10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended September 30, 2013

OR

[  ] TRANSITION REPORT PURSANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Transition Period From ____________To_____________.

Commission File number 0-11733

CITY HOLDING COMPANY

(Exact name of registrant as specified in its charter)

West Virginia	55-0619957
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
25 Gatewater Road
Charleston, West Virginia	25313
(Address of principal executive offices)	(Zip Code)

(304) 769-1100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer [X]
Non-accelerated filer [   ]	Smaller reporting company [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common stock, $2.50 Par Value – 15,730,090 shares as of November 1, 2013.

1

FORWARD-LOOKING STATEMENTS

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including statements in Management’s Discussion and Analysis of Financial Condition and Result of Operations are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 the Company's 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 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") 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. 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.

2

City Holding Company and Subsidiaries

PART I	Financial Information	Pages
Item 1.	Financial Statements (Unaudited).	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Income	6
	Consolidated Statements of Comprehensive Income	8
	Consolidated Statements of Changes in Shareholders’ Equity	8
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	41
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	55
Item 4.	Controls and Procedures.	56
PART II	Other Information
Item 1.	Legal Proceedings.	56
Item 1A.	Risk Factors.	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	56
Item 3.	Defaults Upon Senior Securities.	56
Item 4.	Mine Safety Disclosures.	56
Item 5.	Other Information.	56
Item 6.	Exhibits.	56
Signatures		57

3

Part I - Financial Information

Item 1 - Financial Statements

Consolidated Balance Sheets

City Holding Company and Subsidiaries

(in thousands)

Assets	September 30, 2013			December 31, 2012
	(Unaudited)
Cash and due from banks	$	164,915		$	58,718
Interest-bearing deposits in depository institutions	14,706			16,276
Federal funds sold	—			10,000
Cash and Cash Equivalents	179,621			84,994
Investment securities available for sale, at fair value	329,247			377,122
Investment securities held-to-maturity, at amortized cost (approximate fair value at September 30, 2013 and December 31, 2012, - $6,406 and $13,861, respectively)	3,994			13,454
Other securities	13,344			11,463
Total Investment Securities	346,585			402,039
Gross loans	2,558,456			2,146,369
Allowance for loan losses	(20,606		)	(18,809		)
Net Loans	2,537,850			2,127,560
Bank owned life insurance	91,249			81,901
Premises and equipment, net	82,194			72,728
Accrued interest receivable	8,108			6,692
Net deferred tax asset	45,183			32,737
Goodwill and other intangible assets	76,420			65,057
Other assets	29,478			43,758
Total Assets	$	3,396,688		$	2,917,466
Liabilities
Deposits:
Noninterest-bearing	$	498,245		$	429,969
Interest-bearing:
Demand deposits	604,047			553,132
Savings deposits	606,514			506,869
Time deposits	1,098,730			919,346
Total Deposits	2,807,536			2,409,316
Short-term borrowings:
Customer repurchase agreements	150,943			114,646
Long-term debt	16,495			16,495
Other liabilities	43,672			43,735
Total Liabilities	3,018,646			2,584,192
Shareholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued	—			—

4

Common stock, par value $2.50 per share: 50,000,000 shares authorized; 18,499,282 shares issued at September 30, 2013 and December 31, 2012, less 2,769,192 and 3,665,999 shares in treasury, respectively	46,249			46,249
Capital surplus	107,275			103,524
Retained earnings	326,553			309,270
Cost of common stock in treasury	(95,861		)	(124,347		)
Accumulated other comprehensive income (loss):
Unrealized (loss) gain on securities available-for-sale	(1,179		)	3,573
Underfunded pension liability	(4,995		)	(4,995		)
Total Accumulated Other Comprehensive Loss	(6,174		)	(1,422		)
Total Shareholders’ Equity	378,042			333,274
Total Liabilities and Shareholders’ Equity	$	3,396,688		$	2,917,466

See notes to consolidated financial statements.

5

Consolidated Statements of Income(Unaudited)

City Holding Company and Subsidiaries

(in thousands, except earnings per share data)

Interest Income	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Interest and fees on loans	$	32,983	$	24,633		$	94,693	$	70,843
Interest on investment securities:
Taxable	2,392		3,438			7,774		11,345
Tax-exempt	299		346			935		1,101
Interest on federal funds sold	—		15			22		38
Total Interest Income	35,674		28,432			103,424		83,327
Interest Expense
Interest on deposits	3,068		3,312			9,490		10,363
Interest on short-term borrowings	82		79			232		229
Interest on long-term debt	154		166			464		499
Total Interest Expense	3,304		3,557			10,186		11,091
Net Interest Income	32,370		24,875			93,238		72,236
Provision for loan losses	1,154		975			4,903		4,600
Net Interest Income After Provision for Loan Losses	31,216		23,900			88,335		67,636
Non-interest Income
Total investment securities impairment losses	—		(272		)	—		(878		)
Noncredit impairment losses recognized in other comprehensive income	—		—			—		302
Net investment securities impairment losses	—		(272		)	—		(576		)
Gains on sale of investment securities	—		730			93		1,530
Net investment securities gains	—		458			93		954
Service charges	7,169		6,751			20,601		19,296
Bankcard revenue	3,468		3,110			10,117		9,305
Insurance commissions	1,365		1,439			4,563		4,782
Trust and investment management fee income	939		912			2,893		2,662
Bank owned  life insurance	805		738			2,416		2,228
Other income	734		671			2,376		1,762
Total Non-interest Income	14,480		14,079			43,059		40,989
Non-interest Expense
Salaries and employee benefits	12,930		11,295			38,519		32,207
Occupancy and equipment	2,409		2,126			7,381		6,038
Depreciation	1,437		1,175			4,289		3,371
FDIC insurance expense	500		405			1,352		1,184
Advertising	712		674			2,266		1,993
Bankcard expenses	680		720			2,173		2,035
Postage, delivery, and statement mailings	541		529			1,698		1,565
Office supplies	416		407			1,320		1,258
Legal and professional fees	591		611			1,561		1,349
Telecommunications	721		433			1,631		1,209
Repossessed asset losses, net of expenses	896		429			718		1,200

6

Merger related costs	(150		)	157		5,455		4,335
Other expenses	2,982			2,885		9,664		8,382
Total Non-interest Expense	24,665			21,846		78,027		66,126
Income Before Income Taxes	21,031			16,133		53,367		42,499
Income tax expense	7,056			5,526		18,398		14,450
Net Income Available to Common Shareholders	$	13,975		$	10,607	$	34,969	$	28,049
Total comprehensive income	$	13,342		$	12,719	$	30,217	$	31,591
Average common shares outstanding	15,608			14,751		15,545		14,700
Effect of dilutive securities:
Employee stock awards and warrants outstanding	182			83		168		83
Shares for diluted earnings per share	15,790			14,834		15,713		14,783
Basic earnings per common share	$	0.89		$	0.71	$	2.23	$	1.89
Diluted earnings per common share	$	0.88		$	0.71	$	2.21	$	1.88
Dividends declared per common share	$	0.37		$	0.35	$	1.11	$	1.05

See notes to consolidated financial statements.

7

Consolidated Statements of Comprehensive Income(Unaudited)

City Holding Company and Subsidiaries

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net income	$	13,975		$	10,607		$	34,969		$	28,049
Unrealized gains (losses) on available-for-sale securities arising during the period	(1,004		)	3,847			(7,438		)	6,637
Reclassification adjustment for (gains)	—			(458		)	(93		)	(954		)
Other comprehensive income (loss) before income taxes	(1,004		)	3,389			(7,531		)	5,683
Tax effect	371			(1,277		)	2,779			(2,141		)
Other comprehensive income (loss), net of tax	(633		)	2,112			(4,752		)	3,542
Comprehensive income, net of tax	$	13,342		$	12,719		$	30,217		$	31,591

See notes to consolidated financial statements.

Consolidated Statements of Changes in Shareholders’ Equity(Unaudited)

City Holding Company and Subsidiaries

Nine Months EndedSeptember 30, 2013 and 2012

(in thousands)

	Common Stock		Capital Surplus			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2011	$	46,249	$	103,335		$	291,050		$	(125,593	)	(3,907		)	$	311,134
Net income						28,049									28,049
Other comprehensive income												3,542			3,542
Acquisition of Virginia Savings Bancorp, Inc.			276						7,447						7,723
Cash dividends declared ($1.05 per share)						(15,532		)							(15,532		)
Stock-based compensation expense, net			(179		)				1,049						870
Exercise of 18,899 stock options			(121		)				665						544
Purchase of 237,535 treasury shares									(7,915		)				(7,915		)
Balance at September 30, 2012	$	46,249	$	103,311		$	303,567		$	(124,347	)	$	(365	)	$	328,415

8

	Common Stock	Capital Surplus			Retained Earnings			Treasury Stock		Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2012	46,249	$	103,524		$	309,270		(124,347	)	$	(1,422	)	$	333,274
Net income					34,969								34,969
Other comprehensive loss										(4,752		)	(4,752		)
Acquisition of Community Financial Corporation		4,236						24,272					28,508
Cash dividends declared ($1.11 per share)					(17,686		)						(17,686		)
Stock-based compensation expense, net		(315		)				1,278					963
Exercise of 107,140 stock options		(170		)				2,936					2,766
Balance at September 30, 2013	46,249	$	107,275		$	326,553		(95,861	)	$	(6,174	)	$	378,042

See notes to consolidated financial statements.

9

Consolidated Statements of Cash Flows(Unaudited)

City Holding Company and Subsidiaries

(in thousands)

	Nine months ended September 30,
	2013			2012
Net income	$	34,969		$	28,049
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and accretion	(7,885		)	1,356
Provision for loan losses	4,903			4,600
Depreciation of premises and equipment	4,289			3,371
Deferred income tax expense	4,945			342
Net periodic employee benefit cost	586			391
Realized investment securities gains	(93		)	(1,530		)
Net investment securities impairment losses	—			576
Stock-compensation expense	963			870
Increase in value of bank-owned life insurance	(2,413		)	(2,164		)
Loans originated for sale	(20,895		)	(30,518		)
Proceeds from the sale of loans originated for sale	25,816			29,358
Gain on sale of loans	(553		)	(626		)
Change in accrued interest receivable	(22		)	(137		)
Change in other assets	20,734			(735		)
Change in other liabilities	(6,922		)	2,092
Net Cash Provided by Operating Activities	58,422			35,295
Proceeds from sales of securities available-for-sale	18,398			27,773
Proceeds from maturities and calls of securities available-for-sale	78,671			113,760
Proceeds from maturities and calls of securities held-to-maturity	9,504			10,046
Purchases of securities available-for-sale	(42,295		)	(150,497		)
Net (increase) in loans	(39,643		)	(41,870		)
Purchases of premises and equipment	(4,663		)	(5,910		)
Acquisition of Community Financial Corporation, net of cash acquired of $8,888	(21,852		)	—
Acquisition of Virginia Savings Bancorp, net of cash acquired of $24,943	—			20,275
Net Cash Used in Investing Activities	(1,880		)	(26,423		)
Net increase in noninterest-bearing deposits	25,440			26,777
Net (decrease) increase in interest-bearing deposits	(9,360		)	10,815
Net increase (decrease) in short-term borrowings	36,297			(57,103		)
Purchases of treasury stock	—			(7,915		)
Proceeds from exercise of stock options	2,766			544
Dividends paid	(17,058		)	(15,517		)
Net Cash Provided by (Used in) Financing Activities	38,085			(42,399		)
Increase (decrease) in Cash and Cash Equivalents	94,627			(33,527		)
Cash and cash equivalents at beginning of period	84,994			146,399
Cash and Cash Equivalents at End of Period	$	179,621		$	112,872

See notes to consolidated financial statements.

10

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2013

Note A –Basis of Presentation

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding Company (“the Parent Company”) and its wholly-owned subsidiaries (collectively, “the Company”). All material intercompany transactions have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition for each of the periods presented. Such adjustments are of a normal recurring nature. The results of operations for nine months endedSeptember 30, 2013 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2013. The Company’s accounting and reporting policies conform with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Such policies require management to make estimates and develop assumptions that affect the amounts reported in the consolidated financial statements and related footnotes. Actual results could differ from management’s estimates.

The consolidated balance sheet as of December 31, 2012 has been derived from audited financial statements included in the Company’s 2012 Annual Report to Shareholders.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted.  These financial statements should be read in conjunction with the financial statements and notes thereto included in the 2012 Annual Report of the Company.

Certain amounts in the financial statements have been reclassified.  Such reclassifications had no impact on shareholders’ equity or net income for any period.

Note B - Recent Accounting Pronouncements

In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-01, "Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities." This ASU requires an entity to disclose both the gross and net information about financial instruments, such as derivatives, that are eligible for offset in the balance sheet. ASU No. 2013-01 became effective for the Company on January 1, 2013. The adoption of ASU No. 2013-01 did not have a material impact on the Company's financial statements. See Note I - Derivative Instruments for applicable disclosures.

In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This ASU requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amounts reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 became effective for the Company beginning on January 1, 2013. The adoption of ASU No. 2013-02 did not have a material impact on the Company's financial statements.

In July 2013, the FASB issued ASU No. 2013-10, "Derivatives and Hedging (Topic 815) - Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes." This ASU permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate ("LIBOR"). ASU 2013 is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013 and did not have a material impact on the Company's financial statements.

In July 2013, the FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, subject to certain exceptions. This ASU will become effective for the Company beginning on January 1, 2014. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's financial statements.

11

Note C –Acquisitions

On May 31, 2012, the Company acquired 100% of the outstanding common and preferred stock of Virginia Savings Bancorp, Inc. and its wholly owned subsidiary, Virginia Savings Bank (collectively, “Virginia Savings”).  As a result of this acquisition, the Company acquired five branches which expanded its footprint into Virginia.  At the time of closing, Virginia Savings had total assets of $132 million, loans of $82 million, deposits of $120 million and shareholders’ equity of $11 million.

The total transaction was valued at $12.4 million, consisting of cash of $4.7 million and approximately 240,000 shares of common stock valued at $7.7 million.  The common stock was valued based on the closing price of $32.18 for the Company’s common shares on May 31, 2012.

On January 10, 2013, the Company acquired 100% of the outstanding common and preferred stock of Community Financial Corporation and its wholly owned subsidiary, Community Bank (collectively, "Community"). As a result of this acquisition, the Company acquired eight branches along the I-81 corridor in western Virginia and two branches in Virginia Beach, Virginia. At the time of closing, Community had total assets of $460 million, loans of $410 million, deposits of $380 million and shareholders' equity of $53 million. Community shareholders received 0.1753 shares of the Company's common stock for each share of Community Financial Corporation stock, resulting in the issuance of approximately 767,000 shares of the Company's common stock valued at $27.8 million. The common stock was valued based on the closing price of $36.23 for the Company's common stock on January 9, 2013. In conjunction with this acquisition, the Company repurchased $12.7 million of Community preferred stock previously issued to the U.S. Department of Treasury ("Treasury Department"). A related warrant issued by Community to the Treasury Department has been converted into a warrant to purchase 61,565 shares of the Company's common stock, with an exercise price of $30.80 per share and an expiration period of ten years, which was subsequently reduced to six years. Based on the preliminary purchase price allocation, the Company recorded an estimate of goodwill of $9.3 million and a core deposit intangible of $2.7 million as a result of this acquisition. The Company has recorded estimates of the fair values of the acquired assets and liabilities. These fair value estimates are provisional amounts based on third-party valuations that are currently under review.

12

The purchase price of both acquisitions has been allocated as follows (in thousands):

			(preliminary)
	Virginia Savings		Community		Total
Date of acquisition	May 31, 2012		January 10, 2013
Consideration:
Cash	$	4,672	$	12,738	$	17,410
Common stock	7,723		27,783		35,506
Warrant issued	—		725		725
	$	12,395	$	41,246	$	53,641
Identifiable assets:
Cash and cash equivalents	$	24,943	$	8,888	$	33,831
Investment securities	14,082		17,659		31,741
Loans	73,463		370,754		444,217
Bank owned life insurance	—		6,935		6,935
Premises and equipment	5,158		8,950		14,108
Deferred tax asset, net	4,173		15,228		19,401
Other assets	4,626		7,988		12,614
Total identifiable assets	126,445		436,402		562,847
Identifiable liabilities:
Deposits	122,723		383,070		505,793
Other liabilities	841		24,086		24,927
Total identifiable liabilities	123,564		407,156		530,720
Net identifiable asset	2,881		29,246		32,127
Goodwill	8,241		9,289		17,530
Core deposit intangible	1,273		2,711		3,984
	$	12,395	$	41,246	$	53,641

Acquired Loans

In determining the estimated fair value of the acquired loans, management considered several factors, such as estimated future credit losses, estimated prepayments, remaining lives of the acquired loans, estimated value of the underlying collateral and the net present value of the cash flows expected to be received.  For smaller loans not specifically reviewed, management grouped the loans into their respective homogeneous loan pool and applied a fair value estimate accordingly.

Acquired loans are accounted for using one of the two following accounting standards:

(1) ASC Topic 310-20 is used to value loans that do not have evidence of credit quality deterioration.  For these loans, the difference between the fair value of the loan and the amortized cost of the loan would be amortized or accreted into income using the interest method.

(2) ASC Topic 310-30 is used to value loans that have evidence of credit quality deterioration.  For these loans, the expected cash flows that exceed the fair value of the loan represent the accretable yield, which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans.  The non-accretable difference represents the difference between the contractually required principal and interest payments and the cash flows expected to be collected based upon management’s estimation.  Subsequent decreases in the expected cash flows will require the Company to evaluate the need for additions to the Company’s allowance for loan losses.  Subsequent increases in the expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges with a corresponding adjustment to the accretable yield, which will result in the recognition of additional interest income over the remaining lives of the loans.

13

The following table presents the purchased credit-impaired loans acquired in conjunction with both acquisitions (in thousands):

	Virginia
	Savings			Community			Total
Contractually required principal and interest	$	11,567		$	58,014		$	69,581
Contractual cash flows not expected to be collected (non-accretable difference)	(3,973		)	(20,724		)	(24,697		)
Expected cash flows	7,594			37,290			44,884
Interest component of expected cash flows (accretable difference)	(954		)	(5,587		)	(6,541		)
Estimated fair value of purchased credit impaired loans acquired	$	6,640		$	31,703		$	38,343

Acquired Deposits

The fair values of non-time deposits approximated their carrying value at the acquisition date.  For time deposits, the fair values were estimated based on discounted cash flows, using interest rates that are currently being offered compared to the contractual interest rates.   Based on these analyses, management recorded a premium on time deposits acquired of $2.3 million and $1.1 million, for the Virginia Savings and Community acquisitions, respectively, each of which is being amortized over five years.

Core Deposit Intangible

The Company believes that the customer relationships with the deposits acquired have an intangible value.  In connection with the acquisition, the Company recorded a core deposit intangible asset of $1.3 million and $2.7 million, for Virginia Savings and Community, respectively. Each of the core deposit intangible assets represent the value that the acquiree had with their deposit customers.  The fair value was estimated based on a discounted cash flow methodology that considered type of deposit, deposit retention and the cost of the deposit base.   The core deposit intangible is being amortized over ten years, with an annual charge of less than $0.7 million per year.  The following table presents a rollforward of the Company’s intangible assets from the beginning of the year (in thousands):

	Intangible Assets
Balance, beginning of period	$	2,069
Core deposit intangible acquired in conjunction with the acquisition of Community	2,711
Amortization expense	(779		)
Balance, end of period	$	4,001

Goodwill

Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair values of acquired assets and liabilities.  The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns more information is not obtainable.  Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments during the measurement period will result in adjustments to the goodwill recorded.  The measurement period is limited to one year from the acquisition date.  The goodwill recorded in conjunction with the Virginia Savings and Community acquisitions is not expected to be deductible for tax purposes.  The following table presents a rollforward of goodwill from the beginning of the year (in thousands):

	Goodwill
Balance, beginning of period	$	62,988
Adjustment to goodwill acquired in conjunction with the acquisition of Virginia Savings	142
Goodwill acquired in conjunction with the acquisition of Community	9,289
Balance, end of period	$	72,419

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Merger Related Costs

During the three and nine months ended September 30, 2013, the Company incurred less than $0.1 million and $5.5 million of merger-related costs in connection with the Community acquisition. These costs were primarily for severance ($2.5 million), professional fees ($1.4 million) and data processing costs ($1.1 million).

During the three and nine months ended September 30, 2012, the Company incurred $0.2 million and $4.3 million of merger-related costs in the connection with the Virginia Savings acquisition. These costs were primarily for severance ($0.9 million), professional fees ($0.9 million) and data processing costs ($2.3 million).

Note D –Investments

The amortized cost and estimated fair values of the Company's securities are shown in the following table (in thousands):

	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
U.S. Treasuries and U.S.
government agencies	$	2,511	$	61	$	—	$	2,572	$	3,792	$	96	$	—	$	3,888
Obligations of states and
political subdivisions	41,109		814		74		41,849		47,293		1,651		15		48,929
Mortgage-backed securities:
U.S. government agencies	255,889		3,351		4,601		254,639		279,336		7,231		85		286,482
Private label	2,383		19		2		2,400		3,235		37		—		3,272
Trust preferred
securities	13,456		1,047		2,495		12,008		15,402		55		2,812		12,645
Corporate securities	9,783		172		639		9,316		16,152		207		412		15,947
Total Debt Securities	325,131		5,464		7,811		322,784		365,210		9,277		3,324		371,163
Marketable equity  securities	3,381		1,575		—		4,956		3,381		804		—		4,185
Investment funds	1,525		—		18		1,507		1,724		50		—		1,774
Total Securities
Available-for-Sale	$	330,037	$	7,039	$	7,829	$	329,247	$	370,315	$	10,131	$	3,324	$	377,122

	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities held-to-maturity
Trust preferred securities	$	3,994	$	2,412	$	—	$	6,406	$	13,454	$	465	$	58	$	13,861
Total Securities
Held-to-Maturity	$	3,994	$	2,412	$	—	$	6,406	$	13,454	$	465	$	58	$	13,861
Other investment securities:
Non-marketable equity securities	$	13,344	$	—	$	—	$	13,344	$	11,463	$	—	$	—	$	11,463
Total Other Investment
Securities	$	13,344	$	—	$	—	$	13,344	$	11,463	$	—	$	—	$	11,463

Securities with limited marketability, such as stock in the Federal Reserve Bank or the Federal Home Loan Bank, are carried at cost and are reported as non-marketable equity securities in the table above.

Certain investment securities owned by the Company were in an unrealized loss position (i.e., amortized cost basis exceeded the estimated fair value of the securities).  The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

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	September 30, 2013
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	3,471	$	73	$	448	$	1	$	3,919	$	74
Mortgage-backed securities:
U.S. Government agencies	129,114		4,485		5,217		116		134,331		4,601
Private label	1,604		2		—		—		1,604		2
Trust preferred securities	130		270		4,497		2,225		4,627		2,495
Corporate securities	6,081		639		—		—		6,081		639
Investment funds	1,482		18		—		—		1,482		18
Total	$	141,882	$	5,487	$	10,162	$	2,342	$	152,044	$	7,829

	December 31, 2012
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	1,163	$	15	$	—	$	—	$	1,163	$	15
Mortgage-backed securities:
U.S. Government agencies	16,225		85		—		—		16,225		85
Trust preferred securities	348		51		5,836		2,761		6,184		2,812
Corporate securities	1,950		49		4,344		363		6,294		412
Total	$	19,686	$	200	$	10,180	$	3,124	$	29,866	$	3,324
Securities held-to-maturity:
Trust preferred securities	$	—	$	—	$	3,380	$	58	$	3,380	$	58

Marketable equity securities consist of investments made by the Company in equity positions of various community banks.  Included within this portfolio are meaningful (2-5%) ownership positions in the following community bank holding companies: First National Corporation (FXNC) and First United Corporation (FUNC).

During the nine months ended September 30, 2013, the Company did not record any credit-related net investment impairment losses. During the nine months ended September 30, 2012, the Company recorded $0.6 million in credit-related net investment impairment losses. The charges deemed to be other-than-temporary were related to pooled bank trust preferred securities with a remaining carrying value of $5.6 million at September 30, 2012. The credit-related net impairment charges related to the pooled bank trust preferred securities were based on the Company’s quarterly reviews of its investment securities for indications of losses considered to be other-than-temporary.

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary would be reflected in earnings as realized losses.  In estimating other-than-temporary impairment losses, management considers, among other things (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition, capital strength, and near-term (12 months) prospects of the issuer, including any specific events which may influence the operations of the issuer such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; (iii) the historical volatility in the market value of the investment and/or the liquidity or illiquidity of the investment; (iv) adverse conditions specifically related to the security, an industry, or a geographic area; or (v) the intent to sell the investment security and if it’s more likely than not that the Company will not have to sell the security before recovery of its cost basis.  In addition, management also employs a continuous monitoring process in regards to its marketable equity securities, specifically its portfolio of regional community bank holdings.  Although the regional community bank stocks that are owned by the Company are publicly traded, the trading activity for these stocks is minimal, with trading volumes of less than 0.1% of each respective company being traded on a daily basis.  Another factor influencing the market value of these equity securities is a depressed stock market, particularly in the smaller community bank financial sector.  As part of management’s review process for these securities, management reviews the financial condition of each respective regional community bank for any indications of financial weakness.

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Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company will receive full value for the securities.  Furthermore, as of September 30, 2013, management does not intend to sell an impaired security and it is not more than likely that it will be required to sell the security before the recovery of its amortized cost basis.  The unrealized losses on debt securities are primarily the result of interest rate changes, credit spread widening on agency-issued mortgage related securities, general financial market uncertainty and unprecedented market volatility.  These conditions will not prohibit the Company from receiving its contractual principal and interest payments on its debt securities.  The fair value is expected to recover as the securities approach their maturity date or repricing date.   As of September 30, 2013, management believes the unrealized losses detailed in the table above are temporary and no impairment loss has been recognized in the Company’s consolidated income statement.  Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period of the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income.

At September 30, 2013, the book value of the Company’s five pooled trust preferred securities totaled $4.2 million with an estimated fair value of $2.3 million.  All of these securities are mezzanine tranches.  Pooled trust preferred securities represent beneficial interests in securitized financial assets that the Company analyzes within the scope of ASC 320, “Investments-Debt and Equity Securities” and are evaluated quarterly for other-than-temporary-impairment (“OTTI”).  Management performs an analysis of OTTI utilizing its internal methodology as described below to estimate expected cash flows to be received in the future.  The Company reviews each of its pooled trust preferred securities to determine if an OTTI charge would be recognized in current earnings in accordance with ASC 320, “Investments-Debt and Equity Securities”.  There is a risk that continued collateral deterioration could cause the Company to recognize additional OTTI charges in earnings in the future.

When evaluating pooled trust preferred securities for OTTI, the Company determines a credit related portion and a noncredit related portion.  The credit related portion is recognized in earnings and represents the difference between the present value of expected future cash flows and the amortized cost basis of the security.  The noncredit related portion is recognized in other comprehensive income, and represents the difference between the book value and the fair value of the security less the amount of the credit related impairment.  The determination of whether it is probable that an adverse change in estimated cash flows has occurred is evaluated by comparing estimated cash flows to those previously projected as further described below.  The Company considers this process to be its primary evidence when determining whether credit related OTTI exists.  The results of these analyses are significantly affected by other variables such as the estimate of future cash flows, credit worthiness of the underlying issuers and determination of the likelihood of defaults of the underlying collateral.

The Company utilizes a third party model to compute the present value of expected cash flows which considers the structure and term of each of the five respective pooled trust preferred securities and the financial condition of the underlying issuers.  Specifically, the third party model details interest rates, principal balances of note classes and underlying issuers, the timing and amount of interest and principal payments of the underlying issuers, and the allocation of the payments to the note classes. The current estimate of expected cash flows is based on the most recent trustee reports and any other relevant market information including announcements of interest payment deferrals or defaults of underlying trust preferred securities. For issuing banks that have defaulted, management generally assumes no recovery. For issuing banks that have deferred its interest payments, management excludes the collateral balance associated with these banks and assumes no recoveries of such collateral balance in the future. The exclusion of such issuing banks in a current deferral position is based on such bank experiencing a certain level of financial difficulty that raises doubt about its ability to satisfy its contractual debt obligation, and accordingly, the Company excludes the associated collateral balance from its estimate of expected cash flows. Other assumptions used in the estimate of expected cash flows include expected future default rates and prepayments. Specifically, the model assumes annual prepayments of 1.0% with 100% at maturity and assumes 150 basis points of additional annual defaults from banks that are currently not in default or deferral.  In addition, the model assumes no recoveries except for one trust preferred security which assumes that one of the banks currently deferring will cure such positions.  Management compares the present value of expected cash flows to those previously projected to determine if an adverse change in cash flows has occurred. If an adverse change in cash flows has occurred, management determines the credit loss to be recognized in the current period and the portion related to noncredit factors to be recognized in other comprehensive income.

The following table presents a progression of the credit loss component of OTTI on debt and equity securities recognized in earnings during the nine months ended September 30, 2013 and for the year ended December 31, 2012 (in thousands).  The credit loss component represents the difference between the present value of expected future cash flows and the amortized cost basis of the security.  The credit component of OTTI recognized in earnings during a period is presented in two parts based upon whether the credit impairment in the current period is the first time the security was credit impaired (initial credit impairment) or if there is additional credit impairment on a security that was credit impaired in previous periods.

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	Debt Securities		Equity Securities			Total
Balance at January 1, 2012	$	20,610	$	6,048		$	26,658
Additions:
Initial credit impairment	—		—			—
Additional credit impairment	576		—			576
Deductions:
Called	—		(1,235		)	(1,235		)
Balance at December 31, 2012	21,186		4,813			25,999
Additions:
Initial credit impairment	—		—			—
Additional credit impairment	—		—			—
Deductions:
Called	—		—			—
Balance at September 30, 2013	$	21,186	$	4,813		$	25,999

The following table presents additional information about the Company’s trust preferred securities with a credit rating of below investment grade as of September 30, 2013 (dollars in thousands):

Deal Name		Type	Class	Original Cost		Amortized Cost		Fair Value		Difference (1)		Lowest Credit Rating	# of issuers currently performing	Actual deferrals/defaults (as a % of original dollar)		Expected deferrals/defaults (as a % of remaining of performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (4)
		Pooled trust preferred securities:
		Other-than-temporarily impaired
		Available for Sale:
P1		Pooled	Mezz	$	827	$	268	$	368	100		Caa3	7	19.5	%	21.0	%	(2)	52.5	%
P2		Pooled	Mezz	3,279		436		1,252		816		Ca	6	22.3	%	5.2	%	(2)	23.4	%
P3	(5)	Pooled	Mezz	2,962		1,419		365		(1,054	)	Caa3	22	25.5	%	8.2	%	(2)	12.9	%
P4	(6)	Pooled	Mezz	4,060		400		130		(270	)	Ca	9	19.2	%	7.1	%	(3)	22.8	%
P5		Pooled	Mezz	6,228		826		457		(369	)	Ca	9	26.0	%	21.0	%	(2)	24.7	%
		Held to Maturity:
P6		Pooled	Mezz	1,599		—		737		737		Caa3	7	19.5	%	21.0	%	(2)	52.5	%
P7		Pooled	Mezz	4,354		—		1,669		1,669		Ca	6	22.3	%	5.2	%	(2)	23.4	%
		Single issuer trust preferred securities
		Available for sale:
S5		Single		261		235		289		54		NR	1	—	%	—	%
		Held to Maturity:
S9		Single		4,000		3,994		4,000		6		NR	1	—	%	—	%

(1) The differences noted consist of unrealized gains (losses) recorded at September 30, 2013 and noncredit other-than-temporary impairment losses recorded subsequent to April 1, 2009 that have not been reclassified as credit losses.

(2) Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. This model for this security assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure, thus this bond could recover at a higher percentage upon default than zero.

(3) Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default.  The model for this security assumes that one of the banks that is currently deferring will cure.  If additional underlying issuers cure, this bond could recover at a higher percentage.

(4) Excess subordination is defined as the additional defaults/deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a "break in yield." This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The "percent of current performing collateral" is the ratio of the "excess subordination amount" to current performing collateral—a higher percent means there is more excess subordination to absorb additional defaults/deferrals, and the better our security is protected from loss.

(5) No other-than-temporary impairment losses were recognized during the nine months ended September 30, 2013.  Other-than-temporary impairment losses of $11,000 were recognized during the year ended December 31, 2012.

(6) No other-than-temporary impairment losses were recognized during the nine months ended September 30, 2013.  Other-than-temporary impairment losses of $565,000 were recognized during the year ended December 31, 2012.

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The amortized cost and estimated fair value of debt securities at September 30, 2013, by contractual maturity, are shown in the following table (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.  Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.

	Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	5,566	$	5,581
Due after one year through five years	24,206		24,677
Due after five years through ten years	36,483		37,258
Due after ten years	258,876		255,268
	$	325,131	$	322,784
Securities Held-to-Maturity
Due in one year or less	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	3,994		6,406
	$	3,994	$	6,406

Gross gains and gross losses realized by the Company from investment security transactions are summarized in the table below (in thousands). The specific identification method is used to determine the cost basis of securities sold.

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013		2012			2013		2012
Gross realized gains	$	—	$	830		$	93	$	1,776
Gross realized losses	—		(100		)	—		(246		)
Net investment security gains	$	—	$	730		$	93	$	1,530

The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $266 million and $228 million at September 30, 2013 and December 31, 2012, respectively.

Note E –Loans

The following summarizes the Company’s major classifications for loans (in thousands):

	September 30, 2013			December 31, 2012
Residential real estate	$	1,188,841		$	1,031,435
Home equity – junior liens	140,887			143,110
Commercial and industrial	151,185			108,739
Commercial real estate	1,022,278			821,970
Consumer	50,757			36,564
DDA overdrafts	4,508			4,551
Gross loans	2,558,456			2,146,369
Allowance for loan losses	(20,606		)	(18,809		)
Net loans	$	2,537,850		$	2,127,560

Construction loans of $14.8 million and $15.4 million are included within residential real estate loans at September 30, 2013 and December 31, 2012, respectively.  Construction loans of $17.4 million and $15.4 million are included within commercial real estate loans at September 30, 2013 and December 31, 2012, respectively.  The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets.  These loans were originated

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under the Company’s loan policy, which is focused on the risk characteristics of the loan portfolio, including construction loans.  Adequate consideration has been given to these loans in establishing the Company’s allowance for loan losses.

The information in the following tables related to the Community acquisition are estimated amounts, based on management's assumptions. Once the purchase price allocation is finalized, actual results could be significantly different than those assumed below.

The following table details the loans acquired in conjunction with the Virginia Savings and Community acquisitions (in thousands):

	Virginia
	Savings		Community		Total
September 30, 2013
Outstanding loan balance	$	52,640	$	288,117	$	340,757
Credit-impaired loans:
Carrying value	4,248		24,958		29,206
Contractual principal and interest	5,253		40,896		46,149
December 31, 2012
Outstanding loan balance	$	65,219	$	—	$	65,219
Credit-impaired loans:
Carrying value	7,018		—		7,018
Contractual principal and interest	10,759		—		10,759

Changes in the accretable yield of the credit-impaired loans for the nine months ended September 30, 2013 is as follows (in thousands):

	Virginia Savings						Community						Total
				Carrying						Carrying						Carrying
	Accretable			Amount			Accretable			Amount			Accretable			Amount
	Yield			of Loans			Yield			of Loans			Yield			of Loans
Balance at the beginning of the period	$	1,823		$	7,018		$	—		$	—		$	1,823		$	7,018
Additions	—			—			5,587			31,790			5,587			31,790
Accretion	(844		)	844			(1,665		)	1,665			(2,509		)	2,509
Net reclassifications to accretable yield from
non-accretable yield	889			—			—			—			889			—
Payments received, net	—			(3,585		)	—			(8,497		)	—			(12,082		)
Disposals	(604		)	(29		)	(344		)	—			(948		)	(29		)
Balance at the end of period	$	1,264		$	4,248		$	3,578		$	24,958		$	4,842		$	29,206

Increases in expected cash flow subsequent to the acquisition are recognized first as a reduction of any previous impairment, then prospectively through adjustment of the yield on the loans or pools over its remaining life, while decreases in expected cash flows are recognized as impairment through a provision for loan loss and an increase in the allowance for purchased credit-impaired loans.

Note F – Allowance For Loan Losses

Management systematically monitors the loan portfolio and the adequacy of the allowance for loan losses on a quarterly basis to provide for probable losses inherent in the portfolio.  Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors.

Individual credits are selected throughout the year for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the adequacy of the allowance.  Due to the nature of commercial lending, evaluation of the adequacy

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of the allowance as it relates to these types of loan types is often based more upon specific credit reviews, with consideration given to the potential impairment of certain credits and historical loss rates, adjusted for economic conditions and other inherent risk factors.

The following summarizes the activity in the allowance for loan loss, by portfolio segment, for the nine months ended September 30, 2013 and 2012 (in thousands).  The following also presents the balance in the allowance for loan loss disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans, by portfolio segment, as of September 30, 2013 and December 31, 2012 (in thousands).

