8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 16, 2003

CITY HOLDING COMPANY

(Exact name of registrant as specified in its charter)

West Virginia	0-17733	55-0619957
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employer Identification Number)

25 Gatewater Road

Charleston, West Virginia, 25313

(Address of principal executive officers)

(304) 769-1100

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Item  7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits

99 News Release issued on July 16, 2003

Item  9. Regulation FD Disclosure.

This Current Report on Form 8-K and the earnings news release attached hereto are being furnished by City Holding Company (“the Company”) pursuant to Item 12 of Form 8-K (“Results of Operations and Financial Condition”), in accordance with SEC Release Nos. 33-8216; 34-47583.

On July 16, 2003, the Company issued a news release, attached as Exhibit 99, announcing the Company’s earnings for the second quarter of 2003. Furnished as Exhibit 99 and incorporated herein by reference is the news release by the Company announcing its 2003 second quarter earnings.

SIGNATURE

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

	CITY HOLDING COMPANY
Date: July 16, 2003	By:	/s/    MICHAEL D. DEAN
		Michael D. Dean Senior Vice President – Finance, Chief Accounting Officer and Duly Authorized Officer

EX-99

Exhibit 99

NEWS RELEASE

For Immediate Release

July 16, 2003

For Further Information Contact:

Charles R. Hageboeck, CFO

(304) 769-1102

City Holding Company Announces Strong Second Quarter Performance

Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO; NASDAQ:CHCOP), a $2 billion bank holding company headquartered in Charleston, today announced 2003 second quarter earnings of $12.1 million, an increase of 58.2% over $7.7 million earned in the second quarter of 2002. Earnings per diluted share for the second quarter were $0.72, an increase of 60.0% over $0.45 per diluted share reported for the second quarter of 2002.

The Company’s second quarter 2003 operating results were positively affected by continued growth in non-interest income, specifically in service charge revenues earned on depository relationships, continued success in managing non-interest expenses, and a strong net interest margin. Additionally, during the second quarter of 2003, the Company recorded a negative loan loss provision of $3.3 million, which added $0.13 per diluted share, after income taxes, to the Company’s operating results for the period. The Company has experienced lower than anticipated losses and improving credit quality within certain segments of its loan portfolio. The Company has also had greater than expected success in pursuing recoveries of previously charged-off loans, as evidenced by $0.9 million of net recoveries for the first six months of 2003. As a result, the Company determined that it was appropriate to record the $3.3 million negative loan loss provision for the second quarter. Excluding the impact of the negative loan loss provision, the Company would have reported net income of $10.0 million, or $0.59 per diluted share, for the second quarter of 2003, and $19.3 million, or $1.14 per diluted share, for the first six months of the year. If the Company continues to experience either low net charge-offs or net recoveries in future periods, and continues to experience improvements in loan loss ratios, it is possible that the Company will record additional negative provision expense in forthcoming periods.

For the second quarter of 2003, the Company reported return on average assets (“ROA”) of 2.43%, return on average equity (“ROE”) of 28.13%, net interest margin (“NIM”) of 4.72%, and an efficiency ratio of 50.35%. Each of these ratios compares favorably to the second quarter of 2002 when the Company reported ROA of 1.48%, ROE of 19.70%, NIM of 4.67%, and an efficiency ratio of 59.76%. For comparison purposes, had the Company reported no provision expense, either positive or negative, the Company would have reported ROA of 2.00 %, ROE of 23.16%, NIM of 4.72%, and an efficiency ratio of 50.35%.

Balance Sheet Trends

Total loans increased $10.74 million during the quarter, from $1.19 billion at March 31, 2003 to $1.20 billion at June 30, 2003, despite planned declines within the installment and indirect auto lending portfolios. The Company continued to experience strong growth within the home equity (up $21.1 million, or 9.11%) and commercial real estate (up $12.6 million, or 4.36%) portfolios during the quarter. As previously announced, the Company has strategically focused on real estate secured lending, while intentionally reducing its lending in products not secured by real estate and exiting the indirect auto lending business line. The Company also recorded $4.93 million in previously securitized loans, as described below, during the second quarter of 2003. Since December 31, 2002, total loans increased by $13.5 million, or 1.1%, after allowing for a $20 million fed fund line to another depository institution classified on the balance sheet as a loan. Since December 31, 2002, installment and indirect auto loans were down by $31.0 million while home equity loans (up $42.4 million, or 20.1%) and commercial real estate loans (up

$27.4 million or 10.0%) have grown. Total deposits increased from $1.565 billion at March 31, 2003 to $1.598 billion at June 30, 2003, reflecting an increase of $33.3 million or 2.1%.

Net Interest Income

The Company reported fully taxable net interest income of $22.0 million for the second quarter of 2003, compared to $22.2 million for the second quarter of 2002. The Company’s net interest margin remained strong and increased from 4.67% for the second quarter of 2002 to 4.72% for the same period of 2003. The Company’s net interest margin has benefited from the yield recognized on the Company’s investment in retained interests as well as significant declines in funding costs. Over the past several quarters the Company has continued to focus on funding its balance sheet with checking and savings deposit balances, and with additional equity capital. On average, equity capital increased by $16.8 million, or 10.8%, in the second quarter of 2003 as compared to the second quarter of 2002. Also, non-interest earning assets have declined from $170.4 million at June 30, 2002 to $131.2 million at June 30, 2003. As a result, the average balances of more expensive time deposits, short-term borrowing and long-term borrowings declined $97.0 million, or 11.6%, between the second quarter of 2002 and the second quarter of 2003, thus helping to improve the Company’s net interest margin.

