<PAGE>
As filed with the Securities and Exchange Commission on March 30, 1998
Registration No. _________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PNB FINANCIAL GROUP
-------------------
(Exact Name of Registrant as Specified in Its Charter)
California
------------------------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)
95-3847640
-------------------------------------
(I.R.S. Employer Identification Number)
4665 MacArthur Court, Newport Beach, California 92660
(714) 851-1033
----------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
<TABLE>
<CAPTION>
<S> <C> <C>
Doug L. Heller Copy To: Leonard J. McGill
PNB Financial Group Day Campbell & McGill
4665 MacArthur Court 3070 Bristol, Suite 650
Newport Beach, California 92660 Costa Mesa, California 92626
(714) 851-1033 (714) 429-2900
----------------------------------------------------------------------------
</TABLE>
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Approximate date of commencement of proposed sale to the public: From time
---------
to time after the Registration Statement becomes effective.
- -----------------------------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
registration statement for the same offering. [_] _____________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _____________________
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Shares To Be Aggregate Price Aggregate Registration
To Be Registered Registered Per Share/(1)/ Offering Price/(1)/ Fee
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,416,706 $25.00 $ 35,417,650 $10,448.21
- ---------------------------------------------------------------------------------------
</TABLE>
(1) Estimated, pursuant to Rule 457(c), on the basis of the market price per
share on March 24, 1998 solely for the purposes of calculating the
registration.
--------------------------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION
DATED March 30, 1998
PROSPECTUS
PNB FINANCIAL GROUP
4665 MacArthur Court
Newport Beach, California 92660
(714) 851-1033
----------------------------------------------------
1,416,706 Shares of Common Stock
----------------------------------------------------
The shares of Common Stock of PNB Financial Group (the "Company") offered
hereby (the "Shares") will be sold from time to time by certain stockholders of
the Company (the "Selling Stockholders") in transactions in the national over-
the-counter market or otherwise at prices prevailing at the time of sale. The
Company will not receive any of the proceeds from the sale of the Shares, but
will bear the expenses incurred in registering the Shares.
The Shares offered hereby have been acquired by the Selling Stockholders
from an affiliate of the Company in private transactions and are "restricted
securities" under the Securities Act of 1933, as amended (the "Act"), prior to
their sale hereunder. This Prospectus has been prepared for the purpose of
registering the Shares under the Act to allow for future sales by the Selling
Stockholders to the public without restriction. To the knowledge of the Company
the Selling Stockholders have made no arrangement with any brokerage firm for
the sale of the Shares. The Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Act. Any commissions received by a
broker or dealer in connection with resales of the Shares may be deemed to be
underwriting commissions or discounts under the Act. See "Plan of
Distribution."
Brokers or dealers effecting the transactions in the Shares should
confirm the registration of the Shares under the securities laws of the states
in which such transactions occur or the existence of an exemption from such
registration, or should cause such registration to occur in connection with any
offer or sale of the Shares.
The Common Stock of the Company is not presently trading in an
"established public trading market." The Company is aware of three securities
dealers who seek to handle trades in its stock: Mitchell Securities Corporation
of Portland, Oregon; Sutro and Company of San Francisco, California; and Hoefer
& Arnett of San Francisco, California. The bid and asked prices of the Common
Stock on March 30, 1998 were $24.00 and $26.00 respectively. Such quotations
are to the best knowledge of the Company and reflect interdealer prices, without
retail mark up, mark down or commissions.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
THE COMMON STOCK OFFERED HEREBY IS HIGHLY SPECULATIVE AND INVOLVES A HIGH
DEGREE OF RISK. See "Risk Factors" on page I-5.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------------------
The date of this Prospectus is March __, 1998.
