City Holding Company (CHCO): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of City Holding Company (CHCO)'s external risks and opportunities, and honestly, the regional banking environment in late 2025 is a complex squeeze. The firm, with projected total assets around $6.4 billion, faces a strategic pivot: stricter capital requirements from potential Basel III Endgame rules and a slower revenue environment, given the projected US GDP growth of only about 1.8%. This means CHCO must defintely accelerate its tech efficiency-using AI for back-office work, for instance-while managing localized credit risk from its energy-dependent regional economy and fighting the talent war for skilled compliance staff. We need to map out the six macro-forces-Political, Economic, Sociological, Technological, Legal, and Environmental-to see exactly where the clear actions and dangers lie.

City Holding Company (CHCO) - PESTLE Analysis: Political factors

Increased regulatory scrutiny on regional banks following 2023 failures.

You and I both know the 2023 bank failures-Silicon Valley Bank and others-changed the political temperature for every regional bank, even sound ones like City Holding Company. The immediate fallout was a spike in regulatory scrutiny, forcing a deeper look at capital adequacy and liquidity across the sector. For CHCO, a bank with $6.7 billion in total assets as of Q3 2025, this scrutiny is a cost, but also a competitive advantage.

The good news is that CHCO is defintely well-capitalized, which is the best defense against political and market anxiety. Their Common Equity Tier 1 (CET1) ratio stood at a robust 15.8% at the end of Q3 2025, far exceeding the regulatory minimums for a 'well capitalized' designation. This strong capital buffer helps insulate the company from the sector-wide nervousness that often follows a high-profile failure.

Here's the quick math: CHCO's capital strength is a clear differentiator in a nervous market.

• Q3 2025 Total Assets: $6.7 billion
• Q3 2025 Common Equity Tier 1 (CET1) Ratio: 15.8%
• Q3 2025 Return on Tangible Equity (ROTE): 22.5%

Basel III Endgame proposal could increase capital requirements, affecting CHCO's return on equity (ROE).

The Basel III Endgame proposal is the biggest regulatory cloud hanging over the banking sector right now. It's a complex set of rules designed to increase capital requirements (the money banks must hold in reserve) by changing how banks calculate risk-weighted assets (RWA). The proposal, which was expected to take effect starting July 1, 2025, with a three-year phase-in, is primarily aimed at banks with over $100 billion in assets, which CHCO is below.

Still, the political momentum for stricter capital rules means the spirit of the Endgame affects everyone. General estimates for regional banks suggest a potential capital increase of around 10% to 20% if they were subject to the full proposal, driven largely by new operational risk and market risk calculations. Even though CHCO is below the threshold, the political pressure could push regulators to apply similar, scaled-down rules to smaller institutions in the future.

An increase in required capital, all else being equal, lowers the Return on Equity (ROE). CHCO reported a stellar Return on Tangible Equity (ROTE) of 22.5% in Q3 2025. Any future capital hike, even a small one, would pressure this key profitability metric. The risk here is one of regulatory creep.

Shifts in federal administration priorities impacting Community Reinvestment Act (CRA) enforcement.

The Community Reinvestment Act (CRA) is a crucial political factor for any community-focused bank. Following a period of regulatory uncertainty, the federal banking agencies-the Federal Reserve, FDIC, and OCC-issued a joint Notice of Proposed Rulemaking on July 16, 2025, to rescind the 2023 CRA Final Rule. This is a major policy reversal intended to restore certainty.

The proposal moves to replace the new rule with the older 1995/2021 CRA regulation framework. For banks like City Holding Company, which operates 96 branches across four states, this shift means a return to a more familiar, branch-centric assessment system. The political priority has moved from modernizing the rule to stabilizing the compliance environment for banks.

The practical implication is that CHCO must continue to focus its community lending and investment efforts based on the long-standing, geographically defined assessment areas tied to its physical branch network. This is a known quantity, reducing regulatory compliance risk.

Geopolitical stability affecting energy prices, a key economic driver in their operating region.

City Holding Company's core operating region-West Virginia, Kentucky, Virginia, and Ohio-is heavily influenced by the energy sector, particularly natural gas, coal, and increasingly, renewable energy development. Geopolitical stability, or the lack thereof, directly impacts these local economies through commodity prices.

