City Holding Company Announces Record Earnings

CHARLESTON, W.Va., April 17  /PRNewswire-FirstCall/ -- City Holding Company, "the Company" (NASDAQ:CHCO), a $2.5 billion bank holding company headquartered in Charleston, today announced record net income for the first quarter of $13.2 million or $0.76 per diluted share compared to $12.9 million or $0.71 per diluted share in the first quarter of 2006, or a 7.0% increase. For the first quarter of 2007, the Company achieved a return on assets of 2.10%, a return on equity of 17.1%, a net interest margin of 4.41%, and an efficiency ratio of    44.9%.  This compares with a return on assets of 2.06%, a return on equity of 17.4%, a net interest margin of 4.71%, and an efficiency ratio of 45.3% for the comparable period of 2006.

As previously announced during the first quarter of 2007, the Company recognized a gain of $1.5 million from the sale of its existing merchant processing agreements to NOVA Information Systems, Inc. (NOVA).

Charles Hageboeck, Chief Executive Officer and President, stated, "The Company increased its earnings per share in the first quarter of 2007 as compared to the first quarter of 2006 despite a decrease of over $0.9 million in interest income associated with previously securitized loans (whose balances decreased 49%) and a decrease of $0.6 million due to lower credit card fee income as a result of the sales of the retail and merchant credit card portfolios.  As compared to the quarter ended March 31, 2006, profitability as measured by our return on assets was better and our efficiency ratio improved.  Excluding charge-offs related to depository overdrafts, the Company experienced net recoveries during the first quarter of 2007.  The decline in our charge-offs for the quarter reflects the solid underwriting standards that the Company utilizes in commercial and retail lending as balances of loans written prior to 2002 continue to decline.  Non- performing assets as a percentage of loans rose from 25 basis points at December 31, 2006 to 44 basis points at March 31, 2007 due primarily to the bankruptcy of a single residential mortgage customer during the quarter. Overall, the Company's asset quality remains very favorable in comparison to our peer group (bank holding companies with total assets between $1 and $5 billion) and past due loans remain at a very low level.  Although 2007 looks to be a challenging year for many banks, we remain positive in our outlook for the year.  During the first quarter, we announced plans to open a new branch in Princeton, West Virginia during the fourth quarter of 2007.  As a result of the Company's continued accomplishments, on February 28, 2007, our Board of Directors approved an increase of 10% in our quarterly dividends to 31 cents per share.  In addition, the Company remains well positioned with a tangible equity to tangible asset ratio of 9.8% at March 31, 2007.  We look forward to maintaining our solid performance for the remainder of 2007 on behalf of our shareholders despite the many challenges from the current economic environment."

Balance Sheet Trends

As compared to December 31, 2006, loans have increased $14.3 million (0.9%) at March 31, 2007 with increases in commercial loans of $14.5 million (2.1%), home equity loans of $2.9 million (0.9%) and installment loans of $1.8 million (4.2%).  These increases were partially offset by decreases in previously securitized loans of $2.9 million (see Previously Securitized Loans) and residential real estate loans of $2.1 million.

Total average depository balances increased $17.1 million, or 0.9%, from the quarter ended December 31, 2006 to the quarter ended March 31, 2007.  This growth was primarily in savings and time deposits, which have increased $13.3 million and $6.9 million, respectively.

Net Interest Income

The Company's tax equivalent net interest income decreased $1.4 million, or 5.5%, from $26.1 million during the first quarter of 2006 to $24.7 million during the first quarter of 2007.  This decrease is attributable to two factors.  First, during the third quarter of 2006, the Company sold its retail credit card portfolio.  Average credit card loans outstanding were $14.5 million in the first quarter of 2006. This resulted in a decrease in interest income of $0.5 million from the first quarter of 2006.  Secondly, the Company experienced a decrease of $0.9 million in interest income from previously securitized loans in the first quarter of 2007 as compared to the first quarter of 2006 as the average balance of these loans decreased 48.7%.  The decrease in average balances was partially mitigated by an increase in the yield on these loans from 39.1% for the first quarter of 2006 to 49.5% for the first quarter of 2007 (see Previously Securitized Loans).  An increase of $3.3 million in interest income from all other loans (commercial, residential, home equity, and consumer) was essentially offset by an increase of $3.2 million in interest expense on deposits.

