-----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, WMwjN3tmivdLYjviit2BjEwZMCHEXYsQOZTAcpxh+rDVVs1tOl+xkCYNd5FiIYSP Zz7skMDPgWFmw1iqzAgJ4g== 0000916641-99-000957.txt : 19991217 0000916641-99-000957.hdr.sgml : 19991217 ACCESSION NUMBER: 0000916641-99-000957 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991114 ITEM INFORMATION: FILED AS OF DATE: 19991216 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: 99776044 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 HOLDINGS FORM 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): December 16, 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 September 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 plan adopted by the Board of Directors to improve the Company's earnings and the resulting impact to the market value of the Company's common stock, expected expense reductions, more predictable earnings streams from mortgage banking operations, a return to higher levels of loan quality, and a return to higher growth levels for the bank. 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) the expense reductions anticipated as a result of implementing the plan adopted by the Board of Directors may not be fully realized; (2) staffing reductions and compensation adjustments may not be completed with the anticipated result; (3) overall loan quality may not improve as expected, (4) competitive pressures among depository and other financial institutions may increase significantly; (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: December 16, 1999 By: /s/ Michael D. Dean ---------------------------------- Michael D. Dean Senior Vice President - Finance, Chief Accounting Officer and Duly Authorized Officer EX-99 2 EXHIBIT 99 EXHIBIT 99 LETTER TO SHAREHOLDERS: The Company's net income for the third quarter of 1999 was $2.32 million or $0.14 per share compared to $6.58 million or $0.39 per share for the three months ended September 30, 1998. For the nine months ended September 30, 1999, the Company reported earnings of $14.56 million or $0.86 per share compared to $20.31 million or $1.20 per share for the nine months ended September 30, 1998. The return on average assets and return on average equity for the third quarter of 1999 was 0.34% and 4.27%, respectively, compared to 1.00% and 10.95%, respectively, for the third quarter of 1998. For the nine months ended September 30, 1999, the return on average assets and return on average equity was 0.71% and 8.81%, respectively, compared to 1.08% and 11.51%, respectively, for the nine months ended September 30, 1998. Based on the last several months of operations, trends are improving and earnings are headed upwards. Also, the Board of Directors has adopted a plan to resolve the short-term earnings downturn and more importantly, approved a plan to return the Company to its former level of earnings and the corresponding stock performance. The plan involves the previously mentioned bank consolidation initiative, certain balance sheet restructuring and actions to bring other business lines into profitability. The expected results are dramatic expense reductions, more predictable earnings streams from the mortgage banking operations located on the West Coast, a return to higher levels of overall loan quality and a return to higher growth levels for the bank. Specifically, the bank consolidation and expense reduction program will provide the right sizing and centralization of operations and support needed for improved performance at the bank. Although additional short-term expenses have impacted current earnings, the long-term value of this exercise is expected to provide a recurring return to shareholders. The Company has undertaken the task of rewriting the staffing model for the bank. This action is resulting in the elimination of positions formerly maintained at each of the 16 banks and also adjusts compensation levels to the level of responsibility of the various positions within the bank. To reach the Company's goal of being a high performing bank these actions are difficult but necessary. Management and the Board of Directors believe they have put the proper mechanisms in place to accomplish this goal. Finally, the return of the bank to its former growth and profitability levels will provide opportunities and fuel future improvements in the financial performance of the Company. Although these mentioned actions are not all inclusive of the Board's and Management's plan, they impact the Company's operations most significantly. The Company is trending in a positive manner and taking actions to improve the overall financial performance of City Holding Company. City has been a leader in growth and earnings over the decade and the stock has correspondingly performed in the same manner. City is a very strong company with a history of repeated years of record performance. A strong commitment from management, the Board of Directors and the employees to return the Company to those higher levels is continuing. Your continued support is appreciated and we look forward to a good year in 2000 and beyond. Yours truly, /s/ Steven J. Day Steven J. Day President & CEO CONSOLIDATED BALANCE SHEETS CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS)
