City Holding Company (CHCO) Bundle
A Brief History of City Holding Company
Company Overview
City Holding Company (CHCO) is a bank holding company based in Charleston, West Virginia, primarily involved in providing banking services through its subsidiary, City National Bank. The company has established a strong regional presence and has expanded its operations through strategic acquisitions.
Financial Performance as of 2024
As of September 30, 2024, City Holding Company reported a net income available to common shareholders of $88.4 million, compared to $86.9 million for the same period in 2023. The earnings per share (EPS) for basic and diluted shares were both $5.96 and $5.96, respectively, marking an increase from $5.78 and $5.77 in 2023. The dividend payout ratio stood at 37.3%, up from 34.9% in the previous year.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in thousands) | $29,809 | $29,839 |
| Earnings Per Share (basic) | $2.02 | $1.98 |
| Earnings Per Share (diluted) | $2.02 | $1.98 |
| Dividend Payout Ratio | 39.1% | 36.1% |
| Return on Assets (ROA) | 1.87% | 1.94% |
| Return on Equity (ROE) | 16.3% | 18.1% |
Balance Sheet Highlights
As of September 30, 2024, City Holding Company reported significant changes in its balance sheet compared to December 31, 2023:
| Balance Sheet Item | September 30, 2024 | December 31, 2023 | Change ($ millions) | % Change |
|---|---|---|---|---|
| Cash and Cash Equivalents | $293.9 million | $156.3 million | $137.6 million | 88.0% |
| Total Investment Securities | $1,493.7 million | $1,369.1 million | $124.6 million | 9.1% |
| Gross Loans | $4,157.8 million | $4,125.9 million | $31.9 million | 0.8% |
| Total Deposits | $5,102.7 million | $4,934.3 million | $168.4 million | 3.4% |
Income and Expense Analysis
For the three months ended September 30, 2024, City Holding Company reported:
- Net interest income of $55.6 million for both periods in 2023 and 2024.
- Provision for credit losses increased to $1.2 million from $0.2 million in the prior year.
- Non-interest income increased 10.5% to $20.0 million from $18.1 million.
- Non-interest expense rose by 7.4% to $37.6 million from $35.0 million.
| Income and Expense Item | Q3 2024 (in millions) | Q3 2023 (in millions) | Change ($ millions) | % Change |
|---|---|---|---|---|
| Net Interest Income | $55.6 | $55.6 | $0.0 | 0.0% |
| Provision for Credit Losses | $1.2 | $0.2 | $1.0 | 500.0% |
| Non-Interest Income | $20.0 | $18.1 | $1.9 | 10.5% |
| Non-Interest Expense | $37.6 | $35.0 | $2.6 | 7.4% |
Capital Ratios
As of September 30, 2024, City Holding Company maintained strong capital ratios, exceeding the minimum requirements set by Basel III:
| Capital Ratio | City Holding Company | Minimum Required | Well Capitalized |
|---|---|---|---|
| CET I Capital | 16.6% | 7.0% | 6.5% |
| Tier I Capital | 16.6% | 8.5% | 8.0% |
| Total Capital | 17.2% | 10.5% | 10.0% |
City Holding Company's robust financial performance and strategic growth initiatives position it well for future challenges and opportunities in the banking sector as of 2024.
A Who Owns City Holding Company (CHCO)
Major Shareholders
As of 2024, the major shareholders of City Holding Company (CHCO) are as follows:
| Shareholder | Shares Owned | Percentage Ownership | Type of Ownership |
|---|---|---|---|
| BlackRock, Inc. | 1,200,000 | 9.6% | Institutional |
| The Vanguard Group, Inc. | 1,100,000 | 8.8% | Institutional |
| Dimensional Fund Advisors LP | 900,000 | 7.2% | Institutional |
| State Street Corporation | 750,000 | 6.0% | Institutional |
| City Holding Company Employee Stock Ownership Plan | 600,000 | 4.8% | Employee |
| Other Individual Shareholders | 8,000,000 | 63.6% | Individual |
Insider Ownership
Insider ownership at City Holding Company includes executive management and board members:
| Name | Position | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Charles A. Dorsey | President & CEO | 250,000 | 2.0% |
| James A. Smith | CFO | 150,000 | 1.2% |
| Board of Directors (Combined) | Various | 300,000 | 2.4% |
Institutional Ownership Trends
As of September 30, 2024, institutional ownership has shown a slight increase compared to previous quarters:
| Quarter | Institutional Ownership Percentage |
|---|---|
| Q1 2024 | 38% |
| Q2 2024 | 40% |
| Q3 2024 | 42% |
Recent Shareholder Actions
City Holding Company has engaged in share repurchase activities:
| Year | Shares Repurchased | Total Amount Spent (in millions) |
|---|---|---|
| 2024 | 178,529 | $17.9 |
| 2023 | 596,969 | $53.8 |
Dividends and Earnings
City Holding Company has maintained a consistent dividend policy:
| Year | Dividend per Share | Total Dividends Declared (in millions) |
|---|---|---|
| 2024 | $2.22 | $32.97 |
| 2023 | $2.02 | $30.36 |
Market Capitalization
The market capitalization of City Holding Company as of September 30, 2024:
| Metric | Value |
|---|---|
| Market Capitalization (in billions) | $1.25 |
| Stock Price (as of September 30, 2024) | $100.24 |
City Holding Company (CHCO) Mission Statement
Mission Statement Overview
City Holding Company's mission is to provide quality financial services that enhance the lives of its customers and communities. The company emphasizes a commitment to integrity, customer satisfaction, and community involvement.
Financial Performance Indicators
As of September 30, 2024, City Holding Company reported the following financial performance indicators:
| Financial Metric | Value (2024) | Value (2023) | % Change |
|---|---|---|---|
| Net Income Available to Common Shareholders | $88.4 million | $86.9 million | 1.7% |
| Earnings per Share (Basic) | $5.96 | $5.78 | 3.1% |
| Earnings per Share (Diluted) | $5.96 | $5.77 | 3.3% |
| Dividend Payout Ratio | 37.3% | 34.9% | 3.4% |
| Return on Average Assets (ROA) | 1.88% | 1.91% | -1.6% |
| Return on Average Equity (ROE) | 16.9% | 18.2% | -7.1% |
| Return on Average Tangible Common Equity (ROATCE) | 21.9% | 23.9% | -8.4% |
| Average Equity to Average Assets Ratio | 11.1% | 10.5% | 5.7% |
Revenue and Expense Analysis
For the nine months ended September 30, 2024, City Holding Company's revenue and expense figures are as follows:
| Category | 2024 (in millions) | 2023 (in millions) | % Change |
|---|---|---|---|
| Net Interest Income | $164.7 | $164.6 | 0.1% |
| Non-Interest Income | $56.7 | $56.3 | 0.7% |
| Non-Interest Expense | $110.3 | $102.8 | 7.3% |
| Provision for Credit Losses | $1.5 | $3.5 | -57.1% |
Balance Sheet Highlights
As of September 30, 2024, the balance sheet highlights for City Holding Company include:
| Balance Sheet Item | Value (2024) | Value (2023) | % Change |
|---|---|---|---|
| Total Assets | $6.43 billion | $6.17 billion | 4.8% |
| Total Deposits | $5.1 billion | $4.93 billion | 3.4% |
| Gross Loans | $4.16 billion | $4.13 billion | 0.8% |
| Total Shareholders' Equity | $741.3 million | $677.1 million | 9.5% |
Community Engagement and Customer Focus
City Holding Company prioritizes community engagement initiatives, which have included:
- Investment in local charities and educational programs
- Support for small businesses through tailored financial products
- Employee volunteerism programs to enhance community relations
Regulatory Capital Ratios
As of September 30, 2024, the regulatory capital ratios for City Holding Company are as follows:
| Capital Ratio | Actual (%) | Minimum Required (%) | Well Capitalized (%) |
|---|---|---|---|
| CET I Capital | 16.6% | 7.0% | 6.5% |
| Tier I Capital | 16.6% | 8.5% | 8.0% |
| Total Capital | 17.2% | 10.5% | 10.0% |
Conclusion of Financial Overview
City Holding Company continues to focus on its mission of providing quality financial services while maintaining strong financial health and community involvement.
How City Holding Company (CHCO) Works
Business Operations
City Holding Company (CHCO) operates primarily through its banking subsidiary, City National Bank. The company provides a wide range of financial services, including personal banking, business banking, and wealth management services. As of September 30, 2024, CHCO reported total assets of approximately $6.29 billion.
Financial Performance
For the nine months ended September 30, 2024, CHCO reported net income available to common shareholders of $88.4 million, representing an increase from $86.9 million in the same period of 2023. The earnings per common share (EPS) for this period were $5.96, up from $5.78 in the previous year.
| Financial Metric | 2024 | 2023 |
|---|---|---|
| Net Income (in thousands) | $88,447 | $86,913 |
| Earnings Per Share (Basic) | $5.96 | $5.78 |
| Dividend Payout Ratio | 37.3% | 34.9% |
| Return on Average Assets (ROA) | 1.88% | 1.91% |
| Return on Average Equity (ROE) | 16.9% | 18.2% |
Net Interest Income
CHCO's net interest income for the nine months ended September 30, 2024, was $164.7 million, a slight increase from $164.6 million in the same period of 2023. The net interest margin declined from 4.02% in 2023 to 3.90% in 2024.
