CONTRIBUTOR IS MISSING HEADLINE

  City Holding Company Announces 2012 Earnings

Business Wire

CHARLESTON, W.Va. -- January 29, 2013

City Holding Company, “the Company” (NASDAQ:CHCO), a $2.9 billion bank holding
company headquartered in Charleston, today announced net income of $38.9
million, or $2.61 per diluted share for the year ended December 31, 2012.
During 2012, City’s net interest income increased $5.6 million from 2011, loan
balances increased $173 million, and noninterest income (exclusive of
investment security gains) increased $1.9 million. For 2012, the Company
achieved a return on assets of 1.37%, a return on tangible equity of 14.7%, a
net interest margin of 3.96%, and an efficiency ratio of 57.2%. City’s results
for 2012 are down slightly compared to 2011 as a result of merger-related
expenses of $4.7 million. Exclusive of the acquisition and integration
expenses, 2012’s results compared to 2011 were quite favorable.

For the fourth quarter of 2012 the Company reported net income of $10.9
million, or $0.73 per diluted share. The Company also achieved a return on
assets of 1.49%, a return on tangible equity of 16.2%, a net interest margin
of 3.99%, and an efficiency ratio of 53.1% in the fourth quarter of 2012.

City’s CEO Charles Hageboeck stated that, “2012 was an exciting and important
year for City. The acquisition of Virginia Savings Bancorp marked our first
acquisition in seven years and earlier this month, we completed our
acquisition of Community Financial Corporation. With these acquisitions, City
now has total assets of $3.4 billion, and 15 branch locations in Virginia. We
look forward to continuing the development of our presence in Virginia.”

“Net interest income in 2012 was up $5.6 million due to the acquisition of
Virginia Savings Bancorp, core loan growth of $101 million, and lower deposit
pricing. As a result, our net interest margin increased from 3.89% for 2011 to
3.96% for 2012.”

“Our asset quality continues to remain strong with stable and relatively low
levels of past due loans. The ratio of non-performing assets to total loans
and other real estate owned of 1.41% at December 31, 2012 was down compared to
the prior quarter’s ratio of 1.53%. Provision expense was higher for 2012 due
to loan growth throughout the year, particularly in the fourth quarter, rather
than due to deteriorating asset quality.”

“During 2012, our bankcard interchange fee income increased $1.3 million, or
about 11%, due to increased transaction volumes. Trust and investment
management fee income increased $0.7 million, or 21.5%, from 2011 due to
assets under management increasing from $580 million at December 31, 2011 to
$750 million at December 31, 2012. This increase was the result of core
growth, as Virginia Savings Bancorp did not offer these services. In addition,
an increase in mortgage-related lending activity led to an increase of $0.6
million in other income.”

“In summary, 2012 was another successful year for City both from a financial
performance perspective and from a growth perspective. We expanded our
footprint into Virginia while maintaining solid financial results. We look
forward to 2013 and the opportunities to continue meeting the expectations of
our shareholders and customers.”

Net Interest Income

The Company’s tax equivalent net interest income increased $5.5 million, or
5.9%, from $93.0 million in 2011 to $98.5 million in 2012. This increase is
due primarily to the acquisition of Virginia Savings Bancorp as of May 31,
2012, an increase in loan balances outstanding, and a decline in the average
rate paid on interest bearing deposits. The acquisition of Virginia Savings
Bancorp increased our net interest income by $4.5 million, which included $2.6
million of accretion related to the fair value adjustments recorded as a
result of the acquisition. Excluding the Virginia Savings Bancorp acquisition,
the average balance of loans outstanding increased $71 million, or 3.73%, from
the year ended December 31, 2011. The average rate paid on interest bearing
deposits decreased from 1.07% during 2011 to 0.70% during 2012 and was largely
attributable to the average rate paid on time deposits declining from 1.93%
during 2011 to 1.32% during 2012. These increases were partially offset by a
decrease in investment interest income as approximately $38 million of higher
yielding trust preferred securities were called during the third quarter of
2012. The Company’s reported net interest margin increased from 3.89% for the
year ended December 31, 2011 to 3.96% for the year ended December 31, 2012.
Excluding the favorable impact of the accretion from the fair value
adjustments, the net interest margin for the year ended December 31, 2012
would have been 3.85%.

During the fourth quarter of 2012, the Company’s tax equivalent net interest
income increased $0.6 million, or 2.6%, from $25.1 million during the third
quarter of 2012 to $25.7 million. This increase is due to an increase in the
accretion related to the accounting fair value adjustments recorded as a
result of the acquisition of Virginia Savings Bancorp. The Company’s reported
net interest margin increased from 3.95% for the third quarter of 2012 to
3.99% for the fourth quarter of 2012. Excluding the favorable impact of the
accretion from the fair value adjustments ($1.7 million for the quarter ended
December 31, 2012 and $0.9 million for the quarter ended September 30, 2012),
the net interest margin would have been 3.73% for the quarter ended December
31, 2012 and 3.80% for the quarter ended September 30, 2012.

