-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BFYRuAn8bgUipn9S952m8cBlFxfqgAT9xgjZ7lOrk1Q+gauBtdjB9omGoAokyPn3 r1aB3S30i2KqhCg2eE3UsA== 0000916641-99-000798.txt : 19990915 0000916641-99-000798.hdr.sgml : 19990915 ACCESSION NUMBER: 0000916641-99-000798 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990914 ITEM INFORMATION: FILED AS OF DATE: 19990914 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITY HOLDING CO CENTRAL INDEX KEY: 0000726854 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 550619957 STATE OF INCORPORATION: WV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11733 FILM NUMBER: 99711432 BUSINESS ADDRESS: STREET 1: 25 GATEWATER ROAD STREET 2: P O BOX 7520 CITY: CHARLESTON STATE: WV ZIP: 25313 BUSINESS PHONE: 3047691102 MAIL ADDRESS: STREET 1: 25 GATEWATER ROAD STREET 2: P O BOX 7520 CITY: CHARLESTON STATE: WV ZIP: 25313 8-K 1 CITY HOLDING COMPANY 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 14, 1999 CITY HOLDING COMPANY (Exact name of registrant as specified in its charter) West Virginia 0-17733 55-0619957 (State or other jurisdiction of (Commission File No.) (IRS Employer Identification incorporation or organization) Number)
25 Gatewater Road Charleston, West Virginia, 25313 (Address of principal executive officers) (304) 769-1100 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) ITEM 5. OTHER EVENTS Attached hereto as Exhibit 99 is a report to the shareholders of City Holding Company (the "Company") for the quarter ended June 30, 1999, together with a letter from the Company's President and Chief Executive Officer, Steven J. Day. This letter contains, among other things, certain forward-looking statements, including statements made about the integration of Horizon Bancorp, Inc. ("Horizon") and a possible joint venture with another loan service corporation. Such forward-looking statements involve certain risks and uncertainties, including a variety of factors that may cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) expected cost savings from the integration of Horizon may not be fully realized within the expected time frame; (2) the Company may not complete its proposed joint venture with another loan service corporation, or the results of the joint venture may not be as favorable as currently anticipated; (3) competitive pressures among depository and other financial institutions may increase significantly; (4) costs or difficulties related to the integration of Horizon may be greater than expected; (5) changes in the interest rate environment may reduce margins; (6) general economic or business conditions, either nationally or in the states or regions in which the Company does business, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit; (7) legislative or regulatory changes may adversely affect the businesses in which the Company is engaged; and (8) changes may occur in the securities markets. Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CITY HOLDING COMPANY Date: September 14, 1999 By: /s/ Michael D. Dean ---------------------------------- Michael D. Dean Senior Vice President - Finance, Principal Accounting Officer and Duly Authorized Officer EX-99 2 EXHIBIT 99 EXHIBIT 99 LETTER TO SHAREHOLDERS: The financial performance for the second quarter of 1999 was slightly down from the same period of 1998. Reported earnings for the quarter were $6.99 million or 42 cents per share compared to $7 million or 41 cents per share for three months ended June 30, 1998. City Holding Company reported earnings of $12.24 million or 73 cents per share for the six months ended June 30, 1999 compared to $13.74 million or 81 cents per share for the six months ended June 30, 1998. The return on average assets for the second quarter of 1999 was 1.03% compared to 1.13% for the second quarter of 1998. The return on average shareholder's equity for the second quarter of 1999 was 12.68% compared to 11.85% for the second quarter of 1998. For the first six months of 1999 return on average assets was .91% compared to 1.13% for the six months ended June 30, 1998. Return on average equity was 11.08% and 11.95% for the six months ended June 30, 1999 and 1998, respectively. During the second quarter of 1999, City Holding Company completed the sale of six branch locations as part of the Company's continuing reorganization following its merger of Horizon Bancorp. As a result of the divestitures, other income included a tax effected $5.18 million that was associated