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CITY HOLDING CO (CHCO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered stable net interest income ($55.6M) and diluted EPS of $1.94, while net interest margin compressed 12 bps sequentially to 3.75% due to higher interest-bearing liabilities and lower loan/investment yields .
  • Non-interest income was $16.1M; results included $2.8M realized securities losses and $0.4M unrealized losses, dampening total revenue ($71.7M) vs Q3’s higher fee mix .
  • Credit quality mixed: nonperforming assets rose to 0.35% ($15.0M) largely due to a single movie theater loan charge-off; allowance coverage remained solid (ACL 0.51% of loans) with modest $0.3M provision in Q4 .
  • Capital and liquidity strong; tangible equity ratio up to 9.1% and CET1 16.5% (CHCO), with $1.5B available borrowing capacity; dividend at $0.79 and 179k shares repurchased in 2024 (821k remaining capacity) .

What Went Well and What Went Wrong

What Went Well

  • Net interest income held flat sequentially ($55.6M), supported by loan balance growth (+$82.4M) and higher deposits at depository institutions (+$113.7M), offsetting pressure from yields and funding costs .
  • Fee momentum ex-securities gains/losses: service charges +7.3% YoY in Q4 and trust/investment management fees +15.0% YoY in Q4, underpinning core non-interest income quality .
  • Management emphasized customer franchise strength and cost of funds advantage; “We continue to have an exceptional customer franchise… an enviable cost of funds, strong asset quality” — CEO Charles Hageboeck .

What Went Wrong

  • Net interest margin compressed to 3.75% (from 3.87% in Q3) due to higher balances/cost of interest-bearing liabilities and lower loan/investment yields; deposit cost mix shows time deposits at 367 bps cost in Q4 .
  • Securities repositioning drove realized losses ($2.8M) and unrealized losses ($0.4M) in Q4, muting total revenue and EPS leverage vs Q3 .
  • Credit headline: nonperforming assets increased to 0.35% ($15.0M) on a legacy movie theater loan; $2.0M charge-off in Q3 and move to nonaccrual elevated NPAs, though provision remained low ($0.3M) in Q4 .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Revenue (NII + Non-Interest Income) ($USD Millions)$68.90 $73.54 $75.95 $71.71
Net Interest Income ($USD Millions)$54.67 $54.63 $55.61 $55.58
Non-Interest Income ($USD Millions)$14.24 $18.91 $20.35 $16.13
Diluted EPS ($)$1.84 $1.96 $2.02 $1.94
Net Interest Margin (%)3.98% 3.87% 3.87% 3.75%
Efficiency Ratio (%)47.4% 49.3% 48.8% 48.4%
Return on Average Assets (%)1.78% 1.85% 1.87% 1.75%
Return on Avg Tangible Equity (%)23.5% 22.2% 20.9% 19.4%

Segment/Portfolio Mix (Period-End Loans, $USD Thousands):

CategoryQ4 2023Q2 2024Q3 2024Q4 2024
Commercial & Industrial426,950 408,312 424,414 419,838
Commercial Real Estate (Total)1,673,462 1,661,659 1,673,813 1,768,623
Residential Real Estate (Total)1,788,150 1,797,260 1,806,578 1,823,610
Home Equity167,201 179,607 190,149 199,192
Hotels357,142 370,954 383,232 389,660
Multi-Family189,165 190,390 193,875 240,943

KPIs and Balance Sheet:

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Book Value/Share ($)45.65 46.71 50.42 49.69
Tangible BV/Share ($)34.69 35.75 39.49 38.80
Period-End Deposits ($USD Millions)$4,934.3 $5,067.3 $5,102.7 $5,144.2
Gross Loans ($USD Millions)$4,125.9 $4,112.9 $4,157.8 $4,274.8
ACL / Loans (%)0.55% 0.55% 0.53% 0.51%
NPAs ($USD Thousands)8,559 10,209 16,198 14,965
NPAs / Loans + OREO (%)0.21% 0.25% 0.39% 0.35%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per SharePayable Jan 31, 2025$0.715 (Q2 2024) $0.79 (approved Nov 20, 2024) Raised
Share Repurchase Authorization2024 programAuthorized up to 1,000,000 shares (Jan 2024) 179,000 repurchased in 2024; ~821,000 remaining capacity Maintained capacity
Financial Guidance (Revenue/EPS/Margins)FY/Q4 2024Not providedNot providedN/A

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was available; themes inferred from company press releases.

