CITY HOLDING CO

Previous wording

The Company uses a number of economic variables in its scenarios to estimate the Allowance for credit losses (ACL), with the most significant drivers being an unemployment rate forecast and qualitative adjustments. In the June 30, 2025 estimate, the Company assumed a 2-year unemployment forecast range of 4.2% to 4.7%, changed from 4.1% to 4.7% for the March 31, 2025 estimate. Historical loss rates from periods where the average unemployment rate matches the forecast range are considered when calculating the forecast period loss rate. In total, the changes in loss rates decreased the reserve $0.5 million for the quarter.

Current wording

The Company uses a number of economic variables in its scenarios to estimate the Allowance for credit losses (ACL), with the most significant drivers being an unemployment rate forecast and qualitative adjustments. In the September 30, 2025 estimate, the Company assumed a 2-year unemployment forecast range of 4.3% to 4.7%, changed from 4.2% to 4.7% for the June 30, 2025 estimate. Historical loss rates from periods where the average unemployment rate matches the forecast range are considered when calculating the forecast period loss rate. In total, the changes in loss rates decreased the reserve $0.1 million for the quarter.

Previous wording

Based on sensitivity analysis of all portfolios, a 0.0050% change (slight improvement or decline on bank's scale) in all 11 qualitative risk factors (where assigned) would have a $2.3 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.5 million, impact. Management recognizes that these are extreme scenarios and it is very unlikely that all risk factors would change by 0.005% or 0.01% simultaneously. For the June 30, 2025 estimate, management did not adjust any qualitative factors utilized in the previous quarter.

Current wording

Based on sensitivity analysis of all portfolios, a 0.0050% change (slight improvement or decline on bank's scale) in all 11 qualitative risk factors (where assigned) would have a $2.3 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.6 million impact. Management recognizes that these are extreme scenarios and it is very unlikely that all risk factors would change by 0.005% or 0.01% simultaneously. For the September 30, 2025 estimate, management did not adjust any qualitative factors utilized in the previous quarter.

Previous wording

The Company's net interest income was $114.7 million for the six months ended June 30, 2025 compared to $109.1 million for the six months ended June 30, 2024 (see Net Interest Income). The Company recorded a recovery of credit losses of $2.0 million for the six months ended June 30, 2025 compared to a provision for credit losses of $0.3 million for the six months ended June 30, 2024 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $1.1 million and non-interest expense increased $4.0 million for the six months ended June 30, 2025 from the six months ended June 30, 2024.

Current wording

The Company's net interest income was $175.8 million for the nine months ended September 30, 2025 compared to $164.7 million for the nine months ended September 30, 2024 (see Net Interest Income). The Company recorded a recovery of credit losses of $2.5 million for the nine months ended September 30, 2025 compared to a provision for credit losses of $1.5 million for the nine months ended September 30, 2024 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $0.9 million and non-interest expense increased $4.2 million for the nine months ended September 30, 2025 from the nine months ended September 30, 2024.

Previous wording

The Company's net interest income was $58.9 million for the three months ended June 30, 2025 compared to $54.6 million for the three months ended June 30, 2024 (see Net Interest Income). The Company recorded a $2.0 million recovery of credit losses for the three months ended June 30, 2025 compared to a $0.5 million provision for credit losses for the three months ended June 30, 2024 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $0.3 million and non-interest expense increased $2.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

The Company's net interest income was $61.1 million for the three months ended September 30, 2025 compared to $55.6 million for the three months ended September 30, 2024 (see Net Interest Income). The Company recorded a $0.5 million recovery of credit losses for the three months ended September 30, 2025 compared to a $1.2 million provision for credit losses for the three months ended September 30, 2024 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income decreased $0.2 million and non-interest expense increased $0.3 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Total investment securities increased$141.1 million (9.7%) from December 31, 2024 to $1.59 billion at June 30, 2025, due to mortgage-backed security purchases.

