CITY HOLDING CO Posts 11.8% Net Income Jump, Loan Growth Fuels Q3

TL;DR

**CHCO is a solid regional bank showing strong earnings and loan growth, making it a buy for stability and dividends.**

AI Summary

CITY HOLDING CO (CHCO) reported a robust financial performance for the nine months ended September 30, 2025, with net income available to common shareholders increasing by 11.8% to $98.9 million, up from $88.4 million in the prior year. Basic earnings per common share rose to $6.76 from $5.96. Total interest income grew to $239.8 million from $227.6 million, driven by a rise in interest and fees on loans to $188.1 million from $179.8 million. Net interest income also saw a significant increase, reaching $175.8 million compared to $164.7 million in the same period last year. The company recorded a recovery of provision for credit losses of $2.5 million, a positive shift from a $1.5 million provision in the prior year, indicating improved asset quality. Total assets expanded to $6.67 billion as of September 30, 2025, from $6.46 billion at December 31, 2024, primarily due to growth in gross loans to $4.41 billion and investment securities to $1.54 billion. Total deposits also increased to $5.26 billion from $5.14 billion. Risks include general economic conditions, credit risk, changes in the real estate market, and interest rate fluctuations, as outlined in their forward-looking statements.

Why It Matters

CHCO's strong performance, marked by an 11.8% increase in net income and significant loan growth, signals healthy regional banking activity and effective credit management, evidenced by the $2.5 million recovery of credit losses. This could attract investors seeking stable, dividend-paying financial institutions, as cash dividends declared increased to $2.45 per share for the nine months ended September 30, 2025. For employees, continued growth could mean job security and expansion opportunities within its 96 banking offices across West Virginia, Kentucky, Virginia, and Ohio. Customers benefit from a stable bank with expanding loan capacity. In a competitive landscape, CHCO's ability to grow deposits and loans while improving asset quality positions it favorably against other community banks.

Risk Assessment

Risk Level: medium — The risk level is medium due to the inherent credit risk in its loan portfolio, which grew to $4.41 billion, and exposure to changes in the real estate market. While the company reported a $2.5 million recovery of provision for credit losses, indicating current strength, the forward-looking statements explicitly mention 'risk that our allowance for credit losses may not be sufficient to absorb actual losses' and 'changes in the real estate market, including the value of collateral.'

Analyst Insight

Investors should consider CHCO for its consistent earnings growth and increasing dividends, with cash dividends declared rising to $2.45 per share for the nine months ended September 30, 2025. Monitor interest rate trends and regional economic indicators, as these are key drivers for community banks like CHCO, which operates 96 banking offices across four states.

Financial Highlights

debt To Equity

7.34

revenue

$239.8M

operating Margin

N/A

total Assets

$6.67B

total Debt

$5.87B

net Income

$98.9M

eps

$6.76

gross Margin

N/A

cash Position

$225.6M

revenue Growth

+5.4%

Revenue Breakdown

Key Numbers

• $98.9M — Net Income Available to Common Shareholders (Increased by 11.8% from $88.4 million in the prior year period.)
• $6.76 — Basic Earnings Per Common Share (Increased from $5.96 in the prior year period.)
• $239.8M — Total Interest Income (Increased from $227.6 million in the prior year period.)
• $175.8M — Net Interest Income (Increased from $164.7 million in the prior year period.)
• $2.5M — Recovery of Provision for Credit Losses (A positive shift from a $1.5 million provision in the prior year period.)
• $6.67B — Total Assets (Increased from $6.46 billion at December 31, 2024.)
• $4.41B — Gross Loans (Increased from $4.27 billion at December 31, 2024.)
• $5.26B — Total Deposits (Increased from $5.14 billion at December 31, 2024.)
• $2.45 — Cash Dividends Declared Per Share (For the nine months ended September 30, 2025, up from $2.22 in the prior year period.)
• 14.4M — Shares of Common Stock Outstanding (As of November 3, 2025.)