SEPTEMBER 30 December 31 September 30 1999 1998 1998 ---------------------------------------------------------------- (UNAUDITED) (UNAUDITED) ASSETS Cash and due from banks $ 100,105 $ 87,866 $ 62,529 Federal funds sold 1,617 31,911 30,254 ---------------------------------------------------------------- CASH AND CASH EQUIVALENTS 101,722 119,777 92,783 Securities available for sale, at fair value 389,700 356,659 335,525 Securities held-to-maturity (approximate fair value at December 31, 1998 and September 30, 1998 - - 39,063 40,415 $40,539 and $42,771) Loans: Gross loans 1,821,401 1,715,929 1,709,320 Allowance for loan losses (20,652) (17,610) (18,542) ---------------------------------------------------------------- NET LOANS 1,800,749 1,698,319 1,690,778 Loans held for sale 113,442 246,287 267,543 Premises and equipment 69,497 71,094 68,853 Accrued interest receivable 24,438 21,660 22,176 Other assets 224,939 153,145 133,385 ---------------------------------------------------------------- TOTAL ASSETS $2,724,487 $2,706,004 $2,651,458 ================================================================ LIABILITIES Deposits: Noninterest-bearing $ 253,439 $ 303,421 $ 273,058 Interest-bearing 1,719,155 1,760,994 1,763,416 ---------------------------------------------------------------- TOTAL DEPOSITS 1,972,594 2,064,415 2,036,474 Short-term borrowings 288,763 183,418 192,066 Long-term debt 106,634 102,719 107,334 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 53,141 47,893 44,080 ---------------------------------------------------------------- TOTAL LIABILITIES 2,508,632 2,485,945 2,409,954 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 16,879,815, 16,820,276, and 17,096,390 shares as of September 30, 1999, December 31, 1998, and September 30, 1998, respectively, including 42,199 42,051 42,740 15,867, 10,000, and 266,037 shares, respectively, in treasury Capital surplus 59,291 58,365 66,910 Retained earnings 124,668 120,209 138,466 Cost of common stock in treasury (491) (274) (8,758) Accumulated other comprehensive (loss) income (9,812) (292) 2,146 ---------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 215,855 220,059 241,504 ---------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,724,487 $ 2,706,004 $ 2,651,458 ================================================================
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
Nine Months Ended September 30 1999 1998 --------------------------------------- INTEREST INCOME Interest and fees on loans $126,121 $126,401 Interest on investment securities: Taxable 12,835 13,018 Tax-exempt 3,785 3,638 Other interest income 3,795 2,367 --------------------------------------- TOTAL INTEREST INCOME 146,536 145,424 INTEREST EXPENSE Interest on deposits 54,142 55,198 Interest on short-term borrowings 7,278 7,252 Interest on long-term debt 4,470 3,680 Interest on trust preferred securities 6,010 1,383 --------------------------------------- TOTAL INTEREST EXPENSE 71,900 67,513 --------------------------------------- NET INTEREST INCOME 74,636 77,911 Provision for loan losses 7,327 4,416 --------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 67,309 73,495 OTHER INCOME Investment securities gains 52 5 Service charges 7,301 7,082 Mortgage loan servicing fees 17,013 12,255 Net origination fees on junior-lien mortgages 4,493 11,486 Gain on sale of loans 5,805 12,811 Other income 20,934 11,265 --------------------------------------- TOTAL OTHER INCOME 55,598 54,904 OTHER EXPENSES Salaries and employee benefits 42,793 39,358 Occupancy, excluding depreciation 8,428 6,338 Depreciation 8,578 7,301 Advertising 10,939 16,353 Other expenses 29,150 28,424 --------------------------------------- TOTAL OTHER EXPENSES 99,888 97,774 --------------------------------------- INCOME BEFORE INCOME TAXES 23,019 30,625 INCOME TAXES 8,462 10,314 --------------------------------------- NET INCOME $ 14,557 $ 20,311 ======================================= Basic earnings per common share $ 0.86 $ 1.21 ======================================= Diluted earnings per common share $ 0.86 $ 1.20 ======================================= Average common shares outstanding: Basic 16,833 16,791 ======================================= Diluted 16,833 16,912 =======================================