In 2025, the global energy market is characterized by a paradox: high geopolitical tension but relatively stable and low energy prices, which is putting pressure on domestic producers. This stability is good for consumers, but it creates a near-term headwind for the local energy industry that CHCO lends to. The risk is that a prolonged period of low prices could lead to:

• Reduced capital expenditure by US shale producers.
• Increased credit risk in commercial and industrial loans tied to the energy supply chain.
• Slower regional economic growth, impacting loan demand.

A major geopolitical event could spike prices, boosting the local economy, but the current political reality is one of market resilience absorbing shocks, which means the bank must manage credit risk in a low-price environment. It's a tricky balance.

City Holding Company (CHCO) - PESTLE Analysis: Economic factors

The economic landscape for City Holding Company in 2025 is defined by a decelerating, but not collapsing, national growth rate and the persistent influence of the Federal Reserve's monetary policy on core profitability. Your primary focus here should be on managing the delicate balance between a stabilizing Net Interest Margin (NIM) and the localized credit risks inherent in your operating region.

Federal Reserve's interest rate path remains the primary driver of Net Interest Margin (NIM).

The Federal Reserve's actions continue to be the single biggest lever on your profitability, specifically your Net Interest Margin (NIM) (the difference between interest earned on assets and interest paid on liabilities). As of mid-2025, the Fed Funds rate was in the 4.25% to 4.50% target range.

Analysts anticipate further rate cuts through the end of 2025, with some projections calling for two to three additional 25 basis point cuts. This shift is generally positive for regional banks like City Holding Company because funding costs-what you pay depositors-are expected to fall faster than asset yields, allowing the NIM to expand.

We are already seeing this inflection point: your reported NIM improved from 3.84% in the first quarter of 2025 to 3.95% in the second quarter of 2025. This is a defintely a strong counter-trend against the broader economic slowdown.

Projected 2025 US GDP growth of around 1.8% suggests slower loan demand growth.

The overall pace of the US economy is slowing down. The projected year-over-year US GDP growth for 2025 is estimated at around 1.8%. This modest expansion signals a challenging environment for generating new, high-quality loan volume.

Slower GDP growth means fewer new business expansions and less robust consumer spending, which directly translates to weaker loan demand. You saw this pressure in the second quarter of 2025, where commercial and industrial loans decreased by $13.9 million, even as total loans grew modestly. This is a classic late-cycle banking challenge: the quality of new credit is paramount when volume growth is hard to find.

Regional economic dependence on energy and manufacturing creates localized credit risk concentration.

City Holding Company operates in a region-West Virginia, Kentucky, and Ohio-where the economic base is disproportionately tied to cyclical industries like energy and manufacturing. West Virginia, for example, is the nation's second-largest coal producer and its industrial sector accounts for 46% of the state's total energy consumption.

While the Appalachian counties in your footprint have a manufacturing employment concentration that is 31% to 37% higher than the national average, this concentration creates a localized credit risk. A downturn in global energy prices or a shift in manufacturing supply chains would have an outsized impact on your commercial loan portfolio, even if the overall US economy avoids a recession.

Here's the quick math on your loan portfolio composition as of late 2021, showing the need for continued vigilance despite internal limits:

Inflationary pressures continue to impact non-interest expenses, especially labor costs.

Even as the Federal Reserve works to tame inflation, the effects are still hitting your operating costs. Your non-interest expenses increased to $37.6 million in the first quarter of 2025, a 4.8% jump from the prior year.

The biggest pressure point is labor. Salaries and employee benefits were a key driver of this increase, rising by $0.3 million in Q1 2025 alone. You can't cut costs on compliance or necessary technology, so managing labor costs in a tight regional market is critical for maintaining your efficiency ratio.

The company's total assets are projected to be around $6.4 billion in 2025.

As a mid-sized regional bank, your scale remains a key consideration. City Holding Company's total assets are projected to be around $6.4 billion for the 2025 fiscal year. This asset size places you firmly in the community bank category as defined by the Federal Reserve (under $10 billion), meaning you rely heavily on traditional core banking operations: deposits and loans.

• Maintain a strong capital position: Your Common Equity Tier I ratio was 15.1% at June 30, 2025, well above the regulatory 'well capitalized' threshold.
• Focus on core funding: Deposit mix is weighted toward checking and savings accounts, funding 60.0% of assets, which is a key stability factor.
• Protect the NIM: The NIM of 3.95% (Q2 2025) is high for the industry and must be defended against deposit competition.

