10-K: City Holding Reports Strong 2025 Earnings, Loan Growth

Sentiment:

Annual Report 25 February 2026 3:24 PM

City Holding Company reported a significant increase in net income and loan growth for the fiscal year ended December 31, 2025, alongside robust capital ratios and strategic share repurchases.

Delay expectedThe long-term status of the Cybersecurity Information Sharing Act (CISA) remains uncertain pending further action by the U.S. Congress, as its temporary reauthorization expires September 30, 2026.Final rulemaking for the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) has been extended to May 2026.

Better than expectedNet income available to common shareholders increased by 11.4% year-over-year.Basic earnings per common share increased by 13.0% year-over-year.Net interest income (tax equivalent) increased by 7.3% year-over-year.Net interest margin improved from 3.86% to 3.94%.The company recorded a recovery of credit losses of $1.4 million in 2025, compared to a provision for credit losses in 2024 and 2023.

Summary

Net income available to common shareholders increased to $130.485 million in 2025, up from $117.101 million in 2024.
Basic earnings per common share rose to $8.94 in 2025 from $7.91 in 2024.
Total assets grew to $6.722 billion at December 31, 2025, from $6.459 billion at December 31, 2024.
Gross loans increased by 5.4% to $4.51 billion in 2025, driven by commercial real estate, residential real estate, commercial and industrial, and home equity loans.
Total deposits increased by 3.0% to $5.3 billion in 2025.
Net interest income (tax equivalent) increased by 7.3% to $237.2 million in 2025, with the net interest margin improving to 3.94% from 3.86% in 2024.
The allowance for credit losses decreased to $19.862 million in 2025 from $21.922 million in 2024, reflecting a recovery of credit losses of $1.4 million.
The company maintains strong capital adequacy, with City Holding Company's CET 1 ratio at 16.9% and Total Capital ratio at 17.4%, well above minimum regulatory requirements.
Approximately 397,000 common shares were repurchased in 2025 at a weighted average price of $115.24 per share, as part of a one million share repurchase plan.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, marked by significant earnings and loan growth, improved net interest margin, and robust capital management, despite some operational cost increases and a decrease in cash and cash equivalents.

Positives

Net income available to common shareholders increased by 11.4% to $130.485 million in 2025.
Basic earnings per common share increased by 13.0% to $8.94 in 2025.
Gross loans grew by 5.4% to $4.51 billion, indicating strong lending activity.
Net interest income (tax equivalent) increased by 7.3% to $237.2 million, and net interest margin improved to 3.94% in 2025.
The company reported a recovery of credit losses of $1.4 million in 2025, suggesting improved asset quality and risk management.
Capital ratios (CET 1, Tier 1, Total Capital, and Tier 1 Leverage) for both City Holding Company and City National Bank are well above regulatory 'well capitalized' thresholds, demonstrating financial strength.
Repurchased 397,000 common shares in 2025, returning value to shareholders and indicating management confidence.
Received a 'Satisfactory' rating on its most recent Community Reinvestment Act (CRA) examination in 2025.
Management assessed the effectiveness of internal control over financial reporting as effective as of December 31, 2025.

Negatives

Cash and cash equivalents decreased by $33.5 million (14.9%) from $225.4 million in 2024 to $191.9 million in 2025.
Consumer loans decreased by $10.5 million (18.1%) in 2025.
Gross unrealized losses on available-for-sale securities totaled $107.909 million at December 31, 2025, primarily due to interest rate changes and credit spread fluctuations.
Non-interest expenses increased by $6.9 million (4.7%) to $154.1 million in 2025, driven by higher salaries, employee benefits, other tax-related matters, and equipment/software expenses.
The long-term status of the Cybersecurity Information Sharing Act (CISA) remains uncertain pending further action by the U.S. Congress.
Final rulemaking for the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) has been extended to May 2026.