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	Commercial &		Commercial		Residential						DDA
	Industrial		Real Estate		Real Estate		Home equity		Consumer		Overdrafts		Total
Nine months ended September 30, 2013
Allowance for loan loss
Beginning balance	$	498	$	10,440	$	5,229	$	1,699	$	81	$	862	$	18,809
Charge-offs	772		803		1,598		278		326		1,102		4,879
Recoveries	51		669		137		—		242		674		1,773
Provision	1,460		201		2,481		268		79		414		4,903
Ending balance	$	1,237	$	10,507	$	6,249	$	1,689	$	76	$	848	$	20,606
Nine months ended September 30, 2012
Allowance for loan loss
Beginning balance	$	590	$	11,666	$	3,591	$	2,773	$	88	$	701	$	19,409
Charge-offs	126		2,860		746		989		148		1,128		5,997
Recoveries	12		100		15		12		90		745		974
Provision	45		1,684		955		1,250		75		591		4,600
Ending balance	$	521	$	10,590	$	3,815	$	3,046	$	105	$	909	$	18,986
As of September 30, 2013
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	880	$	—	$	—	$	—	$	—	$	880
Collectively	1,237		9,537		6,249		1,689		76		848		19,636
Acquired with deteriorated
credit quality	—		90		—		—		—		—		90
Total	$	1,237	$	10,507	$	6,249	$	1,689	$	76	$	848	$	20,606
Loans
Evaluated for impairment:
Individually	$	—	$	12,082	$	461	$	297	$	—	$	—	$	12,840
Collectively	148,262		987,711		1,186,995		138,285		50,649		4,508		2,516,410
Acquired with deteriorated
credit quality	2,923		22,485		1,385		2,305		108		—		29,206
Total	$	151,185	$	1,022,278	$	1,188,841	$	140,887	$	50,757	$	4,508	$	2,558,456
As of December 31, 2012
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively	498		10,440		5,229		1,699		81		862		18,809
Acquired with deteriorated
credit quality	—		—		—		—		—		—		—
Total	$	498	$	10,440	$	5,229	$	1,699	$	81	$	862	$	18,809
Loans
Evaluated for impairment:
Individually	$	—	$	9,912	$	469	$	298	$	—	$	—	$	10,679
Collectively	107,044		807,060		1,030,840		142,724		36,453		4,551		2,128,672
Acquired with deteriorated
credit quality	1,695		4,998		126		88		111		—		7,018
Total	$	108,739	$	821,970	$	1,031,435	$	143,110	$	36,564	$	4,551	$	2,146,369

22

Credit Quality Indicators

All commercial loans within the portfolio are subject to internal risk grading.  All non-commercial loans are evaluated based on payment history.  The Company’s internal risk ratings for commercial loans are:  Pass, Special Mention, Substandard and Doubtful.  Each internal risk rating is defined in the loan policy using the following criteria:  balance sheet yields, ratios and leverage, cash flow spread and coverage, prior history, capability of management, market position/industry, potential impact of changing economic, legal, regulatory or environmental conditions, purpose structure, collateral support, and guarantor support.  Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process.  Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of probable loss.

The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity, overall collateral position along with other economic trends, and historical payment performance.  The risk grades for each credit are updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review/credit administration departments, or the loan becomes delinquent or impaired.  The risk grades are updated a minimum of annually for loans rated exceptional, good, acceptable, or pass/watch.  Loans rated special mention, substandard or doubtful are reviewed at least quarterly.  The Company uses the following definitions for its risk ratings:

Risk Rating	Description
Pass ratings:
(a) Exceptional	Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy.  Loans rated within this category pose minimal risk of loss to the bank and the risk grade within this pool of loans is generally updated on an annual basis.
(b) Good	Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles.  Loans within this category are generally reviewed on an annual basis.  Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable	Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles.  Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch	Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk.  A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention	Loans classified as special mention have a potential weakness(es) that deserves management’s close attention.  The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date.  A loan rated in this category poses a moderate loss risk to the bank.
Substandard	Loans classified as substandard reflect a customer with a well defined weakness that jeopardizes the liquidation of the debt.  Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful	Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable.  Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.

The following presents loans by the Company’s commercial loans by credit quality indicators, by class (in thousands):

23

	Commercial and industrial		Commercial real estate		Total
September 30, 2013
Pass	$	140,999	$	939,942	$	1,080,941
Special mention	693		23,123		23,816
Substandard	9,057		58,720		67,777
Doubtful	436		493		929
Total	$	151,185	$	1,022,278	$	1,173,463
December 31, 2012
Pass	$	105,690	$	771,617	$	877,307
Special mention	878		15,015		15,893
Substandard	2,171		35,338		37,509
Doubtful	—		—		—
Total	$	108,739	$	821,970	$	930,709

The following table presents the Company's non-commercial loans by payment performance, by class (in thousands):

	Performing		Non-Performing		Total
September 30, 2013
Residential real estate	$	1,185,616	$	3,225	$	1,188,841
Home equity - junior lien	140,769		118		140,887
Consumer	50,710		47		50,757
DDA overdrafts	4,506		2		4,508
Total	$	1,381,601	$	3,392	$	1,384,993
December 31, 2012
Residential real estate	$	1,029,142	$	2,293	$	1,031,435
Home equity - junior lien	141,961		1,149		143,110
Consumer	36,564		—		36,564
DDA overdrafts	4,548		3		4,551
Total	$	1,212,215	$	3,445	$	1,215,660

Aging Analysis of Accruing and Non-Accruing Loans

Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return.  Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan.  The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types.  However, any loan may be placed on non-accrual if the Company receives information that indicates a borrower is unable to meet the contractual terms of their respective loan agreement.  Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable.  When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for loan losses.  Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection.

Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured.  Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid.  Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment.  Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus

24

the outstanding loan balance.  Commercial loans are generally charged off when the loan becomes 120 days past due.  Open-end consumer loans are generally charged off when the loan becomes 180 days past due.

A loan acquired and accounted for under ASC Topic 310-30 is reported as an accruing loan and a performing asset provided that the loan is performing in accordance with the initial expectations. The loan would be considered non-performing if the loan's performance deteriorates below the initial expectations.

The following presents an aging analysis of the Company’s accruing and non-accruing loans, by class, as of September 30, 2013 and December 31, 2012 (in thousands):

	Originated Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,072,148	$	4,484	$	696	$	234	$	—	$	2,286	$	1,079,848
Home equity - junior lien	139,614		716		5		11		—		107		140,453
Commercial and industrial	127,856		5		—		—		—		303		128,164
Commercial real estate	816,383		408		204		—		—		13,540		830,535
Consumer	34,095		86		10		—		—		—		34,191
DDA overdrafts	4,228		270		8		2		—		—		4,508
Total	$	2,194,324	$	5,969	$	923	$	247	$	—	$	16,236	$	2,217,699
	Acquired Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	107,321	$	848	$	119	$	65	$	—	$	640	$	108,993
Home equity - junior lien	411		23		—		—		—		—		434
Commercial and industrial	20,504		202		40		59		1,865		351		23,021
Commercial real estate	180,111		1,261		178		—		5,885		4,308		191,743
Consumer	15,863		579		77		47		—		—		16,566
DDA overdrafts	—		—		—		—		—		—		—
Total	$	324,210	$	2,913	$	414	$	171	$	7,750	$	5,299	$	340,757
	Total Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,179,469	$	5,332	$	815	$	299	$	—	$	2,926	$	1,188,841
Home equity - junior lien	140,025		739		5		11		—		107		140,887
Commercial and industrial	148,360		207		40		59		1,865		654		151,185
Commercial real estate	996,494		1,669		382		—		5,885		17,848		1,022,278
Consumer	49,958		665		87		47		—		—		50,757
DDA overdrafts	4,228		270		8		2		—		—		4,508
Total	$	2,518,534	$	8,882	$	1,337	$	418	$	7,750	$	21,535	$	2,558,456
	Originated Loans
	December 31, 2012
	Accruing

25

	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,008,190	$	4,910	$	599	$	239	$	—	$	2,054	$	1,015,992
Home equity - junior lien	132,847		2,379		477		37		—		1,112		136,852
Commercial and industrial	105,989		260		236		—		—		98		106,583
Commercial real estate	766,404		433		199		1		—		15,930		782,967
Consumer	34,084		113		8		—		—		—		34,205
DDA overdrafts	4,270		270		8		3		—		—		4,551
Total	$	2,051,784	$	8,365	$	1,527	$	280	$	—	$	19,194	$	2,081,150
	Acquired Loans
	December 31, 2012
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	15,443	$	—	$	—	$	—	$	—	$	—	$	15,443
Home equity - junior lien	6,258		—		—		—		—		—		6,258
Commercial and industrial	1,152		—		—		—		1,004		—		2,156
Commercial real estate	37,210		9		47		—		1,737		—		39,003
Consumer	2,359		—		—		—		—		—		2,359
DDA overdrafts	—		—		—		—		—		—		—
Total	$	62,422	$	9	$	47	$	—	$	2,741	$	—	$	65,219
	Total Loans
	December 31, 2012
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,023,633	$	4,910	$	599	$	239	$	—	$	2,054	$	1,031,435
Home equity - junior lien	139,105		2,379		477		37		—		1,112		143,110
Commercial and industrial	107,141		260		236		—		1,004		98		108,739
Commercial real estate	803,614		442		246		1		1,737		15,930		821,970
Consumer	36,443		113		8		—		—		—		36,564
DDA overdrafts	4,270		270		8		3		—		—		4,551
Total	$	2,114,206	$	8,374	$	1,574	$	280	$	2,741	$	19,194	$	2,146,369

The following presents the Company’s impaired loans, by class, as of September 30, 2013 and December 31, 2012 (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off.

26

	September 30, 2013						December 31, 2012
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate	$	461	$	461	$	—	$	469	$	469	$	—
Home equity - junior liens	297		297		—		298		298		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	8,575		10,455		—		9,912		14,781		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	9,333	$	11,213	$	—	$	10,679	$	15,548	$	—
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	3,507		5,307		880		—		—		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	3,507	$	5,307	$	880	$	—	$	—	$	—

The following table presents information related to the average recorded investment and interest income recognized on the Company’s impaired loans, by class (in thousands):

	For the nine months ended
	September 30, 2013				September 30, 2012
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Residential real estate	$	464	$	—	$	—	$	—
Home equity - junior liens	297		—		—		—
Commercial and industrial	—		—		81		4
Commercial real estate	9,200		24		7,472		232
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	9,961	$	24	$	7,553	$	236
With an allowance recorded
Residential real estate	$	—	$	—	$	1,254	$	36
Home equity - junior liens	—		—		1,354		30
Commercial and industrial	—		—		203		7
Commercial real estate	3,277		—		11,197		378
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	3,277	$	—	$	14,008	$	451

     Approximately $0.4 million and $0.7 million of interest income would have been recognized during the nine months ended September 30, 2013 and 2012, if such loans had been current in accordance with their original terms.  There were no commitments to provide additional funds on non-accrual, impaired or other potential problem loans at September 30, 2013.

27

Loan Modifications

The Company’s policy on loan modifications typically does not allow for modifications that would be considered a concession from the Company.  However, when there is a modification, the Company evaluates each modification to determine if the modification constitutes a troubled debt restructuring (“TDR”) in accordance with ASU 2011-2, whereby a modification of a loan would be considered a TDR when both of the following conditions are met: (1) a borrower is experiencing financial difficulty and (2) the modification constitutes a concession.  When determining whether the borrower is experiencing financial difficulties, the Company reviews whether the debtor is currently in payment default on any of its debt or whether it is probable that the debtor would be in payment default in the foreseeable future without the modification.  Other indicators of financial difficulty include whether the debtor has declared or is in the process of declaring bankruptcy, the debtor’s ability to continue as a going concern, or the debtor’s projected cash flow to service its debt (including principal and interest) in accordance with the contractual terms for the foreseeable future, without a modification.

During the third quarter of 2012, regulatory guidance was clarified to require 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. The filing of bankruptcy is deemed to be evidence that the borrower is in financial difficulty and the discharge of the debt by the bankruptcy court is deemed to be a concession granted to the borrower. The impact on the allowance for loan losses of this reclassification was insignificant. Prior to this reclassification, the Company's TDRs were insignificant.

The following tables set forth the Company’s TDRs (in thousands):

	September 30, 2013						December 31, 2012
			Non-						Non-
	Accruing		Accruing		Total		Accruing		Accruing		Total
Commercial and industrial	$	91	$	—	$	91	$	101	$	—	$	101
Commercial real estate	1,567		—		1,567		734		—		734
Residential real estate	19,416		964		20,380		15,083		162		15,245
Home equity	2,758		14		2,772		7,068		418		7,486
Consumer	—		—		—		142		—		142
	$	23,832	$	978	$	24,810	$	23,128	$	580	$	23,708

	New TDRs					New TDRs
	For the nine months ended					For the nine months ended
	September 30, 2013					September 30, 2012
		Pre		Post			Pre		Post
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	1	$	91	$	91	—	$	—	$	—
Commercial real estate	3	1,567		1,567		—	—		—
Residential real estate	30	2,808		2,808		—	—		—
Home equity	12	323		323		—	—		—
Consumer	—	—		—		1	144		144
	46	$	4,789	$	4,789	1	$	144	$	144

Note G – Previously Securitized Loans

Between 1997 and 1999, the Company completed six securitization transactions involving approximately $760 million in 125% of fixed rate, junior-lien underlying mortgages.  The Company retained a financial interest in each of the securitizations until 2004.  Principal amounts owed to investors were evidenced by securities (“Notes”).  During 2003 and 2004, the Company

28

exercised its early redemption options on each of those securitizations.  Once the Notes were redeemed, the Company became the beneficial owner of the mortgage loans and recorded the loans as assets of the Company within the loan portfolio.

As the Company redeemed the outstanding Notes, no gain or loss was recognized in the Company’s financial statements and the remaining mortgage loans were recorded in the Company’s loan portfolio as “previously securitized loans,” at the lower of carrying value or fair value.  Because the carrying value of the mortgage loans incorporated assumptions for expected prepayment and default rates, the carrying value of the loans was generally less than the actual outstanding contractual balance of the loans.  As of September 30, 2013, there is no carrying value remaining on these loans, while the actual contractual balances of these loans were $6.5 million.  During the three and nine months ended September 30, 2013 and 2012, the Company recognized $0.6 million and $2.0 million and $0.8 million and $2.4 million, respectively, of interest income from its previously securitized loans.

Note H – Long-Term Debt

The components of long-term debt are summarized below (in thousands):

	September 30, 2013		December 31, 2012
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.75% and 3.89%, respectively	$	16,495	$	16,495

The Company formed a statutory business trust, City Holding Capital Trust III (“Capital Trust III”), under the laws of Delaware.  Capital Trust III was created for the exclusive purpose of (i) issuing trust-preferred capital securities (“Capital Securities”), which represent preferred undivided beneficial interests in the assets of the trust, (ii) using the proceeds from the sale of the Capital Securities to acquire junior subordinated debentures (“Debentures”) issued by the Company, and (iii) engaging in only those activities necessary or incidental thereto.  The trust is considered a variable interest entity for which the Company is not the primary beneficiary.  Accordingly, the accounts of the trusts are not included in the Company’s consolidated financial statements.

Distributions on the Debentures are cumulative and will be payable quarterly at an interest rate of 3.50% over the three month LIBOR rate, reset quarterly.  Interest payments are due in March, June, September and December.  The Debentures are redeemable prior to maturity at the option of the Company (i) in whole or at any time or in part from time-to-time, at declining redemption prices ranging from 103.525% to 100.000% on June 15, 2013, and thereafter, or (ii) in whole, but not in part, at any time within 90 days following the occurrence and during the continuation of certain pre-defined events.

Payments of distributions on the trust preferred securities and payments on redemption of the trust preferred securities are guaranteed by the Company.  The Company also entered into an agreement as to expenses and liabilities with the trust pursuant to which it agreed, on a subordinated basis, to pay any cost, expenses or liabilities of the trust other than those arising under the trust preferred securities.  The obligations of the Company under the junior subordinated debentures, the related indentures, the trust agreement establishing the trust, the guarantees and the agreements as to expenses and liabilities, in the aggregate, constitute a full and unconditional guarantee by the Company of the trust’s obligations under the trust preferred securities.  The Capital Securities issued by the statutory business trusts qualify as Tier 1 capital for the Company under current Federal Reserve Board guidelines.

Note I – Derivative Instruments

As of September 30, 2013 and December 31, 2012, the Company has derivative financial instruments not included in hedge relationships.  These derivatives consist of interest rate swaps used for interest rate management purposes and derivatives executed with commercial banking customers to facilitate their interest rate management strategies.

The following table summarizes the fair value of these derivative instruments (in thousands):

Fair Value:	September 30, 2013		December 31, 2012
Other Assets	$	5,810	$	14,012
Other Liabilities	5,810		14,012

The following table summarizes the change in fair value of these derivative instruments (in thousands):

29

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Change in Fair Value:
Other income - derivative asset	$	(86	)	$	581		$	(7,876	)	$	2,839
Other income - derivative liability	86			(581		)	7,876			(2,839		)

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with financial institution counterparties are generally executed under International Swaps and Derivative Association ("ISDA") master agreements which include "right of setoff" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset financial instruments for financial reporting purposes. Information about financial instruments that are eligible for offset in the consolidated balance sheet as of September 30, 2013 is presented in the following tables (in thousands):

Gross Amounts

Not Offset in the Statement

of Financial Position

Total

of Gross

Amounts

Not Offset in

the Statement

of Financial

Position

Netting

Including

Gross

Net Amounts

Adjustment

Applicable

Amounts

of Assets

per

Netting

Gross

Offset in the

presented in

Applicable

Agreement

Amounts of

Statement of

the Statement

Master

Fair Value

and Fair

Recognized

Financial

of Financial

Netting

of Financial

Value of

Description

Assets

Position

Position

Arrangements

Collateral

Collateral

Net Amount

(a)

(b)

(c)=(a)-(b)

(d)

(c)-(d)

Derivative assets:

Interest rate swap agreements

$

5,810

$

—

$

5,810

$

—

$

5,810

$

5,810

$

—

30

Gross Amounts

Not Offset in the Statement

of Financial Position

Total

of Gross

Amounts

Not Offset in

the Statement

of Financial

Position

Netting

Including

Gross

Net Amounts

Adjustment

Applicable

Amounts

of Liabilities

per

Netting

Gross

Offset in the

presented in

Applicable

Agreement

Amounts of

Statement of

the Statement

Master

Fair Value

and Fair

Recognized

Financial

of Financial

Netting

of Financial

Value of

Description

Liabilities

Position

Position

Arrangements

Collateral

Collateral

Net Amount

(a)

(b)

(c)=(a)-(b)

(d)

(c)-(d)

Derivative liabilities:

Interest rate swap agreements

$

5,810

$

—

$

5,810

$

—

$

13,331

$

13,331

$

—

Note J – Employee Benefit Plans

Pursuant to the terms of the City Holding Company 2003 Incentive Plan and the City Holding Company 2013 Incentive Plan (the "2003 Plan” and "2013 Plan", respectively), the Compensation Committee of the Board of Directors, or its delegate, may, from time-to-time, grant stock options, stock appreciation rights (“SARs”), or stock awards to employees, directors and individuals who provide service to the Company (collectively, "Plan Participants").  The 2003 Plan expired in April of 2013 and the 2013 Plan was approved by the shareholders in April 2013. A maximum of 750,000 shares of the Company’s common stock may be issued upon the exercise of stock options, SARs and stock awards.  These limitations may be adjusted in the event of a change in the number of outstanding shares of common stock by reason of a stock dividend, stock split or other similar event.  Specific terms of options and SARs awarded, including vesting periods, exercise prices (stock price at date of grant) and expiration dates are determined at the date of grant and are evidenced by agreements between the Company and the awardee.  The exercise price of the option grants equals the market price of the Company’s stock on the date of grant.  All incentive stock options and SARs will be exercisable up to 10 years from the date granted and all options and SARs are exercisable for the period specified in the individual agreement.

Each award from the Plan is evidenced by an award agreement that specifies the option price, the duration of the option, the number of shares to which the option pertains, and such other provisions as the Compensation Committee, or its delegate, determines.  The option price for each grant is equal to the fair market value of a share of the Company’s common stock on the date of the grant.  Options granted expire at such time as the Compensation Committee, or its delegate, determines at the date of the grant and in no event does the exercise period exceed a maximum of ten years.  Upon a change-in-control of the Company, as defined in the Plan, all outstanding options and awards shall immediately vest.

Stock Options

A summary of the Company’s stock option activity and related information is presented below:

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	Nine months ended September 30,
	2013				2012
	Options		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
Outstanding at January 1	289,544		$	34.38	293,817		$	33.95
Granted	15,475		37.74		16,876		35.39
Exercised	(107,140	)	33.36		(18,899	)	28.78
Forfeited	(2,250	)	34.73		(1,500	)	34.73
Outstanding at September 30	195,629		$	35.19	290,294		$	34.37

Additional information regarding stock options outstanding and exercisable at September 30, 2013, is provided in the following table:

Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Months)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Months)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
$26.62 - $33.90	72,028	$	30.70	53	$	903	22,860	$	31.86	20	$	260
$35.09 - $40.88	123,601	37.81		64	671		75,250	38.95		39	323
	195,629				$	1,574	98,110				$	583

Proceeds from stock option exercises were $2.9 million and $0.5 million during the nine months ended September 30, 2013 and 2012, respectively. Shares issued in connection with stock option exercises are issued from available treasury shares. If no treasury shares are available, new shares are issued from available authorized shares. During the nine months ended September 30, 2013 and 2012 all shares issued in connection with stock option exercises and restricted stock awards were issued from available treasury stock.

The total intrinsic value of stock options exercised was $0.6 million and less than $0.1 million during the nine months ended September 30, 2013 and 2012, respectively.

Stock-based compensation expense was approximately $0.2 million for both the nine months ended September 30, 2013 and 2012.  Unrecognized stock-based compensation expense related to stock options approximated $0.4 million at September 30, 2013. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.7 years.

The fair value of the options is estimated at the date of grant using a Black-Scholes option-pricing model.   The following weighted average assumptions were used to estimate the fair value of options granted:

	Nine months ended September 30,
	2013		2012
Risk-free interest rate	1.88	%	2.51	%
Expected dividend yield	3.70	%	3.90	%
Volatility factor	41.35	%	48.40	%
Expected life of option	8.0 years		5.0 years

Restricted Shares

The Company records compensation expense with respect to restricted shares in an amount equal to the fair value of the common stock covered by each award on the date of grant. The restricted shares awarded become fully vested after various periods of continued employment from the respective dates of grant. The Company is entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Compensation is being charged to expense over the respective vesting periods.

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Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions. The Company records forfeitures of restricted stock as treasury share repurchases and any compensation cost previously recognized is reversed in the period of forfeiture.  Recipients of restricted shares do not pay any cash consideration to the Company for the shares, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested.  Stock-based compensation expense related to restricted shares was approximately $0.6 million and $0.5 million for the nine months ended September 30, 2013 and 2012, respectively.  Unrecognized stock-based compensation expense related to non-vested restricted shares was $2.9 million at September 30, 2013. At September 30, 2013, this unrecognized expense is expected to be recognized over 4.1 years years based on the weighted average-life of the restricted shares.

A summary of the Company’s restricted shares activity and related information is presented below:

	Nine months ended September 30,
	2013				2012
	Restricted Awards		Average Market Price at Grant		Restricted Awards		Average Market Price at Grant
Outstanding at January 1	116,711				108,209
Granted	35,083		$	38.07	23,336		$	34.94
Forfeited/Vested	(9,325	)			(13,234	)
Outstanding at September 30	142,469				118,311

Benefit Plans

The Company provides retirement benefits to its employees through the City Holding Company 401(k) Plan and Trust (“the 401(k) Plan”), which is intended to be compliant with Employee Retirement Income Security Act (ERISA) section 404(c). The Company’s total expense associated with the retirement benefit plan approximated $0.6 million and $0.5 million for the nine months ended September 30, 2013 and 2012, respectively.

The Company maintains two defined benefit pension plan (“the Defined Benefit Plans”), which were inherited from the Company's acquisition of the plan sponsors (Classic Bancshares, Inc. and Community Financial Corporation). The Classic Defined Benefit Plan was frozen in 1999 and maintains a December 31st year-end for purposes of computing its benefit obligations. The Community Defined Benefit Plan was frozen as of December 31, 2012 and maintains a March 31st year-end for purposes of computing its benefit obligations. The Company made contributions of approximately $0.5 million and $0.6 million to the Defined Benefit Plans during the nine months ended September 30, 2013 and 2012, respectively.

The following table presents the components of the net periodic pension cost of the Defined Benefit Plans (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Components of net periodic cost:
Interest cost	$	217		$	158		$	549		$	476
Expected return on plan assets	(276		)	(203		)	(695		)	(607		)
Net amortization and deferral	267			174			732			522
Net Periodic Pension Cost	$	208		$	129		$	586		$	391

Note K – Commitments and Contingencies

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  The Company has entered into agreements with its customers to extend credit or provide a conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment.  Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Company’s discretion.  Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The funded portion of these financial instruments is reflected in the Company’s balance sheet, while the unfunded portion of these commitments is

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not reflected in the balance sheet.  The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):

	September 30, 2013		December 31, 2012
Commitments to extend credit:
Home equity lines	$	179,588	$	156,274
Commercial real estate	36,919		33,869
Other commitments	199,323		171,670
Standby letters of credit	14,450		16,743
Commercial letters of credit	1,189		425

Loan commitments and standby and commercial letters of credit have credit risks essentially the same as that involved in extending loans to customers and are subject to the Company’s standard credit policies. Collateral is obtained based on management’s credit assessment of the customer. Management does not anticipate any material losses as a result of these commitments.

The Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately decided. There can be no assurance that current actions will have immaterial results, either positive or negative, or that no material actions may be presented in the future.

Note L – Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the nine months ended September 30, 2013 and 2012 is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined Federal and state income tax rate approximating 37%.

	Accumulated Other Comprehensive Loss
				Unrealized
				Gains (Losses) on
	Defined Benefit			Securities
	Pension Plans			Available-for-Sale			Total
Balance at December 31, 2011	$	(4,732	)	$	825		$	(3,907	)
Other comprehensive income before reclassifications	—			4,137			4,137
Amounts reclassified from other comprehensive loss	—			(595		)	(595		)
	—			3,542			3,542
Balance at September 30, 2012	$	(4,732	)	$	4,367		$	(365	)
Balance at December 31, 2012	$	(4,995	)	$	3,573		$	(1,422	)
Other comprehensive income before reclassifications	—			(4,693		)	(4,693		)
Amounts reclassified from other comprehensive loss	—			(59		)	(59		)
	—			(4,752		)	(4,752		)
Balance at September 30, 2013	$	(4,995	)	$	(1,179	)	$	(6,174	)

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	Amount reclassified from Other Comprehensive Loss
	Three months ended					Nine months ended						Affected line item
	September 30,					September 30,						in the Statements
	2013		2012			2013			2012			of Income
Securities available-for-sale:
Net securities (gains) losses reclassified into earnings	$	—	$	(458	)	$	(93	)	$	(954	)	Security gains (losses)
Related income tax expense (benefit)	—		172			34			359			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(286	)	$	(59	)	$	(595	)

Note M – Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Distributed earnings allocated to  common stock	$	5,767	$	5,150	$	17,302	$	15,451
Undistributed earnings allocated to common stock	8,081		5,373		17,349		12,375
Net earnings allocated to common shareholders	$	13,848	$	10,523	$	34,651	$	27,826
Average shares outstanding	15,608		14,751		15,545		14,700
Effect of dilutive securities:
Warrants outstanding	62		—		60		—
Employee stock awards	120		83		108		83
Shares for diluted earnings per share	15,790		14,834		15,713		14,783
Basic earnings per share	$	0.89	$	0.71	$	2.23	$	1.89
Diluted earnings per share	$	0.88	$	0.71	$	2.21	$	1.88

Options to purchase approximately 124,000 shares of common stock at an exercise price between $35.09 and $40.88 per share were outstanding during the third quarter of 2012 but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares and therefore, the effect would have been anti-dilutive.  During the third quarter of 2013, there were no anti-dilutive options outstanding.

Note N – Fair Value Measurements

Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market

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data.  If such information is not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.  The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.  Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amount presented herein.  A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Assets and Liabilities

The Company used the following methods and significant assumptions to estimate fair value for financial assets and liabilities measured on a recurring basis.

Securities Available for Sale.  Securities available for sale are reported at fair value utilizing Level 1, Level 2, and Level 3 inputs.  The fair value of securities available for sale is determined by utilizing a market approach by obtaining quoted prices on nationally recognized securities exchanges (other than forced or distressed transactions) that occur in sufficient volume or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.  If such measurements are unavailable, the security is classified as Level 3.  Significant judgment is required to make this determination.

The Company utilizes a third party pricing service provider to value its Level 1 and Level 2 investment securities.  Annually, the Company obtains an independent auditor’s report from its third party pricing service provider regarding its controls over investment securities.  Although no control deficiencies were noted, the report did contain caveats and disclaimers regarding the pricing information, such as the Company should review fair values for reasonableness.  On a quarterly basis, the Company selects a sample of its debt securities and reprices those securities with a third party that is independent of the primary pricing service provider to verify the reasonableness of the fair values. In addition, the Company selects a sample of securities and reviews the underlying support from the primary pricing service provider.

The Company has determined that its pooled trust preferred securities should be priced using Level 3 inputs in accordance with ASC Topic 820 and guidance issued by the SEC.  The Company has determined that there are few observable transactions and market quotations available for pooled trust preferred securities and they are not reliable for purposes of determining fair value at September 30, 2013.  Due to these circumstances, the Company has elected to utilize an income valuation approach produced by a third party pricing source.  This third party model utilizes deferral and default probabilities for the underlying issuers, estimated prepayment rates and assumes no future recoveries of any defaults or deferrals.  The Company then compares the values provided by the third party model with other external sources.  At such time as there are observable transactions or quoted prices that are associated with an orderly and active market for pooled trust preferred securities, the Company will incorporate such market values in its estimate of fair values for these securities.

Derivatives.Derivatives are reported at fair value utilizing Level 2 inputs.  The Company utilizes a market approach by obtaining dealer quotations to value its customer interest rate swaps.  The Company’s derivatives are included within its Other Assets and Other Liabilities in the accompanying consolidated balance sheets. Derivative assets are typically secured through securities with financial counterparties or cross collateralization with a borrowing customer. Derivative liabilities are typically secured through the Company pledging securities to financial counterparties or, in the case of a borrowing customer, by the right of setoff. The Company considers such factors such as the likelihood of default by itself and its counterparties, right of setoff, and remaining maturities in determining the appropriate fair value adjustments. All derivative counterparties approved by the Company's Asset and Liability Committee ("ALCO") are regularly reviewed, and appropriate business action is taken to adjust the exposure to certain counterparties, if necessary. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of marketable collateral securing the position. This approach used to estimate impacted exposures to counterparties is also used by the Company to estimate its own credit risk in derivative liability positions. To date, no material losses have been incurred due to a counterparty's inability to pay any undercollateralized position. There was no significant change in the value of derivative assets and liabilities attributed to credit risk during the three and nine months ended September 30, 2013.

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The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis.  Financial assets measured at fair value on a nonrecurring basis include impaired loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.  Collateral values are estimated using Level 2 inputs based on observable market data for real estate collateral or Level 3 inputs for non-real estate collateral.  The following table presents assets and liabilities measured at fair value (in thousands):

	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
September 30, 2013
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	2,572	$	—	$	2,572	$	—
Obligations of states and political subdivisions	41,849		—		41,849		—
Mortgage-backed securities:
U.S. Government agencies	254,639		—		254,639		—
Private label	2,400		—		2,400		—
Trust preferred securities	12,008		—		9,223		2,785
Corporate securities	9,316		—		9,316		—
Marketable equity securities	4,956		4,956		—		—
Investment funds	1,507		1,507		—		—
Derivative assets	5,810		—		5,810		—
Financial Liabilities
Derivative liabilities	5,810		—		5,810		—
Nonrecurring fair value measurements
Impaired loans	$	11,960	$	—	$	—	$	11,960	$	(880	)
Other real estate owned	7,518		—		—		7,518		(1,058		)
December 31, 2012
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	3,888	$	—	$	3,888	$	—
Obligations of states and political subdivisions	48,929		—		48,929		—
Mortgage-backed securities:
U.S. Government agencies	286,482		—		286,482		—
Private label	3,272		—		3,272		—
Trust preferred securities	12,645		—		10,260		2,385
Corporate securities	15,947		—		15,947		—
Marketable equity securities	4,185		4,185		—		—
Investment funds	1,774		1,774		—		—
Derivative assets	14,012		—		14,012		—
Financial Liabilities
Derivative liabilities	14,012		—		14,012		—
Nonrecurring fair value measurements
Impaired loans	$	10,679	$	—	$	—	$	10,679	$	—
Other real estate owned	$	8,162	$	—	$	—	$	8,162	$	(1,021	)
Other assets	$	1,000	$	—	$	1,000	$	—	$	(288	)

The table below presents a reconcilement of the Company’s financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

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	Nine months ended September 30,
	2013			2012
Beginning balance	$	2,385		$	1,982
Impairment losses on investment securities	—			(576		)
Included in other comprehensive income	2,176			940
Dispositions	(1,776		)	—
Transfers into Level 3	—			—
Ending Balance	$	2,785		$	2,346

The Company utilizes a third party model to compute the present value of expected cash flows which considers the structure and term of each of the five respective pooled trust preferred securities and the financial condition of the underlying issuers.  Specifically, the third party model details interest rates, principal balances of note classes and underlying issuers, the timing and amount of interest and principal payments of the underlying issuers, and the allocation of the payments to the note classes. The current estimate of expected cash flows is based on the most recent trustee reports and any other relevant market information including announcements of interest payment deferrals or defaults of underlying trust preferred securities. For issuing banks that have defaulted, management generally assumes no recovery. For issuing banks that have deferred its interest payments, management excludes the collateral balance associated with these banks and assumes no recoveries of such collateral balance in the future. The exclusion of such issuing banks in a current deferral position is based on such bank experiencing a certain level of financial difficulty that raises doubt about its ability to satisfy its contractual debt obligation, and accordingly, the Company excludes the associated collateral balance from its estimate of expected cash flows. Other assumptions used in the estimate of expected cash flows include expected future default rates and prepayments. Specifically, the model assumes annual prepayments of 1.0% with 100% at maturity and assumes 150 basis points of additional annual defaults from banks that are currently not in default or deferral.  In addition, the model assumes no recoveries except for one trust preferred security which assumes that one of the banks currently deferring or in default will cure such positions.

The table below presents a reconcilement of the Company's financial assets and liabilities measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3), which solely relates to impaired loans that were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan losses based upon the fair value of the underlying collateral (in thousands).  The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  The significant unobservable inputs used in the fair value measurement of collateral for collateral-dependent impaired loans primarily relate to discounts applied to the customers’ reported amount of collateral.  The amount of collateral discount depends upon the marketability of the underlying collateral.  During the nine months ended September 30, 2013 and 2012, collateral discounts ranged from 20% to 30%. During the nine months ended September 30, 2013 and 2012, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

	Nine months ended September 30,
	2013			2012
Beginning balance	$	10,679		$	13,500
Loans classified as impaired during the period	3,052			—
Specific valuation allowance allocations	(750		)	—
	2,302			—
(Additional) reduction in specific valuation allowance allocations	(130		)	2,666
Paydowns, payoffs, other activity	(891		)	(5,396		)
Ending balance	$	11,960		$	10,770

Non-Financial Assets and Liabilities

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The Company has no non-financial assets or liabilities measured at fair value on a recurring basis.  Certain non-financial assets measured at fair value on a non-recurring basis include other real estate owned (“OREO”), which is measured at the lower of cost or fair value, and goodwill and other intangible assets, which are measured at fair value for impairment assessments.

The table below presents OREO that was remeasured and reported at fair value based on significant unobservable inputs (Level 3) (in thousands):

	Nine months ended September 30,
	2013			2012
Beginning balance	$	8,162		$	7,948
OREO remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	4,387			4,563
Charge-offs recognized in the allowance for loan losses	(1,565		)	(1,472		)
Fair value	2,822			3,091
OREO remeasured subsequent to initial recognition
Carrying value of foreclosed assets prior to remeasurement	2,832			2,681
Fair value	1,774			1,872
Write-downs included in other non-interest expense	(1,058		)	(809		)
Acquired	3,492			728
Disposed	(5,900		)	(1,841		)
Ending balance	$	7,518		$	9,117

ASC Topic 825“Financial Instruments” as amended, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including discount rate and estimate of future cash flows.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument.  ASC Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements.  Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The following methods and assumptions were used in estimating fair value for financial instruments:

Cash and cash equivalents: Due to their short-term nature, the carrying amounts reported in the consolidated balance sheets approximate fair value.

Securities:  The fair value of securities, both available-for-sale and held-to-maturity, are generally based on quoted market prices or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

Net loans:  The fair value of the loan portfolio is estimated by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers for the same remaining maturities. Loans were first segregated by type such as commercial, real estate and consumer, and were then further segmented into fixed, adjustable and variable rate categories. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments.