I-2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
and Exchange Act of 1934 (the "1934 Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Northwest Atrium
Building, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a Web site at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding the Company.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Securities and Exchange Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997;
(b) The description of the Company's Common Stock contained in the
Registration Statement filed pursuant to Section 12 of the Exchange Act,
together with all amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering of Common Stock offered hereby shall be deemed to be
incorporated by reference into this Prospectus and to be part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, including any beneficial owner, upon the written
or oral request of any such person, a copy of any or all of the documents
referred to above which have been incorporated into this Prospectus by reference
(other than exhibits to such documents). Requests for such copies should be
directed to Doug L. Heller, Chief Financial Officer, PNB Financial Group, 4665
MacArthur Court, Newport Beach, California 92660; (714) 851-1033.
No person is authorized to give any information or make any representations
other than those contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the registered shares
to which it relates or an offer to sell or a solicitation of an offer to buy
such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
I-3
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in or incorporated by reference into this Prospectus
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general business conditions,
including a worsening economy which might slow the overall demand for the
Company's services; economic conditions which may adversely affect deposits or
significantly reduce the demand for lending services; government action or
regulation which may affect the banking industry as a whole; competitive
factors, including the entry of new competitors; failure to obtain new
customers, retain customers or volume reductions by current customers; loss of
executive management or other key employees; the effects of changes in costs and
availability of insurance coverage; the effects of changes in compensation or
benefit plans; adverse results in significant litigation matters; and other
factors referenced in this Prospectus.
THE COMPANY
PNB Financial Group
- -------------------
The Company was incorporated in California in June, 1982 and is registered
as a Bank Holding Company under the federal Bank Holding Company Act of 1956, as
amended. The Company commenced operations in April, 1983 when, pursuant to a
reorganization, it acquired all of the voting stock of Pacific National Bank
("PNB" or the "Bank"). At the present time, the Company's principal business is
to serve as a holding company for the Bank.
Pacific National Bank
- ---------------------
PNB was organized as a national banking association in 1980. PNB's
business, most of which is conducted in the Southern California marketplace,
consists primarily of attracting deposits from the public and using such
deposits, together with capital and other funds, to make loans to individuals
and small and medium-size businesses. The deposit services offered by the Bank
include those traditionally offered by commercial banks, such as checking,
savings and time deposits. The loans offered by the bank consist primarily of
three types: (1) commercial, real estate and consumer loans which the Bank holds
for investment, (2) residential mortgage loans which are sold to institutional
investors, and (3) Small Business Administration loans in which the guaranteed
portion is generally sold in the secondary market.
The Bank operates three commercial loan and depository regional offices,
two mortgage loan offices and four mortgage loan production offices. With the
exception of the four mortgage loan production offices, all of the offices are
in the Southern California marketplace, with deposit taking offices in Newport
Beach, Beverly Hills and Orange, and mortgage offices in Irvine and San Diego.
The four mortgage loan production offices are located in Phoenix, Flagstaff and
Tucson, Arizona and Sacramento, California. On December 31, 1997, the Bank
employed 229 full time equivalent employees, including 34 commissioned mortgage
brokers. Several of the Bank's employees also provide services for the Company.
The Company's principal executive offices are located at 4665 MacArthur
Court, Newport Beach, California 92660 and its telephone number is (714) 851-
1033.
I-4
<PAGE>
RISK FACTORS
THE SECURITIES WHICH ARE OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK INCLUDING,
BUT NOT NECESSARILY LIMITED TO, THE RISK FACTORS SET FORTH BELOW. PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE RISK FACTORS INHERENT IN AND AFFECTING
THE BUSINESS OF THE COMPANY AND THIS OFFERING IN MAKING AN INVESTMENT DECISION.
Before investing in the Common Stock, prospective purchasers should
carefully consider the matters set forth below as well as the other information
set forth in this Prospectus.
NO ASSURANCE OF FINANCIAL SUCCESS
The banking industry is complicated by competitive, regulatory and other
factors, and by adverse economic conditions. The Company's continued success
will depend on PNB's ability to procure funds at a cost below its earnings on
assets funded therewith, on its ability to generate and effectively manage its
loans and other assets, liabilities and related income and expenses, and on the
availability of capital to support its current operations and future plans. As a
result of the foregoing, there can be no assurances that the Company will
continue to be successful and achieve its objectives.
