Filed By: MountainBank Financial Corporation
Subject Company: CNB Holdings, Inc.
Commission File No. 000-25934
Date: June 21, 2002
Pursuant to Rule 425 under the Securities Act of 1933
and deemed to be filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
The following is a joint press release issued by Mountainbank Financial
Corporation and CNB Holdings, Inc. on June 21, 2002, announcing that they have
entered into a definitive agreement to merge. The text of the joint press
release is as follows:
News Release
Date: Friday, June 21, 2002
Contact: J. W. Davis, President and CEO
MountainBank Financial Corporation (828) 693-7376
Hiawatha Nicely, Chairman
CNB Holdings, Inc. (540) 994-0831
Release Date: For Immediate Release
CNB HOLDINGS, INC. AND MOUNTAINBANK FINANCIAL CORPORATION
SIGN MERGER AGREEMENT
PULASKI, VA. and HENDERSONVILLE, N.C. / June 21 / PR Newswire / -- The Boards of
Directors of CNB Holdings, Inc.(Symbol:CNBY) and MountainBank Financial
Corporation (OTCBB: MBFC) announced today the signing of a definitive agreement
for the merger of CNB Holdings, Inc. with MountainBank Financial Corporation in
a stock and cash transaction valued at approximately $13.8 million. The merger
transaction is subject to the approval of the shareholders of CNB Holdings, Inc.
and to receipt of required state and federal bank regulatory approvals. Subject
to those contingencies, it is expected that the transaction will be consummated
during the fourth quarter of 2002.
In combination with MountainBank Financial Corporation's recently announced
proposed merger with Cardinal Bankshares Corporation of Floyd, Virginia, this
transaction with CNB will increase MountainBank Financial Corporation's assets
to approximately $900 million and will add considerably to the company's
commitment of resources to southwestern Virginia. The transaction is structured
whereby CNB shareholders will receive a combination of MountainBank Financial
Corporation common stock and cash valued at approximately $13.50 per CNB share,
with the actual number of shares to be issued for each CNB share to be based on
the market value of MountainBank Financial's common stock immediately prior to
consummation of the merger.
CNB Holdings, Inc., headquartered in Pulaski, Virginia, has approximately $61
million in assets. It is the bank holding company for Community National Bank,
which operates two banking offices in Pulaski, Virginia.
MountainBank Financial Corporation, parent company of MountainBank headquartered
in Hendersonville, N.C., has approximately $650 million in assets and currently
operates 16 banking offices
in nine western North Carolina counties and a mortgage subsidiary headquartered
in Greenwood, South Carolina.
Mr. Hiawatha Nicely commented on the announcement stating, "We established
Community National Bank in 1994 to serve the banking and financial needs of
Pulaski. We strongly believe that our partnership with MountainBank will enable
us to continue serving Pulaski with highly personalized service and will give us
the financial resources to expand our business both in Pulaski and into
surrounding markets. We believe that our philosophies and those of MountainBank
are very compatible. They are an extremely customer driven organization, as is
Community National, and we are very excited with this opportunity to partner
with a vibrant and motivated organization such as MountainBank. We believe that
the combination of our two companies will provide many additional resources to
our customers and staff and the combined company's size and momentum will
provide tangible benefits to our shareholders. We look forward to joining with
MountainBank and to further expanding Community National's brand of personalized
banking in Southwest Virginia."
J. W. Davis, President and Chief Executive Officer of MountainBank Financial
Corporation, stated, "Community National Bank and MountainBank have similar
operating philosophies, compatible cultures and a shared vision. This strategic
alliance, coupled with our recently announced partnership with Cardinal
Bankshares, expands our franchise in the very attractive southwest Virginia
market."
---------------------------
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 regarding
MountainBank Financial Corporation ("MFC"), CNB Holdings, Inc. ("CNB") and their
proposed merger. Those statements include, but are not limited to: (1)
statements about the benefits of the proposed merger (including future financial
and operating results, cost savings, and enhanced revenues), (2) statements
regarding MFC's and CNB's plans, objectives, expectations and intentions and
other statements that are not historical facts; and (3) other statements
identified by words such as "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "targets," "projects," "would be," and similar expressions.
These statements are based upon the current beliefs and expectations of MFC's
and CNB's management and they are subject to significant risks and
uncertainties. Actual or future results or events may differ from those set
forth in the forward-looking statements.