Current wording

Total investment securities increased$89.6 million (6.2%) from December 31, 2024 to $1.54 billion at September 30, 2025, due to mortgage-backed security purchases.

Previous wording

Gross loans increased $64.4 million (1.5%) from December 31, 2024 to $4.34 billion at June 30, 2025. Residential real estate loans increased $60.8 million (3.3%), commercial real estate loans increased $10.3 million (0.6%), and home equity loans increased $8.7 million (4.4%) during the first six months of 2025. These increases were partially offset by a decrease in commercial and industrial loans of $10.5 million (2.5%) and a decrease in consumer loans of $5.0 million (8.7%).

Current wording

Gross loans increased $138.0 million (3.2%) from December 31, 2024 to $4.41 billion at September 30, 2025. Residential real estate loans increased $86.2 million (4.7%), commercial real estate loans increased $34.4 million (1.9%), home equity loans increased $19.6 million (9.8%), and commercial and industrial loans increased $6.8 million (1.6%) during the first nine months of 2025. These increases were partially offset by a decrease in consumer loans of $7.8 million (13.4%).

Previous wording

Total deposits increased $104.6 million (2.0%) from December 31, 2024 to $5.2 billion at June 30, 2025. Non-interest-bearing demand deposit balances increased $38.8 million, time deposit balances increased $38.4 million, and savings deposits increased $28.8 million.

Current wording

Total deposits increased $113.4 million (2.2%) from December 31, 2024 to $5.3 billion at September 30, 2025. Time deposit balances increased $53.5 million, non-interest-bearing demand deposit balances increased $32.9 million, and savings deposits increased $23.5 million.

Previous wording

The Company’s net interest income increased from $109.1 million for the six months ended June 30, 2024 to $114.7 million for the six months ended June 30, 2025. The Company’s tax equivalent net interest income increased $5.6 million to $115.1 million for the six months ended June 30, 2025 from $109.5 the six months ended June 30, 2024. The increase in net interest income was due to an increase in average loan balances ($370.0 million) and decrease in cost of interest bearing liabilities (10 basis points) which increased net interest income by $11.0 million and $3.3 million, respectively. Additionally, an increase in average balance of investment securities ($88.2 million) increased net interest income by $2.0 million.

Current wording

The Company’s net interest income increased from $164.7 million for the nine months ended September 30, 2024 to $175.8 million for the nine months ended September 30, 2025. The Company’s tax equivalent net interest income increased $11.1 million to $176.4 million for the nine months ended September 30, 2025 from $165.3 the nine months ended September 30, 2024. The increase in net interest income was due to an increase in average loan balances ($221.2 million) and decrease in cost of interest bearing liabilities (7 basis points) which increased net interest income by $9.7 million and $4.3 million, respectively. Additionally, an increase in average balance of investment securities ($79.1 million) increased net interest income by $2.8 million.

Previous wording

These increases were partially offset by a decrease in yield (38 basis points) on loans and increase in average balance of interest bearing liabilities ($384.6 million) which decreased net interest income by $8.6 million and $5.2 million, respectively. The Company’s reported net interest margin decreased slightly from 3.91% for the six months ended June 30, 2024 to 3.90% for the six months ended June 30, 2025.

Current wording

These increases were partially offset by an increase in average balance of interest bearing liabilities ($211.5 million) which decreased net interest income by $5.2 million. The Company’s reported net interest margin increased slightly from 3.90% for the nine months ended September 30, 2024 to 3.95% for the nine months ended September 30, 2025.

Previous wording

The Company’s net interest income increased approximately $4.3 million, or 7.9%, from $54.6 million during the second quarter of 2024 to $58.9 million during the second quarter of 2025. The Company’s tax equivalent net interest income increased approximately $4.3 million from $54.8 million for the second quarter of 2024 to $59.1 million for the second quarter of 2025. Net interest income increased by $3.2 million due to an increase in average loan balances ($217.8 million) and by $1.7 million due to a decrease in the cost of interest-bearing liabilities (10 basis points). Additionally, net interest income increased by $1.0 million due to an increase in average investment security balances ($83.8 million).

