UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
10-K
[X]
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of
1934
For
the
fiscal year ended December 31, 2006
or
[
]
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act
of 1934
For
the
transition period from __________ to __________.
Commission
File Number 0-11733
CITY
HOLDING COMPANY
(Exact
Name of Registrant as Specified in its Charter)
|
West
Virginia
|
55-0169957
|
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
|
Incorporation
or Organization)
|
Identification
No.)
|
25
Gatewater Road, Cross Lanes, WV 25313
(Address
of Principal Executive Offices, Including Zip Code)
304-769-1100
(Registrant’s
Telephone Number, Including Area Code)
Securities
registered pursuant to Section 12(b) of the Act:
|
Title
of Each Class
|
Name
of Each Exchange on Which Registered:
|
|
|
None
|
None
|
Securities
registered pursuant to Section 12(g) of the Act:
Common
Stock, $2.50 par value
(Title
of
class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act. [ ] Yes [X] No
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 reports), 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. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer [ ] Accelerated
filer [X]Non-accelerated
filer [ ]
-1-
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). [ ] Yes [X] No
As
of
June 30, 2006, the last business day of the registrant’s most recently completed
second quarter, the aggregate market value of the shares of common stock held
by
non-affiliates, based upon the closing price per share of the registrant’s
common stock as reported on the Nasdaq National Market System, was approximately
$610.4 million. (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.)
As
of
February 28, 2007, there were 17,359,587 shares of the Company’s common stock
outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the annual report to security holders for the fiscal year ended December
31,
2005
2006
are
incorporated by reference into Part I, Item 1 and Part II, Items 5,
6,
7, 7A,
and 8. Portions of the Proxy Statement for the 2006
2007
annual
shareholders’ meeting to be held on April 25, 2007 are incorporated by reference
into Part III, Items 10, 11, 12, 13, and 14.
-2-
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FORM
10-K INDEX
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Pages
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Item
1.
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4-9
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Item
1A.
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10-14
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Item
1B.
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14
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Item
2.
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14
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Item
3.
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15
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Item
4.
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15
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Item
5.
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15-18
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Item
6.
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18
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Item
7.
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18
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Item
7A.
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18
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Item
8.
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18
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Item
9.
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19
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Item
9A.
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19
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Item
9B.
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19
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Item
10.
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19
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Item
11.
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19
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Item
12.
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20
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Item
13.
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20
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Item
14.
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20
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Item
15.
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21
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22-23
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24-26
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-3-
Item
1. Business
City
Holding Company (the “Company”) is a bank holding company headquartered in
Charleston, West Virginia. The Company conducts its principal activities through
its wholly-owned subsidiary, City National Bank of West Virginia (“City
National”). Through its network of 67 banking offices in West Virginia (56
offices), Kentucky (9 offices), and Ohio (2 offices), City National provides
credit, deposit, trust and investment management, and insurance products and
services to its customers. In addition to its branch network, City National’s
delivery channels include ATMs, check cards, interactive voice response systems,
and internet technology. City National has approximately 7% of the deposit
market share in West Virginia and the Company is the third largest bank holding
company headquartered in West Virginia based on deposit share. The Company’s
business activities are currently limited to one reportable business segment,
which is community banking.
No
portion of City National’s deposits are derived from a single person or persons,
the loss of which could have a material adverse effect on liquidity, capital,
or
other elements of financial performance. Although no portion of City National’s
loan portfolio is concentrated within a single industry or group of related
industries, it historically has held residential mortgage loans as a significant
portion of its loan portfolio. At December 31, 2006, 53% of the Company’s loan
portfolio was categorized as residential mortgage and home equity loans.
However, due to the fractionated nature of residential mortgage lending, there
is no concentration of credits that would be considered materially detrimental
to the Company’s financial position or operating results.
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.
Competition
As
noted
previously, the Company’s principal markets are located in West Virginia. The
majority of the Company’s banking offices are located in the areas of
Charleston, Huntington, Beckley and Martinsburg where there is a significant
presence of other financial service providers. In its markets, the Company
competes with national, regional, and local community banks for deposit, credit,
trust and investment management, and insurance customers. In addition to
traditional banking organizations, the Company competes with credit unions,
finance companies, insurance companies and other financial service providers
who
are able to provide specialty financial services to targeted customer groups.
As
further discussed below, changes in laws and regulations enacted in recent
years
have increased the competitive environment the Company faces to retain and
attract customers.
Regulation
and Supervision
Overview:
The
Company, as a registered bank holding company, and City National, as an insured
depository institution, 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 regulations
and the potential impact of such provisions to which the Company and City
National are subject. These federal and state laws and regulations are designed
to reduce potential loss exposure to the depositors of such depository
institutions and to the Federal Deposit Insurance Corporation’s insurance fund
and are not intended to protect the Company’s security holders. Proposals
to change the laws and regulations governing the banking industry are frequently
raised in Congress, in state legislatures, and before the various bank
regulatory agencies. The likelihood and timing of any changes and the impact
such changes might have on the Company are impossible to determine with any
certainty. A change in applicable laws or regulations, or a change in the way
such laws or regulations are interpreted by regulatory agencies or courts,
may
have a material impact on the business, operations and earnings of the Company.
To the extent that the following information describes statutory or regulatory
provisions, it is qualified entirely by reference to the particular statutory
or
regulatory provision.
-4-
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. Federal banking laws require a bank holding company 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. Additionally, 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 that is so closely related
to banking or to managing or controlling banks as to be a proper incident
thereto. The BHCA also prohibits a bank holding company, with certain
exceptions, from acquiring more than 5% of the voting shares of any company
and
from engaging in any business other than banking or managing or controlling
banks. 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
Gramm-Leach-Bliley Act (“Gramm-Leach”) became law in November 1999. Gramm-Leach
established a comprehensive framework to permit affiliations among commercial
banks, investment banks, insurance companies, securities firms, and other
financial service providers. Gramm-Leach permits qualifying bank holding
companies to register with the Federal Reserve Board as “financial holding
companies” and allows such companies to engage in a significantly broader range
of financial activities than were historically permissible for bank holding
companies. Although the Federal Reserve Board provides the principal regulatory
supervision of financial services permitted under Gramm-Leach, the Securities
and Exchange Commission and state regulators also provide substantial
supervisory oversight. In addition to broadening the range of financial services
a bank holding company may provide, Gramm-Leach also addressed customer privacy
and information sharing issues and set forth certain customer disclosure
requirements. The Company has no current plans to petition the Federal Reserve
Board for consideration as a financial holding company.
