CNB Financial (CCNE) 425 Business combination disclosure

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 13, 2020

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 Number)	(I.R.S. Employer Identification No.)

31 South Second Street

PO Box 42

Clearfield, Pennsylvania 16830

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code: (814) 765-9621

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form8-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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	CCNE	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐  Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 8.01 Other Events.

On February 28, 2020, one purported stockholder of Bank of Akron (“Akron”) filed a lawsuit against Akron, the members of the Akron board of directors, CNB Financial Corporation (“CNB”) and CNB Bank in the Supreme Court of the State of New York, County of Eerie, on behalf of himself, captionedParshall v. Bank of Akron et al., Case No. 803012/2020 (the “Merger Litigation”). The plaintiff generally alleges that the Akron board of directors breached its fiduciary obligations by approving the terms of the Agreement and Plan of Merger, dated December 18, 2019, by and among Akron, CNB and CNB Bank (the “Merger Agreement”), which provides for, among other things, the merger of Akron with and into CNB Bank (the “Merger”). The plaintiff further alleges inadequate merger consideration. Lastly, the plaintiff alleges that the proxy statement/prospectus filed with the SEC on February 10, 2020 and first mailed to Akron shareholders on February 12, 2020 contained materially incomplete disclosures about the merger. The plaintiff seeks injunctive relief, other unspecified damages, and an award of attorneys’ fees and expenses.

On March 13, 2020, solely to avoid the costs, risks and uncertainties inherent in litigation, Akron and CNB have agreed to make additional disclosures to supplement the disclosures contained in the joint proxy statement/prospectus (the “Additional Disclosures”). The Additional Disclosures are set forth below and should be read in conjunction with the joint proxy statement/prospectus.

The Additional Disclosures moot plaintiff’s disclosure claims asserted in the Merger Litigation and, as a result, the plaintiff has agreed to dismiss the Merger Litigation with prejudice as to their individual claims and without prejudice to the claims of the putative members of the class.

This agreement to make the Additional Disclosures will not affect the merger consideration to be paid in connection with the merger of Akron with and into CNB Bank or the timing of the special meeting of Akron’s shareholders.

The defendants have vigorously denied, and continue to vigorously deny, that they have committed or aided and abetted in the commission of any violation of law or engaged in any of the wrongful acts that were or could have been alleged in the Merger Litigation, and expressly maintain that, to the extent applicable, they diligently and scrupulously complied with their fiduciary and other legal duties and are entering into the agreement to make the Additional Disclosures solely to eliminate the burden and expense of further litigation, to put the claims that were or could have been asserted to rest, and to avoid any possible delay to the closing of the merger that might arise from further litigation. Nothing in this Current Report on Form8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein.

SUPPLEMENT TO DEFINITIVE PROXY STATEMENT/PROSPECTUS

The following information supplements the proxy statement/prospectus and should be read in connection with the proxy statement/prospectus, which should be read in its entirety. To the extent that information herein differs from or updates information contained in the proxy

statement/prospectus, the information contained herein supersedes the information contained in the proxy statement/prospectus. All page references in the information below are to pages in the proxy statement/prospectus, and terms used below have the meanings set forth in the proxy statement/prospectus, unless otherwise defined below. Without admitting in any way that the disclosures below are material or otherwise required by law, Akron and CNB make the following supplemental disclosures:

1.    The disclosure under the heading “THE MERGER—Opinion of Akron’s Financial Advisor — Comparable Company Analyses” is hereby amended by deleting the table of company names at the bottom of page 44 (the Akron Peer Group) of the proxy statement/prospectus and replacing it with the following:

