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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission File Number
December 31, 1997 0-11733
CITY HOLDING COMPANY
(Exact name of registrant as specified in its charter)
West Virginia 55-0619957
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
25 Gatewater Road
Cross Lanes, West Virginia 25313
(Address of principal offices)
Registrant's telephone number, including area code: (304) 769-1100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$2.50 Par Value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days. [x] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. [x]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the closing price as of March 10, 1998 (Registrant has
assumed that all of its executive officers and directors are affiliates.
Such assumption shall not be deemed to be conclusive for any other purpose.):
Aggregate Market Value -- $274,206,048
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The number of shares outstanding of the issuer's common stock as of March 10,
1998:
Common Stock, $2.50 Par Value -- 6,456,906 shares
- -------------------------------------------------
The total number of pages are 76 . Exhibit Index is located on page 17 .
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DOCUMENTS INCORPORATED BY REFERENCE
Documents Part of Form 10-K
into which Document
is incorporated
-------------------
Portions of the Annual Part I,Item 1; Part
Report to Shareholders II, Items 5, 6, 7,
of City Holding Company and 8; Part III, Item
for the year ended 13; Part IV, Item 14.
December 31, 1997.
--------
Portions of City Holding Part III, Items 10,
Company's Proxy statement 11, 12 and 13.
for the 1998 Annual
Meeting of Shareholders.
--------
FORM 10-K INDEX
PART I Page
Item 1. Business 4
Item 2. Properties 11
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of
Security Holders 11
PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters 12
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 12
Item 8. Financial Statements and Supplementary Data 12
Item 9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure 12
PART III
Item 10. Directors and Executive Officers of
Registrant 12
Item 11. Executive Compensation 12
Item 12. Security Ownership of Certain Beneficial
Owners and Management 12
Item 13. Certain Relationships and Related
Transactions 13
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 13, 14
Signatures 15
Exhibit Index 17
PART I
Item 1 Business
(a) History
City Holding Company (the Company), a West Virginia corporation
headquartered in Cross Lanes, West Virginia, a suburb of Charleston, commenced
operations in November 1983. The Company currently owns The City National Bank
of Charleston (a wholly-owned subsidiary) (City National) and its banking
divisions, The Peoples National Bank, First State Bank & Trust, The Bank of
Ripley, Home National Bank of Sutton, Blue Ridge Bank, Peoples State Bank, The
First National Bank of Hinton (Hinton), Merchants National Bank, and The Old
National Bank of Huntington. City National and its banking divisions
(collectively, the Bank) are retail and consumer-oriented community banks that
emphasize personal service and currently operate 43 banking offices in 15
counties throughout the state of West Virginia.
Prior to December 1997, these banking divisions of City National
operated as separate affiliates. In December 1997, all banking affiliates'
charters were combined into one, City National. However, as these banks became
divisions of City National, they retained their historical names, management and
Boards of Directors consistent with the Company's historical acquisition policy.
The Company believes that retaining community loyalty is a prudent business
practice and is beneficial in seeking future strategic acquisition opportunities
for small to medium size banks, financial service companies and other entities.
The most recent bank acquisition by the Company was the acquisition of The Old
National Bank of Huntington (Old National) in January 1997, a $49 million bank
located in Huntington, West Virginia. In addition, the Company intends to
acquire Del Amo Savings Bank, FSB, a $115 million federally chartered savings
bank in Torrance, California. This acquisition has been approved by the
shareholders of Del Amo, but remains subject to regulatory approval. The Del Amo
acquisition is expected to be consummated by the end of the first quarter of
1998.
In addition to its banking divisions, as part of its strategy to
diversify and expand into new areas of the financial services area, City
National also operates seven non-banking divisions, City Mortgage Services,
First Allegiance Financial Corporation (First Allegiance), City Credit Services,
RMI, Ltd. (RMI), Jarrett-Aim Communications, Inc. (Jarrett-Aim), City Capital
Markets Corporation, and CNB East Retail.
