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): October 17, 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 October 17, 2005, City Holding Company (“the Company”) issued a news release, attached as Exhibit 99, announcing the Company’s third quarter 2005 earnings. Furnished as Exhibit 99 and incorporated herein by reference is the news release issued by the Company announcing its third quarter 2005 earnings.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

            99 News Release issued on October 17, 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: October 19, 2005	City Holding Company
	By:	/s/ David L. Bumgarner
		David L. Bumgarner Chief Financial Officer

EX-99

Exhibit 99

NEWS RELEASE

For Immediate Release

October 17, 2005

For Further Information Contact:

Charles R. Hageboeck, Chief Executive Officer and President

(304) 769-1102

City Holding Company Announces Third 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 third quarter of $13.2 million, or diluted earnings per share of $0.72 compared to $11.0 million, or $0.65 per diluted share in the third quarter of 2004, a 10.8% increase. For the third quarter of 2005, the Company achieved a return on assets of 2.09%, a return on equity of 18.23%, a net interest margin of 4.51%, and an efficiency ratio of 45.9%. These results would have placed the Company in the top decile of the profitability measures for the most recently reported quarter for the Company’s peer group (bank holding companies with total assets between $1 billion and $5 billion).

The Company continues to perform solidly across all measures. Primarily as a result of the acquisition of Classic Bancshares, Inc. (Classic), which operated 10 banking offices in Eastern Kentucky and Southeastern Ohio, during the second quarter of 2005, targeted loan balances have grown significantly. Average quarterly commercial real estate loans were up 24.0% since the quarter ended September 30, 2004, and average quarterly residential real estate balances were up 29.3% over the same period. Exclusive of the acquisition, targeted loan balances continued to reflect favorable increases with average commercial real estate loans increasing 13.6% and average residential real estate loans up 4.2% from the quarter ended September 30, 2005 to the quarter ended September 30, 2004. Average non-interest and interest bearing demand deposits grew 11.0% when comparing the quarter ended September 30, 2005 to the quarter ended September 30, 2004 with the Classic acquisition representing 10.4% of this increase. Although the average balance of previously securitized loans (which yielded 30.1% during the third quarter of 2005) decreased by $40.5 million compared to the third quarter of 2004, the Company was able to improve the overall level of net interest income through loan and deposit growth and the impact of rising rates. Of further note, service charge income grew 23.6% between the third quarter of 2004 and the third quarter of 2005; the Company was able to improve its efficiency ratio; and asset quality continues to be a source of strength for the Company as non-performing assets remained at very low levels at September 30, 2005.

Balance Sheet Trends

As compared to September 30, 2004, loans have increased $278.8 million at September 30, 2005. The principal factor for this increase was the acquisition of Classic which added approximately $257.3 million in loans. Exclusive of the Classic acquisition, loans increased $21.5 million from September 30, 2004 to September 30, 2005. The primary reasons for this growth were increases in targeted areas of commercial real estate loans of $65.8 million and residential real estate loans of $12.3 million. These increases were partially offset by decreases in previously securitized loans of $35.4 million (see discussion below) and continued decreases in loan portfolios that the Company has de-emphasized, including a decrease in unsecured consumer loans of $9.9 million and a decrease in indirect loans of $8.4 million. Additionally, home equity loans were down $5.4 million from September 30, 2004 to September 30, 2005, due to the flattening of the yield curve and resulting in borrowers refinancing into fixed rate mortgages. Total average depository balances increased $238.7 million, or 14.3%, from the quarter ended September 30, 2004 to the quarter ended September 30, 2005. This growth was attributable to the Classic acquisition, which increased total average depository balances by $236.8 million. 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 2.5% from the third quarter of 2004 to the third quarter of 2005, despite rising interest rates which tend to put pressure on non-interest bearing balance growth.

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 September 30, 2005, the Company reported “Previously Securitized Loans” of $35.6 million compared to $71.0 million and $58.4 million at September 30, 2004 and December 31, 2004, respectively, representing a decrease of 49.8% and 39.1%, respectively. As a result of this decrease, interest income associated with previously securitized loans and retained interests decreased by $2.9 million from the nine months ended September 30, 2004 to the nine months ended September 30, 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 September 30, 2005, the contractual outstanding balances of the mortgages securitized were $53.3 million while the carrying value of these assets was $35.6 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 declines 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                 $32 million

December 31, 2006                 $22 million

December 31, 2007                 $16 million

December 31, 2008                 $12 million

The yield on the previously securitized loans was 30.14% for the quarter ended September 30, 2005 compared to 24.95% for the quarter ended June 30, 2005, 16.79% for the quarter ended December 31, 2004, and 16.83% for the quarter ended September 30, 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 assumed the servicing of all of the pool balances during the second quarter of 2005. 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 internal collection efforts resulting in enhanced levels of recoveries on previously charged-off loans. All of these factors increased the projected cash flows from the previously securitized loans.