Current wording

The Company’s net interest income increased approximately $5.5 million, or 9.9%, from $55.6 million during the third quarter of 2024 to $61.1 million during the third quarter of 2025. The Company’s tax equivalent net interest income increased approximately $5.5 million from $55.8 million for the third quarter of 2024 to $61.3 million for the third quarter of 2025. Net interest income increased by $3.6 million due to an increase in average loan balances ($244.8 million) and by $2.9 million due to a decrease in the cost of interest-bearing liabilities (22 basis points). Additionally, net interest income increased $0.8 million due to an increase in average investment security balances ($60.9 million).

Previous wording

These increases were partially offset by an increase in average balance of interest-bearing liabilities ($204.5 million) which lowered net interest income by $1.7 million. The Company’s reported net interest margin increased from 3.87% for the second quarter of 2024 to 3.95% for the second quarter of 2025.

Current wording

These increases were partially offset by an increase in average balance of interest-bearing liabilities ($170.1 million) which lowered net interest income by $1.4 million. The Company’s reported net interest margin increased from 3.87% for the third quarter of 2024 to 4.04% for the third quarter of 2025.

Previous wording

The commercial and industrial ("C&I") loan portfolio consists of loans to corporate borrowers that are primarily in small to mid-size industrial and commercial companies. Collateral securing these loans includes equipment, machinery, inventory, receivables and vehicles. C&I loans are considered to contain a higher level of risk than other loan types, although care is taken to minimize these risks. Numerous risk factors impact this portfolio, including industry specific risks such as the economy, new technology, labor rates and cyclicality, as well as customer specific factors, such as cash flow, financial structure, operating controls and asset quality. C&I loans decreased $10.5 million from December 31, 2024 to June 30, 2025.

Current wording

The commercial and industrial ("C&I") loan portfolio consists of loans to corporate borrowers that are primarily in small to mid-size industrial and commercial companies. Collateral securing these loans includes equipment, machinery, inventory, receivables and vehicles. C&I loans are considered to contain a higher level of risk than other loan types, although care is taken to minimize these risks. Numerous risk factors impact this portfolio, including industry specific risks such as the economy, new technology, labor rates and cyclicality, as well as customer specific factors, such as cash flow, financial structure, operating controls and asset quality. C&I loans increased $6.8 million from December 31, 2024 to September 30, 2025.

Previous wording

Commercial real estate loans consist of commercial mortgages, which generally are secured by nonresidential and multi-family residential properties, including hotel/motel and apartment lending. Commercial real estate loans are made to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans increased $10.3 million from December 31, 2024 to June 30, 2025. At June 30, 2025, $28.8 million of the commercial real estate loans were for commercial properties under construction.

Current wording

Commercial real estate loans consist of commercial mortgages, which generally are secured by nonresidential and multi-family residential properties, including hotel/motel and apartment lending. Commercial real estate loans are made to many of the same customers and carry similar industry risks as C&I loans. Commercial real estate loans increased $34.4 million from December 31, 2024 to September 30, 2025. At September 30, 2025, $31.9 million of the commercial real estate loans were for commercial properties under construction.

Previous wording

◦Commercial 1-4 Family loans increased $2.1 million from December 31, 2024 to June 30, 2025. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $199.4 million as of June 30, 2025. Risk characteristics are driven by rental housing demand as well as economic and employment conditions. These properties exhibit greater risk than multi-family properties due to fewer income sources.

Current wording

◦Commercial 1-4 Family loans increased $7.0 million from December 31, 2024 to September 30, 2025. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $204.3 million as of September 30, 2025. Risk characteristics are driven by rental housing demand as well as economic and employment conditions. These properties exhibit greater risk than multi-family properties due to fewer income sources.

