Business Wire | Oct 21, 2021 07:30AM EDT

City Holding Company Announces Third Quarter Results

Oct. 21, 2021

CHARLESTON, W. Va.--(BUSINESS WIRE)--Oct. 21, 2021--City Holding Company ("Company" or "City") (NASDAQ:CHCO), a $6.0 billion bank holding company headquartered in Charleston, West Virginia, today announced quarterly net income of $22.7 million and diluted earnings of $1.47 per share for the quarter ended September 30, 2021. For the third quarter of 2021, the Company achieved a return on assets of 1.53% and a return on tangible equity of 15.7%. For the nine months ended September 30, 2021, City reported net income of $64.7 million, or diluted earnings per share of $4.13.

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

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

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

Net Interest Income

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

Credit Quality

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

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

Non-interest Income

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

Non-interest Expenses

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

Balance Sheet Trends

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

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

Income Tax Expense

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

Capitalization and Liquidity

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

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

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

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

Forward-Looking Information

* This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management's beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management's control. Uncertainty, risks, changes in circumstances and other factors could cause the Company's actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 under "ITEM 1A Risk Factors" and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business; (2) the uncertainties on the Company's business, results of operations and financial condition, caused by the COVID-19 pandemic, which will depend on several factors, including the scope and duration of the pandemic, its continued influence on financial markets, the effectiveness of the Company's work from home arrangements and staffing levels in operational facilities, the impact of market participants on which the Company relies and actions taken by governmental authorities and other third parties in response to the pandemic; (3) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (4) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (5) changes in the interest rate environment; (6) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (7) changes in technology and increased competition, including competition from non-bank financial institutions; (8) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers' performance and creditworthiness; (9) difficulty growing loan and deposit balances; (10) our ability to effectively execute our business plan, including with respect to future acquisitions; (11) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (13) regulatory enforcement actions and adverse legal actions; (14) difficulty attracting and retaining key employees; (15) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its September 30, 2021 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary September 30, 2021 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIESFinancial Highlights(Unaudited) Three Months Ended Nine Months Ended September June 30, March December September September September 30, 2021 31, 31, 30, 30, 30, 2021 2021 2020 2020 2021 2020 EarningsNet InterestIncome (fully $ 39,822 $ 38,257 $ 37,871 $ 38,514 $ 38,278 $ 115,950 $ 117,168taxableequivalent)Net Incomeavailable to 22,732 22,148 19,814 22,222 20,126 64,694 67,374commonshareholders Per ShareDataEarnings pershareavailable tocommonshareholders:Basic $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 1.25 $ 4.13 $ 4.15

Diluted 1.47 1.41 1.25 1.40 1.25 4.13 4.15

Weightedaveragenumber ofshares (inthousands):Basic 15,279 15,573 15,656 15,708 15,950 15,501 16,065

Diluted 15,302 15,594 15,687 15,733 15,970 15,526 16,084

Period-endnumber of 15,192 15,527 15,724 15,768 15,848 15,192 15,848shares (inthousands)Cash $ 0.58 $ 0.58 $ 0.58 $ 0.58 $ 0.57 $ 1.74 $ 1.71dividendsdeclaredBook value $ 44.58 $ 44.79 $ 43.99 $ 44.47 $ 43.62 $ 44.58 $ 43.62per share(period-end)Tangible bookvalue per 36.85 37.20 36.47 36.94 36.11 36.85 36.11share(period-end)Market data:High closing $ 79.99 $ 83.85 $ 87.41 $ 70.77 $ 67.98 $ 87.41 $ 82.40priceLow closing 72.29 74.44 69.05 56.98 55.37 69.05 55.18pricePeriod-end 77.91 75.24 81.78 69.55 57.61 77.91 57.61closing priceAverage daily 53 61 63 56 67 59 75volume (inthousands)Treasuryshareactivity:Treasuryshares 337 217 75 81 231 629 492repurchased(inthousands)Averagetreasury $ 75.65 $ 78.75 $ 76.71 $ 60.32 $ 59.49 $ 76.85 $ 64.23sharerepurchaseprice Key Ratios(percent)Return on 1.53% 1.49% 1.38% 1.59% 1.46% 1.47% 1.68%averageassetsReturn onaverage 15.7% 15.2% 13.5% 15.3% 13.8% 14.8% 15.6%tangibleequityYield oninterest 3.04% 3.00% 3.17% 3.32% 3.43% 3.07% 3.75%earningassetsCost ofinterest 0.22% 0.27% 0.37% 0.47% 0.58% 0.28% 0.73%bearingliabilitiesNet Interest 2.89% 2.81% 2.91% 2.99% 3.02% 2.87% 3.22%MarginNon-interestincome as a 31.1% 31.0% 30.4% 30.7% 30.3% 31.0% 35.8%percent oftotal revenueEfficiency 50.0% 52.8% 54.3% 51.0% 51.6% 52.3% 51.5%RatioPrice/ 13.22 13.35 16.30 12.41 11.53 14.14 10.40EarningsRatio (a) Capital(period-end)AverageShareholders' 11.69% 11.81% 12.30% 12.46% 12.71%Equity toAverageAssetsTangibleequity to 9.59% 9.98% 9.93% 10.33% 10.61%tangibleassetsConsolidated CityHolding Company riskbased capital ratios(b):CET I 15.95% 16.40% 16.76% 16.18% 15.93%

Tier I 15.95% 16.40% 16.76% 16.18% 15.93%

Total 16.39% 16.88% 17.33% 16.75% 16.50%

Leverage 9.46% 9.70% 10.06% 10.22% 10.19%

City NationalBank riskbased capitalratios (b):CET I 14.61% 14.82% 14.75% 14.10% 14.46%