City Mortgage Services, a mortgage loan servicing division
headquartered in Cross Lanes, West Virginia, was formed to facilitate the
Company's growth of its mortgage servicing portfolio. On December 31, 1996, the
Company acquired certain assets and assumed certain liabilities of Prime
Financial Corporation, a mortgage loan servicing company located in Costa Mesa,
California, which increased the Company's mortgage loan servicing portfolio by
approximately $600 million. This West Coast operation was absorbed into City
Mortgage Services. In December 1997, this division was transferred from the
Company to City National.
In October 1997, City National acquired First Allegiance and created
City Credit Services, both headquartered in Irvine, California, which are
originators of junior lien mortgages for sale to independent third parties.
On December 5, 1997, City National acquired RMI, an insurance agency
located in Winfield, West Virginia. RMI offers a full range of insurance
products and services, including employee benefit programs, key person programs,
benefits consulting services, property and casualty insurance, retirement plans
and deferred compensation plans, to select corporate associations and individual
clients. In January 1998, City National completed its acquisition of Jarrett-Aim
located in Charleston, West Virginia. Jarrett-Aim will print all of the Bank's
forms, manage its warehouse and distribution functions as well as provide
marketing and direct mail service.
City Capital Markets Corporation, a wholly owned subsidiary of City
National, was formed in December 1997 as a limited purpose finance company to
effect the securitization of various types of mortgage loans and financial
assets. CNB East Retail was created during the fourth quarter of 1997 as a
separate retail loan origination division of City National. CNB East Retail is
the east coast complement to the west coast retail originators, First Allegiance
and City Credit Services, previously discussed. The creation of CNB East Retail
gives the Company three separate retail origination platforms from which its
products and services can be marketed.
The Company, in addition to City National and its divisions, owns City
Financial Corporation, a full service securities brokerage and investment
advisory company, headquartered in Charleston, West Virginia with its office
located in City National's main location.
(b) Business
The banking divisions are engaged in the business of banking in West
Virginia by receiving and paying deposits; by negotiating promissory notes,
drafts, bills of exchange and other evidence of debt; by buying and selling
exchange; by loaning money secured by personal or real property, or both; by
dealing in securities and stocks without recourse solely upon order, and for the
account of customers, except for purchases of investment securities for its
account under limitations and restrictions imposed by regulations of the
Comptroller of the Currency; by providing trust services; by supplying credit
card services as a licensee of Visa and MasterCard; by providing safe deposit
box facilities and miscellaneous other services rendered by a full service bank.
No material portion of the banking divisions' deposits are derived from
a single person or a few persons, the loss of any one or more of which could
have a material adverse effect on liquidity, capital, or other elements of
financial performance. No material portion of the banking divisions' loans are
concentrated within a single industry or group of related industries.
The Company is a bank holding company. Consequently, it is generally
dependent upon the Subsidiaries for cash necessary to pay expenses, dividends to
its stockholders, and to meet debt service requirements.
The Company's business is not seasonal and has no foreign sources or
applications of funds. There are no anticipated material capital expenditures,
or any expected material effects on earnings or the Company's competitive
position as a result of compliance with federal, state and local provisions
enacted or adopted relating to environmental protection.
(c) Regulation and Supervision
Bank holding companies and banks operate in a highly regulated
environment and are regularly examined by federal and state regulators. The
following description briefly discusses certain provisions of federal and state
laws and certain regulations and the potential impact of such provisions to
which the Company and its banking divisions are subject. These federal and state
laws and regulations have been enacted for the protection of depositors in
national and state banks and not for the protection of shareholders of bank
holding companies.
Bank Holding Companies
As a bank holding company registered under the Bank Holding Company Act
of 1956, as amended (the "BHCA"), the Company is subject to regulation by the
Federal Reserve Board. The Federal Reserve Board has jurisdiction under the BHCA
to approve any bank or nonbank acquisition, merger or consolidation proposed by
a bank holding company. The BHCA generally limits the activities of a bank
holding company and its subsidiaries to that of banking, managing or controlling
banks, or any other activity which is so closely related to banking or to
managing or controlling banks as to be a proper incident thereto.
