UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported) June 25, 2009
UNITED FINANCIAL BANCORP,
INC.
(Exact
Name of Registrant as Specified in its Charter)
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Maryland
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000-52947
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74-3242562
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(State
or Other Jurisdiction
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(Commission
File No.)
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(I.R.S.
Employer
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of
Incorporation)
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Identification
No.)
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95 Elm Street, West
Springfield, Massachusetts
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01089
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (413)
787-1700
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
ý Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 – Registrant’s Business and Operations
Item
1.01 – Entry into a Material Definitive Agreement
On June
25, 2009, United Financial Bancorp, Inc. (the “Company”), the parent company of
United Bank, and CNB Financial Corp. (“CNB Financial”), the parent company of
Commonwealth National Bank, entered into an Agreement and Plan of Merger (the
“Merger Agreement”) pursuant to which CNB Financial will merge with and into the
Company. Concurrent with the merger, it is expected that Commonwealth National
Bank will merge with and into United Bank.
Under the terms of the Merger Agreement, CNB Financial
shareholders will have the opportunity to elect to receive either: (1) $10.75
per share in cash for each CNB Financial share; (2) 0.8257 United Financial
shares for each CNB Financial share; or (3) a combination of United Financial
common stock and cash, provided that the total cash consideration paid by United
Financial to shareholders of CNB Financial equals 50% of the total merger
consideration. All CNB Financial shareholder elections will be
subject to the allocation and proration procedures set forth in the Merger
Agreement. The Company expects to issue approximately 942,622 shares of Company
common stock, not including any shares issued as a result of the conversion and
exercise of CNB Financial stock options and warrants. The transaction
value represents 125.6% of CNB Financial’s tangible book value and a 3.8%
premium to core deposits.
As part
of United Financial’s comprehensive due diligence review, United Financial,
together with external loan review professionals, conducted an extensive review
of CNB Financial’s loan portfolio. As an integral aspect of its
review, United Financial examined all nonperforming, substandard and watch list
loans along with certain lower-rated performing loans. In addition,
United Financial physically inspected all projects on which CNB Financial has
active construction loans. Based on this review and to account for
any potential losses in the loan portfolio, United Financial assumed a pre-tax
credit mark adjustment of approximately $8.5 million, which includes CNB
Financial’s existing reserve. In addition, United Financial estimates
a pre-tax purchase accounting adjustment of approximately $4.6 million related
to trust-preferred obligation and a $2.4 million core deposit intangible. United
Financial expects that the transaction will result in tangible book value
dilution of approximately 3% with an earn-back period of approximately
three quarters after completion of the transaction.
United
Financial expects that its close proximity to CNB Financial and its familiarity
with the CNB management and lending teams will provide for manageable
integration risk, achievable synergies, and improved operational
efficiency for the combined institution. Excluding one-time merger costs and
assuming cost savings of approximately 15% of CNB Financial’s operating
expenses, it is anticipated that this transaction will result in 9% accretion to
2010 operating earnings per share. United Financial expects to record
a pre-tax restructuring charge of approximately $4.0 million, including a
one-time termination fee payable to Berkshire Hills Bancorp, Inc., which may be reimbursed under certain
circumstances as set forth in the merger agreement.
The senior management of the Company and United Bank will remain the same
following the merger. Charles R. Valade, the current President and
CEO of CNB Financial, will be appointed as an Executive Vice President
of United Bank. In addition, at the closing of the merger,
the Boards of Directors of United Financial and United Bank will be expanded by
one member each to include one current member of CNB Financial’s
Board.
The
transaction is subject to customary closing conditions, including the receipt of
regulatory approvals and approval by the shareholders of CNB Financial, and is
intended to qualify as a tax free reorganization for federal income tax
purposes, with shares of CNB Financial exchanged for Company shares on a tax
free basis. The merger is currently expected to be completed in the fourth
quarter of 2009.
All
of the directors of CNB Financial have agreed to vote their shares in favor of
the approval of the Merger Agreement at the shareholders’ meeting to be held by
CNB Financial to vote on the proposed transaction. If the merger is not
consummated under certain circumstances, CNB Financial has agreed to pay the
Company a termination fee of $1,227,000.
