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EXHIBIT 8.1
July 7, 1998
F.N.B. Corporation
One F.N.B. Boulevard
Hermitage, Pennsylvania 16148
Citizens Holding Corporation
1150 Cleveland Street
Clearwater, Florida 33755
Re: Agreement and Plan of Merger under which Citizens Holding Corporation
will merge with and into Southwest Banks, Inc., a wholly-owned
subsidiary of F.N.B. Corporation
Ladies/Gentlemen:
We have acted as special counsel to F.N.B. Corporation ("FNB") in
connection with the proposed merger (the "Merger") of Citizens Holding
Corporation ("Citizens") with and into Southwest Banks, Inc. ("Southwest"), a
wholly-owned subsidiary of FNB, pursuant to the terms of and as described in
that certain Agreement and Plan of Merger (the "Merger Agreement") dated as of
April 6, 1998 and amended as of July 7, 1998, by and among FNB, Southwest and
Citizens, described in the FNB Registration Statement on Form S-4, to be filed
with the Securities and Exchange Commission on or about July 8, 1998 (the
"Registration Statement"). At your request, in connection with the filing by FNB
of the Registration Statement and the Proxy Statement- Prospectus of Citizens
and FNB (the "Proxy Statement-Prospectus") included as part of the Registration
Statement, we are rendering our opinion concerning certain federal income tax
consequences of the Merger. Unless otherwise indicated, all capitalized terms
used in this opinion have the same meaning as used in the Proxy
Statement-Prospectus.
For purposes of rendering our opinion herein, we have conducted an
examination of the Internal Revenue Code of 1986, as amended (the "Code"), and
such other applicable laws, regulations, rulings, decisions, documents and
records as we have deemed necessary. With respect to factual matters, we have
relied upon the Merger Agreement, including, without limitation, the
representations of the parties set forth therein, and upon certain statements
and representations made
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F.N.B. Corporation
Citizens Holding Corporation
July 7, 1998
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to us in certificates by officers of FNB and Citizens, in each case without
independent verification thereof. With the consent of FNB and Citizens, we have
relied on the accuracy and completeness of the statements and representations
contained in such certificates and have assumed that such certificates will be
complete and accurate as of the Effective Time. We have also relied on the
accuracy and completeness of the Proxy Statement-Prospectus. In addition, for
purposes of this opinion, we have assumed that at least fifty percent of the
outstanding shares of Citizens Common Stock will be exchanged for FNB Common
Stock in the Merger, and that the shares of Citizens Common Stock constitute
capital assets in the hands of each holder thereof.
Based on the foregoing, and subject to the qualifications set forth
below, we are of the opinion that under the Code:
(1) The Merger will constitute a reorganization under Code
ss.ss.368(a)(1)(A) and 368(a)(2)(D), and FNB, Southwest and Citizens will each
be a party to the reorganization within the meaning of Code ss.368(b).
(2) Holders of shares of Citizens Common Stock who exchange such
shares solely for shares of FNB Common Stock will not recognize gain or loss on
the exchange.
(3) The federal income tax basis of shares of FNB Common Stock
received in exchange for shares of Citizens Common Stock will be equal to the
holder's basis of the shares of Citizens Common Stock surrendered in exchange
therefor, and the holding period of such FNB Common Stock will include the
holding period of the Citizens Common Stock surrendered in exchange therefor.
(4) The receipt of cash in lieu of fractional shares will be treated
as if the fractional shares were distributed as part of the exchange and then
redeemed by FNB, and capital gain or loss will be recognized in an amount equal
to the difference between the cash received and the basis of the fractional
share of FNB Common Stock surrendered.
(5) A holder of Citizens Common Stock who exercises appraisal rights
will recognize capital gain or loss equal to the difference between the cash
received and such holder's tax basis in the Citizens Common Stock exchanged.
The opinions expressed herein are based upon our interpretation of
existing legal authorities, and no assurance can be given that such
interpretations would be followed if the exchange of shares contemplated by the
Merger became the subject of administrative or judicial proceedings. Statements
of opinion herein are opinions only and should not be interpreted as guarantees
of the current status
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F.N.B. Corporation
Citizens Holding Corporation
July 7, 1998
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of the law, nor should they be accepted as a guarantee that a court of law or
administrative agency will concur in such statement.
No opinion is expressed with respect to any of the following:
(i) The appropriate method to determine the fair market value of any
stock or other consideration received in any sale or exchange;
(ii) The state, local or foreign tax consequences of any aspect of the
Merger; or
(iii) The federal income tax consequences of any aspect of the Merger
to holders of Citizens Common Stock who are subject to special tax treatment for
federal income tax purposes, including among others, life insurance companies,
tax exempt entities and foreign taxpayers, or to holders of warrants or options
to purchase Citizens Common Stock, if any, which are exchanged for or converted
into options or warrants to acquire FNB Common Stock.
We expressly consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement, and to the
references to this opinion in the Proxy Statement-Prospectus. In giving this
opinion, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
SMITH, GAMBRELL & RUSSELL, LLP
/s/ David W. Santi
David W. Santi
DWS/dkaw
Corpbh/136299