Prior to June 1, 1997, federal law prohibited bank holding companies
from any one state to acquire banks and bank holding companies located in any
other state. Subsequent to this date, the law allows interstate bank mergers,
subject to earlier "opt-in" or "opt-out" action by individual states. West
Virginia adopted early "opt-in" legislation that allows interstate bank mergers.
These laws also permit interstate branch acquisitions and de novo branching in
West Virginia by out-of-state banks if reciprocal treatment is accorded West
Virginia banks in the state of the acquiror.
There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by federal law
and regulatory policy that are designed to reduce potential loss exposure to the
depositors of such depository institutions and to the FDIC insurance fund in the
event the depository institution becomes in danger of default or in default. For
example, under a policy of the Federal Reserve Board with respect to bank
holding company operations, a bank holding company is required to serve as a
source of financial strength to its subsidiary depository institutions and to
commit resources to support such institutions in circumstances where it might
not do so otherwise. In addition, the "cross-guarantee" provisions of federal
law require insured depository institutions under common control to reimburse
the FDIC for any loss suffered or reasonably anticipated by the Bank Insurance
Fund (BIF) as a result of the default of a commonly controlled insured
depository institution or for any assistance provided by the FDIC to a commonly
controlled insured depository institution in danger of default. The FDIC may
decline to enforce the cross-guarantee provisions if it determines that a waiver
is in the best interest of the BIF. The FDIC's claim for reimbursement is
superior to claims of shareholders of the insured depository institution or its
holding company but is subordinate to claims of depositors, secured creditors
and holders of subordinated debt (other than affiliates) of the commonly
controlled insured depository institution.
The Federal Deposit Insurance Act (FDIA) also provides that amounts
received from the liquidation or other resolution of any insured depository
institution by any receiver must be distributed (after payment of secured
claims) to pay the deposit liabilities of the institution prior to payment of
any other general or unsecured senior liability, subordinated liability, general
creditor or shareholder. This provision would give depositors a preference over
general and subordinated creditors and shareholders in the event a receiver is
appointed to distribute the assets of any of the banking divisions.
The BHCA also prohibits a bank holding company, with certain
exceptions, from acquiring more than 5% of the voting shares of any company that
is not a bank and from engaging in any business other than banking or managing
or controlling banks. Under the BHCA, the Federal Reserve Board is authorized to
approve the ownership of shares by a bank holding company in any company the
activities of which the Federal Reserve Board has determined to be so closely
related to banking or to managing or controlling banks as to be a proper
incident thereto. The Federal Reserve Board has by regulation determined that
certain activities are closely related to banking within the meaning of the
BHCA. These activities include: operating a mortgage company, finance company,
credit card company or factoring company; performing certain data processing
operations; providing investment and financial advice; and acting as an
insurance agent for certain types of credit-related insurance.
The Company is registered under the bank holding company laws of West
Virginia. Accordingly, the Company and its banking divisions are subject to
further regulation and supervision by the WV Division of Banking.
Capital Requirements
The Federal Reserve Board and the FDIC have issued substantially
similar risk-based and leverage capital guidelines applicable to United States
banking organizations. In addition, those regulatory agencies may from time to
time require that a banking organization maintain capital above the minimum
levels because of its financial condition or actual or anticipated growth. Under
the risk-based capital requirements of these federal bank regulatory agencies,
the Company and City National are required to maintain a minimum ratio of total
capital to risk-weighted assets of at least 10% in order to remain categorized
as well capitalized. At least half of the total capital is required to be "Tier
1 capital", which consists principally of common and certain qualifying
preferred shareholders' equity, less certain intangibles and other adjustments.
The remainder "Tier 2 capital" consists of a limited amount of subordinated and
other qualifying debt (including certain hybrid capital instruments) and a
limited amount of the general loan loss allowance. The Tier 1 and total capital
to risk-weighted asset ratios of the Company as of December 31, 1997 were 9.2%
and 10.00%, respectively, meeting the minimums required.
