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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

Capital Holdings, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies: .......

(2) Aggregate number of securities to which transaction applies: ..........

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............

(4) Proposed maximum aggregate value of transaction: ......................

(5) Total fee paid: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

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2

CAPITAL HOLDINGS, INC.

NOTICE OF ANNUAL MEETING

AND

PROXY STATEMENT

ANNUAL SHAREHOLDERS MEETING

APRIL 17, 1997

CAPITAL HOLDINGS, INC.
5520 Monroe Street
Sylvania, OH 43560

NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD
April 17, 1997

TO THE HOLDERS OF SHARES OF COMMON STOCK:

Notice is hereby given that the Annual Meeting of the Shareholders of
Capital Holdings, Inc. (the "Corporation") will be held at The Franciscan Life
Center, Lourdes College, 6832 Convent Boulevard, Sylvania, Ohio, on Thursday,
April 17, 1997, at 6:30 p.m. (local time), for the purpose of considering and
voting upon the following matters:

1. The election of four Directors (to be elected to Class I of the
Corporation's staggered Board of Directors) to serve a three-year term
or until their successors shall have been elected and qualified.

2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF. THE BOARD OF DIRECTORS AT PRESENT KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED BY OR ON BEHALF OF THE CORPORATION.

Shareholders of record at the close of business on March 7, 1997, are
the only shareholders entitled to notice of and to vote at the Annual
Shareholders Meeting.

By order of the Board of Directors

John S. Szuch, Chairman and Chief
Executive Officer

March 20, 1997

IMPORTANT

WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK, SIGN,
DATE, AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE AS PROMPTLY AS POSSIBLE. NO POSTAGE IS REQUIRED.

CAPITAL HOLDINGS, INC.
SYLVANIA, OHIO

PROXY STATEMENT

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Capital Holdings, Inc. (the "Corporation") of
proxies to be voted at the Annual Meeting of Shareholders to be held on
Thursday, April 17, 1997, in accordance with the foregoing notice.

Capital Holdings, Inc. is a registered bank holding company of which
Capital Bank, N.A. (hereinafter collectively "Corporation") is its principal
subsidiary.

The solicitation of proxies on the enclosed form is made on behalf of
the Board of Directors of the Corporation. All costs associated with the
solicitation will be borne by the Corporation. The Corporation does not intend
to solicit proxies other than by use of the mails, but certain officers and
regular employees of the Corporation or its subsidiaries, without additional
compensation, may use their personal efforts, by telephone or otherwise, to
obtain proxies. The proxy materials are first being mailed to shareholders on
March 20, 1997.

Any shareholder executing a proxy has the right to revoke it by the
execution of a subsequently dated proxy, by written notice delivered to the
Secretary of the Corporation prior to the exercise of the proxy or in person by
voting at the meeting. The shares will be voted in accordance with the direction
of the shareholder as specified on the proxy. In the absence of instructions,
the proxy will be voted "FOR" the election of the four persons listed in this
Proxy Statement.

VOTING SECURITIES

Only shareholders of record at the close of business on March 7, 1997,
will be eligible to vote at the Annual Meeting or any adjournment thereof. As of
March 7, 1997, the Corporation had outstanding 1,898,530 shares of no par value
common stock. Shareholders are entitled to one vote for each share of common
stock owned as of the record date, and shall have the right to cumulate votes in
the election of Directors in accordance with Ohio law. Cumulative voting permits
a shareholder to multiply the number of shares held by the number of directors
to be elected, and cast those votes for one candidate or spread those votes
among several candidates as he or she deems appropriate.

All Directors and Executive Officers of the Corporation as a group
(comprised of seventeen individuals), beneficially held 527,311 shares of the
Corporation's common stock as of March 7, 1997, representing 27.77 percent of
the outstanding common stock of the Corporation.