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
Three Months Ended September 30 1999 1998 --------------------------------------- INTEREST INCOME Interest and fees on loans $41,317 $43,483 Interest on investment securities: Taxable 4,305 4,081 Tax-exempt 1,234 1,229 Other interest income 1,012 877 --------------------------------------- TOTAL INTEREST INCOME 47,868 49,670 INTEREST EXPENSE Interest on deposits 17,772 18,939 Interest on short-term borrowings 2,729 2,691 Interest on long-term debt 1,471 965 Interest on trust preferred securities 2,014 689 --------------------------------------- TOTAL INTEREST EXPENSE 23,986 23,284 --------------------------------------- NET INTEREST INCOME 23,882 26,386 Provision for loan losses 2,684 1,949 --------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 21,198 24,437 OTHER INCOME Investment securities gains (losses) 4 11 Service charges 2,794 2,541 Mortgage loan servicing fees 5,711 4,246 Net origination fees on junior-lien mortgages 462 5,269 Gain on sale of loans 216 5,478 Other income 4,281 3,635 --------------------------------------- TOTAL OTHER INCOME 13,468 21,180 OTHER EXPENSES Salaries and employee benefits 13,802 13,486 Occupancy, excluding depreciation 1,777 2,401 Depreciation 2,959 2,716 Advertising 1,586 7,072 Other expenses 11,010 10,543 --------------------------------------- TOTAL OTHER EXPENSES 31,134 36,218 --------------------------------------- INCOME BEFORE INCOME TAXES 3,532 9,399 INCOME TAXES 1,214 2,824 --------------------------------------- NET INCOME $ 2,318 $ 6,575 ======================================= Basic earnings per common share $ 0.14 $ 0.39 ======================================= Diluted earnings per common share $ 0.14 $ 0.39 ======================================= Average common shares outstanding: Basic 16,857 16,850 ======================================= Diluted 16,857 16,995 =======================================
SELECTED FINANCIAL SUMMARY CITY HOLDING COMPANY AND SUBSIDIARIES (IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 1999 1998 ---------------------------------------------------- FOR THE NINE MONTHS ENDED: PER SHARE DATA: Basic earnings per common share $ 0.86 $ 1.21 Diluted earnings per common share 0.86 1.20 SELECTED RATIOS: Return on Average Assets 0.71% 1.08% Return on Average Equity 8.81 11.51 Average Equity to Average Assets 8.10 9.41 FOR THE THREE MONTHS ENDED: PER SHARE DATA: Basic earnings per common share $ 0.14 $ 0.39 Diluted earnings per common share 0.14 0.39 SELECTED RATIOS: Return on Average Assets 0.34% 1.00% Return on Average Equity 4.27 10.95 Average Equity to Average Assets 7.90 9.13 AT PERIOD END: Net Loans $ 1,800,749 $ 1,690,778 Securities 389,700 375,940 Deposits 1,972,594 2,036,474 Stockholders' Equity 215,855 241,504 Total Assets 2,724,487 2,651,458 Book value per common share 12.80 14.36
TWO YEAR SUMMARY OF COMMON STOCK PRICES AND DIVIDENDS
MARKET VALUE CASH DIVIDENDS PER SHARE LOW HIGH --------------------------------------------------------------- 1999 THIRD QUARTER $0.200 $18.125 $30.875 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
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 Partner, Officer, Adams, Fisher & Evans R. T. Rogers Oil Co. 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 Retired, 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 FORWARD-LOOKING STATEMENTS THE LETTER TO SHAREHOLDERS INCLUDED HEREIN MAY INCLUDE FORWARD-LOOKING FINANCIAL INFORMATION WITHIN THE MEANING OF SECTION 27(A) OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. SUCH FORWARD-LOOKING INFORMATION IS IDENTIFIED BY PHRASES SUCH AS "THE COMPANY EXPECTS" OR "ANTICIPATES" AND WORDS OF SIMILAR EFFECT. THE COMPANY'S ACTUAL RESULTS ACHIEVED MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING INFORMATION. THE FORWARD-LOOKING FINANCIAL INFORMATION IS PROVIDED TO ASSIST INVESTORS AND COMPANY STOCKHOLDERS IN UNDERSTANDING ANTICIPATED FUTURE FINANCIAL OPERATIONS OF THE COMPANY AND ARE INCLUDED PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FURTHER, THE COMPANY DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE THIS FORWARD-LOOKING FINANCIAL INFORMATION. -----END PRIVACY-ENHANCED MESSAGE-----