Deposits:  The fair values of demand deposits (i.e., interest and noninterest-bearing deposits, regular savings and other money market demand accounts) are, by definition, equal to their carrying values. The fair values of time deposits were estimated using discounted cash flow analyses. The discount rates used were based on rates currently offered for deposits with similar remaining maturities. The fair values of the time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

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Short-term debt: Securities sold under agreements to repurchase represent borrowings with original maturities of less than 90 days. The carrying amount of borrowings under purchase agreements approximate their fair value.

Long-term debt: The fair value of long-term borrowings is estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements and market conditions of similar debt instruments.

Commitments and letters of credit: The fair values of commitments are estimated based on fees currently charged to enter into similar agreements, taking into consideration the remaining terms of the agreements and the counterparties’ credit standing.  The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.  The amounts of fees currently charged on commitments and letters of credit are deemed insignificant, and therefore, the estimated fair values and carrying values have not been reflected in the table below.

The following table represents the estimates of fair value of financial instruments (in thousands). This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2013
Assets:
Cash and cash equivalents	$	179,621	$	179,621	$	179,621	$	—	$	—
Securities available-for-sale	329,247		329,247		6,463		319,999		2,785
Securities held-to-maturity	3,994		6,406		—		6,406		—
Other securities	13,344		13,344		—		13,344		—
Net loans	2,537,850		2,574,826		—		—		2,574,826
Accrued interest receivable	8,108		8,108		8,108		—		—
Derivative assets	5,810		5,810		—		5,810		—
Liabilities:
Deposits	2,807,536		2,816,263		1,708,806		1,107,457		—
Short-term debt	150,943		150,944		—		150,944		—
Long-term debt	16,495		16,463		—		16,463		—
Derivative liabilities	5,810		5,810		—		5,810		—
December 31, 2012
Assets:
Cash and cash equivalents	84,994		84,994		84,994		—		—
Securities available-for-sale	377,122		377,122		5,959		368,778		2,385
Securities held-to-maturity	13,454		13,861		—		13,861		—
Other securities	11,463		11,463		—		11,463		—
Net loans	2,127,560		2,162,856		—		—		2,162,856
Accrued interest receivable	6,692		6,692		6,692		—		—
Derivative assets	14,012		14,012		—		14,012		—
Liabilities:
Deposits	2,409,316		2,381,495		1,447,954		933,541		—
Short-term debt	114,646		114,648		—		114,648		—
Long-term debt	16,495		16,462		—		16,462		—
Derivative liabilities	14,012		14,012		—		14,012		—

40

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Critical Accounting Policies

The accounting policies of the Company conform with U.S. generally accepted accounting principles and require management to make estimates and develop assumptions that affect the amounts reported in the financial statements and related footnotes. These estimates and assumptions are based on information available to management as of the date of the financial statements. Actual results could differ significantly from management’s estimates. As this information changes, management’s estimates and assumptions used to prepare the Company’s financial statements and related disclosures may also change. The most significant accounting policies followed by the Company are presented in Note One to the audited financial statements included in the Company’s 2012 Annual Report to Shareholders. The information included in this Quarterly Report on Form 10-Q, including the Consolidated Financial Statements, Notes to Consolidated Financial Statements, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the financial statements and notes thereto included in the 2012 Annual Report of the Company.  Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has identified the determination of the allowance for loan losses, income taxes, other-than-temporary impairment on investment securities and purchased credit-impaired loans to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new information becomes available.

The section Allowance and Provision for Loan Losses provides management’s analysis of the Company’s allowance for loan losses and related provision. The allowance for loan losses is maintained at a level that represents management’s best estimate of probable losses in the loan portfolio. Management’s determination of the adequacy of the allowance for loan losses is based upon an evaluation of individual credits in the loan portfolio, historical loan loss experience, current economic conditions, and other relevant factors. This determination is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The allowance for loan losses related to loans considered to be impaired is generally evaluated based on the discounted cash flows using the impaired loan’s initial effective interest rate or the fair value of the collateral for certain collateral dependent loans.

The Company is subject to federal and state income taxes in the jurisdictions in which it conducts business.  In computing the provision for income taxes, management must make judgments regarding interpretation of laws in those jurisdictions.  Because the application of tax laws and regulations for many types of transactions is susceptible to varying interpretations, amounts reported in the financial statements could be changed at a later date upon final determinations by taxing authorities.  On a quarterly basis, the Company estimates its annual effective tax rate for the year and uses that rate to provide for income taxes on a year-to-date basis.  The amount of unrecognized tax benefits could change over the next twelve months as a result of various factors.  However, management cannot currently estimate the range of possible change.  The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended December 31, 2010 through 2012. The Company and its subsidiaries state income tax returns are open to audit under the statute of limitations for the years ended December 31, 2009 through 2012.

On a quarterly basis, the Company performs a review of investment securities to determine if any unrealized losses are other-than-temporarily impaired.  Management considers the following, amongst other things, in its determination of the nature of the unrealized losses, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition, capital strength, and near-term (12 months) prospects of the issuer, including any specific events which may influence the operations of the issuer such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; (iii) the historical volatility in the market value of the investment and/or the liquidity or illiquidity of the investment; (iv) adverse conditions specifically related to the security, an industry, or a geographic area; or (v) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.  The Company continues to actively monitor the market value of these investments along with the financial strength of the issuers behind these securities, as well as its entire investment portfolio.  Based on the market information available, the Company believes that the recent declines in market value are temporary and that the Company does not have the intent to sell any of the securities classified as available for sale and believes it is more likely than not that the Company will not have to sell any such securities before recovery of costs.  The Company cannot guarantee that such securities will recover and if additional information becomes available in the future to suggest that the losses are other than temporary, the Company may need to record impairment charges in future periods.  No impairment charges were recognized during the three and nine months ended September 30, 2013 as a result of this review.  The Company continues to actively monitor the market values of these investments along with the financial strength of the issuers behind these securities, as well as our entire investment portfolio.

41

The Company values purchased credit-impaired loans at fair value in accordance with ASC Topic 310-30. In determining the estimated fair value, management considers several factors, such as estimated future credit losses, estimated prepayments, remaining lives of the acquired loans, estimated value of the underlying collateral and the net present value of the cash flows expected to be received. For these loans, the expected cash flows that exceed the fair value of the loan represent the accretable yield, which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. The non-accretable difference represents the difference between the contractually required principal and interest payments and the cash flows expected to be collected based upon management's estimation. Subsequent decreases in the expected cash flows will require the Company to evaluate the need for additions to the Company's allowance for loan losses. Subsequent increases in the expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges with a corresponding adjustment to the accretable yield, which will result in the recognition of additional interest income over the remaining lives of the loans.

Financial Summary

Nine months ended September 30, 2013 vs. 2012

The Company reported consolidated net income of $35.0 million, or $2.21 per diluted common share, for the nine months ended September 30, 2013, compared to $28.0 million, or $1.88 per diluted common share, for the nine months ended September 30, 2012. Return on average assets (“ROA”) was 1.38% and return on average equity (“ROE”) was 12.6%  for the first nine months of 2013, compared to 1.33% and 11.6%, respectively, for the first nine months of 2012.  The results for the nine months ended September 30, 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").  Excluding these acquisition and integration expenses, the Company would have reported net income of $38.6 million, a return on average assets of 1.53% and a return on average equity of 14.0%. The results for the nine months ended September 30, 2012 include $4.3 million, or $0.19 diluted per share on an after tax basis, of acquisition and integration expenses related to the acquisition of Virginia Savings Bancorp, Inc. ("Virginia Savings").  Excluding these acquisition and integration expenses, the Company would have reported net income of $30.9 million, a return on average assets of 1.47% and a return on average equity of 12.8%.

The Company’s net interest income for the first nine months of 2013 increased $21.0 million compared to the first nine months of 2012 (see Net Interest Income). The Company recorded a provision for loan losses of $4.9 million for the first nine months of 2013 compared to $4.6 million for the first nine months of 2012 (see Allowance and Provision for Loan Losses).  As further discussed under the caption Non-Interest Income and Expense, non-interest income increased $2.1 million from the nine months ended September 30, 2012, to the nine months ended September 30, 2013.  Non-interest expenses for the nine months ended September 30, 2013 increased $11.9 million from the nine months ended September 30, 2012.

Three months ended September 30, 2013 vs. 2012

The Company reported consolidated net income of $14.0 million, or $0.88 per diluted common share, for the three months ended September 30, 2013, compared to $10.6 million, or $0.71 per diluted common share, for the three months ended September 30, 2012. Return on average assets (“ROA”) was 1.65% and return on average equity (“ROE”) was 14.8% for the three months ended September 30, 2013 compared to 1.47% and 13.0%, respectively, for the third quarter of 2012.

The Company’s net interest income for the third quarter of 2013 increased $7.5 million compared to the third quarter of 2012 (see Net Interest Income). The Company recorded a provision for loan losses of $1.2 million for the third quarter of 2013 compared to $1.0 million for the third quarter of 2012 (see Allowance and Provision for Loan Losses).  As further discussed under the caption Non-Interest Income and Expense, non-interest income increased $0.4 million from the third quarter of 2012, to the third quarter of 2013.  Non-interest expenses for the three months ended September 30, 2013 decreased $2.8 million from the three months ended September 30, 2012.

Net Interest Income

Nine months ended September 30, 2013 vs. 2012

The Company’s tax equivalent net interest income increased $20.9 million, or 28.7%, from $72.8 million for the nine months ended September 30, 2012 to $93.7 million for the nine months ended September 30, 2013. This increase is primarily due to the acquisitions of Virginia Savings and Community, and an increase in the accretion related to these acquisitions. The Company’s reported net interest margin increased from 3.95% for the nine months ended September 30, 2012 to 4.33% for the nine months ended September 30, 2013. Excluding the favorable impact of the accretion from the fair value adjustments ($10.7 million and

42

$0.9 million), the net interest margin for the nine months ended September 30, 2013 and 2012 would have been 3.84% and 3.90%, respectively.

Three months ended September 30, 2013 vs. 2012

The Company’s tax equivalent net interest income increased $7.5 million, or 29.8%, from $25.1 million for the third quarter of 2012 to $32.5 million for the third quarter of 2013. This increase is primarily due to the acquisitions of Virginia Savings and Community, and an increase in the accretion related to these acquisitions. The Company’s reported net interest margin increased from 3.95% for the quarter ended September 30, 2012 to 4.47% for the quarter ended September 30, 2013. Excluding the favorable impact of the accretion from the fair value adjustments ($5.0 million and $0.9 million), the net interest margin for the three months ended September 30, 2013 and 2012 would have been 3.78% and 3.80%, respectively.

The following schedule presents the actual and estimated future accretion related to the fair value adjustments on net interest income as a result of the Company's acquisitions (in thousands). The amounts in the table below 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 actual results being materially different than those estimated below.

	Virginia Savings				Community
			Certificates of				Certificates of
Year Ended	Loans		Deposit		Loans		Deposit		Total
1Q 2013	$	985	$	178	$	858	$	160	$	2,181
2Q 2013	1,334		122		1,887		174		3,517
3Q 2013	632		121		4,119		174		5,046
Remainder 2013	268		120		1,111		131		1,630
2014	777		537		3,277		294		4,885
2015	541		518		1,848		160		3,067
Thereafter	1,839		497		8,514		47		10,897

Table One

Average Balance Sheets and Net Interest Income

(In thousands)

43

Assets	Nine months ended September 30,
	2013							2012
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Loan portfolio(1):
Residential real estate(2)	$	1,294,671		$	41,215	4.26	%	$	1,101,805		$	36,731	4.45	%
Commercial, financial, and agriculture(3)	1,145,286			46,755		5.46		873,295			29,395		4.50
Installment loans to individuals(4), (5)	65,557			4,755		9.70		45,756			2,303		6.72
Previously securitized loans(6)	—			1,968		***		—			2,414		***
Total loans	2,505,514			94,693		5.05		2,020,856			70,843		4.68
Securities:
Taxable	329,918			7,774		3.15		367,800			11,345		4.12
Tax-exempt(7)	31,378			1,437		6.12		39,176			1,694		5.78
Total securities	361,296			9,211		3.41		406,976			13,039		4.28
Deposits in depository institutions	8,090			—		—		7,200			—		—
Federal funds sold	17,450			22		0.17		29,712			38		0.17
Total interest-earning assets	2,892,350			103,926		4.80		2,464,744			83,920		4.55
Cash and due from banks	159,942							75,576
Bank premises and equipment	81,976							68,788
Other assets	257,384							221,661
Less: allowance for loan losses	(20,030		)					(19,599		)
Total assets	$	3,371,622						$	2,811,170
Liabilities
Interest-bearing demand deposits	$	606,076		$	537	0.12	%	$	532,231		531		0.13	%
Savings deposits	596,895			645		0.14		473,626			576		0.16
Time deposits(8)	1,109,895			8,308		1.00		905,561			9,256		1.37
Short-term borrowings	121,677			232		0.25		119,454			229		0.26
Long-term debt	16,495			464		3.76		16,495			499		4.04
Total interest-bearing liabilities	2,451,038			10,186		0.56		2,047,367			11,091		0.72
Noninterest-bearing demand deposits	512,993							408,435
Other liabilities	38,698							33,612
Stockholders’ equity	368,893							321,756
Total liabilities and stockholders’ equity	$	3,371,622						$	2,811,170
Net interest income				$	93,740						$	72,829
Net yield on earning assets						4.33	%						3.95	%

44

(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)	For 2013, interest income on residential real estate loans includes $0.8 million and $0.5 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings and Community, respectively. For 2012, interest income on residential real estate loans includes $0.6 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings.
(3)	For 2013, interest income on commercial, financial, and agriculture loans includes $2.0 million and $5.4 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings and Community, respectively. For 2012, interest income on commercial, financial and agricultural loans includes $0.3 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings.
(4)	Includes the Company’s consumer and DDA overdrafts loan categories.
(5)	For 2013, interest income on installment loans to individuals includes $0.1 million and $1.0 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings and Community, respectively. For 2012, interest income on installment loans to individuals includes less than $0.1 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings.
(6)	Effective January 1, 2012, there is no carrying value of the Company’s previously securitized loans.
(7)	Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
(8)	For 2013, interest expense on time deposits includes $0.4 million and $0.5 million in accretion of the fair value adjustments related to the acquisitions of Virginia Savings and Community, respectively. For 2012, interest expense on time deposits includes $0.1 million in accretion of the fair value adjustments related to the acquisition of Virginia Savings.

.

Table Two

Rate/Volume Analysis of Changes in Interest Income and Interest Expense

(In thousands)

	Nine months ended September 30, 2013 vs. 2012
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume			Rate			Net
Loan portfolio
Residential real estate	$	6,424		$	(1,940	)	$	4,484
Commercial, financial, and agriculture	9,147			8,213			17,360
Installment loans to individuals	996			1,456			2,452
Previously securitized loans	—			(446		)	(446		)
Total loans	16,567			7,283			23,850
Securities:
Taxable	(1,167		)	(2,404		)	(3,571		)
Tax-exempt(1)	(337		)	80			(257		)
Total securities	(1,504		)	(2,324		)	(3,828		)
Federal funds sold	(16		)	—			(16		)
Total interest-earning assets	$	15,047		$	4,959		$	20,006
Interest-bearing liabilities:
Interest-bearing demand deposits	$	74		$	(68	)	$	6
Savings deposits	150			(81		)	69
Time deposits	2,087			(3,035		)	(948		)
Short-term borrowings	4			(1		)	3
Long-term debt	—			(35		)	(35		)
Total interest-bearing liabilities	$	2,315		$	(3,220	)	$	(905	)
Net Interest Income	$	12,732		$	8,179		$	20,911

(1) Fully federal taxable equivalent using a tax rate of approximately 35%.

Table Three

Average Balance Sheets and Net Interest Income

(In thousands)

45

Assets	Three months ended September 30,
	2013							2012
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Loan portfolio(1):
Residential real estate(2)	$	1,315,848		$	13,931	4.20	%	$	1,140,910		$	13,000	4.53	%
Commercial, financial, and agriculture(3)	1,157,285			16,910		5.80		880,243			10,069		4.55
Installment loans to individuals(4),(5)	63,409			1,538		9.62		49,111			782		6.33
Previously securitized loans(6)	—			604		***		—			781		***
Total loans	2,536,542			32,983		5.16		2,070,264			24,632		4.73
Securities:
Taxable	312,786			2,392		3.03		372,877			3,438		3.67
Tax-exempt(7)	29,396			460		6.21		36,761			532		5.76
Total securities	342,182			2,852		3.31		409,638			3,970		3.86
Deposits in depository institutions	7,798			—		—		7,063			—		—
Federal funds sold	—			—		—		35,487			15		0.17
Total interest-earning assets	2,886,522			35,835		4.93		2,522,452			28,617		4.51
Cash and due from banks	191,116							80,335
Bank premises and equipment	82,708							72,640
Other assets	251,353							232,793
Less: allowance for loan losses	(20,519		)					(19,889		)
Total assets	$	3,391,180						$	2,888,331
Liabilities
Interest-bearing demand deposits	$	603,592		$	179	0.12	%	$	539,189		$	180	0.13	%
Savings deposits	602,827			216		0.14		497,208			204		0.16
Time deposits(8)	1,106,352			2,673		0.96		931,369			2,928		1.25
Short-term borrowings	127,263			82		0.26		122,955			79		0.26
Long-term debt	16,495			154		3.70		16,495			166		4.00
Total interest-bearing liabilities	2,456,529			3,304		0.53		2,107,216			3,557		0.67
Noninterest-bearing demand deposits	521,114							418,584
Other liabilities	35,854							35,461
Stockholders’ equity	377,683							327,070
Total liabilities and stockholders’ equity	$	3,391,180						$	2,888,331
Net interest income				$	32,531						$	25,060
Net yield on earning assets						4.47	%						3.95	%

46

(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)	For 2013, interest income on residential real estate loans includes $0.3 million and $0.3 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings and Community, respectively. For 2012, interest income on residential real estate loans includes $0.6 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings.
(3)	For 2013, interest income on commercial, financial, and agriculture loans includes $0.3 million and $3.5 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings and Community, respectively. For 2012, interest income on commercial, financial and agricultural loans includes $0.3 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings.
(4)	Includes the Company’s consumer and DDA overdrafts loan categories.
(5)	For 2013, interest income on installment loans to individuals includes $0.1 million and $0.4 million of accretion related to the fair value adjustments due to the acquisitions of Virginia Savings and Community respectively. For 2012, interest income on installment loans to individuals includes less than $0.1 million of accretion related to the fair value adjustments due to the acquisition of Virginia Savings.
(6)	Effective January 1, 2012, there is no carrying value of the Company’s previously securitized loans.
(7)	Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.
(8)	For 2013, interest expense on time deposits includes $0.1 million and $0.2 million in accretion of the fair value adjustments related to the acquisitions of Virginia Savings and Community Financial, respectively. For 2012, interest expense on time deposits includes $0.1 million in accretion of the fair value adjustments related to the acquisition of Virginia Savings.

Table Four

Rate/Volume Analysis of Changes in Interest Income and Interest Expense

(In thousands)

	Three months ended September 30, 2013 vs. 2012
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume			Rate			Net
Loan portfolio
Residential real estate	$	1,999		$	(1,068	)	$	931
Commercial, financial, and agriculture	3,178			3,663			6,841
Installment loans to individual	228			528			756
Previously securitized loans	—			(177		)	(177		)
Total loans	5,405			2,946			8,351
Securities:
Taxable	(556		)	(490		)	(1,046		)
Tax-exempt(1)	(107		)	35			(72		)
Total securities	(663		)	(455		)	(1,118		)
Federal funds sold	(15		)	—			(15		)
Total interest-earning assets	$	4,727		$	2,491		$	7,218
Interest-bearing liabilities:
Interest-bearing demand deposits	$	22		$	(23	)	$	(1	)
Savings deposits	43			(31		)	12
Time deposits	552			(807		)	(255		)
Short-term borrowings	3			—			3
Long-term debt	—			(12		)	(12		)
Total interest-bearing liabilities	$	620		$	(873	)	$	(253	)
Net Interest Income	$	4,107		$	3,364		$	7,471

(1) Fully federal taxable equivalent using a tax rate of approximately 35%.

Loans

The composition of the Company’s loan portfolio as of the dates indicated follows:

47

Table Five

Loan Portfolio

(In thousands)

	September 30, 2013		December 31, 2012		September 30, 2012
Residential real estate	$	1,188,841	$	1,031,435	$	1,008,305
Home equity – junior liens	140,887		143,110		143,058
Commercial and industrial	151,185		108,739		105,027
Commercial real estate	1,022,278		821,970		787,887
Consumer	50,757		36,564		38,285
DDA overdrafts	4,508		4,551		2,670
Total loans	$	2,558,456	$	2,146,369	$	2,085,232

Loan balances increased $412.1 million from December 31, 2012 to September 30, 2013, with the acquisition of Community contributing $371 million.  Excluding the acquisition of Community, which contributed $116 million, residential real estate loans increased $41.1 million, or 4.0%, from December 31, 2012 to September 30, 2013.   Residential real estate loans primarily consist of: (i) single-family 3 and 5 year adjustable rate mortgages with terms that amortize the loans over periods from 15-30 years and (ii) home equity loans secured by first liens.  The Company’s mortgage products do not include sub-prime, interest only, or option adjustable rate mortgage products.  The Company’s home equity loans are underwritten differently than 1-4 family residential mortgages with typically less documentation but lower loan-to-value ratios.  Home equity loans consist of lines of credit, short-term fixed amortizing loans and non-purchase adjustable rate loans.  At September 30, 2013, $14.8 million of the residential real estate loans were for properties under construction.

Junior lien home equity loans decreased $2.5 million during the first nine months of 2013.  Junior lien home equity loans consist of lines of credit, short-term fixed amortizing loans, and non-purchase adjustable rate loans with second lien positions.

Excluding the acquisition of Community, which contributed $185 million, commercial real estate loans increased $15.7 million, or 1.9%, from December 31, 2012 to September 30, 2013.  At September 30, 2013, $17.4 million of the commercial real estate loans were for commercial properties under construction.  Excluding the acquisition of Community, which contributed $46 million, commercial and industrial loans (“C&I”) decreased $3.3 million from December 31, 2012 to September 30, 2013.  This decrease is primarily due to the continuation of a strategy engaged by the Company to allow certain other high risk loans to exit the portfolio.

Exclusive of the acquisition of Community, which contributed $24 million, consumer loans decreased $9.8 million during the first nine months of 2013.  The consumer loan portfolio primarily consists of new and used automobile loans, personal loans secured by cash and cash equivalents, unsecured revolving credit products, and other similar types of credit facilities. The Company strategically decided to reduce consumer loans due to the acquisition of an indirect portfolio of loans associated with Community. These loans have higher loss percentages compared to the Company's historical consumer portfolio.

Allowance and Provision for Loan Losses

Management systematically monitors the loan portfolio and the adequacy of the allowance for loan losses (“ALLL”) on a quarterly basis to provide for probable losses inherent in the portfolio. Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance, and other relevant factors. Individual credits are selected throughout the year for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the adequacy of the allowance. Due to the nature of commercial lending, evaluation of the adequacy of the allowance as it relates to these loan types is often based more upon specific credit review, with consideration given to the potential impairment of certain credits and historical loss rates, adjusted for general economic conditions and other inherent risk factors. Conversely, due to the homogeneous nature of the real estate and installment portfolios, the portions of the allowance allocated to those portfolios are primarily based on prior loss history of each portfolio, adjusted for general economic conditions and other inherent risk factors.

In evaluating the adequacy of the allowance for loan losses, management considers both quantitative and qualitative factors. Quantitative factors include actual repayment characteristics and loan performance, cash flow analyses, and estimated fair values of underlying collateral. Qualitative factors generally include overall trends within the portfolio, composition of the portfolio, changes in pricing or underwriting, seasoning of the portfolio, and general economic conditions.

48

The allowance not specifically allocated to individual credits is generally determined by analyzing potential exposure and other qualitative factors that could negatively impact the adequacy of the allowance.  Loans not individually evaluated for impairment are grouped by pools with similar risk characteristics and the related historical loss rates are adjusted to reflect current inherent risk factors, such as unemployment, overall economic conditions, concentrations of credit, loan growth, classified and impaired loan trends, staffing, adherence to lending policies, and loss trends.

Determination of the allowance for loan losses is subjective in nature and requires management to periodically reassess the validity of its assumptions. Differences between actual losses and estimated losses are assessed such that management can timely modify its evaluation model to ensure that adequate provision has been made for risk in the total loan portfolio.

As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $4.9 million in the first nine months of 2013 and $4.6 million in the first nine months of 2012.  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 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.

The Company had net charge-offs of $3.1 million and $5.0 million for the first nine months of 2013 and 2012, respectively.  Net charge-offs in the first nine months of 2013 consisted primarily of net charge-offs on residential real estate loans of $1.5 million and commercial and industrial loans of $0.7 million.  

The Company’s ratio of non-performing assets to total loans and other real estate owned decreased from 1.28% at December 31, 2012 to 1.15% at September 30, 2013.  Excluded from this ratio are purchased credit-impaired loans in which the Company estimated cash flows and estimated a credit mark. These loans are considered performing loans provided that the loan is performing in accordance with the estimated expectations. Such loans would be considered non-performing loans if the loan's performance deteriorates below the initial expectations. The Company’s ratio of non-performing assets to total loans and other real estate owned is approximately a third of the 3.62% non-performing asset ratio reported by the Company’s peer group (bank holding companies with total assets between $1 and $5 billion), as of the most recently reported quarter ended June 30, 2013.

The ALLL at September 30, 2013 was $20.6 million compared to $18.8 million at December 31, 2012.  Below is a summary of the changes in the components of the ALLL from December 31, 2012 to September 30, 2013.

The allowance allocated to the commercial real estate loan portfolio (see Table Nine) increased $0.1 million, or 0.64%, from $10.4 million at December 31, 2012 to $10.5 million at September 30, 2013.

The allowance related to the commercial and industrial loan portfolio increased from $0.5 million at December 31, 2012 to $1.2 million at September 30, 2013 (see Table Nine). This increase was due to a downgrade of a particular credit.

The allowance allocated to the residential real estate portfolio (see Table Nine) increased $1.0 million from $5.2 million at December 31, 2012 to $6.2 million at September 30, 2013. This increase was due to growth in the portfolio.

The allowance allocated to the home equity loan portfolio (see Table Nine) remained flat at $1.7 million at September 30, 2013.

The allowance allocated to the consumer loan portfolio (see Table Nine) remained flat at $0.1 million at September 30, 2013.

The allowance allocated to overdraft deposit accounts (see Table Nine) decreased modestly from $0.9 million at December 31, 2012 to $0.8 million at September 30, 2013.

Based on the Company’s analysis of the adequacy of the allowance for loan losses and in consideration of the known factors utilized in computing the allowance, management believes that the allowance for loan losses as of September 30, 2013, is adequate to provide for probable losses inherent in the Company’s loan portfolio. Future provisions for loan losses will be dependent upon trends in loan balances including the composition of the loan portfolio, changes in loan quality and loss experience trends, and recoveries of previously charged-off loans, among other factors.

Table Six

Analysis of the Allowance for Loan Losses

49

(In thousands)

	Nine months ended September 30,						Year ended December 31,
	2013			2012			2012
Balance at beginning of period	$	18,809		$	19,409		$	19,409
Charge-offs:
Commercial and industrial	772			126			226
Commercial real estate	803			2,860			4,604
Residential real estate	1,598			746			1,030
Home equity	278			989			1,355
Consumer	326			148			190
DDA overdrafts	1,102			1,128			1,522
Total charge-offs	4,879			5,997			8,927
Recoveries:
Commercial and industrial	51			12			32
Commercial real estate	669			100			289
Residential real estate	137			15			22
Home equity	—			12			18
Consumer	242			90			135
DDA overdrafts	674			745			1,456
Total recoveries	1,773			974			1,952
Net charge-offs	3,106			5,023			6,975
Provision for acquired loans	90			—			—
Provision for loan losses	4,813			4,600			6,375
Balance at end of period	$	20,606		$	18,986		$	18,809
As a Percent of Average Total Loans:
Net charge-offs (annualized)	0.17		%	0.33		%	0.34		%
Provision for loan losses (annualized)	0.26		%	0.30		%	0.31		%
As a Percent of Non-Performing Loans:
Allowance for loan losses	93.86		%	82.61		%	96.59		%

Table Seven

Non-Accrual, Past-Due and Restructured Loans

(In thousands)

	As of September 30,				December 31,
	2013		2012		2012
Non-accrual loans	$	21,535	$	22,586	$	19,194
Accruing loans past due 90 days or more	418		397		280
Total non-performing loans	21,953		22,983		19,474

The average recorded investment in impaired loans during the nine months ended September 30, 2013 and 2012 was $13.2 million and $21.6 million, respectively.  The Company recognized less than $0.1 million and approximately $0.7 million of interest income received in cash on non-accrual and impaired loans for the nine months ended September 30,2013 and 2012, respectively.  Approximately $0.4 million and $0.7 million of interest income would have been recognized during the nine months ended September 30, 2013 and September 30, 2012, respectively, if such loans had been current in accordance with their original terms.  There were no commitments to provide additional funds on non-accrual, impaired, or other potential problem loans at September 30, 2013.  

Interest on loans is accrued and credited to operations based upon the principal amount outstanding.  The accrual of interest income is generally discontinued when a loan becomes 90 days past due as to principal or interest unless the loan is well collateralized and in the process of collection.  When interest accruals are discontinued, interest credited to income in the

50

current year that is unpaid and deemed uncollectible is charged to operations.  Prior-year interest accruals that are unpaid and deemed uncollectible are charged to the allowance for loan losses, provided that such amounts were specifically reserved.

Table Eight

Impaired Loans

(In thousands)

	As of September 30,				As of December 31,
	2013		2012		2012
Impaired loans with a valuation allowance	$	3,507	$	9,779	$	—
Impaired loans with no valuation allowance	9,333		13,204		10,679
Total impaired loans	$	12,840	$	22,983	$	10,679
Allowance for loan losses allocated to impaired loans	$	880	$	1,204	$	—

Table Nine

Allocation of the Allowance for Loan Losses

(In thousands)

	As of September 30,				As of December 31,
	2013		2012		2012
Commercial and industrial	$	1,237	$	521	$	498
Commercial real estate	10,507		10,590		10,440
Residential real estate	6,249		3,815		5,229
Home equity	1,689		3,046		1,699
Consumer	76		105		81
DDA overdrafts	848		909		862
Allowance for Loan Losses	$	20,606	$	18,986	$	18,809

Previously Securitized Loans

As of September 30, 2013, the carrying value of the remaining previously securitized loans was zero, while the actual contractual balances of these loans were $6.5 million. The Company accounts for the difference between the carrying value and the total expected cash flows of previously securitized loans as an adjustment of the yield earned on these loans over their remaining lives. The discount was accreted to income over the period during which payments were probable of collection and were reasonably estimable. During the first nine months of 2013 and 2012, the Company recognized $2.0 million and $2.4 million, respectively, of interest income on its previously securitized loans.

Non-Interest Income and Non-Interest Expense

Nine months ended September 30, 2013 vs. 2012

	Nine months ended September 30,
	2013		2012		$ Change			% Change
Net investment security gains	$	0.1	$	1.0	$	(0.9	)	(90.0	)%
Non-interest income	43.0		40.0		3.0			7.5	%
Non-interest expense	78.0		66.1		11.9			18.0	%

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Non-Interest Income:Excluding investment security transactions, non-interest income increased $3.0 million to $43.0 million in the first nine months of 2013 as compared to $40.0 million in the first nine months of 2012. Service charges increased $1.3 million, or 6.8%, to $20.6 million, while bankcard revenues increased $0.8 million, or 8.7%, to $10.1 million. These increases were primarily due to the acquisitions of Virginia Savings and Community. In addition, other income increased $0.6 million or 34.8%, to $2.4 million primarily as a result of increased mortgage related revenues. Trust and investment management fee income increased $0.2 million, or 8.7%, to $2.9 million due to core growth, as Virginia Savings and Community did not offer these services.

Non-Interest Expense:Non-interest expenses increased $11.9 million from $66.1 million in the first nine months of 2012 to $78.0 million in the first nine months of 2013. During the first nine months of 2013 and 2012 the Company recognized $5.5 million and $4.3 million of acquisition and integration expenses related to the acquisitions of Community and Virginia Savings, respectively. Excluding these expenses, non-interest expenses increased $10.8 million, from $61.8 million in the first nine months of 2012 to $72.6 million in the first nine months of 2013. This increase was primarily related to higher salaries and employee benefits ($6.3 million) due to the acquisitions of Virginia Savings and Community ($5.7 million) and higher health insurance costs ($0.6 million). In addition, other expenses increased $1.3 million, occupancy and equipment expense increased $1.3 million and depreciation increased $0.9 million. These increases were primarily attributable to the acquisitions of Virginia Savings and Community. Overall expense associated with the acquisitions of Virginia Savings and Community have been in line with the Company's expectations.

Income Tax Expense:The Company’s income tax rate for the nine months ended September 30, 2013 was 34.5% compared to 34.3% for the year ended December 31, 2012, and 34.0% for the nine months ended September 30, 2012.  As a result of the Company's acquisition of Community during the first quarter of 2013, the Company's effective tax rate for 2013 is expected to decrease from 34.3% for the year ended December 31, 2012 to 33.6% for the year ending December 31, 2013. Due to this decline in the effective tax rate, the Company's net deferred tax assets are expected to be realized at a lower effective tax rate, and as a result, the Company's net deferred tax assets were reduced by $0.5 million in the first quarter of 2013.

Three months ended September 30, 2013 vs. 2012

	Three months ended September 30,
	2013		2012		$ Change			% Change
Net investment security gains	$	—	$	0.5	$	(0.5	)	(100.0	)%
Non-interest income	14.5		13.6		0.9			6.6	%
Non-interest expense	24.7		21.8		2.9			13.3	%

Non-Interest Income:Exclusive of the net investment gain discussed above, non-interest income increased $0.9 million to $14.5 million in the third quarter of 2013 as compared to $13.6 million in the third quarter of 2012.  Service charges increased $0.4 million, or 6.2%, to $7.2 million while bankcard revenues increased $0.4 million, or 11.5%, to $3.5 million. These increases were primarily due to the acquisition of Community.

Non-Interest Expense: Non-interest expense increased $2.9 million, from $21.8 million in the third quarter of 2012 to $24.7 million in the third quarter of 2013. This increase was primarily related to higher salaries and employee benefits ($1.6 million) and repossessed asset losses ($0.5 million). Salaries and employee benefits increased due to the acquisition of Community ($1.0 million) and higher incentive compensation accruals ($0.2 million). Repossessed asset losses were based on updated appraisals. The Company continually re-evaluates the estimated fair value of properties that have been repossessed by obtaining updated appraisals on at least an annual basis. In addition, occupancy and equipment expense increased $0.3 million and depreciation increased $0.3 million. These increases were also primarily attributable to the acquisition of Community. Overall expense increases associated with the acquisition of Community have been in line with the Company's expectations.

Income Tax Expense:  The Company’s income tax rate for the third quarter of 2013 was 33.6% compared to 34.3% for the year ended December 31, 2012, and 34.3% for the third quarter of 2012.  The income tax rate is based upon the Company’s expected tax rate for the year ending December 31, 2013.

Risk Management

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Market risk is the risk of loss due to adverse changes in current and future cash flows, fair values, earnings or capital due to adverse movements in interest rates and other factors, including foreign exchange rates and commodity prices. Because the Company has no significant foreign exchange activities and holds no commodities, interest rate risk represents the primary risk factor affecting the Company’s balance sheet and net interest margin. Significant changes in interest rates by the Federal Reserve could result in similar changes in LIBOR interest rates, prime rates, and other benchmark interest rates that could affect the estimated fair value of the Company’s investment securities portfolio, interest paid on the Company’s short-term and long-term borrowings, interest earned on the Company’s loan portfolio and interest paid on its deposit accounts.

The Company’s Asset and Liability Committee (“ALCO”) has been delegated the responsibility of managing the Company’s interest-sensitive balance sheet accounts to maximize earnings while managing interest rate risk. ALCO, comprised of various members of executive and senior management, is also responsible for establishing policies to monitor and limit the Company’s exposure to interest rate risk and to manage the Company’s liquidity position. ALCO satisfies its responsibilities through monthly meetings during which product pricing issues, liquidity measures, and interest sensitivity positions are monitored.

In order to measure and manage its interest rate risk, the Company uses an asset/liability management and simulation software model to periodically update the interest sensitivity position of the Company’s balance sheet. The model is also used to perform analyses that measure the impact on net interest income and capital as a result of various changes in the interest rate environment. Such analyses quantify the effects of various interest rate scenarios on projected net interest income.