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Net Interest Margin & Funding CostsNIM down to 3.87%; cost of interest-bearing liabilities up 16 bps; mix shift to time deposits NIM steady at 3.87%; cost up 7 bps; continued deposit mix changes NIM down to 3.75% on higher interest-bearing liabilities and lower asset yields Pressure building
Credit QualityNPAs 0.25%; modest provision $0.5M; rising past dues vs Q1 NPAs rose to 0.39% due to movie theater loan; provision $1.2M NPAs 0.35%; provision $0.3M; single-loan impact persists Stabilizing after spike
Fee Income MixBOLI down vs prior year; trust fees up +18% Fee growth: trust +21%, service +6%; BOLI benefits Service charges +7.3%, trust +15.0%; lower BOLI death benefits Core fees resilient
Securities RepositioningMinimal realized losses in Q2 Small realized loss; unrealized gains $2.8M realized losses; $0.4M unrealized losses Tactical losses in Q4
Capital & LiquidityTCE 8.5%; $1.6B borrowing capacity TCE 9.3%; $1.6B capacity TCE 9.1%; $1.5B capacity; unpledged AFS ~$755M Strong/steady

Management Commentary

  • “As we start 2025, City’s strengths from a year ago remain in place. We continue to have an exceptional customer franchise, an extraordinary team, an enviable cost of funds, strong asset quality...” — Charles Hageboeck, President & CEO .
  • Net interest income drivers: “Due to an increase in balances of interest bearing liabilities…a decrease in the yield on loans…lower yields on investment securities…offset by higher deposits in depository institutions and loan balances” .
  • Credit detail: “Recognized a $2.0 million charge-off for [the movie theater] and moved the remaining balance to nonaccrual…Total past due loans decreased to $8.8 million (0.21%) at Dec 31, 2024” .

Q&A Highlights

No Q4 2024 earnings call transcript was available to extract Q&A highlights or clarifications. Company disclosures are based on press releases and the 8‑K exhibit .

Estimates Context

  • Wall Street consensus (S&P Global) estimates for Q4 2024 could not be retrieved at this time due to data access limits. As a result, beat/miss vs consensus cannot be determined and should be checked once access is restored [SPGI retrieval error]. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential margin compression (3.75% NIM) is the primary watch item; funding cost mix (time deposits at 3.67%) and asset yield drift were the drivers despite stable NII .
  • Core fee income remains a support: service charges and trust fees grew strongly YoY in Q4, mitigating volatility from securities repositioning .
  • Credit headline appears contained to a single legacy loan; provision in Q4 stayed low ($0.3M) with ACL at 0.51% of loans and coverage of NPLs at 154% .
  • Capital strength and liquidity optionality are notable: CET1 16.5% (CHCO), TCE 9.1%, $1.5B borrowing capacity, and ~$755M unpledged AFS securities underpin downside protection and capital return capacity .
  • Dividend increased to $0.79 with ongoing buyback capacity (~821k shares); cash at parent of $117M and annual spend ~$45M supports continued shareholder returns .
  • Loan growth concentrated in CRE (+5.7% YoY) and home equity (+19.1% YoY), with residential real estate steady; monitor multi-family and office exposures alongside credit trends .
  • Near-term trading: sensitivities to rate path and deposit pricing; medium-term thesis: durable franchise and fee growth, with capital flexibility and disciplined credit should support multiple stability even amid NIM pressures .