Your scale is your advantage here; you can be more nimble than the mega-banks. But you still need to be laser-focused on asset quality as the economy slows.

City Holding Company (CHCO) - PESTLE Analysis: Social factors

Aging demographics in the core West Virginia and Appalachian markets increase wealth management demand.

The demographic reality in City Holding Company's (CHCO) core operating region presents a clear opportunity for its wealth management and trust services. The population is significantly older than the national average, creating a natural, high-value client base with accumulated assets. In West Virginia, the senior population (age 65 and over) is approximately 20.68% of the total population, compared to the US national average of around 16.84%. The median age in the state is high at 42.6 years. This trend is even more pronounced across the Appalachian region, where the population aged 65 and over is projected to reach 19.8% in 2025, totaling over 5 million people.

This demographic shift means a greater need for estate planning, trust services, and retirement income management. The average 80+ population in the US is projected to increase to 14.7 million people in 2025 alone, and these individuals often require high-touch, in-person advisory services that a regional bank like City Holding Company can provide through its local presence. This is a defintely a high-margin opportunity.

Strong community banking focus is a competitive advantage against national banks.

City Holding Company's deep roots and community bank model are a significant social competitive advantage, especially in its largely rural and small-city markets. This focus translates directly into a stable, low-cost funding base that mega-banks struggle to replicate. The company's deposit mix is heavily weighted toward core checking and saving accounts, which funded 60.1% of assets as of March 31, 2025. Furthermore, its time deposits are insulated from rate wars, with only 14.7% of those balances exceeding the $250,000 FDIC insurance limit as of December 31, 2024, underscoring its core retail orientation.

This local loyalty is quantifiable:

• City Holding Company was ranked #1 in customer satisfaction for consumer banking in the North Central Region in the J.D. Power 2024 U.S. Retail Banking Satisfaction Study.
• The company holds a strong deposit market share, including approximately 24% in its eastern Kentucky counties.
• The capital position remains robust, with a Common Equity Tier I ratio of 14.4% as of March 31, 2025, significantly above the regulatory 'well capitalized' minimum.

This relationship-based model creates a sticky customer base, helping the company maintain an enviable cost of funds even as competitors fight for deposits.

Talent war for skilled technology and compliance staff is driving up salary costs.

The need for specialized talent in financial technology (FinTech) and regulatory compliance is a major social and operational pressure point. The industry is in a 'Great Compliance Drought,' with 43% of global banks reporting that regulatory work goes undone due to staffing gaps (Deloitte 2025 Global Risk Survey). Regional banks like City Holding Company must compete with major financial centers and FinTech startups for these scarce skills, driving up compensation.

Here's the quick math: The average FinTech salary in the US is approximately $123,495 annually in 2025, with top performers earning over $184,500 in total compensation. Specialized roles in cybersecurity, AI, and compliance can command base salaries exceeding $200,000. The demand is accelerating, with a 30%+ increase in compliance hiring due to new Anti-Money Laundering (AML) and Environmental, Social, and Governance (ESG) requirements. This forces a choice: pay a premium for a smaller pool of talent or risk regulatory findings, which 72% of Chief Compliance Officers (CCOs) say are directly caused by staffing shortages.

Consumer preference for digital-first banking is accelerating, demanding branch network optimization.

Consumer behavior has decisively shifted to digital, forcing City Holding Company to continually re-evaluate its physical footprint of 97 branches. Digital banking usage has surged to 89% of US adults in 2025, and 77% of consumers now prefer to manage their accounts via mobile app or computer. Even the senior demographic, a key market for CHCO, saw digital tool adoption rise to 61% in 2025.

The economics of this shift are stark:

While the US is projected to see up to 1,400 branch closures in 2025, the trend for regional banks is 'optimization,' not just closure. A significant minority, 35%, of financial institutions actually plan to expand their branch networks in 2025, recognizing that the physical location is now a strategic asset for complex sales-like wealth management and commercial lending-not just a transaction hub. The challenge is to reduce the footprint in low-traffic areas while investing in high-value, advisory-focused branches in key markets. The action is clear: keep the community feel, but cut the transaction cost.

City Holding Company (CHCO) - PESTLE Analysis: Technological factors

Significant investment in Artificial Intelligence (AI) for back-office efficiency and fraud detection.

