CITY HOLDING CO

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 $2.4 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.7 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, 2026 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 $2.4 million impact on the reserve allocation. Changing each factor by 0.01% (moderate improvement or decline) would have a $4.8 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, 2026 estimate, management assigned a slight decline (0.005%) to the interest rate risk factor in each pool which increased the reserve by $0.2 million.

Previous wording

The Company's net interest income was $120.4 million for the six months ended June 30, 2026 compared to $114.7 million for the six months ended June 30, 2025 (see Net Interest Income). The Company recorded a provision for credit losses of $1.0 million for the six months ended June 30, 2026 compared to a recovery of credit losses of $1.8 million for the six months ended June 30, 2025 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $2.1 million and non-interest expense increased $2.4 million for the six months ended June 30, 2026 from the six months ended June 30, 2025.

Current wording

The Company's net interest income was $183.0 million for the nine months ended September 30, 2026 compared to $175.8 million for the nine months ended September 30, 2025 (see Net Interest Income). The Company recorded a provision for credit losses of $0.9 million for the nine months ended September 30, 2026 compared to a recovery of credit losses of $2.3 million for the nine months ended September 30, 2025 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $3.1 million and non-interest expense increased $5.0 million for the nine months ended September 30, 2026 from the nine months ended September 30, 2025.

Previous wording

The Company's net interest income was $60.8 million for the three months ended June 30, 2026 compared to $58.9 million for the three months ended June 30, 2025 (see Net Interest Income). The Company recorded a $0.4 million provision for credit losses for the three months ended June 30, 2026 compared to a $1.9 million recovery of credit losses for the three months ended June 30, 2025 (see Allowance for Credit Losses). As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $1.2 million and non-interest expense increased $0.6 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Current wording

The Company's net interest income was $62.6 million for the three months ended September 30, 2026 compared to $61.1 million for the three months ended September 30, 2025 (see Net Interest Income). The Company recorded a $0.1 million recovery of credit losses for the three months ended September 30, 2026 compared to a $0.5 million recovery of credit losses for the three months ended September 30, 2025 (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 $2.6 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.

Previous wording

Cash and cash equivalents increased $75.3 million (39.2%) from December 31, 2025 to $267.2 million at June 30, 2026 primarily due to income from operations, an increase in deposit balances and proceeds from maturities and calls of available-for-sale securities that were partially offset by cash utilized for common stock repurchases.

Current wording

Cash and cash equivalents increased $9.5 million (5.0%) from December 31, 2025 to $201.4 million at September 30, 2026 primarily due to income from operations, an increase in deposit balances and proceeds from maturities and calls of available-for-sale securities that were partially offset by cash utilized for purchases of available-for-sale securities, common stock repurchases, and cash dividend payments.

Previous wording

Total investment securities decreased$26.3 million (1.7)% from December 31, 2025 to $1.51 billion at June 30, 2026, due tomaturities and calls of available-for-sale securities.

Current wording

Total investment securities decreased$43.3 million (2.8%) from December 31, 2025 to $1.49 billion at September 30, 2026, due tomaturities and calls of available-for-sale securities and unrealized losses arising on available-for-sale securities that were partially offset by purchases of available-for-sale securities.

Previous wording

Total deposits increased $39.2 million (0.7%) from December 31, 2025 to $5.3 billion at June 30, 2026. Savings deposits increased $43.7 million, non interest-bearing demand deposit balances increased $8.1 million, and time deposit balances increased $5.3 million. These increases were partially offset by a decrease of $17.9 million in interest-bearing demand deposits.

Current wording

Total deposits increased $57.1 million (1.1%) from December 31, 2025 to $5.4 billion at September 30, 2026. Savings deposits increased $49.6 million and non interest-bearing demand deposit balances increased $41.8 million. These increases were partially offset by decreases of $17.2 million in time deposits and $17.0 million in interest-bearing demand deposits.