The Company's net interest margin was 4.41% in the first quarter of 2007 as compared to 4.71% in the first quarter of 2006.  The decline in the net interest margin can be largely attributed to lower interest income from previously securitized loans and the loss of interest income due to the sale of the retail credit card portfolio.  Excluding these assets, the Company's net interest margin decreased 15 basis points from 4.33% during the first quarter of 2006 to 4.18% for the first quarter of 2007.  This compression is due to increased rates paid on interest-bearing liabilities, primarily time deposits.

Credit Quality

At March 31, 2007, the Allowance for Loan Losses ("ALLL") was $16.1 million or 0.95% of total loans outstanding and 236% of non-performing loans compared to $16.8 million or 1.04% of loans outstanding and 504% of non- performing loans at March 31, 2006, and $15.4 million or 0.92% of loans outstanding and 385% of non-performing loans at December 31, 2006.  While the Company's ALLL as a percent of outstanding loans has decreased since March 31, 2006, this decrease can be directly attributed to the sale of the bank's retail credit card portfolio in the third quarter of 2006.  In fact, after consideration of the impact of the sale of the retail credit card portfolio, the ALLL (less the portion of the allowance allocated to credit cards) was 0.94% of total loans outstanding (net of credit card loans outstanding) and 373% of non-performing loans (net of non-performing credit card loans) at March 31, 2006.

As a result of the Company's quarterly analysis of the adequacy of the ALLL, the Company recorded a provision for loan losses of $0.9 million in the first quarter of 2007 compared to $1.0 million for the comparable period in 2006.  The quality of the Company's loan portfolio has continued to improve. Total past due loans have declined 43% from $10.5 million at December 31, 2006 to $6.0 million at March 31, 2007.  This improvement has been primarily associated with residential real estate loans (down $2.9 million or 46%) and commercial loans (down $0.9 million or 43%) from December 31, 2006.  Changes in the amount of the provision and related allowance are based on the Company's detailed methodology and are directionally consistent with growth and changes in the composition and quality of the Company's loan portfolio.

The Company had net charge-offs of $0.2 million for the first quarter of 2007, with depository accounts representing $0.3 million (or approximately 129%) of this total. 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 core base of checking accounts has grown.  Net charge-offs on residential loans were $0.1 million for the first quarter, while commercial loans experienced net recoveries of $0.1 million during the quarter.  The decrease in net charge-offs is attributable to declines in balances of loans originated prior to 2002 (including loans acquired as part of the Classic Bancshares acquisition).  At March 31, 2007, balances of loans written subsequent to 2002 comprise approximately 74% of total loan balances.

The Company's ratio of non-performing assets to total loans and other real estate owned increased from 0.25% at December 31, 2006 to 0.44% at March 31, 2007 as a result of one residential real estate loan.  Our ratio of non- performing assets to total loans compares quite favorably relative to our peer group (bank holding companies with total assets between $1 and $5 billion), which reported average non-performing assets as a percentage of loans and other real estate owned of 0.81% for the most recently reported quarter ended December 31, 2006.  The composition of the Company's loan portfolio, which is weighted more heavily toward residential mortgage loans and less towards non- real estate secured commercial loans than peers, has allowed it to maintain a lower allowance in comparison to peers.  In addition, the sale of the Company's credit card portfolio resulted in a reduction of the allowance of $1.4 million during 2006.  As a result, the Company's ALLL as a percentage of loans outstanding is 0.95% at March 31, 2007.  The Company believes its methodology for determining the adequacy of its ALLL adequately provides for probable losses inherent in the loan portfolio and produces a provision and allowance for loan losses that is directionally consistent with changes in asset quality and loss experience.

Non-interest Income

Net of the gain from the sale of the Company's merchant credit card portfolio, non-interest income increased $0.5 million to $12.9 million in the first quarter of 2007 as compared to $12.4 million in the first quarter of 2006.  The largest source of non-interest income is service charges from depository accounts, which increased $0.2 million, or 2.0%, from $9.9 million during the first quarter of 2006 to $10.1 million during the first quarter of 2007.  Insurance commission revenues increased $0.4 million, or 64.8% due to the hiring of additional staff by City Insurance to provide worker's compensation insurance to West Virginia businesses.  Partially off-setting these increases was a decrease in other income of $0.3 million due to lower credit card fee income due to the sale of the retail credit card portfolio during the third quarter of 2006 and the sale of the merchant credit card portfolio during the first quarter of 2007.

