Exhibit 99
NEWS RELEASE
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For Immediate Release
January 31, 2001
For Further Information Contact:
Robert A. Henson, Acting CEO
(304) 769-1106
City Holding Company Announces Strategic Repositioning and Fourth
Quarter Results of Operations
City Holding Company (NASDAQ: CHCO) (the "Company"), a $2.7 billion
bank holding company headquartered in Charleston, West Virginia, today announced
a fourth quarter strategic repositioning of the Company that will substantially
complete the process, begun in July 2000, of refocusing on its core community
bank franchise. The repositioning in effect, recognizes the impact of divesting
all of the Company's non-core business lines, while strengthening the core
community banking franchise, including brokerage activities and insurance sales.
The Company will take a pre-tax charge of approximately $27.4 million
to discontinue the Specialty Finance Loan Origination division and to reflect a
write down in the value of the Internet Service Provider (ISP) and
Printing/Direct Mail divisions. The discontinuance of the Specialty Finance Loan
Originations is the last step in the Company's exit from this business line as
the Specialty Finance Servicing division was sold on December 18, 2000. Although
both the sale of servicing and the closing of the origination division have
contractual obligations that require a 90 to 180 day transition period, the
economic impact to the Company has been recognized in the fourth quarter of 2000
based on estimated exit costs.
Based on year end analyses, the Company is taking a pre-tax charge of
approximately $14 million to recognize the market value of its California
banking operations. As previously announced, City has engaged an investment
banking firm to facilitate the sale of the combined California banking
franchise.
The Company will also reduce the carrying value of two investments held
in a Small Business Investment Corporation (SBIC) to zero. This $5 million
charge is due to the remote possibility that the underlying SBIC equity
positions will ever have a verifiable market value.
In response to increased risk factors in the fourth quarter that affect
the loan portfolio of the community banking division, the Company will add an
additional $13 million to City National Bank of West Virginia's (CNB, the
Company's lead subsidiary) allowance for loan losses and write down other
non-performing assets by approximately $1 million. These charges are in
recognition of the continuing softening of the economy, increased loan portfolio
delinquencies and the continued restructuring of the Company's credit
administration functions.
After-tax, these charges total approximately $43.1 million and have
resulted in a net loss of approximately $38.4 million or $2.27 per share for
City Holding Company for the twelve months ended December 31, 2000.
Despite these events the Company's capital base remains strong, with a
year-end Tier 1 Risk Based Capital Ratio of 9.05% and Total Risk Based Capital
Ratio of 11.62%. CNB's year-end capital ratios are even stronger with a Tier 1
Risk Based Capital Ratio of 11.47% and a Total Risk Based Capital Ratio of
12.72%. Even with these high capital ratios, CNB would have to seek regulatory
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approval from the Office of the Comptroller of the Currency to provide dividends
in order to meet Parent Company cash needs. In recognition of this, the
Company's Board of Directors has concluded that it intends to suspend the
Company's common stock dividend.
The Company's Chief Financial Officer and Acting Chief Executive
Officer Robert A. Henson commented, "The last seven months have been spent
restructuring City Holding Company. The Board of Directors and management have
spent the necessary time and effort to determine the best profile for our
Company in order to be able to generate the greatest return to our shareholders.
We've come a long way in a very short period of time and the fourth quarter of
2000 should mark the beginning of the end of this major transformation for us.
Our focus has been inward, as we have taken remedial steps that were necessary
to get us to a point where we can move forward. These fourth quarter events will
allow us to change that focus and begin to improve our banking operations for
the benefit of customers and shareholders. The Board of Directors and management
are excited about the future of City Holding Company."