with the gain of the sale of those branch offices. Conversely, the integration of the former Horizon banks has not occurred as smoothly or as quickly as originally anticipated due to problems with operational restructuring. The problems have been identified and are being corrected in the normal course of business and are temporary by nature. However, until the corrections are completed it is creating significant expenses due to extra personnel and overtime, temporary employment services and outside professional services. Also, it has impeded management's ability to realize the cost savings associated with the merger of Horizon, which occurred on December 31, 1998. Management anticipates having the non-recurring expenses eliminated by early in the fourth quarter of 1999 and to begin to experience cost savings of the full consolidation of its operations thereafter. City Mortgage Services, which services almost $2 billion in loans, is also working towards a joint venture with another loan servicing operation. Those companies have signed a non-binding letter of intent to spin-off their separate operations into a new company. Management views this as extremely valuable to City Holding Company. Finally, the work of positioning City Holding Company for the future has required a great deal of effort from the many people in the organization. Their teamwork continues to provide the foundation for building shareholder value. As we diligently work to improve our financial results and complete this combination of our operations, we appreciate the support and continued goodwill of our shareholders. Yours truly, /s/ Steven J. Day Steven J. Day President & CEO CONSOLIDATED BALANCE SHEETS CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS)
JUNE 30 December 31 June 30 1999 1998 1998 ---------------------------------------------------------------- (UNAUDITED) (UNAUDITED) ASSETS Cash and due from banks $ 101,765 $ 87,866 $ 87,832 Federal funds sold 439 31,911 12,835 ---------------------------------------------------------------- CASH AND CASH EQUIVALENTS 102,204 119,777 100,667 Securities available for sale, at fair value 380,650 356,659 335,587 Securities held-to-maturity (approximate fair value at December 31, 1998 and June 30, 1998 - $40,539 - 39,063 40,430 and $41,572) Loans: Gross loans 1,734,396 1,715,929 1,689,188 Allowance for loan losses (18,795) (17,610) (18,464) ---------------------------------------------------------------- NET LOANS 1,715,601 1,698,319 1,670,724 Loans held for sale 105,918 246,287 194,959 Premises and equipment 68,132 71,094 67,103 Accrued interest receivable 22,975 21,660 19,597 Other assets 209,328 153,145 112,940 ---------------------------------------------------------------- TOTAL ASSETS $2,604,808 $2,706,004 $2,542,007 ================================================================ LIABILITIES Deposits: Noninterest-bearing $ 248,027 $ 303,421 $ 295,008 Interest-bearing 1,681,669 1,760,994 1,698,207 ---------------------------------------------------------------- TOTAL DEPOSITS 1,929,696 2,064,415 1,993,215 Short-term borrowings 216,357 183,418 155,678 Long-term debt 100,472 102,719 87,267 Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts holding solely subordinated debentures of City Holding Company 87,500 87,500 30,000 Other liabilities 54,411 47,893 33,827 ---------------------------------------------------------------- TOTAL LIABILITIES 2,388,436 2,485,945 2,299,987 STOCKHOLDERS' EQUITY Preferred stock, par value $25 per share: authorized - 500,000 shares: none issued Common stock, par value $2.50 per share: 50,000,000 shares authorized; issued and outstanding 16,853,051, 16,820,276, and 17,095,417 shares as of June 30, 1999, December 31, 1998, and June 30, 1998, respectively, including 17,199, 10,000, and 42,133 42,051 42,740 213,702 shares, respectively, in treasury Capital surplus 58,685 58,365 66,994 Retained earnings 125,723 120,209 134,896 Cost of common stock in treasury (535) (274) (5,643) Accumulated other comprehensive (loss) income (9,634) (292) 3,033 ---------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 216,372 220,059 242,020 ---------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,604,808 $2,706,004 $2,542,007 ================================================================
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