Risks

Economic downturns in the company's market areas (West Virginia, Kentucky, Virginia, southeastern Ohio) could negatively impact business and financial condition.
Volatility in the oil, natural gas, and coal industries could affect customers and operating results.
The value of real estate collateral may fluctuate significantly, potentially leading to an under-collateralized loan portfolio and increased credit losses.
Inherent risks associated with lending activities, including the impact of interest rate changes and non-compliance with applicable laws and regulations.
Default on the repayment of loans by customers may negatively impact earnings and increase operating expenses.
Remediation costs for hazardous or toxic substances on real property acquired through foreclosure could impact financial outcomes.
Changes in monetary policy, including interest rates, could adversely affect net interest income, loan origination, deposit acquisition, and the fair value of financial assets and liabilities.
The allowance for credit losses may not be sufficient to absorb actual losses in the loan portfolio.
The value of the company's common stock fluctuates due to various market and company-specific factors.
Lower trading volume in the company's common stock compared to larger financial services companies could lead to significant price falls with large sales.
Future sales or the issuance of additional shares of common stock could negatively affect its market price.
Increased competition from local, regional, and national banks, credit unions, finance companies, and financial technology ('fintech') companies could hinder the ability to attract and retain customers.
New lines of business or new products and services may subject the company to additional risks, including significant time and resource investment and external factors.
Technological change and the emergence of nonbank alternatives to the financial system could lead to disintermediation, loss of fee income, and customer deposits.
The value of the company's investments could decline due to general market conditions, volatility, and inflation rates.
The company may be required to write down goodwill and other intangible assets, negatively affecting shareholders' equity and financial results.
Additional capital may be required in the future, but it may not be available or could be dilutive to existing shareholders.
Acquisition and other growth opportunities may present challenges, including unforeseen difficulties, integration issues, and undisclosed liabilities.
The company may be adversely affected by the soundness of third parties, including other financial institutions and critical third-party vendors, leading to operational disruptions or reputational damage.
Reliance on inaccurate or incomplete information about customers and counterparties could result in credit losses or reputational damage.
The company's risk management practices may prove to be inadequate or not fully effective in identifying or mitigating all risks.
Inability to attract and retain skilled key employees could adversely affect operations and the ability to execute business strategies.
Certain federal banking laws and regulations may have an anti-takeover effect, making it more difficult for a third party to acquire the company.
The company's ability to pay dividends is limited by federal laws and regulatory policies.
Extensive regulation and supervision by governmental agencies (Federal Reserve, OCC, FDIC) impose compliance costs and restrictions, with potential for sanctions for non-compliance.
Failure or circumvention of the company's internal controls and procedures could have a material adverse effect.
Reputational risk from various sources, including adverse sentiment, unethical practices, employee misconduct, and regulatory deficiencies.
Possible claims and litigation relating to fiduciary activities could result in significant financial liability and reputational damage.
Significant legal actions could result in substantial liabilities and negatively affect financial results.
Changes in tax law and accounting standards could materially affect the company's operations.
System failure, cybersecurity breaches, fraud, and employee misconduct could subject the company to increased operating costs, litigation, and other potential losses.
Severe weather, natural disasters, acts of war or terrorism, political instability, and other external events could significantly impact the company's business.
Climate change could materially impact the company's underlying customers or general economic conditions, leading to financial impacts.

Future Outlook

Management anticipates continuing common dividend payments, expected to approximate $50.0 million on an annualized basis for 2026, at a dividend rate of $3.48 per share. The existing Chair of the Federal Reserve's term ends on May 15, 2026, introducing increased uncertainty regarding the future approach to interest rates. Final rulemaking for the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) has been extended to May 2026. The company also anticipates the termination process for the Pentegra Defined Benefit Plan associated with the Classic acquisition to be finalized in mid-2026.

Management Comments

Management believes that, as of December 31, 2025, City Holding and City National meet all capital adequacy requirements under Basel III.
Management believes that the Parent Company’s available cash balance, together with cash dividends from City National, will be adequate to satisfy its funding and cash needs over the next twelve months.
Management believes that the allowance for credit losses as of December 31, 2025 is adequate to provide for expected losses inherent in the Company’s loan portfolio.
Management believes the unrealized losses on investment securities are temporary and no allowance for credit losses has been recognized in the Company’s securities.
Management expects the resolution of current legal actions will not have a material impact on the Company's financial statements.