Previous wording

◦Hotel loans decreased $9.2 million from December 31, 2024 to June 30, 2025. The Hotel portfolio is comprised of all lodging establishments and totaled $380.5 million as of June 30, 2025. Risk characteristics relate to the demand for travel.

Current wording

◦Hotel loans increased $7.7 million from December 31, 2024 to September 30, 2025. The Hotel portfolio is comprised of all lodging establishments and totaled $397.3 million as of September 30, 2025. Risk characteristics relate to the demand for travel.

Previous wording

◦Multi-family loans decreased $19.0 million from December 31, 2024 to June 30, 2025. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $222.0 million as of June 30, 2025. Risk characteristics are driven by rental housing demand as well as economic and employment conditions.

Current wording

◦Multi-family loans decreased $7.3 million from December 31, 2024 to September 30, 2025. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $233.7 million as of September 30, 2025. Risk characteristics are driven by rental housing demand as well as economic and employment conditions.

Previous wording

◦Non-residential commercial real estate includes properties such as retail, office, warehouse, storage, healthcare, entertainment, religious, and other nonresidential commercial properties. The non-residential product type is further segmented into owner- and non-owner occupied properties. Nonresidential non-owner occupied commercial real estate totaled $740.1 million at June 30, 2025 and increased $32.8 million from December 31, 2024 to June 30, 2025.

Current wording

◦Non-residential commercial real estate includes properties such as retail, office, warehouse, storage, healthcare, entertainment, religious, and other nonresidential commercial properties. The non-residential product type is further segmented into owner- and non-owner occupied properties. Nonresidential non-owner occupied commercial real estate totaled $728.6 million at September 30, 2025 and increased $21.4 million from December 31, 2024 to September 30, 2025.

Previous wording

◦Nonresidential owner-occupied commercial real estate totaled $236.9 million at June 30, 2025 and increased $3.4 million from December 31, 2024. Risk characteristics relate to levels of consumer spending and overall economic conditions.

Current wording

◦Nonresidential owner-occupied commercial real estate totaled $239.1 million at September 30, 2025 and increased $5.6 million from December 31, 2024. Risk characteristics relate to levels of consumer spending and overall economic conditions.

Previous wording

Residential real estate loans increased $60.8 million from December 31, 2024 to June 30, 2025. Residential real estate loans represent loans to consumers that are secured by a first lien on residential property. Residential real estate loans provide for the purchase or refinance of a residence and first-lien home equity loans allow consumers to borrow against the equity in their home. These loans primarily consist of single family five- and seven-year adjustable rate mortgages with terms that amortize up to 30 years. The Company also offers fixed-rate residential real estate loans that are generally sold in the secondary market that are not included on the Company's balance sheet; the Company does not retain the servicing rights to these loans. Residential mortgage loans are generally underwritten to comply with Fannie Mae guidelines, while the home equity loans are underwritten with typically less documentation, but with lower loan-to-value ratios and shorter maturities. At June 30, 2025, $6.4 million of the residential real estate loans were for properties under construction.

Current wording

Residential real estate loans increased $86.2 million from December 31, 2024 to September 30, 2025. Residential real estate loans represent loans to consumers that are secured by a first lien on residential property. Residential real estate loans provide for the purchase or refinance of a residence and first-lien home equity loans allow consumers to borrow against the equity in their home. These loans primarily consist of single family five- and seven-year adjustable rate mortgages with terms that amortize up to 30 years. The Company also offers fixed-rate residential real estate loans that are generally sold in the secondary market that are not included on the Company's balance sheet; the Company does not retain the servicing rights to these loans. Residential mortgage loans are generally underwritten to comply with Fannie Mae guidelines, while the home equity loans are underwritten with typically less documentation, but with lower loan-to-value ratios and shorter maturities. At September 30, 2025, $6.8 million of the residential real estate loans were for properties under construction.

