ex99-1.htm

Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $2.6 billion bank holding company headquartered in Charleston, today reported financial results for the third quarter ended September 30, 2010. The Company’s earnings remained strong, with a $28.4 million (1.6%) increase in the Company’s loan portfolio and a $42.5 million (2.0 %) increase in its average depository base from the quarter ended September 30, 2009. This growth, bolstered by a continuation of solid credit quality trends, helped offset the impact of lower service fee income and other-than-temporary losses in the Company’s investment portfolio.

The Company reported net income per diluted share for the third quarter of $0.58 compared to $0.66 per diluted share in the third quarter of 2009. Net income for the third quarter of 2010 was $9.0 million compared to $10.5 million in the third quarter of 2009. For the third quarter of 2010, the Company achieved a return on assets of 1.36%, a return on tangible equity of 13.9%, a net interest margin of 3.94%, and an efficiency ratio of 54.2%. For the first nine months of 2010, the Company achieved a return on assets of 1.46%, a return on tangible equity of 15.0%, a net interest margin of 4.10%, and an efficiency ratio of 53.7%.

Commenting on the Company’s results, Charles Hageboeck, Chief Executive Officer said, “Our financial performance, while down slightly from the year-earlier quarter, remains at a strong level compared to our peers and despite the ongoing challenges facing financial institutions in the form of an uncertain economy, additional regulations and ongoing pressures from the sustained low interest rate environment. City’s asset quality remains strong and stable with past dues and non-performing assets down from December 31, 2009. Net charge-offs for the nine months ended September 30, 2010 are approximately 60% of net charge-offs for the nine months ended September 30, 2009. During the fourth quarter of 2010, two Greenbrier properties held in Other Real Estate Owned sold at values that approximated the Company’s recorded values in such properties. These sales reduced the Company’s remaining Greenbrier related loan balances to $8.1 million, with $7.1 million recorded in the Company’s Other Real Estate Owned category. Our net interest income, exclusive of the impact of our interest rate floors, increased $0.7 million from the quarter ended September 30, 2009. We saw loans grow during the quarter and we continued to carefully control our expenses.

“During the quarter, we faced two significant headwinds – additional regulations impacting our service fee revenues and further credit-related net investment impairment losses. As anticipated, our service fee revenues were impacted by changes during the quarter in the Electronic Funds Transfer Act (“Regulation E”). The reaction from our customers to this choice essentially met our expectations – the majority of customers who utilize these services elected to “opt in” and the majority of those who have not used these services did not. As a result of these changes, our service fee revenues declined $0.75 million (7.1%) from the quarter ended June 30, 2010 and $2.0 million from the quarter ended September 30, 2009. In addition, the Company experienced further credit-related net investment impairment losses of $2.9 million during the quarter, primarily in our portfolio of community bank and bank holding company equity positions.

“Despite these headwinds, City’s continued trend of solid earnings has allowed the Company to maintain our quarterly dividend of 34 cents per share during a time period in which many banks have eliminated or significantly reduced dividends to shareholders. Our healthy capital levels, strong liquidity, and stable core-deposits enable City to consider the opportunities of growing our company through acquisitions. City continues to be one of the most profitable and best capitalized publicly traded banks in the U.S. and we believe we can maintain solid, industry-leading performance as we move forward,” Hageboeck concluded.

The Company’s tax equivalent net interest income decreased $0.5 million, or 2.0%, from $23.9 million during the third quarter of 2009 to $23.4 million during the third quarter of 2010. This decline is due to a decrease in interest income associated with the gain from the sale of interest rate floors. During the third and fourth quarters of 2008, the Company sold $450 million of interest rate floors. The $16.7 million gain from sales of these interest rate floors is being recognized over the remaining lives of the various hedged loans – primarily prime-based commercial and home equity loans. During the third quarter of 2010, the Company recognized $0.9 million of interest income compared to $2.2 million of interest income recognized in the third quarter of 2009 from the interest rate floors. This decline was partially offset by the decrease in interest expense exceeding the decline in interest income from the third quarter of 2009 resulting in an increase in tax equivalent net interest income of approximately $0.8 million. The Company’s reported net interest margin decreased from 4.09% for the quarter ended September 30, 2009 to 3.94% for the quarter ended September 30, 2010.

The Company had net charge-offs of $2.9 million for the third quarter of 2010. Net charge-offs on commercial and residential loans were $2.0 and $0.6 million, respectively, for the third quarter. Charge-offs for commercial loans were primarily related to a specific impaired credit that had been appropriately considered in establishing the allowance for loans losses in prior periods. In addition, net charge-offs for depository accounts were $0.3 million for the third quarter of 2010. While charge-offs on depository accounts are appropriately taken against the Allowance for Loan Losses (“ALLL”), the revenue associated with depository accounts is reflected in service charges.

