Exhibit

The Company’s net interest income increased from $30.4 million during the first quarter of 2017 to $31.3 million during the second quarter of 2017. The Company’s tax equivalent net interest income increased $0.8 million, or 2.7%, from $30.8 million during the first quarter of 2017 to $31.6 million during the second quarter of 2017. Higher yields on commercial and residential real estate loans increased net interest income $1.0 million from the quarter ended March 31, 2017. This increase was partially offset by increased interest expense as a result of higher interest rates on interest bearing liabilities of $0.2 million. The Company’s reported net interest margin remained stable at 3.46% for the second quarter of 2017 compared to 3.45% for the first quarter of 2017. Excluding the favorable impact of the accretion from the fair value adjustments, the net interest margin would have been 3.42% for the quarter ended March 31, 2017 and 3.39% for the quarter ended June 30, 2017.

for loan losses recorded in the second quarter of 2017 reflects changes in the quality of the portfolio and general improvement in the Company’s historical loss rates used to compute the allowance not specifically allocated to individual credits. Changes in the amount of the provision and related allowance are based on the Company’s detailed systematic methodology and are directionally consistent with changes in the composition and quality of the Company’s loan portfolio. The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.

Non-interest income was $14.9 million during the second quarter of 2017. During the second quarter of 2016, the Company realized investment gains of $0.85 million. This gain represented partial recoveries of impairment charges previously recognized on pools of trust preferred securities. Exclusive of this gain, non-interest income increased from $13.7 million for the second quarter of 2016 to $14.9 million for the second quarter of 2017. This increase was mainly due to an increase in service charges of $0.5 million, or 7.8%, from the second quarter of 2016, an increase in trust and investment management fee income of $0.2 million, or 17.6%, an increase in bank owned life insurance revenues of $0.2 million, or 26.0%, and an increase in bankcard revenues of $0.2 million, or 4.3%.

Total average depository balances increased $76.5 million, or 2.3%, from the quarter ended March 31, 2017 to the quarter ended June 30, 2017. The Company experienced increases in savings deposits ($48.0 million), time deposits ($13.8 million), noninterest-bearing demand deposits ($13.0 million), and interest-bearing deposits ($1.7 million). Total deposit balances decreased $114.6 million from March 31, 2017 to June 30, 2017, primarily in savings deposit balances ($76.5 million). Over the last year, one of the Company’s customers accumulated over $100 million in deposits. During the quarter ended June 30, 2017, this particular customer made a significant distribution which returned their depository balance to its normal level.

The Company is also strongly capitalized. The Company’s tangible equity ratio increased from 9.3% at December 31, 2016 to 10.4% at June 30, 2017. During the quarter ended March 31, 2017, the Company sold 441,000 common shares at a weighted average price of $64.48 per share, net of broker fees pursuant to an at-the-market common stock offering. No additional common shares were sold during the quarter ended June 30, 2017. At June 30, 2017, City National Bank’s Leverage Ratio was 8.62%, its Common Equity Tier I ratio was 12.27%, its Tier I Capital ratio was 12.27%, and its Total Risk-Based Capital ratio was 12.96%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company's actual results differing 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, 2016. 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



	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2017			2017			2016			2016			2016			2017			2016

Earnings
Net Interest Income (FTE)	$	31,632		$	30,804		$	30,638		$	30,002		$	29,863		$	62,436		$	59,177
Net Income available to common shareholders	14,688			16,026			14,656			13,232			12,541			30,714			24,244

