SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
ANNUAL REPORT
----------
Pursuant to Section 15(d) of the
Securities Act of 1934
For the year ended December 31, 1996
----------
City Holding Company
Profit Sharing and 401(k) Plan
----------
City Holding Company
3601 MacCorkle Avenue, Southeast
Charleston, West Virginia 25304
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<PAGE>
FORM 11-K
CITY HOLDING COMPANY
PROFIT SHARING AND 401(K) PLAN
December 31, 1996
----------
The following financial statements and schedules of the Plan are included
herein:
<TABLE>
<S> <C>
Report of Independent Auditors 1
Statements of Net Assets Available for Plan Benefits as of December 31,
1996 and 1995 2
Statements of Changes in Net Assets Available for Plan Benefits for the
years ended December 31, 1996 and 1995 3
Notes to Financial Statements 4-12
Item 27(a) - Supplemental Schedule of Assets Held for Investment Purposes 13
Item 27(d) - Supplemental Schedule of Reportable Transactions 14
</TABLE>
Schedules I, II, and III have been omitted because the required
information is shown in the financial statements or in the notes thereto.
Item 9(b) - Exhibits:
Exhibit 24(c) - Consent of Independent Auditors
<PAGE>
Report of Independent Auditors
Board of Directors
City Holding Company
We have audited the accompanying statements of net assets available for plan
benefits of City Holding Company Profit Sharing and 401(k) Plan as of December
31, 1996 and 1995, and the related statements of changes in net assets available
for plan benefits for the years then ended. 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 generally accepted auditing
standards. 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, 1996 and 1995, and the changes in its net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
As discussed in Note 1 to the financial statements, the Plan changed its method
of accounting for investments in 1995.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended are presented for the purpose of additional
analysis and are not part of the basic financial statements, but are
supplementary information required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Ernst & Young LLP
Charleston, West Virginia
May 23, 1997
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Statements of Net Assets Available for Plan Benefits
December 31
1996 1995
----------------------------
Assets
Cash and cash equivalents $ 22,646 $ 901,184
Investments in mutual and commingled funds 3,050,537 337,017
Common stock of City Holding Company at fair value 4,502,967 5,017,934
Receivables:
Participant loans (Note 4) 195,911 83,873
Employer contributions 7,039 298,315
Participant contributions 233,477 26,769
----------------------------
8,012,577 6,665,092
Less benefits payable 38,240 48,699
----------------------------
Net assets available for plan benefits $7,974,337 $6,616,393
============================
See accompanying notes to financial statements.
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year Ended December 31
1996 1995
-----------------------------
<S> <C>
Contributions and income:
Contributions from employer $ 249,647 $ 519,564
Contributions from employees 892,039 694,818
Interest and dividends 151,518 160,527
-----------------------------
Total contributions and income 1,293,204 1,374,909
Deductions:
Benefit payments 588,796 186,763
Administrative expenses (Note 4) 3,510 19,799
-----------------------------
Total deductions 592,306 206,562
-----------------------------
700,898 1,168,347
Net realized and unrealized gains 657,046 109,205
Cumulative effect of change in accounting principle - 275,546
-----------------------------
Net increases 1,357,944 1,553,098
Net assets available for plan benefits at beginning of the year 6,616,393 5,063,295
-----------------------------
Net assets available for plan benefits at end of the year $7,974,337 $6,616,393
=============================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Notes to Financial Statements
December 31, 1996
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. The Plan's
financial statements presented herein are in conformity with generally accepted
accounting principles and require management of the Plan to make estimates and
develop assumptions that affect the amounts reported in the financial statements
and related footnotes. Actual results may differ from management's estimates.
Investments
Effective January 1, 1995, the Plan changed its method of estimating the fair
value of its investment in City Holding Company common stock from bid price to
trade price. The cumulative effect of this change was to increase net assets
available for Plan benefits at January 1, 1995, by $275,546. 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, 1996 and 1995.
