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 20, 2005

CITY HOLDING COMPANY

(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 0-17733

West Virginia	55-0169957
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

25 Gatewater Road, Cross Lanes, WV 25313

(Address of Principal Executive Offices, Including Zip Code)

304-769-1100

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

On July 20, 2005, City Holding Company (“the Company”) issued a news release, attached as Exhibit 99, announcing the Company’s second quarter 2005 earnings. Furnished as Exhibit 99 and incorporated herein by reference is the news release issued by the Company announcing its second quarter 2005 earnings.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99 News Release issued on July 20, 2005

Signatures

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.

Dated: July 21, 2005	City Holding Company
	By:	/s/ Charles R. Hageboeck
		Charles R. Hageboeck
		President and Chief Executive Officer

EX-99

Exhibit 99

NEWS RELEASE

For Immediate Release

July 20, 2005

For Further Information Contact:

Charles R. Hageboeck, Chief Executive Officer and President

(304) 769-1102

City Holding Company Announces Second Quarter Earnings

Charleston, West Virginia – City Holding Company, “the Company” (NASDAQ:CHCO), a $2.5 billion bank holding company headquartered in Charleston, today announced net income for the second quarter of $12.3 million, or diluted earnings per share of $0.71 compared to $13.3 million, or $0.79 per diluted share in the second quarter of 2004. The second quarter of 2004 included income of $3.2 million net of expenses and taxes, or $0.19 per diluted share, recognized in connection with the settlement of a derivative action brought against certain current and former directors and former executive officers of City Holding Company and City National Bank seeking to recover alleged damages on behalf of City Holding Company and City National Bank. After considering the effect of this settlement, net income for the second quarter of 2005 increased 21.8% and diluted earnings per share increased 18.3% compared to the second quarter of 2004. For the quarter, the Company achieved a return on assets of 2.09%, a return on equity of 19.76%, a net interest margin of 4.42%, and an efficiency ratio of 46.9%, placing the Company among the most profitable banks for the quarter. The market value of the Company’s stock increased 15.6% to $36.52 at June 30, 2005 compared to $31.58 at June 30, 2004. Based on the most recent 12-month earnings per diluted share and the stock price at June 30, 2005, City’s price/earnings ratio was 13.48.

During the second quarter of 2005, the Company successfully completed its acquisition and integration of Classic Bancshares, Inc. (Classic), parent company of Classic Bank. The acquisition of Classic was consummated by the exchange of a combination of approximately 1,580,000 shares of City stock and cash valued at $79.2 million. Classic had approximately $332 million in assets at the time of the merger and operated 10 banking offices in Eastern Kentucky and Southeastern Ohio. With the acquisition of Classic, City is now the largest commercial banking franchise in the Huntington/Ashland WV-KY-OH MSA with $361 million in deposits and 13 branches.

Based on the latest available deposit balance data, City also has the 1st largest commercial banking franchise in the Beckley/Lewisburg market (the West Virginia counties of Fayette, Greenbrier, Raleigh, and Summers) and has the 2nd largest commercial banking franchise in the Charleston, WV MSA. Additionally, City has a significant presence in the West Virginia counties of Berkeley, Jefferson, and Morgan. These counties are located in one of the fastest growing suburban areas surrounding Washington, D.C. and Baltimore, Maryland.

The Company continues to perform solidly across all measures. Primarily as a result of the acquisition of Classic, targeted loan balances grew significantly. Average quarterly commercial real estate loans were up 19.2% since June 30, 2004, average quarterly residential real estate balances were up 16.2% and average quarterly home equity loan balances were up 2.3% over the same period. Exclusive of the acquisition, targeted loan balances still continued to reflect favorable increases with average commercial real estate loans increasing 14.5%, average residential real estate loans up 5.0% and average home equity loans up 1.4% from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. Average non-interest and interest bearing demand deposits grew 7.2% from the quarter ended June 30, 2004 to the quarter ended June 30, 2005 with the Classic acquisition representing 4.6% of this increase. Although the average balance of previously securitized loans and retained interests (which yielded 25.0% during the second quarter of 2005) decreased by $45.7 million compared to the second quarter of 2004, the Company was able to improve the level of net interest income through loan and deposit growth and by focusing on the origination of variable rate loans to benefit from rising interest rates. Of further note, between the second quarter of 2004 and the second quarter of 2005, service charge income grew 19.4% while non-interest expenses decreased slightly.

Balance Sheet Trends

As compared to June 30, 2004, loans have increased $250.4 million at June 30, 2005. The principal factor for this increase was the acquisition of Classic which added approximately $256.2 million in loans. Exclusive of the Classic acquisition, loans decreased $5.8 million from June 30, 2004 to June 30, 2005. The primary reasons for this decrease were decreases in previously securitized loans of $41.7 million (see discussion below) and continued decreases in loan portfolios that the Company has de-emphasized, including a decrease in unsecured consumer loans of $10.8 million and a decrease in indirect loans of $10.1 million. These decreases were offset by growth in targeted areas such as commercial real estate and residential real estate, which grew by $32.9 million and $22.3 million, respectively. Total average depository balances increased $109.3 million, or 6.6%, from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. This growth was primarily attributable to the Classic acquisition, which increased total average depository balances by $102.6 million. Additionally, City has continued to focus on increasing its level of non-interest bearing deposit accounts. To that end and exclusive of the Classic transaction, the Company was able to increase average non-interest balances by 4.7% from the second quarter of 2004 to the second quarter of 2005.

