City Holding Co., the parent company of City National Bank of West Virginia, on Monday reported record net income for 2020. The company reported net income of $89.595 million for the year compared with $89.352 million in 2019.
City Holding started 2020 strong with net income of $29 million in the first quarter. In the second quarter, when the impact of the COVID-19 pandemic was strongest, earnings fell to $18.251 million, then rebounded to $20.126 million in the third quarter and $22.222 million in the fourth quarter. Fourth-quarter earnings were still slightly below the $22.611 million reported in 2019.
“2020 was a year unlike any before for City Holding Company, City National Bank, the financial industry, and the world,” City Holding CEO Charles Hageboeck said in the quarterly earnings statement. “COVID-19 has impacted all facets of our lives from personal to professional. As a result of disruptions to our communities and the economy, City’s staff was presented with many unusual and unforeseen challenges during 2020. While the task at hand for our Company and employees was more difficult, our employees rose to the occasion and not only persevered, but excelled at providing outstanding service to our customers.”
In responding to the pandemic, the Federal Reserve slashed interest rates to nearly zero in mid-March, Hageboeck said.
“Consequently, both loan and deposit rates fell and net interest margins for financial institutions contracted significantly in 2020,” he said.
While deposit rates dropped significantly, deposit balances at banks increased, with total deposits at City increasing $576 million, or 14.1%, from Dec. 31, 2019, to Dec. 31, 2020, Hageboeck said. As the economy flattened during 2020, commercial loan demand for most of the year was weak except for government-sponsored Paycheck Protection Program loans administered by the Small Business Administration, Hageboeck said. During the fourth quarter, however, City had commercial loan growth of $32 million, he said.
“In summary, 2020 presented a myriad of obstacles for all of us to overcome and I am pleased with how City and our employees managed these obstacles and are moving into 2021 from a position of strength,” Hageboeck said.
City Holding is a $5.8 billion bank holding company with corporate headquarters at Cross Lanes. It operates 94 branches across West Virginia, Kentucky, Virginia and Ohio.