In addition, each of the federal regulatory agencies has established a
minimum leverage capital ratio (Tier 1 capital to average tangible assets).
These guidelines provide for a minimum ratio of 4% for banks and bank holding
companies that meet certain specified criteria, including that they have the
highest regulatory examination rating and are not contemplating significant
growth or expansion. All other institutions are expected to maintain a leverage
ratio of at least 100 to 200 basis points above the minimum. The Tier 1 capital
leverage ratio of the Company as of December 31, 1997, was 6.5%. The guidelines
also provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels, without significant reliance on intangible
assets.
The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) required each federal banking agency to revise its risk-based capital
standards to ensure that those standards take adequate account of interest rate
risk, concentration of credit risk and the risks of nontraditional activities,
as well as reflect the actual performance and expected risk of loss on
multi-family mortgages. Rules have been promulgated with respect to
concentration of credit risk and the risks of non-traditional activities, and
also as to the risk of loss on multi-family mortgages. A proposed rule with
respect to interest rate risk is still under consideration. The proposal would
allow institutions to use internal risk models to measure interest rate risk (if
the models are acceptable to examiners) and would require additional capital of
institutions identified as having excess interest rate risk. The Company does
not expect any of these rules, either individually or in the aggregate, to have
a material impact on its capital requirements.
Limits on Dividends and Other Payments
The Company is a legal entity separate and distinct from its
Subsidiaries. Most of the Company's revenues result from the dividends paid to
the Company by those Subsidiaries. The right of the Company, and shareholders of
the Company, to participate in any distribution of the assets or earnings of any
Subsidiary through the payment of such dividends or otherwise is necessarily
subject to the prior claims of creditors of such Subsidiary, except to the
extent that claims of the Company in its capacity as a creditor may be
recognized. Moreover, there are various legal limitations applicable to the
payment of dividends to the Company as well as the payment of dividends by the
Company to its shareholders. Under federal law, the Company's Subsidiaries may
not, subject to certain limited expectations, make loans or extensions of credit
to, or investment in the securities of, or take securities of the Company as
collateral for loans to any borrower. The Company's Subsidiaries are also
subject to collateral security requirements for any loans or extensions of
credit permitted by such exceptions.
City National is subject to various statutory restrictions on its
ability to pay dividends to the Company. Under applicable regulations, at
December 31, 1997, City National could have paid aggregate dividends to the
Company of $25.7 million without obtaining prior approval of the Office of the
Comptroller of the Currency (the OCC). The payment of dividends by the Company
and the banking divisions may also be limited by other factors, such as
requirements to maintain adequate capital above regulatory guidelines. The OCC,
which supervises City National, has the authority to prohibit any bank under
their jurisdiction from engaging in an unsafe and unsound practice in conducting
its business. The payment of dividends, depending upon the financial condition
of the subsidiary in question, could be deemed to constitute such an unsafe or
unsound practice. The Federal Reserve Board and the OCC have indicated their
view that it generally would be an unsafe and unsound practice to pay dividends
except out of current operating earnings. The Federal Reserve Board has stated
that, as a matter of prudent banking, a bank or bank holding company should not
maintain its existing rate of cash dividends on common stock unless (1) the
organization's net income available to common shareholders over the past year
has been sufficient to fund fully the dividends and (2) the prospective rate of
earnings retention appears consistent with the organization's capital needs,
asset quality, and overall financial condition. Moreover, the Federal Reserve
Board has indicated that bank holding companies should serve as a source of
managerial and financial strength to their subsidiary banks. Accordingly, the
Federal Reserve Board has stated that a bank holding company should not maintain
a level of cash dividends to its shareholders that places undue pressure on the
capital of bank subsidiaries, or that can be funded only through additional
borrowings or other arrangements that may undermine the bank holding company's
ability to serve as a source of strength.
