UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 23, 2016
CNB FINANCIAL CORPORATION
(Exact name of Registrant as specified in its Charter)
| Pennsylvania | 000-13396 | 25-1450605 | ||
| (State or other jurisdiction of incorporation) |
(Commission File No.) |
(IRS Employer Identification Number) |
CNB BANK
1 South Second Street
PO Box 42
Clearfield, Pennsylvania 16830
(Address of principal executive offices)
Registrant’s telephone number, including area code: (814) 765-9621
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 23, 2016, CNB Financial Corporation (the “Company”), CNB Bank (the “Bank”) and Lake National Bank entered into an amendment (the “Amendment”) to the Agreement and Plan of Merger, dated as of December 29, 2015 (the “Merger Agreement”).
The Amendment provides for an alternative acquisition structure pursuant to which the Company will acquire Lake National Bank through the merger of CNB Interim Bank, a Pennsylvania-chartered interim bank and wholly owned subsidiary of the Company to be formed solely to effect the transactions contemplated by the Merger Agreement, with and into Lake National Bank with Lake National Bank being the surviving bank and becoming a wholly owned subsidiary of the Company (the “Merger”). Immediately following the Merger, Lake National Bank will merge with and into the Bank and continue its corporate existence under the laws of the Commonwealth of Pennsylvania. The other terms and conditions of the Merger Agreement, including the consideration to be paid to shareholders of Lake National Bank in connection with the Merger, remain unchanged.
The foregoing description of the Amendment, and the transactions contemplated thereby, does not purport to be complete and is qualified in its entirety by the full text of the Amendment, which is attached as Exhibit 2.1 hereto and is incorporated herein by reference, and the full text of the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on December 30, 2015 and is incorporated herein by reference.
Important Additional Information
In connection with the proposed transaction, Lake National Bank will distribute a proxy statement to its shareholders in connection with a special meeting of shareholders to be called and held for the purposes of voting on approval of the transaction and related matters.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS REGARDING THE PROPOSED TRANSACTION, LAKE NATIONAL’S SHAREHOLDERS AND INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND ITS EXHIBITS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT LAKE NATIONAL AND THE PROPOSED TRANSACTION.
Copies of the proxy statement will be mailed to all shareholders prior to the special meeting. Shareholders and investors may obtain additional free copies of the proxy statement when it becomes available by directing a request by telephone or mail to Lake National Bank, 7402 Center Street, Mentor, OH 44060, Attention: Andrew L. Meinhold (telephone: 440-205-8100).
Participants in the Transactions
Lake National Bank and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Lake National Bank in connection with the special meeting of shareholders. Information about the directors and executive officers of Lake National Bank is set forth in the proxy statement for Lake National Bank’s 2015 annual meeting of shareholders. Additional information regarding the interests of these participants and other persons who may be deemed participants in the proxy solicitation may be obtained by reading the proxy statement for the special meeting of shareholders when it becomes available.
Cautionary Note Regarding Forward-Looking Statements
This report contains statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and this statement is included for purposes of complying with these safe harbor provisions. Readers should not place undue reliance on such forward-looking statements, which speak only as of the date made. These forward-looking statements are based on current plans and expectations, which are subject to a number of risk factors and uncertainties that could cause future results to differ materially from historical performance or future expectations. These differences may be the result of various factors, including, among others: (1) failure of the parties to satisfy the closing conditions in the merger agreement in a timely manner or at all; (2) failure of the shareholders of Lake National Bank to approve the merger agreement; (3) failure to obtain governmental approvals for the merger; (4) disruptions to the parties’ businesses as a result of the announcement and pendency of the merger; (5) costs or difficulties related to the integration of the business following the proposed merger; (6) the risk that the anticipated benefits, cost savings and any other savings from the transaction may not be fully realized or may take longer than expected to realize; (7) changes in general business, industry or economic conditions or competition; (8) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (9) adverse changes or conditions in the capital and financial markets; (10) changes in interest rates or credit availability; (11) the inability to realize expected cost savings or achieve other anticipated benefits in connection with the proposed merger; (12) changes in the quality or composition of loan and investment portfolios; (13) adequacy of loan loss reserves and changes in loan default and charge-off rates; (14) increased competition and its effect on pricing, spending, third-party relationships and revenues; (15) loss of certain key officers; (16) continued relationships with major customers; (17) deposit attrition, necessitating increased borrowings to fund loans and investments; (18) rapidly changing technology; (19) unanticipated regulatory or judicial proceedings and liabilities and other costs; (20) changes in the cost of funds, demand for loan products or demand for financial services; and (21) other economic, competitive, governmental or technological factors affecting operations, markets, products, services and prices.
The foregoing list should not be construed as exhaustive, and CNB Financial Corporation and Lake National Bank undertake no obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events or circumstances.
For additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements, please see filings by CNB Financial Corporation with the SEC, including CNB Financial Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015.
| Item 9.01 | Financial Statements and Exhibits. |
| (a) | Not applicable. |
| (b) | Not applicable. |
| (c) | Not applicable. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 2.1 | First Amendment to Agreement and Plan of Merger, dated as of March 23, 2016, by and among CNB Financial Corporation, CNB Bank and Lake National Bank. | |
SIGNATURES
Pursuant to the requirements 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.
| CNB Financial Corporation | ||||||
| Date: March 23, 2016 | By: | /s/ Brian W. Wingard | ||||
| Brian W. Wingard | ||||||
| EVP/Chief Financial Officer | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 2.1 | First Amendment to Agreement and Plan of Merger, dated as of March 23, 2016, by and among CNB Financial Corporation, CNB Bank and Lake National Bank. | |
Exhibit 2.1
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this “Amendment”) is entered into as of March 23, 2016, by and among CNB Financial Corporation, a Pennsylvania corporation (“CNB”), CNB Bank, a Pennsylvania-chartered bank and wholly owned subsidiary of CNB (“CNB Bank” and together with CNB, “Buyer”) and Lake National Bank, a federally-chartered national bank (“LNB”). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Merger Agreement (as defined below).
R E C I T A L S
WHEREAS, the parties hereto entered into that certain Agreement and Plan of Merger dated as of December 29, 2015 (the “Merger Agreement”);
WHEREAS, Section 1.8 of the Merger Agreement contemplates that, in accordance with the terms and conditions set forth therein, Buyer may elect to carry out an alternative acquisition structure;
WHEREAS, the parties desire to amend the Merger Agreement with respect to an alternative acquisition structure; and
WHEREAS, pursuant to Section 8.3 of the Merger Agreement, the Merger Agreement may be amended at any time by the parties, by action taken or authorized by their respective Boards of Directors, through an instrument signed in writing on behalf of each such party.
A G R E E M E N T
NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Recitals. The first recital to the Merger Agreement shall be deleted in its entirety and replaced with the following:
“WHEREAS, the Boards of Directors of Buyer and LNB have determined that it is in the best interests of their respective companies and stockholders to consummate the business combination transaction provided for herein in which Buyer will acquire LNB through the merger of CNB Interim Bank, a Pennsylvania-chartered bank and wholly owned subsidiary of Buyer to be formed solely to effect the transactions contemplated by this Agreement (“Interim Bank”), with and into LNB with LNB being the surviving bank and a wholly owned subsidiary of CNB (the “Merger”). Immediately following the Merger, LNB will merge with and into CNB Bank and continue its corporate existence under the laws of the Commonwealth of Pennsylvania (the “Post-Effective Merger);”
2. The Merger; Effective Time; Effects of the Merger and Post-Effective Merger; Conversion of Common Stock; Articles of Incorporation and Bylaws; Directors and Officers; Tax Consequences.
(a) Section 1.1 of the Merger Agreement shall be deleted in its entirety and replaced with the following:
“1.1 The Merger.
Subject to the terms and conditions of this Agreement, in accordance with 12 U.S.C. 215c, at the Effective Time, Interim Bank will merge with and into LNB, with LNB being the surviving institution in the Merger and a wholly owned subsidiary of CNB (LNB as the surviving bank following the Merger is sometimes referred to herein as the “Interim Surviving Bank”). Immediately following the Merger, Interim Surviving Bank will merge with and into CNB Bank, with CNB Bank being the surviving institution in the Post-Effective Merger (hereinafter sometimes called the “Surviving Bank”). Upon consummation of the Post-Effective Merger, the separate corporate existence of Interim Surviving Bank shall cease and Buyer will operate the business of LNB as part of ERIEBANK, a division of CNB Bank (“ERIEBANK”).”
(b) Section 1.2 of the Merger Agreement shall be deleted in its entirety and replaced with the following:
“1.2 Effective Time.
On the Closing Date, after all of the conditions set forth in Article VII shall have been satisfied or, if permissible, waived by the party entitled to the benefit of the same, the Merger shall become effective on the date specified in the certificate of approval from the OCC (the “Effective Time”). Immediately following the Merger, CNB Bank and Interim Surviving Bank shall execute and file with the Pennsylvania Department of Banking and Securities (“PDOB”) articles of merger in a form reasonably satisfactory to Buyer and Interim Surviving Bank, in accordance with the Pennsylvania Banking Code. The Post-Effective Merger shall become effective on the date of such filings at the time specified therein (the “Post-Effective Merger Effective Time”).”
(c) Section 1.3 of the Merger Agreement shall be deleted in its entirety and replaced with the following:
“1.3 Effects of the Merger and the Post-Effective Merger.
