11-K 1 d11k.txt FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________ FORM 11-K ANNUAL REPORT __________ Pursuant to Section 15(d) of the Securities Act of 1934 For the year ended December 31, 2001 __________ City Holding Company Profit Sharing and 401(k) Plan __________ City Holding Company 25 Gatewater Road Cross Lanes, West Virginia 25313 __________ City Holding Company Profit Sharing and 401(k) Plan Form 11-K Year ended December 31, 2001 Required Information The City Holding Company Profit Sharing and 401(k) Plan (the Plan) is subject to the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Accordingly, in lieu of the requirements of Items 1-3 of this section, the Plan is filing financial statements and supplemental schedules prepared in accordance with the financial reporting requirements of ERISA. The following financial statements and supplemental schedules, attached hereto, are filed as part of the Annual Report: Report of Independent Auditors 1 Statements of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-10 Schedule H, Line 4(i) - Schedule of Assets Held for Investment Purposes at End of Year 11 Schedule H, Line 4(j) - Schedule of Reportable Transactions 12
Item 9(b) - Exhibits: Exhibit 24(c) - Consent of Independent Auditors Report of Independent Auditors Board of Directors City Holding Company We have audited the accompanying statements of net assets available for benefits of City Holding Company Profit Sharing and 401(k) Plan (the Plan) as of December 31, 2001 and 2000, and the related statement of changes in net assets available for benefits for the year ended December 31, 2001. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2001 and 2000, and the change in its net assets available for benefits for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held at December 31, 2001, and reportable transactions for the year then ended are presented for the purpose of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP June 25, 2002 1 City Holding Company Profit Sharing and 401(k) Plan Statements of Net Assets Available for Benefits
December 31 2001 2000 --------------------------------------------- Assets Cash and cash equivalents $ 4,230,917 $ 1,166 Investments at fair value: Mutual and commingled funds 1,081,293 6,162,865 Common stock of City Holding Company 4,538,019 1,865,099 Participant loans 275,679 207,260 Receivables: Employer contributions - 43,805 Participant contributions - 100,192 --------------------------------------------- Net assets available for benefits $ 10,125,908 $ 8,380,387 =============================================
See accompanying notes. 2 City Holding Company Profit Sharing and 401(k) Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2001 Additions Contributions and income: Contributions from employer $ 473,315 Contributions from employees 1,137,719 Interest and dividends 155,236 ----------------- Total contributions and income 1,766,270 Deductions Withdrawals and benefit payments (1,656,736) ----------------- 109,534 Net realized and unrealized appreciation in fair value of investments 1,594,255 Transfer from City Holding Company Employee Stock Ownership Plan Money Purchase 41,732 Net assets available for benefits at beginning of year 8,380,387 ----------------- Net assets available for benefits at end of year $ 10,125,908 =================
See accompanying notes. 3 1. Significant Accounting Policies Basis of Accounting The accounting records of the City Holding Company Profit Sharing and 401(k) Plan (the Plan) are maintained on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Cash Equivalents Cash and cash equivalents at December 31, 2001, primarily represent the liquidation of certain investments to be transferred in connection with the transfer of the Plan's assets to the new trustee, City National Bank of West Virginia. Cash equivalents are short-term, highly liquid investments. The market value of cash equivalents approximates cost. Investments The Plan determines the fair value of its investment in City Holding Company common stock based on the stock's quoted trade price. Investments in mutual and commingled funds are valued at the Plan's proportionate share of the quoted fair value of net assets in each fund as of December 31, 2001 and 2000. Included in the Mutual and Commingled Funds on the Statement of Net Assets Available for Benefits is a group annuity contract that represents an investment in a Deposit Administration Fund maintained by an insurance company. Interest is credited to the Deposit Administration Fund, compounded annually, and is determined by annual interest rates which will not be less than 4.25% and 5% for the 2001 and 2000 contract years (as specified in the contract), respectively. At least 30 days prior to the