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Regulatory Requirements And Capital Ratios
 12 Months Ended
Dec. 31, 2018
Regulatory Capital Requirements [Abstract]  
Regulatory Requirements And Capital Ratios
REGULATORY REQUIREMENTS AND CAPITAL RATIOS
 
The principal source of income and cash for City Holding (the “Parent Company”) is dividends from City National. Dividends paid by City National to the Parent Company 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. Approval is also required if dividends declared would cause City National’s regulatory capital to fall below specified minimum levels.  At December 31, 2018, City National could pay dividends up to $88.8 million without prior regulatory permission.

During 2018, the Parent Company used cash obtained from the dividends received primarily to: (1) acquire Farmers Deposit, (2) pay common dividends to shareholders, (3) repay the Company's Junior Subordinated Deferrable Interest Debentures, (4) remit interest payments on those debentures prior to payoff and (5) fund repurchases of the Company's common shares. As of December 31, 2018, the Parent Company reported a cash balance of approximately $20.6 million.  Management believes that the Parent Company’s available cash balance, together with cash dividends from City National, is adequate to satisfy its funding and cash needs in 2019.

In July 2013, the Federal Reserve published the final rules that established a new comprehensive capital framework for banking organizations, commonly referred to as Basel III. These final rules substantially revised the risk-based capital requirements applicable to bank holding companies and depository institutions. The final rule became effective January 1, 2015 for smaller, non-complex banking organizations with full implementation by January 1, 2019.

On January 1, 2019, the Basel III Capital Rules will require City Holding and City National to maintain minimum CET 1, Tier 1 and Total Capital ratios, along with a capital conservation buffer that will become fully phased in on that date, effectively resulting in new minimum capital ratios (which are shown in the table below). The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and was phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reached 2.5% on January 1, 2019). 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 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 City Holding Company or City National Bank.
    
The Company’s regulatory capital ratios for both City Holding and City National are illustrated in the following tables (in thousands):
December 31, 2018
Actual
 
Minimum Required - Basel III Phase-In Schedule
 
Minimum Required - Basel III Fully Phased-In (*)
 
Required to be Considered Well Capitalized
Capital Amount
 
Ratio
 
Capital Amount
 
Ratio
 
Capital Amount
 
Ratio
 
Capital Amount
 
Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CET 1 Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
$
492,526

 
15.1
%
 
$
208,294

 
6.375
%
 
$
228,715

 
7.0
%
 
$
212,378

 
6.5
%
     City National Bank
423,099

 
13.1
%
 
206,676

 
6.375
%
 
226,938

 
7.0
%
 
210,728

 
6.5
%
Tier 1 Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
496,526

 
15.2
%
 
257,304

 
7.875
%
 
277,725

 
8.5
%
 
261,389

 
8.0
%
     City National Bank
423,099

 
13.1
%
 
255,306

 
7.875
%
 
275,568

 
8.5
%
 
259,358

 
8.0
%
Total Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
512,801

 
15.7
%
 
322,651

 
9.875
%
 
343,072

 
10.5
%
 
326,736

 
10.0
%
     City National Bank
439,374

 
13.6
%
 
320,145

 
9.875
%
 
340,408

 
10.5
%
 
324,198

 
10.0
%
Tier 1 Leverage Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
496,526

 
11.4
%
 
174,833

 
4.000
%
 
174,833

 
4.0
%
 
218,542

 
5.0
%
     City National Bank
423,099

 
9.8
%
 
172,594

 
4.000
%
 
172,594

 
4.0
%
 
215,742

 
5.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(*) Represents the minimum required capital levels as of January 1, 2019 when Basel III Capital Rules have been fully phased in.
December 31, 2017:
Actual
 
Minimum Required - Basel III Phase-In Schedule
 
Minimum Required - Basel III Fully Phased-In (*)
 
Required to be Considered Well Capitalized
Capital Amount
 
Ratio
 
Capital Amount
 
Ratio
 
Capital Amount
 
Ratio
 
Capital Amount
 
Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CET 1 Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
$
430,154

 
15.1
%
 
$
163,441

 
5.75
%
 
$
198,972

 
7.0
%
 
$
184,760

 
6.5
%
     City National Bank
338,105

 
12.0
%
 
162,164

 
5.75
%
 
197,418

 
7.0
%
 
183,316

 
6.5
%
Tier 1 Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
446,154

 
15.7
%
 
206,078

 
7.25
%
 
241,609

 
8.5
%
 
227,397

 
8.0
%
     City National Bank
338,105

 
12.0
%
 
204,468

 
7.25
%
 
239,721

 
8.5
%
 
225,620

 
8.0
%
Total Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
465,292

 
16.4
%
 
262,927

 
9.25
%
 
298,458

 
10.5
%
 
284,246

 
10.0
%
     City National Bank
357,243

 
12.7
%
 
260,873

 
9.25
%
 
296,126

 
10.5
%
 
282,025

 
10.0
%
Tier 1 Leverage Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     City Holding Company
446,154

 
11.0
%
 
161,834

 
4.00
%
 
161,834

 
4.0
%
 
202,293

 
5.0
%
     City National Bank
338,105

 
8.5
%
 
159,625

 
4.00
%
 
159,625

 
4.0
%
 
199,531

 
5.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(*) Represents the minimum required capital levels as of January 1, 2019 when Basel III Capital Rules have been fully phased in.


As of December 31, 2018, management believes that City Holding Company, and its banking subsidiary, City National, were “well capitalized.” City Holding is subject to regulatory capital requirements administered by the Federal Reserve, while City National is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”). Regulatory agencies can initiate certain mandatory actions if either City Holding or City National fails to meet the minimum capital requirements, as shown above. As of December 31, 2018, management believes that City Holding and City National meet all capital adequacy requirements.

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the "Regulatory Relief Act") went into effect. The Regulatory Relief Act provides for a simplification of the minimum capital level requirements applicable to the Company. The federal bank regulatory agencies have not yet issued final rules regarding this change, but it is expected that a to–be–developed community bank leverage ratio will replace the Basel III Capital Rules applicable to the Company. There can be no assurances, however, as to the substance of the final rule or its effect on the Company