Per Share Data
Earnings per share available to common shareholders:
Basic	$	0.94		$	1.04		$	0.97		$	0.88		$	0.83		$	1.98		$	1.61
Diluted	0.94			1.04			0.97			0.88			0.83			1.98			1.61
Weighted average number of shares:
Basic	15,462			15,252			14,894			14,899			14,889			15,344			14,903
Diluted	15,487			15,277			14,914			14,909			14,902			15,369			14,915
Period-end number of shares	15,617			15,586			15,128			15,007			15,005			15,617			15,005
Cash dividends declared	$	0.44		$	0.44		$	0.43		$	0.43		$	0.43		$	0.88		$	0.86
Book value per share (period-end)	31.54			30.9			29.25			28.97			28.6			31.54			28.6
Tangible book value per share (period-end)	26.49			25.83			24.01			23.69			23.3			26.49			23.3
Market data:
High closing price	$	72.78		$	67.93		$	68.29		$	50.60		$	50.14		$	72.78		$	50.14
Low closing price	61.34			60.86			48.49			44.53			43.06			60.86			40.82
Period-end closing price	65.87			64.48			67.6			50.29			45.47			65.87			45.47
Average daily volume	56			57			57			61			63			56			67
Treasury share activity:
Treasury shares repurchased	—			—			—			—			2			—			231
Average treasury share repurchase price	$	—		$	—		$	—		—			46.65			—			43.34
Common share issuance:
Common shares issued (in thousands)	—			441			108			—			—			441			—
Average common share issue price (a)	$	—		$	64.48		66.21			—			—			$	64.48		—

Key Ratios (percent)
Return on average assets	1.43		%	1.60		%	1.49		%	1.38		%	1.31		%	1.51		%	1.28		%
Return on average tangible equity	14.20		%	16.50		%	16.10		%	14.90		%	14.50		%	15.30		%	14.10		%
Yield on interest earning assets	3.90		%	3.88		%	3.81		%	3.85		%	3.95		%	3.89		%	3.93		%
Cost of interest bearing liabilities	0.56		%	0.54		%	0.50		%	0.49		%	0.49		%	0.55		%	0.49		%
Net Interest Margin	3.46		%	3.45		%	3.42		%	3.48		%	3.56		%	3.46		%	3.55		%
Non-interest income as a percent of total revenue	32.30		%	31.90		%	32.10		%	32.10		%	31.60		%	32.10		%	31.40		%
Efficiency Ratio (a)	52.00		%	53.80		%	48.90		%	56.30		%	55.60		%	53.40		%	56.20		%



Price/Earnings Ratio (b)	17.52			15.51			17.38			14.33			13.66			16.63	14.15



Capital (period-end)
Average Shareholders' Equity to Average Assets	11.99		%	11.66		%	11.25		%	11.35		%	11.13		%
Tangible equity to tangible assets	10.40		%	9.95		%	9.30		%	9.39		%	9.38		%
Consolidated City Holding Company risk based capital ratios (c):
CET I	14.88		%	14.61		%	13.41		%	13.00		%	13.21		%
Tier I	15.45		%	15.18		%	13.98		%	13.59		%	13.82		%
Total	16.17		%	15.91		%	14.73		%	14.33		%	14.57		%
Leverage	10.94		%	10.83		%	10.08		%	9.92		%	9.74		%
City National Bank risk based capital ratios (c):
CET I	12.27		%	11.74		%	11.23		%	11.14		%	10.99		%
Tier I	12.27		%	11.74		%	11.52		%	11.73		%	11.59		%
Total	12.96		%	12.44		%	12.24		%	12.45		%	12.32		%
Leverage	8.62		%	8.40		%	8.33		%	8.55		%	8.16		%

Other
Branches	85			85			85			85			85
FTE	839			833			847			834			852

Assets per FTE	$	4,836		$	4,951		$	4,704		$	4,636		$	4,468
Deposits per FTE	3,907			4,073			3,815			3,812			3,688

(a) The common share issue price is presented net of commissions and excludes one-time offering costs of approximately $265,000.
(b) The price/earnings ratio is computed based on annualized quarterly earnings.
(c) June 30, 2017 risk-based capital ratios are estimated.