Because interest rates are at historically low levels, the industry is generally experiencing compression in net interest margin. While the Company has, thus far, been successful in maintaining a relatively high net interest margin, the Company could also experience contraction in its net interest margin in future periods should interest rates remain at low levels and as the average balance of its retained interests decline as the result of cash collections.

Credit Quality

As previously noted, the Company recorded negative loan loss provision of $3.3 million during the second quarter of 2003. This action reflects the success the Company has achieved in attaining its credit quality objectives. During the second quarter of 2003, the Company reported gross charge-offs of $1.7 million, which were more than offset by $2.2 million in recoveries. As has been previously reported, the Company vigorously pursues collection of previously charged-off loans and has experienced better-than-expected results in doing so. Additionally, the Company has experienced noticeable improvement in its loss experience in each of the major components of the loan portfolio.

At June 30, 2003, the allowance for loan losses (“ALLL”) was $26.1 million, or 2.18% of total loans outstanding and 701% of non-performing loans, compared to March 31, 2003 in which the ALLL was $28.9 million or 2.44% of total loans outstanding and 1057% of non-performing loans. The Company believes that its methodology for determining its ALLL adequately provides for probable losses inherent in the loan portfolio at June 30. If the Company’s loan loss experience continues or improves upon recent trends, the methodology used to establish the ALLL could lead to low or zero loan loss expense, or, potentially, additional negative provision expense in future periods.

Non-Interest Income

Non-interest income continued to experience strong revenue growth during the second quarter of 2003 and represented 30.29% of total revenues (net interest income plus non-interest income). Within the non-interest income category, service charge revenues and insurance commissions reflected significant growth, as compared to the second quarter of 2002, while trust fee revenues remained stable. In particular, service charge revenues increased $1.3 million, or 22.1%, from the second quarter of 2002 to 2003, reflecting growth in new depository relationships and additional services provided to the Company’s deposit-based customers.

Non-Interest Expenses

Supplementing the Company’s focus on growing revenues, it has also endeavored to consistently focus on managing and containing non-interest expenses to further enhance its profitability. This is evidenced by the

Company’s efficiency ratio (defined as non-interest expenses as a percent of total revenues), which fell from 59.76% in the second quarter of 2002 to 50.35% for the same period of 2003. Non-interest expenses declined $2.1 million, or 12.0%, from $17.9 million in the second quarter of 2002 to $15.7 million in the same period of 2003, as sustainable reductions have been achieved in virtually each component of non-interest expense.

Compensation expense declined $0.4 million, or 4.6%, from $8.0 million in the second quarter of 2002 to $7.6 million in the second quarter of 2003. This decline corresponds to a decline in the number of full time equivalent employees (FTEs) of 3.9% period-to-period. Depreciation expense declined 25.7% in the second quarter of 2003 as compared to the second quarter of 2002, reflecting the Company’s focus on limiting capital expenditures to those that have proven ability to improve customer service, lower expenses, or grow revenues. Telecommunication expenses were down 15.6% reflecting renegotiated contracts with the Company’s primary telecommunication vendors. Insurance and regulatory expenses declined 33.5% as lower regulatory expenses and lower FDIC insurance expense accompanied the Company’s improved financial condition. Repossessed asset losses and expenses were greatly improved as the Company recognized nonrecurring income of $0.547 million on recoveries of properties held in OREO as compared to losses of $0.295 million in the second quarter of 2002. Partially offsetting this nonrecurring revenue were expenses associated with a consulting engagement designed to identify revenue and expense opportunities and costs associated with terminating a $10 million Federal Home Loan Bank advance.

Retained Interests in Securitized Loans

Between 1997 and 1999, the company originated and securitized $760 million in 125% loan to value junior-lien mortgages. The Company has a retained interest in the final cash flows associated with these underlying mortgages after satisfying priority claims. At May 31, 2003 (the most current date that information is available), the outstanding principal balances of the mortgages securitized were $176.2 million. The outstanding obligation to the purchasers of the priority claims was $68.7 million with the Company having an interest in the remaining $107.5 million in balances. The Company determines the value of the retained interests using assumptions regarding default rates, prepayment rates, and an appropriate discount rate for assets of similar characteristics. At June 30, 2003 the Company estimates the fair value of these assets to be $92.8 million, compared to the book value of $80.0 million. The Bank is required to accrete the difference between the fair value and the book value over the life of the investment. Therefore, the retained interests accrued at the rate of 18.79% during the second quarter of 2003. During the first six months of 2003, the Company accrued income of $7.4 million and received cash of $4.5 million.