The
Merger Agreement also contains usual and customary representations and
warranties that the Company and CNB Financial made to each other as of specific
dates. The assertions embodied in those representations and warranties were made
solely for purposes of the contract between the Company and CNB Financial, and
may be subject to important qualifications and limitations agreed to by the
parties in connection with negotiating the terms. Moreover, the representations
and warranties are subject to a contractual standard of materiality that may be
different from what may be viewed as material to shareholders, and the
representations and warranties may have been used to allocate risk between the
Company and CNB Financial rather than establishing matters as
facts.
The
foregoing summary of the Merger Agreement is not complete and is qualified in
its entirety by reference to the complete text of such document, which is filed
as Exhibit 2.1 to this Form 8-K and which is incorporated herein by
reference in its entirety.
The
Company will be filing a registration statement containing a proxy
statement/prospectus and other documents regarding the proposed transaction with
the Securities and Exchange Commission (“SEC”). Company and CNB Financial
shareholders are urged to read the proxy statement/prospectus when it becomes
available, because it will contain important information about the Company and
CNB Financial and the proposed transaction. When available, copies of this proxy
statement/prospectus will be mailed to CNB Financial shareholders. Copies of the
proxy statement/prospectus may be obtained free of charge at the SEC’s web site
at http://www.sec.gov, or by directing a request to United Financial Bancorp,
Inc., 95 Elm Street, West Springfield, MA, 01089, or to CNB Financial Corp., 33
Waldo Street,
P.O. Box 830, Worcester, MA 01613. Copies of other documents filed by the
Company and CNB Financial with the SEC may also be obtained free of charge at
the SEC’s web site or by directing a request to the Company at the address
provided above.
The
Company and CNB Financial and each of their directors, executive officers and
certain other members of management and employees may be soliciting proxies from
CNB Financial shareholders in favor of the proposed transaction. Information
regarding such persons who may,
under the rules of the SEC, be considered to be participants in the solicitation
of CNB Financial’s shareholders in connection with the proposed transaction is
set forth in the Company’s proxy statement filed with the SEC in connection with
the Company’s most recent annual meeting of shareholders, and CNB Financial’s
proxy statement filed with the SEC in connection with CNB Financial’s most
recent annual meeting of shareholders. Additional information will be set forth
in the proxy statement/prospectus when it is filed with the SEC.
Forward-Looking
Statements
Statements contained in this current report on Form 8-K, including
Exhibit 99.1, that are not historical facts are forward-looking statements, as
that term is defined in the Private Securities Litigation Reform Act of
1995. Such statements may be characterized as management’s intentions,
hopes, beliefs, expectations or predictions of the future. It is important
to note that such forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected in such forward-looking statements. Factors that could cause
future results to vary materially from current expectations include, but are not
limited to, changes in interest rates, economic conditions, deposit and loan
growth, real estate values, loan loss provisions, competition, customer
retention, changes in accounting principles, policies or guidelines and
legislative and regulatory changes.
Section
9 – Financial Statements and Exhibits
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Item 9.01.
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Financial Statements
and Exhibits
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(a)
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Financial
Statements of Businesses Acquired. Not applicable.
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(b)
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Pro
Forma Financial Information. Not applicable.
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(c)
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Shell
Company Transactions. Not applicable.
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(d)
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Exhibits.
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Exhibit 2.1
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Agreement
and Plan of Merger dated as of June 25, 2009 by and between United
Financial Bancorp, Inc. and CNB Financial Corp.
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Exhibit 99.1
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Press
Release dated June 25, 2009, “United Financial Bancorp, Inc. to Acquire
CNB Financial Corp.”
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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UNITED
FINANCIAL BANCORP, INC.
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DATE: June
26, 2009
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By:
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/s/
Richard B. Collins
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Richard
B. Collins
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President
and Chief Executive Officer
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EXHIBIT
INDEX
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Exhibit
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Description
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Exhibit 2.1
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Agreement
and Plan of Merger dated as of June 25, 2009 by and between United
Financial Bancorp, Inc. and CNB Financial Corp.
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Exhibit
99.1
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Press
Release dated June 25, 2009, “United Financial Bancorp, Inc. to Acquire
CNB Financial Corp.”
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