Net Interest Income

The Company’s tax equivalent net interest income increased $4.0 million, or 18.4%, from $21.9 million during the third quarter of 2004 to $25.9 million during the third quarter of 2005. The increase was primarily attributable to the acquisition of Classic and increased net interest income as a result of a widening of the net interest margin and growth in the Company’s traditional loan portfolio. The Classic acquisition added net interest income of $3.1 million for the quarter ended September 30, 2005. Net interest income, exclusive of the Classic acquisition and the impact of previously securitized loans, increased $1.3 million, or 7.1%, when comparing the quarter ended September 30, 2005 to the quarter ended September 30, 2004. This increase was due to an increase in the average balances of traditional loans outstanding that grew $47.3 million, or 3.7%, and as a result of increased yields on such loans of approximately 72 basis points. The yield realized on loans increased as a result of increases in rates on variable rate loans 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 $78.9 million for the quarter ended September 30, 2004 to $38.4 million for the quarter ended September 30, 2005. The decrease in balances of $40.5 million was partially offset by higher yields on these loans and as a result, interest income related to previously securitized loans and retained interests decreased by only $0.4 million when comparing the quarter ended September 30, 2005 to the quarter ended September 30, 2004.

The net interest margin for the third quarter of 2005 of 4.51% represented a 26 basis point increase from the third quarter of 2004 net interest margin of 4.25% and represented a 9 basis point increase from the net interest margin of 4.42% for the linked quarter ended June 30, 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 September 2004, the Federal funds rate has increased 200 basis points from 1.75% to 3.75% in September 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 22 basis points, or $0.7 million, when comparing the quarter ended September 30, 2005 to the quarter ended September 30, 2004.

Credit Quality

At September 30, 2005, the Allowance for Loan Losses (“ALLL”) was $17.8 million or 1.09% of total loans outstanding and 487% 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 $18.3 million or 1.14% of loans outstanding and 464% of non-performing loans at June 30, 2005. As a result of the Company’s quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $600,000 in the third quarter of 2005. This is the first quarter since the second quarter of 2002 that the Company’s quarterly analysis of the adequacy of the ALLL has resulted in a provision for loan losses. 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 September 30, 2002 to 0.23% at September 30, 2005. As the Company’s asset quality has improved, the required level of the ALLL has decreased. The provision for loan losses recorded during the third quarter of 2005 was a result of an increase in loss trends for overdraft deposit accounts and credit card loans and growth in the outstanding balances of commercial real estate loans during the quarter. Increased losses in the overdraft deposit accounts and credit card loans categories are consistent with trends being experienced by banks nationally during 2005 and appear to have been impacted by the new bankruptcy laws that will become effective on October 17, 2005. Additionally, the Company has

continued to experience growth in commercial real estate loans, which have increased average balances by $91 million from September 30, 2004 to September 30, 2005. While these trends have required the Company to record a provision during the third quarter, the provision recorded was impacted by the continued improvement in the quality of the loan portfolio. At September 30, 2005, non-performing assets as a percentage of loans and other real estate owned was 0.23% and have not exceeded 0.38% during the last two years. The average ratio of non-performing assets as a percentage of loans and other real estate owned for the Company’s peer group for the most recently reported quarter was 0.76%. Due to the Company’s ratio of non-performing assets as a percentage of loans and other real estate owned, the allowance as a percentage of loans outstanding is 1.09% at September 30, 2005, compared to the average of the Company’s peer group of 1.26% for the most recently reported quarter. The Company had net charge-offs of $1.1 million for the third quarter of 2005. Net charge-offs on depository accounts were $0.7 million, or 63% of total net charge-offs for the quarter ended September 30, 2005. 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. The Company believes that its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision for loan losses that is directionally consistent with changes in asset quality and loss experience.

Non-interest Income

Net of investment securities gains and legal settlement, non-interest income increased $2.1 million, or 19.9%, to $13.0 million in the third quarter of 2005 as compared to $10.9 million in the third quarter of 2004. The largest source of non-interest income is service charges from depository accounts, which increased $2.0 million or 23.6%, from $8.4 million during the third quarter of 2004 to $10.4 million during the third quarter of 2005. The increase during the third quarter was a reflection of the Classic acquisition that accounted for $0.9 million, or 10.5%, of this increase, as well as an increase in the utilization of services by the Company’s customers. In total, non-interest income represented approximately 34% of total revenue (net interest income plus non-interest income) for the quarter ended September 30, 2005 compared to the Company’s peer group which average approximately 21% of total revenue derived from non-interest income based on the most recently reported quarterly data.