The ability of the Company's subsidiaries to pay dividends in the
future is, and is expected to continue to be, influenced by regulatory policies
and by capital guidelines. The OCC has broad discretion in developing and
applying policies and guidelines, in monitoring compliance with existing
policies and guidelines, and in determining whether to modify such policies and
guidelines.
FDICIA
In December 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991 (FDICIA) became effective. FDICIA substantially revised the
depository institution regulatory and funding provisions of the Federal
Deposit Insurance Act and revised several other federal banking
statutes.
Banks
City National and its banking divisions are subject to supervision and
regulation by the OCC, the Federal Reserve Board and the FDIC. The various laws
and regulations administered by the regulatory agencies affect corporate
practices, such as payment of dividends, incurring debt and acquisition of
financial institutions and other companies, and affect business practices, such
as payment of interest on deposits, the charging of interest on loans, types of
business conducted and location of offices.
Governmental Policies
The operations of the Company and its banking divisions are affected
not only by general economic conditions, but also by the policies of various
regulatory authorities. In particular, the Federal Reserve Board regulates money
and credit and interest rates in order to influence general economic conditions.
These policies have a significant influence on overall growth and distribution
of bank loans, investments and deposits and affect interest rates charged on
loans or paid for time and savings deposits. Federal Reserve monetary policies
have had a significant effect on the operating results of commercial banks in
the past and are expected to continue to do so in the future.
Among other things, FDICIA requires the federal banking regulators to
take prompt corrective action with respect to depository institutions that do
not meet minimum capital requirements. FDICIA establishes five capital tiers:
well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized.
The Federal Reserve Board has adopted regulations establishing relevant
capital measures and relevant capital levels for banks. The relevant capital
measures are the total risk-adjusted capital ratio, Tier I risk-adjusted capital
ratio and the leverage ratio. Under the regulations, a bank is considered (i)
well capitalized if it has a total capital ratio of ten percent or greater, a
Tier 1 capital ratio of six percent or greater and a leverage ratio of five
percent or greater and is not subject to any order or written directive by such
regulator to meet and maintain a specific capital level for any capital measure,
(ii) adequately capitalized if it has a total capital ratio of eight percent or
greater, a Tier I capital ratio of four percent or greater and a leverage ratio
of four percent or greater (three percent in certain circumstances) and is not
well capitalized, (iii) undercapitalized if it has a total capital ratio of less
than eight percent, a Tier 1 capital ratio of less than four percent or a
leverage ratio of less than four percent (three percent in certain
circumstances), (iv) significantly undercapitalized if it has a total capital
ratio of less than six percent, a Tier 1 capital ratio of less than three
percent or a leverage ratio of less than three percent, and (v) critically
undercapitalized if its tangible equity is equal to or less than two percent of
average quarterly tangible assets. As of December 31, 1997, City National had
capital levels that qualify it as being well capitalized under such regulations.
FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of a dividend) or paying any management
fee to its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
restrictions on borrowing from the Federal Reserve Board. In addition,
undercapitalized depository institutions are subject to growth limitations and
are required to submit capital restoration plans. In order to obtain acceptance
of a capital restoration plan, a depository institution's holding company must
guarantee the capital plan, up to an amount equal to the lesser of 5% of the
depository institution's assets at the time it becomes undercapitalized or the
amount of the capital deficiency when the institution fails to comply with the
plan. Furthermore, in the event of a bankruptcy of the parent holding company,
such guarantee would take priority over the parent's general unsecured
creditors. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's capital. If a
depository institution fails to submit an acceptable plan, it is treated as if
it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject
to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to reduce
total assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized depository institutions are subject to appointment
of a receiver or conservator.
Under FDICIA, a depository institution that is not well capitalized is
generally prohibited from accepting brokered deposits and offering interest
rates on deposits higher than the prevailing rate in its market. In addition,
pass-through insurance coverage may not be available for certain employee
benefit accounts.
Various other legislation, including proposals to overhaul the banking
regulatory system and to limit the investments that a depository institution may
make with insured funds are from time to time introduced in Congress. The
Company cannot determine the ultimate effect that such potential legislation, if
enacted, would have upon its financial condition or operations.
