SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
ANNUAL REPORT
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Pursuant to Section 15(d) of the
Securities Act of 1934
For the year ended December 31, 1997
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City Holding Company
Profit Sharing and 401(k) Plan
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City Holding Company
25 Gatewater Road
Cross Lanes, West Virginia 25313
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<PAGE>
<TABLE>
FORM 11-K
CITY HOLDING COMPANY
PROFIT SHARING AND 401(K) PLAN
December 31, 1997
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<S> <C>
The following financial statements and schedules of the Plan are included
herein:
Report of Independent Auditors 1
Statements of Net Assets Available for Plan Benefits as of December 31,
1997 and 1996 2
Statements of Changes in Net Assets Available for Plan Benefits for the
years ended December 31, 1997 and 1996 3
Notes to Financial Statements 4-7
Item 27(a) - Supplemental Schedule of Assets Held for Investment Purposes 8
Item 27(d) - Supplemental Schedule of Reportable Transactions 9
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
</TABLE>
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Audited Financial Statements and Supplemental Schedules
December 31, 1997
Contents
Report of Independent Auditors..............................................1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits........................2
Statements of Changes in Net Assets Available for Plan Benefits.............3
Notes to Financial Statements...............................................4
Supplemental Schedules
Item 27(a) - Schedule of Assets Held for Investment Purposes................8
Item 27(d) - Schedule of Reportable Transactions............................9
<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, 1997 and 1996, 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, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
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, 1997, 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
June 26, 1998
1
<PAGE>
<TABLE>
City Holding Company
Profit Sharing and 401(k) Plan
Statements of Net Assets Available for Plan Benefits
<CAPTION>
<S> <C>
Fidelity Fidelity Fidelity
City Advisor Advisor Advisor
Participant Overseas Holding Short Fixed Growth Oppt. Balanced
Loans Fund Company Income Fund Fund Fund
--------------------------------------------------------------------------------------
December 31, 1997
Assets
Cash and cash equivalents $ 17,823 $ - $ 67,464 $ - $ - $ -
Investments:
Mutual and commingled funds - 154,059 - 426,052 1,770,853 903,578
Common stock of City
Holding Company at fair - - 7,935,809 - - -
value
Participant loans 169,986 - - - - -
Receivables:
Employer contributions (17,823) 13,114 (21,563) 350 21,805 13,833
Participant contributions - - - - - -
----------------------------------------------------------------------------------------
Net assets available for plan $169,986 $167,173 $7,981,710 $426,402 $1,792,658 $917,411
benefits
========================================================================================
<CAPTION>
Group
Annuity
Cash Contract Total
--------------------------------------
December 31, 1997
Assets
Cash and cash equivalents $ 439 $ - $ 85,726
Investments:
Mutual and commingled funds - 916,350 4,170,892
Common stock of City
Holding Company at fair - - 7,935,809
value
Participant loans - - 169,986
Receivables:
Employer contributions - 6,144 15,860
Participant contributions - - -
--------------------------------------
Net assets available for plan $ 439 $922,494 $12,378,273
benefits
======================================
<CAPTION>
Fidelity Fidelity Fidelity
City Advisor Advisor Advisor
Participant Overseas Holding Short Fixed Growth Oppt. Income and
Loans Fund Company Income Fund Fund Growth Fund
--------------------------------------------------------------------------------------
December 31, 1996
Assets
Cash and cash equivalents $ - $ - $ - $ - $ - $ -
Investments:
Mutual and commingled funds - - - 335,605 1,195,039 645,957
Common stock of City
Holding Company at fair - - 4,502,967 - - -
value
Participant loans 195,911 - - - - -
Receivables:
Employer contributions - - 7,039 - - -
Participant contributions - 36,774 - 51,549 112,226 31,037
----------------------------------------------------------------------------------------
195,911 36,774 4,510,006 387,154 1,307,265 676,994
Less benefits payable - - 20,698 2,502 8,453 3,348
----------------------------------------------------------------------------------------
Net assets available for plan $195,911 $36,774 $4,489,308 $384,652 $1,298,812 $673,646
benefits
========================================================================================
<CAPTION>
Group
Annuity
Cash Contract Total
--------------------------------------
December 31, 1996
Assets
Cash and cash equivalents $22,646 $ - $ 22,646
Investments:
Mutual and commingled funds - 873,936 3,050,537
Common stock of City
Holding Company at fair - - 4,502,967
value
Participant loans - - 195,911
Receivables:
Employer contributions - - 7,039
Participant contributions - 1,891 233,477
--------------------------------------
22,646 875,827 8,012,577
Less benefits payable - 3,239 38,240
--------------------------------------
Net assets available for plan $22,646 $872,588 $7,974,337
benefits
======================================
See accompanying notes to financial statements.