The
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(“Riegle-Neal”) permits bank holding companies to acquire banks located in any
state. Riegle-Neal also allows national banks and state banks with different
home states to merge across state lines and allows branch banking across state
lines, unless specifically prohibited by state laws.
The
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001 (USA “Patriot Act”) was adopted in response to the September 11, 2001
terrorist attacks. The Patriot Act provides law enforcement with greater powers
to investigate terrorism and prevent future terrorist acts. Among the
broad-reaching provisions contained in the Patriot Act are several designed
to
deter terrorists’ ability to launder money in the United States and provide law
enforcement with additional powers to investigate how terrorists and terrorist
organizations are financed. The Patriot Act creates additional requirements
for
banks, which were already subject to similar regulations. The Patriot Act
authorizes the Secretary of Treasury to require financial institutions to take
certain “special measures” when the Secretary suspects that certain transactions
or accounts are related to money laundering. These special measures may be
ordered when the Secretary suspects that a jurisdiction outside of the United
States, a financial institution operating outside of the United States, a class
of transactions involving a jurisdiction outside of the United States or certain
types of accounts are of “primary money laundering concern.” The special
measures include the following: (a) require financial institutions to keep
records and report on transactions or accounts at issue; (b) require financial
institutions to obtain and retain information related to the beneficial
ownership of any account opened or maintained by foreign persons; (c) require
financial institutions to identify each customer who is permitted to use a
payable-through or correspondent account and obtain certain information from
each customer permitted to use the account; and (d) prohibit or impose
conditions on the opening or maintaining of correspondent or payable-through
accounts. Failure of a financial institution to maintain and implement adequate
programs to combat money laundering and terrorist financing, or to comply with
all of the relevant laws or regulations, could have serious legal and
reputational consequences for the institution.
-5-
Capital
Adequacy:
Federal
banking regulations set forth capital adequacy guidelines, which are used by
regulatory authorities to assess the adequacy of capital in examining and
supervising a bank holding company and its insured depository institutions.
The
capital adequacy guidelines generally require bank holding companies to maintain
total capital equal to at least 8% of total risk-adjusted assets, with at least
one-half of total capital consisting of core capital (i.e., Tier I capital)
and
the remaining amount consisting of “other” capital-eligible items (i.e., Tier II
capital), such as perpetual preferred stock, certain subordinated debt, and,
subject to limitations, the allowance for loan losses. Tier I capital generally
includes common stockholders’ equity plus, within certain limitations, perpetual
preferred stock and trust preferred securities. For purposes of computing
risk-based capital ratios, bank holding companies must meet specific capital
guidelines that involve quantitative measures of assets, liabilities and certain
off-balance sheet items, calculated under regulatory accounting practices.
The
Company’s and City National’s capital amounts and classifications are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.
In
addition to total and Tier I capital requirements, regulatory authorities also
require bank holding companies and insured depository institutions to maintain
a
minimum leverage capital ratio of 3%. The leverage ratio is determined as the
ratio of Tier I capital to total average assets, where average assets exclude
goodwill, other intangibles, and other specifically excluded assets. Regulatory
authorities have stated that minimum capital ratios are adequate for those
institutions that are operationally and financially sound, experiencing solid
earnings, have high levels of asset quality and are not experiencing significant
growth. 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. In those
instances where these criteria are not evident, regulatory authorities expect,
and may require, bank holding companies and insured depository institutions
to
maintain higher than minimum capital levels.
Additionally,
federal banking laws require regulatory authorities to take “prompt corrective
action” with respect to depository institutions that do not satisfy minimum
capital requirements. 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. As an
example, 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. Additionally, a
depository institution is generally prohibited from making any capital
distribution (including payment of a dividend) or paying any management fee
to
its holding company, may be subject to asset growth limitations and may be
required to submit capital restoration plans if the depository institution
is
considered undercapitalized. The Company’s and City National’s regulatory
capital ratios are presented in the following table:
|
December
31,
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|||||||
|
2006
|
2005
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||||||
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City
Holding:
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|||||||
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Tier
I Risk-based
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15.30
|
%
|
15.41
|
%
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|||
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Total
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16.19
|
16.38
|
|||||
|
Tier
I Leverage
|
10.79
|
10.97
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|||||
|
City
National:
|
|||||||
|
Tier
I Risk-based
|
12.53
|
%
|
13.01
|
%
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|||
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Total
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13.42
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13.99
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|||||
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Tier
I Leverage
|
8.81
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9.24
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|||||
-6-
Dividends
and Other Payments:
The
Company is a legal entity separate and distinct from City National. Dividends
from City National are essentially the sole source of cash for the Company.
The
right of the Company, and shareholders of the Company, to participate in any
distribution of the assets or earnings of City National through the payment
of
such dividends or otherwise is necessarily subject to the prior claims of
creditors of City National, 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,
City
National may not, subject to certain limited expectations, make loans or
extensions of credit to, or invest in the securities of, or take securities
of
the Company as collateral for loans to any borrower. City National is 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. Specifically, the approval of the Office of the
Comptroller of the Currency (“OCC”) is required prior to the payment of
dividends by City National in excess of its earnings retained in the current
year plus retained net profits for the preceding two years. The payment of
dividends by the Company and City National may also be limited by other factors,
such as requirements to maintain adequate capital above regulatory guidelines.
The OCC has the authority to prohibit any bank under its jurisdiction from
engaging in an unsafe and unsound practice in conducting its business. Depending
upon the financial condition of City National, the payment of dividends 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.
During
2005 and 2006
combined,
City
National received regulatory approval to pay $144.8 million of cash dividends
to
the Parent Company, while generating net profits of $106.6 million. Therefore,
City National will be required to obtain regulatory approval prior to declaring
any cash dividends to the Parent Company during 2007. Although regulatory
authorities have approved prior cash dividends, there can be no assurance that
future dividend requests will be approved.
During
2006, the Company used cash obtained from these dividends primarily to: (1)
pay
common dividends to shareholders, (2) remit interest payments on the Company’s
junior subordinated debentures, (3) redeem $12.0 million of the Company’s junior
subordinated debentures, (4) invest $40.0 million in a new capital management
subsidiary, and (5) fund repurchases of the Company’s common shares. Management
believes that the Company’s available cash balance, together with cash dividends
from City National, is adequate to satisfy its funding and cash needs in
2007.
Governmental
Policies
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.
Various
other legislative and regulatory initiatives, 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 and state legislatures, as well as regulatory agencies. The Company
cannot determine the ultimate effect that such potential legislation, if
enacted, would have upon its financial condition or operations.