GENERAL ECONOMIC CONDITION
Periods of economic slowdown or recession, rising interest rates,
fluctuations or declining demand for banking and financial services are
conditions that are beyond the Company's control but may nevertheless adversely
affect the Company's business.
COMPETITION
The banking industry in Southern California, generally, and in the Bank's
primary market area in Orange and Los Angeles Counties, in particular, is highly
competitive with respect to both deposits and loans. The area is dominated by a
relatively small number of major banks which have many offices operating over a
wide geographic area. Many of the major commercial banks operating in the Bank's
market area offer services which the Bank does not offer. These competitors,
which are more highly capitalized than the Bank in terms of absolute dollars,
also have higher lending limits. In addition to the traditional banking
institutions, there are also other entities which compete in the lending market,
such as insurance companies, mortgage lenders, and small loan companies. The
stock market, mutual funds, and other non-federally insured investments also
compete with banks for their traditional source of funds, customer deposits.
The mortgage banking business in Southern California is also very
competitive. The Bank's mortgage banking competition includes large national
mortgage companies which have many offices throughout the Bank's primary market
area, along with local non-bank mortgage companies. The large national mortgage
companies typically sell their mortgage loans directly to FNMA and Freddie Mac
and maintain the loan servicing. This, together with their large volume, gives
them a competitive advantage over PNB.
Competition in the banking industry places pressure on banks to lower the
rates they charge on the loans they make and to increase the rates they pay on
deposits, which reduces the spread between these two rates of interest and, in
turn, a bank's profitability. Banks are also pressured to reduce the fees they
charge for services, further reducing profitability. As a result of the
foregoing factors, there can be no assurance that the Bank will continue to
successfully compete in the Southern California market.
I-5
<PAGE>
ASSET QUALITY AND ALLOWANCES FOR LOAN LOSSES
The success of bank holding companies, such as the Company, depends to a
significant extent upon the quality of their loans and other assets. The
Company's ratios of non-performing loans to total loans and non-performing
assets to total assets were 1.2% and .7%, respectively, at December 31, 1997.
The Company's determination of the adequacy of its allowances for loan losses is
based on an evaluation of the risk characteristics of its loan portfolio,
general past loss experience, the quality of specific loans, the level of non-
accruing assets, the value of underlying collateral, current economic
conditions, volume growth of the portfolios and other relevant factors. The
Company believes that its allowances for loan losses at December 31, 1997 were
adequate. However, if delinquency levels were to increase as a result of adverse
general economic conditions in the Company's markets or for any other reason,
this may no longer be true. There can be no assurances that the allowances will
be adequate to cover losses or that significant increases to the allowances will
not be required in the future if general economic conditions should decline. The
need to make additional provisions for the allowance for loan losses could
adversely affect the Company's results of operations.
POTENTIAL IMPACT OF CHANGES IN INTEREST RATES
The Company's profitability is dependent to a large extent on its net
interest income, which is the difference between its interest income on
interest-earning assets, such as loans, and its interest expense on
interest-bearing liabilities, such as deposits.
Financial institutions, including the Company, will continue to be affected
by changes in general interest rate levels and by other economic factors.
Fluctuations in interest rates are not predictable or controllable. Interest
rate risk also arises from mismatches between repricing or maturity
characteristics of assets and liabilities. The Company has structured its assets
and liabilities in an effort to mitigate the impact of changes in interest
rates, but there can be no assurances of the Company's ability to continue to
achieve existing levels of net interest income.
SUPERVISION AND REGULATION
Banks and bank holding companies operate in a highly regulated environment
and are subject to supervision and examination by both federal and state bank
regulatory agencies. Federal and state laws and regulations govern matters
including the regulation of certain debt obligations; changes in control;
maintenance of adequate capital for general business operations and the
financial condition of financial institutions generally; permissible types,
amounts and terms of loans and investments; the level of reserves against
deposits; restrictions on dividend payments; establishment and closing of branch
offices; and the maximum rate of interest that may be charged. The Company is
subject to the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"), and to regulation and supervision by the FRB, the FDIC and the
Comptroller of the Currency (the "Comptroller").