The Company’s policy objective is to avoid negative fluctuations in net income or the economic value of equity of more than 15% within a 12-month period, assuming an immediate parallel increase or decrease of 400 basis points. The Company measures the long-term risk associated with sustained increases and decreases in rates through analysis of the impact to changes in rates on the economic value of equity.  Due to the current Federal Funds target rate of 25 basis points, the Company has chosen not to reflect a decrease of 25 basis points from current rates in its analysis.

During the fourth quarter of 2012, the Company revised its sensitivity analysis to consider the impact of rising interest rates on its deposit balance mix. Prior the interest rates declining in 2007, the Company's deposit account composition included more balances as a percentage of total deposit balances in higher yielding deposit accounts, primarily time deposits. As interest rates have fallen over the last five years, and as the higher yielding time deposits have matured, these balances have shifted to lower yielding transactional deposit accounts such as demand deposits and savings accounts. The Company revised its interest rate sensitivity model at December 31, 2012 and September 30, 2013 to reflect its belief that as interest rates increase, transactional deposit balances will begin to shift back to higher yielding time deposits and the benefit to rising interest rates for the Company will be reducted from its previous models which had not reflected this modification.

The following table summarizes the sensitivity of the Company’s net income to various interest rate scenarios. The results of the sensitivity analyses presented below differ from the results used internally by ALCO in that, in the analyses below, interest rates are assumed to have an immediate and sustained parallel shock. The Company recognizes that rates are volatile, but rarely move with immediate and parallel effects. Internally, the Company considers a variety of interest rate scenarios that are deemed to be possible while considering the level of risk it is willing to assume in “worst-case” scenarios such as shown by the following:

Immediate Basis Point Change in Interest Rates	Implied Federal Funds Rate Associated with Change in Interest Rates		Estimated Increase (Decrease) in Net Income Over 12 Months		Estimated Increase (Decrease) in Economic Value of Equity
September 30, 2013
+400	4.25	%	+1.4	%	(2.5	)%
+300	3.25		+2.5		+0.8
+200	2.25		+1.7		+2.2
+100	1.25		(0.2	)	+1.0
December 31, 2012
+400	4.25	%	+4.2	%	+4.8	%
+300	3.25		+3.8		+5.4
+200	2.25		+2.5		+3.9
+100	1.25		(0.3	)	+1.6

These estimates are highly dependent upon assumptions made by management, including, but not limited to, assumptions regarding the manner in which interest-bearing demand deposit and saving deposit accounts reprice in different interest rate

53

scenarios, changes in the composition of deposit balances, pricing behavior of competitors, prepayments of loans and deposits under alternative rate environments, and new business volumes and pricing. As a result, there can be no assurance that the estimates above will be achieved in the event that interest rates increase during 2013 and beyond.  The estimates above do not necessarily imply that the Company will experience increases in net income if market interest rates rise.  The table above indicates how the Company’s net income and the economic value of equity behave relative to an increase or decrease in rates compared to what would otherwise occur if rates remain stable.

Based upon the estimates above, the Company believes that its net income is positively correlated with increasing rates as compared to the level of net income the Company would expect if interest rates remain flat.

Liquidity

The Company evaluates the adequacy of liquidity at both the Parent Company level and at the banking subsidiary level. At the Parent Company level, the principal source of cash is dividends from its banking subsidiary, City National Bank. Dividends paid by City National Bank to the Parent Company are subject to certain legal and regulatory limitations. Generally, any dividends in amounts that exceed the earnings retained by City National Bank in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At September 30, 2013, City National Bank could pay dividends up to $24.0 million plus net profits for the remainder of 2013, as defined by statute, up to the dividend declaration date without prior regulatory permission.

The Parent Company used cash obtained from the dividends received primarily to: (1) pay common dividends to shareholders, (2) remit interest payments on the Company’s junior subordinated debentures, and (3) fund repurchase of the Company’s common shares.

Over the next 12 months, the Parent Company has an obligation to remit interest payments approximating $0.6 million on the junior subordinated debentures held by City Holding Capital Trust III. Additionally, the Parent Company anticipates continuing the payment of dividends, which are expected to approximate $23.3 million on an annualized basis over the next 12 months based on common shareholders of record at September 30, 2013.  However, interest payments on the debentures can be deferred for up to five years under certain circumstances and dividends to shareholders can, if necessary, be suspended.  In addition to these anticipated cash needs, the Parent Company has operating expenses and other contractual obligations, which are estimated to require $0.7 million of additional cash over the next 12 months. As of September 30, 2013, the Parent Company reported a cash balance of $2.7 million and management believes that the Parent Company’s available cash balance, together with cash dividends from City National Bank will be adequate to satisfy its funding and cash needs over the next twelve months.

Excluding the interest and dividend payments discussed above, the Parent Company has no significant commitments or obligations in years after 2013 other than the repayment of its $16.5 million obligation under the debentures held by City Holding Capital Trust III. However, this obligation does not mature until June 2038, or earlier at the option of the Parent Company. It is expected that the Parent Company will be able to obtain the necessary cash, either through dividends obtained from City National Bank or the issuance of other debt, to fully repay the debentures at their maturity.

City National Bank manages its liquidity position in an effort to effectively and economically satisfy the funding needs of its customers and to accommodate the scheduled repayment of borrowings. Funds are available to City National Bank from a number of sources, including depository relationships, sales and maturities within the investment securities portfolio, and borrowings from the FHLB and other financial institutions. As of September 30, 2013, City National Bank’s assets are significantly funded by deposits and capital. Additionally, City National Bank maintains borrowing facilities with the FHLB and other financial institutions that are accessed as necessary to fund operations and to provide contingency funding mechanisms. As of September 30, 2013, City National Bank has the capacity to borrow an additional $1.4 billion from the FHLB and other financial institutions under existing borrowing facilities. City National Bank maintains a contingency funding plan, incorporating these borrowing facilities, to address liquidity needs in the event of an institution-specific or systemic financial industry crisis. Also, City National Bank maintains a significant percentage (95.0%, or $329.2 million million at September 30, 2013) of its investment securities portfolio in the highly liquid available-for-sale classification. Although it has no current intention to do so, these securities could be liquidated, if necessary, to provide an additional funding source.  City National Bank also segregates certain mortgage loans, mortgage-backed securities, and other investment securities in a separate subsidiary so that it can separately monitor the asset quality of these primarily mortgage-related assets, which could be used to raise cash through securitization transactions or obtain additional equity or debt financing if necessary.

The Company manages its asset and liability mix to balance its desire to maximize net interest income against its desire to minimize risks associated with capitalization, interest rate volatility, and liquidity. With respect to liquidity, the Company has chosen a conservative posture and believes that its liquidity position is strong. The Company’s net loan to asset ratio is 74.7% as

54

of September 30, 2013 and deposit balances fund 82.7% of total assets. The Company has obligations to extend credit, but these obligations are primarily associated with existing home equity loans that have predictable borrowing patterns across the portfolio. The Company has investment security balances with carrying values that totaled $346.6 million million at September 30, 2013, and that greatly exceeded the Company’s non-deposit sources of borrowing which totaled $167.4 million.  Further, the Company’s deposit mix has a very high proportion of transaction and savings accounts that fund 50.3% of the Company’s total assets.

As illustrated in the Consolidated Statements of Cash Flows, the Company generated $58.4 million of cash from operating activities during the first nine months of 2013, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings.  The Company used $1.9 million of cash in investing activities during the first nine months of 2013 primarily from the purchase of available-for-sale securities.  The Company generated $38.1 million of cash in financing activities during the first nine months of 2013, principally as a result of an increase in short-term borrowings ($36.3 million) and deposits ($16.1 million), partially offset by cash dividends paid to the Company’s common stockholders of $17.1 million.

Capital Resources

During the first nine months of 2013, Shareholders’ Equity increased $44.8 million, or 13.4%, from $333.3 million at December 31, 2012 to $378.0 million at September 30, 2013.  This increase was primarily due to the acquisition of Community ($28.5 million) and net income of $35.0 million, partially offset by dividends declared of $17.7 million.

Regulatory guidelines require the Company to maintain a minimum total capital to risk-adjusted assets ratio of 8.0%, with at least one-half of capital consisting of tangible common stockholders’ equity and a minimum Tier I leverage ratio of 4.0%. Similarly, City National Bank is also required to maintain minimum capital levels as set forth by various regulatory agencies. Under capital adequacy guidelines, City National Bank is required to maintain minimum total capital, Tier I capital, and leverage ratios of 8.0%, 4.0%, and 4.0%, respectively. To be classified as “well capitalized,” City National Bank must maintain total capital, Tier I capital, and leverage ratios of 10.0%, 6.0%, and 5.0%, respectively.

The Company’s regulatory capital ratios for both City Holding and City National Bank as illustrated in the following table:

City Holding:	Minimum		Well- Capitalized		Actual
					September 30, 2013		December 31, 2012
Total	8.0	%	10.0	%	13.5	%	13.9	%
Tier I Risk-based	4.0		6.0		12.7		13.0
Tier I Leverage	4.0		5.0		9.4		9.8
City National Bank:
Total	8.0	%	10.0	%	13.1	%	12.4	%
Tier I Risk-based	4.0		6.0		12.2		11.5
Tier I Leverage	4.0		5.0		9.1		8.7

As of September 30, 2013, management believes that City Holding Company, and its banking subsidiary, City National Bank, were “well capitalized.”  City Holding is subject to regulatory capital requirements administered by the Federal Reserve, while City National Bank is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”).  Regulatory agencies can initiate certain mandatory actions if either City Holding or City National Bank fails to meet the minimum capital requirements, as shown above.  As of September 30, 2013, management believes that City Holding and City National Bank meet all capital adequacy requirements.

In July 2013, the Federal Reserve published the final rules that establish a new comprehensive capital framework for banking organizations, commonly referred to as Basel III. These final rules substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions. The final rule is effective January 1, 2015 for smaller, non-complex banking organizations with full implementation by January 1, 2019.

Item 3 - Quantitative and Qualitative Disclosure About Market Risk

55

The information called for by this item is provided under the caption “Risk Management” under Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 4 - Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, the Company carried out an evaluation, with the participation of the Company’smanagement, including the Company’sChief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Company’sChief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’speriodic SEC filings.  There has been no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately decided. There can be no assurance that current actions will have immaterial results, either positive or negative, or that no material actions may be presented in the future.

Item 1A. Risk Factors

There have been no material changes to the factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits

56

		(a) Exhibits
		31(a)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Charles R. Hageboeck
		31(b)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for David L. Bumgarner
		32(a)	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Charles R. Hageboeck
		32(b)	Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for David L. Bumgarner
		101.INS	XBRL Instance Document*
		101.SCH	XBRL Taxonomy Extension Schema*
		101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
		101.DEF	XBRL Taxonomy Extension Definition Linkbase*
		101.LAB	XBRL Taxonomy Extension Label Linkbase*
		101.PRE	XBRL Taxonomy Extension Presentation Linkbase*
·	Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

City Holding Company

(Registrant)

/s/ Charles R. Hageboeck

Charles R. Hageboeck

President and Chief Executive Officer

(Principal Executive Officer)

/s/ David L. Bumgarner

David L. Bumgarner

Senior Vice President, Chief Financial Officer and Principal Accounting Officer

(Principal Financial Officer)

Date: November 7, 2013

57

EX-31.A

Exhibit 31(a)

CERTIFICATION

I, Charles R. Hageboeck, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 of City Holding Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or such persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(a) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2013

/s/ Charles R. Hageboeck

Charles R. Hageboeck

President and Chief Executive Officer

EX-31.B

Exhibit 31(b)

CERTIFICATION

I, David L. Bumgarner, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 of City Holding Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or such persons performing the equivalent functions)

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(a) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2013

/s/ David L. Bumgarner

David L. Bumgarner

Senior Vice President and Chief Financial Officer

EX-32.A

Exhibit 32(a)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of City Holding Company (the “Company”) for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles R. Hageboeck, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Charles R. Hageboeck

Charles R. Hageboeck

President and Chief Executive Officer

Date: November 7, 2013

This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the“Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

EX-32.B

Exhibit 32(b)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of City Holding Company (the “Company”) for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David L. Bumgarner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David L. Bumgarner

David L. Bumgarner

Senior Vice President and Chief Financial Officer

Date: November 7, 2013

This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

XML

Fair Value Measurements (Narrative) (Details)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Inputs, Prepayment Rate	1.00%
Annual prepayments maturity	100.00%
Additional basis points	1.50%
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral discount	30.00%	30.00%
Minimum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Collateral discount	20.00%	20.00%

XML

Fair Value Measurements (Schedule Of Reconciliation Of Investment Securities Available For Sale Measured At Fair Value On A Recurring Basis Level 3 Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 2,385	$ 1,982
Impairment losses on investment securities	0	(576)
Included in other comprehensive income	2,176	940
Dispositions	(1,776)	0
Transfers into Level 3	0	0
Ending Balance	$ 2,785	$ 2,346

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2013

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

Long-Term Debt

The components of long-term debt are summarized below (in thousands):

	September 30, 2013		December 31, 2012
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.75% and 3.89%, respectively	$	16,495	$	16,495

The Company formed a statutory business trust, City Holding Capital Trust III (“Capital Trust III”), under the laws of Delaware.  Capital Trust III was created for the exclusive purpose of (i) issuing trust-preferred capital securities (“Capital Securities”), which represent preferred undivided beneficial interests in the assets of the trust, (ii) using the proceeds from the sale of the Capital Securities to acquire junior subordinated debentures (“Debentures”) issued by the Company, and (iii) engaging in only those activities necessary or incidental thereto.  The trust is considered a variable interest entity for which the Company is not the primary beneficiary.  Accordingly, the accounts of the trusts are not included in the Company’s consolidated financial statements.

Distributions on the Debentures are cumulative and will be payable quarterly at an interest rate of 3.50% over the three month LIBOR rate, reset quarterly.  Interest payments are due in March, June, September and December.  The Debentures are redeemable prior to maturity at the option of the Company (i) in whole or at any time or in part from time-to-time, at declining redemption prices ranging from 103.525% to 100.000% on June 15, 2013, and thereafter, or (ii) in whole, but not in part, at any time within 90 days following the occurrence and during the continuation of certain pre-defined events.

Payments of distributions on the trust preferred securities and payments on redemption of the trust preferred securities are guaranteed by the Company.  The Company also entered into an agreement as to expenses and liabilities with the trust pursuant to which it agreed, on a subordinated basis, to pay any cost, expenses or liabilities of the trust other than those arising under the trust preferred securities.  The obligations of the Company under the junior subordinated debentures, the related indentures, the trust agreement establishing the trust, the guarantees and the agreements as to expenses and liabilities, in the aggregate, constitute a full and unconditional guarantee by the Company of the trust’s obligations under the trust preferred securities.  The Capital Securities issued by the statutory business trusts qualify as Tier 1 capital for the Company under current Federal Reserve Board guidelines.

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Allowance For Loan Losses (Schedule Of Allowance For Loan Loss By Portfolio Segment) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	$ 18,809	$ 19,409
Allowance for loan loss, Charge-offs	4,879	5,997
Allowance for loan loss, Recoveries	1,773	974
Allowance for loan loss, Provision	4,903	4,600
Allowance for loan loss, Ending balance	20,606	18,986
Allowance for loan loss, Evaluated for impairment, Individually	880		0
Allowance for loan loss, Evaluated for impairment, Collectively	19,636		18,809
Allowance for loan loss, Acquired with deteriorated credit quality	90		0
Allowance for loan loss, Total	20,606		18,809
Loans, Evaluated for impairment, Individually	12,840		10,679
Loans, Evaluated for impairment, Collectively	2,516,410		2,128,672
Loans, Acquired with deteriorated credit quality	29,206		7,018
Total	2,558,456		2,146,369
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	498	590
Allowance for loan loss, Charge-offs	772	126
Allowance for loan loss, Recoveries	51	12
Allowance for loan loss, Provision	1,460	45
Allowance for loan loss, Ending balance	1,237	521
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	1,237		498
Allowance for loan loss, Acquired with deteriorated credit quality	0		0
Allowance for loan loss, Total	1,237		498
Loans, Evaluated for impairment, Individually	0		0
Loans, Evaluated for impairment, Collectively	148,262		107,044
Loans, Acquired with deteriorated credit quality	2,923		1,695
Total	151,185		108,739
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	10,440	11,666
Allowance for loan loss, Charge-offs	803	2,860
Allowance for loan loss, Recoveries	669	100
Allowance for loan loss, Provision	201	1,684
Allowance for loan loss, Ending balance	10,507	10,590
Allowance for loan loss, Evaluated for impairment, Individually	880		0
Allowance for loan loss, Evaluated for impairment, Collectively	9,537		10,440
Allowance for loan loss, Acquired with deteriorated credit quality	90		0
Allowance for loan loss, Total	10,507		10,440
Loans, Evaluated for impairment, Individually	12,082		9,912
Loans, Evaluated for impairment, Collectively	987,711		807,060
Loans, Acquired with deteriorated credit quality	22,485		4,998
Total	1,022,278		821,970
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	5,229	3,591
Allowance for loan loss, Charge-offs	1,598	746
Allowance for loan loss, Recoveries	137	15
Allowance for loan loss, Provision	2,481	955
Allowance for loan loss, Ending balance	6,249	3,815
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	6,249		5,229
Allowance for loan loss, Acquired with deteriorated credit quality	0		0
Allowance for loan loss, Total	6,249		5,229
Loans, Evaluated for impairment, Individually	461		469
Loans, Evaluated for impairment, Collectively	1,186,995		1,030,840
Loans, Acquired with deteriorated credit quality	1,385		126
Total	1,188,841		1,031,435
Home equity - junior liens (including lines of credit) [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	1,699	2,773
Allowance for loan loss, Charge-offs	278	989
Allowance for loan loss, Recoveries	0	12
Allowance for loan loss, Provision	268	1,250
Allowance for loan loss, Ending balance	1,689	3,046
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	1,689		1,699
Allowance for loan loss, Acquired with deteriorated credit quality	0		0
Allowance for loan loss, Total	1,689		1,699
Loans, Evaluated for impairment, Individually	297		298
Loans, Evaluated for impairment, Collectively	138,285		142,724
Loans, Acquired with deteriorated credit quality	2,305		88
Total	140,887		143,110
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	81	88
Allowance for loan loss, Charge-offs	326	148
Allowance for loan loss, Recoveries	242	90
Allowance for loan loss, Provision	79	75
Allowance for loan loss, Ending balance	76	105
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	76		81
Allowance for loan loss, Acquired with deteriorated credit quality	0		0
Allowance for loan loss, Total	76		81
Loans, Evaluated for impairment, Individually	0		0
Loans, Evaluated for impairment, Collectively	50,649		36,453
Loans, Acquired with deteriorated credit quality	108		111
Total	50,757		36,564
DDA Overdrafts [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	862	701
Allowance for loan loss, Charge-offs	1,102	1,128
Allowance for loan loss, Recoveries	674	745
Allowance for loan loss, Provision	414	591
Allowance for loan loss, Ending balance	848	909
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	848		862
Allowance for loan loss, Acquired with deteriorated credit quality	0		0
Allowance for loan loss, Total	848		862
Loans, Evaluated for impairment, Individually	0		0
Loans, Evaluated for impairment, Collectively	4,508		4,551
Loans, Acquired with deteriorated credit quality	0		0
Total	$ 4,508		$ 4,551

XML

Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest Income
Interest and fees on loans	$ 32,983	$ 24,633	$ 94,693	$ 70,843
Interest on investment securities:
Taxable	2,392	3,438	7,774	11,345
Tax-exempt	299	346	935	1,101
Interest on federal funds sold	0	15	22	38
Total Interest Income	35,674	28,432	103,424	83,327
Interest Expense
Interest on deposits	3,068	3,312	9,490	10,363
Interest on short-term borrowings	82	79	232	229
Interest on long-term debt	154	166	464	499
Total Interest Expense	3,304	3,557	10,186	11,091
Net Interest Income	32,370	24,875	93,238	72,236
Provision for loan losses	1,154	975	4,903	4,600
Net Interest Income After Provision for Loan Losses	31,216	23,900	88,335	67,636
Non-interest Income
Total investment securities impairment losses	0	(272)	0	(878)
Noncredit impairment losses recognized in other comprehensive income	0	0	0	302
Net investment securities impairment losses	0	(272)	0	(576)
Gains on sale of investment securities	0	730	93	1,530
Net investment securities gains	0	458	93	954
Service charges	7,169	6,751	20,601	19,296
Bankcard revenue	3,468	3,110	10,117	9,305
Insurance commissions	1,365	1,439	4,563	4,782
Trust and investment management fee income	939	912	2,893	2,662
Bank owned life insurance	805	738	2,416	2,228
Other income	734	671	2,376	1,762
Total Non-interest Income	14,480	14,079	43,059	40,989
Non-interest Expense
Salaries and employee benefits	12,930	11,295	38,519	32,207
Occupancy and equipment	2,409	2,126	7,381	6,038
Depreciation	1,437	1,175	4,289	3,371
FDIC insurance expense	500	405	1,352	1,184
Advertising	712	674	2,266	1,993
Bankcard expenses	680	720	2,173	2,035
Postage, delivery, and statement mailings	541	529	1,698	1,565
Office supplies	416	407	1,320	1,258
Legal and professional fees	591	611	1,561	1,349
Telecommunications	721	433	1,631	1,209
Repossessed asset losses, net of expenses	896	429	718	1,200
Merger related costs	(150)	157	5,455	4,335
Other expenses	2,982	2,885	9,664	8,382
Total Non-interest Expense	24,665	21,846	78,027	66,126
Income Before Income Taxes	21,031	16,133	53,367	42,499
Income tax expense	7,056	5,526	18,398	14,450
Net Income Available to Common Shareholders	13,975	10,607	34,969	28,049
Total comprehensive income	$ 13,342	$ 12,719	$ 30,217	$ 31,591
Average common shares outstanding (in shares)	15,608	14,751	15,545	14,700
Effect of dilutive securities:
Employee stock awards and warrants outstanding (in shares)	182	83	168	83
Shares for diluted earnings per share (in shares)	15,790	14,834	15,713	14,783
Basic earnings per common share (in dollars per share)	$ 0.89	$ 0.71	$ 2.23	$ 1.89
Diluted earnings per common share (in dollars per share)	$ 0.88	$ 0.71	$ 2.21	$ 1.88
Dividends declared per common share (in dollars per share)	$ 0.37	$ 0.35	$ 1.11	$ 1.05

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Basis Of Presentation

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis Of Presentation

Basis of Presentation

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of City Holding Company (“the Parent Company”) and its wholly-owned subsidiaries (collectively, “the Company”). All material intercompany transactions have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and financial condition for each of the periods presented. Such adjustments are of a normal recurring nature. The results of operations for nine months endedSeptember 30, 2013 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2013. The Company’s accounting and reporting policies conform with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Such policies require management to make estimates and develop assumptions that affect the amounts reported in the consolidated financial statements and related footnotes. Actual results could differ from management’s estimates.

The consolidated balance sheet as of December 31, 2012 has been derived from audited financial statements included in the Company’s 2012 Annual Report to Shareholders.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted.  These financial statements should be read in conjunction with the financial statements and notes thereto included in the 2012 Annual Report of the Company.

Certain amounts in the financial statements have been reclassified.  Such reclassifications had no impact on shareholders’ equity or net income for any period.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Schedule of Business Acquisition

The purchase price of both acquisitions has been allocated as follows (in thousands):

			(preliminary)
	Virginia Savings		Community		Total
Date of acquisition	May 31, 2012		January 10, 2013
Consideration:
Cash	$	4,672	$	12,738	$	17,410
Common stock	7,723		27,783		35,506
Warrant issued	—		725		725
	$	12,395	$	41,246	$	53,641
Identifiable assets:
Cash and cash equivalents	$	24,943	$	8,888	$	33,831
Investment securities	14,082		17,659		31,741
Loans	73,463		370,754		444,217
Bank owned life insurance	—		6,935		6,935
Premises and equipment	5,158		8,950		14,108
Deferred tax asset, net	4,173		15,228		19,401
Other assets	4,626		7,988		12,614
Total identifiable assets	126,445		436,402		562,847
Identifiable liabilities:
Deposits	122,723		383,070		505,793
Other liabilities	841		24,086		24,927
Total identifiable liabilities	123,564		407,156		530,720
Net identifiable asset	2,881		29,246		32,127
Goodwill	8,241		9,289		17,530
Core deposit intangible	1,273		2,711		3,984
	$	12,395	$	41,246	$	53,641

Acquired Loans At Acquisition

The following table presents the purchased credit-impaired loans acquired in conjunction with both acquisitions (in thousands):

	Virginia
	Savings			Community			Total
Contractually required principal and interest	$	11,567		$	58,014		$	69,581
Contractual cash flows not expected to be collected (non-accretable difference)	(3,973		)	(20,724		)	(24,697		)
Expected cash flows	7,594			37,290			44,884
Interest component of expected cash flows (accretable difference)	(954		)	(5,587		)	(6,541		)
Estimated fair value of purchased credit impaired loans acquired	$	6,640		$	31,703		$	38,343

Schedule Of Intangible Assets

The following table presents a rollforward of the Company’s intangible assets from the beginning of the year (in thousands):

	Intangible Assets
Balance, beginning of period	$	2,069
Core deposit intangible acquired in conjunction with the acquisition of Community	2,711
Amortization expense	(779		)
Balance, end of period	$	4,001

Schedule Of Goodwill

 The following table presents a rollforward of goodwill from the beginning of the year (in thousands):

	Goodwill
Balance, beginning of period	$	62,988
Adjustment to goodwill acquired in conjunction with the acquisition of Virginia Savings	142
Goodwill acquired in conjunction with the acquisition of Community	9,289
Balance, end of period	$	72,419

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Employee Benefit Plans (Summary Of Stock Option Activity) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options Outstanding, beginning balance	289,544	293,817
Options, Granted	15,475	16,876
Options, Exercised	(107,140)	(18,899)
Options, Forfeited	(2,250)	(1,500)
Options Outstanding, ending balance	195,629	290,294
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted-Average Exercise Price, Outstanding, beginning balance	$ 34.38	$ 33.95
Weighted-Average Exercise Price, Granted	$ 37.74	$ 35.39
Weighted-Average Exercise Price, Exercised	$ 33.36	$ 28.78
Weighted-Average Exercise Price, Forfeited	$ 34.73	$ 34.73
Weighted-Average Exercise Price, Outstanding, ending balance	$ 35.19	$ 34.37

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Allowance For Loan Losses (Schedule Of Aging Analysis Of Accruing And Non-Accruing Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 2,518,534	$ 2,114,206
30 - 59 days past due	8,882	8,374
60 - 89 days past due	1,337	1,574
Over 90 days past due	418	280
Impaired Financing Receivable, Recorded Investment, Past Due	7,750	2,741
Non-accrual	21,535	19,194
Total	2,558,456	2,146,369
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,179,469	1,023,633
30 - 59 days past due	5,332	4,910
60 - 89 days past due	815	599
Over 90 days past due	299	239
Non-accrual	2,926	2,054
Total	1,188,841	1,031,435
Home equity - junior liens (including lines of credit) [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	140,025	139,105
30 - 59 days past due	739	2,379
60 - 89 days past due	5	477
Over 90 days past due	11	37
Non-accrual	107	1,112
Total	140,887	143,110
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	148,360	107,141
30 - 59 days past due	207	260
60 - 89 days past due	40	236
Over 90 days past due	59	0
Impaired Financing Receivable, Recorded Investment, Past Due	1,865	1,004
Non-accrual	654	98
Total	151,185	108,739
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	996,494	803,614
30 - 59 days past due	1,669	442
60 - 89 days past due	382	246
Over 90 days past due	0	1
Impaired Financing Receivable, Recorded Investment, Past Due	5,885	1,737
Non-accrual	17,848	15,930
Total	1,022,278	821,970
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	49,958	36,443
30 - 59 days past due	665	113
60 - 89 days past due	87	8
Over 90 days past due	47	0
Non-accrual	0	0
Total	50,757	36,564
DDA Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	4,228	4,270
30 - 59 days past due	270	270
60 - 89 days past due	8	8
Over 90 days past due	2	3
Non-accrual	0	0
Total	4,508	4,551
Originated Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,194,324	2,051,784
30 - 59 days past due	5,969	8,365
60 - 89 days past due	923	1,527
Over 90 days past due	247	280
Non-accrual	16,236	19,194
Total	2,217,699	2,081,150
Originated Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,072,148	1,008,190
30 - 59 days past due	4,484	4,910
60 - 89 days past due	696	599
Over 90 days past due	234	239
Non-accrual	2,286	2,054
Total	1,079,848	1,015,992
Originated Loans [Member] | Home equity - junior liens (including lines of credit) [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	139,614	132,847
30 - 59 days past due	716	2,379
60 - 89 days past due	5	477
Over 90 days past due	11	37
Non-accrual	107	1,112
Total	140,453	136,852
Originated Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	127,856	105,989
30 - 59 days past due	5	260
60 - 89 days past due	0	236
Over 90 days past due	0	0
Non-accrual	303	98
Total	128,164	106,583
Originated Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	816,383	766,404
30 - 59 days past due	408	433
60 - 89 days past due	204	199
Over 90 days past due	0	1
Non-accrual	13,540	15,930
Total	830,535	782,967
Originated Loans [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	34,095	34,084
30 - 59 days past due	86	113
60 - 89 days past due	10	8
Over 90 days past due	0	0
Non-accrual	0	0
Total	34,191	34,205
Originated Loans [Member] | DDA Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	4,228	4,270
30 - 59 days past due	270	270
60 - 89 days past due	8	8
Over 90 days past due	2	3
Non-accrual	0	0
Total	4,508	4,551
Acquired Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	324,210	62,422
30 - 59 days past due	2,913	9
60 - 89 days past due	414	47
Over 90 days past due	171	0
Impaired Financing Receivable, Recorded Investment, Past Due	7,750	2,741
Non-accrual	5,299	0
Total	340,757	65,219
Acquired Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	107,321	15,443
30 - 59 days past due	848	0
60 - 89 days past due	119	0
Over 90 days past due	65	0
Non-accrual	640	0
Total	108,993	15,443
Acquired Loans [Member] | Home equity - junior liens (including lines of credit) [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	411	6,258
30 - 59 days past due	23	0
60 - 89 days past due	0	0
Over 90 days past due	0	0
Non-accrual	0	0
Total	434	6,258
Acquired Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	20,504	1,152
30 - 59 days past due	202	0
60 - 89 days past due	40	0
Over 90 days past due	59	0
Impaired Financing Receivable, Recorded Investment, Past Due	1,865	1,004
Non-accrual	351	0
Total	23,021	2,156
Acquired Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	180,111	37,210
30 - 59 days past due	1,261	9
60 - 89 days past due	178	47
Over 90 days past due	0	0
Impaired Financing Receivable, Recorded Investment, Past Due	5,885	1,737
Non-accrual	4,308	0
Total	191,743	39,003
Acquired Loans [Member] | Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	15,863	2,359
30 - 59 days past due	579	0
60 - 89 days past due	77	0
Over 90 days past due	47	0
Non-accrual	0	0
Total	16,566	2,359
Acquired Loans [Member] | DDA Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	0	0
30 - 59 days past due	0	0
60 - 89 days past due	0	0
Over 90 days past due	0	0
Non-accrual	0	0
Total	$ 0	$ 0

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Derivative Instruments

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

As of September 30, 2013 and December 31, 2012, the Company has derivative financial instruments not included in hedge relationships.  These derivatives consist of interest rate swaps used for interest rate management purposes and derivatives executed with commercial banking customers to facilitate their interest rate management strategies.

The following table summarizes the fair value of these derivative instruments (in thousands):

Fair Value:	September 30, 2013		December 31, 2012
Other Assets	$	5,810	$	14,012
Other Liabilities	5,810		14,012

The following table summarizes the change in fair value of these derivative instruments (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Change in Fair Value:
Other income - derivative asset	$	(86	)	$	581		$	(7,876	)	$	2,839
Other income - derivative liability	86			(581		)	7,876			(2,839		)

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with financial institution counterparties are generally executed under International Swaps and Derivative Association ("ISDA") master agreements which include "right of setoff" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset financial instruments for financial reporting purposes. Information about financial instruments that are eligible for offset in the consolidated balance sheet as of September 30, 2013 is presented in the following tables (in thousands):

Gross Amounts

Not Offset in the Statement

of Financial Position

Total

of Gross

Amounts

Not Offset in

the Statement

of Financial

Position

Netting

Including

Gross

Net Amounts

Adjustment

Applicable

Amounts

of Assets

per

Netting

Gross

Offset in the

presented in

Applicable

Agreement

Amounts of

Statement of

the Statement

Master

Fair Value

and Fair

Recognized

Financial

of Financial

Netting

of Financial

Value of

Description

Assets

Position

Position

Arrangements

Collateral

Collateral

Net Amount

(a)

(b)

(c)=(a)-(b)

(d)

(c)-(d)

Derivative assets:

Interest rate swap agreements

$

5,810

$

—

$

5,810

$

—

$

5,810

$

5,810

$

—

Gross Amounts

Not Offset in the Statement

of Financial Position

Total

of Gross

Amounts

Not Offset in

the Statement

of Financial

Position

Netting

Including

Gross

Net Amounts

Adjustment

Applicable

Amounts

of Liabilities

per

Netting

Gross

Offset in the

presented in

Applicable

Agreement

Amounts of

Statement of

the Statement

Master

Fair Value

and Fair

Recognized

Financial

of Financial

Netting

of Financial

Value of

Description

Liabilities

Position

Position

Arrangements

Collateral

Collateral

Net Amount

(a)

(b)

(c)=(a)-(b)

(d)

(c)-(d)

Derivative liabilities:

Interest rate swap agreements

$

5,810

$

—

$

5,810

$

—

$

13,331

$

13,331

$

—

XML

Loans (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Construction loans	$ 14.8	$ 15.4
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Construction loans	$ 17.4	$ 15.4

XML

Fair Value Measurements (Schedule Of OREO Measured And Reported At Fair Value) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Other Real Estate [Roll Forward]
Beginning balance	$ 8,162	$ 7,948
Acquired	3,492	728
Disposed	(5,900)	(1,841)
Ending balance	7,518	9,117
OREO Remeasured At Initial Recognition [Member]
Other Real Estate [Roll Forward]
Carrying value of foreclosed assets prior to remeasurement	4,387	4,563
Charge-offs recognized in the allowance for loan losses	(1,565)	(1,472)
Fair value	2,822	3,091
OREO Remeasured Subsequent To Initial Recognition [Member]
Other Real Estate [Roll Forward]
Carrying value of foreclosed assets prior to remeasurement	2,832	2,681
Fair value	1,774	1,872
Write-downs included in other non-interest expense	$ (1,058)	$ (809)

XML

Allowance For Loan Losses (Schedule Of Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	$ 9,333	$ 10,679
With no related allowance recorded, Unpaid principal balance	11,213	15,548
With an allowance recorded, Recorded investment	3,507	0
With an allowance recorded, Unpaid principal balance	5,307	0
Related allowance	880	0
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	461	469
With no related allowance recorded, Unpaid principal balance	461	469
With an allowance recorded, Recorded investment	0	0
With an allowance recorded, Unpaid principal balance	0	0
Related allowance	0	0
Home equity - junior lien [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	297	298
With no related allowance recorded, Unpaid principal balance	297	298
With an allowance recorded, Recorded investment	0	0
With an allowance recorded, Unpaid principal balance	0	0
Related allowance	0	0
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	0	0
With no related allowance recorded, Unpaid principal balance	0	0
With an allowance recorded, Recorded investment	0	0
With an allowance recorded, Unpaid principal balance	0	0
Related allowance	0	0
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	8,575	9,912
With no related allowance recorded, Unpaid principal balance	10,455	14,781
With an allowance recorded, Recorded investment	3,507	0
With an allowance recorded, Unpaid principal balance	5,307	0
Related allowance	880	0
Consumer [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	0	0
With no related allowance recorded, Unpaid principal balance	0	0
With an allowance recorded, Recorded investment	0	0
With an allowance recorded, Unpaid principal balance	0	0
Related allowance	0	0
DDA Overdrafts [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	0	0
With no related allowance recorded, Unpaid principal balance	0	0
With an allowance recorded, Recorded investment	0	0
With an allowance recorded, Unpaid principal balance	0	0
Related allowance	$ 0	$ 0

XML

Acquisitions (Schedule Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Jan. 10, 2013 Community Bank [Member]
Finite-lived Intangible Assets [Roll Forward]
Balance, beginning of period	$ 2,069
Core deposit intangible acquired in conjunction with the acquisition of Community	3,984	2,711
Amortization expense	(779)
Balance, end of period	$ 4,001

XML

Allowance For Loan Losses (Tables)

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Schedule Of Allowance For Loan Loss By Portfolio Segment

The following summarizes the activity in the allowance for loan loss, by portfolio segment, for the nine months ended September 30, 2013 and 2012 (in thousands).  The following also presents the balance in the allowance for loan loss disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans, by portfolio segment, as of September 30, 2013 and December 31, 2012 (in thousands).

