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, 2015

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]

1

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 – 15,300,957 shares as of November 4, 2015.

2

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 materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may incur increased charge-offs in the future; (3) the Company could have adverse legal actions of a material nature; (4) the Company may face competitive loss of customers; (5) the Company may be unable to manage its expense levels; (6) the Company may have difficulty retaining key employees; (7) changes in the interest rate environment may have results on the Company’s operations materially different from those anticipated by the Company’s market risk management functions; (8) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (9) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company’s operating results; (10) the Company may experience difficulties growing loan and deposit balances; (11) the current economic environment poses significant challenges for us and could adversely affect our financial condition and results of operations; (12) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions resulting in either actual losses or other than temporary impairments on such investments; (13) the effects of the Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the regulations promulgated and to be promulgated thereunder, which may subject the Company and its subsidiaries to a variety of new and more stringent legal and regulatory requirements which adversely affect their respective businesses; (14) the impact of new minimum capital thresholds established as a part of the implementation of Basel III; and (15) other risk factors relating to the banking industry or the Company as detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission, including those risk factors included in the disclosures under the heading “ITEM 1A Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.  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.

3

City Holding Company and Subsidiaries

PART I	Financial Information	Pages
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Balance Sheets	5
	Consolidated Statements of Income	7
	Consolidated Statements of Comprehensive Income	9
	Consolidated Statements of Changes in Shareholders’ Equity	10
	Consolidated Statements of Cash Flows	11
	Notes to Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	42
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	62
Item 4.	Controls and Procedures.	62
PART II	Other Information
Item 1.	Legal Proceedings.	62
Item 1A.	Risk Factors.	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	62
Item 3.	Defaults Upon Senior Securities.	62
Item 4.	Mine Safety Disclosures.	62
Item 5.	Other Information.	62
Item 6.	Exhibits.	62
Signatures		63

4

Part I - Financial Information

Item 1 - Financial Statements

Consolidated Balance Sheets

City Holding Company and Subsidiaries

(in thousands)

Assets	September 30, 2015			December 31, 2014
	(Unaudited)
Cash and due from banks	$	109,627		$	138,503
Interest-bearing deposits in depository institutions	9,081			9,725
Cash and Cash Equivalents	118,708			148,228
Investment securities available for sale, at fair value	300,865			254,043
Investment securities held-to-maturity, at amortized cost (approximate fair value at September 30, 2015 and December 31, 2014, - $84,005 and $94,191, respectively)	81,095			90,786
Other securities	9,926			9,857
Total Investment Securities	391,886			354,686
Gross loans	2,696,438			2,652,066
Allowance for loan losses	(20,941		)	(20,150		)
Net Loans	2,675,497			2,631,916
Bank owned life insurance	97,157			95,116
Premises and equipment, net	73,419			77,988
Accrued interest receivable	7,690			6,826
Net deferred tax asset	33,342			36,766
Goodwill and other intangible assets, net	70,653			74,198
Other assets	36,266			35,909
Total Assets	$	3,504,618		$	3,461,633
Liabilities
Deposits:
Noninterest-bearing	$	542,177		$	545,465
Interest-bearing:
Demand deposits	647,792			639,932
Savings deposits	693,184			660,727
Time deposits	982,349			1,026,663
Total Deposits	2,865,502			2,872,787
Short-term borrowings	147,036			134,931
Long-term debt	16,495			16,495
Other liabilities	56,818			46,567
Total Liabilities	3,085,851			3,070,780
Shareholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued	—			—
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 18,499,282 shares issued at September 30, 2015 and December 31, 2014, less 3,179,832 and 3,345,590 shares in treasury, respectively	46,249			46,249

5

Capital surplus	106,108			107,370
Retained earnings	383,551			362,211
Cost of common stock in treasury	(113,581		)	(120,818		)
Accumulated other comprehensive income (loss):
Unrealized gain on securities available-for-sale	1,789			1,190
Underfunded pension liability	(5,349		)	(5,349		)
Total Accumulated Other Comprehensive Loss	(3,560		)	(4,159		)
Total Shareholders’ Equity	418,767			390,853
Total Liabilities and Shareholders’ Equity	$	3,504,618		$	3,461,633

See notes to consolidated financial statements.

6

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,
	2015		2014		2015		2014
Interest and fees on loans	$	27,875	$	29,292	$	86,075	$	87,647
Interest and dividends on investment securities:
Taxable	2,621		2,864		7,974		8,797
Tax-exempt	272		282		803		840
Total Interest Income	30,768		32,438		94,852		97,284
Interest Expense
Interest on deposits	2,686		2,730		8,126		8,220
Interest on short-term borrowings	69		86		236		246
Interest on long-term debt	155		152		458		453
Total Interest Expense	2,910		2,968		8,820		8,919
Net Interest Income	27,858		29,470		86,032		88,365
Provision for loan losses	451		1,872		4,175		3,670
Net Interest Income After Provision for Loan Losses	27,407		27,598		81,857		84,695
Non-interest Income
Gains on sale of investment securities	—		71		2,130		972
Service charges	6,907		6,934		19,423		19,833
Bankcard revenue	3,895		3,796		11,971		11,319
Insurance commissions	—		1,396		—		4,740
Trust and investment management fee income	1,176		1,103		3,577		3,251
Bank owned  life insurance	929		771		2,476		2,292
Gain on sale of insurance division	—		—		11,084		—
Other income	799		538		2,471		1,646
Total Non-interest Income	13,706		14,609		53,132		44,053
Non-interest Expense
Salaries and employee benefits	12,179		13,144		36,551		39,260
Occupancy and equipment	2,575		2,531		7,694		7,541
Depreciation	1,522		1,542		4,549		4,553
FDIC insurance expense	456		432		1,351		1,199
Advertising	777		799		2,182		2,548
Bankcard expenses	785		877		2,485		2,607
Postage, delivery, and statement mailings	523		557		1,591		1,662
Office supplies	384		405		1,077		1,235
Legal and professional fees	620		476		1,729		1,497
Telecommunications	418		510		1,356		1,354
Repossessed asset losses, net of expenses	492		31		1,047		552
Merger related expenses	175		—		283		—
Other expenses	4,471		3,021		9,891		7,998
Total Non-interest Expense	25,377		24,325		71,786		72,006
Income Before Income Taxes	15,736		17,882		63,203		56,742

7

Income tax expense	5,129		6,010		22,621		18,310
Net Income Available to Common Shareholders	$	10,607	$	11,872	$	40,582	$	38,432
Total comprehensive income	$	11,939	$	11,460	$	41,181	$	40,501
Average common shares outstanding	15,178		15,363		15,111		15,509
Effect of dilutive securities:
Employee stock awards and warrant outstanding	20		82		58		85
Shares for diluted earnings per share	15,198		15,445		15,169		15,594
							\
Basic earnings per common share	$	0.69	$	0.76	$	2.66	$	2.45
Diluted earnings per common share	$	0.69	$	0.76	$	2.65	$	2.44
Dividends declared per common share	$	0.42	$	0.40	$	1.26	$	1.20

See notes to consolidated financial statements.

8

Consolidated Statements of Comprehensive Income(Unaudited)

City Holding Company and Subsidiaries

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Net income	$	10,607		$	11,872		$	40,582		$	38,432
Unrealized gains (losses) on available-for-sale securities arising during the period	2,111			(582		)	3,079			4,252
Reclassification adjustment for gains	—			(71		)	(2,130		)	(972		)
Other comprehensive income (loss) before income taxes	2,111			(653		)	949			3,280
Tax effect	(779		)	241			(350		)	(1,211		)
Other comprehensive income (loss), net of tax	1,332			(412		)	599			2,069
Comprehensive income, net of tax	$	11,939		$	11,460		$	41,181		$	40,501

See notes to consolidated financial statements.

9

Consolidated Statements of Changes in Shareholders’ Equity(Unaudited)

City Holding Company and Subsidiaries

Nine Months EndedSeptember 30, 2015 and 2014

(in thousands)

	Common Stock		Capital Surplus			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2013	$	46,249	$	107,596		$	333,970		$	(95,202	)	(4,990		)	$	387,623
Net income	—		—			38,432			—			—			38,432
Other comprehensive loss	—		—			—			—			2,069			2,069
Cash dividends declared ($1.20 per share)	—		—			(18,681		)	—			—			(18,681		)
Stock-based compensation expense, net	—		(262		)	—			1,472			—			1,210
Exercise of 19,000 stock options	—		(272		)	—			825			—			553
Purchase of 456,856 treasury shares	—		—			—			(19,533		)	—			(19,533		)
Balance at September 30, 2014	$	46,249	$	107,062		$	353,721		$	(112,438	)	$	(2,921	)	$	391,673

	Common Stock	Capital Surplus			Retained Earnings			Treasury Stock		Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at December 31, 2014	46,249	$	107,370		$	362,211		(120,818	)	$	(4,159	)	$	390,853
Net income	—	—			40,582			—		—			40,582
Other comprehensive income	—	—			—			—		599			599
Cash dividends declared ($1.26 per share)	—	—			(19,242		)	—		—			(19,242		)
Stock-based compensation expense, net	—	(38		)	—			1,468		—			1,430
Exercise of 71,750 stock options	—	(459		)	—			3,108		—			2,649
Exercise of 61,796 warrants	—	(765		)	—			2,661		—			1,896
Balance at September 30, 2015	46,249	$	106,108		$	383,551		(113,581	)	$	(3,560	)	$	418,767

See notes to consolidated financial statements.

10

Consolidated Statements of Cash Flows(Unaudited)

City Holding Company and Subsidiaries

(in thousands)

	Nine months ended September 30,
	2015			2014
Net income	$	40,582		$	38,432
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion and amortization	(3,612		)	(3,889		)
Provision for loan losses	4,175			3,670
Depreciation of premises and equipment	4,549			4,553
Deferred income tax expense	3,479			3,921
Net periodic employee benefit cost	625			393
Realized investment securities gains	(2,130		)	(972		)
Stock-compensation expense	1,430			1,210
Increase in value of bank-owned life insurance	(2,476		)	(2,291		)
Proceeds from bank-owned life insurance	435			—
Loans originated for sale	(13,994		)	(4,911		)
Proceeds from the sale of loans originated for sale	14,533			5,075
Gain on sale of loans	(279		)	(131		)
Gain on sale of insurance division	(11,084		)	—
Change in accrued interest receivable	(864		)	(885		)
Change in other assets	1,161			(5,829		)
Change in other liabilities	7,805			(3,763		)
Net Cash Provided by Operating Activities	44,335			34,583
Proceeds from sales of securities available-for-sale	290			1,821
Proceeds from maturities and calls of securities available-for-sale	45,158			37,071
Proceeds from maturities and calls of securities held-to-maturity	10,640			4,124
Purchases of securities available-for-sale	(91,190		)	(17,058		)
Purchases of securities held-to-maturity	—			(10,226		)
Net (increase) in loans	(43,411		)	(23,454		)
Purchases of premises and equipment	(1,729		)	(1,085		)
Disposals of premises and equipment	133			—
Proceeds from sale of insurance division	15,250			—
Net Cash (Used In) Investing Activities	(64,859		)	(8,807		)
Net (decrease) increase in noninterest-bearing deposits	(3,288		)	5,263
Net (decrease) increase in interest-bearing deposits	(3,489		)	3,597
Net increase in short-term borrowings	12,105			8,317
Purchases of treasury stock	—			(19,533		)
Proceeds from exercise of stock options, net of tax benefit	2,649			553
Proceeds from exercise of warrants	1,896			—
Dividends paid	(18,869		)	(18,357		)
Net Cash (Used in) Financing Activities	(8,996		)	(20,160		)
(Decrease) Increase in Cash and Cash Equivalents	(29,520		)	5,616
Cash and cash equivalents at beginning of period	148,228			85,876
Cash and Cash Equivalents at End of Period	$	118,708		$	91,492

See notes to consolidated financial statements.

11

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2015

Note A –Background and Basis of Presentation

City Holding Company is a financial holding company headquartered in Charleston, West Virginia and conducts its principal activities through its wholly-owned subsidiary, City National Bank of West Virginia ("City National"). City National operates a network of 82 branch offices primarily along the I-64 corridor from Grayson, Kentucky through Lexington, Virginia; and along the I-81 corridor through the Shenandoah Valley from Staunton, Virginia to Martinsburg, West Virginia. City National's branch network includes 57 offices in West Virginia, 14 offices in Virginia, 8 offices in Kentucky and 3 offices in Ohio. City National provides credit, deposit, and investment advisory services to a broad geographical area that includes many rural and small community markets in addition to larger cities such as Charleston (WV), Huntington (WV), Winchester (VA), Staunton (VA), Virginia Beach (VA), Ashland (KY) and Martinsburg (WV). In addition to its branch network, the bank's delivery channels include ATMs, mobile banking, on-line banking, debit cards, cash management tools and telephone banking systems.

On January 9th, 2015 the Company sold its insurance operations, CityInsurance, to The Hilb Group effective January 1, 2015. As a result of this sale, the Company recognized a one-time after tax gain of $5.8 million from this transaction in the first quarter of 2015.

On May 29, 2015, City National entered into a Branch Purchase and Assumption Agreement (the “Purchase Agreement”) with American Founders Bank, Inc. (“AFB”), a wholly-owned subsidiary of Financial Holdings, Inc., pursuant to which City National will purchase AFB’s three Lexington, Kentucky branch locations (the “Acquisition”). Under the terms of the Purchase Agreement, City National will acquire approximately $125 million in performing loans and will assume deposit liabilities of approximately $155 million. City National will pay AFB a deposit premium of 5.5% on non-time deposits, and 1.0% on premium loan balances acquired.

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of the City Holding 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 the nine months endedSeptember 30, 2015 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2015. 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, 2014 has been derived from audited financial statements included in the Company’s 2014 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 2014 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 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-01, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects." This ASU permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment. The ASU also requires reporting entities to disclose information that enable users of its financial statements to understand the nature of its investments in qualified affordable housing projects, and the effect of the measurement of its investments in qualified affordable housing projects and the

12

related tax credits on its financial position and results of operations. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-01 did not have a material impact on the Company's financial statements.

In January 2014, the FASB issued ASU No. 2014-04, "Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure." This ASU clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through similar legal agreement. Additionally, the amendments require interim and annual disclosures of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-04 did not have a material impact on the Company's financial statements.

In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." This ASU changes the requirements for reporting discontinued operations. A disposal of a component or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations when certain criteria are met. Additional disclosures are also required for disposals that meet the criteria to be reported in discontinued operations. The Company elected to early adopt this ASU for the year ended December

31, 2014 relating to the sale of CityInsurance. The adoption of ASU 2014-08 did not have a material impact on the

Company's financial statements.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The core principle will be achieved using a five step process. In August 2015 the FASB issued Accounting Standards Update 2015-14, "Revenue from Contracts with Customers (Topic 606)." which amends the effective date for the Company from January 1, 2017 to January 1, 2018. The adoptions of ASU 2014-09 and ASU 2015-14 are not expected to have a material impact on the Company's financial statements.

In June 2014, the FASB issued ASU No. 2014-11, "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." The amendments in this update require two accounting changes. First, the amendments in this update change the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counter-party, which will result in secured borrowing accounting for the repurchase agreement. This update also requires certain disclosures for these types of transactions. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-11 did not have a material impact on the Company's financial statements.

In June 2014, the FASB issued ASU No. 2014-12, "Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Performance targets should not be reflected in estimating the grant date fair value of the award, but compensation cost should be recognized in the period for which the requisite service has already been rendered. This ASU will become effective for the Company on January 1, 2016, with early adoption permitted. The adoption of ASU 2014-12 is not expected to have a material impact on the Company's financial statements.

In August 2014, the FASB issued ASU No. 2014-14, "Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure." The amendments in this update require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-14 did not have a material impact on the Company's financial statements.

In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis". ASU 2015-02 eliminates the deferral of FAS 167 and makes changes to both the variable interest model and the

13

voting model. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-02 is not expected to have a material impact on the Company's financial statements.

In April 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-03 is not expected to have a material impact on the Company's financial statements.

In April 2015, the FASB issued ASU No. 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-05 is not expected to have a material impact on the Company's financial statements.

In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)." ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. the ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-07 is not expected to have a material impact on the Company's financial statements.

In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 85): Simplifying the Accounting for Measurement-Period Adjustments" The amendments in ASU 2015-16 require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The effect on earnings of the adjustments as a result of the change to the provisional amounts will be calculated as if the accounting had been completed at the acquisition date. The amount that would've been recorded in the previous reporting periods will be presented separately on the face of the income statement or disclosed in the notes to the financial statements. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-16 is not expected to have a material impact on the Company's financial statements.

Note C –Investments

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

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	September 30, 2015								December 31, 2014
	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	$	5	$	—	$	—	$	5	$	1,816	$	11	$	—	$	1,827
Obligations of states and
political subdivisions	42,254		466		18		42,702		41,382		722		8		42,096
Mortgage-backed securities:
U.S. government agencies	225,382		3,686		1,121		227,947		185,831		3,470		1,973		187,328
Private label	1,276		4		1		1,279		1,700		8		4		1,704
Trust preferred
securities	7,578		459		1,080		6,957		9,763		425		1,152		9,036
Corporate securities	17,758		182		597		17,343		7,806		204		693		7,317
Total Debt Securities	294,253		4,797		2,817		296,233		248,298		4,840		3,830		249,308
Marketable equity  securities	2,131		972		—		3,103		2,131		1,082		—		3,213
Investment funds	1,525		4		—		1,529		1,525		—		3		1,522
Total Securities
Available-for-Sale	$	297,909	$	5,773	$	2,817	$	300,865	$	251,954	$	5,922	$	3,833	$	254,043

	September 30, 2015								December 31, 2014
	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
Mortgage-backed securities
US government agencies	$	77,095	$	2,910	$	—	$	80,005	$	86,742	$	2,733	$	—	$	89,475
Trust preferred securities	4,000		—		—		4,000		4,044		672		—		4,716
Total Securities
Held-to-Maturity	$	81,095	$	2,910	$	—	$	84,005	$	90,786	$	3,405	$	—	$	94,191
Other investment securities:
Non-marketable equity securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857
Total Other Investment
Securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857

Securities with limited marketability, such as stock in the Federal Reserve Bank and 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, 2015
	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	$	2,670	$	13	$	125	$	5	$	2,795	$	18
Mortgage-backed securities:
U.S. Government agencies	16,782		102		35,607		1,019		52,389		1,121
Private label	1,005		1		—		—		1,005		1
Trust preferred securities	1,015		16		4,857		1,064		5,872		1,080
Corporate securities	—		—		4,161		597		4,161		597
Investment funds	—		—		—		—		—		—
Total	$	21,472	$	132	$	44,750	$	2,685	$	66,222	$	2,817

	December 31, 2014
	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	$	1,559	$	3	$	125	$	5	$	1,684	$	8
Mortgage-backed securities:
U.S. Government agencies	—		—		60,122		1,973		60,122		1,973
Private label	1,277		4		—		—		1,277		4
Trust preferred securities	—		—		4,760		1,152		4,760		1,152
Corporate securities	—		—		4,049		693		4,049		693
Investment funds	$	—	$	—	$	1,496	$	3	1,496		3
Total	$	2,836	$	7	$	70,552	$	3,826	$	73,388	$	3,833

Marketable equity securities consist of investments made by the Company in equity positions of various regional community bank holding companies, with ownership positions ranging from nominal to a 4% ownership position in First National Corporation (FXNC).

During the nine months ended September 30, 2015 and 2014, the Company had no credit-related net investment impairment losses. Also, for the year ended December 31, 2014, the Company had no credit-related net investment impairment losses.

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 holding company stocks.  Although the regional community bank holding company 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.  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, 2015, 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 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

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expected to recover as the securities approach their maturity date or repricing date.   As of September 30, 2015, 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 where the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income.

At September 30, 2015, the book value of the Company’s five pooled trust preferred securities totaled $1.8 million with an estimated fair value of $1.8 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 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 unless otherwise noted. 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, 2015 and for the year ended December 31, 2014 (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, 2014	$	20,186		$	4,698		$	24,884
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	(3,600		)	(3,114		)	(6,714		)
Balance at December 31, 2014	16,586			1,584			18,170
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	—			—			—
Balance at September 30, 2015	$	16,586		$	1,584		$	18,170

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, 2015 (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 performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (3)
	Pooled trust preferred securities:
	Other-than-temporarily impaired
	Available for Sale:
P1	Pooled	Mezz	$	632	$	—	$	—	—		Caa1	5	14.5	%	—	%	(2)	—	%
P2	Pooled	Mezz	1,513		—		—		—		Ca	3	18.3	%	—	%	(2)	—	%
P3	Pooled	Mezz	2,962		1,419		1,007		(412	)	Caa3	19	20.0	%	7.1	%	(2)	—	%
P5	Pooled	Mezz	6,032		391		838		447		C	7	13.5	%	19.0	%	(2)	33.6	%
	Held to Maturity:
P6	Pooled	Mezz	1,223		—		—		—		Caa1	5	14.5	%	—	%	(2)	—	%
P7	Pooled	Mezz	2,009		—		—		—		Ca	3	18.3	%	—	%	(2)	—	%
	Single issuer trust preferred securities
	Available for sale:
S5	Single		261		235		247		12		NR	1	—	%	—	%
	Held to Maturity:
S9	Single		4,000		4,000		4,000		—		NR	1	—	%	—	%

(1) The differences noted consist of unrealized gains (losses) recorded at September 30, 2015 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.

The amortized cost and estimated fair value of debt securities at September 30, 2015, 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.

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	Amortized Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	2,838	$	15,831
Due after one year through five years	14,590		14,976
Due after five years through ten years	27,168		27,464
Due after ten years	249,657		237,962
	$	294,253	$	296,233
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	81,095		84,005
	$	81,095	$	84,005

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,
	2015		2014		2015		2014
Gross realized gains	$	—	$	71	$	2,130	$	972
Gross realized losses	—		—		—		—
Net investment security gains	$	—	$	71	$	2,130	$	972

The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $274 million and $273 million at September 30, 2015 and December 31, 2014, respectively.

Statement of Cash Flows - Investing Activities - Supplemental Information

During the nine months ended September 30, 2014, the Company transferred certain securities from available-for-sale to held-to-maturity. The non-cash transfers of securities into the held-to-maturity categories from available-for-sale were made at fair value on the date of the transfer. The securities had an aggregate fair value of $83.4 million on the date of transfer. No such transfers occurred during the nine months ended September 30, 2015.

Note D –Loans

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

	September 30, 2015			December 31, 2014
Residential real estate	$	1,358,083		$	1,294,576
Home equity – junior liens	144,748			145,604
Commercial and industrial	124,495			140,548
Commercial real estate	1,029,103			1,028,831
Consumer	36,751			39,705
DDA overdrafts	3,258			2,802
Gross loans	2,696,438			2,652,066
Allowance for loan losses	(20,941		)	(20,150		)
Net loans	$	2,675,497		$	2,631,916

Construction loans of $14.8 million and $23.0 million are included within residential real estate loans at September 30, 2015 and December 31, 2014, respectively.  Construction loans of $12.0 million and $28.7 million are included within commercial real estate loans at September 30, 2015 and December 31, 2014, 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

19

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 following table details the loans acquired in conjunction with the Virginia Savings Bancorp, Inc. ("Virginia Savings") and Community Financial Corporation ("Community") acquisitions (in thousands):

	Virginia
	Savings		Community		Total
September 30, 2015
Outstanding loan balance	$	31,143	$	190,788	$	221,931
Credit-impaired loans:
Carrying value	1,861		13,400		15,261
Contractual principal and interest	2,149		17,834		19,983
December 31, 2014
Outstanding loan balance	$	38,345	$	219,923	$	258,268
Credit-impaired loans:
Carrying value	1,964		15,365		17,329
Contractual principal and interest	2,407		23,277		25,684

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Changes in the accretable yield of the credit-impaired loans for the nine months ended September 30, 2015 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	$	428		$	1,964		$	9,906		$	15,365		$	10,334		$	17,329
Accretion	(147		)	147			(1,915		)	1,915			(2,062		)	2,062
Net reclassifications to accretable yield from
non-accretable yield	—			—			937			—			937			—
Payments received, net	—			(250		)	—			(1,861		)	—			(2,111		)
Disposals	(38		)	—			(1,187		)	(2,019		)	(1,225		)	(2,019		)
Balance at the end of period	$	243		$	1,861		$	7,741		$	13,400		$	7,984		$	15,261

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 E – 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 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 table summarizes the activity in the allowance for loan loss, by portfolio segment, for the nine months ended September 30, 2015 and 2014 (in thousands).  The following table 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, 2015 and December 31, 2014 (in thousands).