-7-
Executive
Officers of the Registrant
At
December 31, 2006, the executive officers of the Company were as
follows:
|
Name
|
Age
|
Business
Experience
|
|
Charles
R. Hageboeck
|
44
|
President
and Chief Executive Officer, City Holding Company and City National
Bank,
Charleston, WV since February
1,
2005. Executive Vice President and Chief Financial Officer, City
Holding
Company and City National Bank, Charleston, WV from June 2001 - January
31,
2005.
Director of Forecasting, Roche Diagnostics Corp. (a medical diagnostic
manufacturer), Indianapolis, IN from 2000 - 2001. Chief Financial
Officer,
Peoples Bank Corp. of Indianapolis, IN from 1997 -
1999.
|
|
Craig
G. Stilwell
|
51
|
Executive
Vice President of Retail Banking, City Holding Company and City National
Bank, Charleston, WV since February 2005. Executive Vice President
of
Marketing & Human Resources, City Holding Company and City National
Bank, Charleston, WV from May 2001 - February 2005. Olive
LLP (a regional accounting and consulting firm specializing in financial
institutions), Indianapolis, IN from 1999 - 2001. Senior Vice President,
Human Resources & Marketing, Peoples Bank Corp. of Indianapolis, IN
from 1978 - 1999.
|
|
John
A. DeRito
|
57
|
Executive
Vice President of Commercial Banking, City Holding Company and City
National Bank, Charleston, WV since June
25,
2004. Regional Credit Officer for the West Virginia Central Region
of
BB&T, Charleston, WV from November
2000
-- June
2004.
Vice President and Credit Officer, One Valley Bank, Charleston, WV
from
1983 - 1998.
|
|
John
W. Alderman, III
|
42
|
Senior
Vice President and Chief Legal Counsel, City Holding Company and
City
National Bank since April 1997.
|
|
David
L. Bumgarner
|
41
|
Senior
Vice President and Chief Financial Officer, City Holding Company
and City
National Bank since February
2005.
Audit Senior Manager, Arnett & Foster, PLLC from August 2000 - January
2005.
Assistant Controller/Director of Accounting, Eastern States Oil & Gas,
Inc. from May 1998 - August 2000.
|
Employees
The
Company had 779 full-time equivalent employees at December 31,
2006.
-8-
Available
Information
The
Company’s Internet website address is www.cityholding.com.
The
Company makes available free of charge through its website its annual report
on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably
practicable after such documents are electronically filed with, or furnished
to,
the Securities and Exchange Commission. The information on the Company’s website
is not, and shall not be deemed to be, a part of this report or incorporated
into any other filing with the Securities and Exchange Commission. Copies of
the
Company’s annual report will be made available, free of charge, upon written
request.
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, 2006 and such pages have been
filed as an exhibit to this Form 10-K and are incorporated herein by
reference.
|
Description
of Information
|
Page
Reference
|
|
|
1.
|
Distribution
of Assets, Liabilities and Stockholders’ Equity; Interest Rates and
Interest Differential
|
|
|
a. Average
Balance Sheets
|
5
|
|
|
b. Analysis
of Net Interest Earnings
|
6-7
|
|
|
c. Rate
Volume Analysis of Changes in Interest Income and Expense
|
8
|
|
|
2.
|
Investment
Portfolio
|
|
|
a. Book
Value of Investments
|
13
|
|
|
b. Maturity
Schedule of Investments
|
13
|
|
|
c. Maturities
of Issuers Exceeding 10% of Stockholders’ Equity
|
13
|
|
|
3.
|
Loan
Portfolio
|
|
|
a. Types
of Loans
|
14
|
|
|
b. Maturities
and Sensitivity to Changes in Interest Rates
|
14
|
|
|
c. Risk
Elements
|
17
|
|
|
d. Other
Interest Bearing Assets
|
N/A
|
|
|
4.
|
Summary
of Loss Experience
|
16
|
|
5.
|
Deposits
|
|
|
a. Breakdown
of Deposits by Categories, Average Balance and
Average Rate Paid
|
5
|
|
|
b. Maturity
Schedule of Time Certificates of Deposit and Other
Time Deposits of $100,000 or More
|
19
|
|
|
6.
|
Return
on Equity and Assets
|
3
|
|
7.
|
Short-term
Borrowings
|
19
|
-9-
Item
1A. Risk
Factors
An
investment in the Company’s common stock is subject to risks inherent to the
Company’s business. The material risks and uncertainties that management
believes affect the Company are described below. The risks and uncertainties
described below are not the only ones facing the Company. Additional risks
and
uncertainties that management is not aware of or focused on or that management
currently deems immaterial may also impair the Company’s business operations.
You should carefully consider the risks described below, as well as the other
information included or incorporated by reference in this Annual Report on
Form
10-K, before making an investment in the Company’s common stock. If any of the
following risks occur, the Company’s financial condition and results of
operations could be materially and adversely affected, and you could lose all
or
part of your investment.
The
Value of the Company’s Common Stock May Fluctuate
The
market for the Company’s common stock may experience significant price and
volume fluctuations in response to a number of factors including actual or
anticipated quarterly variations in operating results, changes in expectations
of future financial performance, changes in estimates by securities analysts,
governmental regulatory action, banking industry reform measures, customer
relationship developments and other factors, many of which will be beyond the
Company’s control.
Furthermore,
the stock market in general, and the market for financial institutions in
particular, have experienced extreme volatility that often has been unrelated
to
the operating performance of particular companies. These broad market and
industry fluctuations may adversely affect the trading price of the Company’s
common stock, regardless of actual operating performance.
The
Trading Volume In The Company’s Common Stock Is Less Than That Of Other Larger
Financial Services Companies
Although
the Company’s common stock is listed for trading on the Nasdaq Stock Market,
Inc. (NASDAQ), the trading volume in its common stock is less than that of
other
larger financial services companies. A public trading market having the desired
characteristics of depth, liquidity and orderliness depends on the presence
in
the marketplace of willing buyers and sellers of the Company’s common stock at
any given time. This presence depends on the individual decisions of investors
and general economic and market conditions over which the Company has no
control. Given the lower trading volume of the Company’s common stock,
significant sales of the Company’s common stock, or the expectation of these
sales, could cause the Company’s stock price to fall.
Future
Sales of Shares of the Company’s Common Stock Could Negatively Affect its Market
Price
Future
sales of substantial amounts of the Company’s common stock, or the perception
that such sales could occur, could adversely affect the market price of the
Company’s common stock in the open market. We make no prediction as to the
effect, if any, that future sales of shares, or the availability of shares
for
future sale, will have on the market price of the Company’s common
stock.
Shares
of the Company’s Common Stock Are Not FDIC Insured
Neither
the Federal Deposit Insurance Corporation nor any other governmental agency
insures the shares of the Company’s common stock. Therefore, the value of your
shares in the Company will be based on their market value and may
decline.
-10-
Anti-takeover
Defenses May Delay or Prevent Future Mergers
The
Company has entered into a Rights Agreement with SunTrust, as its rights agent,
designed to discourage the accumulation of shares in excess of 15% of the
Company’s outstanding shares. This agreement could limit the price that some
investors might be willing to pay in the future for shares of the Company’s
common stock and may have the effect of delaying or preventing a change in
control.
The
Company’s Ability To Pay Dividends Is Limited
Holders
of shares of the Company’s common stock are entitled to dividends if, and when,
they are declared by the Company’s Board of Directors out of funds legally
available for that purpose. Although the Board of Directors has declared cash
dividends in the past, the current ability to pay dividends is largely dependent
upon the receipt of dividends from the City National. Federal and state laws
impose restrictions on the ability of the City National to pay dividends.
Additional restrictions are placed upon the Company by the policies of federal
regulators, including the Federal Reserve Board’s November 14, 1985 policy
statement, which provides that bank holding companies should pay dividends
only
out of the past year’s net income, and then only if their prospective rate of
earnings retention appears consistent with their capital needs, asset quality,
and overall financial condition. In general, future dividend policy is subject
to the discretion of the Board of Directors and will depend upon a number of
factors, including the Company’s and City National’s future earnings, capital
requirements, regulatory constraints and financial condition.
An
Economic Slowdown in West Virginia, Kentucky, and Ohio Could Hurt Our
Business
Because
the Company focuses its business in West Virginia, Kentucky, and Ohio, an
economic slowdown in these states could hurt our business. An economic slowdown
could have the following consequences:
|
·
|
Loan
delinquencies may increase;
|
|
·
|
Problem
assets and foreclosures may
increase;
|
|
·
|
Demand
for the products and services of City National may decline;
and
|
|
·
|
Collateral
(including real estate) for loans made by City National may decline
in
value, in turn reducing customers’ borrowing power, and making existing
loans less secure.
|
The
Company and City National are Extensively Regulated
The
operations of the Company and City National are subject to extensive regulation
by federal, state and local governmental authorities and are subject to various
laws and judicial and administrative decisions imposing requirements and
restrictions on them. Policies adopted or required by these governmental
authorities can affect the Company’s business operations and the availability,
growth and distribution of the Company’s investments, borrowings and deposits.
In addition, the Office of the Comptroller of the Currency periodically conducts
examinations of the Company and City National and may impose various
requirements or sanctions.
Proposals
to change the laws governing financial institutions are frequently raised in
Congress and before bank regulatory authorities. Changes in applicable laws
or
policies could materially affect the Company’s business, and the likelihood of
any major changes in the future and their effects are impossible to determine.
Moreover, it is impossible to predict the ultimate form any proposed legislation
might take or how it might affect the Company.
The
Company is Subject to Interest Rate Risk
The
Company’s earnings and cash flows are largely dependent upon its net interest
income. Net interest income is the difference between interest income earned
on
interest-earning assets such as loans and securities and interest expense paid
on interest-bearing liabilities such as deposits and borrowed funds. Interest
rates are highly sensitive to many factors that are beyond the Company’s
control, including general economic conditions and policies of various
governmental and regulatory agencies and, in particular, the Board of Governors
of the Federal Reserve System. Changes in monetary policy, including changes
in
interest rates, could influence not only the interest the Company receives
on
loans and securities and the amount of interest it pays on deposits and
borrowings, but such changes could also affect (i) the Company’s ability to
originate loans and obtain deposits, (ii) the fair value of the Company’s
financial assets and liabilities,
and (iii) the average duration of the Company’s mortgage-backed securities
portfolio. If the interest rates paid on deposits and other borrowings increase
at a faster rate than the interest rates received on loans and other
investments, the Company’s net interest income, and therefore earnings, could be
adversely affected. Earnings could also be adversely affected if the interest
rates received on loans and other investments fall more quickly than the
interest rates paid on deposits and other borrowings.
-11-
Although
management believes it has implemented effective asset and liability management
strategies, including the use of derivatives as hedging instruments, to reduce
the potential effects of changes in interest rates on the Company’s results of
operations, any substantial, unexpected, prolonged change in market interest
rates could have a material adverse effect on the Company’s financial condition
and results of operations. See the section captioned “Risk Management” in
Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations located elsewhere in this report for further discussion
related to the Company’s management of interest rate risk.
The
Company’s Allowance for Loan Losses May Not Be Sufficient
The
Company maintains an allowance for loan losses, which is a reserve established
through a provision for loan losses charged to expense that represents
management’s best estimate of probable losses in the existing portfolio of
loans. The allowance, in the judgment of management, is necessary to
reserve
provide
for
estimated loan losses and risks inherent in the loan portfolio. The level of
the
allowance reflects management’s continuing evaluation of industry
concentrations; specific credit risks; loan loss experience; current loan
portfolio quality; present economic, political and regulatory conditions and
unidentified losses inherent in the current loan portfolio. The determination
of
the appropriate level of the allowance for loan losses inherently involves
a
high degree of subjectivity and requires the Company to make significant
estimates of current credit risks and future trends, all of which may undergo
material changes. Changes in economic conditions affecting borrowers, new
information regarding existing loans, identification of additional problem
loans
and other factors, both within and outside of the Company’s control, may require
an increase in the allowance for loan losses. In addition, bank regulatory
agencies periodically review the Company’s allowance for loan losses and may
require an increase in the provision for loan losses or the recognition of
further loan charge-offs, based on judgments different than those of management.
In addition, if charge-offs in future periods exceed the allowance for loan
losses, the Company will need additional provisions to increase the allowance
for loan losses. Any increases in the allowance for loan losses will result
in a
decrease in net income and, possibly, capital, and may have a material adverse
effect on the Company’s financial condition and results of operations.
Management
evaluates the adequacy of the allowance for loan losses at least quarterly,
which includes testing certain individual loans as well as collective pools
of
loans for impairment. This evaluation includes an assessment of actual loss
experience within each category of the portfolio, individual commercial and
commercial real estate loans that exhibit credit weakness; current economic
events, including employment statistics, trends in bankruptcy filings, and
other
pertinent factors; industry or geographic concentrations, and regulatory
guidance. See the section captioned “Allowance and Provision for Loan Losses” in
Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations located elsewhere in this report for further discussion
related to the Company’s process for determining the appropriate level of the
allowance for loan losses.
Customers
May Default On the Repayment Of Loans
City
National’s customers may default on the repayment of loans, which may negatively
impact the Company’s earnings due to loss of principal and interest income.
Increased operating expenses may result from the allocation of management time
and resources to the collection and work-out of the loan. Collection efforts
may
or may not be successful causing the Company to write off the loan or repossess
the collateral securing the loan, which may or may not exceed the balance of
the
loan.
-12-
Previously
Securitized Loans May Become Impaired
City
National’s previously securitized loans may become impaired, requiring an
impairment charge to be recognized through the Company’s provision for loan
losses. The Company accounts for the previously securitized loans by accreting
into income the original
discount
on these loans based on their estimated collectibility. This requires the
Company to make estimates for prepayments and defaults on previously securitized
loans. Should any of the actual prepayments or defaults adversely impact
collectibility of these loans, the Company would be required to take an
impairment charge on the previously securitized loans. See the section captioned
“Retained Interests and Previously Securitized Loans” in Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations located elsewhere in this report for further discussion related
to
the Company’s process for determining the appropriate valuation of the Company’s
previously securitized loans.
Due
To Increased Competition, the Company May Not Be Able To Attract and Retain
Banking Customers At Current Levels
The
Company faces competition from the following:
|
·
|
local,
regional and national banks;
|
|
·
|
savings
and loans;
|
|
·
|
internet
banks;
|
|
·
|
credit
unions;
|
|
·
|
finance
companies; and
|
|
·
|
brokerage
firms serving the Company’s market
areas.
|
In
particular, City National’s competitors include several major national financial
and banking companies whose greater resources may afford them a marketplace
advantage by enabling them to maintain numerous banking locations and mount
extensive promotional and advertising campaigns. Additionally, banks and other
financial institutions may have products and services not offered by the
Company, which may cause current and potential customers to choose those
institutions. Areas of competition include interest rates for loans and
deposits, efforts to obtain deposits and range and quality of services provided.
If the Company is unable to attract new and retain current customers, loan
and
deposit growth could decrease causing the Company’s results of operations and
financial condition to be negatively impacted.
The
Company May Be Required To Write Down Goodwill And Other Intangible Assets,
Causing Its Financial Condition And Results To Be Negatively
Affected
When
the
Company acquires a business, a portion of the purchase price of the acquisition
is allocated to goodwill and other identifiable intangible assets. The excess
of
the purchase price over the fair
value of the net
identifiable tangible
and intangible assets
acquired determines the amount of the purchase price that is allocated to
goodwill
and
other intangible assets
acquired. At December 31, 2006, the Company’s goodwill and other identifiable
intangible assets were approximately $58.8
million.
Under current accounting standards, if the Company determines goodwill or
intangible assets are impaired, it would be required to write down the value
of
these assets. The Company conducts an annual review to determine whether
goodwill and other identifiable intangible assets are impaired. The Company
recently completed such an impairment analysis and concluded that no impairment
charge was necessary for the year ended December 31, 2006. The Company cannot
provide assurance whether it will be required to take an impairment charge
in
the future. Any impairment charge would have a negative effect on its
shareholders’ equity and financial results and may cause a decline in our stock
price.
-13-
Acquisition
Opportunities May Present Challenges
The
Company continually evaluates opportunities to acquire other businesses.
However, the Company may not have the opportunity to make suitable acquisitions
on favorable terms in the future, which could negatively impact the growth
of
its business. The Company expects that other banking and financial companies,
many of which have significantly greater resources, will compete with it to
acquire compatible businesses. This competition could increase prices for
acquisitions that the Company would likely pursue, and its competitors may
have
greater resources than it does. Also, acquisitions of regulated businesses
such
as banks are subject to various regulatory approvals. If the Company fails
to
receive the appropriate regulatory approvals, it will not be able to consummate
an acquisition that it believes is in its best interests.
Any
future acquisitions may result in unforeseen difficulties, which could require
significant time and attention from our management that would otherwise be
directed at developing our existing business. In addition, we could discover
undisclosed liabilities resulting from any acquisitions for which we may become
responsible. Further, the benefits that we anticipate from these acquisitions
may not develop.
The
Company’s Controls and Procedures May Fail or Be
Circumvented
Management
regularly reviews and updates the Company’s internal controls, disclosure
controls and procedures, and corporate governance policies and procedures.
Any
system of controls, no matter how well designed and operated, is based in part
on certain assumptions and can provide only reasonable, not absolute, assurances
that the objectives of the system are met. Any failure or circumvention of
the
Company’s controls and procedures or failure to comply with regulations related
to controls and procedures could have a material adverse effect on the Company’s
business, results of operations and financial condition.
The
Company May Not Be Able To Attract and Retain Skilled
People
The
Company’s success depends, in large part, on its ability to attract and retain
key people. Competition for the best people in most activities engaged in by
the
Company can be intense and the Company may not be able to hire people or to
retain them. The unexpected loss of services of one or more of the Company’s key
personnel could have a material adverse impact on the Company’s business because
of their skills, knowledge of the Company’s market, years of industry experience
and the difficulty of promptly finding qualified replacement
personnel.
Item
1B. Unresolved
Staff Comments
None
Item
2. Properties
City
National owns the Company’s executive offices, located at 25 Gatewater Road,
Charleston, West Virginia. City National operates 67 branch offices, with 56
offices in West Virginia, nine in Kentucky, and two offices in Ohio. The West
Virginia locations are primarily centered in the Charleston, Huntington,
Beckley, and Martinsburg markets. City National owns 49
locations
and leases 18
locations,
pursuant to operating leases. All of the properties are suitable and adequate
for their current operations and are generally being fully
utilized.
City
National also owns a thirty thousand square foot office building in an
unincorporated area approximately fifteen miles west of Charleston, West
Virginia. This facility formerly housed loan operations personnel, but has
since
been vacated by the Company. The building is currently being leased to a third
party.
-14-
Item
3. Legal
Proceedings
The
Company is engaged in various legal actions that it deems to be in the ordinary
course of business. The
Company believes that it has adequately provided for probable costs of current
litigation. As
these
legal actions are resolved, the Company could realize positive and/or negative
impact to its financial performance in the period in which these legal actions
are ultimately decided. There can be no assurance that current actions will
have
immaterial results, either positive or negative, or that no material actions
may
be presented in the future.
None
-15-
Common
Stock Market and Dividends
The
Company’s common stock trades on the NASDAQ stock market under the symbol CHCO.
This table 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. At December 31, 2006, there were 3,303 shareholders of
record.
|
Cash
|
||||||||||
|
Dividends
|
Market
Value
|
|||||||||
|
Per
Share
|
Low
|
High
|
||||||||
|
2006
|
||||||||||
|
Fourth
Quarter
|
$
|
0.28
|
$
|
37.49
|
$
|
41.87
|
||||
|
Third
Quarter
|
0.28
|
35.42
|
40.19
|
|||||||
|
Second
Quarter
|
0.28
|
34.53
|
37.31
|
|||||||
|
First
Quarter
|
0.28
|
35.26
|
37.64
|
|||||||
|
2005
|
||||||||||
|
Fourth
Quarter
|
$
|
0.25
|
$
|
32.68
|
$
|
37.62
|
||||
|
Third
Quarter
|
0.25
|
34.69
|
39.21
|
|||||||
|
Second
Quarter
|
0.25
|
27.57
|
37.00
|
|||||||
|
First
Quarter
|
0.25
|
29.01
|
36.61
|
|||||||
As
noted
in the section captioned Dividends and Other Payments included in Item 1.
Business, the section captioned Liquidity included in Item 7. Management’s
Discussion and Analysis and in Note Eighteen of Notes to Consolidated Financial
Statements, the Company’s ability to pay dividends to its shareholders is
dependent upon the ability of City National to pay dividends to City Holding
(“Parent Company”).
Stock
Repurchase Plan
The
following table sets forth information regarding the Company's common stock
repurchases transacted during the quarter:
|
Period
|
|
Total
Number
of
Shares
Purchased
|
|
Average
Price
Paid
per
Share
|
|
Total
Number
of
Shares
Purchased
as
Part of Publicly
Announced
Plans
or
Programs (a)
|
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
1 - October 31, 2006
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
|
204,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
1 - November 30, 2006
|
|
|
15,700
|
|
$
|
38.26
|
|
|
15,700
|
|
|
189,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
1 - December 31, 2006
|
|
|
61,000
|
|
$
|
39.61
|
|
|
61,000
|
|
|
966,000
|
|
-16-
(a) In
June
2005, the Company announced that its Board of Directors had approved a stock
repurchase program relative to the Company’s outstanding common stock.
Management had been authorized to purchase up to 1,000,000 shares of the
Company’s common stock in open market purchases, block transactions, private
transactions or otherwise at such times and at such prices as determined by
management. In December 2006, the Company announced that the Board of Directors
rescinded the share repurchase program approved in June 2005 and announced
it
had authorized the Company to buy back up to 1,000,000 shares of its common
stock, in open market transactions at prices that are accretive to continuing
shareholders. No timetable was placed on the duration of this share repurchase
program.
Stock-Based
Compensation Plan
Information
regarding stock-based compensation awards outstanding and available for future
grants as of December 31, 2006, segregated between stock-based compensation
plans approved by shareholders and stock-based compensation plans not approved
by shareholders, is presented in the table below. Additional information
regarding stock-based compensation plans is presented in Note Fourteen Employee
Benefit Plans of Notes to Consolidated Financial Statements.
|
Plan
Category
|
Number
of Shares to be Issued Upon Exercise of Outstanding Awards
(a)
|
Weighted-average
exercise price of outstanding awards
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
(c)
|
|||||||
|
Plans
approved by shareholders
|
271,709
|
$
|
30.51
|
732,050
|
||||||
|
Plans
not approved by shareholders
|
-
|
-
-
|
-
|
|||||||
|
Total
|
271,709
|
$
|
30.51
|
732,050
|
||||||
-17-
Stock-Based
Compensation Plan
The
following graph sets forth the cumulative total shareholder return (assuming
reinvestment of dividends) to the Company’s shareholders during the five-year
period ended December 31, 2006, as well as an overall stock market index
(The Nasdaq Stock Market Index) and the Company’s Peer Group. The Peer Group
consists of certain publicly-traded banking institutions over $1 billion but
less than $7 billion in assets located in West Virginia and adjoining states.
The trading symbols for such financial institutions include: FCBC, SASR, CTBI,
FNBP, NPBC, UBSH, WSBC, VFGI, KNBT, CMTY, HNBC, PRK, PVSA, RBCAA, PEBO, SLFI,
STBA, UBSI, FFBC and UVSP. The stock performance shown on the graph below
is not necessarily indicative of future price performance.
This
graph shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, unless the Company specifically incorporates this report by
reference. It will not be otherwise filed under such Acts.
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, 2006, included in this report as Exhibit
13, is incorporated herein by reference.
Management's
Discussion and Analysis of Financial Condition and Results of Operations on
pages 2 through 21 of the Annual Report to Shareholders of City Holding Company
for the year ended December 31, 2006, included in this report as Exhibit 13,
is
incorporated herein by reference.
Information
appearing under the caption “Risk Management” appearing on pages 10-11 of the
Annual Report to Shareholders of City Holding Company for the year ended
December 31, 2006, included in this report as Exhibit 13, is incorporated herein
by reference.
The
consolidated financial statements, notes to consolidated financial statements,
reports of management and the independent registered public accounting firm
included on pages 22 through 48 of the Annual Report to Shareholders of
City Holding Company for the year ended December 31, 2006, included in this
report as Exhibit 13, are incorporated herein by reference.
-18-
None
Item
9A. Controls
and Procedures
Pursuant
to Rule 13a-15b under the Securities Exchange Act of 1934, the Company carried
out an evaluation, with the participation of the Company’s management, including
the Company’s Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Company’s disclosure controls and procedures (as defined
under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934)
as of the end of the period covered by this report. Based upon that evaluation,
the Company’s Chief Executive Officer and Chief Financial Officer concluded that
the Company’s disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company required to be
included in the Company’s periodic Securities and Exchange Commission
filings.
| (a) |
Management’s
annual report on internal control over financial reporting appears
on
page22
of
the Annual Report to Shareholders of City Holding Company for the
year
ended December 31, 2006, included in this report as Exhibit 13, is
incorporated herein by reference.
|
| (b) |
The
attestation report of the registered public accounting firm on
management’s assessment of the Company’s internal control over financial
reporting appears on page 23
of
the Annual Report to Shareholders of City Holding Company for the
year
ended December 31, 2006, included in this report as Exhibit 13, is
incorporated herein by reference.
|
| (c) |
The
Company did not have any changes in internal control over financial
reporting during its fourth quarter for the year ending December
31, 2006,
that materially affected, or were reasonably likely to materially
affect,
the Company’s internal control over financial reporting.
|
Item
9B. Other
Information
None
Certain
information regarding executive officers is included under the section captioned
“Executive Officers of The Registrant” in Part I, Item 1, elsewhere in
this Annual Report on Form 10-K. Other information required by this Item
appears under the captions “ELECTION OF DIRECTORS”, “ADDITIONAL INFORMATION
CONCERNING THE BOARD OF DIRECTORS”, “REPORT OF THE AUDIT COMMITTEE”, “SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE” in the Company's 2007 Proxy
Statement that will be filed within 120 days of fiscal year end and is hereby
incorporated by reference.