Principal amounts owed to investors in the securitizations are evidenced by securities (i.e., “Notes”). The Notes are subject to redemption, in whole but not in part, at the option of the Company, as owner of the retained interests in the securitization transactions, or, if the holder of the retained interests does not exercise such option, at the option of the Note insurer, on or after the date on which the related note balance has declined to 5% or less of the original Note balance. Once the Notes have been redeemed, the Company becomes the beneficial owner of the mortgage loans and records the loans as assets of the Company within the loan portfolio. During the second quarter of 2003, the outstanding Note balance on the Company’s 1997-1 securitization declined below this 5% threshold and the Company exercised its early redemption option for $1.5 million. As a result, the $1.5 million combined with the remaining book value of $3.8 million in the retained interest in the 1997-1 securitization, were reclassed to loans on the Company’s balance sheet and reported as “Previously securitized loans” of $5.3 million. As of June 30, 2003, the book value of previously securitized loans had declined to $4.9 million through principal collections and charge-offs. While no immediate gain or loss was recognized by the Company as a result of exercising the early redemption, the Company expects to realize higher yields on the book value of the remaining loans as a result of redeeming Notes that were paying interest at a rate of 6.86%.

Forward Looking Information

During the third quarter of 2003, the Company expects to exercise its early redemption option on two additional securitizations and anticipates that it may be able to exercise early redemption on two of the

remaining three securitizations during the fourth quarter of this year. As a result, the Company anticipates that it will experience increased income associated with these assets through year-end 2003 and that its December 31, 2003 balance sheet will include Retained Interests of approximately $1 million (down from the current book value of $80 million) and Previously Securitized Loan balances of $111 million (up from the current book value of $4.9 million). These balances will then decline as loans are paid off by the borrowers at prepayment rates that have been running more than 40% in recent months. At present, and based upon its assumptions about prepayment speeds, the Company believes that outstanding balances of these loans previously securitized as well as the remaining retained interests will be:

December 31, 2004	$76 million
December 31, 2005	$54 million
December 31, 2006	$42 million
December 31, 2007	$32 million

The Company’s current performance has also been positively affected by its success since 2002 in achieving low levels of non-performing assets and its success in achieving net loan recoveries totaling $1.369MM over the prior four quarters. These successes have led to the point that the Company recognized a negative provision for loan losses in the second quarter of 2003 of $3.30 million. As a measure of comparison, based upon the Company’s specific mix of loans, insured depository institutions in the U.S. over the last five fiscal years have experienced a net charge-off rate of 32 basis points on average loans and leases outstanding.

However, neither of these factors is sustainable in the long-term. Eventually the retained interests and the loans previously securitized will be paid-off, and eventually the Company, like all other banking institutions, will need to incur normal provision expense. In reviewing the forgoing financial results, investors should recognize that these two factors currently contribute to tbe Company’s strong financial performance.

Liquidity and Capitalization

As of June 30, 2003, ratios that measure the adequacy of the Company’s liquidity and capital remain strong. With respect to liquidity, the Company’s loan to deposit ratio was 75% and the loan to asset ratio was 60.4%. The Company maintained investment securities totaling 27.8% of assets at June 30, 2003 including $17.8 million invested in money market funds. Further, The Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 49.3% of assets at June 30, 2003. Time deposits fund 31.3% of assets, but very few of these deposits are in accounts of more than $250,000, reflecting the core retail orientation of the Company.

The Company is also strongly capitalized. Capitalization (as measured by average equity to average assets) significantly increased from 7.51% at June 31, 2002 to 8.53% at March 31, 2003 and to 8.65% at June 30, 2003 as a result of the Company’s strong earnings. With respect to regulatory capital, at June 30, 2003, the Company’s Leverage Ratio is 9.81% the Tier I Capital ratio is 11.63% and the Total risk-based Capital ratio is 14.93%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized”, which is the highest possible regulatory designation.

Earlier this month, the Company announced that it had declared a third quarter dividend of $0.20 per common share payable on July 31, 2003, to shareholders of record on July 15, 2003. The Company also announced that it would pay current dividends on the Company’s 9.125% Capital Securities issued by the Company’s wholly-owned subsidiary, City Holding Capital Trust II payable on July 31, 2003 to shareholders of record as of July 16, 2003.

In June of 2002, the Board of Directors of the Company announced a one million share purchase program. During the second quarter of 2003, no shares were purchased under this program. As of June 30, 2003 a total of 420,700 shares have been repurchased under this program. In June of 2002, the Board of Directors of the Company also announced a $25 million program to retire the outstanding capital securities issued by either City Holding Capital Trust or City Holding Capital Trust II. As of June 30, 2003 the Company has

not taken any action on these securities, but remains ready to do so if the opportunity appears financially attractive. It should be noted that shares of City Holding Capital Trust II, paying 9.125%, are callable, in whole or in part, at par on October 31, 2003.

City Holding Company is the parent company of City National Bank of West Virginia. In addition to the Bank, City National Bank operates CityInsurance Professionals, an insurance agency offering a full range of insurance products and services.