Previous wording

Home equity loans increased $8.7 million during the first six months of 2025. The Company's home equity loans represent loans to consumers that are secured by a second (or junior) lien on a residential property. Home equity loans allow consumers to borrow against the equity in their home without paying off an existing first lien. These loans consist of home equity lines of credit ("HELOC") and amortized home equity loans that require monthly installment payments. Home equity loans are underwritten with less documentation, lower loan-to-value ratios and for shorter terms than residential mortgage loans. The amount of credit extended is directly related to the value of the real estate at the time the loan is made.

Current wording

Home equity loans increased $19.6 million during the first nine months of 2025. The Company's home equity loans represent loans to consumers that are secured by a second (or junior) lien on a residential property. Home equity loans allow consumers to borrow against the equity in their home without paying off an existing first lien. These loans consist of home equity lines of credit ("HELOC") and amortized home equity loans that require monthly installment payments. Home equity loans are underwritten with less documentation, lower loan-to-value ratios and for shorter terms than residential mortgage loans. The amount of credit extended is directly related to the value of the real estate at the time the loan is made.

Previous wording

Consumer loans may be secured by automobiles, boats, recreational vehicles and other personal property or they may be unsecured. The Company monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors. Consumer loans decreased by $5.0 million during the first six months of 2025.

Current wording

Consumer loans may be secured by automobiles, boats, recreational vehicles and other personal property or they may be unsecured. The Company monitors the risk associated with these types of loans by monitoring such factors as portfolio growth, lending policies and economic conditions. Underwriting standards are continually evaluated and modified based upon these factors. Consumer loans decreased by $7.8 million during the first nine months of 2025.

Previous wording

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a recovery of credit losses of $2.0 million in the second quarter of 2025 compared to a $0.5 million provision for credit losses recorded in the second quarter of 2024.

Current wording

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors. The Company's estimate of future economic conditions utilized in its provision estimate is primarily dependent on expected unemployment ranges over a two-year period. Beyond two years, a straight line reversion to historical average loss rates is applied over the life of the loan pool in the migration methodology. The vintage methodology applies future average loss rates based on net losses in historical periods where the unemployment rate was within the forecasted range. As a result of the Company’s quarterly analysis of the adequacy of the Allowance for Credit Losses, the Company recorded a recovery of credit losses of $0.5 million in the third quarter of 2025 compared to a $1.2 million provision for credit losses recorded in the third quarter of 2024.

Previous wording

The Allowance for Credit Losses decreased slightly from $21.9 million at December 31, 2024 to $19.7 million at June 30, 2025. The Company recorded a recovery of credit losses of $2.0 million in the second quarter of 2025, compared to a provision for credit losses of $0.5 million for the comparable period in 2024 and no provision for credit losses for the first quarter of 2025. The recovery of credit losses in the second quarter was primarily due to an upgrade of a specific credit that was downgraded in the third quarter of 2023, but has since seen improved financial performance. This upgrade released $1.4 million of ACL reserves. Additionally, $0.3 million of reserves were reversed due to payoffs on purchase credit deteriorated loans during the quarter ended June 30, 2025. From January 1, 2023 through June 30, 2025, the Company had cumulative net charge-offs of $3.1 million.

Current wording

The Allowance for Credit Losses decreased slightly from $21.9 million at December 31, 2024 to $19.7 million at September 30, 2025. The Company recorded a recovery of credit losses of $0.5 million in the third quarter of 2025, compared to a provision for credit losses of $1.2 million for the comparable period in 2024, and a recovery of credit losses of $2.0 million for the second quarter of 2025. The recovery of credit losses in the third quarter was primarily related to net recoveries of $0.4 million for the quarter ended September 30, 2025. More specifically, the allowance for credit losses allocated to the commercial and industrial portfolio has decreased by $1.7 million since December 31, 2024. The decrease is primarily due to an upgrade of a specific credit during the second quarter of 2025 that was downgraded in the third quarter of 2023, but has since seen improved financial performance.

