City Holding Company Announces Acquisitions Bolstering Kentucky Presence

City Holding Company (“City”) (Nasdaq: CHCO), the parent company of City
National Bank of West Virginia, announced today the concurrent signing
of two separate definitive merger agreements. Under one agreement, City
will acquire Poage Bankshares, Inc., (“Poage”) (Nasdaq: PBSK), the
parent company of Town Square Bank, Ashland, Kentucky; under the other
agreement, City will acquire Farmers Deposit Bancorp, Inc. (“Farmers
Deposit”), the parent company of Farmers Deposit Bank, Cynthiana,
Kentucky. Upon completion of the Poage merger, the subsidiary bank of
Poage and will merge into City National Bank of West Virginia. Upon
completion of the Farmers Deposit merger, the subsidiary bank of Farmers
Deposit and will merge into City National Bank of West Virginia.

Based upon financial data as of March 31, 2018, the combined company
will have $4.8 billion in assets, deposits of $3.9 billion, and gross
loans of $3.5 billion, bolstering City’s presence in the
Huntington-Ashland and Lexington, Kentucky MSAs. “Our leadership
recognized these partnerships as strategic next steps for enhancing our
market presence throughout Kentucky and we are fortunate to be making
this move forward,” remarked Charles R. (Skip) Hageboeck, President &
Chief Executive Officer of City. Both the Poage and Farmers Deposit
merger are expected to close in the fourth quarter of 2018, pending
customary closing conditions, including receipt of required regulatory
approvals and the approval by the shareholders of Poage and Farmers

Subject to the terms of the Poage merger agreement, Poage shareholders
will receive 0.335 shares of City common stock for each outstanding
share of Poage common stock. Based on City’s 5-day average closing price
of $78.43 as of July 10, 2018, this equates to a per share value of
$26.27 and an aggregate deal value of $93.5 million. Upon completion of
the merger, Bruce VanHorn, President, Chief Executive Officer & Director
of Poage, will enter into an employment agreement with City. Mr. VanHorn
stated, “Joining City is a defining moment for our company, shareholders
and customers. Our shared experience in operating in overlapping markets
makes me confident that this will be a seamless transition for our
employees and customer base while providing long-term value for our
shareholders. City is a great franchise, and I look forward to the years
ahead for our combined company.”

Subject to the terms of the Farmers Deposit merger agreement, Farmers
Deposit shareholders will receive $24.9 million in cash for all
outstanding shares of Farmers Deposit common stock. “This merger with
City is an excellent opportunity for our organization to become part of
a successful and established institution,” said W. Brent Hoptry,
Chairman, President, & Chief Executive Officer of Farmers Deposit. “With
our combined markets and leadership, we will continue to provide
high-quality banking solutions for our communities and remain well
positioned for the future.”

Each of the Poage and Farmers Deposit merger agreements have been
unanimously approved by the City board of directors. The Poage board of
directors has unanimously approved the Poage merger agreement, and the
Farmers Deposit board of directors has unanimously approved the Farmers
Deposit agreement. Neither the Poage transaction nor the Farmers Deposit
transaction is conditional upon the other.

Keefe, Bruyette & Woods, Inc. served as financial advisor and Dinsmore &
Shohl LLP served as legal counsel to City in both transactions. Sandler
O’Neill & Partners served as financial advisor and Luse Gorman, PC
served as legal counsel to Poage in the Poage transaction. ProBank
Austin served as financial advisor and Stites & Harbison, PLLC served as
legal counsel to Farmers Deposit in the Farmers Deposit transaction.

About City Holding Company

City Holding Company, headquartered in Charleston, West Virginia is a
financial holding company which owns City National Bank of West
Virginia. City provides a full range of consumer and commercial banking
services to individuals, businesses and industries through its 86
branches across West Virginia, Virginia, Kentucky and Ohio. As of March
31, 2018, City had $4.2 billion in total assets, $3.4 billion in
deposits, and $3.1 billion in gross loans. For additional information,
locations, and hours of operation, please visit

About Poage Bankshares, Inc.

