Business Wire | Jul 22, 2021 07:30AM EDT

City Holding Company Announces Second Quarter Results

Jul. 22, 2021

CHARLESTON, W. Va.--(BUSINESS WIRE)--Jul. 22, 2021--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 HOLDINGCOMPANY ANDSUBSIDIARIESFinancialHighlights(Unaudited) Three Months Ended Six Months Ended

June 30, March 31, December September June 30, June 30, June 30, 2021 2021 31, 30, 2020 2021 2020 2020 2020

EarningsNet InterestIncome (fully $ 38,257 $ 37,871 $ 38,514 $ 38,278 $ 38,287 $ 76,128 $ 78,892 taxableequivalent)Net Incomeavailable to 22,148 19,814 22,222 20,126 18,251 41,962 47,249 commonshareholders Per ShareDataEarnings pershareavailable tocommonshareholders: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

Weightedaveragenumber ofshares (inthousands):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-endnumber of 15,527 15,724 15,768 15,848 16,077 15,527 16,077 shares (inthousands)Cash $ 0.58 $ 0.58 $ 0.58 $ 0.57 $ 0.57 $ 1.16 $ 1.14 dividendsdeclaredBook value $ 44.79 $ 43.99 $ 44.47 $ 43.62 $ 43.15 $ 44.79 $ 43.15 per share(period-end)Tangible bookvalue per 37.20 36.47 36.94 36.11 35.72 37.20 35.72 share(period-end)Market data:High closing $ 83.85 $ 87.41 $ 70.77 $ 67.98 $ 71.19 $ 87.41 $ 82.40 priceLow closing 74.44 69.05 56.98 55.37 55.18 69.05 55.18 pricePeriod-end 75.24 81.78 69.55 57.61 65.17 75.24 65.17 closing priceAverage daily 61 63 56 67 89 62 79 volume (inthousands)Treasuryshareactivity:Treasuryshares 217 75 81 231 79 292 261 repurchased(inthousands)Averagetreasury $ 78.75 $ 76.71 $ 60.32 $ 59.49 $ 61.75 $ 78.22 $ 68.41 sharerepurchaseprice Key Ratios(percent)Return on 1.49 % 1.38 % 1.59 % 1.46 % 1.35 % 1.44 % 1.81 %averageassetsReturn onaverage 15.2 % 13.5 % 15.3 % 13.8 % 12.6 % 14.3 % 16.6 %tangibleequityYield oninterest 3.00 % 3.17 % 3.32 % 3.43 % 3.64 % 3.08 % 3.92 %earningassetsCost ofinterest 0.27 % 0.37 % 0.47 % 0.58 % 0.71 % 0.32 % 0.81 %bearingliabilitiesNet Interest 2.81 % 2.91 % 2.99 % 3.02 % 3.13 % 2.86 % 3.33 %MarginNon-interestincome as a 31.0 % 30.4 % 30.7 % 30.3 % 27.4 % 30.9 % 37.9 %percent oftotal revenueEfficiency 52.8 % 54.3 % 51.0 % 51.6 % 53.3 % 53.5 % 51.4 %RatioPrice/ 13.35 16.30 12.41 11.53 14.50 14.13 11.23 EarningsRatio (a) Capital(period-end)AverageShareholders' 11.81 % 12.30 % 12.46 % 12.71 % 12.91 %Equity toAverageAssetsTangibleequity to 9.98 % 9.93 % 10.33 % 10.61 % 10.62 %tangibleassetsConsolidated City HoldingCompany risk basedcapital 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 NationalBank riskbased capitalratios (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 $ 6,477 $ 6,434 $ 6,219 $ 5,984 $ 6,058 FTE (inthousands)Deposits per 5,271 5,236 5,024 4,799 4,834 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) June 30, 2021 risk-based capital ratios are estimated.CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Statements of Income(Unaudited) ($ in 000s, except per share data)Three Months EndedSix Months EndedJune 30,2021March 31,2021December 31,2020September 30,2020June 30,2020June 30,2021June 30,2020Interest IncomeInterest and fees on loans$

33,114

$

34,324

$

35,685

$

35,761

$

37,718

$

67,438

$

79,053

Interest on investment securities:Taxable5,932

5,242

5,500

6,266

5,718

11,174

11,589

Tax-exempt1,291

1,253

1,254

1,132

821

2,544

1,528

Interest on deposits in depository institutions162

118

60

72

55

280

360

Total Interest Income40,499

40,937

42,499

43,231

44,312

81,436

92,530

Interest ExpenseInterest on deposits2,460

3,280

4,198

5,123

5,963

5,740

13,201

Interest on short-term borrowings125

117

120

131

279

242

743

Interest on long-term debt-

-

-

-

-

-

100

Total Interest Expense2,585

3,397

4,318

5,254

6,242

5,982

14,044

Net Interest Income37,914

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 Losses39,914

37,980

37,707

36,951

36,820

77,894

69,264

Non-Interest IncomeNet gains (losses) on sale of investment securities29

283

6

-

(6

)