Previous wording

The Company’s net interest income increased from $114.7 million for the six months ended June 30, 2025 to $120.4 million for the six months ended June 30, 2026. The Company’s tax equivalent net interest income increased $5.8 million to $120.9 million for the six months ended June 30, 2026 from $115.1 million in the six months ended June 30, 2025. Net interest income increased due to an increase in average loan balances ($197.3 million) and decrease in cost of interest-bearing liabilities (23 basis points) which increased net interest income by $5.7 million and $5.6 million, respectively.

Current wording

The Company’s net interest income increased from $175.8 million for the nine months ended September 30, 2025 to $183.0 million for the nine months ended September 30, 2026. The Company’s tax equivalent net interest income increased $7.4 million to $183.8 million for the nine months ended September 30, 2026 from $176.4 million in the nine months ended September 30, 2025. Net interest income increased due to an increase in average loan balances ($184.5 million) and decrease in cost of interest-bearing liabilities (21 basis points) which increased net interest income by $8.0 million and $7.5 million, respectively.

Previous wording

These increases were partially offset by a decrease in yield earned on investment securities (33 basis points) which decreased net interest income by $2.3 million and higher average balances of interest-bearing liabilities ($79.4 million) decreased net interest income by $1.3 million. The Company’s reported net interest margin increased slightly from 3.90% for the six months ended June 30, 2025 to 3.97% for the six months ended June 30, 2026.

Current wording

These increases were partially offset by a decrease in yield earned on investment securities (35 basis points) which decreased net interest income by $3.6 million and higher average balances of interest-bearing liabilities ($74.7 million) decreased net interest income by $1.5 million. In addition, a decrease in the yield on loans (3 basis points) and a decrease in the average balance balance of investment securities ($20.0 million) decreased net interest by $1.0 million, respectively. The Company’s reported net interest margin increased slightly from 3.95% for the nine months ended September 30, 2025 to 4.00% for the nine months ended September 30, 2026.

Previous wording

The Company’s net interest income increased approximately $1.8 million, or 3.11%, from $58.9 million during the second quarter of 2025 to $60.8 million during the second quarter of 2026. The Company’s tax equivalent net interest income increased approximately $1.9 million from $59.1 million for the second quarter of 2025 to $61.0 million for the second quarter of 2026 (see Non-GAAP section). Net interest income increased by $2.8 million due to an increase in average loan balances ($191.2 million) and increased $2.5 million due to a decrease in the cost of interest-bearing liabilities (21 basis points).

Current wording

The Company’s net interest income increased approximately $1.5 million, or 2.5%, from $61.1 million during the third quarter of 2025 to $62.6 million during the third quarter of 2026. The Company’s tax equivalent net interest income increased approximately $1.6 million from $61.3 million for the third quarter of 2025 to $62.9 million for the third quarter of 2026 (see Non-GAAP section). Net interest income increased by $2.4 million due to an increase in average loan balances ($159.3 million) and increased $1.9 million due to a decrease in the cost of interest-bearing liabilities (18 basis points). An increase in average balance of deposits in depository institutions ($57.5 million) increased net interest income by $0.6 million.

Previous wording

These increases were partially offset by a lower yield earned on investment securities (37 basis points) and a decrease in average investment security balances ($62.6 million) which decreased net interest income by $1.2 million and $0.8 million, respectively. Additionally, an increase in average balance of interest-bearing liabilities ($74.7 million) decreased net interest income by $0.5 million and a lower yield earned on loans (4 basis points) decreased net interest income by $0.5 million. The Company’s reported net interest margin increased from 3.95% for the second quarter of 2025 to 3.97% for the second quarter of 2026.

Current wording

These increases were partially offset by a lower yield earned on investment securities (37 basis points) and a decrease in average investment security balances ($60.4 million) which decreased net interest income by $1.3 million and $0.8 million, respectively. Additionally, a lower yield earned on loans (4 basis points) decreased net interest income by $0.5 million. The Company’s reported net interest margin was 4.04% for both the third quarter of 2025 and 2026.