This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company’s actual results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality, or conversely, the Company may incur less, or even negative, loan loss provision due to positive credit quality trends in the future; (2) the Company may not continue to experience significant recoveries of previously charged-off loans and the Company may incur increased charge-offs in the future; (3) the Company may experience increases in the default rates on its retained interests in securitized mortgages causing it to take impairment charges to earnings; (4) the Company may not realize the expected cash payments that it is presently accruing from its retained interests in securitized mortgages; (5) the Company may experience either faster or slower rates of amortization of its retained interests and loans previously securitized; (6) the Company could have adverse legal actions of a material nature; (7) the Company may face competitive loss of customers associated with its efforts to increase fee-based revenues; (8) the Company may be unable to maintain or improve upon current levels of expense associated with managing its business; (9) rulings affecting, among other things, the Company’s and its banking subsidiaries’ regulatory capital and required loan loss allocations may change, resulting in the need for increased capital levels; (10) 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; (11) changes in general economic conditions and increased competition could adversely affect the Company’s operating results; (12) 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; (13) the planned purchase of Trust I and Trust II Capital Securities and the common stock may not occur or may not have the effects anticipated; and (14) the Company may experience difficulties growing loan and deposit balances. Forward-looking statements made herein reflect management’s expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.

CITY HOLDING COMPANY AND SUBSIDIARIES

Financial Highlights

(Unaudited)

	Three Months Ended						Percent Change
	June 30 2003			June 30 2002
Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	21,978		$	22,248		(1.21	)%
Net Income		12,137			7,671		58.22	%
Earnings per Basic Share		0.73			0.45		62.22	%
Earnings per Diluted Share		0.72			0.45		60.00	%
Key Ratios (percent):
Return on Average Assets		2.43	%		1.48	%	64.19	%
Return on Average Equity		28.13	%		19.70	%	42.79	%
Net Interest Margin		4.72	%		4.67	%	1.07	%
Efficiency Ratio		50.35	%		59.76	%	(15.75	)%
Average Shareholders’ Equity to Average Assets		8.65	%		7.51	%	15.18	%
Risk-Based Capital Ratios (a):
Tier I		11.63	%		9.99	%	16.42	%
Total		14.93	%		13.76	%	8.50	%
Common Stock Data:
Cash Dividends Declared per Share	$	0.20		$	0.15		33.33	%
Book Value per Share		10.74			9.40		14.26	%
Market Value per Share:
High		30.00			23.80		26.05	%
Low		27.30			15.06		81.27	%
End of Period		29.26			23.41		24.99	%
Price/Earnings Ratio (b)		10.02			13.00		(22.92	)%
(a)    June 30, 2003 risk-based capital ratios are estimated. (b)    June 30, 2003 price/earnings ratio computed based on annualized second quarter 2003 earnings.
	Six Months Ended						Percent Change
	June 30 2003			June 30 2002
Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	43,500		$	44,265		(1.73	)%
Net Income		21,489			14,079		52.63	%
Earnings per Basic Share		1.29			0.83		55.42	%
Earnings per Diluted Share		1.27			0.82		54.88	%
Key Ratios (percent):
Return on Average Assets		2.16	%		1.35	%	60.00	%
Return on Average Equity		25.16	%		18.40	%	36.74	%
Net Interest Margin		4.69	%		4.60	%	1.96	%
Efficiency Ratio		51.83	%		61.78	%	(16.11	)%
Average Shareholders’ Equity to Average Assets		8.59	%		7.32	%	17.35	%
Common Stock Data:
Cash Dividends Declared per Share	$	0.40		$	0.15		166.67	%
Market Value per Share:
High		30.00			23.80		26.05	%
Low		25.50			12.04		111.79	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Financial Highlights

(Unaudited)

Book Value and Market Price Range per Share
	Book Value per Share												Market Price Range per Share
	March 31			June 30			September 30			December 31			Low			High
1998 (a)	$	17.18		$	18.72		$	18.56		$	13.09		$	30.00		$	51.00
1999		13.07			12.85			12.80			11.77			12.50			32.75
2000		11.76			11.72			11.72			9.68			4.88			16.19
2001		8.82			8.70			8.37			8.67			5.13			14.64
2002		8.92			9.40			9.64			9.93			12.04			30.20
2003		10.10			10.74			—			—			25.50			30.00
Earnings per Basic Share
	Quarter Ended
	March 31			June 30			September 30			December 31			Year-to-Date
1998 (a)	$	0.48		$	0.49		$	0.56		$	(0.89	)	$	0.31
1999		0.31			0.42			0.14			(0.49	)		0.37
2000		0.24			0.02			(0.05	)		(2.47	)		(2.27	)
2001		(0.34	)		(1.19	)		(0.46	)		0.45			(1.54	)
2002		0.38			0.45			0.53			0.56			1.93
2003		0.56			0.73			—			—			1.29
Earnings per Diluted Share
	Quarter Ended
	March 31			June 30			September 30			December 31			Year-to-Date
1998 (a)	$	0.48		$	0.49		$	0.56		$	(0.89	)	$	0.31
1999		0.31			0.42			0.14			(0.49	)		0.37
2000		0.24			0.02			(0.05	)		(2.47	)		(2.27	)
2001		(0.34	)		(1.19	)		(0.46	)		0.45			(1.54	)
2002		0.38			0.45			0.52			0.55			1.90
2003		0.55			0.72			—			—			1.27

(a) Book value and per share amounts reported through September 30, 1998 are as previously reported by City Holding Company and have not been restated to include the operations of Horizon Bancorp, Inc.