312

56

Unrealized gains (losses) recognized on equity securities still held410

(51

)

835

461

242

359

(2,159

)

Service charges5,895

5,881

6,771

6,295

4,945

11,776

12,667

Bankcard revenue7,221

6,213

5,991

6,065

5,888

13,434

11,003

Trust and investment management fee income2,012

2,033

2,162

1,844

1,931

4,045

3,730

Bank owned life insurance940

1,460

813

1,088

848

2,400

2,523

Sale of VISA shares-

-

-

-

-

-

17,837

Other income941

811

1,143

1,232

783

1,752

2,318

Total Non-Interest Income17,448

16,630

17,721

16,985

14,631

34,078

47,975

Non-Interest ExpenseSalaries and employee benefits15,559

15,671

15,989

15,361

14,873

31,230

30,724

Occupancy related expense2,525

2,622

2,447

2,428

2,402

5,147

4,890

Equipment and software related expense2,655

2,544

2,660

2,607

2,504

5,199

4,933

FDIC insurance expense382

405

363

355

167

787

167

Advertising824

881

538

462

933

1,705

1,776

Bankcard expenses1,746

1,584

1,443

1,517

1,498

3,330

2,933

Postage, delivery, and statement mailings568

592

546

513

592

1,160

1,208

Office supplies371

392

413

396

353

763

747

Legal and professional fees589

675

438

548

589

1,264

1,190

Telecommunications676

690

540

547

531

1,366

1,042

Repossessed asset losses (gains), net of expenses1

79

(68

)

39

76

80

274

Other expenses3,678

3,674

3,332

3,939

3,950

7,352

8,052

Total Non-Interest Expense29,574

29,809

28,641

28,712

28,468

59,383

57,936

Income Before Income Taxes27,788

24,801

26,787

25,224

22,983

52,589

59,303

Income tax expense5,640

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 shareholders13,021

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 outstanding15,573

15,656

15,708

15,950

16,081

15,614

16,123

Shares for diluted earnings per share15,594

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 HOLDINGCOMPANY ANDSUBSIDIARIESConsolidatedStatements ofIncome(Unaudited) ($ in000s, except pershare data) Three Months Ended Six Months Ended June 30, March 31, December September June 30, June 30, June 30, 2021 2021 31, 30, 2020 2021 2020 2020 2020 Interest IncomeInterest and fees $ 33,114 $ 34,324 $ 35,685 $ 35,761 $ 37,718 $ 67,438 $ 79,053 on loansInterest oninvestmentsecurities: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 ondeposits in 162 118 60 72 55 280 360 depositoryinstitutionsTotal Interest 40,499 40,937 42,499 43,231 44,312 81,436 92,530 Income Interest ExpenseInterest on 2,460 3,280 4,198 5,123 5,963 5,740 13,201 depositsInterest on 125 117 120 131 279 242 743 short-termborrowingsInterest on - - - - - - 100 long-term debtTotal Interest 2,585 3,397 4,318 5,254 6,242 5,982 14,044 ExpenseNet Interest 37,914 37,540 38,181 37,977 38,070 75,454 78,486 Income(Recovery of) (2,000 ) (440 ) 474 1,026 1,250 (2,440 ) 9,222 provision forcredit lossesNet InterestIncome After 39,914 37,980 37,707 36,951 36,820 77,894 69,264 (Recovery of)Provision forCredit Losses Non-InterestIncomeNet gains (losses)on sale of 29 283 6 - (6 ) 312 56 investmentsecuritiesUnrealized gains(losses) 410 (51 ) 835 461 242 359 (2,159 )recognized onequity securitiesstill heldService 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 andinvestment 2,012 2,033 2,162 1,844 1,931 4,045 3,730 management feeincomeBank owned life 940 1,460 813 1,088 848 2,400 2,523 insuranceSale of VISA - - - - - - 17,837 sharesOther income 941 811 1,143 1,232 783 1,752 2,318

Total Non-Interest 17,448 16,630 17,721 16,985 14,631 34,078 47,975 Income Non-InterestExpenseSalaries and 15,559 15,671 15,989 15,361 14,873 31,230 30,724 employee benefitsOccupancy related 2,525 2,622 2,447 2,428 2,402 5,147 4,890 expenseEquipment and 2,655 2,544 2,660 2,607 2,504 5,199 4,933 software relatedexpenseFDIC insurance 382 405 363 355 167 787 167 expenseAdvertising 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, 568 592 546 513 592 1,160 1,208 and statementmailingsOffice supplies 371 392 413 396 353 763 747

Legal and 589 675 438 548 589 1,264 1,190 professional feesTelecommunications 676 690 540 547 531 1,366 1,042

Repossessed asset 1 79 (68 ) 39 76 80 274 losses (gains),net of expensesOther expenses 3,678 3,674 3,332 3,939 3,950 7,352 8,052