	Commercial &			Commercial			Residential									DDA
	Industrial			Real Estate			Real Estate			Home equity			Consumer			Overdrafts			Total
Nine months ended September 30, 2015
Allowance for loan loss
Beginning balance	$	1,582		$	8,921		$	7,208		$	1,495		$	85		$	859		$	20,150
Charge-offs	(1,903		)	(277		)	(758		)	(236		)	(171		)	(1,038		)	(4,383		)
Recoveries	72			49			130			—			154			594			999
Provision for acquired loans	521			—			—			—			—			—			521
Provision	2,509			(203		)	681			249			28			390			3,654
Ending balance	$	2,781		$	8,490		$	7,261		$	1,508		$	96		$	805		$	20,941
Nine months ended September 30, 2014
Allowance for loan loss
Beginning balance	$	1,139		$	10,775		$	6,057		$	1,672		$	77		$	855		$	20,575
Charge-offs	(330		)	(1,665		)	(1,348		)	(288		)	(171		)	(1,052		)	(4,854		)
Recoveries	85			94			91			—			172			654			1,096
Provision for acquired loans	135			—			—			—			—			—			135

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Provision	564		402		2,159		107		10		293		3,535
Ending balance	$	1,593	$	9,606	$	6,959	$	1,491	$	88	$	750	$	20,487
As of September 30, 2015
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	274	$	—	$	—	$	—	$	—	$	274
Collectively	2,777		7,508		7,176		1,508		96		805		19,870
Acquired with deteriorated
credit quality	4		708		85		—		—		—		797
Total	$	2,781	$	8,490	$	7,261	$	1,508	$	96	$	805	$	20,941
Loans
Evaluated for impairment:
Individually	$	799	$	5,861	$	439	$	296	$	—	$	—	$	7,395
Collectively	123,359		1,010,611		1,357,271		142,676		36,607		3,258		2,673,782
Acquired with deteriorated
credit quality	337		12,631		373		1,776		144		—		15,261
Total	$	124,495	$	1,029,103	$	1,358,083	$	144,748	$	36,751	$	3,258	$	2,696,438
As of December 31, 2014
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	252	$	—	$	—	$	—	$	—	$	252
Collectively	1,540		7,898		7,208		1,429		85		859		19,019
Acquired with deteriorated
credit quality	42		771		—		66		—		—		879
Total	$	1,582	$	8,921	$	7,208	$	1,495	$	85	$	859	$	20,150
Loans
Evaluated for impairment:
Individually	$	—	$	6,023	$	449	$	297	$	—	$	—	$	6,769
Collectively	139,862		1,009,241		1,293,748		142,743		39,572		2,802		2,627,968
Acquired with deteriorated
credit quality	686		13,567		379		2,564		133		—		17,329
Total	$	140,548	$	1,028,831	$	1,294,576	$	145,604	$	39,705	$	2,802	$	2,652,066

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:

22

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.
(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 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.

23

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

	Commercial and industrial		Commercial real estate		Total
September 30, 2015
Pass	$	111,706	$	972,067	$	1,083,773
Special mention	4,814		21,299		26,113
Substandard	7,934		35,737		43,671
Doubtful	41		—		41
Total	$	124,495	$	1,029,103	$	1,153,598
December 31, 2014
Pass	$	128,812	$	970,585	$	1,099,397
Special mention	761		15,103		15,864
Substandard	10,575		42,691		53,266
Doubtful	400		452		852
Total	$	140,548	$	1,028,831	$	1,169,379

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

	Performing		Non-Performing		Total
September 30, 2015
Residential real estate	$	1,354,865	$	3,218	$	1,358,083
Home equity - junior lien	144,574		174		144,748
Consumer	36,751		—		36,751
DDA overdrafts	3,258		—		3,258
Total	$	1,539,448	$	3,392	$	1,542,840
December 31, 2014
Residential real estate	$	1,292,012	$	2,564	$	1,294,576
Home equity - junior lien	145,506		98		145,604
Consumer	39,692		13		39,705
DDA overdrafts	2,802		—		2,802
Total	$	1,480,012	$	2,675	$	1,482,687

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.

24

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 table presents an aging analysis of the Company’s accruing and non-accruing loans, by class, as of September 30, 2015 and December 31, 2014 (in thousands):

	Originated Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,274,236	$	4,218	$	386	$	208	$	—	$	2,186	$	1,281,234
Home equity - junior lien	142,805		464		67		16		—		159		143,511
Commercial and industrial	110,475		—		5		—		—		6,065		116,545
Commercial real estate	888,458		717		240		225		—		7,654		897,294
Consumer	32,577		85		3		—		—		—		32,665
DDA overdrafts	2,928		330		—		—		—		—		3,258
Total	$	2,451,479	$	5,814	$	701	$	449	$	—	$	16,064	$	2,474,507
	Acquired Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	75,315	$	546	$	162	$	—	$	—	$	826	$	76,849
Home equity - junior lien	1,227		10		—		—		—		—		1,237
Commercial and industrial	7,235		336		14		—		—		365		7,950
Commercial real estate	125,218		701		245		—		1,493		4,152		131,809
Consumer	3,957		117		12		—		—		—		4,086
DDA overdrafts	—		—		—		—		—		—		—
Total	$	212,952	$	1,710	$	433	$	—	$	1,493	$	5,343	$	221,931
	Total Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,349,551	$	4,764	$	548	$	208	$	—	$	3,012	$	1,358,083
Home equity - junior lien	144,032		474		67		16		—		159		144,748
Commercial and industrial	117,710		336		19		—		—		6,430		124,495
Commercial real estate	1,013,676		1,418		485		225		1,493		11,806		1,029,103
Consumer	36,534		202		15		—		—		—		36,751
DDA overdrafts	2,928		330		—		—		—		—		3,258
Total	$	2,664,431	$	7,524	$	1,134	$	449	$	1,493	$	21,407	$	2,696,438

25

	Originated Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,200,177	$	4,235	$	758	$	169	$	—	$	2,259	$	1,207,598
Home equity - junior lien	142,624		561		155		30		—		68		143,438
Commercial and industrial	128,857		100		—		210		—		78		129,245
Commercial real estate	869,530		479		—		—		—		7,330		877,339
Consumer	33,178		119		78		1		—		—		33,376
DDA overdrafts	2,483		317		2		—		—		—		2,802
Total	$	2,376,849	$	5,811	$	993	$	410	$	—	$	9,735	$	2,393,798
	Acquired Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	86,129	$	714	$	—	$	—	$	—	$	135	$	86,978
Home equity - junior lien	2,164		2		—		—		—		—		2,166
Commercial and industrial	10,123		143		—		—		—		1,037		11,303
Commercial real estate	144,721		892		210		—		1,270		4,399		151,492
Consumer	6,108		172		36		13		—		—		6,329
DDA overdrafts	—		—		—		—		—		—		—
Total	$	249,245	$	1,923	$	246	$	13	$	1,270	$	5,571	$	258,268
	Total Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,286,306	$	4,949	$	758	$	169	$	—	$	2,394	$	1,294,576
Home equity - junior lien	144,788		563		155		30		—		68		145,604
Commercial and industrial	138,980		243		—		210		—		1,115		140,548
Commercial real estate	1,014,251		1,371		210		—		1,270		11,729		1,028,831
Consumer	39,286		291		114		14		—		—		39,705
DDA overdrafts	2,483		317		2		—		—		—		2,802
Total	$	2,626,094	$	7,734	$	1,239	$	423	$	1,270	$	15,306	$	2,652,066

26

The following table presents the Company’s impaired loans, by class, as of September 30, 2015 and December 31, 2014 (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off.

	September 30, 2015						December 31, 2014
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate	$	439	$	439	$	—	$	449	$	449	$	—
Home equity - junior liens	296		296		—		297		297		—
Commercial and industrial	799		2,861		—		—		—		—
Commercial real estate	4,509		4,948		—		4,631		4,631		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	6,043	$	8,544	$	—	$	5,377	$	5,377	$	—
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	1,352		4,282		274		1,392		1,392		252
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	1,352	$	4,282	$	274	$	1,392	$	1,392	$	252

     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, 2015				September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Residential real estate	$	443	$	—	$	453	$	—
Home equity - junior liens	296		—		297		—
Commercial and industrial	1,807		—		—		—
Commercial real estate	4,582		3		7,329		4
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	7,128	$	3	$	8,079	$	4
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—
Commercial and industrial	—		—		—		—
Commercial real estate	1,350		—		1,837		30
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	1,350	$	—	$	1,837	$	30

27

     Approximately $0.6 million and $0.3 million of interest income would have been recognized during the nine months ended September 30, 2015 and 2014, 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, 2015.

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.

Regulatory guidance requires loans to be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court and the borrower has not reaffirmed the debt. 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 following tables set forth the Company’s TDRs (in thousands):

	September 30, 2015						December 31, 2014
			Non-						Non-
	Accruing		Accruing		Total		Accruing		Accruing		Total
Commercial and industrial	$	62	$	—	$	62	$	73	$	—	$	73
Commercial real estate	1,921		—		1,921		2,263		—		2,263
Residential real estate	18,154		—		18,154		17,946		545		18,491
Home equity	2,730		16		2,746		2,673		15		2,688
Consumer	—		—		—		—		—		—
	$	22,867	$	16	$	22,883	$	22,955	$	560	$	23,515

	New TDRs					New TDRs
	For the nine months ended					For the nine months ended
	September 30, 2015					September 30, 2014
		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	—	$	—	$	—	—	$	—	$	—
Commercial real estate	—	—		—		1	432		432
Residential real estate	35	2,431		2,431		26	2,049		2,049
Home equity	14	368		368		8	203		203
Consumer	—	—		—		—	—		—
	49	$	2,799	$	2,799	35	$	2,684	$	2,684

28

Note F – Long-Term Debt

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

	September 30, 2015		December 31, 2014
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.84% and 3.74%, 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 at any time or in part from time-to-time, 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 Capital Securities and payments on redemption of the Capital 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 G – Derivative Instruments

As of September 30, 2015 and December 31, 2014, 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. For the majority of these instruments the Company acts as an intermediary for its customers. Changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company's results of operations. The Company also has an interest rate swap for the purpose of hedging changes in LIBOR related to commercial real estate loans. Hedge ineffectiveness is assessed quarterly and any ineffectiveness is recorded as non-interest expense. For the three months ended September 30, 2015 and nine month periods ended September 30, 2015 hedge ineffectiveness was less than $0.1 million.

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

	September 30, 2015				December 31, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
Non-hedging interest rate derivatives:
Other Assets	$	266,284	$	14,099	$	179,958	$	10,253
Other Liabilities	274,284		14,250		179,958		10,253
Derivatives designated as hedges of fair value:
Other Liabilities	5,163		119		5,475		24

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,
	2015			2014			2015			2014
Change in Fair Value Non-Hedging interest rate derivatives:
Other income - derivative asset	$	6,922		$	(373	)	$	4,494		$	4,233
Other income - derivative liability	(7,028		)	373			(4,613		)	(4,233		)
Change in Fair Value Hedging Interest Rate Derivatives:
Hedged item - derivative asset	101			—			89			—
Other income - derivative liability	5			—			6			—

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, 2015 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) *

Non-hedging derivative assets:

Interest rate swap agreements

$

14,099

$

—

$

14,099

$

—

$

14,099

$

14,099

$

—

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) *

Non-hedging derivative liabilities:

Interest rate swap agreements

$

14,250

$

—

$

14,250

$

—

$

15,697

$

15,697

$

—

Hedging derivative liabilities:

Interest rate swap agreements

$

119

$

—

$

119

$

131

$

131

$

—

*

For instances where the fair value of financial collateral meets or exceeds the amounts presented in the Statement of Financial Position, a value of zero is displayed to represent full collateralization.

31

Note H – 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. As of September 30, 2015, under the 2003 Plan and 2013 Plan, 438,515 stock options had been awarded and 241,596 restricted stock awards had been awarded, respectively.

Each award from the 2003 Plan and 2013 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 2003 Plan and 2013 Plan, all outstanding options and awards shall immediately vest.

Certain stock options and restricted stock awards have performance-based vesting requirements. These shares will vest in three separate annual installments of approximately 33.33% per installment on the third, fourth and fifth anniversaries of the grant date, subject further to performance-based vesting requirements. The performance-based vesting requirements are as follows:

* First Installment – the mean return on average assets of the Company (excluding merger and acquisition expenses and other nonrecurring items as determined by the Board of Directors of the Company) of the three years immediately prior to the vesting date is equal to or exceeds the median return on average assets over the 20 year period immediately preceding the vesting date of all FDIC insured depository institutions.

* Second Installment – the mean return on average assets of the Company (excluding merger and acquisition expenses and other nonrecurring items as determined by the Board of Directors of the Company) of the four years immediately prior to the vesting date is equal to or exceeds the median return on average assets over the 20 year period immediately preceding the vesting date of all FDIC insured depository institutions.

* Third Installment – the mean return on average assets of the Company (excluding merger and acquisition expenses and other nonrecurring items as determined by the Board of Directors of the Company) of the five years immediately prior to the vesting date is equal to or exceeds the median return on average assets over the 20 year period immediately preceding the vesting date of all FDIC insured depository institutions.

Stock Options

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

	Nine months ended September 30,
	2015				2014
	Options		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
Outstanding at January 1	167,554		$	36.74	173,601		$	35.26
Granted	12,961		46.41		13,953		44.43
Exercised	(71,750	)	37.01		(19,000	)	29.13
Forfeited	(4,000	)	31.66		—		—
Outstanding at September 30	104,765		$	37.95	168,554		$	36.71

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Additional information regarding stock options outstanding and exercisable at September 30, 2015, is provided in the following table:

Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
25.00 - 29.99	1,250	28.15	3.5	$	26	1,250	$	28.15	3.5	$	26
30.00 - 34.99	17,750	31.63	4.1	314		17,750	31.63		4.1	314
35.00 - 39.99	51,851	36.10	6.0	684		41,000	39.13		1.3	417
40.00 - 44.99	20,953	43.24	6.5	127		7,000	40.88		2.5	59
45.00 - 50.00	12,961	46.41	9.4	37		—	—		—	—
	104,765			$	1,188	67,000				$	816

Proceeds from stock option exercises were $2.7 million and $0.6 million during the nine months ended September 30, 2015 and 2014, respectively. Shares issued in connection with stock option exercises are issued from available treasury shares. If no treasury shares are available, new shares would be issued from available authorized shares. During the nine months ended September 30, 2015 and 2014 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 $0.7 million and $0.3 million during the nine months ended September 30, 2015 and 2014, respectively.

Stock-based compensation expense was approximately $0.2 million and $0.1 million for the nine months ended September 30, 2015 and 2014, respectively.  Unrecognized stock-based compensation expense related to stock options approximated $0.5 million at September 30, 2015. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.4 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,
	2015		2014
Risk-free interest rate	1.95	%	2.42	%
Expected dividend yield	3.50	%	3.60	%
Volatility factor	45.40	%	48.75	%
Expected life of option	7.0 years		8.0 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 $0.9 million and $0.8 million for the nine months ended September 30, 2015 and 2014, respectively.  Unrecognized stock-based compensation expense related to non-vested restricted shares was $3.1 million at September 30, 2015. At September 30, 2015, this unrecognized expense is expected to be recognized over 3.3 years based on the weighted average-life of the restricted shares.

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

	Nine months ended September 30,
	2015				2014
	Restricted Awards		Average Market Price at Grant		Restricted Awards		Average Market Price at Grant
Outstanding at January 1	163,431				142,469
Granted	25,440		$	46.35	27,162		$	39.72
Forfeited/Vested	(17,050	)			(6,200	)
Outstanding at September 30	171,821				163,431

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 for both the nine month periods ended September 30, 2015 and 2014.

The Company maintains two frozen defined benefit pension plans the (“Defined Benefit Plans”), which were inherited from the Company's acquisition of the plan sponsors (Horizon Bancorp, Inc. and Community Financial Corporation). The Company made contributions of approximately $0.3 million to the Defined Benefit Plans during each of the nine months ended September 30, 2015 and 2014, 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,
	2015			2014			2015			2014
Components of net periodic cost:
Interest cost	$	203		$	209		$	668		$	634
Expected return on plan assets	(234		)	(252		)	(757		)	(779		)
Net amortization and deferral	244			150			714			538
Net Periodic Pension Cost	$	213		$	107		$	625		$	393

Note I – 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):

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	September 30, 2015		December 31, 2014
Commitments to extend credit:
Home equity lines	$	179,654	$	175,312
Commercial real estate	102,348		50,298
Other commitments	162,895		145,283
Standby letters of credit	4,865		4,592
Commercial letters of credit	2,590		1,991

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 legal actions will have an immaterial impact on financial results, either positive or negative, or that no material legal actions may be presented in the future.

Note J – Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the nine months ended September 30, 2015 and 2014 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, 2013	$	(2,880	)	$	(2,110	)	$	(4,990	)
Other comprehensive income before reclassifications	—			2,683			2,683
Amounts reclassified from other comprehensive loss	—			(614		)	(614		)
	—			2,069			2,069
Balance at September 30, 2014	$	(2,880	)	$	(41	)	$	(2,921	)
Balance at December 31, 2014	$	(5,349	)	$	1,190		$	(4,159	)
Other comprehensive income before reclassifications	—			1,943			1,943
Amounts reclassified from other comprehensive loss	—			(1,344		)	(1,344		)
	—			599			599
Balance at September 30, 2015	$	(5,349	)	$	1,789		$	(3,560	)

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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
	2015		2014			2015			2014			of Income
Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	(71	)	$	(2,130	)	$	(972	)	Security gains (losses)
Related income tax expense	—		26			786			358			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(45	)	$	(1,344	)	$	(614	)

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Note K – Earnings per Share

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

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Distributed earnings allocated to common stock	$	6,362	$	6,073	$	19,086	$	18,220
Undistributed earnings allocated to common stock	4,125		5,673		21,040		19,809
Net earnings allocated to common shareholders	$	10,487	$	11,746	$	40,126	$	38,029
Average shares outstanding	15,178		15,363		15,111		15,509
Effect of dilutive securities:
Warrant outstanding	—		62		37		62
Employee stock awards	20		20		21		23
Shares for diluted earnings per share	15,198		15,445		15,169		15,594
Basic earnings per share	$	0.69	$	0.76	$	2.66	$	2.45
Diluted earnings per share	$	0.69	$	0.76	$	2.65	$	2.44

During the nine months ended September 30, 2015 there were no anti-dilutive options outstanding. Options to purchase approximately 13,953 shares of common stock at an exercise price of $44.43 per share were outstanding during the third quarter of 2014 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.

Note L – 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

37

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, 2015.  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 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, 2015.

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):

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	Total		Level 1		Level 2		Level 3		Total Gains (Losses)
September 30, 2015
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	5	$	—	$	5	$	—
Obligations of states and political subdivisions	42,702		—		42,702		—
Mortgage-backed securities:
U.S. Government agencies	227,947		—		227,947		—
Private label	1,279		—		1,279		—
Trust preferred securities	6,957		—		4,866		2,091
Corporate securities	17,343		—		17,343		—
Marketable equity securities	3,103		3,103		—		—
Investment funds	1,529		1,529		—		—
Derivative assets	14,099		—		14,099		—
Financial Liabilities
Derivative liabilities	14,369		—		14,369		—
Nonrecurring fair value measurements
Impaired loans	$	7,122	$	—	$	—	$	7,122	$	—
Other real estate owned	6,026		—		—		6,026		(782		)
December 31, 2014
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	1,827	$	—	$	1,827	$	—
Obligations of states and political subdivisions	42,096		—		42,096		—
Mortgage-backed securities:
U.S. Government agencies	187,328		—		187,328		—
Private label	1,704		—		1,704		—
Trust preferred securities	9,036		—		7,165		1,871
Corporate securities	7,317		—		7,317		—
Marketable equity securities	3,213		3,213		—		—
Investment funds	1,522		1,522		—		—
Derivative assets	10,253		—		10,253		—
Financial Liabilities
Derivative liabilities	10,277		—		10,277		—
Nonrecurring fair value measurements
Impaired loans	$	6,517	$	—	$	—	$	6,517	$	(153	)
Other real estate owned	$	8,179	$	—	$	—	$	8,179	$	(464	)

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), which consist solely of trust preferred securities (in thousands):

	Nine months ended September 30,
	2015		2014
Beginning balance	$	1,871	$	3,887
Impairment losses on investment securities	—		—
Included in other comprehensive income	220		(2,161		)
Dispositions	—		—
Transfers into Level 3	—		—
Ending Balance	$	2,091	$	1,726

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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 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, 2015 and 2014, collateral discounts ranged from 20% to 30%. During the nine months ended September 30, 2015 and 2014, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

	Nine months ended September 30,
	2015			2014
Beginning balance	$	6,517		$	11,714
Loans classified as impaired during the period	799			—
Specific valuation allowance allocations	—			—
	799			—
(Additional) reduction in specific valuation allowance allocations	(22		)	633
Paydowns, payoffs, other activity	(172		)	(5,730		)
Ending balance	$	7,122		$	6,617

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):

40

	Nine months ended September 30,
	2015			2014
Beginning balance	$	8,179		$	8,470
OREO remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	2,356			4,225
Charge-offs recognized in the allowance for loan losses	—			—
Fair value	2,356			4,225
OREO remeasured subsequent to initial recognition
Carrying value of foreclosed assets prior to remeasurement	3,601			480
Fair value	2,819			101
Write-downs included in other non-interest expense	(782		)	(379		)
Disposed	(3,727		)	(3,155		)
Ending balance	$	6,026		$	9,161

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.

41

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, 2015
Assets:
Cash and cash equivalents	$	118,708	$	118,708	$	118,708	$	—	$	—
Securities available-for-sale	300,865		300,865		4,632		294,142		2,091
Securities held-to-maturity	81,095		84,005		—		84,005		—
Other securities	9,926		9,926		—		9,926		—
Net loans	2,675,497		2,685,390		—		—		2,685,390
Accrued interest receivable	7,690		7,690		7,690		—		—
Derivative assets	14,099		14,099		—		14,099		—
Liabilities:
Deposits	2,865,502		2,873,255		1,883,153		990,102		—
Short-term debt	147,036		147,035		—		147,035		—
Long-term debt	16,495		16,464		—		16,464		—
Derivative liabilities	14,369		14,369		—		14,369		—
December 31, 2014
Assets:
Cash and cash equivalents	148,228		148,228		148,228		—		—
Securities available-for-sale	254,043		254,043		4,735		247,437		1,871
Securities held-to-maturity	90,786		94,191		—		94,191		—
Other securities	9,857		9,857		—		9,857		—
Net loans	2,631,916		2,638,911		—		—		2,638,911
Accrued interest receivable	6,826		6,826		6,826		—		—
Derivative assets	10,253		10,253		—		10,253		—
Liabilities:
Deposits	2,872,787		2,879,126		1,846,124		1,033,002		—
Short-term debt	134,931		134,934		—		134,934		—
Long-term debt	16,495		16,464		—		16,464		—
Derivative liabilities	10,277		10,277		—		10,277		—

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

42

significant accounting policies followed by the Company are presented in Note One to the audited financial statements included in the Company’s 2014 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 2014 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, 2012 through 2014 and state taxing authorities for the years ended December 31, 2011 through 2013.

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; and (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 (i) the declines in fair value are temporary, driven by fluctuations in the interest rate environment and not due to the creditworthiness of the issuers, (ii) the Company does not have the intent to sell any of the securities classified as available for sale, and (iii) it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

  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, 2015 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 its entire investment portfolio.

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

43

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, 2015 vs. 2014

The Company reported consolidated net income of $40.6 million, or $2.65 per diluted common share, for the nine months ended September 30, 2015, compared to $38.4 million, or $2.44 per diluted common share, for the nine months ended September 30, 2014. Return on average assets (“ROA”) was 1.53% and return on average equity (“ROE”) was 13.1% for the nine months ended September 30, 2015 compared to 1.51% and 12.9%, respectively, for the nine months ended September 30, 2014.

The Company’s net interest income for the first nine months of 2015 decreased $2.3 million compared to the first nine months of 2014 (see Net Interest Income). The Company recorded a provision for loan losses of $4.2 million for the nine months ended September 30, 2015 compared to $3.7 million for the nine months ended September 30, 2014 (see Allowance and Provision for Loan Losses).  As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income increased $9.1 million.  Non-interest expenses for the nine months ended September 30, 2015 decreased $0.2 million from the nine months ended September 30, 2014.

Three months ended September 30, 2015 vs. 2014

The Company reported consolidated net income of $10.6 million, or $0.69 per diluted common share, for the three months ended September 30, 2015, compared to $11.9 million, or $0.76 per diluted common share, for the three months ended September 30, 2014. Return on average assets (“ROA”) was 1.21% and return on average equity (“ROE”) was 10.1% for the three months ended September 30, 2015 compared to 1.40% and 11.9%, respectively, for the three months ended September 30, 2014.

The Company’s net interest income for the third quarter of 2015 decreased $1.6 million compared to the third quarter of 2014 (see Net Interest Income). The Company recorded a provision for loan losses of $0.5 million for the third quarter of 2015 compared to $1.9 million for the third quarter of 2014 (see Allowance and Provision for Loan Losses).  As further discussed under the caption Non-Interest Income and Non-Interest Expense, non-interest income decreased $0.9 million from the three months ended September 30, 2014.  Non-interest expenses for the three months ended September 30, 2015 increased $1.1 million from the three months ended September 30, 2014.

Net Interest Income

Nine months ended September 30, 2015 vs. 2014

The Company’s tax equivalent net interest income decreased $2.4 million, or 2.6%, from $88.8 million for the nine months ended September 30, 2014 to $86.5 million for the nine months ended September 30, 2015. The Company’s reported net interest margin decreased from 4.02% for the nine months ended September 30, 2014 to 3.81% for the nine months ended September 30, 2015. Accretion was $5.5 million for the nine months ended September 30, 2014 and $5.1 million for the nine months ended September 30, 2015. The Company’s tax equivalent net interest income excluding accretion decreased $2.0 million, or 2.4%, from $83.3 million for the nine months ended September 30, 2014 to $81.4 million for the nine months ended September 30, 2015. Excluding the favorable impact of the accretion, the net interest margin for the nine months ended September 30, 2015 and 2014 would have been 3.58% and 3.77%, respectively. The Company continues to originate a significant portion of its commercial loans as variable rate loans based on WSJ Prime or LIBOR and has elected to keep fixed rate investment security balances at approximately 10% of total assets and allow cash balances to increase. The Company believes that these measures position its balance sheet to benefit from a rising rate environment.

Three months ended September 30, 2015 vs. 2014

The Company’s tax equivalent net interest income decreased $1.6 million, or 5.5%, from $29.6 million for the three months ended September 30, 2014 to $28.0 million for the three months ended September 30, 2015. The Company’s reported net interest margin decreased from 3.95% for the three months ended September 30, 2014 to 3.62% for the three months ended September 30, 2015. Accretion was $1.8 million for the three months ended September 30, 2014 and $1.1 million for the three months ended September 30, 2015. The Company’s tax equivalent net interest income excluding accretion decreased $0.8 million, or 3.0%, from $27.8 million for the three months ended September 30, 2014 to $26.9 million for the three months ended September 30, 2015. Excluding the favorable impact of the accretion, the net interest margin for the three months ended September 30, 2015

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and 2014 would have been 3.48% and 3.71%, respectively. The Company continues to originate a significant portion of its commercial loans based on WSJ Prime or LIBOR and has elected to keep fixed rate investment security balances at approximately 10% of total assets and allow cash balances to increase. The Company believes these measures position its balance sheet to benefit from a rising rate environment.