The FRB, Comptroller and FDIC possess cease and desist powers over bank
holding companies to prevent or remedy unsafe or unsound practices or violations
of law. These and other restrictions limit the manner in which the Company and
the Bank may conduct business and obtain financing. Furthermore, the commercial
banking business is affected not only by general economic conditions, but also
by the monetary policies of the FRB.
The FRB implements national monetary policies by its open-market operations
in United States Government securities, by adjusting the required level of
reserves for financial institutions subject to its reserve requirements, and by
varying the discount rate for borrowings by banks which are members of the
Federal Reserve System. The FRB has the authority to conduct examinations of the
Company, including any non-bank subsidiaries, to regulate provisions of certain
bank holding company debt, including authority to impose interest ceilings and
reserve requirements on such debt, and to regulate the ability of a bank holding
company to establish branches abroad. The Company may not pay dividends without
the prior approval of the FRB and must advise the FRB before repurchasing any
stock.
I-6
<PAGE>
The Company is required to obtain the prior approval of the FRB for the
acquisition of more than 5% of the voting shares or substantially all of the
assets of a bank or bank holding company, and is prohibited by the Bank Holding
Company Act, except in certain circumstances and subject to approval of the FRB,
from controlling or engaging in, directly or indirectly, activities other than
banking, managing or controlling banks or furnishing services to its
subsidiaries.
The Comptroller of the Currency regulates the daily operations of the Bank
through an extensive system of regulation, reporting and accounting. The actions
of the FRB and the Comptroller in these areas influence the growth of Bank
loans, investments and deposits and also affect interest rates charged on loans
and deposits. The nature and impact of any future changes in monetary,
regulatory and accounting policies cannot be predicted.
The Bank's Small Business Administration ("SBA") loan department is
substantially impacted by the policies, guidelines and funding availability
established by the U.S. Government's SBA. Congress periodically sets the amount
of SBA funds available. Significant changes in the level of funding could
severely effect the operation of the Bank's SBA department, and a significant
decrease in available funding could have a material adverse effect on the
Company's financial condition.
In September 1994, the Interstate Banking and Branching Efficiency Act of
1994 ("IBBEA") was enacted. The IBBEA largely eliminated restrictions on
interstate banking and since June 1, 1997 has permitted interstate branching,
subject to certain options which states may enact by law. Certain aspects of the
IBBEA were clarified and amended in 1997, with the passage of the Riegle-Neal
Classification Act. The Economics Growth and Regulatory Paperwork Act of 1996
("EGRPA") streamlined application processes and eased regulations in several
areas, facilitating acquisitions and expansion of non-banking activities. The
IBBEA and EGRPA may increase competition by both out-of-state and in-state
banking organizations or by other financial institutions. There can be no
assurance that implementation of changes in laws and regulations affecting
banking will not adversely affect the Company.
The regulatory and monetary policies discussed above have had, and are
expected to continue to have, significant effects on the operating results of
commercial banks, including PNB. Changes in regulatory or monetary policies are
difficult to predict and can have a material adverse effect on the Company's
overall financial condition and the value of the Common Stock.
CREDIT RISKS
As a financial institution, the Company is exposed to the risk that
customers to whom the Bank has made loans will be unable to repay those loans
according to their terms and that the collateral securing such loans, if any,
may not be sufficient in value to assure repayment. Credit losses could have a
material adverse affect on the Company's overall financial condition.
RISKS ASSOCIATED WITH CERTAIN LOANS
In addition to the risks associated with lending generally, certain types
of loans carry their own inherent risks. Risk factors associated with commercial
loans include the competency of the management of the borrower, the industry in
which the borrower is operating, the economy and the strength of the product or
service offered by the borrower. Risk factors associated with installment loans
include the strength of the revenue stream of the borrower and the value of the
collateral. Real estate construction loan risk factors include building
activity, marketing abilities, financing conditions, the economy, and the supply
and demand of the product in the specific area being developed.