The imperative to adopt Artificial Intelligence (AI) is no longer a strategic option but a necessity for regional banks like City Holding Company to maintain a competitive edge and control costs. The focus is dual: driving back-office efficiency and fortifying against the surge in AI-enabled fraud. For context, the global investment in fraud detection and prevention is projected at $21 billion in 2025, reflecting the severity of the threat landscape.

To improve its operational efficiency, which hit an already strong 46% in Q3 2025 (meaning the bank spends 46 cents to earn a dollar of revenue), CHCO must continue to automate manual processes. This means deploying AI for tasks like regulatory reporting, anti-money laundering (AML) transaction monitoring, and initial loan application processing, where automation is key. Honesty, the efficiency ratio is the only number that matters here.

The other critical area is fraud. With 54% of businesses reporting AI is improving their ability to detect fraud, CHCO's continued investment in machine learning models is crucial for real-time risk assessment and flagging sophisticated scams, such as synthetic identity fraud, which is the fastest-growing financial crime in 2025.

Competition from FinTechs and large national banks demanding continuous digital platform upgrades.

City Holding Company operates in a highly competitive regional market, but its true digital rivals are national banks and nimble financial technology (FinTech) firms. The US FinTech adoption rate reached 74% in Q1 2025, and this adoption is disproportionately driven by younger customers, with 68% of Gen Z consumers preferring FinTechs over traditional banks for core financial services. This forces CHCO to invest heavily in its customer-facing digital platforms to prevent client attrition.

The bank's digital transformation spending must align with a market where the global digital transformation market is expected to reach $1,009.8 billion by 2025. Continuous upgrades are needed across its mobile app, online portal, and Application Programming Interfaces (APIs) to match the seamless, instant experience offered by competitors. If the digital experience lags, the bank risks becoming a back-end utility while FinTechs capture the customer relationship.

Cybersecurity spending remains a top non-interest expense to protect customer data.

Cybersecurity is a non-negotiable, escalating cost for all financial institutions. City Holding Company's total Non-Interest Expense for 2024 was $147.2 million, and a significant portion of the year-over-year increase was attributed to equipment expenses, which serves as a proxy for technology and security infrastructure upgrades. The cost of protecting data is rising due to the increasing sophistication of cyberattacks, often powered by generative AI, and the stringent regulatory environment.

The bank's operational risk profile, as noted in its SEC filings, explicitly highlights cybersecurity threats and fraudulent activities as significant risks to its financial condition and reputation. This translates to continuous spending on:

• Advanced threat detection systems.
• Employee training against phishing and social engineering.
• Data encryption and cloud security infrastructure.
• Compliance with evolving data privacy regulations.

This spending is defensive, but it is defintely a necessary part of the cost of doing business, consuming a growing slice of the non-interest budget.

Mobile banking adoption rates are key to reducing transaction costs per customer.

Shifting customer transactions from physical branches to digital channels is the most direct path to reducing the bank's transaction cost per customer. The industry average cost of a teller-assisted transaction is significantly higher than a mobile or online transaction, making high mobile adoption a key driver of the bank's strong 46% efficiency ratio.

While CHCO's specific adoption rate is not public, the pressure is immense: 89% of digital users globally engage with mobile or online banking in 2025. Maximizing mobile adoption is critical to realizing the full benefit of the bank's investment in its digital platform. Every customer who uses the app for a deposit instead of a teller is a direct saving to the bottom line.

Here is the quick math on the operational trade-off:

City Holding Company (CHCO) - PESTLE Analysis: Legal factors

Finalized Community Reinvestment Act (CRA) modernization rules require new data collection and assessment areas.

The regulatory environment for the Community Reinvestment Act (CRA) is currently defined by significant legal uncertainty in 2025. While the 2023 CRA Final Rule aimed to modernize the framework, it is effectively stalled. The rule's implementation was stayed by a preliminary injunction, and in March and July 2025, the federal banking agencies (OCC, FDIC, and Federal Reserve) announced proposals to rescind the 2023 rule and revert to the prior 1995/2021 framework.