At the Effective Time, the effect of the Merger shall be as provided herein and as provided in the applicable provisions of the Pennsylvania banking law and the regulations of the PDOB promulgated thereunder. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, the separate corporate existence of Interim Bank shall cease and all of the rights, privileges, powers, franchises, properties, assets, debts, liabilities, obligations, restrictions, disabilities and duties of Interim Bank shall be vested in and assumed by LNB, which shall survive the Merger as a wholly owned subsidiary of CNB. At the Post-Effective Merger Effective Time, the effect of the Post-Effective Merger shall be as provided herein and as provided in the applicable provisions of the Pennsylvania banking law and the regulations of the PDOB promulgated thereunder. Without limiting the generality of the foregoing, and subject thereto, at the Post-Effective Merger Effective Time, the separate corporate existence of LNB shall cease and all of the rights, privileges, powers, franchises, properties, assets, debts, liabilities, obligations, restrictions, disabilities and duties of LNB shall be vested in and assumed by CNB Bank.”
(d) Section 1.4 of the Merger Agreement shall be deleted in its entirety and replaced with the following:
“1.4 Conversion of Common Stock.
(a) At the Effective Time, subject to Sections 1.4(b) and 1.4(c), each share of LNB Common Stock, issued and outstanding immediately prior to the Effective Time (excluding Dissenters’ Shares) shall be converted in accordance with the procedures set forth in Section 2.1, into the right to receive in cash from Buyer, without interest, an amount equal to $22.50 (the “Merger Consideration”), subject to adjustment, if any, pursuant to Section 1.10 hereof.
(b) No Dissenters’ Shares shall be converted into the Merger Consideration pursuant to this Section 1.4, but instead shall be treated in accordance with the provisions set forth in Section 2.2(a).
(c) At the Effective Time, all shares of LNB Common Stock that are owned by LNB as treasury stock and all shares of LNB Common Stock that are owned directly or indirectly by, LNB, including any shares of LNB Common Stock held by LNB in respect of a debt previously contracted, other than shares that are held by LNB, if any, in a fiduciary capacity, shall be canceled and shall cease to exist and no cash or other consideration shall be delivered in exchange therefor.
(d) Notwithstanding any other provision of this Agreement to the contrary, the sum of the aggregate Merger Consideration (the “Transaction Consideration”) to be issued or paid in connection with the Merger shall not exceed $24.75 million.
(e) At the Effective Time, each share of common stock of Interim Bank issued and outstanding immediately prior to the Effective Time shall be converted into one share of common stock of Interim Surviving Bank.
(f) At the Post-Effective Merger Effective Time, all shares of common stock of Interim Surviving Bank issued and outstanding immediately prior to the Post-Effective Merger Effective Time shall be cancelled and cease to exist and no consideration shall be delivered in exchange therefor.”
(e) Section 1.5 of the Merger Agreement shall be deleted in its entirety and replaced with the following:
“1.5 Articles of Incorporation and Bylaws.
The articles of association of LNB, as in effect immediately prior to the Effective Time, shall be the articles of association of the Interim Surviving Bank, from the Effective Time until thereafter amended as provided therein and in accordance with applicable law. The Bylaws of LNB, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Interim Surviving Bank, from the Effective Time until thereafter amended as provided therein and in accordance with applicable law. The articles of conversion of CNB Bank, as in effect immediately prior to the Post-Effective Merger Effective Time, shall be the articles of conversion of the Surviving Bank, from the Post-Effective Merger Effective Time until thereafter amended as provided therein and in accordance with applicable law. The Bylaws of CNB Bank, as in effect immediately prior to the Post-Effective Merger Effective Time, shall be the Bylaws of the Surviving Bank, from the Post-Effective Merger Effective Time until thereafter amended as provided therein and in accordance with applicable law.”
(f) Section 1.6 of the Merger Agreement shall be deleted in its entirety and replaced with the following:
“1.6 Directors and Officers.
At the Effective Time, the directors and officers of Interim Bank immediately prior to the Effective Time shall be the directors and officers of the Interim Surviving Bank. At the Post-Effective Merger Effective Time, the directors and officers of CNB Bank immediately prior to the Post-Effective Merger Effective Time shall be the directors and officers of the Surviving Bank.”
(g) The following Section 1.11 shall be added to the Merger Agreement:
“1.11 Tax Consequences.
The Post-Effective Merger is intended to constitute a reorganization within the meaning of Section 368(a) of the Code and the parties to this Agreement hereby adopt this Agreement as a “plan of reorganization” within the meaning of Section 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.”
3. Covenants. The following covenant shall be added to the Merger Agreement:
“5.5 Formation of Interim Bank; Joinder.
“(a) Prior to the Effective Time, Buyer shall form Interim Bank, which shall be a Pennsylvania-chartered bank formed solely to effect the transactions contemplated by this Agreement and a wholly owned subsidiary of CNB.