	Three Months Ended										Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
	2017		2017		2016		2016		2016		2017		2016
Interest Income
Interest and fees on loans	$	31,115	$	30,104	$	30,126	$	29,444	$	29,640	$	61,219	$	58,567
Interest on investment securities:
Taxable	3,480		3,444		3,277		3,183		2,927		6,924		5,933
Tax-exempt	686		663		481		419		365		1,349		722
Interest on deposits in depository institutions	17		3		—		—		—		20		—
Total Interest Income	35,298		34,214		33,884		33,046		32,932		69,512		65,222

Interest Expense
Interest on deposits	3,660		3,429		3,137		3,006		3,011		7,088		5,909
Interest on short-term borrowings	187		157		188		90		86		344		193
Interest on long-term debt	189		181		179		172		167		370		331
Total Interest Expense	4,036		3,767		3,504		3,268		3,264		7,802		6,433
Net Interest Income	31,262		30,447		30,380		29,778		29,668		61,710		58,789
Provision for loan losses	510		681		1,301		1,432		1,122		1,191		1,661
Net Interest Income After Provision for Loan Losses	30,752		29,766		29,079		28,346		28,546		60,519		57,128

Non-Interest Income
Gains on sale of investment securities	—		4,276		—		2,668		845		4,276		845
Service charges	7,074		6,730		6,995		6,842		6,564		13,805		12,867
Bankcard revenue	4,372		4,140		4,142		4,216		4,190		8,512		8,157
Trust and investment management fee income	1,612		1,386		1,597		1,329		1,371		2,998		2,647
Bank owned life insurance	968		1,229		952		846		768		2,197		1,528
Other income	895		746		685		846		843		1,642		1,664
Total Non-Interest Income	14,921		18,507		14,371		16,747		14,581		33,430		27,708

Non-Interest Expense
Salaries and employee benefits	12,945		13,078		12,427		12,993		12,790		26,023		25,463
Occupancy and equipment	2,956		2,838		2,792		2,759		2,708		5,794		5,544
Depreciation	1,510		1,525		1,516		1,585		1,567		3,036		3,134
FDIC insurance expense	328		375		137		508		512		703		977
Advertising	781		733		445		667		778		1,514		1,494
Bankcard expenses	970		943		1,011		1,188		1,016		1,913		1,955
Postage, delivery, and statement mailings	504		555		492		517		506		1,059		1,071
Office supplies	345		361		320		325		366		706		719
Legal and professional fees	440		449		515		869		437		889		802



Telecommunications	492		484		494		459		431		976		859
Repossessed asset losses, net of expenses	147		336		244		305		53		482		341
Other expenses	2,755		2,923		2,063		3,109		3,119		5,681		6,064
Total Non-Interest Expense	24,173		24,600		22,456		25,284		24,283		48,776		48,423
Income Before Income Taxes	21,500		23,673		20,994		19,809		18,844		45,173		36,413
Income tax expense	6,812		7,647		6,338		6,577		6,303		14,459		12,169
Net Income Available to Common Shareholders	$	14,688	$	16,026	$	14,656	$	13,232	$	12,541	$	30,714	$	24,244

Distributed earnings allocated to common shareholders	$	6,797	$	6,782	$	6,428	$	6,376	$	6,375	$	13,594	$	12,750
Undistributed earnings allocated to common shareholders	7,733		9,067		8,051		6,699		6,016		16,787		11,202
Net earnings allocated to common shareholders	$	14,530	$	15,849	$	14,479	$	13,075	$	12,391	$	30,381	$	23,952


Average common shares outstanding	15,462		15,252		14,894		14,899		14,889		15,344		14,903
Shares for diluted earnings per share	15,487		15,277		14,914		14,909		14,902		15,369		14,915

Basic earnings per common share	$	0.94	$	1.04	$	0.97	$	0.88	$	0.83	$	1.98	$	1.61
Diluted earnings per common share	$	0.94	$	1.04	$	0.97	$	0.88	$	0.83	$	1.98	$	1.61



