City Holding Company Announces Record Annual Earnings | Q4 2025

CHARLESTON, W.Va.–(BUSINESS WIRE)–City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.7 billion bank holding company headquartered in Charleston, West Virginia, today announced record net income of $130.5 million and record diluted earnings of $8.93 per share for the year ended December 31, 2025. For the year ended December 31, 2025, the Company achieved a return on assets of 1.97% and a return on tangible equity of 21.2%.

“City’s financial performance in 2025 speaks for itself, but undergirding that financial performance, and less well known outside of City’s branch footprint, is a long track record of documented levels of exceptional customer service; community engagement; and strong employee morale,” said City’s President and CEO Charles Hageboeck. “Fifty years ago, there were over 14,000 banks. Today there are less than 4,000. Historically, community banks focused on customers, communities, and employees. Today, there are more large banks, and their primary focus seems to be getting bigger rather than getting better. Our view at City is that focusing on growth for the sake of growth is a recipe for bureaucracy and mediocrity. City’s profitability is among the best in the nation, and our stock price relative to book value is one of the highest in the nation. I believe that this is specifically because our focus is on growing our customer base, engaging within our communities, and striving to be a good employer. That is what I think any good community bank should be doing and is our current focus and strategy.”

Net Interest Income

The Company’s net interest income increased from $220.2 million for the year ended December 31, 2024 to $236.4 million for the year ended December 31, 2025. The Company’s tax equivalent net interest income increased $16.1 million, or 7.3%, from $221.1 million for the year ended December 31, 2024 to $237.2 million for the year ended December 31, 2025. Due to an increase in average loan balances ($220.9 million) net interest income increased by $12.8 million. Additionally, net interest income increased by $7.5 million due to a decrease in the cost of interest bearing liabilities of 12 basis points, by $3.5 million due to an increase in the average balance of investments ($75.7 million), and by $2.1 million due to an increase in the yield on investment securities of 17 basis points.

These increases were partially offset by an increase in the average balances of interest bearing liabilities ($184.3 million) which decreased net interest income by $6.1 million. Decreases in the yield on deposits in depository institutions (87 basis points) and loans (1 basis point) also decreased net interest income by $1.1 million and $0.8 million, respectively. The Company’s reported net interest margin increased from 3.86% for the year ended December 31, 2024 to 3.94% for the year ended December 31, 2025.

For the quarter, the Company’s net interest income decreased approximately $0.6 million, or 0.9%, from $61.1 million during the third quarter of 2025 to $60.6 million during the fourth quarter of 2025. The Company’s tax equivalent net interest income decreased $0.5 million, or 0.8%, from $61.3 million for the third quarter of 2025 to $60.8 million for the fourth quarter of 2025. This decrease was primarily due to a decrease in the yield on loans (11 basis points) which decreased net interest income by $1.1 million. In addition, net interest income decreased $0.7 million due to a decrease in the yield on investments (22 basis points) and by $0.5 million due to an increase in the average balances of interest bearing liabilities ($65.9 million). The decline in net interest income due to the decrease in the yield on investments was primarily attributable to the maturities of $150 million of swap agreements in October 2025 ($50 million) and November 2025 ($100 million). We anticipate that this decline in investment income will be essentially offset in the first quarter of 2026 by loan growth that the Company experienced late in the quarter ended December 31, 2025.

These quarterly decreases were partially offset by an increase in average loans outstanding ($57.3 million), an increase in the average balances of deposits in depository institutions ($63.3 million), and a decrease in the cost of interest bearing liabilities (4 basis points), which increased net interest income by $0.8 million, $0.7 million, and $0.6 million, respectively. The Company’s reported net interest margin decreased from 4.04% for the third quarter of 2025 to 3.94% for the fourth quarter of 2025.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.35%, or $15.0 million, at December 31, 2024 to 0.32%, or $14.4 million at December 31, 2025. Total past due loans decreased from $8.8 million, or 0.21% of total loans outstanding, at December 31, 2024 to $8.5 million, or 0.19% of total loans outstanding, at December 31, 2025.

As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses (“ACL”), the Company recorded a provision for credit losses of $1.1 million for the fourth quarter of 2025 and a recovery of credit losses of $1.4 million for the year ended December 31, 2025, compared to a $0.3 million provision for credit losses for the fourth quarter and a provision for credit losses of $1.8 million for the year ended December 31, 2024. The recovery of credit losses recognized during 2025 related primarily to the upgrade of a specific credit that was downgraded in the third quarter of 2023 but has since seen improved financial performance. This upgrade released $1.4 million of ACL reserves.

Non-interest Income

Non-interest income was $77.8 million for the year ended December 31, 2025, as compared to $73.3 million for the year ended December 31, 2024. In 2025, the Company reported $0.2 million of realized security gains and $0.6 million of unrealized security losses on the Company’s equity securities as compared to $2.8 million realized security losses and $0.2 million of unrealized security gains on the Company’s equity securities in 2024.

Exclusive of these realized and unrealized gains and losses, non-interest income increased $2.2 million, or 2.9%, from $76.0 million for 2024 to $78.2 million for 2025. This increase was largely attributable to an increase of $1.1 million, or 9.7%, in wealth and investment management fee income and an increase of $0.8 million, or 2.6%, from service charges. Additionally, other income increased $0.3 million, or 9.8%, from the year ended December 31, 2024.