The following schedule presents the actual and estimated future accretion 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
Year Ended	Loan Accretion	Certificates of Deposit	Loan Accretion	Certificates of Deposit	Total
1Q 2015	123	129	2,158	40	2,450
2Q 2015	189	129	1,249	40	1,607
3Q 2015	245	129	642	40	1,056
Remainder 2015 (estimated)	88	129	1,057	40	1,314
2016 (estimated)	247	497	1,232	48	2,024
2017 (estimated)	130	—	889	—	1,019

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Table One

Average Balance Sheets and Net Interest Income

(In thousands)

Assets	Nine months ended September 30,
	2015							2014
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Loan portfolio(1):
Residential real estate(2)	$	1,459,247		$	42,797	3.92	%	$	1,373,854		$	41,425	4.03	%
Commercial, financial, and agriculture(2)	1,157,677			38,759		4.48		1,158,198			41,308		4.77
Installment loans to individuals(2),(3)	41,338			3,209		10.38		46,209			3,284		9.50
Previously securitized loans(4)	***			1,310		***		***			1,630		***
Total loans	2,658,262			86,075		4.33		2,578,261			87,647		4.55
Securities:
Taxable	340,585			7,974		3.13		342,349			8,797		3.44
Tax-exempt(5)	29,222			1,235		5.65		27,685			1,292		6.24
Total securities	369,807			9,209		3.33		370,034			10,089		3.65
Deposits in depository institutions	9,790			—		—		8,955			—		—
Total interest-earning assets	3,037,859			95,284		4.19		2,957,250			97,736		4.42
Cash and due from banks	202,423							127,229
Bank premises and equipment	76,273							81,038
Other assets	242,294							246,654
Less: allowance for loan losses	(20,960		)					(21,194		)
Total assets	$	3,537,889						$	3,390,977
Liabilities
Interest-bearing demand deposits	$	643,086		$	379	0.08	%	$	612,720		$	479	0.10	%
Savings deposits	698,433			520		0.10		628,996			597		0.13
Time deposits(2)	1,005,548			7,227		0.96		1,052,625			7,144		0.91
Short-term borrowings	138,192			236		0.23		128,230			246		0.26
Long-term debt	16,495			458		3.71		16,495			453		3.67
Total interest-bearing liabilities	2,501,754			8,820		0.47		2,439,066			8,919		0.49
Noninterest-bearing demand deposits	584,046							522,341
Other liabilities	40,207							32,526
Stockholders’ equity	411,882							397,044
Total liabilities and stockholders’ equity	$	3,537,889						$	3,390,977
Net interest income				$	86,464						$	88,817
Net yield on earning assets						3.81	%						4.02	%

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(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)	Included in the above table are the following amounts for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings and Community:
		Nine months ended September 30, 2015
		Virginia Savings		Community		Total
	Residential real estate	$	246	$	451	$	697
	Commercial, financial and agriculture	236		3,447		3,683
	Installment loans to individuals	75		151		226
	Time deposits	387		120		507
		$	944	$	4,169	$	5,113
		Nine months ended September 30, 2014
		Virginia Savings		Community		Total
	Residential real estate	$	361	$	363	$	724
	Commercial, financial and agriculture	424		3,149		3,573
	Installment loans to individuals	113		473		586
	Time deposits	401		197		598
		$	1,299	$	4,182	$	5,481
(3)	Includes the Company’s consumer and DDA overdrafts loan categories.
(4)	Effective January 1, 2012, there is no carrying value of the Company’s previously securitized loans.
(5)	Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.

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Table Two

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

(In thousands)

	Nine months ended September 30, 2015 vs. 2014
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume			Rate			Net
Loan portfolio
Residential real estate	$	2,575		$	(1,203	)	$	1,372
Commercial, financial, and agriculture	(19		)	(2,530		)	(2,549		)
Installment loans to individual	(346		)	271			(75		)
Previously securitized loans	—			(320		)	(320		)
Total loans	2,210			(3,782		)	(1,572		)
Securities:
Taxable	(45		)	(778		)	(823		)
Tax-exempt(1)	72			(129		)	(57		)
Total securities	27			(907		)	(880		)
Total interest-earning assets	$	2,237		$	(4,689	)	$	(2,452	)
Interest-bearing liabilities:
Interest-bearing demand deposits	$	24		$	(124	)	$	(100	)
Savings deposits	66			(143		)	(77		)
Time deposits	(320		)	403			83
Short-term borrowings	19			(29		)	(10		)
Long-term debt	—			5			5
Total interest-bearing liabilities	$	(211	)	$	112		$	(99	)
Net Interest Income	$	2,448		$	(4,801	)	$	(2,353	)

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

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Table Three

Average Balance Sheets and Net Interest Income

(In thousands)

Assets	Three months ended September 30,
	2015							2014
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Loan portfolio(1):
Residential real estate(2)	$	1,482,445		$	14,469	3.87	%	$	1,400,072		$	14,077	3.99	%
Commercial, financial, and agriculture(2)	1,156,264			12,174		4.18		1,155,269			13,733		4.72
Installment loans to individuals(2),(3)	40,720			875		8.53		44,801			995		8.81
Previously securitized loans(4)	***			357		***		***			487		***
Total loans	2,679,429			27,875		4.13		2,600,142			29,292		4.47
Securities:
Taxable	352,567			2,621		2.95		335,760			2,864		3.38
Tax-exempt(5)	29,675			419		5.60		28,199			434		6.11
Total securities	382,242			3,040		3.16		363,959			3,298		3.60
Deposits in depository institutions	9,924			—		—		8,924			—		—
Total interest-earning assets	3,071,595			30,915		3.99		2,973,025			32,590		4.35
Cash and due from banks	156,575							107,550
Bank premises and equipment	74,543							79,865
Other assets	237,803							246,357
Less: allowance for loan losses	(21,425		)					(20,893		)
Total assets	$	3,519,091						$	3,385,904
Liabilities
Interest-bearing demand deposits	$	644,375		$	122	0.08	%	$	615,830		$	138	0.09	%
Savings deposits	691,600			165		0.09		633,690			192		0.12
Time deposits(2)	989,149			2,399		0.96		1,036,370			2,400		0.92
Short-term borrowings	135,274			69		0.20		132,484			86		0.26
Long-term debt	16,495			155		3.73		16,495			152		3.66
Total interest-bearing liabilities	2,476,893			2,910		0.47		2,434,869			2,968		0.48
Noninterest-bearing demand deposits	594,821							522,083
Other liabilities	28,583							30,188
Stockholders’ equity	418,794							398,764
Total liabilities and stockholders’ equity	$	3,519,091						$	3,385,904
Net interest income				$	28,005						$	29,622
Net yield on earning assets						3.62	%						3.95	%

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(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)	Included in the above table are the following amounts for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings and Community:
		Three months ended September 30, 2015
		Virginia Savings		Community		Total
	Residential real estate	$	95	$	162	$	257
	Commercial, financial and agriculture	130		446		576
	Installment loans to individuals	20		34		54
	Time deposits	129		40		169
		$	374	$	682	$	1,056
		Three months ended September 30, 2014
		Virginia Savings		Community		Total
	Residential real estate	$	103	$	105	$	208
	Commercial, financial and agriculture	169		1,110		1,279
	Installment loans to individuals	43		119		162
	Time deposits	135		52		187
		$	450	$	1,386	$	1,836
(3)	Includes the Company’s consumer and DDA overdrafts loan categories.
(4)	Effective January 1, 2012, there is no carrying value of the Company’s previously securitized loans.
(5)	Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.

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Table Four

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

(In thousands)

	Three months ended September 30, 2015 vs. 2014
Interest-earning assets:	Increase (Decrease) Due to Change In:
	Volume			Rate			Net
Loan portfolio
Residential real estate	$	828		$	(436	)	$	392
Commercial, financial, and agriculture	12			(1,571		)	(1,559		)
Installment loans to individual	(91		)	(29		)	(120		)
Previously securitized loans	—			(130		)	(130		)
Total loans	749			(2,166		)	(1,417		)
Securities:
Taxable	143			(386		)	(243		)
Tax-exempt(1)	23			(38		)	(15		)
Total securities	166			(424		)	(258		)
Total interest-earning assets	$	915		$	(2,590	)	$	(1,675	)
Interest-bearing liabilities:
Interest-bearing demand deposits	$	6		$	(22	)	$	(16	)
Savings deposits	18			(45		)	(27		)
Time deposits	(109		)	108			(1		)
Short-term borrowings	2			(19		)	(17		)
Long-term debt	—			3			3
Total interest-bearing liabilities	$	(83	)	$	25		$	(58	)
Net Interest Income	$	998		$	(2,615	)	$	(1,617	)

Loans

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

Table Five

Loan Portfolio

(In thousands)

	September 30, 2015		December 31, 2014		September 30, 2014
Residential real estate	$	1,358,083	$	1,294,576	$	1,274,062
Home equity – junior liens	144,748		145,604		146,965
Commercial and industrial	124,495		140,548		139,220
Commercial real estate	1,029,103		1,028,831		1,025,835
Consumer	36,751		39,705		41,042
DDA overdrafts	3,258		2,802		3,618
Total loans	$	2,696,438	$	2,652,066	$	2,630,742

Loan balances increased $44.4 million from December 31, 2014 to September 30, 2015. Residential real estate loans increased $63.5 million, or 4.9%, from December 31, 2014 to September 30, 2015.   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-

51

term fixed amortizing loans and non-purchase adjustable rate loans.  At September 30, 2015, $14.8 million of the residential real estate loans were for properties under construction.

Junior lien home equity loans decreased $0.9 million during the first nine months of 2015.  Junior lien home equity loans consist of lines of credit, short-term fixed amortizing loans, and non-purchase adjustable rate loans with second or lower lien positions.

Commercial real estate loans increased $0.3 million from December 31, 2014 to September 30, 2015.  At September 30, 2015, $12.0 million of the commercial real estate loans were for commercial properties under construction. Commercial and industrial loans (“C&I”) decreased $16.1 million from December 31, 2014 to September 30, 2015. During the third quarter of 2015, the decrease in C&I loans outstanding is largely attributable to a more competitive lending environment, a C&I loan customer that sold its business and repaid a $7.6 million loan, and to various lines of credit that experienced balance reductions.

Consumer loans decreased $3.0 million during the first nine months of 2015.  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. Excluding the Community loans, consumer loans decreased $0.6 million.

Allowance and Provision for Loan Losses

Management systematically monitors the loan portfolio and the appropriateness of the allowance for loan losses (“ALLL”) on a quarterly basis to provide for probable losses incurred in the portfolio. Management assesses the risk in each loan type based on historical delinquency and loss trends, the general economic environment of its local markets, individual loan performance, and other relevant factors. Individual credits in excess of $1 million are selected at least annually for detailed loan reviews, which are utilized by management to assess the risk in the portfolio and the appropriateness of the allowance. Due to the nature of commercial lending, evaluation of the appropriateness 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. Risk factors considered by the Company in completing this analysis include: (1) unemployment and economic trends in the Company’s markets, (2) concentrations of credit, if any, among any industries, (3) trends in loan growth, loan mix, delinquencies, losses or credit impairment, (4) adherence to lending policies and others. Each risk factor is designated as low, moderate/increasing, or high based on the Company’s assessment of the risk to loss associated with each factor. Each risk factor is then weighted to consider probability of occurrence.

In evaluating the adequacy of the ALLL, 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.

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 ALLL 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 $4.2 million in the first nine months of 2015 and $3.7 million in the first nine months of 2014.  The provision for loan losses recorded in 2015 reflects difficulties of certain commercial borrowers of the Company during the first nine months of 2015, including difficulties encountered by a, commercial borrower of the Company engaged in the mining and energy sectors (per the North American Industry Classification System (NAICS)) and a charge-off related to a specific credit of said borrower and management’s assessment of the impact of these difficulties on the ultimate collectibility of the loans. In addition, as a result of this loss, the historical loss rates used to compute the allowance not specifically allocated to individual credits for loans in our commercial and industrial mining and energy sector increased which resulted in an increase in the provision for the first nine

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months of 2015. The first nine months of 2015 also includes $0.5 million of provision expense related to purchased credit impaired loans. Changes in the amount of the provision and related allowance are based on the Company’s detailed systematic methodology and are directionally consistent with changes in the composition and quality of the Company’s loan portfolio.  The Company believes its methodology for determining 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 $3.4 million for the first nine months of 2015 and $3.8 million for the first nine months of 2014.  Net charge-offs in the first nine months of 2015 consisted primarily of net charge-offs on commercial and industrial loans of $1.8 million, residential real estate loans of $0.6 million, and overdraft deposit accounts of $0.4 million.  

The Company’s ratio of non-performing assets to total loans and other real estate owned increased from 0.90% at December 31, 2014 to 1.03% at September 30, 2015.  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. This increase was primarily related to a single commercial customer engaged in the mining and energy sectors (per the NAICS) which filed for bankruptcy and for which the Company recorded a charge-off as previously discussed.

The ALLL was $20.9 million at September 30, 2015 and $20.2 million at December 31, 2014.  Below is a summary of the changes in the components of the ALLL from December 31, 2014 to September 30, 2015.

The allowance allocated to the commercial real estate loan portfolio (see Table Nine) decreased $0.4 million, or 4.83%, from $8.9 million at December 31, 2014 to $8.5 million at September 30, 2015. This is due to a decrease in loans classified as substandard as well as a decrease in historical loss rates.

The allowance related to the commercial and industrial loan portfolio increased $1.2 million from $1.6 million at December 31, 2014 to $2.8 million at September 30, 2015 (see Table Nine). This increase is due to an increase in loans classified as special mention as of September 30, 2015 and an increase in historical loss rates used for loans evaluated for impairment collectively.

The allowance allocated to the residential real estate portfolio (see Table Nine) increased modestly from $7.2 million at December 31, 2014 to $7.3 million at September 30, 2015. This was primarily due to an increase in residential real estate loans outstanding.

The allowance allocated to the home equity loan portfolio (see Table Nine) remained flat at $1.5 million at December 31, 2014 and September 30, 2015.

The allowance allocated to the consumer loan portfolio (see Table Nine) remained flat at $0.1 million at December 31, 2014 and September 30, 2015.

The allowance allocated to overdraft deposit accounts (see Table Nine) decreased modestly from $0.9 million at December 31, 2014 to $0.8 million at September 30, 2015.

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, 2015, 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.

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Table Six

Analysis of the Allowance for Loan Losses

(In thousands)

	Nine months ended September 30,						Year ended December 31,
	2015			2014			2014
Balance at beginning of period	$	20,150		$	20,575		$	20,575
Charge-offs:
Commercial and industrial	(1,903		)	(330		)	(323		)
Commercial real estate	(277		)	(1,665		)	(1,925		)
Residential real estate	(758		)	(1,348		)	(1,762		)
Home equity	(236		)	(288		)	(309		)
Consumer	(171		)	(171		)	(188		)
DDA overdrafts	(1,038		)	(1,052		)	(1,415		)
Total charge-offs	(4,383		)	(4,854		)	(5,922		)
Recoveries:
Commercial and industrial	72			85			89
Commercial real estate	49			94			113
Residential real estate	130			91			187
Home equity	—			—			—
Consumer	154			172			204
DDA overdrafts	594			654			850
Total recoveries	999			1,096			1,443
Net charge-offs	(3,384		)	(3,758		)	(4,479		)
Provision for purchased credit impaired loans	521			135			3,771
Provision for loan losses	3,654			3,535			283
Balance at end of period	$	20,941		$	20,487		$	20,150
As a Percent of Average Total Loans:
Net charge-offs (annualized)	0.17		%	0.19		%	0.17		%
Provision for loan losses (annualized)	0.21		%	0.19		%	0.16		%
As a Percent of Non-Performing Loans:
Allowance for loan losses	95.81		%	112.61		%	128.10		%

Table Seven

Non-Accrual, Past-Due and Restructured Loans

(In thousands)

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	As of September 30,				December 31,
	2015		2014		2014
Non-accrual loans	$	21,407	$	17,384	$	15,307
Accruing loans past due 90 days or more	449		809		423
Total non-performing loans	21,856		18,193		15,730
Chapter 7 troubled debt restructurings	$	20,900	$	20,860	$	21,179

Non-accrual loans increased $4.0 million from $17.4 million for the nine months ended September 30, 2014 to $21.4 million for the nine months ended September 30, 2015. This increase was primarily related to a single commercial customer engaged in the mining industry (per the NAICS) which filed for bankruptcy and for which the Company recorded a charge-off as previously discussed. The average recorded investment in impaired loans during the nine months ended September 30, 2015 and 2014 was $8.5 million and $9.9 million, respectively.  The Company recognized less than $0.1 million of interest income received in cash on non-accrual and impaired loans for both the nine months ended September 30,2015 and September 30, 2014.  Approximately $0.6 million and $0.3 million of interest income would have been recognized during the nine months ended September 30, 2015 and September 30, 2014, 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, 2015.  

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 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.

The Company's troubled debt restructurings ("TDRs") related to its borrowers who had filed for Chapter 7 bankruptcy protection make up 91% of the Company's total TDRs as of September 30, 2015. The average age of these TDRs was 11.2 years; the average current balance as a percentage of the original balance was 67.6%; and the average loan-to-value ratio was 63.3% as of September 30, 2015. Of the total 498 Chapter 7 related TDRs, 35 had an estimated loss exposure based on the current balance and appraised value at September 30, 2015.

Table Eight

Impaired Loans

(In thousands)

	As of September 30,				As of December 31,
	2015		2014		2014
Impaired loans with a valuation allowance	$	1,352	$	1,397	$	1,392
Impaired loans with no valuation allowance	6,043		5,466		5,377
Total impaired loans	$	7,395	$	6,863	$	6,769
Allowance for loan losses allocated to impaired loans	$	274	$	247	$	252

Table Nine

Allocation of the Allowance for Loan Losses

(In thousands)

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	As of September 30,				As of December 31,
	2015		2014		2014
Commercial and industrial	$	2,781	$	1,593	$	1,582
Commercial real estate	8,490		9,606		8,921
Residential real estate	7,261		6,959		7,208
Home equity	1,508		1,491		1,495
Consumer	96		88		85
DDA overdrafts	805		750		859
Allowance for Loan Losses	$	20,941	$	20,487	$	20,150

Non-Interest Income and Non-Interest Expense

Nine months ended September 30, 2015 vs. 2014

(In millions)

	Nine months ended September 30,
	2015		2014		$ Change			% Change
Gains on sale of investment securities	$	2.1	$	1.0	$	1.1		110.0	%
Non-interest income, excluding gains on sale of investment securities	51.0		43.1		7.9			18.3	%
Non-interest expense	71.8		72.0		(0.2		)	(0.3	)%

Non-Interest Income: During the first nine months of 2015 the Company realized investment gains of $2.1 million from the call of trust preferred securities which represented a partial recovery of impairment charges previously recognized. Effective January 1, 2015, the Company sold its insurance operations, CityInsurance, which resulted in a pre-tax gain of $11.1 million. Exclusive of this gain and the investment security gains, non-interest income declined from $43.1 million for the first nine months of 2014 to $39.9 million for the first nine months of 2015. The primary reason for this decline was the sale of CityInsurance which had insurance commission revenues of $4.7 million in the first nine months of 2014. In addition, service charges decreased $0.4 million (2.1%), from the first nine months of 2014 to $19.4 million in the first nine months of 2015. These decreases were partially offset by increases in bankcard revenues of $0.7 million (5.8%), other income of $0.8 million (50.1%), and trust and investment management fee income of $0.3 million (10.0%).

Non-Interest Expense:Non-interest expenses decreased $0.2 million, from $72.0 million in the first nine months of 2014 to $71.8 million in the first nine months of 2015. This drop was largely due to a decline in salaries and employee benefit expense of $2.7 million, or 6.9%, to $36.6 million, that was primarily attributable to a reduction in the Company’s salary expense as a result of the sale of CityInsurance. This decrease was partially offset by an increase in other expenses of $1.9 million to $9.9 million and an increase in repossessed asset losses of $0.5 million to $1.0 million. The increase in other expenses was primarily related to a loss the Company recognized related to a partnership investment in Mountaineer Capital LP. In 2000, the Company’s former management team committed $2.8 million to an investment in Mountaineer Capital LP that to date has returned $0.6 million. The Company has taken various write-downs totaling $0.8 million related to this investment. Based upon recently obtained information from the partnership, the Company has concluded that it will not receive any significant additional value from its investment in Mountaineer Capital LP and has written down the remainder of its basis in this investment of $1.4 million. During the first nine months of 2014, the Company’s non-income based taxes decreased due to the recognition of a previously unrecognized tax position due to the close of the statute of limitations for a previous tax year and was discrete to the first quarter of 2014.

Income Tax Expense:The Company’s effective income tax rate for the nine months ended September 30, 2015 was 35.8% compared to 31.4% for the year ended December 31, 2014, and 32.3% for the nine months ended September 30, 2014.  As noted previously, the Company sold CityInsurance in the first quarter of 2015. As a result of differences between the book and tax basis of the assets that were sold, the Company’s income tax expense increased by $1.1 million. During the first nine months of 2014, the Company reduced income tax expense due to the recognition of previously unrecognized tax position resulting from the close of the statute of limitations for a previous tax year. Exclusive of the sale of CityInsurance in the first nine months of 2015 and the discrete item recognized in the first nine months of 2014, the Company’s tax rate from operations was 33.2% and 33.6%, for the year to date periods ended September 30, 2015 and September 30, 2014, respectively.

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Three months ended September 30, 2015 vs. 2014

(In millions)

	Three months ended September 30,
	2015		2014		$ Change			% Change
Gains on sale of investment securities	$	—	$	0.1	$	(0.1	)	(100.0	)%
Non-interest income, excluding gains on sale of investment securities	13.7		14.5		(0.8		)	(5.5	)%
Non-interest expense	25.4		24.3		1.1			4.5	%

Non-Interest Income:The Company did not recognize any investment gains during the third quarter of 2015. Excluding investment security gains recognized in the third quarter of 2014, non-interest income declined from $14.5 million for the three months ended September 30, 2014 to $13.7 million for the three months ended September 30, 2015. The primary reason for this decline was the sale of CityInsurance which had insurance commission revenues of $1.4 million in the three months ended September 30, 2014. This decrease was partially offset by an increase in other income of $0.3 million primarily related to mortgage banking activities and bank owned life insurance income of $0.2 million due to death benefit proceeds.

Non-Interest Expense:Non-interest expenses increased $1.1 million, from $24.3 million in the three months ended September 30, 2014 to $25.4 million in the three months ended September 30, 2015. This increase was primarily related to an increase in other expenses as the Company recognized a loss related to a partnership investment in Mountaineer Capital LP. In 2000, the Company’s former management team committed $2.8 million to an investment in Mountaineer Capital LP that to date has returned $0.6 million. The Company has taken various write-downs totaling $0.8 million related to this investment. Based upon recently obtained information from the partnership, the Company has concluded that it will not receive any significant additional value from its investment in Mountaineer Capital LP and has written down the remainder of its basis in this investment of $1.4 million. In addition, the Company realized losses of $0.5 million during the third quarter of 2015 on the sale of repossessed assets and $0.2 million in merger related expenses in connection with the Company’s forthcoming acquisition of three branches in Lexington, Kentucky from American Founders Bank, Inc., a wholly-owned subsidiary of Financial Holdings, Inc. These increases were partially offset by a decrease in salaries and employee benefits of $1.0 million, or 7.3%, to $12.2 million, which was primarily attributable to a reduction in the Company’s salary expense as a result of the sale of CityInsurance.

Income Tax Expense:The Company’s effective income tax rate for the three months ended September 30, 2015 was 32.6% compared to 31.4% for the year ended December 31, 2014, and 33.6% for the three months ended September 30, 2014.  The effective rate is based upon the Company's expected tax rate for the year ending December 31, 2015.

Risk Management

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

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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.

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.

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, 2015
+400	4.25	%	+3.9	%	(3.8	)%
+300	3.25		+5.8		+2.2
+200	2.25		+5.5		+5.5
+100	1.25		+2.8		+3.6
December 31, 2014
+400	4.25	%	+2.8	%	(4.1	)%
+300	3.25		+4.9		+1.8
+200	2.25		+5.0		+4.9
+100	1.25		+1.9		+2.9

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 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 2015 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 City Holding Company ("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 ("City National"). Dividends paid by City National 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 in the current year plus retained net profits for the preceding two years must be approved by regulatory authorities. At September 30, 2015, City National could pay dividends up to $52.9 million plus net profits for the remainder of 2015, 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 and (2) remit interest payments on the Company’s junior subordinated debentures.

Over the next 12 months, the Parent Company has an obligation to remit interest payments approximating $0.6 million on the debentures held by City Holding Capital Trust III. 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. The Parent Company anticipates continuing the payment of dividends on its common stock, which are expected to approximate $25.7 million on an annualized basis over the next 12 months based on common shareholders outstanding at September 30, 2015.  In addition to these anticipated cash needs, the Parent Company has operating expenses and other contractual obligations, which are estimated to require $1.7 million of additional cash over the next 12 months. As of September 30, 2015, the Parent Company reported a cash balance of

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$11.4 million and management believes that the Parent Company’s available cash balance, together with cash dividends from City National 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 2015 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 or the issuance of other debt, to fully repay the debentures at their maturity.