Non-interest Expenses

Non-interest expenses increased from $15.8 million in the third quarter of 2004 to $17.9 million in the third quarter of 2005. The Classic acquisition increased non-interest expenses by $1.5 million during the third quarter of 2005. Aside from the Classic acquisition, non-interest expenses increased $0.6 million, or 4.1%, in the third quarter of 2005 versus the third quarter of 2004.

The Company’s efficiency ratio was 45.9% for the quarter ended September 30, 2005, versus 48.4% for the quarter ended September 30, 2004, reflecting the Company’s ongoing strength in managing expenses while increasing revenues. The average efficiency ratio for the Company’s peer group for the most recently reported quarter was 58.5%.

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 85.5% and the loan to asset ratio was 64.0% at September 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 43.2% of assets at September 30, 2005. Time deposits fund 31.6% of assets at September 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 11.5% of total assets, leaving only 13.7% 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 11.47% for the quarter ended September 30, 2005 as a result of the Company’s strong earnings. The Company’s tangible equity ratio was 9.32% at September 30, 2005 compared with a tangible equity ratio of 9.24% at September 30, 2004. The Company was able to increase this ratio despite the completion of an acquisition during the second quarter of 2005 that was funded by cash of approximately 25% due to its continued strong earnings performance. With respect to regulatory capital, at September 30, 2005, the Company’s Leverage Ratio is 10.68%, the Tier I Capital ratio is 14.94%, and the Total Risk-Based Capital ratio is 15.95%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.

Other Events of Interest

On August 1, 2005, the Company announced that its Chairman, Gerald R. Francis, resigned from the Board of Directors effective August 1, 2005.

On August 31, 2005, the Company announced the election of Edward M. (Ned) Payne as the Non-executive Chairman of the Board of Directors. Mr. Payne has served as a director of the Company or its predecessor banks since 1964 and lead outside director since January 2004. Mr. Payne’s great grandfather, John W. McCreery, was one of the original founders of the Bank of Raleigh–one of the many community banks that were subsequently consolidated under City Holding Company.

On August 31, 2005, the Board approved a quarterly cash dividend of 25 cents per share payable October 31, 2005 to shareholders of record as of October 15, 2005.

During the third quarter, the Company opened its fourth branch in partnership with Wal-Mart. The Ashland, Kentucky Wal-Mart Super Center opening was its most successful to date, and the Company continues to be pleased with the results from this partnership. As previously announced, the Company’s next branch expansion will be in the fast growing Eastern Panhandle of West Virginia with a new branch under development in Jefferson County.

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
	September 30			September 30			Percent
	2005			2004			Change
Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	25,893		$	21,868		18.41	%
Net Income		13,172			10,956		20.23	%
Earnings per Basic Share		0.73			0.66		10.61	%
Earnings per Diluted Share		0.72			0.65		10.77	%
Key Ratios (percent):
Return on Average Assets		2.09	%		1.98	%	5.42	%
Return on Average Equity		18.23	%		21.41	%	(14.85	)%
Net Interest Margin		4.51	%		4.25	%	6.26	%
Efficiency Ratio		45.92	%		48.43	%	(5.17	)%
Average Shareholders’ Equity to Average Assets		11.47	%		9.26	%	23.81	%
Risk-Based Capital Ratios (a):
Tier I		14.94	%		15.21	%	(1.78	)%
Total		15.95	%		16.44	%	(2.98	)%
Common Stock Data:
Cash Dividends Declared per Share	$	0.25		$	0.22		13.64	%
Book Value per Share		15.99			12.70		25.91	%
Market Value per Share:
High		39.21			33.05		18.64	%
Low		34.69			28.69		20.91	%
End of Period		35.73			32.89		8.63	%
Price/Earnings Ratio (b)		12.24			12.46		(1.78	)%
	Nine Months Ended
	September 30			September 30			Percent
	2005			2004			Change
Earnings ($000s, except per share data):
Net Interest Income (FTE)	$	72,253		$	66,116		9.28	%
Net Income		37,199			35,257		5.51	%
Earnings per Basic Share		2.15			2.12		1.42	%
Earnings per Diluted Share		2.12			2.09		1.44	%
Key Ratios (percent):
Return on Average Assets		2.09	%		2.12	%	(1.42	)%
Return on Average Equity		19.50	%		23.12	%	(15.66	)%
Net Interest Margin		4.46	%		4.30	%	3.76	%
Efficiency Ratio		46.69	%		47.90	%	(2.51	)%
Average Shareholders’ Equity to Average Assets		10.73	%		9.18	%	16.85	%
Common Stock Data:
Cash Dividends Declared per Share	$	0.75		$	0.66		13.64	%
Market Value per Share:
High		39.21			36.00		8.92	%
Low		27.57			25.50		8.12	%