Key Players & Entities

• CITY HOLDING COMPANY (company) — registrant
• City National Bank of West Virginia (company) — wholly-owned subsidiary
• FASB (regulator) — accounting standards setter
• NASDAQ Global Select Market (market) — exchange where common stock is registered
• West Virginia (location) — state of incorporation and headquarters
• Kentucky (location) — state of operation for City National Bank
• Virginia (location) — state of operation for City National Bank
• Ohio (location) — state of operation for City National Bank
• Private Securities Litigation Reform Act of 1995 (law) — safe harbor provisions for forward-looking statements
• SEC (regulator) — filing oversight

FAQ

Risk Factors

• Credit Risk [high — financial]: The company faces credit risk from its loan portfolio, which amounted to $4.41 billion in gross loans as of September 30, 2025. While the allowance for credit losses decreased to $19.7 million from $21.9 million, indicating improved asset quality, a significant deterioration in economic conditions could lead to increased loan defaults and charge-offs.
• Interest Rate Fluctuations [medium — market]: Changes in interest rates can impact the company's net interest income and the fair value of its investment securities. The company holds $1.54 billion in investment securities, and fluctuations in market interest rates can affect their valuation and the company's profitability.
• Real Estate Market Conditions [medium — market]: A substantial portion of the company's loan portfolio is likely tied to real estate. A downturn in the real estate market could lead to increased delinquencies and foreclosures, impacting asset quality and potentially requiring higher provisions for credit losses.
• Liquidity Risk [medium — financial]: While total deposits increased to $5.26 billion, a rapid withdrawal of deposits or an inability to access funding sources could impact the company's ability to meet its obligations. The company relies on deposits and other borrowings, such as $369 million in securities sold under agreements to repurchase, for its funding.
• Economic Conditions [high — operational]: General economic conditions, including inflation, unemployment rates, and overall economic growth, can significantly affect the company's financial performance. A recessionary environment could lead to reduced demand for loans and increased credit risk.

Industry Context

City Holding Company operates as a community bank, primarily through its subsidiary City National Bank. The company focuses on providing credit, deposit, and wealth management services across West Virginia, Kentucky, Virginia, and Ohio. The competitive landscape for community banks involves navigating local market dynamics, competing with larger national institutions, and adapting to evolving customer preferences for digital banking services.

Regulatory Implications

As a financial holding company and a bank holding company, CHCO is subject to extensive regulation by federal and state authorities, including the Federal Reserve and the FDIC. Compliance with capital requirements, consumer protection laws, and anti-money laundering regulations is critical. Changes in regulatory policy could impact operational costs and business strategies.

What Investors Should Do

1. Monitor loan growth and credit quality trends.
2. Assess the impact of interest rate changes on net interest margin and investment portfolio.
3. Evaluate the company's deposit base stability and funding costs.
4. Review management's strategy for navigating economic headwinds and competitive pressures.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reporting period for strong net income growth of 11.8% and EPS increase to $6.76.
• 2025-12-31: As of December 31, 2024 — Prior period balance sheet data for comparison, showing total assets of $6.46 billion.
• 2025-11-03: As of November 3, 2025 — Indicates 14.4 million shares of common stock outstanding.

Glossary

Net Interest Income

The difference between the interest income generated by a bank and the interest it pays out to depositors and other lenders. (A key measure of a bank's profitability from its core lending and borrowing activities. CHCO reported $175.8 million for the nine months ended September 30, 2025.)

Provision for Credit Losses

An expense set aside by a financial institution to cover potential losses from loans that may not be repaid. (A recovery of $2.5 million indicates improved asset quality and reduced expected loan losses for CHCO.)

Allowance for Credit Losses

A contra-asset account that reduces the carrying amount of loans to their estimated net realizable value. (CHCO's allowance decreased to $19.7 million as of September 30, 2025, from $21.9 million at year-end 2024.)

Investment Securities Available for Sale

Securities that a company intends to hold for an indefinite period but may sell in response to changes in interest rates, liquidity needs, or other factors. (CHCO's portfolio grew to $1.54 billion, contributing to interest income.)

Treasury Stock

Shares of a company's own stock that it has repurchased from the open market. (CHCO held 4.55 million shares in treasury as of September 30, 2025, reducing outstanding shares and impacting equity.)

Accumulated Other Comprehensive Loss

A component of shareholders' equity that includes unrealized gains and losses on certain investments and other items not included in net income. (CHCO has an unrealized loss of $82.8 million on securities available-for-sale, impacting total equity.)

Year-Over-Year Comparison

Compared to the prior year period, City Holding Company has demonstrated strong financial performance, with net income available to common shareholders increasing by 11.8% to $98.9 million and basic EPS rising to $6.76. Total assets grew to $6.67 billion, driven by increases in gross loans and investment securities. Net interest income also saw a significant rise, indicating improved core profitability. A notable positive development is the shift from a provision for credit losses to a recovery of $2.5 million, suggesting enhanced asset quality.