Tier I 14.61% 14.82% 14.75% 14.10% 14.46%

Total 15.06% 15.30% 15.33% 14.68% 15.04%

Leverage 8.73% 8.80% 8.91% 8.97% 9.32%

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

FTE 921 912 916 926 925

Assets per $ 6,463 $ 6,477 $ 6,434 $ 6,219 $ 5,984FTE (inthousands)Deposits per 5,308 5,271 5,236 5,024 4,799FTE (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, 2021 risk-based capital ratios are estimated.CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Statements of Income(Unaudited) ($ in 000s, except per share data)Three Months EndedNine Months EndedSeptember 30,2021June 30,2021March 31,2021December 31,2020September 30,2020September 30,2021September 30,2020Interest IncomeInterest and fees on loans$

33,961

$

33,114

$

34,324

$

35,685

$

35,761

$

101,399

$

114,813

Interest on investment securities:Taxable6,144

5,932

5,242

5,500

6,266

17,318

17,855

Tax-exempt1,257

1,291

1,253

1,254

1,132

3,801

2,659

Interest on deposits in depository institutions196

162

118

60

72

476

432

Total Interest Income41,558

40,499

40,937

42,499

43,231

122,994

135,759

Interest ExpenseInterest on deposits1,955

2,460

3,280

4,198

5,123

7,695

18,324

Interest on short-term borrowings115

125

117

120

131

357

873

Interest on long-term debt-

-

-

-

-

-

100

Total Interest Expense2,070

2,585

3,397

4,318

5,254

8,052

19,297

Net Interest Income39,488

37,914

37,540

38,181

37,977

114,942

116,462

(Recovery of) provision for credit losses(725

)

(2,000

)

(440

)

474

1,026

(3,165

)

10,248

Net Interest Income After (Recovery of) Provision for Credit Losses40,213

39,914

37,980

37,707

36,951

118,107

106,214

Non-Interest IncomeNet gains on sale of investment securities-

29

283

6

-

312

56

Unrealized gains (losses) recognized on equity securities still held93

410

(51

)

835

461

452

(1,698

)

Service charges6,706

5,895

5,881

6,771

6,295

18,482

18,962

Bankcard revenue6,791

7,221

6,213

5,991

6,065

20,225

17,068

Trust and investment management fee income2,172

2,012

2,033

2,162

1,844

6,217

5,574

Bank owned life insurance747

940

1,460

813

1,088

3,147

3,611

Sale of VISA shares-

-

-

-

-

-

17,837

Other income1,438

941

811

1,143

1,232

3,190

3,550

Total Non-Interest Income17,947

17,448

16,630

17,721

16,985

52,025

64,960

Non-Interest ExpenseSalaries and employee benefits15,321

15,559

15,671

15,989

15,361

46,551

46,085

Occupancy related expense2,507

2,525

2,622

2,447

2,428

7,654

7,318

Equipment and software related expense2,554

2,655

2,544

2,660

2,607

7,753

7,540

FDIC insurance expense396

382

405

363

355

1,183

522

Advertising804

824

881

538

462

2,509

2,238

Bankcard expenses1,549

1,746

1,584

1,443

1,517

4,879

4,450

Postage, delivery, and statement mailings573

568

592

546

513

1,733

1,721

Office supplies406

371

392

413

396

1,169

1,143

Legal and professional fees610

589

675

438

548

1,874

1,738

Telecommunications790

676

690

540

547

2,156

1,589

Repossessed asset (gains) losses, net of expenses(108

)

1

79

(68

)

39

(28

)

313

Other expenses3,776

3,678

3,674

3,332

3,939

11,128

11,992

Total Non-Interest Expense29,178

29,574

29,809

28,641

28,712

88,561

86,649

Income Before Income Taxes28,982

27,788

24,801

26,787

25,224

81,571

84,525

Income tax expense6,250

5,640

4,987

4,565

5,098

16,877

17,151

Net Income Available to Common Shareholders$

22,732

$

22,148

$

19,814

$

22,222

$

20,126

$

64,694

$

67,374

Distributed earnings allocated to common shareholders$

8,726

$

8,921

$

9,037

$

9,053

$

8,944

$

26,177

$

26,832

Undistributed earnings allocated to common shareholders13,786

13,021

10,598

12,947

10,984

37,899

39,884

Net earnings allocated to common shareholders$

22,512

$

21,942

$

19,635

$

22,000

$

19,928

$

64,076

$

66,716

Average common shares outstanding15,279

15,573

15,656

15,708

15,950

15,501

16,065

Shares for diluted earnings per share15,302

15,594

15,687

15,733

15,970

15,526

16,084

Basic earnings per common share$

1.47

$

1.41

$

1.25

$

1.40

$

1.25

$

4.13

$

4.15

Diluted earnings per common share$

1.47

$

1.41

$

1.25

$

1.40

$

1.25

$

4.13

$

4.15

CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Statements of Income(Unaudited) ($ in 000s, except per share data) Three Months Ended Nine Months Ended September June 30, March 31, December September September September 30, 2021 2021 31, 30, 30, 30, 2021 2020 2020 2021 2020 Interest IncomeInterest and fees on $ 33,961 $ 33,114 $ 34,324 $ 35,685 $ 35,761 $ 101,399 $ 114,813 loansInterest oninvestmentsecurities:Taxable 6,144 5,932 5,242 5,500 6,266 17,318 17,855

Tax-exempt 1,257 1,291 1,253 1,254 1,132 3,801 2,659

Interest on deposits 196 162 118 60 72 476 432 in depositoryinstitutionsTotal Interest 41,558 40,499 40,937 42,499 43,231 122,994 135,759 Income Interest ExpenseInterest on deposits 1,955 2,460 3,280 4,198 5,123 7,695 18,324

Interest on 115 125 117 120 131 357 873 short-termborrowingsInterest on - - - - - - 100 long-term debtTotal Interest 2,070 2,585 3,397 4,318 5,254 8,052 19,297 ExpenseNet Interest Income 39,488 37,914 37,540 38,181 37,977 114,942 116,462

(Recovery of) (725 ) (2,000 ) (440 ) 474 1,026 (3,165 ) 10,248 provision for creditlossesNet Interest IncomeAfter (Recovery of) 40,213 39,914 37,980 37,707 36,951 118,107 106,214 Provision for CreditLosses Non-Interest IncomeNet gains on sale of - 29 283 6 - 312 56 investmentsecuritiesUnrealized gains(losses) recognized 93 410 (51 ) 835 461 452 (1,698 )on equity securitiesstill heldService charges 6,706 5,895 5,881 6,771 6,295 18,482 18,962