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

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

CITY HOLDING COMPANY AND SUBSIDIARIES

Financial Highlights

(Unaudited)

Book Value and Market Price Range per Share
												Market Price
	Book Value per Share											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			15.99					27.57			39.21
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			0.73					2.15
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			0.72					2.12

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

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

	Three Months Ended September 30,
	2005			2004
Interest Income
Interest and fees on loans	$	28,083		$	21,481
Interest on investment securities:
Taxable		7,288			7,733
Tax-exempt		508			438
Interest on deposits in depository institutions		31			15
Total Interest Income		35,910			29,667
Interest Expense
Interest on deposits		7,763			5,867
Interest on short-term borrowings		956			297
Interest on long-term debt		1,571			1,871
Total Interest Expense		10,290			8,035
Net Interest Income		25,620			21,632
Provision for loan losses		600			—
Net Interest Income After Provision for Loan Losses		25,020			21,632
Non-Interest Income
Investment securities gains		5			4
Service charges		10,433			8,440
Insurance commissions		595			600
Trust fee income		468			446
Bank owned life insurance		552			575
Mortgage banking income		191			72
Other income		768			719
Total Non-Interest Income		13,012			10,856
Non-Interest Expense
Salaries and employee benefits		8,739			8,150
Occupancy and equipment		1,687			1,472
Depreciation		1,096			972
Professional fees and litigation expense		456			668
Postage, delivery, and statement mailings		670			601
Advertising		764			459
Telecommunications		702			488
Insurance and regulatory		385			342
Office supplies		327			252
Repossessed asset (gains) losses, net of expenses		(35	)		5
Loss on early extinguishment of debt		—			263
Other expenses		3,131			2,111
Total Non-Interest Expense		17,922			15,783
Income Before Income Taxes		20,110			16,705
Income tax expense		6,938			5,749
Net Income	$	13,172		$	10,956
Basic earnings per share	$	0.73		$	0.66
Diluted earnings per share	$	0.72		$	0.65
Average Common Shares Outstanding:
Basic		18,052			16,584
Diluted		18,238			16,810

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

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

	Nine Months Ended September 30,
	2005			2004
Interest Income
Interest and fees on loans	$	74,796		$	64,588
Interest on investment securities:
Taxable		22,616			22,331
Tax-exempt		1,390			1,372
Interest on retained interests		—			808
Interest on deposits in depository institutions		73			36
Interest on federal funds sold		4			—
Total Interest Income		98,879			89,135
Interest Expense
Interest on deposits		20,236			17,274
Interest on short-term borrowings		2,320			658
Interest on long-term debt		4,818			5,826
Total Interest Expense		27,374			23,758
Net Interest Income		71,505			65,377
Provision for loan losses		600			—
Net Interest Income After Provision for Loan Losses		70,905			65,377
Non-Interest Income
Investment securities gains		26			1,140
Service charges		28,561			23,931
Insurance commissions		1,732			1,979
Trust fee income		1,521			1,561
Bank owned life insurance		2,088			1,747
Mortgage banking income		415			212
Legal settlement		—			5,453
Other income		2,211			2,144
Total Non-Interest Income		36,554			38,167
Non-Interest Expense
Salaries and employee benefits		25,063			24,667
Occupancy and equipment		4,726			4,425
Depreciation		3,034			2,951
Professional fees and litigation expense		1,535			2,694
Postage, delivery, and statement mailings		1,938			1,885
Advertising		2,231			1,766
Telecommunications		1,688			1,417
Insurance and regulatory		1,116			993
Office supplies		805			838
Repossessed asset (gains) losses, net of expenses		(50	)		(45	)
Loss on early extinguishment of debt		—			263
Other expenses		8,688			7,349
Total Non-Interest Expense		50,774			49,203
Income Before Income Taxes		56,685			54,341
Income tax expense		19,486			19,084
Net Income	$	37,199		$	35,257
Basic earnings per share	$	2.15		$	2.12
Diluted earnings per share	$	2.12		$	2.09
Average Common Shares Outstanding:
Basic		17,314			16,653
Diluted		17,514			16,906