Credit Quality

As a result of the Company’s quarterly analysis of the adequacy of the ALLL,
the Company recorded a provision for loan losses of $1.8 million in the fourth
quarter of 2012 and $6.4 million for the year ended December 31, 2012 compared
to $2.2 million and $4.6 million of the comparable periods in 2011. During the
fourth quarter of 2012 the Company’s loan portfolio increased $61.1 million
from September 30, 2012 which resulted in a $0.5 million addition to the ALLL.
The provision for loan losses recorded during 2012 reflects difficulties
encountered by certain commercial borrowers of the Company during the year,
the downgrade of their related credits and management’s assessment of the
impact of these difficulties on the ultimate collectability of the loans. In
addition, the Company received life insurance proceeds as the beneficiary of a
life insurance policy carried by a commercial borrower during the third
quarter of 2012 that enabled the Company to reduce the ALLL by approximately
$0.6 million for amounts previously included in the ALLL. Changes in the
amount of the provision and related allowance are based on the Company’s
detailed systematic methodology and are directionally consistent with changes
in the composition and quality of the Company’s loan portfolio. The Company
believes its methodology for determining the adequacy of its ALLL adequately
provides for probable losses inherent in the loan portfolio and produces a
provision and allowance for loan losses that is directionally consistent with
changes in asset quality and loss experience.

Investment Securities Gains/(Losses)

During 2012, the Company realized investment gains of $1.2 million from the
sale of certain equity positions related to community banks and bank holding
companies. In addition, the Company also recognized gains of $0.3 million
associated with the calls of trust preferred securities.

These gains were partially offset by $0.6 million of credit-related net
investment impairment losses that were recorded by the Company in 2012. The
charges deemed to be other than temporary were related to pooled bank trust
preferreds with a remaining carrying value of $3.5 million at December 31,
2012. The credit-related net impairment charges related to the pooled bank
trust preferred securities were based on the Company’s quarterly reviews of
its investment securities for indications of losses considered to be other
than temporary.

Non-interest Income

Exclusive of net investment securities gains and losses, non-interest income
increased $1.9 million to $54.3 million for the year ended December 31, 2012
as compared to $52.4 million for the year ended December 31, 2011. Bankcard
interchange fees increased $1.3 million, or 11.3%, to $12.4 million for the
year ended December 31, 2012. This increase was primarily due to increased
transaction volumes. In addition, trust and investment management fee income
increased $0.7 million, or 21.5%, to $3.8 million due to core growth as
Virginia Savings Bancorp did not offer these services. Other income increased
$0.6 million, or 30.8%, to $2.7 million due largely to an increase in mortgage
related lending activity.

Exclusive of other than temporary investment impairment losses and investment
losses, total non-interest income increased $1.2 million to $14.3 million for
the fourth quarter of 2012 as compared to the fourth quarter of 2011. This
increase was due primarily to an increase in service charges from depository
accounts of $0.6 million, an increase of $0.3 million in other income, and an
increase of $0.2 million in trust and investment management fee income.

Non-interest Expenses

During 2012, the Company recognized $4.7 million of acquisition and
integration expenses associated with the completed acquisition of Virginia
Savings Bancorp and the upcoming acquisition of Community Financial
Corporation. In comparison, during 2011, the Company recorded a $3.0 million
litigation reserve accrual. Excluding these expenses, noninterest expenses
increased $4.6 million from $78.1 million for the year ended December 31, 2011
to $82.7 million for the year ended December 31, 2012. Included in this
increase are expenses of $1.8 million related to the operation of the acquired
Virginia Savings Bancorp facilities. Salaries and employee benefits increased
$2.8 million due primarily to additional employees associated with the
acquisition of Virginia Savings Bancorp ($1.0 million) and increased health
insurance costs ($1.0 million). Repossessed asset losses increased $1.1
million due to the decline in estimated fair values of several residential
properties located in the eastern panhandle of West Virginia and at the
Greenbrier Resort located in southern West Virginia. The Company continually
reevaluates the estimated fair value of properties that it has repossessed by
obtaining updated appraisals on at least an annual basis. In addition, other
expenses increased $0.8 million, advertising expenses increased $0.6 million,
and bankcard expenses increased $0.4 million. These increases were partially
offset by a decrease in FDIC insurance expense of $1.0 million due to a change
in the assessment base methodology during the third quarter of 2011.

For the fourth quarter of 2012, total non-interest expenses increased $2.6
million, from $18.7 million for the fourth quarter of 2011 to $21.3 million.
Salaries and employee benefit expense increased $1.0 million, primarily
associated with the acquisition of Virginia Savings Bancorp and increased
health insurance costs. In addition, advertising expense increased $0.4
million, merger related expenses increased $0.3 million, occupancy and
equipment expenses increased $0.2 million, and repossessed asset losses
increased $0.2 million from the fourth quarter of 2011.

Balance Sheet Trends

Loans increased $173.3 million (8.8%) from December 31, 2011 to $2.15 billion
at December 31, 2012, in part due to the Company’s acquisition of Virginia
Savings Bancorp, Inc. ($72.0 million). Excluding the Virginia Savings Bancorp,
Inc. acquisition, loans increased $101.3 million (5.1%) from December 31, 2011
to $2.07 billion at December 31, 2012. Increases in residential real estate
loans of $69.7 million (7.5%) and commercial real estate loans of $57.6
million (7.9%) were partially offset by a decline in commercial and industrial
(“C&I”) loans of $23.9 million.

Total average depository balances increased $186.9 million, or 8.5%, from the
quarter ended December 31, 2011 to the quarter ended December 31, 2012. This
growth was primarily attributable to deposits acquired from Virginia Savings
Bancorp, Inc. ($122.7 million). Exclusive of this contribution, the Company
experienced increases in noninterest-bearing demand deposits ($35.2 million),
savings deposits ($31.5 million), and interest-bearing demand deposits ($20.3
million) that were partially offset by a decrease in time deposits ($22.9
million).