At December 31, 1996, mutual and commingled funds consisted of the following
investment alternatives:
Fidelity Advisor Short Fixed-Income Fund: The primary objective of the
Fund is to obtain a high level of current income, consistent with the
preservation of capital, by investing primarily in a broad range of
investment-grade fixed income securities. The Fund consists primarily of
fixed-income securities of all types which may include convertible and
zero-coupon securities. The Fund may also invest a portion of its assets
in securities issued by foreign companies and foreign governments.
Fidelity Advisor Growth Opportunity Fund: The primary objective of the
Fund is to provide capital growth by investing primarily in common stocks
and securities convertible into common stocks. The Fund may also invest in
other securities, such as preferred stock and bonds that may produce
capital growth.
Fidelity Advisor Income and Growth Fund: The primary objective of the Fund
is to invest in equity securities, convertible securities, common and
preferred stocks, and fixed-income securities that provide income or
opportunities for capital growth.
Fidelity Advisor Overseas Fund: The primary objective of the Fund is to
seek growth of capital through investments in foreign securities. The Fund
invests in securities of companies located in the Americas (other than
U.S.), Far East, the Pacific Basin, and Western Europe. The Fund also
invests in debt securities for long-term growth purposes.
<PAGE>
Group Annuity Contract: The group annuity contract represents an
investment in a Deposit Administration Fund maintained by an insurance
company. Interest is credited to the Fund, compounded annually, and is
determined by annual interest rates which will not be less than the
following (as specified in the contract):
Interest Rate Contract Year
----------------------------------------------------------------
6.00% 1997
5.50% 1998
5.00% 1999
At least 90 days prior to the expiration of the interest guarantees, The
Hartford shall advise the Plan of new interest guarantees that apply to the
contract. The group annuity contract is valued at cost plus reinvested income,
which approximates fair value. Participant directed transfers may 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 aforementioned alternatives.
2. Description of Plan
The following description of the Plan provides general information. Participants
should refer to the Plan document 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 have attained the age of 21. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Prior to January 1, 1996, the Company made discretionary profit sharing
contributions ($298,300 in 1995) to the Plan which were allocated to eligible
participants. Beginning January 1, 1996, the Company began contributing any
discretionary contributions to the Company's employee stock ownership. Thus, no
discretionary contributions were made to the Plan in 1996.
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.
<PAGE>
Participants may elect to contribute, on a salary-deferral basis, up to 15% of
this annual compensation, subject to federal income tax limits. Included in
participant contributions are approximately $301,000 and $150,000 in 1996 and
1995, respectively, of participant account balances rolled-over from previous
employer plans.
Vesting
Participants are immediately fully vested in their voluntary contributions and
employer matching contributions, plus actual earnings thereon. A participant
becomes 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
Forfeitures of terminated participants' nonvested account balances are allocated
to eligible participants who are employed on December 31 of each year based on
their annual compensation.
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.
3. Federal Income Taxes
The Internal Revenue Service has determined that the Plan meets the requirements
of Section 401(k) of the Internal Revenue Code and thus it is exempt from
federal income taxes under the applicable provisions of the Code.
4. Related Party Transactions
During 1995, the Plan sponsor formed a non-contributory money purchase employee
benefit plan, which was subsequently converted to an employee stock ownership
<PAGE>
plan effective January 1, 1996. As a result, the Company reduced its
discretionary contribution to the profit sharing and 401(k) plan from 3% of each
eligible participant's annual compensation in 1995 to 0% in 1996.
Contributions made to the Plan as part of the Company's matching provisions
consist of common stock of City Holding Company. Such contributions are
nonparticipant directed investments included in plan assets. For the years ended
December 31, 1996 and 1995, matching contributions approximated $250,000 and
$216,000, respectively.
During 1995, a subsidiary of the Plan sponsor funded all newly originated
participant loans. Such loans, with an approximate aggregate original amount of
$59,000, were granted by the subsidiary in accordance with the loan provisions
of the Plan document and are fully secured by the assets in the participants'
individual accounts. The Plan purchased these loans from the subsidiary during
1996 and is currently funding all future participant loans which meet Plan
provisions. Interest-bearing loans to participants funded by the Plan
approximated $196,000 and $84,000 at December 31, 1996 and 1995, respectively.
Included in interest and dividends for the years ended December 31, 1996 and
1995, are dividends from City Holding Company common stock approximating $85,000
and $105,000, respectively.
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.
5. Net Assets Available for Plan Benefits by Investment Fund Option
A summary of the net assets available for plan benefits included in each of the
investment fund options at December 31, 1996, together with a summary of changes
in net assets available for Plan benefits within each investment fund option for
the year ended December 31, 1996 and 1995, follows:
<PAGE>
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
City Advisor Advisor Advisor Group
Participant Overseas Holding Short Fixed Growth Oppt. Income and Annuity
Loans Fund Company Income Fund Fund Growth Fund Cash Contract Total
------------------------------------------------------------------------------------------------------------
<S> <C>
December 31, 1996
Assets
Cash and cash
equivalents $ -- $ -- $ -- $ -- $ -- $ -- $22,646 $ -- $ 22,646
Investments in mutual
and commingled
funds -- -- -- 335,605 1,195,039 645,957 -- 873,936 3,050,537
Common stock -- -- 4,502,967 -- -- -- -- -- 4,502,967
Receivables:
Participant loans 195,911 -- -- -- -- -- -- -- 195,911
Employer
contributions -- -- 7,039 -- -- -- -- -- 7,039
Participant
contributions -- 36,774 -- 51,549 112,226 31,037 -- 1,891 233,477
--------------------------------------------------------------------------------------------------------------------------
195,911 36,774 4,510,006 387,154 1,307,265 676,994 22,646 875,827 8,012,577
Less benefits payable -- -- 20,698 2,502 8,453 3,348 -- 3,239 38,240
--------------------------------------------------------------------------------------------------------------------------
Net assets available
for plan benefits $ 195,911 $ 36,774 $4,489,308 $ 384,652 $1,298,812 $ 673,646 $22,646 $ 872,588 $7,974,337
==========================================================================================================================
</TABLE>
<PAGE>
Guaranteed
Investment Quality City
Contract Growth Balanced Participant Holding
Fund Fund Fund Loans Company
-----------------------------------------------------
December 31, 1995
Assets
Cash and cash $ - $ - $ - $ - $ _
equivalents
Investments in
mutual and - - - - -
commingled funds
Common stock - - - - 5,017,934
Receivables:
Participant loans - - - 83,873 -
Employer - - - - 140,936
contributions
Participant - - - - 19,219
contributions
-----------------------------------------------------
- - - 83,873 5,178,089
Less benefits payable - - - - 36,527
-----------------------------------------------------
Net assets available
for plan benefits $ - $ - $ - $83,873 $5,141,562
=====================================================
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Advisor Advisor Advisor Group
Short Fixed Growth Oppt. Income and Annuity
Income Fund Fund Growth Fund Cash Contract Total
------------------------------------------------------------------------
<S> <C>
December 31, 1995
Assets
Cash and cash
equivalents $ - $ - $ - $901,184 $ _ $ 901,184
Investments in
mutual and
commingled funds 31,441 161,192 67,340 - 77,044 337,017
Common stock - - - - - 5,017,934
Receivables:
Participant loans - - - - - 83,873
Employer
contributions 12,913 58,387 33,767 - 52,312 298,315
Participant
contributions 678 5,123 1,749 - - 26,769
------------------------------------------------------------------------
45,032 224,702 102,856 901,184 129,356 6,665,092
Less benefits payable 1,372 - 1,804 - 8,996 48,699
------------------------------------------------------------------------
Net assets available
for plan benefits $43,660 $224,702 $101,052 $901,184 $120,360 $6,616,393
========================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fidelity
City Advisor
Participant Overseas Holding Short Fixed
Loans Fund Company Income Fund
----------------------------------------------------
<S> <C>
Year Ended December 31, 1996
Contributions and income:
Contributions from employer $ - $ - $ 249,647 $ -