Non-interest Expenses

Non-interest expenses increased $0.1 million from $17.5 million in the first quarter of 2006 to $17.6 million in the first quarter of 2007.  Salaries and employee benefits increased $0.4 million, or 4.9%, from the first quarter of 2006 due in part to additional staffing for new retail locations and insurance personnel to support the introduction of worker's compensation insurance.  This increase was partially offset by a $0.3 million charge in the first quarter of 2006 related to the redemption of $2.5 million of the Company's trust preferred securities.

The Company's efficiency ratio improved from 45.3% for the quarter ended March 31, 2006 to 44.9% for the quarter ended March 31, 2007, reflecting 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 59.2%.

Previously Securitized Loans

At March 31, 2007, the Company reported "Previously Securitized Loans" of $12.7 million compared to $25.9 million and $15.6 million at March 31, 2006 and December 31, 2006, respectively, representing a decrease of 50.8% and 18.3%, respectively.  The yield on the previously securitized loans was 49.5% for the quarter ended March 31, 2007, compared to 46.6% for the quarter ended December 31, 2006, and 39.1% for the quarter ended March 31, 2006.  The yield on the previously securitized loans has increased due to improved cash flows as net default rates have been less than previously estimated.  The default rates have decreased as a result of the Company's assumption of the servicing of all of the pool balances during the second quarter of 2005.  Subsequent to our assumption of the servicing of these loans, the Company has averaged net recoveries but does not believe that continued net recoveries can be sustained indefinitely.

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 83.0% and the loan to asset ratio was 66.1% at March 31, 2007.  The Company maintained investment securities totaling 22.9% of assets as of this date.  Further, the Company's deposit mix is weighted heavily toward checking and saving accounts that fund 43.6% of assets at March 31, 2007.  Time deposits fund 36.0% of assets at March 31, 2007, 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.

The Company is also strongly capitalized. With respect to regulatory capital, at March 31, 2007, the Company's Leverage Ratio is 10.68%, the Tier I Capital ratio is 15.31 %, and the Total Risk-Based Capital ratio is 16.25%. These regulatory capital ratios are significantly above levels required to be considered "well capitalized," which is the highest possible regulatory designation.

On February 28, 2007 the Board approved a 10% increase in the quarterly cash dividend to 31 cents per share payable April 30, 2007 to shareholders of record as of April 15, 2007.  During the quarter ended March 31, 2007, the Company repurchased 274,300 common shares at a weighted average price of $39.71 as part of a one million share repurchase plan authorized by the Board of Directors in December 2006.  The Company's tangible equity ratio was 9.8% at March 31, 2007 compared with a tangible equity ratio of 10.0% at December 31, 2006.  Due to the Company's strong earnings, the Company was able to both repurchase these shares and increase its cash dividends while maintaining its tangible equity ratio.

City Holding Company is the parent company of City National Bank of West Virginia.  City National operates 68 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 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 may continue to benefit from strong recovery efforts on previously securitized loans resulting in improved yields on these assets; (5)  the Company could have adverse legal actions of a material nature; (6) the Company may face competitive loss of customers; (7) the Company may be unable to manage its expense levels; (8) the Company may have difficulty retaining key employees; (9) 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; (10) changes in general economic conditions and increased competition could adversely affect the Company's operating results; (11) 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 (12) 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 March 31  Percent
                                           2007        2006        Change

  Earnings ($000s, except per share
   data):
  Net Interest Income (FTE)                $24,671     $26,105      (5.49)%
  Net Income                                13,231      12,866       2.84%
  Earnings per Basic Share                    0.76        0.71       7.04%
  Earnings per Diluted Share                  0.76        0.71       7.04%


  Key Ratios (percent):
  Return on Average Assets                   2.10%       2.06%       1.92%
  Return on Average Equity                  17.13%      17.37%      (1.42)%
  Net Interest Margin                        4.41%       4.71%      (6.36)%
  Efficiency Ratio                          44.93%      45.28%      (0.77)%
  Average Shareholders' Equity to
   Average Assets                           12.27%      11.87%       3.39%

  Consolidated Risk Based Capital
   Ratios (a):
  Tier I                                    15.31%      14.83%       3.24%
  Total                                     16.25%      15.80%       2.85%

  Average Tangible Equity to Average
   Tangible Assets                           9.79%       9.24%       5.87%


  Common Stock Data:
  Cash Dividends Declared per Share          $0.31       $0.28      10.71%
  Book Value per Share                       17.62       16.17       8.99%
  Tangible Book Value per Share              14.21       12.84      10.70%
  Market Value per Share:
  High                                       41.54       37.64      10.36%
  Low                                        38.04       35.26       7.88%
  End of Period                              40.45       36.79       9.95%

  Price/Earnings Ratio (b)                   13.31       12.95       2.71%



  (a) March 31, 2007 risk-based capital ratios are estimated.
  (b) March 31, 2007 price/earnings ratio computed based on annualized first
      quarter 2007 earnings.