Previous wording

Non-Interest Income: Non-interest income was $38.0 million for the six months ended June 30, 2025, as compared to $36.9 million for the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company reported $0.2 million of realized investment gains and $0.3 million of unrealized fair value losses on the Company's equity securities compared to $0.2 million of unrealized fair value gains during the six months ended June 30, 2024.

Current wording

Non-Interest Income: Non-interest income was $58.1 million for the nine months ended September 30, 2025, as compared to $57.2 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company reported $0.2 million of realized investment gains and $0.2 million of unrealized fair value losses on the Company's equity securities compared to $0.6 million of unrealized fair value gains during the nine months ended September 30, 2024.

Previous wording

Excluding net investment securities gains and losses, non-interest income increased from $36.6 million for the six months ended June 30, 2024 to$38.1 million for thesix months ended June 30, 2025. The increase was largely attributable to an increase in wealth and investment management fee income of $0.5 million (9.9%), an increase in service charges of $0.4 million (2.9%), and an increase in bank owned life insurance of $0.4 million (23.1%).

Current wording

Excluding net investment securities gains and losses, non-interest income increased from $56.7 million for the nine months ended September 30, 2024 to $58.1 million for the nine months ended September 30, 2025. The increase was largely attributable to an increase in wealth and investment management fee income of $0.7 million (8.2%) and an increase in service charges of $0.7 million (3.3%).

Previous wording

Non-Interest Expense: Non-interest expenses increased $3.9 million (5.4%), from $72.7 million in the first six months of 2024 to $76.6 million in the first six months of 2025 primarily due to an increase in salaries and employee benefits

Current wording

Non-Interest Expense: Non-interest expenses increased $4.2 million (3.8%), from $110.3 million in the first nine months of 2024 to $114.5 million in the first nine months of 2025 primarily due to an increase in salaries and employee benefits ($2.1 million), equipment and software related expense ($1.2 million), bankcard expenses ($0.9 million), and legal and professional fees ($0.2 million). These increases were partially offset by a $0.4 million decrease in advertising expenses.

Previous wording

Income Tax Expense: The Company’s effective income tax rate for the six months ended June 30, 2025 was 18.4% compared to 19.6% for the six months ended June 30, 2024.

Current wording

Income Tax Expense: The Company’s effective income tax rate for the nine months ended September 30, 2025 was 18.9% compared to 19.6% for the nine months ended September 30, 2024.

Previous wording

Non-Interest Income: Non-interest income was $19.2 million during the quarter ended June 30, 2025, as compared to $18.9 million during the quarter ended June 30, 2024. During the second quarter of 2025, the Company reported $0.2 million of realized investment gains and $0.3 million of unrealized fair value losses on the Company’s equity securities as compared to $0.4 million of unrealized fair value gains on the Company’s equity securities during the second quarter of 2024.

Current wording

Non-Interest Income: Non-interest income was $20.2 million during the quarter ended September 30, 2025, as compared to $20.3 million during the quarter ended September 30, 2024. During the third quarter of 2025, the Company reported $0.1 million of unrealized fair value gains on the Company’s equity securities, as compared to $0.4 million of unrealized fair value gains on the Company’s equity securities during the third quarter of 2024.

Previous wording

Exclusive of these items, non-interest income increased $0.8 million, or 4.3%, from $18.6 million for the second quarter of 2024 to $19.4 million for the second quarter of 2025. This increase was attributable to an increase of $0.3 million in service fees, an increase of $0.3 million in wealth and investment management fee income, and an increase of $0.2 million in bank owned life insurance.

Current wording

Exclusive of these items, non-interest income remained consistent at $20.0 million for both the third quarter of 2024 and the third quarter of 2025. Increases of $0.3 million (4.3%) in service fees and $0.2 million (5.2%) in wealth and investment management fee income were essentially offset by lower bank owned life insurance (due to death benefit proceeds in the third quarter of 2024) of $0.5 million.

Previous wording

Non-Interest Expense: Non-interest expenses increased $2.2 million, or 6.1%, from $36.8 million in the second quarter of 2024 to $39.0 million in the second quarter of 2025. This increase was largely due to an increase of $1.2 million in salaries and employee benefits due to increased health insurance costs and salary adjustments. In addition, equipment and software related expenses increased $0.4 million, other tax-related matters increased $0.3 million, and repossessed asset losses increased $0.3 million.

Current wording

Non-Interest Expense: Non-interest expenses increased $0.3 million, or 0.7%, from $37.6 million in the third quarter of 2024 to $37.9. million in the third quarter of 2025. This increase was largely due to an increase in salaries and employee benefits of $0.5 million and an increase of $0.3 million in other tax-related matters. These increases were partially offset by lower advertising $0.4 million and other expenses $0.3 million.

Previous wording

Income Tax Expense: The Company's effective income tax rate for the three months ended June 30, 2025 and June 30, 2024 was 18.9%, and 19.7%, respectively.

Current wording

Income Tax Expense: The Company's effective income tax rate was 19.7% for both the three months ended September 30, 2025 and the three months September 30, 2024.

Previous wording

The Company evaluates the adequacy of liquidity at both the City Holding level and at the City National level. At the City Holding level, the principal source of cash is dividends from City National. Dividends paid by City National to City Holding are subject to certain legal and regulatory limitations. Generally, any dividends in amounts that exceed the earnings retained by City National in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At June 30, 2025, City National could pay dividends up to $100.2 million plus net profits for the remainder of 2025, as defined by statute, up to the dividend declaration date without prior regulatory permission.

Current wording

The Company evaluates the adequacy of liquidity at both the City Holding level and at the City National level. At the City Holding level, the principal source of cash is dividends from City National. Dividends paid by City National to City Holding are subject to certain legal and regulatory limitations. Generally, any dividends in amounts that exceed the earnings retained by City National in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At September 30, 2025, City National could pay dividends up to $135.5 million plus net profits for the remainder of 2025, as defined by statute, up to the dividend declaration date without prior regulatory permission.

Previous wording

Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate$45.8 million on an annualized basis over the next 12 months based on common shares outstanding at June 30, 2025. However, dividends to shareholders can, if necessary, be suspended. In addition to these anticipated cash needs, City Holding has operating expenses and other contractual obligations, which are estimated to require $2.2 million of additional cash over the next 12 months. As of June 30, 2025, City Holding reported a cash balance of$65.9 million and management believes that City Holding’s available cash balance, together with cash dividends from City National, will be adequate to satisfy its funding and cash needs over the next 12 months.

Current wording

Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate $47.4 million on an annualized basis over the next 12 months based on common shares outstanding at September 30, 2025. However, dividends to shareholders can, if necessary, be suspended. In addition to these anticipated cash needs, City Holding has operating expenses and other contractual obligations, which are estimated to require $2.0 million of additional cash over the next 12 months. As of September 30, 2025, City Holding reported a cash balance of $54.4 million and management believes that City Holding’s available cash balance, together with cash dividends from City National, will be adequate to satisfy its funding and cash needs over the next 12 months.

Previous wording

As illustrated in the consolidated statements of cash flows, the Company generated $59.7 million of cash from operating activities during the first six months of 2025, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company utilized $179.4 million of cash in investing activities during the first six months of 2025, primarily due to purchases of available-for-sale securities of $225.8 million and a net increase in loans of $62.0 million. These purchases were partially offset by proceeds from maturities and calls on investment securities of $98.5 million and proceeds of $14.9 million on sales of investment securities. The Company generated $66.4 million of cash in financing activities during the first six months of 2025, principally as a result of a net increase in interest-bearing deposits of $65.9 million, a net increase in non-interest bearing deposits of $38.8 million, and an increase in customer repurchase agreements of $14.2 million. These increases were partially offset by purchases of treasury stock of $28.9 million and dividends paid of $23.2 million.