The risks specific to mortgage banking arise in part from the liability
associated with representations and warranties made to purchasers and insurers
of mortgage loans. Under certain circumstances, the Bank may become liable for
the unpaid principal and interest if there has been a breach of representations
and warranties. In addition,
I-7
<PAGE>
some mortgage loans are sold with a recourse provision. Although the specific
terms of recourse provisions vary from investor to investor, generally loans
sold under a recourse provision are required to be repurchased by the Bank if
the loan becomes delinquent within a period of approximately two to six months
of funding. The Bank may become liable for the unpaid and uninsured portion of
the principal and delinquent interest on mortgage loans either repurchased or
indemnified. A larger than expected number of repurchased or indemnified loans
could have an adverse affect on the Company's earnings and overall financial
condition as well as the value of the Common Stock.
DEPENDENCE UPON KEY PERSONNEL
The Company is dependent upon the efforts and abilities of its senior
management, including its President, Allen C. Barbieri, and its Chief Financial
Officer, Doug L. Heller. The loss of any of the Company's senior management
could have an adverse effect on its business and prospects.
SUBSTANTIAL NUMBER OF SHARES REGISTERED FOR RESALE
The number of shares registered for resale hereunder represents
approximately 63% of the total number of outstanding shares. Sales of
substantial amounts of the Company's Common Stock registered for sale hereunder,
or even the potential for such sales, could have a negative effect on both the
market price of the Common Stock and the Company's overall financial condition.
DIVIDENDS
Due to its earnings and capital, the Company has not historically paid
dividends on any of its shares. Management periodically reviews the possibility
of paying dividends and may decide to do so in the future, but there can be no
assurance at this time that such dividends will in fact be paid.
LIMITED TRADING MARKET
There has generally been no substantial trading volume in the Company's
Common Stock, and there can be no assurance that a substantial trading market
will develop and continue after this offering or that the market price of the
Common Stock will not decline below its current price.
YEAR 2000 ISSUE
The Company is evaluating the potential impact of what is commonly referred
to as the "Year 2000" issue, concerning the inability of certain information
systems to properly recognize and process dates containing the year 2000 and
beyond. If not corrected, these systems could fail or create erroneous results.
The Company is in the process of determining which of its systems, if any, may
present Year 2000 issues, the magnitude of these issues, and the steps that may
be necessary to correct them. Therefore, the potential liabilities and costs
associated with Year 2000 compliance cannot be estimated with certainty at this
time. Regardless of the Year 2000 compliance of the Company's systems, there can
be no assurance that the Company will not be adversely affected by the failure
of others to become Year 2000 compliant. Such risks may include potential losses
related to loans made to third parties whose businesses are adversely affected
by the Year 2000 issue, the disruption or inaccuracy of data provided by non-
Year 2000 compliant third parties and business disruption caused by the failure
of service providers, such
I-8
<PAGE>
as security and data processing companies, to become Year 2000 compliant.
Because of these uncertainties, there can be no assurance that the Year 2000
issue will not have a material financial impact in any future period.
RELATED PARTY TRANSACTIONS
The Company and the following directors, executive officers and principal
shareholders of the Company, Messrs. Barbieri, Hart, Heller, Morris, Salquist,
Schneider and Schuler have invested in, and are shareholders of Alta Residential
Mortgage, Inc., ("Alta"). Alta is a privately held real estate investment trust
which was capitalized on December 24, 1997 by issuing 1,951,500 shares of common
stock at $10.00 per share and warrants to purchase an additional 1,951,500
shares of Alta's common stock. The warrants are exercisable at $10.00 per common
share and are exercisable for a period of 5 years from issuance. In addition,
the Company loaned 1.5 million to Alta as convertible debt which will convert
into 150,000 shares of common stock at such time as Alta increases its
capitalization to 5 million shares of issued and outstanding common stock. Upon
conversion of the 1.5 million convertible debt, the Company will be issued a
warrant to purchase an additional 150,000 shares of Alta's common stock at
$10.00 per share. As of December 31, 1997, the Company and Messrs. Barbieri,
Hart, Heller, Morris, Salquist, Schneider and Schuler own 5.12%, 2.05%, 3.84%,
.92%, 2.56%, 9.74%, .13% and 2.56%, respectively, of the outstanding common
shares of Alta.