(b) Prior to the Effective Time, Buyer shall cause Interim Bank to execute and deliver a Joinder to the Merger Agreement, substantially in the form attached hereto as Exhibit A.”
[Signature Page Follows]
IN WITNESS WHEREOF, CNB Financial Corporation, CNB Bank and Lake National Bank have caused this First Amendment to Agreement and Plan of Merger to be executed and delivered by their respective officers thereunto duly authorized as of the date first above written.
| CNB FINANCIAL CORPORATION
| ||||||||
| ATTEST: | ||||||||
| By: | /s/ Mark D. Breakey | By: | /s/ Brian W. Wingard | |||||
| Name: | Mark D. Breakey | Name: | Brian W. Wingard | |||||
| Title: | SEVP/Chief Credit Officer | Title: | EVP/Chief Financial Officer | |||||
| CNB BANK
| ||||||||
| ATTEST: | ||||||||
| By: | /s/ Mark D. Breakey | By: | /s/ Brian W. Wingard | |||||
| Name: | Mark D. Breakey | Name: | Brian W. Wingard | |||||
| Title: | SEVP/Chief Credit Officer | Title: | EVP/Chief Financial Officer | |||||
| LAKE NATIONAL BANK
| ||||||||
| ATTEST: | ||||||||
| By: | /s/ Christine Hartog | By: | /s/ Andrew L. Meinhold | |||||
| Name: | Christine Hartog | Name: Andrew L. Meinhold | ||||||
| Title: | Senior Vice President | Title: President & Chief Executive Officer | ||||||
[Signature Page to First Amendment to Agreement and Plan of Merger]
Exhibit A
FORM JOINDER AGREEMENT
This Joinder Agreement (this “Agreement”) is made and entered into as of this day of 2016, by and among CNB Interim Bank, a Pennsylvania-chartered bank and wholly owned subsidiary of CNB Financial Corporation (“Interim Bank”), CNB Financial Corporation, a Pennsylvania corporation (“CNB”), CNB Bank, a Pennsylvania-chartered bank and wholly owned subsidiary of CNB (“CNB Bank” and together with CNB and Interim Bank, “Buyer”) and Lake National Bank, a federally-chartered national bank (“LNB”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement and Plan of Merger, dated as of December 29, 2015, as amended by the First Amendment to Agreement and Plan of Merger, dated as of March 23, 2016 (the “Merger Agreement”).
WHEREAS, Interim Bank, formed solely to effect the transactions contemplated by the Merger Agreement, shall join the Merger Agreement pursuant to the terms of Section 5.5.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants, representations, warranties and agreements contained in the Merger Agreement, the parties hereto agree as follows:
1. Joinder. By executing this Agreement, Interim Bank shall become a party to the Merger Agreement as of the date hereof and hereby agrees to be bound by the terms, covenants and other provisions of the Merger Agreement applicable to Interim Bank.
2. Merger Agreement. This Agreement is being entered into pursuant to the terms of the Merger Agreement and nothing in this Agreement, express or implied, is intended to or shall be construed to modify, expand or limit in any way the rights of the parties under, and the terms of, the Merger Agreement. To the extent that any provision of this Agreement conflicts or is inconsistent with the terms of the Merger Agreement, the Merger Agreement shall govern, including with respect to the enforcement of the rights and obligations of the parties to this Agreement.
3. Representations and Warranties of Interim Bank. Interim Bank hereby represents and warrants as follows: Interim Bank is a Pennsylvania-chartered bank duly organized, validly existing and in good standing under the laws of Pennsylvania. CNB Bank has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of any business conducted by it or the character or location of any properties or assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not have a Material Adverse Effect on Interim Bank. The articles of charter and bylaws of Interim Bank, copies of which have previously been made available to LNB, are true, correct and complete copies of such documents as in effect as of the date of this Agreement.
4. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to any applicable conflicts of law rules.
5. Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
| CNB FINANCIAL CORPORATION
| ||||||||
| ATTEST: | ||||||||
| By: | By: | |||||||
| Name: | Name: | Joseph B. Bower, Jr. | ||||||
| Title: | Title: | President & Chief Executive Officer | ||||||
| CNB BANK
| ||||||||
| ATTEST: | ||||||||
| By: | By: | |||||||
| Name: | Name: | Joseph B. Bower, Jr. | ||||||
| Title: | Title: | President & Chief Executive Officer | ||||||
| CNB INTERIM BANK
| ||||||||
| ATTEST: | ||||||||
| By: | By: | |||||||
| Name: | Name: | Joseph B. Bower, Jr. | ||||||
| Title: | Title: | President & Chief Executive Officer
| ||||||
| LAKE NATIONAL BANK
| ||||||||
| ATTEST: | ||||||||
| By: | By: | |||||||
| Name: | Name: | Andrew L. Meinhold | ||||||
| Title: | Title: | President & Chief Executive Officer | ||||||