City National 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 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, 2015, City National’s assets are significantly funded by deposits and capital. Additionally, City National 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, 2015, City National has the capacity to borrow an additional $1.6 billion from the FHLB and other financial institutions under existing borrowing facilities. City National 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, although it has no current intention to do so, City National could liquidate its unpledged securities, if necessary, to provide an additional funding source.  City National 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 76.3% as of September 30, 2015 and deposit balances fund 81.8% 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 $391.9 million at September 30, 2015, and that greatly exceeded the Company’s non-deposit sources of borrowing which totaled $163.5 million.  Further, the Company’s deposit mix has a very high proportion of transaction and savings accounts that fund 53.7% of the Company’s total assets.

As illustrated in the Consolidated Statements of Cash Flows, the Company generated $44.3 million of cash from operating activities during the first nine months of 2015, primarily from interest income received on loans and investments, net of interest expense paid on deposits and borrowings.  The Company used $64.9 million of cash in investing activities during the first nine months of 2015 primarily to increase loans outstanding and for the purchase of available-for-sale securities, partially offset by the proceeds from maturities of available-for-sale securities and the sale of CityInsurance. The Company used $9.0 million of cash in financing activities during the first nine months of 2015, principally a result of cash dividends paid to the Company’s common stockholders of $18.9 million. This was partially offset by an increase of short-term borrowings of $12.1 million. In addtion, the Company received cash of $1.9 million as a result of the exercise of warrants during the first nine months of 2015.

On May 29, 2015, City National entered into a Branch Purchase and Assumption Agreement (the “Purchase Agreement”) with American Founders Bank, Inc. (“AFB”), a wholly-owned subsidiary of Financial Holdings, Inc., pursuant to which City National will purchase AFB’s three Lexington, Kentucky branch locations (the “Acquisition”). Under the terms of the Purchase Agreement, City National will acquire approximately $125 million in performing loans and will assume deposit liabilities of approximately $155 million. City National will pay AFB a deposit premium of 5.5% on non-time deposits, and 1.0% on premium loan balances acquired. The proposed acquisition is expected to be completed in the fourth quarter of 2015.

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Capital Resources

During the first nine months of 2015, Shareholders’ Equity increased $27.9 million, or 7.1%, from $390.9 million at December 31, 2014 to $418.8 million at September 30, 2015.  This increase was primarily due to net income of $40.6 million, partially offset by dividends declared of $19.2 million.

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

Regulatory guidelines require the Company to maintain a minimum common equity tier I ("CET1") capital ratio of 4.5% and a 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 6.0%. Similarly, City National is also required to maintain minimum capital levels as set forth by various regulatory agencies. Under capital adequacy guidelines, City National is required to maintain minimum CET I, total capital, Tier I capital, and leverage ratios of 4.5%, 8.0%, 6.0%, and 4.0%, respectively. To be classified as “well capitalized,” City National must maintain CET I, total capital, Tier I capital, and leverage ratios of 6.5%, 10.0%, 8.0%, and 5.0%, respectively.

When fully phased in on January 1, 2019, the Basel III Capital Rules will require City Holding and City National to maintain (i) a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a 2.5% "capital conservation buffer" (which is added to the 4.5% CET1 ratio as that buffer is phased in, effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets (as compared to a current minimum leverage ratio of 3.0% for banking organizations that either have the highest supervisory rating or have implemented the appropriate federal regulatory authority's risk-adjusted measure for market risk).

The implementation of the capital conservation buffer will begin on January 1, 2016 at the 0.625% level and be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a “countercyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to City Holding Company or City National Bank.

The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.

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

(in thousands):

September 30, 2015	Actual				Minimum Required - Basel III Phase-In Schedule				Minimum Required - Basel III Fully Phased-In (*)				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
CET I Capital
City Holding Company	$	353,224	14.4	%	$	110,214	4.5	%	$	171,443	7.0	%	$	159,197	6.5	%
City National Bank	307,528		12.6		109,507		4.5		170,344		7.0		158,177		6.5
Tier I Capital
City Holding Company	369,224		15.1		146,951		6.0		208,181		8.5		195,935		8.0
City National Bank	331,468		13.6		146,009		6.0		206,847		8.5		194,679		8.0
Total Capital
City Holding Company	390,612		16.0		195,935		8.0		257,165		10.5		244,919		10.0
City National Bank	352,419		14.5		194,679		8.0		255,516		10.5		243,349		10.0
Tier I Leverage Ratio
City Holding Company	369,224		10.7		137,951		4.0		137,951		4.0		172,439		5.0
City National Bank	331,468		9.7		137,336		4.0		137,336		4.0		171,669		5.0
(*) Represents the minimum required capital levels as of January 1, 2019 when Basel III Capital Rules have been fully phased in.

December 31, 2014:	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio
Tier I Capital
City Holding Company	$	333,163	13.4	%	$	99,723	4.0	%	$	149,585	6.0	%
City National Bank	294,870		11.9		99,037		4.0		148,556		6.0
Total Capital
City Holding Company	353,873		14.2		199,446		8.0		249,308		10.0
City National Bank	315,095		12.7		198,074		8.0		247,593		10.0
Tier I Leverage Ratio
City Holding Company	333,163		9.9		134,721		4.0		168,402		5.0
City National Bank	294,870		8.8		133,991		4.0		167,489		5.0

As of September 30, 2015, management believes that City Holding Company, and its banking subsidiary, City National, were “well capitalized.”  City Holding is subject to regulatory capital requirements administered by the Federal Reserve, while City National 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 fails to meet the minimum capital requirements, as shown above.  As of September 30, 2015, management believes that City Holding and City National meet all capital adequacy requirements.

61

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

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, 2015 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, 2014.

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

62

		(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 5, 2015

63

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, 2015 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 5, 2015

/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, 2015 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 5, 2015

/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, 2015 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 5, 2015

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, 2015 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 5, 2015

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

Investments (Additional Information Of Trust Preferred Securities With Credit Rating Below Investment Grade) (Details)		9 Months Ended		12 Months Ended
		Sep. 30, 2015 USD ($) issuer	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Schedule of Investments [Line Items]
Available-for-sale Securities, Amortized Cost		$ 297,909,000		$ 251,954,000
Securities held-to-maturity, Amortized Cost		81,095,000		90,786,000
Investment securities available for sale, at fair value		300,865,000		254,043,000
Securities held-to-maturity, Estimated Fair Value		$ 84,005,000		$ 94,191,000
Model assumption, recovery rate		0.00%		0.00%
Credit-related net investment impairment losses		$ 0	$ 0	$ 0
Marketable Equity Securities [Member] | P1 [Member]
Schedule of Investments [Line Items]
Type		Pooled
Class		Mezz
Original Cost		$ 632,000
Available-for-sale Securities, Amortized Cost		0
Investment securities available for sale, at fair value		0
Difference (1)	[1]	$ 0
Lowest Credit Rating		Caa1
Number of issuers currently performing | issuer		5
Actual deferrals/defaults (as a % of original dollar)		14.50%
Expected deferrals/defaults (as a % of remaining performing collateral)	[2]	0.00%
Excess Subordination as a Percentage of Current Performing Collateral (3)	[3]	0.00%
Marketable Equity Securities [Member] | P2 [Member]
Schedule of Investments [Line Items]
Type		Pooled
Class		Mezz
Original Cost		$ 1,513,000
Available-for-sale Securities, Amortized Cost		0
Investment securities available for sale, at fair value		0
Difference (1)	[1]	$ 0
Lowest Credit Rating		Ca
Number of issuers currently performing | issuer		3
Actual deferrals/defaults (as a % of original dollar)		18.30%
Expected deferrals/defaults (as a % of remaining performing collateral)	[2]	0.00%
Excess Subordination as a Percentage of Current Performing Collateral (3)	[3]	0.00%
Marketable Equity Securities [Member] | P3 [Member]
Schedule of Investments [Line Items]
Type		Pooled
Class		Mezz
Original Cost		$ 2,962,000
Available-for-sale Securities, Amortized Cost		1,419,000
Investment securities available for sale, at fair value		1,007,000
Difference (1)	[1]	$ (412,000)
Lowest Credit Rating		Caa3
Number of issuers currently performing | issuer		19
Actual deferrals/defaults (as a % of original dollar)		20.00%
Expected deferrals/defaults (as a % of remaining performing collateral)	[2]	7.10%
Excess Subordination as a Percentage of Current Performing Collateral (3)	[3]	0.00%
Marketable Equity Securities [Member] | P5 [Member]
Schedule of Investments [Line Items]
Type		Pooled
Class		Mezz
Original Cost		$ 6,032,000
Available-for-sale Securities, Amortized Cost		391,000
Investment securities available for sale, at fair value		838,000
Difference (1)	[1]	$ 447,000
Lowest Credit Rating		C
Number of issuers currently performing | issuer		7
Actual deferrals/defaults (as a % of original dollar)		13.50%
Expected deferrals/defaults (as a % of remaining performing collateral)	[2]	19.00%
Excess Subordination as a Percentage of Current Performing Collateral (3)	[3]	33.60%
Marketable Equity Securities [Member] | S5 [Member]
Schedule of Investments [Line Items]
Type		Single
Original Cost		$ 261,000
Available-for-sale Securities, Amortized Cost		235,000
Investment securities available for sale, at fair value		247,000
Difference (1)	[1]	$ 12,000
Lowest Credit Rating		NR
Number of issuers currently performing | issuer		1
Actual deferrals/defaults (as a % of original dollar)		0.00%
Expected deferrals/defaults (as a % of remaining performing collateral)		0.00%
Held-to-maturity Securities [Member] | P6 [Member]
Schedule of Investments [Line Items]
Type		Pooled
Class		Mezz
Original Cost		$ 1,223,000
Securities held-to-maturity, Amortized Cost		0
Securities held-to-maturity, Estimated Fair Value		0
Difference (1)	[1]	$ 0
Lowest Credit Rating		Caa1
Number of issuers currently performing | issuer		5
Actual deferrals/defaults (as a % of original dollar)		14.50%
Expected deferrals/defaults (as a % of remaining performing collateral)	[2]	0.00%
Excess Subordination as a Percentage of Current Performing Collateral (3)	[3]	0.00%
Held-to-maturity Securities [Member] | P7 [Member]
Schedule of Investments [Line Items]
Type		Pooled
Class		Mezz
Original Cost		$ 2,009,000
Securities held-to-maturity, Amortized Cost		0
Securities held-to-maturity, Estimated Fair Value		0
Difference (1)	[1]	$ 0
Lowest Credit Rating		Ca
Number of issuers currently performing | issuer		3
Actual deferrals/defaults (as a % of original dollar)		18.30%
Expected deferrals/defaults (as a % of remaining performing collateral)	[2]	0.00%
Excess Subordination as a Percentage of Current Performing Collateral (3)	[3]	0.00%
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		4,000,000
Securities held-to-maturity, Estimated Fair Value		4,000,000
Difference (1)	[1]	$ 0
Lowest Credit Rating		NR
Number of issuers currently performing | issuer		1
Actual deferrals/defaults (as a % of original dollar)		0.00%
Expected deferrals/defaults (as a % of remaining performing collateral)		0.00%

[1] The differences noted consist of unrealized gains (losses) recorded at September 30, 2015 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.

XML

Long-Term Debt (Components Of Long-Term Debt) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Long-term Debt, Unclassified [Abstract]
Long-term debt	$ 16,495	$ 16,495
Junior subordinated debentures, interest rate	3.84%	3.74%
Junior subordinated debentures, due date	Dec. 31, 2038	Dec. 31, 2038
Percent over three month LIBOR Rate	3.50%	3.50%
Junior subordinated debenture, Threshold in days	90 days	90 days

XML

Allowance For Loan Losses (Schedule Of Credit Quality Indicators) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,696,438	$ 2,652,066
Commercial, Industrial, And Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,153,598	1,169,379
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	124,495	140,548
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,029,103	1,028,831
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,083,773	1,099,397
Pass [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	111,706	128,812
Pass [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	972,067	970,585
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	26,113	15,864
Special Mention [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	4,814	761
Special Mention [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	21,299	15,103
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	43,671	53,266
Substandard [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	7,934	10,575
Substandard [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	35,737	42,691
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	41	852
Doubtful [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	41	400
Doubtful [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 0	$ 452

XML

Fair Value Measurements (Narrative) (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Inputs, Prepayment Rate	1.00%		1.00%
Annual prepayments maturity	100.00%		100.00%
Additional basis points	1.50%		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

Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Loss on Fair Value Hedge Ineffectiveness	$ 0.1	$ 0.1

XML

Allowance For Loan Losses (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Receivables [Abstract]
Past Due Threshold in Days	30 days
Residential and Home Equity Loan Charge Off Threshold in Days	120 days
Commercial Loan Charge Off Threshold in Days	120 days
Consumer Loan Charge Off Threshold in Days	180 days
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	$ 0.6	$ 0.3

XML

Background and Basis Of Presentation Business Combination (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Gross loans	$ 2,696,438	$ 2,652,066
Deposits	$ 2,865,502	$ 2,872,787
Business Combination, Premium on Non-Time Deposits	5.50%
Business Combination, Premium on Loans	1.00%
American Founders Bank [Member]
Business Acquisition [Line Items]
Gross loans	$ 125,000
Deposits	$ 155,000

XML

Fair Value Measurements (Schedule Of Level 2 Financial Assets And Liabilities Measured On A Recurring Basis) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Fair Value Measurement On Nonrecurring Basis Asset And Liabilities Value [Roll Forward]
Beginning balance	$ 6,517	$ 11,714
Loans classified as impaired during the period	799	0
Specific valuation allowance allocations	0	0
Fair Value	799	0
(Additional) reduction in specific valuation allowance allocations	(22)	633
Paydowns, payoffs, other activity	(172)	(5,730)
Ending balance	$ 7,122	$ 6,617

XML

Derivative Instruments (Change In Fair Value Of Derivative Instruments) (Details) - Other Income [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Not Designated as Hedging Instrument [Member] | Derivative Assets [Member]
Derivatives, Fair Value [Line Items]
Change in Fair Value	$ 6,922	$ (373)	$ 4,494	$ 4,233
Not Designated as Hedging Instrument [Member] | Derivative Liabilities [Member]
Derivatives, Fair Value [Line Items]
Change in Fair Value	(7,028)	373	(4,613)	(4,233)
Designated as Hedging Instrument [Member] | Derivative Assets [Member]
Derivatives, Fair Value [Line Items]
Change in Fair Value	101	0	89	0
Designated as Hedging Instrument [Member] | Derivative Liabilities [Member]
Derivatives, Fair Value [Line Items]
Change in Fair Value	$ 5	$ 0	$ 6	$ 0

XML

Fair Value Measurements (Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring And Nonrecurring Basis) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Obligations Of States And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	$ 42,702	$ 42,096
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	42,702	42,096
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	5	1,827
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	5	1,827
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	227,947	187,328
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	227,947	187,328
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	1,279	1,704
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	1,279	1,704
Private Label [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Trust Preferred Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	6,957	9,036
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	4,866	7,165
Trust Preferred Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	2,091	1,871
Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	17,343	7,317
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	17,343	7,317
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	3,103	3,213
Marketable Equity Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	3,103	3,213
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
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	1,529	1,522
Money Market Funds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	1,529	1,522
Money Market Funds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Recurring	0	0
Money Market 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	14,099	10,253
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	14,099	10,253
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	7,122	6,517
Provision For Loan Losses on Impaired Loans During Period	0	(153)
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	7,122	6,517
Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Assets, Nonrecurring	6,026	8,179
Write-downs included in other non-interest expense	(782)	(464)
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	6,026	8,179
Derivative Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Liabilities, Recurring	14,369	10,277
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	14,369	10,277
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

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Of Derivative Instruments

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

	September 30, 2015				December 31, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
Non-hedging interest rate derivatives:
Other Assets	$	266,284	$	14,099	$	179,958	$	10,253
Other Liabilities	274,284		14,250		179,958		10,253
Derivatives designated as hedges of fair value:
Other Liabilities	5,163		119		5,475		24

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,
	2015			2014			2015			2014
Change in Fair Value Non-Hedging interest rate derivatives:
Other income - derivative asset	$	6,922		$	(373	)	$	4,494		$	4,233
Other income - derivative liability	(7,028		)	373			(4,613		)	(4,233		)
Change in Fair Value Hedging Interest Rate Derivatives:
Hedged item - derivative asset	101			—			89			—
Other income - derivative liability	5			—			6			—

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, 2015 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) *

Non-hedging derivative assets:

Interest rate swap agreements

$

14,099

$

—

$

14,099

$

—

$

14,099

$

14,099

$

—

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) *

Non-hedging derivative liabilities:

Interest rate swap agreements

$

14,250

$

—

$

14,250

$

—

$

15,697

$

15,697

$

—

Hedging derivative liabilities:

Interest rate swap agreements

$

119

$

—

$

119

$

131

$

131

$

—

*

For instances where the fair value of financial collateral meets or exceeds the amounts presented in the Statement of Financial Position, a value of zero is displayed to represent full collateralization.

XML

Allowance For Loan Losses (Schedule Of Aging Analysis Of Accruing And Non-Accruing Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 2,664,431	$ 2,626,094
Financing Receivable, Acquired with Deteriorated Credit Quality, Recorded Investment, Past Due	1,493	1,270
Non-accrual	21,407	15,306
Gross loans	2,696,438	2,652,066
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,349,551	1,286,306
Non-accrual	3,012	2,394
Gross loans	1,358,083	1,294,576
Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	144,032	144,788
Non-accrual	159	68
Gross loans	144,748	145,604
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	117,710	138,980
Financing Receivable, Acquired with Deteriorated Credit Quality, Recorded Investment, Past Due	0	0
Non-accrual	6,430	1,115
Gross loans	124,495	140,548
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,013,676	1,014,251
Financing Receivable, Acquired with Deteriorated Credit Quality, Recorded Investment, Past Due	1,493	1,270
Non-accrual	11,806	11,729
Gross loans	1,029,103	1,028,831
Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	36,534	39,286
Non-accrual	0	0
Gross loans	36,751	39,705
Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,928	2,483
Non-accrual	0	0
Gross loans	3,258	2,802
Originated Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,451,479	2,376,849
Non-accrual	16,064	9,735
Gross loans	2,474,507	2,393,798
Originated Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,274,236	1,200,177
Non-accrual	2,186	2,259
Gross loans	1,281,234	1,207,598
Originated Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	142,805	142,624
Non-accrual	159	68
Gross loans	143,511	143,438
Originated Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	110,475	128,857
Non-accrual	6,065	78
Gross loans	116,545	129,245
Originated Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	888,458	869,530
Non-accrual	7,654	7,330
Gross loans	897,294	877,339
Originated Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	32,577	33,178
Non-accrual	0	0
Gross loans	32,665	33,376
Originated Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,928	2,483
Non-accrual	0	0
Gross loans	3,258	2,802
Acquired Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	212,952	249,245
Financing Receivable, Acquired with Deteriorated Credit Quality, Recorded Investment, Past Due	1,493	1,270
Non-accrual	5,343	5,571
Gross loans	221,931	258,268
Acquired Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	75,315	86,129
Non-accrual	826	135
Gross loans	76,849	86,978
Acquired Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,227	2,164
Non-accrual	0	0
Gross loans	1,237	2,166
Acquired Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	7,235	10,123
Financing Receivable, Acquired with Deteriorated Credit Quality, Recorded Investment, Past Due	0	0
Non-accrual	365	1,037
Gross loans	7,950	11,303
Acquired Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	125,218	144,721
Financing Receivable, Acquired with Deteriorated Credit Quality, Recorded Investment, Past Due	1,493	1,270
Non-accrual	4,152	4,399
Gross loans	131,809	151,492
Acquired Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,957	6,108
Non-accrual	0	0
Gross loans	4,086	6,329
Acquired Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	0	0
Non-accrual	0	0
Gross loans	0	0
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	7,524	7,734
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	4,764	4,949
Financing Receivables, 30 to 59 Days Past Due [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	474	563
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	336	243
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	1,418	1,371
Financing Receivables, 30 to 59 Days Past Due [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	202	291
Financing Receivables, 30 to 59 Days Past Due [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	330	317
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	5,814	5,811
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	4,218	4,235
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	464	561
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	100
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	717	479
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	85	119
Financing Receivables, 30 to 59 Days Past Due [Member] | Originated Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	330	317
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	1,710	1,923
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	546	714
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	10	2
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	336	143
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	701	892
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	117	172
Financing Receivables, 30 to 59 Days Past Due [Member] | Acquired Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	1,134	1,239
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	548	758
Financing Receivables, 60 to 89 Days Past Due [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	67	155
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	19	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	485	210
Financing Receivables, 60 to 89 Days Past Due [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	15	114
Financing Receivables, 60 to 89 Days Past Due [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	2
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	701	993
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	386	758
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	67	155
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	5	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	240	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	3	78
Financing Receivables, 60 to 89 Days Past Due [Member] | Originated Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	2
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	433	246
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	162	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	14	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	245	210
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	12	36
Financing Receivables, 60 to 89 Days Past Due [Member] | Acquired Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	449	423
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	208	169
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	16	30
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	210
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	225	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	14
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	449	410
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	208	169
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	16	30
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	210
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	225	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	1
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Originated Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	13
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member] | Home equity - junior lien [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member] | Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member] | Consumer Loan [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	0	13
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Acquired Loans [Member] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Past Due	$ 0	$ 0

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Loans (Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Construction loans	$ 14.8	$ 23.0
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Construction loans	$ 12.0	$ 28.7

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Fair Value Measurements (Schedule Of Estimates Of Fair Value Of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets:
Securities available-for-sale	$ 300,865	$ 254,043
Securities held-to-maturity	81,095	90,786
Other securities	9,926	9,857
Accrued interest receivable	7,690	6,826
Liabilities:
Deposits	2,865,502	2,872,787
Carrying Amount [Member]
Assets:
Cash and cash equivalents	118,708	148,228
Securities available-for-sale	300,865	254,043
Securities held-to-maturity	81,095	90,786
Other securities	9,926	9,857
Net loans	2,675,497	2,631,916
Accrued interest receivable	7,690	6,826
Derivative assets	14,099	10,253
Liabilities:
Deposits	2,865,502	2,872,787
Short-term debt	147,036	134,931
Long-term debt	16,495	16,495
Derivative liabilities	14,369	10,277
Fair Value [Member]
Assets:
Cash and cash equivalents	118,708	148,228
Securities available-for-sale	300,865	254,043
Securities held-to-maturity	84,005	94,191
Other securities	9,926	9,857
Net loans	2,685,390	2,638,911
Accrued interest receivable	7,690	6,826
Derivative assets	14,099	10,253
Liabilities:
Deposits	2,873,255	2,879,126
Short-term debt	147,035	134,934
Long-term debt	16,464	16,464
Derivative liabilities	14,369	10,277
Level 1 [Member]
Assets:
Cash and cash equivalents	118,708	148,228
Securities available-for-sale	4,632	4,735
Securities held-to-maturity	0	0
Other securities	0	0
Net loans	0	0
Accrued interest receivable	7,690	6,826
Derivative assets	0	0
Liabilities:
Deposits	1,883,153	1,846,124
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	294,142	247,437
Securities held-to-maturity	84,005	94,191
Other securities	9,926	9,857
Net loans	0	0
Accrued interest receivable	0	0
Derivative assets	14,099	10,253
Liabilities:
Deposits	990,102	1,033,002
Short-term debt	147,035	134,934
Long-term debt	16,464	16,464
Derivative liabilities	14,369	10,277
Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Securities available-for-sale	2,091	1,871
Securities held-to-maturity	0	0
Other securities	0	0
Net loans	2,685,390	2,638,911
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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Investments (Gross Unrealized Losses And Fair Value Of Investments) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	$ 21,472	$ 2,836
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	132	7
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	44,750	70,552
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	2,685	3,826
Securities available-for-sale, Total, Estimated Fair Value	66,222	73,388
Securities available-for-sale, Total, Unrealized Loss	2,817	3,833
Obligations Of States And Political Subdivisions [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	2,670	1,559
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	13	3
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	125	125
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	5	5
Securities available-for-sale, Total, Estimated Fair Value	2,795	1,684
Securities available-for-sale, Total, Unrealized Loss	18	8
U.S. Government Agencies Mortgage-backed Securities [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	16,782	0
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	102	0
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	35,607	60,122
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	1,019	1,973
Securities available-for-sale, Total, Estimated Fair Value	52,389	60,122
Securities available-for-sale, Total, Unrealized Loss	1,121	1,973
Private Label [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	1,005	1,277
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	1	4
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	0	0
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	0	0
Securities available-for-sale, Total, Estimated Fair Value	1,005	1,277
Securities available-for-sale, Total, Unrealized Loss	1	4
Corporate Securities [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	0	0
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	0	0
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	4,161	4,049
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	597	693
Securities available-for-sale, Total, Estimated Fair Value	4,161	4,049
Securities available-for-sale, Total, Unrealized Loss	597	693
Money Market Funds [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	0	0
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	0	0
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	0	1,496
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	0	3
Securities available-for-sale, Total, Estimated Fair Value	0	1,496
Securities available-for-sale, Total, Unrealized Loss	0	3
Trust Preferred Securities [Member]
Schedule of Investments [Line Items]
Securities available-for-sale, Less Than Twelve Months, Estimated Fair Value	1,015	0
Securities available-for-sale, Less Than Twelve Months, Unrealized Loss	16	0
Securities available-for-sale, Twelve Months or Greater, Estimated Fair Value	4,857	4,760
Securities available-for-sale, Twelve Months or Greater, Unrealized Loss	1,064	1,152
Securities available-for-sale, Total, Estimated Fair Value	5,872	4,760
Securities available-for-sale, Total, Unrealized Loss	$ 1,080	$ 1,152