Contributions from employee - 36,774 276,314 82,826
Interest and dividends - - 84,826 12,325
----------------------------------------------------
Total contributions and income - 36,774 610,787 95,151
Transfers to/from investment
options, including
participant loan transactions 137,541 - (1,401,990) 267,378
Deductions:
Benefit payments 25,503 - 281,197 28,154
Administrative expenses - - 2,067 150
----------------------------------------------------
Total deductions 25,503 - 283,264 28,304
----------------------------------------------------
Net additions 112,038 36,774 (1,074,467) 334,225
Net realized and unrealized
losses - - 422,213 6,767
Net assets available for plan
benefits at beginning of year 83,873 - 5,141,562 43,660
----------------------------------------------------
Net assets available for plan
benefits at end of year $195,911 $36,774 $4,489,308 $384,652
====================================================
</TABLE>
<TABLE>
<CAPTION>
Fidelity Fidelity
Advisor Advisor Group
Growth Oppt. Income and Annuity
Fund Growth Fund Cash Contract Total
----------------------------------------------------------------
<S> <C>
Year Ended December 31, 1996
Contributions and income:
Contributions from employer $ - $ - $ _ $ _ $ 249,647
Contributions from employee 262,331 111,106 - 122,688 892,039
Interest and dividends 34,272 20,095 - - 151,518
----------------------------------------------------------------
Total contributions and income 296,603 131,201 - 122,688 1,293,204
Transfers to/from investment
options, including
participant loan transactions 694,600 451,518 (878,538) 729,491 -
Deductions:
Benefit payments 62,457 37,991 - 153,494 588,796
Administrative expenses 457 296 - 540 3,510
----------------------------------------------------------------
Total deductions 62,914 38,287 - 154,034 592,306
----------------------------------------------------------------
Net additions 928,289 544,432 (878,538) 698,145 700,898
Net realized and unrealized
losses 145,821 28,162 - 54,083 657,046
Net assets available for plan
benefits at beginning of year 224,702 101,052 901,184 120,360 6,616,393
----------------------------------------------------------------
Net assets available for plan
benefits at end of year $1,298,812 $673,646 $ 22,646 $872,588 $7,974,337
================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Guaranteed Fidelity
Investment Quality City Advisor
Contract Growth Balanced Participant Holding Short Fixed
Fund Fund Fund Loans Company Income Fund
--------------------------------------------------------------------------
<S> <C>
Year Ended December 31, 1995
Contributions and income:
Contributions from employer $ _ $ _ $ - $ - $ 362,185 $12,913
Contributions from employee - - - - 429,706 20,578
Interest and dividends 28,417 1,243 4,229 8,369 104,864 945
--------------------------------------------------------------------------
Total contributions and income
income 28,417 1,243 4,229 8,369 896,755 34,436
Transfers to/from investment
options, including participant
loan transactions (507,607) (146,184) (233,983) (28,977) (30,615) 5,624
Deductions:
Benefit payments 18,782 1,231 2,317 - 144,922 228
Administrative expenses 7,743 7 3,511 252 8,036 -
--------------------------------------------------------------------------
Total deductions 26,525 1,238 5,828 252 152,958 228
--------------------------------------------------------------------------
Net additions (505,715) (146,179) (235,582) (20,860) 713,182 39,832
Net realized and unrealized losses - 31,194 43,081 - 7,473 3,828
Cumulative effect of change in
accounting principle - - - - 275,546 -
Net assets available for plan
benefits at beginning of year 505,715 114,985 192,501 104,733 4,145,361 -
--------------------------------------------------------------------------
Net assets available for plan
benefits at end of year $ - $ - $ - $ 83,873 $5,141,562 $43,660
==========================================================================
</TABLE>
<TABLE>
<CAPTION>
Fidelity Fidelity
Advisor Advisor Group
Growth Oppt. Income and Annuity
Fund Growth Fund Cash Contract Total
-----------------------------------------------------------