2
5

PROPOSAL #1 ELECTION OF DIRECTORS AND INFORMATION
WITH RESPECT TO DIRECTORS AND OFFICERS

CLASSIFICATION SYSTEM FOR THE ELECTION OF DIRECTORS

The Corporation has a staggered system for the election of Directors.
Directors are divided into three classes as nearly equal in number as possible.
The Corporation has fourteen Directors, and they are elected to serve a
three-year term.

INFORMATION WITH RESPECT TO NOMINEES

The following information is provided with respect to each Class I
(term to expire in 2000) nominee for Director and each present and continuing
Director whose term of office extends beyond the Annual Meeting of the
Corporation's Shareholders. Those nominees receiving the greatest number of
votes will be elected as Directors.

There is no minimum number of votes required to elect a Director.

Director of the
Name and Age Principal Occupation Past 5 Years Corporation Since
- ------------ --------------------------------- -----------------

James M. Appold President of Consolidated Biscuit Co. 1988
(57) (consumer food business); Director of
the Corporation

David P. Bennett President of Bennett Enterprises, Inc. 1988
(67) (restaurant business); Director of the

Corporation

Yale M. Feniger (1) Chief Executive Officer of Fen Ltd. 1988
(76) (airplane sales); Director of the Corporation

Thomas W. Noe President of Vintage Coins & Cards 1988
(42) (coin dealer); Director of the Corporation

THE DIRECTORS UNANIMOUSLY RECOMMEND A VOTE IN FAVOR OF THIS PROPOSAL #1.

3
6

INFORMATION WITH RESPECT TO DIRECTORS NOT STANDING FOR REELECTION

CLASS II - (CONTINUING DIRECTORS WITH TERM TO EXPIRE 1998)

Director of the

Name and Age Principal Occupation Past 5 Years Corporation Since
- ------------ --------------------------------- -----------------

Michael C. Landin (2) President of Michael Landin Associates 1988
(53) (clothing broker); Director of the
Corporation

Ronald R. Langenderfer President of Centaur, Inc. (steel service center); 1988
(52) Director of the Corporation

Joel A. Levine Spengler Nathanson of Counsel; 1988
(58) Director of the Corporation

Noel S. Romanoff Chief Executive Officer of Romanoff Electric 1988
(55) Corp. (electrical contractor); Director of the
Corporation

Robert A. Sullivan President, Chief Operating Officer, Secretary 1988
(42) and Director of the Corporation

{THIS SPACE INTENTIONALLY LEFT BLANK}

4
7

CLASS III - (CONTINUING DIRECTORS WITH TERM TO EXPIRE 1999)
- -----------------------------------------------------------

Director of the
Name and Age Principal Occupation Past 5 Years Corporation Since
- ------------ --------------------------------- -----------------

George A. Isaac, III President and Chief Executive Officer of The 1988
(43) Isaac Corporation (scrap processor/broker;
commercial real estate and development);
Director of the Corporation

W. Geoffrey Lyden, III President and Chief Executive Officer
(44) of The Lyden Company (petroleum 1988
marketing); Director of the Corporation

James D. Sayre President of M&S Manufacturing Co. 1988
(51) (automotive parts supplier); Director
of the Corporation

John S. Szuch Chairman of the Board of Directors, Chief 1988
(48) Executive Officer and Director of the
Corporation

James M. Tuschman Principal, Executive Vice President and 1988
(55) Chairman of the Operations Committee of
Jacobson, Maynard, Tuschman & Kalur
(law firm); Director of the Corporation

(1) Mr. Feniger previously served as Chief Executive Officer of Ottawa River
Steel Co. from 1976 to October 1992.

(2) Mr. Landin previously served as President - Landin & Landin Clothiers, Inc.
from January 1993 to November 1996. He served as President - Retail
Division of Capital Mercury Shirt Co. from March 1992 to December 1992. He
served as President of Harry's Clothing from May 1978 to February 1992.

The business experience of each of the above-listed nominees and
Directors during the past five years was that typical to a person engaged in the
principal occupation listed. Unless otherwise indicated, each of the nominees
and Directors has had the same position or another executive position with the
same employer during the past five years.