Total Non-Interest 29,574 29,809 28,641 28,712 28,468 59,383 57,936 ExpenseIncome Before 27,788 24,801 26,787 25,224 22,983 52,589 59,303 Income TaxesIncome tax expense 5,640 4,987 4,565 5,098 4,732 10,627 12,054

Net IncomeAvailable to $ 22,148 $ 19,814 $ 22,222 $ 20,126 $ 18,251 $ 41,962 $ 47,249 CommonShareholders Distributedearnings allocated $ 8,921 $ 9,037 $ 9,053 $ 8,944 $ 9,073 $ 17,845 $ 18,147 to commonshareholdersUndistributedearnings allocated 13,021 10,598 12,947 10,984 8,998 23,732 28,639 to commonshareholdersNet earningsallocated to $ 21,942 $ 19,635 $ 22,000 $ 19,928 $ 18,071 $ 41,577 $ 46,786 commonshareholders Average common 15,573 15,656 15,708 15,950 16,081 15,614 16,123 shares outstandingShares for diluted 15,594 15,687 15,733 15,970 16,097 15,640 16,142 earnings per share Basic earnings per $ 1.41 $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 2.66 $ 2.90 common shareDiluted earnings $ 1.41 $ 1.25 $ 1.40 $ 1.25 $ 1.12 $ 2.66 $ 2.90 per common share CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Balance Sheets($ in 000s)(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

AssetsCash and due from banks$

97,523

$

97,709

$

77,412

$

76,451

$

87,658

Interest-bearing deposits in depository institutions512,367

659,090

451,247

176,267

285,596

Cash and cash equivalents609,890

756,799

528,659

252,718

373,254

Investment securities available-for-sale, at fair value1,340,681

1,185,245

1,178,789

1,157,399

1,055,185

Other securities24,548

27,182

27,372

26,548

26,144

Total investment securities1,365,229

1,212,427

1,206,161

1,183,947

1,081,329

Gross loans3,529,416

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 loans3,509,400

3,522,647

3,597,570

3,639,099

3,640,397

Bank owned life insurance119,491

118,976

118,243

117,501

116,746

Premises and equipment, net76,263

76,529

76,925

77,031

77,991

Accrued interest receivable15,967

16,231

15,793

16,627

14,200

Net deferred tax assets-

1,395

-

-

-

Intangible assets117,857

118,224

118,592

119,004

119,417

Other assets89,958

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

LiabilitiesDeposits:Noninterest-bearing$

1,279,932

$

1,244,175

$

1,176,990

$

1,061,310

$

1,079,469

Interest-bearing:Demand deposits1,070,004

1,077,749

1,027,201

940,791

921,761

Savings deposits1,301,219

1,265,038

1,188,003

1,117,684

1,067,254

Time deposits1,153,391

1,209,873

1,260,022

1,300,291

1,342,631

Total deposits4,804,546

4,796,835

4,652,216

4,420,076

4,411,115

Short-term borrowingsCustomer repurchase agreements311,316

316,003

295,956

279,866

282,676

Net deferred tax liabilities2,310

-

3,202

1,601

2,598

Other liabilities90,407

89,847

106,160

118,386

138,633

Total Liabilities5,208,579

5,202,685

5,057,534

4,819,929

4,835,022

Stockholders' EquityPreferred stock-

-

-

-

-

Common stock47,619

47,619

47,619

47,619

47,619

Capital surplus169,674

170,526

171,304

170,526

169,881

Retained earnings613,553

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-sale28,227

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 Income22,566

15,628

31,233

30,490

31,029

Total Stockholders' Equity695,476

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 CapitalTotal CET 1 capital$

561,317

$

563,523

$

557,641

$

548,269

$

548,972

Total tier 1 capital561,317

563,523

557,641

548,269

548,972

Total risk-based capital577,543

582,816

577,292

568,153

569,213

Total risk-weighted assets3,421,764

3,362,595

3,446,774

3,442,629

3,410,589

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

June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020

AssetsCash and due from $ 97,523 $ 97,709 $ 77,412 $ 76,451 $ 87,658 banksInterest-bearingdeposits in 512,367 659,090 451,247 176,267 285,596 depositoryinstitutionsCash and cash 609,890 756,799 528,659 252,718 373,254 equivalents Investmentsecurities 1,340,681 1,185,245 1,178,789 1,157,399 1,055,185 available-for-sale,at fair valueOther securities 24,548 27,182 27,372 26,548 26,144

Total investment 1,365,229 1,212,427 1,206,161 1,183,947 1,081,329 securities Gross loans 3,529,416 3,546,723 3,622,119 3,663,966 3,665,596

Allowance for (20,016 ) (24,076 ) (24,549 ) (24,867 ) (25,199 )credit lossesNet loans 3,509,400 3,522,647 3,597,570 3,639,099 3,640,397