Six Months Ended June 30 1999 1998 --------------------------------------- INTEREST INCOME Interest and fees on loans $84,804 $82,918 Interest on investment securities: Taxable 8,530 8,937 Tax-exempt 2,551 2,409 Other interest income 2,783 1,490 --------------------------------------- TOTAL INTEREST INCOME 98,668 95,754 INTEREST EXPENSE Interest on deposits 36,370 36,259 Interest on short-term borrowings 4,549 4,561 Interest on long-term debt 2,999 2,715 Interest on trust preferred securities 3,996 694 --------------------------------------- TOTAL INTEREST EXPENSE 47,914 44,229 --------------------------------------- NET INTEREST INCOME 50,754 51,525 Provision for loan losses 4,643 2,467 --------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 46,111 49,058 OTHER INCOME Investment securities gains (losses) 48 (6) Service charges 4,507 4,541 Mortgage loan servicing fees 11,302 8,009 Net origination fees on junior-lien mortgages 4,031 6,217 Gain on sale of loans 5,208 7,333 Other income 17,034 7,630 --------------------------------------- TOTAL OTHER INCOME 42,130 33,724 OTHER EXPENSES Salaries and employee benefits 28,991 25,872 Occupancy, excluding depreciation 6,651 3,937 Depreciation 5,619 4,585 Advertising 9,353 9,281 Other expenses 18,140 17,881 --------------------------------------- TOTAL OTHER EXPENSES 68,754 61,556 --------------------------------------- INCOME BEFORE INCOME TAXES 19,487 21,226 INCOME TAXES 7,248 7,490 --------------------------------------- NET INCOME $12,239 $13,736 ======================================= Basic earnings per common share $0.73 $0.82 ======================================= Diluted earnings per common share $0.73 $0.81 ======================================= Average common shares outstanding: Basic 16,820 16,760 ======================================= Diluted 16,820 16,866 =======================================
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
Three Months Ended June 30 1999 1998 --------------------------------------- INTEREST INCOME Interest and fees on loans $41,096 $43,198 Interest on investment securities: Taxable 4,256 4,349 Tax-exempt 1,263 1,206 Other interest income 1,458 948 --------------------------------------- TOTAL INTEREST INCOME 48,073 49,701 INTEREST EXPENSE Interest on deposits 17,773 19,152 Interest on short-term borrowings 2,591 1,940 Interest on long-term debt 1,356 1,248 Interest on trust preferred securities 1,998 686 --------------------------------------- TOTAL INTEREST EXPENSE 23,718 23,026 --------------------------------------- NET INTEREST INCOME 24,355 26,675 Provision for loan losses 2,229 1,238 --------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 22,126 25,437 OTHER INCOME Investment securities gains (losses) 6 9 Service charges 2,322 2,404 Mortgage loan servicing fees 5,617 4,126 Net origination fees on junior-lien mortgages 3,838 4,071 Gain on sale of loans 4,483 4,775 Other income 11,445 4,166 --------------------------------------- TOTAL OTHER INCOME 27,711 19,551 OTHER EXPENSES Salaries and employee benefits 13,779 13,621 Occupancy, excluding depreciation 3,307 2,175 Depreciation 2,991 2,429 Advertising 8,233 6,104 Other expenses 9,825 9,855 --------------------------------------- TOTAL OTHER EXPENSES 38,135 34,184 --------------------------------------- INCOME BEFORE INCOME TAXES 11,702 10,804 INCOME TAXES 4,708 3,805 --------------------------------------- NET INCOME $6,994 $6,999 ======================================= Basic earnings per common share $0.42 $0.41 ======================================= Diluted earnings per common share $0.42 $0.41 ======================================= Average common shares outstanding: Basic 16,820 16,879 ======================================= Diluted 16,820 17,042 =======================================
SELECTED FINANCIAL SUMMARY CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS, EXCEPT PER SHARE DATA)
JUNE 30, 1999 1998 ----------------------------------------------------- FOR THE SIX MONTHS ENDED: PER SHARE DATA: Basic earnings per common share $ 0.73 $ 0.82 Diluted earnings per common share 0.73 0.81 SELECTED RATIOS: Return on Average Assets 0.91% 1.13% Return on Average Equity 11.08 11.95 Average Equity to Average Assets 8.20 9.52 FOR THE THREE MONTHS ENDED: PER SHARE DATA: Basic earnings per common share $ 0.42 $ 0.41 Diluted earnings per common share 0.42 0.41 SELECTED RATIOS: Return on Average Assets 1.03% 1.13% Return on Average Equity 12.68 11.85 Average Equity to Average Assets 8.14 9.56 AT PERIOD END: Net Loans $ 1,715,601 $ 1,670,724 Securities 380,650 376,017 Deposits 1,929,696 1,993,215 Stockholders' Equity 216,372 242,020 Total Assets 2,604,808 2,542,007 Book value per common share 12.85 14.34