	(Unaudited)			(Unaudited)						(Unaudited)			(Unaudited)
	June 30,			March 31,			December 31,			September 30,			June 30,
	2017			2017			2016			2016			2016
Assets
Cash and due from banks	$	54,577		$	164,887		$	62,263		$	57,233		$	69,933
Interest-bearing deposits in depository institutions	27,783			25,925			25,876			7,576			8,643
Cash and cash equivalents	82,360			190,812			88,139			64,809			78,576

Investment securities available-for-sale, at fair value	504,660			470,098			450,083			434,717			409,039
Investment securities held-to-maturity, at amortized cost	69,798			72,308			75,169			79,499			83,208
Other securities	16,039			10,240			14,352			11,895			10,203
Total investment securities	590,497			552,646			539,604			526,111			502,450

Gross loans	3,083,767			3,074,173			3,046,226			2,957,912			2,903,398
Allowance for loan losses	(19,063		)	(19,209		)	(19,730		)	(19,550		)	(19,139		)
Net loans	3,064,704			3,054,964			3,026,496			2,938,362			2,884,259

Bank owned life insurance	101,960			101,481			100,732			100,293			99,446
Premises and equipment, net	72,809			73,805			75,165			75,589			75,040
Accrued interest receivable	8,122			8,644			8,408			7,986			8,428
Net deferred tax assets	22,944			24,606			28,043			23,179			23,995
Intangible assets	78,865			79,000			79,135			79,284			79,433
Other assets	35,138			38,029			38,681			50,748			55,234
Total Assets	$	4,057,399		$	4,123,987		$	3,984,403		$	3,866,361		$	3,806,861

Liabilities
Deposits:
Noninterest-bearing	$	688,223		$	714,791		$	672,286		$	669,865		$	651,867
Interest-bearing:
Demand deposits	722,440			743,246			695,891			713,642			701,248
Savings deposits	797,552			874,031			822,057			765,195			758,323
Time deposits	1,069,932			1,060,690			1,041,419			1,030,584			1,030,841
Total deposits	3,278,147			3,392,758			3,231,653			3,179,286			3,142,279
Short-term borrowings
Federal Funds purchased	46,400			—			64,100			6,000			—
Customer repurchase agreements	177,904			186,686			184,205			173,384			153,674
Long-term debt	16,495			16,495			16,495			16,495			16,495
Other liabilities	45,946			46,402			45,512			56,412			66,054
Total Liabilities	3,564,892			3,642,341			3,541,965			3,431,577			3,378,502



Stockholders' Equity
Preferred stock	—			—			—			—			—
Common stock	47,619			47,619			46,518			46,249			46,249
Capital surplus	139,972			140,305			112,873			105,996			105,648
Retained earnings	433,944			426,126			417,017			408,823			402,044
Cost of common stock in treasury	(124,943		)	(126,265		)	(126,958		)	(127,538		)	(127,619		)
Accumulated other comprehensive loss:
Unrealized gain on securities available-for-sale	575			(1,479		)	(2,352		)	6,013			6,796
Underfunded pension liability	(4,660		)	(4,660		)	(4,660		)	(4,759		)	(4,759		)
Total Accumulated Other Comprehensive Loss	(4,085		)	(6,139		)	(7,012		)	1,254			2,037
Total Stockholders' Equity	492,507			481,646			442,438			434,784			428,359
Total Liabilities and Stockholders' Equity	$	4,057,399		$	4,123,987		$	3,984,403		$	3,866,361		$	3,806,861

Regulatory Capital
Total CET 1 capital	$	418,449		$	409,533		$	371,677		$	355,934		$	349,100
Total tier 1 capital	434,449			425,533			387,677			371,934			365,100
Total risk-based capital	454,832			445,938			408,406			392,258			384,855
Total risk-weighted assets	2,812,443			2,807,347			2,772,456			2,737,721			2,642,040



	June 30,		March 31,		December 31,		September 30,		June 30,
	2017		2017		2016		2016		2016

