City Holding Company Announces First Quarter Results

  City Holding Company Announces First Quarter Results

Business Wire

CHARLESTON, W. Va. -- April 23, 2013

City Holding Company, “the Company” (NASDAQ:CHCO), a $3.4 billion bank holding
company headquartered in Charleston, today announced first quarter net income
per diluted share of $0.51 and net income of $8.0 million. The results for the
first quarter of 2013 include $5.5 million, or $0.23 diluted per share on an
after tax basis, of acquisition and integration expenses related to the
acquisition of Community Financial Corporation (”Community Bank”). For the
first quarter of 2013, the Company achieved a return on assets of 0.96%, a
return on tangible equity of 11.3%, a net interest margin of 4.18%, and an
efficiency ratio of 66.5%. Excluding the acquisition and integration expenses,
the Company would have reported net income of $11.7 million, a return on
assets of 1.40%, a return on tangible equity of 16.4%, and an efficiency ratio
of 53.9% for the first quarter of 2013.

City’s CEO Charles Hageboeck stated that, “During the first quarter of 2013,
we continued to expand our footprint in Virginia by successfully completing
our acquisition of Community Bank. This marked our second acquisition in
Virginia in the last 12 months and the ten branches of Community Bank added
approximately $381 million in deposits and $363 million in loans, net of the
credit mark of $45 million. We are excited about our growth in Virginia and
look forward to ongoing efforts to further develop our Virginia presence.”

“Our net interest income increased $4.0 million from the fourth quarter of
2012 due to the acquisition of Community Bank and correspondingly, our net
interest margin increased from 3.99% in the fourth quarter of 2012 to 4.18% in
the first quarter of 2013. Noninterest income increased $1.1 million from the
first quarter of 2012 due to our acquisitions of Virginia Savings Bancorp,
Inc. (“Virginia Savings”) and Community Bank and increased mortgage-related
lending activity and trust and investment management fee income.”

“In March 2013, we announced a 6% increase in our quarterly dividend from 35
cents per share to 37 cents per share. This increase is based on the Company’s
current strong liquidity position, our outstanding financial performance in
2012 and our confidence in the Company being able to sustain this
performance,” Hageboeck concluded.

Net Interest Income

The Company’s tax equivalent net interest income increased $4.0 million, or
15.7%, from $25.7 million during the fourth quarter of 2012 to $29.7 million
during the first quarter of 2013. This increase is due to the acquisition of
Community Bank as of January 10, 2013 and an increase in the accretion related
to the acquisitions of Virginia Savings and Community Bank. The Company’s
reported net interest margin increased from 3.99% for the fourth quarter of
2012 to 4.18% for the first quarter of 2013. Excluding the favorable impact of
the accretion from the fair value adjustments ($2.2 million for the quarter
ended March 31, 2013 and $1.7 million for the quarter ended December 31,
2012), the net interest margin would have been 3.87% for the quarter ended
March 31, 2013 and 3.73% for the quarter ended December 31, 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 $1.7 million in the first
quarter of 2013, compared to $1.95 for the comparable period in 2012 and $1.8
million for the fourth quarter of 2012. The provision for loan losses recorded
in the first quarter of 2013 reflects difficulties of certain commercial
borrowers of the Company during the quarter, the downgrade of their related
credits and management’s assessment of the impact of these difficulties on the
ultimate collectability of the loans. 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.

Non-interest Income

Excluding investment security transactions, non-interest income increased $1.1
million to $14.2 million in the first quarter of 2013 as compared to $13.1
million in the first quarter of 2012. Service charges increased $0.5 million,
or 8.1%, to $6.5 million while bankcard revenues increased $0.2 million, or
5.2%, to $3.2 million. These increases were primarily due to the acquisitions
of Virginia Savings and Community Bank. In addition, other income increased
$0.3 million or 62.5%, to $0.9 million primarily as a result of increased
mortgage related revenues. Trust and investment management fee income
increased $0.2 million, or 22.7%, to $1.0 million due to core growth, as
Virginia Savings and Community Bank did not offer these services.

Non-interest Expenses

During the first quarter of 2013, the Company completed its acquisition of
Community Bank and recognized $5.5 million of acquisition and integration
expenses. Excluding these expenses, non-interest expenses increased $4.4
million, from $19.5 million in the first quarter of 2012 to $23.9 million in
the first quarter of 2013. This increase was primarily related to higher
salaries and employee benefits ($2.7 million) due to the acquisitions of
Virginia Savings and Community Bank ($1.9 million), higher pension costs ($0.3
million), and higher health insurance ($0.2 million). In addition, other
expenses increased $0.7 million, occupancy and equipment expense increased
$0.5 million and depreciation increased $0.3 million. These increases were
primarily attributable to the acquisitions of Virginia Savings and Community
Bank.

Balance Sheet Trends

Loans have increased $350.7 million (16.3%) from December 31, 2012 to $2.50
billion at March 31, 2013, primarily due to the Company’s acquisition of
Community Bank ($370.9 million). Excluding the Community Bank acquisition,
loans have decreased $20.2 million (1.0%) from December 31, 2012 to $2.13
billion at March 31, 2013. Consumer loans declined $5.4 million (14.7%),
commercial real estate loans decreased $5.1 million (0.6%), home equity loans
declined $5.0 million (3.5%) and commercial and industrial (“C&I”) loans
decreased $4.8 million (4.4%). The Company strategically decided to reduce
consumer loans due to the acquisition of an indirect portfolio of auto loans
associated with Community Bank. These loans have higher loss percentages
compared to the Company’s historical consumer portfolio. In addition, the
Company has opted to allow certain other high risk loans to exit the
portfolio.

Total average depository balances increased $397.1 million, or 16.6%, from the
quarter ended December 31, 2012 to the quarter ended March 31, 2013. This
growth was primarily attributable to deposits acquired from Community Bank
($337.3 million). Exclusive of this contribution, noninterest-bearing deposits
increased $24.5 million, interest-bearing deposits increased $21.0 million,
and savings deposits increased $16.1 million.

Income Tax Expense

The Company’s effective income tax rate for the first quarter of 2013 was
37.4% compared to 34.3% for the year ended December 31, 2012, and 33.9% for
the quarter ended March 31, 2012. As a result of the Company’s acquisition of
Community Bank during the first quarter of 2013, the Company’s effective tax
rate for 2013 is expected to decrease from 34.3% for the year ending December
31, 2012 to 33.7% for the year ending December 31, 2013. Due to this decline
in the effective rate, the Company’s net deferred tax assets are expected to
be realized at a lower effective rate, and as a result, the Company’s net
deferred tax asset was reduced by $0.5 million in the first quarter ($0.03
diluted per share).

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 86.6% and the loan to asset ratio was
72.9% at March 31, 2013. The Company maintained investment securities totaling
10.7% of assets as of this date. Further, the Company’s deposit mix is
weighted heavily toward checking and saving accounts that fund 51.3% of assets
at March 31, 2013. Time deposits fund 32.9% of assets at March 31, 2013, 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 continues to be strongly capitalized. The Company’s tangible
equity ratio was 8.6% at March 31, 2013 compared to 9.4% at December 31, 2012.
At March 31, 2013, City National Bank’s Leverage Ratio is 8.70%, its Tier I
Capital ratio is 11.53%, and its Total Risk-Based Capital ratio is 12.34%.
These regulatory capital ratios are significantly above levels required to be
considered “well capitalized,” which is the highest possible regulatory
designation.

On March 28, 2013, the Board approved a quarterly cash dividend of $0.37 cents
per share payable April 30, 2013, to shareholders of record as of April 15,
2013.

City Holding Company is the parent company of City National Bank of West
Virginia. City National operates 83 branches across 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 March 31, 2013 Form 10-Q. The Company will continue to
evaluate the impact of any subsequent events on the preliminary March 31, 2013
results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES                             
Financial Highlights
(Unaudited)
                                                                     
                                                                 
                                   Three Months Ended March 31,      Percent
                                   2013             2012            Change
                                                                     
Earnings ($000s, except per share
data):
Net Interest Income (FTE)          $   29,745       $  23,730        25.35  %
Net Income available to common         7,987           10,031        (20.38 )%
shareholders
Earnings per Basic Share               0.51            0.68          (24.51 )%
Earnings per Diluted Share             0.51            0.67          (24.84 )%
                                                                 
                                                                     
Key Ratios (percent):
Return on Average Assets               0.96     %      1.47    %     (34.36 )%
Return on Average Tangible Equity      11.26    %      15.42   %     (27.00 )%
Net Interest Margin                    4.18     %      3.98    %     5.08   %
Efficiency Ratio                       66.52    %      52.95   %     25.62  %
Average Shareholders' Equity to        10.74    %      11.55   %     (7.06  )%
Average Assets
                                                                     
Consolidated Risk Based Capital Ratios (a):
Tier I                                 11.90    %      13.36   %     (10.93 )%
Total                                  12.74    %      14.27   %     (10.72 )%
                                                                     