Bankcard revenue 6,791 7,221 6,213 5,991 6,065 20,225 17,068

Trust and investment 2,172 2,012 2,033 2,162 1,844 6,217 5,574 management feeincomeBank owned life 747 940 1,460 813 1,088 3,147 3,611 insuranceSale of VISA shares - - - - - - 17,837

Other income 1,438 941 811 1,143 1,232 3,190 3,550

Total Non-Interest 17,947 17,448 16,630 17,721 16,985 52,025 64,960 Income Non-Interest ExpenseSalaries and 15,321 15,559 15,671 15,989 15,361 46,551 46,085 employee benefitsOccupancy related 2,507 2,525 2,622 2,447 2,428 7,654 7,318 expenseEquipment and 2,554 2,655 2,544 2,660 2,607 7,753 7,540 software relatedexpenseFDIC insurance 396 382 405 363 355 1,183 522 expenseAdvertising 804 824 881 538 462 2,509 2,238

Bankcard expenses 1,549 1,746 1,584 1,443 1,517 4,879 4,450

Postage, delivery, 573 568 592 546 513 1,733 1,721 and statementmailingsOffice supplies 406 371 392 413 396 1,169 1,143

Legal and 610 589 675 438 548 1,874 1,738 professional feesTelecommunications 790 676 690 540 547 2,156 1,589

Repossessed asset (108 ) 1 79 (68 ) 39 (28 ) 313 (gains) losses, netof expensesOther expenses 3,776 3,678 3,674 3,332 3,939 11,128 11,992

Total Non-Interest 29,178 29,574 29,809 28,641 28,712 88,561 86,649 ExpenseIncome Before Income 28,982 27,788 24,801 26,787 25,224 81,571 84,525 TaxesIncome tax expense 6,250 5,640 4,987 4,565 5,098 16,877 17,151

Net Income Available $ 22,732 $ 22,148 $ 19,814 $ 22,222 $ 20,126 $ 64,694 $ 67,374 to CommonShareholders Distributed earnings $ 8,726 $ 8,921 $ 9,037 $ 9,053 $ 8,944 $ 26,177 $ 26,832 allocated to commonshareholdersUndistributedearnings allocated 13,786 13,021 10,598 12,947 10,984 37,899 39,884 to commonshareholdersNet earnings $ 22,512 $ 21,942 $ 19,635 $ 22,000 $ 19,928 $ 64,076 $ 66,716 allocated to commonshareholders Average common 15,279 15,573 15,656 15,708 15,950 15,501 16,065 shares outstandingShares for diluted 15,302 15,594 15,687 15,733 15,970 15,526 16,084 earnings per share Basic earnings per $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 1.25 $ 4.13 $ 4.15 common shareDiluted earnings per $ 1.47 $ 1.41 $ 1.25 $ 1.40 $ 1.25 $ 4.13 $ 4.15 common shareCITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Balance Sheets($ in 000s)(Unaudited)(Unaudited)(Unaudited)(Unaudited)September 30,2021June 30,2021March 31,2021December 31,2020September 30,2020AssetsCash and due from banks$

103,841

$

97,523

$

97,709

$

77,412

$

76,451

Interest-bearing deposits in depository institutions535,708

512,367

659,090

451,247

176,267

Cash and cash equivalents639,549

609,890

756,799

528,659

252,718

Investment securities available-for-sale, at fair value1,373,073

1,340,681

1,185,245

1,178,789

1,157,399

Other securities24,501

24,548

27,182

27,372

26,548

Total investment securities1,397,574

1,365,229

1,212,427

1,206,161

1,183,947

Gross loans3,521,925

3,529,416

3,546,723

3,622,119

3,663,966

Allowance for credit losses(18,751

)

(20,016

)

(24,076

)

(24,549

)

(24,867

)

Net loans3,503,174

3,509,400

3,522,647

3,597,570

3,639,099

Bank owned life insurance120,238

119,491

118,976

118,243

117,501

Premises and equipment, net75,156

76,263

76,529

76,925

77,031

Accrued interest receivable16,224

15,967

16,231

15,793

16,627

Net deferred tax assets90

-

1,395

-

-

Intangible assets117,489

117,857

118,224

118,592

119,004

Other assets82,419

89,958

71,142

96,697

105,361

Total Assets$

5,951,913

$

5,904,055

$

5,894,370

$

5,758,640

$

5,511,288

LiabilitiesDeposits:Noninterest-bearing$

1,311,464

$

1,279,932

$

1,244,175

$

1,176,990

$

1,061,310

Interest-bearing:Demand deposits1,139,033

1,070,004

1,077,749

1,027,201

940,791

Savings deposits1,332,910

1,301,219

1,265,038

1,188,003

1,117,684

Time deposits1,104,069

1,153,391

1,209,873

1,260,022

1,300,291

Total deposits4,887,476

4,804,546

4,796,835

4,652,216

4,420,076

Short-term borrowingsCustomer repurchase agreements296,642

311,316

316,003

295,956

279,866

Net deferred tax liabilities-

2,310

-

3,202

1,601

Other liabilities90,499

90,407

89,847

106,160

118,386

Total Liabilities5,274,617

5,208,579

5,202,685

5,057,534

4,819,929

Stockholders' EquityPreferred stock-

-

-

-

-

Common stock47,619

47,619

47,619

47,619

47,619

Capital surplus170,300

169,674

170,526

171,304

170,526

Retained earnings627,463

613,553

600,396

589,988

576,901

Cost of common stock in treasury(183,303

)

(157,936

)

(142,484

)

(139,038

)

(134,177

)

Accumulated other comprehensive income:Unrealized gain on securities available-for-sale20,878

28,227

21,289

36,894

36,760

Underfunded pension liability(5,661

)

(5,661

)

(5,661

)

(5,661

)

(6,270

)

