
~~Part I -~~	~~FINANCIAL INFORMATION~~

Part I - FINANCIAL INFORMATION


~~Item 1 -~~	~~Financial Statements~~

Item 1 - Financial Statements

Table of Contents

Consolidated Balance Sheets

City Holding Company and Subsidiaries

(in ~~thousands)~~thousands, except share amounts)


	(Unaudited)
	March 31, 2024		December 31, 2023
Assets
Cash and due from banks	$	121,853	$	123,033
Interest-bearing deposits in depository institutions	196,829		33,243
Cash and Cash Equivalents	318,682		156,276

Investment securities available for sale, at fair value (amortized cost $1,503,572 and $1,479,545, net of allowance for credit losses of $0 at March 31, 2024 and December 31, 2023, respectively)	1,347,657		1,338,137
Other securities	30,681		30,966
Total Investment Securities	1,378,338		1,369,103

Gross loans	4,091,788		4,125,923
Allowance for credit losses	(22,310)		(22,745)
Net Loans	4,069,478		4,103,178

Bank owned life insurance	118,875		118,122
Premises and equipment, net	71,623		72,146
Accrued interest receivable	21,759		20,290
Deferred tax assets, net	43,969		42,216
Goodwill and other intangible assets, net	161,832		162,568
Other assets	129,627		124,153
Total Assets	$	6,314,183	$	6,168,052

Liabilities
Deposits:
Noninterest-bearing	$	1,359,072	$	1,342,804
Interest-bearing:
Demand deposits	1,330,268		1,291,011
Savings deposits	1,266,211		1,259,457
Time deposits	1,100,250		1,040,990
Total Deposits	5,055,801		4,934,262

Short-term borrowings:
FHLB short-term advances	—		25,000
Securities sold under agreements to repurchase	304,941		309,856
FHLB long-term advances	150,000		100,000
Other liabilities	121,210		121,868
Total Liabilities	5,631,952		5,490,986

Commitments and contingencies - see Note I

Shareholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued	—		—
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 19,047,548 shares issued at March 31, 2024 and December 31, 2023, less 4,222,772 and 4,215,731 shares in treasury, respectively	47,619		47,619
Capital surplus	175,747		177,424
Retained earnings	799,024		780,299
Treasury Stock	(218,555)		(217,737)
Accumulated other comprehensive (loss) income:
Unrealized (loss) on securities available-for-sale	(119,023)		(107,958)
Underfunded pension liability	(2,581)		(2,581)
Total Accumulated Other Comprehensive (Loss)	(121,604)		(110,539)
Total Shareholders’ Equity	682,231		677,066
Total Liabilities and Shareholders’ Equity	$	6,314,183	$	6,168,052

(Unaudited)
September 30, 2017 December 31, 2016
Assets
Cash and due from banks $ 54,281
$ 62,263
Interest-bearing deposits in depository institutions 28,884
25,876
Cash and Cash Equivalents 83,165
88,139

Investment securities available for sale, at fair value 525,633
450,083
Investment securities held-to-maturity, at amortized cost (approximate fair value at September 30, 2017 and December 31, 2016 - $68,478 and $76,445, respectively) 66,989
75,169
Other securities 15,988
14,352
Total Investment Securities 608,610
539,604

Gross loans 3,105,912
3,046,226
Allowance for loan losses (19,554 ) (19,730 )
Net Loans 3,086,358
3,026,496

Bank owned life insurance 102,706
100,732
Premises and equipment, net 72,334
75,165
Accrued interest receivable 9,236
8,408
Net deferred tax asset 22,355
28,043
Goodwill and other intangible assets, net 78,730
79,135
Other assets 36,060
38,681
Total Assets $ 4,099,554
$ 3,984,403

Liabilities

Deposits:

Noninterest-bearing $ 669,876
$ 672,286
Interest-bearing:

   Demand deposits 711,121
695,891
   Savings deposits 799,592
822,057
   Time deposits 1,075,945
1,041,419
Total Deposits 3,256,534
3,231,653

Short term borrowings:
   Federal funds purchased 79,800
64,100
   Customer repurchase agreements 201,664
184,205
Long-term debt 16,495
16,495
Other liabilities 44,746
45,512
Total Liabilities 3,599,239
3,541,965

Shareholders’ Equity

Preferred stock, par value $25 per share: 500,000 shares authorized; none issued —
—
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 19,047,548 shares and 18,606,944 shares issued at September 30, 2017 and December 31, 2017, less 3,429,519 and 3,478,511 shares in treasury, respectively 47,619
46,518
Capital surplus 140,381
112,873
Retained earnings 441,001
417,017
Cost of common stock in treasury (124,909 ) (126,958 )
Accumulated other comprehensive income (loss):

Unrealized gain (loss) on securities available-for-sale 883
(2,352 )
Underfunded pension liability (4,660 ) (4,660 )
Total Accumulated Other Comprehensive Income (Loss) (3,777 ) (7,012 )
Total Shareholders’ Equity 500,315
442,438
Total Liabilities and Shareholders’ Equity $ 4,099,554
$ 3,984,403

~~See~~To be read with the attached notes to consolidated financial statements.

Table of Contents

Consolidated Statements of Income(Unaudited)

City Holding Company and Subsidiaries

(in thousands, except earnings per share data)


Interest Income	Three months ended March 31,
	2024		2023

Interest and fees on loans	$	59,128	$	47,004
Interest and dividends on investment securities:
Taxable	12,040		11,773
Tax-exempt	830		1,162
Interest on deposits in depository institutions	1,570		1,591
Total Interest Income	73,568		61,530

Interest Expense
Interest on deposits	14,097		5,690
Interest on short-term borrowings	3,621		2,381
Interest on FHLB long-term advances	1,423		—
Total Interest Expense	19,141		8,071
Net Interest Income	54,427		53,459
(Recovery of ) provision for credit losses	(180)		2,918
Net Interest Income After (Recovery of) Provision for Credit Losses	54,607		50,541

Non-Interest Income
(Losses) gains on sale of investment securities, net	(1)		773
Unrealized (losses) gains recognized on equity securities still held, net	(152)		361
Service charges	7,035		6,563
Bankcard revenue	6,800		6,603
Trust and investment management fee income	2,623		2,252
Bank owned life insurance	927		804
Other income	716		1,326
Total Non-Interest Income	17,948		18,682

Non-Interest Expense
Salaries and employee benefits	18,878		17,673
Occupancy related expense	2,840		2,640
Equipment and software related expense	2,929		3,092
FDIC insurance expense	711		445
Advertising	867		760
Bankcard expenses	2,039		1,509
Postage, delivery, and statement mailings	666		647
Office supplies	453		420
Legal and professional fees	482		470
Telecommunications	600		606
Repossessed asset losses, net of expenses	229		16
Merger related expenses	—		5,645
Other expenses	5,206		4,700
Total Non-Interest Expense	35,900		38,623
Income Before Income Taxes	36,655		30,600
Income tax expense	7,132		6,259

Table of Contents

Interest Income Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016

Interest and fees on loans $ 32,004
$ 29,444
$ 93,223
$ 88,011
Interest and dividends on investment securities:

Taxable 3,666
3,183
10,591
9,115
Tax-exempt 665
419
2,014
1,141
Interest on deposits in depository institutions 31
—
51
—
Total Interest Income 36,366
33,046
105,879
98,267

Interest Expense

Interest on deposits 3,796
3,006
10,885
8,915
Interest on short-term borrowings 349
90
693
283
Interest on long-term debt 195
172
565
503
Total Interest Expense 4,340
3,268
12,143
9,701
Net Interest Income 32,026
29,778
93,736
88,566
Provision for loan losses 1,393
1,432
2,584
3,093
Net Interest Income After Provision for Loan Losses 30,633
28,346
91,152
85,473

Non-Interest Income

Net gains on sale of investment securities —
2,668
4,276
3,513
Service charges 7,415
6,842
21,219
19,709
Bankcard revenue 4,291
4,216
12,804
12,373
Trust and investment management fee income 1,471
1,329
4,469
3,976
Bank owned life insurance 774
846
2,972
2,374
Other income 660
846
2,303
2,510
Total Non-Interest Income 14,611
16,747
48,043
44,455

Non-Interest Expense

Salaries and employee benefits 12,876
12,993
38,899
38,456
Occupancy and equipment 2,916
2,759
8,710
8,303
Depreciation 1,450
1,585
4,486
4,719
FDIC insurance expense 328
508
1,031
1,485
Advertising 689
667
2,203
2,161
Bankcard expenses 1,051
1,188
2,964
3,143
Postage, delivery, and statement mailings 517
517
1,576
1,588
Office supplies 377
325
1,082
1,044
Legal and professional fees 504
869
1,393
1,671
Telecommunications 494
459
1,470
1,318
Repossessed asset losses, net of expenses 107
305
589
646
Other expenses 3,000
3,109
8,683
9,173
Total Non-Interest Expense 24,309
25,284
73,086
73,707
Income Before Income Taxes 20,935
19,809
66,109
56,221
Income tax expense 7,003
6,577
21,463
18,745
Net Income Available to Common Shareholders $ 13,932
$ 13,232
$ 44,646
$ 37,476


Net Income Available to Common Shareholders	$	29,523	$	24,341


Basic earnings per common share	$	1.98	$	1.63
Diluted earnings per common share	$	1.97	$	1.63

Total Comprehensive Income $ 14,240
$ 12,449
$ 47,881
$ 42,562

Average shares outstanding, basic 15,485
14,899
15,391
14,902
Effect of dilutive securities 20
11
24
11
Average shares outstanding, diluted 15,505
14,910
15,415
14,913

Basic earnings per common share $ 0.89
$ 0.88
$ 2.87
$ 2.48
Diluted earnings per common share $ 0.89
$ 0.88
$ 2.86
$ 2.48
Dividends declared per common share $ 0.44
$ 0.43
$ 1.32
$ 1.29

~~See~~To be read with the attached notes to consolidated financial statements.

Table of Contents

Consolidated Statements of Comprehensive Income(Unaudited)

City Holding Company and Subsidiaries

(in thousands)


	Three Months Ended
	March 31,
	2024		2023

Net income available to common shareholders	$	29,523	$	24,341

Available-for-Sale Securities
Unrealized (losses) gains on available-for-sale securities arising during the period	(14,507)		20,634
Reclassification adjustment for net losses (gains)	1		(773)
Other comprehensive (loss) income before income taxes	(14,506)		19,861
Tax effect	3,441		(4,762)
Other comprehensive (loss) income, net of tax	(11,065)		15,099

Comprehensive Income, Net of Tax	$	18,458	$	39,440

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016

Net income $ 13,932
$ 13,232
$ 44,646
$ 37,476

Unrealized gains on available-for-sale securities arising during the period 488
1,427
9,404
11,575
Reclassification adjustment for gains —
(2,668 ) (4,276 ) (3,513 )
   Other comprehensive income before income taxes 488
(1,241 ) 5,128
8,062
Tax effect (180 ) 458
(1,893 ) (2,976 )
   Other comprehensive income (loss), net of tax 308
(783 ) 3,235
5,086

    Comprehensive Income, Net of Tax $ 14,240
$ 12,449
$ 47,881
$ 42,562

~~See~~To be read with the attached notes to consolidated financial statements.

Table of Contents

Consolidated Statements of Changes in Shareholders’ Equity(Unaudited)

City Holding Company and Subsidiaries

~~Nine~~Three Months Ended~~September 30, 2017~~ March 31, 2024 and ~~2016~~2023

(in ~~thousands)~~thousands, except share amounts)

Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity
Balance at December 31, 2015 $ 46,249
$ 106,269
$ 390,690
$ (120,104 ) $ (3,832 ) $ 419,272
Net income —
—
37,476
—
—
37,476
Other comprehensive income —
—
—
—
5,086
5,086
Cash dividends declared ($1.29 per share) —
—
(19,343 ) —
—
(19,343 )
Stock-based compensation expense —
1,568
—
—
—
1,568
Restricted awards granted —
(1,627 ) —
1,665
—
38
Exercise of 21,000 stock options —
(214 ) —
919
—
705
Purchase of 231,132 treasury shares —
—
—
(10,018 ) —
(10,018 )
Balance at September 30, 2016 $ 46,249
$ 105,996
$ 408,823
$ (127,538 ) $ 1,254
$ 434,784


	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive (Loss)		Total Shareholders’ Equity
Balance at December 31, 2022	$	47,619	$	170,980	$	706,696	$	(215,955)	$	(131,488)	$	577,852
Adoption of ASU No. 2022-02	—		—		175		—		—		$	175
Balances at January 1, 2023	47,619		170,980		706,871		(215,955)		(131,488)		578,027
Net income	—		—		24,341		—		—		24,341
Other comprehensive income, net of tax	—		—		—		—		15,099		15,099
Cash dividends declared ($0.65 per share)	—		—		(9,485)		—		—		(9,485)
Stock-based compensation expense	—		1,093		—		—		—		1,093
Restricted awards granted	—		(2,118)		—		2,118		—		—
Purchase of 218,249 treasury shares	—		—		—		(20,103)		—		(20,103)
Acquisition of Citizens Commerce Bancshares, Inc.	$	—	$	7,574	$	—	$	54,504	$	—	62,078
Balance at March 31, 2023	$	47,619	$	177,529	$	721,727	$	(179,436)	$	(116,389)	$	651,050


	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive (Loss)		Total Shareholders’ Equity
Balance at December 31, 2023	$	47,619	$	177,424	$	780,299	$	(217,737)	$	(110,539)	$	677,066
Net income	—		—		29,523		—		—		29,523
Other comprehensive loss, net of tax	—		—		—		—		(11,065)		(11,065)
Cash dividends declared ($0.72 per share)	—		—		(10,798)		—		—		(10,798)
Stock-based compensation expense	—		(1,609)		—		2,709		—		1,100
Restricted awards granted	—		(9)		—		9		—		—
Exercise of 1,309 stock options	—		(59)		—		117		—		58
Purchase of 36,438 treasury shares	—		—		—		(3,653)		—		(3,653)
Balance at March 31, 2024	$	47,619	$	175,747	$	799,024	$	(218,555)	$	(121,604)	$	682,231

Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity
Balance at December 31, 2016 $ 46,518
$ 112,873
$ 417,017
$ (126,958 ) $ (7,012 ) $ 442,438
Net income —
—
44,646
—
—
44,646
Other comprehensive income —
—
—
—
3,235
3,235
Cash dividends declared ($1.32 per share) —
—
(20,662 ) —
—
(20,662 )
Stock-based compensation expense —
1,653
—
—
—
1,653
Restricted awards granted —
(1,351 ) —
1,351
—
—
Issuance of 440,604 shares of common stock 1,101
27,307
—
—
—
28,408
Exercise of 16,639 stock options —
(101 ) —
698
—
597
Balance at September 30, 2017 $ 47,619
$ 140,381
$ 441,001
$ (124,909 ) $ (3,777 ) $ 500,315

~~See~~To be read with the attached notes to consolidated financial statements.

Table of Contents

Consolidated Statements of Cash Flows(Unaudited)

City Holding Company and Subsidiaries

(in thousands)


	Three months ended March 31,
	2024		2023
Net income	$	29,523	$	24,341
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization, net	1,916		2,302
(Recovery of) provision for credit losses	(180)		2,918
Depreciation of premises and equipment	1,072		1,210
Deferred income tax expense (benefit)	984		(654)
Net periodic employee benefit cost	15		13
Unrealized and realized investment securities losses (gains), net	153		(1,134)
Stock-compensation expense	1,100		1,093
Excess tax expense from stock-compensation	42		102
Increase in value of bank-owned life insurance	(976)		(804)
Loans held for sale
Loans originated for sale	(3,018)		(2,637)
Proceeds from the sale of loans originated for sale	3,035		2,689
Gain on sale of loans	(17)		(52)
Change in accrued interest receivable	(1,469)		759
Change in other assets	1,364		3,156
Change in other liabilities	(1,376)		6,599
Net Cash Provided by Operating Activities	32,168		39,901

Net decrease in loans	34,018		6,108
Securities available-for-sale
Purchases	(49,304)		—
Proceeds from sales of securities available-for-sale	—		84,940
Proceeds from maturities and calls	24,201		26,839
Other investments
Purchases	(9)		(189)
Proceeds from sales	142		249

Purchases of premises and equipment	(596)		(616)
Proceeds from the disposals of premises and equipment	47		—
Proceeds from bank-owned life insurance policies	223		206
Payments for low income housing tax credits	(5,771)		(1,704)
Acquisition of Citizens Commerce Bancshares, Inc.	—		13,518
Net Cash Provided by Investing Activities	2,951		129,351

Net increase in non-interest-bearing deposits	16,268		9,288
Net increase (decrease) in interest-bearing deposits	105,334		(41,622)
Net (decrease) in short-term borrowings	(29,915)		(4,208)
Proceeds from long-term debt	50,000		—
Purchases of treasury stock	(3,653)		(20,103)
Proceeds from exercise of stock options	58		—
Lease payments	(202)		(203)
Dividends paid	(10,603)		(9,594)
Net Cash Provided by (Used in) Financing Activities	127,287		(66,442)
Decrease in Cash and Cash Equivalents	162,406		102,810
Cash and cash equivalents at beginning of period	156,276		200,000
Cash and Cash Equivalents at End of Period	$	318,682	$	302,810

Table of Contents

Nine months ended September 30,
2017 2016
Net income $ 44,646
$ 37,476
Adjustments to reconcile net income to net cash provided by operating activities:

Accretion and amortization 836
436
Provision for loan losses 2,584
3,093
Depreciation of premises and equipment 4,486
4,719
Deferred income tax expense 3,810
3,998
Net periodic employee benefit cost 337
386
Realized investment securities gains (4,276 ) (3,978 )
Investment securities impairment losses —
465
Stock-compensation expense 1,653
1,606
Excess tax benefit from stock-compensation expense (550 ) —
Proceeds from life insurance 1,717
—
Increase in value of bank-owned life insurance (1,974 ) (2,374 )
Loans originated for sale (13,858 ) (11,537 )
Proceeds from the sale of loans originated for sale 16,315
11,637
Gain on sale of loans (437 ) (268 )
Change in accrued interest receivable (828 ) (554 )
Asset write down —
444
Change in other assets 1,562
(14,068 )
Change in other liabilities (1,505 ) 16,338
Net Cash Provided by Operating Activities 54,518
47,819

Proceeds from sales of securities available-for-sale 5,576
30,850
Proceeds from maturities and calls of securities available-for-sale 61,367
55,565
Proceeds from maturities and calls of securities held-to-maturity 8,072
9,194
Purchases of securities available-for-sale (136,418 ) (141,271 )
Net increase in loans (63,139 ) (96,007 )
Purchases of premises and equipment (4,262 ) (3,553 )
Disposals of premises and equipment 2,500
408
Net Cash (Used in) Investing Activities (126,304 ) (144,814 )

Net (decrease) increase in non-interest-bearing deposits (2,410 ) 48,792
Net increase in interest-bearing deposits 27,307
46,963
Net increase in short-term borrowings 33,159
24,515
Proceeds from issuance of common stock 28,408
—
Purchases of treasury stock —
(10,018 )
Proceeds from exercise of stock options 597
705
Dividends paid (20,249 ) (19,266 )
Net Cash Provided by Financing Activities 66,812
91,691
(Decrease) in Cash and Cash Equivalents (4,974 ) (5,304 )
Cash and cash equivalents at beginning of period 88,139
70,113
Cash and Cash Equivalents at End of Period $ 83,165
$ 64,809


Supplemental Cash Flow Information:
Cash paid for interest	$	17,929	7,694
Cash paid for income taxes	2,510		3,500
Acquisition
Identifiable assets acquired (net of purchase consideration)	$	—	$	320,453
Liabilities assumed	—		(307,104)
Goodwill	—		40,451
Core deposit intangible	—		8,278

~~See~~To be read with the attached notes to consolidated financial statements.

Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

~~September 30, 2017~~March 31, 2024

Note A –- Background and Basis of Presentation

City Holding Company ("City Holding"), a West Virginia corporation headquartered in Charleston, West Virginia, is a registered financial holding company under the Bank Holding Company Act and conducts its principal activities through its wholly-owned subsidiary, City National Bank of West Virginia ("City National"). City National is a retail and consumer-oriented community bank with 8697 banking offices in West Virginia ~~(57)~~(58), Kentucky (22), Virginia ~~(14), Kentucky (12)~~(13) and southeastern Ohio ~~(3)~~(4). City National provides credit, deposit, and trust and investment management services to its ~~customers.~~customers in a broad geographical area that includes many rural and small community markets in addition to larger cities including Charleston (WV), Huntington (WV), Martinsburg (WV), Ashland (KY), Lexington (KY), Winchester (VA) and Staunton (VA). In addition to its branch network, City National's delivery channels include ~~ATMs,~~automated-teller-machines ("ATMs"), interactive-teller machines ("ITMs"), mobile banking, debit cards, interactive voice response systems, and Internet technology. The Company’s business activities are currently limited to one reportable business segment, which is community banking.

On March 10, 2023, the Company acquired 100% of the outstanding common shares of Citizens Commerce Bancshares, Inc. ("Citizens") and its principal banking subsidiary, Citizens Commerce Bank. See Note C for additional information on the acquisition.

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding ~~Company~~ and its wholly-owned subsidiaries (collectively, the "Company"). All material intercompany transactions have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition for each of the periods presented. Such adjustments are of a normal recurring nature. The results of operations for the ~~nine~~three months ended~~September 30, 2017~~ March 31, 2024 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, ~~2017~~.2024. The Company’s accounting and reporting policies conform with generally accepted accounting principles for interim financial information, ~~and~~ with the instructions to Form 10-Q and Article 10 of Regulation ~~S-X.~~S-X, and with Industry Guide 3, Statistical Disclosure by Bank Holding Companies. Such policies require management to make estimates and develop assumptions that affect the amounts reported in the consolidated financial statements and related footnotes. Actual results could differ from management’s estimates.

The consolidated balance sheet as of December 31, ~~2016~~2023 has been derived from audited financial statements included in the Company’s ~~2016~~2023 Annual Report to Shareholders. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. These financial statements should be read in conjunction with the financial statements and notes thereto included in the ~~2016~~2023 Annual Report of the Company.

~~Certain amounts in the financial statements have been reclassified. Such reclassifications had no impact on shareholders’ equity or net income for any period.~~

Note B - Recent Accounting Pronouncements

Recently Adopted

In ~~May 2014,~~June 2022, the FASB issued ASU 2022-03, "Fair Value Measurement Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions." The FASB issued this ASU to (1) clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) amend a related illustrative example, and (3) introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments in this ASU also require the following disclosures for equity securities subject to contractual sale restrictions: (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; (2) the nature and remaining duration of the restriction(s); and (3) the circumstances that could cause a lapse in the restriction(s). This ASU became effective for the Company on March 31, 2024. The adoption of ASU No. 2022-03 did not have a material impact to the Company's financial statements.

In March 2023, the FASB issued ASU No. ~~2014-09,~~ 2023-02, "~~Revenue from Contracts with Customers~~Investments - Equity Method and Joint Ventures (Topic ~~606)~~.323): Accounting for Investments in Tax Credit Structures using the Proportional Amortization Method." ~~This standard clarified the principles~~The amendments in this update permit reporting entities to elect to account for ~~recognizing revenue and developed a common revenue standard. The core principle~~their tax equity investments, regardless of the ~~standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to~~tax credit program from which the ~~entity expects~~income tax credits are received, using the proportional amortization method if certain conditions are met. This ASU

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became effective for the Company on January 1, 2024. The Company did not elect to ~~be entitled in exchange~~account for ~~those goods~~their tax equity investments using the proportional amortization method and ~~services. To achieve~~as such, ASU No. 2023-02 did not have an impact on the Company's financial statements.

Pending Adoption

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". The amendment requires companies to disclose significant segment expenses that core principle, an entity should apply the following steps: (i) identify the contracts with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction priceare regularly provided to the ~~performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation.~~chief operating decision maker. This ASU will become effective for the Company on January 1, 2018. The Company's revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. ASU 2014-09 may require the Company to change how it recognizes certain components of non-interest income, but the Company does not believe it will have a material impact on the Company's financial statements or disclosures.December 31, 2024. The Company ~~anticipates adopting this standard with a cumulative effect adjustment to opening retained earnings (the modified retrospective approach), if~~has one reportable segment and as such, ~~adjustment is deemed to be material.~~

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~"Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities."~~ This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. This ASU will become effective for the Company for interim and annual periods on January 1, 2018. The adoption of ASU No. ~~2016-01~~2023-07 is not expected to have a material impact on the Company's financial statements.

In ~~February 2016,~~December 2023, the FASB issued ASU No. ~~2016-02,~~ ~~“Leases~~2023-09, "Income Taxes (Topic ~~842).”~~ ~~This standard~~requires organizations to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing requirements for leases that were historically classified as operating leases under previous generally accepted accounting principals. This ASU will become

effective for the Company for interim and annual periods on January 1, 2019. The Company's preliminary evaluation indicates that the adoption of ASU 2016-02 will have an immaterial impact on the Company's consolidated balance sheet. However, the Company continues to evaluate the extent of the potential impact the new guidance will have on the Company's consolidated financial statements.

~~In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718)~~740): Improvements to ~~Employee Share-Based Accounting~~Income Tax Disclosures".~~” This standard makes several modifications~~ The amendment requires companies to disclose, on an annual basis, specific categories in the ~~accounting~~effective tax rate reconciliation and provide additional information for ~~share-based payment transactions, including the~~reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income ~~tax consequences when awards are exercised or vest, classification of awards as either equity~~

~~or liabilities, and classification on the statement of cash flows. This~~taxes paid. ASU ~~became~~2023-09 will be effective for ~~the Company for interim and~~ annual periods beginning on January 1, ~~2017. This ASU requires~~2025 and will be applied on a prospective basis with the ~~Company~~option to ~~record all excess tax benefits and tax deficiencies in~~apply the ~~income statement and treat excess tax benefits as discrete items in the calculation of income tax expense in the period in which they occur. Under this~~ standard ~~the Company also elected to account for forfeitures of share-based payments as they occur.~~retrospectively. The adoption of ASU No. ~~2016-09 did not have a material impact on the Company’s financial statements.~~

~~In April 2016, the FASB issued ASU No. 2016-10,~~ ~~“Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.”~~ ~~The standard was issued to clarify~~ ~~Revenue from Contracts with Customers (Topic 606)~~ ~~related to: (i) identifying performance obligations; and (ii) the licensing implementation guidance. The effective date is the same as the effective date of~~ ~~ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," as discussed above. ASU 2016-10 is not expected to have a significant impact on the Company's financial statements.~~

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~"Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments."~~ This standard replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new current expected credit losses model (CECL) will apply to the allowance for loan losses, available-for-sale and held to maturity debt securities, purchased financial assets with credit deterioration and certain off-balance sheet credit exposures. This ASU will become effective for the Company for interim and annual periods on January 1, 2020. Management is currently evaluating the potential impact of ASU No. 2016-13 on the Company's financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~"Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments."~~ This amendment addresses existing diversity in practice regarding how certain receipts and payments are presented in the statement of cash flows. Issues addressed in this amendment include debt prepayment and extinguishment costs, proceeds from the settlement of insurance claims, proceeds from the settlement of bank-owned life insurance policies, and separately identifiable cash flows and application of the predominance principle and their classifications in the statement of cash flows. This ASU will become effective for the Company for interim and annual periods on January 1, 2018. The adoption of ASU No. 2016-152023-09 is not expected to have a material impact on the Company's financial ~~statements.~~

~~In October 2016, the FASB issued ASU No. 2016-16,~~ ~~"Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory."~~ ~~This amendment improves the accounting for the~~statements, but will impact our income tax consequences of intra-entity transfers of assets other than inventory. Issues addressed in this amendment include the recognition of income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU will become effective fordisclosures.

Note C - Acquisition and Purchase Price Allocation

On March 10, 2023, the Company ~~on January 1, 2018.~~acquired 100% of the outstanding common shares of Citizens Commerce Bancshares, Inc. ("Citizens") and its principal banking subsidiary, Citizens Commerce Bank, in order to strengthen the Company's market presence in the Lexington, Kentucky area. The ~~adoption~~acquisition of ~~ASU No. 2016-16 is~~Citizens was structured as a stock transaction in which the Company issued approximately 0.7 million shares, valued at approximately $61.6 million.

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The following table summarizes the consideration paid for Citizens and the amounts of the assets acquired and liabilities assumed as of the date of acquisition (in thousands):


Consideration:
Common stock	$	61,570
Cash	13
	61,583

Identifiable assets:
Cash and cash equivalents	14,041
Investment securities	41,008
FHLB stock	620
Loans	251,406
Fixed assets	3,237
Bank owned life insurance	2,966
Deferred tax assets, net	1,623
Other assets	5,198
Total identifiable assets	320,099

Identifiable liabilities:
Deposits	299,251
Short-term borrowings	6,500
Other liabilities	1,864
Total identifiable liabilities	307,615

Net identifiable assets (liabilities)	12,484
Goodwill	40,821
Core deposit intangible	8,278
	$	61,583

Investment Securities

Citizen's entire investment portfolio of $41 million was sold shortly after the acquisition date and resulted in a $0.7 million realized gain during the quarter ended March 31, 2023 .

Acquired Loans

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not ~~expected~~considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that there was not deterioration of credit at the date of acquisition. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit deteriorated loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include non-impaired loans with a ~~material impact~~fair value of $246.4 million on the ~~Company's financial statements.~~ date of acquisition.

In connection with the completion of the acquisition of Citizens during the year ended December ~~2016, the FASB issued ASU No. 2016-20,~~ ~~"Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers."~~ ~~This amendment provides clarification for multiple aspects of Update 2014-09,~~ ~~“Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Accounting”,~~ ~~including the scope of guarantee fees, impairment testing of contract costs and the accrual of advertising costs. This ASU will become effective for~~31, 2023, the Company ~~on January 1, 2018.~~ recorded $2.0 million of credit loss expense associated with loans acquired from Citizens in its total provision for credit losses.

The ~~adoption~~fair value of ~~ASU No. 2016-20 is not expected to have a material impact~~purchased financial assets with credit deterioration ("PCD") was $4.9 million on the ~~Company's~~date of acquisition. The gross contractual amounts receivable relating to the purchased financial ~~statements.~~asset with credit deterioration was

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~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~"Business Combinations (Topic 805): Clarifying the Definition of a Business."~~ This amendment clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU will become effective for the$8.5 million. The Company ~~on January 1, 2018. The adoption of ASU No. 2017-01 is not expected to have a material impact~~estimates, on the ~~Company's financial statements.~~

~~In January 2017,~~date of acquisition, that $3.6 million of the ~~FASB issued ASU No. 2017-04,~~ ~~"Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment."~~ ~~This amendment simplifies the measurement of goodwill by eliminating Step 2 from the goodwill~~

~~impairment test. This ASU will become effective for the Company on January 1, 2020. The adoption of ASU No. 2017-04 is not expected to have a material impact on the Company's financial statements.~~

~~In March 2017, the FASB issued ASU No. 2017-07,~~ ~~"Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost."~~ This amendment requires that an employer disaggregate the service cost component from the other components of net benefit cost and also provides explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement. This ASU will become effective for the Company on January 1, 2018. The adoption of ASU No. 2017-07 is not expected to have a material impact on the Company's financial statements.

~~In March 2017, the FASB issued ASU No. 2017-08,~~ ~~"Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities."~~ ~~The amendments in this update shorten the amortization period for certain callable debt securities held at a premium and require the premium to be amortized~~contractual cash flows specific to the ~~earliest call date. This ASU~~purchased financial assets with credit deterioration will ~~become effective for the Company on January 1, 2019. The adoption of ASU No. 2017-08 is~~ not ~~expected to have a material impact on the Company's financial statements.~~be collected.

~~In May 2017, the FASB issued ASU No. 2017-09,~~ ~~"Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting."~~ This amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASU No. 2016-09. This ASU will become effective for the Company on January 1, 2018. The adoption of ASU No. 2017-09 is not expected to have a material impact on the Company’s financial statements.Acquired Deposits

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~"Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities."~~ This amendment expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This ASU will become effective for the Company on January 1, 2019. The adoption of ASU No. 2017-12 is not expected to have a material impact on the Company's financial statements.

~~Note C –Investments~~

The ~~amortized cost and estimated~~ fair values of non-time deposits approximated their carrying value at the acquisition date. For time deposits, the fair values were estimated based on discounted cash flows, using interest rates that were being offered at the time of acquisition compared to the contractual interest rates. Based on this analysis, management recorded a premium on time deposits acquired of $0.6 million which is being amortized over 5 years.

Core Deposit Intangible

The Company believes that the customer relationships with the deposits acquired have an intangible value. In connection with the acquisition, the Company recorded a core deposit intangible asset of $8.3 million. The core deposit intangible asset represents the value that the acquiree had with their deposit customers. The fair value was estimated based on a discounted cash flow methodology that considered the type of deposit, deposit retention and the cost of the deposit base. The core deposit intangible is being amortized over 10 years.

Goodwill

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 result in adjustments to the goodwill recorded. As of March 31, 2024, twelve months have occurred since the date of acquisition on March 10, 2023, and the measurement period is now complete. The following table summarizes adjustments to goodwill subsequent to December 31, 2023 (in thousands):


	Goodwill
Balance at December 31, 2023	$	149,902
Adjustment to goodwill acquired in conjunction with the acquisition of Citizens	(140)
Balance at March 31, 2024	$	149,762

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Note D - Investments

The aggregate carrying and approximate fair values of investment securities follow (in thousands). Fair values are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable financial instruments.


	March 31, 2024								December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
Obligations of states and
political subdivisions	$	227,434	$	217	$	17,127	$	210,524	$	228,456	$	371	$	16,089	$	212,738
Mortgage-backed securities:
U.S. government agencies	1,236,587		1,316		138,106		1,099,797		1,211,484		2,362		125,753		1,088,093
Private label	6,981		—		284		6,697		6,997		—		293		6,704
Trust preferred securities	4,600		—		151		4,449		4,599		—		321		4,278
Corporate securities	27,970		52		1,832		26,190		28,009		137		1,822		26,324
Total Securities Available-for-Sale	$	1,503,572	$	1,585	$	157,500	$	1,347,657	$	1,479,545	$	2,870	$	144,278	$	1,338,137

The Company's other investment securities include marketable equity securities and non-marketable equity securities held for investment. At March 31, 2024 and December 31, 2023, the Company held $7.3 million and $7.5 million, respectively, in marketable equity securities. Changes in the fair value of the marketable equity securities are ~~shown~~recorded in "unrealized (losses) gains recognized on equity securities still held" in the ~~following table (in thousands):~~

September 30, 2017 December 31, 2016
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Securities available-for-sale:
U.S. Treasuries and U.S.
government agencies $ 2
$ —
$ —
$ 2
$ 3
$ —
$ —
$ 3
Obligations of states and

political subdivisions 95,907
1,835
574
97,168
83,248
594
1,474
82,368
Mortgage-backed securities:

U.S. government agencies 397,192
1,931
5,136
393,987
335,867
1,507
6,560
330,814
Private label 687
3
—
690
941
1
—
942
Trust preferred securities 4,761
183
—
4,944
6,052
1,164
554
6,662
Corporate securities 21,918
562
154
22,326
23,925
127
478
23,574
Total Debt Securities 520,467
4,514
5,864
519,117
450,036
3,393
9,066
444,363
Marketable equity securities 2,136
2,881
—
5,017
2,136
2,095
—
4,231
Investment funds 1,525
—
26
1,499
1,525
—
36
1,489
Total Securities

Available-for-Sale $ 524,128
$ 7,395
$ 5,890
$ 525,633
$ 453,697
$ 5,488
$ 9,102
$ 450,083

September 30, 2017 December 31, 2016
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Securities held-to-maturity:
Mortgage-backed securities:
U.S. government agencies $ 62,989
$ 1,489
$ —
$ 64,478
$ 71,169
$ 1,346
$ 70
$ 72,445
Trust preferred securities 4,000
—
—
4,000
4,000
—
—
4,000
Total Securities

Held-to-Maturity $ 66,989
$ 1,489
$ —
$ 68,478
$ 75,169
$ 1,346
$ 70
$ 76,445

Other investment securities:

Non-marketable equity securities $ 15,988
$ —
$ —
$ 15,988
$ 14,352
$ —
$ —
$ 14,352
Total Other Investment

Securities
$ 15,988
$ —
$ —
$ 15,988
$ 14,352
$ —
$ —
$ 14,352

~~Marketable equity~~consolidated statements of income. The Company's non-marketable securities consist of investments made by the Company in equity positions of various regional community banks. Included within this portfolio are ownership positions in the following community bank holding companies: First National Corporation (FXNC) (4%) and Eagle Financial Services, Inc. (EFSI) (1.5%). Securitiessecurities with limited marketability, such as stock in the Federal Reserve Bank ("~~Federal Reserve"~~FRB") ~~and~~or the Federal Home Loan Bank ("FHLB"),. At March 31, 2024 and December 31, 2023, the Company held $23.4 million and $23.5 million, respectively, in non-marketable equity securities. These securities are carried at cost due to the restrictions placed on their transferability. The Company held no certificates of deposits for investment at March 31, 2024 and at December 31, 2023.

