CHARLESTON, W.Va., April 2, 2008 /PRNewswire-FirstCall/ -- City Holding Company, "the Company" , a $2.5 billion bank holding company headquartered in Charleston, today announced today that it completed the private placement of $16.0 million Trust Preferred Securities through its City Holding Capital Trust III subsidiary.
Distributions on the Trust Preferred Securities are cumulative and will be payable quarterly at an interest rate of 3.5% over the three-month LIBOR Rate, reset quarterly. Interest payments are due in March, June, September, and December. The securities mature in 30 years and are redeemable by the Company after five years. The proceeds of the capital securities were used to fund the redemption on March 31, 2008 of all the Company's outstanding 9.15% trust preferred securities in the amount of $16.0 million.
As previously announced, the Company will incur charges to fully amortize issuance costs incurred in 1998 and for the early redemption premium totaling $1.2 million in the first quarter of 2008. The Company estimates that the combined effect of the issuance of the capital securities and the redemption of trust preferred securities will reduce the Company's interest expense by approximately $0.4 million in 2008 and $0.5 million annually thereafter through 2012.
City Holding Company is the parent company of City National Bank of West Virginia. City National operates 69 branches across West Virginia, Eastern Kentucky and Southern Ohio.
Forward-Looking Information
This news release contains certain forward-looking statements that are included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information involves risks and uncertainties that could result in the Company's actual results differing from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, (1) the Company may incur additional loan loss provision due to negative credit quality trends in the future that may lead to a deterioration of asset quality; (2) the Company may incur increased charge-offs in the future; (3) the Company may experience increases in the default rates on previously securitized loans that would result in impairment losses or lower the yield on such loans; (4) the Company may continue to benefit from strong recovery efforts on previously securitized loans resulting in improved yields on these assets; (5) the Company could have adverse legal actions of a material nature; (6) the Company may face competitive loss of customers; (7) the Company may be unable to manage its expense levels; (8) the Company may have difficulty retaining key employees; (9) changes in the interest rate environment may have results on the Company's operations materially different from those anticipated by the Company's market risk management functions; (10) changes in general economic conditions and increased competition could adversely affect the Company's operating results; (11) changes in other regulations and government policies affecting bank holding companies and their subsidiaries, including changes in monetary policies, could negatively impact the Company's operating results; and (12) the Company may experience difficulties growing loan and deposit balances. Forward-looking statements made herein reflect management's expectations as of the date such statements are made. Such information is provided to assist stockholders and potential investors in understanding current and anticipated financial operations of the Company and is included pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances that arise after the date such statements are made.