Industry Context

StockSavvy.ai notes that City Holding Company's strong performance in net interest income and loan growth, particularly in commercial and residential real estate, reflects a resilient regional banking environment. The increase in net interest margin to 3.94% is a positive indicator in a potentially volatile interest rate environment, especially with the upcoming change in Federal Reserve leadership. The company's robust capital ratios position it favorably against industry peers, demonstrating stability amidst ongoing regulatory scrutiny and increased competition from fintech companies. The continued share repurchase program signals management's confidence and commitment to shareholder value, a trend observed among financially strong regional banks.

Comparison to Industry Standards

The company's deposit mix has a very high proportion of transaction and savings accounts that fund 59.5% of total assets, compared to its peer group (commercial banks with assets ranging from $3 billion to $10 billion) which funds 73.0% of total assets with deposits, suggesting a lower reliance on higher-cost funding.
City Holding uses time deposits over $250,000 to fund 7.0% of total assets, compared to its peers, which fund 9.1% of total assets with such deposits, indicating a potentially more stable and less rate-sensitive deposit base.
The company's net loan to asset ratio is 66.8% as of December 31, 2025, a key metric for asset utilization, which is a strong indicator of efficient deployment of assets into revenue-generating loans.
The company's ROA of 1.97% and ROE of 16.9% in 2025 are strong indicators of profitability and efficiency, generally outperforming many regional bank averages, reflecting effective management and operational performance.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Board Member	Tracy W. Hylton	NA	January 2025	Passed away

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Policy Adoption	Executive Officer Compensation Clawback Policy adopted to increase incentives for executive officers to consider risks and reduce them, and to seek recoupment of incentive compensation in case of accounting restatements.	December 17, 2014	Enhances corporate accountability and risk management for executive compensation.
Plan Replacement	City Holding Company 2023 Incentive Plan approved by shareholders, replacing the 2013 Incentive Plan which expired in April 2023. A maximum of 600,000 shares of common stock may be issued under the new plan.	April 2023	Updates equity compensation framework, allowing for continued incentive awards to employees, directors, and service providers.
Policy Update	Insider Trading Policy updated to include specific blackout periods for directors, executive officers, and certain employees, and to require pre-clearance for trades outside of Rule 10b5-1 plans.	NA	Strengthens compliance with federal, state, and foreign securities laws and reduces the appearance of improper conduct related to insider trading.
Policy Update	Insider Trading Policy updated to prohibit certain transactions for directors and executive officers, including short-term trading (within 6 months), short sales, option trading, holding Company Securities in margin accounts or pledging them as collateral, and hedging transactions.	NA	Aligns executive and director interests with long-term shareholder value and mitigates perceived conflicts of interest.

Legal Proceedings

The company is engaged in various legal actions that it deems to be in the ordinary course of business. Management expects the resolution of current legal actions will not have a material impact on the Company's financial statements as of December 31, 2025.

Related Party Transactions

Loans to non-executive officers and directors, and their associates, totaled $154k at December 31, 2025, a decrease from $6.303 million at December 31, 2024.
Unfunded commitments on related party loans were $4.5 million as of December 31, 2025.
A board member, Tracy W. Hylton, passed away in January 2025, and outstanding loans to them are no longer considered related party as of December 31, 2025.

Stakeholder Impact

Shareholders: Positive impact from increased earnings, EPS, dividends, and share repurchases. Strong capital position provides stability, though potential dilution from future equity issuance is a risk.
Employees: Benefit from competitive compensation, 'Integrity in Action' program, employee development, and stock-based compensation plans, subject to regulatory scrutiny on incentive compensation.
Customers: Access to a broad range of banking, wealth, and investment management services through a network of 96 branches and digital channels, with services evolving to meet preferences and competition.
Regulators: The company operates in a highly regulated environment, subject to supervision by the Federal Reserve, OCC, and FDIC, requiring continuous compliance with various acts and capital adequacy requirements.
Creditors: Strong capital ratios and a conservative liquidity position enhance confidence in the company's ability to meet its obligations.