  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

  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        16.14    27.57   39.21
  2006           16.17   16.17         16.99        17.46    34.53   41.87
  2007           17.62                                       38.04   41.54



  Earnings per Basic Share

                                   Quarter Ended
                 March 31  June 30  September 30  December 31  Year- to-Date

  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         0.72           2.87
  2006               0.71     0.78          0.78         0.74           3.00
  2007               0.76                                               0.76



  Earnings per Diluted Share

                                    Quarter Ended
                 March 31   June 30  September 30  December 31  Year-to-Date

  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         0.72          2.84
  2006               0.71      0.77          0.77         0.74          2.99
  2007               0.76                                               0.76



                  CITY HOLDING COMPANY AND SUBSIDIARIES
                    Consolidated Statements of Income
              (Unaudited) ($ in 000s, except per share data)

                                           Three Months Ended March 31,
                                               2007              2006

  Interest Income
  Interest and fees on loans                 $31,464           $29,564
  Interest on investment securities:
  Taxable                                      6,933             7,260
  Tax-exempt                                     427               467
  Interest on deposits in depository
   institutions                                  117               150
  Interest on federal funds sold                 257               -
  Total Interest Income                       39,198            37,441

  Interest Expense
  Interest on deposits                        12,712             9,201
  Interest on short-term borrowings            1,513             1,127
  Interest on long-term debt                     531             1,260
  Total Interest Expense                      14,756            11,588
  Net Interest Income                         24,442            25,853
  Provision for loan losses                      900             1,000
  Net Interest Income After Provision
   for Loan Losses                            23,542            24,853

  Non-Interest Income
  Investment securities gains (losses)           -                 -
  Service charges                             10,063             9,862
  Insurance commissions                        1,012               614
  Trust and investment management fee
   income                                        568               566
  Bank owned life insurance                      696               537
  Gain on sale of credit card merchant
   agreements                                  1,500               -
  Other income                                   532               810
  Total Non-Interest Income                   14,371            12,389

  Non-Interest Expense
  Salaries and employee benefits               9,057             8,632
  Occupancy and equipment                      1,637             1,599
  Depreciation                                 1,070             1,050
  Professional fees                              403               395
  Postage, delivery, and statement
   mailings                                      777               644
  Advertising                                    852               774
  Telecommunications                             455               476
  Bankcard expenses                              518               543
  Insurance and regulatory                       385               388
  Office supplies                                455               383
  Repossessed asset (gains) losses, net
   of expenses                                   (14)                4
  Loss on early extinguishment of debt           -                 282
  Other expenses                               2,021             2,327
  Total Non-Interest Expense                  17,616            17,497
  Income Before Income Taxes                  20,297            19,745
  Income tax expense                           7,066             6,879
  Net Income                                 $13,231           $12,866

  Basic earnings per share                     $0.76             $0.71
  Diluted earnings per share                   $0.76             $0.71
  Average Common Shares Outstanding:
  Basic                                       17,369            18,006
  Diluted                                     17,424            18,067



                  CITY HOLDING COMPANY AND SUBSIDIARIES
        Consolidated Statements of Changes in Stockholders' Equity
                         (Unaudited) ($ in 000s)

                                                    Three Months Ended
                                            March 31, 2007    March 31, 2006

  Balance at January 1                         $305,307          $292,141

    Cumulative effect of adopting FIN
     48                                            (125)                -
  Net income                                     13,231            12,866
  Other comprehensive income:
  Change in unrealized gain on
   securities available-for-sale                    723              (917)
  Change in unrealized gain/(loss) on
   interest rate floors                             122              (509)
  Cash dividends declared ($0.31/share)          (5,342)                -
  Cash dividends declared ($0.28/share)               -            (4,988)
  Issuance of stock award shares, net               264               167
  Exercise of 5,300 stock options                    82                 -
  Exercise of 26,875 stock options                    -               357
  Excess tax benefits on stock
   compensation                                       -               173
  Purchase of 274,300 common shares of
   treasury                                     (10,908)                -
  Purchase of 300,572 common shares of
   treasury                                           -           (10,914)
  Balance at March 31                          $303,354          $288,376