Total Accumulated Other Comprehensive Income15,217

22,566

15,628

31,233

30,490

Total Stockholders' Equity677,296

695,476

691,685

701,106

691,359

Total Liabilities and Stockholders' Equity$

5,951,913

$

5,904,055

$

5,894,370

$

5,758,640

$

5,511,288

Regulatory CapitalTotal CET 1 capital$

550,426

$

561,317

$

563,523

$

557,641

$

548,269

Total tier 1 capital550,426

561,317

563,523

557,641

548,269

Total risk-based capital565,712

577,543

582,816

577,292

568,153

Total risk-weighted assets3,451,018

3,421,764

3,362,595

3,446,774

3,442,629

CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Balance Sheets($ in 000s) (Unaudited) (Unaudited) (Unaudited) (Unaudited) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 AssetsCash and due from $ 103,841 $ 97,523 $ 97,709 $ 77,412 $ 76,451 banksInterest-bearingdeposits in 535,708 512,367 659,090 451,247 176,267 depositoryinstitutionsCash and cash 639,549 609,890 756,799 528,659 252,718 equivalents Investmentsecurities 1,373,073 1,340,681 1,185,245 1,178,789 1,157,399 available-for-sale,at fair valueOther securities 24,501 24,548 27,182 27,372 26,548

Total investment 1,397,574 1,365,229 1,212,427 1,206,161 1,183,947 securities Gross loans 3,521,925 3,529,416 3,546,723 3,622,119 3,663,966

Allowance for (18,751 ) (20,016 ) (24,076 ) (24,549 ) (24,867 )credit lossesNet loans 3,503,174 3,509,400 3,522,647 3,597,570 3,639,099

Bank owned life 120,238 119,491 118,976 118,243 117,501 insurancePremises and 75,156 76,263 76,529 76,925 77,031 equipment, netAccrued interest 16,224 15,967 16,231 15,793 16,627 receivableNet deferred tax 90 - 1,395 - - assetsIntangible assets 117,489 117,857 118,224 118,592 119,004

Other assets 82,419 89,958 71,142 96,697 105,361

Total Assets $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 $ 5,511,288

LiabilitiesDeposits:Noninterest-bearing $ 1,311,464 $ 1,279,932 $ 1,244,175 $ 1,176,990 $ 1,061,310

Interest-bearing:Demand deposits 1,139,033 1,070,004 1,077,749 1,027,201 940,791

Savings deposits 1,332,910 1,301,219 1,265,038 1,188,003 1,117,684

Time deposits 1,104,069 1,153,391 1,209,873 1,260,022 1,300,291

Total deposits 4,887,476 4,804,546 4,796,835 4,652,216 4,420,076

Short-termborrowingsCustomer repurchase 296,642 311,316 316,003 295,956 279,866 agreementsNet deferred tax - 2,310 - 3,202 1,601 liabilitiesOther liabilities 90,499 90,407 89,847 106,160 118,386

Total Liabilities 5,274,617 5,208,579 5,202,685 5,057,534 4,819,929

Stockholders'EquityPreferred stock - - - - -

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

Capital surplus 170,300 169,674 170,526 171,304 170,526

Retained earnings 627,463 613,553 600,396 589,988 576,901

Cost of common (183,303 ) (157,936 ) (142,484 ) (139,038 ) (134,177 )stock in treasuryAccumulated othercomprehensiveincome:Unrealized gain on 20,878 28,227 21,289 36,894 36,760 securitiesavailable-for-saleUnderfunded pension (5,661 ) (5,661 ) (5,661 ) (5,661 ) (6,270 )liabilityTotal Accumulated 15,217 22,566 15,628 31,233 30,490 Other ComprehensiveIncomeTotal Stockholders' 677,296 695,476 691,685 701,106 691,359 EquityTotal Liabilities $ 5,951,913 $ 5,904,055 $ 5,894,370 $ 5,758,640 $ 5,511,288 and Stockholders'Equity Regulatory CapitalTotal CET 1 capital $ 550,426 $ 561,317 $ 563,523 $ 557,641 $ 548,269

Total tier 1 550,426 561,317 563,523 557,641 548,269 capitalTotal risk-based 565,712 577,543 582,816 577,292 568,153 capitalTotal risk-weighted 3,451,018 3,421,764 3,362,595 3,446,774 3,442,629 assetsCITY HOLDING COMPANY AND SUBSIDIARIESLoan Portfolio(Unaudited) ($ in 000s)September 30,2021June 30,2021March 31,2021December 31,2020September 30,2020Commercial and industrial$

353,046

$

358,583

$

371,195

$

372,989

$

383,980

1-4 Family108,913

108,079

108,131

109,812

114,071

Hotels297,341

290,119

293,176

294,464

295,989

Multi-family215,307

212,715

212,561

215,671

214,394

Non Residential Non-Owner Occupied664,365

653,264

649,683

641,351

628,814

Non Residential Owner Occupied205,579

209,100

199,130

213,484

211,433

Commercial real estate (1)1,491,505

1,473,277

1,462,681

1,474,782

1,464,701

Residential real estate (2)1,506,572

1,521,102

1,532,907

1,587,694

1,621,265

Home equity124,806

127,608

130,009

136,469

140,135

Consumer43,296

45,184

47,224

47,688

50,541

DDA overdrafts2,700

3,662

2,707

2,497

3,344

Gross Loans$

3,521,925

$

3,529,416

$

3,546,723

$

3,622,119

$

3,663,966

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

19,360

$

43,904

$

39,101

$

40,449

$

42,449

(2) - Residential real estate loans19,059

20,838

22,129

27,078

28,947

CITY HOLDING COMPANY AND SUBSIDIARIESLoan Portfolio(Unaudited) ($ in 000s) September June 30, March 31, December September 30, 2021 2021 31, 30, 2021 2020 2020 Commercial and $ 353,046 $ 358,583 $ 371,195 $ 372,989 $ 383,980industrial 1-4 Family 108,913 108,079 108,131 109,812 114,071