Bank owned life 119,491 118,976 118,243 117,501 116,746 insurancePremises and 76,263 76,529 76,925 77,031 77,991 equipment, netAccrued interest 15,967 16,231 15,793 16,627 14,200 receivableNet deferred tax - 1,395 - - - assetsIntangible 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

LiabilitiesDeposits: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-termborrowingsCustomer repurchase 311,316 316,003 295,956 279,866 282,676 agreementsNet deferred tax 2,310 - 3,202 1,601 2,598 liabilitiesOther 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'EquityPreferred 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 (157,936 ) (142,484 ) (139,038 ) (134,177 ) (120,583 )stock in treasuryAccumulated othercomprehensiveincome:Unrealized gain on 28,227 21,289 36,894 36,760 37,299 securitiesavailable-for-saleUnderfunded pension (5,661 ) (5,661 ) (5,661 ) (6,270 ) (6,270 )liabilityTotal Accumulated 22,566 15,628 31,233 30,490 31,029 Other ComprehensiveIncomeTotal Stockholders' 695,476 691,685 701,106 691,359 693,750 EquityTotal Liabilities $ 5,904,055 $ 5,894,370 $ 5,758,640 $ 5,511,288 $ 5,528,772 and Stockholders'Equity Regulatory CapitalTotal CET 1 capital $ 561,317 $ 563,523 $ 557,641 $ 548,269 $ 548,972

Total tier 1 561,317 563,523 557,641 548,269 548,972 capitalTotal risk-based 577,543 582,816 577,292 568,153 569,213 capitalTotal risk-weighted 3,421,764 3,362,595 3,446,774 3,442,629 3,410,589 assets CITY HOLDING COMPANY AND SUBSIDIARIESLoan 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 Family108,079

108,131

109,812

114,071

123,814

Hotels290,119

293,176

294,464

295,989

295,179

Multi-family212,715

212,561

215,671

214,394

204,580

Non Residential Non-Owner Occupied653,264

649,683

641,351

628,814

628,628

Non Residential Owner Occupied209,100

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 equity127,608

130,009

136,469

140,135

142,672

Consumer45,184

47,224

47,688

50,541

52,278

DDA overdrafts3,662

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 loans20,838

22,129

27,078

28,947

28,252

CITY HOLDINGCOMPANY ANDSUBSIDIARIESLoanPortfolio(Unaudited)($ in 000s) June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020

Commercial $ 358,583 $ 371,195 $ 372,989 $ 383,980 $ 369,122andindustrial 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

NonResidential 653,264 649,683 641,351 628,814 628,628 Non-OwnerOccupiedNonResidential 209,100 199,130 213,484 211,433 215,472 OwnerOccupiedCommercial 1,473,277 1,462,681 1,474,782 1,464,701 1,467,673 real estate^(1) Residential 1,521,102 1,532,907 1,587,694 1,621,265 1,631,151 real estate^(2)Home equity 127,608 130,009 136,469 140,135 142,672

Consumer 45,184 47,224 47,688 50,541 52,278

DDA 3,662 2,707 2,497 3,344 2,700 overdraftsGross Loans $ 3,529,416 $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596

Constructionloansincluded in:^(1) -Commercial $ 43,904 $ 39,101 $ 40,449 $ 42,449 $ 42,092 real estateloans^(2) -Residential 20,838 22,129 27,078 28,947 28,252 real estateloans CITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information(Unaudited) ($ in 000s)Three Months EndedSix Months EndedJune 30,2021March 31,2021December 31,2020September 30,2020June 30,2020June 30,2021June 30,2020Allowance for Credit LossesBalance 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 industrial25

46

74

3

5

71

14

Commercial real estate15

164

150

44

128

179

331

Residential real estate17

74

57

24

8

91

103

Home equity3

23

47

33

9

26

56

Consumer104

39

55

42

128

143

141

DDA overdrafts308

413

333

334

349

721

800

Total recoveries472

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 outstanding0.57

%

0.68

%

0.68

%

0.68

%

0.69

%

Allowance as a percent of non-performing loans199.3

%

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 outstanding0.23

%

0.00

%

0.09

%

0.15

%

0.05

%

0.12

%

0.08

%

CITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information, continued(Unaudited) ($ in 000s)June 30,2021March 31,2021December 31,2020September 30,2020June 30,2020Nonaccrual LoansResidential real estate$

