Business Wire | Oct 22, 2020 07:30AM EDT

City Holding Company Announces Third Quarter Results

Oct. 22, 2020

CHARLESTON, W. Va.--(BUSINESS WIRE)--Oct. 22, 2020--City Holding Company ("Company" or "City") (NASDAQ:CHCO), a $5.5 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $20.1 million and diluted earnings of $1.25 per share for the quarter ended September 30, 2020. For the third quarter of 2020, the Company achieved a return on assets of 1.46% and a return on tangible equity of 13.8%.

Charles R. ("Skip") Hageboeck, the President and Chief Executive Officer of City Holding Company, commented: "Like all of the world, City Holding Company and City National Bank have experienced repercussions from the economic slow-down that has accompanied COVID-19. As an essential business, our company has focused on continuing to provide our customers safe access to banking products and services consistent with our reputation for exceptional customer service. In 2020, City was recognized for the third consecutive year by the JD Power organization as the "Highest in Customer Satisfaction" in the North Central US. We have also been highly focused on protecting the health of our employees and customers. Branches were open by appointment only during the initial months of the pandemic, but by the end of the third quarter of 2020, all 94 of our locations were fully open to customers. We are pleased that while many businesses in our nation have had to implement layoffs, we have been fortunate not to have to consider such painful changes, and City's family of dedicated employees have continued to demonstrate their exceptional commitment to each other, our customers, our communities, and to our company. I thank all of them for their brave and hard work during a very stressful time."

"The COVID crisis caused the Federal Reserve to lower short-term interest rates to nearly zero during the second quarter of 2020. As a result, deposit rates are very low across all financial institutions. And yet, deposits at banks have ballooned this year. At City, deposits are up nearly $350 million since December 31, 2019 - or about 8%. While the economy continued to recover in the third quarter of 2020, the drop-off in the second quarter of 2020 was extraordinarily steep and thus loan demand outside of the Government sponsored Paycheck Protection Program ("PPP") remains very weak. Despite these lingering effects of COVID-19, City was again able to produce strong results during the third quarter of 2020. Net interest income for the third quarter of 2020 was about flat with the linked quarter. Provision expense was low. Fee income was solid and expenses continue to be well managed. These successes are attributable to the hard working team of City professionals, and I thank them for their dedication and effort."

"Asset quality seems to be the top concern for analysts who follow banking organizations. In our opinion, City's asset quality continues to remain solid. As compared to pre-COVID asset quality levels at December 31, 2019, nonperforming assets have improved; past-due loans have improved and troubled-debt restructured loans have improved! Further, the amount of loans in deferment status dropped dramatically during the quarter ended September 30, 2020. As of September 30, 2020, approximately $180 million of commercial loans have been granted deferrals as compared to approximately $430 million as of June 30, 2020. Nearly $160 million of the commercial loan deferments were for hotel and lodging related loans at September 30, 2020. While reduced business and personal travel have lowered occupancy rates for our hotel and lodging loan customers, occupancy rates continued to improve during the third quarter of 2020. As of September 30, 2020, approximately $15 million of mortgage loans have been granted deferrals as compared to approximately $125 million at June 30, 2020."

Net Interest Income

The Company's net interest income decreased slightly from $38.1 million during the second quarter of 2020 to $38.0 million during the third quarter of 2020. The Company's tax equivalent net interest income remained level at $38.3 million for both the second and third quarters of 2020. Lower loan yields (21 basis points) decreased net interest income by $1.5 million and a decrease in accretion fair value adjustments lowered net interest income by $0.5 million. These decreases were essentially offset by an increase in investment income due to higher yields and an increase in balances and a decrease in rates paid on deposits (13 basis points) which increased net interest income by $0.9 million and $0.8 million, respectively. The Company's reported net interest margin decreased from 3.13% for the second quarter of 2020 to 3.02% for the third quarter of 2020. Excluding the favorable impact of the accretion from fair value adjustments, the net interest margin would have been 2.97% for the quarter ended September 30, 2020 and 3.05% for the quarter ended June 30, 2020.

Credit Quality

The Company's ratio of nonperforming assets to total loans and other real estate owned decreased from 0.48% at June 30, 2020 to 0.43% at September 30, 2020. Total nonperforming assets decreased from $17.6 million at June 30, 2020 to $15.7 million at September 30, 2020. Total past due loans increased marginally from $7.1 million, or 0.19% of total loans outstanding, at June 30, 2020 to $7.4 million, or 0.20% of total loans outstanding, at September 30, 2020.

As a result of the Company's quarterly analysis of the adequacy of the allowance for credit losses ("ACL"), the Company recorded a provision for credit losses of $1.0 million in the third quarter of 2020, compared to a provision for loan losses of $0.3 million for the comparable period in 2019 and a provision for credit losses of $1.25 million for the second quarter of 2020. The provision for credit losses recognized in the third quarter of 2020 primarily relates to changes in outstanding balances in the Company's loan portfolio and their associated loss rates and downgrades of certain hotel/motel credits during the quarter based on current market conditions which increased the Company's ACL by $2.0 million and $1.2 million. 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.

Non-interest Income

Non-interest income was $17.0 million for the third quarter of 2020 as compared to $16.7 million for the third quarter of 2019. During the third quarter of 2020, the Company reported $0.5 million of unrealized fair value gains on the Company's equity securities compared to $0.3 million of unrealized fair value losses on the Company's equity securities in the third quarter of 2019. Exclusive of these gains, non-interest income decreased from $17.0 million for the third quarter of 2019 to $16.5 million for the third quarter of 2020. This decrease was largely attributable to a decrease of $1.9 million, or 23.1%, 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 ($0.6 million), other income due to fees from loan interest rate swap originations ($0.5 million), and bank owned life insurance revenues due to death benefit proceeds ($0.3 million).

Non-interest Expenses

Non-interest expenses increased $0.3 million (1.1%), from $28.4 million in the third quarter of 2019 to $28.7 million in the third quarter of 2020. This increase was primarily due to an increase in equipment and software related expenses of $0.4 million, FDIC insurance expense of $0.4 million, and other expenses of $0.2 million. These increases were partially offset by decreases in advertising expenses ($0.4 million) and occupancy related expenses ($0.3 million).

Balance Sheet Trends

Loans increased $47.9 million (1.3%) from December 31, 2019 to $3.66 billion at September 30, 2020. As a result of the Company's participation in the PPP loans administered by the SBA, commercial and industrial loans increased $88.5 million. Excluding PPP loans, total loans decreased $40.6 million, (1.1%), from December 31, 2019 to $3.58 billion at September 30, 2020. Residential real estate loans decreased $19.1 million (1.2%), commercial and industrial loans decreased $12.5 million (4.1%) (excluding PPP loans), home equity loans decreased $8.8 million (5.9%) and consumer loans decreased $3.7 million (6.9%). These decreases were partially offset by an increase in commercial real estate loans of $5.0 million (0.3%). Decreases in loan outstandings are reflective of the low-interest rate environment driving residential mortgage originations toward fixed rate loans and a general lack of borrowing for commercial loans.