Hotels 297,341 290,119 293,176 294,464 295,989

Multi-family 215,307 212,715 212,561 215,671 214,394

NonResidential 664,365 653,264 649,683 641,351 628,814Non-OwnerOccupiedNon 205,579 209,100 199,130 213,484 211,433ResidentialOwner OccupiedCommercial 1,491,505 1,473,277 1,462,681 1,474,782 1,464,701real estate ^(1) Residential 1,506,572 1,521,102 1,532,907 1,587,694 1,621,265real estate ^(2)Home equity 124,806 127,608 130,009 136,469 140,135

Consumer 43,296 45,184 47,224 47,688 50,541

DDA overdrafts 2,700 3,662 2,707 2,497 3,344

Gross Loans $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 $ 3,663,966

Constructionloans includedin:^(1) -Commercial $ 19,360 $ 43,904 $ 39,101 $ 40,449 $ 42,449real estateloans^(2) -Residential 19,059 20,838 22,129 27,078 28,947real estateloansCITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information(Unaudited) ($ in 000s)Three Months EndedNine Months EndedSeptember 30,2021June 30,2021March 31,2021December 31,2020September 30,2020September 30,2021September 30,2020Allowance for Credit LossesBalance at beginning of period$

20,016

$

24,076

$

24,549

$

24,867

$

25,199

$

24,549

$

11,589

Charge-offs:Commercial and industrial-

(211

)

(34

)

(9

)

(757

)

(245

)

(834

)

Commercial real estate(392

)

(1,718

)

(1

)

(616

)

(75

)

(2,111

)

(497

)

Residential real estate(18

)

(86

)

(93

)

(139

)

(252

)

(197

)

(1,111

)

Home equity(47

)

(8

)

(64

)

(88

)

(126

)

(119

)

(332

)

Consumer(3

)

(79

)

(147

)

(27

)

(74

)

(229

)

(165

)

DDA overdrafts(633

)

(430

)

(453

)

(629

)

(554

)

(1,516

)

(1,716

)

Total charge-offs(1,093

)

(2,532

)

(792

)

(1,508

)

(1,838

)

(4,417

)

(4,655

)

Recoveries:Commercial and industrial69

25

46

74

3

140

17

Commercial real estate18

15

164

150

44

197

375

Residential real estate29

17

74

57

24

120

127

Home equity58

3

23

47

33

84

89

Consumer72

104

39

55

42

215

183

DDA overdrafts307

308

413

333

334

1,028

1,134

Total recoveries553

472

759

716

480

1,784

1,925

Net charge-offs(540

)

(2,060

)

(33

)

(792

)

(1,358

)

(2,633

)

(2,730

)

(Recovery of) provision for credit losses(725

)

(2,000

)

(440

)

474

1,026

(3,165

)

10,248

Impact of Adopting ASC 326-

-

-

-

-

-

5,760

Balance at end of period$

18,751

$

20,016

$

24,076

$

24,549

$

24,867

$

18,751

$

24,867

Loans outstanding$

3,521,925

$

3,529,416

$

3,546,723

$

3,622,119

$

3,663,966

Allowance as a percent of loans outstanding0.53

%

0.57

%

0.68

%

0.68

%

0.68

%

Allowance as a percent of non-performing loans243.1

%

199.3

%

194.5

%

200.7

%

182.7

%

Average loans outstanding$

3,535,497

$

3,541,165

$

3,585,790

$

3,635,673

$

3,661,569

$

3,553,966

$

3,643,603

Net charge-offs (annualized) as a percent of average loans outstanding0.06

%

0.23

%

0.00

%

0.09

%

0.15

%

0.10

%

0.10

%

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

3,634

$

2,482

$

3,004

$

2,968

$

3,983

Home equity67

81

88

95

74

Commercial and industrial531

820

1,200

768

728

Commercial real estate3,355

6,383

7,792

8,401

8,479

Consumer-

-

-

-

-

Total nonaccrual loans7,587

9,766

12,084

12,232

13,264

Accruing loans past due 90 days or more127

278

295

-

345

Total non-performing loans7,714

10,044

12,379

12,232

13,609

Other real estate owned1,335

1,309

1,625

1,650

2,080

Total non-performing assets$

9,049

$

11,353

$

14,004

$

13,882

$

15,689

Non-performing assets as a percent of loans and other real estate owned0.26

%

0.32

%

0.39

%

0.38

%

0.43

%

Past Due LoansResidential real estate$

5,258

$

5,453

$

4,092

$

5,993

$

5,153

Home equity688

523

449

575

474

Commercial and industrial455

721

1,358

1,241

691

Commercial real estate441

498

508

625

602

Consumer35

12

10

113

121

DDA overdrafts390

417

212

341

379

Total past due loans$

7,267

$

7,624

$

6,629

$

8,888

$

7,420

Total past due loans as a percent of loans outstanding0.21

%

0.22

%

0.19

%

0.25

%

0.20

%

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

16,910

$

17,788

$

18,572

$

19,226

$

20,398

Home equity1,822

1,920

1,956

2,001

2,100

Commercial and industrial430

-

-

-

-

Commercial real estate1,937

3,076

4,615

4,638

4,894

Consumer221

203

211

277

260

Total TDRs$

21,320

$

22,987

$

25,354

$

26,142

$

27,652

CITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information(Unaudited) ($ in 000s) Three Months Ended Nine Months Ended September 30, June 30, March 31, December 31, September 30, September 30, September 30, 2021 2021 2021 2020 2020 2021 2020Allowance forCredit LossesBalance at $ 20,016 $ 24,076 $ 24,549 $ 24,867 $ 25,199 $ 24,549 $ 11,589 beginning ofperiod Charge-offs:Commercial and - (211 ) (34 ) (9 ) (757 ) (245 ) (834 )industrialCommercial (392 ) (1,718 ) (1 ) (616 ) (75 ) (2,111 ) (497 )real estateResidential (18 ) (86 ) (93 ) (139 ) (252 ) (197 ) (1,111 )real estateHome equity (47 ) (8 ) (64 ) (88 ) (126 ) (119 ) (332 )

Consumer (3 ) (79 ) (147 ) (27 ) (74 ) (229 ) (165 )