2,482

$

3,004

$

2,968

$

3,983

$

3,477

Home equity81

88

95

74

265

Commercial and industrial820

1,200

768

728

1,087

Commercial real estate6,383

7,792

8,401

8,479

8,715

Consumer-

-

-

-

-

Total nonaccrual loans9,766

12,084

12,232

13,264

13,544

Accruing loans past due 90 days or more278

295

-

345

68

Total non-performing loans10,044

12,379

12,232

13,609

13,612

Other real estate owned1,309

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 owned0.32

%

0.39

%

0.38

%

0.43

%

0.48

%

Past Due LoansResidential real estate$

5,453

$

4,092

$

5,993

$

5,153

$

5,261

Home equity523

449

575

474

393

Commercial and industrial721

1,358

1,241

691

160

Commercial real estate498

508

625

602

917

Consumer12

10

113

121

67

DDA overdrafts417

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 outstanding0.22

%

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 equity1,920

1,956

2,001

2,100

2,138

Commercial and industrial-

-

-

-

-

Commercial real estate3,076

4,615

4,638

4,894

4,915

Consumer203

211

277

260

185

Total TDRs$

22,987

$

25,354

$

26,142

$

27,652

$

27,869

CITY HOLDINGCOMPANY ANDSUBSIDIARIESAsset QualityInformation(Unaudited) ($in 000s) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2021 2021 2020 2020 2020 2021 2020Allowance forCredit LossesBalance at $ 24,076 $ 24,549 $ 24,867 $ 25,199 $ 24,393 $ 24,549 $ 11,589 beginning ofperiod Charge-offs:Commercial and (211 ) (34 ) (9 ) (757 ) - (245 ) (77 )industrialCommercial (1,718 ) (1 ) (616 ) (75 ) (39 ) (1,719 ) (422 )real estateResidential (86 ) (93 ) (139 ) (252 ) (376 ) (179 ) (859 )real estateHome 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 (2,532 ) (792 ) (1,508 ) (1,838 ) (1,071 ) (3,324 ) (2,817 )charge-offs Recoveries:Commercial and 25 46 74 3 5 71 14 industrialCommercial 15 164 150 44 128 179 331 real estateResidential 17 74 57 24 8 91 103 real estateHome 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 472 759 716 480 627 1,231 1,445 recoveries Net (2,060 ) (33 ) (792 ) (1,358 ) (444 ) (2,093 ) (1,372 )charge-offs(Recovery of) (2,000 ) (440 ) 474 1,026 1,250 (2,440 ) 9,222 provision forcredit lossesImpact of - - - - - - 5,760 Adopting ASC326Balance at end $ 20,016 $ 24,076 $ 24,549 $ 24,867 $ 25,199 $ 20,016 $ 25,199 of period Loans $ 3,529,416 $ 3,546,723 $ 3,622,119 $ 3,663,966 $ 3,665,596 outstandingAllowance as apercent of 0.57 % 0.68 % 0.68 % 0.68 % 0.69 %loansoutstandingAllowance as apercent of 199.3 % 194.5 % 200.7 % 182.7 % 185.1 %non-performingloans Average loans $ 3,541,165 $ 3,585,790 $ 3,635,673 $ 3,661,569 $ 3,660,174 $ 3,563,356 $ 3,634,522 outstandingNetcharge-offs(annualized) 0.23 % 0.00 % 0.09 % 0.15 % 0.05 % 0.12 % 0.08 %as a percentof averageloansoutstanding CITY HOLDINGCOMPANY ANDSUBSIDIARIESAsset QualityInformation,continued(Unaudited) ($in 000s) June 30, March 31, December 31, September 30, June 30, 2021 2021 2020 2020 2020NonaccrualLoansResidential $ 2,482 $ 3,004 $ 2,968 $ 3,983 $ 3,477 real estateHome equity 81 88 95 74 265

Commercial and 820 1,200 768 728 1,087 industrialCommercial 6,383 7,792 8,401 8,479 8,715 real estateConsumer - - - - -

Total 9,766 12,084 12,232 13,264 13,544 nonaccrualloansAccruing loans 278 295 - 345 68 past due 90days or moreTotal 10,044 12,379 12,232 13,609 13,612 non-performingloansOther real 1,309 1,625 1,650 2,080 3,997 estate ownedTotal $ 11,353 $ 14,004 $ 13,882 $ 15,689 $ 17,609 non-performingassets Non-performingassets as apercent of 0.32 % 0.39 % 0.38 % 0.43 % 0.48 %loans andother realestate owned Past Due LoansResidential $ 5,453 $ 4,092 $ 5,993 $ 5,153 $ 5,261 real estateHome equity 523 449 575 474 393

Commercial and 721 1,358 1,241 691 160 industrialCommercial 498 508 625 602 917 real estateConsumer 12 10 113 121 67

DDA overdrafts 417 212 341 379 273

Total past due $ 7,624 $ 6,629 $ 8,888 $ 7,420 $ 7,071 loans Total past dueloans as a 0.22 % 0.19 % 0.25 % 0.20 % 0.19 %percent ofloansoutstanding Troubled DebtRestructurings("TDRs")Residential $ 17,788 $ 18,572 $ 19,226 $ 20,398 $ 20,631 real estateHome equity 1,920 1,956 2,001 2,100 2,138

Commercial and - - - - - industrialCommercial 3,076 4,615 4,638 4,894 4,915 real estateConsumer 203 211 277 260 185