Previously Securitized Loans

Between 1997 and 1999, the Company originated and securitized $760 million in 125% loan to value junior-lien underlying mortgages in six separate pools. The Company had a retained interest in the residual cash flows associated with these underlying mortgages after satisfying priority claims. Principal amounts owed to investors in the securitizations were evidenced by notes that were subject to redemption under certain circumstances. When the notes were redeemed during 2003 and 2004, the Company became the beneficial owner of the mortgage loans and recorded the loans as “Previously Securitized Loans” within the loan portfolio. At June 30, 2005, the Company reported “Previously Securitized Loans” of $41.7 million compared to $83.4 million and $58.4 million at June 30, 2004 and December 31, 2004, respectively,

representing a decrease of 50.0% and 28.7%, respectively. As a result of this decrease, interest income associated with previously securitized loans and retained interests decreased by $1.0 million from the second quarter of 2004 to the second quarter of 2005. This decrease in interest income was offset by targeted loan growth in the commercial real estate and residential real estate loan portfolios and by an increase net interest margin yield due to the Company’s positioning of its balance sheet to benefit from rising interest rates.

Because the carrying value of the previously securitized loans incorporates discounts for expected prepayment and default rates, the carrying value of the loans is generally less than the contractual outstanding balance of the loans. As of June 30, 2005, the contractual outstanding balances of the mortgages securitized were $59.4 million while the carrying value of these assets was $41.7 million. The difference between the carrying value and the contractual outstanding balance of previously securitized loans is accreted into interest income over the life of the loans. An impairment charge on previously securitized loans would be provided through the Company’s provision and allowance for loan losses if the discounted present value of estimated future cash flows decline below the recorded value of previously securitized loans.

The Company estimates the net carrying value of previously securitized loan balances to decrease as shown below:

December 31, 2005	$	34 million
December 31, 2006	$	23 million
December 31, 2007	$	17 million
December 31, 2008	$	13 million

The yield on the previously securitized loans was 24.95% for the quarter ended June 30, 2005 compared to 22.44% for the quarter ended March 31, 2005 and 16.79% for the quarter ended December 31, 2004. The yield on the previously securitized loans has increased due to default rates being less than previously estimated and balances prepaying faster than previously estimated. In addition, the Company has now assumed the servicing of all of the pool balances. This has also favorably impacted the yield realized on the previously securitized loans due to the elimination of the servicing fees previously being paid to the external servicing agent and increased collection efforts. As a result, the yield is now estimated to be in the range of 24% and 27%, depending on defaults and prepayment rates experienced on these loans in the future.

Net Interest Income

The Company’s tax equivalent net interest income increased $2.2 million, or 10.1%, from $21.7 million during the second quarter of 2004 to $23.9 million during the second quarter of 2005. The increase was primarily the result of the acquisition of Classic and increased interest income from the Company’s traditional loan portfolio. As a result of the Classic acquisition, net interest income increased $1.4 million during the quarter ended June 30, 2005. Interest income from traditional loan products increased $2.4 million, or 13.4%, from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. This increase was due to an increase in the average balances outstanding of $64.4 million, or 4.8%, and as a result of increased yields on such loans of approximately 26 basis points. The yield realized on loans increased as a result of the increases by the Federal Reserve in the Federal Funds rate and the Company’s positioning of its balance sheet to benefit from such an increased interest rate environment.

These increases were partially offset by decreased income associated with the previously securitized loans and increased interest expense. Decreasing balances of previously securitized loans and retained interests with high yields reduced the amount of interest income reported. Average balances of previously securitized loans and retained interests decreased from $91.3 million for the quarter ended June 30, 2004 to $45.6 million for the quarter ended June 30, 2005. As a result of the decrease in balances of $45.7 million, interest income related to previously securitized loans and retained interests decreased $1.0 million from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. Due to the Classic acquisition and the increasing interest rate environment, interest expense increased $1.2 million from the second quarter of 2004 to the second quarter of 2005.

The net interest margin for the second quarter of 2005 of 4.42% represented a 20 basis point increase from the second quarter of 2004 net interest margin of 4.22% and approximated the net interest margin of 4.40% for the quarter ended March 31, 2005. In order to offset the decreasing balances of high yielding previously securitized loans and resultant lower levels of interest income from these assets, the Company positioned its balance sheet to benefit from rising interest rates by focusing on the origination of variable rate loans in its traditional lending areas of residential real estate, home equity and commercial real estate loans. Since June 2004, the Federal funds rate has increased 225 basis points from 1.00% to 3.25% in June 2005. As a result of this increase in rates and excluding the impact of previously securitized loans, retained interests, and the acquisition of Classic, the Company’s net interest margin increased 33 basis points, or $1.8 million, from the quarter ended June 30, 2004 to the quarter ended June 30, 2005. Because of the Company’s strong core deposit base of checking accounts and savings accounts, management believes that an increasing interest rate environment will continue to beneficially impact the Company’s net interest income excluding the impact of previously securitized loans. However, due to the continued decrease in high yielding balances of previously securitized loans, the Company’s ability to report positive net interest margin trends will be dependent upon its ability to increase loan balances and/or a continued rising interest rate environment.