Other Safety and Soundness Regulations
The federal banking agencies have broad powers under current federal
law to take prompt corrective action to resolve problems of insured depository
institutions. The extent of these powers depends upon whether the institutions
in question are "well capitalized", "adequately capitalized",
"undercapitalized", "significantly undercapitalized" or "critically
undercapitalized", as such terms are defined under uniform regulations defining
such capital levels issued by each of the federal banking agencies.
(d) Employees
As of December 31, 1997, City Holding Company and Subsidiaries employed
1,136 associates. Employee relations within the Subsidiaries are considered to
be satisfactory.
(e) Statistical Information
The information noted below is provided pursuant to Guide 3 --
Statistical Disclosure by Bank Holding Companies. Page references are to the
Annual Report to Shareholders for the year ended December 31, 1997 and such
pages are incorporated herein by reference.
Page
Description of Information Reference
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1. Distribution of Assets, Liabilities and Stockholders'
Equity; Interest Rates and Interest Differential
a. Average Balance Sheets 8
b. Analysis of Net Interest Earnings 9
c. Rate Volume Analysis of Changes in
Interest Income and Expense 9
2. Investment Portfolio
a. Book Value of Investments 18
b. Maturity Schedule of Investments 18
c. Securities of Issuers Exceeding 10%
of Stockholders' Equity 18
3. Loan Portfolio
a. Types of Loans 19
b. Maturities and Sensitivity to Changes in Interest Rates 20
c. Risk Elements 25
d. Other Interest Bearing Assets N/A
4. Summary of Loan Loss Experience 25, 26
5. Deposits
a. Breakdown of Deposits by Categories,
Average Balance and Average Rate Paid 8
b. Maturity Schedule of Time Certificates of
Deposit and Other Time Deposits of
$100,000 or More 26
6. Return on Equity and Assets 1
Item 2 Properties
City Holding Company and its subsidiaries own the facilities
maintained as the Company's headquarters and generally own all of the facilities
maintained as operating facilities by the subsidiaries. Those facilities not
owned by the Company are maintained under long term lease agreements. The
properties owned or leased by the Company consist generally of the main
corporate office, the main banking office, forty-two (42) branch locations in
West Virginia, four loan production offices in California, two loan production
offices in West Virginia and one non-banking office in West Virginia. All of the
properties are suitable and adequate for their current operations and are
generally being fully utilized.
Item 3 Legal Proceedings
There are various legal proceedings pending to which City Holding
Company and/or its subsidiaries are parties. These proceedings are incidental to
the business of City Holding Company and its subsidiaries and, after reviewing
the matters and consulting with counsel, management is of the opinion that the
ultimate resolution of such matters will not materially affect the consolidated
financial statements.
Item 4 Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5 Market for Registrant's Common Stock and Related Stockholder Matters
Page 2 of the Annual Report to Shareholders of City Holding Company for
the year ended December 31, 1997, included in this report as Exhibit 13, is
incorporated herein by reference.
During the fourth quarter of 1997, the Company issued 346,606 shares of
its common stock pursuant to two acquisition transactions. The shares were
issued in private transactions pursuant to the exemption from registration
provided under Section 4.(2) of the Securities Act of 1933.
Item 6 Selected Financial Data
Selected Financial Data on page 1 of the Annual Report to Shareholders
of City Holding Company for the year ended December 31, 1997, included in this
report as Exhibit 13, is incorporated herein by reference.
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's Discussion and Analysis of Financial Condition and Results
of Operations on pages 3 through 27 of the Annual Report to Shareholders of City
Holding Company for the year ended December 31, 1997, included in this report as
Exhibit 13, is incorporated herein by reference.
Item 8 Financial Statements and Supplementary Data
The report of independent auditors and consolidated financial
statements, included on pages 28 through 52 of the Annual Report to Shareholders
of City Holding Company for the year ended December 31, 1997, included in this
report as Exhibit 13, are incorporated herein by reference.