For City Holding Company, which reported total assets of $6.7 billion as of September 30, 2025, this creates a dual compliance track. Under the stalled 2023 rule, CHCO would be classified as a 'Large Bank' (assets $\ge$ $2 billion), which meant facing significant new requirements. These new mandates, if they were to take effect, would have required new 'Retail Lending Assessment Areas' in any metropolitan area where the bank originated a high volume of loans, not just where it has a physical branch. The effective date for these new assessment areas and associated data collection was set for January 1, 2026.

The immediate action is monitoring, but the long-term risk is needing to quickly implement a complex new system. The rescission proposal is intended to restore certainty, but until it is formally adopted, the risk of the 2023 rule's requirements being reinstated remains a tail risk that requires a ready-to-go compliance plan. The current operating framework is the older 1995/2021 rule. That's the one you're defintely being examined under today.

Ongoing state-level data privacy laws (like Virginia's CDPA) necessitate compliance updates.

The proliferation of state-level data privacy laws is a major compliance cost driver, but City Holding Company benefits from a key federal preemption. The Virginia Consumer Data Protection Act (CDPA), effective since January 1, 2023, is a comprehensive state law that grants consumers rights like data access, correction, and deletion.

However, the CDPA includes a broad entity-level exemption for financial institutions that are subject to the Gramm-Leach-Bliley Act (GLBA). This means that City Holding Company, as a GLBA-regulated bank, is largely exempt from the CDPA's core requirements. This exemption is a significant operational win, reducing the immediate need to build out expensive consumer rights request (Data Subject Access Request) fulfillment systems specific to Virginia. Still, this exemption is not a blanket pass for all data, and the legal landscape is fluid.

Here's the quick compliance reality:

• The GLBA Safeguards Rule still requires you to protect customer data with administrative, technical, and physical safeguards.
• The GLBA Privacy Rule mandates clear privacy notices and the right for customers to opt-out of sharing nonpublic personal information (NPI) with non-affiliated third parties.
• The risk of a $7,500 per violation penalty under CDPA is mitigated, but the cost of a GLBA enforcement action is far higher.

You avoid the CDPA headache, but your GLBA compliance must be ironclad.

Increased litigation risk around overdraft fees and consumer lending practices.

Litigation risk surrounding overdraft and Non-Sufficient Funds (NSF) fees remains high, even as the pace of new class-action filings has slowed in 2024 and 2025. The biggest regulatory shift is the Consumer Financial Protection Bureau (CFPB) final rule, effective October 2025, which caps overdraft fees at $5 for banks with assets of $10 billion or more.

Since City Holding Company's assets are $6.7 billion, you are not directly subject to the CFPB's $5 cap. This is a temporary competitive advantage, but it will create immense market pressure. The CFPB estimates the rule will save consumers $5 billion annually, and this will drive customer expectations across the board, forcing smaller banks to reduce their average fee of around $27.08 (2024 average) to stay competitive.

The primary litigation threats revolve around two core practices:

• Authorize Positive, Settle Negative (APSN): Charging an overdraft fee when a transaction was authorized against a positive balance, but then settles later against a negative balance due to an intervening transaction.
• Multiple NSF Fees (Re-presentment): Charging multiple NSF fees when a merchant repeatedly re-presents the same check or ACH transaction after it was initially returned for insufficient funds.

The legal focus is shifting from simply disclosing the fee to proving the fee practice itself is not an unfair, deceptive, or abusive act or practice (UDAAP). The maximum civil liability amount for certain consumer protection violations was adjusted to $672,950 in 2025, showing the financial stakes are rising.

Stricter enforcement of Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations.

Regulators are not easing up on financial crime compliance; they are intensifying it, and smaller institutions are squarely in the crosshairs. Enforcement actions for Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) violations continue to be a top priority for the OCC, FinCEN, and other agencies in 2025.

The sheer volume of penalties is staggering. BSA/AML-related financial penalties amounted to approximately $3.3 billion in 2024. More importantly for City Holding Company, the focus is not just on the mega-banks. In 2024, 54% of BSA/AML-related enforcement actions against banks were issued to institutions with assets under $1 billion, proving that size is no shield from scrutiny.

The regulatory expectation is a robust, risk-based approach to compliance, which for a $6.7 billion regional bank means significant investment in technology and personnel. The OCC has announced enforcement actions in late 2025 for issues including deficient BSA/AML risk management and suspicious activity reporting. FinCEN is also expanding its reach, demonstrated by a June 2025 designation of three Mexican financial institutions as primary money-laundering concerns, which mandates US-covered financial institutions block fund transmittals to them.

