- Transaction valued at approximately $74.0 million
- Increases Farmers asset base approximately 50% to $1.7 billion
- Messrs. Smail and Wenger to be added to Farmers Board. Mark Witmer
to continue as Senior Executive Vice President of Farmers
CANFIELD, Ohio--(BUSINESS WIRE)--
Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB),
the holding company for The Farmers National Bank of Canfield, and
National Bancshares Corporation (“National Bancshares”) (OTCQX: NBOH),
the holding company for First National Bank of Orrville, announced today
they have entered into an agreement and plan of merger (the “Agreement”).
Kevin J. Helmick, President and CEO of Farmers, stated, “We are very
pleased to announce this transformational merger. National Bancshares
has a strong reputation in its core markets and provides an attractive
mix of additional loans and deposits to our franchise. This transaction
helps Farmers achieve additional operating scale and drive earnings per
share growth as our management team continues to focus on achieving
above-average returns for our shareholders. In addition to the financial
benefits, the merger is a significant step in our strategy to expand our
footprint. The combined company will create a top-performing Midwest
community bank that has the scale, product depth and efficiency to
compete effectively and deliver best-in-class service to our customers,
while providing employees with a compelling corporate culture and
enhanced advancement potential.”
“The transaction creates value for our shareholders, customers and
employees by uniting two strong community banks with a long history of
delivering top customer service,” said Mark R. Witmer, President and CEO
of National Bancshares. “We are excited about the additional products
and services that Farmers will bring to our customer base and the
long-term value this transaction creates for our shareholders.”
Pursuant to the Agreement, each shareholder of National Bancshares will
be entitled to elect to receive either $32.15 per share in cash or 4.034
shares of Farmers’ common stock, subject to an overall limitation of 80%
of the shares being exchanged for stock and 20% for cash. Based on
Farmers’ volume weighted average stock price over the last 20 trading
days of $7.97, as of January 26, 2015, the transaction is valued at
approximately $74.0 million. The merger is expected to qualify as a
tax-free reorganization for those shareholders electing to receive
Farmers’ stock. The transaction is subject to receipt of National
Bancshares’ shareholder approval, Farmers’ shareholder approval and
customary regulatory approvals. The Company expects the transaction to
close in the first half of 2015.
At closing, two current members of the National Bancshares Board of
Directors, James R. Smail and Howard J. Wenger, will be added to the
Board of Directors of Farmers. Mark R. Witmer will also continue with
Farmers as Senior Executive Vice President, Chief Community Banking
Officer.
John W. Kropf, National Bancshares’ Chairman, commented, “We are very
pleased to announce the combination of these two great community banks
and look forward to continuity in leadership with Jim, Howard and Mark’s
roles in the combined company.”
James R. Smail added, “The combined company will create a top-performing
Northeast Ohio franchise with complementary business lines and branch
locations. The increased operating scale, product depth and efficiency
will help drive strong returns to shareholders.”
Lance Ciroli, Chairman of Farmers Board of Directors, stated, “I look
forward to working with Jim and Howard and the National Bancshares
organization. Jim's and Howard’s experience will help provide continuity
and guidance as Farmers enters into these new markets.”
Upon consummation of the transaction, First National Bank of Orrville
will be merged with and into The Farmers National Bank of Canfield. At
that time, First National Bank of Orrville branches will become branches
of The Farmers National Bank of Canfield. Farmers estimates that,
following the closing, it will have approximately $1.7 billion in assets
and 33 banking locations throughout Ohio. Farmers expects the
transaction to be accretive to earnings per share for the first full
year of operations, excluding one-time merger costs, by over 20% and
expects any tangible book value dilution created in the transaction to
be earned back in approximately 4 years. Following consummation of the
transaction it is expected that The Farmers National Bank of Canfield
will exceed “well-capitalized” thresholds under all regulatory
definitions.
As of December 31, 2014, National Bancshares had total assets of $529.6
million, which included net loans of $398.6 million and deposits of
$418.3 million. Agricultural and small business loans were the fastest
growing part of National Bancshares’ loan portfolio. For the year ended
December 31, 2014, National Bancshares' return on average assets and
return on average equity were 1.16% and 11.92%, respectively.
