

Commercial and industrial

$

358,583

$

371,195

$

372,989

$

383,980

$

369,122

1-4 Family

108,079

108,131

109,812

114,071

123,814

Hotels

290,119

293,176

294,464

295,989

295,179

Multi-family

212,715

212,561

215,671

214,394

204,580

Non Residential Non-Owner Occupied

653,264

649,683

641,351

628,814

628,628

Non Residential Owner Occupied

209,100

199,130

213,484

211,433

215,472

Commercial real estate (1)

1,473,277

1,462,681

1,474,782

1,464,701

1,467,673

Residential real estate (2)

1,521,102

1,532,907

1,587,694

1,621,265

1,631,151

Home equity

127,608

130,009

136,469

140,135

142,672

Consumer

45,184

47,224

47,688

50,541

52,278

DDA overdrafts

3,662

2,707

2,497

3,344

2,700

Gross Loans

$

3,529,416

$

3,546,723

$

3,622,119

$

3,663,966

$

3,665,596

Construction loans included in:

(1) - Commercial real estate loans

$

43,904

$

39,101

$

40,449

$

42,449

$

42,092

(2) - Residential real estate loans

20,838

22,129

27,078

28,947

28,252

CITY HOLDING COMPANY AND SUBSIDIARIES

Asset Quality Information

(Unaudited) ($ in 000s)

Three Months Ended

Six Months Ended

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

June 30,
2021

June 30,
2020

Allowance for Credit Losses

Balance at beginning of period

$

24,076

$

24,549

$

24,867

$

25,199

$

24,393

$

24,549

$

11,589

Charge-offs:

Commercial and industrial

(211

)

(34

)

(9

)

(757

)

-

(245

)

(77

)

Commercial real estate

(1,718

)

(1

)

(616

)

(75

)

(39

)

(1,719

)

(422

)

Residential real estate

(86

)

(93

)

(139

)

(252

)

(376

)

(179

)

(859

)

Home equity

(8

)

(64

)

(88

)

(126

)

(161

)

(72

)

(206

)

Consumer

(79

)

(147

)

(27

)

(74

)

(36

)

(226

)

(91

)

DDA overdrafts

(430

)

(453

)

(629

)

(554

)

(459

)

(883

)

(1,162

)

Total charge-offs

(2,532

)

(792

)

(1,508

)

(1,838

)

(1,071

)

(3,324

)

(2,817

)

Recoveries:

Commercial and industrial

25

46

74

3

5

71

14

Commercial real estate

15

164

150

44

128

179

331

Residential real estate

17

74

57

24

8

91

103

Home equity

3

23

47

33

9

26

56

Consumer

104

39

55

42

128

143

141

DDA overdrafts

308

413

333

334

349

721

800

Total recoveries

472

759

716

480

627

1,231

1,445

Net charge-offs

(2,060

)

(33

)

(792

)

(1,358

)

(444

)

(2,093

)

(1,372

)

(Recovery of) provision for credit losses

(2,000

)

(440

)

474

1,026

1,250

(2,440

)

9,222

Impact of Adopting ASC 326

-

-

-

-

-

-

5,760

Balance at end of period

$

20,016

$

24,076

$

24,549

$

24,867

$

25,199

$

20,016

$

25,199

Loans outstanding

$

3,529,416

$

3,546,723

$

3,622,119

$

3,663,966

$

3,665,596

Allowance as a percent of loans outstanding

0.57

%

0.68

%

0.68

%

0.68

%

0.69

%

Allowance as a percent of non-performing loans

199.3

%

194.5

%

200.7

%

182.7

%

185.1

%

Average loans outstanding

$

3,541,165

$

3,585,790

$

3,635,673

$

3,661,569

$

3,660,174

$

3,563,356

$

3,634,522

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

0.23

%

0.00

%

0.09

%

0.15

%

0.05

%

0.12

%

0.08

%

CITY HOLDING COMPANY AND SUBSIDIARIES

Asset Quality Information, continued

(Unaudited) ($ in 000s)

June 30,
2021

March 31,
2021

December 31,
2020

September 30,
2020

June 30,
2020

Nonaccrual Loans

Residential real estate

$

2,482

$

3,004

$

2,968

$

3,983

$

3,477

Home equity

81

88

95

74

265

Commercial and industrial

820

1,200

768

728

1,087

Commercial real estate

6,383

7,792

8,401

8,479

8,715

Consumer

-

-

-

-

-

Total nonaccrual loans

9,766

12,084

12,232

13,264

13,544

Accruing loans past due 90 days or more

278

295

-

345

68

Total non-performing loans

10,044

12,379

12,232

13,609

13,612

Other real estate owned

1,309

1,625

1,650

2,080

3,997

Total non-performing assets

$

11,353

$

14,004

$

13,882

$

15,689

$

17,609

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

0.32

%

0.39

%

0.38

%

0.43

%

0.48

%

Past Due Loans

Residential real estate

$

5,453

$

4,092

$

5,993

$

5,153

$

5,261

Home equity

523

449

575

474

393

Commercial and industrial

721

1,358

1,241

691

160

Commercial real estate

498

508

625

602

917

Consumer

12

10

113

121

67

DDA overdrafts

417

212

341

379

273

Total past due loans

$

7,624

$

6,629

$

8,888

$

7,420

$

7,071

Total past due loans as a percent of loans outstanding

0.22

%

0.19

%

0.25

%

0.20

%

0.19

%

Troubled Debt Restructurings ("TDRs")

Residential real estate

$

17,788

$

18,572

$

19,226

$

20,398

$

20,631

Home equity

1,920

1,956

2,001

2,100

2,138

Commercial and industrial

-

-

-

-

-

Commercial real estate

3,076

4,615

4,638

4,894

4,915

Consumer

203

211

277

260

185

Total TDRs

$

22,987

$

25,354

$

26,142

$

27,652

$

27,869

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates