CITY HOLDING CO
For the period ended Mar 31, 2025. Filed May 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
CHCO$141.49-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000726854-24-000204
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000726854-25-000130
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 89 current paragraphs.
57 unchanged; 25 reworded; 7 added; 24 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Total investment securities remained flat at$1.45 billion at December 31, 2024 and March 31, 2025.
Current report
Gross loans increased $11.0 million (0.3%) from December 31, 2024 to $4.29 billion at March 31, 2025. Residential real estate loans increased $18.2 million (1.0%), home equity loans increased $4.1 million (2.0%), and commercial and industrial loans increased $3.4 million (0.8%) during the quarter ended March 31, 2025. These increases were partially offset by a decrease in commercial real estate loans of $9.6 million.
Current report
Total deposits increased $114.3 million (2.2%) from December 31, 2024 to $5.3 billion at March 31, 2025. Savings deposits increased $45.5 million, time deposit balances increased $26.8 million, non-interest-bearing demand deposit balances increased $21.4 million, and interest-bearing demand deposits increased $20.6 million.
Current report
The Company’s net interest income increased approximately $1.4 million, or 2.55%, from $54.4 million during the first quarter of 2024 to $55.8 million during the first quarter of 2025. The Company’s tax equivalent net interest income increased approximately $1.4 million, or 2.49%, from $54.6 million for the first quarter of 2024 to $56.0 million for the first quarter of 2025. Net interest income increased by $2.9 million due to an increase in average loan balances ($200.3 million) and by $1.0 million due to an increase in average investment security balances ($92.1 million). Additionally, higher yields on investment securities increased net interest income by $0.8 million and higher average balances of deposits in depository institutions ($48.1 million) increased net interest income by $0.6 million.
Current report
These increases were partially offset by an increase in average balance of interest-bearing liabilities ($259.9 million) which lowered net interest income by $2.0 million. Additionally, accretion income decreased net interest income by $0.6 million, lower loan yields (1 basis point) lowered net interest income by $0.6 million, and an increase in the cost of interest-bearing liabilities (13 basis points) decreased net interest income by $0.4 million. The Company’s reported net interest margin decreased from 3.95% for the first quarter of 2024 to 3.84% for the first quarter of 2025.
Current report
Loan balances increased $11.0 million from December 31, 2024 to March 31, 2025.
Current report
The Allowance for Credit Losses decreased slightly from $21.9 million at December 31, 2024 to $21.7 million at March 31, 2025. The Company did not record a provision for credit losses in the first quarter of 2025, compared to a recovery of credit losses of $0.2 million for the comparable period in 2024, and a provision for credit losses of $0.3 million for the fourth quarter of 2024. The Company did not record a provision for loan losses in the first quarter of 2025 due to an improvement in the loss rate for residential real estate loans that was essentially offset by net charge-offs during the quarter ended March 31, 2025.
Removed paragraphs (24)
Previous report
Acquisition and Preliminary Purchase Price Allocation
Previous report
The calculation of the Company's acquisition and preliminary purchase price allocation is considered a critical accounting estimate as it involves a significant level of estimation and uncertainty, particularly in relation to the fair value and goodwill calculations. Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair value of acquired assets and liabilities. The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments will resultin adjustments to the goodwill recorded. As of September 30, 2024, over twelve months have occurred since the date of acquisition on March 10, 2023, and the measurement period is now complete.
Previous report
Financial Summary
Previous report
Total investment securities increased$124.6 million (9.1%) from December 31, 2023 to$1.49 billion at September 30, 2024, primarily due to security purchases that were partially offset by maturities and calls.
Previous report
Gross loans increased $31.9 million (0.8%) from December 31, 2023 to $4.16 billion at September 30, 2024. Home equity loans increased $22.9 million (13.7%) and residential real estate loans increased $18.4 million (1.0%) during the first nine months of 2024. These increases were partially offset by a decrease in consumer loans of $6.5 million (10.0%) and a decrease in commercial and industrial loans of $2.5 million (0.6%).
Previous report
Total deposits increased $168.4 million (3.4%) from December 31, 2023 to $5.1 billion at September 30, 2024. Time deposit balances increased $162.1 million and interest-bearing demand deposit balances increased $60.2 million. These increases were partially offset by a decrease in savings deposit balances of $50.6 million and a decrease in noninterest-bearing demand deposit balances of $3.3 million.
Previous report
FHLB long-term advances increased $50.0 million from December 31, 2023 to September 30, 2024. During the first nine months of 2024, the Company borrowed an additional $50.0 million from the Federal Home Loan Bank at a rate of 4.39%.
Previous report
The Company’s net interest income increased from $164.6 million for the nine months ended September 30, 2023 to $164.7 million for the nine months ended September 30, 2024. The Company’s tax equivalent net interest income decreased $0.1 million to $165.3 million for the nine months ended September 30, 2024 from $165.4 the nine months ended September 30, 2023. The decrease in net interest income was due to an increase in the cost of interest bearing liabilities (91 basis points) and increase in average balance of interest bearing liabilities ($34.7 million), which decreased net interest income by $22.9 million and $4.5 million, respectively. Additionally, a decrease in the average balance of deposits in depository institutions ($46.5 million) decreased interest income by $1.5 million.
Previous report
These decreases were essentially offset by increases in the Federal Funds rate since the nine months ended September 30, 2023, which increased net interest income by $18.3 million due to an increase in loan yields (net of loan fees and accretion) of 62 basis points. Net interest income increased $4.7 million due to an increase in investment yields of 44 basis points and an increase in average loans ($92.0 million) which increased interest income by $3.3 million. In addition, an increase of 110 basis points in the yield on deposits in depository institutions increased net interest income by $1.0 million. The Company’s reported net interest margin decreased from 4.02% for the nine months ended September 30, 2023 to 3.90% for the nine months ended September 30, 2024.
Previous report
(1)Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 21%.
Previous report
Net Interest Income
Previous report
The Company’s net interest income was $55.6 million for both the three months ended September 30, 2023 and the three months ended September 30, 2024. The Company’s tax equivalent net interest income decreased approximately $0.1 million, from $55.9 million for the third quarter of 2023 to $55.8 million for the third quarter of 2024. The Company's net interest income declined by $5.7 million due to an increase in the cost of interest bearing liabilities of 65 basis points and by $2.0 million due to an increase in the average balance of interest bearing liabilities ($217.0 million).
Previous report
These decreases in net interest income were essentially offset by an increase in loan yields (35 basis points) and an increase in average loan balances ($176.6 million), which increased net interest income $3.4 million and $2.5 million, respectively. In addition, an increase of 37 basis points in the yield on investment securities increased net interest income by $1.3 million. The Company’s reported net interest margin decreased from 4.03% for the third quarter of 2023 to 3.87% for the third quarter of 2024.
Previous report
Table One
Previous report
(in thousands, except percentages)
Previous report
Table Two
Previous report
Loan balances increased $31.9 million from December 31, 2023 to September 30, 2024.
Previous report
The Allowance for Credit Losses decreased slightly from $22.7 million at December 31, 2023 to $21.8 million at September 30, 2024. The Company recorded a provision for credit losses of $1.2 million in the third quarter of 2024, compared to a provision for credit losses of $0.2 million for the comparable period in 2023, and a provision for credit losses of $0.5 million for the second quarter of 2024. The provision for credit losses in the third quarter was primarily related to a commercial loan for a movie theater that had been originated in September 2014. The loan had paid according to terms but cash flows began deteriorating during the COVID-19 crisis which began in 2020. Due to further operating weaknesses during 2024, the loan was transferred to nonaccrual status and a $2.0 million charge-off was recorded in the quarter ending September 30, 2024, leaving an outstanding balance of approximately $6.7 million. The Company has only one other loan to a movie theater and the outstanding balance of that performing loan is under $5.0 million. This charge-off was partially offset by a $0.75 million reversal of a reserve on a purchase credit deteriorated loan that was paid-off in full during the quarter ended September 30, 2024.
Previous report
Non-Interest Income: Non-interest income was $57.2 million for the nine months ended September 30, 2024, as compared to $56.4 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Company reported $0.6 million of unrealized fair value gains on the Company's equity securities compared to $0.1 million of unrealized fair value gains during the nine months ended September 30, 2023.
Previous report
Excluding net investment securities gains, non-interest income increased from $56.3 million for the nine months ended September 30, 2023 to$56.7 million for thenine months ended September 30, 2024. The increase was largely attributable to an increase in trust and investment management fee income of $1.3 million (18.7%), an increase in service charges of
Previous report
$1.0 million (4.6%), and an increase in bankcard revenue of $0.5 million (2.6%). These increases were partially offset by a decrease in bank owned life insurance of $1.7 million (34.9%) and a decrease in other income of $0.7 million (24.7%).
Previous report
Non-Interest Expense: Non-interest expenses, less merger related expenses, increased $7.5 million (7.3%), from $102.8 million in the first nine months of 2023 to $110.3 million in the first nine months of 2024 primarily due to an increase in salaries and employee benefits ($2.5 million), other expenses ($2.4 million), bankcard expenses ($1.2 million), equipment and software related expense ($0.7 million), and advertising expense ($0.4 million).
Previous report
Income Tax Expense: The Company’s effective income tax rate for the nine months ended September 30, 2024 was 19.6% compared to 20.3% for the nine months ended September 30, 2023.
Previous report
(in millions, except percentages)
Reworded paragraphs (25)
Previous wording
The Company uses a number of economic variables in its scenarios to estimate the Allowance for credit losses (ACL), with the most significant drivers being an unemployment rate forecast and qualitative adjustments. In the September 30, 2024 estimate, the Company assumed a 2-year unemployment forecast range of 4.3% to 4.9%, changed from 4.0% to 4.7% for the June 30, 2024 estimate. Historical loss rates from periods where the average unemployment rate matches the forecast range are considered when calculating the forecast period loss rate. In total, the changes in loss rates increased the reserve $0.2 million for the quarter.
Current wording
The Company uses a number of economic variables in its scenarios to estimate the Allowance for credit losses (ACL), with the most significant drivers being an unemployment rate forecast and qualitative adjustments. In the March 31, 2025 estimate, the Company assumed a 2-year unemployment forecast range of 4.1% to 4.7% compared to 4.2% to 4.8% range for the December 31, 2024 estimate. Historical loss rates from periods where the average unemployment rate matches the forecast range are considered when calculating the forecast period loss rate. In total, the changes in loss rates decreased the reserve $0.5 million for the quarter.
Previous wording
Based on sensitivity analysis of all portfolios, a 0.0050% change (slight improvement or decline on bank's scale) in all 11 qualitative risk factors (where assigned) would have a $2.2 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.3 million, impact. Management recognizes that these are extreme scenarios and it is very unlikely that all risk factors would change by 0.005% or 0.01% simultaneously. For the September 30, 2024 estimate, no changes were made to the qualitative factors utilized in the previous quarter.
Current wording
Based on sensitivity analysis of all portfolios, a 0.0050% change (slight improvement or decline on bank's scale) in all 11 qualitative risk factors (where assigned) would have a $2.2 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.5 million, impact. Management recognizes that these are extreme scenarios and it is very unlikely that all risk factors would change by 0.005% or 0.01% simultaneously. For the March 31, 2025 estimate, management assigned moderate decline (0.01%) adjustment to the Overall Economic Conditions qualitative factor for all pools which increased the reserve by $0.4 million
Previous wording
The Company's net interest income for the nine months ended September 30, 2024 increased $0.1 million compared to the nine months ended September 30, 2023 (see Net Interest Income). The Company recorded a provision for credit losses of $1.5 million for the nine months ended September 30, 2024 compared to a provision of credit losses of $3.5 million for the nine months ended September 30, 2023 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $0.8 million and non-interest expense increased $1.9 million for the nine months ended September 30, 2024 from the nine months ended September 30, 2023.
Current wording
The Company's net interest income was $55.8 million for the three months ended March 31, 2025 compared to $54.4 million for the three months ended March 31, 2024 (see Net Interest Income). The Company recorded no provision for credit losses for the three months ended March 31, 2025 compared to a $0.2 million recovery of credit losses for the three months ended March 31, 2024 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $0.8 million and non-interest expense increased $1.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Previous wording
Cash and cash equivalents increased $137.6 million (88.0%) from December 31, 2023 to $293.9 million at September 30, 2024, primarilydue to an increase in deposit balances and an increase in FHLB long-term advances. These increasing impacts were partially offset by an increase in investment securities.
Current wording
Cash and cash equivalents increased $159.3 million (70.7%) from December 31, 2024 to $384.7 million at March 31, 2025, primarilydue to an increase in deposit balances and securities sold under agreements to repurchase. These cash increasing impacts were partially offset by an increase in gross loans.
Previous wording
The commercial and industrial ("C&I") loan portfolio consists of loans to corporate borrowers that are primarily in small to mid-size industrial and commercial companies. Collateral securing these loans includes equipment, machinery, inventory, receivables and vehicles. C&I loans are considered to contain a higher level of risk than other loan types, although care is taken to minimize these risks. Numerous risk factors impact this portfolio, including industry specific risks such as the economy, new technology, labor rates and cyclicality, as well as customer specific factors, such as cash flow, financial structure, operating controls and asset quality. C&I loans decreased $2.5 million from December 31, 2023 to September 30, 2024.
Current wording
The commercial and industrial ("C&I") loan portfolio consists of loans to corporate borrowers that are primarily in small to mid-size industrial and commercial companies. Collateral securing these loans includes equipment, machinery, inventory, receivables and vehicles. C&I loans are considered to contain a higher level of risk than other loan types, although care is taken to minimize these risks. Numerous risk factors impact this portfolio, including industry specific risks such as the economy, new technology, labor rates and cyclicality, as well as customer specific factors, such as cash flow, financial structure, operating controls and asset quality. C&I loans increased $3.4 million from December 31, 2024 to March 31, 2025.
Previous wording
Commercial real estate loans consist of commercial mortgages, which generally are secured by nonresidential and multi-family residential properties, including hotel/motel and apartment lending. Commercial real estate loans are made to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans increased $0.4 million from December 31, 2023 to September 30, 2024. At September 30, 2024, $2.7 million of the commercial real estate loans were for commercial properties under construction.
Current wording
Commercial real estate loans consist of commercial mortgages, which generally are secured by nonresidential and multi-family residential properties, including hotel/motel and apartment lending. Commercial real estate loans are made to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans decreased $9.6 million from December 31, 2024 to March 31, 2025. At March 31, 2025, $5.3 million of the commercial real estate loans were for commercial properties under construction.
Previous wording
◦Commercial 1-4 Family loans decreased $11.6 million from December 31, 2023 to September 30, 2024. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $194.7 million as of September 30, 2024. Risk characteristics are driven by rental housing demand as well as economic and employment conditions. These properties exhibit greater risk than multi-family properties due to fewer income sources.
Current wording
◦Commercial 1-4 Family loans decreased $1.6 million from December 31, 2024 to March 31, 2025. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $195.6 million as of March 31, 2025. Risk characteristics are driven by rental housing demand as well as economic and employment conditions. These properties exhibit greater risk than multi-family properties due to fewer income sources.
Previous wording
◦Hotel loans increased $26.1 million from December 31, 2023 to September 30, 2024. The Hotel portfolio is comprised of all lodging establishments and totaled $383.2 million as of September 30, 2024. Risk characteristics relate to the demand for travel.
Current wording
◦Hotel loans decreased $16.9 million from December 31, 2024 to March 31, 2025. The Hotel portfolio is comprised of all lodging establishments and totaled $372.8 million as of March 31, 2025. Risk characteristics relate to the demand for travel.
Previous wording
◦Multi-family loans increased $4.7 million from December 31, 2023 to September 30, 2024. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $193.9 million as of September 30, 2024. Risk characteristics are driven by rental housing demand as well as economic and employment conditions.
Current wording
◦Multi-family loans decreased $25.4 million from December 31, 2024 to March 31, 2025. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $215.5 million as of March 31, 2025. Risk characteristics are driven by rental housing demand as well as economic and employment conditions.
Previous wording
◦Non-residential commercial real estate includes properties such as retail, office, warehouse, storage, healthcare, entertainment, religious, and other nonresidential commercial properties. The non-residential product type is further segmented into owner- and non-owner occupied properties. Nonresidential non-owner occupied commercial real estate totaled $665.2 million at September 30, 2024 and decreased $15.4 million from December 31, 2023 to September 30,
Current wording
◦Non-residential commercial real estate includes properties such as retail, office, warehouse, storage, healthcare, entertainment, religious, and other nonresidential commercial properties. The non-residential product type is further segmented into owner- and non-owner occupied properties. Nonresidential non-owner occupied commercial real estate totaled $742.3 million at March 31, 2025 and increased $35.1 million from December 31, 2024 to March 31, 2025.
Previous wording
Nonresidential owner-occupied commercial real estate totaled $236.8 million at September 30, 2024 and decreased $3.5 million from December 31, 2023. Risk characteristics relate to levels of consumer spending and overall economic conditions.
Current wording
Nonresidential owner-occupied commercial real estate totaled $232.7 million at March 31, 2025 and decreased $0.8 million from December 31, 2024. Risk characteristics relate to levels of consumer spending and overall economic conditions.
Previous wording
Residential real estate loans increased $18.4 million from December 31, 2023 to September 30, 2024. Residential real estate loans represent loans to consumers that are secured by a first lien on residential property. Residential real estate loans provide for the purchase or refinance of a residence and first-lien home equity loans allow consumers to borrow against the equity in their home. These loans primarily consist of single family 3, 5 and 7 year adjustable rate mortgages with terms that amortize up to 30 years. The Company also offers fixed-rate residential real estate loans that are generally sold in the secondary market that are not included on the Company's balance sheet; the Company does not retain the servicing rights to these loans. Residential mortgage loans are generally underwritten to comply with Fannie Mae guidelines, while the home equity loans are underwritten with typically less documentation, but with lower loan-to-value ratios and shorter maturities. At September 30, 2024, $7.6 million of the residential real estate loans were for properties under construction.
Current wording
Residential real estate loans increased $18.2 million from December 31, 2024 to March 31, 2025. Residential real estate loans represent loans to consumers that are secured by a first lien on residential property. Residential real estate loans provide for the purchase or refinance of a residence and first-lien home equity loans allow consumers to borrow against the equity in their home. These loans primarily consist of single family five- and seven-year adjustable rate mortgages with terms that amortize up to 30 years. The Company also offers fixed-rate residential real estate loans that are generally sold in the secondary market that are not included on the Company's balance sheet; the Company does not retain the servicing rights to these loans. Residential mortgage loans are generally underwritten to comply with Fannie Mae guidelines, while the home equity loans are underwritten with typically less documentation, but with lower loan-to-value ratios and shorter maturities. At March 31, 2025, $25.7 million of the residential real estate loans were for properties under construction.
Previous wording
Home equity loans increased $22.9 million during the first nine months of 2024. The Company's home equity loans represent loans to consumers that are secured by a second (or junior) lien on a residential property. Home equity loans allow consumers to borrow against the equity in their home without paying off an existing first lien. These loans consist of home equity lines of credit ("HELOC") and amortized home equity loans that require monthly installment payments. Home equity loans are underwritten with less documentation, lower loan-to-value ratios and for shorter terms than residential mortgage loans. The amount of credit extended is directly related to the value of the real estate at the time the loan is made.
Current wording
Home equity loans increased $4.1 million during the first three months of 2025. The Company's home equity loans represent loans to consumers that are secured by a second (or junior) lien on a residential property. Home equity loans allow consumers to borrow against the equity in their home without paying off an existing first lien. These loans consist of home equity lines of credit ("HELOC") and amortized home equity loans that require monthly installment payments. Home equity loans are underwritten with less documentation, lower loan-to-value ratios and for shorter terms than residential mortgage loans. The amount of credit extended is directly related to the value of the real estate at the time the loan is made.
Previous wording
Consumer loans may be secured by automobiles, boats, recreational vehicles and other personal property or they may be unsecured. The Company monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors. Consumer loans decreased by $6.5 million during the first nine months of 2024.
Current wording
Consumer loans may be secured by automobiles, boats, recreational vehicles and other personal property or they may be unsecured. The Company monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors. Consumer loans decreased by $3.1 million during the first three months of 2025.
Previous wording
Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a $1.2 million provision for credit losses in the third quarter of 2024 and recorded a provision for credit losses of $0.2 million in the third quarter of 2023.
Current wording
Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company did not record a provision for credit losses in the first quarter of 2025 compared to a $0.2 million recovery of credit losses recorded in the first quarter of 2024.
Previous wording
Non-Interest Income: Non-interest income was $20.3 million during the quarter ended September 30, 2024, as compared to $17.4 million during the quarter ended September 30, 2023. During the third quarter of 2024, the Company reported $0.4 million of unrealized fair value gains on the Company’s equity securities, as compared to $0.7 million of realized security losses during the third quarter of 2023.
Current wording
Non-Interest Income: Non-interest income was $18.7 million during the quarter ended March 31, 2025, as compared to $17.9 million during the quarter ended March 31, 2024. During the first quarter of 2024, the Company reported $0.2 million of unrealized fair value losses on the Company’s equity securities.
Previous wording
Exclusive of these items, non-interest income increased $1.9 million, or 10.5%, from $18.1 million for the third quarter of 2023 to $20.0 million for the third quarter of 2024. This increase was attributable to an increase of $0.6 million (77.8%) in bank owned life insurance (due to death benefit proceeds), an increase of $0.5 million (21.3%) in trust and investment management fee income, an increase of $0.4 million (5.7%) in service fees, and an increase of $0.3 million (4.1%) in bankcard revenues.
Current wording
Exclusive of this item, non-interest income increased $0.6 million, or 3.5%, from $18.1 million for the first quarter of 2024 to $18.7 million for the first quarter of 2025. This increase was due to an increase of $0.3 million, or 10.6%, in in wealth and investment management fee income, and a $0.2 million, or 24.4%, increase in bank owned life insurance.
Previous wording
Non-Interest Expense: Non-interest expenses increased $2.6 million, or 7.4%, from $35.0 million in the third quarter of 2023 to $37.6 million in the third quarter of 2024. This increase was largely due to an increase in other expenses of $1.1 million and an increase in salaries and employee benefits of $1.0 million. In addition, equipment and software related expenses increased $0.6 million and advertising expenses increased $0.3 million.
Current wording
Non-Interest Expense: Non-interest expenses increased $1.7 million, or 4.8%, from $35.9 million in the first quarter of 2024 to $37.6 million in the first quarter of 2025. This increase was largely due to an increase of $0.5 million in equipment and software related expenses and a $0.5 million in other expenses. In addition, salaries and employee benefits increased $0.3 million, other tax-related matters increased $0.2 million, and bankcard expenses increased $0.2 million. These increases were partially offset by a decrease of $0.3 million in repossessed asset gains, net of expenses.
Previous wording
Income Tax Expense: The Company's effective income tax rate for the three months ended September 30, 2024 and September 30, 2023 was 19.7%, and 21.1%, respectively.
Current wording
Income Tax Expense: The Company's effective income tax rate for the three months ended March 31, 2025 and March 31, 2024 was 17.8%, and 19.5%, respectively.
