March 27 - CNB Financial Corporation (NASDAQ: CCNE), the parent company of CNB Bank based in Clearfield, Pa., has entered into a definitive agreement to acquire FC Banc Corp. (OTC: FCBZ), and its subsidiary, The Farmers Citizens Bank in Bucyrus, Ohio, for $30 per share in cash and stock, or approximately $40.4 million in the aggregate. FC Banc Corp. had approximately $367 million in total assets and $34.2 million in shareholders' equity as of Dec. 31, 2012, and had net income of $3.5 million for the year ended Dec. 31, 2012.
FC Bank serves the northern Ohio markets of Bucyrus, Cardington, Fredericktown, Mount Hope and Shiloh, as well as the markets of Worthington and Upper Arlington in the greater Columbus area with eight branch locations, as well as a mortgage banking business headquartered in Dublin. Following completion of the merger, FC Bank will operate as a separate and distinctly branded division of CNB Bank, with local decision making and oversight, with most customer-facing personnel largely unaffected. Coleman Clougherty, currently president and CEO of FC Banc Corp., will continue with CNB following closing of the merger.
"We are excited to expand our franchise into the neighboring Ohio market, and to partner with such a strong earning, high performing bank," announced Joseph B. Bower Jr., president and CEO of CNB Financial Corporation. "There are many similarities between the markets of FC Banc Corp. and our central Pennsylvania and ERIEBANK markets. A presence in the greater Columbus area will provide us additional growth opportunities and allow us to build our business with attractive pricing and terms. We understand the needs of customers in these markets and look forward to providing FC Bank the support and assistance it needs to continue to grow and thrive."
Under the terms of the definitive merger agreement, which has been approved by the boards of directors of both companies, shareholders of FC Banc Corp. will be entitled to receive either a fixed exchange of 1.754 shares of CNB common stock for each share of FC Banc Corp common stock, which is based on a 10-day average closing price of CNB common stock as of March 25, 2013, of $17.106 per share, or $30 per share in cash, with at least 80 percent of the consideration to be paid in the form of CNB common stock. The transaction is expected to be a tax-free exchange for shareholders of FC Banc Corp. CNB expects the transaction to be accretive to its earnings per share in the first full year of operations. On a pro forma basis, the combined company will have approximately $2.2 billion in assets and 37 offices in central and western Pennsylvania and northern and central Ohio.
"CNB Financial Corporation is an outstanding partner for our bank," said Clougherty. "CNB has a successful community banking model and has shown consistent growth, high returns and strong stock price performance. Leveraging CNB's infrastructure and community banking products, and having access to the capital to continue to grow our business will serve our customers and communities well."
R. Duane Hord, chairman of FC Banc Corp., added, "We wanted liquidity, a strong dividend and an attractive currency for our shareholders, but also the products, services and access to the capital markets of a larger institution, coupled with the local decision making and responsive service of a community bank. CNB provides all of those things. What CNB has done with its ERIEBANK franchise is exactly the type of opportunity we find attractive."
Following consummation of the merger, Hord will join the boards of directors of CNB Financial Corporation and CNB Bank.
The transaction is expected to close in the fourth quarter of 2013, subject to customary closing conditions, including regulatory approvals and the approval of FC Banc Corp. shareholders.
Griffin Financial Group, LLC acted as financial adviser to CNB Financial Corporation, and Hogan Lovells US, LLP acted as legal counsel. FC Banc Corp. was advised by Boenning & Scattergood Inc. and its legal counsel was Vorys, Sater, Seymour and Pease LLP.
About CNB Financial Corporation
CNB Financial Corporation is a financial holding company with consolidated assets of approximately $1.8 billion that conducts business primarily through CNB Bank, CNB's principal subsidiary. CNB Bank is a full-service bank engaging in a full range of banking activities and services, including trust and wealth management services, for individual, business, governmental and institutional customers. CNB Bank operations include wealth and asset management, a private banking division and 29 full-service offices in Pennsylvania, including ERIEBANK, a division of CNB Bank. More information about CNB and CNB Bank may be found on the internet at www.bankcnb.com.
About FC Banc Corp
FC Banc Corp. is the holding company for The Farmers Citizens Bank. Since 1907, FC Bank has had a tradition of being a locally owned bank proudly serving its customers. With offices in Bucyrus, Cardington, Fredericktown, Mount Hope, Upper Arlington, Shiloh and Worthington,