Total TDRs $ 22,987 $ 25,354 $ 26,142 $ 27,652 $ 27,869

CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Average Balance Sheets, Yields, and Rates(Unaudited) ($ in 000s)Three Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

Average

Yield/

Average

Yield/

Average

Yield/

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Assets:Loan portfolio (1):Residential real estate (2)$

1,652,165

$

16,135

3.92

%

$

1,696,064

$

16,853

4.03

%

$

1,785,631

$

19,048

4.29

%

Commercial, financial, and agriculture (2)1,839,478

16,158

3.52

%

1,838,928

16,542

3.65

%

1,818,344

17,665

3.91

%

Installment loans to individuals (2), (3)49,522

713

5.77

%

50,798

713

5.69

%

56,199

852

6.10

%

Previously securitized loans (4)***109

******215

******152

***Total loans3,541,165

33,115

3.75

%

3,585,790

34,323

3.88

%

3,660,174

37,717

4.14

%

Securities:Taxable1,046,008

5,932

2.27

%

945,177

5,242

2.25

%

896,997

5,718

2.56

%

Tax-exempt (5)244,233

1,633

2.68

%

239,589

1,585

2.68

%

120,751

1,039

3.46

%

Total securities1,290,241

7,565

2.35

%

1,184,766

6,827

2.34

%

1,017,748

6,757

2.67

%

Deposits in depository institutions628,158

162

0.10

%

513,469

118

0.09

%

236,320

55

0.09

%

Total interest-earning assets5,459,564

40,842

3.00

%

5,284,025

41,268

3.17

%

4,914,242

44,529

3.64

%

Cash and due from banks92,243

79,683

79,501

Premises and equipment, net76,660

76,837

78,717

Goodwill and intangible assets118,088

118,453

119,681

Other assets206,709

217,453

230,423

Less: Allowance for credit losses(23,701

)

(24,909

)

(24,700

)

Total assets$

5,929,563

$

5,751,542

$

5,397,864

Liabilities:Interest-bearing demand deposits$

1,069,896

$

122

0.05

%

$

1,008,283

$

124

0.05

%

$

893,832

$

178

0.08

%

Savings deposits1,287,966

163

0.05

%

1,221,169

183

0.06

%

1,037,387

363

0.14

%

Time deposits (2)1,181,953

2,175

0.74

%

1,236,197

2,973

0.98

%

1,353,619

5,422

1.61

%

Short-term borrowings305,134

125

0.16

%

290,766

117

0.16

%

256,790

279

0.44

%

Long-term debt-

-

-

-

-

-

-

-

-

Total interest-bearing liabilities3,844,949

2,585

0.27

%

3,756,415

3,397

0.37

%

3,541,628

6,242

0.71

%

Noninterest-bearing demand deposits1,311,340

1,197,910

1,044,009

Other liabilities72,940

89,695

115,110

Stockholders' equity700,334

707,522

697,117

Total liabilities andstockholders' equity$

5,929,563

$

5,751,542

$

5,397,864

Net interest income$

38,257

$

37,871

$

38,287

Net yield on earning assets2.81

%

2.91

%

3.13

%

(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$

488

$

835

$

609

(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$

211

$

106

$

194

Commercial, financial, and agriculture365

325

651

Installment loans to individuals23

28

37

Time deposits48

48

155

$

647

$

507

$

1,037

(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 $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDING COMPANY ANDSUBSIDIARIESConsolidated AverageBalance Sheets, Yields,and Rates(Unaudited) ($ in 000s) Three Months Ended

June 30, 2021 March 31, 2021 June 30, 2020

Average Yield/ Average Yield/ Average Yield/

Balance Interest Rate Balance Interest Rate Balance Interest Rate

Assets:Loan portfolio ^(1):Residential real estate $ 1,652,165 $ 16,135 3.92 % $ 1,696,064 $ 16,853 4.03 % $ 1,785,631 $ 19,048 4.29 %^(2)Commercial, financial, 1,839,478 16,158 3.52 % 1,838,928 16,542 3.65 % 1,818,344 17,665 3.91 %and agriculture ^(2)Installment loans to 49,522 713 5.77 % 50,798 713 5.69 % 56,199 852 6.10 %individuals ^(2), (3)Previously securitized *** 109 *** *** 215 *** *** 152 ***loans ^(4)Total loans 3,541,165 33,115 3.75 % 3,585,790 34,323 3.88 % 3,660,174 37,717 4.14 %

Securities:Taxable 1,046,008 5,932 2.27 % 945,177 5,242 2.25 % 896,997 5,718 2.56 %

Tax-exempt ^(5) 244,233 1,633 2.68 % 239,589 1,585 2.68 % 120,751 1,039 3.46 %

Total securities 1,290,241 7,565 2.35 % 1,184,766 6,827 2.34 % 1,017,748 6,757 2.67 %

