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CH

CITY HOLDING CO (CHCO)·Q3 2025 Earnings Summary

Executive Summary

  • CHCO delivered record net income of $35.2M and diluted EPS of $2.41 in Q3 2025, driven by higher net interest income, a 9 bps sequential NIM expansion to 4.04%, and stable credit quality .
  • EPS and revenue both beat Wall Street consensus: EPS $2.41 vs $2.155*, revenue $81.76M* vs $79.72M*; strong loan yields and average loan growth were the primary upside drivers (NIM +9 bps QoQ; average loans +$68.1M QoQ) .
  • Dividend raised 10% to $0.87 (from $0.79) and tangible equity ratio improved to 9.8%, underscoring capital strength; regulatory capital well above “well-capitalized” thresholds .
  • Stock catalysts: continued NIM expansion, stable credit metrics (NPAs at 0.32%), loan growth across CRE/residential, and capital return via higher dividend and buyback capacity .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly net income and EPS performance, with ROA at 2.11% and return on tangible equity at 22.5% .
  • NIM expanded to 4.04% (+9 bps QoQ) on 8 bps higher loan yields and incremental average loan growth (+$68.1M QoQ); yields on investments +9 bps and cost of interest-bearing liabilities -3 bps provided further tailwinds .
  • Credit quality remained stable: NPAs were 0.32%; allowance coverage of NPLs improved vs Q2 (142.5% vs 140.3%); net recoveries posted for the quarter (+$0.434M) with an ACL recovery of $0.5M .
  • Management tone: “record quarterly results” driven by strong loan growth, higher net interest income, and credit stability .

What Went Wrong

  • Non-interest income was flat YoY ($20.2M vs $20.3M) excluding small equity securities marks; BOLI YoY decline ($0.5M) offset gains in service fees and wealth management .
  • Non-interest expenses crept up 0.7% YoY to $37.9M, with higher salaries/benefits (+$0.5M) and tax-related matters (+$0.3M) partially offset by lower advertising (-$0.4M) and other expenses (-$0.3M) .
  • Past due loans increased modestly to 0.19% of loans outstanding (from 0.18% in Q2), and commercial real estate nonaccruals remained the largest component of NPLs .

Financial Results

Actual vs Consensus (Q3 2025)

MetricConsensusActualSurprise
EPS ($)2.155*2.41 +0.255* (beat)
Revenue ($USD Millions)79.72*81.76*+2.04* (beat)

Values marked with * are retrieved from S&P Global.

Quarterly Trends

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Diluted EPS ($)2.02 2.06 2.29 2.41
Net Interest Income ($MM)55.61 55.82 58.92 61.11
Non-Interest Income ($MM)20.35 18.74 19.24 20.15
Net Interest Margin (%)3.87 3.84 3.95 4.04
ROA (%)1.87 1.89 2.03 2.11
Efficiency Ratio (%)48.8 49.6 49.0 46.0

Loan Portfolio (Period-End)

Category ($MM)Q3 2024Q2 2025Q3 2025
Gross Loans4,157.83 4,339.20 4,412.78
Commercial Real Estate (Total)1,673.81 1,778.91 1,802.98
Residential Real Estate (Total)1,806.58 1,884.45 1,909.79
Home Equity190.15 207.91 218.75
Hotels383.23 380.50 397.34
Multi-family193.88 221.97 233.68

Credit KPIs

KPIQ3 2024Q1 2025Q2 2025Q3 2025
NPAs / Loans + OREO (%)0.39 0.38 0.33 0.32
Allowance / Loans (%)0.53 0.51 0.45 0.45
Allowance / NPLs (%)141.1 135.5 140.3 142.5
Past Due Loans ($MM)11.32 7.53 7.99 8.29
Net (Recoveries) Charge-offs ($MM)(2.06) 0.25 (0.06) (0.43)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per Share ($)Q4 2025 payout$0.79 (declared May 28, 2025; paid Jul 31, 2025) $0.87 (declared Sep 24, 2025; payable Oct 31, 2025) Raised 10%
Formal Financial Guidance (revenue, margins, OpEx, tax, segments)N/ANone providedNone providedMaintained (no formal guidance)

Note: Management did not issue quantitative forward guidance beyond capital return actions .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available in the catalog; analysis below uses Q1/Q2 press releases for trend context and Q3 press release for current period .