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited) ($ in 000s, except per share data)

	Three Months Ended June 30.
	2003			2002
Interest Income
Interest and fees on loans	$	19,577		$	23,809
Interest on investment securities:
Taxable		5,663			5,102
Tax-exempt		559			684
Interest on retained interests		3,842			2,991
Interest on deposits in depository institutions		28			—
Interest on federal funds sold		—			181
Total Interest Income		29,669			32,767
Interest Expense
Interest on deposits		5,598			7,640
Interest on short-term borrowings		132			525
Interest on long-term debt		255			539
Interest on trust preferred securities		2,006			2,183
Total Interest Expense		7,991			10,887
Net Interest Income		21,678			21,880
Provision for loan losses		(3,300	)		900
Net Interest Income After Provision for Loan Losses		24,978			20,980
Non-Interest Income
Investment securities gains		22			238
Service charges		7,041			5,768
Insurance commissions		591			532
Trust fee income		355			354
Mortgage banking income		180			189
Other income		1,230			1,615
Total Non-Interest Income		9,419			8,696
Non-Interest Expense
Salaries and employee benefits		7,629			7,995
Occupancy and equipment		1,489			1,638
Depreciation		1,113			1,497
Professional fees and litigation expense		981			733
Postage, delivery, and statement mailings		744			767
Advertising		557			699
Telecommunications		518			614
Insurance and regulatory		326			490
Office supplies		405			405
Repossessed asset losses and expenses		(547	)		295
Other expenses		2,510			2,741
Total Non-Interest Expense		15,725			17,874
Income Before Income Taxes		18,672			11,802
Income Tax Expense		6,535			4,131
Net Income	$	12,137		$	7,671
Basic Earnings per Share	$	0.73		$	0.45
Diluted Earnings per Share	$	0.72		$	0.45
Average Common Shares Outstanding:
Basic		16,622			16,892
Diluted		16,918			17,133

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited) ($ in 000s, except per share data)

	Six Months Ended June 30
	2003			2002
Interest Income
Interest and fees on loans	$	39,879		$	49,382
Interest on investment securities:
Taxable		10,876			9,687
Tax-exempt		1,130			1,415
Interest on retained interests		7,365			5,797
Interest on deposits in depository institutions		58			—
Interest on federal funds sold		60			367
Total Interest Income		59,368			66,648
Interest Expense
Interest on deposits		11,365			16,618
Interest on short-term borrowings		566			1,141
Interest on long-term debt		533			1,085
Interest on trust preferred securities		4,012			4,301
Total Interest Expense		16,476			23,145
Net Interest Income		42,892			43,503
Provision for loan losses		(3,300	)		1,800
Net Interest Income After Provision for Loan Losses		46,192			41,703
Non-Interest Income
Investment securities gains		375			470
Service charges		13,122			10,397
Insurance commissions		1,353			1,037
Trust fee income		703			670
Mortgage banking income		348			375
Other income		2,503			2,761
Total Non-Interest Income		18,404			15,710
Non-Interest Expense
Salaries and employee benefits		15,367			16,633
Occupancy and equipment		3,034			3,266
Depreciation		2,300			3,094
Professional fees and litigation expense		1,818			1,373
Postage, delivery, and statement mailings		1,524			1,601
Advertising		1,207			1,342
Telecommunications		923			1,303
Insurance and regulatory		651			1,017
Office supplies		840			742
Repossessed asset losses and expenses		(738	)		642
Other expenses		4,806			5,033
Total Non-Interest Expense		31,732			36,046
Income Before Income Taxes		32,864			21,367
Income Tax Expense		11,375			7,288
Net Income	$	21,489		$	14,079
Basic Earnings per Share	$	1.29		$	0.83
Diluted Earnings per Share	$	1.27		$	0.82
Average Common Shares Outstanding:
Basic		16,630			16,890
Diluted		16,936			17,074

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited) ($ in 000s)

	Three Months Ended
	June 30, 2003			June 30, 2002
Balance at March 31	$	167,877		$	150,707
Net income		12,137			7,671
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		1,776			2,761
Cash dividends declared ($0.15/share)		—			(2,536	)
Cash dividends declared ($0.20/share)		(3,325	)		—
Exercise of 17,500 stock options		—			225
Exercise of 7,400 stock options		106			—
Balance at June 30	$	178,571		$	158,828
	Six Months Ended
	June 30, 2003			June 30, 2002
Balance at December 31	$	165,393		$	146,349
Net income		21,489			14,079
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		718			711
Cash dividends declared ($0.15/share)		—			(2,536	)
Cash dividends declared ($0.40/share)		(6,652	)		—
Exercise of 17,500 stock options		—			225
Exercise of 86,482 stock options		881			—
Purchase of 118,300 common shares for treasury		(3,258	)		—
Balance at June 30	$	178,571		$	158,828

CITY HOLDING COMPANY AND SUBSIDIARIES

Condensed Consolidated Quarterly Statements of Income

(Unaudited) ($ in 000s, except per share data)