Income Tax Expense

The Company’s effective income tax rate for the quarter and year ended
December 31, 2012 was 34.9% and 34.3%, respectively, compared to 33.2% and
33.6% for the quarter and year ended December 31, 2011, respectively.

Capitalization and Liquidity

One of the Company’s strengths is that it is highly profitable while
maintaining strong liquidity and capital. With respect to liquidity, the
Company’s loan to deposit ratio was 89.1% and the loan to asset ratio was
73.6% at December 31, 2012. The Company maintained investment securities
totaling 13.8% of assets as of this date. Further, the Company’s deposit mix
is weighted heavily toward checking and saving accounts that fund 51.1% of
assets at December 31, 2012. Time deposits fund 31.5% of assets at December
31, 2012, but very few of these deposits are in accounts that have balances of
more than $250,000, reflecting the core retail orientation of the Company.

The Company is also strongly capitalized. The Company’s tangible equity ratio
was 9.4% at both December 31, 2012 and at December 31, 2011. At December 31,
2012, City National Bank’s leverage ratio is 8.72%, its tier I capital ratio
is 11.51%, and its total risk-based capital ratio is 12.40%. These regulatory
capital ratios are significantly above levels required to be considered “well
capitalized,” which is the highest possible regulatory designation.

On December 19, 2012, the Board approved a quarterly cash dividend of 35 cents
per share payable January 31, 2013, to shareholders of record as of January
15, 2013. During the year ended December 31, 2012, the Company repurchased
237,535 common shares at a weighted average price of $33.32 as part of a one
million share repurchase plan authorized by the Board of Directors in July
2011. At December 31, 2012, the Company could repurchase approximately 454,000
shares under the July 2011 authorization.

City Holding Company is the parent company of City National Bank of West
Virginia. City National operates 73 branches across West Virginia, Kentucky,
Virginia, and Ohio.

City completed the acquisition of Staunton, Virginia-based Community Financial
Corporation (“Community”) and its wholly owned banking subsidiary, Community
Bank effective January 10, 2013 at 12:01 a.m. The merger, which was announced
in August 2012, received the approval of all required regulatory agencies in
December 2012 and Community’s shareholders on January 8, 2013. Community
shareholders received 0.1753 shares of City stock for each share of Community
common stock, resulting in the issuance of 766,849 shares of City Holding
Company. In connection with the acquisition, City repaid Community’s
borrowings under the U.S. Troubled Asset Relief Program (TARP) of $12.6
million on January 9, 2013.

At December 31, 2012, Community had total assets of approximately $460
million, with stockholders’ equity of approximately $53 million, loans of
approximately $410 million, and deposits of approximately $380 million. In
addition, nonperforming assets at December 31, 2012 totaled $27 million.
During the quarter ended December 31, 2012, Community had net interest income
of $5.1 million, noninterest income of $0.85 million, and noninterest expenses
of $4.3 million. Included in the noninterest expenses for the quarter ending
December 31, 2012 were compensation and benefit costs of $2.0 million,
repossessed asset losses of $0.8 million, data processing expenses of $0.25
million, and professional expenses of $0.2 million. City expects to reduce
compensation and benefit expenses by approximately 25% based on employees
retained after January 2013. During the fourth quarter of 2012, City
recognized approximately $0.2 million, after taxes, of one-time merger related
expenses for the Community acquisition and anticipates that between $4.0
million and $4.6 million, after taxes, will be recognized in the first quarter
of 2013. Additionally, the credit mark originally estimated at $55 million is
now anticipated to be in the range of $46 million to $51 million.

This acquisition further expands City’s presence in Virginia by adding ten
branches and City grows to $3.4 billion in assets with 83 banking offices in
West Virginia, Virginia, Kentucky, and Ohio.

Forward-Looking Information

This news release contains certain forward-looking statements that are
included pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such information involves risks and
uncertainties that could result in the Company's actual results differing from
those projected in the forward-looking statements. Important factors that
could cause actual results to differ materially from those discussed in such
forward-looking statements include, but are not limited to, (1) the Company
may incur additional loan loss provision due to negative credit quality trends
in the future that may lead to a deterioration of asset quality; (2) the
Company may incur increased charge-offs in the future; (3) the Company could
have adverse legal actions of a material nature; (4) the Company may face
competitive loss of customers; (5) the Company may be unable to manage its
expense levels; (6) the Company may have difficulty retaining key employees;
(7) changes in the interest rate environment may have results on the Company’s
operations materially different from those anticipated by the Company’s market
risk management functions; (8) changes in general economic conditions and
increased competition could adversely affect the Company’s operating results;
(9) changes in other regulations and government policies affecting bank
holding companies and their subsidiaries, including changes in monetary
policies, could negatively impact the Company’s operating results; (10) the
Company may experience difficulties growing loan and deposit balances; (11)
the current economic environment poses significant challenges for us and could
adversely affect our financial condition and results of operations; (12)
continued deterioration in the financial condition of the U.S. banking system
may impact the valuations of investments the Company has made in the
securities of other financial institutions resulting in either actual losses
or other than temporary impairments on such investments; (13)  the effects of
the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)
recently adopted by the United States Congress and (14) the integration of the
operations of City Holding and Community Financial may be more difficult than
anticipated. Forward-looking statements made herein reflect management’s
expectations as of the date such statements are made. Forward-looking
statements made herein reflect management's expectations as of the date such
statements are made. Such information is provided to assist stockholders and
potential investors in understanding current and anticipated financial
operations of the Company and is included pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The
Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances that arise after the date such statements are
made. Further, the Company is required to evaluate subsequent events through
the filing of its December 31, 2012 Form 10-K. The Company will continue to
evaluate the impact of any subsequent events on the preliminary December 31,
2012 results and will adjust the amounts if necessary.



CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
                                                                  
                                                                
                                 Three Months Ended December 31,      Percent
                                      2012           2011       Change
                                                                      
Earnings ($000s, except per
share data):
Net Interest Income (FTE)        $     25,707         $  23,440       9.67  %
Net Income available to                10,894            9,652        12.87 %
common shareholders
Earnings per Basic Share               0.73              0.65         12.71 %
Earnings per Diluted Share             0.73              0.65         12.63 %
                                                                
                                                                      
Key Ratios (percent):
Return on Average Assets               1.49     %        1.43    %    4.64  %
Return on Average Tangible             16.15    %        14.93   %    8.21  %
Equity
Net Interest Margin                    3.99     %        3.90    %    2.30  %
Efficiency Ratio                       53.12    %        51.24   %    3.69  %
Average Shareholders' Equity           11.49    %        11.65   %    (1.39 )%
to Average Assets
                                                                      
Consolidated Risk Based Capital Ratios (a):
Tier I                                 12.97    %        13.12   %    (1.14 )%
Total                                  13.85    %        14.07   %    (1.56 )%
                                                                      
Tangible Equity to Tangible            9.40     %        9.37    %    0.35  %
Assets
                                                                
                                                                      
Common Stock Data:
Cash Dividends Declared per      $     0.35           $  0.35         -
Share
Book Value per Share                   22.47             21.05        6.74  %
Tangible Book Value per Share          18.08             17.25        4.83  %
Market Value per Share:
High                                   36.45             35.10        3.85  %
Low                                    31.78             26.06        21.95 %
End of Period                          34.85             33.89        2.83  %
                                                                      
Price/Earnings Ratio (b)               11.89             13.04        (8.77 )%
                                                                
                                 Twelve Months Ended December 31,     Percent
                                      2012           2011       Change
                                                                      
Earnings ($000s, except per
share data):
Net Interest Income (FTE)        $     98,538         $  93,044       5.90  %
Net Income available to                38,945            40,678       (4.26 )%
common shareholders
Earnings per Basic Share               2.63              2.68         (2.10 )%
Earnings per Diluted Share             2.61              2.67         (2.16 )%
                                                                
                                                                      
Key Ratios (percent):
Return on Average Assets               1.37     %        1.51    %    (8.83 )%
Return on Average Tangible             14.74    %        15.66   %    (5.84 )%
Equity
Net Interest Margin                    3.96     %        3.89    %    1.75  %
Efficiency Ratio                       57.16    %        55.87   %    2.32  %
Average Shareholders' Equity           11.46    %        11.70   %    (2.09 )%
to Average Assets
                                                                
                                                                      
Common Stock Data:
Cash Dividends Declared per      $     1.40           $  1.37         2.19  %
Share
Market Value per Share:
High                                   37.16             37.22        (0.16 )%
Low                                    30.96             26.06        18.80 %
                                                                      
Price/Earnings Ratio (b)               13.27             12.63        5.04  %
                                                                      
                                                                      
(a) December 31, 2012 risk-based capital ratios are estimated
(b) December 31, 2012 price/earnings ratio computed based on annualized fourth
quarter 2012 earnings



CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)
                                                                
                                                           
                                                                       
Book Value and Market Price Range per Share
                                                        Market Price
         Book Value per Share                           Range per Share
         March 31   June 30  September    December  Low           High
                               30            31
                                                                       
2008     $  18.92    $ 18.72   $  17.61      $  17.58   $    29.08     $ 42.88
2009        17.69      18.24      18.95         19.37        20.88       34.34
2010        19.71      20.02      20.31         20.31        26.87       38.03
2011        20.39      20.58      20.86         21.05        26.06       37.22
2012        21.46      21.63      22.14         22.47        30.96       37.16
                                                           
                                                                       
Earnings per Basic
Share
                                                                       
         Quarter Ended
         March 31   June 30  September    December  Year-to-Date
                               30            31
                                                                       
2008     $  0.81     $ 0.83    $  (0.16  )   $  0.26    $    1.74
2009        0.69       0.64       0.66          0.70         2.69
2010        0.59       0.68       0.58          0.64         2.48
2011        0.62       0.65       0.77          0.65         2.68
2012        0.68       0.50       0.71          0.73         2.63
                                                           
                                                                       
Earnings per Diluted Share
                                                                       
         Quarter Ended
         March 31   June 30  September    December  Year-to-Date
                               30            31
                                                                       
2008     $  0.80     $ 0.83    $  (0.16  )   $  0.26    $    1.74
2009        0.69       0.64       0.66          0.70         2.68
2010        0.58       0.68       0.58          0.64         2.47
2011        0.62       0.64       0.76          0.65         2.67
2012        0.67       0.50       0.71          0.73         2.61

                                                            
                                                                
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
                                                                
                                               Three Months Ended December 31,
                                               2012            2011
                                                                
Interest Income
Interest and fees on loans                     $   25,588       $   22,998
Interest on investment securities:
Taxable                                            2,940            4,036
Tax-exempt                                         341              398
Interest on federal funds sold                    15              9       
Total Interest Income                              28,884           27,441
                                                                