The majority of the Company's investment securities are ~~reported as non-marketable equity~~mortgage-backed. These securities are collateralized by both residential and commercial properties. The mortgage-backed securities in which the ~~table above.~~Company has invested are predominantly issued by government-sponsored agencies such as Fannie Mae, Freddie Mac, and Ginnie Mae. At March 31, 2024 and December 31, 2023 there were no securities of any non-governmental issuer whose aggregate carrying value or estimated fair value exceeded 10% of shareholders' equity.

Certain investment securities owned by the Company were in an unrealized loss position (i.e., amortized cost basis exceeded the estimated fair value of the securities). as of March 31, 2024 and December 31, 2023. The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):


	March 31, 2024
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	14,599	$	200	$	181,421	$	16,927	$	196,020	$	17,127
Mortgage-backed securities:
U.S. Government agencies	265		8,546		724,601		129,560		724,866		138,106
Private label	1,849		22		4,848		262		6,697		284
Trust preferred securities	—		—		4,449		151		4,449		151
Corporate securities	—		—		24,551		1,832		24,551		1,832
Total available-for-sale	$	16,713	$	8,768	$	939,870	$	148,732	$	956,583	$	157,500

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	September 30, 2017
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
	December 31, 2023																		December 31, 2023
													Less Than Twelve Months		Twelve Months or Greater		Total
													Estimated Fair Value	Unrealized Loss	Estimated Fair Value	Unrealized Loss	Estimated Fair Value	Unrealized Loss
Securities available-for-sale:													Securities available-for-sale:
Obligations of states and political subdivisions	$	8,291	$	146	$	11,859	$	428	$	20,150	$	574
Mortgage-backed securities:													Mortgage-backed securities:
U.S. Government agencies	160,312		3,214		57,814		1,922		218,126		5,136
Private label
Trust preferred securities
Corporate securities	—		—		2,265		154		2,265		154
Investment funds	1,500		26		—		—		1,500		26
Total	$	170,103	$	3,386	$	71,938	$	2,504	$	242,041	$	5,890
Total available-for-sale

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~~Item 2 -~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Critical Accounting Policies and Estimates

The accounting policies of the Company conform with U.S. generally accepted accounting principles and require management to make estimates and develop assumptions that affect the amounts reported in the financial statements and related footnotes. These estimates and assumptions are based on information available to management as of the date of the financial statements. Actual results could differ significantly from management’s estimates. As this information changes, management’s estimates and assumptions used to prepare the Company’s financial statements and related disclosures may also change. The most significant accounting policies followed by the Company are presented in Note One to the audited financial statements included in the Company’s ~~2016~~2023 Annual Report to Shareholders. The information included in this Quarterly Report on Form 10-Q, including the Consolidated Financial Statements, Notes to Consolidated Financial Statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the financial statements and notes thereto included in the ~~2016~~2023 Annual Report of the Company. Based on ~~the valuation techniques used and~~ the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has ~~identified~~identified: (i) the determination of the allowance for ~~loan~~credit losses ~~and~~(ii) income taxes and (iii) acquisition and preliminary purchase price accounting to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new information becomes available.

~~The section~~ Allowance ~~and Provision~~ for ~~Loan~~Credit Losses ~~provides management’s analysis of the Company’s allowance for loan losses and related provision.~~

The allowance for ~~loan~~credit losses is ~~maintained at~~ a ~~level~~valuation account that ~~represents management’s best reasonable estimate~~is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of ~~probable losses~~a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off in the future. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, delinquency level, or term, as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. These evaluations are conducted at least quarterly and more frequently if deemed necessary. Additionally, all commercial loans within the portfolio are subject to internal risk grading. Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan ~~portfolio. Management’s determination~~review process.

In evaluating the appropriateness of its allowance for credit losses, the ~~adequacy of~~Company stratifies the loan portfolio into six major groupings. The Company has identified the following portfolio segments and measures the allowance for credit losses using the following methods:


Portfolio Segment			Measurement Method
Commercial and industrial			Migration
Commercial real estate:
1-4 family			Migration
Hotels			Migration
Multi-family			Migration
Non Residential Non-Owner Occupied			Migration
Non Residential Owner Occupied			Migration
Residential real estate			Vintage
Home equity			Vintage
Consumer			Vintage

Migration is an analysis that tracks a closed pool of loans for a configurable period of time and calculates a loss ratio on only those loans in the pool at the start date based on outstanding balance. Vintage is a predictive loss model that includes a reasonable approximation of probable and estimable future losses by tracking each loan's net losses over the life of the loan as compared to its original balance. For demand deposit overdrafts, the allowance for credit losses is ~~based upon~~measured using the historical loss rate. Loans that do not share risk characteristics are evaluated on an ~~evaluation~~individual basis. Loans evaluated individually are not

Table of ~~individual credits~~Contents

included in the ~~loan portfolio, historical loan loss experience, current economic conditions, and other relevant factors. This determination~~collective evaluation. When management determines that foreclosure is ~~inherently subjective as it requires material estimates including~~probable, the ~~amounts and timing of future cash flows~~ expected ~~to be received on impaired loans that may be susceptible to significant change. The allowance for loan~~credit losses ~~related to loans considered to be impaired is generally evaluated~~are based on ~~the discounted cash flows using the impaired loan’s initial effective interest rate or~~ the fair value of the collateral at the reporting date, adjusted for ~~certain collateral dependent loans.~~selling costs as appropriate.

Expected credit losses are estimated over the contractual term of the loan, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a restructured loan will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

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, 2024 estimate, the Company assumed a 2-year unemployment forecast range of 3.9% to 4.7%, changed from 3.8% to 4.8% for the December 31, 2023 estimate. Historical loss rates from periods where the average unemployment rate matches the forecast range are considered when calculating the forecast period loss rate. The change had no material impact.

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 $2.1 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 March 31, 2024 estimate, no changes were made to the qualitative factors utilized in the previous quarter.

Income Taxes

The Company is subject to federal and state income taxes in the jurisdictions in which it conducts business. In computing the provision for income taxes, management must make judgments regarding interpretation of laws in those jurisdictions. Because the application of tax laws and regulations for many types of transactions is susceptible to varying interpretations, amounts reported in the financial statements could be changed at a later date upon final determinations by taxing authorities. On a quarterly basis, the Company estimates its annual effective tax rate for the year and uses that rate to provide for income taxes on a year-to-date basis. The amount of unrecognized tax benefits could change over the next twelve months as a result of various factors. However, management cannot currently estimate the range of possible change. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and various state taxing authorities for the years ended December 31, ~~2013 through 2015~~2020 and ~~various state taxing authorities.~~forward.

The effective tax rate is calculated by taking the statutory rate and adjusting for permanent and discrete items. The discrete items can vary between periods but historically have remained consistent.

Acquisition and Preliminary Purchase Price Allocation

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 result in adjustments to the goodwill recorded. As of March 31, 2024, twelve months have occurred since the date of acquisition on March 10, 2023, and the measurement period is now complete.

Table of Contents

Financial Summary

~~Nine~~Three months ended ~~September 30, 2017~~March 31, 2024 vs. ~~2016~~2023

The Company's financial performance is summarized in the following table:


	Three months ended March 31,											Three months ended March 31,
	2024										2024	2023

	Nine months ended September 30,
	2017			2016

Net income available to common shareholders (in thousands)
Net income available to common shareholders (in thousands)
Net income available to common shareholders (in thousands)	$	44,646		$	37,476
Earnings per common share, basic	$	2.87		$	2.48
Earnings per common share, diluted	$	2.86		$	2.48
Dividend payout ratio	45.7		%	51.0		%	Dividend payout ratio	36.2	%	39.9	%
ROA*	1.46		%	1.31		%	ROA*	1.92	%	1.63	%
ROE*	12.2		%	11.7		%	ROE*	17.3	%	15.8	%
ROATCE*	14.6		%	14.4		%	ROATCE*	22.7	%	19.9	%
Average equity to average assets ratio	12.0		%	11.2		%	Average equity to average assets ratio	11.1	%	10.3	%

*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.

The Company's ~~net interest income for the nine months ended September 30, 2017 increased $5.2 million compared to the nine months ended September 30, 2016 (see~~ ~~Net Interest Income). The Company recorded a provision for loan losses of~~ ~~$2.6 million~~ ~~for the~~ ~~nine months ended September 30, 2017~~ ~~compared to $3.1 million for the nine months ended September 30, 2016 (see~~ ~~Allowance and Provision for Loan Losses). As further discussed under the caption~~ ~~Non-Interest Income and Non-Interest Expense, non-interest income increased~~ ~~$3.6 million~~ ~~and non-interest expense decreased~~ ~~$0.6 million~~ ~~for the nine months ended September 30, 2017 from the nine months ended September 30, 2016.~~

~~Three months ended September 30, 2017 vs. 2016~~

~~The Company's financial performance for the three months ended September 30, 2017 and 2016 is summarized in the following table:~~

Three months ended September 30,
2017 2016

Net income available to common shareholders (in thousands)
$ 13,932
$ 13,232
Earnings per common share, basic $ 0.89
$ 0.88
Earnings per common share, diluted $ 0.89
$ 0.88
Dividend payout ratio 48.8 % 48.2 %
ROA 1.37 % 1.38 %
ROE 11.1 % 12.2 %
ROATCE 13.2 % 14.9 %
Average equity to average assets ratio 12.3 % 11.4 %

~~The Company’s~~ net interest income for the three months ended ~~September 30, 2017~~March 31, 2024 increased ~~$2.2~~$1.0 million compared to the three months ended ~~September 30, 2016~~March 31, 2023 (see Net Interest Income). The Company recorded a ~~provision for loan~~$0.2 million recovery of credit losses ~~of $1.4 million~~ for the three months ended ~~September 30, 2017 and~~March 31, 2024 compared to a $2.9 million provision for credit losses for the three months ended ~~September 30, 2016~~March 31, 2023 (see Allowance ~~and Provision~~ for ~~Loan~~Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income decreased ~~$2.1~~$0.7 million and non-interest expense decreased ~~$1.0~~$2.7 million for the three months ended March 31, 2024 from the three months ended ~~September 30, 2016.~~March 31, 2023.

Balance Sheet Analysis

Selected balance sheet fluctuations from the year ended December 31, ~~2016~~2023 are summarized in the following table (in millions):


	March 31,		December 31,
	2024		2023		$ Change		% Change

Cash and cash equivalents	$	318.7	$	156.3	$	162.4	103.9	%
Gross loans	4,091.8		4,125.9		(34.1)		(0.8)

Total deposits	5,055.8		4,934.3		121.5		2.5
FHLB long-term advances	150.0		100.0		50.0		50.0

September 30, December 31,
2017 2016 $ Change % Change

Cash and cash equivalents $ 83.2
$ 88.1
$ (4.9 ) (5.6 )%
Investment securities 608.6
539.6
69.0
12.8 %
Gross loans 3,105.9
3,046.2
59.7
2.0 %

Total deposits 3,256.5
3,231.7
24.8
0.8 %
Federal Funds purchased 79.8
64.1
15.7
24.5 %

Shareholders' Equity 500.3
442.4
57.9
13.1 %

Cash and cash equivalents ~~decreased $4.9~~increased $162.4 million (103.9%) from December 31, ~~2016~~2023 to ~~$83.2~~$318.7 million at ~~September 30, 2017 primarily~~ March 31, 2024, due to a decrease in ~~cash on-hand.~~gross loans, an increase in FHLB long-term advances, and an increase in deposit balances and these increases were partially offset by a decrease in federal funds purchased.

Investment securities increased $69.0 million from December 31, 2016 to $608.6 million at September 30, 2017 primarily due to additional investment purchases made during the nine months ended September 30, 2017.

Gross loans ~~increased $59.7~~decreased $34.1 million ~~(2.0%~~(0.8%) from December 31, ~~2016~~2023 to ~~$3.11~~$4.09 billion at ~~September 30, 2017.~~ March 31, 2024. Commercial and industrial loans decreased $19.2 million (4.5%), commercial real estate loans ~~increased $31.4~~decreased $14.6 million ~~(2.6%~~(0.9%), ~~commercial and industrial~~consumer loans ~~increased $19.1~~decreased $1.7 million ~~(10.3%~~(2.6%), and residential real estate loans ~~increased $14.5~~decreased $1.4 million ~~(1.0%~~(0.1%). during the quarter ended March 31, 2024. These ~~increases~~decreases were partially offset by ~~decreases~~an increase in home equity loans of ~~$2.3~~$4.1 million ~~and consumer loans of $2.2 million.~~(2.5%).

Total deposits increased ~~$24.8~~$121.5 million (2.5%) from December 31, 2023 to $5.1 billion at March 31, 2024. Time deposit balances increased $59.3 million, interest-bearing demand deposit balances increased $39.3 million, noninterest-bearing demand deposit balances increased $16.3 million, and savings deposit balances increased $6.8 million.

Table of Contents

FHLB long-term advances increased $50.0 million from December 31, ~~2016~~2023 to ~~$3.26 billion at September 30, 2017 due to growth in time deposits~~March 31, 2024. During the first quarter of $34.5 million and interest-bearing demand deposits of $15.2 million. These increases were partially offset by decreases in savings deposits of $22.5 million and non-interest bearing demand deposits of $2.4 million.

~~Federal Funds purchased increased $15.7~~2024, the Company borrowed an additional $50.0 million from ~~December 31, 2016, as~~ the ~~Company's loan and investment securities growth exceeded its deposit growth.~~

~~Shareholders' equity increased $57.9 million primarily due to net income of $44.6 million and the fact that the Company sold approximately 441,000 shares of common stock~~Federal Home Loan Bank at a ~~weighted average price~~rate of ~~$64.48 per share, net of broker fees during the nine months ended September 30, 2017. These increases were partially offset by cash dividends declared of $20.7 million.~~4.39%.

Net Interest Income

~~Nine~~Three months ended ~~September 30, 2017~~March 31, 2024 vs. ~~2016~~2023

The Company’s net interest income increased from $53.5 million for the three months ended March 31, 2023 to $54.4 million for the three months ended March 31, 2024. The Company’s tax equivalent net interest income increased ~~$5.6~~$0.9 million, or ~~6.3%~~1.64% , from ~~$89.2~~$53.8 million for the ~~nine months ended September 30, 2016~~first quarter of 2023 to ~~$94.8~~$54.6 million for the ~~nine~~first quarter of 2024. Due to increases in the Federal Funds rate, net interest income increased by $5.9 million due to an increase in loan yields (net of loan fees and accretion) of 58 basis points and by an increase in average loans ($137.7 million) which added $1.8 million to interest income. In addition, the acquistion of Citizens added $2.9 million of net interest income during the three months ended September 30, 2017. The increase was primarily due to higher average balances on commercial loans which increased income by $4.1 million, and residential real estate loans which increased income $1.2 millionMarch 31, 2024 as compared to the ~~nine~~three months ended ~~September 30, 2016. In addition, higher average investment balances~~March 31, 2023 and interest income from accretion of fair value adjustments increased ~~investment income by $2.6 million.~~$0.9 million during the same time periods. These increases were partially offset by ~~increased interest expense on interest bearing accounts ($2.0 million), primarily due to~~ an increase in the cost of ~~funds, and lower accretion from fair value adjustments on recent acquisitions ($1.1 million). The~~interest bearing liabilities (117 basis points) which decreased net interest income by $10.3 million. Due to an increase in average interest-earning assets, the Company’s reported net interest margin decreased from ~~3.52%~~4.05% for the ~~nine months ended September 30, 2016~~first quarter of 2023 to ~~3.46%~~3.95% for the ~~nine months ended September 30, 2017. Excluding the favorable impact~~first quarter of ~~accretion, the net interest margin for the nine months ended September 30, 2017 and 2016 would have been 3.41% and 3.43%, respectively.~~2024.