Financial Data as of September 30, 2019					Balance Sheet /Asset Quality						Capital Position								LTM Profitability								Valuation as of December 17, 2019
																											Price /
									NPAs /						Total		CRE /
					Total		Loans /		Total		TCE /		Leverage		RBC		Total								Efficiency				LTM		Dividend		Market
					Assets		Deposits		Assets		TA		Ratio		Ratio		RBC		ROAA		ROAE		NIM		Ratio		TBV		EPS		Yield		Cap
Company	State		Ticker		($M)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(x)		(%)		($M)
Muncy Bank Financial, Inc.		PA		MYBF		493		88.5		0.80		9.96		9.82		15.63		83.3¹		1.07		10.80		3.65		67.13		118		11.3		3.7		58
Susquehanna Community Financial, Inc.		PA		SQCF		476		59.1		0.15		10.03		9.01		13.31		52.3¹		1.15		12.55¹		3.24¹		63.14¹		121		11.1		2.6		58
Mauch Chunk Trust Financial Corp.		PA		MCHT		460		63.9		0.74		9.11		8.88		15.24		77.9¹		0.59		6.91		2.83		75.47		97		15.0		2.2		45
Mifflinburg Bancorp, Inc.		PA		MIFF		455		89.0		0.85¹		10.77		10.05¹		14.51¹		187.6¹		1.12		10.81		3.27¹		60.20		109		10.7		0.0		53
Commercial National Financial Corporation		PA		CNAF		432		72.9		0.08		15.16		13.51		21.40		140.1¹		1.12		7.50		3.93		71.81		91		12.8		5.0		60
Woodlands Financial Services Company		PA		WDFN		425		86.6		1.84		10.69		10.62		14.77		122.6¹		1.29		12.69		3.72		67.60		110		9.3		3.2		50
ES Bancshares, Inc.		NY		ESBS		422		113.2		1.02¹		5.33		7.41¹		11.63¹		431.3¹		0.39		7.07		3.04		77.72		94		14.6		0.0		34
Peoples Limited		PA		PPLL		406		68.9		0.34		9.25		9.22		15.40		71.8¹		1.16		12.91		3.31		61.35		140		11.7		2.8		52
Mars Bancorp, Inc.		PA		MNBP		403		76.7		0.02		9.30		9.28		15.93		199.2¹		0.47		5.20		2.93		83.60		82		16.5		3.1		31
Hamlin Bank and Trust Company		PA		HMLN		389		81.9		0.67		23.14		20.55		28.88		7.6		0.85		3.91		3.88		57.27		116		—		3.9		104
VSB Bancorp, Inc.		NY		VSBN		376		48.3		0.58		10.14		9.81		19.96¹		227.1¹		0.95		10.30		3.42		68.66		107		10.8		2.7		40
WVS Financial Corp.		PA		WVFC		359		56.9		0.00		10.22		10.33		19.47		16.3¹		0.80		8.09		2.07		48.97		85		10.1		2.5		29
HV Bancorp, Inc.		PA		HVBC		357		87.8		1.07		9.33		8.61¹		15.94¹		44.0¹		0.29		2.97		2.60		87.39		109		NM		0.0		34
National Bank of Coxsackie		NY		NCXS		335		61.9		0.76		8.53		9.18		16.72		139.1		0.55		6.13		3.16		78.92		74		12.8		2.2		21
FSB Bancorp, Inc.		NY		FSBC		325		119.6		0.32		9.83		9.13¹		16.53¹		91.8¹		0.00		0.02		2.64		97.21		102		NM		0.0		32
First Resource Bank		PA		FRSB		322		103.9		1.16		8.48		8.66		13.11		315.5		0.78		8.89		3.84		68.60		98		11.6		0.0		27
Delhi Bank Corp.		NY		DWNX		305		66.7		0.43		10.12		10.16		28.51		30.2¹		0.86		9.01		3.04		67.97		169		20.0		2.2		52

2.    The disclosure under the heading “THE MERGER—Opinion of Akron’s Financial Advisor — Comparable Company Analyses” is hereby amended by deleting the table of company names at the bottom of page 45 (the CNB Peer Group) of the proxy statement/prospectus and replacing it with the following:

Financial Data as of September 30, 2019					Balance Sheet /Asset Quality						Capital Position								LTM Profitability								Valuation as of December 17, 2019
																											Price /
									NPAs /						Total		CRE /
					Total		Loans /		Total		TCE /		Leverage		RBC		Total								Efficiency				LTM		2019E		2020E		Dividend		Market
					Assets		Deposits		Assets		TA		Ratio		Ratio		RBC		ROAA		ROAE		NIM		Ratio		TBV		EPS		EPS		EPS		Yield		Cap
Company	State		Ticker		($M)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(%)		(x)		(x)		(x)		(%)		($M)
NBT Bancorp Inc.		NY		NBTB		9,661		90.6		0.43		8.65		10.15		13.38		158.2		1.26		11.58		3.61		58.97		222		15.1		15.1		16.1		2.6		1,804
Park National Corporation		OH		PRK		8,724		89.0		1.32		9.15		9.37		13.15		140.2		1.27		11.86		3.89		63.28		219		16.1		15.5		15.0		3.9		1,714
First Commonwealth Financial Corporation		PA		FCF		8,152		91.3		0.46		9.18		10.13		14.11		229.8		1.33		10.55		3.74		56.85		203		13.9		13.4		13.1		2.7		1,459
S&T Bancorp, Inc.		PA		STBA		7,572		103.6		1.19		9.51		10.12		13.15		319.7		1.42		10.83		3.67		51.59		198		13.4		13.3		13.0		2.8		1,372
Tompkins Financial Corporation		NY		TMP		6,628		90.4		0.45		8.58		9.43		13.36		245.0		1.19		12.51		3.36		62.54		243		17.5		17.6		17.4		2.3		1,360
Univest Financial Corporation		PA		UVSP		5,354		98.0		0.71		9.42		9.97		13.81		184.9		1.35		10.73		3.66		59.82		165		11.7		12.4		12.6		2.9		806
Bryn Mawr Bank Corporation		PA		BMTC		4,829		95.7		0.40		8.60		9.07		14.61		273.3		1.31		10.40		3.66		60.08		207		13.8		13.5		13.1		2.5		824
Peoples Bancorp Inc.		OH		PEBO		4,396		84.9		0.61		9.77		10.28		15.18		117.2		1.28		9.67		3.76		61.45		173		13.1		11.9		12.5		4.0		702
Financial Institutions, Inc.		NY		FISI		4,333		88.0		0.17		7.99		8.86		12.57		188.2		1.01		10.53		3.25		59.80		156		12.7		12.1		12.0		3.0		526
First Defiance Financial Corp.		OH		FDEF		3,351		96.5		0.75		9.67		10.91		12.83		288.7		1.52		12.26		3.99		59.14		196		12.8		12.6		12.1		2.8		616
Arrow Financial Corporation		NY		AROW		3,113		89.3		0.16		8.71		10.04		14.81		107.8		1.22		13.14		3.09		57.39		211		15.5		15.4		14.1		2.7		567
ACNB Corporation		PA		ACNB		1,736		90.9		0.40		9.46		9.97¹		14.87¹		175.7¹		1.43		13.71		3.83		58.70		161		10.9		—		—		2.7		261
Penns Woods Bancorp, Inc.		PA		PWOD		1,673		102.4		1.23		8.28		8.46		11.55		217.1¹		1.03		11.59		3.33		62.66		175		14.1		—		—		3.7		240
Evans Bancorp, Inc.		NY		EVBN		1,456		96.9		1.26¹		9.16		10.11		13.11		368.3¹		1.23		13.03		3.79		67.86		151		11.4		11.7		11.0		2.6		198
Franklin Financial Services Corporation		PA		FRAF		1,302		80.8		1.27		9.06		9.45		15.80		243.5¹		1.26		12.94		3.72		64.89		141		10.8		—		—		3.2		165
Middlefield Banc Corp.		OH		MBCN		1,281		96.6		1.03		9.40		10.46		12.93		351.5¹		1.07		9.76		3.72		63.78		145		13.4		13.8		13.6		2.2		172

3.    The disclosure under the heading “THE MERGER—Opinion of Akron’s Financial Advisor — Analysis of Precedent Transactions” is hereby amended by deleting the table of Acquiror and Target names at the top of page 47 (the Regional Precedent Transactions group) of the proxy statement/prospectus and replacing it with the following:

								Transaction Information												Seller Information
										Price /
														Core			1-Day
								Deal		LTM				Deposit			Market			Total		TCE/		LTM		LTM		Efficiency		NPAs/
Acquiror			Target			Annc.		Value		Earnings		TBV		Premium			Premium			Assets		TA		ROAA		ROAE		Ratio		Assets
Company	St.		Company	St.		Date		($M)		(x)		(%)		(%)			(%)			($M)		(%)		(%)		(%)		(%)		(%)
Fidelity D & D Bancorp Inc.		PA	MNB Corporation		PA		12/10/19		78.7		21.0		200		11.6			97.1			413		9.5		0.94		10.8		69.0		0.53
Community Bank System Inc.		NY	Steuben Trust Corporation		NY		10/21/19		108.6		15.4		171		11.5			39.2			577		11.0		1.25		12.0		61.9		0.55
Citizens Financial Services		PA	MidCoast Community Bancorp Inc		DE		9/18/19		29.8		12.2		117		2.8			2.6			269		9.5		0.97		9.9		79.9		0.17
BV Financial Inc. (MHC)		MD	MB Bancorp Inc		MD		9/5/19		31.9		14.0		92		(2.8	)		(3.9	)		147		22.8		1.38		6.3		95.6		—
Investors Bancorp Inc		NJ	Gold Coast Bancorp Inc.		NY		7/24/19		63.6		25.1		135		5.1			21.8			572		8.1		0.45		5.7		74.0		—
ACNB Corp.		PA	Frederick County Bancorp		MD		7/2/19		62.3		21.8		163		8.3			41.5			442		8.2		0.65		7.9		77.9		0.46
1st Constitution Bancorp		NJ	Shore Community Bank		NJ		6/24/19		53.1		13.2		162		10.7			11.0			274		11.6		1.45		13.2		52.8		0.62
First Bank		NJ	Grand Bank NA		NJ		3/19/19		22.1		27.8		102		0.3			—			197		11.0		0.49		4.6		84.4		4.15
Community Bank System Inc.		NY	Kinderhook Bank Corp.		NY		1/22/19		93.2		17.1		184		9.1			74.4			632		6.2		0.86		10.0		66.5		—

4.    The disclosure under the heading “THE MERGER—Opinion of Akron’s Financial Advisor — Analysis of Precedent Transactions” is hereby amended by deleting the table of Acquiror and Target names in the middle of page 47 (the Nationwide Precedent Transactions group) of the proxy statement/prospectus and replacing it with the following:

						Transaction Information											Seller Information
								Price /
												Core			1-Day
						Deal		LTM				Deposit			Market		Total		TCE/		LTM		LTM		Efficiency		NPAs/
Acquiror		Target		Annc.		Value		Earnings		TBV		Premium			Premium		Assets		TA		ROAA		ROAE		Ratio		Assets
Company	St.	Company	St.	Date		($M)		(x)		(%)		(%)			(%)		($M)		(%)		(%)		(%)		(%)		(%)
SmartFinancial Inc.	TN	Progressive Financial Grp Inc	TN		10/29/19		41.4		27.0		125		4.2			—		292		10.4		0.67		6.6		83.8		2.22
Reliant Bancorp Inc.	TN	First Advantage Bancorp	TN		10/23/19		123.1		17.9		147		9.8			23.6		733		11.0		1.06		9.2		66.9		1.31
Centreville Bank	RI	PB Bancorp Inc.	CT		10/22/19		115.5		25.4		145		—			33.2		538		14.7		0.82		5.1		71.6		1.20
First Community Bankshares Inc	VA	Highlands Bankshares Inc.	VA		9/11/19		93.2		25.0		155		7.3			22.5		612		8.7		0.62		6.5		75.0		2.61
Farmers National Banc Corp.	OH	Maple Leaf Financial Inc.	OH		8/30/19		39.6		NM		120		7.4			—		277		14.5		0.56		3.8		71.7		4.86
Heartland Financial USA Inc.	IA	Rockford B&TC	IL		8/13/19		59.2		NM		129		4.7			—		523		8.8		0.11		1.3		71.5		1.41
First Guaranty Bancshares Inc.	LA	Union Bancshares Inc.	LA		8/5/19		43.4		12.8		154		9.0			—		261		10.8		1.28		12.9		64.0		1.78
Wintrust Financial Corp.	IL	SBC Inc.	IL		7/25/19		90.5		12.3		180		9.5			—		594		11.0		1.87		17.2		63.9		1.08
Spirit of Texas Bancshares Inc	TX	Chandler Bancorp Inc.	TX		7/24/19		65.6		12.7		168		11.5			—		349		12.4		1.55		12.8		52.5		0.84
Carolina Financial Corp.	SC	Carolina Trust BancShares Inc.	NC		7/15/19		100.1		21.8		161		9.7			39.4		617		10.1		0.74		6.9		63.0		0.82
Wintrust Financial Corp.	IL	STC Bancshares Corp.	IL		6/5/19		44.9		22.3		146		7.5			—		277		10.8		1.00		9.5		77.5		1.80
Blue Ridge Bankshares Inc.	VA	Virginia Community Bankshares	VA		5/14/19		44.6		21.7		182		9.7			59.4		251		9.8		0.81		8.0		78.5		1.07
Central Bancompany Inc.	MO	Liberty Bancorp Inc.	MO		4/10/19		104.3		—		195		—			73.2		540		10.0		—		—		—		0.93
Midland States Bancorp Inc.	IL	HomeStar Financial Group Inc.	IL		4/2/19		9.9		7.1		95		(0.0	)		—		375		8.0		1.16		15.4		78.4		1.28