Tangible Equity to Tangible Assets     8.61     %      9.54    %     (9.71  )%
                                                                 
                                                                     
Common Stock Data:
Cash Dividends Declared per Share  $   0.37         $  0.35          5.71   %
Book Value per Share                   23.27           21.46         8.48   %
Tangible Book Value per Share          18.44           17.65         4.46   %
Market Value per Share:
High                                   40.05           37.16         7.78   %
Low                                    36.07           32.59         10.68  %
End of Period                          39.79           34.74         14.54  %
                                                                     
Price/Earnings Ratio (b)               19.43           12.81         51.72  %
                                                                 
                                                                     
(a) March 31, 2013 risk-based capital ratios are
estimated
(b) March 31, 2013 price/earnings ratio computed based on annualized first
quarter 2013 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    June 30  September  December  Low           High
             31                  30          31
                                                                       
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
2013           23.27                                         36.07       40.05
                                                            
                                                                       
Earnings per Basic
Share
                                                                       
             Quarter Ended
             March    June 30  September  December  Year-to-Date
             31                  30          31
                                                                       
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
2013           0.51                                          0.51
                                                            
                                                                       
Earnings per Diluted
Share
                                                                       
             Quarter Ended
             March    June 30  September  December  Year-to-Date
             31                  30          31
                                                                       
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
2013           0.51                                          0.51

CITY HOLDING COMPANY AND SUBSIDIARIES                           
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)
                                                                   
                                                  Three Months Ended March 31,
                                                  2013            2012
                                                                   
Interest Income
Interest and fees on loans                        $  29,939        $  23,068
Interest on investment securities:
Taxable                                              2,750            3,964
Tax-exempt                                           324              387
Interest on federal funds sold                      13             11     
Total Interest Income                                33,026           27,430
                                                                   
Interest Expense
Interest on deposits                                 3,227            3,668
Interest on short-term borrowings                    71               73
Interest on long-term debt                          157            167    
Total Interest Expense                              3,455          3,908  
Net Interest Income                                  29,571           23,522
Provision for loan losses                           1,738          1,950  
Net Interest Income After Provision for Loan         27,833           21,572
Losses
                                                                   
Non-Interest Income
Total investment securities impairment losses        -                -
Noncredit impairment losses recognized in other     -              -      
comprehensive income
Net investment securities impairment losses          -                -
Gains (losses) on sale of investment securities     84             (31    )
Net investment securities losses                     84               (31    )
                                                                   
Service charges                                      6,535            6,048
Bankcard revenue                                     3,199            3,042
Insurance commissions                                1,840            1,996
Trust and investment management fee income           990              807
Bank owned life insurance                            812              723
Other income                                        866            533    
Total Non-Interest Income                            14,326           13,118
                                                                   
Non-Interest Expense
Salaries and employee benefits                       12,949           10,245
Occupancy and equipment                              2,472            1,935
Depreciation                                         1,399            1,086
FDIC insurance expense                               511              385
Advertising                                          735              644
Bankcard expenses                                    727              620
Postage, delivery, and statement mailings            605              548
Office supplies                                      441              455
Legal and professional fees                          435              447
Telecommunications                                   445              389
Repossessed asset (gains)/losses, net of expenses    (155    )        121
Merger related expenses                              5,540            -
Other expenses                                      3,299          2,640  
Total Non-Interest Expense                          29,403         19,515 
Income Before Income Taxes                           12,756           15,175
Income tax expense                                  4,769          5,144  
Net Income Available to Common Shareholders       $  7,987        $  10,031 
                                                                   
                                                                   
Distributed earnings allocated to common          $  5,747         $  5,118
shareholders
Undistributed earnings allocated to common          2,175          4,837  
shareholders
Net earnings allocated to common shareholders     $  7,922        $  9,955  
                                                                   
Average common shares outstanding                    15,473           14,679
Effect of dilutive securities:
Employee stock options                              154            80     
Shares for diluted earnings per share               15,627         14,759 
                                                                   
Basic earnings per common share                   $  0.51          $  0.68
Diluted earnings per common share                 $  0.51          $  0.67
Dividends declared per common share               $  0.37          $  0.35
                                                                   
Comprehensive Income                              $  8,077         $  12,201

CITY HOLDING COMPANY AND SUBSIDIARIES                         
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) ($ in 000s)
                                                                
                                                                
                                               Three Months Ended
                                               March 31, 2013  March 31, 2012
                                                                