	Quarter Ended
	June 30 2003			March 31 2003			Dec. 31 2002			Sept. 30 2002			June 30 2002
Interest income	$	29,669		$	29,699		$	30,616		$	31,701		$	32,767
Taxable equivalent adjustment		300			308			341			351			368
Interest income (FTE)		29,969			30,007			30,957			32,052			33,135
Interest expense		7,991			8,485			9,465			9,689			10,887
Net interest income		21,978			21,522			21,492			22,363			22,248
Provision for loan losses		(3,300	)		—			—			—			900
Net interest income after provision for loan losses		25,278			21,522			21,492			22,363			21,348
Noninterest income		9,419			8,985			9,555			8,839			8,696
Noninterest expense		15,725			16,007			16,486			17,257			17,874
Income before income taxes		18,972			14,500			14,561			13,945			12,170
Income tax expense		6,535			4,840			4,812			4,622			4,131
Taxable equivalent adjustment		300			308			341			351			368
Net income	$	12,137		$	9,352		$	9,408		$	8,972		$	7,671
Basic earnings per share	$	0.73		$	0.56		$	0.56		$	0.53		$	0.45
Diluted earnings per share		0.72			0.55			0.55			0.52			0.45
Cash dividends declared per share		0.20			0.20			0.15			0.15			0.15
Average Common Share (000s):
Outstanding		16,622			16,638			16,652			16,804			16,892
Diluted		16,918			16,950			16,999			17,140			17,133
Net Interest Margin		4.72	%		4.66	%		4.68	%		4.83	%		4.67	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Non-Interest Income and Non-Interest Expense

(Unaudited) ($ in 000s)

	Quarter Ended
	June 30 2003			March 31 2003			Dec.31 2002			Sept. 30 2002		June 30 2002
Non-Interest Income:
Service charges	$	7,041		$	6,081		$	6,790		$	6,313	$	5,768
Insurance commissions		591			762			411			436		532
Trust fee income		355			348			345			319		354
Mortgage banking income		180			168			233			248		189
Other income		1,230			1,273			1,110			1,200		1,615
Subtotal		9,397			8,632			8,889			8,516		8,458
Investment security gains		22			353			666			323		238
Total Non-Interest Income	$	9,419		$	8,985		$	9,555		$	8,839	$	8,696
Non-Interest Expense:
Salaries and employee benefits	$	7,629		$	7,738		$	7,631		$	7,651	$	7,995
Occupancy and equipment		1,489			1,545			1,679			1,710		1,638
Depreciation		1,113			1,187			1,288			1,367		1,497
Professional fees and litigation expense		981			837			702			782		733
Postage, delivery, and statement mailings		744			780			718			873		767
Advertising		557			650			646			580		699
Telecommunications		518			405			565			536		614
Insurance and regulatory		326			325			189			450		490
Office supplies		405			435			468			347		405
Repossessed asset losses and expenses		(547	)		(191	)		(3	)		25		295
Other expenses		2,510			2,296			2,603			2,936		2,741
Total Non-Interest Expense	$	15,725		$	16,007		$	16,486		$	17,257	$	17,874
Employees (Full Time Equivalent)		719			722			737			743		748
Branch Locations		55			55			55			55		55

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

($ in 000s)

	June 30 2003			December 31 2002
	(Unaudited)
Assets
Cash and due from banks	$	57,792		$	64,003
Interest-bearing deposits in depository institutions		11,809			45,315
Federal funds sold		—			20,000
Cash and cash equivalents		69,601			129,318
Investment securities available-for-sale, at fair value		483,358			445,384
Investment securities held-to-maturity, at amortized cost		67,975			72,410
Total investment securities		551,333			517,794
Securities purchased under agreement to resell		—			27,202
Loans:
Residential real estate		452,014			471,806
Home equity		253,178			210,753
Commercial real estate		301,321			273,904
Other commercial		85,356			95,323
Loans to depository institutions		—			20,000
Installment		46,877			64,181
Indirect		35,059			48,709
Credit card		19,155			19,715
Previously securitized loans		4,933			—
Gross Loans		1,197,893			1,204,391
Allowance for loan losses		(26,092	)		(28,504	)
Net loans		1,171,801			1,175,887
Retained interests		79,978			80,923
Premises and equipment		35,702			37,802
Accrued interest receivable		10,954			11,265
Net deferred tax assets		31,515			35,895
Other assets		32,414			31,825
Total Assets	$	1,983,298		$	2,047,911
Liabilities
Deposits:
Noninterest-bearing	$	301,233		$	281,290
Interest-bearing:
Demand deposits		387,875			377,165
Savings deposits		287,962			286,198
Time deposits		620,832			619,927
Total deposits		1,597,902			1,564,580
Federal funds purchased and securities sold under agreement to repurchase		78,873			146,937
Securities sold, not yet purchased		—			26,284
Long-term debt		15,000			25,000
Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts holding solely subordinated debentures of City Holding Company		87,500			87,500
Other liabilities		25,452			32,217
Total Liabilities		1,804,727			1,882,518
Stockholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued		—			—
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 16,919,248 shares issued and outstanding at June 30, 2003 and December 31, 2002, including 293,381 and 261,563 shares in treasury		42,298			42,298
Capital surplus		57,550			59,029
Retained earnings		80,913			66,076
Cost of common stock in treasury		(7,324	)		(6,426	)
Accumulated other comprehensive income:
Unrealized gain on securities available-for-sale		6,678			5,960
Underfunded pension liability		(1,544	)		(1,544	)
Total Accumulated Other Comprehensive Income		5,134			4,416
Total Stockholders’ Equity		178,571			165,393
Total Liabilities and Stockholders’ Equity	$	1,983,298		$	2,047,911