DDA overdrafts (633 ) (430 ) (453 ) (629 ) (554 ) (1,516 ) (1,716 )

Total (1,093 ) (2,532 ) (792 ) (1,508 ) (1,838 ) (4,417 ) (4,655 )charge-offs Recoveries:Commercial and 69 25 46 74 3 140 17 industrialCommercial 18 15 164 150 44 197 375 real estateResidential 29 17 74 57 24 120 127 real estateHome equity 58 3 23 47 33 84 89

Consumer 72 104 39 55 42 215 183

DDA overdrafts 307 308 413 333 334 1,028 1,134

Total 553 472 759 716 480 1,784 1,925 recoveries Net (540 ) (2,060 ) (33 ) (792 ) (1,358 ) (2,633 ) (2,730 )charge-offs(Recovery of) (725 ) (2,000 ) (440 ) 474 1,026 (3,165 ) 10,248 provision forcredit lossesImpact of - - - - - - 5,760 Adopting ASC326Balance at end $ 18,751 $ 20,016 $ 24,076 $ 24,549 $ 24,867 $ 18,751 $ 24,867 of period Loans $ 3,521,925 $ 3,529,416 $ 3,546,723 $ 3,622,119 $ 3,663,966 outstandingAllowance as apercent of 0.53 % 0.57 % 0.68 % 0.68 % 0.68 %loansoutstandingAllowance as apercent of 243.1 % 199.3 % 194.5 % 200.7 % 182.7 %non-performingloans Average loans $ 3,535,497 $ 3,541,165 $ 3,585,790 $ 3,635,673 $ 3,661,569 $ 3,553,966 $ 3,643,603 outstandingNetcharge-offs(annualized) 0.06 % 0.23 % 0.00 % 0.09 % 0.15 % 0.10 % 0.10 %as a percentof averageloansoutstanding CITY HOLDING COMPANY AND SUBSIDIARIESAsset Quality Information, continued(Unaudited) ($ in 000s) September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020NonaccrualLoansResidential $ 3,634 $ 2,482 $ 3,004 $ 2,968 $ 3,983 real estateHome equity 67 81 88 95 74

Commercial and 531 820 1,200 768 728 industrialCommercial 3,355 6,383 7,792 8,401 8,479 real estateConsumer - - - - -

Total 7,587 9,766 12,084 12,232 13,264 nonaccrualloansAccruing loans 127 278 295 - 345 past due 90days or moreTotal 7,714 10,044 12,379 12,232 13,609 non-performingloansOther real 1,335 1,309 1,625 1,650 2,080 estate ownedTotal $ 9,049 $ 11,353 $ 14,004 $ 13,882 $ 15,689 non-performingassets Non-performingassets as apercent of 0.26 % 0.32 % 0.39 % 0.38 % 0.43 %loans andother realestate owned Past Due LoansResidential $ 5,258 $ 5,453 $ 4,092 $ 5,993 $ 5,153 real estateHome equity 688 523 449 575 474

Commercial and 455 721 1,358 1,241 691 industrialCommercial 441 498 508 625 602 real estateConsumer 35 12 10 113 121

DDA overdrafts 390 417 212 341 379

Total past due $ 7,267 $ 7,624 $ 6,629 $ 8,888 $ 7,420 loans Total past dueloans as a 0.21 % 0.22 % 0.19 % 0.25 % 0.20 %percent ofloansoutstanding Troubled DebtRestructurings("TDRs")Residential $ 16,910 $ 17,788 $ 18,572 $ 19,226 $ 20,398 real estateHome equity 1,822 1,920 1,956 2,001 2,100

Commercial and 430 - - - - industrialCommercial 1,937 3,076 4,615 4,638 4,894 real estateConsumer 221 203 211 277 260

Total TDRs $ 21,320 $ 22,987 $ 25,354 $ 26,142 $ 27,652

CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Average Balance Sheets, Yields, and Rates(Unaudited) ($ in 000s)Three Months EndedSeptember 30, 2021June 30, 2021September 30, 2020AverageYield/AverageYield/AverageYield/BalanceInterestRateBalanceInterestRateBalanceInterestRateAssets:Loan portfolio (1):Residential real estate (2)$

1,648,921

$

15,813

3.80

%

$

1,652,165

$

16,135

3.92

%

$

1,766,796

$

17,899

4.03

%

Commercial, financial, and agriculture (2)1,836,604

17,344

3.75

%

1,839,478

16,158

3.52

%

1,839,939

16,910

3.66

%

Installment loans to individuals (2), (3)49,972

714

5.67

%

49,522

713

5.77

%

54,834

804

5.83

%

Previously securitized loans (4)***91

******109

******148

***Total loans3,535,497

33,962

3.81

%

3,541,165

33,115

3.75

%

3,661,569

35,761

3.89

%

Securities:Taxable1,136,519

6,144

2.14

%

1,046,008

5,932

2.27

%

877,623

6,266

2.84

%

Tax-exempt (5)245,551

1,590

2.57

%

244,233

1,633

2.68

%

204,178

1,433

2.79

%

Total securities1,382,070

7,734

2.22

%

1,290,241

7,565

2.35

%

1,081,801

7,699

2.83

%

Deposits in depository institutions544,843

196

0.14

%

628,158

162

0.10

%

304,498

72

0.09

%

Total interest-earning assets5,462,410

41,892

3.04

%

5,459,564

40,842

3.00

%

5,047,868

43,532

3.43

%

Cash and due from banks101,058

92,243

80,505

Premises and equipment, net75,956

76,660

77,647

Goodwill and intangible assets117,719

118,088

119,267

Other assets220,420

206,709

229,667

Less: Allowance for credit losses(20,407

)

(23,701

)

(25,311

)