Balance at January 1                           $  333,274       $  311,134
                                                                
Net income                                        7,987            10,031
Other comprehensive income:
Change in unrealized loss on securities           90               2,170
available-for-sale
Cash dividends declared ($0.37/share) and         (6,064   )       (5,144   )
($0.35/share), respectively
Issuance of stock award shares, net               1,380            442
Acquisition of Community Financial Corporation    26,405           -
Exercise of 42,250 stock options                  1,397            -
Exercise of 16,899 stock options                  -                485
Purchase of 88,000 common shares of treasury     -              (3,072   )
Balance at March 31                            $  364,469     $  316,046  

CITY HOLDING COMPANY AND                                       
SUBSIDIARIES
Condensed Consolidated Quarterly
Statements of Income
(Unaudited) ($ in 000s,
except per share data)
              
                Quarter Ended
                March 31     December     September    June 30      March 31
                             31           30
                2013        2012        2012        2012        2012
                                                                    
Interest       $ 33,026     $ 28,884     $ 28,432     $ 27,466     $ 27,430
income
Taxable
equivalent      174       183       185       198       208    
adjustment
Interest
income            33,200       29,067       28,617       27,664       27,638
(FTE)
Interest        3,455     3,360     3,557     3,625     3,908  
expense
Net
interest         29,745       25,707       25,060       24,039       23,730
income
Provision
for loan         1,738     1,775     975       1,675     1,950  
losses
Net
interest
income
after
provision
for loan          28,007       23,932       24,085       22,364       21,780
losses
                                                                    
Noninterest       14,326       14,266       14,079       13,790       13,118
income
Noninterest      29,403    21,273    21,846    24,763    19,515 
expense
Income
before            12,930       16,925       16,318       11,391       15,383
income
taxes
Income tax        4,769        5,848        5,526        3,780        5,144
expense
Taxable
equivalent       174       183       185       198       208    
adjustment
Net income
available to    $ 7,987    $ 10,894   $ 10,607   $ 7,413    $ 10,031 
common
shareholders
                                                                    
                                                         
                                                                    
Distributed
earnings
allocated to    $ 5,747      $ 5,151      $ 5,150      $ 5,146      $ 5,118
common
shareholders
Undistributed
earnings
allocated to     2,175     5,658     5,373     2,208     4,837  
common
shareholders
Net earnings
allocated to    $ 7,922    $ 10,809   $ 10,523   $ 7,354    $ 9,955  
common
shareholders
                                                                    
Average
common            15,473       14,755       14,751       14,680       14,679
shares
outstanding
                                                                    
Effect of
dilutive
securities:
Employee
stock            154       82        83        79        80     
options
                                                                    
Shares for
diluted          15,627    14,837    14,834    14,759    14,759 
earnings
per share
                                                                    
Basic
earnings        $ 0.51       $ 0.73       $ 0.71       $ 0.50       $ 0.68
per common
share
Diluted
earnings          0.51         0.73         0.71         0.50         0.67
per common
share
                                                                    
Cash
dividends         0.37         0.35         0.35         0.35         0.35
declared
per share
                                                         
                                                                    
Net
Interest          4.18   %     3.99   %     3.95   %     3.91   %     3.98   %
Margin
                                                                    
Interest
Income from
Accretion
Related to
Fair Value      $ 2,181      $ 1,658      $ 936        $ -          $ -
Adjustments
Recorded as a
Result of
Acquisition

CITY HOLDING COMPANY AND                                        
SUBSIDIARIES
Non-Interest
Income and
Non-Interest
Expense
(Unaudited) ($ in
000s)
                                                                     
                   Quarter Ended
                   March 31     December   September    June 30      March 31
                                31         30
                   2013        2012      2012        2012        2012
                                                                     
Non-Interest
Income:
Service charges    $ 6,535      $ 7,113    $ 6,750      $ 6,497      $ 6,048
Bankcard revenue     3,199        3,101      3,111        3,152        3,042
Insurance            1,840        1,289      1,439        1,347        1,996
commissions
Trust and
investment           990          1,112      912          942          807
management fee
income
Bank owned life      812          754        738          766          723
insurance
Other income        866       897      671       558       533    
Subtotal             14,242       14,266     13,621       13,262       13,149
Total investment
securities           -            -          (272   )     (606   )     -
impairment losses
Noncredit impairment losses
recognized in other
comprehensive       -         -        -         302       -      
income
Net investment
securities           -            -          (272   )     (304   )     -
impairment losses
Gain (loss) on
sale of investment  84         -         730        832        (31    )
securities
Total Non-Interest $ 14,326   $ 14,266  $ 14,079   $ 13,790   $ 13,118 
Income
                                                                     