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Net Interest MarginNIM improved to 3.84% in Q1 (lower cost of liabilities -11 bps); rose to 3.95% in Q2 (loan yield +18 bps; cost of liabilities -3 bps) .NIM expanded to 4.04% (+9 bps QoQ) on higher loan yields (+8 bps) and average loans (+$68.1M) .Upward expansion sequentially Q1→Q2→Q3.
Loan GrowthQ1: modest (+$11.0M), mixed CRE; Q2: +$53.4M with residential +$42.6M and CRE +$19.9M .Q3: +$73.6M with increases across residential (+$25.3M), CRE (+$24.1M), C&I (+$17.3M), HE (+$10.8M) .Accelerating loan growth.
Credit QualityQ1 NPAs rose to 0.38% then declined to 0.33% in Q2; ACL recovery $2.0M in Q2 on specific upgrade .NPAs stable at 0.32%; ACL recovery $0.5M on net recoveries of $0.4M .Stable/improving NPAs; continued recoveries.
Deposit Mix & LiquidityQ1: period-end deposits +$114.3M; Q2: period-end -$9.6M; unpledged securities $924M; borrowing capacity +$1.6B .Q3: period-end deposits +$8.8M; unpledged securities ~$815M; borrowing capacity +$1.7B .Steady liquidity and core deposit mix.
Capital & Shareholder ReturnsQ1: buybacks 80.6k shares at $117.42; dividend $0.79 . Q2: buybacks 175k shares at $111.09; dividend $0.79 .Q3: dividend raised to $0.87; strong capital ratios; buyback resources cited .Increasing capital returns; strong capital maintained.
CRE Exposure DetailsCRE categories tracked with DSC/LTV; hotels, office, self-storage concentrations disclosed (Q1/Q2) .Updated CRE concentrations with similar DSC/LTV; hotels $397.8M, office $166.6M, nonresidential lessors $606.3M .Mix steady; transparency maintained.

Management Commentary

  • “City Holding Company… announced record quarterly net income of $35.2 million and diluted earnings of $2.41 per share… driven by strong loan growth, higher net interest income, and continued credit quality stability.”
  • “The Company’s reported net interest margin increased from 3.95% for the second quarter of 2025 to 4.04% for the third quarter of 2025.”
  • “The Company’s gross loan to deposit ratio was 83.9%… deposit mix weighted heavily toward checking and saving accounts… City National had the capacity to borrow an additional $1.7 billion…”
  • “On September 24, 2025, the Board… approved a quarterly cash dividend of $0.87 per share… a 10.0% increase from $0.79…”

Q&A Highlights

No Q3 2025 earnings call transcript was available; therefore, Q&A highlights and any clarifications from management’s live remarks could not be evaluated from a transcript [List: earnings-call-transcript search returned none].

Estimates Context

  • EPS beat: $2.41 actual vs $2.155* consensus; magnitude +$0.255* (approx. +11.8%*). Values retrieved from S&P Global.
  • Revenue beat: $81.76M* actual vs $79.72M* consensus; magnitude +$2.04M* (approx. +2.6%*). Values retrieved from S&P Global.
  • Next quarter (Q4 2025) consensus: EPS $2.2575*, revenue $81.38M*. With NIM momentum and stable credit, estimates could drift higher if loan growth persists and deposit costs remain contained*. Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS and revenue beats were powered by NIM expansion and broad-based loan growth; continued momentum into Q4 is plausible if asset yields and loan balances remain supportive .
  • Credit quality is a differentiator: NPAs at 0.32%, recovery of credit losses, and allowance coverage of NPLs improved sequentially—mitigating CRE concerns .
  • Capital strength and rising capital returns (10% dividend increase) underpin shareholder yield; regulatory ratios far above “well-capitalized” .
  • Liquidity optionality remains robust (Fed/FHLB lines +$1.7B; substantial unpledged securities), reducing funding risk amid rate volatility .
  • Watch deposit mix and cost trajectory; Q3 showed a 3 bps decline in interest-bearing liability costs—further progress would amplify NIM .
  • Monitor CRE concentrations (hotels, office, nonresidential lessors) and DSC/LTV disclosures; stability thus far, but macro shifts could alter risk .
  • Near-term trading: the beat plus dividend increase are positive; medium-term thesis hinges on sustaining NIM expansion and disciplined credit through cycle .