Residential real estate ⁽¹⁾	$	1,455,578	$	1,444,795	$	1,451,462	$	1,445,242	$	1,417,137
Home equity - junior liens	139,534		139,165		141,965		141,616		142,827
Commercial and industrial	197,429		205,011		185,667		176,387		171,362
Commercial real estate ⁽²⁾	1,256,736		1,250,106		1,229,516		1,158,088		1,135,493
Consumer	30,860		32,043		32,545		33,614		33,799
DDA overdrafts	3,630		3,053		5,071		2,965		2,780
Gross Loans	$	3,083,767	$	3,074,173	$	3,046,226	$	2,957,912	$	2,903,398

Construction loans included in:
(1) - Residential real estate loans	$	12,056	$	9,777	$	14,182	$	12,284	$	12,344
(2) - Commercial real estate loans	20,204		18,499		12,840		7,309		2,237


Secondary Mortgage Loan Activity
Mortgage loans originated	$	5,433	$	3,951	$	6,444	$	5,624	$	3,103
Mortgage loans sold	5,465		6,118		4,936		5,836		3,183
Mortgage loans gain on loans sold	142		167		107		129		80



	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2017			2017			2016			2016			2016			2017			2016
Allowance for Loan Losses
Balance at beginning of period	$	19,209		$	19,730		$	19,550		$	19,139		$	19,315		$	19,730		$	19,251

Charge-offs:
Commercial and industrial	(57		)	(53		)	—			(103		)	(44		)	(110		)	(45		)
Commercial real estate	(102		)	(180		)	(463		)	(142		)	(769		)	(282		)	(1,071		)
Residential real estate	(258		)	(626		)	(453		)	(539		)	(337		)	(884		)	(742		)
Home equity	(118		)	(121		)	(90		)	(125		)	(69		)	(239		)	(175		)
Consumer	(23		)	(6		)	(24		)	(20		)	(44		)	(29		)	(82		)
DDA overdrafts	(635		)	(636		)	(395		)	(378		)	(321		)	(1,271		)	(639		)
Total charge-offs	(1,193		)	(1,622		)	(1,425		)	(1,307		)	(1,584		)	(2,815		)	(2,754		)

Recoveries:
Commercial and industrial	53			2			1			9			3			55			4
Commercial real estate	21			11			40			43			20			32			404
Residential real estate	131			25			74			23			51			156			90
Home equity	—			—			—			—			—			—			—
Consumer	14			11			9			28			52			25			81
DDA overdrafts	319			371			180			183			160			690			402
Total recoveries	538			420			304			286			286			958			981

Net charge-offs	(655		)	(1,202		)	(1,121		)	(1,021		)	(1,298		)	(1,857		)	(1,773		)
Provision for (recovery of) acquired loans	58			(19		)	(1		)	(4		)	128			39			168
Provision for loan losses	451			700			1,302			1,436			994			1,151			1,493
Balance at end of period	$	19,063		$	19,209		$	19,730		$	19,550		$	19,139		$	19,063		$	19,139

Loans outstanding	$	3,083,767		$	3,074,173		$	3,046,226		$	2,957,912		$	2,903,398
Allowance as a percent of loans outstanding	0.62		%	0.62		%	0.65		%	0.66		%	0.66		%
Allowance as a percent of non-performing loans	177.6		%	167.7		%	140.1		%	129		%	124		%

Average loans outstanding	$	3,073,255		$	3,055,979		$	3,006,426		$	2,919,756		$	2,891,292		$	3,064,665		$	2,878,119
Net charge-offs (annualized) as a percent of average loans outstanding	0.09		%	0.16		%	0.15		%	0.14		%	0.18		%	0.12		%	0.12		%



	June 30,			March 31,			December 31,			September 30,			June 30,
	2017			2017			2016			2016			2016
Nonaccrual Loans
Residential real estate	$	1,608		$	2,810		$	4,302		$	3,919		$	2,531
Home equity	153			114			100			154			165
Commercial and industrial	1,571			1,353			1,958			2,441			2,724
Commercial real estate	7,250			7,141			7,341			8,077			9,779
Consumer	—			—			—			—			—
Total nonaccrual loans	10,582			11,418			13,701			14,591			15,199
Accruing loans past due 90 days or more	150			35			382			569			241
Total non-performing loans	10,732			11,453			14,083			15,160			15,440
Other real estate owned	4,204			4,405			4,588			5,435			5,868
Total non-performing assets	$	14,936		$	15,858		$	18,671		$	20,595		$	21,308