Total assets$

5,957,156

$

5,929,563

$

5,529,643

Liabilities:Interest-bearing demand deposits$

1,093,243

$

127

0.05

%

$

1,069,896

$

122

0.05

%

$

931,152

$

187

0.08

%

Savings deposits1,315,462

169

0.05

%

1,287,966

163

0.05

%

1,093,886

303

0.11

%

Time deposits (2)1,126,553

1,659

0.58

%

1,181,953

2,175

0.74

%

1,322,423

4,633

1.39

%

Short-term borrowings282,722

115

0.16

%

305,134

125

0.16

%

260,518

131

0.20

%

Total interest-bearing liabilities3,817,980

2,070

0.22

%

3,844,949

2,585

0.27

%

3,607,979

5,254

0.58

%

Noninterest-bearing demand deposits1,356,745

1,311,340

1,114,822

Other liabilities86,263

72,940

104,084

Stockholders' equity696,168

700,334

702,758

Total liabilities andstockholders' equity$

5,957,156

$

5,929,563

$

5,529,643

Net interest income$

39,822

$

38,257

$

38,278

Net yield on earning assets2.89

%

2.81

%

3.02

%

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

1,120

$

488

$

156

(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:Residential real estate$

154

$

211

$

132

Commercial, financial, and agriculture265

365

250

Installment loans to individuals21

23

38

Time deposits48

48

155

$

488

$

647

$

575

(3) Includes the Company's consumer and DDA overdrafts loan categories.(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Average Balance Sheets, Yields, and Rates(Unaudited) ($ in 000s) Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets:Loan portfolio ^(1):Residential real $ 1,648,921 $ 15,813 3.80 % $ 1,652,165 $ 16,135 3.92 % $ 1,766,796 $ 17,899 4.03 %estate ^(2)Commercial, financial, 1,836,604 17,344 3.75 % 1,839,478 16,158 3.52 % 1,839,939 16,910 3.66 %and agriculture ^(2)Installment loans to 49,972 714 5.67 % 49,522 713 5.77 % 54,834 804 5.83 %individuals ^(2), (3)Previously securitized *** 91 *** *** 109 *** *** 148 ***loans ^(4)Total loans 3,535,497 33,962 3.81 % 3,541,165 33,115 3.75 % 3,661,569 35,761 3.89 %

Securities:Taxable 1,136,519 6,144 2.14 % 1,046,008 5,932 2.27 % 877,623 6,266 2.84 %

Tax-exempt ^(5) 245,551 1,590 2.57 % 244,233 1,633 2.68 % 204,178 1,433 2.79 %

Total securities 1,382,070 7,734 2.22 % 1,290,241 7,565 2.35 % 1,081,801 7,699 2.83 %

Deposits in depository 544,843 196 0.14 % 628,158 162 0.10 % 304,498 72 0.09 %institutionsTotal interest-earning 5,462,410 41,892 3.04 % 5,459,564 40,842 3.00 % 5,047,868 43,532 3.43 %assetsCash and due from 101,058 92,243 80,505 banksPremises and 75,956 76,660 77,647 equipment, netGoodwill and 117,719 118,088 119,267 intangible assetsOther assets 220,420 206,709 229,667

Less: Allowance for (20,407 ) (23,701 ) (25,311 )credit lossesTotal assets $ 5,957,156 $ 5,929,563 $ 5,529,643

Liabilities:Interest-bearing $ 1,093,243 $ 127 0.05 % $ 1,069,896 $ 122 0.05 % $ 931,152 $ 187 0.08 %demand depositsSavings deposits 1,315,462 169 0.05 % 1,287,966 163 0.05 % 1,093,886 303 0.11 %

Time deposits ^(2) 1,126,553 1,659 0.58 % 1,181,953 2,175 0.74 % 1,322,423 4,633 1.39 %

Short-term borrowings 282,722 115 0.16 % 305,134 125 0.16 % 260,518 131 0.20 %

Total interest-bearing 3,817,980 2,070 0.22 % 3,844,949 2,585 0.27 % 3,607,979 5,254 0.58 %liabilitiesNoninterest-bearing 1,356,745 1,311,340 1,114,822 demand depositsOther liabilities 86,263 72,940 104,084

Stockholders' equity 696,168 700,334 702,758

Total liabilities andstockholders' equity $ 5,957,156 $ 5,929,563 $ 5,529,643

Net interest income $ 39,822 $ 38,257 $ 38,278

Net yield on earning 2.89 % 2.81 % 3.02 %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 $ 1,120 $ 488 $ 156

(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 $ 154 $ 211 $ 132estateCommercial, financial, 265 365 250and agricultureInstallment loans to 21 23 38individualsTime deposits 48 48 155

$ 488 $ 647 $ 575

(3) Includes the Company's consumer and DDA overdrafts loan categories.(4) Effective January 1, 2012, the carrying value of the Company's 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)Nine Months EndedSeptember 30, 2021September 30, 2020AverageYield/AverageYield/BalanceInterestRateBalanceInterestRateAssets:Loan portfolio (1):Residential real estate (2)$

1,669,324

$

48,801

3.91

%

$

1,776,903

$

56,827

4.27

%

Commercial, financial, and agriculture (2)1,833,744

50,044

3.65

%

1,810,165

55,051

4.06

%

Installment loans to individuals (2), (3)50,898

2,140

5.62

%

56,535

2,519

5.95

%

Previously securitized loans (4)***414

******415

***Total loans3,553,966

101,399

3.81

%

3,643,603

114,812

4.21

%

Securities:Taxable1,043,269

17,318

2.22

%

861,853

17,855

2.77

%

Tax-exempt (5)243,146

4,811

2.65

%

140,075

3,366

3.21

%

Total securities1,286,415

22,129

2.30

%

1,001,928

21,221

2.83

%

Deposits in depository institutions562,272

474

0.11

%

214,912

432

0.27

%

Total interest-earning assets5,402,653

124,002

3.07

%

4,860,443

136,465

3.75

%

Cash and due from banks91,073

76,936

Premises and equipment, net76,481

77,910

Goodwill and intangible assets118,084

119,678

Other assets214,872

218,695

Less: Allowance for credit losses(22,989

)

(21,984

)