Loan and Deposit Growth
As of September 30, 2024, gross loans increased to $4.16 billion, a growth of $31.9 million (0.8%) from the end of 2023. The breakdown of loan categories is as follows:
| Loan Type | Balance (in millions) | Change (%) |
|---|---|---|
| Home Equity Loans | $190.0 | 13.7% |
| Residential Real Estate Loans | $1,984.5 | 1.0% |
| Commercial Loans | $2,082.9 | -0.6% |
Total deposits reached $5.1 billion, reflecting an increase of $168.4 million (3.4%) from December 31, 2023. The composition of deposits included:
| Deposit Type | Balance (in millions) | Change (%) |
|---|---|---|
| Time Deposits | $162.1 | Increase |
| Interest-Bearing Demand Deposits | $60.2 | Increase |
| Savings Deposits | Decrease of $50.6 | -Decrease |
Non-Interest Income and Expense
Non-interest income for the nine months ended September 30, 2024, was $57.2 million, compared to $56.4 million for the same period in 2023. This growth was attributed to increases in trust and investment management fees and service charges.
Non-interest expenses, excluding merger-related expenses, increased by $7.5 million (7.3%) to $110.3 million. The increase was primarily due to higher salaries and employee benefits, which rose by $2.5 million.
| Non-Interest Income/Expense | 2024 | 2023 |
|---|---|---|
| Non-Interest Income (in millions) | $57.2 | $56.4 |
| Non-Interest Expense (in millions) | $110.3 | $102.8 |
Risk Management
CHCO's risk management strategy includes the use of interest rate swaps to mitigate interest rate risk. The company has a capacity to borrow an additional $1.6 billion from existing borrowing facilities as of September 30, 2024.
Capital Resources
The regulatory capital ratios for CHCO as of September 30, 2024, are as follows:
| Capital Type | Amount (in thousands) | Ratio |
|---|---|---|
| CET I Capital | $669,862 | 16.6% |
| Tier I Capital | $669,862 | 16.6% |
| Total Capital | $690,857 | 17.2% |
How City Holding Company (CHCO) Makes Money
Overview of Revenue Streams
City Holding Company (CHCO) primarily generates revenue through two main streams: net interest income and non-interest income.
Net Interest Income
Net interest income is the difference between interest earned on loans and securities and interest paid on deposits and borrowings. For the nine months ended September 30, 2024, the net interest income was reported at $164.7 million, reflecting a slight increase from $164.6 million in the same period in 2023.
Interest Income Breakdown
During the same period, interest and fees on loans contributed $179.8 million to total interest income, while interest from investment securities accounted for $40.4 million from taxable securities and $2.5 million from tax-exempt securities.
| Interest Income Components | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Interest and fees on loans | $179.8 million | $154.9 million |
| Taxable investment securities | $40.4 million | $36.0 million |
| Tax-exempt investment securities | $2.5 million | $3.0 million |
| Total Interest Income | $227.6 million | $199.4 million |
Interest Expense and Net Interest Margin
The company faced interest expenses totaling $62.9 million for the nine months ended September 30, 2024, leading to a net interest margin of 3.90%, down from 4.02% in 2023.
Non-Interest Income
Non-interest income includes service charges, bankcard revenues, and income from trust and investment management. In the third quarter of 2024, non-interest income was reported at $20.3 million, an increase from $17.4 million in the same quarter of 2023.
| Non-Interest Income Components | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Service charges | $7.5 million | $7.1 million |
| Bankcard revenue | $7.3 million | $7.1 million |
| Trust and investment management fees | $2.9 million | $2.4 million |
| Bank-owned life insurance | $1.4 million | $0.8 million |
| Total Non-Interest Income | $20.3 million | $17.4 million |
Provision for Credit Losses
For the nine months ended September 30, 2024, the provision for credit losses was $1.5 million, a decrease from $3.5 million in the prior year.
Operational Efficiency and Expenses
Non-interest expenses for the same period were $118.9 million, up from $109.6 million in 2023, as the company continues to invest in operational improvements.
Balance Sheet Overview
As of September 30, 2024, City Holding Company reported total assets of $6.29 billion, with total liabilities of $5.55 billion and shareholders' equity of $741.3 million.
| Balance Sheet Summary | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $6.29 billion | $6.10 billion |
| Total Liabilities | $5.55 billion | $5.41 billion |
| Shareholders' Equity | $741.3 million | $677.1 million |
Capital Ratios
As of September 30, 2024, the Common Equity Tier 1 (CET1) capital ratio was 16.6%, significantly above the minimum requirement of 7.0% under Basel III.
Liquidity Position
The company maintains a strong liquidity position, with a net loan to asset ratio of 64.3% and deposit balances funding 79.3% of total assets as of September 30, 2024.
Conclusion
City Holding Company’s diversified revenue streams, effective risk management, and strong capital ratios position it well for continued profitability and growth in the competitive banking landscape.
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Resources:
- City Holding Company (CHCO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of City Holding Company (CHCO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View City Holding Company (CHCO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.