Deposits in depository 628,158 162 0.10 % 513,469 118 0.09 % 236,320 55 0.09 %institutionsTotal interest-earning 5,459,564 40,842 3.00 % 5,284,025 41,268 3.17 % 4,914,242 44,529 3.64 %assetsCash and due from banks 92,243 79,683 79,501

Premises and equipment, 76,660 76,837 78,717 netGoodwill and intangible 118,088 118,453 119,681 assetsOther assets 206,709 217,453 230,423

Less: Allowance for (23,701 ) (24,909 ) (24,700 )credit lossesTotal assets $ 5,929,563 $ 5,751,542 $ 5,397,864

Liabilities:Interest-bearing demand $ 1,069,896 $ 122 0.05 % $ 1,008,283 $ 124 0.05 % $ 893,832 $ 178 0.08 %depositsSavings deposits 1,287,966 163 0.05 % 1,221,169 183 0.06 % 1,037,387 363 0.14 %

Time deposits ^(2) 1,181,953 2,175 0.74 % 1,236,197 2,973 0.98 % 1,353,619 5,422 1.61 %

Short-term borrowings 305,134 125 0.16 % 290,766 117 0.16 % 256,790 279 0.44 %

Long-term debt - - - - - - - - -

Total interest-bearing 3,844,949 2,585 0.27 % 3,756,415 3,397 0.37 % 3,541,628 6,242 0.71 %liabilitiesNoninterest-bearing 1,311,340 1,197,910 1,044,009 demand depositsOther liabilities 72,940 89,695 115,110

Stockholders' equity 700,334 707,522 697,117

Total liabilities andstockholders' equity $ 5,929,563 $ 5,751,542 $ 5,397,864

Net interest income $ 38,257 $ 37,871 $ 38,287

Net yield on earning 2.81 % 2.91 % 3.13 %assets (1)^ For purposes of this table, non-accruing loans have been included inaverage balances and the following amounts (in thousands) of net loan fees havebeen included in interest income: Loan fees, net $ 488 $ 835 $ 609

(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 $ 211 $ 106 $ 194

Commercial, financial, 365 325 651 and agricultureInstallment loans to 23 28 37 individualsTime deposits 48 48 155

$ 647 $ 507 $ 1,037

(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 $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate ofapproximately 21%. CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Average Balance Sheets, Yields, and Rates(Unaudited) ($ in 000s)Six Months Ended

June 30, 2021

June 30, 2020

Average

Yield/

Average

Yield/

Balance

Interest

Rate

Balance

Interest

Rate

Assets:Loan portfolio (1):Residential real estate (2)$

1,675,222

$

32,987

3.97

%

$

1,785,795

$

38,930

4.38

%

Commercial, financial, and agriculture (2)1,837,947

32,701

3.59

%

1,791,510

38,141

4.28

%

Installment loans to individuals (2), (3)50,187

1,426

5.73

%

57,217

1,715

6.03

%

Previously securitized loans (4)***324

******267

***Total loans3,563,356

67,438

3.82

%

3,634,522

79,053

4.37

%

Securities:Taxable995,871

11,174

2.26

%

853,882

11,589

2.73

%

Tax-exempt (5)241,924

3,220

2.68

%

107,671

1,934

3.61

%

Total securities1,237,795

14,394

2.35

%

961,553

13,523

2.83

%

Deposits in depository institutions571,130

280

0.10

%

169,626

360

0.43

%

Total interest-earning assets5,372,281

82,112

3.08

%

4,765,701

92,936

3.92

%

Cash and due from banks85,998

75,132

Premises and equipment, net76,748

78,042

Goodwill and intangible assets118,270

119,886

Other assets212,051

213,147

Less: Allowance for credit losses(24,302

)

(20,303

)

Total assets$

5,841,046

$

5,231,605

Liabilities:Interest-bearing demand deposits$

1,039,260

$

246

0.05

%

$

881,904

$

647

0.15

%

Savings deposits1,254,752

346

0.06

%

1,021,608

1,063

0.21

%

Time deposits (2)1,208,925

5,149

0.86

%

1,359,442

11,491

1.70

%

Short-term borrowings297,990

243

0.16

%

232,900

743

0.64

%

Long-term debt-

-

-

1,670

100

12.04

%

Total interest-bearing liabilities3,800,927

5,984

0.32

%

3,497,524

14,044

0.81

%

Noninterest-bearing demand deposits1,254,938

948,196

Other liabilities81,273

95,516

Stockholders' equity703,908

690,369

Total liabilities andstockholders' equity$

5,841,046

$

5,231,605

Net interest income$

76,128

$

78,892

Net yield on earning assets2.86

%

3.33

%

(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$

1,323

$

725

(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$

317

$

345

Commercial, financial, and agriculture690

1,891

Installment loans to individuals51

76

Time deposits97

311

$

1,155

$

2,623

(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 $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%. CITY HOLDINGCOMPANY ANDSUBSIDIARIESConsolidatedAverage BalanceSheets, Yields, andRates(Unaudited) ($ in000s) Six Months Ended