CITY HOLDING COMPANY AND SUBSIDIARIES

Loan Portfolio

(Unaudited) ($ in 000s)

	June 30 2003		March 31 2003		Dec. 31 2002		Sept. 30 2002		June 30 2002
Residential real estate	$	452,014	$	463,813	$	471,806	$	486,566	$	522,016
Home equity		253,178		232,048		210,753		185,084		157,577
Commercial real estate		301,321		288,724		273,904		262,824		251,347
Other commercial		85,356		88,824		95,323		109,068		110,468
Loans to depository institutions		—		—		20,000		35,000		—
Installment		46,877		53,488		64,181		75,047		89,117
Indirect		35,059		41,475		48,709		56,425		65,634
Credit card		19,155		18,780		19,715		19,081		18,285
Previously securitized loans		4,933		—		—		—		—
Gross Loans	$	1,197,893	$	1,187,152	$	1,204,391	$	1,229,095	$	1,214,444

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)

	Three Months Ended June 30,
	2003							2002
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets:
Total loans	$	1,188,363		$	19,577	6.59	%	$	1,253,098		$	23,809	7.60	%
Securities:
Taxable		538,998			5,663	4.20	%		477,358			5,102	4.28	%
Tax-exempt		45,091			859	7.62	%		54,617			1,052	7.70	%
Total securities		584,089			6,522	4.47	%		531,975			6,154	4.63	%
Retained interest in securitized loans		81,774			3,842	18.79	%		75,140			2,991	15.92	%
Deposits in depository institutions		10,190			28	1.10	%		—			—	—
Federal funds sold		—			—	—			44,493			181	1.63	%
Total interest-earning assets		1,864,416			29,969	6.43	%		1,904,706			33,135	6.96	%
Cash and due from banks		45,391							66,605
Bank premises and equipment		36,334							41,067
Other assets		78,885							100,155
Less: Allowance for loan losses		(29,380	)						(37,473	)
Total assets	$	1,995,646						$	2,075,060
Liabilities:
Interest-bearing demand deposits	$	386,348		$	531	0.55	%	$	373,691		$	544	0.58	%
Savings deposits		294,108			395	0.54	%		314,639			882	1.12	%
Time deposits		620,543			4,672	3.01	%		682,688			6,214	3.64	%
Short-term borrowings		94,784			132	0.56	%		114,343			525	1.84	%
Long-term debt		22,143			255	4.61	%		37,475			539	5.75	%
Trust preferred securities		87,500			2,006	9.17	%		87,500			2,183	9.98	%
Total interest-bearing liabilities		1,505,426			7,991	2.12	%		1,610,336			10,887	2.70	%
Noninterest-bearing demand deposits		291,971							275,919
Other liabilities		25,645							33,048
Stockholders’ equity		172,604							155,757
Total liabilities and stockholders’ equity	$	1,995,646						$	2,075,060
Net interest income				$	21,978						$	22,248
Net yield on earning assets						4.72	%						4.67	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)

	Six Months Ended June 30,
	2003							2002
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets:
Total loans	$	1,192,184		$	39,879	6.69	%	$	1,298,044		$	49,382	7.61	%
Securities:
Taxable		514,553			10,876	4.23	%		452,087			9,687	4.29	%
Tax-exempt		46,317			1,738	7.50	%		56,561			2,177	7.70	%
Total securities		560,870			12,614	4.50	%		508,648			11,864	4.66	%
Retained interest in securitized loans		81,535			7,365	18.07	%		73,690			5,797	15.73	%
Deposits in depository institutions		14,294			82	1.15	%		—			—	—
Federal funds sold		6,868			36	1.05	%		46,103			367	1.59	%
Total interest-earning assets		1,855,751			59,976	6.46	%		1,926,485			67,410	7.00	%
Cash and due from banks		46,498							63,373
Bank premises and equipment		36,872							41,791
Other assets		78,737							102,392
Less: Allowance for loan losses		(29,248	)						(42,435	)
Total assets	$	1,988,610						$	2,091,606
Liabilities:
Interest-bearing demand deposits	$	381,445		$	1,051	0.55	%	$	378,529		$	1,098	0.58	%
Savings deposits		291,204			846	0.58	%		305,538			1,777	1.16	%
Time deposits		620,494			9,468	3.05	%		707,276			13,743	3.89	%
Short-term borrowings		101,189			566	1.12	%		113,767			1,141	2.01	%
Long-term debt		23,564			533	4.52	%		37,312			1,085	5.82	%
Trust preferred securities		87,500			4,012	9.17	%		87,500			4,301	9.83	%
Total interest-bearing liabilities		1,505,396			16,476	2.19	%		1,629,922			23,145	2.84	%
Noninterest-bearing demand deposits		284,984							274,219
Other liabilities		27,399							34,392
Stockholders’ equity		170,831							153,073
Total liabilities and stockholders’ equity	$	1,988,610						$	2,091,606
Net interest income				$	43,500						$	44,265
Net yield on earning assets						4.69	%						4.60	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Analysis of Risk-Based Capital