Non-Interest
Expense:
Salaries and       $ 12,949     $ 11,301   $ 11,295     $ 10,668     $ 10,245
employee benefits
Occupancy and        2,472        2,147      2,126        1,978        1,935
equipment
Depreciation         1,399        1,234      1,175        1,109        1,086
FDIC insurance       511          407        405          394          385
expense
Advertising          735          596        674          675          644
Bankcard expenses    727          628        720          694          620
Postage, delivery
and statement        605          514        529          488          548
mailings
Office supplies      441          412        407          396          455
Legal and            435          437        611          421          317
professional fees
Telecommunications   445          405        433          387          389
Repossessed asset
(gains) losses,      (155   )     146        429          650          121
net of expenses
Merger related       5,540        373        157          4,042        135
expenses
Other expenses      3,299     2,673    2,885     2,861     2,635  
Total Non-Interest $ 29,403   $ 21,273  $ 21,846   $ 24,763   $ 19,515 
Expense
                                                                     
                                                                     
                                                            
                                                                     
Employees (Full      932          843        836          831          797
Time Equivalent)
Branch Locations     83           73         73           73           68

CITY HOLDING COMPANY AND SUBSIDIARIES                          
Consolidated Balance Sheets
($ in 000s)
                                                 March 31        December 31
                                                 2013           2012
                                                 (Unaudited)
Assets
Cash and due from banks                          $ 191,865       $ 58,718
Interest-bearing deposits in depository            6,872           16,276
institutions
Federal funds sold                                35,000       10,000    
Cash and cash equivalents                          233,737         84,994
                                                                 
Investment securities available-for-sale, at       348,146         377,122
fair value
Investment securities held-to-maturity, at         8,383           13,454
amortized cost
Other securities                                  11,502       11,463    
Total investment securities                        368,031         402,039
                                                                 
Gross loans                                        2,497,023       2,146,369
Allowance for loan losses                         (19,721   )   (18,809   )
Net loans                                          2,477,302       2,127,560
                                                                 
Bank owned life insurance                          89,645          81,901
Premises and equipment, net                        82,002          72,728
Accrued interest receivable                        8,701           6,692
Net deferred tax assets                            45,983          32,737
Intangible assets                                  75,750          65,057
Other assets                                      46,067       43,758    
Total Assets                                     $ 3,427,218   $ 2,917,466 
                                                                 
Liabilities
Deposits:
Noninterest-bearing                              $ 525,870       $ 429,969
Interest-bearing:
Demand deposits                                    629,244         553,132
Savings deposits                                   603,191         506,869
Time deposits                                     1,125,946    919,346   
Total deposits                                     2,884,251       2,409,316
Short-term borrowings
Customer repurchase agreements                     116,427         114,646
Long-term debt                                     16,495          16,495
Other liabilities                                 45,576       43,735    
Total Liabilities                                  3,062,749       2,584,192
                                                                 
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 March 31, 2013 and
December 31, 2012
less 2,839,589 and 3,665,999 shares in treasury,   46,249          46,249
respectively
Capital surplus                                    107,977         103,524
Retained earnings                                  311,193         309,270
Cost of common stock in treasury                   (98,240   )     (124,347  )
Accumulated other comprehensive loss:
Unrealized gain on securities available-for-sale   3,664           3,573
Underfunded pension liability                     (6,374    )   (4,995    )
Total Accumulated Other Comprehensive Loss        (2,710    )   (1,422    )
Total Stockholders' Equity                        364,469      333,274   
Total Liabilities and Stockholders' Equity       $ 3,427,218   $ 2,917,466 

CITY HOLDING COMPANY AND                                       
SUBSIDIARIES
Investment
Portfolio
(Unaudited) ($
in 000s)
                                                                   
                               Credit-Related

                               Net Investment
                 Original                       Unrealized Gains   Carrying
                 Cost          Impairment                          Value
                                                (Losses)
                               Losses through

                               March 31, 2013
                                                                   
US Government    $  3,295      $  -             $  88              $  3,383
Agencies
Mortgage Backed     257,098       -                5,906              263,004
Securities
Municipal Bonds     44,311        -                1,490              45,801
Pooled Bank         26,839        (20,171 )        (3,166  )          3,502
Trust Preferreds
Single Issuer
Bank Trust
Preferreds,
Subdebt of
Financial
Institutions,
and
Bank Holding
Company             35,360        (1,015  )        (110    )          34,235
Preferred Stocks
Money Markets       1,724         -                39                 1,763
and Mutual Funds
Federal Reserve
Bank and FHLB       11,502        -                -                  11,502
stock
Community Bank     8,194        (4,813  )     1,460           4,841
Equity Positions
Total            $  388,323    $  (25,999 )    $  5,707         $  368,031
Investments