In addition to the security holdings, Messrs. Barbieri, Hart and Salquist
are board members of Alta. Along with his positions in the Company and the
Bank, Mr. Barbieri is also the Chairman and C.E.O. of Alta. In connection with
his position in Alta, effective January 1998, Alta is reimbursing the Bank
$100,000 of Mr. Barbieri's salary. The Bank has also entered into two
agreements with Alta. The agreements provide that Alta will be given a first
right of refusal to purchase residential mortgage loans originated by the Bank
and that the Bank will provide certain administrative and other services to
Alta. All transactions between the two companies have been based upon the fair
market value for such services or sales of mortgage loans.
USE OF PROCEEDS
All of the Shares offered hereby are being offered by the Selling
Stockholders. The Company will not receive any proceeds from the sales of the
Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by the Selling Stockholders
as of December 31, 1997, and as adjusted to reflect the sale of the shares.
<TABLE>
<CAPTION>
Number of Shares Number of Shares Shares Beneficially
---------------- ---------------- -------------------
Beneficially Owned to be Sold Pursuant Owned After Offering(1)
------------------ ------------------- -----------------------
Selling Stockholder Prior to Offering to this Prospectus Number Percent
------------------- ----------------- ------------------ ------ -------
<S> <C> <C> <C> <C>
Martin T. Hart(2) 411,022 380,062 30,690 1.3%
G. Mitchell Morris(2) 241,012 241,012 0 0%
James K. Shuller 380,062 380,062 0 0%
Jon A. Salquist(2) 266,000 241,312 24,688 1.0%
Allen C. Barbieri(3) 178,958 149,067 29,891 1.3%
Doug L. Heller(4) 37,191 25,191 12,000 *
</TABLE>
- --------------------------------
(1) Assumes the sale of all shares covered by this Prospectus. There can be
no assurance that any of the Selling Shareholders will sell any or all of
the shares of Common Stock offered by them hereunder
(2) Martin T. Hart, G. Mitchell Morris and Jon A. Salquist are directors of
the Company
(3) Allen C. Barbieri is the President and a director of the Company.
(4) Doug L. Heller is the Chief Financial Officer of the Company.
I-9
<PAGE>
PLAN OF DISTRIBUTION
The Shares will be offered and sold by the Selling Stockholders for their
own accounts. The Company will not receive any of the proceeds from the sale of
the Shares pursuant to this Prospectus. The Company has agreed to bear the
expenses of the registration of the Shares, including legal and accounting fees,
and such expenses are estimated to be $25,000.
The Selling Stockholders may, from time to time, offer and sell all or part
of the shares acquired by them pursuant to the Plan on the over-the-counter
market at market prices prevailing at the time or in negotiated transactions at
negotiated prices. The Selling Stockholders have advised the Company that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their Shares, nor is there
an underwriter or coordinating broker acting in connection with the proposed
sale of Shares by the Selling Stockholders. Sales may be made directly or to or
through broker-dealers who may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
Shares for whom such broker-dealers may act as agent or to whom they may sell as
principal, or both (which compensation as to a particular broker-dealer may be
in excess of customary commissions).
The Selling Stockholders and any broker-dealers acting in connection with
the sale of the Shares hereunder may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Act, and any commissions received by them and
any profit realized by them on the resale of Shares as principals may be deemed
underwriting compensation under the Act.
The Company has informed the Selling Stockholders that the anti-
manipulative Regulation M under the Securities Exchange Act of 1934, as amended,
may apply to their sales in the market and has furnished each Selling
Stockholder with a copy of these Rules and has informed them of the need for
delivery of copies of this Prospectus.
The Selling Stockholders may also use Rule 144 under the Act to sell the
Shares if they meet the criteria and conform to the requirements of such Rule.