Table of Contents

Table One

Average Balance Sheets and Net Interest Income

(in thousands)


Assets	Three months ended March 31,
	2024						2023
	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate

Loan portfolio(1):
Residential real estate(2)	$	1,953,647	$	24,148	4.97	%	$	1,840,828	$	20,007	4.41	%
Commercial, financial, and agriculture(2)	2,070,054		33,980		6.60		1,795,309		26,248		5.93
Installment loans to individuals(2),(3)	68,828		999		5.84		64,057		749		4.74
Total loans	4,092,529		59,127		5.81		3,700,194		47,004		5.15
Securities:
Taxable	1,200,310		12,040		4.03		1,322,060		11,773		3.61
Tax-exempt(4)	160,847		1,051		2.63		204,957		1,471		2.91
Total securities	1,361,157		13,091		3.87		1,527,017		13,244		3.52
Deposits in depository institutions	115,953		1,570		5.45		160,031		1,590		4.03
Total interest-earning assets	5,569,639		73,788		5.33		5,387,242		61,838		4.66
Cash and due from banks	98,966						67,975
Bank premises and equipment	71,954						71,422
Goodwill and intangible assets	162,257						124,546
Other assets	306,278						327,442
Less: allowance for credit losses	(23,142)						(18,143)
Total assets	$	6,185,952					$	5,960,484

Liabilities
Interest-bearing demand deposits	$	1,283,868	$	3,439	1.08	%	$	1,234,981	$	1,741	0.57	%
Savings deposits	1,254,253		2,273		0.73		1,376,317		1,348		0.40
Time deposits(2)	1,073,083		8,385		3.14		902,583		2,601		1.17
Customer repurchase agreements	313,623		3,621		4.64		281,861		2,381		3.43
FHLB long-term advances	136,813		1,423		4.18		—		—		—
Total interest-bearing liabilities	4,061,640		19,141		1.90		3,795,742		8,071		0.86
Noninterest-bearing demand deposits	1,322,540						1,420,676
Other liabilities	115,589						129,411
Shareholders’ equity	686,183						614,655
Total liabilities and shareholders’ equity	$	6,185,952					$	5,960,484
Net interest income			$	54,647					$	53,767
Net yield on earning assets					3.95	%					4.05	%

Table of Contents

Assets Nine months ended September 30,
2017 2016
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate

Loan portfolio⁽¹⁾:
Residential real estate⁽²⁾
$ 1,591,403
$ 47,329
3.98 % $ 1,549,465
$ 45,267
3.90 %
Commercial, financial, and agriculture⁽²⁾
1,446,849
42,974
3.97
1,304,467
39,294
4.02
   Installment loans to individuals^(2),(3)
34,881
1,835
7.03
38,166
2,220
7.77
   Previously securitized loans⁽⁴⁾
***
1,086
*** ***
1,230
***
Total loans 3,073,133
93,224
4.06
2,892,098
88,011
4.06
Securities:

Taxable 481,372
10,591
2.94
432,303
9,115
2.82
   Tax-exempt⁽⁵⁾
88,484
3,099
4.68
46,646
1,754
5.02
Total securities 569,856
13,690
3.21
478,949
10,869
3.03
Deposits in depository institutions 25,822
51
0.26
9,779
—
—
Total interest-earning assets 3,668,811
106,965
3.90
3,380,826
98,880
3.91
Cash and due from banks 92,159
104,287

Bank premises and equipment 73,686
76,161

Other assets 249,700
260,297

Less: allowance for loan losses (19,999 ) (19,930 )
Total assets $ 4,064,357

$ 3,801,641

Liabilities

   Interest-bearing demand deposits $ 706,355
$ 476
0.09 % $ 683,926
$ 458
0.09 %
Savings deposits 844,375
998
0.16
765,222
699
0.12
Time deposits⁽²⁾
1,063,137
9,411
1.18
1,026,845
7,757
1.01
Short-term borrowings 208,419
693
0.44
156,884
283
0.24
Long-term debt 16,495
565
4.58
16,495
504
4.08
Total interest-bearing liabilities 2,838,781
12,143
0.57
2,649,372
9,701
0.49
Noninterest-bearing demand deposits 697,231
679,730

Other liabilities 41,159
45,452

Stockholders’ equity 487,186
427,087

Total liabilities and stockholders’ equity $ 4,064,357

$ 3,801,641

Net interest income
$ 94,822

$ 89,179

Net yield on earning assets

3.46 % 3.52 %


(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:

		2024		2023
	Loan fees, net	$	133	$	518

(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:

		2024		2023
	Residential real estate	$	45	$	76
	Commercial, financial and agriculture	1,065		177
	Installment loans to individuals	6		4
	Time deposits	63		9
		$	1,179	$	266

(3)	Includes the Company’s consumer and DDA overdrafts loan categories.
(4)	Computed on a fully federal tax-equivalent basis assuming a tax rate of 21%.

(1) For purposes of this table, non-accruing loans have been included in average balances and loan fees, which are immaterial, have been included in interest income.
(2) Included in the above table are the following amounts for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bancorp, Inc., Community Financial Corporation and American Founders Bank, Inc.:

Nine months ended September 30,
2017
2016
Residential real estate $ 404
$ 538

Commercial, financial and agriculture 907
1,360

Installment loans to individuals 17
98

Time deposits 16
444

$ 1,344
$ 2,440

(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 35%.

Table Two

Rate/Volume Analysis of Changes in Interest Income and Interest Expense

(in thousands)


	Three months ended March 31, 2024 vs. 2023
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume		Rate		Net

Loan portfolio
Residential real estate	$	1,236	$	2,905	$	4,141
Commercial, financial, and agriculture	4,050		3,682		7,732
Installment loans to individuals	56		194		250
Total loans	5,342		6,781		12,123
Securities:
Taxable	(1,093)		1,360		267
Tax-exempt(1)	(319)		(101)		(420)
Total securities	(1,412)		1,259		(153)
Deposits in depository institutions	(442)		422		(20)
Total interest-earning assets	$	3,488	$	8,462	$	11,950
Interest-bearing liabilities:
Interest-bearing demand deposits	$	69	$	1,629	$	1,698
Savings deposits	(121)		1,046		925
Time deposits	495		5,289		5,784
Customer repurchase agreements	271		969		1,240
FHLB long-term advances	1,423		—		1,423
Total interest-bearing liabilities	$	2,137	$	8,933	$	11,070
Net Interest Income	$	1,351	$	(471)	$	880

(1) Computed on a fully federal taxable equivalent using a tax rate of 21%.

Nine months ended September 30, 2017 vs. 2016
Interest-earning assets:
Increase (Decrease)
Due to Change In:
Volume Rate Net

Loan portfolio
Residential real estate $ 1,224
$ 838
$ 2,062
Commercial, financial, and agriculture 4,285
(605 ) 3,680
Installment loans to individuals (191 ) (194 ) (385 )
Previously securitized loans —
(144 ) (144 )
Total loans 5,318
(105 ) 5,213
Securities:

Taxable 1,034
442
1,476
Tax-exempt⁽¹⁾
1,572
(227 ) 1,345
Total securities 2,606
215
2,821
Deposits in depository institutions —
51
51
Total interest-earning assets $ 7,924
$ 161
$ 8,085
Interest-bearing liabilities:

Interest-bearing demand deposits $ 15
$ 3
$ 18
Savings deposits 72
227
299
Time deposits 274
1,380
1,654
Short-term borrowings 93
317
410
Long-term debt —
61
61
Total interest-bearing liabilities $ 454
$ 1,988
$ 2,442
Net Interest Income $ 7,470
$ (1,827 ) $ 5,643


~~(1)~~	~~Fully federal taxable equivalent using a tax rate of approximately 35%.~~

~~Three months ended September 30, 2017 vs. 2016~~

The Company’s tax equivalent net interest income increased $2.4 million or 7.9%, from $30.0 million for the three months ended September 30, 2016 to $32.4 million for the three months ended September 30, 2017. Higher average balancesTable of commercial and residential real estate loans ($173.3 million) increased net interest income by $1.7 million while higher average investment balances ($94.1 million) increased net interest income by $0.8 million. In addition, higher yields on commercial and residential real estate loans increased net interest income by $1.1 million. These increases were partially offset by increased interest expense on interest bearing accounts ($0.7 million) and lower accretion from fair value adjustments ($0.3 million). The Company’s reported net interest margin decreased from 3.48% for the three months ended September 30, 2016 to 3.45% for the three months ended September 30, 2017. Excluding the favorable impact of accretion, the net interest margin for the three months ended September 30, 2017 and 2016 would have been 3.42% and 3.40%, respectively.Contents

~~Table Three~~

~~Average Balance Sheets and Net Interest Income~~

~~(in thousands)~~

Assets Three months ended September 30,
2017 2016
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate

Loan portfolio⁽¹⁾:
Residential real estate⁽²⁾
$ 1,598,037
$ 16,117
4.00 % $ 1,570,787
$ 15,309
3.88 %
Commercial, financial, and agriculture⁽²⁾
1,457,821
14,903
4.06
1,311,819
13,066
3.96
   Installment loans to individuals^(2),(3)
33,935
630
7.37
37,150
690
7.39
   Previously securitized loans⁽⁴⁾
***
353
*** ***
378
***
Total loans 3,089,793
32,003
4.11
2,919,756
29,443
4.01
Securities:

Taxable 507,106
3,666
2.87
449,977
3,183
2.81
   Tax-exempt⁽⁵⁾
91,276
1,024
4.45
54,317
644
4.72
Total securities 598,382
4,690
3.11
504,294
3,827
3.02
Deposits in depository institutions 31,517
31
0.39
9,623
—
—
Total interest-earning assets 3,719,692
36,724
3.92
3,433,673
33,270
3.85
Cash and due from banks 62,723
87,219

Bank premises and equipment 72,756
75,743

Other assets 247,076
263,258

Less: allowance for loan losses (20,038 ) (19,517 )
Total assets $ 4,082,209
$ 3,840,376

Liabilities
   Interest-bearing demand deposits $ 700,625
$ 159
0.09 % $ 687,487
$ 138
0.08 %
Savings deposits 821,949
321
0.15
761,734
234
0.12
Time deposits⁽²⁾
1,070,941
3,316
1.23
1,030,731
2,634
1.02
Short-term borrowings 230,030
349
0.60
154,585
90
0.23
Long-term debt 16,495
195
4.69
16,495
172
4.15
Total interest-bearing liabilities 2,840,040
4,340
0.61
2,651,032
3,268
0.49
Noninterest-bearing demand deposits 698,106
700,932

Other liabilities 42,202

52,641

Stockholders’ equity 501,861
435,771

Total liabilities and stockholders’ equity $ 4,082,209

$ 3,840,376

Net interest income
$ 32,384

$ 30,002

Net yield on earning assets

3.45 % 3.48 %

(1) For purposes of this table, non-accruing loans have been included in average balances and loan fees, which are immaterial, have been included in interest income.
(2) Included in the above table are the following amounts for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bancorp, Inc., Community Financial Corporation and American Founders Bank, Inc.:

Three months ended September 30,
2017 2016
Residential real estate $ 122
$ 166

Commercial, financial and agriculture 235
311

Installment loans to individuals 3
16

Time deposits —
148

$ 360
$ 641

(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 35%.

~~Table Four~~

~~Rate/Volume Analysis of Changes in Interest Income and Interest Expense~~

~~(in thousands)~~

Three months ended September 30, 2017 vs. 2016
Interest-earning assets:
Increase (Decrease)
Due to Change In:
Volume Rate Net

Loan portfolio
Residential real estate $ 266
$ 542
$ 808
Commercial, financial, and agriculture 1,458
379
1,837
Installment loans to individuals (60 ) —
(60 )
Previously securitized loans —
(25 ) (25 )
Total loans 1,664
896
2,560
Securities:
Taxable 405
78
483
Tax-exempt⁽¹⁾
439
(59 ) 380
Total securities 844
19
863
Deposits in depository institutions —
31
31
Total interest-earning assets $ 2,508
$ 946
$ 3,454
Interest-bearing liabilities:

Interest-bearing demand deposits $ 3
$ 18
$ 21
Savings deposits 19
68
87
Time deposits 103
579
682
Short-term borrowings 44
215
259
Long-term debt —
23
23
Total interest-bearing liabilities $ 169
$ 903
$ 1,072
Net Interest Income $ 2,339
$ 43
$ 2,382


~~(1)~~	~~Fully federal taxable equivalent using a tax rate of approximately 35%.~~

~~Table Five~~

Non-GAAP Financial Measures

Management of the Company uses measures in its analysis of the Company's performance other than those in accordance with generally accepted accounting ~~principals~~principles in the United States of America ("GAAP"). These measures are useful when evaluating the underlying performance of the Company's operations. The Company's management believes that these non-GAAP measures enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company's management believes that investors may use these non-GAAP financial measures to evaluate the Company's financial performance without the impact of those items that may obscure trends in the Company's performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they comparable to non-GAAP financial measures that may be presented by other companies. The following table reconciles fully taxable equivalent net interest income ~~and fully taxable equivalent net interest income excluding accretion~~ with net interest income as derived from the Company's financial statements, ~~(in~~as well as other non-GAAP measures (dollars in thousands):


	Three months ended March 31,
	2024			2023

Net interest income ("GAAP")	$	54,427		$	53,459
Taxable equivalent adjustment	$	220		$	308
Net interest income, fully taxable equivalent	$	54,647		$	53,767

Equity to assets ("GAAP")	10.81		%	10.48		%
Effect of goodwill and other intangibles, net	(2.35)		%	(2.43)		%
Tangible common equity to tangible assets	8.46		%	8.05		%

Table of Contents

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016

Net interest income (GAAP) $ 32,026
$ 29,778
$ 93,736
$ 88,566
Taxable equivalent adjustment 358
224
1,086
613
Net interest income, fully taxable equivalent $ 32,384
$ 30,002
$ 94,822
$ 89,179

Average interest earning assets $ 3,719,692
$ 3,433,673
$ 3,668,811
$ 3,380,826
Net interest margin 3.45 % 3.48 % 3.46 % 3.52 %

Net interest income (GAAP)

$ 32,026
$ 29,778
$ 93,736
$ 88,566
Taxable equivalent adjustment 358
224
1,086
613
Accretion related to fair value adjustments (360 ) (641 ) (1,344 ) (2,441 )
Net interest income, fully taxable equivalent, excluding accretion

$ 32,024
$ 29,361
$ 93,478
$ 86,738

Net interest margin (excluding accretion) 3.42 % 3.40 % 3.41 % 3.43 %

Loans

Table ~~Six~~Three

Loan Portfolio

The composition of the Company's loan portfolio as of the dates indicated follows (in thousands):


	March 31, 2024		December 31, 2023		March 31, 2023
Commercial and industrial	$	407,770	$	426,951	$	390,861

1-4 Family	202,378		206,237		181,442
Hotels	354,929		357,142		327,554
Multi-family	186,555		189,165		195,042
Non Residential Non-Owner Occupied	682,609		680,590		617,357
Non Residential Owner Occupied	232,440		240,328		223,096
Commercial real estate	1,658,911		1,673,462		1,544,491

Residential real estate	1,786,764		1,788,149		1,737,604
Home equity	171,292		167,201		151,341
Consumer	63,556		65,246		66,994
DDA overdrafts	3,495		4,914		3,395
Total loans	$	4,091,788	$	4,125,923	$	3,894,686

September 30, 2017 December 31, 2016 September 30, 2016
Residential real estate $ 1,465,942
$ 1,451,462
$ 1,445,242
Home equity 139,702
141,965
141,616
Commercial and industrial 204,722
185,667
176,387
Commercial real estate 1,260,906
1,229,516
1,158,088
Consumer 30,323
32,545
33,614
DDA overdrafts 4,317
5,071
2,965
Total loans $ 3,105,912
$ 3,046,226
$ 2,957,912

Loan balances ~~increased~~ ~~$59.7~~decreased $34.1 million from December 31, ~~2016~~2023 to ~~September 30, 2017~~.March 31, 2024.

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 $19.2 million from December 31, 2023 to March 31, 2024.

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 to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans decreased $14.6 million from December 31, 2023 to March 31, 2024. At March 31, 2024, $6.7 million of the commercial real estate loans were for commercial properties under construction.

In order to group loans with similar risk characteristics, the portfolio is further segmented by product types:

◦Commercial 1-4 Family loans decreased $3.9 million from December 31, 2023 to March 31, 2024. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $202.4 million as of March 31, 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.

◦Hotel loans decreased $2.2 million from December 31, 2023 to March 31, 2024. The Hotel portfolio is comprised of all lodging establishments and totaled $354.9 million as of March 31, 2024. Risk characteristics relate to the demand for travel.

◦Multi-family loans decreased $2.6 million from December 31, 2023 to March 31, 2024. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $186.6 million as of March 31, 2024. Risk characteristics are driven by rental housing demand as well as economic and employment conditions.

◦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 $682.6 million at March 31, 2024 and increased $2.0 million from December 31, 2023 to March 31, 2024.

Table of Contents

Nonresidential owner-occupied commercial real estate totaled $232.4 million at March 31, 2024 and decreased $7.9 million from December 31, 2023. Risk characteristics relate to levels of consumer spending and overall economic conditions.

Residential real estate loans ~~increased $14.5~~decreased $1.4 million from December 31, ~~2016~~2023 to ~~September 30, 2017.~~March 31, 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 57 year adjustable rate mortgages with terms that amortize up to 30

years. The Company also offers fixed-rate residential real estate loans that are 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, 2017, $19.8~~March 31, 2024, $19.7 million of the residential real estate loans were for properties under construction.

Home equity loans ~~decreased $2.3~~increased $4.1 million during the first ~~nine~~three months of ~~2017.~~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.~~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.

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 $19.1 million from December 31, 2016 to September 30, 2017.

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 to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans increased $31.4 million from December 31, 2016 to September 30, 2017. At September 30, 2017, $24.3 million of the commercial real estate loans were for commercial properties under construction.

Consumer loans may be secured by automobiles, boats, recreational vehicles and other personal ~~property.~~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 ~~$2.2~~$1.7 million during the first ~~nine~~three months of ~~2017.~~ 2024.

Allowance ~~and Provision~~ for ~~Loan~~Credit Losses

Management systematically monitors the loan portfolio and the appropriateness of the allowance for ~~loan~~credit losses ~~(“ALLL”)~~ on a quarterly basis to provide for ~~probable~~expected losses ~~incurred~~inherent in the portfolio. Management assesses the risk in each loan type based on historical ~~delinquency and loss~~ 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 $0.2 million recovery of credit losses in the first quarter of 2024. The company recorded a provision for credit losses of $2.9 million in the first quarter of 2023.

Individual credits in excess of $1 million are selected at least annually for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the appropriateness of the allowance. Due to the nature of commercial lending, evaluation of the appropriateness of the allowance as it relates to these loan types is often based more upon specific credit review, with consideration given to the potential impairment of certain credits and historical loss rates, adjusted for general economic conditions and other inherent risk factors. Conversely, due to the homogeneous nature of the real estate and installment portfolios, the portions of the allowance allocated to those portfolios are primarily based on prior loss history of each portfolio, adjusted for general economic conditions and other inherent risk factors. Risk factors considered by the Company in completing this analysis include: (i) unemployment and economic trends in the Company’s markets; (ii) concentrations of credit, if any, among any industries; (iii) trends in loan growth, loan mix, delinquencies, losses or credit impairment; and (iv) adherence to lending policies and others. Each risk factor is designated as low, moderate/increasing, or high based on the Company’s assessment of the risk to loss associated with each factor. Each risk factor is then weighted to consider probability of occurrence.

