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Exhibit 99.1
PRESS RELEASE
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Exhibit 99.1
For Immediate Release
Tuesday, July 11, 2000
Press Release
FNB CORPORATION AND CNB HOLDINGS, INC.
ANNOUNCE AFFILIATION
FNB Corporation, (NASDAQ: FNBP), parent company of First National Bank
headquartered in Christiansburg, Virginia, and CNB Holdings, Inc., parent
company of Community National Bank headquartered in Pulaski, Virginia, today
jointly announced that they have entered into an agreement to merge CNB Holdings
("CNB") into FNB Corporation ("FNB").
Under the terms of the agreement, shareholders of CNB will receive consideration
valued at $10.60 for each share of CNB common stock, in the form of cash, stock
of FNB, or a combination of cash and stock, at each CNB shareholder's election.
The cash and FNB stock portion of the consideration, however, will each be
limited to 50 percent of the total consideration paid. For those CNB shares
which are converted into FNB shares, the number of FNB shares issued will be
determined by dividing $10.60 by the average closing price of FNB shares for the
30 trading days ending 10 days prior to closing, but in no case will FNB issue
more than 0.642 shares or less than 0.544 shares. The transaction will be
structured as a tax-free reorganization to the extent of the shares exchanged
and accounted for under the purchase method of accounting. It is expected to be
accretive to cash earnings per share in the first full year of operation.
Both First National Bank and Community National Bank will continue operating
under their respective managements, with their current names, as wholly-owned
subsidiaries of FNB. Each bank will be managed by its own board of directors,
and each bank's customers will see no change in day-to-day operations.
Kendall Clay, Chairman of the Board of Directors of FNB, and Hiawatha Nicely,
Chairman, President, and CEO of CNB, said of the affiliation, "We are very
excited about this partnership. The combination of our two organizations will
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create a company with over $570 million in assets and $55 million in capital,
commanding the leading market share in Montgomery and Pulaski counties. The
increased resources of the combined organization will allow us to provide our
customers a wider variety of services and greater technological capabilities.
We will have approximately 4.4 million common shares outstanding and over 1,600
shareholders, resulting in an immediate improvement in the liquidity of our
shareholders' investments."
J. Daniel Hardy, Jr., President and CEO of FNB said, "Both First National and
Community National are committed to providing the highest quality customer
service that we believe only community banks can effectively deliver. The
philosophy shared by both banks is one of commitment to preserving community-
oriented banking. By maintaining our identity in each community, we can
continue to offer the individualized service for which each bank is known. At
the same time, we believe our shareholders will benefit from the efficiencies
that can be generated from a larger organization. This affiliation marks the
beginning of a multi-bank, community-based, financial services organization that
will be able, through its combined resources, to aggressively compete with other
banking entities to facilitate the organization's continued expansion."
In addition to the financial terms of the merger, the companies also announced
the intent to include First National's Dublin office in the Community National
subsidiary beginning at the time of a core processing conversion anticipated in
early Spring 2001. The core processing conversion will allow customers of both
banks to transact business at any of the combined organization's 14 branches and
25 ATMs. First National currently has 12 offices serving the New River Valley
and the Mountain Empire regions. Community National presently operates two
offices in Pulaski County.
This merger is subject to approval by the shareholders of CNB and bank
regulators. The companies anticipate closing the transaction in the fourth
quarter of 2000.
Davenport and Company, LLC, is serving as financial advisor to CNB, and The
Carson Medlin Company is advising FNB, in this transaction.