Total average depository balances increased $133.4 million, or 3.1%, from the quarter ended June 30, 2020 to the quarter ended September 30, 2020. Average noninterest-bearing demand deposit balances increased $70.8 million, average savings deposit balances increased $56.5 million, and average interest-bearing demand deposit balances increased $37.3 million. These increases were partially offset by a decrease in time deposit balances of $31.2 million. Since December 31, 2019, depository balances have increased $344.2 million (8.4%) due to the infusion of government transfer payments for unemployment insurance, PPP loans and stimulus checks. Additionally, due to very low interest rates across a wide array of investment alternatives, it appears that customers are stockpiling cash in banking institutions.

Income Tax Expense

The Company's effective income tax rate for the third quarter of 2020 was 20.2% compared to 21.3% for the year ended December 31, 2019, and 21.7% for the quarter ended September 30, 2019.

Capitalization and Liquidity

The Company's loan to deposit ratio was 82.9% and the loan to asset ratio was 66.5% at September 30, 2020. The Company maintained investment securities totaling 21.5% of assets as of the same date. The Company's deposit mix is weighted heavily toward checking and saving accounts, which fund 56.6% of assets at September 30, 2020. Time deposits fund 23.6% of assets at September 30, 2020, 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. The Company's tangible equity ratio decreased from 11.0% at December 31, 2019 to 10.6% at September 30, 2020. At September 30, 2020, City National Bank's Leverage Ratio was 9.32%, its Common Equity Tier I ratio was 14.46%, its Tier I Capital ratio was 14.46%, and its Total Risk-Based Capital ratio was 15.04%. These regulatory capital ratios are significantly above levels required to be considered "well capitalized," which is the highest possible regulatory designation.

On September 30, 2020, the Board of Directors of the Company approved a quarterly cash dividend of $0.57 per share payable October 30, 2020, to shareholders of record as of October 15, 2020. During the quarter ended September 30, 2020, the Company repurchased 231,000 common shares at a weighted average price of $59.49 as part of a one million share repurchase plan authorized by the Board of Directors in February 2019. As of September 30, 2020, the Company could repurchase approximately 247,000 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. The Company recently commenced construction of a new branch in Spring Mills, WV. Located in Berkeley County, the branch will serve one of West Virginia's fastest growing markets in the second-most populous of West Virginia's 55 counties.

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 September 30, 2020 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2020 results and will adjust the amounts if necessary.

CITY HOLDINGCOMPANY ANDSUBSIDIARIESFinancialHighlights(Unaudited) Three Months Ended Nine Months Ended

September June 30, March 31, December September September September 30, 2020 2020 2020 31, 2019 30, 2019 30, 2020 30, 2019

EarningsNet InterestIncome (fully $ 38,278 $ 38,287 $ 40,603 $ 40,036 $ 40,729 $ 117,168 $ 122,118 taxableequivalent)Net Incomeavailable to 20,126 18,251 29,000 22,611 22,371 67,374 66,741 commonshareholders Per ShareDataEarnings pershareavailable tocommonshareholders:Basic $ 1.25 $ 1.12 $ 1.79 $ 1.38 $ 1.36 $ 4.15 $ 4.05

Diluted 1.25 1.12 1.78 1.38 1.36 4.15 4.04

Weightedaveragenumber ofshares (inthousands):Basic 15,950 16,081 16,080 16,207 16,271 16,065 16,350

Diluted 15,970 16,097 16,101 16,230 16,289 16,084 16,368

Period-endnumber of 15,848 16,077 16,140 16,303 16,302 15,848 16,302 shares (inthousands)Cash $ 0.57 $ 0.57 $ 0.57 $ 0.57 $ 0.57 $ 1.71 $ 1.63 dividendsdeclaredBook value $ 43.62 $ 43.15 $ 42.45 $ 40.36 $ 39.85 $ 43.62 $ 39.85 per share(period-end)Tangible bookvalue per 36.11 35.72 35.03 32.98 32.44 36.11 32.44 share(period-end)Market data:High closing $ 67.98 $ 71.19 $ 82.40 $ 82.72 $ 78.30 $ 82.40 $ 82.56 priceLow closing 55.37 55.18 57.11 74.33 72.35 55.18 67.58 pricePeriod-end 57.61 65.17 66.53 81.95 76.25 57.61 76.25 closing priceAverage daily 67 89 69 54 62 75 56 volume (inthousands)Treasuryshareactivity:Treasuryshares 231 79 182 - 99 492 261 repurchased(inthousands)Averagetreasury $ 59.49 $ 61.75 $ 71.31 $ - $ 74.17 $ 64.23 $ 74.54 sharerepurchaseprice Key Ratios(percent)Return on 1.46 % 1.35 % 2.29 % 1.80 % 1.81 % 1.68 % 1.81 %averageassetsReturn onaverage 13.8 % 12.6 % 20.6 % 16.8 % 17.0 % 15.6 % 17.5 %tangibleequityYield oninterest 3.43 % 3.64 % 4.22 % 4.22 % 4.42 % 3.75 % 4.46 %earningassetsCost ofinterest 0.58 % 0.71 % 0.91 % 1.00 % 1.10 % 0.73 % 1.08 %bearingliabilitiesNet Interest 3.02 % 3.13 % 3.54 % 3.46 % 3.59 % 3.22 % 3.64 %MarginNon-interestincome as a 30.3 % 27.4 % 30.6 % 31.2 % 29.2 % 35.8 % 29.3 %percent oftotal revenueEfficiency 51.6 % 53.3 % 49.7 % 50.0 % 48.2 % 51.5 % 50.0 %RatioPrice/ 11.53 14.50 17.63 14.82 13.98 10.40 14.13 EarningsRatio (a) Capital(period-end)AverageShareholders' 12.71 % 12.91 % 13.50 % 13.12 % 13.12 %Equity toAverageAssetsTangibleequity to 10.61 % 10.62 % 11.38 % 10.98 % 10.93 %tangibleassetsConsolidatedCity HoldingCompany riskbased capitalratios (b):CET I 15.93 % 16.10 % 16.02 % 16.05 % 15.62 %

Tier I 15.93 % 16.10 % 16.02 % 16.05 % 15.74 %

Total 16.50 % 16.69 % 16.46 % 16.40 % 16.14 %

Leverage 10.19 % 10.45 % 11.10 % 10.90 % 10.87 %

City NationalBank riskbased capitalratios (b):CET I 14.46 % 14.55 % 14.32 % 13.92 % 14.00 %

Tier I 14.46 % 14.55 % 14.32 % 13.92 % 14.00 %

Total 15.04 % 15.15 % 14.82 % 14.28 % 14.40 %

Leverage 9.32 % 9.29 % 9.98 % 9.51 % 9.72 %

Other(period-end)Branches 94 94 95 95 95

FTE 921 913 921 918 916

Assets per $ 5,984 $ 6,058 $ 5,525 $ 5,467 $ 5,412 FTE (inthousands)Deposits per 4,799 4,834 4,400 4,440 4,399 FTE (inthousands) (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, 2020 risk-based capital ratios are estimated.

CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Statements of Income(Unaudited) ($ in 000s, except per share data)Three Months Ended

Nine Months Ended

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

September 30, 2020

September 30, 2019

Interest IncomeInterest and fees on loans$

35,761

$

37,718

$

41,335

$

41,615

$

42,944

$

114,813

$

128,397

Interest on investment securities:Taxable6,266

5,718

5,871

5,924

6,044

17,855

17,465

Tax-exempt1,132

821

707

711

722

2,659

2,257

Interest on deposits in depository institutions72

55

304

298

271

432

1,034

Total Interest Income43,231

44,312

48,217

48,548

49,981

135,759

149,153

Interest ExpenseInterest on deposits5,123

5,963

7,238

7,897

8,585

18,324

24,768

Interest on short-term borrowings131

279

464

762

814

873

2,729

Interest on long-term debt-

-

100

42

45

100

140

Total Interest Expense5,254

6,242

7,802

8,701

9,444

19,297

27,637

Net Interest Income37,977

38,070

40,415

39,847

40,537

116,462

121,516

Provision for (recovery of) credit losses1,026

1,250

7,972

(75

)

274

10,248

(1,175

)

Net Interest Income After Provision for (Recovery of) Credit Losses36,951

36,820

32,443

39,922

40,263

106,214

122,691

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

(6

)

63

-

(40

)

56

69

Unrealized gains (losses) recognized on equity securities still held461

242

(2,402

)

914

(214

)

(1,698

)

(27

)

Service charges6,295

4,945

7,723

8,233

8,183

18,962

23,281

Bankcard revenue6,065

5,888

5,115

5,162

5,440

17,068

15,931

Trust and investment management fee income1,844

1,931

1,799

2,016

1,802

5,574

5,144

Bank owned life insurance1,088

848

1,676

856

762

3,611

2,910

Sale of VISA shares-

-

17,837

-

-

17,837

-

Other income1,232

783

1,536

861

765

3,550

3,139

Total Non-Interest Income16,985

14,631

33,347

18,042

16,698

64,960

50,447

Non-Interest ExpenseSalaries and employee benefits15,361

14,873

15,851

15,918

15,210

46,085

46,220

Occupancy related expense2,428

2,402

2,488

2,540

2,725

7,318

8,055

Equipment and software related expense2,607

2,504

2,429

2,302

2,248

7,540

6,662

FDIC insurance expense355

167

-

-

-

522

639

Advertising462

933

843

694

861

2,238

2,650

Bankcard expenses1,517

1,498

1,435

1,285

1,554

4,450

4,270

Postage, delivery, and statement mailings513

592

616

588

659

1,721

1,828

Office supplies396

353

394

392

382

1,143

1,167

Legal and professional fees548

589

601

706

539

1,738

1,665

Telecommunications547

531

511

563

569

1,589

1,892

Repossessed asset losses (gains), net of expenses39

76

198

224

(59

)

313

410

Merger related expenses-

-

-

-

-

-

797

Other expenses3,939

3,950

4,102

3,822

3,709

11,992

12,326

Total Non-Interest Expense28,712

28,468

29,468

29,034

28,397

86,649

88,581

Income Before Income Taxes25,224

22,983

36,322

28,930

28,564

84,525

84,557

Income tax expense5,098

4,732

7,322

6,319

6,193

17,151

17,816

Net Income Available to Common Shareholders$

20,126

$

18,251

$

29,000

$

22,611

$

22,371

$

67,374

$

66,741

Distributed earnings allocated to common shareholders$

8,944

$

9,073

$

9,117

$

9,209

$

9,213

$

26,832

$

26,346

Undistributed earnings allocated to common shareholders10,984

8,998

19,620

13,200

12,966

39,884

39,828

Net earnings allocated to common shareholders$

19,928

$

18,071

$

28,737

$

22,409

$

22,179

$

66,716

$

66,174

Average common shares outstanding15,950

16,081

16,080

16,207

16,271

16,065

16,350

Shares for diluted earnings per share15,970

16,097

16,101

16,230

16,289

16,084

16,368

Basic earnings per common share$

1.25

$

1.12

$

1.79

$

1.38

$

1.36

$

4.15

$

4.05

Diluted earnings per common share$

1.25

$

1.12

$

1.78

$

1.38

$

1.36

$

4.15

$

4.04

CITY HOLDINGCOMPANY ANDSUBSIDIARIESConsolidatedStatements ofIncome(Unaudited) ($ in000s, except pershare data) Three Months Ended Nine Months Ended

September June 30, March 31, December September September September 30, 2020 2020 2020 31, 2019 30, 2019 30, 2020 30, 2019

Interest IncomeInterest and fees $ 35,761 $ 37,718 $ 41,335 $ 41,615 $ 42,944 $ 114,813 $ 128,397 on loansInterest oninvestmentsecurities:Taxable 6,266 5,718 5,871 5,924 6,044 17,855 17,465

Tax-exempt 1,132 821 707 711 722 2,659 2,257

Interest ondeposits in 72 55 304 298 271 432 1,034 depositoryinstitutionsTotal Interest 43,231 44,312 48,217 48,548 49,981 135,759 149,153 Income Interest ExpenseInterest on 5,123 5,963 7,238 7,897 8,585 18,324 24,768 depositsInterest on 131 279 464 762 814 873 2,729 short-termborrowingsInterest on - - 100 42 45 100 140 long-term debtTotal Interest 5,254 6,242 7,802 8,701 9,444 19,297 27,637 ExpenseNet Interest 37,977 38,070 40,415 39,847 40,537 116,462 121,516 IncomeProvision for 1,026 1,250 7,972 (75 ) 274 10,248 (1,175 )(recovery of)credit lossesNet InterestIncome After 36,951 36,820 32,443 39,922 40,263 106,214 122,691 Provision for(Recovery of)Credit Losses Non-InterestIncomeNet (losses) gainson sale of - (6 ) 63 - (40 ) 56 69 investmentsecuritiesUnrealized gains(losses) 461 242 (2,402 ) 914 (214 ) (1,698 ) (27 )recognized onequity securitiesstill heldService charges 6,295 4,945 7,723 8,233 8,183 18,962 23,281

Bankcard revenue 6,065 5,888 5,115 5,162 5,440 17,068 15,931

Trust andinvestment 1,844 1,931 1,799 2,016 1,802 5,574 5,144 management feeincomeBank owned life 1,088 848 1,676 856 762 3,611 2,910 insuranceSale of VISA - - 17,837 - - 17,837 - sharesOther income 1,232 783 1,536 861 765 3,550 3,139

Total Non-Interest 16,985 14,631 33,347 18,042 16,698 64,960 50,447 Income Non-InterestExpenseSalaries and 15,361 14,873 15,851 15,918 15,210 46,085 46,220 employee benefitsOccupancy related 2,428 2,402 2,488 2,540 2,725 7,318 8,055 expenseEquipment and 2,607 2,504 2,429 2,302 2,248 7,540 6,662 software relatedexpenseFDIC insurance 355 167 - - - 522 639 expenseAdvertising 462 933 843 694 861 2,238 2,650

Bankcard expenses 1,517 1,498 1,435 1,285 1,554 4,450 4,270

Postage, delivery, 513 592 616 588 659 1,721 1,828 and statementmailingsOffice supplies 396 353 394 392 382 1,143 1,167

Legal and 548 589 601 706 539 1,738 1,665 professional feesTelecommunications 547 531 511 563 569 1,589 1,892

Repossessed asset 39 76 198 224 (59 ) 313 410 losses (gains),net of expensesMerger related - - - - - - 797 expensesOther expenses 3,939 3,950 4,102 3,822 3,709 11,992 12,326