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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	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	$ 7,128	$ 8,079
With no related allowance recorded, Interest income recognized	3	4
With an allowance recorded, Average recorded investment	1,350	1,837
With an allowance recorded, Interest income recognized	0	30
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	443	453
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
Home equity - junior lien [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	296	297
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
Commercial And Industrial [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	1,807	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
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Average recorded investment	4,582	7,329
With no related allowance recorded, Interest income recognized	3	4
With an allowance recorded, Average recorded investment	1,350	1,837
With an allowance recorded, Interest income recognized	0	30
Consumer Loan [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
Demand Deposit Account 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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Accumulated Other Comprehensive Loss (Schedule of Changes In Each Component of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
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	$ (5,349)	$ (2,880)
Defined Benefit Pension Plans, Ending Balance	(5,349)	(2,880)
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	1,190	(2,110)
Unrealized Gains (Losses) on Securities Available-for-Sale Securities, Other comprehensive income before reclassifications	1,943	2,683
Unrealized Gains (Losses) on Securities Available-for-Sale, Amounts reclassified from other comprehensive loss	(1,344)	(614)
Unrealized Gain (Losses) on Securities Available-for-Sale Total	599	2,069
Unrealized Gains (Losses) on Securities Available-for-Sale, Ending Balance	1,789	(41)
Accumulated Other Comprehensive Income (Loss), Net of Income Tax [Roll Forward]
Total, Beginning Balance	(4,159)	(4,990)
Total, Other comprehensive income before reclassifications	1,943	2,683
Total, Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	(1,344)	(614)
Total, Accumulated other comprehensive loss	599	2,069
Total, Ending Balance	$ (3,560)	$ (2,921)

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Employee Benefit Plans (Summary Of Stock Option Activity) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options Outstanding, beginning balance (in shares)	167,554	173,601
Options, Granted (in shares)	12,961	13,953
Options, Exercised (in shares)	(71,750)	(19,000)
Options, Forfeited (in shares)	(4,000)	0
Options Outstanding, ending balance (in shares)	104,765	168,554
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted-Average Exercise Price, Outstanding, beginning balance (in dollars per share)	$ 36.74	$ 35.26
Weighted-Average Exercise Price, Granted (in dollars per share)	46.41	44.43
Weighted-Average Exercise Price, Exercised (in dollars per share)	37.01	29.13
Weighted-Average Exercise Price, Forfeited (in dollars per share)	31.66	0.00
Weighted-Average Exercise Price, Outstanding, ending balance (in dollars per share)	$ 37.95	$ 36.71

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Allowance For Loan Losses (Schedule Of Allowance For Loan Loss By Portfolio Segment) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	$ 20,150	$ 20,575
Allowance for loan loss, Charge-offs	(4,383)	(4,854)
Allowance for loan loss, Recoveries	999	1,096
Allowance for loan loss, Provision for acquired loans	521	135
Allowance for loan loss, Provision	3,654	3,535
Allowance for loan loss, Ending balance	20,941	20,487
Allowance for loan loss, Evaluated for impairment, Individually	274		$ 252
Allowance for loan loss, Evaluated for impairment, Collectively	19,870		19,019
Allowance for loan loss, Total	20,941		20,150
Loans, Evaluated for impairment, Individually	7,395		6,769
Loans, Evaluated for impairment, Collectively	2,673,782		2,627,968
Gross loans	2,696,438		2,652,066
Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	1,582	1,139
Allowance for loan loss, Charge-offs	(1,903)	(330)
Allowance for loan loss, Recoveries	72	85
Allowance for loan loss, Provision for acquired loans	521	135
Allowance for loan loss, Provision	2,509	564
Allowance for loan loss, Ending balance	2,781	1,593
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	2,777		1,540
Allowance for loan loss, Total	2,781		1,582
Loans, Evaluated for impairment, Individually	799		0
Loans, Evaluated for impairment, Collectively	123,359		139,862
Gross loans	124,495		140,548
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	8,921	10,775
Allowance for loan loss, Charge-offs	(277)	(1,665)
Allowance for loan loss, Recoveries	49	94
Allowance for loan loss, Provision for acquired loans	0	0
Allowance for loan loss, Provision	(203)	402
Allowance for loan loss, Ending balance	8,490	9,606
Allowance for loan loss, Evaluated for impairment, Individually	274		252
Allowance for loan loss, Evaluated for impairment, Collectively	7,508		7,898
Allowance for loan loss, Total	8,490		8,921
Loans, Evaluated for impairment, Individually	5,861		6,023
Loans, Evaluated for impairment, Collectively	1,010,611		1,009,241
Gross loans	1,029,103		1,028,831
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	7,208	6,057
Allowance for loan loss, Charge-offs	(758)	(1,348)
Allowance for loan loss, Recoveries	130	91
Allowance for loan loss, Provision for acquired loans	0	0
Allowance for loan loss, Provision	681	2,159
Allowance for loan loss, Ending balance	7,261	6,959
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	7,176		7,208
Allowance for loan loss, Total	7,261		7,208
Loans, Evaluated for impairment, Individually	439		449
Loans, Evaluated for impairment, Collectively	1,357,271		1,293,748
Gross loans	1,358,083		1,294,576
Home equity - junior liens (including lines of credit) [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	1,495	1,672
Allowance for loan loss, Charge-offs	(236)	(288)
Allowance for loan loss, Recoveries	0	0
Allowance for loan loss, Provision for acquired loans	0	0
Allowance for loan loss, Provision	249	107
Allowance for loan loss, Ending balance	1,508	1,491
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	1,508		1,429
Allowance for loan loss, Total	1,508		1,495
Loans, Evaluated for impairment, Individually	296		297
Loans, Evaluated for impairment, Collectively	142,676		142,743
Gross loans	144,748		145,604
Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	85	77
Allowance for loan loss, Charge-offs	(171)	(171)
Allowance for loan loss, Recoveries	154	172
Allowance for loan loss, Provision for acquired loans	0	0
Allowance for loan loss, Provision	28	10
Allowance for loan loss, Ending balance	96	88
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	96		85
Allowance for loan loss, Total	96		85
Loans, Evaluated for impairment, Individually	0		0
Loans, Evaluated for impairment, Collectively	36,607		39,572
Gross loans	36,751		39,705
Demand Deposit Account Overdrafts [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Allowance for loan loss, Beginning balance	859	855
Allowance for loan loss, Charge-offs	(1,038)	(1,052)
Allowance for loan loss, Recoveries	594	654
Allowance for loan loss, Provision for acquired loans	0	0
Allowance for loan loss, Provision	390	293
Allowance for loan loss, Ending balance	805	$ 750
Allowance for loan loss, Evaluated for impairment, Individually	0		0
Allowance for loan loss, Evaluated for impairment, Collectively	805		859
Allowance for loan loss, Total	805		859
Loans, Evaluated for impairment, Individually	0		0
Loans, Evaluated for impairment, Collectively	3,258		2,802
Gross loans	3,258		2,802
Receivables Acquired with Deteriorated Credit Quality [Domain]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	797		879
Loans, Acquired with Deteriorated Credit Quality	15,261		17,329
Receivables Acquired with Deteriorated Credit Quality [Domain] | Commercial And Industrial [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	4		42
Loans, Acquired with Deteriorated Credit Quality	337		686
Receivables Acquired with Deteriorated Credit Quality [Domain] | Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	708		771
Loans, Acquired with Deteriorated Credit Quality	12,631		13,567
Receivables Acquired with Deteriorated Credit Quality [Domain] | Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	85		0
Loans, Acquired with Deteriorated Credit Quality	373		379
Receivables Acquired with Deteriorated Credit Quality [Domain] | Home equity - junior liens (including lines of credit) [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	0		66
Loans, Acquired with Deteriorated Credit Quality	1,776		2,564
Receivables Acquired with Deteriorated Credit Quality [Domain] | Consumer Loan [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	0		0
Loans, Acquired with Deteriorated Credit Quality	144		133
Receivables Acquired with Deteriorated Credit Quality [Domain] | Demand Deposit Account Overdrafts [Member]
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Allowance for Loan Losses	0		0
Loans, Acquired with Deteriorated Credit Quality	$ 0		$ 0

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Background and Basis Of Presentation

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis Of Presentation

Background and Basis of Presentation

City Holding Company is a financial holding company headquartered in Charleston, West Virginia and conducts its principal activities through its wholly-owned subsidiary, City National Bank of West Virginia ("City National"). City National operates a network of 82 branch offices primarily along the I-64 corridor from Grayson, Kentucky through Lexington, Virginia; and along the I-81 corridor through the Shenandoah Valley from Staunton, Virginia to Martinsburg, West Virginia. City National's branch network includes 57 offices in West Virginia, 14 offices in Virginia, 8 offices in Kentucky and 3 offices in Ohio. City National provides credit, deposit, and investment advisory services to a broad geographical area that includes many rural and small community markets in addition to larger cities such as Charleston (WV), Huntington (WV), Winchester (VA), Staunton (VA), Virginia Beach (VA), Ashland (KY) and Martinsburg (WV). In addition to its branch network, the bank's delivery channels include ATMs, mobile banking, on-line banking, debit cards, cash management tools and telephone banking systems.

On January 9th, 2015 the Company sold its insurance operations, CityInsurance, to The Hilb Group effective January 1, 2015. As a result of this sale, the Company recognized a one-time after tax gain of $5.8 million from this transaction in the first quarter of 2015.

On May 29, 2015, City National entered into a Branch Purchase and Assumption Agreement (the “Purchase Agreement”) with American Founders Bank, Inc. (“AFB”), a wholly-owned subsidiary of Financial Holdings, Inc., pursuant to which City National will purchase AFB’s three Lexington, Kentucky branch locations (the “Acquisition”). Under the terms of the Purchase Agreement, City National will acquire approximately $125 million in performing loans and will assume deposit liabilities of approximately $155 million. City National will pay AFB a deposit premium of 5.5% on non-time deposits, and 1.0% on premium loan balances acquired.

The accompanying consolidated financial statements, which are unaudited, include all of the accounts of the City Holding 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 the nine months endedSeptember 30, 2015 are not necessarily indicative of the results of operations that can be expected for the year ending December 31, 2015. 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, 2014 has been derived from audited financial statements included in the Company’s 2014 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 2014 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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Employee Benefit Plans (Stock Options Outstanding And Exercisable) (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares) | shares	104,765
Aggregate Intrinsic Value (in thousands) | $	$ 1,188
No. of Options Currently Exercisable (in shares) | shares	67,000
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands) | $	$ 816
Ranges Of Exercise Prices Twenty Five Point Zero To Twenty Nine Point Ninety Nine [Member] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares) | shares	1,250
Weighted-Average Exercise Price (in dollars per share)	$ 28.15
Weighted-Average Remaining Contractual Life (Years)	3 years 6 months
Aggregate Intrinsic Value (in thousands) | $	$ 26
No. of Options Currently Exercisable (in shares) | shares	1,250
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 28.15
Weighted-Average Remaining Contractual Life (Years)	3 years 6 months
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands) | $	$ 26
Ranges Of Exercise Prices Twenty Five Point Zero To Twenty Nine Point Ninety Nine [Member] [Domain] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 25.00
Ranges Of Exercise Prices Twenty Five Point Zero To Twenty Nine Point Ninety Nine [Member] [Domain] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 29.99
Ranges Of Exercise Prices Thirty Point Zero To Thirty Four Point Ninety Nine [Member] [Domain] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares) | shares	17,750
Weighted-Average Exercise Price (in dollars per share)	$ 31.63
Weighted-Average Remaining Contractual Life (Years)	4 years 1 month
Aggregate Intrinsic Value (in thousands) | $	$ 314
No. of Options Currently Exercisable (in shares) | shares	17,750
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 31.63
Weighted-Average Remaining Contractual Life (Years)	4 years 1 month
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands) | $	$ 314
Ranges Of Exercise Prices Thirty Point Zero To Thirty Four Point Ninety Nine [Member] [Domain] [Domain] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 30
Ranges Of Exercise Prices Thirty Point Zero To Thirty Four Point Ninety Nine [Member] [Domain] [Domain] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 34.99
Ranges Of Exercise Prices Thirty Five Point Zero To Thirty Nine Point Ninety Nine [Member] [Domain] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares) | shares	51,851
Weighted-Average Exercise Price (in dollars per share)	$ 36.10
Weighted-Average Remaining Contractual Life (Years)	6 years
Aggregate Intrinsic Value (in thousands) | $	$ 684
No. of Options Currently Exercisable (in shares) | shares	41,000
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 39.13
Weighted-Average Remaining Contractual Life (Years)	1 year 3 months
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands) | $	$ 417
Ranges Of Exercise Prices Thirty Five Point Zero To Thirty Nine Point Ninety Nine [Member] [Domain] [Domain] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 35
Ranges Of Exercise Prices Thirty Five Point Zero To Thirty Nine Point Ninety Nine [Member] [Domain] [Domain] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 39.99
Ranges Of Exercise Prices Forty Point Zero To Forty Four Point Ninety Nine [Member] [Domain] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares) | shares	20,953
Weighted-Average Exercise Price (in dollars per share)	$ 43.24
Weighted-Average Remaining Contractual Life (Years)	6 years 6 months
Aggregate Intrinsic Value (in thousands) | $	$ 127
No. of Options Currently Exercisable (in shares) | shares	7,000
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 40.88
Weighted-Average Remaining Contractual Life (Years)	2 years 6 months
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands) | $	$ 59
Ranges Of Exercise Prices Forty Point Zero To Forty Four Point Ninety Nine [Member] [Domain] [Domain] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 40
Ranges Of Exercise Prices Forty Point Zero To Forty Four Point Ninety Nine [Member] [Domain] [Domain] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 44.99
Ranges Of Exercise Prices Forty Five Point Zero To Fifty Point Zero [Member] [Domain] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
No. of Options Outstanding (in shares) | shares	12,961
Weighted-Average Exercise Price (in dollars per share)	$ 46.41
Weighted-Average Remaining Contractual Life (Years)	9 years 5 months
Aggregate Intrinsic Value (in thousands) | $	$ 37
No. of Options Currently Exercisable (in shares) | shares	0
Weighted-Average Exercise Price of Options Currently Exercisable (in dollars per share)	$ 0.00
Aggregate Intrinsic Value of Options Currently Exercisable (in thousands) | $	$ 0
Ranges Of Exercise Prices Forty Five Point Zero To Fifty Point Zero [Member] [Domain] [Domain] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 45
Ranges Of Exercise Prices Forty Five Point Zero To Fifty Point Zero [Member] [Domain] [Domain] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ranges Of Exercise Prices (in dollars per share)	$ 50

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Loans (Summary Of Major Classifications For Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 2,696,438	$ 2,652,066
Allowance for loan losses	(20,941)	(20,150)
Net loans	2,675,497	2,631,916
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,358,083	1,294,576
Allowance for loan losses	(7,261)	(7,208)
Home equity - junior liens (including lines of credit) [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	144,748	145,604
Allowance for loan losses	(1,508)	(1,495)
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	124,495	140,548
Allowance for loan losses	(2,781)	(1,582)
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	1,029,103	1,028,831
Allowance for loan losses	(8,490)	(8,921)
Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	36,751	39,705
Allowance for loan losses	(96)	(85)
Demand Deposit Account Overdrafts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	3,258	2,802
Allowance for loan losses	$ (805)	$ (859)

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2015

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 using the two class method (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Distributed earnings allocated to common stock	$	6,362	$	6,073	$	19,086	$	18,220
Undistributed earnings allocated to common stock	4,125		5,673		21,040		19,809
Net earnings allocated to common shareholders	$	10,487	$	11,746	$	40,126	$	38,029
Average shares outstanding	15,178		15,363		15,111		15,509
Effect of dilutive securities:
Warrant outstanding	—		62		37		62
Employee stock awards	20		20		21		23
Shares for diluted earnings per share	15,198		15,445		15,169		15,594
Basic earnings per share	$	0.69	$	0.76	$	2.66	$	2.45
Diluted earnings per share	$	0.69	$	0.76	$	2.65	$	2.44

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015 and 2014 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, 2013	$	(2,880	)	$	(2,110	)	$	(4,990	)
Other comprehensive income before reclassifications	—			2,683			2,683
Amounts reclassified from other comprehensive loss	—			(614		)	(614		)
	—			2,069			2,069
Balance at September 30, 2014	$	(2,880	)	$	(41	)	$	(2,921	)
Balance at December 31, 2014	$	(5,349	)	$	1,190		$	(4,159	)
Other comprehensive income before reclassifications	—			1,943			1,943
Amounts reclassified from other comprehensive loss	—			(1,344		)	(1,344		)
	—			599			599
Balance at September 30, 2015	$	(5,349	)	$	1,789		$	(3,560	)

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
	2015		2014			2015			2014			of Income
Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	(71	)	$	(2,130	)	$	(972	)	Security gains (losses)
Related income tax expense	—		26			786			358			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(45	)	$	(1,344	)	$	(614	)

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Derivative Instruments (Fair Value Of Derivative Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Designated as Hedging Instrument [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	$ 5,163	$ 5,475
Fair Value	119	24
Not Designated as Hedging Instrument [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	266,284	179,958
Fair Value	14,099	10,253
Not Designated as Hedging Instrument [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	274,284	179,958
Fair Value	$ 14,250	$ 10,253

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Loans (Composition Of Loans Acquired At Acquisition) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Outstanding loan balance	$ 2,696,438	$ 2,652,066
Virginia Savings Bank [Member]
Financing Receivable, Impaired [Line Items]
Outstanding loan balance	31,143	38,345
Credit-impaired loans:
Carrying value	1,861	1,964
Contractual principal and interest	2,149	2,407
Community Bank [Member]
Financing Receivable, Impaired [Line Items]
Outstanding loan balance	190,788	219,923
Credit-impaired loans:
Carrying value	13,400	15,365
Contractual principal and interest	17,834	23,277
Virginia Savings Bank And Community Financial [Member]
Financing Receivable, Impaired [Line Items]
Outstanding loan balance	221,931	258,268
Credit-impaired loans:
Carrying value	15,261	17,329
Contractual principal and interest	$ 19,983	$ 25,684

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	5	$	—	$	5	$	—
Obligations of states and political subdivisions	42,702		—		42,702		—
Mortgage-backed securities:
U.S. Government agencies	227,947		—		227,947		—
Private label	1,279		—		1,279		—
Trust preferred securities	6,957		—		4,866		2,091
Corporate securities	17,343		—		17,343		—
Marketable equity securities	3,103		3,103		—		—
Investment funds	1,529		1,529		—		—
Derivative assets	14,099		—		14,099		—
Financial Liabilities
Derivative liabilities	14,369		—		14,369		—
Nonrecurring fair value measurements
Impaired loans	$	7,122	$	—	$	—	$	7,122	$	—
Other real estate owned	6,026		—		—		6,026		(782		)
December 31, 2014
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	1,827	$	—	$	1,827	$	—
Obligations of states and political subdivisions	42,096		—		42,096		—
Mortgage-backed securities:
U.S. Government agencies	187,328		—		187,328		—
Private label	1,704		—		1,704		—
Trust preferred securities	9,036		—		7,165		1,871
Corporate securities	7,317		—		7,317		—
Marketable equity securities	3,213		3,213		—		—
Investment funds	1,522		1,522		—		—
Derivative assets	10,253		—		10,253		—
Financial Liabilities
Derivative liabilities	10,277		—		10,277		—
Nonrecurring fair value measurements
Impaired loans	$	6,517	$	—	$	—	$	6,517	$	(153	)
Other real estate owned	$	8,179	$	—	$	—	$	8,179	$	(464	)

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), which consist solely of trust preferred securities (in thousands):

	Nine months ended September 30,
	2015		2014
Beginning balance	$	1,871	$	3,887
Impairment losses on investment securities	—		—
Included in other comprehensive income	220		(2,161		)
Dispositions	—		—
Transfers into Level 3	—		—
Ending Balance	$	2,091	$	1,726

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, 2015 and 2014, collateral discounts ranged from 20% to 30%. During the nine months ended September 30, 2015 and 2014, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

	Nine months ended September 30,
	2015			2014
Beginning balance	$	6,517		$	11,714
Loans classified as impaired during the period	799			—
Specific valuation allowance allocations	—			—
	799			—
(Additional) reduction in specific valuation allowance allocations	(22		)	633
Paydowns, payoffs, other activity	(172		)	(5,730		)
Ending balance	$	7,122		$	6,617

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,
	2015			2014
Beginning balance	$	8,179		$	8,470
OREO remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	2,356			4,225
Charge-offs recognized in the allowance for loan losses	—			—
Fair value	2,356			4,225
OREO remeasured subsequent to initial recognition
Carrying value of foreclosed assets prior to remeasurement	3,601			480
Fair value	2,819			101
Write-downs included in other non-interest expense	(782		)	(379		)
Disposed	(3,727		)	(3,155		)
Ending balance	$	6,026		$	9,161

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, 2015
Assets:
Cash and cash equivalents	$	118,708	$	118,708	$	118,708	$	—	$	—
Securities available-for-sale	300,865		300,865		4,632		294,142		2,091
Securities held-to-maturity	81,095		84,005		—		84,005		—
Other securities	9,926		9,926		—		9,926		—
Net loans	2,675,497		2,685,390		—		—		2,685,390
Accrued interest receivable	7,690		7,690		7,690		—		—
Derivative assets	14,099		14,099		—		14,099		—
Liabilities:
Deposits	2,865,502		2,873,255		1,883,153		990,102		—
Short-term debt	147,036		147,035		—		147,035		—
Long-term debt	16,495		16,464		—		16,464		—
Derivative liabilities	14,369		14,369		—		14,369		—
December 31, 2014
Assets:
Cash and cash equivalents	148,228		148,228		148,228		—		—
Securities available-for-sale	254,043		254,043		4,735		247,437		1,871
Securities held-to-maturity	90,786		94,191		—		94,191		—
Other securities	9,857		9,857		—		9,857		—
Net loans	2,631,916		2,638,911		—		—		2,638,911
Accrued interest receivable	6,826		6,826		6,826		—		—
Derivative assets	10,253		10,253		—		10,253		—
Liabilities:
Deposits	2,872,787		2,879,126		1,846,124		1,033,002		—
Short-term debt	134,931		134,934		—		134,934		—
Long-term debt	16,495		16,464		—		16,464		—
Derivative liabilities	10,277		10,277		—		10,277		—

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Background and Basis of Presentation (Details) - City National [Member]	Sep. 30, 2015 store
Entity Location [Line Items]
Number of Stores	82
WEST VIRGINIA
Entity Location [Line Items]
Number of Stores	57
VIRGINIA
Entity Location [Line Items]
Number of Stores	14
KENTUCKY
Entity Location [Line Items]
Number of Stores	8
OHIO
Entity Location [Line Items]
Number of Stores	3

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating Activities
Net income	$ 40,582	$ 38,432
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion and amortization	(3,612)	(3,889)
Provision for loan losses	4,175	3,670
Depreciation of premises and equipment	4,549	4,553
Deferred income tax expense	3,479	3,921
Net periodic employee benefit cost	625	393
Realized investment securities gains	(2,130)	(972)
Stock-compensation expense	1,430	1,210
Increase in value of bank-owned life insurance	(2,476)	(2,291)
Proceeds from bank-owned life insurance	435	0
Loans originated for sale	(13,994)	(4,911)
Proceeds from the sale of loans originated for sale	14,533	5,075
Gain on sale of loans	(279)	(131)
Gain on sale of insurance division	(11,084)	0
Change in accrued interest receivable	(864)	(885)
Change in other assets	1,161	(5,829)
Change in other liabilities	7,805	(3,763)
Net Cash Provided by Operating Activities	44,335	34,583
Investing Activities
Proceeds from sales of securities available-for-sale	290	1,821
Proceeds from maturities and calls of securities available-for-sale	45,158	37,071
Proceeds from maturities and calls of securities held-to-maturity	10,640	4,124
Purchases of securities available-for-sale	(91,190)	(17,058)
Purchases of securities held-to-maturity	0	(10,226)
Net (increase) in loans	(43,411)	(23,454)
Purchases of premises and equipment	(1,729)	(1,085)
Disposals of premises and equipment	133	0
Proceeds from sale of insurance division	15,250	0
Net Cash (Used In) Investing Activities	(64,859)	(8,807)
Financing Activities
Net (decrease) increase in noninterest-bearing deposits	(3,288)	5,263
Net (decrease) increase in interest-bearing deposits	(3,489)	3,597
Net increase in short-term borrowings	12,105	8,317
Purchases of treasury stock	0	(19,533)
Proceeds from exercise of stock options, net of tax benefit	2,649	553
Proceeds from exercise of warrants	1,896	0
Dividends paid	(18,869)	(18,357)
Net Cash (Used in) Financing Activities	(8,996)	(20,160)
(Decrease) Increase in Cash and Cash Equivalents	(29,520)	5,616
Cash and cash equivalents at beginning of period	148,228	85,876
Cash and Cash Equivalents at End of Period	$ 118,708	$ 91,492

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Background and Basis Of Presentation Business Divestiture (Details) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Proceeds from Divestiture of Businesses	$ 5.8

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Investments (Amortized Cost And Estimated Fair Value Of Debt Securities By Contractual Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Securities Available-for-Sale, Amortized Cost
Securities Available-for-Sale, Due in one year or less, Cost	$ 2,838
Securities Available-for-Sale, Due after one year through five years, Cost	14,590
Securities Available-for-Sale, Due after five years through ten years, Cost	27,168
Securities Available-for-Sale, Due after ten years, Cost	249,657
Securities Available-for-Sale, Cost, Total	294,253
Securities Available-for-Sale, Estimated Fair Value
Securities Available-for-Sale, Due in one year or less, Estimated Fair Value	15,831
Securities Available-for-Sale, Due after one year through five years, Estimated Fair Value	14,976
Securities Available-for-Sale, Due after five years through ten years, Estimated Fair Value	27,464
Securities Available-for-Sale, Due after ten years, Estimated Fair Value	237,962
Securities Available-for-Sale, Estimated Fair Value, Total	296,233
Held-to-maturity Securities, Debt Maturities, within One Year, Net Carrying Amount	0
Held-to-maturity Securities, Debt Maturities, Next Twelve Months, Fair Value	0
Held-to-maturity Securities, Debt Maturities, after One Through Five Years, Net Carrying Amount	0
Held-to-maturity Securities, Debt Maturities, Year Two Through Five, Fair Value	0
Held-to-maturity Securities, Debt Maturities, after Five Through Ten Years, Net Carrying Amount	0
Held-to-maturity Securities, Debt Maturities, Year Six Through Ten, Fair Value	0
Securities Held-to-Maturity, Amortized Cost
Securities Held-to-Maturity, Due after ten years, Cost	81,095
Securities held-to-maturity, Amortized Cost	81,095	$ 90,786
Securities Held-to-Maturity, Estimated Fair Value
Securities Held-to-Maturity, Due after ten years, Estimated Fair Value	84,005
Securities held-to-maturity, Estimated Fair Value	$ 84,005	$ 94,191

