City Holding Co., based in Charleston, W. Va., is acquiring three bank branches in Lexington from American Founders Bank.
American Founders is a wholly owned subsidiary of Financial Holdings Inc.
The acquisition, announced Tuesday, will expand City National's presence to 11 branches in Kentucky. The bank has 74 branches in Virginia, West Virginia and Ohio.
American Founders Bank branches in Lexington had deposits of $164.2 million as of May 15, including $93.5 million in core deposits, according to a news release from City Holding.
City Holding also will acquire $125 million in performing loans as part of the transaction, which is expected to be completed in the third quarter of 2015.
AFB's president, Bill Craycraft, will be City National's market president in Lexington.