Total Non-Interest 28,712 28,468 29,468 29,034 28,397 86,649 88,581 ExpenseIncome Before 25,224 22,983 36,322 28,930 28,564 84,525 84,557 Income TaxesIncome tax expense 5,098 4,732 7,322 6,319 6,193 17,151 17,816

Net IncomeAvailable to $ 20,126 $ 18,251 $ 29,000 $ 22,611 $ 22,371 $ 67,374 $ 66,741 CommonShareholders Distributedearnings allocated $ 8,944 $ 9,073 $ 9,117 $ 9,209 $ 9,213 $ 26,832 $ 26,346 to commonshareholdersUndistributedearnings allocated 10,984 8,998 19,620 13,200 12,966 39,884 39,828 to commonshareholdersNet earningsallocated to $ 19,928 $ 18,071 $ 28,737 $ 22,409 $ 22,179 $ 66,716 $ 66,174 commonshareholders Average common 15,950 16,081 16,080 16,207 16,271 16,065 16,350 shares outstandingShares for diluted 15,970 16,097 16,101 16,230 16,289 16,084 16,368 earnings per share Basic earnings per $ 1.25 $ 1.12 $ 1.79 $ 1.38 $ 1.36 $ 4.15 $ 4.05 common shareDiluted earnings $ 1.25 $ 1.12 $ 1.78 $ 1.38 $ 1.36 $ 4.15 $ 4.04 per common share CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Balance Sheets($ in 000s)(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

AssetsCash and due from banks$

76,451

$

87,658

$

92,365

$

88,658

$

71,332

Interest-bearing deposits in depository institutions176,267

285,596

18,271

51,486

44,862

Cash and cash equivalents252,718

373,254

110,636

140,144

116,194

Investment securities available-for-sale, at fair value1,157,399

1,055,185

934,113

810,106

798,930

Investment securities held-to-maturity, at amortized cost-

-

-

49,036

51,211

Other securities26,548

26,144

26,827

28,490

28,070

Total investment securities1,183,947

1,081,329

960,940

887,632

878,211

Gross loans3,663,966

3,665,596

3,613,050

3,616,099

3,582,571

Allowance for credit losses(24,867

)

(25,199

)

(24,393

)

(11,589

)

(13,186

)

Net loans3,639,099

3,640,397

3,588,657

3,604,510

3,569,385

Bank owned life insurance117,501

116,746

116,000

115,261

114,616

Premises and equipment, net77,031

77,991

78,948

76,965

76,929

Accrued interest receivable16,627

14,200

12,570

11,569

12,929

Net deferred tax assets-

-

2,159

6,669

6,432

Intangible assets119,004

119,417

119,829

120,241

120,773

Other assets105,361

105,438

98,710

55,765

62,248

Total Assets$

5,511,288

$

5,528,772

$

5,088,449

$

5,018,756

$

4,957,717

LiabilitiesDeposits:Noninterest-bearing$

1,061,310

$

1,079,469

$

857,501

$

805,087

$

795,548

Interest-bearing:Demand deposits940,791

921,761

837,966

896,465

898,704

Savings deposits1,117,684

1,067,254

989,609

1,009,771

980,539

Time deposits1,300,291

1,342,631

1,366,977

1,364,571

1,354,787

Total deposits4,420,076

4,411,115

4,052,053

4,075,894

4,029,578

Short-term borrowingsFederal Funds purchased-

-

9,900

-

-

Customer repurchase agreements279,866

282,676

224,247

211,255

202,622

Long-term debt-

-

-

4,056

4,055

Net deferred tax liabilities1,601

2,598

-

-

-

Other liabilities118,386

138,633

117,021

69,568

71,859

Total Liabilities4,819,929

4,835,022

4,403,221

4,360,773

4,308,114

Stockholders' EquityPreferred stock-

-

-

-

-

Common stock47,619

47,619

47,619

47,619

47,619

Capital surplus170,526

169,881

170,096

170,309

169,794

Retained earnings576,901

565,804

556,718

539,253

525,933

Cost of common stock in treasury(134,177

)

(120,583

)

(116,665

)

(105,038

)

(105,138

)

Accumulated other comprehensive income:Unrealized gain on securities available-for-sale36,760

37,299

33,730

12,110

17,266

Underfunded pension liability(6,270

)

(6,270

)

(6,270

)

(6,270

)

(5,871

)

Total Accumulated Other Comprehensive Income30,490

31,029

27,460

5,840

11,395

Total Stockholders' Equity691,359

693,750

685,228

657,983

649,603

Total Liabilities and Stockholders' Equity$

5,511,288

$

5,528,772

$

5,088,449

$

5,018,756

$

4,957,717

Regulatory CapitalTotal CET 1 capital$

548,269

$

548,972

$

547,040

$

532,829

$

518,175

Total tier 1 capital548,269

548,972

547,040

532,829

522,175

Total risk-based capital568,153

569,213

561,944

544,479

535,441

Total risk-weighted assets3,442,629

3,410,589

3,412,591

3,319,998

3,318,386

CITY HOLDINGCOMPANY ANDSUBSIDIARIESConsolidatedBalance Sheets($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited)

September 30, June 30, 2020 March 31, December 31, September 30, 2020 2020 2019 2019

AssetsCash and due from $ 76,451 $ 87,658 $ 92,365 $ 88,658 $ 71,332 banksInterest-bearingdeposits in 176,267 285,596 18,271 51,486 44,862 depositoryinstitutionsCash and cash 252,718 373,254 110,636 140,144 116,194 equivalents Investmentsecurities 1,157,399 1,055,185 934,113 810,106 798,930 available-for-sale,at fair valueInvestmentsecurities - - - 49,036 51,211 held-to-maturity,at amortized costOther securities 26,548 26,144 26,827 28,490 28,070

Total investment 1,183,947 1,081,329 960,940 887,632 878,211 securities Gross loans 3,663,966 3,665,596 3,613,050 3,616,099 3,582,571

Allowance for (24,867 ) (25,199 ) (24,393 ) (11,589 ) (13,186 )credit lossesNet loans 3,639,099 3,640,397 3,588,657 3,604,510 3,569,385

Bank owned life 117,501 116,746 116,000 115,261 114,616 insurancePremises and 77,031 77,991 78,948 76,965 76,929 equipment, netAccrued interest 16,627 14,200 12,570 11,569 12,929 receivableNet deferred tax - - 2,159 6,669 6,432 assetsIntangible assets 119,004 119,417 119,829 120,241 120,773

Other assets 105,361 105,438 98,710 55,765 62,248

Total Assets $ 5,511,288 $ 5,528,772 $ 5,088,449 $ 5,018,756 $ 4,957,717

LiabilitiesDeposits:Noninterest-bearing $ 1,061,310 $ 1,079,469 $ 857,501 $ 805,087 $ 795,548

Interest-bearing:Demand deposits 940,791 921,761 837,966 896,465 898,704

Savings deposits 1,117,684 1,067,254 989,609 1,009,771 980,539

Time deposits 1,300,291 1,342,631 1,366,977 1,364,571 1,354,787

Total deposits 4,420,076 4,411,115 4,052,053 4,075,894 4,029,578

Short-termborrowingsFederal Funds - - 9,900 - - purchasedCustomer repurchase 279,866 282,676 224,247 211,255 202,622 agreementsLong-term debt - - - 4,056 4,055

Net deferred tax 1,601 2,598 - - - liabilitiesOther liabilities 118,386 138,633 117,021 69,568 71,859

Total Liabilities 4,819,929 4,835,022 4,403,221 4,360,773 4,308,114

Stockholders'EquityPreferred stock - - - - -

Common stock 47,619 47,619 47,619 47,619 47,619

Capital surplus 170,526 169,881 170,096 170,309 169,794

Retained earnings 576,901 565,804 556,718 539,253 525,933

Cost of common (134,177 ) (120,583 ) (116,665 ) (105,038 ) (105,138 )stock in treasuryAccumulated othercomprehensiveincome:Unrealized gain on 36,760 37,299 33,730 12,110 17,266 securitiesavailable-for-saleUnderfunded pension (6,270 ) (6,270 ) (6,270 ) (6,270 ) (5,871 )liabilityTotal Accumulated 30,490 31,029 27,460 5,840 11,395 Other ComprehensiveIncomeTotal Stockholders' 691,359 693,750 685,228 657,983 649,603 EquityTotal Liabilities $ 5,511,288 $ 5,528,772 $ 5,088,449 $ 5,018,756 $ 4,957,717 and Stockholders'Equity Regulatory CapitalTotal CET 1 capital $ 548,269 $ 548,972 $ 547,040 $ 532,829 $ 518,175

Total tier 1 548,269 548,972 547,040 532,829 522,175 capitalTotal risk-based 568,153 569,213 561,944 544,479 535,441 capitalTotal risk-weighted 3,442,629 3,410,589 3,412,591 3,319,998 3,318,386 assets CITY HOLDING COMPANY AND SUBSIDIARIESLoan Portfolio(Unaudited) ($ in 000s)September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

Residential real estate (1)$

1,621,265

$

1,631,151

$

1,629,578

$

1,640,396

$

1,643,416

Home equity - junior liens140,135

142,672

146,034

148,928

150,808

Commercial and industrial383,980

369,122

308,567

308,015

296,927

Commercial real estate (2)1,464,701

1,467,673

1,470,949

1,459,737

1,431,983

Consumer50,541

52,278

54,749

54,263

54,799

DDA overdrafts3,344

2,700

3,173

4,760

4,638

Gross Loans$

3,663,966

$

3,665,596

$

3,613,050

$

3,616,099

$

3,582,571

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

28,947

$

28,252

$

28,870

$

29,033

$

24,955

(2) - Commercial real estate loans42,449

42,092

44,453

64,049

55,267

CITY HOLDINGCOMPANY ANDSUBSIDIARIESLoanPortfolio(Unaudited)($ in 000s) September June 30, March 31, December September 30, 2020 2020 2020 31, 2019 30, 2019

Residential $ 1,621,265 $ 1,631,151 $ 1,629,578 $ 1,640,396 $ 1,643,416real estate^(1)Home equity 140,135 142,672 146,034 148,928 150,808- juniorliensCommercial 383,980 369,122 308,567 308,015 296,927andindustrialCommercial 1,464,701 1,467,673 1,470,949 1,459,737 1,431,983real estate^(2)Consumer 50,541 52,278 54,749 54,263 54,799

DDA 3,344 2,700 3,173 4,760 4,638overdraftsGross Loans $ 3,663,966 $ 3,665,596 $ 3,613,050 $ 3,616,099 $ 3,582,571

Constructionloansincluded in:^(1) -Residential $ 28,947 $ 28,252 $ 28,870 $ 29,033 $ 24,955real estateloans^(2) -Commercial 42,449 42,092 44,453 64,049 55,267real estateloans CITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information(Unaudited) ($ in 000s)Three Months Ended

Nine Months Ended

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

September 30, 2020

September 30, 2019

Allowance for Credit LossesBalance at beginning of period$

25,199

$

24,393

$

11,589

$

13,186

$

13,795

$

11,589

$

15,966

Charge-offs:Commercial and industrial(757

)

-

(77

)

(193

)

(17

)

(834

)

(68

)

Commercial real estate(75

)

(39

)

(383

)

(964

)

(216

)

(497

)

(394

)

Residential real estate(252

)

(376

)

(483

)

(226

)

(194

)

(1,111

)

(922

)

Home equity(126

)

(161

)

(45

)

(134

)

(43

)

(332

)

(160

)

Consumer(74

)

(36

)

(55

)

(338

)

(279

)

(165

)

(478

)

DDA overdrafts(554

)

(459

)

(703

)

(792

)

(772

)

(1,716

)

(1,985

)

Total charge-offs(1,838

)

(1,071

)

(1,746

)

(2,647

)

(1,521

)

(4,655

)

(4,007

)

Recoveries:Commercial and industrial3

5

9

581

43

17

183

Commercial real estate44

128

203

10

7

375

614

Residential real estate24

8

95

87

157

127

282

Home equity33

9

47

-

-

89

-

Consumer42

128

13

54

68

183

211

DDA overdrafts334

349

451

393

363

1,134

1,112

Total recoveries480

627

818

1,125

638

1,925

2,402

Net (charge-offs)/recoveries(1,358

)

(444

)

(928

)

(1,522

)

(883

)

(2,730

)

(1,605

)

Provision for (recovery of) credit losses1,026

1,250

7,972

(75

)

274

10,248

(1,175

)

Impact of Adopting ASC 326-

-

5,760

-

-

5,760

-

Balance at end of period$

24,867

$

25,199

$

24,393

$

11,589

$

13,186

$

24,867

$

13,186

Loans outstanding$

3,663,966

$

3,665,596

$

3,613,050

$

3,616,099

$

3,582,571

Allowance as a percent of loans outstanding0.68

%

0.69

%

0.68

%

0.32

%

0.37

%

Allowance as a percent of non-performing loans182.7

%

185.1

%

202.2

%

98.6

%

84.3

%

Average loans outstanding$

3,661,569

$

3,660,174

$

3,608,868

$

3,607,864

$

3,544,548

$

3,643,603

$

3,553,417

Net charge-offs (recoveries) (annualized) as a percent of average loans outstanding0.15

%

0.05

%

0.10

%

0.17

%

0.10

%

0.10

%

0.06

%

CITY HOLDINGCOMPANY ANDSUBSIDIARIESAsset QualityInformation(Unaudited) ($in 000s) Three Months Ended Nine Months Ended

September 30, June 30, 2020 March 31, December 31, September 30, September 30, September 30, 2020 2020 2019 2019 2020 2019

Allowance forCredit LossesBalance at $ 25,199 $ 24,393 $ 11,589 $ 13,186 $ 13,795 $ 11,589 $ 15,966 beginning ofperiod Charge-offs:Commercial and (757 ) - (77 ) (193 ) (17 ) (834 ) (68 )industrialCommercial (75 ) (39 ) (383 ) (964 ) (216 ) (497 ) (394 )real estateResidential (252 ) (376 ) (483 ) (226 ) (194 ) (1,111 ) (922 )real estateHome equity (126 ) (161 ) (45 ) (134 ) (43 ) (332 ) (160 )

Consumer (74 ) (36 ) (55 ) (338 ) (279 ) (165 ) (478 )

DDA overdrafts (554 ) (459 ) (703 ) (792 ) (772 ) (1,716 ) (1,985 )