2
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits
<CAPTION>
Fidelity Fidelity
City Advisor Advisor
Participant Overseas Holding Short Fixed Growth Oppt.
Loans Fund Company Income Fund Fund
--------------------------------------------------------------------
Year Ended December 31, 1997
Contributions and income:
Contributions from employer $ - $ - $ 278,616 $ - $ -
Contributions from employee - 34,377 290,795 53,372 211,023
Interest and dividends 16,303 9,945 133,343 24,454 110,196
--------------------------------------------------------------------
Total contributions and income 16,303 44,322 702,754 77,826 321,219
Transfers to/from investment options, including
participant loan transactions (26,931) 87,899 (3,721) (19,198) (28,185)
Deductions:
Benefit payments 15,297 1,151 194,873 14,933 66,597
Administrative expenses - - - - -
--------------------------------------------------------------------
Total deductions 15,297 1,151 194,873 14,933 66,597
--------------------------------------------------------------------
Net additions (25,925) 131,070 504,160 43,695 226,437
Net realized and unrealized losses - (671) 2,988,242 (1,945) 267,409
Net assets available for plan benefits at 195,911 36,774 4,489,308 384,652 1,298,812
beginning of year
--------------------------------------------------------------------
Net assets available for plan benefits at end $169,986 $167,173 $7,981,710 $426,402 $1,792,658
of year
====================================================================
<CAPTION>
Fidelity
Advisor Group
Balanced Annuity
Fund Cash Contract Total
------------------------------------------------------
Year Ended December 31, 1997
Contributions and income:
Contributions from employer $ - $ - $ - $ 278,616
Contributions from employee 94,808 - 75,797 760,172
Interest and dividends 81,270 106 55,933 431,550
------------------------------------------------------
Total contributions and income 176,078 106 131,730 1,470,338
Transfers to/from investment options, including
participant loan transactions 32,725 (22,313) (20,276) -
Deductions:
Benefit payments 38,301 - 61,298 392,450
Administrative expenses - - 250 250
------------------------------------------------------
Total deductions 38,301 - 61,548 392,700
------------------------------------------------------
Net additions 170,502 (22,207) 49,906 1,077,638
Net realized and unrealized losses 73,263 - - 3,326,298
Net assets available for plan benefits at 673,646 22,646 872,588 7,974,337
beginning of year
------------------------------------------------------
Net assets available for plan benefits at end $917,411 $ 439 $922,494 $12,378,273
of year
======================================================
<CAPTION>
Fidelity Fidelity
City Advisor Advisor
Participant Overseas Holding Short Fixed Growth Oppt.