Credit Quality

At June 30, 2005, the Allowance for Loan Losses (“ALLL”) was $18.3 million or 1.14% of total loans outstanding and 464% of non-performing loans compared to $17.8 million or 1.31% of loans outstanding and 487% of non-performing loans at December 31, 2004, and $19.8 million or 1.47% of loans outstanding and 493% of non-performing loans at June 30, 2004. While the Company recorded no provision for loan losses in the second quarter of 2005 and has not recorded a provision for loan losses since the second quarter of 2002, the Company’s ALLL increased from March 31, 2005 to June 30, 2005, due to the acquisition of Classic. During the last three years, management has implemented a number of strategic initiatives to strengthen the loan portfolio including tightening credit standards, changing the overall mix of the portfolio to include a higher proportion of real estate secured loans, and identifying and charging-off or resolving problem loans. As a result of these initiatives, the quality of the Company’s loan portfolio has increased significantly as evidenced by the improvement in its ratio of non-

performing assets to total loans and other real estate owned from 1.38% at June 30, 2002 to 0.28% at June 30, 2005. As the Company’s asset quality has improved, the ALLL has decreased. However, given the relatively stable credit profile achieved over the last several years, the Company expects that it may begin to record a provision for loan losses within the next three to six months. 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 potential recoveries of previously charged-off loans. The Company believes that its methodology for determining its ALLL adequately provides for probable losses inherent in the loan portfolio at June 30, 2005.

The Company had net charge-offs of $1.3 million for the second quarter of 2005. During the second quarter, the Company sold a commercial real estate loan, which had been originated in 1999, to a third party resulting in a $0.6 million charge-off. The Company’s ALLL included $0.7 million that had previously been allocated specifically for this credit. Although the ratio of ALLL to loans outstanding decreased from 1.22% at March 31, 2005 to 1.14% at June 30, 2005, the Company believes that the ALLL remains adequate at June 30, 2005 to provide for probable losses inherent in the loan portfolio. The Company also recovered approximately $0.3 million associated with a commercial real estate loan that had been charged-off in the first quarter of 2005.

Net charge-offs on depository accounts were $0.6 million, or 46% of total net charge-offs. While charge-offs on depository accounts are appropriately taken against the ALLL, the revenue associated with depository accounts is reflected in service charges, and has been steadily growing as the Company’s core base of checking accounts has grown.

Non-performing assets were $4.4 million at June 30, 2005, representing 0.28% of total loans and other real estate owned. This ratio has been very stable over the last two years, fluctuating between 0.28% at June 30, 2005, and 0.38% at September 30, 2003.

Non-interest Income

Net of investment securities gains and legal settlement, non-interest income increased $1.3 million, or 11.7%, to $12.1 million in the second quarter of 2005 as compared to $10.8 million in the second quarter of 2004. The largest source of non-interest income is service charges from depository accounts, which increased $1.6 million or 19.4%, from $8.1 million during the second quarter of 2004 to $9.7 million during the second quarter of 2005. The increase during the second quarter was primarily a reflection of an increase in the number of customers that the Company is serving while the Classic acquisition accounted for $0.3 million, or 3.9%, of this increase. Trust fee and insurance commissions decreased $0.2 million and $0.2 million, respectively, from the second quarter of 2004 to the second quarter of 2005 as both areas of business experienced items of a non-recurring nature during the second quarter of 2004. In total, non-interest income represented approximately 34% of total revenues (net interest income plus non-interest income), for the quarter ended June 30, 2005 compared to other similarly sized banking companies which average approximately 24% of total revenues derived from non-interest income.

Non-interest Expenses

Non-interest expenses decreased from $17.0 million in the second quarter of 2004 to $16.8 million in the second quarter of 2005. The Classic acquisition increased non-interest expenses by $0.5 million during the second quarter of 2005. Excluding the impact of Classic non-interest expenses decreased $0.7 million primarily due to litigation expense of $0.6 million incurred during the second quarter of 2004 associated with the resolution of the Company’s derivative lawsuit. Aside from these two issues, the Company essentially held non-interest expenses flat in the second quarter of 2005 versus the second quarter of 2004.

The Company’s efficiency ratio was 46.9% for the quarter ended June 30, 2005, versus 44.9% for the quarter ended June 30, 2004. After considering the effect of income and expenses associated with the settlement of the derivative lawsuit, the efficiency ratio improved from 50.7% for the quarter ended June 30, 2004 to 46.9% for the quarter ended June 30, 2005. This decrease is a result of the Company’s ability to control its non-interest expenses. The average efficiency ratio for the Company’s peer group for the most recently reported quarter was 55.6%.

Capitalization and Liquidity

One of the Company’s strengths is that it is highly profitable while maintaining strong liquidity and capital. With respect to liquidity, the Company’s loan to deposit ratio was 84.5% and the loan to asset ratio was 63.8% at June 30, 2005. The Company maintained investment securities totaling 26.0% of assets as of this date. Further, the Company’s deposit mix is weighted heavily toward checking and saving accounts that fund 44.4% of assets at June 30, 2005. Time deposits fund 31.2% of assets at June 30, 2005, but very few of these deposits are in accounts that have balances of more than $150,000, reflecting the core retail orientation of the Company. Equity represents 11.1% of total assets, leaving only 13.3% of the Company’s assets funded by short and long-term borrowings and other liabilities.