<S> <C>
Year Ended December 31, 1995
Contributions and income:
Contributions from employer $ 58,387 $ 33,767 $ $ 52,312 $ 519,564
Contributions from employee 105,764 60,988 13,906 63,876 694,818
Interest and dividends 2,036 1,709 6,876 1,839 160,527
-----------------------------------------------------------
Total contributions and income 166,187 96,464 20,782 118,027 1,374,909
income
Transfers to/from investment
options, including participant
loan transactions 42,292 3,828 882,869 12,753 -
Deductions:
Benefit payments 3,954 2,692 2,467 10,170 186,763
Administrative expenses - - - 250 19,799
-----------------------------------------------------------
Total deductions 3,954 2,692 2,467 10,420 206,562
-----------------------------------------------------------
Net additions 204,525 97,600 901,184 120,360 1,168,347
Net realized and unrealized losses 20,177 3,452 - - 109,205
Cumulative effect of change in
accounting principle - - - - 275,546
Net assets available for plan
benefits at beginning of year - - - - 5,063,295
-----------------------------------------------------------
Net assets available for plan
benefits at end of year $224,702 $101,052 $901,184 $120,360 $6,616,393
===========================================================
</TABLE>
<PAGE>
6. Investments Representing 5% or More of the Fair Value of Net Assets Available
for Plan Benefits
December 31
1996 1995
----------------------------
Group Annuity Contract Fund $ 872,588 $ 120,360
City Holding Company common stock 4,479,058 5,017,934
Mutual Funds:
Fidelity Advisor Short Fixed Income Fund 384,652 43,660
Fidelity Advisor Growth Opportunity Fund 1,298,812 224,702
Fidelity Advisor Income & Growth Fund 673,646 101,052
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1996
Current
Shares/Units Description Cost Value
- --------------------------------------------------------------------------------
Common stock:
175,508 City Holding Company $3,915,593 $4,502,967
Investments in mutual or commingled funds:
34,596 Fidelity Advisor Short Fixed Income Fund 322,366 335,605
33,574 Fidelity Advisor Growth Opportunity Fund 1,061,169 1,195,039
39,201 Fidelity Advisor Income and Growth Fund 612,943 645,957
873,936 Group Annuity Contract 873,936 873,936
-----------------------
2,870,414 3,050,537
Loans to participants 195,911 195,911
Cash and cash equivalents 22,646 22,646
-----------------------
$7,004,564 $7,772,061
=======================
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Item 27(d) - Schedule of Reportable Transactions
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Number Total Number Total Total Gain
of Cost of Cost Proceeds (Loss)
Units of Units of from on
Purchased Purchase Sold Sales Sales Sales
--------------------------------------------------------------------------
<S> <C>
Category (i)--Individual Transactions in Excess of 5% of Plan Assets
Fidelity Advisor Growth Opportunity Fund 20,004 $ 636,327 - $ _ $ - $ -
Fidelity Advisor Income & Growth Fund 28,588 456,264 - - - -
Category (iii)--Series of Transactions in Excess of 5% of Plan Assets
Fidelity Advisor Income & Growth Fund 54,673 854,070 - - - -
Fidelity Advisor Growth Opportunity 30,616 991,153 - - - -
Fund
City Holding Company Common Stock 147,746 3,551,113 67,421 1,445,529 1,603,651 158,122
</TABLE>
There were no category (ii) or (iv) reportable transactions during 1996.
<PAGE>
Pursuant to the requirements of the Securities and Exchange Act of 1934, City
Holding Company has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
City Holding Company Profit
Sharing and 401(k) Plan
/s/ Robert A. Henson
--------------------
Mr. Robert A. Henson
Plan Administrator
May 23, 1997
Exhibit 24(c)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 File No. 33-62738) pertaining to the City Holding Company Profit Sharing and
401(k) Plan of our report dated May 23, 1997, with respect to the financial
statements and supplemental schedules of the City Holding Company Profit Sharing
and 401(k) Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1996.
/s/ Ernst & Young LLP
Charleston, West Virginia
June 30, 1997