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited) ($ in 000s)

	Three Months Ended
	September 30, 2005			September 30, 2004
Balance at July 1	$	279,624		$	197,569
Net income		13,172			10,956
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		(333	)		7,599
Change in unrealized loss on interest rate swaps		(439	)		—
Cash dividends declared ($0.25/share)		(4,543	)		—
Cash dividends declared ($0.22/share)		—			(3,644	)
Exercise of 224,341 stock options		4,158			—
Exercise of 29,600 stock options		—			433
Purchase of 34,100 common shares of treasury		(1,207	)		—
Purchase of 87,740 common shares of treasury		—			(2,628	)
Balance at September 30	$	290,432		$	210,285

	Nine Months Ended
	September 30, 2005			September 30, 2004
Balance at January 1	$	216,080		$	190,690
Net income		37,199			35,257
Other comprehensive income:
Change in unrealized gain on securities available-for-sale		(2,419	)		(226	)
Change in unrealized loss on interest rate swaps		(543	)		—
Cash dividends declared ($0.75/share)		(13,194	)		—
Cash dividends declared ($0.66/share)		—			(10,979	)
Issuance of 1,580,034 shares for acquisition of Classic Bancshares, net 108,173 owned and transferred to treasury		54,339			—
Issuance of 18,300 stock award shares		147			—
Exercise of 262,709 stock options		4,655			—
Exercise of 114,403 stock options		—			1,400
Purchase of 173,876 common shares for treasury		(5,832	)		—
Purchase of 197,040 common shares for treasury		—			(5,857	)
Balance at September 30	$	290,432		$	210,285

CITY HOLDING COMPANY AND SUBSIDIARIES

Condensed Consolidated Quarterly Statements of Income

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

	Quarter Ended
	Sept. 30 2005			June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004
Interest income	$	35,910		$	32,676		$	30,293		$	29,746		$	29,667
Taxable equivalent adjustment		273			241			233			236			236
Interest income (FTE)		36,183			32,917			30,526			29,982			29,903
Interest expense		10,290			9,054			8,030			8,112			8,035
Net interest income		25,893			23,863			22,496			21,870			21,868
Provision for loan losses		600			—			—			—			—
Net interest income after provision for loan losses		25,293			23,863			22,496			21,870			21,868
Noninterest income		13,012			12,098			11,444			11,869			10,856
Noninterest expense		17,922			16,839			16,013			17,131			15,783
Income before income taxes		20,383			19,122			17,927			16,608			16,941
Income tax expense		6,938			6,532			6,016			5,285			5,749
Taxable equivalent adjustment		273			241			233			236			236
Net income	$	13,172		$	12,349		$	11,678		$	11,087		$	10,956
Basic earnings per share	$	0.73		$	0.72		$	0.70		$	0.67		$	0.66
Diluted earnings per share		0.72			0.71			0.69			0.66			0.65
Cash dividends declared per share		0.25			0.25			0.25			0.22			0.22
Average Common Share (000s):
Outstanding		18,052			17,268			16,605			16,572			16,584
Diluted		18,238			17,477			16,812			16,810			16,810
Net Interest Margin		4.51	%		4.42	%		4.40	%		4.27	%		4.25	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Non-Interest Income and Non-Interest Expense

(Unaudited) ($ in 000s)

	Quarter Ended
	Sept. 30			June 30			March 31		Dec. 31			Sept. 30
	2005			2005			2005		2004			2004
Non-Interest Income:
Service charges	$	10,433		$	9,685		$	8,443	$	8,678		$	8,440
Insurance commissions		595			545			592		754			600
Trust fee income		468			462			591		466			446
Bank owned life insurance		552			545			991		1,184			575
Mortgage banking income		191			106			118		70			72
Other income		768			737			706		685			719
Subtotal		13,007			12,080			11,441		11,837			10,852
Investment security gains		5			18			3		32			4
Total Non-Interest Income	$	13,012		$	12,098		$	11,444	$	11,869		$	10,856
Non-Interest Expense:
Salaries and employee benefits	$	8,739		$	8,404		$	7,920	$	9,578		$	8,150
Occupancy and equipment		1,687			1,564			1,475		1,560			1,472
Depreciation		1,096			994			944		981			972
Professional fees and litigation expense		456			514			565		571			668
Postage, delivery, and statement mailings		670			615			653		589			601
Advertising		764			762			705		600			459
Telecommunications		702			513			473		403			488
Insurance and regulatory		385			365			366		330			342
Office supplies		327			275			203		210			252
Repossessed asset (gains) losses, net of expenses		(35	)		(16	)		1		(31	)		5
Loss on early extinguishment of debt		—			—			—		—			263
Other expenses		3,131			2,849			2,708		2,340			2,111
Total Non-Interest Expense	$	17,922		$	16,839		$	16,013	$	17,131		$	15,783
Employees (Full Time Equivalent)		768			767			689		691			692
Branch Locations		67			67			56		56			56

