Company Website: https://www.bankatcity.com/investors/
CHARLESTON, W.Va. -- (Business Wire)

City Holding Company (“Company” or “City”) (NASDAQ:CHCO), a $6.8 billion bank holding company headquartered in Charleston, West Virginia, today announced net income of $33.3 million and diluted earnings of $2.35 per share for the quarter ended June 30, 2026. For the quarter ended June 30, 2026, the Company achieved a return on assets of 1.98% and a return on tangible equity of 20.7%.

Net Interest Income

The Company’s net interest income increased approximately $1.2 million, or 1.9%, from $59.6 million during the first quarter of 2026 to $60.8 million during the second quarter of 2026. The Company’s tax equivalent net interest income increased approximately $1.1 million, or 1.9%, from $59.9 million for the first quarter of 2026 to $61.0 million for the second quarter of 2026. This increase was primarily due to an increase in the yield on loans (2 basis points) and an increase in the average balances of deposits in depository institutions ($78.1 million) which increased net interest income by $0.9 million and $0.7 million, respectively. These increases were partially offset by an increase in the average balances of interest-bearing liabilities ($53.7 million) which decreased net interest income by $0.3 million. The Company’s reported net interest margin remained at 3.97% for both the first quarter of 2026 and for the second quarter of 2026.

Credit Quality

The Company’s ratio of nonperforming assets to total loans and other real estate owned decreased from 0.27%, or $12.2 million, at March 31, 2026 to 0.24%, or $10.6 million, at June 30, 2026. Total past due loans increased modestly from $8.5 million, or 0.19% of total loans outstanding, at March 31, 2026, to $8.6 million, or 0.19% of total loans outstanding, at June 30, 2026.

As a result of the Company’s quarterly analysis of the adequacy of the allowance for credit losses, the Company recorded a provision for credit losses of $0.4 million in the second quarter of 2026, compared to a recovery of credit losses of $1.9 million for the comparable period in 2025, and a provision for credit losses of $0.6 million for the first quarter of 2026. The provision for credit losses in the second quarter of 2026 was primarily related to the downgrade of a commercial real estate loan and a marginal increase in the historical loss rate for commercial and industrial loans during the quarter ended June 30, 2026, which were partially offset by net recoveries of $0.2 million during the quarter ended June 30, 2026.

Non-interest Income

Non-interest income increased $1.2 million from $19.5 million in the second quarter of 2025 to $20.8 million in the second quarter of 2026. During the second quarter of 2026, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities as compared to $0.2 million of realized investment gains and $0.3 million of unrealized fair value losses on the Company’s equity securities during the second quarter of 2025.

Exclusive of these items, non-interest income increased $1.1 million, or 5.4%, from $19.6 million for the second quarter of 2025 to $20.7 million for the second quarter of 2026. This increase was due to an increase of $0.4 million, or 14.4%, in wealth and investment management fee income, an increase of $0.4 million, or 5.2%, in service charges, and a $0.3 million, or 4.4%, increase in bankcard revenue.

Non-interest Expenses

Non-interest expenses increased $0.6 million, or 1.5%, from $39.2 million in the second quarter of 2025 to $39.8 million in the second quarter of 2026. This increase was largely due to an increase in salaries and employee benefit expenses ($0.5 million) and equipment and software related expenses ($0.2 million).

Balance Sheet Trends

Loans increased $10.2 million (0.2%) from March 31, 2026 to $4.50 billion at June 30, 2026. Commercial and industrial loans increased $12.5 million (2.8%) and home equity loans increased $6.3 million (2.8%) during the quarter ended June 30, 2026. These increases were partially offset by decreases in residential real estate loans of $6.9 million and consumer loans of $3.1 million.

Period-end deposit balances declined $3.5 million from March 31, 2026, to June 30, 2026. Total average depository balances increased $59.5 million (1.1%) from the quarter ended March 31, 2026 to the quarter ended June 30, 2026 to $5.33 billion. Average noninterest-bearing demand balances increased $30.3 million and average balances of savings deposits balances increased $28.9 million.

Income Tax Expense

The Company’s effective income tax rate for the second quarter of 2026 was 19.4%, compared to 19.2% for the year ended December 31, 2025, and 18.9% for the quarter ended June 30, 2025.

Capitalization and Liquidity

The Company’s loan to deposit ratio was 84.3% and the loan to asset ratio was 66.5% at June 30, 2026. The Company maintained investment securities totaling 22.2% of assets as of the same date. The Company’s deposit mix is weighted heavily toward checking and savings accounts, which fund 59.5% of assets at June 30, 2026. Time deposits funded 19.3% of assets at June 30, 2026, with only 14.9% 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 June 30, 2026, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, approximately $715 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $791 million of City National’s investment securities unpledged at June 30, 2026.

The Company continues to be strongly capitalized with tangible equity of $652 million at June 30, 2026. The Company’s tangible equity ratio remained at 9.9% at both December 31, 2025 and June 30, 2026. At June 30, 2026, City National’s Leverage Ratio was 9.7%, its Common Equity Tier I ratio was 15.0%, its Tier I Capital ratio was 15.0%, and its Total Risk-Based Capital ratio was 15.5%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

On May 27, 2026, the Board of Directors of the Company approved a quarterly cash dividend of $0.87 per share, payable July 31, 2026, to shareholders of record as of July 15, 2026. During the quarter ended June 30, 2026, the Company repurchased 59,156 common shares at a weighted average price of $122.46 per share as part of a one million share repurchase plan authorized by the Board of Directors in March 2026. As of June 30, 2026, the Company could repurchase approximately 926,000 shares under the current plan, which was approved by the Board of Directors on March 25, 2026 and authorizes the Company to buy back up to 1,000,000 shares of its common stock (approximately 7% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders (the "2026 Program").

City National operates 95 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, 2025 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 or financial technology companies; (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; (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 June 30, 2026 Form 10-Q. The Company will continue to evaluate the impact of any subsequent events on the preliminary June 30, 2026 results and will adjust the amounts if necessary.