Interest Expense
Interest on deposits                               3,114            3,965
Interest on short-term borrowings                  83               86
Interest on long-term debt                        163             165     
Total Interest Expense                            3,360           4,216   
Net Interest Income                                25,524           23,225
Provision for loan losses                         1,775           2,229   
Net Interest Income After Provision for Loan       23,749           20,996
Losses
                                                                
Non-Interest Income
Total investment securities impairment losses      -                (918    )
Noncredit impairment losses recognized in         -               -       
other comprehensive income
Net investment securities impairment losses        -                (918    )
Gains on sale of investment securities            -               1       
Net investment securities losses                   -                (917    )
                                                                
Service charges                                    7,113            6,511
Bankcard interchange fees                          3,101            2,849
Insurance commissions                              1,289            1,433
Trust and investment management fee income         1,112            925
Bank owned life insurance                          754              728
Other income                                      897             599     
Total Non-Interest Income                          14,266           12,128
                                                                
Non-Interest Expense
Salaries and employee benefits                     11,301           10,320
Occupancy and equipment                            2,147            1,929
Depreciation                                       1,234            1,100
FDIC insurance expense                             407              300
Advertising                                        596              153
Bankcard expenses                                  628              566
Postage, delivery, and statement mailings          514              484
Office supplies                                    412              429
Legal and professional fees                        437              366
Telecommunications                                 405              388
Repossessed asset (gains)/losses, net of           146              (27     )
expenses
Merger related expenses                            373              -
Other expenses                                    2,673           2,677   
Total Non-Interest Expense                        21,273          18,685  
Income Before Income Taxes                         16,742           14,439
Income tax expense                                5,848           4,787   
Net Income Available to Common Shareholders    $   10,894       $   9,652   
                                                                
                                                                
Distributed earnings allocated to common       $   5,151        $   5,136
shareholders
Undistributed earnings allocated to common        5,658           4,446   
shareholders
Net earnings allocated to common shareholders  $   10,809       $   9,582   
                                                                
Average common shares outstanding                  14,755           14,743
Effect of dilutive securities:
Employee stock options                            82              71      
Shares for diluted earnings per share             14,837          14,814  
                                                                
Basic earnings per common share                $   0.73         $   0.65
Diluted earnings per common share              $   0.73         $   0.65
Dividends declared per common share            $   0.35         $   0.35
                                                                
Comprehensive Income                           $   9,837        $   8,446



CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
                                                            
                                              Twelve months ended December 31,
                                              2012             2011
                                                                
Interest Income
Interest and fees on loans                    $  96,432         $  93,414
Interest on investment securities:
Taxable                                          14,285            17,729
Tax-exempt                                       1,442             1,697
Interest on federal funds sold                  53              48       
Total Interest Income                            112,212           112,888
                                                                
Interest Expense
Interest on deposits                             13,477            19,794
Interest on short-term borrowings                312               325
Interest on long-term debt                      661             639      
Total Interest Expense                          14,450          20,758   
Net Interest Income                              97,762            92,130
Provision for loan losses                       6,375           4,600    
Net Interest Income After Provision for          91,387            87,530
Loan Losses
                                                                
Non-Interest Income
Total investment securities impairment           (878     )        (2,767   )
losses
Noncredit impairment losses recognized in       302             1,494    
other comprehensive income
Net investment securities impairment losses      (576     )        (1,273   )
Gains on sale of investment securities          1,530           3,756    
Net investment securities gains                  954               2,483
                                                                
Service charges                                  26,409            26,959
Bankcard interchange fees                        12,406            11,150
Insurance commissions                            6,071             5,946
Trust and investment management fee income       3,774             3,106
Bank owned life insurance                        2,983             3,183
Other income                                    2,660           2,033    
Total Non-Interest Income                        55,257            54,860
                                                                
Non-Interest Expense
Salaries and employee benefits                   43,509            40,717
Occupancy and equipment                          8,186             8,013
Depreciation                                     4,605             4,508
FDIC insurance expense                           1,590             2,576
Advertising                                      2,589             2,007
Bankcard expenses                                2,662             2,258
Postage, delivery, and statement mailings        2,079             2,099
Office supplies                                  1,669             1,911
Legal and professional fees                      1,786             4,913
Telecommunications                               1,614             1,605
Repossessed asset losses, net of expenses        1,346             272
Merger related expenses                          4,708             -
Other expenses                                  11,058          10,262   
Total Non-Interest Expense                      87,401          81,141   
Income Before Income Taxes                       59,243            61,249
Income tax expense                              20,298          20,571   
Net Income Available to Common Shareholders   $  38,945        $  40,678   
                                                                
                                                                
Distributed earnings allocated to common      $  20,603         $  20,102
shareholders
                                                                
Undistributed earnings allocated to common      18,034          20,280   
shareholders
                                                                
Net earnings allocated to common              $  38,637        $  40,382   
shareholders
                                                                
Average common shares outstanding                14,714            15,055
                                                                
Effect of dilutive securities:
Employee stock options                          82              75       
                                                                
Shares for diluted earnings per share           14,796          15,130   
                                                                
Basic earnings per common share               $  2.63           $  2.68
Diluted earnings per common share             $  2.61           $  2.67
Dividends declared per common share           $  1.40           $  1.37
                                                                
Comprehensive Income                          $  41,430         $  39,268



CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) ($ in 000s)                
                                                           
                                                             
                                         Three Months Ended
                                         December 31, 2012  December 31, 2011
                                                             