Key Financial Figures

• $2.50 — ange on which registered Common Stock, $2.50 par value CHCO NASDAQ Global Select Mar

Filing Documents

• chco-20250930.htm (10-Q) — 2908KB
• exhibit31a09-30x2025.htm (EX-31.A) — 10KB
• exhibit31b09-30x2025.htm (EX-31.B) — 11KB
• exhibit32a09-30x2025.htm (EX-32.A) — 7KB
• exhibit32b09-30x2025.htm (EX-32.B) — 7KB
• chco-20250930_g1.jpg (GRAPHIC) — 12KB
• 0000726854-25-000178.txt ( ) — 13776KB
• chco-20250930.xsd (EX-101.SCH) — 38KB
• chco-20250930_cal.xml (EX-101.CAL) — 92KB
• chco-20250930_def.xml (EX-101.DEF) — 269KB
• chco-20250930_lab.xml (EX-101.LAB) — 658KB
• chco-20250930_pre.xml (EX-101.PRE) — 491KB
• chco-20250930_htm.xml (XML) — 3498KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements express only management's beliefs regarding future results or events and are subject to inherent uncertainty, risks, and changes in circumstances, many of which are outside of management's control. Uncertainty, risks, changes in circumstances and other factors could cause the Company's (as hereinafter defined) actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 under "ITEM 1A Risk Factors" and the following: (1) general economic conditions, especially in the communities and markets in which we conduct our business, which could be further impacted by a prolonged government shutdown ; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in our loan portfolio, and risk from concentrations in our loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of our loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers' performance and creditworthiness; (8) difficulty growing loan and deposit balances

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 1 Consolidated Balance Sheets 2 Consolidated Statements of Income 3 Consolidated Statements of Comprehensive Income 4 Consolidated Statements of Changes in Shareholders' Equity 5 Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

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 36

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 54

Controls and Procedures

Item 4. Controls and Procedures 54 PART II Other Information

Legal Proceedings

Item 1. Legal Proceedings 54

Risk Factors

Item 1A. Risk Factors 54

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 55

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 55

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 55

Other Information

Item 5. Other Information 56

Exhibits

Item 6. Exhibits 57

Signatures

Signatures 58 Table of Contents

- FINANCIAL INFORMATION

Part I - FINANCIAL INFORMATION

- Financial Statements

Item 1 - Financial Statements 1 Table of Contents Consolidated Balance Sheets (in thousands, except share amounts) (Unaudited) September 30, 2025 December 31, 2024 Assets Cash and due from banks $ 129,665 $ 117,580 Interest-bearing deposits in depository institutions 95,929 107,809 Cash and Cash Equivalents 225,594 225,389 Investment securities available for sale, at fair value (amortized cost $ 1,618,775 and $ 1,570,449 , net of allowance for credit losses of $ 0 at September 30, 2025 and December 31, 2024, respectively) 1,510,772 1,421,306 Other securities 29,878 29,803 Total Investment Securities 1,540,650 1,451,109 Gross loans 4,412,775 4,274,776 Allowance for credit losses ( 19,658 ) ( 21,922 ) Net Loans 4,393,117 4,252,854 Bank owned life insurance 123,506 120,887 Premises and equipment, net 69,539 70,539 Accrued interest receivable 21,890 20,650 Deferred tax assets, net 32,159 41,704 Goodwill and other intangible assets, net 158,414 160,044 Other assets 102,763 116,283 Total Assets $ 6,667,632 $ 6,459,459 Liabilities Deposits: Noninterest-bearing $ 1,377,313 $ 1,344,449 Interest-bearing: Demand deposits 1,338,872 1,335,220 Savings deposits 1,238,832 1,215,358 Time deposits 1,302,575 1,249,123 Total Deposits 5,257,592 5,144,150 Securities sold under agreements to repurchase 369,012 325,655 FHLB long-term advances 150,000 150,000 Other liabilities 92,085 108,990 Total Liabilities 5,868,689 5,728,795 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 September 30, 2025 and December 31, 2024, less 4,552,467 and 4,342,108 shares in treasury, respectively 47,619 47,619 Capital surplus 173,733 176,506 Retained earnings 915,971 852,757 Treasury Stock ( 254,153 ) ( 230,499 ) Accu

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) September 30, 2025 Note A - Background and Basis of Presentation The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding 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 months ended September 30, 2025 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2025. The Company's accounting and reporting policies conform with generally accepted accounting

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