	Commercial &		Commercial		Residential						DDA
	Industrial		Real Estate		Real Estate		Home equity		Consumer		Overdrafts		Total
Nine months ended September 30, 2013
Allowance for loan loss
Beginning balance	$	498	$	10,440	$	5,229	$	1,699	$	81	$	862	$	18,809
Charge-offs	772		803		1,598		278		326		1,102		4,879
Recoveries	51		669		137		—		242		674		1,773
Provision	1,460		201		2,481		268		79		414		4,903
Ending balance	$	1,237	$	10,507	$	6,249	$	1,689	$	76	$	848	$	20,606
Nine months ended September 30, 2012
Allowance for loan loss
Beginning balance	$	590	$	11,666	$	3,591	$	2,773	$	88	$	701	$	19,409
Charge-offs	126		2,860		746		989		148		1,128		5,997
Recoveries	12		100		15		12		90		745		974
Provision	45		1,684		955		1,250		75		591		4,600
Ending balance	$	521	$	10,590	$	3,815	$	3,046	$	105	$	909	$	18,986
As of September 30, 2013
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	880	$	—	$	—	$	—	$	—	$	880
Collectively	1,237		9,537		6,249		1,689		76		848		19,636
Acquired with deteriorated
credit quality	—		90		—		—		—		—		90
Total	$	1,237	$	10,507	$	6,249	$	1,689	$	76	$	848	$	20,606
Loans
Evaluated for impairment:
Individually	$	—	$	12,082	$	461	$	297	$	—	$	—	$	12,840
Collectively	148,262		987,711		1,186,995		138,285		50,649		4,508		2,516,410
Acquired with deteriorated
credit quality	2,923		22,485		1,385		2,305		108		—		29,206
Total	$	151,185	$	1,022,278	$	1,188,841	$	140,887	$	50,757	$	4,508	$	2,558,456
As of December 31, 2012
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively	498		10,440		5,229		1,699		81		862		18,809
Acquired with deteriorated
credit quality	—		—		—		—		—		—		—
Total	$	498	$	10,440	$	5,229	$	1,699	$	81	$	862	$	18,809
Loans
Evaluated for impairment:
Individually	$	—	$	9,912	$	469	$	298	$	—	$	—	$	10,679
Collectively	107,044		807,060		1,030,840		142,724		36,453		4,551		2,128,672
Acquired with deteriorated
credit quality	1,695		4,998		126		88		111		—		7,018
Total	$	108,739	$	821,970	$	1,031,435	$	143,110	$	36,564	$	4,551	$	2,146,369

Schedule Of Credit Quality Indicators

The Company uses the following definitions for its risk ratings:

Risk Rating	Description
Pass ratings:
(a) Exceptional	Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy.  Loans rated within this category pose minimal risk of loss to the bank and the risk grade within this pool of loans is generally updated on an annual basis.
(b) Good	Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles.  Loans within this category are generally reviewed on an annual basis.  Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable	Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles.  Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch	Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk.  A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention	Loans classified as special mention have a potential weakness(es) that deserves management’s close attention.  The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date.  A loan rated in this category poses a moderate loss risk to the bank.
Substandard	Loans classified as substandard reflect a customer with a well defined weakness that jeopardizes the liquidation of the debt.  Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful	Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable.  Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.

The following presents loans by the Company’s commercial loans by credit quality indicators, by class (in thousands):

	Commercial and industrial		Commercial real estate		Total
September 30, 2013
Pass	$	140,999	$	939,942	$	1,080,941
Special mention	693		23,123		23,816
Substandard	9,057		58,720		67,777
Doubtful	436		493		929
Total	$	151,185	$	1,022,278	$	1,173,463
December 31, 2012
Pass	$	105,690	$	771,617	$	877,307
Special mention	878		15,015		15,893
Substandard	2,171		35,338		37,509
Doubtful	—		—		—
Total	$	108,739	$	821,970	$	930,709

Schedule Of Noncommercial Loans By Payment Performance

The following table presents the Company's non-commercial loans by payment performance, by class (in thousands):

	Performing		Non-Performing		Total
September 30, 2013
Residential real estate	$	1,185,616	$	3,225	$	1,188,841
Home equity - junior lien	140,769		118		140,887
Consumer	50,710		47		50,757
DDA overdrafts	4,506		2		4,508
Total	$	1,381,601	$	3,392	$	1,384,993
December 31, 2012
Residential real estate	$	1,029,142	$	2,293	$	1,031,435
Home equity - junior lien	141,961		1,149		143,110
Consumer	36,564		—		36,564
DDA overdrafts	4,548		3		4,551
Total	$	1,212,215	$	3,445	$	1,215,660

Schedule Of Aging Analysis Of Accruing And Non-Accruing Loans

The following presents an aging analysis of the Company’s accruing and non-accruing loans, by class, as of September 30, 2013 and December 31, 2012 (in thousands):

	Originated Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,072,148	$	4,484	$	696	$	234	$	—	$	2,286	$	1,079,848
Home equity - junior lien	139,614		716		5		11		—		107		140,453
Commercial and industrial	127,856		5		—		—		—		303		128,164
Commercial real estate	816,383		408		204		—		—		13,540		830,535
Consumer	34,095		86		10		—		—		—		34,191
DDA overdrafts	4,228		270		8		2		—		—		4,508
Total	$	2,194,324	$	5,969	$	923	$	247	$	—	$	16,236	$	2,217,699
	Acquired Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	107,321	$	848	$	119	$	65	$	—	$	640	$	108,993
Home equity - junior lien	411		23		—		—		—		—		434
Commercial and industrial	20,504		202		40		59		1,865		351		23,021
Commercial real estate	180,111		1,261		178		—		5,885		4,308		191,743
Consumer	15,863		579		77		47		—		—		16,566
DDA overdrafts	—		—		—		—		—		—		—
Total	$	324,210	$	2,913	$	414	$	171	$	7,750	$	5,299	$	340,757
	Total Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,179,469	$	5,332	$	815	$	299	$	—	$	2,926	$	1,188,841
Home equity - junior lien	140,025		739		5		11		—		107		140,887
Commercial and industrial	148,360		207		40		59		1,865		654		151,185
Commercial real estate	996,494		1,669		382		—		5,885		17,848		1,022,278
Consumer	49,958		665		87		47		—		—		50,757
DDA overdrafts	4,228		270		8		2		—		—		4,508
Total	$	2,518,534	$	8,882	$	1,337	$	418	$	7,750	$	21,535	$	2,558,456
	Originated Loans
	December 31, 2012
	Accruing

	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,008,190	$	4,910	$	599	$	239	$	—	$	2,054	$	1,015,992
Home equity - junior lien	132,847		2,379		477		37		—		1,112		136,852
Commercial and industrial	105,989		260		236		—		—		98		106,583
Commercial real estate	766,404		433		199		1		—		15,930		782,967
Consumer	34,084		113		8		—		—		—		34,205
DDA overdrafts	4,270		270		8		3		—		—		4,551
Total	$	2,051,784	$	8,365	$	1,527	$	280	$	—	$	19,194	$	2,081,150
	Acquired Loans
	December 31, 2012
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	15,443	$	—	$	—	$	—	$	—	$	—	$	15,443
Home equity - junior lien	6,258		—		—		—		—		—		6,258
Commercial and industrial	1,152		—		—		—		1,004		—		2,156
Commercial real estate	37,210		9		47		—		1,737		—		39,003
Consumer	2,359		—		—		—		—		—		2,359
DDA overdrafts	—		—		—		—		—		—		—
Total	$	62,422	$	9	$	47	$	—	$	2,741	$	—	$	65,219
	Total Loans
	December 31, 2012
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,023,633	$	4,910	$	599	$	239	$	—	$	2,054	$	1,031,435
Home equity - junior lien	139,105		2,379		477		37		—		1,112		143,110
Commercial and industrial	107,141		260		236		—		1,004		98		108,739
Commercial real estate	803,614		442		246		1		1,737		15,930		821,970
Consumer	36,443		113		8		—		—		—		36,564
DDA overdrafts	4,270		270		8		3		—		—		4,551
Total	$	2,114,206	$	8,374	$	1,574	$	280	$	2,741	$	19,194	$	2,146,369

Schedule Of Impaired Loans

The following presents the Company’s impaired loans, by class, as of September 30, 2013 and December 31, 2012 (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off.

	September 30, 2013						December 31, 2012
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate	$	461	$	461	$	—	$	469	$	469	$	—
Home equity - junior liens	297		297		—		298		298		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	8,575		10,455		—		9,912		14,781		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	9,333	$	11,213	$	—	$	10,679	$	15,548	$	—
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	3,507		5,307		880		—		—		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	3,507	$	5,307	$	880	$	—	$	—	$	—

Schedule Of Information Related To Average Recorded Investment And Interest Income Recognized On Impaired Loans

The following table presents information related to the average recorded investment and interest income recognized on the Company’s impaired loans, by class (in thousands):

	For the nine months ended
	September 30, 2013				September 30, 2012
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Residential real estate	$	464	$	—	$	—	$	—
Home equity - junior liens	297		—		—		—
Commercial and industrial	—		—		81		4
Commercial real estate	9,200		24		7,472		232
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	9,961	$	24	$	7,553	$	236
With an allowance recorded
Residential real estate	$	—	$	—	$	1,254	$	36
Home equity - junior liens	—		—		1,354		30
Commercial and industrial	—		—		203		7
Commercial real estate	3,277		—		11,197		378
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	3,277	$	—	$	14,008	$	451

Schedule Of Troubled Debt Restructurings

The following tables set forth the Company’s TDRs (in thousands):

	September 30, 2013						December 31, 2012
			Non-						Non-
	Accruing		Accruing		Total		Accruing		Accruing		Total
Commercial and industrial	$	91	$	—	$	91	$	101	$	—	$	101
Commercial real estate	1,567		—		1,567		734		—		734
Residential real estate	19,416		964		20,380		15,083		162		15,245
Home equity	2,758		14		2,772		7,068		418		7,486
Consumer	—		—		—		142		—		142
	$	23,832	$	978	$	24,810	$	23,128	$	580	$	23,708

	New TDRs					New TDRs
	For the nine months ended					For the nine months ended
	September 30, 2013					September 30, 2012
		Pre		Post			Pre		Post
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	1	$	91	$	91	—	$	—	$	—
Commercial real estate	3	1,567		1,567		—	—		—
Residential real estate	30	2,808		2,808		—	—		—
Home equity	12	323		323		—	—		—
Consumer	—	—		—		1	144		144
	46	$	4,789	$	4,789	1	$	144	$	144

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Loans (Tables)

9 Months Ended

Sep. 30, 2013

Loans Receivable, Net [Abstract]

Summary Of Major Classifications For Loans

The following summarizes the Company’s major classifications for loans (in thousands):

	September 30, 2013			December 31, 2012
Residential real estate	$	1,188,841		$	1,031,435
Home equity – junior liens	140,887			143,110
Commercial and industrial	151,185			108,739
Commercial real estate	1,022,278			821,970
Consumer	50,757			36,564
DDA overdrafts	4,508			4,551
Gross loans	2,558,456			2,146,369
Allowance for loan losses	(20,606		)	(18,809		)
Net loans	$	2,537,850		$	2,127,560

Composition Of Loans Acquired At Acquisition

The following table details the loans acquired in conjunction with the Virginia Savings and Community acquisitions (in thousands):

	Virginia
	Savings		Community		Total
September 30, 2013
Outstanding loan balance	$	52,640	$	288,117	$	340,757
Credit-impaired loans:
Carrying value	4,248		24,958		29,206
Contractual principal and interest	5,253		40,896		46,149
December 31, 2012
Outstanding loan balance	$	65,219	$	—	$	65,219
Credit-impaired loans:
Carrying value	7,018		—		7,018
Contractual principal and interest	10,759		—		10,759

Activity For The Accretable Yield

Changes in the accretable yield of the credit-impaired loans for the nine months ended September 30, 2013 is as follows (in thousands):

	Virginia Savings						Community						Total
				Carrying						Carrying						Carrying
	Accretable			Amount			Accretable			Amount			Accretable			Amount
	Yield			of Loans			Yield			of Loans			Yield			of Loans
Balance at the beginning of the period	$	1,823		$	7,018		$	—		$	—		$	1,823		$	7,018
Additions	—			—			5,587			31,790			5,587			31,790
Accretion	(844		)	844			(1,665		)	1,665			(2,509		)	2,509
Net reclassifications to accretable yield from
non-accretable yield	889			—			—			—			889			—
Payments received, net	—			(3,585		)	—			(8,497		)	—			(12,082		)
Disposals	(604		)	(29		)	(344		)	—			(948		)	(29		)
Balance at the end of period	$	1,264		$	4,248		$	3,578		$	24,958		$	4,842		$	29,206

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Investments (Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Investments [Abstract]
Securities Available-for-Sale, Due in one year or less, Cost	$ 5,566
Securities Available-for-Sale, Due after one year through five years, Cost	24,206
Securities Available-for-Sale, Due after five years through ten years, Cost	36,483
Securities Available-for-Sale, Due after ten years, Cost	258,876
Securities Available-for-Sale, Cost, Total	325,131
Securities Available-for-Sale, Due in one year or less, Estimated Fair Value	5,581
Securities Available-for-Sale, Due after one year through five years, Estimated Fair Value	24,677
Securities Available-for-Sale, Due after five years through ten years, Estimated Fair Value	37,258
Securities Available-for-Sale, Due after ten years, Estimated Fair Value	255,268
Securities Available-for-Sale, Estimated Fair Value, Total	322,784
Securities Held-to-Maturity, Due after ten years, Cost	3,994
Securities Held-to-Maturity, Cost, Total	3,994
Securities Held-to-Maturity, Due after ten years, Estimated Fair Value	6,406
Securities Held-to-Maturity, Estimated Fair Value, Total	$ 6,406

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring And Nonrecurring Basis

The following table presents assets and liabilities measured at fair value (in thousands):

	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
September 30, 2013
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	2,572	$	—	$	2,572	$	—
Obligations of states and political subdivisions	41,849		—		41,849		—
Mortgage-backed securities:
U.S. Government agencies	254,639		—		254,639		—
Private label	2,400		—		2,400		—
Trust preferred securities	12,008		—		9,223		2,785
Corporate securities	9,316		—		9,316		—
Marketable equity securities	4,956		4,956		—		—
Investment funds	1,507		1,507		—		—
Derivative assets	5,810		—		5,810		—
Financial Liabilities
Derivative liabilities	5,810		—		5,810		—
Nonrecurring fair value measurements
Impaired loans	$	11,960	$	—	$	—	$	11,960	$	(880	)
Other real estate owned	7,518		—		—		7,518		(1,058		)
December 31, 2012
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	3,888	$	—	$	3,888	$	—
Obligations of states and political subdivisions	48,929		—		48,929		—
Mortgage-backed securities:
U.S. Government agencies	286,482		—		286,482		—
Private label	3,272		—		3,272		—
Trust preferred securities	12,645		—		10,260		2,385
Corporate securities	15,947		—		15,947		—
Marketable equity securities	4,185		4,185		—		—
Investment funds	1,774		1,774		—		—
Derivative assets	14,012		—		14,012		—
Financial Liabilities
Derivative liabilities	14,012		—		14,012		—
Nonrecurring fair value measurements
Impaired loans	$	10,679	$	—	$	—	$	10,679	$	—
Other real estate owned	$	8,162	$	—	$	—	$	8,162	$	(1,021	)
Other assets	$	1,000	$	—	$	1,000	$	—	$	(288	)

Schedule Of Reconciliation Of Investment Securities Available For Sale Measured At Fair Value On A Recurring Basis Level 3 Assets

The table below presents a reconcilement of the Company’s financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

	Nine months ended September 30,
	2013			2012
Beginning balance	$	2,385		$	1,982
Impairment losses on investment securities	—			(576		)
Included in other comprehensive income	2,176			940
Dispositions	(1,776		)	—
Transfers into Level 3	—			—
Ending Balance	$	2,785		$	2,346

Schedule Of Level 3 Financial Assets And Liabilities Measured On A Non-Recurring Basis

The table below presents a reconcilement of the Company's financial assets and liabilities measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3), which solely relates to impaired loans that were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan losses based upon the fair value of the underlying collateral (in thousands).  The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  The significant unobservable inputs used in the fair value measurement of collateral for collateral-dependent impaired loans primarily relate to discounts applied to the customers’ reported amount of collateral.  The amount of collateral discount depends upon the marketability of the underlying collateral.  During the nine months ended September 30, 2013 and 2012, collateral discounts ranged from 20% to 30%. During the nine months ended September 30, 2013 and 2012, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

	Nine months ended September 30,
	2013			2012
Beginning balance	$	10,679		$	13,500
Loans classified as impaired during the period	3,052			—
Specific valuation allowance allocations	(750		)	—
	2,302			—
(Additional) reduction in specific valuation allowance allocations	(130		)	2,666
Paydowns, payoffs, other activity	(891		)	(5,396		)
Ending balance	$	11,960		$	10,770

Schedule Of Level 3 Non-Financial Assets and Liabilities Measured On a Non-Recurring Basis

The table below presents OREO that was remeasured and reported at fair value based on significant unobservable inputs (Level 3) (in thousands):

	Nine months ended September 30,
	2013			2012
Beginning balance	$	8,162		$	7,948
OREO remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	4,387			4,563
Charge-offs recognized in the allowance for loan losses	(1,565		)	(1,472		)
Fair value	2,822			3,091
OREO remeasured subsequent to initial recognition
Carrying value of foreclosed assets prior to remeasurement	2,832			2,681
Fair value	1,774			1,872
Write-downs included in other non-interest expense	(1,058		)	(809		)
Acquired	3,492			728
Disposed	(5,900		)	(1,841		)
Ending balance	$	7,518		$	9,117

Schedule Of Estimates Of Fair Value Of Financial Instruments

The following table represents the estimates of fair value of financial instruments (in thousands). This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2013
Assets:
Cash and cash equivalents	$	179,621	$	179,621	$	179,621	$	—	$	—
Securities available-for-sale	329,247		329,247		6,463		319,999		2,785
Securities held-to-maturity	3,994		6,406		—		6,406		—
Other securities	13,344		13,344		—		13,344		—
Net loans	2,537,850		2,574,826		—		—		2,574,826
Accrued interest receivable	8,108		8,108		8,108		—		—
Derivative assets	5,810		5,810		—		5,810		—
Liabilities:
Deposits	2,807,536		2,816,263		1,708,806		1,107,457		—
Short-term debt	150,943		150,944		—		150,944		—
Long-term debt	16,495		16,463		—		16,463		—
Derivative liabilities	5,810		5,810		—		5,810		—
December 31, 2012
Assets:
Cash and cash equivalents	84,994		84,994		84,994		—		—
Securities available-for-sale	377,122		377,122		5,959		368,778		2,385
Securities held-to-maturity	13,454		13,861		—		13,861		—
Other securities	11,463		11,463		—		11,463		—
Net loans	2,127,560		2,162,856		—		—		2,162,856
Accrued interest receivable	6,692		6,692		6,692		—		—
Derivative assets	14,012		14,012		—		14,012		—
Liabilities:
Deposits	2,409,316		2,381,495		1,447,954		933,541		—
Short-term debt	114,646		114,648		—		114,648		—
Long-term debt	16,495		16,462		—		16,462		—
Derivative liabilities	14,012		14,012		—		14,012		—

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Investments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013 security	Sep. 30, 2012	Dec. 31, 2012
Schedule of Investments [Line Items]
Credit-related net investment impairment losses		$ 0.6
Regional community bank stocks, percent of average trading volumes (less than 0.1%)		0.10%
Number Of Pooled Trust Preferred Securities	5
Pooled trust preferred securities, book value	4.2
Pooled trust preferred securities, estimated fair value	2.3
Annual prepayment rate	1.00%
Annual prepayments maturity	100.00%
Additional basis points	1.50%
Carrying value of securities pledged	266		228
Minimum [Member]
Schedule of Investments [Line Items]
Equity ownership positions in the community bank holding companies	2.00%
Maximum [Member]
Schedule of Investments [Line Items]
Equity ownership positions in the community bank holding companies	5.00%
Pooled Bank Trust Preferred Securities [Member]
Schedule of Investments [Line Items]
Remaining book value		$ 5.6

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Loans (Summary Of Major Classifications For Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 2,558,456	$ 2,146,369
Allowance for loan losses	(20,606)	(18,809)
Net loans	2,537,850	2,127,560
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,188,841	1,031,435
Home equity - junior liens (including lines of credit) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	140,887	143,110
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	151,185	108,739
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,022,278	821,970
Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	50,757	36,564
DDA Overdrafts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 4,508	$ 4,551

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Commitments And Contingencies (Tables)

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Contractual Obligations From Significant Commitments

The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):

	September 30, 2013		December 31, 2012
Commitments to extend credit:
Home equity lines	$	179,588	$	156,274
Commercial real estate	36,919		33,869
Other commitments	199,323		171,670
Standby letters of credit	14,450		16,743
Commercial letters of credit	1,189		425

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Derivative Instruments (Derivative Assets Offset in The Consolidated Balance Sheets) (Details) (Interest Rate Swap [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Interest Rate Swap [Member]
Offsetting Assets [Line Items]
Gross amounts of recognized assets	$ 5,810
Net Amounts of Assets presented in the Statement of Financial Position	5,810
Fair Value of collateral	5,810
Total Gross amounts not offset in the statement of financial position including applicable netting agreement and fair value of collateral	5,810
Net Amount	$ 0

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Commitments And Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Standby Letters Of Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	$ 14,450	$ 16,743
Commercial Letters Of Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	1,189	425
Home equity - junior liens (including lines of credit) [Member] | Commitments To Extend Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	179,588	156,274
Commercial Real Estate [Member] | Commitments To Extend Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	36,919	33,869
Other Commitments [Member] | Commitments To Extend Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	$ 199,323	$ 171,670

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Derivative Instruments (Change In Fair Value Of Derivative Instruments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Other Income Derivative Asset [Member]
Derivatives, Fair Value [Line Items]
Change in Fair Value	$ (86)	$ 581	$ (7,876)	$ 2,839
Other Income Derivative Liability [Member]
Derivatives, Fair Value [Line Items]
Change in Fair Value	$ 86	$ (581)	$ 7,876	$ (2,839)

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Investments (Gross Unrealized Losses And Fair Value Of Investments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	$ 141,882	$ 19,686
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	5,487	200
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	10,162	10,180
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	2,342	3,124
Securities available-for-sale, Total, Estimated Fair Value	152,044	29,866
Securities available-for-sale, Total, Unrealized Loss	7,829	3,324
Obligations Of States And Political Subdivisions [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	3,471	1,163
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	73	15
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	448	0
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	1	0
Securities available-for-sale, Total, Estimated Fair Value	3,919	1,163
Securities available-for-sale, Total, Unrealized Loss	74	15
U.S. Government Agencies Mortgage-backed Securities [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	129,114	16,225
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	4,485	85
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	5,217	0
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	116	0
Securities available-for-sale, Total, Estimated Fair Value	134,331	16,225
Securities available-for-sale, Total, Unrealized Loss	4,601	85
Private Label [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	1,604
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	2
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	0
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	0
Securities available-for-sale, Total, Estimated Fair Value	1,604
Securities available-for-sale, Total, Unrealized Loss	2
Corporate Securities [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	6,081	1,950
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	639	49
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	0	4,344
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	0	363
Securities available-for-sale, Total, Estimated Fair Value	6,081	6,294
Securities available-for-sale, Total, Unrealized Loss	639	412
Investment Funds [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	1,482
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	18
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	0
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	0
Securities available-for-sale, Total, Estimated Fair Value	1,482
Securities available-for-sale, Total, Unrealized Loss	18
Trust Preferred Securities [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	130	348
Securities held-to-maturity, Less Than Twelve Months, Estimated Fair Value		0
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	270	51
Securities held-to-maturity, Less Than Twelve Months, Unrealized Loss		0
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	4,497	5,836
Securities held-to-maturity, Twelve Months or Greater, Estimated Fair Value		3,380
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	2,225	2,761
Securities held-to-maturity, Twelve Months or Greater, Unrealized Loss		58
Securities available-for-sale, Total, Estimated Fair Value	4,627	6,184
Securities held-to-maturity, Total Estimated Fair Value		3,380
Securities available-for-sale, Total, Unrealized Loss	2,495	2,812
Securities held-to-maturity, Total Unrealized Loss		$ 58

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Employee Benefit Plans (Weighted Average Assumptions Estimate The Fair Value Of Options Granted) (Details)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation [Abstract]
Risk-free interest rate	1.88%	2.51%
Expected dividend yield	3.70%	3.90%
Volatility factor	41.35%	48.40%
Expected life of option	8 years	5 years

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Investments (Tables)

9 Months Ended

Sep. 30, 2013

Investments [Abstract]

Aggregate Carrying And Approximate Market Values Of Available-For-Sale Securities

The amortized cost and estimated fair values of the Company's securities are shown in the following table (in thousands):

	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
U.S. Treasuries and U.S.
government agencies	$	2,511	$	61	$	—	$	2,572	$	3,792	$	96	$	—	$	3,888
Obligations of states and
political subdivisions	41,109		814		74		41,849		47,293		1,651		15		48,929
Mortgage-backed securities:
U.S. government agencies	255,889		3,351		4,601		254,639		279,336		7,231		85		286,482
Private label	2,383		19		2		2,400		3,235		37		—		3,272
Trust preferred
securities	13,456		1,047		2,495		12,008		15,402		55		2,812		12,645
Corporate securities	9,783		172		639		9,316		16,152		207		412		15,947
Total Debt Securities	325,131		5,464		7,811		322,784		365,210		9,277		3,324		371,163
Marketable equity  securities	3,381		1,575		—		4,956		3,381		804		—		4,185
Investment funds	1,525		—		18		1,507		1,724		50		—		1,774
Total Securities
Available-for-Sale	$	330,037	$	7,039	$	7,829	$	329,247	$	370,315	$	10,131	$	3,324	$	377,122

Aggregate Carrying And Approximate Market Values Of Held-To-Maturity Securities

	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities held-to-maturity
Trust preferred securities	$	3,994	$	2,412	$	—	$	6,406	$	13,454	$	465	$	58	$	13,861
Total Securities
Held-to-Maturity	$	3,994	$	2,412	$	—	$	6,406	$	13,454	$	465	$	58	$	13,861
Other investment securities:
Non-marketable equity securities	$	13,344	$	—	$	—	$	13,344	$	11,463	$	—	$	—	$	11,463
Total Other Investment
Securities	$	13,344	$	—	$	—	$	13,344	$	11,463	$	—	$	—	$	11,463

Gross Unrealized Losses And Fair Value Of Investments

The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	September 30, 2013
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	3,471	$	73	$	448	$	1	$	3,919	$	74
Mortgage-backed securities:
U.S. Government agencies	129,114		4,485		5,217		116		134,331		4,601
Private label	1,604		2		—		—		1,604		2
Trust preferred securities	130		270		4,497		2,225		4,627		2,495
Corporate securities	6,081		639		—		—		6,081		639
Investment funds	1,482		18		—		—		1,482		18
Total	$	141,882	$	5,487	$	10,162	$	2,342	$	152,044	$	7,829

	December 31, 2012
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	1,163	$	15	$	—	$	—	$	1,163	$	15
Mortgage-backed securities:
U.S. Government agencies	16,225		85		—		—		16,225		85
Trust preferred securities	348		51		5,836		2,761		6,184		2,812
Corporate securities	1,950		49		4,344		363		6,294		412
Total	$	19,686	$	200	$	10,180	$	3,124	$	29,866	$	3,324
Securities held-to-maturity:
Trust preferred securities	$	—	$	—	$	3,380	$	58	$	3,380	$	58

Credit Loss Component Of OTTI On Debt Securities Recognized In Earnings

The following table presents a progression of the credit loss component of OTTI on debt and equity securities recognized in earnings during the nine months ended September 30, 2013 and for the year ended December 31, 2012 (in thousands).  The credit loss component represents the difference between the present value of expected future cash flows and the amortized cost basis of the security.  The credit component of OTTI recognized in earnings during a period is presented in two parts based upon whether the credit impairment in the current period is the first time the security was credit impaired (initial credit impairment) or if there is additional credit impairment on a security that was credit impaired in previous periods.

	Debt Securities		Equity Securities			Total
Balance at January 1, 2012	$	20,610	$	6,048		$	26,658
Additions:
Initial credit impairment	—		—			—
Additional credit impairment	576		—			576
Deductions:
Called	—		(1,235		)	(1,235		)
Balance at December 31, 2012	21,186		4,813			25,999
Additions:
Initial credit impairment	—		—			—
Additional credit impairment	—		—			—
Deductions:
Called	—		—			—
Balance at September 30, 2013	$	21,186	$	4,813		$	25,999

Additional Information Of Trust Preferred Securities With Credit Rating Below Investment Grade

The following table presents additional information about the Company’s trust preferred securities with a credit rating of below investment grade as of September 30, 2013 (dollars in thousands):

Deal Name		Type	Class	Original Cost		Amortized Cost		Fair Value		Difference (1)		Lowest Credit Rating	# of issuers currently performing	Actual deferrals/defaults (as a % of original dollar)		Expected deferrals/defaults (as a % of remaining of performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (4)
		Pooled trust preferred securities:
		Other-than-temporarily impaired
		Available for Sale:
P1		Pooled	Mezz	$	827	$	268	$	368	100		Caa3	7	19.5	%	21.0	%	(2)	52.5	%
P2		Pooled	Mezz	3,279		436		1,252		816		Ca	6	22.3	%	5.2	%	(2)	23.4	%
P3	(5)	Pooled	Mezz	2,962		1,419		365		(1,054	)	Caa3	22	25.5	%	8.2	%	(2)	12.9	%
P4	(6)	Pooled	Mezz	4,060		400		130		(270	)	Ca	9	19.2	%	7.1	%	(3)	22.8	%
P5		Pooled	Mezz	6,228		826		457		(369	)	Ca	9	26.0	%	21.0	%	(2)	24.7	%
		Held to Maturity:
P6		Pooled	Mezz	1,599		—		737		737		Caa3	7	19.5	%	21.0	%	(2)	52.5	%
P7		Pooled	Mezz	4,354		—		1,669		1,669		Ca	6	22.3	%	5.2	%	(2)	23.4	%
		Single issuer trust preferred securities
		Available for sale:
S5		Single		261		235		289		54		NR	1	—	%	—	%
		Held to Maturity:
S9		Single		4,000		3,994		4,000		6		NR	1	—	%	—	%

(1) The differences noted consist of unrealized gains (losses) recorded at September 30, 2013 and noncredit other-than-temporary impairment losses recorded subsequent to April 1, 2009 that have not been reclassified as credit losses.

(2) Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. This model for this security assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure, thus this bond could recover at a higher percentage upon default than zero.

(3) Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default.  The model for this security assumes that one of the banks that is currently deferring will cure.  If additional underlying issuers cure, this bond could recover at a higher percentage.

(4) Excess subordination is defined as the additional defaults/deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a "break in yield." This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The "percent of current performing collateral" is the ratio of the "excess subordination amount" to current performing collateral—a higher percent means there is more excess subordination to absorb additional defaults/deferrals, and the better our security is protected from loss.

(5) No other-than-temporary impairment losses were recognized during the nine months ended September 30, 2013.  Other-than-temporary impairment losses of $11,000 were recognized during the year ended December 31, 2012.

(6) No other-than-temporary impairment losses were recognized during the nine months ended September 30, 2013.  Other-than-temporary impairment losses of $565,000 were recognized during the year ended December 31, 2012.

Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity

The amortized cost and estimated fair value of debt securities at September 30, 2013, by contractual maturity, are shown in the following table (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.  Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.

	Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	5,566	$	5,581
Due after one year through five years	24,206		24,677
Due after five years through ten years	36,483		37,258
Due after ten years	258,876		255,268
	$	325,131	$	322,784
Securities Held-to-Maturity
Due in one year or less	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	3,994		6,406
	$	3,994	$	6,406

Gross Gains And Losses Realized

Gross gains and gross losses realized by the Company from investment security transactions are summarized in the table below (in thousands). The specific identification method is used to determine the cost basis of securities sold.

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013		2012			2013		2012
Gross realized gains	$	—	$	830		$	93	$	1,776
Gross realized losses	—		(100		)	—		(246		)
Net investment security gains	$	—	$	730		$	93	$	1,530

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Consolidated Statements Of Changes In Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock [Member]	Capital Surplus[Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2011	$ 311,134	$ 46,249	$ 103,335	$ 291,050	$ (125,593)	$ (3,907)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	28,049			28,049
Other comprehensive income (loss)	3,542					3,542
Acquisition of Virginia Savings Bancorp, Inc.	7,723		276		7,447
Cash dividends declared	(15,532)			(15,532)
Stock-based compensation expense, net	870		(179)		1,049
Exercise of stock options	544		(121)		665
Purchase of 237,535 treasury shares	(7,915)				(7,915)
Ending balance at Sep. 30, 2012	328,415	46,249	103,311	303,567	(124,347)	(365)
Beginning Balance at Dec. 31, 2012	333,274	46,249	103,524	309,270	(124,347)	(1,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	34,969			34,969
Other comprehensive income (loss)	(4,752)					(4,752)
Acquisition of Virginia Savings Bancorp, Inc.	28,508		4,236		24,272
Cash dividends declared	(17,686)			(17,686)
Stock-based compensation expense, net	963		(315)		1,278
Exercise of stock options	2,766		(170)		2,936
Ending balance at Sep. 30, 2013	$ 378,042	$ 46,249	$ 107,275	$ 326,553	$ (95,861)	$ (6,174)

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Operating Activities
Net income	$ 34,969	$ 28,049
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and accretion	(7,885)	1,356
Provision for loan losses	4,903	4,600
Depreciation of premises and equipment	4,289	3,371
Deferred income tax expense	4,945	342
Net periodic employee benefit cost	586	391
Realized investment securities gains	(93)	(1,530)
Net investment securities impairment losses	0	576
Stock-compensation expense	963	870
Increase in value of bank-owned life insurance	(2,413)	(2,164)
Loans originated for sale	(20,895)	(30,518)
Proceeds from the sale of loans originated for sale	25,816	29,358
Gain on sale of loans	(553)	(626)
Change in accrued interest receivable	(22)	(137)
Change in other assets	20,734	(735)
Change in other liabilities	(6,922)	2,092
Net Cash Provided by Operating Activities	58,422	35,295
Investing Activities
Proceeds from sales of securities available-for-sale	18,398	27,773
Proceeds from maturities and calls of securities available-for-sale	78,671	113,760
Proceeds from maturities and calls of securities held-to-maturity	9,504	10,046
Purchases of securities available-for-sale	(42,295)	(150,497)
Net (increase) in loans	(39,643)	(41,870)
Purchases of premises and equipment	(4,663)	(5,910)
Net Cash Used in Investing Activities	(1,880)	(26,423)
Financing Activities
Net increase in noninterest-bearing deposits	25,440	26,777
Net (decrease) increase in interest-bearing deposits	(9,360)	10,815
Net increase (decrease) in short-term borrowings	36,297	(57,103)
Purchases of treasury stock	0	(7,915)
Proceeds from exercise of stock options	2,766	544
Dividends paid	(17,058)	(15,517)
Net Cash Provided by (Used in) Financing Activities	38,085	(42,399)
Increase (decrease) in Cash and Cash Equivalents	94,627	(33,527)
Cash and cash equivalents at beginning of period	84,994	146,399
Cash and Cash Equivalents at End of Period	179,621	112,872
Community Bank [Member]
Investing Activities
Acquisitions, net of cash acquired	(21,852)	0
Virginia Savings Bank [Member]
Investing Activities
Acquisitions, net of cash acquired	$ 0	$ 20,275

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-01, "Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities." This ASU requires an entity to disclose both the gross and net information about financial instruments, such as derivatives, that are eligible for offset in the balance sheet. ASU No. 2013-01 became effective for the Company on January 1, 2013. The adoption of ASU No. 2013-01 did not have a material impact on the Company's financial statements. See Note I - Derivative Instruments for applicable disclosures.

In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This ASU requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amounts reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU No. 2013-02 became effective for the Company beginning on January 1, 2013. The adoption of ASU No. 2013-02 did not have a material impact on the Company's financial statements.

In July 2013, the FASB issued ASU No. 2013-10, "Derivatives and Hedging (Topic 815) - Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes." This ASU permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate ("LIBOR"). ASU 2013 is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013 and did not have a material impact on the Company's financial statements.

In July 2013, the FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, subject to certain exceptions. This ASU will become effective for the Company beginning on January 1, 2014. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's financial statements.