(Unaudited) ($ in 000s)

	June 30 2003 (a)			March 31 2003			Dec. 31 2002			Sept. 30 2002			June 30 2002
Tier I Capital:
Stockholders’ equity	$	178,571		$	167,877		$	165,393		$	160,705		$	158,828
Goodwill and other intangibles		(6,574	)		(6,652	)		(6,730	)		(6,808	)		(6,885	)
Accumulated other comprehensive income		(5,134	)		(3,357	)		(4,416	)		(6,077	)		(4,638	)
Qualifying trust preferred stock		57,812			54,840			53,659			51,543			51,397
Excess retained interests		(23,810	)		(29,169	)		(28,946	)		(30,000	)		(27,255	)
Excess deferred tax assets		(9,048	)		(14,477	)		(15,104	)		(11,102	)		(14,766	)
Total tier I capital	$	191,817		$	169,062		$	163,856		$	158,261		$	156,681
Total Risk-Based Capital:
Tier I capital	$	191,817		$	169,062		$	163,856		$	158,261		$	156,681
Qualifying allowance for loan losses		24,701			24,139			24,068			23,477			22,910
Qualifying trust preferred stock		29,688			32,660			33,841			35,957			36,103
Total risk-based capital	$	246,206		$	225,861		$	221,765		$	217,695		$	215,694
Net risk-weighted assets	$	1,648,715		$	1,650,156		$	1,660,489		$	1,621,129		$	1,567,809
Ratios:
Average stockholders’ equity to average assets		8.65	%		8.53	%		8.30	%		8.05	%		7.51	%
Risk-based capital ratios:
Tier I capital		11.63	%		10.25	%		9.87	%		9.76	%		9.99	%
Total risk-based capital		14.93	%		13.69	%		13.36	%		13.43	%		13.76	%
Leverage capital		9.81	%		8.75	%		8.49	%		8.08	%		7.73	%
(a)    June 30, 2003 risk-based capital ratios are estimated. CITY HOLDING COMPANY AND SUBSIDIARIES Intangibles (Unaudited) ($ in 000s)
	As of and for the Quarter Ended
	June 30 2003			March 31 2003			Dec. 31 2002			Sept. 30 2002			June 30 2002
Intangibles, net	$	6,574		$	6,652		$	6,730		$	6,808		$	6,885
Intangibles amortization expense		78			78			78			77			78

CITY HOLDING COMPANY AND SUBSIDIARIES

Summary of Loan Loss Experience

(Unaudited) ($ in 000s)

	Quarter Ended
	June 30 2003			March 31 2003			Dec. 31 2002			Sept. 30 2002			June 30 2002
Balance at beginning of period	$	28,910		$	28,504		$	28,623		$	28,023		$	37,779
Charge-offs:
Commercial		2			532			565			1,722			8,925
Real estate—mortgage		503			594			421			212			3,222
Installment		676			1,007			1,187			1,204			1,156
Overdraft deposit accounts		501			—			—			—			—
Previously securitized loans		28			—			—			—			—
Total charge-offs		1,710			2,133			2,173			3,138			13,303
Recoveries:
Commercial		1,309			929			490			2,703			2,129
Real estate—mortgage		307			1,178			1,140			525			92
Installment		408			432			424			510			426
Overdraft deposit accounts		168			—			—			—			—
Previously securitized loans		—			—			—			—			—
Total recoveries		2,192			2,539			2,054			3,738			2,647
Net (recoveries) charge-offs		(482	)		(406	)		119			(600	)		10,656
Provision for loan losses		(3,300	)		—			—			—			900
Balance at end of period	$	26,092		$	28,910		$	28,504		$	28,623		$	28,023
Loans outstanding	$	1,197,893		$	1,187,152		$	1,204,391		$	1,229,095		$	1,214,444
Average loans outstanding		1,188,363			1,196,048			1,215,757			1,213,295			1,253,098
Allowance as a percent of loans outstanding		2.18	%		2.44	%		2.37	%		2.36	%		2.31	%
Allowance as a percent of non-performing loans		701	%		1057	%		948	%		1119	%		1729	%
Net (recoveries) charge-offs (annualized) as a percent of average loans outstanding		(0.16	)%		(0.14	)%		0.04	%		(0.20	)%		3.40	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Summary of Non-Performing Assets

(Unaudited) ($ in 000s)

	June 30 2003			March 31 2003			Dec. 31 2002			Sept. 30 2002			June 30 2002
Nonaccrual loans	$	1,919		$	2,148		$	2,126		$	1,511		$	626
Accruing loans past due 90 days or more		1,744			588			880			1,046			995
Previously securitized loans past due 90 days or more		61			—			—			—			—
Restructured loans		—			—			—			—			—
Total non-performing loans		3,724			2,736			3,006			2,557			1,621
Other real estate owned		623			387			403			1,079			1,681
Total non-performing assets	$	4,347		$	3,123		$	3,409		$	3,636		$	3,302
Non-performing assets as a percent of loans and other real estate owned		0.36	%		0.26	%		0.28	%		0.30	%		0.27	%