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1. Company Snapshot

1.a. Company Description

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust and investment management, and other financial solutions in the United States.The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts.It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts.


In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government insured mortgages, secondary marketing, and mortgage servicing.Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services.The company operates through a network of 94 branches and 905 full-time equivalent associates in West Virginia, Virginia, Kentucky, and Ohio.


City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.

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1.b. Last Insights on CHCO

City Holding Company's recent performance was negatively impacted by the spin-out consideration of City View Green Holdings Inc., a cannabis-infused edibles manufacturing company, as part of its strategic review. This move may distract management from focusing on the core banking business, potentially affecting future growth. Additionally, the company's cash flow growth and undervalued status, highlighted in a recent article, may be overshadowed by the spin-out consideration, creating uncertainty for investors.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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AM Best Revises Outlooks to Negative for Kansas City Life Insurance Company; Downgrades Credit Ratings of Grange Life Insurance Company; Revises Issuer Credit Rating Outlook to Negative for Old American Insurance Company

Dec -04

Source: businesswire.com

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Freelance Economy Grows Amid Workforce and Economic Volatility, Expanding Across Every Major U.S. City

Dec -03

Source: globenewswire.com

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Plug Executive Leadership to Participate in Investor Conferences in New York City

Dec -03

Source: globenewswire.com

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Archer Reveals Plans for Miami Air Taxi Network Featuring Partnerships With Related Ross and Magic City Innovation District

Dec -03

Source: businesswire.com

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City View Green Holdings Inc. Completes Non-Brokered Private Placement

Dec -02

Source: newsfilecorp.com

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Western Alliance Bank Provides $35 Million Financing for Major Capital Improvements at Marina City Club

Dec -02

Source: businesswire.com

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Edible Garden to Feature Hydroponic Basil, Pulp, and Pickle Party® at the NY Produce Show at the Jacob Javits Center in New York City on December 3

Dec -02

Source: globenewswire.com

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Beyond Oil to Present at The Benchmark Company's Upcoming Discovery One-on-One Investor Conference in New York City

Dec -02

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.00%)

6. Segments

Community Banking

Expected Growth: 1.0%

City Holding Company's 1.0% growth in Community Banking is driven by increasing demand for personalized services, strategic branch expansions, and investments in digital platforms. Additionally, a focus on small business and commercial lending, as well as a strong presence in rural markets, contribute to the segment's growth.

7. Detailed Products

Consumer Banking

Provides various banking services to individuals, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions to businesses, including cash management, lending, and trade finance.

Wealth Management

Provides investment and wealth management services to individuals, families, and institutions.

Investment Banking

Offers advisory services for mergers and acquisitions, equity and debt capital markets, and leveraged finance.

Markets and Securities

Provides sales, trading, and research services for equities, fixed income, currencies, and commodities.

Treasury and Trade Solutions

Offers cash management, trade finance, and securities services to corporations and financial institutions.

8. City Holding Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for City Holding Company is moderate due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the ease of switching banks and the availability of online comparison tools.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's large scale of operations and its ability to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the banking industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several large banks and financial institutions competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.11%
Debt Cost 4.24%
Equity Weight 60.89%
Equity Cost 6.44%
WACC 5.58%
Leverage 64.23%

11. Quality Control: City Holding Company passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 6.7

Growth: 7.0

Quality: 6.9

Yield: 4.0

Momentum: 7.5

Volatility: 8.0

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City Holding

A-Score: 6.6/10

Value: 4.5

Growth: 6.3

Quality: 7.6

Yield: 6.0

Momentum: 6.0

Volatility: 9.3

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Growth: 5.6

Quality: 7.0

Yield: 7.0

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Value: 6.1

Growth: 3.7

Quality: 6.2

Yield: 10.0

Momentum: 3.5

Volatility: 8.3

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First Community Bankshares

A-Score: 6.1/10

Value: 5.9

Growth: 4.4

Quality: 8.1

Yield: 9.0

Momentum: 1.5

Volatility: 7.7

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First Busey

A-Score: 6.0/10

Value: 5.2

Growth: 5.2

Quality: 5.6

Yield: 8.0

Momentum: 4.0

Volatility: 8.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

121.62$

Current Price

121.62$

Potential

-0.00%

Expected Cash-Flows