Balance at October 1                     $   328,415         $   309,892
                                                             
Net income                                   10,894              9,652
Other comprehensive income:
Change in unrealized loss on                 (794      )         (288      )
securities available-for-sale
Change in underfunded pension                (263      )         (918      )
liability
Cash dividends declared ($0.35/share)        (5,192    )         (5,137    )
and ($0.35/share), respectively
Issuance of stock award shares, net          214                 201
Exercise of 3,000 stock options              -                   94
Purchase of 80,000 common shares of         -                (2,362    )
treasury
Balance at December 31                   $   333,274       $   311,134   
                                                             
                                                             
                                                             
                                         Twelve Months Ended
                                         December 31, 2012  December 31, 2011
                                                             
Balance at January 1                     $   311,134         $   314,861
                                                             
Net income                                   38,945              40,678
Other comprehensive income:
Change in unrealized gain (loss) on          2,749               (196      )
securities available-for-sale
Change in unrealized (loss) on               -                   (295      )
interest rate floors
Change in underfunded pension                (264      )         (919      )
liability
Cash dividends declared ($1.40/share)        (20,725   )         (20,533   )
and ($1.37/share), respectively
Issuance of stock award shares, net          1,083               1,066
Acquisition of Virgina Savings Bancorp       7,723               -
Exercise of 18,899 stock options             544                 -
Exercise of 9,576 stock options              -                   262
Purchase of 237,535 common shares of         (7,915    )         -
treasury
Purchase of 755,501 common shares of        -                (23,790   )
treasury
Balance at December 31                   $   333,274       $   311,134   

                                                               
                                                                    
CITY HOLDING COMPANY AND
SUBSIDIARIES
Condensed Consolidated Quarterly
Statements of Income
(Unaudited) ($ in 000s,
except per share data)
              
                Quarter Ended
                December     September    June 30      March 31     December
                31           30                                     31
                 2012      2012      2012      2012      2011   
                                                                    
Interest
income          $ 28,884     $ 28,432     $ 27,466     $ 27,430     $ 27,441


Taxable
equivalent
adjustment       183       185       198       208       215    


Interest          29,067       28,617       27,664       27,638       27,656
income (FTE)
Interest
expense          3,360     3,557     3,625     3,908     4,216  


Net interest
income            25,707       25,060       24,039       23,730       23,440


Provision for    1,775     975       1,675     1,950     2,229  
loan losses
Net interest
income after
provision
for loan          23,932       24,085       22,364       21,780       21,211
losses
                                                                    
Noninterest       14,266       14,079       13,790       13,118       12,128
income
Noninterest      21,273    21,846    24,763    19,515    18,685 
expense
Income before     16,925       16,318       11,391       15,383       14,654
income taxes
Income tax        5,848        5,526        3,780        5,144        4,787
expense
Taxable
equivalent       183       185       198       208       215    
adjustment
Net income
available to    $ 10,894   $ 10,607   $ 7,413    $ 10,031   $ 9,652  
common
shareholders
                                                                    
                                                          
                                                                    
Distributed
earnings
allocated to    $ 5,151      $ 5,150      $ 5,146      $ 5,118      $ 5,136
common
shareholders
Undistributed
earnings
allocated to     5,658     5,373     2,208     4,837     4,446  
common
shareholders
Net earnings
allocated to    $ 10,809   $ 10,523   $ 7,354    $ 9,955    $ 9,582  
common
shareholders
                                                                    
Average
common shares     14,755       14,751       14,680       14,679       14,743
outstanding
                                                                    
Effect of
dilutive
securities:
Employee         82        83        79        80        71     
stock options
                                                                    
Shares for
diluted          14,837    14,834    14,759    14,759    14,814 
earnings per
share
                                                                    
Basic
earnings per    $ 0.73       $ 0.71       $ 0.50       $ 0.68       $ 0.65
common share
Diluted
earnings per      0.73         0.71         0.50         0.67         0.65
common share
                                                                    
Cash
dividends         0.35         0.35         0.35         0.35         0.35
declared per
share
                                                          
                                                                    
Net Interest      3.99   %     3.95   %     3.91   %     3.98   %     3.90   %
Margin
                                                                    
Interest
Income from
Accretion
Related to
Fair Value      $ 1,658      $ 936        $ -          $ -          $ -
Adjusments
Recorded as a
Result of
Acquisition

                                                                
                                                                     
CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)
                                                                     
                   Quarter Ended
                   December   September    June 30      March 31     December
                   31         30                                     31
                    2012     2012      2012      2012      2011   
                                                                     
Non-Interest
Income:
Service charges    $ 7,113    $ 6,750      $ 6,497      $ 6,048      $ 6,511
Bankcard             3,101      3,111        3,152        3,042        2,849
interchange fees
Insurance            1,289      1,439        1,347        1,996        1,433
commissions
Trust and
investment           1,112      912          942          807          925
management fee
income
Bank owned life      754        738          766          723          728
insurance
Other income        897      671       558       533       599    
Subtotal             14,266     13,621       13,262       13,149       13,045
Total investment
securities           -          (272   )     (606   )     -            (918   )
impairment losses
Noncredit
impairment losses
recognized in       -        -         302       -         -      
other
comprehensive
income
Net investment
securities           -          (272   )     (304   )     -            (918   )
impairment losses
Gain (loss) on
sale of investment  -        730       832       (31    )   1      
securities
Total Non-Interest $ 14,266  $ 14,079   $ 13,790   $ 13,118   $ 12,128 
Income
                                                                     