Your compliance costs are fixed and non-negotiable. You must invest in real-time monitoring and advanced suspicious activity report (SAR) documentation to mitigate the risk of a formal agreement or a multi-million dollar fine.

City Holding Company (CHCO) - PESTLE Analysis: Environmental factors

The environmental factors for City Holding Company (CHCO) in 2025 are dominated by the dual pressures of climate-related financial risk (transition risk) and the increasing physical risk from extreme weather, particularly given its core operating region in the Appalachian states.

Growing pressure from investors and regulators for greater climate-related financial risk disclosures.

You are operating in a market where climate-related financial risk disclosure is no longer optional; it is a baseline expectation from institutional investors and regulators. While CHCO is a regional bank, the pressure from frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) is filtering down from the largest banks.

The core challenge for CHCO is the lack of granular, public disclosure on its financed emissions (Scope 3, Category 15). This opacity creates a perceived risk for investors. The company's total assets were approximately $6.4 billion as of February 2025, with a loan portfolio of roughly $4.34 billion as of June 30, 2025. Without a clear breakdown of the commercial loan book's exposure to the coal, natural gas, and associated heavy industries in West Virginia, Kentucky, Ohio, and Virginia, the market must assume a higher-than-average transition risk.

Here is the high-level loan portfolio composition as of late 2024, showing the segments where transition risk is concentrated:

The absence of a specific dollar value for energy-sector lending is a disclosure gap that will become a greater point of contention as the SEC and other bodies tighten rules on climate-related disclosures for smaller public companies.

Potential loan portfolio exposure to high-carbon industries like coal and natural gas in the region.

CHCO's primary market is a region historically dependent on fossil fuel extraction and processing. While the company states there is no concentration of credits materially detrimental to its financial position, the systemic risk remains. The transition risk (the risk of assets becoming 'stranded' due to policy or market shifts) is real for any bank with exposure to coal and natural gas.

For context, the US electric power sector's CO2 emissions in 2024 saw a 4% increase from natural gas-fired generation, even as coal-fired generation emissions decreased by 3%, showing a market shift within the fossil fuel space that still carries transition risk for lenders. Your commercial and industrial customers face this headwind directly, meaning their ability to repay loans is tied to an accelerating energy transition.

Focus on energy efficiency in bank-owned properties to meet emerging ESG standards.

The bank is committed to reducing its corporate carbon footprint and has efforts in energy conservation. This focus is an operational necessity, not just an ESG talking point. With a network of approximately 97 branches, energy consumption in bank-owned properties represents CHCO's direct operational footprint (Scope 1 and 2 emissions).

The opportunity here is clear: cutting energy use directly improves the efficiency ratio-a key metric for a regional bank. However, without public data on metrics like annual megawatt-hour (MWh) consumption or a stated goal for energy reduction percentage by a specific date, the commitment lacks the necessary accountability for institutional investors. You need to translate the general commitment into concrete, measurable targets, such as a capital allocation plan for HVAC system upgrades or solar panel installations on a portion of the branch network.

Increased physical risk from extreme weather events impacting branch operations and collateral values.

The operational footprint across West Virginia, Kentucky, Ohio, and Virginia exposes CHCO to increasing physical risks from climate change. These are not abstract risks; they translate to financial costs via business interruption and collateral devaluation.

• Branch Operations: Flooding and severe storms, which are increasing in frequency, can force the temporary closure of any of the 97 branches, disrupting service and incurring repair costs.
• Collateral Risk: The value of real estate collateral-which makes up a significant portion of the total loan portfolio (especially the 47% residential mortgage segment)-is directly threatened by increased flood risk and other chronic hazards.
• Credit Risk: Extreme weather events can impair the cash flow of commercial borrowers, leading to higher nonperforming assets. CHCO's nonperforming assets were already $14.2 million at June 30, 2025, a number that is highly sensitive to regional economic shocks caused by weather disasters.

The next step is to initiate a TCFD-aligned scenario analysis (Task Force on Climate-related Financial Disclosures) to model the financial impact of a 1-in-100-year flood event on the collateral value of properties within a 5-mile radius of the 58 West Virginia branches. This moves the discussion from a theoretical risk to a quantifiable capital exposure.