The allowance not specifically allocated to individual credits is generally determined by analyzing potential exposure and other qualitative factors that could negatively impact the adequacy of the allowance. Loans not individually evaluated for impairment are grouped by pools with similar risk characteristics and the related historical loss rates are adjusted to reflect current inherent risk factors, such as unemployment, overall economic conditions, concentrations of credit, loan growth, classified and impaired loan trends, staffing, adherence to lending policies, and loss trends.

Determination of the ~~ALLL~~Allowance for Credit Losses is subjective in nature and requires management to periodically reassess the validity of its assumptions. Differences between actual losses and estimated losses are assessed such that management can timely modify its evaluation model to ensure that adequate provision has been made for risk in the total loan portfolio.

As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $2.6 million in the first nine months of 2017 as compared to $3.1 million in the first nine months of 2016. The provision for loan losses recorded in the first nine months of 2017 reflects revisions to the regulatory rating of a shared national credit ("SNC") in which the Company is a participant, changes in the quality of the portfolio and general improvement in the Company's historical loss rates used to compute the allowance not specifically allocated to individual credits. SNCs are credit facilities greater than $20 million that are shared by three or more federally supervised financial institutions and are reviewed annually by regulatory authorities at the agent bank level. The SNC that the Company is a participant is for a local customer that outgrew the lending limit of the Company and involves three banks. The reserve recorded in the quarter ended September 30, 2017 related to this SNC reflects the loss factors associated with the rating assigned to this SNC as a result of the current year review by the Office of the Comptroller of the Currency (“OCC”). The Company’s balance outstanding at September 30, 2017 associated with this SNC is $25.8 million, with an additional commitment of $6.4 million related to a line of credit to the borrower. As of September 30, 2017, the SNC is performing in accordance to terms and debt service coverage ratios are acceptable. Changes in the amount of the provision and related allowance are based on the Company’s detailed systematic methodology and are directionally consistent with changes in the composition and quality of the Company’s loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.

The Company had net charge-offs of $2.8 million for the first nine months of 2017 and $2.8 million for the first nine months of 2016. Net charge-offs in the first nine months of 2017 consisted primarily of net charge-offs on residential real estate loans ($1.0 million), commercial real estate loans ($0.5 million), and DDA overdrafts ($1.0 million).

Based on the Company’s analysis of the adequacy of the allowance for ~~loan~~credit losses and in consideration of the known factors utilized in computing the allowance, management believes that the allowance for ~~loan~~credit losses as of ~~September 30, 2017~~March 31, 2024 is adequate to provide for ~~probable~~expected losses inherent in the Company’s loan portfolio. Future provisions for ~~loan~~credit losses will be dependent upon trends in loan balances including the composition of the loan portfolio, changes in loan quality and loss experience trends, and recoveries of previously charged-off loans, among other factors.

Table ~~Seven~~

~~Analysis of the Allowance for Loan Losses~~

~~An analysis of changes in the Company's allowance for loan losses follows (dollars in thousands):~~

Nine months ended September 30,
Year ended
December 31,
2017 2016 2016
Balance at beginning of period $ 19,730
$ 19,251
$ 19,251
Charge-offs:

Commercial and industrial (150 ) (148 ) (148 )
Commercial real estate (564 ) (1,213 ) (1,676 )
Residential real estate (1,295 ) (1,281 ) (1,734 )
Home equity (256 ) (300 ) (390 )
Consumer (47 ) (102 ) (126 )
DDA overdrafts (1,989 ) (1,017 ) (1,412 )
Total charge-offs (4,301 ) (4,061 ) (5,486 )
Recoveries:

Commercial and industrial 57
13
14
Commercial real estate 92
447
487
Residential real estate 286
113
187
Home equity 45
—
—
Consumer 46
109
118
DDA overdrafts 1,015
585
764
Total recoveries 1,541
1,267
1,570
Net charge-offs (2,760 ) (2,794 ) (3,916 )
Provision for purchased credit impaired loans 39
164
163
Provision for loan losses 2,545
2,929
4,232
Balance at end of period $ 19,554
$ 19,550
$ 19,730
As a Percent of Average Total Loans:

Net charge-offs (annualized) 0.12 % 0.13 % 0.13 %
Provision for loan losses (annualized) 0.11 % 0.14 % 0.15 %
As a Percent of Non-Performing Loans:
Allowance for loan losses 182.83 % 128.96 % 140.10 %
As a Percent of Total Loans:
Allowance for loan losses 0.63 % 0.66 % 0.65 %

~~Table Eight~~Four

Allocation of the Allowance for ~~Loan~~Credit Losses

The allocation of the allowance for ~~loan~~credit losses is shown in the table below (in thousands). The allocation of a portion of the allowance in one portfolio ~~segment~~loan classification does not preclude its availability to absorb losses in other portfolio ~~segments.~~

Table of Contents

As of September 30, As of December 31,
2017 2016 2016
Commercial and industrial $ 5,059
$ 4,054
$ 4,206
Commercial real estate 6,306
6,271
6,573
Residential real estate 5,889
7,024
6,680
Home equity 1,274
1,447
1,417
Consumer 56
75
82
DDA overdrafts 970
679
772
Allowance for Loan Losses $ 19,554
$ 19,550
$ 19,730
segments.


	As of March 31,				As of December 31,
	2024		2023		2023
Commercial and industrial	$	4,275	$	4,286	$	4,474

1-4 Family	1,394		613		1,402
Hotels	2,257		2,184		2,211
Multi-family	999		1,027		1,002
Non Residential Non-Owner Occupied	4,012		4,924		4,077
Non Residential Owner Occupied	2,421		2,437		2,453
Commercial real estate	11,083		11,185		11,145
Residential real estate	5,137		5,484		5,398
Home equity	507		400		490
Consumer	426		371		269
DDA overdrafts	882		998		969
Allowance for Credit Losses	$	22,310	$	22,724	$	22,745

The ~~ALLL~~Allowance for Credit Losses decreased from ~~$19.7~~$22.7 million at December 31, ~~2016~~2023 to ~~$19.6~~$22.3 million at ~~September 30, 2017. Below is~~March 31, 2024. The Company recorded a ~~summary~~recovery of ~~the changes~~credit losses of $0.2 million in the ~~components~~first quarter of 2024, compared to a provision for credit losses of $2.9 million for the ~~ALLL from December 31, 2016 to September 30, 2017.~~

comparable period in 2023, and a recovery of credit losses of $0.3 million for the fourth quarter of 2023. The ~~allowance related to the commercial and industrial loan portfolio increased from $4.2 million at December 31, 2016 to $5.1 million at September 30, 2017,~~recovery of credit losses was primarily due to revisions to the regulatory rating of a shared national credit ("SNC") in which the Company is a participant, changes in the quality of the portfolio and general improvement in the Company's historical loss rates used to compute the allowance not specifically allocated to individual credits. SNCs are credit facilities greater than $20 million that are shared by three or more federally supervised financial institutions and are reviewed annually by regulatory authorities at the agent bank level. The SNC that the Company is a participant is for a local customer that outgrew the lending limit of the Company and involves three banks. The reserve recorded in the quarter ended September 30, 2017 related to this SNC reflects the loss factors associated with the rating assigned to this SNC as a result of the current year review by the Office of the Comptroller of the Currency (“OCC”). The Company’s balance outstanding at September 30, 2017 associated with this SNC is $25.8 million, with an additional commitment of $6.4 million related to a ~~line~~decline in loan balances from the fourth quarter of ~~credit to the borrower. As of September 30, 2017, the SNC is performing in accordance to terms~~2023 and ~~debt service coverage ratios are acceptable.~~

~~The allowance allocated to the commercial real estate portfolio decreased $0.3 million from $6.6 million at December 31, 2016 to $6.3 million at September 30, 2017, primarily due to an improvement~~a reduction in the ~~historical~~ loss rate of ~~the portfolio which was~~residential real estate loans that were partially offset by ~~growth in the loan portfolio.~~

The allowance allocated to the residential real estate portfolio decreased from $6.7 million at December 31, 2016 to $5.9 million at September 30, 2017, primarily due to a decrease in risk-rated loans and improvement in historical loss rates, offset by growth in the loan portfolio.

~~The allowance allocated to the home equity loan portfolio decreased slightly from $1.4 million at December 31, 2016 to $1.3 million at September 30, 2017.~~

~~The allowance allocated to the consumer loan portfolio remained flat at $0.1 million at December 31, 2016 and September 30, 2017.~~

~~The allowance allocated to overdraft deposit accounts increased slightly from $0.8 million at December 31, 2016 to $1.0 million at September 30, 2017.~~

~~Table Nine~~

~~Non-Accrual and Past-Due Loans~~

~~The Company's nonperforming assets and past-due loans are shown below (dollars in thousands):~~

As of September 30, December 31,
2017 2016 2016
Non-accrual loans $ 10,673
$ 14,591
$ 13,701
Accruing loans past due 90 days or more 22
569
382
Total non-performing loans 10,695
15,160
14,083
Other real estate owned ("OREO") 3,995
5,435
4,588
Total non-performing assets $ 14,690
$ 20,595
$ 18,671

As a Percent of Loans and Other Real Estate Owned:
Non-performing loans 0.47 % 0.69 % 0.61 %

Past-due loans $ 7,569
$ 8,970
$ 8,594

As a Percentage of Total Loans
Past-due loans 0.24 % 0.30 % 0.28 %

The Company’s ratio of non-performing assets to total loans and other real estate owned improved from 0.61% at December 31, 2016 to 0.47% at September 30, 2017. Excluded from this ratio are purchased credit-impaired loans in which the Company estimated cash flows and estimated a credit mark. These loans are considered performing loans provided that the loan

is performing in accordance with the estimated expectations. Such loans would be considered non-performing loans if the loan's performance deteriorates below the initial expectations. Total past due loans decreased from $8.6 million, or 0.28% of total loans outstanding, at December 31, 2016 to $7.6 million, or 0.24% of total loans outstanding, at September 30, 2017.

Interest on loans is accrued and credited to operations based upon the principal amount outstanding. The accrual of interest income is generally discontinued when a loan becomes 90 days past due as to principal or interest, unless the loan is well collateralized and in the process of collection. When interest accruals are discontinued, interest credited to income in the current year that is unpaid and deemed uncollectible is charged to operations. Prior-year interest accruals that are unpaid and deemed uncollectible are charged to the allowance for loan losses, provided that such amounts were specifically reserved.

~~Table Ten~~

~~Impaired Loans~~

~~Information pertaining to the Company's impaired loans is included in the following table (in thousands):~~

As of September 30, As of December 31,
2017 2016 2016
Impaired loans with a valuation allowance $ 5,804
$ —
$ 2,832
Impaired loans with no valuation allowance 4,157
5,367
4,749
Total impaired loans $ 9,961
$ 5,367
$ 7,581

Allowance for loan losses allocated to impaired loans $ 705
$ —
$ 665

~~The average recorded investment in impaired loans~~net charge-offs during the nine months ended September 30, 2017 and September 30, 2016 was $10.0 million and $6.5 million, respectively. There were no commitments to provide additional funds on non-accrual, impaired, or other potential problem loans at September 30, 2017. first quarter of 2024.

The Company recognized less than $0.2 million of interest income received in cash on non-accrual and impaired loans for both the nine months ended September 30, 2017 and September 30, 2016. Less than $0.2 million of interest income would have been recognized during the nine months ended September 30, 2017 and September 30, 2016, if such loans had been current in accordance with their original terms.

~~Table Eleven~~

~~Troubled Debt Restructurings ("TDRs")~~

~~The following table sets forth the Company's troubled debt restructurings ("TDRs") (in thousands):~~

As of September 30, December 31,
2017 2016 2016
Accruing:
Residential real estate $ 20,741
$ 19,944
$ 20,424
Home equity 2,947
3,159
3,105
Commercial and industrial 31
46
42
Commercial real estate 8,427
2,718
5,525
Total accruing TDRs 32,146
25,867
29,096

Non-Accruing:
Residential real estate 47
452
391
Home equity —
85
30
Total non-accruing TDRs 47
537
421

Total TDRs $ 32,193
$ 26,404
$ 29,517

Regulatory guidance requires that loans be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court and the borrower has not reaffirmed the debt. The filing of bankruptcy is deemed to be evidence that the borrower is in financial difficulty and the discharge of debt by the bankruptcy court is deemed to be a concession granted to the borrower.

The Company's troubled debt restructurings ("TDRs") related to its borrowers who had filed for Chapter 7 bankruptcy protection make up 71% of the Company's total TDRs as of September 30, 2017. The average age of these TDRs was 12.0 years; the average current balance as a percentage of the original balance was 68.2%; and the average loan-to-value ratio was 65.6% as of September 30, 2017. Of the total 461 Chapter 7 related TDRs, 26 had an estimated loss exposure based on the current balance

and appraised value at September 30, 2017. The increase in commercial real estate TDRs from September 30, 2016 to September 30, 2017 primarily resulted from an addition of 2 loans with a total balance of $5.8 million.

Non-Interest Income and Non-Interest Expense

~~Nine~~Three months ended ~~September 30, 2017~~March 31, 2024 vs. ~~2016~~2023

(in millions)


	Three months ended March 31,
	2024		2023		$ Change		% Change
Net investment securities (losses) gains	$	(0.2)	$	1.2	$	(1.4)	(116.7)
Non-interest income, excluding net investment securities gains (losses)	18.1		17.5		0.6		3.4
Non-interest expense, less merger-related expenses	35.9		33.0		2.9		8.8

Nine months ended September 30,
2017 2016 $ Change % Change
Gains on sale of investment securities $ 4.3
$ 3.5
$ 0.8
22.9 %
Non-interest income (excluding above gains) 43.8
40.9
2.9
7.1 %

Non-interest expense 73.1
73.7
(0.6 ) (0.8 )%

Non-Interest Income: ~~The~~Non-interest income was $17.9 million during the quarter ended March 31, 2024, as compared to $18.7 million during the quarter ended March 31, 2023. During the first quarter of 2024, the Company ~~realized $4.3 million and $3.5~~reported $0.2 million of ~~investment~~unrealized fair value losses on the Company’s equity securities compared to $0.8 million of realized gains during the nine months ended September 30, 2017 and nine months ended September 30, 2016, respectively. These gains represented partial recoveries of impairment charges previously recognized on pools of trust preferred securities. As a result offrom the sale of ~~these~~investment securities and $0.4 million of unrealized fair value gains on the ~~Company no longer holds any pooled trust preferred~~Company’s equity securities ~~in its investment portfolio.~~ during the first quarter of 2023.

Exclusive of these ~~gains,~~items, non-interest income increased $0.6 million, or 2.9%, from ~~$40.9~~$17.5 million for the first ~~nine months~~quarter of ~~2016~~2023 to ~~$43.8~~$18.1 million for the first ~~nine months~~quarter of ~~2017.~~2024. This increase was ~~mainly due~~largely attributable to an increase of ~~$1.5~~$0.5 million, ~~(7.7%)~~or 7.2%, in service charges, an increase of ~~$0.6~~$0.4 million, ~~(25.2%) in bank owned life insurance revenues due to death benefit proceeds, an increase of $0.5 million (12.4%)~~or 16.4%, in trust and investment management fee income, and ana $0.2 million, or 3.0%, increase ~~of $0.4 million (3.5%)~~ in bankcard revenues.

~~Non-Interest Expense:~~ Non-interest expenses decreased $0.6 million, from $73.7 million in the first nine months of 2016 to $73.1 million in the first nine months of 2017. This decrease was largely due to a decrease in other expenses of $0.5 million, FDIC insurance expense of $0.5 million, and legal and professional fees of $0.3 million. These decreases were partially offset by an increase in salaries and employee benefits of $0.4 million and occupancy and equipment of $0.4 million.

~~Income Tax Expense:~~ ~~The Company’s effective income tax rate for the nine months ended September 30, 2017 was 32.5% compared to 33.3% for the nine months ended September 30, 2016.~~

~~Three months ended September 30, 2017 vs. 2016~~

~~(in millions)~~

Three months ended September 30,
2017 2016 $ Change % Change
Gains on sale of investment securities $ —
$ 2.7
$ (2.7 ) (100.0 )%
Non-interest income (excluding investment gains) $ 14.6
$ 14.1
$ 0.5
3.5 %

Non-interest expense 24.3
25.3
$ (1.0 ) (4.0 )%

~~Non-Interest Income:~~ The Company realized $2.7 million of realized investment gains during the third quarter of 2016. These gains represented partial recoveries of impairment charges previously recognized on pools of trust preferred securities. Exclusive of these gains, non-interest income increased from $14.1 million for the third quarter of 2016 to $14.6 million for the third quarter of 2017. This increase was mainly due to an increase in service charge revenues of $0.6 million (8.4%), an increase in trust and investment management fee income of $0.1 million (10.7%), and an increase in bankcard revenue of $0.1 million (1.8%). These increases were partially offset by a decrease in other income of ~~$0.2~~$0.6 million.

Non-Interest Expense: Non-interest expenses decreased ~~$1.0~~$2.7 million, or 7.1%, from ~~$25.3~~$38.6 million in the ~~third~~first quarter of ~~2016~~2023 to ~~$24.3~~$35.9 million in the ~~third~~first quarter of ~~2017.~~2024. During the quarter ended March 31, 2023, the Company recognized $5.6 million of acquisition and integration expenses (included in other expenses) associated with the completed acquisition of Citizens Commerce Bancshares, Inc. (“Citizens”) and its principal banking subsidiary, Citizens Commerce Bank, on March 10, 2023. Excluding these expenses, non-interest expenses increased $2.9 million from $33.0 million in the quarter ended March 31, 2023 to $35.9 million in the quarter ended March 31, 2024. This increase was largely due to ~~a decrease from the third quarter~~an increase in salaries and employee benefits of ~~2016 in legal~~$1.2 million due to salary adjustments and ~~professional fees of $0.4~~increased health insurance costs. In addition, bankcard expenses increased $0.5 million, ~~(42.0%), repossessed asset losses of $0.2~~other expenses increased $0.5 million, ~~(64.9%),~~ and FDIC insurance expense increased $0.3 million. .