Shareholders desiring to nominate individuals to serve as Directors may
do so by following the procedure outlined in the Corporation's Code of
Regulations requiring advance notice to the Corporation of such nomination and
certain information regarding the proposed nominee.

5
8

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below sets forth the number and percentage of shares of
common stock owned by the Directors and named Executive Officers of the
Corporation and the name and address of any five percent or greater holder of
the Corporation's common stock.

AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
NAME MARCH 7, 1997 PERCENTAGE
---- ------------- ----------

FIVE PERCENT HOLDERS
- --------------------

Robert A. Sullivan 109,192 (8) 5.75%
5520 Monroe Street
Sylvania, OH 43560

John S. Szuch 100,720 (9) 5.31
5520 Monroe Street
Sylvania, OH 43560

DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
James M. Appold 29,586 1.56
David P. Bennett 23,983 (1) 1.26
Yale M. Feniger 18,130 *
George A. Isaac, III 36,227 (2) 1.91
Michael P. Killian 17,017 (3) *
Stephen J. Kovatch 10,701 (4) *
Michael C. Landin 3,264 *
Ronald R. Langenderfer 27,458 1.45
Bruce K. Lee 18,194 (5) *
Joel A. Levine 9,188 *
W. Geoffrey Lyden, III 27,048 (6) 1.42
Thomas W. Noe 3,252 *
Noel S. Romanoff 53,919 (7) 2.84
James D. Sayre 12,215 *
James M. Tuschman 27,217 (10) 1.43
---------
All Directors and Executive Officers
as a Group (17 persons) 527,311 27.77%
- --------------------------------------------------------------------------------------------------
*Represents less than one percent.

All shares shown as beneficially owned are shares over which the named person
exercises sole voting or investment power except as set forth below and include
options issued to Executive Officers under the terms of the Corporation's
Incentive Stock Option Plans which are exercisable within 60 days of the date
for which disclosure is provided.

(1) Includes 313 shares held by spouse.

(2) Includes 2,418 shares held by spouse and 4,890 shares held in child's
trust.

(3) Includes 1,328 shares held as custodian for minor children and 13,917
option shares exercisable within 60 days.

(4) Represents option shares exercisable within 60 days.

(5) Includes 362 shares held as custodian for minor child and 13,917 option
shares exercisable within 60 days.

(6) Includes 22,741 shares held by The Lyden Company.

(7) Includes 52,974 shares held by spouse.

(8) Includes 23,538 shares held by spouse, 3,430 shares held as custodian for
minor children and 23,301 option shares exercisable within 60 days.

(9) Includes 21,200 shares held by spouse, 5,616 shares held as custodian for
minor children and 23,301 option shares exercisable within 60 days.

(10) Includes 17,750 shares held by a partnership in which Mr. Tuschman is a
general partner.

6
9

COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS

The Board of Directors conducts its business through meetings of the
Board and through its committees. In accordance with the Code of Regulations of
the Corporation, the Board of Directors has appointed and maintains an Audit
Committee, Compensation Committee, Investment Committee, Securities Committee
and Loan Committee.

The Corporation's nominating function is performed by the Board of
Directors acting as a committee of the whole. In conducting its nominating
function, the Board of Directors of the Corporation is responsible for making
annual nominations for Directors to fill vacancies created by expired terms of
Directors and from time to time, making appointments to fill vacancies created
prior to the expiration of a Director's term. During 1996, the Board met once to
consider and act upon the nomination of Directors.

The Audit Committee reviews with the Corporation's independent
auditors, the audit plan, the scope and results of their audit engagement and
the accompanying management letter, if any; reviews the scope and results of the
Corporation's internal auditing procedures; consults with the independent
auditors and management with regard to the Corporation's accounting methods and
the adequacy of its internal accounting controls; approves professional services
provided by the independent auditors; reviews the independence of the
independent auditors; and reviews the range of the independent auditors' audit
and nonaudit fees. The Audit Committee is composed of Messrs. Feniger, Isaac,
Langenderfer, Levine and Sayre (Chairman). The Audit Committee met two times
during 1996.