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 increased $0.1 million from December 31, 2025 to June 30, 2026.

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 $20.3 million from December 31, 2025 to September 30, 2026.

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 $2.9 million from December 31, 2025 to June 30, 2026. At June 30, 2026, $43.4 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 $15.8 million from December 31, 2025 to September 30, 2026. At September 30, 2026, $46.9 million of the commercial real estate loans were for commercial properties under construction.

Previous wording

◦Commercial 1-4 Family loans increased $13.1 million from December 31, 2025 to June 30, 2026. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $223.3 million as of June 30, 2026. 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 $16.1 million from December 31, 2025 to September 30, 2026. Commercial 1-4 Family loans consist of residential single-family, duplex, triplex, and fourplex rental properties and totaled $226.4 million as of September 30, 2026. 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 $2.5 million from December 31, 2025 to June 30, 2026. The Hotel portfolio is comprised of all lodging establishments and totaled $396.1 million as of June 30, 2026. Risk characteristics relate to the demand for travel.

Current wording

◦Hotel loans increased $5.2 million from December 31, 2025 to September 30, 2026. The Hotel portfolio is comprised of all lodging establishments and totaled $403.8 million as of September 30, 2026. Risk characteristics relate to the demand for travel.

Previous wording

◦Multi-family loans decreased $5.5 million from December 31, 2025 to June 30, 2026. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $231.9 million as of June 30, 2026. 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, 2025 to September 30, 2026. Multi-family consists of 5 or more family residential apartment lending. The portfolio totaled $230.2 million as of September 30, 2026. 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 $765.4 million at June 30, 2026 and decreased $2.2 million from December 31, 2025 to June 30, 2026.

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 $772.1 million at September 30, 2026 and increased $4.5 million from December 31, 2025 to September 30, 2026.

Previous wording

◦Nonresidential owner-occupied commercial real estate totaled $253.5 million at June 30, 2026 and increased $0.1 million from December 31, 2025. Risk characteristics relate to levels of consumer spending and overall economic conditions.

Current wording

◦Nonresidential owner-occupied commercial real estate totaled $250.7 million at September 30, 2026 and decreased $2.7 million from December 31, 2025. Risk characteristics relate to levels of consumer spending and overall economic conditions.

Previous wording

Residential real estate loans decreased $3.5 million from December 31, 2025 to June 30, 2026. 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, 2026, $11.1 million of the residential real estate loans were for properties under construction.

Current wording

Residential real estate loans increased $5.3 million from December 31, 2025 to September 30, 2026. 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, 2026, $12.8 million of the residential real estate loans were for properties under construction.

Previous wording

Home equity loans increased by $6.4 million during the first six months of 2026. 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 by $14.6 million during the first nine months of 2026. 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 $7.4 million during the first six months of 2026.

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 $9.1 million during the first nine months of 2026.

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 provision of credit losses of $0.4 million in the second quarter of 2026 compared to a $1.9 million recovery of credit losses recorded in the second quarter of 2025.

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 $0.1 million in the third quarter of 2026 compared to a $0.5 million recovery of credit losses recorded in the third quarter of 2025.

Previous wording

The Allowance for Credit Losses increased slightly from $19.3 million at December 31, 2025 to $19.8 million at June 30, 2026. The Company recorded a provision for credit losses of $0.4 million in the second quarter of 2026, compared to a recovery of credit losses of $1.9 million for the comparable period in 2025, and a provision for credit losses of $0.6 million for the first quarter of 2026. The provision for credit losses in the second quarter of 2026 was primarily related to the downgrade of a commercial real estate loan and a marginal increase in the historical loss rate for commercial and industrial loans during the quarter ended June 30, 2026, which were partially offset by net recoveries of $0.2 million during the quarter ended June 30, 2026.