As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $1.85 million in the third quarter of 2010 compared to $1.7 million for the comparable period in 2009. The ALLL recorded as of September 30, 2010 reflects financial difficulties of certain commercial borrowers of the Company that occurred 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 ALLL and related provision for loan losses 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.

During the third quarter of 2010, the Company recorded $2.9 million of credit-related net investment impairment losses. The charges deemed to be other than temporary were related to pooled bank trust preferreds ($0.7 million credit-related net impairment losses) with a remaining book value of $6.5 million at September 30, 2010 and community bank and bank holding company equity positions ($2.2 million credit-related net impairment losses) with remaining book value of $5.1 million at September 30, 2010. The credit-related net impairment charges related to the pooled bank trust preferred securities was based on the Company’s quarterly reviews of its investment securities for indications of losses considered to be other than temporary. Based on management’s assessment of the securities the Company owns, the seniority position of the securities within the pools, the level of defaults and deferred payments within the pools, and a review of the financial strength of the banks within the respective pools, management concluded that credit-related net impairment charges of $0.7 million on the pooled bank trust preferred securities was appropriate for the quarter ended September 30, 2010. The credit-related net impairment charges of $2.2 million related to the Company’s equity position in First United Corporation of Oakland, Maryland. The Company determined that this security was other-than-temporary impaired due to the recent announcement by First United Corporation of another quarterly loss, which continued a trend of poor performance over the past several quarters. As a result, management determined that the length of time and extent to which the market value of this security has been below the Company’s cost basis is not expected to recover in the near term. These losses were partially offset by realized investment gains of $1.3 million as the Company sold certain single issuer trust preferred securities with a remaining book value of $75.4 million during the quarter ended September 30, 2010.

Exclusive of net other-than-temporary investment impairment losses, non-interest income decreased $1.5 million to $13.2 million in the third quarter of 2010 from $14.7 million in the third quarter of 2009. Service charges from depository accounts decreased $2.0 million, or 17.0%, to $9.7 million in the third quarter of 2010. This decline is primarily attributable to the Company’s compliance with new federal rules under the Electronic Funds Transfer Act, also known as Regulation E. The changes to this regulation affect how banks can offer certain overdraft services, and were effective July 1, 2010 for new customers and August 15, 2010 for existing accounts. The decrease in service charges from depository accounts was partially offset by an increase in bank owned life insurance revenues of $0.3 million due to death benefit proceeds and an increase in insurance commission revenues of $0.1 million, or 11.4%, from $1.2 million during the third quarter of 2009 to $1.3 million during the third quarter of 2010.

Non-interest expenses increased $1.0 million from $18.8 million in the third quarter of 2009 to $19.8 million in the third quarter of 2010. Insurance and regulatory expense increased $0.8 million, or 202.7%, from the quarter ended September 30, 2009 primarily due to the impact of the Company fully utilizing its FDIC credits during 2009 and increases in the assessment rates during 2010, which increased our FDIC insurance expense from $0.1 million for the quarter ended September 30, 2009 to $1.0 million for the quarter ended September 30, 2010. In addition, salaries and employee benefits increased $0.2 million, or 2.0%, from the quarter ended September 30, 2009 to $9.8 million.

Total average depository balances decreased $16.6 million, or 0.8%, from the quarter ended June 30, 2010 to the quarter ended September 30, 2010. This decline was primarily in time deposits and noninterest-bearing deposits, which have decreased $9.0 million and $5.8 million, respectively. As compared to the quarter ended September 30, 2009, total average depository balances have increased $42.4 million, or 2.0%, for the quarter ended September 30, 2010. This increase was due to increased noninterest bearing deposits ($30.8 million), interest bearing deposits ($30.6 million), and savings deposits ($11.9 million) that were partially offset by a decrease in time deposits ($30.7 million).

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 84.6% and the loan to asset ratio was 69.5% at September 30, 2010. The Company maintained investment securities totaling 17.2% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 45.1% of assets at September 30, 2010. Time deposits fund 37.0% of assets at September 30, 2010, but very few of these deposits are in accounts that have balances of more than $150,000, reflecting the core retail orientation of the Company.

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 may experience increases in the default rates on previously securitized loans that would result in impairment losses or lower the yield on such loans; (4) the Company may not continue to benefit from strong recovery efforts on previously securitized loans resulting in improved yields on these assets; (5) the Company could have adverse legal actions of a material nature; (6) the Company may face competitive loss of customers; (7) the Company may be unable to manage its expense levels; (8) the Company may have difficulty retaining key employees; (9) 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; (10) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (11) 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; (12) the Company may experience difficulties growing loan and deposit balances; (13) the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; (14) 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; and (15) the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) recently adopted by the United States Congress. 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.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)


	Three Months Ended September 30,						Percent
	2010			2009			Change

Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	23,404		$	23,891			(2.04	)%
Net Income available to common shareholders		9,023			10,497			(14.04	)%
Earnings per Basic Share		0.58			0.66			(12.34	)%
Earnings per Diluted Share		0.58			0.66			(12.34	)%


Key Ratios (percent):
Return on Average Assets		1.36	%		1.60	%		(15.18	)%
Return on Average Tangible Equity		13.90	%		17.49	%		(20.49	)%
Net Interest Margin		3.94	%		4.09	%		(3.57	)%
Efficiency Ratio		54.15	%		48.75	%		11.08	%
Average Shareholders' Equity to Average Assets		11.90	%		11.33	%		5.00	%

Consolidated Risk Based Capital Ratios (a):
Tier I		13.73	%		13.04	%		5.29	%
Total		14.68	%		14.06	%		4.41	%

Tangible Equity to Tangible Assets		10.04	%		9.77	%		2.82	%


Common Stock Data:
Cash Dividends Declared per Share	$	0.34		$	0.34			-
Book Value per Share		20.31			19.18			5.92	%
Tangible Book Value per Share		16.66			15.59			6.86	%
Market Value per Share:
High		31.15			34.34			(9.29	)%
Low		26.87			28.65			(6.21	)%
End of Period		30.67			31.17			(1.60	)%

Price/Earnings Ratio (b)		13.25			11.80			12.25	%
	Nine Months Ended September 30,						Percent
		2010			2009		Change

Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	72,075		$	72,520			(0.61	)%
Net Income available to common shareholders		29,051			31,567			(7.97	)%
Earnings per Basic Share		1.85			1.99			(7.03	)%
Earnings per Diluted Share		1.84			1.98			(7.09	)%


Key Ratios (percent):
Return on Average Assets		1.46	%		1.62	%		(9.76	)%
Return on Average Tangible Equity		15.04	%		18.05	%		(16.71	)%
Net Interest Margin		4.10	%		4.22	%		(2.78	)%
Efficiency Ratio		53.66	%		49.79	%		7.76	%
Average Shareholders' Equity to Average Assets		11.84	%		11.15	%		6.17	%


Common Stock Data:
Cash Dividends Declared per Share	$	1.02		$	1.02			-
Market Value per Share:
High		37.28			34.34			8.56	%
Low		26.87			20.88			28.69	%

Price/Earnings Ratio (b)		12.46			11.78			5.84	%


(a) September 30, 2010 risk-based capital ratios are estimated
(b) September 30, 2010 price/earnings ratio computed based on annualized third quarter 2010 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 30			December 31		Low		High

2006	$	16.17	$	16.17	$	16.99		$	17.46	$	34.53	$	41.87
2007		17.62		17.40		17.68			18.14		31.16		41.54
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		19.95		20.31					26.87		37.28


Earnings per Basic Share

	Quarter Ended
	March 31		June 30		September 30			December 31		Year-to-Date

2006	$	0.71	$	0.78	$	0.78		$	0.74	$	3.00
2007		0.76		0.72		0.76			0.78		3.02
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					1.85


Earnings per Diluted Share

	Quarter Ended
	March 31		June 30		September 30			December 31		Year-to-Date

2006	$	0.71	$	0.77	$	0.77		$	0.74	$	2.99
2007		0.76		0.72		0.76			0.78		3.01
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					1.84

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)

	Three Months Ended September 30,
	2010			2009

Interest Income
Interest and fees on loans	$	24,487		$	26,392
Interest on investment securities:
Taxable		5,019			5,820
Tax-exempt		452			437
Interest on deposits in depository institutions		-			2
Interest on federal funds sold		12			-
Total Interest Income		29,970			32,651

Interest Expense
Interest on deposits		6,551			8,673
Interest on short-term borrowings		86			131
Interest on long-term debt		173			191
Total Interest Expense		6,810			8,995
Net Interest Income		23,160			23,656
Provision for loan losses		1,847			1,681
Net Interest Income After Provision for Loan Losses		21,313			21,975

Non-Interest Income
Total investment securities impairment losses		(3,028	)		(2,306	)
Noncredit impairment losses recognized in other comprehensive income		127			-
Net investment securities impairment losses		(2,901	)		(2,306	)
Gain (loss) on sale of investment securities		1,335			(14	)
Service charges		9,702			11,689
Insurance commissions		1,346			1,208
Trust and investment management fee income		618			590
Bank owned life insurance		1,104			794
Other income		439			379
Total Non-Interest Income		11,643			12,340

Non-Interest Expense
Salaries and employee benefits		9,817			9,623
Occupancy and equipment		1,917			1,953
Depreciation		1,145			1,171
Professional fees		414			216
Postage, delivery, and statement mailings		599			611
Advertising		891			883
Telecommunications		413			476
Bankcard expenses		481			695
Insurance and regulatory		1,244			411
Office supplies		497			520
Repossessed asset losses, net of expenses		234			136
Other expenses		2,152			2,101
Total Non-Interest Expense		19,804			18,796
Income Before Income Taxes		13,152			15,519
Income tax expense		4,129			5,022
Net Income Available to Common Shareholders	$	9,023		$	10,497


Distributed earnings allocated to common shareholders	$	5,237		$	5,380

Undistributed earnings allocated to common shareholders		3,733			5,116

Net earnings allocated to common shareholders	$	8,970		$	10,496

Average common shares outstanding		15,496			15,893

Effect of dilutive securities:
Employee stock options		56			59

Shares for diluted earnings per share		15,552			15,952

Basic earnings per common share	$	0.58		$	0.66
Diluted earnings per common share	$	0.58		$	0.66

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) ($ in 000s, except per share data)

	Nine months ended September 30,
	2010			2009

Interest Income
Interest and fees on loans	$	75,332		$	81,396
Interest on investment securities:
Taxable		15,947			17,494
Tax-exempt		1,383			1,249
Interest on deposits in depository institutions		-			10
Interest on federal funds sold		13			-
Total Interest Income		92,675			100,149

Interest Expense
Interest on deposits		20,566			27,230
Interest on short-term borrowings		284			395
Interest on long-term debt		496			676
Total Interest Expense		21,346			28,301
Net Interest Income		71,329			71,848
Provision for loan losses		4,750			5,519
Net Interest Income After Provision for Loan Losses		66,579			66,329

Non-Interest Income
Total investment securities impairment losses		(7,468	)		(4,463	)
Noncredit impairment losses recognized in other comprehensive income		2,623			-
Net investment securities impairment losses		(4,845	)		(4,463	)
Gain (loss) on sale of investment securities		1,397			(264	)
Service charges		30,378			33,385
Insurance commissions		3,987			4,466
Trust and investment management fee income		2,047			1,794
Bank owned life insurance		2,645			2,518
Other income		1,424			1,624
Total Non-Interest Income		37,033			39,060

Non-Interest Expense
Salaries and employee benefits		29,311			29,003
Occupancy and equipment		5,836			5,742
Depreciation		3,537			3,566
Professional fees		1,175			1,066
Postage, delivery, and statement mailings		1,823			2,027
Advertising		3,045			2,673
Telecommunications		1,304			1,410
Bankcard expenses		1,405			2,029
Insurance and regulatory		3,631			2,365
Office supplies		1,474			1,521
Repossessed asset losses, net of expenses		1,258			351
Other expenses		6,521			6,175
Total Non-Interest Expense		60,320			57,928
Income Before Income Taxes		43,292			47,461
Income tax expense		14,241			15,894
Net Income Available to Common Shareholders	$	29,051		$	31,567


Distributed earnings allocated to common shareholders	$	15,711		$	16,139

Undistributed earnings allocated to common shareholders		13,164			15,403

Net earnings allocated to common shareholders	$	28,875		$	31,542

Average common shares outstanding		15,646			15,889

Effect of dilutive securities:
Employee stock options		64			55

Shares for diluted earnings per share		15,710			15,944

Basic earnings per common share	$	1.85		$	1.99
Diluted earnings per common share	$	1.84		$	1.98

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited) ($ in 000s)


	Three Months Ended
	September 30, 2010			September 30, 2009

Balance at July 31	$	312,575		$	295,751

Net income		9,023			10,497
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		2,087			7,421
Change in unrealized (loss) on interest rate floors		(539	)		(1,413	)
Cash dividends declared ($0.34/share)		(5,267	)		(5,415	)
Issuance of stock award shares, net		154			80
Exercise of 750 stock options		-			22
Purchase of 111,136 common shares of treasury		(3,192	)		-
Purchase of 56,323 common shares of treasury		-			(1,803	)
Balance at September 30	$	314,841		$	305,140



	Nine Months Ended
	September 30, 2010			September 30, 2009

Balance at January 1	$	308,902		$	284,296

Net income		29,051			31,567
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		7,329			11,909
Change in unrealized (loss) on interest rate floors		(2,277	)		(4,982	)
Cash dividends declared ($1.02/share)		(15,952	)		(16,251	)
Issuance of stock award shares, net		644			1,621
Exercise of 1,700 stock options		46			-
Exercise of 1,050 stock options		-			25
Purchase of 408,151 common shares of treasury		(12,902	)		-
Purchase of 105,686 common shares of treasury		-			(3,045	)
Balance at September 30	$	314,841		$	305,140

CITY HOLDING COMPANY AND SUBSIDIARIES
Condensed Consolidated Quarterly Statements of Income
(Unaudited) ($ in 000s, except per share data)

	Quarter Ended
	September 30			June 30			March 31			December 31			September 30
	2010			2010			2010			2009			2009

Interest income	$	29,970		$	31,770		$	30,935		$	31,887		$	32,651
Taxable equivalent adjustment		244			246			255			234			236
Interest income (FTE)		30,214			32,016			31,190			32,121			32,887
Interest expense		6,810			7,092			7,444			8,302			8,995
Net interest income		23,404			24,924			23,746			23,819			23,892
Provision for loan losses		1,847			1,823			1,080			1,475			1,681
Net interest income after provision
for loan losses		21,557			23,101			22,666			22,344			22,211

Noninterest income		11,643			13,278			12,112			12,923			12,340
Noninterest expense		19,804			19,965			20,551			19,316			18,796
Income before income taxes		13,396			16,414			14,227			15,951			15,755
Income tax expense		4,129			5,453			4,659			4,639			5,022
Taxable equivalent adjustment		244			246			255			234			236
Net income available to common shareholders	$	9,023		$	10,715		$	9,313		$	11,078		$	10,497



Distributed earnings allocated to common shareholders	$	5,237		$	5,274		$	5,345		$	5,370		$	5,380
Undistributed earnings allocated to common shareholders		3,733			5,373			3,918			5,697			5,116
Net earnings allocated to common shareholders	$	8,970		$	10,648		$	9,263		$	11,067		$	10,496

Average common shares outstanding		15,496			15,656			15,793			15,838			15,893

Effect of dilutive securities:
Employee stock options		56			65			58			53			59

Shares for diluted earnings per share		15,552			15,721			15,851			15,891			15,952

Basic earnings per common share	$	0.58		$	0.68		$	0.59		$	0.70		$	0.66
Diluted earnings per common share		0.58			0.68			0.58			0.70			0.66

Cash dividends declared per share		0.34			0.34			0.34			0.34			0.34


Average Common Share (000s):
Outstanding		15,496			15,656			15,793			15,838			15,893
Diluted		15,552			15,721			15,851			15,897			15,952

Net Interest Margin		3.94	%		4.22	%		4.14	%		4.07	%		4.09	%

CITY HOLDING COMPANY AND SUBSIDIARIES
Non-Interest Income and Non-Interest Expense
(Unaudited) ($ in 000s)

	Quarter Ended
	September 30			June 30			March 31			December 31			September 30
	2010			2010			2010			2009			2009

Non-Interest Income:
Service charges	$	9,702		$	10,448		$	10,228		$	11,628		$	11,689
Insurance commissions		1,346			1,244			1,397			1,110			1,208
Trust and investment management fee income		618			567			862			549			590
Bank owned life insurance		1,104			813			728			753			794
Other income		439			437			548			320			379
Subtotal		13,209			13,509			13,763			14,360			14,660
Total investment securities impairment losses		(3,028	)		(1,237	)		(3,203	)		(861	)		(2,306	)
Noncredit impairment losses recognized in other
comprehensive income		127			944			1,552			-			-
Net investment securities impairment losses		(2,901	)		(293	)		(1,651	)		(861	)		(2,306	)
Gain (loss) on sale of investment securities		1,335			62			-			(576	)		(14	)
Total Non-Interest Income	$	11,643		$	13,278		$	12,112		$	12,923		$	12,340

Non-Interest Expense:
Salaries and employee benefits	$	9,817		$	9,745		$	9,749		$	8,523		$	9,623
Occupancy and equipment		1,917			1,874			2,045			1,947			1,953
Depreciation		1,145			1,174			1,218			1,180			1,171
Professional fees		414			398			363			439			216
Postage, delivery, and statement mailings		599			615			609			573			611
Advertising		891			1,241			913			830			883
Telecommunications		413			440			451			455			476
Bankcard expenses		481			448			476			570			695
Insurance and regulatory		1,244			1,200			1,187			1,014			411
Office supplies		497			484			493			484			520
Repossessed asset losses, net of expenses		234			78			946			321			136
Other expenses		2,152			2,268			2,101			2,880			2,107
Total Non-Interest Expense	$	19,804		$	19,965		$	20,551		$	19,216		$	18,802




Employees (Full Time Equivalent)		801			812			815			809			814
Branch Locations		68			67			67			67			68

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
	September 30			December 31
	2010			2009
	(Unaudited)
Assets
Cash and due from banks	$	44,746		$	59,116
Interest-bearing deposits in depository institutions		3,924			3,519
Federal funds sold		34,100			-
Cash and cash equivalents		82,770			62,635

Investment securities available-for-sale, at fair value		427,190			485,767
Investment securities held-to-maturity, at amortized cost		24,381			28,164
Total investment securities		451,571			513,931

Gross loans		1,825,838			1,792,434
Allowance for loan losses		(18,364	)		(18,541	)
Net loans		1,807,474			1,773,893

Bank owned life insurance		75,479			73,388
Premises and equipment		64,991			64,193
Accrued interest receivable		8,298			7,969
Net deferred tax assets		25,774			29,480
Intangible assets		56,682			57,010
Other assets		54,094			40,121
Total Assets	$	2,627,133		$	2,622,620

Liabilities
Deposits:
Noninterest-bearing	$	317,221		$	328,440
Interest-bearing:
Demand deposits		478,947			457,293
Savings deposits		389,497			379,893
Time deposits		973,085			998,096
Total deposits		2,158,750			2,163,722
Short-term borrowings		110,634			118,329
Long-term debt		16,892			16,959
Other liabilities		26,016			14,708
Total Liabilities		2,312,292			2,313,718

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 September 30, 2010 and December 31, 2009
less 3,001,063 and 2,616,161 shares in treasury, respectively		46,249			46,249
Capital surplus		102,867			102,917
Retained earnings		266,266			253,167
Cost of common stock in treasury		(103,039	)		(90,877	)
Accumulated other comprehensive income (loss):
Unrealized gain/(loss) on securities available-for-sale		5,449			(1,880	)
Unrealized gain on derivative instruments		786			3,063
Underfunded pension liability		(3,737	)		(3,737	)
Total Accumulated Other Comprehensive Income (Loss)		2,498			(2,554	)
Total Stockholders' Equity		314,841			308,902
Total Liabilities and Stockholders' Equity	$	2,627,133		$	2,622,620

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

	Original Cost		Credit-Related Net Investment Impairment Losses through September 30, 2010			Unrealized Gains (Losses)			Carrying Value

Mortgage Backed Securities		269,847		-			11,574			281,421
Municipal Bonds		52,509		-			1,065			53,574
Pooled Bank Trust Preferreds		27,088		(19,177	)		(1,435	)		6,476
Single Issuer Bank Trust Preferreds,
Subdebt of Financial Institutions, and
Bank Holding Company Preferred Stocks		93,223		(1,653	)		(1,080	)		90,490
Money Markets and Mutual Funds		1,630		-			28			1,657
Federal Reserve Bank and FHLB stock		12,899		-			-			12,899
Community Bank Equity Positions		10,332		(3,973	)		(1,305	)		5,054
Total Investments	$	467,528	$	(24,803	)	$	8,846		$	451,571

CITY HOLDING COMPANY AND SUBSIDIARIES
Loan Portfolio
(Unaudited) ($ in 000s)

	September 30		June 30		March 31		December 31			September 30
	2010		2010		2010		2009			2009

Residential real estate	$	605,351	$	605,026	$	597,429	$	595,678		$	590,653
Home equity		411,481		404,789		398,443		398,752			396,648
Commercial, financial, and agriculture		765,331		778,114		761,223		752,052			762,194
Installment loans to individuals		42,407		43,859		43,597		44,239			45,309
Previously securitized loans		1,268		1,784		1,148		1,713			2,580
Gross Loans	$	1,825,838	$	1,833,572	$	1,801,840	$	1,792,434		$	1,797,384






CITY HOLDING COMPANY AND SUBSIDIARIES
Previously Securitized Loans
(Unaudited) ($ in millions)
					Annualized		Effective
			December 31		Interest		Annualized
	Year Ended:		Balance (a)		Income (a)		Yield (a)

		2009	$	1.7	$	5.6		108	%
		2010		1.2		3.9		265	%
		2011		1.0		2.0		184	%
		2012		0.8		1.7		184	%
		2013		0.6		1.3		184	%

a - 2009 amounts are based on actual results. 2010 amounts are based on actual results through September 30, 2010 and estimated amounts for the remainder of the year. 2011, 2012, and 2013 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 September 30,
				2010								2009
	Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate

Assets:
Loan portfolio:
Residential real estate	$	602,382		$	7,815		5.15	%	$	590,108		$	8,170		5.49	%
Home equity		408,685			5,333		5.18	%		394,069			5,972		6.01	%
Commercial, financial, and agriculture		768,393			9,656		4.99	%		765,689			10,334		5.35	%
Installment loans to individuals		48,172			902		7.43	%		50,935			975		7.59	%
Previously securitized loans		1,487			781		208.37	%		2,810			942		133.00	%
Total loans		1,829,119			24,487		5.31	%		1,803,611			26,393		5.81	%
Securities:
Taxable		447,445			5,019		4.45	%		463,703			5,820		4.98	%
Tax-exempt		48,352			696		5.71	%		43,682			672		6.10	%
Total securities		495,797			5,715		4.57	%		507,385			6,492		5.08	%
Deposits in depository institutions		4,977			-		-			5,753			2		0.14	%
Federal funds sold		24,062			12		-			489			-		-
Total interest-earning assets		2,353,955			30,214		5.09	%		2,317,238			32,887		5.63	%
Cash and due from banks		51,056								50,496
Bank premises and equipment		65,044								63,709
Other assets		208,311								212,925
Less: Allowance for loan losses		(19,751	)							(20,828	)
Total assets	$	2,658,615							$	2,623,540

Liabilities:
Interest-bearing demand deposits		462,200			308		0.26	%		431,676			418		0.38	%
Savings deposits		391,655			252		0.26	%		379,793			417		0.44	%
Time deposits		982,877			5,992		2.42	%		1,013,610			7,838		3.07	%
Short-term borrowings		112,128			85		0.30	%		134,323			131		0.39	%
Long-term debt		16,900			173		4.06	%		17,988			192		4.23	%
Total interest-bearing liabilities		1,965,760			6,810		1.37	%		1,977,390			8,996		1.80	%
Noninterest-bearing demand deposits		356,590								325,821
Other liabilities		19,973								23,065
Stockholders' equity		316,292								297,264
Total liabilities and
stockholders' equity	$	2,658,615							$	2,623,540
Net interest income				$	23,404							$	23,891
Net yield on earning assets							3.94	%							4.09	%

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

	Nine Months Ended September 30,
				2010								2009
	Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate

Assets:
Loan portfolio:
Residential real estate	$	597,298		$	23,595		5.28	%	$	597,282		$	25,495		5.71	%
Home equity		402,751			16,007		5.31	%		390,388			18,165		6.22	%
Commercial, financial, and agriculture		764,446			29,583		5.17	%		758,050			31,519		5.56	%
Installment loans to individuals		49,047			2,830		7.71	%		49,498			3,150		8.51	%
Previously securitized loans		1,281			3,317		346.20	%		3,364			3,067		121.90	%
Total loans		1,814,823			75,332		5.55	%		1,798,582			81,396		6.05	%
Securities:
Taxable		470,783			15,947		4.53	%		453,713			17,494		5.16	%
Tax-exempt		49,158			2,128		5.79	%		39,829			1,921		6.45	%
Total securities		519,941			18,075		4.65	%		493,542			19,415		5.26	%
Deposits in depository institutions		5,288			-		-			5,271			10		0.25	%
Federal funds sold		8,590			13		-			165			-		-
Total interest-earning assets		2,348,642			93,420		5.32	%		2,297,560			100,821		5.87	%
Cash and due from banks		53,070								51,553
Bank premises and equipment		64,552								62,443
Other assets		207,648								213,285
Less: Allowance for loan losses		(19,462	)							(21,867	)
Total assets	$	2,654,450							$	2,602,974

Liabilities:
Interest-bearing demand deposits		461,178			999		0.29	%		425,972			1,327		0.42	%
Savings deposits		388,356			792		0.27	%		371,706			1,386		0.50	%
Time deposits		991,419			18,774		2.53	%		1,004,959			24,517		3.26	%
Short-term borrowings		111,089			284		0.34	%		135,708			395		0.39	%
Long-term debt		16,923			496		3.92	%		18,669			676		4.84	%
Total interest-bearing liabilities		1,968,965			21,345		1.45	%		1,957,014			28,301		1.93	%
Noninterest-bearing demand deposits		353,418								328,302
Other liabilities		17,726								27,335
Stockholders' equity		314,341								290,323
Total liabilities and
stockholders' equity	$	2,654,450							$	2,602,974
Net interest income				$	72,075							$	72,520
Net yield on earning assets							4.10	%							4.22	%

CITY HOLDING COMPANY AND SUBSIDIARIES
Analysis of Risk-Based Capital
(Unaudited) ($ in 000s)

	September 30			June 30			March 31			December 31			September 30
	2010 (a)			2010			2010			2009			2009

Tier I Capital:
Stockholders' equity	$	314,841		$	312,575		$	312,835		$	308,902		$	305,140
Goodwill and other intangibles		(56,487	)		(56,596	)		(56,705	)		(56,810	)		(56,928	)
Accumulated other comprehensive (income) loss		(2,498	)		(950	)		330			2,554			(330	)
Qualifying trust preferred stock		16,000			16,000			16,000			16,000			16,000
Unrealized Loss on AFS securities		(1,277	)		(3,668	)		(2,950	)		(3,531	)		(2,355	)
Excess deferred tax assets		(2,916	)		(3,530	)		(3,827	)		(3,412	)		(10,105	)
Total tier I capital	$	267,664		$	262,664		$	264,516		$	262,536		$	250,255


Total Risk-Based Capital:
Tier I capital	$	267,664		$	262,664		$	264,516		$	262,536		$	250,255
Qualifying allowance for loan losses		18,364			19,456			18,982			18,687			19,655
Total risk-based capital	$	286,028		$	282,120		$	283,498		$	281,223		$	269,910