During the quarter ended December 31, 2025, non-interest income was $19.6 million, as compared to $16.1 million during the quarter ended December 31, 2024. During the fourth quarter of 2025, the Company reported $0.4 million of unrealized fair value losses on the Company’s equity securities, as compared to $2.8 million of realized security losses and $0.4 million of unrealized fair value losses on the Company’s equity securities, during the fourth quarter of 2024.

Exclusive of these realized and unrealized gains and losses, non-interest income increased from $19.3 million for the fourth quarter of 2024 to $20.1 million for the fourth quarter of 2025. This increase was primarily attributable to increased wealth and investment management fee income of $0.4 million, or 13.7%, and higher bankcard revenue of $0.2 million, or 2.6%.

Non-interest Expenses

Non-interest expenses increased $6.9 million, or 4.7%, from $147.2 million for 2024 to $154.1 million for 2025. This increase was primarily due to an increase in salaries and employee benefit expenses ($2.8 million due to salary adjustments and increased health insurance costs); other tax-related matters ($1.3 million); and equipment and software related expense ($1.3 million). In addition, other expenses increased $1.0 million and bankcard expense increased $0.5 million. These expenses were partially offset by lower advertising expenses of $0.7 million.

In the fourth quarter of 2025, non-interest expenses increased $2.6 million (7.1%) from $36.9 million in the fourth quarter of 2024 to $39.5 million. This increase was largely due to increases in other expenses of $1.1 million and salaries and employee benefits of $0.7 million. In addition, bankcard expenses increased $0.5 million and other tax-related matters increased $0.4 million. These increases were partially offset by decreased advertising expenses of $0.3 million.

Balance Sheet Trends

Loans increased $232.2 million (5.4%) from December 31, 2024 to $4.51 billion at December 31, 2025. Commercial real estate loans increased $98.6 million (5.6%); residential real estate loans increased $86.5 million (4.7%); commercial and industrial loans increased $34.1 million (8.1%); and home equity loans increased $25.5 million (12.8%). These increases were partially offset by a decrease in consumer loans ($10.5 million).

Period-end deposit balances increased $156.8 million, or 3.0%, from December 31, 2024, to December 31, 2025. Average depository balances for the year ended December 31, 2025 increased $192.8 million from the year ended December 31, 2024 to $5.23 billion. Average time deposits increased $137.3 million; average noninterest bearing demand deposits increased $30.4 million; average interest bearing demand deposits increased $15.2 million; and average savings deposits increased $9.8 million.

Income Tax Expense

The Company’s effective income tax rates for the quarter and year ended December 31, 2025 were 20.2% and 19.2%, respectively, compared to 16.9% and 19.0% for the comparable periods in 2024.

Capitalization and Liquidity

The Company’s gross loan to deposit ratio was 85.0% and its gross loan to asset ratio was 67.0% at December 31, 2025. The Company maintained investment securities totaling 22.8% of assets as of the same date. The Company’s deposit mix is weighted toward checking and saving accounts that fund 59.5% of total assets at December 31, 2025. Time deposits fund 19.4% of total assets at December 31, 2025, with only 15.0% of time deposits having balances of more than $250,000, reflecting the core retail orientation of the Company.

City Holding Company is the parent company of City National Bank of West Virginia (“City National”). City National has borrowing facilities with the Federal Reserve Bank and the Federal Home Loan Bank that can be accessed as necessary to fund operations and to provide contingency funding. These borrowing facilities are collateralized by various loans held on City National’s balance sheet. As of December 31, 2025, City National had the capacity to borrow an additional $1.7 billion from these existing borrowing facilities. In addition, approximately $817 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $716 million of City National’s investment securities unpledged at December 31, 2025.

The Company continues to be strongly capitalized with tangible equity of $652 million at December 31, 2025. The Company’s tangible equity ratio increased from 9.1% at December 31, 2024 to 9.9% at December 31, 2025. This increase was attributable to the Company’s net income for 2025 less share repurchases and dividends.

At December 31, 2025, City National’s Leverage Ratio was 8.7%, its Common Equity Tier I ratio was 13.4%, its Tier I Capital ratio was 13.4%, and its Total Risk-Based Capital ratio was 13.9%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On November 18, 2025, the Company’s Board of Directors approved a quarterly cash dividend of $0.87 cents per share payable January 30, 2026, to shareholders of record as of January 15, 2026. During the year ended December 31, 2025, the Company repurchased 397,000 common shares at a weighted average price of $115.24 per share as part of a one million share repurchase plan authorized by the Board of Directors in January 2024. As of December 31, 2025, the Company could repurchase an additional approximately 424,000 shares under the current plan. City Holding Company had a cash balance of $149 million at December 31, 2025. The parent company’s annual expenditures are approximately $50 million (based on the Company’s operating expenses, contractual obligations and current quarterly dividend ($0.87 per share)).

City National operates 96 branches across West Virginia, Kentucky, Virginia, and Ohio.

Forward-Looking Information

This news release 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 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; (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; (9) our ability to effectively execute our business plan, including with respect to future acquisitions; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting our operations. Forward-looking statements made herein reflect management’s expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its December 31, 2025 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2025 results and will adjust the amounts if necessary.