                  CITY HOLDING COMPANY AND SUBSIDIARIES
          Condensed Consolidated Quarterly Statements of Income
              (Unaudited) ($ in 000s, except per share data)

                                               Quarter Ended
                               March 31  Dec. 31 Sept. 30  June 30 March 31
                                 2007     2006     2006     2006     2006

  Interest income               $39,198  $39,925  $39,747  $39,010  $37,441
  Taxable equivalent adjustment     230      228      236      246      252
  Interest income (FTE)          39,428   40,153   39,983   39,256   37,693
  Interest expense               14,756   14,820   14,233   13,085   11,588
  Net interest income            24,672   25,333   25,750   26,171   26,105
  Provision for loan losses         900      901    1,225      675    1,000
  Net interest income after
   provision for loan losses     23,772   24,432   24,525   25,496   25,105

  Noninterest income             14,371   13,586   14,766   13,463   12,389
  Noninterest expense            17,616   18,099   18,133   17,555   17,497
  Income before income taxes     20,527   19,919   21,158   21,404   19,997
  Income tax expense              7,066    6,752    7,302    7,397    6,879
  Taxable equivalent adjustment     230      228      236      246      252
  Net income                    $13,231  $12,939  $13,620  $13,761  $12,866



  Basic earnings per share        $0.76    $0.74    $0.78    $0.78    $0.71
  Diluted earnings per share       0.76     0.74     0.77     0.77     0.71
  Cash dividends declared per
   share                           0.31     0.28     0.28     0.28     0.28


  Average Common Share (000s):
  Outstanding                    17,369   17,535   17,557   17,719   18,006
  Diluted                        17,424   17,601   17,619   17,772   18,067

  Net Interest Margin             4.41%    4.43%    4.51%    4.58%    4.71%



                  CITY HOLDING COMPANY AND SUBSIDIARIES
               Non-Interest Income and Non-Interest Expense
                         (Unaudited) ($ in 000s)

                                               Quarter Ended
                               March 31  Dec. 31 Sept. 30  June 30 March 31
                                 2007     2006     2006     2006     2006

  Non-Interest Income:
  Service charges               $10,063  $10,962  $10,833  $10,903   $9,862
  Insurance commissions           1,012      675      526      521      614
  Trust and investment
   management fee income            568      498      572      504      566
  Bank owned life insurance         696      576      561      678      537
  Other income                      532      803      778      857      810
  Subtotal                       12,871   13,514   13,270   13,463   12,389
  Investment security gains         -         72   (2,067)     -        -
  Gain on sale of credit card
   merchant agreements            1,500      -      3,563      -        -
  Total Non-Interest Income     $14,371  $13,586  $14,766  $13,463  $12,389

  Non-Interest Expense:
  Salaries and employee
   benefits                      $9,057   $8,354   $8,733   $8,764   $8,632
  Occupancy and equipment         1,637    1,655    1,602    1,624    1,599
  Depreciation                    1,070    1,037    1,061    1,071    1,050
  Professional fees                 403      415      379      571      395
  Postage, delivery, and
   statement mailings               777      735      765      689      644
  Advertising                       852      876      810      755      774
  Telecommunications                455      549      498      525      476
  Bankcard expenses                 518      478      485      458      543
  Insurance and regulatory          385      375      384      381      388
  Office supplies                   455      408      417      372      383
  Repossessed asset (gains)
   losses, net of expenses          (14)       6       20     (129)       4
  Loss on early extinguishment
   of debt                          -        708      379      -        282
  Other expenses                  2,021    2,503    2,600    2,474    2,327
  Total Non-Interest Expense    $17,616  $18,099  $18,133  $17,555  $17,497

  Employees (Full Time
   Equivalent)                      791      779      767      779      764
  Branch Locations                   68       67       67       67       66



                  CITY HOLDING COMPANY AND SUBSIDIARIES
                       Consolidated Balance Sheets
                               ($ in 000s)
                                            March 31        December 31
                                              2007              2006
                                          (Unaudited)
  Assets
  Cash and due from banks                     $53,011           $58,014
  Interest-bearing deposits in
   depository institutions                      6,041            27,434
  Federal funds sold                           20,000            25,000
  Cash and cash equivalents                    79,052           110,448