Next Steps

Finalization of the Pentegra DB Plan termination associated with the Classic acquisition in mid-2026.
The Board of Governors of the Federal Reserve System will have a new Chair after May 15, 2026, which could influence future interest rate policies.
Continued monitoring of industry concentrations against internally established risk-based capital thresholds.
Ongoing evaluation and modification of consumer loan underwriting standards.
Periodic review of the information security program by the board of directors.
Compliance with new accounting standards (ASU No. 2025-05, ASU No. 2025-09, ASU No. 2025-11, ASU No. 2025-12) in future periods.

Key Dates

Date	Description
January 1987	Directors Deferred Compensation Plan for the Directors of the Bank of Raleigh established.
June 22, 2001	Rights Agreement dated.
June 28, 2004	Form of Change in Control and Termination Agreement for John A. DeRito dated.
June 2004	John A. DeRito became Executive Vice President of Commercial Banking.
January 2005	Code of Business Conduct and Ethics covering the Board of Directors approved.
February 1, 2005	Charles R. Hageboeck, Ph.D. became President and Chief Executive Officer.
February 2005	David L. Bumgarner became Executive Vice President and Chief Financial Officer.
March 2, 2005	City Holding Company's Form 10-K Annual Report for the year ended December 31, 2004, filed.
April 2005	Federal regulators issued guidance requiring financial institutions to develop and implement a response program for unauthorized access to sensitive customer information.
December 2005	Jeffrey D. Legge became Executive Vice President, Chief Administration Officer and Chief Information Officer.
November 30, 2005	Amendment No. 1 to the Rights Agreement dated.
December 21, 2005	Amendment No. 1 on Form 8-A filed.
March 7, 2006	City Holding Company's Form 10-K Annual Report for the year ended December 31, 2005, filed.
December 22, 2006	Indenture between Town Square Financial Corporation and Wilmington Trust Company, as Trustee.
July 25, 2007	Form of Employment Agreement for Charles R. Hageboeck, Ph.D. dated.
July 31, 2007	City Holding Company's Current Report on Form 8-K filed.
December 19, 2011	Amendment to Employment Agreement for Charles R. Hageboeck dated.
December 21, 2011	City Holding Company's Form 8-K filed.
March 22, 2013	City Holding Company's Definitive Proxy Statement for the 2013 Incentive Plan filed.
July 2013	Federal Reserve published final rules establishing a comprehensive capital framework (Basel III).
December 17, 2014	Executive Officer Compensation Clawback Policy became effective.
January 1, 2015	Basel III Capital Rules became effective for smaller, non-complex banking organizations.
March 2016	FDIC adopted a final rule permanently increasing the reserve ratio for the Deposit Insurance Fund (DIF) to 1.35%.
May 24, 2018	The Economic Growth, Regulatory Relief, and Consumer Protection Act was signed into law.
July 11, 2018	Agreement and Plan of Merger with Poage Bankshares, Inc. dated.
December 7, 2018	Second Supplemental Indenture dated.
March 11, 2019	City Holding Company's Form 10K Annual Report for the period ended December 31, 2018, filed.
November 2019	Federal banking regulators published final rules implementing a simplified measure of capital adequacy for certain banking organizations.
December 18, 2019	Amended and Restated Bylaws of City Holding Company revised.
December 20, 2019	City Holding Company's Current Report on Form 8-K filed.
February 27, 2020	City Holding Company's Form 10-K Annual Report for the year ended December 31, 2019, filed.
January 1, 2020	ASU No. 2016-13, 'Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments' (CECL) adopted; community bank leverage ratio framework went into effect.
December 31, 2020	Company entered into three $50 million swap agreements to hedge interest rate risk.
January 2021	Michael T. Quinlan, Jr. became Executive Vice President of Retail Banking.
November 4, 2021	City Holding Company's Form 10-Q Quarterly Report for the quarter ending September 30, 2021, filed.
