Exhibit B - Opinion Letter of CIBC World Markets Corp.
December 28, 1999
Board of Directors
CNY Financial Corporation
1 North Main Street
Cortland, NY 13045
Directors:
You have requested our opinion as to the fairness, from a financial
point of view, to the holders of the outstanding shares of common stock of CNY
Financial Corporation (the "Company") of the consideration to be received by
such shareholders from Niagara Bancorp, Inc. ("Niagara") pursuant to the
definitive Agreement and Plan of Merger to be dated as of December 28, 1999 by
and between Niagara and the Company (the "Agreement"). Pursuant to the
Agreement, the Company will be merged with and into Niagara, the Company's sole
bank subsidiary will become a wholly owned subsidiary of Niagara and each
outstanding share of the Company's common stock will be converted into the right
to receive $18.65 - $18.75 in cash (the "Consideration").
In connection with this opinion we have reviewed, among other things:
(a) the Agreement; (b) the Stockholders Agreements and Seller Option Agreement
(as such terms are defined in the Agreement); (c) audited consolidated financial
statements and management's discussions and analysis of the financial condition
and results of operations for the Company and for Niagara for the three fiscal
years ended December 31, 1998; (d) unaudited consolidated financial statements
for the Company and for Niagara for the nine months ended September 30, 1999;
(e) certain other publicly available business and financial information relating
to the Company and to Niagara; (f) the views of senior management of the Company
of the past and current business operations, results thereof, financial
condition and future prospects of the Company; (g) a comparison of certain
financial information for the Company with similar information for certain other
companies we considered comparable to the Company; (h) the financial terms of
certain recent business combinations in the banking industry; (i) the current
market environment generally and the banking environment in particular; and (j)
such other information, financial studies, analyses and investigations and
financial, economic and market criteria as we considered appropriate in the
circumstances.
B-1
We have relied, without independent verification or investigation, on
all of the financial information, analyses and other information furnished to us
for purposes of this opinion, including information relating to assets and
liabilities, contingent or otherwise, as being complete and accurate. We have
also relied upon the management of the Company as to the reasonableness and
achievability of the financial and operating forecasts and projections provided
to us. In that regard, we have assumed, with your consent, that such forecasts,
projections and estimates have been reasonably prepared and reflect the best
currently available estimates and judgments of the management of the Company as
to the future financial performance of the Company. We have not made an
independent evaluation or appraisal of the assets and liabilities of the Company
or any of its subsidiaries and we have not been furnished with any such
evaluation or appraisal. Furthermore, this opinion shall not constitute any such
evaluation or appraisal. We were not asked to, and did not, solicit indications
of interest from any other person regarding a business combination involving the
Company.
We have acted as financial advisor to the Company in connection with
the Merger and will receive a fee for our services, a portion of which is
contingent on the consummation of the Merger. In the ordinary course of our
business, we may actively trade the equity services of the Company and of
Niagara for our own account and for the accounts of customers, and accordingly
may at any time hold a long or short position in such securities. In April,
1998, we acted as lead advisor in Niagara's mutual to stock conversion. We
currently provide equity research coverage of Niagara and make a market in their
stock.
It is understood that this opinion is for the information of the Board
of Directors in connection with its consideration of the Merger and does not
constitute a recommendation to any stockholder as to how such stockholder should
vote on the merger.
Based upon and subject to the foregoing and based upon such other
matters as we consider relevant, it is our opinion that, as of the date hereof,
the Consideration to be received by the common shareholders of the Company in
the Merger is fair, from a financial point of view, to such shareholders.
Very truly yours,
/s/ CIBC WORLD MARKETS
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CIBC World Markets