The
Company has adopted a Code of Ethics that applies to the Company’s chief
executive officer, chief financial officer, chief accounting officer, and all
directors, officers and employees of the Company and has posted such Code of
Ethics on its website at www.cityholding.com
under
the “Corporate Governance” link. A copy of the Company’s Code of Ethics covering
all employees will be mailed without charge upon request to Investor Relations,
City Holding Company, 25 Gatewater Road, P. O. Box 7520, Charleston, WV
25356-0520. Any amendments to or waivers from any provision of the Code of
Ethics applicable to the Company’s chief executive officer, chief financial
officer, or chief accounting officer will be disclosed by timely posting such
information on the Company’s internet website.
Item
11. Executive
Compensation
The
information required by Item 11 of FORM 10-K appears under the captions
"EXECUTIVE
COMPENSATION
OF
DIRECTORS",
“COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATIONDISCUSSION
AND ANALYSIS”,
“ANNUAL
COMPENSATION”, “EQUITY HOLDINGS”, “POST-EMPLOYMENT PAYMENTS”, and
“BOARD
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION”OTHER
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS”
in the
Company's 2007 Proxy Statement that will be filed within 120 days of fiscal
year
end and is hereby incorporated by reference.
-19-
|
Item
12.
|
The
information required by Item 12 of FORM 10-K appears under the
captions
"COMMON
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" in the Company's
2007 Proxy Statement that will be filed within 120 days of fiscal year end
and
is hereby incorporated by reference.
The
information required by Item 13 of FORM 10-K appears under the caption "CERTAIN
TRANSACTIONS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS" in the Company's 2007
Proxy Statement that will be filed within 120 days of fiscal year end and is
hereby incorporated by reference.
The
information required by Item 14 of FORM 10-K appears under the caption
"PRINCIPAL ACCOUNTING FEES AND SERVICES" in the Company's 2007 Proxy Statement
that will be filed within 120 days of fiscal year end and is hereby incorporated
by reference.
-20-
|
(a)
|
(1)
|
Financial
Statements.
Reference is made to Part II, Item 8, of this Annual Report on
Form
10-K.
|
|
(2)
|
Financial
Statement Schedules.
These schedules are omitted as the required information is inapplicable
or
the information is presented in the consolidated financial statements
or
related notes.
|
|
|
(3)
|
Exhibits.
The exhibits listed in the “Exhibit Index” on pages 24-26 of this Annual
Report on Form 10-K included herein are filed herewith or incorporated
by
reference from previous filings.
|
|
|
(b)
|
See
(a) (3) above.
|
|
|
(c)
|
See
(a) (1) and (2)
above.
|
-21-
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/
Charles R. Hageboeck
|
|
|
Charles
R. Hageboeck
|
|
|
President
and Chief Executive Officer
|
|
|
(Principal
Executive Officer)
|
|
|
/s/
David L. Bumgarner
|
|
|
David
L. Bumgarner
|
|
|
Senior
Vice President and Chief Financial Officer
|
|
|
(Principal
Financial Officer)
|
|
POWER
OF ATTORNEY
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been
signed below by the following persons on behalf of the Registrant and in the
capacities indicated on February 28,
2007.
Each of
the directors and/or officers of City Holding Company whose signature appears
below hereby appoints E. M. Payne, III, and/or Charles R. Hageboeck, as his
attorney-in-fact to sign in his name and behalf, in any and all capacities
stated below and to file with the Securities and Exchange 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.
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/s/
E. M. Payne, III
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/s/
Charles R. Hageboeck
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|
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E.
M. Payne, III
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Charles
R. Hageboeck
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|
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Chairman
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Director,
President, and Chief Executive Officer
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|
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/s/
Tracy W. Hylton, II
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||
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Samuel
M. Bowling
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Tracy
W. Hylton, II
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Director
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Director
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/s/
Hugh R. Clonch
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/s/
C. Dallas Kayser
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Hugh
R. Clonch
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C.
Dallas Kayser
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|
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Director
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Director
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-22-
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/s/
Oshel B. Craigo
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/s/
Philip L. McLaughlin
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Oshel
B. Craigo
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Philip
L. McLaughlin
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|
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Director
|
Director
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|
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/s/
John R Elliot
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/s/
James L. Rossi
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|
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John
R Elliot
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James
L. Rossi
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Director
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Director
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/s/
William H. File, III
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||
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William
H. File, III
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Sharon
H. Rowe
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Director
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Director
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/s/
Robert D. Fisher
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/s/
James E. Songer, II
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Robert
D. Fisher
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James
E. Songer, II
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Director
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Director
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|
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/s/
Jay C. Goldman
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/s/
Mary H. Williams
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Jay
C. Goldman
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Mary
H. Williams
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Director
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Director
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/s/
David W. Hambrick
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||
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David
W. Hambrick
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||
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Director
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||
-23-
The
following exhibits are filed herewith or are incorporated herein by
reference.
Exhibit Description
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3(a)
|
Articles
of Incorporation of City Holding Company
(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).
|
|
3(b)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated March 6, 1984 (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).
|
|
3(c)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated March 4, 1986 (attached to, and incorporated by reference
from, City
Holding Company's Form 10-K Annual Report for the year ended December
31,
1986, filed March 31, 1987 with the Securities and Exchange
Commission).
|
|
3(d)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated September 29, 1987 (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).
|
|
3(e)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated May 6, 1991 (attached to, and incorporated by reference from,
City
Holding Company's Form 10-K Annual Report for the year ended December
31,
1991, filed March 17, 1992 with the Securities and Exchange
Commission).
|
|
3(f)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated May 7, 1991 (attached to, and incorporated by reference from,
City
Holding Company's Form 10-K Annual Report for the year ended December
31,
1991, filed March 17, 1992 with the Securities and Exchange
Commission).
|
|
3(g)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated August 1, 1994 (attached to, and incorporated by reference
from,
City Holding Company's Form 10-Q Quarterly Report for the quarter
ended
September 30, 1994, filed November 14, 1994 with the Securities
and
Exchange Commission).
|
|
3(h)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated December 9, 1998 (attached to, and incorporated by reference
from,
City Holding Company’s Form 10-K Annual Report for the year ended December
31, 1998, filed March 31, 1999 with the Securities and Exchange
Commission).
|
|
3(i)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated June 13, 2001 (attached to, and incorporated by reference
from, City
Holding Company’s Registration Statement on Form 8-A, filed June 22, 2001
with the Securities and Exchange
Commission).