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Allowance For Loan Losses (Schedule Of Troubled Debt Restructurings) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($) contract	Sep. 30, 2014 USD ($) contract	Dec. 31, 2014 USD ($)
Financing Receivable, Modifications [Line Items]
Accruing	$ 22,867		$ 22,955
Non-Accruing	16		560
Total	$ 22,883		23,515
Financing Receivable, Modifications, Number of Contracts | contract	49	35
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 2,799	$ 2,684
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,799	$ 2,684
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Accruing	62		73
Non-Accruing	0		0
Total	$ 62		73
Financing Receivable, Modifications, Number of Contracts | contract	0	0
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 0	$ 0
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	$ 0
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Accruing	1,921		2,263
Non-Accruing	0		0
Total	$ 1,921		2,263
Financing Receivable, Modifications, Number of Contracts | contract	0	1
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 0	$ 432
Financing Receivable, Modifications, Post-Modification Recorded Investment	0	$ 432
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Accruing	18,154		17,946
Non-Accruing	0		545
Total	$ 18,154		18,491
Financing Receivable, Modifications, Number of Contracts | contract	35	26
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 2,431	$ 2,049
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,431	$ 2,049
Home equity - junior lien [Member]
Financing Receivable, Modifications [Line Items]
Accruing	2,730		2,673
Non-Accruing	16		15
Total	$ 2,746		2,688
Financing Receivable, Modifications, Number of Contracts | contract	14	8
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 368	$ 203
Financing Receivable, Modifications, Post-Modification Recorded Investment	368	$ 203
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Accruing	0		0
Non-Accruing	0		0
Total	$ 0		$ 0
Financing Receivable, Modifications, Number of Contracts | contract	0	0
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 0	$ 0
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 0	$ 0

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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	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 1,871	$ 3,887
Impairment losses on investment securities	0	0
Included in other comprehensive income	220	(2,161)
Dispositions	0	0
Transfers into Level 3	0	0
Ending Balance	$ 2,091	$ 1,726

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 109,627	$ 138,503
Interest-bearing deposits in depository institutions	9,081	9,725
Cash and Cash Equivalents	118,708	148,228
Investment securities available for sale, at fair value	300,865	254,043
Investment securities held-to-maturity, at amortized cost (approximate fair value at September 30, 2015 and December 31, 2014, - $84,005 and $94,191, respectively)	81,095	90,786
Other securities	9,926	9,857
Total Investment Securities	391,886	354,686
Gross loans	2,696,438	2,652,066
Allowance for loan losses	(20,941)	(20,150)
Net Loans	2,675,497	2,631,916
Bank owned life insurance	97,157	95,116
Premises and equipment, net	73,419	77,988
Accrued interest receivable	7,690	6,826
Net deferred tax asset	33,342	36,766
Goodwill and other intangible assets, net	70,653	74,198
Other assets	36,266	35,909
Total Assets	3,504,618	3,461,633
Liabilities
Noninterest-bearing	542,177	545,465
Interest-bearing:
Demand deposits	647,792	639,932
Savings deposits	693,184	660,727
Time deposits	982,349	1,026,663
Total Deposits	2,865,502	2,872,787
Short-term borrowings	147,036	134,931
Long-term debt	16,495	16,495
Other liabilities	56,818	46,567
Total Liabilities	3,085,851	3,070,780
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, 2015 and December 31, 2014, less 3,179,832 and 3,345,590 shares in treasury, respectively	46,249	46,249
Capital surplus	106,108	107,370
Retained earnings	383,551	362,211
Cost of common stock in treasury	(113,581)	(120,818)
Accumulated other comprehensive income (loss):
Unrealized gain on securities available-for-sale	1,789	1,190
Underfunded pension liability	(5,349)	(5,349)
Total Accumulated Other Comprehensive Loss	(3,560)	(4,159)
Total Shareholders’ Equity	418,767	390,853
Total Liabilities and Shareholders’ Equity	$ 3,504,618	$ 3,461,633

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Loans (Activity For The Accretable Yield) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
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	$ 428
Accretion	(147)
Net reclassifications to accretable yield from non-accretable yield	0
Disposals	(38)
Balance at the end of period	243
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Carrying Amount Net [Roll Forward]
Balance at the beginning of the period	1,964
Accretion	147
Payments received, net	(250)
Disposals	0
Balance at the end of period	1,861
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	9,906
Accretion	(1,915)
Net reclassifications to accretable yield from non-accretable yield	937
Disposals	(1,187)
Balance at the end of period	7,741
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Carrying Amount Net [Roll Forward]
Balance at the beginning of the period	15,365
Accretion	1,915
Payments received, net	(1,861)
Disposals	(2,019)
Balance at the end of period	13,400
Virginia Savings Bank and 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	10,334
Accretion	(2,062)
Net reclassifications to accretable yield from non-accretable yield	937
Disposals	(1,225)
Balance at the end of period	7,984
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities, Carrying Amount Net [Roll Forward]
Balance at the beginning of the period	17,329
Accretion	2,062
Payments received, net	(2,111)
Disposals	(2,019)
Balance at the end of period	$ 15,261

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Consolidated Statements Of Changes In Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Capital Surplus[Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2013	$ 387,623	$ 46,249	$ 107,596	$ 333,970	$ (95,202)	$ (4,990)
Net income	38,432			38,432
Other comprehensive income (loss)	2,069					2,069
Cash dividends declared	(18,681)			(18,681)
Stock-based compensation expense, net	1,210		(262)		1,472
Exercise of stock options	553		(272)		825
Purchase of treasury shares	(19,533)				(19,533)
Ending balance at Sep. 30, 2014	391,673	46,249	107,062	353,721	(112,438)	(2,921)
Beginning Balance at Dec. 31, 2014	390,853	46,249	107,370	362,211	(120,818)	(4,159)
Net income	40,582			40,582
Other comprehensive income (loss)	599					599
Cash dividends declared	(19,242)			(19,242)
Stock-based compensation expense, net	1,430		(38)		1,468
Exercise of stock options	2,649		(459)		3,108
Exercise of warrants	1,896		(765)		2,661
Ending balance at Sep. 30, 2015	$ 418,767	$ 46,249	$ 106,108	$ 383,551	$ (113,581)	$ (3,560)

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Derivative Instruments (Derivative Liabilities Offset in The consolidated Balance Sheets) (Details) - Interest Rate Swap [Member] $ in Thousands	Sep. 30, 2015 USD ($)
Not Designated as Hedging Instrument [Member]
Offsetting Liabilities [Line Items]
Gross Amounts of Recognized Liabilities	$ 14,250
Derivative liabilities	14,250
Fair Value of collateral	15,697
Total Gross amounts not offset in the statement of financial position including applicable netting agreement and fair value of collateral	15,697
Net Amount	0
Designated as Hedging Instrument [Member]
Offsetting Liabilities [Line Items]
Gross Amounts of Recognized Liabilities	119
Derivative liabilities	119
Fair Value of collateral	131
Total Gross amounts not offset in the statement of financial position including applicable netting agreement and fair value of collateral	131
Net Amount	$ 0

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Investments (Aggregate Carrying And Approximate Market Values Of Available-For-Sale Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	$ 297,909	$ 251,954
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	5,773	5,922
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	2,817	3,833
Securities available-for-sale	300,865	254,043
U.S Treasuries and U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	5	1,816
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0	11
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	0
Securities available-for-sale	5	1,827
Obligations Of States And Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	42,254	41,382
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	466	722
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	18	8
Securities available-for-sale	42,702	42,096
U.S. Government Agencies Mortgage-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	225,382	185,831
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	3,686	3,470
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	1,121	1,973
Securities available-for-sale	227,947	187,328
Private Label [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	1,276	1,700
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	4	8
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	1	4
Securities available-for-sale	1,279	1,704
Trust Preferred Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	7,578	9,763
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	459	425
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	1,080	1,152
Securities available-for-sale	6,957	9,036
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	17,758	7,806
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	182	204
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	597	693
Securities available-for-sale	17,343	7,317
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	294,253	248,298
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	4,797	4,840
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	2,817	3,830
Securities available-for-sale	296,233	249,308
Marketable Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	2,131	2,131
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	972	1,082
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	0
Securities available-for-sale	3,103	3,213
Money Market Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Securities available-for-sale, Amortized Cost	1,525	1,525
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	4	0
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	3
Securities available-for-sale	$ 1,529	$ 1,522

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Employee Benefit Plans (Net Periodic Pension Cost Of The Defined Benefit Plan) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Components of net periodic cost:
Interest cost	$ 203	$ 209	$ 668	$ 634
Expected return on plan assets	(234)	(252)	(757)	(779)
Net amortization and deferral	244	150	714	538
Net Periodic Pension Cost	$ 213	$ 107	$ 625	$ 393

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Loans (Tables)

9 Months Ended

Sep. 30, 2015

Loans Receivable, Net [Abstract]

Summary Of Major Classifications For Loans

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

	September 30, 2015			December 31, 2014
Residential real estate	$	1,358,083		$	1,294,576
Home equity – junior liens	144,748			145,604
Commercial and industrial	124,495			140,548
Commercial real estate	1,029,103			1,028,831
Consumer	36,751			39,705
DDA overdrafts	3,258			2,802
Gross loans	2,696,438			2,652,066
Allowance for loan losses	(20,941		)	(20,150		)
Net loans	$	2,675,497		$	2,631,916

Composition Of Loans Acquired At Acquisition

The following table details the loans acquired in conjunction with the Virginia Savings Bancorp, Inc. ("Virginia Savings") and Community Financial Corporation ("Community") acquisitions (in thousands):

	Virginia
	Savings		Community		Total
September 30, 2015
Outstanding loan balance	$	31,143	$	190,788	$	221,931
Credit-impaired loans:
Carrying value	1,861		13,400		15,261
Contractual principal and interest	2,149		17,834		19,983
December 31, 2014
Outstanding loan balance	$	38,345	$	219,923	$	258,268
Credit-impaired loans:
Carrying value	1,964		15,365		17,329
Contractual principal and interest	2,407		23,277		25,684

Activity For The Accretable Yield

Changes in the accretable yield of the credit-impaired loans for the nine months ended September 30, 2015 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	$	428		$	1,964		$	9,906		$	15,365		$	10,334		$	17,329
Accretion	(147		)	147			(1,915		)	1,915			(2,062		)	2,062
Net reclassifications to accretable yield from
non-accretable yield	—			—			937			—			937			—
Payments received, net	—			(250		)	—			(1,861		)	—			(2,111		)
Disposals	(38		)	—			(1,187		)	(2,019		)	(1,225		)	(2,019		)
Balance at the end of period	$	243		$	1,861		$	7,741		$	13,400		$	7,984		$	15,261

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Investments (Aggregate Carrying And Approximate Market Values Of Held-To-Maturity Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	$ 81,095	$ 90,786
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	2,910	3,405
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Securities held-to-maturity, Estimated Fair Value	84,005	94,191
Other Investments and Securities, at Cost	9,926	9,857
Other Investment Not Readily Marketable, Fair Value	9,926	9,857
U.S. Government Agencies Mortgage-backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	77,095	86,742
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	2,910	2,733
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Securities held-to-maturity, Estimated Fair Value	80,005	89,475
Trust Preferred Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Securities held-to-maturity, Amortized Cost	4,000	4,044
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	0	672
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Securities held-to-maturity, Estimated Fair Value	4,000	4,716
Non-Marketable Equity Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Other Investments and Securities, at Cost	9,926	9,857
Other Investment Not Readily Marketable, Fair Value	$ 9,926	$ 9,857

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2015

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

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

	September 30, 2015		December 31, 2014
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.84% and 3.74%, respectively	$	16,495	$	16,495

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Accumulated Other Comprehensive Loss (Schedule Of Amounts Reclassified Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Reclassifications Out Of Accumulated Other Comprehensive Income [Line Items]
Related income tax expense	$ (5,129)	$ (6,010)	$ (22,621)	$ (18,310)
Other comprehensive income (loss), net of tax	1,332	(412)	599	2,069
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 reclassified into earnings	0	(71)	(2,130)	(972)
Related income tax expense	0	26	786	358
Other comprehensive income (loss), net of tax	$ 0	$ (45)	$ (1,344)	$ (614)

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Consolidated Statements Of Changes In Shareholders' Equity (Parenthetical) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 1.26	$ 1.20
Exercise of stock options (in shares)	71,750	19,000
Stock Issued During Period, Shares, Other	61,796	0
Purchase of treasury shares (in shares)	0	456,856

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Securities held-to-maturity, Estimated Fair Value	$ 84,005	$ 94,191
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)	3,179,832	3,345,590

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

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, 2015		December 31, 2014
Commitments to extend credit:
Home equity lines	$	179,654	$	175,312
Commercial real estate	102,348		50,298
Other commitments	162,895		145,283
Standby letters of credit	4,865		4,592
Commercial letters of credit	2,590		1,991

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 legal actions will have an immaterial impact on financial results, either positive or negative, or that no material legal actions may be presented in the future.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 04, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015
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		15,300,957
Trading Symbol	chco

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Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The activity in accumulated other comprehensive loss for the nine months ended September 30, 2015 and 2014 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, 2013	$	(2,880	)	$	(2,110	)	$	(4,990	)
Other comprehensive income before reclassifications	—			2,683			2,683
Amounts reclassified from other comprehensive loss	—			(614		)	(614		)
	—			2,069			2,069
Balance at September 30, 2014	$	(2,880	)	$	(41	)	$	(2,921	)
Balance at December 31, 2014	$	(5,349	)	$	1,190		$	(4,159	)
Other comprehensive income before reclassifications	—			1,943			1,943
Amounts reclassified from other comprehensive loss	—			(1,344		)	(1,344		)
	—			599			599
Balance at September 30, 2015	$	(5,349	)	$	1,789		$	(3,560	)

	Amount reclassified from Other Comprehensive Loss
	Three months ended					Nine months ended						Affected line item
	September 30,					September 30,						in the Statements
	2015		2014			2015			2014			of Income
Securities available-for-sale:
Net securities gains reclassified into earnings	$	—	$	(71	)	$	(2,130	)	$	(972	)	Security gains (losses)
Related income tax expense	—		26			786			358			Income tax expense
Net effect on accumulated other comprehensive loss	$	—	$	(45	)	$	(1,344	)	$	(614	)

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Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest Income
Interest and fees on loans	$ 27,875	$ 29,292	$ 86,075	$ 87,647
Interest and dividends on investment securities:
Taxable	2,621	2,864	7,974	8,797
Tax-exempt	272	282	803	840
Total Interest Income	30,768	32,438	94,852	97,284
Interest Expense
Interest on deposits	2,686	2,730	8,126	8,220
Interest on short-term borrowings	69	86	236	246
Interest on long-term debt	155	152	458	453
Total Interest Expense	2,910	2,968	8,820	8,919
Net Interest Income	27,858	29,470	86,032	88,365
Provision for loan losses	451	1,872	4,175	3,670
Net Interest Income After Provision for Loan Losses	27,407	27,598	81,857	84,695
Non-interest Income
Gains on sale of investment securities	0	71	2,130	972
Service charges	6,907	6,934	19,423	19,833
Bankcard revenue	3,895	3,796	11,971	11,319
Insurance commissions	0	1,396	0	4,740
Trust and investment management fee income	1,176	1,103	3,577	3,251
Bank owned life insurance	929	771	2,476	2,292
Gain on sale of insurance division	0	0	11,084	0
Other income	799	538	2,471	1,646
Total Non-interest Income	13,706	14,609	53,132	44,053
Non-interest Expense
Salaries and employee benefits	12,179	13,144	36,551	39,260
Occupancy and equipment	2,575	2,531	7,694	7,541
Depreciation	1,522	1,542	4,549	4,553
FDIC insurance expense	456	432	1,351	1,199
Advertising	777	799	2,182	2,548
Bankcard expenses	785	877	2,485	2,607
Postage, delivery, and statement mailings	523	557	1,591	1,662
Office supplies	384	405	1,077	1,235
Legal and professional fees	620	476	1,729	1,497
Telecommunications	418	510	1,356	1,354
Repossessed asset losses, net of expenses	492	31	1,047	552
Merger related expenses	175	0	283	0
Other expenses	4,471	3,021	9,891	7,998
Total Non-interest Expense	25,377	24,325	71,786	72,006
Income Before Income Taxes	15,736	17,882	63,203	56,742
Income tax expense	5,129	6,010	22,621	18,310
Net Income Available to Common Shareholders	10,607	11,872	40,582	38,432
Total comprehensive income	$ 11,939	$ 11,460	$ 41,181	$ 40,501
Average common shares outstanding (in shares)	15,178	15,363	15,111	15,509
Effect of dilutive securities, employee stock awards and warrants outstanding (in shares)	20	82	58	85
Effect of dilutive securities:
Shares for diluted earnings per share (in shares)	15,198	15,445	15,169	15,594
Basic earnings per common share (in dollars per share)	$ 0.69	$ 0.76	$ 2.66	$ 2.45
Diluted earnings per common share (in dollars per share)	0.69	0.76	2.65	2.44
Dividends declared per common share (in dollars per share)	$ 0.42	$ 0.4	$ 1.26	$ 1.2

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Loans

9 Months Ended

Sep. 30, 2015

Loans Receivable, Net [Abstract]

Loans

Loans

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

	September 30, 2015			December 31, 2014
Residential real estate	$	1,358,083		$	1,294,576
Home equity – junior liens	144,748			145,604
Commercial and industrial	124,495			140,548
Commercial real estate	1,029,103			1,028,831
Consumer	36,751			39,705
DDA overdrafts	3,258			2,802
Gross loans	2,696,438			2,652,066
Allowance for loan losses	(20,941		)	(20,150		)
Net loans	$	2,675,497		$	2,631,916

Construction loans of $14.8 million and $23.0 million are included within residential real estate loans at September 30, 2015 and December 31, 2014, respectively.  Construction loans of $12.0 million and $28.7 million are included within commercial real estate loans at September 30, 2015 and December 31, 2014, 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 following table details the loans acquired in conjunction with the Virginia Savings Bancorp, Inc. ("Virginia Savings") and Community Financial Corporation ("Community") acquisitions (in thousands):

	Virginia
	Savings		Community		Total
September 30, 2015
Outstanding loan balance	$	31,143	$	190,788	$	221,931
Credit-impaired loans:
Carrying value	1,861		13,400		15,261
Contractual principal and interest	2,149		17,834		19,983
December 31, 2014
Outstanding loan balance	$	38,345	$	219,923	$	258,268
Credit-impaired loans:
Carrying value	1,964		15,365		17,329
Contractual principal and interest	2,407		23,277		25,684

Changes in the accretable yield of the credit-impaired loans for the nine months ended September 30, 2015 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	$	428		$	1,964		$	9,906		$	15,365		$	10,334		$	17,329
Accretion	(147		)	147			(1,915		)	1,915			(2,062		)	2,062
Net reclassifications to accretable yield from
non-accretable yield	—			—			937			—			937			—
Payments received, net	—			(250		)	—			(1,861		)	—			(2,111		)
Disposals	(38		)	—			(1,187		)	(2,019		)	(1,225		)	(2,019		)
Balance at the end of period	$	243		$	1,861		$	7,741		$	13,400		$	7,984		$	15,261

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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Investments

9 Months Ended

Sep. 30, 2015

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, 2015								December 31, 2014
	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	$	5	$	—	$	—	$	5	$	1,816	$	11	$	—	$	1,827
Obligations of states and
political subdivisions	42,254		466		18		42,702		41,382		722		8		42,096
Mortgage-backed securities:
U.S. government agencies	225,382		3,686		1,121		227,947		185,831		3,470		1,973		187,328
Private label	1,276		4		1		1,279		1,700		8		4		1,704
Trust preferred
securities	7,578		459		1,080		6,957		9,763		425		1,152		9,036
Corporate securities	17,758		182		597		17,343		7,806		204		693		7,317
Total Debt Securities	294,253		4,797		2,817		296,233		248,298		4,840		3,830		249,308
Marketable equity  securities	2,131		972		—		3,103		2,131		1,082		—		3,213
Investment funds	1,525		4		—		1,529		1,525		—		3		1,522
Total Securities
Available-for-Sale	$	297,909	$	5,773	$	2,817	$	300,865	$	251,954	$	5,922	$	3,833	$	254,043

	September 30, 2015								December 31, 2014
	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
Mortgage-backed securities
US government agencies	$	77,095	$	2,910	$	—	$	80,005	$	86,742	$	2,733	$	—	$	89,475
Trust preferred securities	4,000		—		—		4,000		4,044		672		—		4,716
Total Securities
Held-to-Maturity	$	81,095	$	2,910	$	—	$	84,005	$	90,786	$	3,405	$	—	$	94,191
Other investment securities:
Non-marketable equity securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857
Total Other Investment
Securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857

Securities with limited marketability, such as stock in the Federal Reserve Bank and 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, 2015
	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	$	2,670	$	13	$	125	$	5	$	2,795	$	18
Mortgage-backed securities:
U.S. Government agencies	16,782		102		35,607		1,019		52,389		1,121
Private label	1,005		1		—		—		1,005		1
Trust preferred securities	1,015		16		4,857		1,064		5,872		1,080
Corporate securities	—		—		4,161		597		4,161		597
Investment funds	—		—		—		—		—		—
Total	$	21,472	$	132	$	44,750	$	2,685	$	66,222	$	2,817

	December 31, 2014
	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	$	1,559	$	3	$	125	$	5	$	1,684	$	8
Mortgage-backed securities:
U.S. Government agencies	—		—		60,122		1,973		60,122		1,973
Private label	1,277		4		—		—		1,277		4
Trust preferred securities	—		—		4,760		1,152		4,760		1,152
Corporate securities	—		—		4,049		693		4,049		693
Investment funds	$	—	$	—	$	1,496	$	3	1,496		3
Total	$	2,836	$	7	$	70,552	$	3,826	$	73,388	$	3,833

Marketable equity securities consist of investments made by the Company in equity positions of various regional community bank holding companies, with ownership positions ranging from nominal to a 4% ownership position in First National Corporation (FXNC).

During the nine months ended September 30, 2015 and 2014, the Company had no credit-related net investment impairment losses. Also, for the year ended December 31, 2014, the Company had no credit-related net investment impairment losses.

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 holding company stocks.  Although the regional community bank holding company 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.  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, 2015, 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 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, 2015, 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 where the other-than-temporary impairment is identified, while any noncredit loss will be recognized in other comprehensive income.

At September 30, 2015, the book value of the Company’s five pooled trust preferred securities totaled $1.8 million with an estimated fair value of $1.8 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 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 unless otherwise noted. 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, 2015 and for the year ended December 31, 2014 (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, 2014	$	20,186		$	4,698		$	24,884
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	(3,600		)	(3,114		)	(6,714		)
Balance at December 31, 2014	16,586			1,584			18,170
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	—			—			—
Balance at September 30, 2015	$	16,586		$	1,584		$	18,170

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, 2015 (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 performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (3)
	Pooled trust preferred securities:
	Other-than-temporarily impaired
	Available for Sale:
P1	Pooled	Mezz	$	632	$	—	$	—	—		Caa1	5	14.5	%	—	%	(2)	—	%
P2	Pooled	Mezz	1,513		—		—		—		Ca	3	18.3	%	—	%	(2)	—	%
P3	Pooled	Mezz	2,962		1,419		1,007		(412	)	Caa3	19	20.0	%	7.1	%	(2)	—	%
P5	Pooled	Mezz	6,032		391		838		447		C	7	13.5	%	19.0	%	(2)	33.6	%
	Held to Maturity:
P6	Pooled	Mezz	1,223		—		—		—		Caa1	5	14.5	%	—	%	(2)	—	%
P7	Pooled	Mezz	2,009		—		—		—		Ca	3	18.3	%	—	%	(2)	—	%
	Single issuer trust preferred securities
	Available for sale:
S5	Single		261		235		247		12		NR	1	—	%	—	%
	Held to Maturity:
S9	Single		4,000		4,000		4,000		—		NR	1	—	%	—	%

(1) The differences noted consist of unrealized gains (losses) recorded at September 30, 2015 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.

The amortized cost and estimated fair value of debt securities at September 30, 2015, 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.

	Amortized Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	2,838	$	15,831
Due after one year through five years	14,590		14,976
Due after five years through ten years	27,168		27,464
Due after ten years	249,657		237,962
	$	294,253	$	296,233
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	81,095		84,005
	$	81,095	$	84,005

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,
	2015		2014		2015		2014
Gross realized gains	$	—	$	71	$	2,130	$	972
Gross realized losses	—		—		—		—
Net investment security gains	$	—	$	71	$	2,130	$	972

The carrying value of securities pledged to secure public deposits and for other purposes as required or permitted by law approximated $274 million and $273 million at September 30, 2015 and December 31, 2014, respectively.

Statement of Cash Flows - Investing Activities - Supplemental Information

During the nine months ended September 30, 2014, the Company transferred certain securities from available-for-sale to held-to-maturity. The non-cash transfers of securities into the held-to-maturity categories from available-for-sale were made at fair value on the date of the transfer. The securities had an aggregate fair value of $83.4 million on the date of transfer. No such transfers occurred during the nine months ended September 30, 2015.