Table of ~~$0.2 million (35.4%).~~Contents

Income Tax Expense: The Company's effective income tax rate for the three months ended ~~September 30, 2017~~March 31, 2024 and March 31, 2023 was ~~33.5% compared to 32.5% for the year ended December 31, 2016,~~19.5%, and ~~33.2% for the three months ended September 30, 2016. The effective income tax rate is based upon the Company's expected tax rate for the year ended December 31, 2017.~~20.5%, respectively.

Risk Management

Market risk is the risk of loss due to adverse changes in current and future cash flows, fair values, earnings or capital due to adverse movements in interest rates and other factors, including foreign exchange rates, underlying credit risk and commodity prices. Because the Company has no significant foreign exchange activities and holds no commodities, interest rate risk represents the primary market risk factor affecting the Company’s balance sheet and net interest margin. Significant changes in interest rates by the Federal Reserve could result in similar changes in ~~LIBOR~~SOFR interest rates, prime rates, and other benchmark interest rates that could affect the estimated fair value of the Company’s investment securities portfolio, interest paid on the Company’s short-term and long-term borrowings, interest earned on the Company’s loan portfolio and interest paid on its deposit accounts. The Company utilizes derivative instruments, primarily in the form of interest rate swaps, to help manage its interest rate risk on commercial loans.

The Company’s ~~Asset and Liability Committee (“ALCO”)~~ALCO has been delegated the responsibility of managing the Company’s interest-sensitive balance sheet accounts to maximize earnings while managing interest rate risk. ALCO, comprised of various members of executive and senior management, is also responsible for establishing policies to monitor and limit the Company’s exposure to interest rate risk and to manage the Company’s liquidity position. ALCO satisfies its responsibilities through at least quarterly meetings during which product pricing issues, liquidity measures, and interest sensitivity positions are monitored.

In order to measure and manage its interest rate risk, the Company uses an asset/liability management and simulation software model to periodically update the interest sensitivity position of the Company’s balance sheet. The model is also used to perform analyses that measure the impact on net interest income and capital as a result of various changes in the interest rate environment. Such analyses quantify the effects of various interest rate scenarios on projected net interest income.

The Company’s policy objective is to avoid negative fluctuations in net income or the economic value of equity of more than 15% within a 12-month period, assuming an immediate parallel increase or decrease of ~~400~~100 to 300 basis points. The Company measures the long-term risk associated with sustained increases and decreases in rates through analysis of the impact to changes in rates on the economic value of equity.

The following table summarizes the sensitivity of the Company’s net income to various interest rate scenarios. The results of the sensitivity analyses presented below differ from the results used internally by ALCO in that, in the analyses below, interest rates are assumed to have an immediate and sustained parallel shock. The Company recognizes that rates are volatile, but rarely move with immediate and parallel effects. Internally, the Company considers a variety of interest rate scenarios that are deemed ~~to be~~ possible while considering the level of risk it is willing to assume in “worst-case” scenarios such as shown by the following:

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Immediate Basis Point Change in Interest Rates Implied Federal Funds Rate Associated with Change in Interest Rates Estimated Increase (Decrease) in Net Income Over 12 Months
September 30, 2017
+400
5.25 % +8.2 %
+300
4.25
+9.4
+200
3.25
+8.7
+100
2.25
+5.9
-50
0.75
-5.9
-100
0.25
-12.4

December 31, 2016

+400
4.75 % +8.0 %
+300
3.75
+9.9
+200
2.75
+9.7
+100
1.75
+6.2
-50
0.25
-6.1
-100
(0.25 ) -9.5


Immediate Basis Point Change in Interest Rates	Implied Federal Funds Rate Associated with Change in Interest Rates		Estimated Increase or Decrease in Net Income Over 12 Months
March 31, 2024
+300	8.50	%	-3.2	%
+200	7.50		-2.0
+100	6.50		-0.7
-100	4.50		-6.4
-200	3.50		-9.9
-300	2.50		-14.3

December 31, 2023
+300	8.50	%	-4.5	%
+200	7.50		-2.4
+100	6.50		-1.6
-100	4.50		-7.2
-200	3.50		-8.3
-300	2.50		-13.9

These estimates are highly dependent upon assumptions made by management, including, but not limited to, assumptions regarding the manner in which interest-bearing demand deposit and ~~saving~~savings deposit accounts reprice in different interest rate scenarios, changes in the composition of deposit balances, pricing behavior of competitors, prepayments of loans and deposits under alternative rate environments, and new business volumes and pricing. As a result, there can be no assurance that the estimates above will be achieved in the event that interest rates increase or decrease during ~~2017~~the remainder of 2024 and beyond. The estimates above do not necessarily imply that the Company will experience increases in net income if market interest rates rise. The table above indicates how the Company’s net income behaves relative to an increase ~~or decrease~~ in rates compared to what would otherwise occur if rates remain stable.

Based upon the estimates above, the Company believes that its net income is positively correlated with increasing rates as compared to the level of net income the Company would expect if interest rates remain flat.

Liquidity and Capital Resources

Liquidity

The Company evaluates the adequacy of liquidity at both the City Holding ~~Company ("City Holding")~~ level and at the ~~banking subsidiary~~City National level. At the City Holding level, the principal source of cash is dividends from ~~its banking subsidiary,~~ City ~~National Bank ("City National").~~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, 2017~~,March 31, 2024, City National could pay dividends up to ~~$95.3~~$69.3 million plus net profits for the remainder of ~~2017~~,2024, as defined by statute, up to the dividend declaration date without prior regulatory permission.

On December 19, 2016, the Company announced that it had filed a prospectus supplement to its existing shelf registration statement on Form S-3 for the sale of its common stock having an aggregate value of up to $55 million through an "at-the-market" equity offering program. The Company intends to use the net proceeds from the offering to support loan growth, bolster regulatory capital, and provide cash for possible future acquisitions. Pending this use, the proceeds will be invested by the Company in various investment securities. During the quarter ended March 31, 2017, the Company sold approximately 441,000 common shares at a weighted average price of $64.48, net of broker fees. Through November 1, 2017, the Company has sold approximately 548,000 common shares at a weighted average price of $64.82, net of broker fees. The Company has sold no shares since the first quarter of 2017.

City Holding used cash obtained from the dividends received from its banking subsidiary primarily to: (i) pay common dividends to shareholders and (ii) remit interest payments on the Company’s junior subordinated debentures.

~~Over the next 12 months, City Holding has an obligation to remit interest payments approximating~~ ~~$0.8 million~~ on the debentures held by City Holding Capital Trust III. Interest payments on the debentures can be deferred for up to five years under certain circumstances and dividends to shareholders can, if necessary, be suspended.Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate $~~27.5~~42.7 million on an annualized basis over the next 12 months based on common ~~shareholders~~shares outstanding at ~~September 30, 2017~~.March 31, 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 $1.6 million of additional cash over the next 12 months. As of ~~September 30, 2017~~,March 31, 2024, City Holding reported a cash balance of $~~35.9~~50.0 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.

~~Excluding~~As illustrated in the consolidated statements of cash flows, the Company generated $32.2 million of cash from operating activities during the first three months of 2024, primarily from interest income received on loans and ~~dividend~~investments, net of interest expense paid on deposits and borrowings. The Company generated $3.0 million of cash in investing activities during the first three months of 2024, primarily due to a decrease in loans of $34.0 million and proceeds from maturities and calls of $24.2 million. These increases were partially offset by purchases of available-for-sale securities of $49.3 million and payments ~~discussed above, City Holding has no significant commitments or obligations~~for low income housing credits of $5.8 million. The Company generated $127.3 million of cash in ~~years after~~ ~~2017~~ ~~other than~~financing activities during the ~~repayment~~first three months of ~~its $16.5~~2024, principally as a result of an increase in interest-bearing deposits of $105.3 million, ~~obligation under the debentures held~~proceeds from long-term debt of $50.0 million, and an increase in non-interest-bearing deposits of $16.3 million. These increases were partially offset by ~~City Holding Capital Trust III. However, this obligation does not mature until June 2038, or earlier at the option~~a decrease in short-term borrowings of ~~City Holding. It is expected that City Holding will be able to obtain the necessary cash, either through~~$29.9 million and dividends ~~obtained from City National or the issuance~~paid of ~~other debt, to fully repay the debentures at their maturity.~~$10.6 million.

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City National manages its liquidity position in an effort to effectively and economically satisfy the funding needs of its customers and to accommodate the scheduled repayment of borrowings. Funds are available to City National from a number of sources, including depository relationships, sales and maturities within the investment securities portfolio, and borrowings from the Federal ~~Home Loan~~Reserve Bank ~~("FHLB")~~ and ~~other financial institutions.~~the FHLB. As of ~~September 30, 2017~~,March 31, 2024, City National’s assets are significantly funded by deposits and capital. Additionally, City National maintains borrowing facilities with the ~~FHLB~~Federal Reserve Bank and ~~other financial institutions~~the FHLB that are accessed as necessary to fund operations and to provide contingency ~~funding~~funding mechanisms. As of ~~September 30, 2017~~,March 31, 2024, City National ~~has~~had outstanding borrowings totaling $150 million from these facilities and had the capacity to borrow an additional $~~1.6~~1.5 billion from ~~the FHLB and other financial institutions under~~these existing borrowing facilities. ~~City National maintains a contingency funding plan, incorporating these borrowing~~

~~facilities, to address liquidity needs in the event of an institution-specific or systemic financial industry crisis.~~ Also, although it has no current intention to do so, City National could liquidate its unpledged securities, if necessary, to provide an additional funding source.Approximately $0.7 billion of City National’s investment securities were unpledged at March 31, 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.

The Company manages its asset and liability mix to balance its desire to maximize net interest income against its desire to minimize risks associated with capitalization, interest rate volatility, and liquidity. 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 ~~75.3%~~64.4% as of ~~September 30, 2017~~March 31, 2024 and deposit balances fund ~~79.4%~~80.1% 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 ~~$608.6 million~~$1.4 billion at ~~September 30, 2017~~,March 31, 2024, and that ~~greatly~~ exceeded the Company’s non-deposit sources of borrowing, which totaled ~~$298.0 million~~.$454.9 million. Further, the Company’s deposit mix has a ~~very~~ high proportion of transaction and savings accounts that fund ~~53.2%~~62.6% 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.

As ~~illustrated in~~ the ~~Consolidated Statements~~following table reflects, less than 15% (estimated) of ~~Cash Flows,~~ the ~~Company generated~~ ~~$54.5~~Company's deposits were uninsured (either with balances above $250,000 or not collateralized by investment securities) as of March 31, 2024.

Estimated Uninsured Deposits by Deposit Type


	March 31, 2024		December 31, 2023
Noninterest-Bearing Demand Deposits	16	%	16	%

Interest-Bearing Deposits
Demand Deposits	12	%	7	%
Savings Deposits	12	%	11	%
Time Deposits	15	%	13	%
Total Deposits	14	%	12	%

The amounts listed above represent management's best estimate as of the respective period shown of uninsured deposits (either with balances above $250,000 or not collateralized by investment securities).

Capital Resources

Shareholders' equity increased $5.2 million ~~of cash from operating activities during~~ for the ~~first nine~~three months ~~of 2017, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company used~~ ~~$126.3 million~~ ~~of cash in investing activities during the~~ ~~first nine months of 2017~~,ended March 31, 2024, primarily due ~~an increase in loans~~to net income of ~~$63.1~~$29.5 million and ~~net purchases~~stock based compensation expense of ~~investment securities of $136.4~~$1.1 million. These increases were partially offset by ~~a decrease in maturities and calls~~other comprehensive loss $11.1 million, cash dividends declared of ~~securities available-for-sale of $61.4 million. The Company generated~~ ~~$66.8 million~~ of cash in financing activities during the first nine months of 2017, principally as a result of an increase in other short-term borrowings of $33.2 million, proceeds from the issuance of common stock of $28.4 million, and an increase in interest-bearing deposits of $27.3 million. These increases were partially offset by dividends paid of $20.2 million to the Company’s common stockholders and a decrease in non-interest bearing deposits of $2.4 million.

~~Capital Resources~~

~~During the~~ ~~first nine months of 2017, shareholders’ equity increased~~ ~~$57.9 million, or~~ ~~13.1%, from~~ ~~$442.4 million~~ at ~~December 31, 2016~~ to ~~$500.3 million~~ at ~~September 30, 2017. This increase was primarily due to net income of $44.6~~$10.6 million and the ~~issuance~~repurchase of 36,438 common ~~stock~~shares at a weighted average price of ~~$28.4~~$100.24 per share ($3.7 million) as part of a one million ~~that was partially offset~~share repurchase plan authorized by ~~dividends declared~~the Board of ~~$20.7 million.~~Directors in January 2024.

In July 2013, the Federal Reserve published the final rules that established a new comprehensive capital framework for banking organizations, commonly referred to as Basel III. These final rules substantially revised the risk-based capital requirements applicable to bank holding companies and depository institutions. The ~~final rule became effective January 1, 2015 for smaller, non-complex banking organizations, with full implementation by January 1, 2019.~~

Regulatory guidelines require the Company to maintain a minimum common equity tier I ("CET1") capital ratio of 5.75% and a total capital to risk-adjusted assets ratio of 9.25%, with at least one-half of capital consisting of tangible common stockholders’ equity and a minimum Tier I leverage ratio of 7.25%. Similarly, City National is also required to maintain minimum capital levels as set forth by various regulatory agencies. Under capital adequacy guidelines, City National is required to maintain minimum CET1, total capital, Tier I capital, and leverage ratios of 5.75%, 9.25%, 7.25%, and 4.0%, respectively. To be classified as “well capitalized,” City National must maintain CET1, total capital, Tier I capital, and leverage ratios of 6.5%, 10.0%, 8.0%, and 5.0%, respectively.

~~When fully phased in on January 1, 2019, the~~ Basel III Capital Rules ~~will~~ require City Holding and City National to maintain ~~(i)~~minimum CET 1, Tier 1 and Total Capital ratios, along with a ~~minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% "capital~~capital conservation ~~buffer" (which is added to the 4.5% CET1 ratio as that~~ buffer, ~~is phased in,~~ effectively resulting in anew minimum ~~ratio of CET1 to risk-weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1~~ capital ~~to risk-weighted assets of at least 6.0%, plus~~ratios (which are shown in the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets (as compared to a current minimum leverage ratio of 3.0% for banking organizations that either have the highest supervisory rating or have implemented the appropriate federal regulatory authority's risk-adjusted measure for market risk)table below).

The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and will be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019).

The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to City Holding Company or City National Bank.

~~The aforementioned~~ capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of ~~CET1~~CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The Basel III Capital

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Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to City Holding Company or City National Bank.

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The Company’s regulatory capital ratios for both City Holding and City National include the 2.5% capital conservation buffer are illustrated in the following tables (in thousands):

(~~dollars in thousands~~):


March 31, 2024	Actual				Minimum Required - Basel III				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio

CET I Capital
City Holding Company	$	644,235	16.2	%	$	279,242	7.0	%	$	259,296	6.5	%
City National Bank	580,069		14.6		278,196		7.0		258,325		6.5
Tier I Capital
City Holding Company	644,235		16.2		339,079		8.5		319,134		8.0
City National Bank	580,069		14.6		337,809		8.5		317,938		8.0
Total Capital
City Holding Company	665,707		16.7		418,863		10.5		398,917		10.0
City National Bank	601,542		15.1		417,293		10.5		397,422		10.0
Tier I Leverage Ratio
City Holding Company	644,235		10.5		246,667		4.0		308,333		5.0
City National Bank	580,069		9.4		246,423		4.0		308,029		5.0


December 31, 2023	Actual				Minimum Required - Basel III				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio

CET I Capital
City Holding Company	$	627,579	15.7	%	$	279,768	7.0	%	$	259,875	6.5	%
City National Bank	549,031		13.8		278,692		7.0		258,785		6.5
Tier I Capital
City Holding Company	627,579		15.7		339,718		8.5		319,735		8.0
City National Bank	549,031		13.8		338,412		8.5		318,505		8.0
Total Capital
City Holding Company	648,646		16.2		419,652		10.5		399,669		10.0
City National Bank	570,099		14.3		418,038		10.5		398,131		10.0
Tier I Leverage Ratio
City Holding Company	627,579		10.2		245,468		4.0		306,835		5.0
City National Bank	549,031		8.9		245,587		4.0		306,984		5.0

September 30, 2017 Actual Minimum Required - Basel III Phase-In Schedule Minimum Required - Basel III Fully Phased-In (*) Required to be Considered Well Capitalized
Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio

CET I Capital
     City Holding Company $ 426,057
15.1 % $ 162,423
5.750 % $ 197,733
7.0 % $ 183,609
6.5 %
     City National Bank 356,765
12.7
161,076
5.750
196,092
7.0
182,086
6.5
Tier I Capital
     City Holding Company 442,057
15.7
204,794
7.250
240,104
8.5
225,980
8.0
     City National Bank 356,765
12.7
203,096
7.250
238,112
8.5
224,106
8.0
Total Capital
     City Holding Company 463,198
16.4
261,289
9.250
296,599
10.5
282,475
10.0
     City National Bank 376,622
13.4
259,122
9.250
294,139
10.5
280,132
10.0
Tier I Leverage Ratio
     City Holding Company 442,057
11.1
160,012
4.0
160,012
4.0
200,015
5.0
     City National Bank 356,765
9.0
157,814
4.0
157,814
4.0
197,268
5.0

(*) Represents the minimum required capital levels as of January 1, 2019 when Basel III Capital Rules have been fully phased in.