expiration of the interest guarantees, the Hartford Life Insurance Company shall advise the Plan of new interest guarantees that apply to the contract. In addition to the interest guarantees above, a long-term guaranteed interest rate of 3% applies to all contributions and earnings received and applies for the life of the contract. The group annuity 4 1. Significant Accounting Policies (continued) contract is valued at cost plus reinvested income, which approximates fair value. Participant directed transfers might be made under the contract. Such transfers will not be subject to withdrawal charges, market value adjustments, or penalties provided that the amount of the withdrawal, when added to the sum of all withdrawals during the preceding twelve months, does not exceed 12% of the balance of the fund twelve months earlier. Such withdrawals are subject to the consent of the insurance company. Each participant may designate the percentage of his or her contributions to be invested into any of the five investment options, offered by the Plan. 2. Description of Plan The following description of the Plan provides general information. Participants should refer to the summary Plan description for a complete description of the Plan's provisions. The Plan, which was adopted and became effective January 1, 1991, is a defined contribution savings and profit sharing plan covering all employees of City Holding Company and its subsidiaries (the Company) who have completed one year of service and attained the age of 21. Effective January 1, 2002, employees are eligible for participation in the plan the first day of the month subsequent to date of hire or attaining the age of 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Company's contribution consists of a 50% match of the first 6% of each eligible participant's contribution. Matching contributions are made with common stock of the Plan sponsor, City Holding Company. Effective January 1, 2002, matching contributions by the Company are directed by the participant's investment elections. Participants may elect to contribute, on a salary-deferral basis, up to 15% of annual compensation, subject to federal income tax limits. Included in participant contributions are approximately $31,000 and $38,000 in 2001 and 2000, respectively, of participant account balances rolled-over from previous employer plans. 5 2. Description of Plan (continued) Vesting Effective November 1, 2001, vesting for participant's accounts affected by certain business divestures of the Company were fully vested based upon the following dates: City Mortgage Services effective July 2, 1999; CityNet effective April 30, 2001; and Jarrett/Aim Communications effective May 31, 2001. The remaining participants not affected by the divestitures were fully vested in their account balance effective December 31, 1995. Prior to November 1, 2001, participants were immediately fully vested in their voluntary contributions and employer matching contributions, plus actual earnings thereon. A participant became vested in discretionary profit sharing contributions as follows: Vested Percentage of Years of Service Employer Contributions ------------------------------------------------------------- Less than 2 0% 3 20 4 40 5 60 6 80 7 or more 100 There were no discretionary profit sharing contributions during 2001 or 2000. Forfeitures of terminated participants' non-vested account balances are allocated to eligible participants who are employed based upon the dates discussed above regarding vesting. Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the plan subject to the provisions of ERISA. Benefits Benefits, representing each participant's share in the Plan, are generally payable upon the participating employee's death, retirement, disability, or separation from the Company. Benefits are payable in the form of cash, stock, or a combination thereof. 6 3. Federal Income Taxes The Plan has received a determination letter from the Internal Revenue Service dated August 27, 1992, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax-exempt. As further discussed in Note 6, the Plan was amended effective January 1, 2002. A determination letter as to the tax status of the amended Plan has been requested by the Plan. 4. Related Party Transactions The Company provides certain accounting and administrative services to the Plan without charge. The Company also pays certain administrative costs on behalf of the Plan, including legal and accounting fees. Effective January 1, 2002, City National Bank of West Virginia, a subsidiary of the Company, became the trustee of the Plan's assets. 5. Investments During 2001, the Plan's five investments (including investments purchased and sold as well as those held during the year) appreciated in fair value as determined by quoted market prices as follows: Net Realized and Unrealized Appreciation (Depreciation) in Fair Value of Investments -------------- Common Stock $ 2,078,024 Mutual and Commingled Funds (483,769) -------------- Total $ 1,594,255 ============== 7 5. Investments (continued) The fair values of individual investments that represent 5% or more of the Plan's net assets are as follows:
December 31 2001 2000 -------------------------------- * City Holding Company Common Stock $ 4,538,019 $ 1,865,099 Fidelity Advisor Short Fixed Income Fund 49,215 871,614 Fidelity Advisor Growth Opportunity Fund 17,305 2,212,670 Fidelity Advisor Balanced Fund 11,079 1,559,558 Group Annuity Contract 912,012 1,016,037 * Nonparticipant directed and party-in-interest
Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant directed investments is a follows:
December 31 2001 2000 -------------------------------- Net assets: City Holding Company common stock, at fair value $ 4,538,019 $ 1,865,099 Cash and cash equivalents 1,776 929 Contribution receivable - 63,131 -------------------------------- Total $ 4,539,795 $ 1,929,159 ================================
8 5. Investments (continued)
Year Ended December 31 2001 --------------- Change in net assets: Contributions from employer $ 473,315 Contributions from employees 275,628 Interfund transfers 291,590 Interest and dividends 356 Transfer from City Holding Company Employee Stock Ownership Plan Money Purchase 41,732 Net realized and unrealized appreciation in fair value 2,078,024 Distribution to participants (550,009) --------------- Net change $ 2,610,636 ===============
6. Subsequent Events Effective January 1, 2002, the Board of Directors of the Company approved changing the name of the Plan to the City Holding Company 401(k) Plan and Trust. In addition, the Board of Directors of the Company approved the merger of the Horizon Bancorp 401(k) Plan (Horizon Plan) into the City Holding Company 401(k) Plan. The net assets that approximated $1.6 million of the Horizon Plan were transferred to the City Holding Company 401(k) Plan trustee on January 7, 2002. Effective November 1, 2001, the Board of Directors of the Company approved the merger of the City Holding Company Employee Stock Ownership Bonus Plan and City Holding Company Employee Stock Ownership Plan Money Purchase (collectively the ESOP Plans) into the Plan. The ESOP Plans' benefits are completely financed with Company stock. Approximately 446,000 shares of Company stock were transferred to the City Holding Company 401(k) Plan trustee on January 8, 2002 to be added to the respective participant's account balance. 9 7. Differences Between Financial Statements and Form 5500 For purposes of Form 5500, amounts allocated to withdrawn participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to year end but not paid as of year end. For financial reporting purposes, these amounts are not recorded. The amounts allocated to withdrawn participants not yet paid as of December 31, 2001 and 2000, were $8,301 and $509,176, respectively. 10 City Holding Company Profit Sharing and 401(k) Plan Plan: 002 EIN: 550619957 Schedule H, line 4(i) - Schedule of Assets Held for Investment Purposes at End of Year December 31, 2001
Current Shares/Units Description Cost Value ------------------------------------------------------------------------------------------------------------- Common stock: 376,912 * City Holding Company common stock $ 7,119,667 $ 4,538,019 Investments in mutual or commingled funds: 5,264 Fidelity Advisor Short Fixed Income Fund NR 49,215 602 Fidelity Advisor Growth Opportunity Fund NR 17,305 713 Fidelity Advisor Balanced Fund NR 11,079 6,629 Fidelity Advisor Overseas Fund NR 91,682 912,012 Group Annuity Contract NR 912,012 -------------------------------- - 1,081,293 Cash and cash equivalents Cash NR 3,926,709 Evergreen Money Market Trust U.S . Government Money Market Fund NR 304,208 -------------------------------- - 4,230,917 Participant loans (annual interest rates ranging from 6% to 10.21%) NR 275,679 -------------------------------- Total $ 7,119,667 $ 10,125,908 ================================
* Party-in-interest NR (Not Required) 11 Plan: 002 EIN: 550619957 Schedule H, line 4(j) - Schedule of Reportable Transactions Year ended December 31, 2001
Number Total Number Total Total of Cost of Cost Proceeds Loss Units of Units of from on Purchased Purchase Sold Sales Sales Sales -------------------------------------------------------------------------- Category (iii)--Series of Transactions in Excess of 5% of Plan Assets * City Holding Company Common Stock 99,853 $ 1,041,523 34,436 $ 590,134 $ 333,781 $ (256,353) * Party-in-interest
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