Loans Fund Company Income Fund Fund
------------------------------------------------------------------------
Year Ended December 31, 1996
Contributions and income:
Contributions from employer $ - $ - $ 249,647 $ - $ -
Contributions from employee - 36,774 276,314 82,826 262,331
Interest and dividends - - 84,826 12,325 34,272
------------------------------------------------------------------------
Total contributions and income - 36,774 610,787 95,151 296,603
Transfers to/from investment options, including
participant loan transactions 137,541 - (1,401,990) 267,378 694,600
Deductions:
Benefit payments 25,503 - 281,197 28,154 62,457
Administrative expenses - - 2,067 150 457
------------------------------------------------------------------------
Total deductions 25,503 - 283,264 28,304 62,914
------------------------------------------------------------------------
Net additions 112,038 36,774 (1,074,467) 334,225 928,289
Net realized and unrealized losses - - 422,213 6,767 145,821
Net assets available for plan benefits at 83,873 - 5,141,562 43,660 224,702
beginning of year
------------------------------------------------------------------------
Net assets available for plan benefits at end $195,911 $36,774 $4,489,308 $384,652 $1,298,812
of year
========================================================================
<CAPTION>
Fidelity
Advisor Group
Income and Annuity
Growth Fund Cash Contract Total
------------------------------------------------------
Year Ended December 31, 1996
Contributions and income:
Contributions from employer $ - $ - $ - $ 249,647
Contributions from employee 111,106 - 122,688 892,039
Interest and dividends 20,095 - - 151,518
------------------------------------------------------
Total contributions and income 131,201 - 122,688 1,293,204
Transfers to/from investment options, including
participant loan transactions 451,518 (878,538) 729,491 -
Deductions:
Benefit payments 37,991 - 153,494 588,796
Administrative expenses 296 - 540 3,510
------------------------------------------------------
Total deductions 38,287 - 154,034 592,306
------------------------------------------------------
Net additions 544,432 (878,538) 698,145 700,898
Net realized and unrealized losses 28,162 - 54,083 657,046
Net assets available for plan benefits at 101,052 901,184 120,360 6,616,393
beginning of year
------------------------------------------------------
Net assets available for plan benefits at end $673,646 $ 22,646 $872,588 $ 7,974,337
of year
======================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Notes to Financial Statements
December 31, 1997
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
The Plan estimates the fair value of its investment in City Holding Company
common stock based on the stock's quoted trade price. Investments in mutual and
commingled funds are valued at the Plan's proportionate share of the quoted fair
value of net assets in each fund as of December 31, 1997 and 1996. At December
31, 1997, 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 Balanced Fund (formerly called 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.
4
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Notes to Financial Statements (continued)
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).
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.
Participants may elect to contribute, on a salary-deferral basis, up to 15% of
annual compensation, subject to federal income tax limits. Included in
participant contributions are approximately $173,000 and $301,000 in 1997 and
1996, respectively, of participant account balances rolled-over from previous
employer plans.
5
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Notes to Financial Statements (continued)
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
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, 1997 and 1996, matching contributions approximated $279,000 and
$250,000, 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
6
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Notes to Financial Statements (continued)
1996 and is currently funding all future participant loans which meet Plan
provisions. Interest-bearing loans to participants funded by the Plan
approximated $170,000 and $196,000 at December 31, 1997 and 1996, respectively.
Included in interest and dividends for the years ended December 31, 1997 and
1996, are dividends from City Holding Company common stock approximating
$133,000 and $85,000, 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. Investments Representing 5% or More of the Fair Value of Net Assets Available
for Plan Benefits
December 31
1997 1996
---------------------------------
Group Annuity Contract Fund $ 922,494 $ 875,827
City Holding Company common stock 7,981,710 4,502,967
Mutual Funds:
Fidelity Advisor Short Fixed Income Fund 426,402 387,154
Fidelity Advisor Growth Opportunity Fund 1,792,658 1,307,265
Fidelity Advisor Balanced Fund 917,411 -
Fidelity Advisor Income & Growth Fund - 676,994
7
<PAGE>
<TABLE>
City Holding Company
Profit Sharing and 401(k) Plan
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31, 1997
<CAPTION>
Current
Shares/Units Description Cost Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Common stock:
188,869 City Holding Company $4,416,172 $ 7,935,809
Investments in mutual or commingled funds:
45,263 Fidelity Advisor Short Fixed Income Fund 421,834 426,052
41,732 Fidelity Advisor Growth Opportunity Fund 1,375,803 1,770,853
49,611 Fidelity Advisor Balanced Fund 800,238 903,578
9,636 Fidelity Advisor Overseas Fund 154,732 154,059
916,350 Group Annuity Contract 916,350 916,350
------------------------------------
3,668,957 4,170,892
Loans to participants 169,986 169,986
Cash and cash equivalents 85,726 85,726
------------------------------------
$8,340,841 $12,362,413
====================================
8
<PAGE>
City Holding Company
Profit Sharing and 401(k) Plan
Item 27(d) - Schedule of Reportable Transactions
Year Ended December 31, 1997
<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
-----------------------------------------------------------------------
Category (iii)--Series of Transactions in Excess of 5% of Plan Assets
City Holding Company Common Stock 24,591 $893,452 - $ - $ - $ -
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1997.
9
<PAGE>
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 June 26, 1998, 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, 1997.
/s/ Ernst & Young LLP
Charleston, West Virginia
June 29, 1998
<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
June 29, 1998