The Company is also strongly capitalized. Capitalization (as measured by average equity to average assets) was 10.57% for the quarter ended June 30, 2005 as a result of the Company’s strong earnings. The Company’s tangible equity ratio was 8.83% at June 30, 2005 compared with a tangible equity ratio of 8.71% at June 30, 2004. The Company was able to maintain this ratio despite the completion of an acquisition that was funded by cash of approximately 25% due to its continued strong earnings performance. With respect to regulatory capital, at June 30, 2005, the Company’s Leverage Ratio is 10.59%, the Tier I Capital ratio is 14.27%, and the Total Risk-Based Capital ratio is 15.32%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

During the second quarter of 2005, the Company repurchased 137,476 common shares at a weighted average price of $33.65 as part of a 1 million share repurchase plan authorized by the Board of Directors in June 2002. On June 29, 2005, the Company announced that the Board of Directors authorized the Company to buy back up to 1,000,000 shares of its common shares (approximately 5% of outstanding shares) in open market transactions at prices that are accretive to the earnings per share of continuing shareholders. No time limit was placed on the duration of

the share repurchase program. As part of this authorization, the Company rescinded the previous share repurchase program plan approved in June 2002. The Company had repurchased 755,216 shares under the June 2002 Stock Repurchase Plan.

Other Events of Interest

On July 11, 2005, the Company announced that Greg Shrewsbury had been named Senior Vice President and Director of Human Resources.

On July 19, 2005, the Company announced plans to open a new branch location in the Potomac Marketplace in Ranson, West Virginia. Ranson is located in Jefferson County, one of the state’s fastest growing counties. This branch is expected to open in the first quarter of 2006.

During the second quarter City opened a new branch in the Wal-Mart Supercenter located in Mac Arthur, West Virginia and will be opening a branch in the Ashland, Kentucky Wal-Mart Supercenter in the third quarter. These are the third and fourth branches to be opened by City in Wal-Mart’s in the last year. The Company has been pleased with the initial success of its partnership with Wal-Mart.

City Holding Company is the parent company of City National Bank of West Virginia. City National operates 67 branches across West Virginia, Eastern Kentucky and Southern Ohio.

Forward Looking Information

This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company’s actual results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may 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 previously securitized loans that would result in impairment losses or lower the yield on such loans, (4) the Company could have adverse legal actions of a material nature, (5) the Company may face competitive loss of customers, (6) the Company may be unable to manage its expense levels, (7) the Company may have difficulty retaining key employees, (8) 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, (9) changes in general economic conditions and increased competition could adversely affect the Company’s operating results, (10) 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, and (11) 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
	June 30 2005			June 30 2004			Percent Change
Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	23,863		$	21,679		10.07	%
Net Income		12,349			13,298		(7.14	)%
Earnings per Basic Share		0.72			0.80		(10.00	)%
Earnings per Diluted Share		0.71			0.79		(10.13	)%
Key Ratios (percent):
Return on Average Assets		2.09	%		2.39	%	(12.65	)%
Return on Average Equity		19.76	%		25.64	%	(22.92	)%
Net Interest Margin		4.42	%		4.22	%	4.74	%
Efficiency Ratio		46.90	%		44.92	%	4.41	%
Average Shareholders’ Equity to Average Assets		10.57	%		9.33	%	13.32	%
Risk-Based Capital Ratios (a):
Tier I		14.27	%		14.43	%	(1.11	)%
Total		15.32	%		15.68	%	(2.30	)%
Common Stock Data:
Cash Dividends Declared per Share	$	0.25		$	0.22		13.64	%
Book Value per Share		15.56			11.89		30.87	%
Market Value per Share:
High		37.00			35.71		3.61	%
Low		27.57			27.30		0.99	%
End of Period		36.52			31.58		15.64	%
Price/Earnings Ratio (b)		12.68			9.87		28.49	%
	Six Months Ended
	June 30 2005			June 30 2004			Percent Change
Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	46,360		$	44,248		4.77	%
Net Income		24,027			24,301		(1.13	)%
Earnings per Basic Share		1.42			1.46		(2.74	)%
Earnings per Diluted Share		1.40			1.43		(2.10	)%
Key Ratios (percent):
Return on Average Assets		2.10	%		2.19	%	(4.34	)%
Return on Average Equity		20.30	%		23.99	%	(15.37	)%
Net Interest Margin		4.44	%		4.33	%	2.47	%
Efficiency Ratio		47.12	%		47.65	%	(1.11	)%
Average Shareholders’ Equity to Average Assets		10.33	%		9.14	%	12.98	%
Common Stock Data:
Cash Dividends Declared per Share	$	0.50		$	0.44		13.64	%
Market Value per Share:
High		37.00			36.18		2.27	%
Low		27.57			27.30		0.99	%

(a) June 30, 2005 risk-based capital ratios are estimated.

(b) June 30, 2005 price/earnings ratio computed based on annualized second quarter 2005 earnings.

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
2001	$	8.82	$	8.70	$	8.37	$	8.67	$	5.13	$	13.94
2002		8.92		9.40		9.64		9.93		12.04		30.20
2003		10.10		10.74		11.03		11.46		25.50		37.15
2004		12.09		11.89		12.70		13.03		27.30		37.58
2005		13.20		15.56						27.57		37.00

Earnings per Basic Share

	Quarter Ended
	March 31			June 30			September 30			December 31		Year-to-Date
2001	$	(0.34	)	$	(1.19	)	$	(0.46	)	$	0.45	$	(1.54	)
2002		0.38			0.45			0.53			0.56		1.92
2003		0.56			0.73			0.69			0.64		2.62
2004		0.66			0.80			0.66			0.67		2.79
2005		0.70			0.72								1.42

Earnings per Diluted Share

	Quarter Ended
	March 31			June 30			September 30			December 31		Year-to-Date
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			0.68			0.63		2.58
2004		0.65			0.79			0.65			0.66		2.75
2005		0.69			0.71								1.40