Total (1,838 ) (1,071 ) (1,746 ) (2,647 ) (1,521 ) (4,655 ) (4,007 )charge-offs Recoveries:Commercial and 3 5 9 581 43 17 183 industrialCommercial 44 128 203 10 7 375 614 real estateResidential 24 8 95 87 157 127 282 real estateHome equity 33 9 47 - - 89 -

Consumer 42 128 13 54 68 183 211

DDA overdrafts 334 349 451 393 363 1,134 1,112

Total 480 627 818 1,125 638 1,925 2,402 recoveries Net (1,358 ) (444 ) (928 ) (1,522 ) (883 ) (2,730 ) (1,605 )(charge-offs)/recoveriesProvision for 1,026 1,250 7,972 (75 ) 274 10,248 (1,175 )(recovery of)credit lossesImpact of - - 5,760 - - 5,760 - Adopting ASC326Balance at end $ 24,867 $ 25,199 $ 24,393 $ 11,589 $ 13,186 $ 24,867 $ 13,186 of period Loans $ 3,663,966 $ 3,665,596 $ 3,613,050 $ 3,616,099 $ 3,582,571 outstandingAllowance as apercent of 0.68 % 0.69 % 0.68 % 0.32 % 0.37 %loansoutstandingAllowance as apercent of 182.7 % 185.1 % 202.2 % 98.6 % 84.3 %non-performingloans Average loans $ 3,661,569 $ 3,660,174 $ 3,608,868 $ 3,607,864 $ 3,544,548 $ 3,643,603 $ 3,553,417 outstandingNetcharge-offs(recoveries)(annualized) 0.15 % 0.05 % 0.10 % 0.17 % 0.10 % 0.10 % 0.06 %as a percentof averageloansoutstanding CITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information, continued(Unaudited) ($ in 000s)September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019Nonaccrual LoansResidential real estate$

3,983

$

3,477

$

2,750

$

3,393

$

2,570

Home equity74

265

249

531

469

Commercial and industrial728

1,087

1,175

1,182

2,059

Commercial real estate8,479

8,715

7,865

6,384

10,099

Consumer-

-

1

-

-

Total nonaccrual loans13,264

13,544

12,040

11,490

15,197

Accruing loans past due 90 days or more345

68

26

267

452

Total non-performing loans13,609

13,612

12,066

11,757

15,649

Other real estate owned2,080

3,997

3,922

4,670

2,326

Total non-performing assets$

15,689

$

17,609

$

15,988

$

16,427

$

17,975

Non-performing assets as a percent of loans and other real estate owned0.43

%

0.48

%

0.44

%

0.45

%

0.50

%

Past Due LoansResidential real estate$

5,153

$

5,261

$

7,815

$

7,485

$

6,859

Home equity474

393

430

956

796

Commercial and industrial691

160

71

458

526

Commercial real estate602

917

1,021

1,580

1,276

Consumer121

67

177

187

124

DDA overdrafts379

273

467

730

626

Total past due loans$

7,420

$

7,071

$

9,981

$

11,396

$

10,207

Total past due loans as a percent of loans outstanding0.20

%

0.19

%

0.28

%

0.32

%

0.28

%

Troubled Debt Restructurings ("TDRs")Residential real estate$

20,398

$

20,631

$

21,413

$

21,029

$

21,320

Home equity2,100

2,138

2,294

3,628

3,034

Commercial and industrial-

-

-

-

83

Commercial real estate4,894

4,915

5,163

4,973

8,100

Consumer260

185

184

-

-

Total TDRs$

27,652

$

27,869

$

29,054

$

29,630

$

32,537

CITY HOLDINGCOMPANY ANDSUBSIDIARIESAsset QualityInformation,continued(Unaudited) ($ in000s) September June 30, March 31, December September 30, 2020 2020 2020 31, 2019 30, 2019Nonaccrual LoansResidential real $ 3,983 $ 3,477 $ 2,750 $ 3,393 $ 2,570 estateHome equity 74 265 249 531 469

Commercial and 728 1,087 1,175 1,182 2,059 industrialCommercial real 8,479 8,715 7,865 6,384 10,099 estateConsumer - - 1 - -

Total nonaccrual 13,264 13,544 12,040 11,490 15,197 loansAccruing loans past 345 68 26 267 452 due 90 days or moreTotal 13,609 13,612 12,066 11,757 15,649 non-performingloansOther real estate 2,080 3,997 3,922 4,670 2,326 ownedTotal $ 15,689 $ 17,609 $ 15,988 $ 16,427 $ 17,975 non-performingassets Non-performingassets as a percent 0.43 % 0.48 % 0.44 % 0.45 % 0.50 %of loans and otherreal estate owned Past Due LoansResidential real $ 5,153 $ 5,261 $ 7,815 $ 7,485 $ 6,859 estateHome equity 474 393 430 956 796

Commercial and 691 160 71 458 526 industrialCommercial real 602 917 1,021 1,580 1,276 estateConsumer 121 67 177 187 124

DDA overdrafts 379 273 467 730 626

Total past due $ 7,420 $ 7,071 $ 9,981 $ 11,396 $ 10,207 loans Total past dueloans as a percent 0.20 % 0.19 % 0.28 % 0.32 % 0.28 %of loansoutstanding Troubled DebtRestructurings("TDRs")Residential real $ 20,398 $ 20,631 $ 21,413 $ 21,029 $ 21,320 estateHome equity 2,100 2,138 2,294 3,628 3,034

Commercial and - - - - 83 industrialCommercial real 4,894 4,915 5,163 4,973 8,100 estateConsumer 260 185 184 - -

Total TDRs $ 27,652 $ 27,869 $ 29,054 $ 29,630 $ 32,537

CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Average Balance Sheets, Yields, and Rates(Unaudited) ($ in 000s)Three Months EndedSeptember 30, 2020June 30, 2020September 30, 2019AverageYield/AverageYield/AverageYield/BalanceInterestRateBalanceInterestRateBalanceInterestRateAssets:Loan portfolio (1):Residential real estate (2)$

1,766,796

$

17,899

4.03

%

$

1,785,631

$

19,048

4.29

%

$

1,794,068

$

20,564

4.55

%

Commercial, financial, and agriculture (2)1,839,939

16,910

3.66

%

1,818,344

17,665

3.91

%

1,692,000

21,293

4.99

%

Installment loans to individuals (2), (3)54,834

804

5.83

%

56,199

852

6.10

%

58,480

928

6.30

%

Previously securitized loans (4)***

148

***

***

152

***

***

159

***

Total loans3,661,569

35,761

3.89

%

3,660,174

37,717

4.14

%

3,544,548

42,944

4.81

%

Securities:Taxable877,623

6,266

2.84

%

896,997

5,718

2.56

%

790,207

6,044

3.03

%

Tax-exempt (5)204,178

1,433

2.79

%

120,751

1,039

3.46

%

96,011

914

3.78

%

Total securities1,081,801

7,699

2.83

%

1,017,748

6,757

2.67

%

886,218

6,958

3.11

%

Deposits in depository institutions304,498

72

0.09

%

236,320

55

0.09

%

72,736

271

1.48

%

Total interest-earning assets5,047,868

43,532

3.43

%

4,914,242

44,529

3.64

%

4,503,502

50,173

4.42

%

Cash and due from banks80,505

79,501

67,106

Premises and equipment, net77,647

78,717

78,091

Goodwill and intangible assets119,267

119,681

121,124

Other assets229,667

230,423

188,206

Less: Allowance for credit losses(25,311

)

