Financial Analysis

Credit Related Financial Instruments The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. The Company has entered into agreements with certain customers to extend credit or provide conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment. Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Companys discretion. Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The majority of the Company's commitments have variable interest rates. The funded portion of these financial instruments is reflected in the Companys balance sheet, while the unfunded portion of these commitments is not reflec …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Pursuant to the terms of the City Holding Company 2023 Incentive Plan (the ""2023 Plan""), the Compensation Committee of the Board of Directors, or its delegate, may, from time-to-time, grant stock options, stock appreciation rights, (""SARs""), restricted stock units, or stock awards (collectively, the ""awards"") to employees, directors and individuals who provide service to the Company (collectively, ""Plan Participants""). The 2023 Plan was approved by the shareholders in April 2023 and replaced the City Holding 2013 Incentive Plan (the ""2013 Plan"") that expired in April 2023. A maximum of 600,000 shares of the Companys common stock may be issued under the 2023 Plan, subject to certain limitations. These limitations may be adjusted in the event of a change in the number of outstanding shares of common stock by reason of a stock dividend, stock split, combination, reclassification, recapitalization or other similar event. Specific terms of the awards granted, including the number of shares, vesting periods, exercise prices (for stock options) and expiration dates are determined at the date of grant and are evidenced by agreements between the Company and the awardee. The exercise price of the stock option grants equals the fair market value of the Companys stock on the date of grant. All incentive stock options and SARs will be exercisable up to 10 years from the date granted and all options and SARs are exercisable for the period specified in the individual agreement. U …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

The following table illustrates the disaggregation by the Company's major revenue streams (in thousands): Point of Revenue Recognition 2025 2024 2023 Major revenue streams Service charges At a point in time and over time $ 29,980 $ 29,225 $ 27,751 Bankcard revenue At a point in time 28,655 28,500 27,960 Wealth and investment management fee income Over time 12,345 11,255 9,563 Other income At a point in time and over time 3,308 3,012 3,794 Net revenue from contracts with customers 74,288 71,992 69,068 Non-interest income within the scope of other GAAP topics 3,477 1,342 1,561 Total non-interest income $ 77,765 $ 73,334 $ 70,629

DisaggregationOfRevenueTableTextBlock

"FAIR VALUE MEASUREMENTS Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. If such information is not available, fair value is based upon internal …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS The Company completed its annual assessment of the carrying value of goodwill during 2025 and concluded that its carrying value was not impaired. The Company's reporting unit had positive equity and a qualitative assessment was completed, indicating that it was not more likely than not that goodwill was impaired. The following table presents a roll forward of the Company's goodwill activity (in thousands): 2025 2024 Beginning balance $ 149,762 $ 149,902 Goodwill acquired in conjunction with the acquisition of Citizens Commerce (140) Ending balance $ 149,762 $ 149,762 The Company believes that the customer relationships with the deposits acquired have an intangible value. In connection with acquisitions, the Company recorded a core deposit intangible, which represented the value that the acquiree had with their deposit customers. The fair value was estimated based on a discounted cash flow methodology that considered the type of deposit, estimated deposit retention, the cost of the deposit base and an alternate cost of funds. The following tables present the details of the Company's core deposit intangibles (in thousands): 2025 2024 Gross carrying amount $ 29,462 $ 29,462 Accumulated amortization (21,353) (19,180) $ 8,109 $ 10,282 Beginning balance $ 10,282 $ 12,666 Amortization expense (2,173) (2,384) Ending balance $ 8,109 $ 10,282 The core deposit intangibles are being amortized over 10 years. The estimated amortization expense for core …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Companys deferred tax assets and liabilities are as follows (in thousands): 2025 2024 Allowance for credit losses $ 4,368 $ 4,495 Deferred compensation payable 3,712 3,441 Accrued expenses 2,122 2,365 Unrealized losses on available for sale securities 23,731 34,973 Depreciation 3,133 2,603 Other 3,938 4,307 Total Deferred Tax Assets 41,004 52,184 Goodwill and other intangible assets 3,159 3,080 Deferred loan fees 2,875 2,550 Other 4,965 4,850 Total Deferred Tax Liabilities 10,999 10,480 Deferred Tax Assets, net $ 30,005 $ 41,704 No material valuation allowances for deferred tax assets were recorded at December 31, 2025 or 2024 as the Company believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years. Significant components of the provision for income taxes are as follows (in thousands): 2025 2024 2023 Current: Federal $ 25,286 $ 23,883 $ 27,156 State 5,744 3,151 4,349 Total current tax expense 31,030 27,034 31,505 Deferred Federal 50 270 (2,497) State (100) 111 (267) Total deferred tax expense (50) 381 (2,764) Income tax expense $ 30,980 $ 27,415 $ 28,741 A reconciliation of the significant differences between the federal statutory …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Recently Adopted In March 2024, the FASB issued ASU No. 2024-01, "" Stock Compensation (Topic 718): Scope Application of Profits Interest Awards."" The amendment clarifies how an entity determines whether a profits interest or similar award is within the scope of ASC Topic 718 or not a share-based payment arrangement and therefore within the scope of other guidance. This ASU became effective for the Company on March 31, 2025. The adoption of ASU No. 2024-01 did not have a material impact to the Company's financial statements. In March 2024, the FASB issued ASU No. 2024-02, "" Codification Improvements: Amendments to Remove References to the Concepts Statements."" The amendment removes various references to the FASBs Concepts Statements from the FASBs Accounting Standards Codification (Codification or GAAP). This ASU became effective for the Company on March 31, 2025. The adoption of ASU No. 2024-02 did not have a material impact to the Company's financial statements. In December 2023, the FASB issued ASU No. 2023-09, "" Income Taxes (Topic 740): Improvements to Income Tax Disclosures."" The amendment requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. This ASU became effective for the Company on December 31, 2025. The ado …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