Current wording

The Allowance for Credit Losses increased slightly from $19.3 million at December 31, 2025 to $19.6 million at September 30, 2026. The Company recorded a recovery of credit losses of $0.1 million in the third quarter of 2026, compared to a recovery of credit losses of $0.5 million for the comparable period in 2025, and a provision for credit losses of $0.4 million for the second quarter of 2026. The recovery of credit losses in the third quarter of 2026 was primarily related to the upgrade of a commercial real estate loan and a marginal decrease in the historical loss rates for commercial and residential real estate loans during the quarter ended September 30, 2026 These decreases were partially offset by revisions to qualitative adjustment factors and the downgrade of a commercial loan ($0.25 million) during the quarter ended September 30, 2026.

Previous wording

Non-Interest Income: Non-interest income was $40.8 million for the six months ended June 30, 2026, as compared to $38.6 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, the Company reported $0.1 million of unrealized fair value gains on the Company's equity securities compared to $0.2 million of realized investment gains and $0.3 million of unrealized fair value losses on the Company's equity securities during the six months ended June 30, 2025.

Current wording

Non-Interest Income: Non-interest income was $62.2 million for the nine months ended September 30, 2026, as compared to $59.1 million for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, the Company reported $0.1 million of unrealized fair value gains on the Company's equity securities compared to $0.2 million of realized investment gains and $0.2 million of unrealized fair value losses on the Company's equity securities during the nine months ended September 30, 2025.

Previous wording

Excluding net investment securities gains and losses, non-interest income increased from $38.7 million for the six months ended June 30, 2025 to $40.7 million for the six months ended June 30, 2026. The increase was largely attributable to an increase in wealth and investment management fee income of $0.9 million (14.4%), an increase in services charges of $0.6 million (4.3%), and an increase in bankcard revenue of $0.4 million (2.8%).

Current wording

Excluding net investment securities gains and losses, non-interest income increased from $59.1 million for the nine months ended September 30, 2025 to $62.1 million for the nine months ended September 30, 2026. The increase was largely attributable to an increase in wealth and investment management fee income of $1.2 million (13.0%), an increase in services charges of $1.1 million (4.9%), and an increase in bankcard revenue of $0.5 million (2.3%).

Previous wording

Non-Interest Expense: Non-interest expenses increased $2.4 million (3.2%), from $77.1 million in the first six months of 2025 to $79.5 million in the first six months of 2026 primarily due to an increase in salaries and employee benefits ($1.4 million), other tax related matters ($0.5 million), and equipment and software related expenses ($0.4 million).

Current wording

Non-Interest Expense: Non-interest expenses increased $5.0 million (4.4%), from $115.4 million in the first nine months of 2025 to $120.4 million in the first nine months of 2026 primarily due to an increase in salaries and employee benefits ($2.6 million), other tax related matters ($0.7 million), advertising costs ($0.5 million), and other expenses ($0.5 million).

Previous wording

Income Tax Expense: The Company’s effective income tax rate for the six months ended June 30, 2026 was 19.3% compared to 18.4% for the six months ended June 30, 2025.

Current wording

Income Tax Expense: The Company’s effective income tax rate for the nine months ended September 30, 2026 was 19.5% compared to 18.9% for the nine months ended September 30, 2025.

Previous wording

Exclusive of these items, non-interest income increased $1.1 million from $19.6 million for the second quarter of 2025 to $20.7 million for the second quarter of 2026. This increase was due to an increase of $0.4 million, or 14.4% in wealth and investment fee income, an increase of $0.4 million, or 5.2%, in service charges, and a $0.3 million, or 4.4%, increase in bankcard revenue.

Current wording

Non-Interest Income: Non-interest income increased $0.9 million, or 4.4%, from $20.5 million for the third quarter of 2025 to $21.4 million for the third quarter of 2026. This increase was due to an increase of $0.5 million, or 6.0%, in service charges and an increase of $0.3 million, or 10.5%, in wealth and investment management fee income.