Non-performing assets as a percent of loans and other real estate owned	0.48		%	0.52		%	0.61		%	0.69		%	0.73		%

Past Due Loans
Residential real estate	$	5,648		$	3,876		$	6,074		$	5,713		$	5,490
Home equity	628			301			673			925			595
Commercial and industrial	259			611			94			399			304
Commercial real estate	819			1,014			1,115			1,275			1,746
Consumer	70			38			39			104			150
DDA overdrafts	527			330			599			554			290
Total past due loans	$	7,951		$	6,170		$	8,594		$	8,970		$	8,575

Total past due loans as a percent of loans outstanding	0.26		%	0.20		%	0.28		%	0.30		%	0.30		%

Troubled Debt Restructurings ("TDRs") (period-end)
Accruing:
Residential real estate	$	20,647		$	20,294		$	20,643		$	19,944		$	19,685
Home equity	3,146			3,104			3,105			3,159			2,873
Commercial and industrial	35			38			42			46			50
Commercial real estate	8,483			8,513			5,525			2,718			2,743
Consumer	—			—			—			—			—
Total accruing TDRs	$	32,311		$	31,949		$	29,315		$	25,867		$	25,351



	Three Months Ended
	June 30, 2017							March 31, 2017							June 30, 2016
	Average					Yield/		Average					Yield/		Average					Yield/
	Balance			Interest		Rate		Balance			Interest		Rate		Balance			Interest		Rate
Assets:
Loan portfolio ⁽¹⁾:
Residential real estate ⁽²⁾	$	1,589,748		$	15,732	3.97	%	$	1,591,255		$	15,479	3.95	%	$	1,545,550		$	15,038	3.91	%
Commercial, financial, and agriculture ⁽²⁾	1,448,535			14,473		4.01	%	1,429,075			13,598		3.86	%	1,306,931			13,310		4.10	%
Installment loans to individuals ^{(2), (3)}	34,972			624		7.16	%	35,650			581		6.61	%	38,811			809		8.38	%
Previously securitized loans ⁽⁴⁾	***			285		***		***			447		***		***			483		***
Total loans	3,073,255			31,114		4.06	%	3,055,979			30,105		4.00	%	2,891,292			29,640		4.12	%
Securities:
Taxable	478,179			3,480		2.92	%	458,295			3,444		3.05	%	425,450			2,927		2.77	%
Tax-exempt ⁽⁵⁾	89,320			1,056		4.74	%	84,784			1,019		4.87	%	43,637			561		5.17	%
Total securities	567,499			4,536		3.21	%	543,079			4,463		3.33	%	469,087			3,488		2.99	%
Deposits in depository institutions	28,961			17		0.24	%	16,826			3		0.07	%	9,186			—		—
Total interest-earning assets	3,669,715			35,667		3.90	%	3,615,884			34,571		3.88	%	3,369,565			33,128		3.95	%
Cash and due from banks	132,331							81,629							144,260
Premises and equipment, net	73,555							74,768							75,798
Other assets	248,716							253,378							261,271
Less: Allowance for loan losses	(19,809		)					(20,150		)					(19,686		)
Total assets	$	4,104,508						$	4,005,509						$	3,831,208