City National has granted loans to certain non-executive officers and directors of the Company and its subsidiaries, and to their associates. Principal Principal December 31, 2024 Additions Reductions Other (1) December 31, 2025 Related Party Loans $ 6,303 $ $ (210) $ (5,939) $ 154 …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

"NOTE TWENTY-TWO CONTRACTS WITH CUSTOMERS The Company's largest source of revenue is comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASC Topic 606, Revenue from Contracts with Customers (""ASC 606""), and non-interest income. The Company's significant sources of non-interest income are: service charges, bankcard revenue, wealth and investment management fee income and bank owned life insurance (which is also excluded from ASC 606). The Company's significant policies related to contracts with customers are discussed below. Service Charges: Service charges consist of service charges on deposit accounts (monthly service fees, account analysis fees, non-sufficient funds (""NSF"") fees and other deposit account related fees). For transaction-based fees, the Company's performance obligation is generally satisfied, and the related revenue recognized, at a point in time. For non-transaction-based fees, the Company's performance obligation is generally satisfied, and the related revenue recognized, over the period in which the service is provided (typically a month). Generally, payments are received immediately through a direct charge to the customer's account. Bankcard Revenue: Bankcard revenue is primarily comprised of debit card income and ATM fees. Debit card income is primarily comprised of interchange fees earned whenever the Company's debit cards are processed through card payment networks such as Ma …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"REPORTABLE SEGMENT The Company conducts its business activities through community banking. Community banking revolves around serving the community and customers where the bank has branches and offices. Community banking consists of lending, depository, and wealth management relationships. The Companys chief executive officer is in charge of allocating the Companys resources and assessing the Company's performance, and as such, has been identified as the chief operating decision maker. The chief operating decision maker regularly reviews a multitude of reports that have a varying level of combined detail on products offered, however, all of the information and activity reviewed fall under the definition of community banking. Based on the business activities and information reviewed by the chief operating decision maker, the Company has one reportable segment - Community Banking. The accounting policies of the community banking segment are the same as those for the Company described in Note One . In accordance with ASC 280, the Company has concluded that consolidated net income is the measure of segment profit or loss that is required to be reported because it is the measure determined in accordance with measurement principles that are most consistent with US GAAP. As the Company only has one reportable segment, total segment net income and total segment assets are equivalent to the results disclosed in the accompanying Consolidated Statements of Income (reported as ""Income A …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Commitments and Contingencies Credit-Related Financial Instruments The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. The Company has entered into agreements with certain customers to extend credit or provide a conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment. Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Companys discretion. Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The majority of the Company's commitments have variable interest rates. The funded portion of these financial instruments is reflected in the Companys balance sheet, while the unfunded portion of …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Employee Benefit Plans Restricted Shares, Restricted Stock Units (""RSUs""), Performance Share Units (""PSUs"") The Company records compensation expense with respect to restricted shares, RSUs and PSUs (collectively, the ""restricted shares"") in an amount equal to the fair value of the common stock covered by each award on the date of grant. These restricted shares become fully vested after various periods of continued employment from the respective dates of grant. The Company is entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Compensation is being charged to expense over the respective vesting periods. Restricted shares are forfeited if the awarded officer or employee terminates his employment with the Company prior to the lapsing of restrictions. The Company records forfeitures of restricted stock as treasury share repurchases and any compensation cost previously recognized is reversed in the period of forfeiture. Recipients of restricted shares do not pay any cash consideration to the Company for the shares, and, except for restricted stock units and performance share units, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested. For restricted shares that have performance-based criteria, management has evaluated those criteria and has deter …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

"Fair Value Measurements Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data. If such information is not available, fair value is based upon internal …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Note C - Reportable Segment The Company conducts its business activities through community banking. Community banking revolves around serving the community and customers where the bank has branches and offices. Community banking consists of lending, depository, and trust relationships. The Companys chief executive officer is in charge of allocating the Companys resources and assessing the Company's performance, and as such, has been identified as the chief operating decision maker. The chief operating decision maker regularly reviews a multitude of reports that have a varying level of combined detail on products offered, however, all of the information and activity reviewed fall under the definition of community banking. Based on the business activities and information reviewed by the chief operating decision maker, the Company has one reportable segment Community Banking. The accounting policies of the community banking segment are the same as those for the Company described in Note A . In accordance with ASC Topic 280, the Company has concluded that consolidated net income is the measure of segment profit or loss that is required to be reported because it is the measure determined in accordance with measurement principles that are most consistent with US GAAP. As the Company only has one reportable segment, total segment net income and total segment assets are equivalent to the results disclosed in the accompanying Consolidated Statements of Income (reported as ""Income Av …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing