ex99-1.htm

City’s CEO Charles Hageboeck stated that, “Although City and the financial industry in general faced many challenges during the year including a sustained low interest rate environment, an unsettled economy, and regulatory changes on how service fees are collected, City was able to improve our financial results from 2010 and continues to compare very favorably to our peers. Our net interest income decreased only $2.2 million from 2010 despite the impact of lower interest income from our interest rate floors ($3.4 million) and lower interest income from our previously securitized loans ($0.9 million). We were able to partially offset these losses by increasing our loan balances $108 million from December 31, 2010, along with solid growth in non-time deposits. As a result of our loan growth, our net interest income grew in the fourth quarter of 2011 as compared to the fourth quarter of 2010, and our net interest margin remained relatively stable at 3.90% in the fourth quarter of 2011 compared to 3.92% in the fourth quarter of 2010. While we are particularly pleased with our commercial loan growth in the fourth quarter of 2011, we expect this growth to level off during through the first quarter of 2012.”

“As anticipated, our service fee revenues declined from 2010 due to compliance with Regulation E, less consumer spending, and the implementation of “real time” authorization of all electronic transactions during the second quarter of 2010. Additionally in anticipation of further guidance from our primary regulator, the Company ceased processing check transactions in high to low order during the fourth quarter of 2011. This decrease in service charge revenues of $1.9 million, or 4.7%, from 2010 was partially offset by stronger trust and investment management fee income (12.3% increase over 2010) and insurance commissions (8.3% increase over 2010). The Company also experienced less credit-related net investment impairment losses in 2011 ($4.8 million decline over 2010).”

The Company’s tax equivalent net interest income decreased $2.2 million, or 2.3%, from $95.3 million in 2010 to $93.1 million in 2011. This decline is due to a decrease in interest income associated with the gain from the sale of interest rate floors as well as a decrease in interest income from the Company’s previously securitized loans (PSLs). During the year ended December 31, 2011, the Company recognized $1.1 million of interest income compared to $4.5 million of interest income recognized in the year ended December 31, 2010 from the interest rate floors. During the year ended December 31, 2011, the Company recognized $3.1 million of interest income compared to $4.0 million of interest income recognized in the year ended December 31, 2010 from the PSLs. These decreases were partially offset by the decrease in interest expense exceeding the decline in interest income for the year ended December 31, 2011 by $1.7 million and the receipt of $0.4 million of previously deferred interest income from a trust preferred security. The decline in interest expense is largely due to the average interest rate paid on interest-bearing liabilities declining from 1.41% for the year ended December 31, 2010 to 1.05% for the year ended December 31, 2011 and an increase of $79 million in the average balance of loans for the year ended December 31, 2011 compared to the year ended December 31, 2010. The Company’s reported net interest margin decreased from 4.06% for the year ended December 31, 2010 to 3.89% for the year ended December 31, 2011.

The Company’s ratio of non-performing assets to total loans and other real estate owned decreased from 1.60% at September 30, 2011 to 1.52% at December 31, 2011. Past due loans increased from $10.6 million at September 30, 2011 to $13.3 million or 0.67% of total loans outstanding at December 31, 2011. At December 31, 2011, past due residential real estate loans were $5.4 million or 0.84% of residential real estate loans outstanding; past due home equity loans were $2.2 million or 0.52% of home equity loans outstanding; and past due commercial real estate loans were $3.4 million or 0.47% of commercial real estate loans outstanding.

As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $2.2 million in the fourth quarter of 2011 and $4.6 million for the year ended December 31, 2011 compared to $2.3 million and $7.1 million of the comparable periods in 2010. During the fourth quarter of 2011 the Company’s loan portfolio increased $47.3 million from the third quarter of 2011 which resulted in a $0.4 million addition to the ALLL. The provision for loan losses recorded during 2011 reflects difficulties encountered by certain commercial borrowers of the Company during the year, the downgrade of their related credits and management’s assessment of the impact of these difficulties on the ultimate collectability of the loans. In addition, the Company received life insurance proceeds as the beneficiary of a life insurance policy carried by one of the Company’s commercial borrowers during the third quarter of 2011. The Company had previously placed several loans to this customer on non-accrual status and recorded charge-offs related to these credits. The life insurance proceeds satisfied the customer’s remaining outstanding balances and also enabled the Company to recover $1.9 million of the previously recorded charge-offs. 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.

During 2011, the Company realized investment gains of $3.1 million from the sale of U.S. government agencies, mortgage backed securities and certain single issuer trust preferred securities with remaining book values of $6.0 million, $232.8 million and $66.1 million, respectively. In addition, the Company received full repayment in 2011 on its investment in a single issuer bank trust preferred security, along with accrued interest that had previously been deferred, that the Company had previously recognized a credit-related net impairment charge of $0.6 million during 2010. As a result of this repayment, the Company recognized an investment gain of $0.6 million in 2011.

These gains were partially offset by $1.3 million of credit-related net investment impairment losses that were recorded by the Company in 2011, including $0.9 million in the fourth quarter. The charges deemed to be other than temporary were related to pooled bank trust preferreds ($0.4 million credit-related net impairment losses for the full year) with remaining book value of $3.4 million at December 31, 2011 and community bank and bank holding company equity positions ($0.9 million credit-related net impairment losses in the fourth quarter and $0.9 million for the full year) with remaining book value of $3.9 million at December 31, 2011. The credit-related net impairment charges related to the pooled bank trust preferred securities are 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 impairment charges of $0.4 million on the pooled bank trust preferred securities were appropriate for the year ended December 31, 2011. During the year ended December 31, 2011, the Company also recognized $0.9 million of credit-related impairment charges on the Company’s equity positions in First National Corporation of Strasburg, Virginia ($0.6 million) and Eagle Financial Services, Inc. of Berrysville, Virginia ($0.3 million) due to the length of time and the extent to which the market values of these securities have been below the Company’s cost basis in these positions.

Exclusive of net investment securities gains and losses, non-interest income decreased $1.2 million to $52.4 million for the year ended December 31, 2011 as compared to $53.6 million for the year ended December 31, 2010. Service charges from depository accounts decreased $1.9 million, or 4.7%, to $38.1 million for the year ended December 31, 2011 due to the changes from complying with Regulation E, a general decline in consumer spending, and implementation of “real time” authorization of all electronic transactions in the second quarter of 2010. Additionally in anticipation of further guidance from its primary regulator, the Company ceased processing check transactions in high to low order during the fourth quarter of 2011. This decrease was partially offset by an increase in insurance commission revenues of $0.5 million, or 8.3%, from $5.5 million for the year ended December 31, 2010 to $6.0 million for the year ended December 31, 2011 and an increase in trust and investment management fee income of $0.3 million to $3.1 million for the year ended December 31, 2011.

Non-interest expenses increased $2.4 million from $78.7 million for the year ended December 31, 2010 to $81.1 million for the year ended December 31, 2011 due to increased legal and professional fees ($3.2 million) and salaries and employee benefits ($2.5 million). Based on the Company’s routine review of facts and circumstances related to pending litigation, the Company recorded a $3.0 million litigation reserve accrual during the second quarter of 2011. These increases were partially offset by declines in advertising expense, repossessed asset losses, and FDIC insurance expense. Advertising expenses declined $1.7 million as the Company increased its communications with its customer base in 2010 regarding the passage of Regulation E, while repossessed asset losses decreased $1.2 million due to the write down of a foreclosed property located in the eastern panhandle of West Virginia in 2010. In addition, FDIC insurance expense decreased $1.2 million due to a change in the assessment base methodology.

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 88.8% and the loan to asset ratio was 71.0% at December 31, 2011. The Company maintained investment securities totaling 14.3% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 48.1% of assets at December 31, 2011. Time deposits fund 31.9% of assets at December 31, 2011, 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.

On December 14, 2011, the Board approved a quarterly cash dividend of 35 cents per share payable January 31, 2012, to shareholders of record as of January 13, 2012. During the year ended December 31, 2011, the Company repurchased 755,501 common shares at a weighted average price of $31.49. On July 27, 2011, the Company announced that the Board of Directors authorized the Company to buy back up to 1,000,000 shares of its common shares (approximately 7% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders. No time limit was placed on the duration of the share repurchase program. As part of this authorization, the Company rescinded the previous share repurchase program plan approved in October 2009. At December 31, 2011, the Company could repurchase approximately 692,000 shares under the current plan.

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; and (13) 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. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made. Further, the Company is required to evaluate subsequent events through the filing of its December 31, 2011 Form 10-K. The Company will continue to evaluate the impact of any subsequent events on the preliminary December 31, 2011 results and will adjust the amounts if necessary.

CITY HOLDING COMPANY AND SUBSIDIARIES
Financial Highlights
(Unaudited)


	Three Months Ended December 31,						Percent
	2011			2010			Change

Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	23,440		$	23,202			1.03	%
Net Income available to common shareholders		9,652			9,908			(2.58	)%
Earnings per Basic Share		0.65			0.64			1.88	%
Earnings per Diluted Share		0.65			0.64			1.85	%


Key Ratios (percent):
Return on Average Assets		1.43	%		1.49	%		(4.30	)%
Return on Average Tangible Equity		14.93	%		14.99	%		(0.43	)%
Net Interest Margin		3.90	%		3.92	%		(0.49	)%
Efficiency Ratio		51.24	%		50.69	%		1.07	%
Average Shareholders' Equity to Average Assets		11.65	%		12.09	%		(3.65	)%

Consolidated Risk Based Capital Ratios (a):
Tier I		13.12	%		13.88	%		(5.48	)%
Total		14.07	%		14.81	%		(5.00	)%

Tangible Equity to Tangible Assets		9.37	%		10.01	%		(6.37	)%


Common Stock Data:
Cash Dividends Declared per Share	$	0.35		$	0.34			2.94	%
Book Value per Share		21.05			20.31			3.65	%
Tangible Book Value per Share		17.25			16.66			3.55	%
Market Value per Share:
High		35.10			38.03			(7.70	)%
Low		26.06			30.37			(14.19	)%
End of Period		33.89			36.23			(6.46	)%

Price/Earnings Ratio (b)		13.04			14.20			(8.19	)%

	Twelve Months Ended December 31,						Percent
		2011			2010		Change

Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	93,044		$	95,277			(2.34	)%
Net Income available to common shareholders		40,678			38,960			4.41	%
Earnings per Basic Share		2.68			2.48			7.98	%
Earnings per Diluted Share		2.67			2.47			7.88	%


Key Ratios (percent):
Return on Average Assets		1.51	%		1.47	%		2.58	%
Return on Average Tangible Equity		15.66	%		15.02	%		4.26	%
Net Interest Margin		3.89	%		4.06	%		(4.11	)%
Efficiency Ratio		55.87	%		52.93	%		5.54	%
Average Shareholders' Equity to Average Assets		11.70	%		11.91	%		(1.71	)%


Common Stock Data:
Cash Dividends Declared per Share	$	1.37		$	1.36			0.74	%
Market Value per Share:
High		37.22			38.03			(2.13	)%
Low		26.06			26.87			(3.01	)%

Price/Earnings Ratio (b)		12.63			14.59			(13.37	)%


(a) December 31, 2011 risk-based capital ratios are estimated
(b) December 31, 2011 price/earnings ratio computed based on annualized fourth quarter 2011 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

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		20.02		20.31			20.31		26.87		38.03
2011		20.39		20.58		20.86			21.05		26.06		37.22


Earnings per Basic Share

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

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			0.64		2.48
2011		0.62		0.65		0.77			0.65		2.68


Earnings per Diluted Share

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

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			0.64		2.47
2011		0.62		0.64		0.76			0.65		2.67

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

	Three Months Ended December 31,
	2011			2010

Interest Income
Interest and fees on loans	$	22,998		$	24,124
Interest on investment securities:
Taxable		4,036			4,647
Tax-exempt		398			454
Interest on federal funds sold		9			16
Total Interest Income		27,441			29,241

Interest Expense
Interest on deposits		3,965			6,042
Interest on short-term borrowings		86			79
Interest on long-term debt		165			162
Total Interest Expense		4,216			6,283
Net Interest Income		23,225			22,958
Provision for loan losses		2,229			2,343
Net Interest Income After Provision for Loan Losses		20,996			20,615

Non-Interest Income
Total investment securities impairment losses		(918	)		(1,932	)
Noncredit impairment losses recognized in other comprehensive income		-			713
Net investment securities impairment losses		(918	)		(1,219	)
Gains (losses) on sale of investment securities		1			(1	)
Net investment securities (losses)		(917	)		(1,220	)

Service charges		9,360			9,624
Insurance commissions		1,433			1,503
Trust and investment management fee income		925			720
Bank owned life insurance		728			751
Other income		599			527
Total Non-Interest Income		12,128			11,905

Non-Interest Expense
Salaries and employee benefits		10,320			8,930
Occupancy and equipment		1,929			1,861
Depreciation		1,100			1,138
FDIC insurance expense		300			958
Advertising		153			647
Bankcard expenses		566			548
Postage, delivery, and statement mailings		484			548
Office supplies		429			457
Legal and professional fees		366			502
Telecommunications		388			428
Repossessed asset (gains)/losses, net of expenses		(27	)		196
Other expenses		2,677			2,187
Total Non-Interest Expense		18,685			18,400
Income Before Income Taxes		14,439			14,120
Income tax expense		4,787			4,212
Net Income Available to Common Shareholders	$	9,652		$	9,908


Distributed earnings allocated to common shareholders	$	5,136		$	5,239

Undistributed earnings allocated to common shareholders		4,446			4,610

Net earnings allocated to common shareholders	$	9,582		$	9,849

Average common shares outstanding		14,743			15,439

Effect of dilutive securities:
Employee stock options		71			69

Shares for diluted earnings per share		14,814			15,508

Basic earnings per common share	$	0.65		$	0.64
Diluted earnings per common share	$	0.65		$	0.64

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

	Twelve months ended December 31,
	2011			2010

Interest Income
Interest and fees on loans	$	93,414		$	99,456
Interest on investment securities:
Taxable		17,729			20,594
Tax-exempt		1,697			1,837
Interest on federal funds sold		48			29
Total Interest Income		112,888			121,916

Interest Expense
Interest on deposits		19,794			26,608
Interest on short-term borrowings		325			362
Interest on long-term debt		639			658
Total Interest Expense		20,758			27,628
Net Interest Income		92,130			94,288
Provision for loan losses		4,600			7,093
Net Interest Income After Provision for Loan Losses		87,530			87,195

Non-Interest Income
Total investment securities impairment losses		(2,767	)		(9,400	)
Noncredit impairment losses recognized in other comprehensive income		1,494			3,336
Net investment securities impairment losses		(1,273	)		(6,064	)
Gains on sale of investment securities		3,756			1,397
Net investment securities gains (losses)		2,483			(4,667	)

Service charges		38,109			40,002
Insurance commissions		5,946			5,490
Trust and investment management fee income		3,106			2,767
Bank owned life insurance		3,183			3,396
Other income		2,033			1,951
Total Non-Interest Income		54,860			48,939

Non-Interest Expense
Salaries and employee benefits		40,717			38,241
Occupancy and equipment		8,013			7,697
Depreciation		4,508			4,675
FDIC insurance expense		2,576			3,733
Advertising		2,007			3,692
Bankcard expenses		2,258			1,953
Postage, delivery, and statement mailings		2,099			2,371
Office supplies		1,911			1,931
Legal and professional fees		4,913			1,677
Telecommunications		1,605			1,732
Repossessed asset losses, net of expenses		272			1,453
Other expenses		10,262			9,566
Total Non-Interest Expense		81,141			78,721
Income Before Income Taxes		61,249			57,413
Income tax expense		20,571			18,453
Net Income Available to Common Shareholders	$	40,678		$	38,960


Distributed earnings allocated to common shareholders	$	20,102		$	20,956

Undistributed earnings allocated to common shareholders		20,280			17,767

Net earnings allocated to common shareholders	$	40,382		$	38,723

Average common shares outstanding		15,055			15,589

Effect of dilutive securities:
Employee stock options		75			62

Shares for diluted earnings per share		15,130			15,651

Basic earnings per common share	$	2.68		$	2.48
Diluted earnings per common share	$	2.67		$	2.47

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


	Three Months Ended
	December 31, 2011			December 31, 2010

Balance at October 1	$	309,892		$	314,841

Net income		9,652			9,908
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		(288	)		(4,427	)
Change in underfunded pension liability		(918	)		(77	)
Change in unrealized (loss) on interest rate floors		-			(491	)
Cash dividends declared ($0.35/share) and ($0.34/share), respectively		(5,137	)		(5,269	)
Issuance of stock award shares, net		201			186
Exercise of 3,000 stock options		87			-
Exercise of 6,262 stock options		-			175
Excess tax benefits on stock compensation		7			15
Purchase of 80,000 common shares of treasury		(2,362	)		-
Balance at December 31	$	311,134		$	314,861



	Twelve Months Ended
	December 31, 2011			December 31, 2010

Balance at January 1	$	314,861		$	308,902

Net income		40,678			38,960
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		(196	)		2,902
Change in unrealized (loss) on interest rate floors		(295	)		(2,768	)
Change in underfunded pension liability		(918	)		(77	)
Cash dividends declared ($1.37/share) and ($1.36/share), respectively		(20,532	)		(21,222	)
Issuance of stock award shares, net		1,066			830
Exercise of 9,576 stock options		254			-
Exercise of 7,962 stock options		-			221
Excess tax benefits on stock compensation		7			15
Purchase of 755,501 common shares of treasury		(23,791	)		-
Purchase of 408,151 common shares of treasury		-			(12,902	)
Balance at December 31	$	311,134		$	314,861

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

	Quarter Ended
	December 31			September 30			June 30			March 31			December 31
	2011			2011			2011			2011			2010

Interest income	$	27,441		$	28,370		$	28,323		$	28,754		$	29,241
Taxable equivalent adjustment		215			212			240			248			244
Interest income (FTE)		27,656			28,582			28,563			29,002			29,485
Interest expense		4,216			4,799			5,803			5,940			6,283
Net interest income		23,440			23,783			22,760			23,062			23,202
Provision for loan losses		2,229			-			1,286			1,086			2,343
Net interest income after provision for loan loasses		21,211			23,783			21,474			21,976			20,859

Noninterest income		12,128			13,531			16,537			12,662			11,905
Noninterest expense		18,685			19,688			22,912			19,858			18,400
Income before income taxes		14,654			17,626			15,099			14,780			14,364
Income tax expense		4,787			5,837			5,029			4,918			4,212
Taxable equivalent adjustment		215			212			240			248			244
Net income available to common shareholders	$	9,652		$	11,577		$	9,830		$	9,614		$	9,908



Distributed earnings allocated to common shareholders	$	5,136		$	5,015		$	5,092		$	5,154		$	5,239
Undistributed earnings allocated to common shareholders		4,446			6,479			4,669			4,392			4,610
Net earnings allocated to common shareholders	$	9,582		$	11,494		$	9,761		$	9,546		$	9,849

Average common shares outstanding		14,743			15,003			15,120			15,380			15,439

Effect of dilutive securities:
Employee stock options		71			68			73			82			69

Shares for diluted earnings per share		14,814			15,071			15,193			15,462			15,508

Basic earnings per common share	$	0.65		$	0.77		$	0.65		$	0.62		$	0.64
Diluted earnings per common share		0.65			0.76			0.64			0.62			0.64

Cash dividends declared per share		0.35			0.34			0.34			0.34			0.34


Net Interest Margin		3.90	%		3.93	%		3.78	%		3.95	%		3.92	%

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

	Quarter Ended
	December 31			September 30			June 30			March 31		December 31
	2011			2011			2011			2011		2010

Non-Interest Income:
Service charges	$	9,360		$	9,840		$	9,855		$	9,054	$	9,624
Insurance commissions		1,433			1,388			1,504			1,621		1,503
Trust and investment management fee income		925			699			730			753		720
Bank owned life insurance		728			952			745			758		751
Other income		599			380			575			476		527
Subtotal		13,045			13,259			13,409			12,662		13,125
Total investment securities impairment losses		(918	)		(1,849	)		-			-		(1,932	)
Noncredit impairment losses recognized in other
comprehensive income		-			1,494			-			-		713
Net investment securities impairment losses		(918	)		(355	)		-			-		(1,219	)
Gain (loss) on sale of investment securities		1			627			3,128			-		(1	)
Total Non-Interest Income	$	12,128		$	13,531		$	16,537		$	12,662	$	11,905

Non-Interest Expense:
Salaries and employee benefits	$	10,320		$	10,302		$	10,183		$	9,912	$	8,930
Occupancy and equipment		1,929			2,057			1,921			2,106		1,861
Depreciation		1,100			1,131			1,140			1,136		1,138
FDIC insurance expense		300			392			932			952		958
Advertising		153			546			628			680		647
Bankcard expenses		566			559			633			501		548
Postage, delivery and statement mailings		484			551			510			554		548
Office supplies		429			492			452			539		457
Legal and professional fees		366			567			3,511			469		502
Telecommunications		388			371			417			429		428
Repossessed asset (gains) losses, net of expenses		(27	)		109			(7	)		198		196
Other expenses		2,677			2,611			2,592			2,382		2,187
Total Non-Interest Expense	$	18,685		$	19,688		$	22,912		$	19,858	$	18,400




Employees (Full Time Equivalent)		795			792			795			796		805
Branch Locations		68			68			68			68		68

CITY HOLDING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in 000s)
	December 31			December 31
	2011			2010
	(Unaudited)
Assets
Cash and due from banks	$	140,873		$	50,043
Interest-bearing deposits in depository institutions		5,526			5,336
Federal funds sold		-			11,000
Cash and cash equivalents		146,399			66,379

Investment securities available-for-sale, at fair value		360,783			417,167
Investment securities held-to-maturity, at amortized cost		23,458			23,865
Other securities		11,934			12,553
Total investment securities		396,175			453,585

Gross loans		1,973,103			1,865,000
Allowance for loan losses		(19,409	)		(18,224	)
Net loans		1,953,694			1,846,776

Bank owned life insurance		78,961			76,231
Premises and equipment, net		64,612			64,530
Accrued interest receivable		7,093			7,264
Net deferred tax assets		32,219			29,235
Intangible assets		56,164			56,573
Other assets		41,792			36,722
Total Assets	$	2,777,109		$	2,637,295

Liabilities
Deposits:
Noninterest-bearing	$	369,025		$	337,927
Interest-bearing:
Demand deposits		526,824			486,737
Savings deposits		439,823			397,042
Time deposits		885,596			949,669
Total deposits		2,221,268			2,171,375
Short-term borrowings
FHLB borrowings		-			375
Federal Funds purchased		75,000			-
Customer repurchase agreements		114,050			112,335
Long-term debt		16,495			16,495
Other liabilities		39,162			21,854
Total Liabilities		2,465,975			2,322,434

Stockholders' Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued		-			-
Common stock, par value $2.50 per share: 50,000,000 shares authorized;
18,499,282 shares issued at December 31, 2011 and December 31, 2010
less 3,717,993 and 2,994,501 shares in treasury, respectively		46,249			46,249
Capital surplus		103,335			103,057
Retained earnings		291,050			270,905
Cost of common stock in treasury		(125,593	)		(102,853	)
Accumulated other comprehensive loss:
Unrealized gain on securities available-for-sale		825			1,022
Unrealized gain on derivative instruments		-			295
Underfunded pension liability		(4,732	)		(3,814	)
Total Accumulated Other Comprehensive Loss		(3,907	)		(2,497	)
Total Stockholders' Equity		311,134			314,861
Total Liabilities and Stockholders' Equity	$	2,777,109		$	2,637,295

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

	Original Cost		Credit-Related Net Investment Impairment Losses through December 31, 2011			Unrealized Gains (Losses)			Carrying Value

US Government Agencies	$	5,868	$	-		$	174		$	6,041
Mortgage Backed Securities		225,931		-			6,838			232,769
Municipal Bonds		55,262		-			1,539			56,802
Pooled Bank Trust Preferreds		27,080		(19,596	)		(4,228	)		3,256
Single Issuer Bank Trust Preferreds,
Subdebt of Financial Institutions, and
Bank Holding Company Preferred Stocks		83,991		(1,653	)		(2,581	)		79,757
Money Markets and Mutual Funds		1,724		-			39			1,763
Federal Reserve Bank and FHLB stock		11,934		-			-			11,934
Community Bank Equity Positions		10,366		(6,048	)		(466	)		3,852
Total Investments	$	422,157	$	(27,297	)	$	1,315		$	396,175

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

	December 31		September 30		June 30		March 31		December 31
	2011		2011		2011		2011		2010

Residential real estate (1)	$	638,585	$	630,679	$	622,118	$	615,635	$	610,369
Home equity		433,000		427,471		420,752		415,719		416,172
Commercial and industrial		130,899		119,377		121,149		129,475		134,612
Commercial real estate (2)		732,146		708,558		693,959		668,710		661,758
Consumer		35,845		36,575		36,626		37,482		38,424
DDA overdrafts		2,628		2,924		2,415		1,970		2,876
Previously securitized loans		-		214		325		533		789
Gross Loans	$	1,973,103	$	1,925,798	$	1,897,344	$	1,869,524	$	1,865,000

Construction loans included in:
(1) - Residential real estate loans	$	9,287	$	7,456	$	6,879	$	9,404	$	7,891
(2) - Commercial real estate loans	$	20,201	$	23,915	$	23,433	$	24,328	$	31,458

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

	Three Months Ended December 31,
				2011								2010
	Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate

Assets:
Loan portfolio (1):
Residential real estate	$	630,925		$	7,258		4.56	%	$	602,002		$	7,624		5.02	%
Home equity (2)		429,208			4,785		4.42	%		413,810			5,256		5.04	%
Commercial, financial, and agriculture (3)		833,217			9,463		4.51	%		769,158			9,579		4.94	%
Installment loans to individuals (4)		47,515			805		6.72	%		51,731			966		7.41	%
Previously securitized loans		85			687		3206.59	%		986			699		281.26	%
Total loans		1,940,950			22,998		4.70	%		1,837,687			24,124		5.21	%
Securities:
Taxable		366,024			4,036		4.37	%		421,648			4,647		4.37	%
Tax-exempt (5)		42,968			613		5.66	%		50,584			698		5.47	%
Total securities		408,992			4,649		4.51	%		472,232			5,345		4.49	%
Deposits in depository institutions		7,183			-		-			5,134			-		-
Federal funds sold		25,714			9		0.14	%		32,060			16		0.20	%
Total interest-earning assets		2,382,839			27,656		4.60	%		2,347,113			29,485		4.98	%
Cash and due from banks		62,176								54,314
Bank premises and equipment		65,030								65,005
Other assets		212,106								206,879
Less: Allowance for loan losses		(19,777	)							(18,680	)
Total assets	$	2,702,374							$	2,654,631

Liabilities:
Interest-bearing demand deposits		501,570			184		0.15	%		466,985			243		0.21	%
Savings deposits		433,480			233		0.21	%		392,438			224		0.23	%
Time deposits		886,187			3,548		1.59	%		959,249			5,575		2.31	%
Short-term borrowings		130,154			86		0.26	%		116,987			79		0.27	%
Long-term debt		16,495			165		3.97	%		16,737			162		3.84	%
Total interest-bearing liabilities		1,967,886			4,216		0.85	%		1,952,396			6,283		1.28	%
Noninterest-bearing demand deposits		387,459								359,647
Other liabilities		32,134								21,547
Stockholders' equity		314,895								321,041
Total liabilities and
stockholders' equity	$	2,702,374							$	2,654,631
Net interest income				$	23,440							$	23,202
Net yield on earning assets							3.90	%							3.92	%



(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 includes $0 and $533 from interest rate floors for the three months ended December 31, 2011 and December 31, 2010, respectively.
(3) Includes the Company’s commercial and industrial and commercial real estate loan categories. Interest income includes $0 and $264 from interest rate floors for the three months ended December 31, 2011 and December 31, 2010, respectively.
(4) Includes the Company’s consumer and DDA overdrafts loan categories.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.

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

	Twelve Months Ended December 31,
				2011								2010
	Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate

Assets:
Loan portfolio (1):
Residential real estate	$	618,976		$	29,349		4.74	%	$	598,484		$	31,218		5.22	%
Home equity (2)		421,484			19,599		4.65	%		405,539			21,263		5.24	%
Commercial, financial, and agriculture (3)		812,401			37,955		4.67	%		765,634			39,163		5.12	%
Installment loans to individuals (4)		46,167			3,375		7.31	%		49,724			3,796		7.63	%
Previously securitized loans		360			3,136		871.11	%		1,207			4,016		332.73	%
Total loans		1,899,388			93,414		4.92	%		1,820,588			99,456		5.46	%
Securities:
Taxable		408,472			17,729		4.34	%		458,398			20,594		4.49	%
Tax-exempt (5)		46,041			2,611		5.67	%		49,517			2,826		5.71	%
Total securities		454,513			20,340		4.48	%		507,915			23,420		4.61	%
Deposits in depository institutions		7,655			-		-			5,249			-		-
Federal funds sold		29,928			48		0.16	%		14,506			29		0.20	%
Total interest-earning assets		2,391,484			113,802		4.76	%		2,348,258			122,905		5.23	%
Cash and due from banks		58,247								53,384
Bank premises and equipment		64,678								64,666
Other assets		206,724								207,454
Less: Allowance for loan losses		(19,413	)							(19,265	)
Total assets	$	2,701,720							$	2,654,497

Liabilities:
Interest-bearing demand deposits		493,433			895		0.18	%		462,641			1,242		0.27	%
Savings deposits		420,212			1,023		0.24	%		389,385			1,016		0.26	%
Time deposits		927,789			17,876		1.93	%		983,310			24,350		2.48	%
Short-term borrowings		123,569			325		0.26	%		112,575			362		0.32	%
Long-term debt		16,495			639		3.87	%		16,876			658		3.90	%
Total interest-bearing liabilities		1,981,498			20,758		1.05	%		1,964,787			27,628		1.41	%
Noninterest-bearing demand deposits		379,980								354,988
Other liabilities		24,081								18,692
Stockholders' equity		316,161								316,030
Total liabilities and
stockholders' equity	$	2,701,720							$	2,654,497
Net interest income				$	93,044							$	95,277
Net yield on earning assets							3.89	%							4.06	%

(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 includes $632 and $2,494 from interest rate floors for the six months ended December 31, 2011 and December 31, 2010, respectively.
(3) Includes the Company’s commercial and industrial and commercial real estate loan categories. Interest income includes $488 and $1,999 from interest rate floors for the twelve months ended December 31, 2011 and December 31, 2010, respectively.
(4) Includes the Company’s consumer and DDA overdrafts loan categories.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.

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

	December 31			September 30			June 30			March 31			December 31
	2011 (a)			2011			2011			2011			2010

Tier I Capital:
Stockholders' equity	$	311,134		$	309,892		$	310,379		$	311,122		$	314,861
Goodwill and other intangibles		(55,969	)		(56,071	)		(56,173	)		(56,276	)		(56,378	)
Accumulated other comprehensive loss (income)		3,907			2,701			1,838			1,904			2,497
Qualifying trust preferred stock		16,000			16,000			16,000			16,000			16,000
Unrealized loss on AFS securities		(448	)		(1,081	)		(82	)		(856	)		(521	)
Excess deferred tax assets		(5,897	)		(5,435	)		(4,462	)		(4,174	)		(2,904	)
Total tier I capital	$	268,727		$	266,007		$	267,500		$	267,720		$	273,555


Total Risk-Based Capital:
Tier I capital	$	268,727		$	266,007		$	267,500		$	267,720		$	273,555
Qualifying allowance for loan losses		19,409			19,848			18,944			18,414			18,224
Total risk-based capital	$	288,136		$	285,855		$	286,444		$	286,134		$	291,779

Net risk-weighted assets	$	2,048,398		$	2,013,294		$	1,993,003		$	1,977,395		$	1,970,635


Ratios:
Average stockholders' equity to average assets		11.65	%		11.67	%		11.59	%		11.91	%		12.09	%
Tangible capital ratio		9.37	%		9.65	%		9.56	%		9.63	%		10.01	%
Risk-based capital ratios:
Tier I capital		13.12	%		13.21	%		13.42	%		13.54	%		13.88	%
Total risk-based capital		14.07	%		14.20	%		14.37	%		14.47	%		14.81	%
Leverage capital		10.18	%		10.04	%		10.07	%		10.24	%		10.54	%


(a) December 31, 2011 risk-based capital ratios are estimated




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

	As of and for the Quarter Ended
	December 31			September 30			June 30			March 31			December 31
		2011			2011			2011			2011			2010

Intangibles, net	$	56,164		$	56,266		$	56,368		$	56,471		$	56,573
Intangibles amortization expense		102			102			103			102			109

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

	Quarter Ended
	December 31			September 30			June 30			March 31			December 31
	2011			2011			2011			2011			2010

Balance at beginning of period	$	19,848		$	18,944		$	18,414		$	18,224		$	18,364

Charge-offs:
Commercial and industrial		247			200			-			75			25
Commercial real estate		1,650			141			166			34			149
Residential real estate		176			264			377			550			511
Home equity		475			209			168			237			312
Consumer		31			75			14			44			38
DDA overdrafts		394			492			392			434			1,867
Total charge-offs		2,973			1,381			1,117			1,374			2,902

Recoveries:
Commercial and industrial		15			2			3			3			5
Commercial real estate		-			1,954			26			2			24
Residential real estate		10			1			12			6			12
Home equity		1			1			4			1			15
Consumer		29			58			11			38			37
DDA overdrafts		250			269			305			428			326
Total recoveries		305			2,285			361			478			419

Net charge-offs		2,668			(904	)		756			896			2,483
Provision for loan losses		2,229			-			1,286			1,086			2,343
Balance at end of period	$	19,409		$	19,848		$	18,944		$	18,414		$	18,224

Loans outstanding	$	1,973,103		$	1,925,798		$	1,897,344		$	1,869,524		$	1,865,000
Average loans outstanding		1,940,950			1,917,246			1,876,530			1,861,760			1,837,687
Allowance as a percent of loans outstanding		0.98	%		1.03	%		1.00	%		0.98	%		0.98	%
Allowance as a percent of non-performing loans		87.76	%		87.27	%		81.08	%		72.14	%		156.39	%
Net charge-offs (annualized) as a
percent of average loans outstanding		0.55	%		(0.19	)%		0.16	%		0.19	%		0.54	%
Net charge-offs, excluding overdraft deposit accounts,
(annualized) as a percent of average loans outstanding		0.52	%		(0.24	)%		0.14	%		0.19	%		0.21	%

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

	December 31			September 30			June 30			March 31			December 31
	2011			2011			2011			2011			2010

Nonaccrual loans	$	21,951		$	22,423		$	23,178		$	25,166		$	10,817
Accruing loans past due 90 days or more		166			320			188			358			782
Previously securitized loans past due 90 days or more		-			-			-			-			54
Total non-performing loans		22,117			22,743			23,366			25,524			11,653
Other real estate owned		7,948			8,273			7,999			7,241			9,316
Total non-performing assets	$	30,065		$	31,016		$	31,365		$	32,765		$	20,969

Non-performing assets as a percent of loans and
other real estate owned		1.52	%		1.60	%		1.65	%		1.75	%		1.12	%



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

	December 31			September 30			June 30			March 31			December 31
		2011			2011			2011			2011			2010

Residential real estate	$	5,362		$	4,569		$	4,971		$	3,293		$	4,774
Home equity		2,246			2,425			2,299			2,260			2,276
Commercial and industrial		1,243			37			476			397			-
Commercial real estate		3,415			2,423			2,186			1,740			775
Consumer		138			112			185			75			147
Previously securitized loans		-			403			305			262			345
DDA overdrafts		909			614			279			231			361
Total past due loans	$	13,313		$	10,583		$	10,701		$	8,258		$	8,678