(24,700

)

(13,786

)

Total assets$

5,529,643

$

5,397,864

$

4,944,243

Liabilities:Interest-bearing demand deposits$

931,152

$

187

0.08

%

$

893,832

$

178

0.08

%

$

881,476

$

954

0.43

%

Savings deposits1,093,886

303

0.11

%

1,037,387

363

0.14

%

978,198

1,159

0.47

%

Time deposits (2)1,322,423

4,633

1.39

%

1,353,619

5,422

1.61

%

1,360,409

6,472

1.89

%

Short-term borrowings260,518

131

0.20

%

256,790

279

0.44

%

187,301

814

1.72

%

Long-term debt-

-

0.00

%

-

-

0.00

%

4,054

45

4.40

%

Total interest-bearing liabilities3,607,979

5,254

0.58

%

3,541,628

6,242

0.71

%

3,411,438

9,444

1.10

%

Noninterest-bearing demand deposits1,114,822

1,044,009

825,029

Other liabilities104,084

115,110

58,857

Stockholders' equity702,758

697,117

648,919

Total liabilities andstockholders' equity$

5,529,643

$

5,397,864

$

4,944,243

Net interest income$

38,278

$

38,287

$

40,729

Net yield on earning assets3.02

%

3.13

%

3.59

%

(1)For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income:Loan fees$

156

$

609

$

96

(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$

132

$

194

$

50

Commercial, financial, and agriculture250

651

1,110

Installment loans to individuals38

37

13

Time deposits155

155

75

$

575

$

1,037

$

1,248

(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 $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANYAND SUBSIDIARIESConsolidated AverageBalance Sheets, Yields,and Rates(Unaudited) ($ in 000s) Three Months Ended September 30, 2020 June 30, 2020 September 30, 2019 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets:Loan portfolio ^(1):Residential real estate $ 1,766,796 $ 17,899 4.03 % $ 1,785,631 $ 19,048 4.29 % $ 1,794,068 $ 20,564 4.55 %^(2)Commercial, financial, 1,839,939 16,910 3.66 % 1,818,344 17,665 3.91 % 1,692,000 21,293 4.99 %and agriculture ^(2)Installment loans to 54,834 804 5.83 % 56,199 852 6.10 % 58,480 928 6.30 %individuals ^(2), (3)Previously securitized *** 148 *** *** 152 *** *** 159 ***loans ^(4)Total loans 3,661,569 35,761 3.89 % 3,660,174 37,717 4.14 % 3,544,548 42,944 4.81 %

Securities:Taxable 877,623 6,266 2.84 % 896,997 5,718 2.56 % 790,207 6,044 3.03 %

Tax-exempt ^(5) 204,178 1,433 2.79 % 120,751 1,039 3.46 % 96,011 914 3.78 %

Total securities 1,081,801 7,699 2.83 % 1,017,748 6,757 2.67 % 886,218 6,958 3.11 %

Deposits in depository 304,498 72 0.09 % 236,320 55 0.09 % 72,736 271 1.48 %institutionsTotal interest-earning 5,047,868 43,532 3.43 % 4,914,242 44,529 3.64 % 4,503,502 50,173 4.42 %assetsCash and due from banks 80,505 79,501 67,106

Premises and equipment, 77,647 78,717 78,091 netGoodwill and intangible 119,267 119,681 121,124 assetsOther assets 229,667 230,423 188,206

Less: Allowance for (25,311 ) (24,700 ) (13,786 )credit lossesTotal assets $ 5,529,643 $ 5,397,864 $ 4,944,243

Liabilities:Interest-bearing demand $ 931,152 $ 187 0.08 % $ 893,832 $ 178 0.08 % $ 881,476 $ 954 0.43 %depositsSavings deposits 1,093,886 303 0.11 % 1,037,387 363 0.14 % 978,198 1,159 0.47 %

Time deposits ^(2) 1,322,423 4,633 1.39 % 1,353,619 5,422 1.61 % 1,360,409 6,472 1.89 %

Short-term borrowings 260,518 131 0.20 % 256,790 279 0.44 % 187,301 814 1.72 %

Long-term debt - - 0.00 % - - 0.00 % 4,054 45 4.40 %

Total interest-bearing 3,607,979 5,254 0.58 % 3,541,628 6,242 0.71 % 3,411,438 9,444 1.10 %liabilitiesNoninterest-bearing 1,114,822 1,044,009 825,029 demand depositsOther liabilities 104,084 115,110 58,857

Stockholders' equity 702,758 697,117 648,919

Total liabilities andstockholders' equity $ 5,529,643 $ 5,397,864 $ 4,944,243

Net interest income $ 38,278 $ 38,287 $ 40,729

Net yield on earning 3.02 % 3.13 % 3.59 %assets (1)^ For purposes of this table, non-accruing loans have been included inaverage balances and the following amounts (in thousands) of loan fees havebeen included in interest income: Loan fees $ 156 $ 609 $ 96

(2) Included in the above table are the following amounts (in thousands) forthe accretion of the fair value adjustments related to the Company'sacquisitions: Residential real estate $ 132 $ 194 $ 50

Commercial, financial, 250 651 1,110and agricultureInstallment loans to 38 37 13individualsTime deposits 155 155 75

$ 575 $ 1,037 $ 1,248

(3) Includes the Company's consumer and DDA overdrafts loan categories.(4) Effective January 1, 2012, the carrying value of the Company's previouslysecuritized loans was reduced to $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate ofapproximately 21%.CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)

Nine Months Ended

September 30, 2020

September 30, 2019

Average

Yield/

Average

Yield/

Balance

Interest

Rate

Balance

Interest

Rate

Assets:

Loan portfolio (1):

Residential real estate (2)

$

1,776,903

$

56,827

4.27

%

$

1,792,013

$

61,468

4.59

%

Commercial, financial, and agriculture (2)

1,810,165

55,051

4.06

%

1,704,141

63,796

5.01

%

Installment loans to individuals (2), (3)

56,535

2,519

5.95

%

57,263

2,656

6.20

%

Previously securitized loans (4)

***

415

***

***

477

***

Total loans

3,643,603

114,812

4.21

%

3,553,417

128,397

4.83

%

Securities:

Taxable

861,853

17,855

2.77

%

751,600

17,464

3.11

%

Tax-exempt (5)

140,075

3,366

3.21

%

99,555

2,856

3.84

%

Total securities

1,001,928

21,221

2.83

%

851,155

20,320

3.19

%

Deposits in depository institutions

214,912

432

0.27

%

82,214

1,038

1.69

%

Total interest-earning assets

4,860,443

136,465

3.75

%

4,486,786

149,755

4.46

%

Cash and due from banks

76,936

65,433

Premises and equipment, net

77,910

78,475

Goodwill and intangible assets

119,678

121,780

Other assets

218,695

191,231

Less: Allowance for credit losses

(21,984

)

(15,000

)

Total assets

$

5,331,678

$

4,928,705

Liabilities:

Interest-bearing demand deposits

$

898,440

$

833

0.12

%

$

880,763

$

2,796

0.42

%

Savings deposits

1,045,877

1,366

0.17

%

968,655

3,461

0.48

%

Time deposits (2)