CITY HOLDING COMPANY AND                                                
SUBSIDIARIES
Loan         
Portfolio
(Unaudited)
($ in 000s)
                                                                            
               March 31        December 31   September 30    June 30        March 31
               2013           2012         2012           2012          2012
                                                                            
Residential
real estate    $  1,149,411    $ 1,031,435   $   1,008,305   $  997,016     $ 939,611
^(1)
Home equity
- junior          138,333        143,110         143,058        143,400       139,764
liens
Commercial
and               149,677        108,739         105,027        116,288       108,707
industrial
Commercial
real estate       1,001,453      821,970         787,887        768,176       745,586
^(2)
Consumer          55,274         36,564          38,285         37,383        35,448
DDA              2,876        4,551         2,670        3,326       2,848
overdrafts
Gross Loans    $  2,497,024   $ 2,146,369  $   2,085,232  $  2,065,589  $ 1,971,964
                                                                            
Construction
loans
included in:
^(1) -
Residential    $  16,884       $ 15,408      $   12,787      $  11,919      $ 11,613
real estate
loans
^(2) -
Commercial     $  26,163       $ 15,352      $   17,072      $  18,544      $ 20,661
real estate
loans
                                                                            
                                                                            
                                                                            
CITY HOLDING COMPANY AND
SUBSIDIARIES
Acquisition
Activity -
Accretion
(Unaudited)
($ in
millions)
                                                                            
                                                                            
The following table presents the actual and forecasted accretion related to the fair
value adjustments on net interest income recorded as a result of the Virginia Savings
Bancorp (VSB) and Community Financial Corporation (Community) acquisitions.
                                                                            
                                                                            
               VSB                           Community
               Loan            Certificates  Loan            Certificates
                               of                            of
Year Ended:    Accretion^(a)  Deposit^(a)   Accretion^(a)  Deposit^(a)    Total
                                                                            
1Q 2013        $  985          $ 178         $   858         $  160         $ 2,181
Remainder         1,318          364             2,800          480           4,962
2013
2014              1,001          537             3,043          294           4,875
2015              790            518             1,750          160           3,218
Thereafter        1,252          497             6,791          46            8,586
                                                                            
a - 1Q 2013 amounts are based on actual results. Remainder 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 March 31,
                    2013                                2012
                    Average                    Yield/   Average                    Yield/
                    Balance        Interest  Rate    Balance        Interest  Rate
                                                                                   
Assets:
Loan portfolio
^(1):
Residential real    $ 1,277,557     $ 13,720   4.36 %   $ 1,067,911     $ 11,827   4.45 %
estate ^(2)
Commercial,
financial, and        1,121,916       14,192   5.13 %     862,886         9,584    4.47 %
agriculture ^(3)
Installment loans
to individuals        65,863          1,377    8.48 %     41,681          770      7.43 %
^(4), (5)
Previously
securitized loans   ***              650      ***      ***              887      ***
^(6)
Total loans           2,465,336       29,939   4.93 %     1,972,478       23,068   4.70 %
Securities:
Taxable               350,128         2,750    3.19 %     351,811         3,964    4.53 %
Tax-exempt ^(7)      32,991        498      6.12 %    41,117        595      5.82 %
Total securities      383,119         3,248    3.44 %     392,928         4,559    4.67 %
Deposits in
depository            9,033           -        -          7,587           -        -
institutions
Federal funds sold   29,932        13       0.18 %    27,462        11       0.16 %
Total
interest-earning      2,887,420       33,200   4.66 %     2,400,455       27,638   4.63 %
assets
Cash and due from     112,002                             75,484
banks
Bank premises and     80,958                              64,746
equipment
Other assets          259,335                             216,379
Less: Allowance for  (19,472   )                   (19,726   )           
loan losses
Total assets        $ 3,320,243                   $ 2,737,338            
                                                                                   