Item 9 Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10 Directors and Executive Officers of Registrant
The information required by Item 10 of FORM 10-K appears in the
Company's 1998 Proxy Statement to be filed within 120 days of fiscal year end
under the captions "ELECTION OF DIRECTORS" and "EXECUTIVE OFFICERS".
Item 11 Executive Compensation
The information required by Item 11 of FORM 10-K appears in the
Company's 1998 Proxy Statement under the caption "EXECUTIVE COMPENSATION".
Item 12 Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 of FORM 10-K appears in the
Company's 1998 Proxy Statement under the caption "OWNERSHIP OF EQUITY
SECURITIES".
Item 13 Certain Relationships and Related Transactions
The information required by Item 13 of FORM 10-K appears in the
Company's 1998 Proxy Statement under the caption "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS" and in NOTE FIFTEEN of Notes to Consolidated Financial
Statements appearing at page 28 of the Company's Annual Report to Shareholders
for the year ended December 31, 1997, included in this report as Exhibit 13, and
incorporated herein by reference.
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements Filed; Financial Statement Schedules
The following consolidated financial statements of City Holding Company
and subsidiaries, included in the Company's Annual Report to Shareholders for
the year ended December 31, 1997, are incorporated by reference in Item 8:
Exhibit 13
Page Number
Report of Independent Auditors 28
Consolidated Balance Sheets - December 31, 1997
and 1996 29
Consolidated Statements of Income - years
ended December 31, 1997, 1996, and 1995 30
Consolidated Statements of Changes in
Stockholders' Equity - years ended December 31,
1997, 1996, and 1995 31
Consolidated Statements of Cash Flows -
years ended December 31, 1997, 1996, and 1995 32
Notes to Consolidated Financial Statements -
December 31, 1997 33 - 52
Financial Schedules I and II under Article 9 of Regulation S-X are not
applicable.
(b) Reports on Form 8-K
The Company filed Form 8-K on October 10, 1997, reporting the
acquisition of First Allegiance Financial Corporation.
(c) Exhibits
The exhibits listed in the Exhibit Index on pages 17
through 19 of this FORM 10-K are filed herewith or incorporated by reference
from previous filings.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
City Holding Company
--------------------------
(Registrant)
/s/_________________________
Steven J. Day,
President/Director
(Principal Executive Officer)
/s/_________________________
Robert A. Henson,
Chief Financial Officer
(Principal Financial Officer)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Exchange Act of
1934, this report on Form 10-K has been signed below by the following persons on
behalf of the Registrant and in the capacities indicated on February 23, 1998.
Each of the directors and/or officers of City Holding Company whose signature
appears below hereby appoints Steven J. Day and Robert A. Henson and each of
them severally, as his attorney-in-fact to sign in his name and behalf, in any
and all capacities stated below and to file with the Commission, any and all
amendments to this report on Form 10-K, making such changes in this report on
Form 10-K as appropriate, and generally to do all such things in their behalf in
their capacities as officers and directors to enable City Holding Company to
comply with the provisions of the Securities Exchange Act of 1934, and all
requirements of the Securities and Exchange Commission.
/s/__________________________ /s/__________________________
Samuel M. Bowling, C. Scott Briers,
Director Director
/s/__________________________ /s/__________________________
Dr. D. K. Cales, Steven J. Day,
Director Director/President
/s/__________________________ /s/___________________________
Robert D. Fisher, Jack E. Fruth, Director
Director
/s/__________________________ /s/__________________________
Jay Goldman, Carlin K. Harmon,
Director Director/Executive Vice President
/s/__________________________ /s/__________________________
C. Dallas Kayser, Dale Nibert, Director
Director
/s/__________________________ /s/___________________________
Otis L. O'Connor, Bob F. Richmond,
Director Director
/s/__________________________ /s/___________________________
Mark H. Schaul, Van R. Thorn,
Director Director
/s/__________________________ /s/___________________________
George F. Davis, Hugh R. Clonch,
Director/Executive Vice President Director
/s/__________________________ /s/___________________________
William M. Frazier, Leon K. Oxley,
Director Director
/s/__________________________
David E. Haden,
Director
EXHIBIT INDEX
The following exhibits are filed herewith or are incorporated
herein by reference.