The Compensation Committee is responsible for administering the
Corporation's employee benefit plans including its stock option plans; setting
the compensation of the Chairman of the Board, President and all Senior Vice
Presidents; reviewing the criteria that form the basis for management's officer
and employee compensation recommendations and reviewing management's
recommendations in this regard. The Compensation Committee is composed of
Messrs. Isaac, Levine, Noe, Romanoff, Sayre, Sullivan, Szuch and Tuschman
(Chairman). The Compensation Committee met once during 1996.

The Investment Committee is responsible for reviewing the securities
portfolio of the Bank. The Corporation's Securities Committee reviews and makes
recommendations to the full Board on matters affecting the market for the
Corporation's common stock and the Corporation's dividend policy. The Loan
Committee reviews loan policy matters and approves loan requests as required by
internal policy.

The Board of Directors of the Corporation meets monthly for its regular
meetings and upon call for special meetings. During 1996, the Board met 12
times. All Directors of the Corporation attended at least 75 percent of the
Board and Committee Meetings that they were scheduled to attend during 1996,
except Mr. Bennett who attended 50% of the meetings he was scheduled to attend.

7
10

The Corporation compensates directors, other than those persons who
serve as officers of the Corporation and its subsidiary, Capital Bank, N.A., in
options of the Corporation's common stock pursuant to the Capital Holdings, Inc.
Nonemployee Director Stock Option Plan (the "Director Option Plan"). Pursuant to
the Director Option Plan, directors of the Corporation receive an option grant
of 500 shares annually as a retainer and 50 shares per regular Board meeting
attended. All options granted under the Director Option Plan contain an exercise
price equal to the shares' fair market value as of the date of grant. Directors
receive no cash compensation for their service as a director except for
committee service, for which directors who are not employees of the Corporation,
receive $350 per committee meeting attended.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table provides certain summary information concerning
compensation paid or accrued by the Corporation and/or its subsidiaries, to or
on behalf of the Corporation's Chairman and Chief Executive Officer and the four
most highly compensated individuals for the fiscal years ended December 31,
1996, 1995, and 1994.

SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------------------- ------------
Name and Option # All Other
Principal Position Year Salary(1) Bonus(2) Awards(shares) Compensation(3)
- ------------------ ---- --------- -------- -------------- ---------------

Mr. John S. Szuch 1996 $175,000 $168,300 2,500 $33,345
Chairman and Chief 1995 163,500 118,000 2,650 27,747
Executive Officer 1994 146,000 120,000 -- 15,435

Mr. Robert A. Sullivan 1996 $175,000 $168,300 2,500 $32,289
President and Chief 1995 163,500 118,000 2,650 28,307
Operating Officer 1994 146,000 120,000 -- 15,435

Mr. Bruce K. Lee 1996 $116,600 $95,000 1,500 $17,104
Senior Vice President 1995 110,000 70,000 1,590 14,487
1994 102,820 55,000 562 15,435

Mr. Michael P. Killian 1996 $102,900 $45,000 500 $11,924
Senior Vice President 1995 98,000 35,000 530 10,710
1994 93,450 30,000 562 12,677

Mr. Stephen J. Kovatch 1996 $102,900 $45,000 500 $12,073
Senior Vice President 1995 98,000 35,000 530 10,847
1994 93,450 30,000 562 12,763

(1) Represents total cash compensation earned, including amounts earned but
deferred at the election of these officers.

(2) Represents cash bonus awarded.

(3) Figures for 1996 represent:
Capital Bank, N.A. Retirement Savings Plan (Szuch, Sullivan and Lee -
$12,250, Killian - $11,924, Kovatch - $12,073); Capital Holdings, Inc.
Supplemental Executive Retirement Plan (Szuch and Sullivan - $15,815,
Lee - $4,854); Split dollar life insurance premiums (Szuch - $5,280,
Sullivan - $4,224).