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Accumulated Other Comprehensive Loss - Schedule of Changes In Each Component of Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Equity [Abstract]
Combined Federal and state income tax rate	37.00%	37.00%
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax [Roll Forward]
Defined Benefit Pension Plans, Beginning Balance	$ (4,995)	$ (4,732)
Defined Benefit Pension Plans, Ending Balance	(4,995)	(4,732)
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax [Roll Forward]
Unrealized Gains (Losses) on Securities Available-for-Sale, Beginning Balance	3,573	825
Unrealized Gains (Losses) on Securities Available-for-Sale Securities, Other comprehensive income before reclassifications	(4,693)	4,137
Unrealized Gains (Losses) on Securities Available-for-Sale, Amounts reclassified from other comprehensive loss	(59)	(595)
Unrealized Gain (Losses) on Securities Available-for-Sale Total	(4,752)	3,542
Unrealized Gains (Losses) on Securities Available-for-Sale, Ending Balance	(1,179)	4,367
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Total, Beginning Balance	(1,422)	(3,907)
Total, Other comprehensive income before reclassifications	(4,693)	4,137
Total, Amounts reclassified from other comprehensive loss	(59)	(595)
Total, Accumulated other comprehensive loss	(4,752)	3,542
Total, Ending Balance	$ (6,174)	$ (365)

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Consolidated Statements Of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013 Community Bank [Member]	Sep. 30, 2012 Virginia Savings Bank [Member]
Cash acquired from acquisition	$ 8,888	$ 24,943

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Investments (Aggregate Carrying And Approximate Market Values Of Available-For-Sale Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	$ 330,037	$ 370,315
Securities available-for-sale, Gross Unrealized Gains	7,039	10,131
Securities available-for-sale, Gross Unrealized Losses	7,829	3,324
Securities available-for-sale, Estimated Fair Value	329,247	377,122
U.S Treasuries and U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	2,511	3,792
Securities available-for-sale, Gross Unrealized Gains	61	96
Securities available-for-sale, Gross Unrealized Losses	0	0
Securities available-for-sale, Estimated Fair Value	2,572	3,888
Obligations Of States And Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	41,109	47,293
Securities available-for-sale, Gross Unrealized Gains	814	1,651
Securities available-for-sale, Gross Unrealized Losses	74	15
Securities available-for-sale, Estimated Fair Value	41,849	48,929
U.S. Government Agencies Mortgage-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	255,889	279,336
Securities available-for-sale, Gross Unrealized Gains	3,351	7,231
Securities available-for-sale, Gross Unrealized Losses	4,601	85
Securities available-for-sale, Estimated Fair Value	254,639	286,482
Private Label [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	2,383	3,235
Securities available-for-sale, Gross Unrealized Gains	19	37
Securities available-for-sale, Gross Unrealized Losses	2	0
Securities available-for-sale, Estimated Fair Value	2,400	3,272
Trust Preferred Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	13,456	15,402
Securities available-for-sale, Gross Unrealized Gains	1,047	55
Securities available-for-sale, Gross Unrealized Losses	2,495	2,812
Securities available-for-sale, Estimated Fair Value	12,008	12,645
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	9,783	16,152
Securities available-for-sale, Gross Unrealized Gains	172	207
Securities available-for-sale, Gross Unrealized Losses	639	412
Securities available-for-sale, Estimated Fair Value	9,316	15,947
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	325,131	365,210
Securities available-for-sale, Gross Unrealized Gains	5,464	9,277
Securities available-for-sale, Gross Unrealized Losses	7,811	3,324
Securities available-for-sale, Estimated Fair Value	322,784	371,163
Marketable Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	3,381	3,381
Securities available-for-sale, Gross Unrealized Gains	1,575	804
Securities available-for-sale, Gross Unrealized Losses	0	0
Securities available-for-sale, Estimated Fair Value	4,956	4,185
Investment Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	1,525	1,724
Securities available-for-sale, Gross Unrealized Gains	0	50
Securities available-for-sale, Gross Unrealized Losses	18	0
Securities available-for-sale, Estimated Fair Value	$ 1,507	$ 1,774

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2013

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

The components of long-term debt are summarized below (in thousands):

	September 30, 2013		December 31, 2012
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.75% and 3.89%, respectively	$	16,495	$	16,495

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Schedule of Changes In Each Component of Accumulated Other Comprehensive Income

The activity in accumulated other comprehensive loss for the nine months ended September 30, 2013 and 2012 is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined Federal and state income tax rate approximating 37%.

	Accumulated Other Comprehensive Loss
				Unrealized
				Gains (Losses) on
	Defined Benefit			Securities
	Pension Plans			Available-for-Sale			Total
Balance at December 31, 2011	$	(4,732	)	$	825		$	(3,907	)
Other comprehensive income before reclassifications	—			4,137			4,137
Amounts reclassified from other comprehensive loss	—			(595		)	(595		)
	—			3,542			3,542
Balance at September 30, 2012	$	(4,732	)	$	4,367		$	(365	)
Balance at December 31, 2012	$	(4,995	)	$	3,573		$	(1,422	)
Other comprehensive income before reclassifications	—			(4,693		)	(4,693		)
Amounts reclassified from other comprehensive loss	—			(59		)	(59		)
	—			(4,752		)	(4,752		)
Balance at September 30, 2013	$	(4,995	)	$	(1,179	)	$	(6,174	)

Schedule of Amounts Reclassified Out Of Accumulated Other Comprehensive Income

	Amount reclassified from Other Comprehensive Loss
	Three months ended					Nine months ended						Affected line item
	September 30,					September 30,						in the Statements
	2013		2012			2013			2012			of Income
Securities available-for-sale:
Net securities (gains) losses reclassified into earnings	$	—	$	(458	)	$	(93	)	$	(954	)	Security gains (losses)
Related income tax expense (benefit)	—		172			34			359			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(286	)	$	(59	)	$	(595	)

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Employee Benefit Plans (Net Periodic Pension Cost Of The Defined Benefit Plan) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Components of net periodic cost:
Interest cost	$ 217	$ 158	$ 549	$ 476
Expected return on plan assets	(276)	(203)	(695)	(607)
Net amortization and deferral	267	174	732	522
Net Periodic Pension Cost	$ 208	$ 129	$ 586	$ 391

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Acquisitions (Acquired Loans At Acquisition) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013 Virginia Savings Bank [Member]	Dec. 31, 2012 Virginia Savings Bank [Member]	May 31, 2012 Virginia Savings Bank [Member]	Sep. 30, 2013 Community Bank [Member]	Jan. 10, 2013 Community Bank [Member]	Dec. 31, 2012 Community Bank [Member]	Sep. 30, 2013 Virginia Savings Bank And Community Financial [Member]	Jan. 10, 2013 Virginia Savings Bank And Community Financial [Member]	Dec. 31, 2012 Virginia Savings Bank And Community Financial [Member]
Business Acquisition [Line Items]
Contractually required principal and interest	$ 5,253	$ 10,759	$ 11,567	$ 40,896	$ 58,014	$ 0	$ 46,149	$ 69,581	$ 10,759
Contractual cash flows not expected to be collected (non-accretable difference)			(3,973)		(20,724)			(24,697)
Expected cash flows			7,594		37,290			44,884
Interest component of expected cash flows (accretable difference)			(954)		(5,587)			(6,541)
Estimated fair value of purchased credit impaired loans acquired			$ 6,640		$ 31,703			$ 38,343

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Employee Benefit Plans (Restricted Shares Activity And Related Information) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Restricted Awards, beginning balance	116,711	108,209
Restricted Awards, Granted	35,083	23,336
Restricted Awards, Forfeited/Vested	(9,325)	(13,234)
Restricted Awards, ending balance	142,469	118,311
Average Market Price at Grant, Granted (in dollars per share)	$ 38.07	$ 34.94

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Allowance For Loan Losses (Schedule Of Non-Commercial Loans By Payment Performance) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,558,456	$ 2,146,369
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,188,841	1,031,435
Residential Real Estate [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,185,616	1,029,142
Residential Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,225	2,293
Home equity - junior lien [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	140,887	143,110
Home equity - junior lien [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	140,769	141,961
Home equity - junior lien [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	118	1,149
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	50,757	36,564
Consumer [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	50,710	36,564
Consumer [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	47	0
DDA Overdrafts [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	4,508	4,551
DDA Overdrafts [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	4,506	4,548
DDA Overdrafts [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	2	3
Noncommercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,384,993	1,215,660
Noncommercial Loans [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,381,601	1,212,215
Noncommercial Loans [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 3,392	$ 3,445

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Loans (Composition Of Loans Acquired At Acquisition) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Virginia Savings Bank [Member]	Dec. 31, 2012 Virginia Savings Bank [Member]	May 31, 2012 Virginia Savings Bank [Member]	Sep. 30, 2013 Community Bank [Member]	Jan. 10, 2013 Community Bank [Member]	Dec. 31, 2012 Community Bank [Member]	Sep. 30, 2013 Virginia Savings Bank And Community Financial [Member]	Jan. 10, 2013 Virginia Savings Bank And Community Financial [Member]	Dec. 31, 2012 Virginia Savings Bank And Community Financial [Member]
Financing Receivable, Impaired [Line Items]
Outstanding loan balance	$ 2,558,456	$ 2,146,369	$ 52,640	$ 65,219	$ 82,000	$ 288,117	$ 410,000	$ 0	$ 340,757		$ 65,219
Credit-impaired loans:
Carrying value			4,248	7,018		24,958		0	29,206		7,018
Contractual principal and interest			$ 5,253	$ 10,759	$ 11,567	$ 40,896	$ 58,014	$ 0	$ 46,149	$ 69,581	$ 10,759

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Investments (Additional Information Of Trust Preferred Securities With Credit Rating Below Investment Grade) (Details) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013		Dec. 31, 2012
Schedule of Investments [Line Items]
Available-for-sale Securities, Amortized Cost	$ 330,037,000		$ 370,315,000
Securities held-to-maturity, Amortized Cost	3,994,000		13,454,000
Securities available-for-sale, Estimated Fair Value	329,247,000		377,122,000
Investment securities held-to-maturity, fair value	6,406,000		13,861,000
Model assumption, recovery rate	0.00%
P3 [Member]
Schedule of Investments [Line Items]
Other than temporary impairment losses	0		11,000
P4 [Member]
Schedule of Investments [Line Items]
Model assumption, number of banks deferring will cure	1
Other than temporary impairment losses	0		565,000
Available-for-sale Securities [Member] | P1 [Member]
Schedule of Investments [Line Items]
Type	Pooled
Class	Mezz
Original Cost	827,000
Available-for-sale Securities, Amortized Cost	268,000
Securities available-for-sale, Estimated Fair Value	368,000
Difference (1)	100,000	[1]
Lowest Credit Rating	Caa3
Number of issuers currently performing	7
Actual deferrals/defaults (as a % of original dollar)	19.50%
Expected deferrals/defaults (as a % of remaining of performing collateral)	21.00%	[2]
Excess Subordination as a Percentage of Current Performing Collateral (4)	52.50%	[3]
Available-for-sale Securities [Member] | P2 [Member]
Schedule of Investments [Line Items]
Type	Pooled
Class	Mezz
Original Cost	3,279,000
Available-for-sale Securities, Amortized Cost	436,000
Securities available-for-sale, Estimated Fair Value	1,252,000
Difference (1)	816,000	[1]
Lowest Credit Rating	Ca
Number of issuers currently performing	6
Actual deferrals/defaults (as a % of original dollar)	22.30%
Expected deferrals/defaults (as a % of remaining of performing collateral)	5.20%	[2]
Excess Subordination as a Percentage of Current Performing Collateral (4)	23.40%	[3]
Available-for-sale Securities [Member] | P3 [Member]
Schedule of Investments [Line Items]
Type	Pooled	[4]
Class	Mezz	[4]
Original Cost	2,962,000	[4]
Available-for-sale Securities, Amortized Cost	1,419,000	[4]
Securities available-for-sale, Estimated Fair Value	365,000	[4]
Difference (1)	(1,054,000)	[1],[4]
Lowest Credit Rating	Caa3	[4]
Number of issuers currently performing	22	[4]
Actual deferrals/defaults (as a % of original dollar)	25.50%	[4]
Expected deferrals/defaults (as a % of remaining of performing collateral)	8.20%	[2],[4]
Excess Subordination as a Percentage of Current Performing Collateral (4)	12.90%	[3],[4]
Available-for-sale Securities [Member] | P4 [Member]
Schedule of Investments [Line Items]
Type	Pooled	[5]
Class	Mezz	[5]
Original Cost	4,060,000	[5]
Available-for-sale Securities, Amortized Cost	400,000	[5]
Securities available-for-sale, Estimated Fair Value	130,000	[5]
Difference (1)	(270,000)	[1],[5]
Lowest Credit Rating	Ca	[5]
Number of issuers currently performing	9	[5]
Actual deferrals/defaults (as a % of original dollar)	19.20%	[5]
Expected deferrals/defaults (as a % of remaining of performing collateral)	7.10%	[5],[6]
Excess Subordination as a Percentage of Current Performing Collateral (4)	22.80%	[3],[5]
Available-for-sale Securities [Member] | P5 [Member]
Schedule of Investments [Line Items]
Type	Pooled
Class	Mezz
Original Cost	6,228,000
Available-for-sale Securities, Amortized Cost	826,000
Securities available-for-sale, Estimated Fair Value	457,000
Difference (1)	(369,000)	[1]
Lowest Credit Rating	Ca
Number of issuers currently performing	9
Actual deferrals/defaults (as a % of original dollar)	26.00%	[5]
Expected deferrals/defaults (as a % of remaining of performing collateral)	21.00%	[2]
Excess Subordination as a Percentage of Current Performing Collateral (4)	24.70%	[3]
Available-for-sale Securities [Member] | S5 [Member]
Schedule of Investments [Line Items]
Type	Single
Original Cost	261,000
Available-for-sale Securities, Amortized Cost	235,000
Securities available-for-sale, Estimated Fair Value	289,000
Difference (1)	54,000	[1]
Lowest Credit Rating	NR
Number of issuers currently performing	1
Actual deferrals/defaults (as a % of original dollar)	0.00%
Expected deferrals/defaults (as a % of remaining of performing collateral)	0.00%
Held-to-maturity Securities [Member] | P6 [Member]
Schedule of Investments [Line Items]
Type	Pooled
Class	Mezz
Original Cost	1,599,000
Securities held-to-maturity, Amortized Cost	0
Investment securities held-to-maturity, fair value	737,000
Difference (1)	737,000	[1]
Lowest Credit Rating	Caa3
Number of issuers currently performing	7
Actual deferrals/defaults (as a % of original dollar)	19.50%
Expected deferrals/defaults (as a % of remaining of performing collateral)	21.00%	[2]
Excess Subordination as a Percentage of Current Performing Collateral (4)	52.50%	[3]
Held-to-maturity Securities [Member] | P7 [Member]
Schedule of Investments [Line Items]
Type	Pooled
Class	Mezz
Original Cost	4,354,000
Securities held-to-maturity, Amortized Cost	0
Investment securities held-to-maturity, fair value	1,669,000
Difference (1)	1,669,000	[1]
Lowest Credit Rating	Ca
Number of issuers currently performing	6
Actual deferrals/defaults (as a % of original dollar)	22.30%
Expected deferrals/defaults (as a % of remaining of performing collateral)	5.20%	[2]
Excess Subordination as a Percentage of Current Performing Collateral (4)	23.40%	[3]
Held-to-maturity Securities [Member] | S9 [Member]
Schedule of Investments [Line Items]
Type	Single
Original Cost	4,000,000
Securities held-to-maturity, Amortized Cost	3,994,000
Investment securities held-to-maturity, fair value	4,000,000
Difference (1)	$ 6,000	[1]
Lowest Credit Rating	NR
Number of issuers currently performing	1
Actual deferrals/defaults (as a % of original dollar)	0.00%
Expected deferrals/defaults (as a % of remaining of performing collateral)	0.00%

[1] The differences noted consist of unrealized gains (losses) recorded at September 30, 2013 and noncredit other-than-temporary impairment losses recorded subsequent to April 1, 2009 that have not been reclassified as credit losses.

[2] Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. This model for this security assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure, thus this bond could recover at a higher percentage upon default than zero.

[3] Excess subordination is defined as the additional defaults/deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a "break in yield." This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The "percent of current performing collateral" is the ratio of the "excess subordination amount" to current performing collateral—a higher percent means there is more excess subordination to absorb additional defaults/deferrals, and the better our security is protected from loss.

[4] ther-than-temporary impairment losses were recognized during the nine months ended September 30, 2013. Other-than-temporary impairment losses of $11,000 were recognized during the year ended December 31, 2012.

[5] ther-than-temporary impairment losses were recognized during the nine months ended September 30, 2013. Other-than-temporary impairment losses of $565,000 were recognized during the year ended December 31, 2012.

[6] Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. The model for this security assumes that one of the banks that is currently deferring will cure. If additional underlying issuers cure, this bond could recover at a higher percentage.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Investment securities held-to-maturity, fair value	$ 6,406	$ 13,861
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	500,000	500,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 2.50	$ 2.50
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	18,499,282	18,499,282
Common stock, treasury shares (in shares)	2,769,192	3,665,999

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Loans

9 Months Ended

Sep. 30, 2013

Loans Receivable, Net [Abstract]

Loans

Loans

The following summarizes the Company’s major classifications for loans (in thousands):

	September 30, 2013			December 31, 2012
Residential real estate	$	1,188,841		$	1,031,435
Home equity – junior liens	140,887			143,110
Commercial and industrial	151,185			108,739
Commercial real estate	1,022,278			821,970
Consumer	50,757			36,564
DDA overdrafts	4,508			4,551
Gross loans	2,558,456			2,146,369
Allowance for loan losses	(20,606		)	(18,809		)
Net loans	$	2,537,850		$	2,127,560

Construction loans of $14.8 million and $15.4 million are included within residential real estate loans at September 30, 2013 and December 31, 2012, respectively.  Construction loans of $17.4 million and $15.4 million are included within commercial real estate loans at September 30, 2013 and December 31, 2012, respectively.  The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets.  These loans were originated under the Company’s loan policy, which is focused on the risk characteristics of the loan portfolio, including construction loans.  Adequate consideration has been given to these loans in establishing the Company’s allowance for loan losses.

The information in the following tables related to the Community acquisition are estimated amounts, based on management's assumptions. Once the purchase price allocation is finalized, actual results could be significantly different than those assumed below.

The following table details the loans acquired in conjunction with the Virginia Savings and Community acquisitions (in thousands):

	Virginia
	Savings		Community		Total
September 30, 2013
Outstanding loan balance	$	52,640	$	288,117	$	340,757
Credit-impaired loans:
Carrying value	4,248		24,958		29,206
Contractual principal and interest	5,253		40,896		46,149
December 31, 2012
Outstanding loan balance	$	65,219	$	—	$	65,219
Credit-impaired loans:
Carrying value	7,018		—		7,018
Contractual principal and interest	10,759		—		10,759

Changes in the accretable yield of the credit-impaired loans for the nine months ended September 30, 2013 is as follows (in thousands):

	Virginia Savings						Community						Total
				Carrying						Carrying						Carrying
	Accretable			Amount			Accretable			Amount			Accretable			Amount
	Yield			of Loans			Yield			of Loans			Yield			of Loans
Balance at the beginning of the period	$	1,823		$	7,018		$	—		$	—		$	1,823		$	7,018
Additions	—			—			5,587			31,790			5,587			31,790
Accretion	(844		)	844			(1,665		)	1,665			(2,509		)	2,509
Net reclassifications to accretable yield from
non-accretable yield	889			—			—			—			889			—
Payments received, net	—			(3,585		)	—			(8,497		)	—			(12,082		)
Disposals	(604		)	(29		)	(344		)	—			(948		)	(29		)
Balance at the end of period	$	1,264		$	4,248		$	3,578		$	24,958		$	4,842		$	29,206

Increases in expected cash flow subsequent to the acquisition are recognized first as a reduction of any previous impairment, then prospectively through adjustment of the yield on the loans or pools over its remaining life, while decreases in expected cash flows are recognized as impairment through a provision for loan loss and an increase in the allowance for purchased credit-impaired loans.

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 13,975	$ 10,607	$ 34,969	$ 28,049
Unrealized gains (losses) on available-for-sale securities arising during the period	(1,004)	3,847	(7,438)	6,637
Reclassification adjustment for (gains)	0	(458)	(93)	(954)
Other comprehensive income (loss) before income taxes	(1,004)	3,389	(7,531)	5,683
Tax effect	371	(1,277)	2,779	(2,141)
Other comprehensive income (loss), net of tax	(633)	2,112	(4,752)	3,542
Comprehensive income, net of tax	$ 13,342	$ 12,719	$ 30,217	$ 31,591

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Allowance For Loan Losses (Schedule Of Information Related To Average Recorded Investment And Interest Income Recognized On Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	$ 9,961	$ 7,553
With no related allowance recorded, Interest income recognized	24	236
With an allowance recorded, Average recorded investment	3,277	14,008
With an allowance recorded, Interest income recognized	0	451
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	464	0
With no related allowance recorded, Interest income recognized	0	0
With an allowance recorded, Average recorded investment	0	1,254
With an allowance recorded, Interest income recognized	0	36
Home equity - junior lien [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	297	0
With no related allowance recorded, Interest income recognized	0	0
With an allowance recorded, Average recorded investment	0	1,354
With an allowance recorded, Interest income recognized	0	30
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	0	81
With no related allowance recorded, Interest income recognized	0	4
With an allowance recorded, Average recorded investment	0	203
With an allowance recorded, Interest income recognized	0	7
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	9,200	7,472
With no related allowance recorded, Interest income recognized	24	232
With an allowance recorded, Average recorded investment	3,277	11,197
With an allowance recorded, Interest income recognized	0	378
Consumer [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	0	0
With no related allowance recorded, Interest income recognized	0	0
With an allowance recorded, Average recorded investment	0	0
With an allowance recorded, Interest income recognized	0	0
DDA Overdrafts [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	0	0
With no related allowance recorded, Interest income recognized	0	0
With an allowance recorded, Average recorded investment	0	0
With an allowance recorded, Interest income recognized	$ 0	$ 0

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets
Cash and due from banks	$ 164,915	$ 58,718
Interest-bearing deposits in depository institutions	14,706	16,276
Federal funds sold	0	10,000
Cash and Cash Equivalents	179,621	84,994
Investment securities available for sale, at fair value	329,247	377,122
Investment securities held-to-maturity, at amortized cost (approximate fair value at September 30, 2013 and December 31, 2012, - $6,406 and $13,861, respectively)	3,994	13,454
Other securities	13,344	11,463
Total Investment Securities	346,585	402,039
Gross loans	2,558,456	2,146,369
Allowance for loan losses	(20,606)	(18,809)
Net Loans	2,537,850	2,127,560
Bank owned life insurance	91,249	81,901
Premises and equipment, net	82,194	72,728
Accrued interest receivable	8,108	6,692
Net deferred tax asset	45,183	32,737
Goodwill and other intangible assets	76,420	65,057
Other assets	29,478	43,758
Total Assets	3,396,688	2,917,466
Liabilities
Noninterest-bearing	498,245	429,969
Interest-bearing:
Demand deposits	604,047	553,132
Savings deposits	606,514	506,869
Time deposits	1,098,730	919,346
Total Deposits	2,807,536	2,409,316
Short-term borrowings:
Customer repurchase agreements	150,943	114,646
Long-term debt	16,495	16,495
Other liabilities	43,672	43,735
Total Liabilities	3,018,646	2,584,192
Shareholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued	0	0
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 18,499,282 shares issued at September 30, 2013 and December 31, 2012, less 2,769,192 and 3,665,999 shares in treasury, respectively	46,249	46,249
Capital surplus	107,275	103,524
Retained earnings	326,553	309,270
Cost of common stock in treasury	(95,861)	(124,347)
Accumulated other comprehensive income (loss):
Unrealized (loss) gain on securities available-for-sale	(1,179)	3,573
Underfunded pension liability	(4,995)	(4,995)
Total Accumulated Other Comprehensive Loss	(6,174)	(1,422)
Total Shareholders’ Equity	378,042	333,274
Total Liabilities and Shareholders’ Equity	$ 3,396,688	$ 2,917,466

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Loans (Activity For The Accretable Yield) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at the beginning of the period	$ 1,823
Additions	5,587
Accretion	(2,509)
Net reclassifications to accretable yield from non-accretable yield	889
Disposals	(948)
Balance at the end of period	4,842
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Carrying Amount Net [Roll Forward]
Balance at the beginning of the period	7,018
Additions	31,790
Accretion	2,509
Payments received, net	(12,082)
Disposals	(29)
Balance at the end of period	29,206
Virginia Savings Bank [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at the beginning of the period	1,823
Additions	0
Accretion	(844)
Net reclassifications to accretable yield from non-accretable yield	889
Disposals	(604)
Balance at the end of period	1,264
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Carrying Amount Net [Roll Forward]
Balance at the beginning of the period	7,018
Additions	0
Accretion	844
Payments received, net	(3,585)
Disposals	(29)
Balance at the end of period	4,248
Community Bank [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at the beginning of the period	0
Additions	5,587
Accretion	(1,665)
Disposals	(344)
Balance at the end of period	3,578
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Carrying Amount Net [Roll Forward]
Balance at the beginning of the period	0
Additions	31,790
Accretion	1,665
Payments received, net	(8,497)
Balance at the end of period	$ 24,958

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Fair Value Measurements (Schedule Of Level 2 Financial Assets And Liabilities Measured On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Fair Value Measurement On Nonrecurring Basis Asset And Liabilities Value [Roll Forward]
Beginning balance	$ 10,679	$ 13,500
Loans classified as impaired during the period	3,052	0
Specific valuation allowance allocations	(750)	0
Fair Value	2,302	0
(Additional) reduction in specific valuation allowance allocations	(130)	2,666
Paydowns, payoffs, other activity	(891)	(5,396)
Ending balance	$ 11,960	$ 10,770

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Distributed earnings allocated to common stock	$ 5,767	$ 5,150	$ 17,302	$ 15,451
Undistributed earnings allocated to common stock	8,081	5,373	17,349	12,375
Net earnings allocated to common shareholders	$ 13,848	$ 10,523	$ 34,651	$ 27,826
Average shares outstanding (in shares)	15,608,000	14,751,000	15,545,000	14,700,000
Effect of dilutive securities:
Warrants outstanding (in shares)	62,000	0	60,000	0
Employee stock awards (in shares)	120,000	83,000	108,000	83,000
Shares for diluted earnings per share (in shares)	15,790,000	14,834,000	15,713,000	14,783,000
Basic earnings per share (in dollars per share)	$ 0.89	$ 0.71	$ 2.23	$ 1.89
Diluted earnings per share (in dollars per share)	$ 0.88	$ 0.71	$ 2.21	$ 1.88
Options to purchase shares of common stock, anti-dilutive (in shares)	0	124,000
Common stock exercise price, lower limit (in dollars per share)		$ 35.09
Common stock exercise price, upper limit (in dollars per share)		$ 40.88

XML

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Of Derivative Instruments

The following table summarizes the fair value of these derivative instruments (in thousands):

Fair Value:	September 30, 2013		December 31, 2012
Other Assets	$	5,810	$	14,012
Other Liabilities	5,810		14,012

Change In Fair Value Of Derivative Instruments

The following table summarizes the change in fair value of these derivative instruments (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Change in Fair Value:
Other income - derivative asset	$	(86	)	$	581		$	(7,876	)	$	2,839
Other income - derivative liability	86			(581		)	7,876			(2,839		)

Derivative Assets Offset in The Consolidated Balance Sheets

Information about financial instruments that are eligible for offset in the consolidated balance sheet as of September 30, 2013 is presented in the following tables (in thousands):

Gross Amounts

Not Offset in the Statement

of Financial Position

Total

of Gross

Amounts

Not Offset in

the Statement

of Financial

Position

Netting

Including

Gross

Net Amounts

Adjustment

Applicable

Amounts

of Assets

per

Netting

Gross

Offset in the

presented in

Applicable

Agreement

Amounts of

Statement of

the Statement

Master

Fair Value

and Fair

Recognized

Financial

of Financial

Netting

of Financial

Value of

Description

Assets

Position

Position

Arrangements

Collateral

Collateral

Net Amount

(a)

(b)

(c)=(a)-(b)

(d)

(c)-(d)

Derivative assets:

Interest rate swap agreements

$

5,810

$

—

$

5,810

$

—

$

5,810

$

5,810

$

—

Derivative Liabilities Offset in The Consolidated Balance Sheets

Gross Amounts

Not Offset in the Statement

of Financial Position

Total

of Gross

Amounts

Not Offset in

the Statement

of Financial

Position

Netting

Including

Gross

Net Amounts

Adjustment

Applicable

Amounts

of Liabilities

per

Netting

Gross

Offset in the

presented in

Applicable

Agreement

Amounts of

Statement of

the Statement

Master

Fair Value

and Fair

Recognized

Financial

of Financial

Netting

of Financial

Value of

Description

Liabilities

Position

Position

Arrangements

Collateral

Collateral

Net Amount

(a)

(b)

(c)=(a)-(b)

(d)

(c)-(d)

Derivative liabilities:

Interest rate swap agreements

$

5,810

$

—

$

5,810

$

—

$

13,331

$

13,331

$

—

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company bases fair value of assets and liabilities on quoted market prices, prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.  If such information is not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.  The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.  Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amount presented herein.  A more detailed description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Financial Assets and Liabilities

The Company used the following methods and significant assumptions to estimate fair value for financial assets and liabilities measured on a recurring basis.

Securities Available for Sale.  Securities available for sale are reported at fair value utilizing Level 1, Level 2, and Level 3 inputs.  The fair value of securities available for sale is determined by utilizing a market approach by obtaining quoted prices on nationally recognized securities exchanges (other than forced or distressed transactions) that occur in sufficient volume or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.  If such measurements are unavailable, the security is classified as Level 3.  Significant judgment is required to make this determination.

The Company utilizes a third party pricing service provider to value its Level 1 and Level 2 investment securities.  Annually, the Company obtains an independent auditor’s report from its third party pricing service provider regarding its controls over investment securities.  Although no control deficiencies were noted, the report did contain caveats and disclaimers regarding the pricing information, such as the Company should review fair values for reasonableness.  On a quarterly basis, the Company selects a sample of its debt securities and reprices those securities with a third party that is independent of the primary pricing service provider to verify the reasonableness of the fair values. In addition, the Company selects a sample of securities and reviews the underlying support from the primary pricing service provider.

The Company has determined that its pooled trust preferred securities should be priced using Level 3 inputs in accordance with ASC Topic 820 and guidance issued by the SEC.  The Company has determined that there are few observable transactions and market quotations available for pooled trust preferred securities and they are not reliable for purposes of determining fair value at September 30, 2013.  Due to these circumstances, the Company has elected to utilize an income valuation approach produced by a third party pricing source.  This third party model utilizes deferral and default probabilities for the underlying issuers, estimated prepayment rates and assumes no future recoveries of any defaults or deferrals.  The Company then compares the values provided by the third party model with other external sources.  At such time as there are observable transactions or quoted prices that are associated with an orderly and active market for pooled trust preferred securities, the Company will incorporate such market values in its estimate of fair values for these securities.

Derivatives.Derivatives are reported at fair value utilizing Level 2 inputs.  The Company utilizes a market approach by obtaining dealer quotations to value its customer interest rate swaps.  The Company’s derivatives are included within its Other Assets and Other Liabilities in the accompanying consolidated balance sheets. Derivative assets are typically secured through securities with financial counterparties or cross collateralization with a borrowing customer. Derivative liabilities are typically secured through the Company pledging securities to financial counterparties or, in the case of a borrowing customer, by the right of setoff. The Company considers such factors such as the likelihood of default by itself and its counterparties, right of setoff, and remaining maturities in determining the appropriate fair value adjustments. All derivative counterparties approved by the Company's Asset and Liability Committee ("ALCO") are regularly reviewed, and appropriate business action is taken to adjust the exposure to certain counterparties, if necessary. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of marketable collateral securing the position. This approach used to estimate impacted exposures to counterparties is also used by the Company to estimate its own credit risk in derivative liability positions. To date, no material losses have been incurred due to a counterparty's inability to pay any undercollateralized position. There was no significant change in the value of derivative assets and liabilities attributed to credit risk during the three and nine months ended September 30, 2013.

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis.  Financial assets measured at fair value on a nonrecurring basis include impaired loans reported at the fair value of the underlying collateral if repayment is expected solely from the collateral.  Collateral values are estimated using Level 2 inputs based on observable market data for real estate collateral or Level 3 inputs for non-real estate collateral.  The following table presents assets and liabilities measured at fair value (in thousands):

	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
September 30, 2013
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	2,572	$	—	$	2,572	$	—
Obligations of states and political subdivisions	41,849		—		41,849		—
Mortgage-backed securities:
U.S. Government agencies	254,639		—		254,639		—
Private label	2,400		—		2,400		—
Trust preferred securities	12,008		—		9,223		2,785
Corporate securities	9,316		—		9,316		—
Marketable equity securities	4,956		4,956		—		—
Investment funds	1,507		1,507		—		—
Derivative assets	5,810		—		5,810		—
Financial Liabilities
Derivative liabilities	5,810		—		5,810		—
Nonrecurring fair value measurements
Impaired loans	$	11,960	$	—	$	—	$	11,960	$	(880	)
Other real estate owned	7,518		—		—		7,518		(1,058		)
December 31, 2012
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	3,888	$	—	$	3,888	$	—
Obligations of states and political subdivisions	48,929		—		48,929		—
Mortgage-backed securities:
U.S. Government agencies	286,482		—		286,482		—
Private label	3,272		—		3,272		—
Trust preferred securities	12,645		—		10,260		2,385
Corporate securities	15,947		—		15,947		—
Marketable equity securities	4,185		4,185		—		—
Investment funds	1,774		1,774		—		—
Derivative assets	14,012		—		14,012		—
Financial Liabilities
Derivative liabilities	14,012		—		14,012		—
Nonrecurring fair value measurements
Impaired loans	$	10,679	$	—	$	—	$	10,679	$	—
Other real estate owned	$	8,162	$	—	$	—	$	8,162	$	(1,021	)
Other assets	$	1,000	$	—	$	1,000	$	—	$	(288	)

The table below presents a reconcilement of the Company’s financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

	Nine months ended September 30,
	2013			2012
Beginning balance	$	2,385		$	1,982
Impairment losses on investment securities	—			(576		)
Included in other comprehensive income	2,176			940
Dispositions	(1,776		)	—
Transfers into Level 3	—			—
Ending Balance	$	2,785		$	2,346

The Company utilizes a third party model to compute the present value of expected cash flows which considers the structure and term of each of the five respective pooled trust preferred securities and the financial condition of the underlying issuers.  Specifically, the third party model details interest rates, principal balances of note classes and underlying issuers, the timing and amount of interest and principal payments of the underlying issuers, and the allocation of the payments to the note classes. The current estimate of expected cash flows is based on the most recent trustee reports and any other relevant market information including announcements of interest payment deferrals or defaults of underlying trust preferred securities. For issuing banks that have defaulted, management generally assumes no recovery. For issuing banks that have deferred its interest payments, management excludes the collateral balance associated with these banks and assumes no recoveries of such collateral balance in the future. The exclusion of such issuing banks in a current deferral position is based on such bank experiencing a certain level of financial difficulty that raises doubt about its ability to satisfy its contractual debt obligation, and accordingly, the Company excludes the associated collateral balance from its estimate of expected cash flows. Other assumptions used in the estimate of expected cash flows include expected future default rates and prepayments. Specifically, the model assumes annual prepayments of 1.0% with 100% at maturity and assumes 150 basis points of additional annual defaults from banks that are currently not in default or deferral.  In addition, the model assumes no recoveries except for one trust preferred security which assumes that one of the banks currently deferring or in default will cure such positions.

The table below presents a reconcilement of the Company's financial assets and liabilities measured at fair value on a nonrecurring basis using significant unobservable inputs (Level 3), which solely relates to impaired loans that were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan losses based upon the fair value of the underlying collateral (in thousands).  The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  The significant unobservable inputs used in the fair value measurement of collateral for collateral-dependent impaired loans primarily relate to discounts applied to the customers’ reported amount of collateral.  The amount of collateral discount depends upon the marketability of the underlying collateral.  During the nine months ended September 30, 2013 and 2012, collateral discounts ranged from 20% to 30%. During the nine months ended September 30, 2013 and 2012, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

	Nine months ended September 30,
	2013			2012
Beginning balance	$	10,679		$	13,500
Loans classified as impaired during the period	3,052			—
Specific valuation allowance allocations	(750		)	—
	2,302			—
(Additional) reduction in specific valuation allowance allocations	(130		)	2,666
Paydowns, payoffs, other activity	(891		)	(5,396		)
Ending balance	$	11,960		$	10,770

Non-Financial Assets and Liabilities

The Company has no non-financial assets or liabilities measured at fair value on a recurring basis.  Certain non-financial assets measured at fair value on a non-recurring basis include other real estate owned (“OREO”), which is measured at the lower of cost or fair value, and goodwill and other intangible assets, which are measured at fair value for impairment assessments.

The table below presents OREO that was remeasured and reported at fair value based on significant unobservable inputs (Level 3) (in thousands):

	Nine months ended September 30,
	2013			2012
Beginning balance	$	8,162		$	7,948
OREO remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	4,387			4,563
Charge-offs recognized in the allowance for loan losses	(1,565		)	(1,472		)
Fair value	2,822			3,091
OREO remeasured subsequent to initial recognition
Carrying value of foreclosed assets prior to remeasurement	2,832			2,681
Fair value	1,774			1,872
Write-downs included in other non-interest expense	(1,058		)	(809		)
Acquired	3,492			728
Disposed	(5,900		)	(1,841		)
Ending balance	$	7,518		$	9,117

ASC Topic 825“Financial Instruments” as amended, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques.  Those techniques are significantly affected by the assumptions used, including discount rate and estimate of future cash flows.  In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument.  ASC Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements.  Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The following methods and assumptions were used in estimating fair value for financial instruments:

Cash and cash equivalents: Due to their short-term nature, the carrying amounts reported in the consolidated balance sheets approximate fair value.