5.    The disclosure under the heading “THE MERGER—Certain Akron Unaudited Prospective Financial Information” is hereby amended by deleting the table on page 52 of the proxy statement/prospectus and replacing it with the following:

	2019			2020		2021		2022		2023
Earnings Per Share	$	16.63		$	13.39	$	14.46	$	15.62	$	16.87
Dividends Per Share	$	0.70	¹	$	2.80	$	2.80	$	2.80	$	2.80
Net Income ($000s)	$	4,988		$	4,018	$	4,339	$	4,686	$	5,061

1) Dividend for the quarter ending December 31, 2019

Important Additional Information and Where to Find It

In connection with the Merger, CNB filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement onForm S-4 that includes a proxy statement of Akron and a prospectus of CNB, which proxy statement/prospectus was mailed or other disseminated to Akron shareholders on or about February 12, 2020. CNB has also filed other relevant documents with the SEC regarding the Merger. Investors and shareholders are urged to read the Registration Statement and the proxy statement/prospectus regarding the Merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information. A free copy of Registration Statement and the proxy statement/prospectus, as well as other documents filed with the SEC that contain important information, may be obtained at the SEC’s website at www.sec.gov.

Copies of the Registration Statement and proxy statement/prospectus and the filings that are be incorporated by reference therein may be obtained, free of charge, from CNB Financial Corporation’s website at www.CNBBank.bank, or by directing a request to CNB Financial Corporation, 1 South Second Street, P.O. Box 42, Clearfield, PA 16830, or to Bank of Akron, Attention: President and Chief Executive Officer, 46 Main Street, P.O. Box 420, Akron, NY 14001.

No Offer

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Participants in Solicitation

CNB, Akron and their respective directors, executive officers and certain other members of management and employees may be deemed to be “participants” in the solicitation of proxies from the shareholders of Akron in connection with the Merger. Information about the directors and executive officers of Akron and their ownership of Akron common stock, and the interests of such participants, may be obtained by reading the proxy statement/prospectus. Information about the directors and executive officers of CNB may be found in CNB’s Annual Report onForm 10-K for the year ended December 31, 2019, filed with the SEC on March 5, 2020, and in its definitive proxy statement filed with the SEC on March 11, 2020. You may obtain free copies of these documents from CNB using the contact information above.

Forward Looking Statements

This Current Report onForm 8-K 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 Akron 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 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; (11) the inability to realize expected cost savings or achieve other anticipated benefits in connection with the Merger; (12) changes in the quality or composition of our loan and investment portfolios; (13) adequacy of loan loss reserves; (14) increased competition; (15) loss of certain key officers; (16) deposit attrition; (17) rapidly changing technology; (18) unanticipated regulatory or judicial proceedings and liabilities and other costs; (19) changes in the cost of funds, demand for loan products or demand for financial services; and (20) 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 and Akron 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’s Annual Report onForm 10-K for the year ended December 31, 2019.

SIGNATURE

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 13, 2020
	By	/s/ Tito L. Lima
		Tito L. Lima
		Treasurer