DESCRIPTION OF COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of
20,000,000 shares of Common Stock, no par value, of which approximately
2,280,680 shares were outstanding as of March 30, 1998. The shares are fully
paid and nonassessable.
Holders of shares of Common Stock are entitled to one vote for each share
on all matters to be voted on by the shareholders and, upon the giving of notice
as required by law, are entitled to cumulate their votes in the election of
directors. Holders of shares of Common Stock are entitled to share ratably in
dividends, if any, as may be declared, from time to time, by the Board of
Directors in its discretion, from funds legally available therefor. In the event
of a liquidation, dissolution or winding up of the Company, the holders of
shares of Common Stock are entitled to share pro rata all assets remaining after
payment in full of all liabilities. Holders of Common Stock have no preemptive
or other subscription rights, and there are no conversion rights or redemption
or sinking fund provisions with respect to such shares.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Day Campbell & McGill, 3070 Bristol Street, Suite 650, Costa
Mesa, California.
EXPERTS
I-10
<PAGE>
The audited financial statements of the Company incorporated by reference
herein have been audited by McGladrey & Pullen, LLP, independent auditors, as
set forth in their report thereon appearing elsewhere herein and in the
Registration Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
OTHER MATTERS
The Company's articles of incorporation, bylaws and Section 317 of the
California General Corporation Law makes provisions for the indemnification of
directors and officers against certain liabilities. Officers and directors of
the Company are indemnified generally against expenses actually and reasonably
incurred in connection with actions, suits or proceedings, whether civil or
criminal, provided that it is determined that they acted in good faith, and, in
any criminal matter, had reasonable cause to believe that their conduct was not
unlawful. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act of 1933, as amended (the "Securities
Act") and is therefore unenforceable.
I-11
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
<TABLE>
<S> <C>
Registration fee $10,448
Blue Sky fees and expenses 2,000
Legal fees and expenses 5,000
Accounting fees and expenses 5,000
Printing 1,000
Miscellaneous 1,552
----- -------
TOTAL $25,000
</TABLE>
_____________
(1) All of the above expenses except the SEC registration fee are estimated.
All of the above expenses will be paid by the Company.
Item 15. Indemnification of Directors and Officers.
-----------------------------------------
Section 317 of the California General Corporation Law makes
provision for the indemnification of officers and directors in terms
sufficiently broad to include indemnification under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). The Articles of Incorporation
of the Company authorize the Company to provide indemnification of its officers,
directors and agents for breach of duty to the Company and its shareholders
through bylaw provisions and/or indemnification agreements. The Company's Bylaws
provide for the indemnification of its officers and directors to the fullest
extent permitted by law.
In addition, as permitted by Section 2094(a)(10) of the California
General Corporation Law, the Articles of Incorporation and Bylaws of the Company
provide that the liability of the directors of the Company for monetary damages
shall be eliminated to the fullest extent permissible under California law.
However, as provided by California law, such a limitation will not act to limit
the liability of a director for (i) acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) acts or omissions
that a director believes to be contrary to the best interest of the Company or
its shareholders or that involve the absence of good faith on the part of the
director, (iii) any transaction from which a director derived an improper
personal benefit, (iv) acts or omissions that show a reckless disregard for the
director's duty to the Company or its shareholders in circumstances in which the
director was aware or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the Company or
its shareholders, (v) acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the Company
or its shareholders, (vi) any improper transactions between a director and the
Company in which the director has a material financial interest or (vii) any
unlawful distributions to the shareholders of the Company or any unlawful loan
of money or property to, or a guarantee of the obligation of, any director or
officer of the Company.
Item 16. Exhibits
--------
Exhibit
Number
4.1* Restated Articles of Incorporation of the Company
II-1
<PAGE>
4.2** Amended of Articles of Incorporation of the Company
4.3*** Bylaws of the Company of the Company
5 Opinion of Day Campbell & McGill
23.1 Consent of McGladrey & Pullen, LLP
23.4 Consent of Day Campbell & McGill, counsel for the Company,
included in Exhibit 5.