8
11

1996 STOCK OPTION GRANTS TABLE

The following table sets forth stock options granted to the
Corporation's Chairman and Chief Executive Officer and the Corporation's four
other most highly compensated Executive Officers during 1996 under the
Corporation's Incentive Stock Option Plans. Under new Securities and Exchange
Commission regulations, companies are required to project an estimate of
appreciation of the underlying shares of stock during the option term. The
Corporation has chosen the "five percent/ten percent" formula approved by the
SEC. However, the ultimate value will depend on the market value of the
Corporation's stock at a future date, which may not correspond to the
projections below.

Potential Realizable Value
at Assumed Annual Rates
Of Stock Price Appreciation
Individual Grants for Option Term
- ---------------------------------------------------------------------------- ---------------------------
% of Total
Options Granted Exercise
Options to Employees Price(2)
Name Granted(1) in 1996 Per Share Expiration Date 5% 10%
---- ---------- ------- --------- --------------- -- ---

John S. Szuch 2,500 20% $37.50 January 1, 2007 $58,959 $149,413
Robert A. Sullivan 2,500 20% 37.50 January 1, 2007 58,959 149,413
Bruce K. Lee 1,500 12% 37.50 January 1, 2007 35,375 89,648
Michael P. Killian 500 4% 37.50 January 1, 2007 11,792 29,883
Stephen J. Kovatch 500 4% 37.50 January 1, 2007 11,792 29,883
-----
7,500

(1) Options granted in 1996 are incentive stock options which are exercisable
after five years from the date of grant with full vesting occurring after
the fifth anniversary date; however, all options become immediately
exercisable in the event of a change in control of the Corporation. These
options were granted for a term of 10 years, subject to earlier termination
in certain events related to termination of employment.

(2) Exercise price is the fair market value on the date of grant.

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12

1996 STOCK OPTION EXERCISES AND YEAR-END VALUE TABLE

The following table sets forth the number and value of all unexercised
stock options held by Executive Officers at year-end. The value of
"in-the-money" options refers to options having an exercise price which is less
than the market price of the Corporation's stock on December 31, 1996. On that
date, the Corporation's named Executive Officers held exercisable options which
were "in-the-money" as discussed in the following table. In addition, the table
sets forth the number of options exercised by each of the named Executive
Officers during 1996 and indicates the amount of value realized upon such
exercise.

Number (#) of Value ($) of
Unexercised Unexercised
Options- Options-
12/31/96 12/31/96(2)
-------- -----------
Shares Acquired Net Value($) Exercisable/ Exercisable/
Name on Exercise Realized(1) Unexercisable Unexercisable
---- ----------- ----------- ------------- -------------

John S. Szuch 0 0 23,301/ $490,719/
5,150 20,008
Robert A. Sullivan 0 0 23,301/ 490,719/
5,150 20,008
Bruce K. Lee 0 0 13,917/ 371,862/
5,625 59,543
Michael P. Killian 0 0 13,917/ 371,862/
3,565 51,540
Stephen J. Kovatch 0 0 10,701/ 285,931/
3,565 51,540

(1) Represents estimated market value of the Corporation's common stock at
exercise date, less the exercise price.

(2) Represents estimated market value of the Corporation's common stock at
December 31, 1996, less the exercise price.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

The Corporation has a funded, non-qualified supplemental executive
retirement plan (the "Supplemental Retirement Plan"), due to limitations imposed
by federal law on the amount of retirement income that may be paid through the
Corporation's Profit Sharing Plan. Under the Supplemental Retirement Plan, only
employees selected by the Compensation Committee and approved by the Board of
Directors are eligible to participate. As of the date of this proxy
participation in the Supplemental Retirement Plan is limited to Mr. Szuch, Mr.
Sullivan and Mr. Lee. Benefits under the Supplemental Retirement Plan are funded
annually and are held in an irrevocable trust for the benefit of the
participants. Payments under the Supplemental Retirement Plan have no effect on
the funding or availability of funds under the Corporation's current Profit
Sharing Plan nor on any future qualified plan. The following Executive Officers
participated in the Supplemental Retirement Plan in 1996: Mr. Szuch ($15,815),
Mr. Sullivan ($15,815) and Mr. Lee ($4,854).