The following risks and other factors, among others, could cause actual
results or events to differ materially from the anticipated results, events or
other expectations expressed in the forward-looking statements: (1) that the
businesses of MFC and CNB will not be integrated successfully or that the
process of integrating their businesses may be more difficult, time-consuming or
costly than expected; (2) that expected revenue synergies and cost savings from
the merger may not be fully realized or may not be realized within the expected
time frame; (3) that revenues following the merger may be lower than expected;
(4) that deposit attrition, operating costs, customer loss and business
disruption following the merger, including without limitation difficulties in
maintaining relationships with employees, may be greater than expected; (5) that
required governmental approvals of the merger will not be obtained on its
proposed terms and schedule; (6) that CNB's stockholders will not approve the
merger; (7) that competitive pressures among depository and other financial
institutions may increase significantly and have an effect on pricing, spending,
third-party relationships and revenues; (8) that the strength of the United
States economy in general, and of the local economies in which the combined
company will operate, may be different than expected, which could result in,
among other things, a deterioration in credit quality or a reduced demand for
credit and have a negative effect on the combined company's loan portfolio and
allowance for loan losses; (9) that there will be changes in the U.S. legal and
regulatory framework; and (10) that there will be adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) which would negatively affect the combined
company's business and operating results.
Additional factors that could cause MFC's and CNB's results to differ
materially from those described in the forward-looking statements can be found
in reports (such as Annual Reports on Form 10-K or 10-KSB, Quarterly Reports on
Form 10-Q or 10-QSB and Current Reports on Form 8-K) filed by MFC and CNB with
the Securities and Exchange Commission and which are available, without charge,
at the SEC's Internet site (http://www.sec.gov). All subsequent written and oral
forward-looking statements concerning the proposed merger or other matters
attributable to MFC and CNB or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above. MFC and CNB do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
are made.
The proposed merger will be submitted to the stockholders of CNB for
their consideration and approval. MFC will file a registration statement, a
prospectus (which will be combined with CNB's proxy statements) and other
related documents with the SEC concerning the proposed merger. THE PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT MATERIALS, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER FILINGS CONTAINING INFORMATION
ABOUT CNB OR MFC, WILL CONTAIN IMPORTANT INFORMATION, AND CNB'S STOCKHOLDERS ARE
URGED TO READ THOSE DOCUMENTS WHEN THEY BECOME AVAILABLE AND BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER. STOCKHOLDERS
WILL BE ABLE TO OBTAIN A FREE COPY OF THE PROXY STATEMENT/PROSPECTUS AND OTHER
RELEVANT MATERIALS (WHEN THEY BECOME AVAILABLE), AND ANY OTHER DOCUMENTS FILED
BY MFC OR CNB, AT THE SEC'S INTERNET SITE (http://www.sec.gov). IN ADDITION, YOU
MAY OBTAIN COPIES OF THE PROXY STATEMENT/PROSPECTUS, ANY SEC FILINGS THAT WILL
BE INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, AND ANY OTHER
DOCUMENTS FILED WITH THE SEC BY MFC, WITHOUT CHARGE, BY DIRECTING A REQUEST TO
THE PRESIDENT, MOUNTAINBANK FINANCIAL CORPORATION, 201 WREN DRIVE,
HENDERSONVILLE, N.C. 28792, TELEPHONE (828) 693-7376. YOU MAY OBTAIN COPIES OF
ANY DOCUMENTS FILED WITH THE SEC BY CNB, WITHOUT CHARGE, BY DIRECTING A REQUEST
TO THE PRESIDENT, CNB HOLDINGS, INC., 901 MEMORIAL DRIVE, PULASKI, VIRGINIA
24301, TELEPHONE (540) 994-0831.
MFC and CNB, and their respective directors and executive officers, may
be deemed to be participants in the solicitation of proxies from the
stockholders of CNB in favor of the proposed merger. INFORMATION ABOUT MFC'S
DIRECTORS AND EXECUTIVE OFFICERS AND THEIR OWNERSHIP OF MFC'S CAPITAL STOCK IS
CONTAINED IN THE PROXY STATEMENT DISTRIBUTED BY MFC IN CONNECTION WITH ITS 2002
ANNUAL MEETING OF STOCKHOLDERS WHICH WAS FILED WITH THE SEC ON MAY 15, 2002.
INFORMATION ABOUT CNB'S DIRECTORS AND EXECUTIVE OFFICERS AND THEIR OWNERSHIP OF
CNB'S CAPITAL STOCK IS CONTAINED IN THE PROXY STATEMENT DISTRIBUTED BY CNB IN
CONNECTION WITH ITS 2002 ANNUAL MEETING OF STOCKHOLDERS WHICH WAS FILED WITH THE
SEC ON APRIL 11, 2002. ADDITIONAL INFORMATION REGARDING THE INTERESTS OF THOSE
PARTICIPANTS IN THE PROPOSED MERGER MAY BE OBTAINED BY READING THE PROXY
STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE.
This press release does not constitute an offer of any securities for
sale. Any offer will be made only by the proxy statement/prospectus.
SOURCE: CNB Holdings, Inc. and MountainBank Financial Corporation
+++End of Release+++