_____________________________
* Filed as Exhibit 3.1 to the Company's 1989 Annual Report on
Form 10-Kand incorporated herein by reference.
** Filed as Exhibit 3.3 to the Company's 1990 Annual Report on
Form 10-K and incorporated herein by reference.
*** Filed as Exhibit 6 to the Company's Registration Statement
on From S-14 (File No. 2-78580) and incorporated herein by
reference.
17. Undertakings
------------
A. Supplementary and Periodic Information, Documents and Reports
-------------------------------------------------------------
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority in that
Section.
B. Item 512 Undertaking with Respect to Rule 415 Under the
-------------------------------------------------------
Securities Act of 1933
----------------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration
Statement:
(a) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(b) To reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement; and
(c) To include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
II-2
<PAGE>
C. Indemnification
---------------
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("Securities Act") may be permitted to directors,
officers or persons controlling the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
D. Item 512 Undertaking with Respect to Rule 430A
----------------------------------------------
The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the
Securities Act of 1933, the registrant will treat the
information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act as part of this registration statement as of
the time it was declared effective.
(ii) For the purpose of determining any liability under
the Securities Act of 1933, the registrant will treat each
post-effective amendment that contains a form of prospectus
as a new registration statement for the securities offered in
the registration statement, and the offering of such
securities at that time as the initial bona fide offering
thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-3 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Rancho Dominguez, State of California on March
30, 1998.
PNB FINANCIAL GROUP, INC.
By: /s/ ALLEN C. BARBIERI
-------------------------------
Allen C. Barbieri
President and Director
Each person whose signature to this Registration Statement appears below
hereby appoints Allen S. Barbieri as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below and to file all amendments and
post-effective amendments to this Registration Statement as such attorney-in-
fact may deem necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ ALLEN C. BARBIERI President and Director March 30, 1998
-------------------
Allen C. Barbieri
Chairman of the Board March , 1998
--------------------
Bernard E. Schnieder
/s/ DOUG L. HELLER Chief Financial Officer March 30, 1998
--------------------
Doug L. Heller
/s/ MARTIN T. HART Director March 30, 1998
--------------------
Martin T. Hart
/s/ G. MITCHELL MORRIS Director March 30, 1998
--------------------
G. Mitchell Morris
Director March , 1998
--------------------
Jon A. Salquist
II-4
<PAGE>
[DAY CAMPBELL & McGILL LETTERHEAD]
EXHIBIT 5
March 30, 1998
PNB Financial Group
4665 MacArthur Court
Newport Beach, California 92660
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
You have requested our opinion as counsel for PNB Financial Group (the
"Company"), as to the matters set forth below in connection with the
registration under the Securities Act of 1933 on Form S-3 of 1,416,706 shares
of the Company's Common Stock (the "Shares").
We have examined the Company's Registration Statement on Form S-3 filed
with the Securities and Exchange Commission ("Commission") on or about March 30,
1998 (the "Registration Statement"). We have also examined the Articles of
Incorporation of the Company, as amended, the Bylaws and the minute books of the
Company, and such other documents as we deemed pertinent as a basis for the
opinion hereinafter expressed. For these purposes we have relied, without
independent investigation, upon certificates provided by public officials,
officers of the Company and the Selling Stockholders as to certain factual
matters. We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to the original
documents of documents submitted to us as certified or photostatic copies and
the authenticity of the originals of the latter documents.
On the basis of the foregoing, and relying solely thereon, we are of the
opinion that the Shares have been duly authorized and are legally and validly
issued, fully paid and non-assessable.
We consent to the inclusion of our name in the Registration Statement
under the caption "Legal Matters" and the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
/s/ DAY CAMPBELL & McGILL
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report, dated January 29, 1998, which appears on
page F-1 of Form 10-KSB of PNB Financial Group for the year ended December 31,
1997. We also consent to the reference to our Firm under the captions "Experts"
and "Selected Financial Data" in the Prospectus.
/s/ McGLADREY & PULLEN, LLP
Anaheim, California
March 30, 1998