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

($ in 000s)

	September 30			December 31
	2005			2004
	(Unaudited)
Assets
Cash and due from banks	$	54,903		$	52,854
Interest-bearing deposits in depository institutions		4,124			3,230
Cash and cash equivalents		59,027			56,084
Investment securities available-for-sale, at fair value		601,466			620,034
Investment securities held-to-maturity, at amortized cost		56,455			59,740
Total investment securities		657,921			679,774
Loans:
Residential real estate		596,184			469,458
Home equity		306,448			308,173
Commercial real estate		483,334			400,801
Other commercial		138,011			71,311
Installment		42,844			18,145
Indirect		4,658			10,324
Credit card		15,632			18,126
Previously securitized loans		35,599			58,436
Gross Loans		1,622,710			1,354,774
Allowance for loan losses		(17,768	)		(17,815	)
Net loans		1,604,942			1,336,959
Bank owned life insurance		52,477			50,845
Premises and equipment		42,547			34,607
Accrued interest receivable		12,838			9,868
Net deferred tax assets		25,234			27,025
Intangible assets		59,742			6,255
Other assets		19,192			11,813
Total Assets	$	2,533,920		$	2,213,230
Liabilities
Deposits:
Noninterest-bearing	$	350,903		$	319,425
Interest-bearing:
Demand deposits		439,314			411,127
Savings deposits		305,550			281,466
Time deposits		801,242			660,705
Total deposits		1,897,009			1,672,723
Short-term borrowings		186,918			145,183
Long-term debt		129,301			148,836
Other liabilities		30,260			30,408
Total Liabilities		2,243,488			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 September 30, 2005 and December 31, 2004 less 329,931 and 331,191 shares in treasury, respectively		46,249			42,298
Capital surplus		104,997			55,512
Retained earnings		152,180			128,175
Cost of common stock in treasury		(8,888	)		(8,761	)
Accumulated other comprehensive (loss) income:
Unrealized (loss) gain on securities available-for-sale		(1,138	)		1,281
Unrealized (loss) on interest rate swaps		(543	)		—
Underfunded pension liability		(2,425	)		(2,425	)
Total Accumulated Other Comprehensive (Loss) Income		(4,106	)		(1,144	)
Total Stockholders’ Equity		290,432			216,080
Total Liabilities and Stockholders’ Equity	$	2,533,920		$	2,213,230

CITY HOLDING COMPANY AND SUBSIDIARIES

Loan Portfolio

(Unaudited) ($ in 000s)

	Sept. 30 2005		June 30 2005		March 31 2005		December 31 2004		Sept. 30 2004
Residential real estate	$	596,184	$	596,893	$	463,869	$	469,458	$	468,372
Home equity		306,448		307,354		302,262		308,173		304,934
Commercial real estate		483,334		445,241		409,064		400,801		377,742
Other commercial		138,011		138,923		66,485		71,311		70,745
Loans to depository institutions		—		—		10,000		—		—
Installment		42,844		48,668		16,065		18,145		20,221
Indirect		4,658		6,048		7,960		10,324		13,020
Credit card		15,632		16,188		16,954		18,126		17,893
Previously securitized loans		35,599		41,670		50,588		58,436		70,970
Gross Loans	$	1,622,710	$	1,600,985	$	1,343,247	$	1,354,774	$	1,343,897

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)