Securities:  The fair value of securities, both available-for-sale and held-to-maturity, are generally based on quoted market prices or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

Net loans:  The fair value of the loan portfolio is estimated by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers for the same remaining maturities. Loans were first segregated by type such as commercial, real estate and consumer, and were then further segmented into fixed, adjustable and variable rate categories. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments.

Deposits:  The fair values of demand deposits (i.e., interest and noninterest-bearing deposits, regular savings and other money market demand accounts) are, by definition, equal to their carrying values. The fair values of time deposits were estimated using discounted cash flow analyses. The discount rates used were based on rates currently offered for deposits with similar remaining maturities. The fair values of the time deposit liabilities do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Short-term debt: Securities sold under agreements to repurchase represent borrowings with original maturities of less than 90 days. The carrying amount of borrowings under purchase agreements approximate their fair value.

Long-term debt: The fair value of long-term borrowings is estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements and market conditions of similar debt instruments.

Commitments and letters of credit: The fair values of commitments are estimated based on fees currently charged to enter into similar agreements, taking into consideration the remaining terms of the agreements and the counterparties’ credit standing.  The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.  The amounts of fees currently charged on commitments and letters of credit are deemed insignificant, and therefore, the estimated fair values and carrying values have not been reflected in the table below.

The following table represents the estimates of fair value of financial instruments (in thousands). This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as noninterest-bearing demand, interest-bearing demand and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2013
Assets:
Cash and cash equivalents	$	179,621	$	179,621	$	179,621	$	—	$	—
Securities available-for-sale	329,247		329,247		6,463		319,999		2,785
Securities held-to-maturity	3,994		6,406		—		6,406		—
Other securities	13,344		13,344		—		13,344		—
Net loans	2,537,850		2,574,826		—		—		2,574,826
Accrued interest receivable	8,108		8,108		8,108		—		—
Derivative assets	5,810		5,810		—		5,810		—
Liabilities:
Deposits	2,807,536		2,816,263		1,708,806		1,107,457		—
Short-term debt	150,943		150,944		—		150,944		—
Long-term debt	16,495		16,463		—		16,463		—
Derivative liabilities	5,810		5,810		—		5,810		—
December 31, 2012
Assets:
Cash and cash equivalents	84,994		84,994		84,994		—		—
Securities available-for-sale	377,122		377,122		5,959		368,778		2,385
Securities held-to-maturity	13,454		13,861		—		13,861		—
Other securities	11,463		11,463		—		11,463		—
Net loans	2,127,560		2,162,856		—		—		2,162,856
Accrued interest receivable	6,692		6,692		6,692		—		—
Derivative assets	14,012		14,012		—		14,012		—
Liabilities:
Deposits	2,409,316		2,381,495		1,447,954		933,541		—
Short-term debt	114,646		114,648		—		114,648		—
Long-term debt	16,495		16,462		—		16,462		—
Derivative liabilities	14,012		14,012		—		14,012		—

XML

Investments (Credit Loss Component Of OTTI On Debt Securities Recognized In Earnings) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning Balance	$ 25,999	$ 26,658
Additions:
Initial credit impairment	0	0
Additional credit impairment	0	576
Deductions:
Called	0	(1,235)
Ending Balance	25,999	25,999
Debt Securities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning Balance	21,186	20,610
Additions:
Initial credit impairment	0	0
Additional credit impairment	0	576
Deductions:
Called	0	0
Ending Balance	21,186	21,186
Equity Securities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning Balance	4,813	6,048
Additions:
Initial credit impairment	0	0
Additional credit impairment	0	0
Deductions:
Called	0	(1,235)
Ending Balance	$ 4,813	$ 4,813

XML

Fair Value Measurements (Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring And Nonrecurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Obligations Of States And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	$ 41,849	$ 48,929
Obligations Of States And Political Subdivisions [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Obligations Of States And Political Subdivisions [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	41,849	48,929
Obligations Of States And Political Subdivisions [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	2,572	3,888
U.S. Government Agencies [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
U.S. Government Agencies [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	2,572	3,888
U.S. Government Agencies [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
U.S. Government Agencies Mortgage-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	254,639	286,482
U.S. Government Agencies Mortgage-backed Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
U.S. Government Agencies Mortgage-backed Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	254,639	286,482
U.S. Government Agencies Mortgage-backed Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Private Label [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	2,400	3,272
Private Label [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Private Label [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	2,400	3,272
Private Label [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	7,518	8,162
Total Gains (Losses), Nonrecurring	(1,058)	(1,021)
Other Real Estate Owned [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	0	0
Other Real Estate Owned [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	0	0
Other Real Estate Owned [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	7,518	8,162
Trust Preferred Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	12,008	12,645
Trust Preferred Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Trust Preferred Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	9,223	10,260
Trust Preferred Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	2,785	2,385
Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	9,316	15,947
Corporate Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Corporate Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	9,316	15,947
Corporate Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Marketable Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	4,956	4,185
Marketable Equity Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	4,956	4,185
Marketable Equity Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Marketable Equity Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Investment Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	1,507	1,774
Investment Funds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	1,507	1,774
Investment Funds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Investment Funds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Derivative Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	5,810	14,012
Derivative Assets [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Derivative Assets [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	5,810	14,012
Derivative Assets [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	11,960	10,679
Total Gains (Losses), Nonrecurring	(880)	0
Impaired Loans [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	0	0
Impaired Loans [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	0	0
Impaired Loans [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	11,960	10,679
Other Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring		1,000
Total Gains (Losses), Nonrecurring		(288)
Other Assets [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring		0
Other Assets [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring		1,000
Other Assets [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring		0
Derivative Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Liabilities, Recurring	5,810	14,012
Derivative Liabilities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Liabilities, Recurring	0	0
Derivative Liabilities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Liabilities, Recurring	5,810	14,012
Derivative Liabilities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Liabilities, Recurring	$ 0	$ 0

XML

Allowance For Loan Losses (Schedule Of Credit Quality Indicators) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,558,456	$ 2,146,369
Commercial, Industrial, And Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,173,463	930,709
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	151,185	108,739
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,022,278	821,970
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,080,941	877,307
Pass [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	140,999	105,690
Pass [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	939,942	771,617
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	23,816	15,893
Special Mention [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	693	878
Special Mention [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	23,123	15,015
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	67,777	37,509
Substandard [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	9,057	2,171
Substandard [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	58,720	35,338
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	929	0
Doubtful [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	436	0
Doubtful [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 493	$ 0

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Derivative Instruments (Derivative Liabilities Offset in The consolidated Balance Sheets) (Details) (Interest Rate Swap [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Interest Rate Swap [Member]
Offsetting Liabilities [Line Items]
Gross Amounts of Recognized Liabilities	$ 5,810
Net Amount of Liabilities presented in the Statement of Financial Position	5,810
Fair Value of collateral	13,331
Total Gross amounts not offset in the statement of financial position including applicable netting agreement and fair value of collateral	13,331
Net Amount	$ 0

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Acquisitions (Schedule Of Goodwill) (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Virginia Savings Bank [Member]	Sep. 30, 2013 Community Bank [Member]
Goodwill [Roll Forward]
Balance, beginning of period	$ 72,419	$ 62,988
Adjustment to goodwill acquired in conjunction with the acquisition of Virginia Savings			142
Goodwill acquired in conjunction with the acquisition of Community				9,289
Balance, end of period	$ 72,419	$ 62,988

XML

Acquisitions (Narrative) (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended				3 Months Ended	9 Months Ended					3 Months Ended	9 Months Ended				9 Months Ended		0 Months Ended	9 Months Ended
	Jan. 10, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011	Sep. 30, 2013 Community Bank [Member]	Sep. 30, 2013 Community Bank [Member]	Jan. 10, 2013 Community Bank [Member]	Dec. 31, 2012 Community Bank [Member]	Jan. 10, 2013 Community Bank [Member] Western Virginia [Member] branch	Jan. 10, 2013 Community Bank [Member] Virginia Beach [Member] branch	Sep. 30, 2012 Virginia Savings Bank [Member]	Sep. 30, 2012 Virginia Savings Bank [Member]	Sep. 30, 2013 Virginia Savings Bank [Member]	Dec. 31, 2012 Virginia Savings Bank [Member]	May 31, 2012 Virginia Savings Bank [Member] branch	Sep. 30, 2013 Virginia Savings Bank And Community Financial [Member]	Dec. 31, 2012 Virginia Savings Bank And Community Financial [Member]	Jan. 10, 2013 Warrant [Member] Community Bank [Member]	Sep. 30, 2013 Employee Severance [Member] Community Bank [Member]	Sep. 30, 2012 Employee Severance [Member] Virginia Savings Bank [Member]	Sep. 30, 2013 Professional Fees [Member] Community Bank [Member]	Sep. 30, 2012 Professional Fees [Member] Virginia Savings Bank [Member]	Sep. 30, 2013 Data Processing Costs [Member] Community Bank [Member]	Sep. 30, 2012 Data Processing Costs [Member] Virginia Savings Bank [Member]
Business Acquisition [Line Items]
Percentage of outstanding common and preferred stock										100.00%								100.00%
Number of branches acquired												8	2					5
Assets		$ 3,396,688,000		$ 3,396,688,000		$ 2,917,466,000				$ 460,000,000								$ 132,000,000
Gross loans		2,558,456,000		2,558,456,000		2,146,369,000		288,117,000	288,117,000	410,000,000	0					52,640,000	65,219,000	82,000,000	340,757,000	65,219,000
Deposits		2,807,536,000		2,807,536,000		2,409,316,000				380,000,000								120,000,000
Shareholders equity		378,042,000	328,415,000	378,042,000	328,415,000	333,274,000	311,134,000			53,000,000								11,000,000
Number of shares received by Community shareholders for each share of Community Financial	0.1753
Transaction purchase price		53,641,000		53,641,000						41,246,000								12,395,000
Cash		17,410,000		17,410,000						12,738,000								4,672,000
Number of common stock shares issued										767,000								240,000
Common stock valued		35,506,000		35,506,000						27,783,000								7,723,000
Closing price of common stock at acquisition										$ 36.23								$ 32.18
Number of shares to purchase through warrant																					61,565
Exercise price per share																					$ 30.8
Original warrant expiration period																					10 years
Revised warrant expiration period																					6 years
Goodwill		17,530,000		17,530,000						9,289,000								8,241,000
Core deposit intangible		3,984,000		3,984,000						2,711,000								1,273,000
Premium on time deposits										1,100,000								2,300,000
Premium on time deposits amortization period				5 years
Amortization time period for core deposit intangible assets				10 years
Core deposit annual charge (less than 0.7 million)																			700,000
Merger related costs (less than 0.1 million)		$ (150,000)	$ 157,000	$ 5,455,000	$ 4,335,000			$ 100,000	$ 5,500,000					$ 200,000	$ 4,300,000							$ 2,500,000	$ 900,000	$ 1,400,000	$ 900,000	$ 1,100,000	$ 2,300,000

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Acquisitions (Schedule Of Business Acquisition) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	May 31, 2012 Virginia Savings Bank [Member]	Jan. 10, 2013 Community Bank [Member]
Consideration:
Cash	$ 17,410	$ 4,672	$ 12,738
Common stock	35,506	7,723	27,783
Warrant issued	725	0	725
Purchase price	53,641	12,395	41,246
Identifiable assets:
Cash and cash equivalents	33,831	24,943	8,888
Investment securities	31,741	14,082	17,659
Loans	444,217	73,463	370,754
Bank owned life insurance	6,935	0	6,935
Premises and equipment	14,108	5,158	8,950
Deferred tax asset, net	19,401	4,173	15,228
Other assets	12,614	4,626	7,988
Total identifiable assets	562,847	126,445	436,402
Identifiable liabilities:
Deposits	505,793	122,723	383,070
Other liabilities	24,927	841	24,086
Total identifiable liabilities	530,720	123,564	407,156
Net identifiable asset	32,127	2,881	29,246
Goodwill	17,530	8,241	9,289
Core deposit intangible	$ 3,984	$ 1,273	$ 2,711

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Investments

9 Months Ended

Sep. 30, 2013

Investments [Abstract]

Investments

Investments

The amortized cost and estimated fair values of the Company's securities are shown in the following table (in thousands):

	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities available-for-sale:
U.S. Treasuries and U.S.
government agencies	$	2,511	$	61	$	—	$	2,572	$	3,792	$	96	$	—	$	3,888
Obligations of states and
political subdivisions	41,109		814		74		41,849		47,293		1,651		15		48,929
Mortgage-backed securities:
U.S. government agencies	255,889		3,351		4,601		254,639		279,336		7,231		85		286,482
Private label	2,383		19		2		2,400		3,235		37		—		3,272
Trust preferred
securities	13,456		1,047		2,495		12,008		15,402		55		2,812		12,645
Corporate securities	9,783		172		639		9,316		16,152		207		412		15,947
Total Debt Securities	325,131		5,464		7,811		322,784		365,210		9,277		3,324		371,163
Marketable equity  securities	3,381		1,575		—		4,956		3,381		804		—		4,185
Investment funds	1,525		—		18		1,507		1,724		50		—		1,774
Total Securities
Available-for-Sale	$	330,037	$	7,039	$	7,829	$	329,247	$	370,315	$	10,131	$	3,324	$	377,122

	September 30, 2013								December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Securities held-to-maturity
Trust preferred securities	$	3,994	$	2,412	$	—	$	6,406	$	13,454	$	465	$	58	$	13,861
Total Securities
Held-to-Maturity	$	3,994	$	2,412	$	—	$	6,406	$	13,454	$	465	$	58	$	13,861
Other investment securities:
Non-marketable equity securities	$	13,344	$	—	$	—	$	13,344	$	11,463	$	—	$	—	$	11,463
Total Other Investment
Securities	$	13,344	$	—	$	—	$	13,344	$	11,463	$	—	$	—	$	11,463

Securities with limited marketability, such as stock in the Federal Reserve Bank or the Federal Home Loan Bank, are carried at cost and are reported as non-marketable equity securities in the table above.

Certain investment securities owned by the Company were in an unrealized loss position (i.e., amortized cost basis exceeded the estimated fair value of the securities).  The following table shows the gross unrealized losses and fair value of the Company’s investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	September 30, 2013
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	3,471	$	73	$	448	$	1	$	3,919	$	74
Mortgage-backed securities:
U.S. Government agencies	129,114		4,485		5,217		116		134,331		4,601
Private label	1,604		2		—		—		1,604		2
Trust preferred securities	130		270		4,497		2,225		4,627		2,495
Corporate securities	6,081		639		—		—		6,081		639
Investment funds	1,482		18		—		—		1,482		18
Total	$	141,882	$	5,487	$	10,162	$	2,342	$	152,044	$	7,829

	December 31, 2012
	Less Than Twelve Months				Twelve Months or Greater				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Securities available-for-sale:
Obligations of states and political subdivisions	$	1,163	$	15	$	—	$	—	$	1,163	$	15
Mortgage-backed securities:
U.S. Government agencies	16,225		85		—		—		16,225		85
Trust preferred securities	348		51		5,836		2,761		6,184		2,812
Corporate securities	1,950		49		4,344		363		6,294		412
Total	$	19,686	$	200	$	10,180	$	3,124	$	29,866	$	3,324
Securities held-to-maturity:
Trust preferred securities	$	—	$	—	$	3,380	$	58	$	3,380	$	58

Marketable equity securities consist of investments made by the Company in equity positions of various community banks.  Included within this portfolio are meaningful (2-5%) ownership positions in the following community bank holding companies: First National Corporation (FXNC) and First United Corporation (FUNC).

During the nine months ended September 30, 2013, the Company did not record any credit-related net investment impairment losses. During the nine months ended September 30, 2012, the Company recorded $0.6 million in credit-related net investment impairment losses. The charges deemed to be other-than-temporary were related to pooled bank trust preferred securities with a remaining carrying value of $5.6 million at September 30, 2012. The credit-related net impairment charges related to the pooled bank trust preferred securities were based on the Company’s quarterly reviews of its investment securities for indications of losses considered to be other-than-temporary.

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary would be reflected in earnings as realized losses.  In estimating other-than-temporary impairment losses, management considers, among other things (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition, capital strength, and near-term (12 months) prospects of the issuer, including any specific events which may influence the operations of the issuer such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; (iii) the historical volatility in the market value of the investment and/or the liquidity or illiquidity of the investment; (iv) adverse conditions specifically related to the security, an industry, or a geographic area; or (v) the intent to sell the investment security and if it’s more likely than not that the Company will not have to sell the security before recovery of its cost basis.  In addition, management also employs a continuous monitoring process in regards to its marketable equity securities, specifically its portfolio of regional community bank holdings.  Although the regional community bank stocks that are owned by the Company are publicly traded, the trading activity for these stocks is minimal, with trading volumes of less than 0.1% of each respective company being traded on a daily basis.  Another factor influencing the market value of these equity securities is a depressed stock market, particularly in the smaller community bank financial sector.  As part of management’s review process for these securities, management reviews the financial condition of each respective regional community bank for any indications of financial weakness.

Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company will receive full value for the securities.  Furthermore, as of September 30, 2013, management does not intend to sell an impaired security and it is not more than likely that it will be required to sell the security before the recovery of its amortized cost basis.  The unrealized losses on debt securities are primarily the result of interest rate changes, credit spread widening on agency-issued mortgage related securities, general financial market uncertainty and unprecedented market volatility.  These conditions will not prohibit the Company from receiving its contractual principal and interest payments on its debt securities.  The fair value is expected to recover as the securities approach their maturity date or repricing date.   As of September 30, 2013, management believes the unrealized losses detailed in the table above are temporary and no impairment loss has been recognized in the Company’s consolidated income statement.  Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period of the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income.

At September 30, 2013, the book value of the Company’s five pooled trust preferred securities totaled $4.2 million with an estimated fair value of $2.3 million.  All of these securities are mezzanine tranches.  Pooled trust preferred securities represent beneficial interests in securitized financial assets that the Company analyzes within the scope of ASC 320, “Investments-Debt and Equity Securities” and are evaluated quarterly for other-than-temporary-impairment (“OTTI”).  Management performs an analysis of OTTI utilizing its internal methodology as described below to estimate expected cash flows to be received in the future.  The Company reviews each of its pooled trust preferred securities to determine if an OTTI charge would be recognized in current earnings in accordance with ASC 320, “Investments-Debt and Equity Securities”.  There is a risk that continued collateral deterioration could cause the Company to recognize additional OTTI charges in earnings in the future.

When evaluating pooled trust preferred securities for OTTI, the Company determines a credit related portion and a noncredit related portion.  The credit related portion is recognized in earnings and represents the difference between the present value of expected future cash flows and the amortized cost basis of the security.  The noncredit related portion is recognized in other comprehensive income, and represents the difference between the book value and the fair value of the security less the amount of the credit related impairment.  The determination of whether it is probable that an adverse change in estimated cash flows has occurred is evaluated by comparing estimated cash flows to those previously projected as further described below.  The Company considers this process to be its primary evidence when determining whether credit related OTTI exists.  The results of these analyses are significantly affected by other variables such as the estimate of future cash flows, credit worthiness of the underlying issuers and determination of the likelihood of defaults of the underlying collateral.

The Company utilizes a third party model to compute the present value of expected cash flows which considers the structure and term of each of the five respective pooled trust preferred securities and the financial condition of the underlying issuers.  Specifically, the third party model details interest rates, principal balances of note classes and underlying issuers, the timing and amount of interest and principal payments of the underlying issuers, and the allocation of the payments to the note classes. The current estimate of expected cash flows is based on the most recent trustee reports and any other relevant market information including announcements of interest payment deferrals or defaults of underlying trust preferred securities. For issuing banks that have defaulted, management generally assumes no recovery. For issuing banks that have deferred its interest payments, management excludes the collateral balance associated with these banks and assumes no recoveries of such collateral balance in the future. The exclusion of such issuing banks in a current deferral position is based on such bank experiencing a certain level of financial difficulty that raises doubt about its ability to satisfy its contractual debt obligation, and accordingly, the Company excludes the associated collateral balance from its estimate of expected cash flows. Other assumptions used in the estimate of expected cash flows include expected future default rates and prepayments. Specifically, the model assumes annual prepayments of 1.0% with 100% at maturity and assumes 150 basis points of additional annual defaults from banks that are currently not in default or deferral.  In addition, the model assumes no recoveries except for one trust preferred security which assumes that one of the banks currently deferring will cure such positions.  Management compares the present value of expected cash flows to those previously projected to determine if an adverse change in cash flows has occurred. If an adverse change in cash flows has occurred, management determines the credit loss to be recognized in the current period and the portion related to noncredit factors to be recognized in other comprehensive income.

The following table presents a progression of the credit loss component of OTTI on debt and equity securities recognized in earnings during the nine months ended September 30, 2013 and for the year ended December 31, 2012 (in thousands).  The credit loss component represents the difference between the present value of expected future cash flows and the amortized cost basis of the security.  The credit component of OTTI recognized in earnings during a period is presented in two parts based upon whether the credit impairment in the current period is the first time the security was credit impaired (initial credit impairment) or if there is additional credit impairment on a security that was credit impaired in previous periods.

	Debt Securities		Equity Securities			Total
Balance at January 1, 2012	$	20,610	$	6,048		$	26,658
Additions:
Initial credit impairment	—		—			—
Additional credit impairment	576		—			576
Deductions:
Called	—		(1,235		)	(1,235		)
Balance at December 31, 2012	21,186		4,813			25,999
Additions:
Initial credit impairment	—		—			—
Additional credit impairment	—		—			—
Deductions:
Called	—		—			—
Balance at September 30, 2013	$	21,186	$	4,813		$	25,999

The following table presents additional information about the Company’s trust preferred securities with a credit rating of below investment grade as of September 30, 2013 (dollars in thousands):

Deal Name		Type	Class	Original Cost		Amortized Cost		Fair Value		Difference (1)		Lowest Credit Rating	# of issuers currently performing	Actual deferrals/defaults (as a % of original dollar)		Expected deferrals/defaults (as a % of remaining of performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (4)
		Pooled trust preferred securities:
		Other-than-temporarily impaired
		Available for Sale:
P1		Pooled	Mezz	$	827	$	268	$	368	100		Caa3	7	19.5	%	21.0	%	(2)	52.5	%
P2		Pooled	Mezz	3,279		436		1,252		816		Ca	6	22.3	%	5.2	%	(2)	23.4	%
P3	(5)	Pooled	Mezz	2,962		1,419		365		(1,054	)	Caa3	22	25.5	%	8.2	%	(2)	12.9	%
P4	(6)	Pooled	Mezz	4,060		400		130		(270	)	Ca	9	19.2	%	7.1	%	(3)	22.8	%
P5		Pooled	Mezz	6,228		826		457		(369	)	Ca	9	26.0	%	21.0	%	(2)	24.7	%
		Held to Maturity:
P6		Pooled	Mezz	1,599		—		737		737		Caa3	7	19.5	%	21.0	%	(2)	52.5	%
P7		Pooled	Mezz	4,354		—		1,669		1,669		Ca	6	22.3	%	5.2	%	(2)	23.4	%
		Single issuer trust preferred securities
		Available for sale:
S5		Single		261		235		289		54		NR	1	—	%	—	%
		Held to Maturity:
S9		Single		4,000		3,994		4,000		6		NR	1	—	%	—	%

(1) The differences noted consist of unrealized gains (losses) recorded at September 30, 2013 and noncredit other-than-temporary impairment losses recorded subsequent to April 1, 2009 that have not been reclassified as credit losses.

(2) Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default. This model for this security assumes that all collateral that is currently deferring will default with a zero recovery rate. The underlying issuers can cure, thus this bond could recover at a higher percentage upon default than zero.

(3) Performing collateral is defined as total collateral minus all collateral that has been called, is currently deferring, or currently in default.  The model for this security assumes that one of the banks that is currently deferring will cure.  If additional underlying issuers cure, this bond could recover at a higher percentage.

(4) Excess subordination is defined as the additional defaults/deferrals necessary in the next reporting period to deplete the entire credit enhancement (excess interest and over-collateralization) beneath our tranche within each pool to the point that would cause a "break in yield." This amount assumes that all currently performing collateral continues to perform. A break in yield means that our security would not be expected to receive all the contractual cash flows (principal and interest) by maturity. The "percent of current performing collateral" is the ratio of the "excess subordination amount" to current performing collateral—a higher percent means there is more excess subordination to absorb additional defaults/deferrals, and the better our security is protected from loss.

(5) No other-than-temporary impairment losses were recognized during the nine months ended September 30, 2013.  Other-than-temporary impairment losses of $11,000 were recognized during the year ended December 31, 2012.

(6) No other-than-temporary impairment losses were recognized during the nine months ended September 30, 2013.  Other-than-temporary impairment losses of $565,000 were recognized during the year ended December 31, 2012.

The amortized cost and estimated fair value of debt securities at September 30, 2013, by contractual maturity, are shown in the following table (in thousands).  Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.  Mortgage-backed securities have been allocated to their respective maturity groupings based on their contractual maturity.

	Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	5,566	$	5,581
Due after one year through five years	24,206		24,677
Due after five years through ten years	36,483		37,258
Due after ten years	258,876		255,268
	$	325,131	$	322,784
Securities Held-to-Maturity
Due in one year or less	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	3,994		6,406
	$	3,994	$	6,406

Gross gains and gross losses realized by the Company from investment security transactions are summarized in the table below (in thousands). The specific identification method is used to determine the cost basis of securities sold.

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013		2012			2013		2012
Gross realized gains	$	—	$	830		$	93	$	1,776
Gross realized losses	—		(100		)	—		(246		)
Net investment security gains	$	—	$	730		$	93	$	1,530

The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $266 million and $228 million at September 30, 2013 and December 31, 2012, respectively.

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Derivative Instruments (Fair Value Of Derivative Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Other Assets [Member]
Derivatives, Fair Value [Line Items]
Fair Value	$ 5,810	$ 14,012
Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Fair Value	$ 5,810	$ 14,012

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2013

Share-based Compensation [Abstract]

Summary Of Stock Option Activity

A summary of the Company’s stock option activity and related information is presented below:

	Nine months ended September 30,
	2013				2012
	Options		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
Outstanding at January 1	289,544		$	34.38	293,817		$	33.95
Granted	15,475		37.74		16,876		35.39
Exercised	(107,140	)	33.36		(18,899	)	28.78
Forfeited	(2,250	)	34.73		(1,500	)	34.73
Outstanding at September 30	195,629		$	35.19	290,294		$	34.37

Stock Options Outstanding And Exercisable

Additional information regarding stock options outstanding and exercisable at September 30, 2013, is provided in the following table:

Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Months)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Months)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
$26.62 - $33.90	72,028	$	30.70	53	$	903	22,860	$	31.86	20	$	260
$35.09 - $40.88	123,601	37.81		64	671		75,250	38.95		39	323
	195,629				$	1,574	98,110				$	583

Weighted Average Assumptions Estimate The Fair Value Of Options Granted

 The following weighted average assumptions were used to estimate the fair value of options granted:

	Nine months ended September 30,
	2013		2012
Risk-free interest rate	1.88	%	2.51	%
Expected dividend yield	3.70	%	3.90	%
Volatility factor	41.35	%	48.40	%
Expected life of option	8.0 years		5.0 years

Restricted Shares Activity And Related Information

A summary of the Company’s restricted shares activity and related information is presented below:

	Nine months ended September 30,
	2013				2012
	Restricted Awards		Average Market Price at Grant		Restricted Awards		Average Market Price at Grant
Outstanding at January 1	116,711				108,209
Granted	35,083		$	38.07	23,336		$	34.94
Forfeited/Vested	(9,325	)			(13,234	)
Outstanding at September 30	142,469				118,311

Net Periodic Pension Cost Of The Defined Benefit Plan

The following table presents the components of the net periodic pension cost of the Defined Benefit Plans (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Components of net periodic cost:
Interest cost	$	217		$	158		$	549		$	476
Expected return on plan assets	(276		)	(203		)	(695		)	(607		)
Net amortization and deferral	267			174			732			522
Net Periodic Pension Cost	$	208		$	129		$	586		$	391

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Investments (Aggregate Carrying And Approximate Market Values Of Held-To-Maturity Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	$ 3,994	$ 13,454
Securities held-to-maturity, Gross Unrealized Gains	2,412	465
Securities held-to-maturity, Gross Unrealized Losses	0	58
Securities held-to-maturity, Estimated Fair Value	6,406	13,861
Trust Preferred Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	3,994	13,454
Securities held-to-maturity, Gross Unrealized Gains	2,412	465
Securities held-to-maturity, Gross Unrealized Losses	0	58
Securities held-to-maturity, Estimated Fair Value	6,406	13,861
Other Investment Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	13,344	11,463
Securities held-to-maturity, Gross Unrealized Gains	0	0
Securities held-to-maturity, Gross Unrealized Losses	0	0
Securities held-to-maturity, Estimated Fair Value	13,344	11,463
Non-Marketable Equity Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	13,344	11,463
Securities held-to-maturity, Gross Unrealized Gains	0	0
Securities held-to-maturity, Gross Unrealized Losses	0	0
Securities held-to-maturity, Estimated Fair Value	$ 13,344	$ 11,463

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Previously Securitized Loans

9 Months Ended

Sep. 30, 2013

Previously Securitized Loans [Abstract]

Previously Securitized Loans

Previously Securitized Loans

Between 1997 and 1999, the Company completed six securitization transactions involving approximately $760 million in 125% of fixed rate, junior-lien underlying mortgages.  The Company retained a financial interest in each of the securitizations until 2004.  Principal amounts owed to investors were evidenced by securities (“Notes”).  During 2003 and 2004, the Company exercised its early redemption options on each of those securitizations.  Once the Notes were redeemed, the Company became the beneficial owner of the mortgage loans and recorded the loans as assets of the Company within the loan portfolio.

As the Company redeemed the outstanding Notes, no gain or loss was recognized in the Company’s financial statements and the remaining mortgage loans were recorded in the Company’s loan portfolio as “previously securitized loans,” at the lower of carrying value or fair value.  Because the carrying value of the mortgage loans incorporated assumptions for expected prepayment and default rates, the carrying value of the loans was generally less than the actual outstanding contractual balance of the loans.  As of September 30, 2013, there is no carrying value remaining on these loans, while the actual contractual balances of these loans were $6.5 million.  During the three and nine months ended September 30, 2013 and 2012, the Company recognized $0.6 million and $2.0 million and $0.8 million and $2.4 million, respectively, of interest income from its previously securitized loans.

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Accumulated Other Comprehensive Loss - Schedule Of Amounts Reclassified Out of Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Related income tax expense (benefit)	$ (7,056)	$ (5,526)	$ (18,398)	$ (14,450)
Other comprehensive income (loss), net of tax	(633)	2,112	(4,752)	3,542
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Net securities (gains) losses reclassified into earnings	0	(458)	(93)	(954)
Related income tax expense (benefit)	0	172	34	359
Other comprehensive income (loss), net of tax	$ 0	$ (286)	$ (59)	$ (595)

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Acquisitions

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Acquisitions

Acquisitions

On May 31, 2012, the Company acquired 100% of the outstanding common and preferred stock of Virginia Savings Bancorp, Inc. and its wholly owned subsidiary, Virginia Savings Bank (collectively, “Virginia Savings”).  As a result of this acquisition, the Company acquired five branches which expanded its footprint into Virginia.  At the time of closing, Virginia Savings had total assets of $132 million, loans of $82 million, deposits of $120 million and shareholders’ equity of $11 million.

The total transaction was valued at $12.4 million, consisting of cash of $4.7 million and approximately 240,000 shares of common stock valued at $7.7 million.  The common stock was valued based on the closing price of $32.18 for the Company’s common shares on May 31, 2012.

On January 10, 2013, the Company acquired 100% of the outstanding common and preferred stock of Community Financial Corporation and its wholly owned subsidiary, Community Bank (collectively, "Community"). As a result of this acquisition, the Company acquired eight branches along the I-81 corridor in western Virginia and two branches in Virginia Beach, Virginia. At the time of closing, Community had total assets of $460 million, loans of $410 million, deposits of $380 million and shareholders' equity of $53 million. Community shareholders received 0.1753 shares of the Company's common stock for each share of Community Financial Corporation stock, resulting in the issuance of approximately 767,000 shares of the Company's common stock valued at $27.8 million. The common stock was valued based on the closing price of $36.23 for the Company's common stock on January 9, 2013. In conjunction with this acquisition, the Company repurchased $12.7 million of Community preferred stock previously issued to the U.S. Department of Treasury ("Treasury Department"). A related warrant issued by Community to the Treasury Department has been converted into a warrant to purchase 61,565 shares of the Company's common stock, with an exercise price of $30.80 per share and an expiration period of ten years, which was subsequently reduced to six years. Based on the preliminary purchase price allocation, the Company recorded an estimate of goodwill of $9.3 million and a core deposit intangible of $2.7 million as a result of this acquisition. The Company has recorded estimates of the fair values of the acquired assets and liabilities. These fair value estimates are provisional amounts based on third-party valuations that are currently under review.

The purchase price of both acquisitions has been allocated as follows (in thousands):

			(preliminary)
	Virginia Savings		Community		Total
Date of acquisition	May 31, 2012		January 10, 2013
Consideration:
Cash	$	4,672	$	12,738	$	17,410
Common stock	7,723		27,783		35,506
Warrant issued	—		725		725
	$	12,395	$	41,246	$	53,641
Identifiable assets:
Cash and cash equivalents	$	24,943	$	8,888	$	33,831
Investment securities	14,082		17,659		31,741
Loans	73,463		370,754		444,217
Bank owned life insurance	—		6,935		6,935
Premises and equipment	5,158		8,950		14,108
Deferred tax asset, net	4,173		15,228		19,401
Other assets	4,626		7,988		12,614
Total identifiable assets	126,445		436,402		562,847
Identifiable liabilities:
Deposits	122,723		383,070		505,793
Other liabilities	841		24,086		24,927
Total identifiable liabilities	123,564		407,156		530,720
Net identifiable asset	2,881		29,246		32,127
Goodwill	8,241		9,289		17,530
Core deposit intangible	1,273		2,711		3,984
	$	12,395	$	41,246	$	53,641

Acquired Loans

In determining the estimated fair value of the acquired loans, management considered several factors, such as estimated future credit losses, estimated prepayments, remaining lives of the acquired loans, estimated value of the underlying collateral and the net present value of the cash flows expected to be received.  For smaller loans not specifically reviewed, management grouped the loans into their respective homogeneous loan pool and applied a fair value estimate accordingly.

Acquired loans are accounted for using one of the two following accounting standards:

(1) ASC Topic 310-20 is used to value loans that do not have evidence of credit quality deterioration.  For these loans, the difference between the fair value of the loan and the amortized cost of the loan would be amortized or accreted into income using the interest method.

(2) ASC Topic 310-30 is used to value loans that have evidence of credit quality deterioration.  For these loans, the expected cash flows that exceed the fair value of the loan represent the accretable yield, which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans.  The non-accretable difference represents the difference between the contractually required principal and interest payments and the cash flows expected to be collected based upon management’s estimation.  Subsequent decreases in the expected cash flows will require the Company to evaluate the need for additions to the Company’s allowance for loan losses.  Subsequent increases in the expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges with a corresponding adjustment to the accretable yield, which will result in the recognition of additional interest income over the remaining lives of the loans.

The following table presents the purchased credit-impaired loans acquired in conjunction with both acquisitions (in thousands):

	Virginia
	Savings			Community			Total
Contractually required principal and interest	$	11,567		$	58,014		$	69,581
Contractual cash flows not expected to be collected (non-accretable difference)	(3,973		)	(20,724		)	(24,697		)
Expected cash flows	7,594			37,290			44,884
Interest component of expected cash flows (accretable difference)	(954		)	(5,587		)	(6,541		)
Estimated fair value of purchased credit impaired loans acquired	$	6,640		$	31,703		$	38,343

Acquired Deposits

The fair values of non-time deposits approximated their carrying value at the acquisition date.  For time deposits, the fair values were estimated based on discounted cash flows, using interest rates that are currently being offered compared to the contractual interest rates.   Based on these analyses, management recorded a premium on time deposits acquired of $2.3 million and $1.1 million, for the Virginia Savings and Community acquisitions, respectively, each of which is being amortized over five years.