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13

REPORT OF THE COMPENSATION COMMITTEE OF CAPITAL HOLDINGS, INC. ON COMPENSATION

Under rules established by the Securities and Exchange Commission (the
"SEC"), the Corporation is required to provide certain data and information in
regard to the compensation and benefits provided to the Corporation's Chairman
of the Board, President and Chief Executive Officer and, if applicable, the four
other most highly compensated Executive Officers, whose compensation exceeded
$100,000 during the Corporation's fiscal year. The disclosure requirements, as
applied to the Corporation, include the Corporation's Chairman of the Board and
Chief Executive Officer (John S. Szuch), its President and Chief Operating
Officer (Robert A. Sullivan) and its three Senior Vice Presidents, Mr. Bruce K.
Lee, Mr. Michael P. Killian, and Mr. Stephen J. Kovatch. The disclosure includes
the use of tables and a report explaining the rationale and considerations that
led to fundamental executive compensation decisions affecting such officers.
Capital Holdings, Inc. is a holding company and owns a single operating
subsidiary, Capital Bank, N.A. Capital Holdings, Inc. has no direct employees.
All disclosures contained in this Proxy Statement regarding executive
compensation reflect compensation paid by Capital Bank, N.A. The Compensation
Committee of the Corporation has the responsibility of determining the
compensation policy and practices with respect to all Executive Officers. At the
direction of the Board of Directors, the Compensation Committee has prepared the
following report for inclusion in this Proxy Statement.

COMPENSATION PHILOSOPHY. This report reflects the Corporation's
compensation philosophy as endorsed by the Compensation Committee. The
Compensation Committee makes a recommendation regarding the level of
compensation for Mr. Szuch and Mr. Sullivan. The Compensation Committee
determines the level of compensation for all other Executive Officers within the
constraints of the amounts approved by the Board.

Essentially, the executive compensation program of the Corporation has
been designed to:

- Support a pay-for-performance policy that awards Executive
Officers for corporate performance.

- Motivate key Executive Officers to achieve strategic business
goals.

- Provide compensation opportunities which are comparable to those
offered by other peer group companies; thus allowing the
Corporation to compete for and retain talented executives who are
critical to the Corporation's long-term success.

SALARIES. Effective January 1, 1997, the Compensation Committee
recommended and the Board increased the salary paid to Mr. Szuch and Mr.
Sullivan. The increase reflected consideration of competitive data reported in
compensation surveys and the Compensation Committee's assessment of the
performance of such executives over the intervening year and recognition of the
Corporation's performance during 1996. In addition, the Compensation Committee
approved compensation increases for all other Executive Officers of the
Corporation. Executive Officer salary increase determinations are based upon an
evaluation of such executives' performance against goals set in the prior year.

11
14

CASH BONUS PLAN. The Corporation maintains a cash bonus plan (the
"Bonus Plan") which allocates a portion of the Corporation's pre-tax net income
for the purpose of employee cash bonuses on an annual basis. The Bonus Plan is
administered by the Compensation Committee and provides for the allocation of
two percent of the Corporation's pre-tax net income to each of the Corporation's
Chairman of the Board and Chief Executive Officer (Mr. Szuch) and the
Corporation's President and Chief Operating Officer (Mr. Sullivan), provided
that overall corporate objectives are met. The award of a bonus to any employee
under the terms of the Bonus Plan is discretionary and in the case of Messrs.
Szuch and Sullivan is determined by the Board of Directors upon the
recommendation of the Compensation Committee, and in all other cases is
determined by the Compensation Committee upon recommendation of management.

The Compensation Committee has determined that a significant portion of
executive compensation should be payable in an annual bonus which shall be based
principally upon the financial performance of the Corporation. The Compensation
Committee believes that it is important to reward executive management based
upon the success of the Corporation.