Liabilities:
Interest-bearing demand deposits	$	710,091		$	160	0.09	%	$	708,434		$	157	0.09	%	$	686,403		$	176	0.10	%
Savings deposits	879,643			352		0.16	%	831,639			324		0.16	%	766,708			238		0.12	%
Time deposits ⁽²⁾	1,066,047			3,147		1.18	%	1,052,218			2,948		1.14	%	1,030,346			2,598		1.01	%
Short-term borrowings	199,224			187		0.38	%	195,626			157		0.33	%	154,047			86		0.22	%
Long-term debt	16,495			189		4.60	%	16,495			181		4.45	%	16,495			167		4.07	%
Total interest-bearing liabilities	2,871,500			4,035		0.56	%	2,804,412			3,767		0.54	%	2,653,999			3,265		0.49	%
Noninterest-bearing demand deposits	703,259							690,243							707,501
Other liabilities	37,633							43,655							43,435
Stockholders' equity	492,116							467,199							426,273
Total liabilities and
stockholders' equity	$	4,104,508						$	4,005,509						$	3,831,208
Net interest income				$	31,632						$	30,804						$	29,863
Net yield on earning assets						3.46	%						3.45	%						3.56	%

(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 (in thousands) for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bancorp ("Virginia Savings"), Community Financial Corporation ("Community") and American Founders Banks, Inc. ("AFB"):
Residential real estate	$	145	$	138	$	190
Commercial, financial, and agriculture	464		176		656
Installment loans to individuals	5		9		29
Time deposits	—		17		148
	$	614	$	340	$	1,023

(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.



	Six Months Ended
	June 30, 2017							June 30, 2016
	Average					Yield/		Average					Yield/
	Balance			Interest		Rate		Balance			Interest		Rate
Assets:
Loan portfolio ⁽¹⁾:
Residential real estate ⁽²⁾	$	1,590,528		$	31,211	3.96	%	$	1,538,095		$	29,957	3.92	%
Commercial, financial, and agriculture ⁽²⁾	1,438,764			28,071		3.93	%	1,301,380			26,228		4.05	%
Installment loans to individuals ^{(2), (3)}	35,374			1,205		6.87	%	38,644			1,530		7.96	%
Previously securitized loans ⁽⁴⁾	***			732		***		***			852		***
Total loans	3,064,665			61,219		4.03	%	2,878,119			58,567		4.09	%
Securities:
Taxable	468,292			6,924		2.98	%	423,369			5,933		2.82	%
Tax-exempt ⁽⁵⁾	87,065			2,075		4.81	%	42,768			1,110		5.22	%
Total securities	555,357			8,999		3.27	%	466,137			7,043		3.04	%
Deposits in depository institutions	22,927			20		0.18	%	9,858			—		—	%
Total interest-earning assets	3,642,949			70,238		3.89	%	3,354,114			65,610		3.93	%
Cash and due from banks	107,120							112,915
Premises and equipment, net	74,159							76,372
Other assets	251,034							258,800
Less: Allowance for loan losses	(19,979		)					(20,138		)
Total assets	$	4,055,283						$	3,782,063

Liabilities:
Interest-bearing demand deposits	$	709,267		$	317	0.09	%	$	682,126		$	321	0.09	%
Savings deposits	855,774			676		0.16	%	766,985			465		0.12	%
Time deposits ⁽²⁾	1,059,171			6,095		1.16	%	1,024,881			5,123		1.01	%
Short-term borrowings	197,435			344		0.35	%	158,046			193		0.25	%
Long-term debt	16,495			370		4.52	%	16,495			331		4.04	%
Total interest-bearing liabilities	2,838,142			7,802		0.55	%	2,648,533			6,433		0.49	%
Noninterest-bearing demand deposits	696,787							669,013
Other liabilities	40,628							41,820
Stockholders' equity	479,726							422,697
Total liabilities and
stockholders' equity	$	4,055,283						$	3,782,063
Net interest income				$	62,436						$	59,177
Net yield on earning assets						3.46	%						3.55	%

(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 (in thousands) for the accretion of the fair value adjustments related to the acquisitions of Virginia Savings Bancorp ("Virginia Savings"), Community Financial Corporation ("Community") and American Founders Banks, Inc. ("AFB"):

Residential real estate	282		371
Commercial, financial, and agriculture	640		1,050
Installment loans to individuals	14		82
Time deposits	16		296
	$	952	$	1,799

(3) Includes the Company’s consumer and DDA overdrafts loan categories.
(4) Effective January 1, 2012, the carrying value of the Company's previously securitized loans was reduced to $0.
(5) Computed on a fully federal tax-equivalent basis assuming a tax rate of approximately 35%.