Prior Filing
Exhibit Reference or Page
Number Description Number Herein
- ------- ----------- -----------------
3(a) Articles of Incorporation of I
City Holding Company
3(b) Articles of Amendment to the II
Articles of Incorporation of
City Holding Company, dated
March 6, 1984
3(c) Articles of Amendment to the III
Articles of Incorporation of
City Holding Company, dated
March 4, 1986
3(d) Articles of Amendment to the IV
Articles of Incorporation of
City Holding Company, dated
September 29, 1987
3(e) Articles of Amendment to the
Articles of Incorporation of
City Holding Company, dated
May 6, 1991 V
3(f) Articles of Amendment to the
Articles of Incorporation of
City Holding Company, dated
May 7, 1991 V
3(g) By-laws of City Holding Company I
3(h) Amendment to the By-laws of III
City Holding Company, dated
February 14, 1985
3(i) Amendment to the By-laws of III
City Holding Company, dated
March 4, 1986
3(j) Amendment to the By-laws of III
City Holding Company, dated
May 1, 1986
3(k) Amendment to the By-laws of III
City Holding Company, dated
February 5, 1987
3(l) Amendment to the By-laws of VI
City Holding Company, dated
November 3, 1988
3(m) Articles of Amendment to the Articles of
Incorporation of City Holding Company,
dated August 1, 1994 VIII
4 Amendment and Restated Rights
Agreement, dated as of May 7, 1991,
between the Company and Sovran Bank,
N.A. (predecessor to Nations Bank,
N.A.), as Rights Agent VII
10 Agreement dated June 5, 1986, by III
and between Steven J. Day and
City Holding Company
11 Statement Re: Computation of Per
Share Earnings 20
13 City Holding Company Annual Report
to Shareholders for Year Ended
December 31, 1997 21
22 Subsidiaries of City Holding Company 72
23 Consent of Ernst & Young LLP 73
24 Power of Attorney (included on the
signature page hereof) 15
27 Financial Data Schedule for the year ending
December 31, 1997 74
- --------------------
I Attached to, and incorporated by reference from Amendment No.
1 to City Holding Company's Registration Statement on Form
S-4, Registration No. 2-86250, filed November 4, 1983, with
the Securities and Exchange Commission.
II Attached to, and incorporated by reference from City Holding
Company's Form 8-K Report dated March 7, 1984, and filed with
the Securities and Exchange Commission on March 22, 1984.
III Attached to, and incorporated by reference from City Holding
Company's Form 10-K Annual Report dated December 31, 1986, and
filed March 31, 1987, with the Securities and Exchange
Commission.
IV Attached to and incorporated by reference from City Holding
Company's Registration Statement on Form S-4, Registration No.
33-23295, filed with the Securities and Exchange Commission on
August 3, 1988. Attached to, and incorporated by reference
from City Holding Company's Form 10-K Annual Report dated
December 31, 1991, and filed March 17, 1992, with the
Securities and Exchange Commission.
V Attached to, and incorporated by reference from City Holding
Company's Form 10-K Annual Report dated December 31, 1991, and
filed March 17, 1992, with the Securities and Exchange
Commission.
VI Attached to, and incorporated by reference from City Holding
Company's Form 10-K Annual Report dated December 31, 1988, and
filed March 30, 1989, with the Securities and Exchange
Commission.
VII Attached to, and incorporated by reference from City Holding
Company's Form 8-K Current Report dated May 7, 1991, and filed
May 14, 1991, with the Securities and Exchange Commission.
VIII Attached to, and incorporated by reference from City Holding
Company's Form 10-Q Quarterly Report dated September 30, 1994
and filed November 14, 1994, with the Securities and Exchange
Commission.