third quarter of 2026
Filed Oct 26, 2026City Holding Company Announces Record Quarterly Results
The company reported record quarterly diluted earnings of $2.43 per share, sequential growth in net interest income, a wider reported net interest margin, loan growth, stable nonperforming assets, and a 15% increase in the quarterly cash dividend.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $ 62,605 ($ in 000s) | increased approximately $1.8 million, or 3.0% | – |
| Net interest income, fully taxable equivalent, three months ended September 30, 2026non-GAAP | $ 62,870 ($ in 000s) | increased approximately $1.9 million, or 3.0% | – |
| Net interest income, nine months ended September 30, 2026GAAP | $ 182,981 ($ in 000s) | – | – |
| Net interest income, fully taxable equivalent, nine months ended September 30, 2026non-GAAP | $ 183,794 ($ in 000s) | – | – |
| Total interest income, three months ended September 30, 2026GAAP | $ 81,917 ($ in 000s) | – | – |
| Total interest expense, three months ended September 30, 2026GAAP | $ 19,312 ($ in 000s) | – | – |
| Recovery of credit losses, three months ended September 30, 2026GAAP | $ (108) ($ in 000s) | – | – |
| Recovery of credit losses, nine months ended September 30, 2026GAAP | $ 941 ($ in 000s) | – | – |
| Total non-interest income, three months ended September 30, 2026GAAP | $ 21,431 ($ in 000s) | – | increased $0.9 million |
| Total non-interest income, nine months ended September 30, 2026GAAP | $ 62,195 ($ in 000s) | – | – |
| Service charges, three months ended September 30, 2026GAAP | $ 8,715 ($ in 000s) | – | increased $0.5 million, or 6.0% |
| Bankcard revenue, three months ended September 30, 2026GAAP | $ 7,425 ($ in 000s) | – | – |
| Wealth and investment management fee income, three months ended September 30, 2026GAAP | $ 3,398 ($ in 000s) | – | increased $0.3 million, or 10.5% |
| Total non-interest expense, three months ended September 30, 2026GAAP | $ 40,917 ($ in 000s) | – | increased $2.6 million |
| Total non-interest expense, nine months ended September 30, 2026GAAP | $ 120,426 ($ in 000s) | – | increased $5.0 million, or 4.4% |
| Salaries and employee benefits, three months ended September 30, 2026GAAP | $ 20,920 ($ in 000s) | – | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $ 43,227 ($ in 000s) | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $ 8,618 ($ in 000s) | – | – |
| Effective income tax rate, third quarter of 2026GAAP | 19.9% | – | – |
| Net income available to common shareholders, three months ended September 30, 2026GAAP | $ 34,609 ($ in 000s) | – | – |
| Net income available to common shareholders, nine months ended September 30, 2026GAAP | $ 99,642 ($ in 000s) | – | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $ 2.43 | – | – |
| Basic earnings per common share, three months ended September 30, 2026GAAP | $ 2.44 | – | – |
| Diluted earnings per common share, nine months ended September 30, 2026GAAP | $ 6.98 | – | – |
| Return on average assets, third quarter of 2026other | 2.03 % | – | – |
| Return on average tangible equity, third quarter of 2026other | 20.9 % | – | – |
| Net interest margin, third quarter of 2026GAAP | 4.04 % | – | – |
| Efficiency ratio, third quarter of 2026other | 48.0 % | – | – |
| Gross loans, September 30, 2026GAAP | $ 4,550,140 ($ in 000s) | increased $48.4 million (1.1%) | – |
| Total deposits, September 30, 2026GAAP | $ 5,358,140 ($ in 000s) | increased $18.0 million | – |
| Cash and cash equivalents, September 30, 2026GAAP | $ 201,379 ($ in 000s) | – | – |
| Total investment securities, September 30, 2026GAAP | $ 1,489,468 ($ in 000s) | – | – |
| Total assets, September 30, 2026GAAP | $ 6,786,251 ($ in 000s) | – | – |
| FHLB advances, September 30, 2026GAAP | $ 150,000 ($ in 000s) | – | – |
| Total stockholders' equity, September 30, 2026GAAP | $ 781,614 ($ in 000s) | – | – |
| Tangible common equity to tangible assets, September 30, 2026non-GAAP | 9.43 % | – | – |
| Total non-performing assets, September 30, 2026GAAP | $ 10,893 ($ in 000s) | – | – |
| Non-performing assets as a percent of loans and other real estate owned, September 30, 2026GAAP | 0.24 % | – | – |
| Total past due loans, September 30, 2026GAAP | $ 8,292 ($ in 000s) | decreased modestly from $8.6 million, or 0.19% of total loans outstanding, to $8.3 million, or 0.18% of total loans outstanding | – |
| Allowance for credit losses, September 30, 2026GAAP | $ 19,624 ($ in 000s) | – | – |
| Allowance as a percent of loans outstanding, September 30, 2026GAAP | 0.43 % | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- On September 30, 2026, the Board of Directors approved a quarterly cash dividend of $1.00 per share, payable October 30, 2026 to shareholders of record as of October 15, 2026.
- The $1.00 per share dividend represents a 15% increase from the $0.87 per share dividend paid on July 31, 2026.
- Cash dividends declared were $ 1.00 per share for the three months ended September 30, 2026 and $ 2.74 per share for the nine months ended September 30, 2026.
- Treasury shares repurchased were 321 thousand for the nine months ended September 30, 2026, at an average treasury share repurchase price of $ 118.65.
What drove it
- Net interest income increased sequentially primarily because the yield on loans increased 3 basis points and average loan balances increased $36.1 million, which increased net interest income by $1.1 million and $0.5 million, respectively.
- A 5-basis-point increase in investment yield and a $20.7 million increase in average investment balances increased net interest income by $0.4 million and $0.2 million, respectively.
- Average noninterest-bearing demand balances increased $28.0 million and average savings deposit balances increased $11.0 million, partially offset by a $9.5 million decrease in average time deposits.
- Non-interest income growth reflected higher service charges and wealth and investment management fee income.
- Loan growth during the quarter included increases of $20.1 million in commercial and industrial loans, $12.9 million in commercial real estate loans, $8.8 million in residential real estate loans, and $8.2 million in home equity loans.
- The third-quarter recovery of credit losses was primarily related to the upgrade of a commercial real estate loan and a marginal decrease in historical loss rates for commercial and residential real estate loans.
Concerns
- Non-interest expenses increased $2.6 million from the third quarter of 2025, including a $1.1 million increase in salaries and employee benefits, $0.5 million higher other expenses, and $0.4 million higher advertising expenses.
- Tangible equity ratio declined from 9.9% at December 31, 2025 to 9.4% at September 30, 2026, due primarily to unrealized security losses during the nine months ended September 30, 2026.
- Accumulated other comprehensive loss, including unrealized loss on securities available-for-sale, was $ (131,035) ($ in 000s) at September 30, 2026, compared with $ (82,116) ($ in 000s) at June 30, 2026.
- Commercial loan downgrade of $0.25 million and revisions to qualitative adjustment factors partially offset the factors supporting the credit-loss recovery.
What to watch
- Whether loan and deposit balance growth continues following gross loans of $ 4,550,140 ($ in 000s) and total deposits of $ 5,358,140 ($ in 000s) at September 30, 2026.
- Net interest margin progression after reported margin expanded to 4.04 % from 3.97 % in the second quarter of 2026.
- Expense growth, particularly salaries and employee benefits, incentive compensation, health insurance costs, other expenses, and advertising.
- Credit trends following the recovery of credit losses of $ (108) ($ in 000s), total non-performing assets of $ 10,893 ($ in 000s), and total past due loans of $ 8,292 ($ in 000s).
- The effect of unrealized securities losses on tangible equity and accumulated other comprehensive loss.
Balance sheet and cash flow
- Cash and cash equivalents were $ 201,379 ($ in 000s) at September 30, 2026.
- The company reported a cash balance of $74 million and dividends available from City National of approximately $120 million at September 30, 2026.
- City National had capacity to borrow an additional $1.8 billion from existing borrowing facilities at September 30, 2026.
- Approximately $688 million of investment securities were pledged, leaving approximately $801 million of investment securities unpledged at September 30, 2026.
- Tangible equity was $625 million at September 30, 2026.
- Operating cash flow and free cash flow were not reported.
Analysis
City Holding reported record quarterly diluted earnings of $2.43 per share and net income available to common shareholders of $ 34,609 ($ in 000s) for the third quarter of 2026. Net income was $ 33,298 ($ in 000s) in the second quarter of 2026 and $ 35,188 ($ in 000s) in the third quarter of 2025. Return on average assets was 2.03 % and return on average tangible equity was 20.9 %.
Core spread performance improved sequentially. GAAP net interest income was $ 62,605 ($ in 000s), while fully taxable-equivalent net interest income was $ 62,870 ($ in 000s), up approximately $1.9 million, or 3.0%, sequentially on the taxable-equivalent basis. Reported net interest margin rose to 4.04 % from 3.97 %. Management attributed the increase principally to higher loan yields, higher average loan balances, higher investment yields, and higher average investment balances, partly offset by lower average deposits in depository institutions.
Balance-sheet growth was led by loans. Gross loans reached $ 4,550,140 ($ in 000s), with commercial and industrial, commercial real estate, residential real estate, and home equity loans each increasing during the quarter. Total deposits were $ 5,358,140 ($ in 000s), and average depository balances were $5.35 billion. Credit metrics remained contained: non-performing assets were $ 10,893 ($ in 000s), or 0.24 % of loans and other real estate owned, while total past due loans were $ 8,292 ($ in 000s), or 0.18 % of loans outstanding. The company recorded a recovery of credit losses of $ (108) ($ in 000s).
Non-interest income was $ 21,431 ($ in 000s), compared with $ 20,523 ($ in 000s) in the third quarter of 2025, supported by service charges and wealth and investment management fee income. Total non-interest expense rose to $ 40,917 ($ in 000s) from $ 38,312 ($ in 000s), with salaries and employee benefits the largest identified driver. The company increased its quarterly cash dividend to $1.00 per share. Capital ratios remained above well-capitalized thresholds, although tangible common equity to tangible assets was 9.43 % and the company cited unrealized security losses as the primary reason tangible equity declined during the nine months ended September 30, 2026.
The filing provided no forward financial guidance. Attention centers on the durability of net interest margin expansion, loan and deposit growth, expense growth, credit quality, and the continuing effect of unrealized securities losses on tangible equity.
Not in the filing
stated, not guessed- Total revenue was not reported as a labeled line item.
- Gross margin was not reported.
- Operating income was not reported as a labeled line item.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Forward guidance was not provided.
- Prior-release outlook was not provided.
- Reportable operating segments and segment revenue were not reported.
- Named executive quotations were not provided.
- Third-quarter treasury shares repurchased and average repurchase price were displayed as a dash rather than a numerical figure.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.