  Investment securities available-for-
   sale, at fair value                        540,261           472,398
  Investment securities held-to-
   maturity, at amortized cost                 46,396            47,500
  Total investment securities                 586,657           519,898

  Gross Loans                               1,691,748         1,677,469
  Allowance for loan losses                   (16,082)          (15,405)
  Net loans                                 1,675,666         1,662,064

  Bank owned life insurance                    55,687            55,195
  Premises and equipment                       45,190            44,689
  Accrued interest receivable                  12,371            12,337
  Net deferred tax assets                      23,551            23,652
  Intangible assets                            58,681            58,857
  Other assets                                 22,157            20,667
  Total Assets                             $2,559,012        $2,507,807

  Liabilities
  Deposits:
  Noninterest-bearing                        $338,332          $321,038
  Interest-bearing:
  Demand deposits                             435,069           422,925
  Savings deposits                            343,366           321,075
  Time deposits                               922,384           920,179
  Total deposits                            2,039,151         1,985,217
  Short-term borrowings                       156,062           136,570
  Long-term debt                               21,940            48,069
  Other liabilities                            38,505            32,644
  Total Liabilities                         2,255,658         2,202,500

  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 shares issued at March 31,
   2007 and December 31, 2006
  less 1,278,095 and 1,009,095 shares
   in treasury, respectively                   46,249            46,249
  Capital surplus                             103,938           104,043
  Retained earnings                           201,977           194,213
  Cost of common stock in treasury            (44,126)          (33,669)
  Accumulated other comprehensive
   (loss) income:
  Unrealized loss on securities
   available-for-sale                          (1,926)           (2,649)
  Unrealized loss on derivative
   instruments                                    (88)             (210)
  Underfunded pension liability                (2,670)           (2,670)
  Total Accumulated Other Comprehensive
   (Loss) Income                               (4,684)           (5,529)
  Total Stockholders' Equity                  303,354           305,307
  Total Liabilities and Stockholders'
   Equity                                  $2,559,012        $2,507,807









                  CITY HOLDING COMPANY AND SUBSIDIARIES
                              Loan Portfolio
                         (Unaudited) ($ in 000s)

                        March 31  Dec 31    Sept 30     June 30     March 31
                           2007    2006       2006        2006        2006

  Residential
   real estate          $596,412   $598,502   $604,867   $601,097   $595,093
  Home equity            324,653    321,708    318,666    313,301    304,559
  Commercial, financial,
   and agriculture       713,183    698,719    713,933    668,581    643,269
  Installment loans to
   individuals            44,756     42,943     41,215     42,307     54,287
  Previously securitized
   loans                  12,744     15,597     18,520     22,253     25,918
  Gross Loans         $1,691,748 $1,677,469 $1,697,201 $1,647,539 $1,623,126



                  CITY HOLDING COMPANY AND SUBSIDIARIES
                       Previously Securitized Loans
                       (Unaudited) ($ in millions)

                               Annualized     Effective
                December 31    Interest     Annualized
  Year Ended:   Balance (a)    Income (a)    Yield (a)

  2006               $15.6         $9.4           42%
  2007                10.0          6.2           50%
  2008                 7.7          4.6           51%
  2009                 6.6          3.8           51%
  2010                 5.7          3.3           51%

  a - 2006 amounts are based on actual results.  2007 amounts are based on
  actual results through 3/31/07 and estimated amounts for the remainder of
  the year.  2008, 2009, and 2010 amounts are based on estimated amounts.



  Note:  The amounts reflected in the table above require management to make
         significant assumptions based on estimated future default,
         prepayment, and discount rates. Actual performance could be
         different from that assumed, which could result in the actual
         results being materially different from the amounts estimated
         above.