Liabilities:
Interest-bearing      603,300         178      0.12 %     523,761         178      0.14 %
demand deposits
Savings deposits      584,048         213      0.15 %     448,435         188      0.17 %
Time deposits ^(8)    1,106,982       2,836    1.04 %     889,110         3,302    1.49 %
Short-term            111,870         71       0.26 %     113,946         73       0.26 %
borrowings
Long-term debt       16,495       157     3.86 %   16,495       167     4.07 %
Total
interest-bearing      2,422,695       3,455    0.58 %     1,991,747       3,908    0.79 %
liabilities
Noninterest-bearing   498,404                             392,902
demand deposits
Other liabilities     42,615                              36,436
Stockholders'        356,529                      316,253              
equity
Total liabilities
and
stockholders'       $ 3,320,243                   $ 2,737,338            
equity
Net interest income               $ 29,745                       $ 23,730  
Net yield on                               4.18 %                         3.98 %
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 $0.3 million
and $0.2 million of accretion related to the fair value market adjustments due
to the acquisition of Virginia Savings Bancorp, Inc. and Community Financial
Corporation, respectively.
(3) - Interest income on commercial, financial, and agriculture loans includes
$0.7 million and $0.6 million of accretion related to the fair value market
adjustments due to the acquisition of Virginia Savings Bancorp, Inc. and
Community Financial Corporation, respectively.
(4) - Interest income on installment loans to individuals includes $0.1
million and $0.1 million of accretion related to the fair value market
adjustments due to the acquisition of Virginia Savings Bancorp, Inc. and
Community Financial Corporation, respectively.
(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 $0.2 million and $0.2 million
in accretion of the fair market value adjustments related to the acquisition
of Virginia Savings Bancorp, Inc. and Community Financial Corporation,
respectively.

CITY HOLDING COMPANY AND                  
SUBSIDIARIES
Analysis of
Risk-Based
Capital
(Unaudited)
($ in 000s)
                                                                        
              March 31      December 31     September 30  June 30       March 31
              2013 (a)      2012           2012          2012          2012
                                                                        
Tier I
Capital:
Stockholders' $ 364,469     $ 333,274       $ 328,415     $ 320,622     $ 316,046
equity
Goodwill and
other           (75,563   )   (64,866   )     (64,912   )   (64,971   )   (55,871   )
intangibles
Accumulated
other           2,710         1,422           365           2,477         1,737
comprehensive
loss
Qualifying
trust           16,000        16,000          16,000        16,000        16,000
preferred
stock
Excess
deferred tax   (17,737   )  (6,577    )   (7,472    )  (7,847    )  (4,020    )
assets
Total tier I  $ 289,880    $ 279,254     $ 272,397    $ 266,282    $ 273,892   
capital
                                                                   
                                                                        
Total
Risk-Based
Capital:
Tier I        $ 289,880     $ 279,254       $ 272,397     $ 266,282     $ 273,892
capital
Qualifying
allowance for   19,721        18,809          18,986        19,452        18,628
loan losses
Unrealized
gain on        696         -            -           -           -         
securities
Total
risk-based    $ 310,297    $ 298,063     $ 291,383    $ 285,734    $ 292,520   
capital
                                                                        
Net
risk-weighted $ 2,436,022   $ 2,152,622     $ 2,112,581   $ 2,136,249   $ 2,050,520
assets
                                                                  
                                                                        
Ratios:
Average
stockholders'
equity to       10.74     %   11.49     %     11.32     %   11.47     %   11.55     %
average
assets
Tangible        8.61      %   9.40      %     9.29      %   9.03      %   9.54      %
capital ratio
Risk-based
capital
ratios:
Tier I          11.90     %   12.97     %     12.89     %   12.46     %   13.36     %
capital
Total
risk-based      12.74     %   13.85     %     13.79     %   13.38     %   14.27     %
capital
Leverage        8.98      %   9.82      %     9.67      %   9.74      %   10.23     %
capital
                                                                        
                                                                        
(a) March 31, 2013
risk-based capital ratios
are estimated
                                                                        
                                                                  
                                                                        
                                                                        
CITY HOLDING COMPANY AND
SUBSIDIARIES
Intangibles
(Unaudited)
($ in 000s)
                                                                        
              As of and for the Quarter Ended
              March 31      December 31     September 30  June 30       March 31
              2013          2012           2012          2012          2012
                                                                        
Intangibles,  $ 75,750      $ 65,057        $ 65,103      $ 65,162      $ 56,066
net
Intangibles
amortization    260           135             135           109           98
expense

CITY HOLDING COMPANY AND                   
SUBSIDIARIES
Summary of
Loan Loss
Experience
(Unaudited) ($
in 000s)
                                                                         
               Quarter Ended
               March 31      December 31     September 30  June 30       March 31
               2013          2012           2012          2012          2012
                                                                         
Balance at
beginning of   $ 18,809      $ 18,986        $ 19,452      $ 18,628      $ 19,409
period
                                                                         