1,347,013

16,125

1.60

%

1,370,934

18,511

1.81

%

Short-term borrowings

242,173

873

0.48

%

208,004

2,729

1.75

%

Long-term debt

1,109

100

12.04

%

4,053

140

4.62

%

Total interest-bearing liabilities

3,534,612

19,297

0.73

%

3,432,409

27,637

1.08

%

Noninterest-bearing demand deposits

1,004,144

811,411

Other liabilities

98,393

54,356

Stockholders' equity

694,529

630,529

Total liabilities and

stockholders' equity

$

5,331,678

$

4,928,705

Net interest income

$

117,168

$

122,118

Net yield on earning assets

3.22

%

3.64

%

(1) For purposes of this table, non-accruing loans have been included in average balances and the following amounts (in thousands) of loan fees have been included in interest income:

Loan fees

$

881

$

711

(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

$

477

$

165

Commercial, financial, and agriculture

2,141

1,968

Installment loans to individuals

114

1

Time deposits

466

527

$

3,198

$

2,661

(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 COMPANYAND SUBSIDIARIES

Consolidated AverageBalance Sheets, Yields,and Rates

(Unaudited) ($ in 000s)

Nine Months Ended

September 30, 2020 September 30, 2019

Average Yield/ Average Yield/

Balance Interest Rate Balance Interest Rate



Assets:

Loan portfolio ^(1):

Residential real estate $ 1,776,903 $ 56,827 4.27 % $ 1,792,013 $ 61,468 4.59 %^(2)

Commercial, financial, 1,810,165 55,051 4.06 % 1,704,141 63,796 5.01 %and agriculture ^(2)

Installment loans to 56,535 2,519 5.95 % 57,263 2,656 6.20 %individuals ^(2), (3)

Previously securitized *** 415 *** *** 477 ***loans ^(4)

Total loans 3,643,603 114,812 4.21 % 3,553,417 128,397 4.83 %

Securities:

Taxable 861,853 17,855 2.77 % 751,600 17,464 3.11 %

Tax-exempt ^(5) 140,075 3,366 3.21 % 99,555 2,856 3.84 %

Total securities 1,001,928 21,221 2.83 % 851,155 20,320 3.19 %

Deposits in depository 214,912 432 0.27 % 82,214 1,038 1.69 %institutions

Total interest-earning 4,860,443 136,465 3.75 % 4,486,786 149,755 4.46 %assets

Cash and due from banks 76,936 65,433

Premises and equipment, 77,910 78,475 net

Goodwill and intangible 119,678 121,780 assets

Other assets 218,695 191,231

Less: Allowance for (21,984 ) (15,000 )credit losses

Total assets $ 5,331,678 $ 4,928,705

Liabilities:

Interest-bearing demand $ 898,440 $ 833 0.12 % $ 880,763 $ 2,796 0.42 %deposits

Savings deposits 1,045,877 1,366 0.17 % 968,655 3,461 0.48 %

Time deposits ^(2) 1,347,013 16,125 1.60 % 1,370,934 18,511 1.81 %

Short-term borrowings 242,173 873 0.48 % 208,004 2,729 1.75 %

Long-term debt 1,109 100 12.04 % 4,053 140 4.62 %

Total interest-bearing 3,534,612 19,297 0.73 % 3,432,409 27,637 1.08 %liabilities

Noninterest-bearing 1,004,144 811,411 demand deposits

Other liabilities 98,393 54,356

Stockholders' equity 694,529 630,529

Total liabilities and

stockholders' equity $ 5,331,678 $ 4,928,705

Net interest income $ 117,168 $ 122,118

Net yield on earning 3.22 % 3.64 %assets

(1) For purposes of this table, non-accruing loans have been included inaverage balances and the following amounts (in thousands) of loan fees havebeen included in interest income:

Loan fees $ 881 $ 711

(2) Included in the above table are the following amounts (in thousands) forthe accretion of the fair value adjustments related to the Company'sacquisitions:

Residential real estate $ 477 $ 165

Commercial, financial, 2,141 1,968and agriculture

Installment loans to 114 1 individuals

Time deposits 466 527

$ 3,198 $ 2,661

(3) Includes the Company's consumer and DDA overdrafts loan categories.

(4) Effective January 1, 2012, the carrying value of the Company's previouslysecuritized loans was reduced to $0.

(5) Computed on a fully federal tax-equivalent basis assuming a tax rate ofapproximately 21%.

CITY HOLDING COMPANY AND SUBSIDIARIESNon-GAAP Reconciliations(Unaudited) ($ in 000s, except per share data)Three Months Ended

Nine Months Ended

September 30, 2020

June 30, 2020

March 31, 2020

December 31, 2019

September 30, 2019

September 30, 2020

September 30, 2019

Net Interest Income/MarginNet interest income ("GAAP")$

37,977

$

38,070

$

40,415

$

39,847

$

40,537

$

116,462

$

121,516

Taxable equivalent adjustment301

217

188

189

192

706

602

Net interest income, fully taxable equivalent$

38,278

$

38,287

$

40,603

$

40,036

$

40,729

$

117,168

$

122,118

Average interest earning assets$

5,047,868

$

4,914,242

$

4,617,157

$

4,585,008

$

4,503,502

$

4,860,443

$

4,486,786

Net Interest Margin3.02

%

3.13

%

3.54

%

3.46

%

3.59

%

3.22

%

3.64

%

Accretion related to fair value adjustments-0.05

%

-0.08

%

-0.14

%

-0.08

%

-0.11

%

-0.09

%

-0.08

%

Net Interest Margin (excluding accretion)2.97

%

3.05

%

3.40

%

3.38

%

3.48

%

3.13

%

3.56

%

Tangible Equity Ratio (period end)Equity to assets ("GAAP")12.54

%

12.55

%

13.47

%

13.11

%

13.10

%

Effect of goodwill and other intangibles, net-1.93

%

-1.93

%

-2.09

%

-2.13

%

-2.17

%

Tangible common equity to tangible assets10.61

%

10.62

%

11.38

%

10.98

%

10.93

%

Return on Tangible EquityReturn on tangible equity ("GAAP")13.8

%

12.6

%

20.6

%

16.8

%

17.0

%

15.6

%

17.5

%

Impact of merger related expenses0.0

%

0.0

%

0.0

%

0.0

%

0.0

%

0.0

%

0.2

%

Impact of sale of VISA shares0.0

%

0.0

%

-9.7

%

0.0

%

0.0

%

-3.1

%

0.0

%

Return on tangible equity, excluding merger related expenses and sale of VISA shares13.8

%

12.6

%

10.9

%

16.8

%

17.0

%

12.5

%

17.7

%

Return on AssetsReturn on assets ("GAAP")1.46

%

1.35

%

2.29

%

1.80

%

1.81

%

1.68

%

1.81

%

Impact of merger related expenses0.00

%

0.00

%

0.00

%

0.00

%

0.00

%

0.00

%

0.02

%

Impact of sale of VISA shares0.00

%

0.00

%

-1.08

%

0.00

%

0.00

%

-0.33

%

0.00

%

Return on assets, excluding merger related expenses and sale of VISA shares1.46

%

1.35

%

1.21

%

1.80

%

1.81

%

1.35

%

1.83

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005077/en/

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