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

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

	Three Months Ended June 30,
	2005			2004
Interest Income
Interest and fees on loans	$	24,523		$	21,384
Interest on investment securities:
Taxable		7,682			7,374
Tax-exempt		447			457
Interest on retained interests		—			67
Interest on deposits in depository institutions		24			11
Interest on federal funds sold		—			—
Total Interest Income		32,676			29,293
Interest Expense
Interest on deposits		6,605			5,715
Interest on short-term borrowings		787			195
Interest on long-term debt		1,662			1,950
Total Interest Expense		9,054			7,860
Net Interest Income		23,622			21,433
Provision for loan losses		—			—
Net Interest Income After Provision for Loan Losses		23,622			21,433
Non-Interest Income
Investment securities gains		18			124
Service charges		9,685			8,110
Insurance commissions		545			718
Trust fee income		462			627
Bank owned life insurance		545			591
Mortgage banking income		106			71
Legal settlement		—			5,453
Other income		737			695
Total Non-Interest Income		12,098			16,389
Non-Interest Expense
Salaries and employee benefits		8,404			8,390
Occupancy and equipment		1,564			1,459
Depreciation		994			974
Professional fees and litigation expense		514			1,181
Postage, delivery, and statement mailings		615			598
Advertising		762			651
Telecommunications		513			463
Insurance and regulatory		365			320
Office supplies		275			273
Repossessed asset (gains) losses, net of expenses		(16	)		(108	)
Loss on early extinguishment of debt		—			263
Other expenses		2,849			2,521
Total Non-Interest Expense		16,839			16,985
Income Before Income Taxes		18,881			20,837
Income tax expense		6,532			7,539
Net Income	$	12,349		$	13,298
Basic earnings per share	$	0.72		$	0.80
Diluted earnings per share	$	0.71		$	0.79
Average Common Shares Outstanding:
Basic		17,268			16,694
Diluted		17,475			16,935

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

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

	Six Months Ended June 30,
	2005			2004
Interest Income
Interest and fees on loans	$	46,713		$	43,107
Interest on investment securities:
Taxable		15,328			14,598
Tax-exempt		882			934
Interest on retained interests		—			807
Interest on deposits in depository institutions		42			22
Interest on federal funds sold		4			—
Total Interest Income		62,969			59,468
Interest Expense
Interest on deposits		12,473			11,407
Interest on short-term borrowings		1,364			361
Interest on long-term debt		3,247			3,955
Total Interest Expense		17,084			15,723
Net Interest Income		45,885			43,745
Provision for loan losses		—			—
Net Interest Income After Provision for Loan Losses		45,885			43,745
Non-Interest Income
Investment securities gains		21			1,136
Service charges		18,128			15,491
Insurance commissions		1,137			1,378
Trust fee income		1,053			1,114
Bank owned life insurance		1,536			1,172
Mortgage banking income		224			139
Legal settlement		—			5,453
Other income		1,443			1,427
Total Non-Interest Income		23,542			27,310
Non-Interest Expense
Salaries and employee benefits		16,324			16,517
Occupancy and equipment		3,039			2,953
Depreciation		1,938			1,980
Professional fees and litigation expense		1,079			2,025
Postage, delivery, and statement mailings		1,268			1,283
Advertising		1,467			1,307
Telecommunications		986			929
Insurance and regulatory		731			651
Office supplies		478			585
Repossessed asset (gains) losses, net of expenses		(15	)		(51	)
Loss on early extinguishment of debt		—			263
Other expenses		5,557			4,977
Total Non-Interest Expense		32,852			33,419
Income Before Income Taxes		36,575			37,636
Income tax expense		12,548			13,335
Net Income	$	24,027		$	24,301
Basic earnings per share	$	1.42		$	1.46
Diluted earnings per share	$	1.40		$	1.43
Average Common Shares Outstanding:
Basic		16,938			16,687
Diluted		17,145			16,954

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited) ($ in 000s)

	Three Months Ended
	June 30, 2005			June 30, 2004
Balance at April 1	$	219,302		$	202,204
Net income		12,349			13,298
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		2,660			(11,196	)
Change in unrealized loss on interest rate swaps		(104	)		—
Cash dividends declared ($0.25/share)		(4,497	)		—
Cash dividends declared ($0.22/share)		—			(3,657	)
Issuance of 1,580,034 shares for acquisition of Classic Bancshares, net 108,173 owned and transferred to treasury		54,339			—
Exercise of 15,018 stock options		200			—
Exercise of 10,325 stock options		—			149
Purchase of 139,776 common shares of treasury		(4,625	)		—
Purchase of 109,300 common shares of treasury		—			(3,229	)
Balance at June 30	$	279,624		$	197,569
	Six Months Ended
	June 30, 2005			June 30, 2004
Balance at January 1	$	216,080		$	190,690
Net income		24,027			24,301
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		(2,086	)		(7,825	)
Change in unrealized loss on interest rate swaps		(104	)		—
Cash dividends declared ($0.50/share)		(8,651	)		—
Cash dividends declared ($0.44/share)		—			(7,335	)
Issuance of 1,580,034 shares for acquisition of Classic Bancshares, net 108,173 owned and transferred to treasury		54,339			—
Issuance of 4,800 stock award shares		147			—
Exercise of 38,368 stock options		497			—
Exercise of 84,803 stock options		—			967
Purchase of 139,776 common shares for treasury		(4,625	)		—
Purchase of 109,300 common shares for treasury		—			(3,229	)
Balance at June 30	$	279,624		$	197,569