LONG-TERM COMPENSATION. Long-term incentive compensation is addressed
by the Corporation's Incentive Stock Option Plans and the Nonemployee Director
Stock Option Plan. These option plans are designed to provide long-term
incentive to the executive officers and directors of the Corporation, and to
better align the interest of management with those of the Corporation's
shareholders. The Board generally believes that stock options provide an
effective means of accomplishing its long-term compensation objectives, as the
level of compensation is directly proportional to the level of appreciation in
the market value of the Corporation's common stock subsequent to the date of the
option grant.

THIS REPORT ON COMPENSATION IS SUBMITTED BY THE COMPENSATION COMMITTEE MEMBERS:

James M. Tuschman, Chairman Noel S. Romanoff
George A. Isaac, III James D. Sayre
Joel A. Levine Robert A. Sullivan
Thomas W. Noe John S. Szuch

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

John S. Szuch, the Corporation's Chairman of the Board and Chief
Executive Officer, and Robert A. Sullivan, the Corporation's President and Chief
Operating Officer, served on the Compensation Committee of the Corporation,
which is responsible for compensation matters (see "Report of the Compensation
Committee of Capital Holdings, Inc. on Compensation" in this Proxy Statement).

Although Messrs. Szuch and Sullivan served on the Compensation
Committee, they did not participate in any decisions regarding their own
compensation as an Executive Officer. Each year, the Compensation Committee
recommends the amount of the bonus award for Messrs.

12
15

Szuch and Sullivan (pursuant to the Cash Bonus Plan described elsewhere in this
Proxy Statement) and salary for the ensuing year. Neither Mr. Szuch nor Mr.
Sullivan participated in discussions nor decision-making relative to their own
nor each other's compensation.

PERFORMANCE GRAPH - FIVE-YEAR SHAREHOLDER RETURN COMPARISON

The SEC requires that the Corporation include in this Proxy Statement a
line-graph presentation comparing cumulative five-year shareholder returns on an
indexed basis with a broad equity market index and either a nationally
recognized industry standard or an index of peer companies selected by the
Corporation. The Corporation has selected the Dow Jones Equity Market Index and
the Dow Jones Regional Bank Index for purposes of this performance comparison.
The chart below compares the value of $100 invested on December 31, 1991, in the
Corporation's stock, the Dow Jones Equity Market Index and the Dow Jones
Regional Bank Index.

[GRAPHIC]

*TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS

- --------------------------------------------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----

CAPITAL HOLDINGS, INC. $100.00 $119.30 $147.53 $168.30 $200.50 $251.02
DOW JONES EQUITY MARKET INDEX $100.00 $108.61 $119.41 $120.33 $166.50 $205.57
DOW JONES REGIONAL BANK INDEX $100.00 $133.67 $140.69 $135.39 $216.53 $297.52
- --------------------------------------------------------------------------------------------------------------------

ASSUMES $100 INVESTED ON JANUARY 1, 1991 IN CAPITAL HOLDINGS, INC. COMMON STOCK,
DOW JONES EQUITY MARKET INDEX & DOW JONES MAJOR REGIONAL BANK INDEX

13
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Directors of the Corporation and their associates were customers of,
and have had transactions with, the Corporation in the ordinary course of
business during 1996.

These transactions consisted of extensions of credit by the Corporation
in the ordinary course of business and were made on substantially the same terms
as those prevailing at the time for comparable transactions with other persons.
In the opinion of the management of the Corporation, those transactions do not
involve more than a normal risk of being collectible or present other
unfavorable features. The Corporation expects to have, in the future, banking
transactions in the ordinary course of its business with Directors and their
associates on the same terms, including interest rates and collateral on loans,
as those prevailing at the time of comparable transactions with others.

Director Levine is of counsel to Spengler Nathanson, a law firm which
performed services for the Corporation during 1996, and is expected to continue
to provide services to the Corporation in the future.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and Directors, and persons who own more than ten percent
of a registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, Directors and greater than ten percent shareholders are required by
SEC regulation to furnish the Corporation with copies of all Section 16(a) forms
they file.