Previous wording

Non-Interest Expense: Non-interest expenses increased $0.6 million, or 1.5%, from $39.2 million in the second quarter of 2025 to $39.8 million in the second quarter of 2026. This increase was largely due to an increase in salaries and employee benefit expenses ($0.5 million) and equipment and software related expenses ($0.2 million).

Current wording

Non-Interest Expense: Non-interest expenses increased $2.6 million from $38.3 million in the third quarter of 2025 to $40.9 million in the third quarter of 2026. The increase during the quarter ended September 30, 2026 was largely due to an increase in salaries and employee benefit expenses of $1.1 million due to salary adjustments, increased incentive compensation, and increased health insurance costs. In addition, other expenses increased $0.5 million and advertising expenses increased $0.4 million.

Previous wording

Income Tax Expense: The Company's effective income tax rate for the three months ended June 30, 2026 and June 30, 2025 was 19.4%, and 18.9%, respectively.

Current wording

Income Tax Expense: The Company's effective income tax rate for the three months ended September 30, 2026 and September 30, 2025 was 19.9%, and 19.7%, respectively.

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, 2026, City National could pay dividends up to $83.0 million plus net profits for the remainder of 2026, 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, 2026, City National could pay dividends up to $118.1 million plus net profits for the remainder of 2026, 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 $48.9 million on an annualized basis over the next 12 months based on common shares outstanding at June 30, 2026. 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 $2.5 million of additional cash over the next 12 months. As of June 30, 2026, City Holding reported a cash balance of $86.4 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.

Current wording

Additionally, City Holding anticipates continuing the payment of dividends on its common stock, which are expected to approximate $56.3 million on an annualized basis over the next 12 months based on common shares outstanding at September 30, 2026. 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 $2.9 million of additional cash over the next 12 months. As of September 30, 2026, City Holding reported a cash balance of $74.0 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 $70.7 million of cash from operating activities during the first six months of 2026, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company generated $19.0 million of cash in investing activities during the first six months of 2026, primarily due to proceeds from maturities and calls on investment securities of $117.8 million which was partially offset by $97.4 million in purchases of available for sale securities. The Company utilized $14.4 million of cash in financing activities during the first six months of 2026 due to purchases of treasury stock of $38.1 million and dividends paid of $24.9 million. The cash utilized for financing activities was partially offset by a net increase in interest-bearing deposits of $31.1 million, an increase in customer repurchase agreements of $9.9 million, and a net increase in non-interest bearing deposits of $8.1 million.

Current wording

As illustrated in the consolidated statements of cash flows, the Company generated $106.5 million of cash from operating activities during the first nine months of 2026, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings. The Company utilized $78.0 million of cash in investing activities during the first nine months of 2026, primarily due to $210.5 million in purchases of available for sale securities which was partially offset by proceeds from maturities and calls on investment securities of $183.6 million. The Company utilized $19.0 million of cash in financing activities during the first nine months of 2026 due to purchases of treasury stock of $38.1 million and dividends paid of $37.2 million. The cash utilized for financing activities was partially offset by a net increase in non-interest bearing deposits of $41.8 million and a net increase in interest-bearing deposits of $15.4 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, 2026, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, approximately $715 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $791 million of City National’s investment securities unpledged at June 30, 2026. 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, 2026, City National had the capacity to borrow an additional $1.8 billion from these existing borrowing facilities. In addition, approximately $688 million of City National’s investment securities were pledged to collateralize customer repurchase agreements and various deposit accounts, leaving approximately $801 million of City National’s investment securities unpledged at September 30, 2026. 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