TWO YEAR SUMMARY OF COMMON STOCK PRICES AND DIVIDENDS
MARKET VALUE CASH DIVIDENDS PER SHARE LOW HIGH ----------------------------------------------------------------- 1999 SECOND QUARTER $0.200 $25.750 $32.250 First Quarter 0.200 24.813 31.250 1998 Fourth Quarter 0.200 30.000 37.125 Third Quarter 0.190 34.250 44.875 Second Quarter 0.190 41.000 48.000 First Quarter 0.190 41.500 51.000 1997 Fourth Quarter 0.190 39.875 42.375 Third Quarter 0.180 32.250 43.250
City Holding Company's common stock trades on The Nasdaq Stock Market under the symbol CHCO. The table above sets forth the cash dividends paid per share and information regarding the market prices per share of the Company's common stock for the periods indicated. The price ranges are based on transactions as reported on The Nasdaq Stock Market. CITY HOLDING COMPANY SUBSIDIARIES AND DIVISIONS www.cityholding.com CITY NATIONAL BANK OF WEST VIRGINIA Community banking subsidiary of City Holding Company Main Office: 3601 MacCorkle Avenue, S.E. Charleston, West Virginia www.citynational-bank.com DEL AMO SAVINGS BANK, FSB Community banking subsidiary of City Holding Company Main Office: 3422 Carson Street Torrance, California FRONTIER STATE BANK Community banking subsidiary of City Holding Company Main Office: 2233 Artesia Boulevard Redondo Beach, California CITY FINANCIAL CORPORATION Investment brokerage subsidiary of City Holding Company Main Office: 3601 MacCorkle Avenue, S.E. Charleston, West Virginia www.cityfinancialcorp.com CITY MORTGAGE SERVICES Loan origination and servicing division of City National Bank Main Office: 25 Gatewater Road Cross Lanes, West Virginia www.citymortgageservices.com CITYNET Internet service and web site development division of City National Bank Main Office: 25 Gatewater Road Cross Lanes, West Virginia www.citynet.net JARRETT/AIM COMMUNICATIONS Printing and direct mail division of City National Bank Main Office: 900 Christopher Street Charleston, West Virginia www.jarrett-aim.com RMI, LTD. Insurance brokerage division of City National Bank Main Office: 1 Wall Street Winfield, West Virginia www.rmiltd.com CITY HOLDING COMPANY, A WEST VIRGINIA CORPORATION HEADQUARTERED IN CHARLESTON, WEST VIRGINIA, IS A MULTI-BANK HOLDING COMPANY THAT PROVIDES DIVERSIFIED FINANCIAL PRODUCTS AND SERVICES TO CONSUMERS AND LOCAL BUSINESSES. THROUGH ITS NETWORK OF 65 BANKING OFFICES IN WEST VIRGINIA, OHIO, AND CALIFORNIA, THE COMPANY PROVIDES CREDIT, DEPOSIT, INVESTMENT ADVISORY, INSURANCE AND TECHNOLOGY PRODUCTS AND SERVICES TO ITS CUSTOMERS. CITY HOLDING COMPANY BOARD OF DIRECTORS SAMUEL M. BOWLING C. DALLAS KAYSER President, Dougherty Co., Inc. Attorney Vice Chairman of the Board, City Holding Company BERNARD C. MCGINNIS, III Vice Chairman of the Board, PHILLIP W. CAIN City Holding Company Executive Vice President, City National Bank THOMAS L. MCGINNIS Executive Vice President, DR. D. K. CALES City National Bank Dentist PHILIP L. MCLAUGHLIN HUGH R. CLONCH Chairman of the Board, President, City Holding Company Clonch Industries, Inc. LEON K. OXLEY STEVEN J. DAY Partner, President & Chief Executive Officer, Frazier & Oxley, LC City Holding Company E. M. PAYNE, III WILLIAM C. DOLIN Partner, Retired, File, Payne, Scherer & File Dolin Supply Co. R. T. ROGERS ROBERT D. FISHER President & Chief Executive Officer, Partner, R. T. Rogers Oil Co. Adams, Fisher & Evans MARK H. SCHAUL JAY C. GOLDMAN President, President, Charmar Realty Company Goldman & Associates JAMES E. SONGER, SR. DAVID E. HADEN Retired, President, Songer Insurance, Inc. RMI, Ltd. ALBERT M. TIECHE, JR. DAVID W. HAMBRICK President, Vice President, BHI, Inc. City Holding Company DIRECTORS EMERITUS FRANK S. HARKINS, JR. George F. Davis Retired, William M. Frazier Bank of Raleigh Jack E. Fruth Vitus Hartley, Jr. CARLIN K. HARMON Dale Nibert Former President & CEO, First State Bank & Trust TRACY W. HYLTON, II President, Eller, Inc.
CITY NATIONAL BANK BOARD OF DIRECTORS JACK ALLEN CLARENCE MARTIN JACK BAZEMORE CURTIS MCCALL SAMUEL M. BOWLING HAROLD PAYNE OSHEL CRAIGO PAT REED STEVEN J. DAY JAMES ROSSI WILLIAM FILE SHARON ROWE SCOTT GIBSON MICHAEL SELLARDS ROBERT GRIST CHARLES SMITH CAROL KABLE PAUL TURMAN, II BARRY KEMERER CECIL WILLIAMS JACK KLIM MARY HOOTEN WILLIAMS TOM LILLY LEE WILSON TIMOTHY J. MANCHIN -----END PRIVACY-ENHANCED MESSAGE-----