                  CITY HOLDING COMPANY AND SUBSIDIARIES
          Consolidated Average Balance Sheets, Yields, and Rates
                         (Unaudited) ($ in 000s)

                                        Three Months Ended March 31, 2007

                                          Average                 Yield/
                                          Balance     Interest     Rate

  Assets:
  Loan portfolio:
  Residential real estate                   $594,504     $8,854     6.04%
  Home equity                                322,647      6,242     7.85%
  Commercial, financial, and
   agriculture                               716,517     13,343     7.55%
  Installment loans to individuals            42,903      1,269    12.00%
  Previously securitized loans                14,375      1,756    49.54%
  Total loans                              1,690,946     31,464     7.55%
  Securities:
  Taxable                                    505,585      6,933     5.56%
  Tax-exempt                                  40,413        658     6.60%
  Total securities                           545,998      7,591     5.64%
  Deposits in depository institutions         13,033        117     3.64%
  Federal funds sold                          19,533        256     5.32%
  Total interest-earning assets            2,269,510     39,428     7.05%
  Cash and due from banks                     50,129
  Bank premises and equipment                 44,968
  Other assets                               169,046
  Less:  Allowance for loan losses           (15,636)
         Total assets                     $2,518,017

  Liabilities:
  Interest-bearing demand deposits           430,201      1,332     1.26%
  Savings deposits                           330,023      1,307     1.61%
  Time deposits                              921,937     10,074     4.43%
  Short-term borrowings                      146,455      1,512     4.19%
  Long-term debt                              32,434        532     6.65%
     Total interest-bearing liabilities    1,861,050     14,757     3.22%
  Noninterest-bearing demand deposits        316,716
  Other liabilities                           31,234
  Stockholders' equity                       309,017
  Total liabilities and
  stockholders' equity                    $2,518,017
  Net interest income                                   $24,671
  Net yield on earning assets                                       4.41%



                                         Three Months Ended March 31, 2006

                                          Average                 Yield/
                                          Balance     Interest     Rate
  Assets:
  Loan portfolio:
  Residential real estate                   $593,131     $8,380     5.73%
  Home equity                                302,265      5,594     7.51%
  Commercial, financial, and
   agriculture                               635,249     11,293     7.21%
  Installment loans to individuals            56,546      1,593    11.43%
  Previously securitized loans                28,051      2,704    39.09%
  Total loans                              1,615,242     29,564     7.42%
  Securities:
  Taxable                                    574,195      7,260     5.13%
  Tax-exempt                                  44,303        719     6.58%
  Total securities                           618,498      7,979     5.23%
  Deposits in depository institutions         14,888        150     4.09%
  Federal funds sold                             -          -       0.00%
  Total interest-earning assets            2,248,628     37,693     6.80%
  Cash and due from banks                     53,252
  Bank premises and equipment                 42,529
  Other assets                               168,035
  Less:  Allowance for loan losses           (16,851)
         Total assets                     $2,495,593

  Liabilities:
  Interest-bearing demand deposits           444,126      1,259     1.15%
  Savings deposits                           306,314        732     0.97%
  Time deposits                              830,866      7,210     3.52%
  Short-term borrowings                      151,728      1,127     3.01%
  Long-term debt                              95,296      1,260     5.36%
     Total interest-bearing liabilities    1,828,330     11,588     2.57%
  Noninterest-bearing demand deposits        342,482
  Other liabilities                           28,564
  Stockholders' equity                       296,217
  Total liabilities and
  stockholders' equity                    $2,495,593
  Net interest income                                   $26,105
  Net yield on earning assets                                       4.71%




                  CITY HOLDING COMPANY AND SUBSIDIARIES
                      Analysis of Risk-Based Capital
                         (Unaudited) ($ in 000s)

                           March 31  Dec. 31  Sept. 30  June 30  March 31
                           2007 (a)    2006      2006     2006      2006

  Tier I Capital:
  Stockholders'
   equity               303,354   $305,307   $298,327  $284,120    $288,376
  Goodwill and
   other intangibles    (58,681)  (58,857)    (59,038)   (59,219)   (59,378)
  Accumulated other
   comprehensive
   income                 2,014      2,859      4,109      9,762      6,265
  Qualifying trust
   preferred stock       16,000     16,000     22,000     25,500     25,500
  Excess deferred tax
   assets                    -        -         -         (4,079)    (2,254)
  Total tier I capital $262,687   $265,309   $265,398   $256,084   $258,509


  Total Risk-Based
   Capital:
  Tier I capital       $262,687   $265,309   $265,398   $256,084   $258,509
  Qualifying allowance
   for loan losses       16,082     15,405     15,557     15,268     16,818
  Total risk-based
   capital             $278,769   $280,714   $280,955   $271,352   $275,327

  Net risk-weighted
   assets            $1,715,664 $1,734,214 $1,770,458 $1,757,720 $1,743,243


  Ratios:
  Average
   stockholders'
   equity to average
   assets                 12.27%     12.14%     11.67%     11.51%     11.87%
  Tangible capital
   ratio                   9.79%     10.06%      9.69%      9.13%      9.24%
  Risk-based capital
   ratios:
  Tier I capital         15.31%      15.30%     14.99%     14.58%     14.83%
  Total risk-based
   capital               16.25%      16.19%     15.87%     15.45%     15.80%
  Leverage capital       10.68%      10.79%     10.81%     10.34%     10.62%


  (a) March 31, 2007 risk-based capital ratios are estimated.



                  CITY HOLDING COMPANY AND SUBSIDIARIES
                               Intangibles
                         (Unaudited) ($ in 000s)

                                      As of and for the Quarter Ended
                               March 31  Dec 31. Sept. 30  June 30 March 31
                                 2007     2006     2006     2006     2006

  Intangibles, net              $58,681  $58,857  $59,038  $59,219  $59,378
  Intangibles amortization
   expense                          176      181      181      181      181




                  CITY HOLDING COMPANY AND SUBSIDIARIES
                     Summary of Loan Loss Experience
                         (Unaudited) ($ in 000s)

                                           Quarter Ended
                         March 31   Dec. 31   Sept. 30   June 30   March 31
                           2007       2006       2006      2006       2006

  Balance at beginning
   of period             $15,405    $15,557    $15,268   $16,818    $16,790

  Reduction of
   allowance for loans
   sold                      -           -         -      (1,368)        -

  Charge-offs:
  Commercial, financial,
   and agricultural           35        844        207        43        185
  Real estate-mortgage       111        230        177       232        296
  Installment loans to
   individuals                84        126        165       239        368
  Overdraft deposit
   accounts                  860        892      1,018       955        958
  Total charge-offs        1,090      2,092      1,567     1,469      1,807

  Recoveries:
  Commercial, financial,
   and agricultural          148        101         44        33         32
  Real estate-mortgage        15        350         64        56        105
  Installment loans to
   individuals               132        118        131       151        198
  Overdraft deposit
   accounts                  573        470        392       372        500
  Total recoveries           868      1,039        631       612        835

  Net charge-offs            222      1,053        936       857        972
  Provision for loan
   losses                    900        901      1,225        675      1,000
  Balance at end of
   period                $16,083    $15,405    $15,557    $15,268    $16,818

  Loans outstanding   $1,691,748 $1,677,469 $1,697,201 $1,647,539 $1,623,126
  Average loans
   outstanding         1,690,946  1,689,846  1,662,929  1,630,454  1,615,242
  Allowance as a
   percent of loans
   outstanding              0.95%      0.92%      0.92%      0.93%     1.04%
  Allowance as a
   percent of
   non-performing
   loans                  235.75%    384.93%    408.43%    408.02%   503.53%
  Net charge-offs
   (annualized) as a
   percent of average
   loans outstanding        0.05%      0.25%      0.23%      0.21%     0.24%
  Net charge-offs,
   excluding overdraft
   deposit accounts,
   (annualized) as a
   percent of average
   loans outstanding      (0.02)%      0.15%      0.07%      0.07%     0.13%




                  CITY HOLDING COMPANY AND SUBSIDIARIES
                     Summary of Non-Performing Assets
                         (Unaudited) ($ in 000s)




                                  March 31 Dec. 31 Sept. 30 June 30 March 31
                                      2007    2006    2006    2006    2006

  Nonaccrual loans                   $6,714  $3,319  $3,359  $3,046  $2,743
  Accruing loans past due 90 days or
   more                                 108     635     328     573     512
  Previously securitized loans past
   due 90 days or more                  -        48     122     123      85
  Total non-performing loans          6,822   4,002   3,809   3,742   3,340
  Other real estate owned, excluding
   property associated
  with previously securitized loans     290     161     499     294     403
  Other real estate owned associated
   with previously
  securitized loans                     252      20      20      92     306
  Other real estate owned               542     181     519     386     709
  Total non-performing assets        $7,364  $4,183  $4,328  $4,128  $4,049

  Non-performing assets as a percent
   of loans and
  other real estate owned             0.44%   0.25%   0.25%   0.25%   0.25%


DATASOURCE: City Holding Company



CONTACT:  Charles R. Hageboeck, Chief Executive Officer and President of

City Holding Company, [phone]



Web site:  http://www.cityholding.com/

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