	Three Months Ended September 30,
	2005							2004
	Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
Assets:
Loan portfolio:
Residential real estate	$	594,233		$	8,396	5.61	%	$	459,439		$	6,652	5.76	%
Home equity		307,302			4,894	6.32	%		303,057			3,594	4.72	%
Commercial real estate		470,687			7,740	6.52	%		379,450			5,312	5.57	%
Other commercial		136,346			2,378	6.92	%		71,897			980	5.42	%
Installment		43,960			1,095	9.88	%		23,229			670	11.47	%
Indirect		5,279			159	11.95	%		14,485			400	10.99	%
Credit card		16,169			506	12.42	%		17,841			537	11.97	%
Previously securitized loans		38,368			2,915	30.14	%		78,867			3,336	16.83	%
Total loans		1,612,344			28,083	6.91	%		1,348,265			21,481	6.34	%
Securities:
Taxable		610,142			7,288	4.74	%		656,878			7,733	4.68	%
Tax-exempt		48,709			781	6.36	%		37,050			674	7.24	%
Total securities		658,851			8,069	4.86	%		693,928			8,407	4.82	%
Deposits in depository institutions		4,460			31	2.76	%		5,531			15	1.08	%
Total interest-earning assets		2,275,655			36,183	6.31	%		2,047,724			29,903	5.81	%
Cash and due from banks		53,965							43,361
Bank premises and equipment		41,451							34,766
Other assets		167,399							104,027
Less: Allowance for loan losses		(17,818	)						(19,573	)
Total assets	$	2,520,652						$	2,210,305
Liabilities:
Interest-bearing demand deposits		450,767			1,098	0.97	%		412,051			683	0.66	%
Savings deposits		308,361			563	0.72	%		278,947			365	0.52	%
Time deposits		792,336			6,102	3.06	%		662,803			4,819	2.89	%
Short-term borrowings		167,357			956	2.27	%		122,301			297	0.97	%
Long-term debt		131,649			1,571	4.73	%		193,836			1,871	3.84	%
Total interest-bearing liabilities		1,850,470			10,290	2.21	%		1,669,938			8,035	1.91	%
Noninterest-bearing demand deposits		352,342							311,333
Other liabilities		28,790							24,314
Stockholders’ equity		289,050							204,720
Total liabilities and stockholders’ equity	$	2,520,652						$	2,210,305
Net interest income				$	25,893						$	21,868
Net yield on earning assets						4.51	%						4.25	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Consolidated Average Balance Sheets, Yields, and Rates

(Unaudited) ($ in 000s)

	Nine Months Ended September 30,
	2005							2004
	Average					Yield/		Average					Yield/
	Balance			Interest		Rate		Balance			Interest		Rate
Assets:
Loan portfolio:
Residential real estate	$	528,420		$	22,205	5.62	%	$	450,366		$	20,223	6.00	%
Home equity		306,047			13,770	6.02	%		295,678			10,038	4.53	%
Commercial real estate		431,999			20,254	6.27	%		361,222			15,043	5.56	%
Other commercial		101,891			4,892	6.42	%		74,171			2,897	5.22	%
Loans to depository institutions		9,919			213	2.87	%		4,087			35	1.14	%
Installment		30,794			2,454	10.65	%		27,081			2,291	11.30	%
Indirect		7,100			600	11.30	%		18,283			1,503	10.98	%
Credit card		16,801			1,576	12.54	%		18,085			1,630	12.04	%
Previously securitized loans		46,232			8,832	25.54	%		84,799			10,928	17.21	%
Total loans		1,479,203			74,796	6.76	%		1,333,772			64,588	6.47	%
Securities:
Taxable		637,413			22,616	4.74	%		670,339			22,331	4.45	%
Tax-exempt		42,450			2,138	6.73	%		38,370			2,111	7.35	%
Total securities		679,863			24,754	4.87	%		708,709			24,442	4.61	%
Retained interest in securitized loans		—			—	—			4,408			808	24.49	%
Deposits in depository institutions		4,415			73	2.21	%		5,546			36	0.87	%
Federal funds sold		141			4	3.79	%		—			—	—
Total interest-earning assets		2,163,622			99,627	6.16	%		2,052,435			89,874	5.85	%
Cash and due from banks		47,124							43,850
Bank premises and equipment		37,989							34,786
Other assets		138,319							103,025
Less: Allowance for loan losses		(17,597	)						(20,280	)
Total assets	$	2,369,457						$	2,213,816
Liabilities:
Interest-bearing demand deposits		431,035			2,659	0.82	%		405,135			1,924	0.63	%
Savings deposits		292,396			1,386	0.63	%		280,315			1,094	0.52	%
Time deposits		721,582			16,191	3.00	%		662,383			14,256	2.87	%
Short-term borrowings		156,617			2,320	1.98	%		117,372			658	0.75	%
Long-term debt		145,006			4,818	4.44	%		210,047			5,826	3.70	%
Total interest-bearing liabilities		1,746,636			27,374	2.10	%		1,675,252			23,758	1.89	%
Noninterest-bearing demand deposits		339,884							310,786
Other liabilities		28,612							24,483
Stockholders’ equity		254,325							203,295
Total liabilities and stockholders’ equity	$	2,369,457						$	2,213,816
Net interest income				$	72,253						$	66,116
Net yield on earning assets						4.46	%						4.30	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Analysis of Risk-Based Capital

(Unaudited) ($ in 000s)