June 30, 2021 June 30, 2020

Average Yield/ Average Yield/

Balance Interest Rate Balance Interest Rate

Assets:Loan portfolio ^(1):Residential real $ 1,675,222 $ 32,987 3.97 % $ 1,785,795 $ 38,930 4.38 %estate ^(2)Commercial, 1,837,947 32,701 3.59 % 1,791,510 38,141 4.28 %financial, andagriculture ^(2)Installment loans 50,187 1,426 5.73 % 57,217 1,715 6.03 %to individuals ^(2), (3)Previously 324 267 securitized loans ^ *** *** *** ***(4)Total loans 3,563,356 67,438 3.82 % 3,634,522 79,053 4.37 %

Securities:Taxable 995,871 11,174 2.26 % 853,882 11,589 2.73 %

Tax-exempt ^(5) 241,924 3,220 2.68 % 107,671 1,934 3.61 %

Total securities 1,237,795 14,394 2.35 % 961,553 13,523 2.83 %

Deposits in 571,130 280 0.10 % 169,626 360 0.43 %depositoryinstitutionsTotal 5,372,281 82,112 3.08 % 4,765,701 92,936 3.92 %interest-earningassetsCash and due from 85,998 75,132 banksPremises and 76,748 78,042 equipment, netGoodwill and 118,270 119,886 intangible assetsOther assets 212,051 213,147

Less: Allowance for (24,302 ) (20,303 )credit lossesTotal assets $ 5,841,046 $ 5,231,605

Liabilities:Interest-bearing $ 1,039,260 $ 246 0.05 % $ 881,904 $ 647 0.15 %demand depositsSavings deposits 1,254,752 346 0.06 % 1,021,608 1,063 0.21 %

Time deposits ^(2) 1,208,925 5,149 0.86 % 1,359,442 11,491 1.70 %

Short-term 297,990 243 0.16 % 232,900 743 0.64 %borrowingsLong-term debt - - - 1,670 100 12.04 %

Total 3,800,927 5,984 0.32 % 3,497,524 14,044 0.81 %interest-bearingliabilitiesNoninterest-bearing 1,254,938 948,196 demand depositsOther liabilities 81,273 95,516

Stockholders' 703,908 690,369 equityTotal liabilitiesandstockholders' $ 5,841,046 $ 5,231,605 equityNet interest income $ 76,128 $ 78,892

Net yield on 2.86 % 3.33 %earning assets (1) For purposes of this table, non-accruing loans have been included inaverage balances and the following amounts (in thousands) of net loan fees havebeen included in interest income: Loan fees, net $ 1,323 $ 725

(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 $ 317 $ 345 estateCommercial, 690 1,891 financial, andagricultureInstallment loans 51 76 to individualsTime deposits 97 311

$ 1,155 $ 2,623

(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

Six Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

June 30, 2021

June 30, 2020

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

37,914

$

37,540

$

38,181

$

37,977

$

38,070

$

75,454

$

78,486

Taxable equivalent adjustment343

331

333

301

217

674

406

Net interest income, fully taxable equivalent$

38,257

$

37,871

$

38,514

$

38,278

$

38,287

$

76,128

$

78,892

Average interest earning assets$

5,459,564

$

5,284,025

$

5,125,874

$

5,047,868

$

4,914,242

$

5,372,281

$

4,765,701

Net Interest Margin2.81

%

2.91

%

2.99

%

3.02

%

3.13

%

2.86

%

3.33

%

Accretion related to fair value adjustments-0.05

%

-0.04

%

-0.05

%

-0.05

%

-0.08

%

-0.04

%

-0.11

%

Net Interest Margin (excluding accretion)2.76

%

2.87

%

2.94

%

2.97

%

3.05

%

2.81

%

3.22

%

Tangible Equity Ratio (period end)Equity to assets ("GAAP")11.78

%

11.74

%

12.18

%

12.54

%

12.55

%

Effect of goodwill and other intangibles, net-1.80

%

-1.81

%

-1.85

%

-1.93

%

-1.93

%

Tangible common equity to tangible assets9.98

%

9.93

%

10.33

%

10.61

%

10.62

%

Return on Tangible EquityReturn on tangible equity ("GAAP")15.2

%

13.5

%

15.3

%

13.8

%

12.6

%

14.3

%

16.6

%

Impact of sale of VISA shares-

-

-

-

-

--4.8

%

Return on tangible equity, excluding sale of VISA shares15.2

%

13.5

%

15.3

%

13.8

%

12.6

%

14.3

%

11.8

%

Return on AssetsReturn on assets ("GAAP")1.49

%

1.38

%

1.59

%

1.46

%

1.35

%

1.44

%

1.81

%

Impact of sale of VISA shares-

-

-

-

-

0.01

%

-0.52

%

Return on assets, excluding sale of VISA shares1.49

%

1.38

%

1.59

%

1.46

%

1.35

%

1.44

%

1.29

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005086/en/

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