Poage Bankshares, Inc., headquartered in Ashland, Kentucky, is the
parent company of Town Square Bank, which was founded as a savings and
loan association in 1889. Poage operates nine branches and one loan
production office across northeastern Kentucky. As of March 31, 2018,
Poage had $450 million in total assets, $375 million in deposits, and
$333 million in gross loans. For additional formation on Poage
Bankshares, Inc. and Town Square Bank, please visit

About Farmers Deposit Bancorp, Inc.

Farmers Deposit Bancorp, Inc., headquartered in Cynthiana, Kentucky, is
the parent company of Farmers Deposit Bank, which was founded as a full
service bank in 1866. Farmers Deposit operates 3 branches around the
Lexington, Kentucky market. As of March 31, 2018, Farmers Deposit had
$122 million in total assets, $98 million in deposits, and $60 million
in gross loans. For additional formation on Farmers Deposit Bankshares,
Inc. and Farmers Deposit Bank, please visit

Important Information for Investors and Poage Shareholders:

This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities of City or a solicitation of
any vote or approval. City will file a registration statement on Form
S-4 and other documents regarding the proposed transaction referenced in
this press release related to the Poage transaction with the Securities
and Exchange Commission (“SEC”) to register the shares of City’s common
stock to be issued to the shareholders of Poage. The registration
statement will include a proxy statement/prospectus, which will be sent
to the shareholders of Poage in advance of its special meeting of
shareholders to be held to consider the proposed Poage merger. Before
making any voting or investment decision investors and security holders
are urged to read the proxy statement/prospectus and any other relevant
documents to be filed with the SEC in connection with the proposed Poage
transaction because they contain important information about City, Poage
and the proposed transaction. Shareholders are also urged to
carefully review and consider each of City’s and Poage’s public filings
with the SEC, including, but not limited to, their Annual Reports or
Form 10-K, their Quarterly Reports or Form 10-Q, their Current Reports
or Form 8-K and their proxy statements. Investors and security holders
may obtain a free copy of these documents (when available) through the
website maintained by the SEC at
These documents may also be obtained, without charge, from City at
under the tab “Investors” or by directing a request to City Holding
Company, 25 Gatewater Road P.O. Box 7520, Charleston, West
Virginia 25356, Attn.: Investor Relations, or from Poage at
under the tab “Investor Relations” or by directing a request to Poage
Bankshares, Inc., 1500 Carter Avenue, Ashland, Kentucky 41101, Attn.:
Investor Relations.

Poage and certain of its directors and executive officers may be deemed
to be participants in the solicitation of proxies from the shareholders
of Poage in connection with the proposed Poage merger. Information about
the directors and executive officers of Poage is set forth in the
definitive proxy statement for Poage’s 2018 annual meeting of
shareholders, as filed with the SEC on a Schedule 14A on April 13, 2018.
Additional information regarding the interests of those participants and
other persons who may be deemed participants in the transaction may be
obtained by reading the proxy statement/prospectus regarding the
proposed Poage merger when it becomes available. Free copies of this
document may be obtained as described in the preceding paragraph.

Safe Harbor Statement:

Statements made in this news release that are not historical facts are
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities Litigation
Reform Act of 1995. These statements are subject to certain risks and
uncertainties including, but not limited to, the successful completion
and integration of the transaction contemplated in this release, which
includes the retention of the acquired customer relationships, adverse
changes in economic conditions, the impact of competitive products and
pricing and the other risks set forth in City’s filings with the SEC. As
a result, actual results may differ materially from the forward-looking
statements in this news release.

These factors are not necessarily all of the factors that could cause
City’s, Poage’s or the combined company’s actual results, performance,
or achievements to differ materially from those expressed in or implied
by any of the forward-looking statements. Other unknown or unpredictable
factors also could harm City’s, Poage’s or the combined company’s

All forward-looking statements attributable to City’s, Poage’s or the
combined company’s, or persons acting on City’s or Poage’s behalf are
expressly qualified in their entirety by the cautionary statements set
forth above. Forward-looking statements speak only as of the date they
are made and City and Poage do not undertake or assume any obligation to
update publicly any of these statements to reflect actual results, new
information or future events, changes in assumptions, or changes in
other factors affecting forward-looking statements, except to the extent
required by applicable laws. If City or Poage update one or more
forward-looking statements, no inference should be drawn that City or
Poage will make additional updates with respect to those or other
forward-looking statements.

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