December 31, 2016 Actual Minimum Required - Basel III Phase-In Schedule Minimum Required - Basel III Fully Phased-In (*) Required to be Considered Well Capitalized
Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio

CET I Capital
     City Holding Company $ 371,677
13.3 % $ 142,845
5.125 % $ 195,105
7.0 % $ 181,169
6.5 %
     City National Bank 310,912
11.2
141,860
5.125
193,761
7.0
179,921
6.5
Tier I Capital
     City Holding Company 387,677
13.9
184,653
6.625
236,913
8.5
222,977
8.0
     City National Bank 318,872
11.5
183,381
6.625
235,281
8.5
221,441
8.0
Total Capital
     City Holding Company 408,406
14.7
240,397
8.625
292,658
10.5
278,722
10.0
     City National Bank 338,675
12.2
238,741
8.625
290,641
10.5
276,801
10.0
Tier I Leverage Ratio
     City Holding Company 387,677
10.1
153,864
4.000
153,864
4.0
192,330
5.0
     City National Bank 318,872
8.3
153,088
4.000
153,088
4.0
191,359
5.0

(*) Represents the minimum required capital levels as of January 1, 2019 when Basel III Capital Rules have been fully phased in.

As of ~~September 30, 2017,~~March 31, 2024, management believes that City Holding Company and its banking subsidiary, City National, were “well capitalized.” City Holding is subject to regulatory capital requirements administered by the Federal Reserve, while City National is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”). Regulatory agencies can initiate certain mandatory actions if either City Holding or City National fails to meet the minimum capital requirements, as shown above. As of ~~September 30, 2017~~,March 31, 2024, management believes that City Holding and City National have met all capital adequacy requirements.

Depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio of greater than 9%, off–balance–sheet exposures of 25% or less of total consolidated assets and trading assets plus trading liabilities of 5% or less of total consolidated

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assets, are deemed “qualifying community banking organizations” and are eligible to opt into the “community bank leverage ratio framework.” A qualifying community banking organization that elects to use the community bank leverage ratio framework and that maintains a leverage ratio of greater than 9% is considered to have satisfied the generally applicable risk–based and leverage capital requirements under the Basel III Rules and, if applicable, is considered to have met the “well capitalized” ratio requirements for purposes of its primary federal regulator’s prompt corrective action rules. The Company and its subsidiary bank do not have any immediate plans to elect to use the community bank leverage ratio framework but may make such an election in the future.


~~Item 3 -~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is provided under the caption “Risk Management” under Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.


~~Item 4 -~~	~~Controls and Procedures~~

Item 4 - Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, the Company carried out an evaluation, with the participation of the Company’smanagement, including the Company’sChief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Company’sChief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’speriodic SEC filings. There has been no change in the Company’s internal control over financial reporting during the quarter ended ~~September 30, 2017~~March 31, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


~~Part II -~~	~~OTHER INFORMATION~~

Part II - OTHER INFORMATION


~~Item 1.~~	~~Legal Proceedings~~

Item 1.Legal Proceedings

The Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately resolved. There can be no assurance that current actions will have immaterial results, either positive or negative, or that no material actions may be presented in the future.

Item 1A. Risk Factors

~~There have been no material changes to~~Readers should carefully consider the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year endedDecember 31, ~~2016.~~2023


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

~~At-The-Market Common Stock Offering~~

On ~~December 19, 2016,~~January 31, 2024, the Board of Directors of the Company ~~announced that it had filed a prospectus supplement~~authorized the Company to ~~its existing shelf registration statement on Form S-3 for the sale~~buy back up to 1,000,000 shares of its common stock ~~having an aggregate value~~(approximately 7% of upoutstanding shares) in open market transactions at prices that are accretive to ~~$55 million through an "at-the-market" equity offering~~the earnings per share of continuing shareholders. No time limit was placed on the duration of the share repurchase program. ~~During the first quarter~~As part of ~~2017,~~this authorization, the Company ~~issued 440,604 shares of~~terminated its previous repurchase program that was approved in May 2022. The following table sets forth information regarding the Company's common stock ~~at an average price received~~repurchases transacted during the quarter ended March 31, 2024:

Total Number

Maximum Number

of Shares Purchased

of Shares that May

as Part of Publicly

Yet Be Purchased

Total Number of

Average Price

Announced Plans

Under the Plans

Period

Shares Purchased

Paid per Share

or Programs

February 1, 2024 - February 29, 2024*

18,138

100.66

18,138

981,862

March 1, 2024 - March 31, 2024

18,300

99.82

36,438

963,562

Table of $64.48, net of commissions and excluding one-time offering costs of $265,000. Based on the average sales price of $66.48 as of September 30, 2017, approximately 279,000 remaining shares may be issued under the “at-the-market” equity offering program.Contents

*There were no common stock repurchases in January 2024.


~~Item 3.~~	~~Defaults Upon Senior Securities~~

Item 3.Defaults Upon Senior Securities

None.


~~Item 4.~~	~~Mine Safety Disclosures~~

Item 4.Mine Safety Disclosures

None.


~~Item 5.~~	~~Other Information~~

Item 5.Other Information

~~None.~~

During the three months ended March 31, 2024, none of our directors or officers informed us of the adoption, modification or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408.

Table of Contents


~~Item 6.~~	~~Exhibits~~

Item 6.Exhibits

The exhibits required to be filed or furnished with this Form 10-Q are attached hereto or incorporated herein by ~~reference. For a list of such exhibits, see~~reference as shown in the following "Exhibit Index."

~~SIGNATURES~~

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~



	~~City Holding Company~~
	~~(Registrant)~~

	~~/s/ Charles R. Hageboeck~~
	~~Charles R. Hageboeck~~
	~~President and Chief Executive Officer~~
	~~(Principal Executive Officer)~~

	~~/s/ David L. Bumgarner~~
	~~David L. Bumgarner~~
	~~Senior Vice President, Chief Financial Officer and Principal Accounting Officer~~
	~~(Principal Financial Officer)~~

~~Date:~~ ~~November 3, 2017~~

Exhibit Index

The following exhibits are filed herewith or are incorporated herein by reference.

2(a)

Agreement and Plan of Merger, dated ~~November 14, 2011,~~October 18, 2022, by and among ~~Virginia Savings Bancorp, Inc., Virginia Savings Bank, F.S.B.,~~ City Holding Company and ~~City National Bank of West Virginia~~Citizens Commerce Bancshares, Inc. (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated ~~November 14, 2011,~~October 18, 2022, and filed with the Securities and Exchange Commission on ~~November 14, 2011)~~October 18, 2022).

2(b)

Agreement and Plan of Merger, dated ~~August 2, 2012,~~July 11, 2018, by and among ~~Community Financial Corporation, Community~~Poage Bankshares, Inc., Town Square Bank, City Holding Company and City National Bank of West Virginia (attached to, and incorporated by reference from, City Holding Company’s Form 8-K dated ~~August 7, 2012,~~July 11, 2018, and filed with the Securities and Exchange Commission on ~~August 7, 2012)~~July 12, 2018).

~~3(a)~~

2(c)

~~Articles~~Agreement and Plan of ~~Incorporation of~~Merger, dated July 11, 2018, by and among Farmers Deposit Bancorp, Inc., Farmers Deposit Bank, City Holding Company ~~(attached to,~~ and ~~incorporated by reference from, Amendment No. 1 to~~ City ~~Holding Company’s Registration Statement on Form S-4, Registration No. 2-86250, filed November 4, 1983 with the Securities and Exchange Commission).~~

~~3(b)~~

~~Articles~~National Bank of ~~Amendment to the Articles of Incorporation of City Holding Company, dated March 6, 1984~~West Virginia (attached to, and incorporated by reference from, City Holding ~~Company's~~Company’s Form 8-K ~~Report~~ dated ~~March 7, 1984,~~July 11, 2018, and filed with the Securities and Exchange Commission on ~~March 22, 1984)~~July 12, 2018).

~~3(c)~~

3(a)

~~Articles of Amendment to the~~Amended and Restated Articles of Incorporation of City Holding Company, dated March 4, 1986 (attached to, and incorporated by reference from, City Holding Company's Form 10-K Annual Report for the year ended December 31, 1986, filed March 31, 1987 with the Securities and Exchange Commission).

~~3(d)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company~~, dated September 29, 1987 (attached to and incorporated by reference from, City Holding Company's Registration Statement on Form S-4, Registration No. 33-23295, filed with the Securities and Exchange Commission on August 3, 1988).

~~3(e)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company~~, dated May 6, 1991 (attached to, and incorporated by reference from, City Holding Company's Form 10-K Annual Report for the year ended December 31, 1991, filed March 17, 1992 with the Securities and Exchange Commission).

~~3(f)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company~~, dated May 7, 1991 (attached to, and incorporated by reference from, City Holding Company's Form 10-K Annual Report for the year ended December 31, 1991, filed March 17, 1992 with the Securities and Exchange Commission).

~~3(g)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company, dated August 1, 1994 (attached~~(attached to, and incorporated by reference from City Holding Company's Form 10-Q Quarterly Report for the quarter ~~ended~~ending September 30, ~~1994,~~2021, filed November ~~14, 1994~~4, 2021 with the Securities ~~and~~ Exchange Commission).

~~3(h)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company~~, dated December 9, 1998 (attached to, and incorporated by reference from, City Holding Company’s Form 10-K Annual Report for the year ended December 31, 1998, filed March 31, 1999 with the Securities and Exchange Commission).

~~3(i)~~3(b)

~~Articles of Amendment to the Articles of Incorporation of City Holding Company, dated June 13, 2001 (attached to, and incorporated by reference from, City Holding Company’s Registration Statement on Form 8-A, filed June 22, 2001 with the Securities and Exchange Commission).~~

~~3(j)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company~~, dated May 10, 2006 (attached to, and incorporated by reference from, City Holding Company’s Form 10-Q, Quarterly Report for the quarter ended June 30, 2006, filed August 9, 2006 with the Securities and Exchange Commission).

~~3(k)~~

~~Articles of Amendment to the Articles of Incorporation of City Holding Company~~, dated April 19, 2017 (attached to, and incorporated by reference from, City Holding Company's Form 10-Q Quarterly Report for the quarter ended March 31, 2017, filed May 5, 2017 with the Securities and Exchange Commission).

~~3(l)~~

Amended and Restated Bylaws of City Holding Company, revised ~~February 24, 2010~~December 18, 2019 (attached to, and incorporated by reference from, City Holding Company’s Current Report on Form 8-K filed ~~March 1, 2010~~December 20, 2019 with the Securities and Exchange Commission).

4(a)

Rights Agreement dated as of June 13, 2001 (attached to, and incorporated by reference from, City Holding Company's Form 8–A, filed June 22, 2001, with the Securities and Exchange Commission).

4(b)

Amendment No. 1 to the Rights Agreement dated as of November 30, 2005 (attached to, and incorporated by reference from, City Holding Company’s Amendment No. 1 on Form 8-A, filed December 21, 2005, with the Securities and Exchange Commission).

10(a)

Change in Control Agreement for David L. Bumgarner, effective as of May 4, 2022.

10(b)

Change in Control Agreement for Jeffrey D. Legge, effective as of May 4, 2022.

10(c)

Change in Control Agreement for Michael T. Quinlan, Jr., effective as of May 4, 2022.

31(a)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Charles R. ~~Hageboeck~~Hageboeck.

31(b)

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David L. ~~Bumgarner~~Bumgarner.

32(a)

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Charles R. ~~Hageboeck~~Hageboeck.

32(b)

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David L. ~~Bumgarner~~Bumgarner.

101

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104

Cover Page Interactive Data file (formatted as inline XBRL and contained in Exhibit 101).

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			City Holding Company
			(Registrant)

			/s/ Charles R. Hageboeck
			Charles R. Hageboeck
			President and Chief Executive Officer
			(Principal Executive Officer)

			/s/ David L. Bumgarner
			David L. Bumgarner
			Executive Vice President, Chief Financial Officer and Principal Accounting Officer
			(Principal Financial Officer)

Date: May 8, 2024



West Virginia		55-0619957
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

25 Gatewater Road,	Charleston,
~~Charleston,~~ West Virginia	25313
(Address of ~~principal executive offices)~~Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $2.50 par value	CHCO	NASDAQ Global Select Market



~~Yes~~	~~[X]~~	No	~~[ ]~~



~~Yes~~	~~[X]~~	No	~~[ ]~~


Large Accelerated Filer
~~Large accelerated filer [X]~~	x	Accelerated filer ~~[ ]~~	o
Non accelerated filer
~~Non-accelerated filer [ ]~~	o	Smaller reporting company ~~[ ]~~	☐

		Emerging growth company ~~[ ]~~	☐


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



PART I	Financial Information	Pages

Item 1.	Financial Statements (Unaudited)	51
	Consolidated Balance Sheets	52
	Consolidated Statements of Income	73
	Consolidated Statements of Comprehensive Income	95
	Consolidated Statements of Changes in Shareholders’ Equity	106
	Consolidated Statements of Cash Flows	117
	Notes to Consolidated Financial Statements	129
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3837
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5752
Item 4.	Controls and Procedures	5752

PART II	Other Information

Item 1.	Legal Proceedings	5752
Item 1A.	Risk Factors	5852
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5852
Item 3.	Defaults Upon Senior Securities	5853
Item 4.	Mine Safety Disclosures	5853
Item 5.	Other Information	5853
Item 6.	Exhibits	5954

Signatures		5955



	(Unaudited)
	September 30, 2017			December 31, 2016
Assets
Cash and due from banks	$	54,281		$	62,263
Interest-bearing deposits in depository institutions	28,884			25,876
Cash and Cash Equivalents	83,165			88,139

Investment securities available for sale, at fair value	525,633			450,083
Investment securities held-to-maturity, at amortized cost (approximate fair value at September 30, 2017 and December 31, 2016 - $68,478 and $76,445, respectively)	66,989			75,169
Other securities	15,988			14,352
Total Investment Securities	608,610			539,604

Gross loans	3,105,912			3,046,226
Allowance for loan losses	(19,554		)	(19,730		)
Net Loans	3,086,358			3,026,496

Bank owned life insurance	102,706			100,732
Premises and equipment, net	72,334			75,165
Accrued interest receivable	9,236			8,408
Net deferred tax asset	22,355			28,043
Goodwill and other intangible assets, net	78,730			79,135
Other assets	36,060			38,681
Total Assets	$	4,099,554		$	3,984,403

Liabilities
Deposits:
Noninterest-bearing	$	669,876		$	672,286
Interest-bearing:
Demand deposits	711,121			695,891
Savings deposits	799,592			822,057
Time deposits	1,075,945			1,041,419
Total Deposits	3,256,534			3,231,653

Short term borrowings:
Federal funds purchased	79,800			64,100
Customer repurchase agreements	201,664			184,205
Long-term debt	16,495			16,495
Other liabilities	44,746			45,512
Total Liabilities	3,599,239			3,541,965



Interest Income	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016

Interest and fees on loans	$	32,004	$	29,444	$	93,223	$	88,011
Interest and dividends on investment securities:
Taxable	3,666		3,183		10,591		9,115
Tax-exempt	665		419		2,014		1,141
Interest on deposits in depository institutions	31		—		51		—
Total Interest Income	36,366		33,046		105,879		98,267

Interest Expense
Interest on deposits	3,796		3,006		10,885		8,915
Interest on short-term borrowings	349		90		693		283
Interest on long-term debt	195		172		565		503
Total Interest Expense	4,340		3,268		12,143		9,701
Net Interest Income	32,026		29,778		93,736		88,566
Provision for loan losses	1,393		1,432		2,584		3,093
Net Interest Income After Provision for Loan Losses	30,633		28,346		91,152		85,473

Non-Interest Income
Net gains on sale of investment securities	—		2,668		4,276		3,513
Service charges	7,415		6,842		21,219		19,709
Bankcard revenue	4,291		4,216		12,804		12,373
Trust and investment management fee income	1,471		1,329		4,469		3,976
Bank owned life insurance	774		846		2,972		2,374
Other income	660		846		2,303		2,510
Total Non-Interest Income	14,611		16,747		48,043		44,455

Non-Interest Expense
Salaries and employee benefits	12,876		12,993		38,899		38,456
Occupancy and equipment	2,916		2,759		8,710		8,303
Depreciation	1,450		1,585		4,486		4,719
FDIC insurance expense	328		508		1,031		1,485
Advertising	689		667		2,203		2,161
Bankcard expenses	1,051		1,188		2,964		3,143
Postage, delivery, and statement mailings	517		517		1,576		1,588
Office supplies	377		325		1,082		1,044
Legal and professional fees	504		869		1,393		1,671
Telecommunications	494		459		1,470		1,318
Repossessed asset losses, net of expenses	107		305		589		646
Other expenses	3,000		3,109		8,683		9,173
Total Non-Interest Expense	24,309		25,284		73,086		73,707
Income Before Income Taxes	20,935		19,809		66,109		56,221
Income tax expense	7,003		6,577		21,463		18,745
Net Income Available to Common Shareholders	$	13,932	$	13,232	$	44,646	$	37,476



Total Comprehensive Income	$	14,240	$	12,449	$	47,881	$	42,562

Average shares outstanding, basic	15,485		14,899		15,391		14,902
Effect of dilutive securities	20		11		24		11
Average shares outstanding, diluted	15,505		14,910		15,415		14,913

Basic earnings per common share	$	0.89	$	0.88	$	2.87	$	2.48
Diluted earnings per common share	$	0.89	$	0.88	$	2.86	$	2.48
Dividends declared per common share	$	0.44	$	0.43	$	1.32	$	1.29



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016

Net income	$	13,932		$	13,232		$	44,646		$	37,476

Unrealized gains on available-for-sale securities arising during the period	488			1,427			9,404			11,575
Reclassification adjustment for gains	—			(2,668		)	(4,276		)	(3,513		)
Other comprehensive income before income taxes	488			(1,241		)	5,128			8,062
Tax effect	(180		)	458			(1,893		)	(2,976		)
Other comprehensive income (loss), net of tax	308			(783		)	3,235			5,086

Comprehensive Income, Net of Tax	$	14,240		$	12,449		$	47,881		$	42,562


	Amortized Cost		Estimated Fair Value
Available-for-Sale Debt Securities
Due in one year or less	$	2,630	$	2,598
Due after one year through five years	108,133		102,535
Due after five years through ten years	406,455		375,247
Due after ten years	986,354		867,277
Total	$	1,503,572	$	1,347,657


	Beginning Balance		Impact of Adopting ASU 2022-02		PCD Loan Reserves		Charge-offs		Recoveries		Provision for (recovery of) credit losses		Ending Balance
Three months ended March 31, 2024
Commercial and industrial	$	4,474	$	—	$	—	$	(306)	$	25	$	82	$	4,275