Based solely on review of the copies of such forms furnished to the
Corporation or written representations that no Form 5s were required, the
Corporation believes that during 1996 all Section 16(a) filing requirements
applicable to its officers and Directors were complied with. The Corporation has
no shareholders who are ten percent beneficial owners.

SELECTION OF AUDITORS

Ernst & Young LLP has been appointed to serve as the Independent
Auditor for the Corporation and its subsidiary for the fiscal year ended
December 31, 1996. It is the intention of the Corporation to appoint Ernst &
Young LLP as Independent Auditor for 1997. Representatives of Ernst & Young LLP
are expected to be present at the Annual Meeting to respond to appropriate
questions from shareholders and to have the opportunity to make any statements
they consider appropriate.

14
17

SHAREHOLDER PROPOSALS

Any proposals to be considered for inclusion in the proxy material to
be provided to shareholders of the Corporation for its next annual meeting, to
be held in 1998, must be made by a qualified shareholder and must be received by
the Corporation no later than November 20, 1997.

OTHER MATTERS

The Board of Directors of the Corporation is not aware of any other
matters that may come before the meeting. However, the enclosed Proxy will
confer discretionary authority with respect to matters which are not known to
the Board of Directors at the time of printing hereof and which may properly
come before the meeting. A copy of the Corporation's 1996 report filed with the
Securities and Exchange Commission, on Form 10-K, will be available without
charge to shareholders on request. Address all requests, in writing, for this
document to Michael P. Killian, Senior Vice President, Capital Holdings, Inc.,
5520 Monroe Street, Sylvania, Ohio 43560.

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18
OFFICIAL PROXY

THIS PROXY IS SOLICITED BY MANAGEMENT AND UNLESS OTHERWISE MARKED, WILL BE VOTED
FOR THE PROPOSALS.

Be it known, that John S. Szuch and Robert A. Sullivan, or either of them, are
appointed attorneys or attorney, with full power of substitution, including the
right to vote cumulatively for and in the name of the undersigned, all shares of
stock of Capital Holdings, Inc. which the undersigned is entitled to vote at the
Annual Meeting of the Stockholders of said company scheduled to be held at 6:30
p.m., April 17, 1997, at FRANCISCAN CENTER, LOURDES COLLEGE, Sylvania, Ohio
43560, or at any adjournment of recess thereof, such proxies being directed to
vote as specified below and being authorized to vote in their discretion on any
matter to come before the meeting and as to which a specified vote is not
requested.

PROPOSAL 1. TO RE-ELECT THE FOLLOWING DIRECTORS TO SERVE FOR THE TERM INDICATED.
PLEASE MARK AN "X" IN THE APPROPRIATE BOX. MANAGEMENT RECOMMENDS A "FOR" VOTE ON
THE PROPOSAL.

[ ] FOR [ ] WITHHOLD AUTHORITY
To vote for all nominees listed below

CLASS TERM EXPIRES
- --------------------------
Class I 2000

1. James M. Appold NOTE: Directors Landin, Langenderfer, Levine,
2. David P. Bennett Romanoff, and Sullivan are members of Class II whose
3. Yale M. Feniger terms will expire in 1998. Directors Isaac, Lyden,
4. Thomas W. Noe Sayre, Szuch, and Tuschman are members of Class III
whose terms will expire in 1999.

To withhold authority to vote for any individual nominee, write that name on the
line.

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PROPOSAL 2. TO TRANSACT SUCH BUSINESS AS MAY LAWFULLY COME BEFORE THE
STOCKHOLDERS AT SUCH ANNUAL MEETING.

If the above ballot is not marked, such proxies are authorized to vote the
shares represented by this Proxy in accordance with their discretion.

ALL FORMER PROXIES ARE HEREBY REVOKED Number of shares: ______________

Date Signed:____________________
_______________________________________
Titling of Stock

________________________________ __________________________________
Signature of Stockholder Signature of Stockholder

(All joint owners should sign. When signing in fiduciary capacity or as a
corporate officer, please give your full title as such.)