CITY HOLDING COMPANY AND SUBSIDIARIES

Condensed Consolidated Quarterly Statements of Income

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

	Quarter Ended
	June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004			June 30 2004
Interest income	$	32,676		$	30,293		$	29,746		$	29,667		$	29,293
Taxable equivalent adjustment		241			233			236			236			246
Interest income (FTE)		32,917			30,526			29,982			29,903			29,539
Interest expense		9,054			8,030			8,112			8,035			7,860
Net interest income		23,863			22,496			21,870			21,868			21,679
Provision for loan losses		—			—			—			—			—
Net interest income after provision for loan losses		23,863			22,496			21,870			21,868			21,679
Noninterest income		12,098			11,444			11,869			10,856			16,389
Noninterest expense		16,839			16,013			17,131			15,783			16,985
Income before income taxes		19,122			17,927			16,608			16,941			21,083
Income tax expense		6,532			6,016			5,285			5,749			7,539
Taxable equivalent adjustment		241			233			236			236			246
Net income	$	12,349		$	11,678		$	11,087		$	10,956		$	13,298
Basic earnings per share	$	0.72		$	0.70		$	0.67		$	0.66		$	0.80
Diluted earnings per share		0.71			0.69			0.66			0.65			0.79
Cash dividends declared per share		0.25			0.25			0.22			0.22			0.22
Average Common Share (000s):
Outstanding		17,268			16,605			16,572			16,584			16,694
Diluted		17,475			16,812			16,810			16,812			16,935
Net Interest Margin		4.42	%		4.40	%		4.27	%		4.27	%		4.20	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Non-Interest Income and Non-Interest Expense

(Unaudited) ($ in 000s)

	Quarter Ended
	June 30 2005			March 31 2005		Dec. 31 2004			Sept. 30 2004		June 30 2004
Non-Interest Income:
Service charges	$	9,685		$	8,443	$	8,678		$	8,440	$	8,110
Insurance commissions		545			592		754			600		718
Trust fee income		462			591		466			446		627
Bank owned life insurance		545			991		1,184			575		591
Mortgage banking income		106			118		70			72		71
Other income		737			706		685			719		695
Subtotal		12,080			11,441		11,837			10,852		10,812
Investment security gains		18			3		32			4		124
Net proceeds from litigation settlement		—			—		—			—		5,453
Total Non-Interest Income	$	12,098		$	11,444	$	11,869		$	10,856	$	16,389
Non-Interest Expense:
Salaries and employee benefits	$	8,404		$	7,920	$	9,578		$	8,150	$	8,390
Occupancy and equipment		1,564			1,475		1,560			1,472		1,459
Depreciation		994			944		981			972		974
Professional fees and litigation expense		514			565		571			668		1,181
Postage, delivery, and statement mailings		615			653		589			601		598
Advertising		762			705		600			459		651
Telecommunications		513			473		403			488		463
Insurance and regulatory		365			366		330			342		320
Office supplies		275			203		210			252		273
Repossessed asset (gains) losses, net of expenses		(16	)		1		(31	)		5		(108	)
Loss on early exinguishment of debt		—			—		—			—		263
Other expenses		2,849			2,708		2,340			2,374		2,521
Total Non-Interest Expense	$	16,839		$	16,013	$	17,131		$	15,783	$	16,985
Employees (Full Time Equivalent)		767			689		691			692		692
Branch Locations		67			56		56			56		54

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

($ in 000s)

	June 30 2005			December 31 2004
	(Unaudited)
Assets
Cash and due from banks	$	59,647		$	52,854
Interest-bearing deposits in depository institutions		3,302			3,230
Cash and cash equivalents		62,949			56,084
Investment securities available-for-sale, at fair value		594,729			620,034
Investment securities held-to-maturity, at amortized cost		56,764			59,740
Total investment securities		651,493			679,774
Loans:
Residential real estate		596,893			469,458
Home equity		307,354			308,173
Commercial real estate		445,241			400,801
Other commercial		138,923			71,311
Installment		48,668			18,145
Indirect		6,048			10,324
Credit card		16,188			18,126
Previously securitized loans		41,670			58,436
Gross Loans		1,600,985			1,354,774
Allowance for loan losses		(18,298	)		(17,815	)
Net loans		1,582,687			1,336,959
Bank owned life insurance		51,925			50,845
Premises and equipment		41,390			34,607
Accrued interest receivable		12,141			9,868
Net deferred tax assets		24,280			27,025
Other assets		82,161			18,068
Total Assets	$	2,509,026		$	2,213,230
Liabilities
Deposits:
Noninterest-bearing	$	344,567		$	319,425
Interest-bearing:
Demand deposits		458,753			411,127
Savings deposits		309,489			281,466
Time deposits		782,775			660,705
Total deposits		1,895,584			1,672,723
Short-term borrowings		156,770			145,183
Long-term debt		145,787			148,836
Other liabilities		31,261			30,408
Total Liabilities		2,229,402			1,997,150
Stockholders’ Equity
Preferred stock, par value $25 per share: 500,000 shares authorized; none issued		—			—
Common stock, par value $2.50 per share: 50,000,000 shares authorized; 18,499,282 and 16,919,248 shares issued at June 30, 2005 and December 31, 2004 less 523,172 and 331,191 shares in treasury, respectively		46,249			42,298
Capital surplus		108,269			55,512
Retained earnings		143,551			128,175
Cost of common stock in treasury		(15,111	)		(8,761	)
Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale		(805	)		1,281
Unrealized (loss) on interest rate swaps		(104	)		—
Underfunded pension liability		(2,425	)		(2,425	)
Total Accumulated Other Comprehensive (Loss) Income		(3,334	)		(1,144	)
Total Stockholders’ Equity		279,624			216,080
Total Liabilities and Stockholders’ Equity	$	2,509,026		$	2,213,230