Non-Interest
Expense:
Salaries and       $ 11,301   $ 11,295     $ 10,668     $ 10,245     $ 10,320
employee benefits
Occupancy and        2,147      2,126        1,978        1,935        1,929
equipment
Depreciation         1,234      1,175        1,109        1,086        1,100
FDIC insurance       407        405          394          385          300
expense
Advertising          596        674          675          644          153
Bankcard expenses    628        720          694          620          566
Postage, delivery
and statement        514        529          488          548          484
mailings
Office supplies      412        407          396          455          429
Legal and            437        611          421          317          366
professional fees
Telecommunications   405        433          387          389          388
Repossessed asset
(gains) losses,      146        429          650          121          (27    )
net of expenses
Merger related       373        157          4,042        135          -
expenses
Other expenses      2,673    2,885     2,861     2,635     2,677  
Total Non-Interest $ 21,273  $ 21,846   $ 24,763   $ 19,515   $ 18,685 
Expense
                                                                     
                                                                     
                                                            
                                                                     
Employees (Full      843        836          831          797          795
Time Equivalent)
Branch Locations     73         73           73           68           68



CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
                                                 December 31    December 31
                                                 2012           2011
                                                 (Unaudited)
Assets
Cash and due from banks                          $ 58,718        $ 140,873
Interest-bearing deposits in depository            16,276          5,526
institutions
Federal funds sold                                10,000       -         
Cash and cash equivalents                          84,994          146,399
                                                                 
Investment securities available-for-sale, at       377,122         360,783
fair value
Investment securities held-to-maturity, at         13,454          23,458
amortized cost
Other securities                                  11,463       11,934    
Total investment securities                        402,039         396,175
                                                                 
Gross loans                                        2,146,369       1,973,103
Allowance for loan losses                         (18,809   )   (19,409   )
Net loans                                          2,127,560       1,953,694
                                                                 
Bank owned life insurance                          81,901          78,961
Premises and equipment, net                        72,728          64,612
Accrued interest receivable                        6,692           7,093
Net deferred tax assets                            32,737          32,219
Intangible assets                                  65,057          56,164
Other assets                                      43,758       41,792    
Total Assets                                     $ 2,917,466   $ 2,777,109 
                                                                 
Liabilities
Deposits:
Noninterest-bearing                              $ 429,969       $ 369,025
Interest-bearing:
Demand deposits                                    553,132         526,824
Savings deposits                                   506,869         439,823
Time deposits                                     919,346      885,596   
Total deposits                                     2,409,316       2,221,268
Short-term borrowings
Federal Funds purchased                            -               75,000
Customer repurchase agreements                     114,646         114,050
Long-term debt                                     16,495          16,495
Other liabilities                                 43,735       39,162    
Total Liabilities                                  2,584,192       2,465,975
                                                                 
Stockholders' Equity
Preferred stock, par value $25 per share:          -               -
500,000 shares authorized; none issued
Common stock, par value $2.50 per share:
50,000,000 shares authorized; 18,499,282 shares
issued at December 31, 2012 and December 31,       46,249          46,249
2011 less 3,665,999 and 3,717,993 shares in
treasury, respectively
Capital surplus                                    103,524         103,335
Retained earnings                                  309,270         291,050
Cost of common stock in treasury                   (124,347  )     (125,593  )
Accumulated other comprehensive loss:
Unrealized gain on securities available-for-sale   3,573           825
Underfunded pension liability                     (4,995    )   (4,732    )
Total Accumulated Other Comprehensive Loss        (1,422    )   (3,907    )
Total Stockholders' Equity                        333,274      311,134   
Total Liabilities and Stockholders' Equity       $ 2,917,466   $ 2,777,109 



CITY HOLDING COMPANY AND SUBSIDIARIES
Investment Portfolio
(Unaudited) ($ in 000s)
                                                               
                                 Credit-Related
                                 Net Investment      Unrealized
                 Original        Impairment Losses   Gains           Carrying
                 Cost                                (Losses)        Value
                                 through
                                 December 31, 2012
                                                                     
US Government    $  3,792        $    -              $  96           $ 3,888
Agencies
Mortgage
Backed              282,572           -                 7,182          289,754
Securities
Municipal           47,293            -                 1,636          48,929
Bonds
Pooled Bank
Trust               26,917            (20,171  )        (3,206  )      3,540
Preferreds
Single Issuer
Bank Trust
Preferreds,
Subdebt of
Financial
Institutions,
and
Bank Holding
Company             40,401            (1,015   )        (880    )      38,506
Preferred
Stocks
Money Markets
and Mutual          1,724             -                 50             1,774
Funds
Federal
Reserve Bank        11,463            -                 -              11,463
and FHLB stock
Community Bank
Equity             8,194            (4,813   )       804          4,185
Positions
Total            $  422,356      $    (25,999  )     $  5,682       $ 402,039
Investments



CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)
                                                                   
               December 31   September     June 30         March 31      December 31
                             30
                2012        2012         2012         2012        2011
                                                                         
Residential
real estate    $ 1,031,435   $ 1,008,305   $  997,016      $ 939,611     $ 929,788
^(1)
Home equity
- junior         143,110       143,058        143,400        139,764       141,797
liens
Commercial
and              108,739       105,027        116,288        108,707       130,899
industrial
Commercial
real estate      821,970       787,887        768,176        745,586       732,146
^(2)
Consumer         36,564        38,285         37,383         35,448        35,845
DDA             4,551       2,670        3,326        2,848       2,628
overdrafts
Gross Loans    $ 2,146,369  $ 2,085,232  $  2,065,589   $ 1,971,964  $ 1,973,103
                                                                         
