City Holding Company (CHCO) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $29.1M, down from $32.7M in Q2 2023; six-month net income was $58.6M, up from $57.1M year-over-year.

• Diluted EPS for Q2 2024 was $1.96, compared to $2.16 in Q2 2023; six-month diluted EPS was $3.94, up from $3.79.

• Return on average assets (ROA) for the six months ended June 30, 2024 was 1.89%, unchanged from the prior year; Q2 ROA was 1.85%.

• Return on average equity (ROE) for the six months was 17.1%, down from 18.3% year-over-year; return on tangible equity was 22.2%.

• Loans grew 0.5% to $4.11B, and deposits increased by $11.5M from the prior quarter.

Financial highlights

• Net interest income for Q2 2024 was $54.6M, down from $55.5M in Q2 2023; six-month net interest income was $109.1M, flat year-over-year.

• Non-interest income for Q2 2024 was $18.9M, down 6.9% year-over-year, mainly due to lower bank owned life insurance proceeds.

• Non-interest expense for Q2 2024 was $36.8M, up 5.8% year-over-year; six-month non-interest expense was $72.7M, up from $67.7M.

• Provision for credit losses was $0.5M in Q2 2024, up from $0.4M in Q2 2023; six-month provision was $0.3M, down from $3.3M.

• Effective tax rate for Q2 2024 was 19.7%; six-month effective tax rate was 19.6%.

Outlook and guidance

• Management expects continued dividend payments approximating $42M annually, with sufficient liquidity and capital.

• No immediate plans to opt into the community bank leverage ratio framework, but may consider in the future.

• Interest rate risk remains a key focus, with net income sensitivity modeled for various rate scenarios; a 100 bps decrease in rates could reduce net income by 6.7%.

• Forward-looking statements are subject to risks including economic conditions, credit quality, interest rates, regulatory changes, and competition.