The Company manages its asset and liability mix to balance its desire to maximize net interest income against its desire to minimize risks associated with capitalization, interest rate volatility, and liquidity. Historically, the Company has utilized derivative instruments, when appropriate, to assist this goal. During the year ending December 31, 2020, the Company entered into three $50 million swap agreements that hedged interest rate risk on certain pools of the Company’s investment securities. These agreements require the Company to pay rates ranging from 0.20% to 0.24%, while receiving the federal funds effective rate in return. Interest income and changes in market valuations from these swap agreements are recognized as investment income in the accompanying statements of income. These agreements matured in October ($50 million) and November ($100 million) of 2025. During the year ending December 31, 2023, the Company entered into a $100 million swap agreement that hedged interest rate risk on certain loans of the Company. This agreement requires the Company to pay 3.60%, while receiving SOFR in return. Interest income and changes in market valuations from this swap agreement are recognized as loan interest income in the accompanying statements of income. This agreement matured in March 2026.

Current wording

The Company manages its asset and liability mix to balance its desire to maximize net interest income against its desire to minimize risks associated with capitalization, interest rate volatility, and liquidity. Historically, the Company has utilized derivative instruments, when appropriate, to assist this goal. During the year ended December 31, 2020, the Company entered into three $50 million swap agreements that hedged interest rate risk on certain pools of the Company’s investment securities. These agreements require the Company to pay rates ranging from 0.20% to 0.24%, while receiving the federal funds effective rate in return. Interest income and changes in market valuations from these swap agreements are recognized as investment income in the accompanying statements of income. These agreements matured in October ($50 million) and November ($100 million) of 2025. During the year ending December 31, 2023, the Company entered into a $100 million swap agreement that hedged interest rate risk on certain loans of the Company. This agreement requires the Company to pay 3.60%, while receiving SOFR in return. Interest income and changes in market valuations from this swap agreement are recognized as loan interest income in the accompanying statements of income. This agreement matured in March 2026.

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 66.2% as of June 30, 2026 and deposit balances fund 78.8% 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 June 30, 2026, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $527.6 million. Further, the Company’s deposit mix has a high proportion of transaction and savings accounts that fund 59.5% 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 66.8% as of September 30, 2026 and deposit balances fund 79.0% 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, 2026, and that exceeded the Company’s non-deposit sources of borrowing, which totaled $517.4 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.

Previous wording

Shareholders' equity decreased $0.7 million for the six months ended June 30, 2026, primarily due to the repurchase of 321,173 common shares at a weighted average price of $118.65 per share ($38.1 million) as part of a one million share repurchase plans authorized by the Board of Directors in January 2024 and March 2026 and cash dividends declared of $24.6 million. These decreases were partially offset by net income of $65.0 million.

Current wording

Shareholders' equity decreased $28.1 million for the nine months ended September 30, 2026, primarily due to other comprehensive loss of $54.4 million, cash dividends declared of $38.7 million, and the repurchase of 321,173 common shares at a weighted average price of $118.65 per share ($38.1 million) as part of the one million share repurchase plans authorized by the Board of Directors in January 2024 and March 2026. These decreases were partially offset by net income of $99.6 million.

Previous wording

The Company continues to be strongly capitalized with tangible equity of $652 million at June 30, 2026. The Company’s tangible equity ratio remained at 9.9% at both December 31, 2025 and June 30, 2026. Additionally, average equity to average assets was at 11.9% and 12.0% at December 31, 2025 and June 30, 2026, respectively.

Current wording

The Company continues to be strongly capitalized with tangible equity of $625 million at September 30, 2026. Due primarily to unrealized security losses, the Company’s tangible equity ratio decreased from 9.9% at December 31, 2025 to 9.4% at September 30, 2026. Additionally, average equity to average assets remained at 12.0% at both December 31, 2025 and September 30, 2026.

Previous wording

The Basel III Capital Rules require City Holding and City National to maintain minimum Common Equity Tier 1 (CET 1), Tier 1 and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios (which are shown in the table below). The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The

Current wording

The Basel III Capital Rules require City Holding and City National to maintain minimum Common Equity Tier I (CET I), Tier I and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios (which are shown in the table below). The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET I capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company.