Construction
loans
included in:
^(1) -
Residential    $ 15,408      $ 12,787      $  11,919       $ 11,613      $ 9,287
real estate
loans
^(2) -
Commercial     $ 15,352      $ 17,072      $  18,544       $ 20,661      $ 20,201
real estate
loans
                                                                         
                                                                         
                                                                         
CITY HOLDING COMPANY AND SUBSIDIARIES
Acquisition Activity - Accretion
(Unaudited) ($ in millions)
                                                                         
                                                                         
The following table presents the accretion related to the fair value adjustments on
net interest income recorded as a result of the Virginia Savings Bancorp acquisition
completed on May 31, 2012.
                                                                         
                                                                         
                                                                         
                                           Loan            Certificates of
                             Year Ended:   Accretion^(a)  Deposit^(a)  Total
                                                                         
                               2012        $  2.4          $ 0.2         $ 2.6
                               2013           2.2            0.4           2.6
                               2014           1.1            0.4           1.4
                               2015           0.8            0.3           1.1
                             Thereafter       1.5            1.1           2.5
                                                                         
a - 2012 amounts are based on actual results. 2013, 2014, 2015, and Thereafter
amounts are based on estimated amounts.

                                                                         
Note: The amounts reflected in the table above require management to make
significant assumptions based on
estimated future default, prepayment, and discount rates. Actual performance
could be significantly
different from that assumed, which could result in the actual results being
materially different
from the amounts estimated above.





CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
                                                                              
                      Three Months Ended December 31,
                                      2012                                2011
                      Average                    Yield/   Average                    Yield/
                      Balance        Interest  Rate    Balance        Interest  Rate
                                                                                     
Assets:
Loan portfolio
^(1):
Residential real      $ 1,152,921     $ 12,267   4.23 %   $ 1,060,133     $ 12,043   4.51    %
estate ^(2)
Commercial,
financial, and          901,966         11,420   5.04 %     833,217         9,463    4.51    %
agriculture ^(3)
Installment loans
to individuals          49,596          1,007    8.08 %     47,515          805      6.72    %
^(4), (5)
Previously
securitized loans     ***             894     ***      85           687     3206.59 %
^(6)
Total loans             2,104,483       25,588   4.84 %     1,940,950       22,998   4.70    %
Securities:
Taxable                 380,897         2,940    3.07 %     366,024         4,036    4.37    %
Tax-exempt ^(7)        35,847       524     5.82 %   42,968       613     5.66    %
Total securities        416,744         3,464    3.31 %     408,992         4,649    4.51    %
Deposits in
depository              7,431           -        -          7,183           -        -
institutions
Federal funds sold     32,876       15      0.18 %   25,714       9       0.14    %
Total
interest-earning        2,561,534       29,067   4.51 %     2,382,839       27,656   4.60    %
assets
Cash and due from       70,075                              62,176
banks
Bank premises and       72,702                              65,030
equipment
Other assets            230,098                             212,106
Less: Allowance for    (19,551   )                   (19,777   )           
loan losses
Total assets          $ 2,914,858                   $ 2,702,374            
                                                                                     
Liabilities:
Interest-bearing        540,107         165      0.12 %     501,570         184      0.15    %
demand deposits
Savings deposits        498,027         183      0.15 %     433,480         233      0.21    %
Time deposits ^(8)      923,025         2,766    1.19 %     886,187         3,548    1.59    %
Short-term              128,706         83       0.26 %     130,154         86       0.26    %
borrowings
Long-term debt         16,495       163     3.93 %   16,495       165     3.97    %
Total
interest-bearing        2,106,360       3,360    0.63 %     1,967,886       4,216    0.85    %
liabilities
Noninterest-bearing     434,429                             387,459
demand deposits
Other liabilities       39,120                              32,134
Stockholders'          334,949                      314,895              
equity
Total liabilities
and stockholders'     $ 2,914,858                   $ 2,702,374            
equity
Net interest income                 $ 25,707                       $ 23,440  
Net yield on                                 3.99 %                         3.90    %
earning assets
                                                                                     
                                                                                     
                                                                                     
(1) - For purposes of this table, non-accruing loans have been included in average balances
and loan fees,
which are immaterial, have been included in interest income.
(2) - Interest income on residential real estate loans includes $0.1 million of accretion
related to the fair
value market adjustments due to the acquisition of Virginia Savings Bancorp.
(3) - Interest income on commercial, financial, and agriculture loans includes $1.4 million of
accretion
related to the fair value market adjustments due to the acquisition of Virginia Savings
Bancorp.
(4) - Interest income on installment loans to individuals includes $0.1 million of accretion
related to the
fair value market adjustments due to the acquisition of Virginia Savings Bancorp.
(5) - Includes the Company’s consumer and DDA overdrafts loan categories.
(6) - Effective January 1, 2012, the carrying value of the Company's previously securitized
loans was reduced
to $0.
(7) - Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately
35%.
(8) - Interest expense on time deposits includes $0.1 million in accretion of the fair market
value adjustments
related to the acquisition of Virginia Savings Bancorp.


                                               
                                                     
CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Average Balance Sheets, Yields, and Rates
(Unaudited) ($ in 000s)
 
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