FILED BY CLASSIC BANCSHARES, INC. PURSUANT TO RULE 425 UNDER THE
SECURITIES ACT OF 1933 AND DEEMED FILED PURSUANT TO RULE 14A-12
OF THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: CLASSIC BANCSHARES, INC.
COMMISSION FILE NO. 000-27170
NEWS RELEASE
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For Immediate Release
December 29, 2004
City Holding Company and Classic Bancshares, Inc. Announce Merger
CHARLESTON, West Virginia - City Holding Company (Cross Lanes, West Virginia)
(Nasdaq: CHCO) and Classic Bancshares, Inc. (Ashland, Kentucky) (Nasdaq: CLAS)
announced today the execution of a definitive agreement for City Holding to
acquire Classic and its wholly-owned subsidiary, Classic Bank. Classic is a $340
million commercial bank that operates ten full-service branches located in Boyd,
Carter, Greenup and Johnson Counties in Kentucky and Lawrence County in Ohio.
City Holding and Classic anticipate that the transaction will be completed in
the second quarter of 2005, pending regulatory approvals, the approval of the
shareholders of Classic and completion of other customary closing conditions.
The directors of Classic have agreed to vote their shares in favor of the
merger.
Under the terms of the agreement, shareholders of Classic will receive .9624
shares of City common stock (valued at $35.42, based on City's December 28, 2004
closing price of $36.80 per share), and $11.08 in cash for each share of Classic
common stock owned by them. Additionally, Classic has agreed to sell or have
repaid a $4 million performing commercial loan prior to the closing date of the
transaction, and has further agreed that if that loan is sold or repaid for less
than its legal balance, shareholders of Classic will receive a proportionate
reduction in the cash received. While Classic management believes the loan will
be sold or repaid for its legal balance, the cash received by shareholders in
the merger could range between $9.47 and $11.08 per share depending on the
results of the sale or repayment of the loan. The total transaction value is
estimated at $77.4 million (assuming that outstanding stock options for 109,435
shares held by directors of Classic will be cashed out at the difference between
the merger consideration and the exercise price of the options and stock options
for 210,385 shares will be exercised prior to the closing).
"We are very pleased that Classic has chosen to partner with City Holding
Company," stated Gerald R. Francis, President, Chairman and Chief Executive
Officer of City. "Classic is the perfect institution to enable us to strengthen
our retail and business presence in the Huntington/Ashland MSA and surrounding
areas. We look forward to working with the staff at Classic to grow in the
markets of Boyd, Greenup, Carter and Johnson Counties, Kentucky and Lawrence
County, Ohio."
The merger of City and Classic solidifies City's market share in the important
Huntington/ Ashland MSA. City currently is the fourth largest banking
institution in the MSA while Classic is the 11th largest. On a combined basis,
City will become the largest banking franchise in this $3.5 billion market with
deposits of $361 million, 14 branches and 23 ATMs.
"We are thrilled to be joining such an excellent organization," said David B.
Barbour, President and Chief Executive Officer of Classic. "City has a solid
track record of delivering quality services and products to its customers while
achieving extraordinary results for its shareholders. They have culture that
completely fits our community banking model and we share the same core values of
dedication to our customers, employees and community."
Keefe Bruyette & Woods, Inc. served as financial advisor to Classic and RBC
Capital Markets served as financial advisor to City. Ernst-Webb LLC served as
integration Consultants for the business combination. Luse Gorman Pomerenk &
Schick, P.C., served as legal advisor to Classic. Barnes & Thornburg LLP served
as legal advisor to City.
About City Holding Company
City is a $2.2 billion diversified financial holding company with its
headquarters in Cross Lanes, West Virginia. The company operates 56 branch
locations and 64 ATMs serving communities across West Virginia and Ohio. City
Holding Company was named by Forbes magazine as the top performing bank in
one-year price appreciation in 2002. For a second consecutive year, City made
the American Banker Association's (ABA) Top Performer list, which ranks the
performance of domestic institutions with assets over $1 billion, based on
return on average equity for the previous year. City Holding Company is ranked
14th on the ABA's 2004 list, with a 2003 return on average equity of 24.5%. City
is located on the web at www.cityholding.com.
About Classic Bancshares, Inc.
Classic Bancshares, Inc. is the holding company of Classic Bank. Classic
operates a network of 10 branches located in Boyd, Carter, Greenup and Johnson
Counties in Kentucky and Lawrence County in Ohio. Classic is located on the web
at www.classicbank.com.
Statements contained in this press release that are not historical facts may
constitute forward-looking statements (within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended), which involve significant risks
and uncertainties. The companies intend such forward-looking statements to be
covered in the Private Securities Litigation Reform Act of 1995, and are
including this statement for purposes of invoking these safe harbor provisions.
The companies' ability to predict results or the actual effect of future plans
or strategies is inherently uncertain and involves a number of risks and
uncertainties, some of which have been set forth in the companies' most recent
annual reports on Form 10-K or Form 10-KSB, which disclosures are incorporated
by reference herein and which also include the risk that Classic will be unable
to sell or have repaid the $4 million commercial loan described above for its
legal balance. The fact that there are various risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements.
City will be filing a Registration Statement on Form S-4 concerning the merger
with the Securities and Exchange Commission ("SEC"), which will include a proxy
statement/prospectus that will be mailed to Classic's shareholders. WE URGE
INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain the documents free of charge, when filed, at
the SEC's website, www.sec.gov. In addition, documents filed with the SEC by
City will be available free of charge from the Secretary of City at 25 Gatewater
Road, Cross Lanes, West Virginia 25313, telephone (304) 769-1112. Documents
filed with the SEC by Classic will be available free of charge from the
Secretary of Classic at 344 17th Street, P.O. Box 1527, Ashland, Kentucky,
41105, telephone (606) 326-2800. CLASSIC shareholders SHOULD READ THE PROXY
STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
Copies of all recent proxy statements and annual reports are also available free
of charge from the respective companies by contacting the company secretary.
Classic and its directors and executive officers may be deemed to be
participants in the solicitation of proxies to approve the merger. INFORMATION
ABOUT THE PARTICIPANTS MAY BE OBTAINED THROUGH THE SEC'S WEBSITE FROM THE
DEFINITIVE PROXY STATEMENT FILED WITH THE SEC ON JULY 22, 2004, WITH RESPECT TO
CLASSIC. Additional information regarding the interests of the participants may
be obtained by reading the proxy statement/prospectus regarding the merger when
it becomes available.
For more information contact:
Gerald R. Francis David B. Barbour
Chairman, President and CEO President and CEO
City Holding Company Classic Bancshares, Inc.
(304) 769-1101 (606) 326-2828