Previous wording
The Company evaluates the adequacy of liquidity at both the City Holding level and at the City National level. At the City Holding level, the principal source of cash is dividends from City National. Dividends paid by City National to City Holding are subject to certain legal and regulatory limitations. Generally, any dividends in amounts that exceed the earnings retained by City National in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At September 30, 2024, City National could pay dividends up to $128.2 million plus net profits for the remainder of 2024, as defined by statute, up to the dividend declaration date without prior regulatory permission.
Current wording
The Company evaluates the adequacy of liquidity at both the City Holding level and at the City National level. At the City Holding level, the principal source of cash is dividends from City National. Dividends paid by City National to City Holding are subject to certain legal and regulatory limitations. Generally, any dividends in amounts that exceed the earnings retained by City National in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At March 31, 2025, City National could pay dividends up to $66.0 million plus net profits for the remainder of 2025, as defined by statute, up to the dividend declaration date without prior regulatory permission.
Previous wording
Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate$43.5 million on an annualized basis over the next 12 months based on common shares outstanding at September 30, 2024. However, dividends to shareholders can, if necessary, be suspended. In addition to these anticipated cash needs, City Holding has operating expenses and other contractual obligations, which are estimated to require $1.8 million of additional cash over the next 12 months. As of September 30, 2024, City Holding reported a cash balance of$19.2 million and management believes that City Holding’s available cash balance, together with cash dividends from City National, will be adequate to satisfy its funding and cash needs over the next 12 months.
Current wording
Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate$46.3 million on an annualized basis over the next 12 months based on common shares outstanding at March 31, 2025. However, dividends to shareholders can, if necessary, be suspended. In addition to these anticipated cash needs, City Holding has operating expenses and other contractual obligations, which are estimated to require $1.9 million of additional cash over the next 12 months. As of March 31, 2025, City Holding reported a cash balance of$96.1 million and management believes that City Holding’s available cash balance, together with cash dividends from City National, will be adequate to satisfy its funding and cash needs over the next 12 months.
Previous wording
As illustrated in the consolidated statements of cash flows, the Company generated $98.1 million of cash from operating activities during the first nine months of 2024, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company used $133.2 million of cash in investing activities during the first nine months of 2024, primarily due to purchases of available-for-sale securities of $192.6 million, an increase in loans of $30.9 million, payments for low income housing credits of $10.4 million, and purchases of premises and equipment of $1.8 million. These increases were partially offset by proceeds from maturities and calls of $100.4 million and proceeds from the bank-owned life insurance policies of $1.2 million. The Company generated $172.7 million of cash in financing activities during the first nine months of 2024, principally as a result of an increase in interest-bearing deposits of $171.8 million, proceeds from long-term debt of $50.0 million, and an increase in short-term borrowings of $4.3 million. These increases were partially offset by a decrease in dividends paid of $31.9 million, purchases of treasury stock of $17.9 million, and a decrease in non-interest-bearing deposits of $3.3 million.
Current wording
As illustrated in the consolidated statements of cash flows, the Company generated $31.5 million of cash from operating activities during the first three months of 2025, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company generated $12.7 million of cash in investing activities during the first three months of 2025, primarily due to proceeds from maturities and calls of $45.5 million. These proceeds were partially offset by purchases of available-for-sale securities of $19.7 million, a net increase in loans of $10.2 million, and payments for low income housing credits of $2.8 million. The Company generated $115.1 million of cash in financing activities during the first three months of 2025, principally as a result of a net increase in interest-bearing deposits of $92.9 million, an increase in customer repurchase agreements of $22.1 million, and net increase in non-interest bearing deposits of $21.4 million. These increases were partially offset by dividends paid of $11.6 million and purchases of treasury stock of $9.5 million.
Previous wording
City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of September 30, 2024, City National had the capacity to borrow an additional $1.6 billion from these existing borrowing facilities. In addition, approximately $765 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $730 million of City National’s investment securities unpledged at September 30, 2024. City National also segregates certain mortgage loans, mortgage-backed securities, and other investment securities in a separate subsidiary so that it can separately monitor the asset quality of these primarily mortgage-related assets, which could be used to raise cash through securitization transactions or obtain additional equity or debt financing if necessary.
Current wording
City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of March 31, 2025, City National had the capacity to borrow an additional $1.6 billion from these existing borrowing facilities. In addition, approximately $697 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $750 million of City National’s investment securities unpledged at March 31, 2025. City National also segregates certain mortgage loans, mortgage-backed securities, and other investment securities in a separate subsidiary so that it can separately monitor the asset quality of these primarily mortgage-related assets, which could be used to raise cash through securitization transactions or obtain additional equity or debt financing if necessary.
Previous wording
With respect to liquidity, the Company has chosen a conservative posture and believes that its liquidity position is strong. The Company’s net loan to asset ratio is 64.3% as of September 30, 2024 and deposit balances fund 79.3% of total assets. The Company has obligations to extend credit, but these obligations are primarily associated with existing home equity loans that have predictable borrowing patterns across the portfolio. The Company has investment security balances with carrying values that totaled $1.5 billion at September 30, 2024, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $489.2 million. Further, the Company’s deposit mix has a high proportion of transaction and savings accounts that fund 60.6% of the Company’s total assets. As interest rates increase, deposit balances may decline or the composition of the deposit portfolio may shift to higher yielding deposit products, such as money market accounts or time deposits.
Current wording
With respect to liquidity, the Company has chosen a conservative posture and believes that its liquidity position is strong. The Company’s net loan to asset ratio is 64.4% as of March 31, 2025 and deposit balances fund 79.4% of total assets. The Company has obligations to extend credit, but these obligations are primarily associated with existing home equity loans that have predictable borrowing patterns across the portfolio. The Company has investment security balances with carrying values that totaled $1.4 billion at March 31, 2025, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $497.7 million. Further, the Company’s deposit mix has a high proportion of transaction and savings accounts that fund 60.1% of the Company’s total assets. As interest rates increase, deposit balances may decline or the composition of the deposit portfolio may shift to higher yielding deposit products, such as money market accounts or time deposits.
Previous wording
Shareholders' equity increased $64.2 million for the nine months ended September 30, 2024, primarily due to net income of $88.4 million and other comprehensive income of $23.7 million. This increase was partially offset by cash dividends declared of $33.0 million, and the repurchase of 178,529 common shares at a weighted average price of $100.24 per share ($17.9 million) as part of a one million share repurchase plan authorized by the Board of Directors in January 2024.
Current wording
Shareholders' equity increased $25.7 million for the three months ended March 31, 2025, primarily due to net income of $30.3 million and other comprehensive income of $15.8 million. These increases were partially offset by cash dividends declared of $11.7 million, and the repurchase of 80,600 common shares at a weighted average price of $117.42 per share ($9.5 million) as part of a one million share repurchase plan authorized by the Board of Directors in January 2024.
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The Company's financial performance is summarized in the following table:
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*ROA (Return on Average Assets) is a measure of the effectiveness of asset utilization. ROE (Return on Average Equity) is a measure of the return on shareholders' investment. ROATCE (Return on Average Tangible Common Equity) is a measure of the return on shareholders' equity, less intangible assets.
Previous report — wording carried elsewhere
The Company's net interest income was $55.6 million for the three months ended September 30, 2024 and September 30, 2023, respectively (see Net Interest Income). The Company recorded a $1.2 million provision for credit losses for the three months ended September 30, 2024 compared to a $0.2 million provision for credit losses for the three months ended September 30, 2023 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and
Previous report — wording carried elsewhere
Non-Interest Expense, non-interest income increased $2.9 million and non-interest expense increased $2.6 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
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Average Balance Sheets and Net Interest Income
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Rate/Volume Analysis of Changes in Interest Income and Interest Expense
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Non-Interest Income and Non-Interest Expense