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Unaudited summary financial data is presented below:
Three Months Ended Twelve Months Ended
December 31, December 31,
Income Statement (in thousands) 2000 1999 2000 1999
---- ---- ---- ----
Interest income $ 49,793 $ 49,017 $202,912 $ 195,553
Interest expense 29,155 25,233 113,756 97,133
Net interest income 20,638 23,784 89,156 98,420
Provision for loan losses 17,030 11,959 25,480 19,286
Other Income
Investment securities losses (5,017) (9,949) (5,015) (9,897)
Service charges 2,878 2,773 10,778 10,074
Mortgage loan servicing fees 2,668 5,055 16,962 22,068
Net origination fees 120 (201) 2,331 4,292
Gain (loss) on sale of loans 904 795 (1,405) 6,600
Other income (1,190) 5,464 10,913 26,398
Other Expenses
Salaries and employee benefits 10,130 13,737 47,957 56,530
Occupancy and depreciation 4,754 6,192 19,326 23,198
Advertising 508 1,358 3,788 12,297
Other expenses 47,620 9,439 81,272 38,589
Income tax (benefit) expense (17,275) (6,620) (15,730) 1,842
Net (loss) income (41,766) (8,344) (38,373) 6,213
As of December 31,
Balance Sheet (in thousands) 2000 1999
---- ----
Cash and cash equivalents $ 90,628 $ 122,112
Securities available for sale 385,462 381,112
Loans, net of unearned income 1,968,159 1,886,114
Allowance for loan losses (40,627) (27,113)
Loans held for sale 17,900 118,025
Total assets 2,671,500 2,792,490
Non-interest bearing deposits 271,358 246,555
Interest-bearing deposits 1,812,583 1,709,215
Short-term borrowings 248,766 386,719
Long-term debt 34,832 116,000
Trust preferred securities 87,500 87,500
Total liabilities 2,508,043 2,593,948
Total stockholders'equity 163,457 198,542
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Three Months Ended Twelve Months Ended
December 31, December 31,
Average Balance Sheet 2000 1999 2000 1999
---- ---- ---- ----
(in thousands)
Loans $1,997,658 $1,866,941 $1,969,785 $1,792,625
Loans held-for-sale 17,660 114,564 82,228 178,711
Securities 388,413 395,470 370,247 390,839
Total interest earning assets 2,484,308 2,472,441 2,502,973 2,449,605
Interest-bearing deposits 1,821,677 1,679,918 1,804,849 1,726,324
Short-term borrowings 293,061 304,969 309,330 230,060
Long-term debt 26,840 123,653 69,508 110,592
Trust preferred securities 87,500 87,500 87,500 87,500
Total interest-bearing liabilities 2,229,078 2,196,040 2,271,187 2,154,476
The following tables summarize the Company's allowance for loan losses for the
twelve months ended December 31, 2000 and 1999, and asset quality as of December
31, 2000 and 1999:
For the year ended December 31,
Allowance for Loan Losses 2000 1999
---- ----
(in thousands)
Balance at beginning of period $ 27,113 $ 17,610
Provision for loan losses 25,480 19,286
Charge-offs (14,623) (12,252)
Recoveries 2,657 1,731
Balance of acquired institution - 738
------- -------
Balance at end of period $ 40,627 $ 27,113
======= =======
For the twelve months
ended December 31,
2000 1999
---- ----
Net charge-offs to average loans 0.61% 0.59%
Provision for loan losses to average loans 1.29% 1.08%
Allowance for loan losses to average loans 2.06% 1.51%
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As of December 31
Asset Quality 2000 1999
---- ----
Non-accrual loans $ 16,676 $ 9,553
Accruing loans past due 90 days or more 3,350 5,830
Restructured loans 300 703
------- -------
Total non-performing loans 20,326 16,086
Other real estate owned 3,488 3,496
------ ------
Total non-performing assets $ 23,814 $ 19,582
====== ======
Allowance for loan losses times non-
performing loans 2.00x 1.69x
City Holding Company is the parent company of City National Bank of
West Virginia, Del Amo Savings Bank FSB, Frontier State Bank, and City Financial
Corporation. City National Bank, in addition to its banking divisions, operates:
CityInsurance Professionals, an insurance agency offering a full range of
insurance products and services; Jarrett/Aim Communications, a direct mail
service provider; and Citynet, an internet service provider and web-site
development firm.
Information contained in this news release includes forward-looking
information. Such forward-looking information involves risks and uncertainties
and is provided to assist investors and Company shareholders in understanding
anticipated operations of the Company. The forward-looking information is
included pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Actual results achieved may differ materially
from those projected in the forward-looking information. Factors that might
cause such a difference include, but are not limited to: (1) the Company may be
required to take additional actions and incur additional expenses in order to
restructure its operations; (2) actions taken to restructure the operations of
the Company and divest all of the Company's non-core business lines, including
the discontinuance of the Company's Specialty Finance Loan Operations division,
may not have the anticipated effect or may require the Company to incur
additional expenses; (3) competitive pressures may increase significantly; (4)
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general economic or business conditions, either nationally or in the states or
regions in which the Companies conduct business may be less favorable than
expected, resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit; (5) legislative or regulatory changes may adversely
affect the businesses in which the Companies are engaged; and (6) changes may
occur in securities markets. The Company disclaims any intent or obligations to
update this forward-looking information.
City Holding Company's common stock is publicly traded on The Nasdaq
Stock Market under the symbol CHCO.
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