Net risk-weighted assets	$	1,949,080		$	1,952,076		$	1,935,071		$	1,926,824		$	1,919,093


Ratios:
Average stockholders' equity to average assets		11.90	%		11.76	%		11.87	%		11.70	%		11.33	%
Tangible capital ratio		10.04	%		9.86	%		9.79	%		9.77	%		9.62	%
Risk-based capital ratios:
Tier I capital		13.73	%		13.46	%		13.67	%		13.63	%		13.04	%
Total risk-based capital		14.68	%		14.45	%		14.65	%		14.60	%		14.06	%
Leverage capital		10.30	%		10.06	%		10.28	%		10.23	%		9.79	%


(a) September 30, 2010 risk-based capital ratios are estimated




CITY HOLDING COMPANY AND SUBSIDIARIES
Intangibles
(Unaudited) ($ in 000s)

	As of and for the Quarter Ended
	September 30			June 30			March 31			December 31			September 30
		2010			2010			2010			2009			2009

Intangibles, net	$	56,682		$	56,791		$	56,900		$	57,010		$	57,127
Intangibles amortization expense		109			109			110			117			117

CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Loan Loss Experience
(Unaudited) ($ in 000s)

	Quarter Ended
	September 30			June 30			March 31			December 31			September 30
	2010			2010			2010			2009			2009

Balance at beginning of period	$	19,456		$	18,836		$	18,541		$	19,609		$	20,923

Charge-offs:
Commercial, financial, and agricultural		2,046			796			361			1,821			2,117
Real estate-mortgage		654			637			423			448			567
Installment loans to individuals		43			20			26			87			36
Overdraft deposit accounts		615			565			550			737			795
Total charge-offs		3,358			2,018			1,360			3,093			3,515

Recoveries:
Commercial, financial, and agricultural		28			378			9			88			27
Real estate-mortgage		12			38			23			31			19
Installment loans to individuals		29			53			50			37			95
Overdraft deposit accounts		350			346			493			394			379
Total recoveries		419			815			575			550			520

Net charge-offs		2,939			1,203			785			2,543			2,995
Provision for loan losses		1,847			1,823			1,080			1,475			1,681
Balance at end of period	$	18,364		$	19,456		$	18,836		$	18,541		$	19,609

Loans outstanding	$	1,825,838		$	1,833,572		$	1,801,840		$	1,792,434		$	1,797,384
Average loans outstanding		1,829,119			1,821,822			1,793,134			1,792,759			1,803,611
Allowance as a percent of loans outstanding		1.01	%		1.06	%		1.05	%		1.03	%		1.09	%
Allowance as a percent of non-performing loans		160.40	%		177.78	%		131.60	%		132.02	%		118.61	%
Net charge-offs (annualized) as a
percent of average loans outstanding		0.64	%		0.26	%		0.18	%		0.57	%		0.66	%
Net charge-offs, excluding overdraft deposit
accounts, (annualized) as a percent of average loans outstanding		0.58	%		0.22	%		0.16	%		0.49	%		0.57	%

CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Non-Performing Assets
(Unaudited) ($ in 000s)

	September 30			June 30			March 31			December 31			September 30
	2010			2010			2010			2009			2009

Nonaccrual loans	$	11,220		$	10,246		$	14,008		$	13,583		$	16,423
Accruing loans past due 90 days or more		195			698			305			382			98
Previously securitized loans past due 90 days or more		34			-			-			79			12
Total non-performing loans		11,449			10,944			14,313			14,044			16,533
Other real estate owned, excluding property associated
with previously securitized loans		12,636			12,722			10,800			11,729			12,323
Other real estate owned associated with previously
securitized loans		-			-			-			-			-
Other real estate owned		12,636			12,722			10,800			11,729			12,323
Total non-performing assets	$	24,085		$	23,666		$	25,113		$	25,773		$	28,856

Non-performing assets as a percent of loans and
other real estate owned		1.31	%		1.28	%		1.39	%		1.43	%		1.59	%



CITY HOLDING COMPANY AND SUBSIDIARIES
Summary of Total Past Due Loans
(Unaudited) ($ in 000s)

	September 30			June 30			March 31			December 31			September 30
		2010			2010			2010			2009			2009

Residential real estate	$	3,815		$	5,298		$	3,850		$	3,830		$	3,167
Home equity		2,863			1,763			1,818			2,396			1,718
Commercial, financial, and agriculture		262			3,680			498			601			545
Installment loans to individuals		106			168			133			172			185
Previously securitized loans		518			394			539			1,023			1,054
Overdraft deposit accounts		337			399			326			461			510
Total past due loans	$	7,901		$	11,702		$	7,164		$	8,483		$	7,179