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Allowance For Loan Losses (Tables)

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Schedule Of Allowance For Loan Loss By Portfolio Segment

The following table summarizes the activity in the allowance for loan loss, by portfolio segment, for the nine months ended September 30, 2015 and 2014 (in thousands).  The following table 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, 2015 and December 31, 2014 (in thousands).

	Commercial &			Commercial			Residential									DDA
	Industrial			Real Estate			Real Estate			Home equity			Consumer			Overdrafts			Total
Nine months ended September 30, 2015
Allowance for loan loss
Beginning balance	$	1,582		$	8,921		$	7,208		$	1,495		$	85		$	859		$	20,150
Charge-offs	(1,903		)	(277		)	(758		)	(236		)	(171		)	(1,038		)	(4,383		)
Recoveries	72			49			130			—			154			594			999
Provision for acquired loans	521			—			—			—			—			—			521
Provision	2,509			(203		)	681			249			28			390			3,654
Ending balance	$	2,781		$	8,490		$	7,261		$	1,508		$	96		$	805		$	20,941
Nine months ended September 30, 2014
Allowance for loan loss
Beginning balance	$	1,139		$	10,775		$	6,057		$	1,672		$	77		$	855		$	20,575
Charge-offs	(330		)	(1,665		)	(1,348		)	(288		)	(171		)	(1,052		)	(4,854		)
Recoveries	85			94			91			—			172			654			1,096
Provision for acquired loans	135			—			—			—			—			—			135

Provision	564		402		2,159		107		10		293		3,535
Ending balance	$	1,593	$	9,606	$	6,959	$	1,491	$	88	$	750	$	20,487
As of September 30, 2015
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	274	$	—	$	—	$	—	$	—	$	274
Collectively	2,777		7,508		7,176		1,508		96		805		19,870
Acquired with deteriorated
credit quality	4		708		85		—		—		—		797
Total	$	2,781	$	8,490	$	7,261	$	1,508	$	96	$	805	$	20,941
Loans
Evaluated for impairment:
Individually	$	799	$	5,861	$	439	$	296	$	—	$	—	$	7,395
Collectively	123,359		1,010,611		1,357,271		142,676		36,607		3,258		2,673,782
Acquired with deteriorated
credit quality	337		12,631		373		1,776		144		—		15,261
Total	$	124,495	$	1,029,103	$	1,358,083	$	144,748	$	36,751	$	3,258	$	2,696,438
As of December 31, 2014
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	252	$	—	$	—	$	—	$	—	$	252
Collectively	1,540		7,898		7,208		1,429		85		859		19,019
Acquired with deteriorated
credit quality	42		771		—		66		—		—		879
Total	$	1,582	$	8,921	$	7,208	$	1,495	$	85	$	859	$	20,150
Loans
Evaluated for impairment:
Individually	$	—	$	6,023	$	449	$	297	$	—	$	—	$	6,769
Collectively	139,862		1,009,241		1,293,748		142,743		39,572		2,802		2,627,968
Acquired with deteriorated
credit quality	686		13,567		379		2,564		133		—		17,329
Total	$	140,548	$	1,028,831	$	1,294,576	$	145,604	$	39,705	$	2,802	$	2,652,066

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

	Commercial and industrial		Commercial real estate		Total
September 30, 2015
Pass	$	111,706	$	972,067	$	1,083,773
Special mention	4,814		21,299		26,113
Substandard	7,934		35,737		43,671
Doubtful	41		—		41
Total	$	124,495	$	1,029,103	$	1,153,598
December 31, 2014
Pass	$	128,812	$	970,585	$	1,099,397
Special mention	761		15,103		15,864
Substandard	10,575		42,691		53,266
Doubtful	400		452		852
Total	$	140,548	$	1,028,831	$	1,169,379

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, 2015
Residential real estate	$	1,354,865	$	3,218	$	1,358,083
Home equity - junior lien	144,574		174		144,748
Consumer	36,751		—		36,751
DDA overdrafts	3,258		—		3,258
Total	$	1,539,448	$	3,392	$	1,542,840
December 31, 2014
Residential real estate	$	1,292,012	$	2,564	$	1,294,576
Home equity - junior lien	145,506		98		145,604
Consumer	39,692		13		39,705
DDA overdrafts	2,802		—		2,802
Total	$	1,480,012	$	2,675	$	1,482,687

Schedule Of Aging Analysis Of Accruing And Non-Accruing Loans

The following table presents an aging analysis of the Company’s accruing and non-accruing loans, by class, as of September 30, 2015 and December 31, 2014 (in thousands):

	Originated Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,274,236	$	4,218	$	386	$	208	$	—	$	2,186	$	1,281,234
Home equity - junior lien	142,805		464		67		16		—		159		143,511
Commercial and industrial	110,475		—		5		—		—		6,065		116,545
Commercial real estate	888,458		717		240		225		—		7,654		897,294
Consumer	32,577		85		3		—		—		—		32,665
DDA overdrafts	2,928		330		—		—		—		—		3,258
Total	$	2,451,479	$	5,814	$	701	$	449	$	—	$	16,064	$	2,474,507
	Acquired Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	75,315	$	546	$	162	$	—	$	—	$	826	$	76,849
Home equity - junior lien	1,227		10		—		—		—		—		1,237
Commercial and industrial	7,235		336		14		—		—		365		7,950
Commercial real estate	125,218		701		245		—		1,493		4,152		131,809
Consumer	3,957		117		12		—		—		—		4,086
DDA overdrafts	—		—		—		—		—		—		—
Total	$	212,952	$	1,710	$	433	$	—	$	1,493	$	5,343	$	221,931
	Total Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,349,551	$	4,764	$	548	$	208	$	—	$	3,012	$	1,358,083
Home equity - junior lien	144,032		474		67		16		—		159		144,748
Commercial and industrial	117,710		336		19		—		—		6,430		124,495
Commercial real estate	1,013,676		1,418		485		225		1,493		11,806		1,029,103
Consumer	36,534		202		15		—		—		—		36,751
DDA overdrafts	2,928		330		—		—		—		—		3,258
Total	$	2,664,431	$	7,524	$	1,134	$	449	$	1,493	$	21,407	$	2,696,438

	Originated Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,200,177	$	4,235	$	758	$	169	$	—	$	2,259	$	1,207,598
Home equity - junior lien	142,624		561		155		30		—		68		143,438
Commercial and industrial	128,857		100		—		210		—		78		129,245
Commercial real estate	869,530		479		—		—		—		7,330		877,339
Consumer	33,178		119		78		1		—		—		33,376
DDA overdrafts	2,483		317		2		—		—		—		2,802
Total	$	2,376,849	$	5,811	$	993	$	410	$	—	$	9,735	$	2,393,798
	Acquired Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	86,129	$	714	$	—	$	—	$	—	$	135	$	86,978
Home equity - junior lien	2,164		2		—		—		—		—		2,166
Commercial and industrial	10,123		143		—		—		—		1,037		11,303
Commercial real estate	144,721		892		210		—		1,270		4,399		151,492
Consumer	6,108		172		36		13		—		—		6,329
DDA overdrafts	—		—		—		—		—		—		—
Total	$	249,245	$	1,923	$	246	$	13	$	1,270	$	5,571	$	258,268
	Total Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,286,306	$	4,949	$	758	$	169	$	—	$	2,394	$	1,294,576
Home equity - junior lien	144,788		563		155		30		—		68		145,604
Commercial and industrial	138,980		243		—		210		—		1,115		140,548
Commercial real estate	1,014,251		1,371		210		—		1,270		11,729		1,028,831
Consumer	39,286		291		114		14		—		—		39,705
DDA overdrafts	2,483		317		2		—		—		—		2,802
Total	$	2,626,094	$	7,734	$	1,239	$	423	$	1,270	$	15,306	$	2,652,066

Schedule Of Impaired Loans

The following table presents the Company’s impaired loans, by class, as of September 30, 2015 and December 31, 2014 (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off.

	September 30, 2015						December 31, 2014
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate	$	439	$	439	$	—	$	449	$	449	$	—
Home equity - junior liens	296		296		—		297		297		—
Commercial and industrial	799		2,861		—		—		—		—
Commercial real estate	4,509		4,948		—		4,631		4,631		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	6,043	$	8,544	$	—	$	5,377	$	5,377	$	—
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	1,352		4,282		274		1,392		1,392		252
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	1,352	$	4,282	$	274	$	1,392	$	1,392	$	252

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, 2015				September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Residential real estate	$	443	$	—	$	453	$	—
Home equity - junior liens	296		—		297		—
Commercial and industrial	1,807		—		—		—
Commercial real estate	4,582		3		7,329		4
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	7,128	$	3	$	8,079	$	4
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—
Commercial and industrial	—		—		—		—
Commercial real estate	1,350		—		1,837		30
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	1,350	$	—	$	1,837	$	30

Schedule Of Troubled Debt Restructurings

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

	September 30, 2015						December 31, 2014
			Non-						Non-
	Accruing		Accruing		Total		Accruing		Accruing		Total
Commercial and industrial	$	62	$	—	$	62	$	73	$	—	$	73
Commercial real estate	1,921		—		1,921		2,263		—		2,263
Residential real estate	18,154		—		18,154		17,946		545		18,491
Home equity	2,730		16		2,746		2,673		15		2,688
Consumer	—		—		—		—		—		—
	$	22,867	$	16	$	22,883	$	22,955	$	560	$	23,515

	New TDRs					New TDRs
	For the nine months ended					For the nine months ended
	September 30, 2015					September 30, 2014
		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	—	$	—	$	—	—	$	—	$	—
Commercial real estate	—	—		—		1	432		432
Residential real estate	35	2,431		2,431		26	2,049		2,049
Home equity	14	368		368		8	203		203
Consumer	—	—		—		—	—		—
	49	$	2,799	$	2,799	35	$	2,684	$	2,684

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Earnings per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

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

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Distributed earnings allocated to common stock	$	6,362	$	6,073	$	19,086	$	18,220
Undistributed earnings allocated to common stock	4,125		5,673		21,040		19,809
Net earnings allocated to common shareholders	$	10,487	$	11,746	$	40,126	$	38,029
Average shares outstanding	15,178		15,363		15,111		15,509
Effect of dilutive securities:
Warrant outstanding	—		62		37		62
Employee stock awards	20		20		21		23
Shares for diluted earnings per share	15,198		15,445		15,169		15,594
Basic earnings per share	$	0.69	$	0.76	$	2.66	$	2.45
Diluted earnings per share	$	0.69	$	0.76	$	2.65	$	2.44

During the nine months ended September 30, 2015 there were no anti-dilutive options outstanding. Options to purchase approximately 13,953 shares of common stock at an exercise price of $44.43 per share were outstanding during the third quarter of 2014 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.

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Derivative Instruments

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

As of September 30, 2015 and December 31, 2014, 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. For the majority of these instruments the Company acts as an intermediary for its customers. Changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company's results of operations. The Company also has an interest rate swap for the purpose of hedging changes in LIBOR related to commercial real estate loans. Hedge ineffectiveness is assessed quarterly and any ineffectiveness is recorded as non-interest expense. For the three months ended September 30, 2015 and nine month periods ended September 30, 2015 hedge ineffectiveness was less than $0.1 million.

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

	September 30, 2015				December 31, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
Non-hedging interest rate derivatives:
Other Assets	$	266,284	$	14,099	$	179,958	$	10,253
Other Liabilities	274,284		14,250		179,958		10,253
Derivatives designated as hedges of fair value:
Other Liabilities	5,163		119		5,475		24

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,
	2015			2014			2015			2014
Change in Fair Value Non-Hedging interest rate derivatives:
Other income - derivative asset	$	6,922		$	(373	)	$	4,494		$	4,233
Other income - derivative liability	(7,028		)	373			(4,613		)	(4,233		)
Change in Fair Value Hedging Interest Rate Derivatives:
Hedged item - derivative asset	101			—			89			—
Other income - derivative liability	5			—			6			—

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, 2015 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) *

Non-hedging derivative assets:

Interest rate swap agreements

$

14,099

$

—

$

14,099

$

—

$

14,099

$

14,099

$

—

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) *

Non-hedging derivative liabilities:

Interest rate swap agreements

$

14,250

$

—

$

14,250

$

—

$

15,697

$

15,697

$

—

Hedging derivative liabilities:

Interest rate swap agreements

$

119

$

—

$

119

$

131

$

131

$

—

*

For instances where the fair value of financial collateral meets or exceeds the amounts presented in the Statement of Financial Position, a value of zero is displayed to represent full collateralization.

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Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Proceeds from exercise of stock options	$ 2.7	$ 0.6
Total intrinsic value of stock options exercised	0.7	0.3
Stock-based compensation expense	0.2	0.1
Stock-based compensation expense related to restricted shares	0.9	0.8
Total expense associated with the retirement benefit plan	0.6	0.6
Contributions made by company	$ 0.3	$ 0.3
Employee Stock Option [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Incentive stock options and SARs exercisable period	10 years
Stock options awarded	438,515
Unrecognized stock-based compensation expense	$ 0.5
Weighted-average period, unrecognized expense expected to be recognized	1 year 5 months
Restricted Stock [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock options awarded	241,596
Unrecognized stock-based compensation expense	$ 3.1
Weighted-average period, unrecognized expense expected to be recognized	3 years 4 months
Performance Shares [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	33.33%
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
Share-based Compensation Award, Tranche One [Member] | Performance Shares [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Median Return on Average Assets of all FDIC Insured Depository Institutions Time Period	20 years
Share-based Compensation Award, Tranche Two [Member] | Performance Shares [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Median Return on Average Assets of all FDIC Insured Depository Institutions Time Period	20 years
Share-based Compensation Award, Tranche Three [Member] | Performance Shares [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Median Return on Average Assets of all FDIC Insured Depository Institutions Time Period	20 years

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Allowance For Loan Losses

9 Months Ended

Sep. 30, 2015

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 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 table summarizes the activity in the allowance for loan loss, by portfolio segment, for the nine months ended September 30, 2015 and 2014 (in thousands).  The following table 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, 2015 and December 31, 2014 (in thousands).

	Commercial &			Commercial			Residential									DDA
	Industrial			Real Estate			Real Estate			Home equity			Consumer			Overdrafts			Total
Nine months ended September 30, 2015
Allowance for loan loss
Beginning balance	$	1,582		$	8,921		$	7,208		$	1,495		$	85		$	859		$	20,150
Charge-offs	(1,903		)	(277		)	(758		)	(236		)	(171		)	(1,038		)	(4,383		)
Recoveries	72			49			130			—			154			594			999
Provision for acquired loans	521			—			—			—			—			—			521
Provision	2,509			(203		)	681			249			28			390			3,654
Ending balance	$	2,781		$	8,490		$	7,261		$	1,508		$	96		$	805		$	20,941
Nine months ended September 30, 2014
Allowance for loan loss
Beginning balance	$	1,139		$	10,775		$	6,057		$	1,672		$	77		$	855		$	20,575
Charge-offs	(330		)	(1,665		)	(1,348		)	(288		)	(171		)	(1,052		)	(4,854		)
Recoveries	85			94			91			—			172			654			1,096
Provision for acquired loans	135			—			—			—			—			—			135

Provision	564		402		2,159		107		10		293		3,535
Ending balance	$	1,593	$	9,606	$	6,959	$	1,491	$	88	$	750	$	20,487
As of September 30, 2015
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	274	$	—	$	—	$	—	$	—	$	274
Collectively	2,777		7,508		7,176		1,508		96		805		19,870
Acquired with deteriorated
credit quality	4		708		85		—		—		—		797
Total	$	2,781	$	8,490	$	7,261	$	1,508	$	96	$	805	$	20,941
Loans
Evaluated for impairment:
Individually	$	799	$	5,861	$	439	$	296	$	—	$	—	$	7,395
Collectively	123,359		1,010,611		1,357,271		142,676		36,607		3,258		2,673,782
Acquired with deteriorated
credit quality	337		12,631		373		1,776		144		—		15,261
Total	$	124,495	$	1,029,103	$	1,358,083	$	144,748	$	36,751	$	3,258	$	2,696,438
As of December 31, 2014
Allowance for loan loss
Evaluated for impairment:
Individually	$	—	$	252	$	—	$	—	$	—	$	—	$	252
Collectively	1,540		7,898		7,208		1,429		85		859		19,019
Acquired with deteriorated
credit quality	42		771		—		66		—		—		879
Total	$	1,582	$	8,921	$	7,208	$	1,495	$	85	$	859	$	20,150
Loans
Evaluated for impairment:
Individually	$	—	$	6,023	$	449	$	297	$	—	$	—	$	6,769
Collectively	139,862		1,009,241		1,293,748		142,743		39,572		2,802		2,627,968
Acquired with deteriorated
credit quality	686		13,567		379		2,564		133		—		17,329
Total	$	140,548	$	1,028,831	$	1,294,576	$	145,604	$	39,705	$	2,802	$	2,652,066

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

	Commercial and industrial		Commercial real estate		Total
September 30, 2015
Pass	$	111,706	$	972,067	$	1,083,773
Special mention	4,814		21,299		26,113
Substandard	7,934		35,737		43,671
Doubtful	41		—		41
Total	$	124,495	$	1,029,103	$	1,153,598
December 31, 2014
Pass	$	128,812	$	970,585	$	1,099,397
Special mention	761		15,103		15,864
Substandard	10,575		42,691		53,266
Doubtful	400		452		852
Total	$	140,548	$	1,028,831	$	1,169,379

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

	Performing		Non-Performing		Total
September 30, 2015
Residential real estate	$	1,354,865	$	3,218	$	1,358,083
Home equity - junior lien	144,574		174		144,748
Consumer	36,751		—		36,751
DDA overdrafts	3,258		—		3,258
Total	$	1,539,448	$	3,392	$	1,542,840
December 31, 2014
Residential real estate	$	1,292,012	$	2,564	$	1,294,576
Home equity - junior lien	145,506		98		145,604
Consumer	39,692		13		39,705
DDA overdrafts	2,802		—		2,802
Total	$	1,480,012	$	2,675	$	1,482,687

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 table presents an aging analysis of the Company’s accruing and non-accruing loans, by class, as of September 30, 2015 and December 31, 2014 (in thousands):

	Originated Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,274,236	$	4,218	$	386	$	208	$	—	$	2,186	$	1,281,234
Home equity - junior lien	142,805		464		67		16		—		159		143,511
Commercial and industrial	110,475		—		5		—		—		6,065		116,545
Commercial real estate	888,458		717		240		225		—		7,654		897,294
Consumer	32,577		85		3		—		—		—		32,665
DDA overdrafts	2,928		330		—		—		—		—		3,258
Total	$	2,451,479	$	5,814	$	701	$	449	$	—	$	16,064	$	2,474,507
	Acquired Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	75,315	$	546	$	162	$	—	$	—	$	826	$	76,849
Home equity - junior lien	1,227		10		—		—		—		—		1,237
Commercial and industrial	7,235		336		14		—		—		365		7,950
Commercial real estate	125,218		701		245		—		1,493		4,152		131,809
Consumer	3,957		117		12		—		—		—		4,086
DDA overdrafts	—		—		—		—		—		—		—
Total	$	212,952	$	1,710	$	433	$	—	$	1,493	$	5,343	$	221,931
	Total Loans
	September 30, 2015
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,349,551	$	4,764	$	548	$	208	$	—	$	3,012	$	1,358,083
Home equity - junior lien	144,032		474		67		16		—		159		144,748
Commercial and industrial	117,710		336		19		—		—		6,430		124,495
Commercial real estate	1,013,676		1,418		485		225		1,493		11,806		1,029,103
Consumer	36,534		202		15		—		—		—		36,751
DDA overdrafts	2,928		330		—		—		—		—		3,258
Total	$	2,664,431	$	7,524	$	1,134	$	449	$	1,493	$	21,407	$	2,696,438

	Originated Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,200,177	$	4,235	$	758	$	169	$	—	$	2,259	$	1,207,598
Home equity - junior lien	142,624		561		155		30		—		68		143,438
Commercial and industrial	128,857		100		—		210		—		78		129,245
Commercial real estate	869,530		479		—		—		—		7,330		877,339
Consumer	33,178		119		78		1		—		—		33,376
DDA overdrafts	2,483		317		2		—		—		—		2,802
Total	$	2,376,849	$	5,811	$	993	$	410	$	—	$	9,735	$	2,393,798
	Acquired Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	86,129	$	714	$	—	$	—	$	—	$	135	$	86,978
Home equity - junior lien	2,164		2		—		—		—		—		2,166
Commercial and industrial	10,123		143		—		—		—		1,037		11,303
Commercial real estate	144,721		892		210		—		1,270		4,399		151,492
Consumer	6,108		172		36		13		—		—		6,329
DDA overdrafts	—		—		—		—		—		—		—
Total	$	249,245	$	1,923	$	246	$	13	$	1,270	$	5,571	$	258,268
	Total Loans
	December 31, 2014
	Accruing
	Current		30-59 days		60-89 days		Over 90 days		Purchased-Credit Impaired		Non-accrual		Total
Residential real estate	$	1,286,306	$	4,949	$	758	$	169	$	—	$	2,394	$	1,294,576
Home equity - junior lien	144,788		563		155		30		—		68		145,604
Commercial and industrial	138,980		243		—		210		—		1,115		140,548
Commercial real estate	1,014,251		1,371		210		—		1,270		11,729		1,028,831
Consumer	39,286		291		114		14		—		—		39,705
DDA overdrafts	2,483		317		2		—		—		—		2,802
Total	$	2,626,094	$	7,734	$	1,239	$	423	$	1,270	$	15,306	$	2,652,066

The following table presents the Company’s impaired loans, by class, as of September 30, 2015 and December 31, 2014 (in thousands). The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off.

	September 30, 2015						December 31, 2014
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
Residential real estate	$	439	$	439	$	—	$	449	$	449	$	—
Home equity - junior liens	296		296		—		297		297		—
Commercial and industrial	799		2,861		—		—		—		—
Commercial real estate	4,509		4,948		—		4,631		4,631		—
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	6,043	$	8,544	$	—	$	5,377	$	5,377	$	—
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Commercial real estate	1,352		4,282		274		1,392		1,392		252
Consumer	—		—		—		—		—		—
DDA overdrafts	—		—		—		—		—		—
Total	$	1,352	$	4,282	$	274	$	1,392	$	1,392	$	252

     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, 2015				September 30, 2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Residential real estate	$	443	$	—	$	453	$	—
Home equity - junior liens	296		—		297		—
Commercial and industrial	1,807		—		—		—
Commercial real estate	4,582		3		7,329		4
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	7,128	$	3	$	8,079	$	4
With an allowance recorded
Residential real estate	$	—	$	—	$	—	$	—
Home equity - junior liens	—		—		—		—
Commercial and industrial	—		—		—		—
Commercial real estate	1,350		—		1,837		30
Consumer	—		—		—		—
DDA overdrafts	—		—		—		—
Total	$	1,350	$	—	$	1,837	$	30

     Approximately $0.6 million and $0.3 million of interest income would have been recognized during the nine months ended September 30, 2015 and 2014, 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, 2015.

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.

Regulatory guidance requires loans to be accounted for as collateral-dependent loans when borrowers have filed Chapter 7 bankruptcy, the debt has been discharged by the bankruptcy court and the borrower has not reaffirmed the debt. 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 following tables set forth the Company’s TDRs (in thousands):

	September 30, 2015						December 31, 2014
			Non-						Non-
	Accruing		Accruing		Total		Accruing		Accruing		Total
Commercial and industrial	$	62	$	—	$	62	$	73	$	—	$	73
Commercial real estate	1,921		—		1,921		2,263		—		2,263
Residential real estate	18,154		—		18,154		17,946		545		18,491
Home equity	2,730		16		2,746		2,673		15		2,688
Consumer	—		—		—		—		—		—
	$	22,867	$	16	$	22,883	$	22,955	$	560	$	23,515

	New TDRs					New TDRs
	For the nine months ended					For the nine months ended
	September 30, 2015					September 30, 2014
		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	—	$	—	$	—	—	$	—	$	—
Commercial real estate	—	—		—		1	432		432
Residential real estate	35	2,431		2,431		26	2,049		2,049
Home equity	14	368		368		8	203		203
Consumer	—	—		—		—	—		—
	49	$	2,799	$	2,799	35	$	2,684	$	2,684

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Long-Term Debt

9 Months Ended

Sep. 30, 2015

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

Long-Term Debt

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

	September 30, 2015		December 31, 2014
Junior subordinated debentures owed to City Holding Capital Trust III, due 2038, interest at a rate of 3.84% and 3.74%, 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 at any time or in part from time-to-time, 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 Capital Securities and payments on redemption of the Capital 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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Employee Benefit Plans

9 Months Ended

Sep. 30, 2015

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. As of September 30, 2015, under the 2003 Plan and 2013 Plan, 438,515 stock options had been awarded and 241,596 restricted stock awards had been awarded, respectively.

Each award from the 2003 Plan and 2013 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 2003 Plan and 2013 Plan, all outstanding options and awards shall immediately vest.

Certain stock options and restricted stock awards have performance-based vesting requirements. These shares will vest in three separate annual installments of approximately 33.33% per installment on the third, fourth and fifth anniversaries of the grant date, subject further to performance-based vesting requirements. The performance-based vesting requirements are as follows:

* First Installment – the mean return on average assets of the Company (excluding merger and acquisition expenses and other nonrecurring items as determined by the Board of Directors of the Company) of the three years immediately prior to the vesting date is equal to or exceeds the median return on average assets over the 20 year period immediately preceding the vesting date of all FDIC insured depository institutions.

* Second Installment – the mean return on average assets of the Company (excluding merger and acquisition expenses and other nonrecurring items as determined by the Board of Directors of the Company) of the four years immediately prior to the vesting date is equal to or exceeds the median return on average assets over the 20 year period immediately preceding the vesting date of all FDIC insured depository institutions.