|
|
3(j)
|
Articles
of Amendment to the Articles of Incorporation of City Holding
Company,
dated May 10, 2006 (attached to, and incorporated by reference
from, City
Holding Company’s Form 10-Q, Quarterly Report for the quarter ended June
30, 2006, filed August 9, 2006 with the Securities and Exchange
Commission).
|
|
3(k)
|
Amended
and Restated Bylaws of City Holding Company,
revised February 28, 2007(attached to, and incorporated by reference
from,
City Holding Company’s Current Report on Form 8-K filed March 1,
2007 with the Securities and Exchange
Commission).
|
-24-
|
4(a)
|
Rights
Agreement,
dated as of June 13, 2001 (the “Rights Agreement”), between City Holding
Company and SunTrust Bank, as Rights Agent (attached to, and incorporated
by reference from, City Holding Company’s Registration Statement on Form
8-A, filed June 22, 2001 with the Securities and Exchange
Commission).
|
|
4(b)
|
Amendment
No. 1 to the Rights Agreement dated as of November 30, 2005 (attached
to,
and incorporated by reference from City Holding Company’s Amendment No. 1
on Form 8-A, filed December 21, 2005, with the Securities and Exchange
Commission).
|
|
10(a)
|
Directors’
Deferred Compensation Plan for the Directors of the Bank of
Raleigh,
dated January 1987 (attached to and incorporated by reference from,
City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2004, filed March 2, 2005 with the Securities and Exchange
Commission).
|
|
10(b)
|
Form
of Deferred Compensation Agreement for the Directors of the National
Bank
of Summers,
dated January 15, 1987 (attached to and incorporated by reference
from,
City Holding Company’s Form 10-K Annual Report for the year ended December
31, 2004, filed March 2, 2005 with the Securities and Exchange
Commission).
|
|
10(c)
|
Junior
Subordinated Indenture,
dated as of March 31, 1998, between City Holding Company and The
Chase
Manhattan Bank, as Trustee (attached to, and incorporated by reference
from, City Holding Company’s Registration Statement on Form S-4,
Registration No. 333-62419, filed with the Securities and Exchange
Commission on August 28, 1998).
|
|
10(d)
|
Form
of City Holding Company’s 9.15% Debenture due April 1,
2028
(attached to, and incorporated by reference from, City Holding
Company’s
Registration Statement on Form S-4, Registration No. 333-62419,
filed with
the Securities and Exchange Commission on August 28,
1998).
|
|
10(e)
|
City
Holding Company’s 1993 Stock Incentive Plan
(attached to, and incorporated by reference from, Exhibit 4.1 to
City
Holding Company’s Registration Statement on Form S-8, Registration No.
333-87667, filed with the Securities and Exchange Commission on
September
23, 1999).
|
|
10(f)
|
Amendment
No. 1 to City Holding Company’s 1993 Stock Incentive
Plan
(attached to, and incorporated by reference from, Exhibit 4.2 to
City
Holding Company’s Registration Statement on Form S-8, Registration No.
333-87667, filed with the Securities and Exchange Commission on
September
23, 1999).
|
|
10(g)
|
Amendment
No. 2 to City Holding Company’s 1993 Stock Incentive
Plan
(attached to, and incorporated by reference from, City Holding
Company’s
Form 10-Q Quarterly Report for the quarter ended June 30, 2002,
filed
August 14, 2002 with the Securities and Exchange
Commission).
|
|
10(h)
|
City
Holding Company’s 2003 Incentive Plan
(attached to, and incorporated by reference from, City Holding
Company’s
Definitive Proxy Statement, filed March 21, 2003 with the Securities
and
Exchange Commission).
|
|
10(i)
|
Form
of Amended and Restated Employment Agreement,
dated as of November 18, 2003, by and between City Holding Company
and
Gerald R. Francis (attached to and incorporated by reference from,
City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2003, filed March 11, 2004 with the Securities and Exchange
Commission).
|
|
10(j)
|
Form
of Amended and Restated Employment Agreement,
dated as of November 18, 2003, by and between City Holding Company
and
William L. Butcher (attached to and incorporated by reference from,
City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2003, filed March 11, 2004 with the Securities and Exchange
Commission).
|
|
10(k)
|
Form
of Amended and Restated Employment Agreement,
dated as of November 18, 2003, by and between City Holding Company
and
Charles R. Hageboeck (attached to and incorporated by reference
from, City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2003, filed March 11, 2004 with the Securities and Exchange
Commission).
|
-25-
|
10(l)
|
Form
of Amended and Restated Employment Agreement,
dated as of November 18, 2003, by and between City Holding Company
and
Craig Stilwell (attached to and incorporated by reference from,
City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2003, filed March 11, 2004 with the Securities and Exchange
Commission).
|
|
10(m)
|
Form
of Amendment to Employment Agreement,
dated as of February 1, 2005, by and between City Holding Company
and
Charles R. Hageboeck (attached to and incorporated by reference
from, City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2004, filed March 2, 2005 with the Securities and Exchange
Commission).
|
|
10(n)
|
Form
of Change of Control Agreement,
dated February 1, 2005, by and between City Holding Company and
David L.
Bumgarner (attached to and incorporated by reference from, City
Holding
Company’s Form 10-K Annual Report for the year ended December 31, 2004,
filed March 2, 2005 with the Securities and Exchange Commission).
|
|
10(o)
|
Form
of Amendment to Employment Agreement,
dated as of February 25, 2005, by and between City Holding Company
and
Craig Stilwell (attached to and incorporated by reference from,
City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2004, filed March 2, 2005 with the Securities and Exchange Commission).
|
|
10(p)
|
Form
of Employment Agreement,
dated March 14, 2002, by and between City Holding Company and John
W.
Alderman, III (attached to, and incorporated by reference from,
City
Holding Company’s Form 10-K Annual Report for the year ended December 31,
2005, filed March 7, 2006 with the Securities and Exchange Commission).
|
|
10(q)
|
Form
of Change in Control and Termination Agreement,
dated June 28, 2004, by and between City Holding Company and John
A.
DeRito (attached to, and incorporated by reference from, City Holding
Company’s Form 10-K Annual Report for the year ended December 31, 2005,
filed March 7, 2006 with the Securities and Exchange Commission).
|
|
10(r)
|
Description
of Base Salaries of Named Executive Officers for 2007,
(incorporated by reference from City Holding Company’s Current Report on
Form 8-K filed March 1, 2007 with the Securities and Exchange
Commission).
|
|
24
|
Power
of Attorney (included on the signature page
hereof)
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-26-