CITY HOLDING COMPANY AND SUBSIDIARIES

Loan Portfolio

(Unaudited) ($ in 000s)

	June 30 2005		March 31 2005		December 31 2004		September 30 2004		June 30 2004
Residential real estate	$	596,893	$	463,869	$	469,458	$	468,372	$	459,759
Home equity		307,354		302,262		308,173		304,934		301,231
Commercial real estate		445,241		409,064		400,801		377,742		374,292
Other commercial		138,923		66,485		71,311		70,745		73,139
Loans to depository institutions		—		10,000		—		—		—
Installment		48,668		16,065		18,145		20,221		24,722
Indirect		6,048		7,960		10,324		13,020		16,140
Credit card		16,188		16,954		18,126		17,893		17,961
Previously securitized loans		41,670		50,588		58,436		70,970		83,385
Gross Loans	$	1,600,985	$	1,343,247	$	1,354,774	$	1,343,897	$	1,350,629

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($in 000s)

	Three Months Ended June 30,
	2005							2004
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets:
Loan portfolio:
Residential real estate	$	523,607		$	7,290	5.58	%	$	450,436		$	6,719	6.00	%
Home equity		304,475			4,602	6.06	%		297,628			3,268	4.42	%
Commercial real estate		423,254			6,584	6.24	%		355,144			4,864	5.51	%
Other commercial		100,301			1,510	6.04	%		76,047			955	5.05	%
Loans to depository institutions		21,956			164	3.00	%		9,011			26	1.16	%
Installment		31,032			818	10.57	%		26,964			744	11.10	%
Indirect		6,966			193	11.11	%		18,015			491	10.96	%
Credit card		16,706			526	12.63	%		18,004			539	12.04	%
Previously securitized loans		45,583			2,836	24.95	%		90,752			3,778	16.74	%
Total loans		1,473,880			24,523	6.67	%		1,342,001			21,384	6.41	%
Securities:
Taxable		645,375			7,682	4.77	%		680,100			7,374	4.36	%
Tax-exempt		41,209			688	6.70	%		38,100			703	7.42	%
Total securities		686,584			8,370	4.89	%		718,200			8,077	4.52	%
Retained interest in securitized loans		—			—	—			547			67	49.26	%
Deposits in depository institutions		5,061			24	1.90	%		5,461			11	0.81	%
Federal funds sold		—			—	—			—			—	—
Total interest-earning assets		2,165,525			32,917	6.10	%		2,066,209			29,539	5.75	%
Cash and due from banks		38,292							43,485
Bank premises and equipment		38,104							34,588
Other assets		140,308							99,983
Less: Allowance for loan losses		(17,489	)						(20,053	)
Total assets	$	2,364,740						$	2,224,212
Liabilities:
Interest-bearing demand deposits		428,700			845	0.79	%		405,824			637	0.63	%
Savings deposits		289,332			468	0.65	%		282,620			366	0.52	%
Time deposits		713,383			5,292	2.98	%		662,611			4,712	2.86	%
Short-term borrowings		158,170			787	2.00	%		112,548			195	0.70	%
Long-term debt		154,723			1,662	4.31	%		215,264			1,950	3.64	%
Total interest-bearing liabilities		1,744,308			9,054	2.08	%		1,678,867			7,860	1.88	%
Noninterest-bearing demand deposits		342,376							313,410
Other liabilities		28,105							24,476
Stockholders’ equity		249,951							207,459
Total liabilities and stockholders’ equity	$	2,364,740						$	2,224,212
Net interest income				$	23,863						$	21,679
Net yield on earning assets						4.42	%						4.22	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)

	Six Months Ended June 30,
	2005							2004
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets:
Loan portfolio:
Residential real estate	$	494,968		$	13,809	5.63	%	$	445,780		$	13,571	6.12	%
Home equity		305,410			8,876	5.86	%		291,947			6,444	4.44	%
Commercial real estate		412,335			12,514	6.12	%		352,008			9,731	5.56	%
Other commercial		84,378			2,514	6.01	%		75,320			1,917	5.12	%
Loans to depository institutions		14,961			213	2.87	%		6,154			35	1.14	%
Installment		24,102			1,359	11.37	%		29,028			1,621	11.23	%
Indirect		8,025			441	11.08	%		20,204			1,103	10.98	%
Credit card		17,122			1,070	12.60	%		18,209			1,093	12.07	%
Previously securitized loans		50,230			5,917	23.75	%		87,797			7,592	17.39	%
Total loans		1,411,531			46,713	6.67	%		1,326,447			43,107	6.54	%
Securities:
Taxable		651,275			15,328	4.75	%		677,143			14,598	4.34	%
Tax-exempt		39,269			1,357	6.97	%		39,037			1,437	7.40	%
Total securities		690,544			16,685	4.87	%		716,180			16,035	4.50	%
Retained interest in securitized loans		—			—	—			6,636			807	24.46	%
Deposits in depository institutions		4,391			42	1.93	%		5,554			22	0.80	%
Federal funds sold		290			4	2.78	%		—			—	—
Total interest-earning assets		2,106,756			63,444	6.07	%		2,054,817			59,971	5.87	%
Cash and due from banks		41,063							44,097
Bank premises and equipment		36,229							34,796
Other assets		123,541							102,519
Less: Allowance for loan losses		(17,485	)						(20,637	)
Total assets	$	2,290,104						$	2,215,592
Liabilities:
Interest-bearing demand deposits		421,005			1,561	0.75	%		401,639			1,241	0.62	%
Savings deposits		283,258			823	0.59	%		281,006			729	0.52	%
Time deposits		685,619			10,089	2.97	%		662,171			9,437	2.87	%
Short-term borrowings		151,158			1,364	1.82	%		114,881			361	0.63	%
Long-term debt		151,796			3,247	4.31	%		218,242			3,955	3.64	%
Total interest-bearing liabilities		1,692,836			17,084	2.04	%		1,677,939			15,723	1.88	%
Noninterest-bearing demand deposits		332,069							310,509
Other liabilities		28,525							24,569
Stockholders’ equity		236,674							202,575
Total liabilities and stockholders’ equity	$	2,290,104						$	2,215,592
Net interest income				$	46,360						$	44,248
Net yield on earning assets						4.44	%						4.33	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Analysis of Risk-Based Capital