	Three Months Ended															Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2017			2017			2016			2016			2016			2017			2016
Net Interest Income/Margin
Net interest income ("GAAP")	$	31,262		$	30,447		$	30,380		$	29,778		$	29,668		$	61,710		$	58,789
Taxable equivalent adjustment	370			357			258			224			195			726			388
Net interest income, fully taxable equivalent	$	31,632		$	30,804		$	30,638		$	30,002		$	29,863		$	62,436		$	59,177

Average interest earning assets	$	3,669,715		$	3,615,884		$	3,561,166		$	3,433,673		$	3,369,565		$	3,642,949		$	3,354,114
Net Interest Margin	3.46		%	3.45		%	3.42		%	3.48		%	3.56		%	3.46		%	3.55		%

Net interest income ("GAAP")	$	31,262		$	30,447		$	30,380		$	29,778		$	29,668		$	61,710		$	58,789
Taxable equivalent adjustment	370			357			258			224			195			726			388
Accretion related to fair value adjustments	(614		)	(338		)	(466		)	(641		)	(1,023		)	(950		)	(1,799		)
Net interest income, fully taxable equivalent, excluding accretion	$	31,018		$	30,466		$	30,172		$	29,361		$	28,840		$	61,486		$	57,378

Average interest earning assets	$	3,669,715		$	3,615,884		$	3,561,166		$	3,433,673		$	3,369,565		$	3,642,949		$	3,354,114
Net Interest Margin (excluding accretion)	3.39		%	3.42		%	3.37		%	3.40		%	3.44		%	3.40		%	3.44		%

Tangible Equity Ratio (period end)
Tangible common equity to tangible assets	10.4		%	9.95		%	9.3		%	9.39		%	9.38		%
Effect of goodwill and other intangibles, net	1.74		%	1.72		%	1.8		%	1.86		%	1.89		%
Equity to assets ("GAAP")	12.14		%	11.68		%	11.1		%	11.25		%	11.27		%

Income tax expense ("GAAP")	$	6,812		$	7,647		$	6,338		$	6,577		$	6,303		$	14.459		$	12.169
FIN 48	—			—			554			—			—			—			—
Income tax expense, excluding FIN 48	$	6,812		$	7,647		$	6,892		$	6,577		$	6,303		$	14.459		$	12.169

Income before income taxes	$	21,500		$	23,673		$	20,994		$	19,809		$	18,844		$	45,173		$	36,413

Effective tax rate, excluding FIN 48	31.7		%	32.3		%	32.8		%	33.2		%	33.4		%	32.0		%	33.4		%
Effective tax rate ("GAAP")	31.7		%	32.3		%	30.2		%	33.2		%	33.4		%	32.0		%	33.4		%


•	Return on assets and return on tangible equity of 1.43% and 14.2%, respectively.


•	Reported net interest income increased $1.6 million from the quarter ended June 30, 2016, while net interest income exclusive of accretion from fair value adjustments increased $2.0 million from the quarter ended June 30, 2016.


•	Total loan growth of $37.5 million from December 31, 2016 to June 30, 2017.


•	Asset quality continues to remain strong with nonperforming assets declining to $14.9 million or 0.48% of total loans and other real estate owned. Past due loans remained steady at just 0.26% of total loans outstanding.



Non-Accruing
Residential real estate	$	154	$	100	172		$	452	$	390
Home equity	—		30		30		85		44
Commercial and industrial	—		—		—		—		—
Commercial real estate	—		—		—		—		—
Consumer	—		—		—		—		—
Total non-accruing TDRs	$	154	$	130	$	202	$	537	$	434

Total TDRs	$	32,465	$	32,079	$	29,517	$	26,404	$	25,785