Charge-offs:
Commercial and   62            100             9             48            69
industrial
Commercial       203           1,744           845           26            1,989
real estate
Residential      591           284             252           296           198
real estate
Home equity      116           366             133           347           509
Consumer         3             42              53            36            59
DDA overdrafts  339         394          418         375         335       
Total            1,314         2,930           1,710         1,128         3,159
charge-offs
                                                                         
Recoveries:
Commercial and   1             19              10            -             3
industrial
Commercial       18            190             3             -             96
real estate
Residential      48            7               8             3             4
real estate
Home equity      -             6               1             10            1
Consumer         147           45              26            35            29
DDA overdrafts  274         711          221         229         295       
Total            488           978             269           277           427
recoveries
                                                                    
Net              826           1,952           1,441         851           2,731
charge-offs
Provision for   1,738       1,775        975         1,675       1,950     
loan losses
Balance at end $ 19,721     $ 18,809      $ 18,986     $ 19,452     $ 18,628    
of period
                                                                         
Loans          $ 2,497,023  $ 2,146,369   $ 2,085,232  $ 2,065,589  $ 1,971,964 
outstanding
Average loans   2,465,336   2,104,483    2,070,264   2,019,281   1,972,478 
outstanding
Allowance as a
percent of      0.79      %  0.88      %   0.91      %  0.94      %  0.94      %
loans
outstanding
Allowance as a
percent of      57.85     %  84.67     %   82.61     %  88.92     %  88.78     %
non-performing
loans
Net
charge-offs
(annualized)
as a
percent of
average loans   0.13      %  0.37      %   0.28      %  0.17      %  0.55      %
outstanding
Net
charge-offs,
excluding
overdraft
deposit
accounts,
(annualized)
as a percent    0.12      %  0.43      %   0.24      %  0.14      %  0.55      %
of average
loans
outstanding

CITY HOLDING COMPANY AND
SUBSIDIARIES
Summary of
Non-Performing
Assets
(Unaudited) ($
in 000s)
                                                                    
                March 31      December 31   September 30 June 30    March 31
                2013          2012          2012         2012       2012
                                                                    
Nonaccrual      $  33,293     $  21,935     $  22,586    $ 21,726   $ 20,420
loans
Accruing loans
past due 90       799         280         397       149      562    
days or more
Total
non-performing     34,092        22,215        22,983      21,875     20,982
loans
Other real        10,508      8,162       9,017     8,697    8,250  
estate owned
Total
non-performing  $  44,600    $  30,377    $  32,000   $ 30,572  $ 29,232 
assets
                                                                    
Non-performing assets as a
percent of loans and
other real         1.78    %     1.41    %     1.53    %   1.47   %   1.48   %
estate owned
                                                               
                                                                    
                                                                    
CITY HOLDING COMPANY AND
SUBSIDIARIES
Summary of
Total Past Due
Loans
(Unaudited) ($
in 000s)
                                                                    
                March 31      December 31   September 30 June 30    March 31
                2013          2012          2012         2012       2012
                                                                    
Residential     $  7,926      $  5,748      $  4,909     $ 5,575    $ 4,108
real estate
Home equity        858           2,893         2,643       1,864      1,560
Commercial and     2,949         496           25          540        63
industrial
Commercial real    2,315         689           1,271       3,145      2,636
estate
Consumer           947           121           136         90         58
DDA overdrafts    337         281         319       364      304    
Total past due  $  15,332    $  10,228    $  9,303    $ 11,578  $ 8,729  
loans
                                                                    
Past due loans
as a percent of    0.61    %     0.48    %     0.43    %   0.56   %   0.42   %
loans
outstanding
                                                               
                                                                    
                                                                    
CITY HOLDING COMPANY AND
SUBSIDIARIES
Summary of
Troubled Debt
Restructurings
(Unaudited) ($
in 000s)
                                                                    
                March 31      December 31   September 30 June 30    March 31
                2013          2012          2012         2012       2012
                                                                    
Residential     $  20,136     $  18,988     $  17,979    $ -        $ -
real estate
Home equity        3,025         3,743         3,126       -          -
Commercial and     101           101           -           -          -
industrial
Commercial real    1,805         734           227         228        228
estate
Consumer          142         142         144       146      147    
Total           $  25,209    $  23,708    $  21,476   $ 374     $ 375    
                                                                    
                                                                    
At September 30, 2012, the Company reclassified $21.1 million of loans as TDRs
in accordance with recent regulatory guidance. The regulatory guidance
requires loans to be accounted for as collateral-dependent loans when
borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the
bankruptcy court and the borrower has not reaffirmed the debt.

Contact:

City Holding Company
Charles R. Hageboeck, 304-769-1102
Chief Executive Officer and President