	Sept. 30 2005 (a)			June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004
Tier I Capital:
Stockholders' equity	$	290,432		$	279,624		$	219,302		$	216,080		$	210,285
Goodwill and other intangibles		(59,742	)		(61,578	)		(6,204	)		(6,255	)		(6,306	)
Accumulated other comprehensive income		4,106			3,334			5,890			1,144			(1,146	)
Qualifying trust preferred stock		28,000			28,000			28,000			28,000			28,000
Excess deferred tax assets		—			—			(4,524	)		(3,129	)		—
Total tier I capital	$	262,796		$	249,380		$	242,464		$	235,840		$	230,833
Total Risk-Based Capital:
Tier I capital	$	262,796		$	249,380		$	242,464		$	235,840		$	230,833
Qualifying allowance for loan losses		17,768			18,298			16,325			17,815			18,537
Total risk-based capital	$	280,564		$	267,678		$	258,789		$	253,655		$	249,370
Net risk-weighted assets	$	1,758,566		$	1,734,653		$	1,522,881		$	1,524,581		$	1,517,158
Ratios:
Average stockholders' equity to average assets		11.47	%		10.57	%		10.08	%		9.81	%		9.26	%
Tangible capital ratio		9.32	%		8.91	%		9.52	%		9.51	%		9.24	%
Risk-based capital ratios:
Tier I capital		14.94	%		14.38	%		15.92	%		15.47	%		15.21	%
Total risk-based capital		15.95	%		15.43	%		16.99	%		16.64	%		16.44	%
Leverage capital		10.68	%		10.83	%		11.00	%		10.74	%		10.47	%
(a) September 30, 2005 risk-based capital ratios are estimated.
CITY HOLDING COMPANY AND SUBSIDIARIES Intangibles (Unaudited) ($ in 000s)
	As of and for the Quarter Ended
	Sept. 30 2005			June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004
Intangibles, net	$	59,742		$	61,578		$	6,204		$	6,255		$	6,306
Intangibles amortization expense		183			95			51			51			51

CITY HOLDING COMPANY AND SUBSIDIARIES

Summary of Loan Loss Experience

(Unaudited) ($ in 000s)

	Quarter Ended
	Sept. 30 2005			June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004
Balance at beginning of period	$	18,298		$	16,325		$	17,815		$	18,537		$	19,833
Allowance acquired through acquisition		—			3,265			—			—			—
Charge-offs:
Residential real estate		74			97			237			166			299
Home equity		134			226			421			5			105
Commercial real estate		52			653			393			105			1,134
Other commercial		2			10			36			14			220
Installment		476			263			308			458			568
Overdraft deposit accounts		1,012			832			744			586			631
Total charge-offs		1,750			2,081			2,139			1,334			2,957
Recoveries:
Residential real estate		46			16			37			137			196
Home equity		7			9			—			—			1
Commercial real estate		24			311			50			10			922
Other commercial		111			34			45			80			103
Installment		136			175			205			147			183
Overdraft deposit accounts		296			244			312			238			256
Total recoveries		620			789			649			612			1,661
Net charge-offs		1,130			1,292			1,490			722			1,296
Provision for loan losses		600			—			—			—			—
Balance at end of period	$	17,768		$	18,298		$	16,325		$	17,815		$	18,537
Loans outstanding	$	1,622,710		$	1,600,985		$	1,343,247		$	1,354,774		$	1,343,897
Average loans outstanding		1,612,344			1,473,880			1,348,489			1,347,297			1,348,265
Allowance as a percent of loans outstanding		1.09	%		1.14	%		1.22	%		1.31	%		1.38	%
Allowance as a percent of non-performing loans		487	%		464	%		490	%		487	%		515	%
Net charge-offs (annualized) as a percent of average loans outstanding		0.28	%		0.35	%		0.44	%		0.21	%		0.38	%

CITY HOLDING COMPANY AND SUBSIDIARIES

Summary of Non-Performing Assets

(Unaudited) ($ in 000s)

	Sept. 30 2005			June 30 2005			March 31 2005			Dec. 31 2004			Sept. 30 2004
Nonaccrual loans	$	2,468		$	2,709		$	2,641		$	2,147		$	1,924
Accruing loans past due 90 days or more		1,003			936			322			677			800
Previously securitized loans past due 90 days or more		174			299			372			832			876
Total non-performing loans		3,645			3,944			3,335			3,656			3,600
Other real estate owned		117			471			463			247			267
Total non-performing assets	$	3,762		$	4,415		$	3,798		$	3,903		$	3,867
Non-performing assets as a percent of loans and other real estate owned		0.23	%		0.28	%		0.28	%		0.29	%		0.29	%