Core Deposit Intangible

The Company believes that the customer relationships with the deposits acquired have an intangible value.  In connection with the acquisition, the Company recorded a core deposit intangible asset of $1.3 million and $2.7 million, for Virginia Savings and Community, respectively. Each of the core deposit intangible assets represent the value that the acquiree had with their deposit customers.  The fair value was estimated based on a discounted cash flow methodology that considered type of deposit, deposit retention and the cost of the deposit base.   The core deposit intangible is being amortized over ten years, with an annual charge of less than $0.7 million per year.  The following table presents a rollforward of the Company’s intangible assets from the beginning of the year (in thousands):

	Intangible Assets
Balance, beginning of period	$	2,069
Core deposit intangible acquired in conjunction with the acquisition of Community	2,711
Amortization expense	(779		)
Balance, end of period	$	4,001

Goodwill

Under GAAP, management has up to twelve months following the date of the acquisition to finalize the fair values of acquired assets and liabilities.  The measurement period ends as soon as the Company receives information it was seeking about facts and circumstances that existed as of the acquisition date or learns more information is not obtainable.  Any subsequent adjustments to the fair value of the acquired assets and liabilities, intangible assets or other purchase accounting adjustments during the measurement period will result in adjustments to the goodwill recorded.  The measurement period is limited to one year from the acquisition date.  The goodwill recorded in conjunction with the Virginia Savings and Community acquisitions is not expected to be deductible for tax purposes.  The following table presents a rollforward of goodwill from the beginning of the year (in thousands):

	Goodwill
Balance, beginning of period	$	62,988
Adjustment to goodwill acquired in conjunction with the acquisition of Virginia Savings	142
Goodwill acquired in conjunction with the acquisition of Community	9,289
Balance, end of period	$	72,419

Merger Related Costs

During the three and nine months ended September 30, 2013, the Company incurred less than $0.1 million and $5.5 million of merger-related costs in connection with the Community acquisition. These costs were primarily for severance ($2.5 million), professional fees ($1.4 million) and data processing costs ($1.1 million).

During the three and nine months ended September 30, 2012, the Company incurred $0.2 million and $4.3 million of merger-related costs in the connection with the Virginia Savings acquisition. These costs were primarily for severance ($0.9 million), professional fees ($0.9 million) and data processing costs ($2.3 million).

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Consolidated Statements Of Changes In Shareholders' Equity (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 1.11	$ 1.05
Exercise of stock options (in shares)	107,140	18,899
Purchase of treasury shares (in shares)		237,535

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Allowance For Loan Losses (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Receivables [Abstract]
Interest income recognized	$ 0.4	$ 0.7

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Investments (Gross Gains And Losses Realized) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Investments [Abstract]
Gross realized gains	$ 0	$ 830	$ 93	$ 1,776
Gross realized losses	0	(100)	0	(246)
Net investment security gains	$ 0	$ 730	$ 93	$ 1,530

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule Of Computation Of Basic And Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Distributed earnings allocated to  common stock	$	5,767	$	5,150	$	17,302	$	15,451
Undistributed earnings allocated to common stock	8,081		5,373		17,349		12,375
Net earnings allocated to common shareholders	$	13,848	$	10,523	$	34,651	$	27,826
Average shares outstanding	15,608		14,751		15,545		14,700
Effect of dilutive securities:
Warrants outstanding	62		—		60		—
Employee stock awards	120		83		108		83
Shares for diluted earnings per share	15,790		14,834		15,713		14,783
Basic earnings per share	$	0.89	$	0.71	$	2.23	$	1.89
Diluted earnings per share	$	0.88	$	0.71	$	2.21	$	1.88

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Fair Value Measurements (Schedule Of Estimates Of Fair Value Of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets:
Securities held-to-maturity	$ 3,994	$ 13,454
Liabilities:
Deposits	1,098,730	919,346
Long-term debt	16,495	16,495
Carrying Amount [Member]
Assets:
Cash and cash equivalents	179,621	84,994
Securities available-for-sale	329,247	377,122
Securities held-to-maturity	3,994	13,454
Other securities	13,344	11,463
Net loans	2,537,850	2,127,560
Accrued interest receivable	8,108	6,692
Derivative assets	5,810	14,012
Liabilities:
Deposits	2,807,536	2,409,316
Short-term debt	150,943	114,646
Long-term debt	16,495	16,495
Derivative liabilities	5,810	14,012
Fair Value [Member]
Assets:
Cash and cash equivalents	179,621	84,994
Securities available-for-sale	329,247	377,122
Securities held-to-maturity	6,406	13,861
Other securities	13,344	11,463
Net loans	2,574,826	2,162,856
Accrued interest receivable	8,108	6,692
Derivative assets	5,810	14,012
Liabilities:
Deposits	2,816,263	2,381,495
Short-term debt	150,944	114,648
Long-term debt	16,463	16,462
Derivative liabilities	5,810	14,012
Level 1 [Member]
Assets:
Cash and cash equivalents	179,621	84,994
Securities available-for-sale	6,463	5,959
Securities held-to-maturity	0	0
Other securities	0	0
Net loans	0	0
Accrued interest receivable	8,108	6,692
Derivative assets	0	0
Liabilities:
Deposits	1,708,806	1,447,954
Short-term debt	0	0
Long-term debt	0	0
Derivative liabilities	0	0
Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Securities available-for-sale	319,999	368,778
Securities held-to-maturity	6,406	13,861
Other securities	13,344	11,463
Net loans	0	0
Accrued interest receivable	0	0
Derivative assets	5,810	14,012
Liabilities:
Deposits	1,107,457	933,541
Short-term debt	150,944	114,648
Long-term debt	16,463	16,462
Derivative liabilities	5,810	14,012
Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Securities available-for-sale	2,785	2,385
Securities held-to-maturity	0	0
Other securities	0	0
Net loans	2,574,826	2,162,856
Accrued interest receivable	0	0
Derivative assets	0	0
Liabilities:
Deposits	0	0
Short-term debt	0	0
Long-term debt	0	0
Derivative liabilities	$ 0	$ 0

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Employee Benefit Plans (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Proceeds from exercise of stock options	$ 2.9	$ 0.5
Total intrinsic value of stock options exercised (less than 0.1 million for nine months ended 2012)	0.6	0.1
Stock-based compensation expense	0.2	0.2
Unrecognized stock-based compensation expense	0.4
Weighted-average period, unrecognized expense expected to be recognized	1 year 8 months 12 days
Stock-based compensation expense related to restricted shares	0.6	0.5
Total expense associated with the retirement benefit plan	0.6	0.5
Contributions made by company	0.5	0.6
Stock Appreciation Rights (SARs) [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Incentive stock options and SARs exercisable period	10 years
Stock Options [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Incentive stock options and SARs exercisable period	10 years
Non-Vested Restricted Shares [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized stock-based compensation expense	$ 2.9
Weighted-average period, unrecognized expense expected to be recognized	4 years 1 month 6 days
Maximum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Common stock issued upon the exercise of stock options, SARs and stock awards	750,000

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Allowance For Loan Losses (Schedule Of Troubled Debt Restructurings) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013 contract	Sep. 30, 2012 contract	Dec. 31, 2012
Financing Receivable, Modifications [Line Items]
Accruing	$ 23,832		$ 23,128
Non-Accruing	978		580
Total	24,810		23,708
Number Of Contracts	46	1
Pre Modification Outstanding Recorded Investment	4,789	144
Post Modification Outstanding Recorded Investment	4,789	144
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Accruing	91		101
Non-Accruing	0		0
Total	91		101
Number Of Contracts	1	0
Pre Modification Outstanding Recorded Investment	91	0
Post Modification Outstanding Recorded Investment	91	0
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Accruing	1,567		734
Non-Accruing	0		0
Total	1,567		734
Number Of Contracts	3	0
Pre Modification Outstanding Recorded Investment	1,567	0
Post Modification Outstanding Recorded Investment	1,567	0
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Accruing	19,416		15,083
Non-Accruing	964		162
Total	20,380		15,245
Number Of Contracts	30	0
Pre Modification Outstanding Recorded Investment	2,808	0
Post Modification Outstanding Recorded Investment	2,808	0
Home equity - junior lien [Member]
Financing Receivable, Modifications [Line Items]
Accruing	2,758		7,068
Non-Accruing	14		418
Total	2,772		7,486
Number Of Contracts	12	0
Pre Modification Outstanding Recorded Investment	323	0
Post Modification Outstanding Recorded Investment	323	0
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Accruing	0		142
Non-Accruing	0		0
Total	0		142
Number Of Contracts	0	1
Pre Modification Outstanding Recorded Investment	0	144
Post Modification Outstanding Recorded Investment	$ 0	$ 144

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2013

Share-based Compensation [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Pursuant to the terms of the City Holding Company 2003 Incentive Plan and the City Holding Company 2013 Incentive Plan (the "2003 Plan” and "2013 Plan", respectively), the Compensation Committee of the Board of Directors, or its delegate, may, from time-to-time, grant stock options, stock appreciation rights (“SARs”), or stock awards to employees, directors and individuals who provide service to the Company (collectively, "Plan Participants").  The 2003 Plan expired in April of 2013 and the 2013 Plan was approved by the shareholders in April 2013. A maximum of 750,000 shares of the Company’s common stock may be issued upon the exercise of stock options, SARs and stock awards.  These limitations may be adjusted in the event of a change in the number of outstanding shares of common stock by reason of a stock dividend, stock split or other similar event.  Specific terms of options and SARs awarded, including vesting periods, exercise prices (stock price at date of grant) and expiration dates are determined at the date of grant and are evidenced by agreements between the Company and the awardee.  The exercise price of the option grants equals the market price of the Company’s stock on the date of grant.  All incentive stock options and SARs will be exercisable up to 10 years from the date granted and all options and SARs are exercisable for the period specified in the individual agreement.

Each award from the Plan is evidenced by an award agreement that specifies the option price, the duration of the option, the number of shares to which the option pertains, and such other provisions as the Compensation Committee, or its delegate, determines.  The option price for each grant is equal to the fair market value of a share of the Company’s common stock on the date of the grant.  Options granted expire at such time as the Compensation Committee, or its delegate, determines at the date of the grant and in no event does the exercise period exceed a maximum of ten years.  Upon a change-in-control of the Company, as defined in the Plan, all outstanding options and awards shall immediately vest.

Stock Options

A summary of the Company’s stock option activity and related information is presented below:

	Nine months ended September 30,
	2013				2012
	Options		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
Outstanding at January 1	289,544		$	34.38	293,817		$	33.95
Granted	15,475		37.74		16,876		35.39
Exercised	(107,140	)	33.36		(18,899	)	28.78
Forfeited	(2,250	)	34.73		(1,500	)	34.73
Outstanding at September 30	195,629		$	35.19	290,294		$	34.37

Additional information regarding stock options outstanding and exercisable at September 30, 2013, is provided in the following table:

Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Months)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Months)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
$26.62 - $33.90	72,028	$	30.70	53	$	903	22,860	$	31.86	20	$	260
$35.09 - $40.88	123,601	37.81		64	671		75,250	38.95		39	323
	195,629				$	1,574	98,110				$	583

Proceeds from stock option exercises were $2.9 million and $0.5 million during the nine months ended September 30, 2013 and 2012, respectively. Shares issued in connection with stock option exercises are issued from available treasury shares. If no treasury shares are available, new shares are issued from available authorized shares. During the nine months ended September 30, 2013 and 2012 all shares issued in connection with stock option exercises and restricted stock awards were issued from available treasury stock.

The total intrinsic value of stock options exercised was $0.6 million and less than $0.1 million during the nine months ended September 30, 2013 and 2012, respectively.

Stock-based compensation expense was approximately $0.2 million for both the nine months ended September 30, 2013 and 2012.  Unrecognized stock-based compensation expense related to stock options approximated $0.4 million at September 30, 2013. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.7 years.

The fair value of the options is estimated at the date of grant using a Black-Scholes option-pricing model.   The following weighted average assumptions were used to estimate the fair value of options granted:

	Nine months ended September 30,
	2013		2012
Risk-free interest rate	1.88	%	2.51	%
Expected dividend yield	3.70	%	3.90	%
Volatility factor	41.35	%	48.40	%
Expected life of option	8.0 years		5.0 years

Restricted Shares

The Company records compensation expense with respect to restricted shares in an amount equal to the fair value of the common stock covered by each award on the date of grant. The restricted shares awarded become fully vested after various periods of continued employment from the respective dates of grant. The Company is entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted shares when the restrictions are released and the shares are issued. Compensation is being charged to expense over the respective vesting periods.

Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions. The Company records forfeitures of restricted stock as treasury share repurchases and any compensation cost previously recognized is reversed in the period of forfeiture.  Recipients of restricted shares do not pay any cash consideration to the Company for the shares, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested.  Stock-based compensation expense related to restricted shares was approximately $0.6 million and $0.5 million for the nine months ended September 30, 2013 and 2012, respectively.  Unrecognized stock-based compensation expense related to non-vested restricted shares was $2.9 million at September 30, 2013. At September 30, 2013, this unrecognized expense is expected to be recognized over 4.1 years years based on the weighted average-life of the restricted shares.

A summary of the Company’s restricted shares activity and related information is presented below:

	Nine months ended September 30,
	2013				2012
	Restricted Awards		Average Market Price at Grant		Restricted Awards		Average Market Price at Grant
Outstanding at January 1	116,711				108,209
Granted	35,083		$	38.07	23,336		$	34.94
Forfeited/Vested	(9,325	)			(13,234	)
Outstanding at September 30	142,469				118,311

Benefit Plans

The Company provides retirement benefits to its employees through the City Holding Company 401(k) Plan and Trust (“the 401(k) Plan”), which is intended to be compliant with Employee Retirement Income Security Act (ERISA) section 404(c). The Company’s total expense associated with the retirement benefit plan approximated $0.6 million and $0.5 million for the nine months ended September 30, 2013 and 2012, respectively.

The Company maintains two defined benefit pension plan (“the Defined Benefit Plans”), which were inherited from the Company's acquisition of the plan sponsors (Classic Bancshares, Inc. and Community Financial Corporation). The Classic Defined Benefit Plan was frozen in 1999 and maintains a December 31st year-end for purposes of computing its benefit obligations. The Community Defined Benefit Plan was frozen as of December 31, 2012 and maintains a March 31st year-end for purposes of computing its benefit obligations. The Company made contributions of approximately $0.5 million and $0.6 million to the Defined Benefit Plans during the nine months ended September 30, 2013 and 2012, respectively.

The following table presents the components of the net periodic pension cost of the Defined Benefit Plans (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Components of net periodic cost:
Interest cost	$	217		$	158		$	549		$	476
Expected return on plan assets	(276		)	(203		)	(695		)	(607		)
Net amortization and deferral	267			174			732			522
Net Periodic Pension Cost	$	208		$	129		$	586		$	391

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Allowance For Loan Losses

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Allowance For Loan Losses

Allowance For Loan Losses

Management systematically monitors the loan portfolio and the adequacy of the allowance for loan losses on a quarterly basis to provide for probable losses inherent in the portfolio.  Management assesses the risk in each loan type based on historical trends, the general economic environment of its local markets, individual loan performance and other relevant factors.

Individual credits are selected throughout the year for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the adequacy of the allowance.  Due to the nature of commercial lending, evaluation of the adequacy of the allowance as it relates to these types of loan types is often based more upon specific credit reviews, with consideration given to the potential impairment of certain credits and historical loss rates, adjusted for economic conditions and other inherent risk factors.

The following summarizes the activity in the allowance for loan loss, by portfolio segment, for the nine months ended September 30, 2013 and 2012 (in thousands).  The following also presents the balance in the allowance for loan loss disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans, by portfolio segment, as of September 30, 2013 and December 31, 2012 (in thousands).

	Commercial &		Commercial		Residential						DDA
	Industrial		Real Estate		Real Estate		Home equity		Consumer		Overdrafts		Total
Nine months ended September 30, 2013
Allowance for loan loss
Beginning balance	$	498	$	10,440	$	5,229	$	1,699	$	81	$	862	$	18,809
Charge-offs	772		803		1,598		278		326		1,102		4,879
Recoveries	51		669		137		—		242		674		1,773
Provision	1,460		201		2,481		268		79		414		4,903
Ending balance	$	1,237	$	10,507	$	6,249	$	1,689	$	76	$	848	$	20,606
Nine months ended September 30, 2012
Allowance for loan loss
Beginning balance	$	590	$	11,666	$	3,591	$	2,773	$	88	$	701	$	19,409
Charge-offs	126		2,860		746		989		148		1,128		5,997
Recoveries	12		100		15		12		90		745		974
Provision	45		1,684		955		1,250		75		591		4,600
Ending balance	$	521	$	10,590	$	3,815	$	3,046	$	105	$	909	$	18,986
As of September 30, 2013
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	880	$	—	$	—	$	—	$	—	$	880
Collectively	1,237		9,537		6,249		1,689		76		848		19,636
Acquired with deteriorated
credit quality	—		90		—		—		—		—		90
Total	$	1,237	$	10,507	$	6,249	$	1,689	$	76	$	848	$	20,606
Loans
Evaluated for impairment:
Individually	$	—	$	12,082	$	461	$	297	$	—	$	—	$	12,840
Collectively	148,262		987,711		1,186,995		138,285		50,649		4,508		2,516,410
Acquired with deteriorated
credit quality	2,923		22,485		1,385		2,305		108		—		29,206
Total	$	151,185	$	1,022,278	$	1,188,841	$	140,887	$	50,757	$	4,508	$	2,558,456
As of December 31, 2012
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively	498		10,440		5,229		1,699		81		862		18,809
Acquired with deteriorated
credit quality	—		—		—		—		—		—		—
Total	$	498	$	10,440	$	5,229	$	1,699	$	81	$	862	$	18,809
Loans
Evaluated for impairment:
Individually	$	—	$	9,912	$	469	$	298	$	—	$	—	$	10,679
Collectively	107,044		807,060		1,030,840		142,724		36,453		4,551		2,128,672
Acquired with deteriorated
credit quality	1,695		4,998		126		88		111		—		7,018
Total	$	108,739	$	821,970	$	1,031,435	$	143,110	$	36,564	$	4,551	$	2,146,369

Credit Quality Indicators

All commercial loans within the portfolio are subject to internal risk grading.  All non-commercial loans are evaluated based on payment history.  The Company’s internal risk ratings for commercial loans are:  Pass, Special Mention, Substandard and Doubtful.  Each internal risk rating is defined in the loan policy using the following criteria:  balance sheet yields, ratios and leverage, cash flow spread and coverage, prior history, capability of management, market position/industry, potential impact of changing economic, legal, regulatory or environmental conditions, purpose structure, collateral support, and guarantor support.  Risk grades are generally assigned by the primary lending officer and are periodically evaluated by the Company’s internal loan review process.  Based on an individual loan’s risk grade, estimated loss percentages are applied to the outstanding balance of the loan to determine the amount of probable loss.

The Company categorizes loans into risk categories based on relevant information regarding the customer’s debt service ability, capacity, overall collateral position along with other economic trends, and historical payment performance.  The risk grades for each credit are updated when the Company receives current financial information, the loan is reviewed by the Company’s internal loan review/credit administration departments, or the loan becomes delinquent or impaired.  The risk grades are updated a minimum of annually for loans rated exceptional, good, acceptable, or pass/watch.  Loans rated special mention, substandard or doubtful are reviewed at least quarterly.  The Company uses the following definitions for its risk ratings:

Risk Rating	Description
Pass ratings:
(a) Exceptional	Loans classified as exceptional are secured with liquid collateral conforming to the internal loan policy.  Loans rated within this category pose minimal risk of loss to the bank and the risk grade within this pool of loans is generally updated on an annual basis.
(b) Good	Loans classified as good have similar characteristics that include a strong balance sheet, satisfactory debt service coverage ratios, strong management and/or guarantors, and little exposure to economic cycles.  Loans within this category are generally reviewed on an annual basis.  Loans in this category generally have a low chance of loss to the bank.
(c) Acceptable	Loans classified as acceptable have acceptable liquidity levels, adequate debt service coverage ratios, experienced management, and have average exposure to economic cycles.  Loans within this category generally have a low risk of loss to the bank.
(d) Pass/watch	Loans classified as pass/watch have erratic levels of leverage and/or liquidity, cash flow is volatile and the borrower is subject to moderate economic risk.  A borrower in this category poses a low to moderate risk of loss to the bank.
Special mention	Loans classified as special mention have a potential weakness(es) that deserves management’s close attention.  The potential weakness could result in deterioration of the loan repayment or the bank’s credit position at some future date.  A loan rated in this category poses a moderate loss risk to the bank.
Substandard	Loans classified as substandard reflect a customer with a well defined weakness that jeopardizes the liquidation of the debt.  Loans in this category have the possibility that the bank will sustain some loss if the deficiencies are not corrected and the bank’s collateral value is weakened by the financial deterioration of the borrower.
Doubtful	Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that make collection of the full contract amount highly improbable.  Loans rated in this category are most likely to cause the bank to have a loss due to a collateral shortfall or a negative capital position.

The following presents loans by the Company’s commercial loans by credit quality indicators, by class (in thousands):

	Commercial and industrial		Commercial real estate		Total
September 30, 2013
Pass	$	140,999	$	939,942	$	1,080,941
Special mention	693		23,123		23,816
Substandard	9,057		58,720		67,777
Doubtful	436		493		929
Total	$	151,185	$	1,022,278	$	1,173,463
December 31, 2012
Pass	$	105,690	$	771,617	$	877,307
Special mention	878		15,015		15,893
Substandard	2,171		35,338		37,509
Doubtful	—		—		—
Total	$	108,739	$	821,970	$	930,709

The following table presents the Company's non-commercial loans by payment performance, by class (in thousands):

	Performing		Non-Performing		Total
September 30, 2013
Residential real estate	$	1,185,616	$	3,225	$	1,188,841
Home equity - junior lien	140,769		118		140,887
Consumer	50,710		47		50,757
DDA overdrafts	4,506		2		4,508
Total	$	1,381,601	$	3,392	$	1,384,993
December 31, 2012
Residential real estate	$	1,029,142	$	2,293	$	1,031,435
Home equity - junior lien	141,961		1,149		143,110
Consumer	36,564		—		36,564
DDA overdrafts	4,548		3		4,551
Total	$	1,212,215	$	3,445	$	1,215,660

Aging Analysis of Accruing and Non-Accruing Loans

Interest income on loans is accrued and credited to operations based upon the principal amount outstanding, using methods that generally result in level rates of return.  Loan origination fees, and certain direct costs, are deferred and amortized as an adjustment to the yield over the term of the loan.  The accrual of interest generally is discontinued when a loan becomes 90 days past due as to principal or interest for all loan types.  However, any loan may be placed on non-accrual if the Company receives information that indicates a borrower is unable to meet the contractual terms of their respective loan agreement.  Other indicators considered for placing a loan on non-accrual status include the borrower’s involvement in bankruptcies, foreclosures, repossessions, litigation and any other situation resulting in doubt as to whether full collection of contractual principal and interest is attainable.  When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and interest accrued in prior years is charged to the allowance for loan losses.  Management may elect to continue the accrual of interest when the net realizable value of collateral exceeds the principal balance and related accrued interest, and the loan is in the process of collection.

Generally for all loan classes, interest income during the period the loan is non-performing is recorded on a cash basis after recovery of principal is reasonably assured.  Cash payments received on nonperforming loans are typically applied directly against the outstanding principal balance until the loan is fully repaid.  Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time, and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Generally, all loan types are considered past due when the contractual terms of a loan are not met and the borrower is 30 days or more past due on a payment.  Furthermore, residential and home equity loans are generally subject to charge-off when the loan becomes 120 days past due, depending on the estimated fair value of the collateral less cost to dispose, versus the outstanding loan balance.  Commercial loans are generally charged off when the loan becomes 120 days past due.  Open-end consumer loans are generally charged off when the loan becomes 180 days past due.

A loan acquired and accounted for under ASC Topic 310-30 is reported as an accruing loan and a performing asset provided that the loan is performing in accordance with the initial expectations. The loan would be considered non-performing if the loan's performance deteriorates below the initial expectations.

The following presents an aging analysis of the Company’s accruing and non-accruing loans, by class, as of September 30, 2013 and December 31, 2012 (in thousands):

	Originated Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,072,148	$	4,484	$	696	$	234	$	—	$	2,286	$	1,079,848
Home equity - junior lien	139,614		716		5		11		—		107		140,453
Commercial and industrial	127,856		5		—		—		—		303		128,164
Commercial real estate	816,383		408		204		—		—		13,540		830,535
Consumer	34,095		86		10		—		—		—		34,191
DDA overdrafts	4,228		270		8		2		—		—		4,508
Total	$	2,194,324	$	5,969	$	923	$	247	$	—	$	16,236	$	2,217,699
	Acquired Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	107,321	$	848	$	119	$	65	$	—	$	640	$	108,993
Home equity - junior lien	411		23		—		—		—		—		434
Commercial and industrial	20,504		202		40		59		1,865		351		23,021
Commercial real estate	180,111		1,261		178		—		5,885		4,308		191,743
Consumer	15,863		579		77		47		—		—		16,566
DDA overdrafts	—		—		—		—		—		—		—
Total	$	324,210	$	2,913	$	414	$	171	$	7,750	$	5,299	$	340,757
	Total Loans
	September 30, 2013
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,179,469	$	5,332	$	815	$	299	$	—	$	2,926	$	1,188,841
Home equity - junior lien	140,025		739		5		11		—		107		140,887
Commercial and industrial	148,360		207		40		59		1,865		654		151,185
Commercial real estate	996,494		1,669		382		—		5,885		17,848		1,022,278
Consumer	49,958		665		87		47		—		—		50,757
DDA overdrafts	4,228		270		8		2		—		—		4,508
Total	$	2,518,534	$	8,882	$	1,337	$	418	$	7,750	$	21,535	$	2,558,456
	Originated Loans
	December 31, 2012
	Accruing

	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,008,190	$	4,910	$	599	$	239	$	—	$	2,054	$	1,015,992
Home equity - junior lien	132,847		2,379		477		37		—		1,112		136,852
Commercial and industrial	105,989		260		236		—		—		98		106,583
Commercial real estate	766,404		433		199		1		—		15,930		782,967
Consumer	34,084		113		8		—		—		—		34,205
DDA overdrafts	4,270		270		8		3		—		—		4,551
Total	$	2,051,784	$	8,365	$	1,527	$	280	$	—	$	19,194	$	2,081,150
	Acquired Loans
	December 31, 2012
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	15,443	$	—	$	—	$	—	$	—	$	—	$	15,443
Home equity - junior lien	6,258		—		—		—		—		—		6,258
Commercial and industrial	1,152		—		—		—		1,004		—		2,156
Commercial real estate	37,210		9		47		—		1,737		—		39,003
Consumer	2,359		—		—		—		—		—		2,359
DDA overdrafts	—		—		—		—		—		—		—
Total	$	62,422	$	9	$	47	$	—	$	2,741	$	—	$	65,219
	Total Loans
	December 31, 2012
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,023,633	$	4,910	$	599	$	239	$	—	$	2,054	$	1,031,435
Home equity - junior lien	139,105		2,379		477		37		—		1,112		143,110
Commercial and industrial	107,141		260		236		—		1,004		98		108,739
Commercial real estate	803,614		442		246		1		1,737		15,930		821,970
Consumer	36,443		113		8		—		—		—		36,564
DDA overdrafts	4,270		270		8		3		—		—		4,551
Total	$	2,114,206	$	8,374	$	1,574	$	280	$	2,741	$	19,194	$	2,146,369

The following presents the Company’s impaired loans, by class, as of September 30, 2013 and December 31, 2012 (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off.

	September 30, 2013						December 31, 2012
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate	$	461	$	461	$	—	$	469	$	469	$	—
Home equity - junior liens	297		297		—		298		298		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	8,575		10,455		—		9,912		14,781		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	9,333	$	11,213	$	—	$	10,679	$	15,548	$	—
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	3,507		5,307		880		—		—		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	3,507	$	5,307	$	880	$	—	$	—	$	—

The following table presents information related to the average recorded investment and interest income recognized on the Company’s impaired loans, by class (in thousands):

	For the nine months ended
	September 30, 2013				September 30, 2012
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Residential real estate	$	464	$	—	$	—	$	—
Home equity - junior liens	297		—		—		—
Commercial and industrial	—		—		81		4
Commercial real estate	9,200		24		7,472		232
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	9,961	$	24	$	7,553	$	236
With an allowance recorded
Residential real estate	$	—	$	—	$	1,254	$	36
Home equity - junior liens	—		—		1,354		30
Commercial and industrial	—		—		203		7
Commercial real estate	3,277		—		11,197		378
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	3,277	$	—	$	14,008	$	451

     Approximately $0.4 million and $0.7 million of interest income would have been recognized during the nine months ended September 30, 2013 and 2012, if such loans had been current in accordance with their original terms.  There were no commitments to provide additional funds on non-accrual, impaired or other potential problem loans at September 30, 2013.

Loan Modifications

The Company’s policy on loan modifications typically does not allow for modifications that would be considered a concession from the Company.  However, when there is a modification, the Company evaluates each modification to determine if the modification constitutes a troubled debt restructuring (“TDR”) in accordance with ASU 2011-2, whereby a modification of a loan would be considered a TDR when both of the following conditions are met: (1) a borrower is experiencing financial difficulty and (2) the modification constitutes a concession.  When determining whether the borrower is experiencing financial difficulties, the Company reviews whether the debtor is currently in payment default on any of its debt or whether it is probable that the debtor would be in payment default in the foreseeable future without the modification.  Other indicators of financial difficulty include whether the debtor has declared or is in the process of declaring bankruptcy, the debtor’s ability to continue as a going concern, or the debtor’s projected cash flow to service its debt (including principal and interest) in accordance with the contractual terms for the foreseeable future, without a modification.

During the third quarter of 2012, regulatory guidance was clarified to require 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. The filing of bankruptcy is deemed to be evidence that the borrower is in financial difficulty and the discharge of the debt by the bankruptcy court is deemed to be a concession granted to the borrower. The impact on the allowance for loan losses of this reclassification was insignificant. Prior to this reclassification, the Company's TDRs were insignificant.

The following tables set forth the Company’s TDRs (in thousands):

	September 30, 2013						December 31, 2012
			Non-						Non-
	Accruing		Accruing		Total		Accruing		Accruing		Total
Commercial and industrial	$	91	$	—	$	91	$	101	$	—	$	101
Commercial real estate	1,567		—		1,567		734		—		734
Residential real estate	19,416		964		20,380		15,083		162		15,245
Home equity	2,758		14		2,772		7,068		418		7,486
Consumer	—		—		—		142		—		142
	$	23,832	$	978	$	24,810	$	23,128	$	580	$	23,708

	New TDRs					New TDRs
	For the nine months ended					For the nine months ended
	September 30, 2013					September 30, 2012
		Pre		Post			Pre		Post
		Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
Commercial and industrial	1	$	91	$	91	—	$	—	$	—
Commercial real estate	3	1,567		1,567		—	—		—
Residential real estate	30	2,808		2,808		—	—		—
Home equity	12	323		323		—	—		—
Consumer	—	—		—		1	144		144
	46	$	4,789	$	4,789	1	$	144	$	144

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Employee Benefit Plans (Stock Options Outstanding And Exercisable) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares)	195,629
Aggregate Intrinsic Value (in thousands)	$ 1,574
No. of Options Currently Exercisable (in shares)	98,110
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)	583
Ranges Of Exercise Prices 26.62 - 33.90 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares)	72,028
Weighted-Average Exercise Price (in dollars per share)	$ 30.70
Weighted-Average Remaining Contractual Life (Months)	53 months
Aggregate Intrinsic Value (in thousands)	903
No. of Options Currently Exercisable (in shares)	22,860
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 31.86
Weighted-Average Remaining Contractual Life (Months)	20 months
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)	260
Ranges Of Exercise Prices 26.62 - 33.90 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 26.62
Ranges Of Exercise Prices 26.62 - 33.90 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 33.90
Ranges Of Exercise Prices 35.09 - 40.88 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares)	123,601
Weighted-Average Exercise Price (in dollars per share)	$ 37.81
Weighted-Average Remaining Contractual Life (Months)	64 months
Aggregate Intrinsic Value (in thousands)	671
No. of Options Currently Exercisable (in shares)	75,250
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 38.95
Weighted-Average Remaining Contractual Life (Months)	39 months
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)	$ 323
Ranges Of Exercise Prices 35.09 - 40.88 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 35.09
Ranges Of Exercise Prices 35.09 - 40.88 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 40.88

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Distributed earnings allocated to  common stock	$	5,767	$	5,150	$	17,302	$	15,451
Undistributed earnings allocated to common stock	8,081		5,373		17,349		12,375
Net earnings allocated to common shareholders	$	13,848	$	10,523	$	34,651	$	27,826
Average shares outstanding	15,608		14,751		15,545		14,700
Effect of dilutive securities:
Warrants outstanding	62		—		60		—
Employee stock awards	120		83		108		83
Shares for diluted earnings per share	15,790		14,834		15,713		14,783
Basic earnings per share	$	0.89	$	0.71	$	2.23	$	1.89
Diluted earnings per share	$	0.88	$	0.71	$	2.21	$	1.88

Options to purchase approximately 124,000 shares of common stock at an exercise price between $35.09 and $40.88 per share were outstanding during the third quarter of 2012 but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares and therefore, the effect would have been anti-dilutive.  During the third quarter of 2013, there were no anti-dilutive options outstanding.

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  The Company has entered into agreements with its customers to extend credit or provide a conditional commitment to provide payment on drafts presented in accordance with the terms of the underlying credit documents. The Company also provides overdraft protection to certain demand deposit customers that represent an unfunded commitment.  Overdraft protection commitments, which are included with other commitments below, are uncollateralized and are paid at the Company’s discretion.  Conditional commitments generally include standby and commercial letters of credit. Standby letters of credit represent an obligation of the Company to a designated third party contingent upon the failure of a customer of the Company to perform under the terms of the underlying contract between the customer and the third party. Commercial letters of credit are issued specifically to facilitate trade or commerce. Under the terms of a commercial letter of credit, drafts will be drawn when the underlying transaction is consummated, as intended, between the customer and a third party. The funded portion of these financial instruments is reflected in the Company’s balance sheet, while the unfunded portion of these commitments is not reflected in the balance sheet.  The table below presents a summary of the contractual obligations of the Company resulting from significant commitments (in thousands):

	September 30, 2013		December 31, 2012
Commitments to extend credit:
Home equity lines	$	179,588	$	156,274
Commercial real estate	36,919		33,869
Other commitments	199,323		171,670
Standby letters of credit	14,450		16,743
Commercial letters of credit	1,189		425

Loan commitments and standby and commercial letters of credit have credit risks essentially the same as that involved in extending loans to customers and are subject to the Company’s standard credit policies. Collateral is obtained based on management’s credit assessment of the customer. Management does not anticipate any material losses as a result of these commitments.

The Company is engaged in various legal actions that it deems to be in the ordinary course of business. As these legal actions are resolved, the Company could realize positive and/or negative impact to its financial performance in the period in which these legal actions are ultimately decided. There can be no assurance that current actions will have immaterial results, either positive or negative, or that no material actions may be presented in the future.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013
Entity Registrant Name	CITY HOLDING CO
Entity Central Index Key	0000726854
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		15,730,090
Trading Symbol	chco

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Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the nine months ended September 30, 2013 and 2012 is presented in the tables below (in thousands). All amounts are shown net of tax, which is calculated using a combined Federal and state income tax rate approximating 37%.

	Accumulated Other Comprehensive Loss
				Unrealized
				Gains (Losses) on
	Defined Benefit			Securities
	Pension Plans			Available-for-Sale			Total
Balance at December 31, 2011	$	(4,732	)	$	825		$	(3,907	)
Other comprehensive income before reclassifications	—			4,137			4,137
Amounts reclassified from other comprehensive loss	—			(595		)	(595		)
	—			3,542			3,542
Balance at September 30, 2012	$	(4,732	)	$	4,367		$	(365	)
Balance at December 31, 2012	$	(4,995	)	$	3,573		$	(1,422	)
Other comprehensive income before reclassifications	—			(4,693		)	(4,693		)
Amounts reclassified from other comprehensive loss	—			(59		)	(59		)
	—			(4,752		)	(4,752		)
Balance at September 30, 2013	$	(4,995	)	$	(1,179	)	$	(6,174	)

	Amount reclassified from Other Comprehensive Loss
	Three months ended					Nine months ended						Affected line item
	September 30,					September 30,						in the Statements
	2013		2012			2013			2012			of Income
Securities available-for-sale:
Net securities (gains) losses reclassified into earnings	$	—	$	(458	)	$	(93	)	$	(954	)	Security gains (losses)
Related income tax expense (benefit)	—		172			34			359			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(286	)	$	(59	)	$	(595	)

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Long-Term Debt (Components Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Long-term Debt, Unclassified [Abstract]
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.75% and 3.89%, respectively	$ 16,495	$ 16,495
Junior subordinated debentures, interest rate	3.75%	3.89%
Junior subordinated debentures, due date	Dec. 31, 2038	Dec. 31, 2038
Percent over three month LIBOR Rate	3.50%
Junior subordinated debenture redemption price range rate, Upper limit	103.525%
Junior subordinated debenture redemption price range rate, Lower limit	100.00%
Junior subordinated debenture, Redemption date	Jun. 15, 2013
Junior subordinated debenture, Threshold in days	90 days

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Previously Securitized Loans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		36 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 1999 transaction
Previously Securitized Loans [Abstract]
Number of securitization transactions					6
Proceeds from securitization transactions					$ 760
Fixed rate of junior-lien underlying mortgages					125.00%
Outstanding balance of securitized loans	6.5		6.5
Recognized interest income from previously securitized loans	$ 0.6	$ 0.8	$ 2.0	$ 2.4