Current wording

As illustrated in the consolidated statements of cash flows, the Company generated $97.0 million of cash from operating activities during the first nine months of 2025, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company utilized $189.5 million of cash in investing activities during the first nine months of 2025, primarily due to purchases of available-for-sale securities of $267.9 million, a net increase in loans of $134.3 million, and payments of $8.6 million for low income housing tax credits. These purchases were partially offset by proceeds from maturities and calls on investment securities of $156.9 million and proceeds of $66.8 million on sales of investment securities. The Company generated $92.7 million of cash in financing activities during the first nine months of 2025, principally as a result of a net increase in interest-bearing deposits of $80.6 million, an increase in customer repurchase agreements of $43.4 million, and a net increase in non-interest bearing deposits of $32.9 million. These increases were partially offset by dividends paid of $34.7 million and purchases of treasury stock of $28.9 million.

Previous wording

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, 2025, City National had the capacity to borrow an additional $1.6 billion from these existing borrowing facilities. In addition, approximately $669 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $924 million of City National’s investment securities unpledged at June 30, 2025. City National also segregates certain mortgage loans, mortgage-backed securities, and other investment securities in a separate subsidiary so that it can separately monitor the asset quality of these primarily mortgage-related assets, which could be used to raise cash through securitization transactions or obtain additional equity or debt financing if necessary.

Current wording

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 September 30, 2025, City National had the capacity to borrow an additional $1.7 billion from these existing borrowing facilities. In addition, approximately $725 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $815 million of City National’s investment securities unpledged at September 30, 2025. City National also segregates certain mortgage loans, mortgage-backed securities, and other investment securities in a separate subsidiary so that it can separately monitor the asset quality of these primarily mortgage-related assets, which could be used to raise cash through securitization transactions or obtain additional equity or debt financing if necessary.

Previous wording

With respect to liquidity, the Company has chosen a conservative posture and believes that its liquidity position is strong. The Company’s net loan to asset ratio is 65.5% as of June 30, 2025 and deposit balances fund 79.6% of total assets. The Company has obligations to extend credit, but these obligations are primarily associated with existing home equity loans that have predictable borrowing patterns across the portfolio. The Company has investment security balances with carrying values that totaled $1.6 billion at June 30, 2025, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $489.8 million. Further, the Company’s deposit mix has a high proportion of transaction and savings accounts that fund 60.0% of the Company’s total assets. As interest rates increase, deposit balances may decline or the composition of the deposit portfolio may shift to higher yielding deposit products, such as money market accounts or time deposits.

Current wording

With respect to liquidity, the Company has chosen a conservative posture and believes that its liquidity position is strong. The Company’s net loan to asset ratio is 65.9% as of September 30, 2025 and deposit balances fund 78.9% of total assets. The Company has obligations to extend credit, but these obligations are primarily associated with existing home equity loans that have predictable borrowing patterns across the portfolio. The Company has investment security balances with carrying values that totaled $1.5 billion at September 30, 2025, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $519.0 million. Further, the Company’s deposit mix has a high proportion of transaction and savings accounts that fund 59.3% of the Company’s total assets. As interest rates increase, deposit balances may decline or the composition of the deposit portfolio may shift to higher yielding deposit products, such as money market accounts or time deposits.

Previous wording

Shareholders' equity increased $33.6 million for the six months ended June 30, 2025, primarily due to net income of $63.7 million and other comprehensive income of $20.2 million. These increases were partially offset by the repurchase of 255,494 common shares at a weighted average price of $113.09 per share ($28.9 million) as part of a one million share repurchase plan authorized by the Board of Directors in January 2024, and cash dividends declared of $23.0 million.

Current wording

Shareholders' equity increased $68.3 million for the nine months ended September 30, 2025, primarily due to net income of $98.9 million and other comprehensive income of $31.5 million. These increases were partially offset by cash dividends declared of $35.7 million and the repurchase of 255,494 common shares at a weighted average price of $113.09 per share ($28.9 million) as part of a one million share repurchase plan authorized by the Board of Directors in January 2024.