Farmers National Banc Corp. (NASDAQ:FMNB) Files An 8-K Entry into a Material Definitive Agreement
ITEM1.01
| ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. |
On March13, 2017, Monitor Bancorp, Inc. (Monitor), the parent
company of the Monitor Bank (Monitor Bank), Farmers National Banc
Corp. (the Company), the parent company of The Farmers National
Bank of Canfield (Farmers Bank), and FMNB Merger Subsidiary II,
LLC, a newly-formed wholly-owned subsidiary of the Company
(Merger Sub), entered into an Agreement and Plan of Merger (the
Merger Agreement) to which Monitor will merge with and into
Merger Sub (the Merger). Promptly following consummation of the
Merger, it is expected that Merger Sub will be dissolved and
liquidated, and Monitor Bank will merge with and into Farmers
Bank.
to the Merger Agreement, the actual consideration to be paid to
Monitor shareholders will be calculated based on Monitors
consolidated tangible book value per share as of March31, 2017,
plus the after-tax proceeds of the anticipated sale of Monitors
interest in the Monitor Wealth Group (in aggregate, March 31
TBV). Each shareholder of Monitor will be entitled to elect to
receive consideration in cash or in common shares, without par
value, of the Company (the Company Common Shares), subject to an
overall limitation of 85% of the shares being exchanged for
Company Common Shares and 15% for cash. The per share cash
consideration will be equal to Monitors March31 TBV multiplied by
1.25. The initial per share stock exchange ratio will be equal to
Monitors March31 TBV multiplied by 1.25 and divided by $13.31,
Farmers 20-day volume-weighted average closing stock price
through February10, 2017. The exchange ratio will be subject to
adjustment prior to closing, as described in the Merger
Agreement, in order to ensure that the aggregate value of the
consideration to be received by Monitor shareholders is not less
than 115% and not more than 125% of March31 TBV.
The Merger Agreement contains (a)customary representations and
warranties of Monitor, the Company and Merger Sub, including,
among others, with respect to corporate organization,
capitalization, corporate authority, third party and governmental
consents and approvals, financial statements and compliance with
applicable laws, (b)covenants of Monitor and the Company conduct
their respective businesses in the ordinary course until the
Merger is completed and (c)covenants of Monitor and the Company
not to take certain actions during such period. Monitor also has
agreed that neither it nor its representatives will (i)solicit
proposals relating to alternative business combination
transactions or, (ii)subject to certain exceptions, enter into
discussions concerning, or furnish information in connection
with, any proposals for alternative business combination
transactions, or approve, endorse or recommend, or take other
actions relating to, an alternative business combination
transaction.
Consummation of the Merger is subject to certain conditions,
including, among others, approval of the Merger by the
shareholders of Monitor, effectiveness of the registration
statement to be filed by the Company with the Securities and
Exchange Commission (the SEC) to register the Company Common
Shares to be offered to the common shareholders of Monitor, the
absence of any injunctions or other legal restraints,
governmental filings and regulatory approvals and expiration of
applicable waiting periods, accuracy of specified representations
and warranties of each party and receipt of tax opinions.
The Merger Agreement contains certain termination rights for each
of Monitor and the Company, as the case may be, applicable upon
the occurrence or non-occurrence of certain events, including
(a)a final, non-appealable denial of required regulatory
approvals, (b)the Merger has not been completed on or before
March13, 2018, (c)a breach by the other party that is not or
cannot be cured within 30 days if such breach would result in a
failure of the conditions to closing set forth in the Merger
Agreement, (d)the failure of the shareholders of Monitor to
approve the Merger by the requisite vote, (e)the failure of the
Board of Directors of Monitor to recommend the Merger to its
shareholders or a change in the recommendation by the Board of
Directors, (f)a breach of certain of the covenants of Monitor or
(g)the recommendation by the Board of Directors to the
shareholders to tender (or the failure to recommend not to
tender) Monitor common shares in certain tender or exchange
offers. If the Merger Agreement is terminated under certain
conditions, Monitor has agreed to pay the Company a termination
fee of $300,000.00. If the Merger Agreement is terminated under
certain other conditions, the Company has agreed to pay Monitor a
termination fee of $100,000.00.
The foregoing description of the Merger Agreement is not complete
and is qualified in its entirety by reference to the full text of
the Merger Agreement, which is filed as Exhibit 2.1 hereto and is
incorporated herein by reference. The Merger Agreement has been
attached as an exhibit to this report in order to provide
investors and security holders with information regarding its
terms. It is not intended to provide any other information about
the Company, Monitor or their respective subsidiaries and
affiliates. The covenants, representations and warranties
contained in the Merger Agreement were made only for purposes of
that agreement and, in the case of representations and
warranties, as of specific dates, may be subject to a contractual
standard of materiality different from what a shareholder might
view as material, may have been used for purposes of allocating
risk between the respective parties rather than establishing
matters as facts, may have been qualified by or subject to
certain disclosures and exceptions not reflected in the Merger
Agreement and generally were for the benefit of the parties to
that agreement. Investors should not rely on the representations,
warranties or covenants or any description thereof as
characterizations of the actual state of facts or condition of
the Company, Monitor or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter
of the representations, warranties and covenants may change after
the date of the Merger Agreement, which subsequent information
may or may not be fully reflected in public disclosures by the
Company or Monitor.
Important Additional Information About the
Merger.
In connection with the proposed Merger, the Company will file
with the SEC a Registration Statement on Form S-4 that will
include a Monitor proxy statement and a Company prospectus, as
well as other relevant documents concerning the proposed
transaction.
SHAREHOLDERS OF MONITOR AND OTHER INVESTORS ARE URGED TO
CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS TO BE INCLUDED IN
THE REGISTRATION STATEMENT ON FORM S-4, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, MONITOR, THE PROPOSED
MERGER, THE PERSONS SOLICITING PROXIES WITH RESPECT TO THE
PROPOSED MERGER AND THEIR INTERESTS IN THE PROPOSED MERGER AND
RELATED MATTERS.
The respective directors and executive officers of the Company
and Monitor and other persons may be deemed to be participants in
the solicitation of proxies from the common shareholders of
Monitor with respect to the proposed Merger. Information
regarding the directors and executive officers of the Company is
available in its proxy statement filed with the SEC on March16,
2017. Information regarding directors and executive officers of
Monitor is available on its website at http://monitorbank.com/.
Other information regarding the participants in the solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus to be included in the Registration Statement
on Form S-4 and other relevant materials to be filed with the SEC
when they become available.
Investors and security holders will be able to obtain free copies
of the registration statement (when available) and other
documents filed with the SEC by the Company through the website
maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by the Company will be available
free of charge on the Companys website at
https://www.farmersbankgroup.com.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor shall there be
any sale of securities in any jurisdiction in which the offer,
solicitation or sale is unlawful before registration or
qualification of the securities under the securities laws of the
jurisdiction. No offer of securities shall be made except by
means of a prospectus satisfying the requirements of Section10 of
the Securities Act.
Forward Looking Statements.
This report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements are not historical facts, but rather statements
based on the Companys current expectations regarding its business
strategies and its intended results and future performance.
Forward-looking statements are preceded by terms such as expects,
believes, anticipates, intends and similar expressions, as well
as any statements related to future expectations of performance
or conditional verbs, such as will, would, should, could or
may.
Forward-looking statements are not guarantees of future
performance. Numerous risks and uncertainties could cause or
contribute to the Companys actual results, performance, and
achievements to be materially different from those expressed or
implied by the forward-looking statements. Factors that may cause
or contribute to these differences include, without limitation,
the Companys failure to integrate Monitor and its subsidiary in
accordance with expectations; deviations from performance
expectations related to Monitor and its subsidiary; general
economic conditions, including changes in market interest rates
and changes in monetary and fiscal policies of the federal
government; legislative and regulatory changes; competitive
conditions in the banking markets served by the Companys
subsidiaries; the adequacy of the allowance for losses on loans
and the level of future provisions for losses on loans; and other
factors disclosed periodically in the Companys filings with the
SEC.
Because of the risks and uncertainties inherent in
forward-looking statements, readers are cautioned not to place
undue reliance on them, whether included in this report or made
elsewhere from time to time by the Company or on the Companys
behalf. The Company assumes no obligation to update any
forward-looking statements.
| ITEM9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
| (d) | Exhibits. |
|
Exhibit Number |
Description |
|
| 2.1 |
Agreement and Plan of Merger by and among Monitor Bancorp, Inc., Farmers National Banc Corp. and FMNB Merger Subsidiary II, LLC, dated as of March13, 2017 (Schedules have been omitted to Item601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request.). |
About Farmers National Banc Corp. (NASDAQ:FMNB)
Farmers National Banc Corp. is a one-bank holding company. The Company operates principally through its subsidiaries, The Farmers National Bank of Canfield (the Bank), Farmers Trust Company (Farmers Trust) and National Associates, Inc. (NAI). The Company’s segments include the Bank, Trust and Retirement Consulting. The Bank segment includes Farmers National Insurance, LLC (Farmers Insurance) and Farmers of Canfield Investment Co. (Farmers Investments). The banking operation offers loans, investments and deposits; the trust operations provide trust services, and the retirement consulting operations offer consulting services. The Company and its subsidiaries operate in the domestic banking, trust, retirement consulting, insurance and financial management industries. The Bank is a national banking association engaged in commercial and retail banking. It operates approximately 30 branches in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina and Cuyahoga Counties in Ohio. Farmers National Banc Corp. (NASDAQ:FMNB) Recent Trading Information
Farmers National Banc Corp. (NASDAQ:FMNB) closed its last trading session up +0.02 at 14.12 with 53,716 shares trading hands.