(Unaudited) ($ in 000s)

	June 30 2005 (a)			March 31 2005			Dec. 31 2004			Sept. 30 2004			June 30 2004
Tier I Capital:
Stockholders’ equity	$	279,624		$	219,302		$	216,080		$	210,285		$	197,569
Goodwill and other intangibles		(63,833	)		(6,204	)		(6,255	)		(6,306	)		(6,357	)
Accumulated other comprehensive income		3,334			5,890			1,144			(1,146	)		6,454
Qualifying trust preferred stock		28,000			28,000			28,000			28,000			28,000
Excess deferred tax assets		—			(4,524	)		(3,129	)		—			(6,922	)
Total tier I capital	$	247,125		$	242,464		$	235,840		$	230,833		$	218,744
Total Risk-Based Capital:
Tier I capital	$	247,125		$	242,464		$	235,840		$	230,833		$	218,744
Qualifying allowance for loan losses		18,298			16,325			17,815			18,537			18,939
Total risk-based capital	$	265,423		$	258,789		$	253,655		$	249,370		$	237,683
Net risk-weighted assets	$	1,732,341		$	1,522,881		$	1,524,581		$	1,517,158		$	1,514,261
Ratios:
Average stockholders’ equity to average assets		10.57	%		10.08	%		9.81	%		9.26	%		9.33	%
Tangible capital ratio		8.83	%		9.52	%		9.51	%		9.24	%		8.71	%
Risk-based capital ratios:
Tier I capital		14.27	%		15.92	%		15.47	%		15.21	%		14.43	%
Total risk-based capital		15.32	%		16.99	%		16.64	%		16.44	%		15.68	%
Leverage capital		10.59	%		11.00	%		10.74	%		10.47	%		9.89	%
(a)    June 30, 2005 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES Intangibles (Unaudited) ($ in 000s)
	As of and for the Quarter Ended
	June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004			June 30 2004
Intangibles, net	$	63,833		$	6,204		$	6,255		$	6,306		$	6,357
Intangibles amortization expense		95			51			51			51			51

CITY HOLDING COMPANY AND SUBSIDIARIES

Summary of Loan Loss Experience

(Unaudited) ($ in 000s)

	Quarter Ended
	June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004			June 30 2004
Balance at beginning of period	$	16,325		$	17,815		$	18,537		$	19,833		$	20,289
Allowance acquired through acquisition		3,265			—			—			—			—
Charge-offs:
Residential real estate		97			237			166			299			173
Home equity		226			421			5			105			66
Commercial real estate		653			393			105			1,134			44
Other commercial		10			36			14			220			22
Installment		263			308			458			568			457
Overdraft deposit accounts		832			744			586			631			610
Total charge-offs		2,081			2,139			1,334			2,957			1,372
Recoveries:
Residential real estate		16			37			137			196			133
Home equity		9			—			—			1			—
Commercial real estate		311			50			10			922			201
Other commercial		34			45			80			103			127
Installment		175			205			147			183			202
Overdraft deposit accounts		244			312			238			256			253
Total recoveries		789			649			612			1,661			916
Net charge-offs		1,292			1,490			722			1,296			456
Provision for loan losses		—			—			—			—			—
Balance at end of period	$	18,298		$	16,325		$	17,815		$	18,537		$	19,833
Loans outstanding	$	1,600,985		$	1,343,247		$	1,354,774		$	1,343,897		$	1,350,629
Average loans outstanding		1,473,880			1,348,489			1,347,297			1,348,265			1,342,001
Allowance as a percent of loans outstanding		1.14	%		1.22	%		1.31	%		1.38	%		1.47	%
Allowance as a percent of non-performing loans		464	%		490	%		487	%		515	%		493	%
Net charge-offs (annualized) as a percent of average loans outstanding		0.35	%		0.44	%		0.21	%		0.38	%		0.14	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Summary of Non-Performing Assets

(Unaudited) ($ in 000s)

	June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004			June 30 2004
Nonaccrual loans	$	2,709		$	2,641		$	2,147		$	1,924		$	1,792
Accruing loans past due 90 days or more		936			322			677			800			689
Previously securitized loans past due 90 days or more		299			372			832			876			1,544
Total non-performing loans		3,944			3,335			3,656			3,600			4,025
Other real estate owned		471			463			247			267			171
Total non-performing assets	$	4,415		$	3,798		$	3,903		$	3,867		$	4,196
Non-performing assets as a percent of loans and other real estate owned		0.28	%		0.28	%		0.29	%		0.29	%		0.31	%