Total assets$

5,880,174

$

5,331,678

Liabilities:Interest-bearing demand deposits$

1,057,452

$

373

0.05

%

$

898,440

$

833

0.12

%

Savings deposits1,275,211

516

0.05

%

1,045,877

1,366

0.17

%

Time deposits (2)1,181,166

6,806

0.77

%

1,347,013

16,125

1.60

%

Short-term borrowings292,845

357

0.16

%

242,173

873

0.48

%

Long-term debt-

-

-

1,109

100

12.04

%

Total interest-bearing liabilities3,806,674

8,052

0.28

%

3,534,612

19,297

0.73

%

Noninterest-bearing demand deposits1,289,247

1,004,144

Other liabilities82,953

98,393

Stockholders' equity701,300

694,529

Total liabilities andstockholders' equity$

5,880,174

$

5,331,678

Net interest income$

115,950

$

117,168

Net yield on earning assets2.87

%

3.22

%

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

2,443

$

881

(2) Included in the above table are the following amounts (in thousands) for the accretion of the fair value adjustments related to the Company's acquisitions:Residential real estate$

472

$

477

Commercial, financial, and agriculture956

2,141

Installment loans to individuals72

114

Time deposits145

466

$

1,645

$

3,198

(3) Includes the Company's consumer and DDA overdrafts loan categories.(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.CITY HOLDING COMPANY AND SUBSIDIARIESConsolidated Average Balance Sheets, Yields, and Rates(Unaudited) ($ in 000s) Nine Months Ended September 30, 2021 September 30, 2020 Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Assets:Loan portfolio ^(1):Residential real $ 1,669,324 $ 48,801 3.91 % $ 1,776,903 $ 56,827 4.27 %estate ^(2)Commercial, 1,833,744 50,044 3.65 % 1,810,165 55,051 4.06 %financial, andagriculture ^(2)Installment loans 50,898 2,140 5.62 % 56,535 2,519 5.95 %to individuals ^(2), (3)Previously 414 415securitized loans ^ *** *** *** ***(4)Total loans 3,553,966 101,399 3.81 % 3,643,603 114,812 4.21 %

Securities:Taxable 1,043,269 17,318 2.22 % 861,853 17,855 2.77 %

Tax-exempt ^(5) 243,146 4,811 2.65 % 140,075 3,366 3.21 %

Total securities 1,286,415 22,129 2.30 % 1,001,928 21,221 2.83 %

Deposits in 562,272 474 0.11 % 214,912 432 0.27 %depositoryinstitutionsTotal 5,402,653 124,002 3.07 % 4,860,443 136,465 3.75 %interest-earningassetsCash and due from 91,073 76,936 banksPremises and 76,481 77,910 equipment, netGoodwill and 118,084 119,678 intangible assetsOther assets 214,872 218,695

Less: Allowance for (22,989 ) (21,984 )credit lossesTotal assets $ 5,880,174 $ 5,331,678

Liabilities:Interest-bearing $ 1,057,452 $ 373 0.05 % $ 898,440 $ 833 0.12 %demand depositsSavings deposits 1,275,211 516 0.05 % 1,045,877 1,366 0.17 %

Time deposits ^(2) 1,181,166 6,806 0.77 % 1,347,013 16,125 1.60 %

Short-term 292,845 357 0.16 % 242,173 873 0.48 %borrowingsLong-term debt - - - 1,109 100 12.04 %

Total 3,806,674 8,052 0.28 % 3,534,612 19,297 0.73 %interest-bearingliabilitiesNoninterest-bearing 1,289,247 1,004,144 demand depositsOther liabilities 82,953 98,393

Stockholders' 701,300 694,529 equityTotal liabilitiesandstockholders' $ 5,880,174 $ 5,331,678 equityNet interest income $ 115,950 $ 117,168

Net yield on 2.87 % 3.22 %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 $ 2,443 $ 881

(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 $ 472 $ 477estateCommercial, 956 2,141financial, andagricultureInstallment loans 72 114to individualsTime deposits 145 466

$ 1,645 $ 3,198

(3) Includes the Company's consumer and DDA overdrafts loan categories.(4) Effective January 1, 2012, the carrying value of the Company's 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 EndedNine Months EndedSeptember 30,2021June 30,2021March 31,2021December 31,2020September 30,2020September 30,2021September 30,2020Net Interest Income/MarginNet interest income ("GAAP")$

39,488

$

37,914

$

37,540

$

38,181

$

37,977

$

114,942

$

116,462

Taxable equivalent adjustment334

343

331

333

301

1,008

706

Net interest income, fully taxable equivalent$

39,822

$

38,257

$

37,871

$

38,514

$

38,278

$

115,950

$

117,168

Average interest earning assets$

5,462,410

$

5,459,564

$

5,284,025

$

5,125,874

$

5,047,868

$

5,402,653

$

4,860,443

Net Interest Margin2.89%

2.81%

2.91%

2.99%

3.02%

2.87%

3.22%

Accretion related to fair value adjustments-0.04%

-0.05%

-0.04%

-0.05%

-0.05%

-0.04%

-0.09%

Net Interest Margin (excluding accretion)2.85%

2.76%

2.87%

2.94%

2.97%

2.83%

3.13%

Tangible Equity Ratio (period end)Equity to assets ("GAAP")11.37%

11.78%

11.74%

12.18%

12.54%

Effect of goodwill and other intangibles, net-1.78%

-1.80%

-1.81%

-1.85%

-1.93%

Tangible common equity to tangible assets9.59%

9.98%

9.93%

10.33%

10.61%

Return on Tangible EquityReturn on tangible equity ("GAAP")15.7%

15.2%

13.5%

15.3%

13.8%

14.8%

15.6%

Impact of sale of VISA shares-

-

-

-

-

-

-3.1%

Return on tangible equity, excluding sale of VISA shares15.7%

15.2%

13.5%

15.3%

13.8%

14.8%

12.5%

Return on AssetsReturn on assets ("GAAP")1.53%

1.49%

1.38%

1.59%

1.46%

1.47%

1.68%

Impact of sale of VISA shares-

-

-

-

-

-

-0.33%

Return on assets, excluding sale of VISA shares1.53%

1.49%

1.38%

1.59%

1.46%

1.47%

1.35%

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

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