* Third Installment – the mean return on average assets of the Company (excluding merger and acquisition expenses and other nonrecurring items as determined by the Board of Directors of the Company) of the five years immediately prior to the vesting date is equal to or exceeds the median return on average assets over the 20 year period immediately preceding the vesting date of all FDIC insured depository institutions.

Stock Options

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

	Nine months ended September 30,
	2015				2014
	Options		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
Outstanding at January 1	167,554		$	36.74	173,601		$	35.26
Granted	12,961		46.41		13,953		44.43
Exercised	(71,750	)	37.01		(19,000	)	29.13
Forfeited	(4,000	)	31.66		—		—
Outstanding at September 30	104,765		$	37.95	168,554		$	36.71

Additional information regarding stock options outstanding and exercisable at September 30, 2015, is provided in the following table:

Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
25.00 - 29.99	1,250	28.15	3.5	$	26	1,250	$	28.15	3.5	$	26
30.00 - 34.99	17,750	31.63	4.1	314		17,750	31.63		4.1	314
35.00 - 39.99	51,851	36.10	6.0	684		41,000	39.13		1.3	417
40.00 - 44.99	20,953	43.24	6.5	127		7,000	40.88		2.5	59
45.00 - 50.00	12,961	46.41	9.4	37		—	—		—	—
	104,765			$	1,188	67,000				$	816

Proceeds from stock option exercises were $2.7 million and $0.6 million during the nine months ended September 30, 2015 and 2014, respectively. Shares issued in connection with stock option exercises are issued from available treasury shares. If no treasury shares are available, new shares would be issued from available authorized shares. During the nine months ended September 30, 2015 and 2014 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 $0.7 million and $0.3 million during the nine months ended September 30, 2015 and 2014, respectively.

Stock-based compensation expense was approximately $0.2 million and $0.1 million for the nine months ended September 30, 2015 and 2014, respectively.  Unrecognized stock-based compensation expense related to stock options approximated $0.5 million at September 30, 2015. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.4 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,
	2015		2014
Risk-free interest rate	1.95	%	2.42	%
Expected dividend yield	3.50	%	3.60	%
Volatility factor	45.40	%	48.75	%
Expected life of option	7.0 years		8.0 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 $0.9 million and $0.8 million for the nine months ended September 30, 2015 and 2014, respectively.  Unrecognized stock-based compensation expense related to non-vested restricted shares was $3.1 million at September 30, 2015. At September 30, 2015, this unrecognized expense is expected to be recognized over 3.3 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,
	2015				2014
	Restricted Awards		Average Market Price at Grant		Restricted Awards		Average Market Price at Grant
Outstanding at January 1	163,431				142,469
Granted	25,440		$	46.35	27,162		$	39.72
Forfeited/Vested	(17,050	)			(6,200	)
Outstanding at September 30	171,821				163,431

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 for both the nine month periods ended September 30, 2015 and 2014.

The Company maintains two frozen defined benefit pension plans the (“Defined Benefit Plans”), which were inherited from the Company's acquisition of the plan sponsors (Horizon Bancorp, Inc. and Community Financial Corporation). The Company made contributions of approximately $0.3 million to the Defined Benefit Plans during each of the nine months ended September 30, 2015 and 2014, 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,
	2015			2014			2015			2014
Components of net periodic cost:
Interest cost	$	203		$	209		$	668		$	634
Expected return on plan assets	(234		)	(252		)	(757		)	(779		)
Net amortization and deferral	244			150			714			538
Net Periodic Pension Cost	$	213		$	107		$	625		$	393

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Employee Benefit Plans (Restricted Shares Activity And Related Information) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Restricted Awards
Beginning Balance	163,431	142,469
Granted	25,440	27,162
Forfeited/Vested	(17,050)	(6,200)
Ending Balance	171,821	163,431
Average Market Price at Grant, Granted	$ 46.35	$ 39.72

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Standby Letters Of Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	$ 4,865	$ 4,592
Letter of Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	2,590	1,991
Home equity - junior liens (including lines of credit) [Member] | Commitments To Extend Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	179,654	175,312
Commercial Real Estate [Member] | Commitments To Extend Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	102,348	50,298
Other Commitments [Member] | Commitments To Extend Credit [Member]
Commitments And Contingencies [Line Items]
Contractual obligations	$ 162,895	$ 145,283

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Employee Benefit Plans (Weighted Average Assumptions Estimate The Fair Value Of Options Granted) (Details)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation [Abstract]
Risk-free interest rate	1.95%	2.42%
Expected dividend yield	3.50%	3.60%
Volatility factor	45.40%	48.75%
Expected life of option	7 years	8 years

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Investments (Narrative) (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($) security	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Schedule of Investments [Line Items]
Credit-related net investment impairment losses	$ 0	$ 0	$ 0
Regional community bank stocks, percent of average trading volumes (less than 0.1%)	0.10%
Number Of Pooled Trust Preferred Securities | security	5
Pooled trust preferred securities, book value	$ 1,800,000
Pooled trust preferred securities, estimated fair value	$ 1,800,000
Annual prepayment rate	1.00%		1.00%
Annual prepayments maturity	100.00%		100.00%
Additional basis points	1.50%		1.50%
Carrying value of securities pledged	$ 274,000,000		$ 273,000,000
Held-to-maturity Securities, Transferred Security, at Carrying Value	$ 0	$ 83,400,000
Maximum [Member]
Schedule of Investments [Line Items]
Equity ownership positions in the community bank holding companies	4.00%

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Allowance For Loan Losses (Schedule Of Impaired Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	$ 6,043	$ 5,377
With no related allowance recorded, Unpaid principal balance	8,544	5,377
With an allowance recorded, Recorded investment	1,352	1,392
With an allowance recorded, Unpaid principal balance	4,282	1,392
Related allowance	274	252
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With no related allowance recorded, Recorded investment	439	449
With no related allowance recorded, Unpaid principal balance	439	449
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	296	297
With no related allowance recorded, Unpaid principal balance	296	297
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	799	0
With no related allowance recorded, Unpaid principal balance	2,861	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	4,509	4,631
With no related allowance recorded, Unpaid principal balance	4,948	4,631
With an allowance recorded, Recorded investment	1,352	1,392
With an allowance recorded, Unpaid principal balance	4,282	1,392
Related allowance	274	252
Consumer Loan [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
Demand Deposit Account 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

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Investments (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015								December 31, 2014
	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	$	5	$	—	$	—	$	5	$	1,816	$	11	$	—	$	1,827
Obligations of states and
political subdivisions	42,254		466		18		42,702		41,382		722		8		42,096
Mortgage-backed securities:
U.S. government agencies	225,382		3,686		1,121		227,947		185,831		3,470		1,973		187,328
Private label	1,276		4		1		1,279		1,700		8		4		1,704
Trust preferred
securities	7,578		459		1,080		6,957		9,763		425		1,152		9,036
Corporate securities	17,758		182		597		17,343		7,806		204		693		7,317
Total Debt Securities	294,253		4,797		2,817		296,233		248,298		4,840		3,830		249,308
Marketable equity  securities	2,131		972		—		3,103		2,131		1,082		—		3,213
Investment funds	1,525		4		—		1,529		1,525		—		3		1,522
Total Securities
Available-for-Sale	$	297,909	$	5,773	$	2,817	$	300,865	$	251,954	$	5,922	$	3,833	$	254,043

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

	September 30, 2015								December 31, 2014
	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
Mortgage-backed securities
US government agencies	$	77,095	$	2,910	$	—	$	80,005	$	86,742	$	2,733	$	—	$	89,475
Trust preferred securities	4,000		—		—		4,000		4,044		672		—		4,716
Total Securities
Held-to-Maturity	$	81,095	$	2,910	$	—	$	84,005	$	90,786	$	3,405	$	—	$	94,191
Other investment securities:
Non-marketable equity securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857
Total Other Investment
Securities	$	9,926	$	—	$	—	$	9,926	$	9,857	$	—	$	—	$	9,857

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, 2015
	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	$	2,670	$	13	$	125	$	5	$	2,795	$	18
Mortgage-backed securities:
U.S. Government agencies	16,782		102		35,607		1,019		52,389		1,121
Private label	1,005		1		—		—		1,005		1
Trust preferred securities	1,015		16		4,857		1,064		5,872		1,080
Corporate securities	—		—		4,161		597		4,161		597
Investment funds	—		—		—		—		—		—
Total	$	21,472	$	132	$	44,750	$	2,685	$	66,222	$	2,817

	December 31, 2014
	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	$	1,559	$	3	$	125	$	5	$	1,684	$	8
Mortgage-backed securities:
U.S. Government agencies	—		—		60,122		1,973		60,122		1,973
Private label	1,277		4		—		—		1,277		4
Trust preferred securities	—		—		4,760		1,152		4,760		1,152
Corporate securities	—		—		4,049		693		4,049		693
Investment funds	$	—	$	—	$	1,496	$	3	1,496		3
Total	$	2,836	$	7	$	70,552	$	3,826	$	73,388	$	3,833

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, 2015 and for the year ended December 31, 2014 (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, 2014	$	20,186		$	4,698		$	24,884
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	(3,600		)	(3,114		)	(6,714		)
Balance at December 31, 2014	16,586			1,584			18,170
Additions:
Initial credit impairment	—			—			—
Additional credit impairment	—			—			—
Deductions:
Called or Sold	—			—			—
Balance at September 30, 2015	$	16,586		$	1,584		$	18,170

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, 2015 (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 performing collateral)			Excess Subordination as a Percentage of Current Performing Collateral (3)
	Pooled trust preferred securities:
	Other-than-temporarily impaired
	Available for Sale:
P1	Pooled	Mezz	$	632	$	—	$	—	—		Caa1	5	14.5	%	—	%	(2)	—	%
P2	Pooled	Mezz	1,513		—		—		—		Ca	3	18.3	%	—	%	(2)	—	%
P3	Pooled	Mezz	2,962		1,419		1,007		(412	)	Caa3	19	20.0	%	7.1	%	(2)	—	%
P5	Pooled	Mezz	6,032		391		838		447		C	7	13.5	%	19.0	%	(2)	33.6	%
	Held to Maturity:
P6	Pooled	Mezz	1,223		—		—		—		Caa1	5	14.5	%	—	%	(2)	—	%
P7	Pooled	Mezz	2,009		—		—		—		Ca	3	18.3	%	—	%	(2)	—	%
	Single issuer trust preferred securities
	Available for sale:
S5	Single		261		235		247		12		NR	1	—	%	—	%
	Held to Maturity:
S9	Single		4,000		4,000		4,000		—		NR	1	—	%	—	%

(1) The differences noted consist of unrealized gains (losses) recorded at September 30, 2015 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.

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, 2015, 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.

	Amortized Cost		Estimated Fair Value
Securities Available-for-Sale
Due in one year or less	$	2,838	$	15,831
Due after one year through five years	14,590		14,976
Due after five years through ten years	27,168		27,464
Due after ten years	249,657		237,962
	$	294,253	$	296,233
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	81,095		84,005
	$	81,095	$	84,005

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,
	2015		2014		2015		2014
Gross realized gains	$	—	$	71	$	2,130	$	972
Gross realized losses	—		—		—		—
Net investment security gains	$	—	$	71	$	2,130	$	972

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Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2015

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,
	2015				2014
	Options		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
Outstanding at January 1	167,554		$	36.74	173,601		$	35.26
Granted	12,961		46.41		13,953		44.43
Exercised	(71,750	)	37.01		(19,000	)	29.13
Forfeited	(4,000	)	31.66		—		—
Outstanding at September 30	104,765		$	37.95	168,554		$	36.71

Stock Options Outstanding And Exercisable

Additional information regarding stock options outstanding and exercisable at September 30, 2015, is provided in the following table:

Ranges of Exercise Prices	No. of Options Outstanding	Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)		No. of Options Currently Exercisable	Weighted-Average Exercise Price of Options Currently Exercisable		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value of Options Currently Exercisable (in thousands)
25.00 - 29.99	1,250	28.15	3.5	$	26	1,250	$	28.15	3.5	$	26
30.00 - 34.99	17,750	31.63	4.1	314		17,750	31.63		4.1	314
35.00 - 39.99	51,851	36.10	6.0	684		41,000	39.13		1.3	417
40.00 - 44.99	20,953	43.24	6.5	127		7,000	40.88		2.5	59
45.00 - 50.00	12,961	46.41	9.4	37		—	—		—	—
	104,765			$	1,188	67,000				$	816

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,
	2015		2014
Risk-free interest rate	1.95	%	2.42	%
Expected dividend yield	3.50	%	3.60	%
Volatility factor	45.40	%	48.75	%
Expected life of option	7.0 years		8.0 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,
	2015				2014
	Restricted Awards		Average Market Price at Grant		Restricted Awards		Average Market Price at Grant
Outstanding at January 1	163,431				142,469
Granted	25,440		$	46.35	27,162		$	39.72
Forfeited/Vested	(17,050	)			(6,200	)
Outstanding at September 30	171,821				163,431

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,
	2015			2014			2015			2014
Components of net periodic cost:
Interest cost	$	203		$	209		$	668		$	634
Expected return on plan assets	(234		)	(252		)	(757		)	(779		)
Net amortization and deferral	244			150			714			538
Net Periodic Pension Cost	$	213		$	107		$	625		$	393

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Allowance For Loan Losses (Schedule Of Non-Commercial Loans By Payment Performance) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total	$ 2,696,438	$ 2,652,066
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,358,083	1,294,576
Residential Real Estate [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,354,865	1,292,012
Residential Real Estate [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,218	2,564
Home equity - junior lien [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	144,748	145,604
Home equity - junior lien [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	144,574	145,506
Home equity - junior lien [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	174	98
Consumer Loan [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	36,751	39,705
Consumer Loan [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	36,751	39,692
Consumer Loan [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	0	13
Demand Deposit Account Overdrafts [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,258	2,802
Demand Deposit Account Overdrafts [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	3,258	2,802
Demand Deposit Account Overdrafts [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	0	0
Noncommercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,542,840	1,482,687
Noncommercial Loans [Member] | Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,539,448	1,480,012
Noncommercial Loans [Member] | Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 3,392	$ 2,675

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Investments (Gross Gains And Losses Realized) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Investments [Abstract]
Gross realized gains	$ 0	$ 71	$ 2,130	$ 972
Gross realized losses	0	0	0	0
Net investment security gains	$ 0	$ 71	$ 2,130	$ 972

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net income	$ 10,607	$ 11,872	$ 40,582	$ 38,432
Unrealized gains (losses) on available-for-sale securities arising during the period	2,111	(582)	3,079	4,252
Reclassification adjustment for gains	0	(71)	(2,130)	(972)
Other comprehensive income (loss) before income taxes	2,111	(653)	949	3,280
Tax effect	(779)	241	(350)	(1,211)
Other comprehensive income (loss), net of tax	1,332	(412)	599	2,069
Comprehensive income, net of tax	$ 11,939	$ 11,460	$ 41,181	$ 40,501

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-01, "Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects." This ASU permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment. The ASU also requires reporting entities to disclose information that enable users of its financial statements to understand the nature of its investments in qualified affordable housing projects, and the effect of the measurement of its investments in qualified affordable housing projects and the related tax credits on its financial position and results of operations. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-01 did not have a material impact on the Company's financial statements.

In January 2014, the FASB issued ASU No. 2014-04, "Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure." This ASU clarifies that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through similar legal agreement. Additionally, the amendments require interim and annual disclosures of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-04 did not have a material impact on the Company's financial statements.

In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." This ASU changes the requirements for reporting discontinued operations. A disposal of a component or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations when certain criteria are met. Additional disclosures are also required for disposals that meet the criteria to be reported in discontinued operations. The Company elected to early adopt this ASU for the year ended December

31, 2014 relating to the sale of CityInsurance. The adoption of ASU 2014-08 did not have a material impact on the

Company's financial statements.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The core principle will be achieved using a five step process. In August 2015 the FASB issued Accounting Standards Update 2015-14, "Revenue from Contracts with Customers (Topic 606)." which amends the effective date for the Company from January 1, 2017 to January 1, 2018. The adoptions of ASU 2014-09 and ASU 2015-14 are not expected to have a material impact on the Company's financial statements.

In June 2014, the FASB issued ASU No. 2014-11, "Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." The amendments in this update require two accounting changes. First, the amendments in this update change the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the amendments require separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counter-party, which will result in secured borrowing accounting for the repurchase agreement. This update also requires certain disclosures for these types of transactions. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-11 did not have a material impact on the Company's financial statements.

In June 2014, the FASB issued ASU No. 2014-12, "Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Performance targets should not be reflected in estimating the grant date fair value of the award, but compensation cost should be recognized in the period for which the requisite service has already been rendered. This ASU will become effective for the Company on January 1, 2016, with early adoption permitted. The adoption of ASU 2014-12 is not expected to have a material impact on the Company's financial statements.

In August 2014, the FASB issued ASU No. 2014-14, "Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure." The amendments in this update require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. This ASU became effective for the Company on January 1, 2015. The adoption of ASU 2014-14 did not have a material impact on the Company's financial statements.

In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis". ASU 2015-02 eliminates the deferral of FAS 167 and makes changes to both the variable interest model and the voting model. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-02 is not expected to have a material impact on the Company's financial statements.

In April 2015, the FASB issued ASU No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-03 is not expected to have a material impact on the Company's financial statements.

In April 2015, the FASB issued ASU No. 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement." ASU 2015-05 provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-05 is not expected to have a material impact on the Company's financial statements.

In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)." ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. the ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-07 is not expected to have a material impact on the Company's financial statements.

In September 2015, the FASB issued ASU No. 2015-16, "Business Combinations (Topic 85): Simplifying the Accounting for Measurement-Period Adjustments" The amendments in ASU 2015-16 require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The effect on earnings of the adjustments as a result of the change to the provisional amounts will be calculated as if the accounting had been completed at the acquisition date. The amount that would've been recorded in the previous reporting periods will be presented separately on the face of the income statement or disclosed in the notes to the financial statements. This ASU will become effective for the Company on January 1, 2016. The adoption of ASU 2015-16 is not expected to have a material impact on the Company's financial statements.

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Derivative Instruments (Derivative Assets Offset in The Consolidated Balance Sheets) (Details) - Not Designated as Hedging Instrument [Member] - Interest Rate Swap [Member] $ in Thousands	Sep. 30, 2015 USD ($)
Offsetting Assets [Line Items]
Gross amounts of recognized assets	$ 14,099
Net Amounts of Assets presented in the Statement of Financial Position	14,099
Fair Value of collateral	14,099
Total Gross amounts not offset in the statement of financial position including applicable netting agreement and fair value of collateral	14,099
Net Amount	$ 0

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Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Distributed earnings allocated to common stock	$ 6,362	$ 6,073	$ 19,086	$ 18,220
Undistributed earnings allocated to common stock	4,125	5,673	21,040	19,809
Net earnings allocated to common shareholders	$ 10,487	$ 11,746	$ 40,126	$ 38,029
Average shares outstanding (in shares)	15,178,000	15,363,000	15,111,000	15,509,000
Effect of dilutive securities:
Warrant outstanding	0	62,000	37,000	62,000
Employee stock awards	20,000	20,000	21,000	23,000
Shares for diluted earnings per share (in shares)	15,198,000	15,445,000	15,169,000	15,594,000
Basic earnings per common share (in dollars per share)	$ 0.69	$ 0.76	$ 2.66	$ 2.45
Diluted earnings per share (in dollars per share)	$ 0.69	$ 0.76	$ 2.65	$ 2.44
Options to purchase shares of common stock, anti-dilutive (in shares)			0	13,953
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit				$ 44.43

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015		December 31, 2014
Commitments to extend credit:
Home equity lines	$	179,654	$	175,312
Commercial real estate	102,348		50,298
Other commitments	162,895		145,283
Standby letters of credit	4,865		4,592
Commercial letters of credit	2,590		1,991

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Fair Value Measurements (Schedule Of OREO Measured And Reported At Fair Value) (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Other Real Estate [Roll Forward]
Beginning balance	$ 8,179	$ 8,470	$ 8,470
Disposed	(3,727)	(3,155)
Ending balance	6,026	9,161	$ 8,179
OREO Remeasured At Initial Recognition [Member]
Other Real Estate [Roll Forward]
Carrying value of foreclosed assets prior to remeasurement	2,356	4,225
Charge-offs recognized in the allowance for loan losses	0	0
Fair value	2,356	4,225
OREO Remeasured Subsequent To Initial Recognition [Member]
Other Real Estate [Roll Forward]
Carrying value of foreclosed assets prior to remeasurement	3,601	480
Fair value	2,819	101
Write-downs included in other non-interest expense	$ (782)	$ (379)

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Investments (Credit Loss Component Of OTTI On Debt Securities Recognized In Earnings) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning Balance	$ 18,170	$ 24,884
Additions:
Initial credit impairment	0	0
Additional credit impairment	0	0
Deductions:
Called or Sold	0	(6,714)
Ending Balance	18,170	18,170
Debt Securities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning Balance	16,586	20,186
Additions:
Initial credit impairment	0	0
Additional credit impairment	0	0
Deductions:
Called or Sold	0	(3,600)
Ending Balance	16,586	16,586
Equity Securities [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning Balance	1,584	4,698
Additions:
Initial credit impairment	0	0
Additional credit impairment	0	0
Deductions:
Called or Sold	0	(3,114)
Ending Balance	$ 1,584	$ 1,584

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Fair Value Measurements

9 Months Ended

Sep. 30, 2015

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, 2015.  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 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, 2015.

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, 2015
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	5	$	—	$	5	$	—
Obligations of states and political subdivisions	42,702		—		42,702		—
Mortgage-backed securities:
U.S. Government agencies	227,947		—		227,947		—
Private label	1,279		—		1,279		—
Trust preferred securities	6,957		—		4,866		2,091
Corporate securities	17,343		—		17,343		—
Marketable equity securities	3,103		3,103		—		—
Investment funds	1,529		1,529		—		—
Derivative assets	14,099		—		14,099		—
Financial Liabilities
Derivative liabilities	14,369		—		14,369		—
Nonrecurring fair value measurements
Impaired loans	$	7,122	$	—	$	—	$	7,122	$	—
Other real estate owned	6,026		—		—		6,026		(782		)
December 31, 2014
Recurring fair value measurements
Financial Assets
U.S. Government agencies	$	1,827	$	—	$	1,827	$	—
Obligations of states and political subdivisions	42,096		—		42,096		—
Mortgage-backed securities:
U.S. Government agencies	187,328		—		187,328		—
Private label	1,704		—		1,704		—
Trust preferred securities	9,036		—		7,165		1,871
Corporate securities	7,317		—		7,317		—
Marketable equity securities	3,213		3,213		—		—
Investment funds	1,522		1,522		—		—
Derivative assets	10,253		—		10,253		—
Financial Liabilities
Derivative liabilities	10,277		—		10,277		—
Nonrecurring fair value measurements
Impaired loans	$	6,517	$	—	$	—	$	6,517	$	(153	)
Other real estate owned	$	8,179	$	—	$	—	$	8,179	$	(464	)

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), which consist solely of trust preferred securities (in thousands):

	Nine months ended September 30,
	2015		2014
Beginning balance	$	1,871	$	3,887
Impairment losses on investment securities	—		—
Included in other comprehensive income	220		(2,161		)
Dispositions	—		—
Transfers into Level 3	—		—
Ending Balance	$	2,091	$	1,726

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 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, 2015 and 2014, collateral discounts ranged from 20% to 30%. During the nine months ended September 30, 2015 and 2014, the Company had no Level 2 financial assets and liabilities that were measured on a nonrecurring basis.

	Nine months ended September 30,
	2015			2014
Beginning balance	$	6,517		$	11,714
Loans classified as impaired during the period	799			—
Specific valuation allowance allocations	—			—
	799			—
(Additional) reduction in specific valuation allowance allocations	(22		)	633
Paydowns, payoffs, other activity	(172		)	(5,730		)
Ending balance	$	7,122		$	6,617

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,
	2015			2014
Beginning balance	$	8,179		$	8,470
OREO remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	2,356			4,225
Charge-offs recognized in the allowance for loan losses	—			—
Fair value	2,356			4,225
OREO remeasured subsequent to initial recognition
Carrying value of foreclosed assets prior to remeasurement	3,601			480
Fair value	2,819			101
Write-downs included in other non-interest expense	(782		)	(379		)
Disposed	(3,727		)	(3,155		)
Ending balance	$	6,026		$	9,161

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, 2015
Assets:
Cash and cash equivalents	$	118,708	$	118,708	$	118,708	$	—	$	—
Securities available-for-sale	300,865		300,865		4,632		294,142		2,091
Securities held-to-maturity	81,095		84,005		—		84,005		—
Other securities	9,926		9,926		—		9,926		—
Net loans	2,675,497		2,685,390		—		—		2,685,390
Accrued interest receivable	7,690		7,690		7,690		—		—
Derivative assets	14,099		14,099		—		14,099		—
Liabilities:
Deposits	2,865,502		2,873,255		1,883,153		990,102		—
Short-term debt	147,036		147,035		—		147,035		—
Long-term debt	16,495		16,464		—		16,464		—
Derivative liabilities	14,369		14,369		—		14,369		—
December 31, 2014
Assets:
Cash and cash equivalents	148,228		148,228		148,228		—		—
Securities available-for-sale	254,043		254,043		4,735		247,437		1,871
Securities held-to-maturity	90,786		94,191		—		94,191		—
Other securities	9,857		9,857		—		9,857		—
Net loans	2,631,916		2,638,911		—		—		2,638,911
Accrued interest receivable	6,826		6,826		6,826		—		—
Derivative assets	10,253		10,253		—		10,253		—
Liabilities:
Deposits	2,872,787		2,879,126		1,846,124		1,033,002		—
Short-term debt	134,931		134,934		—		134,934		—
Long-term debt	16,495		16,464		—		16,464		—
Derivative liabilities	10,277		10,277		—		10,277		—