1-4 Family	1,402		—		—		(31)		11		12		1,394
Hotels	2,211		—		—		—		—		46		2,257
Multi-family	1,002		—		—		—		—		(3)		999
Non Residential Non-Owner Occupied	4,077		—		—		—		—		(65)		4,012
Non Residential Owner Occupied	2,453		—		—		—		—		(32)		2,421
Commercial real estate	11,145		—		—		(31)		11		(42)		11,083

Residential real estate	5,398		—		—		(19)		49		(291)		5,137
Home equity	490		—		—		(27)		9		35		507
Consumer	269		—		—		(115)		98		174		426
DDA overdrafts	969		—		—		(356)		407		(138)		882
	$	22,745	$	—	$	—	$	(854)	$	599	$	(180)	$	22,310

Three months ended March 31, 2023
Commercial and industrial	$	3,565	$	12	$	—	$	—	$	83	$	626	$	4,286

1-4 Family	566		(1)		—		(3)		14		37		613
Hotels	2,332		—		—		—		—		(148)		2,184
Multi-family	380		—		500		—		—		147		1,027
Non Residential Non-Owner Occupied	2,019		—		1,536		—		144		1,225		4,924
Non Residential Owner Occupied	1,315		—		775		—		—		347		2,437
Commercial real estate	6,612		(1)		2,811		(3)		158		1,608		11,185

Residential real estate	5,430		(138)		—		(32)		10		214		5,484
Home equity	290		(46)		—		(67)		4		219		400
Consumer	110		(2)		—		(62)		23		302		371
DDA Overdrafts	1,101		—		—		(450)		398		(51)		998
	$	17,108	$	(175)	$	2,811	$	(614)	$	676	$	2,918	$	22,724


	Non-accrual With No		Non-accrual With		Loans Past Due
	Allowance for		Allowance for		Over 90 Days
	Credit Losses		Credit Losses		Still Accruing
Commercial & Industrial	$	—	$	3,405	$	—

1-4 Family	—		672		—
Hotels	—		—		—
Multi-family	—		—		—
Non Residential Non-Owner Occupied	—		410		—
Non Residential Owner Occupied	—		2,725		—
Commercial Real Estate	—		3,807		—

Residential Real Estate	—		3,452		—
Home Equity	—		121		—
Consumer	—		1		—
Total	$	—	$	10,786	$	—


	March 31, 2024
	30-59		60-89		90+		Total		Current		Non-		Total
	Past Due		Past Due		Past Due		Past Due		Loans		accrual		Loans
Commercial and industrial	$	25	$	—	$	—	$	25	$	404,340	$	3,405	$	407,770

1-4 Family	—		—		—		—		201,706		672		202,378
Hotels	—		—		—		—		354,929		—		354,929
Multi-family	—		—		—		—		186,555		—		186,555
Non Residential Non-Owner Occupied	138		—		—		138		682,061		410		682,609
Non Residential Owner Occupied	—		—		—		—		229,715		2,725		232,440
Commercial real estate	138		—		—		138		1,654,966		3,807		1,658,911

Residential real estate	4,876		159		—		5,035		1,778,277		3,452		1,786,764
Home Equity	854		174		—		1,028		170,143		121		171,292
Consumer	65		10		—		75		63,480		1		63,556
Overdrafts	403		3		—		406		3,089		—		3,495
Total	$	6,361	$	346	$	—	$	6,707	$	4,074,295	$	10,786	$	4,091,788



	Commercial &			Commercial			Residential									DDA
	Industrial			Real Estate			Real Estate			Home Equity			Consumer			Overdrafts			Total
Nine months ended September 30, 2017
Allowance for loan loss
Beginning balance	$	4,206		$	6,573		$	6,680		$	1,417		$	82		$	772		$	19,730
Charge-offs	(150		)	(564		)	(1,295		)	(256		)	(47		)	(1,989		)	(4,301		)
Recoveries	57			92			286			45			46			1,015			1,541
Provision for acquired loans	—			39			—			—			—			—			39
Provision	946			166			218			68			(25		)	1,172			2,545
Ending balance	$	5,059		$	6,306		$	5,889		$	1,274		$	56		$	970		$	19,554

Nine months ended September 30, 2016
Allowance for loan loss
Beginning balance	$	3,271		$	6,985		$	6,778		$	1,463		$	97		$	657		$	19,251
Charge-offs	(148		)	(1,213		)	(1,281		)	(300		)	(102		)	(1,017		)	(4,061		)
Recoveries	13			447			113			—			109			585			1,267
Provision for acquired loans	—			164			—			—			—			—			164
Provision	918			(112		)	1,414			284			(29		)	454			2,929
Ending balance	$	4,054		$	6,271		$	7,024		$	1,447		$	75		$	679		$	19,550

As of September 30, 2017
Allowance for loan loss
Evaluated for impairment:
Individually	$	—		$	705		$	—		$	—		$	—		$	—		$	705
Collectively	5,057			5,424			5,861			1,274			54			970			18,640
Acquired with deteriorated
credit quality	2			177			28			—			2			—			209
Total	$	5,059		$	6,306		$	5,889		$	1,274		$	56		$	970		$	19,554

Loans
Evaluated for impairment:
Individually	$	1,095		$	8,866		$	—		$	—		$	—		$	—		$	9,961
Collectively	203,588			1,245,347			1,463,344			139,702			30,206			4,317			3,086,504
Acquired with deteriorated
credit quality	39			6,693			2,598			—			117			—			9,447
Total	$	204,722		$	1,260,906		$	1,465,942		$	139,702		$	30,323		$	4,317		$	3,105,912

As of December 31, 2016
Allowance for loan loss
Evaluated for impairment:
Individually	$	—		$	665		$	—		$	—		$	—		$	—		$	665
Collectively	4,200			5,788			6,589			1,417			82			772			18,848
Acquired with deteriorated
credit quality	6			120			91			—			—			—			217
Total	$	4,206		$	6,573		$	6,680		$	1,417		$	82		$	772		$	19,730

Loans
Evaluated for impairment:
Individually	$	1,611		$	5,970		$	—		$	—		$	—		$	—		$	7,581
Collectively	183,741			1,216,050			1,448,830			141,965			32,545			5,071			3,028,202
Acquired with deteriorated



credit quality	315		7,496		2,632		—		—		—		10,443
Total	$	185,667	$	1,229,516	$	1,451,462	$	141,965	$	32,545	$	5,071	$	3,046,226


Risk Rating		Description
Pass Ratings:
~~Risk Rating~~		~~Description~~
~~Pass ratings:~~
(a) Exceptional	Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy. Loans rated within this category pose minimal risk of loss to the bank.
(b) Good		Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles. Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable		Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles. Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch		Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk. A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention		Loans classified as special mention have a potential weakness(es) that deserves management’s close attention. The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date. A loan rated in this category poses a moderate loss risk to the bank.
Substandard		Loans classified as substandard reflect a customer with a ~~well defined~~well-defined weakness that jeopardizes the liquidation of the debt. Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful		Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable. Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.



	Performing		Non-Performing		Total
September 30, 2017
Residential real estate	$	1,463,386	$	2,556	$	1,465,942
Home equity	139,610		92		139,702
Consumer	30,323		—		30,323
DDA overdrafts	4,317		—		4,317
Total	$	1,637,636	$	2,648	$	1,640,284

December 31, 2016
Residential real estate	$	1,447,087	$	4,375	$	1,451,462
Home equity	141,834		131		141,965
Consumer	32,545		—		32,545
DDA overdrafts	5,071		—		5,071
Total	$	1,626,537	$	4,506	$	1,631,043



	September 30, 2017
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,458,091	$	4,684	$	611	$	—	$	—	$	2,556	$	1,465,942
Home equity	138,737		797		57		19		—		92		139,702
Commercial and industrial	203,093		304		—		—		—		1,325		204,722
Commercial real estate	1,253,686		240		133		—		147		6,700		1,260,906
Consumer	30,298		23		2		—		—		—		30,323
DDA overdrafts	3,765		542		7		3		—		—		4,317
Total	$	3,087,670	$	6,590	$	810	$	22	$	147	$	10,673	$	3,105,912

	December 31, 2016
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,441,086	$	5,364	$	637	$	73	$	—	$	4,302	$	1,451,462
Home equity	141,192		423		219		31		—		100		141,965
Commercial and industrial	183,615		94		—		—		—		1,958		185,667
Commercial real estate	1,221,344		553		—		278		—		7,341		1,229,516
Consumer	32,506		38		1		—		—		—		32,545
DDA overdrafts	4,472		595		4		—		—		—		5,071
Total	$	3,024,215	$	7,067	$	861	$	382	$	—	$	13,701	$	3,046,226



	September 30, 2017						December 31, 2016
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Commercial and industrial	$	1,095	$	3,259	$	—	$	1,611	$	3,775	$	—
Commercial real estate	3,062		4,887		—		3,138		4,963		—
Total	$	4,157	$	8,146	$	—	$	4,749	$	8,738	$	—

With an allowance recorded:
Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate	5,804		5,804		705		2,832		2,832		665
Total	$	5,804	$	5,804	$	705	$	2,832	$	2,832	$	665


													Revolving
	Term Loans												Loans
	Amortized Cost Basis by Origination Year and Risk Level												Amortized
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		Total
Commercial and industrial
Pass	$	11,932	$	66,867	$	46,209	$	72,430	$	41,097	$	39,592	$	99,859	$	377,986
Special mention	—		—		—		—		—		13		—		13
Substandard	378		571		2,609		720		579		2,385		22,529		29,771
Total	$	12,310	$	67,438	$	48,818	$	73,150	$	41,676	$	41,990	$	122,388	$	407,770
YTD Gross Charge-offs	$	—	$	—	$	—	$	56	$	—	$	—	$	250	$	306



	New TDRs
	Nine months ended September 30,
	2017					2016
		Pre		Post			Pre		Post
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	—	$	—	$	—	—	$	—	$	—
Commercial real estate	—	—		—		1	2,207		2,207
Residential real estate	27	3,009		3,009		30	2,924		2,924
Home equity	7	145		145		7	190		190
Consumer	—	—		—		—	—		—
Total	34	$	3,154	$	3,154	38	$	5,321	$	5,321



	September 30, 2017				December 31, 2016
	Notional Amount		Fair Value		Notional Amount		Fair Value

Non-hedging interest rate derivatives:
Customer counterparties:
Loan interest rate swap - assets	$	318,072	$	7,570	$	234,806	$	7,352
Loan interest rate swap - liabilities	225,990		6,881		207,201		8,111

Non-hedging interest rate derivatives:
Financial institution counterparties:
Loan interest rate swap - assets	232,665		6,903		207,201		8,111
Loan interest rate swap - liabilities	311,484		7,575		241,995		7,360

Derivatives designated as hedges of fair value:
Financial institution counterparties:
Loan interest rate swap - liabilities	4,326		2		4,626		12



							Gross Amounts
							Not Offset in the
							Balance Sheet
											Total
											of Gross
											Amounts
											Not Offset in
											the Statement
											of Financial
											Position
							Netting				Including
			Gross		Net Amounts		Adjustment				Applicable
			Amounts		of Liabilities		per				Netting
	Gross		Offset in the		Presented in		Applicable				Agreement
	Amounts of		Statement of		the Statement		Master		Fair Value		and Fair
	Recognized		Financial		of Financial		Netting		of Financial		Value of
Description	Liabilities		Position		Position		Arrangements		Collateral		Collateral		Net Amount
	(a)		(b)		(c)=(a)-(b)						(d)		(c)-(d) *
Non-hedging derivative liabilities:
Interest rate swap agreements - customer counterparties	$	6,881	$	—	$	6,881	$	—	$	6,881	$	6,881	$	—
Interest rate swap agreements - financial institution counterparties	$	7,575	$	—	$	7,575	$	—	$	16,459	$	16,459	$	—

Hedging derivative liabilities:
Interest rate swap agreements- financial institution counterparties	$	2	$	—	$	2	$	—	$	3	$	3	$	—

*	For instances where the fair value of financial collateral meets or exceeds the amounts presented in the Statement of Financial Position, no value is displayed to represent full collateralization.



Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
$30.00 - $34.99	500	$	30.38	1.1	21		500	$	30.38	1.1	$	21
35.00 - 39.99	20,854	37.13		5.2	725		5,379	35.39		4.5	196
40.00 - 44.99	35,659	43.95		7.8	997		2,008	44.43		6.5	55
45.00 - 49.99	12,961	46.61		7.4	328		—	—		—	—
50.00 - 70.00	17,631	66.32		9.4	$	99	—	—		—	$	—
	87,605				$	2,170	7,887				$	272


	March 31, 2024
Gross loans	$	(1,673)
Other assets	1,654
Cumulative adjustment to Interest and fees on loans	19


	Three months ended March 31,

	Defined
	Benefit		Securities
	Pension		Available-
	Plan		-for-Sale		Total
2024
Beginning Balance	$	(2,581)	$	(107,958)	$	(110,539)

Other comprehensive (loss) before reclassifications	—		(11,066)		(11,066)
Amounts reclassified from other comprehensive income	—		1		1
	—		(11,065)		(11,065)

Ending Balance	$	(2,581)	$	(119,023)	$	(121,604)

2023
Beginning Balance	$	(3,422)	$	(128,066)	$	(131,488)

Other comprehensive income before classifications	—		15,687		15,687
Amounts reclassified from other comprehensive income	—		(588)		(588)
	—		15,099		15,099

Ending Balance	$	(3,422)	$	(112,967)	$	(116,389)


	Amounts reclassified from Other Comprehensive (Loss) Income
	Three months ended				Affected line item
	March 31,				in the Consolidated Statements
	2024		2023			of Income

Securities available-for-sale:
Net securities (losses) gains reclassified into earnings	$	(1)	$	773		(Losses) gains on sale of investment securities, net
Related income tax expense	—		(185)			Income tax expense (benefit)
Net effect on accumulated other comprehensive loss	$	(1)	$	588



	Accumulated Other Comprehensive Income (Loss)
				Unrealized
				Gains (Losses) on
	Defined Benefit			Securities
	Pension Plans			Available-for-Sale			Total

Balance at December 31, 2015	$	(4,759	)	$	927		$	(3,832	)

Other comprehensive income before reclassifications	—			7,301			7,301
Amounts reclassified from other comprehensive loss	—			(2,215		)	(2,215		)
	—			5,086			5,086

Balance at September 30, 2016	$	(4,759	)	$	6,013		$	1,254

Balance at December 31, 2016	$	(4,660	)	$	(2,352	)	$	(7,012	)

Other comprehensive income before reclassifications	—			5,933			5,933
Amounts reclassified from other comprehensive loss	—			(2,698		)	(2,698		)
	—			3,235			3,235

Balance at September 30, 2017	$	(4,660	)	$	883		$	(3,777	)



	Amount reclassified from Other Comprehensive Loss
	Three months ended					Nine months ended						Affected line item
	September 30,					September 30,						in the Statements
	2017		2016			2017			2016			of Income

Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	(2,668	)	$	(4,276	)	$	(3,513	)	Security gains (losses)
Related income tax expense	—		985			1,578			1,298			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(1,683	)	$	(2,698	)	$	(2,215	)


	Total		Level 1		Level 2		Level 3
March 31, 2024
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	210,524	$	—	$	210,524	$	—
Mortgage-backed securities:
U.S. Government agencies	1,099,797		—		1,099,797		—
Private label	6,697		—		4,848		1,849
Trust preferred securities	4,449		—		4,449		—
Corporate securities	26,190		—		26,190		—
Marketable equity securities	7,253		2,930		4,323		—
Derivative assets	68,216		—		68,216		—
Financial Liabilities
Derivative liabilities	55,445		—		55,445		—

Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	752		—		—		752

December 31, 2023
Recurring fair value measurements
Financial Assets
Obligations of states and political subdivisions	$	212,738	$	—	$	212,738	$	—
Mortgage-backed securities:
U.S. Government agencies	1,088,093		—		1,088,093		—
Private label	6,704		—		4,833		1,871
Trust preferred securities	4,278		—		4,278		—
Corporate securities	26,324		—		26,324		—
Marketable equity securities	7,538		3,093		4,445		—
Certificates of deposit held for investment	—		—		—		—
Derivative assets	60,527		—		60,527		—
Financial Liabilities
Derivative liabilities	48,578		—		48,578		—

Nonrecurring fair value measurements
Non-Financial Assets
Other real estate owned	731		—		—		731


	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2024
Assets:
Cash and cash equivalents	$	318,682	$	318,682	$	318,682	$	—	$	—
Securities available-for-sale	1,347,657		1,347,657		—		1,345,808		1,849
Marketable equity securities	7,253		7,253		2,930		4,323		—
Net loans	4,069,478		3,890,421		—		—		3,890,421
Accrued interest receivable	21,759		21,759		—		21,759		—
Derivative assets	68,216		68,216		—		68,216		—

Liabilities:
Deposits	5,055,801		4,780,020		3,696,729		1,083,291		—
Short-term debt	304,941		304,941		—		304,941		—
FHLB long-term advances	150,000		148,696		—		148,696		—
Accrued interest payable	5,575		5,575		—		5,575		—
Derivative liabilities	55,445		55,445		—		55,445		—

December 31, 2023
Assets:
Cash and cash equivalents	$	156,276	$	156,276	$	156,276	$	—	$	—
Securities available-for-sale	1,338,137		1,338,137		—		1,336,266		1,871
Marketable equity securities	7,538		7,538		3,093		4,445		—
Net loans	4,103,178		3,922,638		—		—		3,922,638
Accrued interest receivable	20,290		20,290		—		20,290		—
Derivative assets	60,527		60,527		—		60,527		—

Liabilities:
Deposits	4,934,262		4,617,487		3,591,458		1,026,029		—
Short-term debt	334,856		334,856		—		334,856		—
FHLB long-term advances	100,000		99,928		—		99,928		—
Accrued interest payable	4,301		4,301		4,301		—		—
Derivative liabilities	48,578		48,578		—		48,578		—

September 30, 2017

December 31, 2016

Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 4.82% and 4.35%, respectively