CITY HOLDING CO (NASDAQ:CHCO) announced record quarterly net income of $35.2 million and diluted earnings per share of $2.41 for the third quarter ended September 30, 2025. These results were driven by strong loan growth, higher net interest income, and stable credit quality, according to the company.
The $6.7 billion bank holding company achieved a return on assets of 2.11% and a return on tangible equity of 22.5% for the quarter. Net income available to common shareholders rose from $29.809 million in Q3 2024, while diluted earnings per share increased from $2.02 in the same period last year.
Net interest income increased by approximately $2.2 million, or 3.7%, to $61.1 million in Q3 2025 from $58.9 million in Q2 2025. This improvement was primarily due to an 8 basis point increase in the yield on loans and a $68.1 million increase in average loans outstanding, which together contributed $2.0 million to net interest income. The company's net interest margin also expanded, rising from 3.95% in Q2 2025 to 4.04% in Q3 2025.
Credit quality remained stable, with the ratio of nonperforming assets to total loans and other real estate owned at 0.32%, or $14.3 million, at September 30, 2025, a slight decrease from 0.33%, or $14.2 million, at June 30, 2025. The company reported a recovery of credit losses of $0.5 million in Q3 2025, compared to a provision for credit losses of $1.2 million in Q3 2024.
Non-interest income totaled $20.2 million in Q3 2025, a slight decrease from $20.3 million in Q3 2024. This was largely due to lower unrealized fair value gains on equity securities. Non-interest expenses increased 0.7% to $37.9 million from $37.6 million in the prior year's third quarter, mainly attributed to a $0.5 million rise in salaries and employee benefits.
Gross loans grew by $73.6 million, or 1.7%, to $4.41 billion at September 30, 2025, compared to June 30, 2025. Residential real estate, commercial real estate, commercial and industrial, and home equity loans all saw increases. Period-end deposit balances increased by $8.8 million, or 0.2%, over the same period.
City Holding maintained strong capitalization, with tangible equity reaching $641 million at September 30, 2025, and its tangible equity ratio increasing to 9.8% from 9.1% at December 31, 2024. All regulatory capital ratios for City National Bank were significantly above well-capitalized levels.
The Board of Directors approved a quarterly cash dividend of $0.87 per share, payable October 31, 2025, representing a 10.0% increase from the $0.79 per share paid on July 31, 2025.