November 2021	Federal banking agencies approved a final rule requiring banking agencies to notify regulators of significant computer-security incidents.
December 31, 2022	All previously issued stock options granted under the 2013 Plan were fully vested.
January 1, 2023	Initial base deposit insurance assessment rate schedules uniformly increased by 2 basis points.
March 10, 2023	Acquisition of Citizens Commerce Bancshares, Inc. and its subsidiary, Citizens Commerce Bank, completed.
March 27, 2023	City Holding Company's Definitive Proxy Statement for the 2023 Incentive Plan filed.
April 2023	The 2023 Incentive Plan was approved by shareholders, replacing the 2013 Incentive Plan which expired.
July 26, 2023	SEC adopted final rules requiring public companies to promptly disclose material cybersecurity incidents.
December 31, 2023	ASU No. 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures' became effective for the company.
January 31, 2024	Board of Directors authorized the company to buy back up to 1,000,000 shares of common stock, terminating the previous repurchase program approved in May 2022.
April 4, 2024	The Cybersecurity and Infrastructure Security Agency (CISA Agency) proposed a rule under the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA).
November 30, 2025	Robert D. Fisher, James A. Hoyer, Diane W. Strong-Treister, and Javier A. Reyes adopted non-discretionary stock purchase plans.
December 31, 2025	Fiscal year ended for the Annual Report on Form 10-K.
January 2025	Board member Tracy W. Hylton passed away.
October 2025	A $50 million interest rate swap agreement matured.
November 2025	Two $50 million interest rate swap agreements matured; ASU No. 2025-08, 'Financial Instruments—Credit Losses (Topic 326): Purchased Loans' was issued and early adopted by the company.
February 23, 2026	Number of common stock shares outstanding was 14,350,422.
February 25, 2026	Date of the audit report and signing of the 10-K filing.
March 2026	A $100 million interest rate swap agreement entered into in 2023 matures.
March 31, 2026	ASU No. 2025-05, 'Measurement of Credit Losses for Accounts Receivable and Contract Assets' will become effective for the company.
April 29, 2026	Date of the 2026 annual shareholders meeting.
May 15, 2026	Existing Chair of the Federal Reserve's term ends.
Mid-2026	Anticipated finalization of the Pentegra DB Plan termination associated with the Classic acquisition.
May 2026	Final rulemaking for CIRCIA extended to.
September 30, 2026	The Cybersecurity Information Sharing Act (CISA) is temporarily reauthorized to remain in effect until this date.
March 31, 2027	ASU No. 2025-09, 'Derivatives and Hedging (Topic 815): Hedge Accounting Improvements' and ASU No. 2025-12, 'Codification Improvements' will become effective for the company.
December 31, 2027	ASU No. 2024-03, 'Expense Disaggregation Disclosures (Topic 230): Disaggregation of Income Statement Expenses' will become effective for the company.
March 31, 2028	ASU No. 2025-11, 'Interim Reporting (Topic 270): Narrow Scope Improvements' will become effective for the company.

Recommendation

buy

City Holding Company demonstrates robust financial health with significant year-over-year growth in net income and EPS, coupled with strong loan and deposit expansion. The improved net interest margin and conservative capital management, well above regulatory minimums, indicate operational efficiency and resilience. The ongoing share repurchase program and consistent dividend increases further enhance shareholder value. While operational costs increased and cash equivalents decreased, the overall performance and strategic positioning suggest a favorable outlook for long-term investors.

Keywords

Community Banking, Financial Holding Company, SEC Filing, Earnings Report, Loan Growth, Deposit Growth, Capital Adequacy, Share Repurchase, Net Interest Income, Asset Quality, Risk Management, Cybersecurity, Wealth Management, Investment Management, West Virginia, Kentucky, Virginia, Ohio

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