Farmers intends to release its 2014 fourth-quarter and full-year
financial results after the market closes January 28, 2015.
Sterne, Agee & Leach, Inc. is serving as financial advisor to Farmers
and Vorys, Sater, Seymour and Pease LLP is serving as legal counsel to
Farmers on the transaction. Boenning & Scattergood, Inc. is serving as
financial advisor to National Bancshares and Calfee, Halter & Griswold
LLP is serving as legal counsel to National Bancshares on the
transaction.
CONFERENCE CALL
Farmers will hold a conference call to discuss the National Bancshares
transaction, its 2014 fourth-quarter and full-year financial results,
and respond to questions from current shareholders and analysts at 10:00
AM ET on Thursday, January 29, 2015. A slide presentation accompanying
management’s presentation will be available on the Company’s website.
Media representatives and the public are encouraged to listen to the
conference call, but the company will only take questions from
shareholders and analysts. If members of the media or the public have
questions, please direct them to the Company’s public relations
department at 330-702-8427.
To participate in the conference call, please dial 888-215-6853 several
minutes before 10:00 AM ET on Thursday, January 29, 2015. A replay will
be available from 1:00 PM ETJanuary 29, 2015 until midnight February 5,
2015. The number to hear the teleconference replay is 877-870-5176. The
access code for the replay is 7820612.
ABOUT FARMERS NATIONAL BANC CORP.
Founded in 1887, Farmers National Banc Corp. is a diversified financial
services company headquartered in Canfield, Ohio, with more than $1
billion in Banking assets and $1 billion in Trust assets. Farmers
National Banc Corp.’s wholly-owned subsidiaries are comprised of The
Farmers National Bank of Canfield, a full-service national bank engaged
in commercial and retail banking with 19 banking locations in Mahoning,
Trumbull, Columbiana, Stark and Cuyahoga Counties in Ohio, Farmers Trust
Company, which operates two trust offices and offers services in the
same geographic markets and National Associates, Inc.Farmers National
Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank
of Canfield, offers a variety of insurance products.
ABOUT NATIONAL BANCSHARES CORPORATION
National Bancshares Corporation’s subsidiary, First National Bank, is
headquartered in Orrville, Ohio with fourteen banking offices in
Orrville, Massillon, Wooster, Apple Creek, Dalton, Kidron, Lodi, Mt.
Eaton, Salem, Seville and Smithville.
FORWARD LOOKING STATEMENTS
This press release 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
Company's 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
Company's 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 Company's failure to integrate National
Bancshares and First National Bank in accordance with expectations;
deviations from performance expectations related to National Bancshares
and First National Bank; 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 Company's 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 Company's filings with the Securities and Exchange
Commission (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 Company's behalf. The Company assumes no
obligation to update any forward-looking statements.
OTHER INFORMATION
In connection with the proposed merger, Farmers will file with the SEC a
Registration Statement on Form S-4 that will include a joint proxy
statement and a Farmers prospectus, as well as other relevant documents
concerning the proposed transaction.
SHAREHOLDERS OF FARMERS AND NATIONAL BANCSHARES 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 FARMERS, NATIONAL BANCSHARES, 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 Farmers and National
Bancshares and other persons may be deemed to be participants in the
solicitation of proxies from National Bancshares and Farmers
shareholders with respect to the proposed merger. Information regarding
the directors and executive officers of Farmers is available in its
proxy statement filed with the SEC on March 19, 2014. Information
regarding directors and executive officers of National Bancshares is
available on its website at http://www.discoverfirstnational.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 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 Farmers through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Farmers will be available
free of charge on Farmers' website at https://www.farmersbankgroup.com.
Farmers National Banc Corp.
Amber Wallace, 330-702-8427
Senior
Vice President, Chief Retail & Marketing Officer
awallace@farmersbankgroup.com
Source: Farmers National Banc Corp.