f8k112107.htm
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):
November_21,
2007
Summit
Financial Group, Inc.
(Exact
name of registrant as specified in its charter)
West
Virginia
No.
0-16587 55-0672148
(State or other jurisdiction
of
(Commission File
Number) (I.R.S.
Employer
incorporation or
organization)
Identification No.)
300
North Main Street
Moorefield,
West Virginia 26836
(Address
of Principal Executive Offices)
(304)
530-1000
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or 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:
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[X]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
1 – Registrant’s Business and Operations
Item 1.01
Entry into a Material Definitive Agreement
On
November 21, 2007, Summit Financial Group, Inc. (“Summit”), entered into a
Letter of Intent with Danny L. Wiginton, Commonwealth Savingshares Corporation,
SOUTHBank FSB, and Corinthian Mortgage Corporation (the “Letter of Intent”). The
purpose of the Letter of Intent is to settle the previously disclosed civil
action styled Corinthian Mortgage Corporation v. Summit Financial LLC et
al., (the “Litigation”) and to state the basic terms and conditions upon
which the parties have agreed to negotiate a proposed transaction whereby Summit
may acquire Commonwealth Savingshares Corporation (“CSC”) and its subsidiary,
SOUTHBank FSB, or exercise a cash alternative to settle the
Litigation.
The
settlement ends all current litigation between Summit, its wholly owned
subsidiary, Summit Community Bank, Inc. (the “Bank”), the individual defendants
who were former employees of Summit named in the Litigation, and the plaintiff
Corinthian Mortgage Corporation. The settlement will not have a
material adverse impact on the financial condition or liquidity of Summit or
the
Bank.
Under
the
Letter of Intent, Summit and CSC agree to negotiate in an effort to enter into
a
definitive merger agreement to purchase CSC for a combination of stock and
cash
equal to $52.5 million. However, at any time prior to execution of a
definitive merger agreement, Summit, CSC, and CSC’s principal shareholder (Danny
L. Wiginton) shall each have the right, in its or his sole discretion to choose
not to pursue the acquisition of CSC by Summit and to terminate the Letter
of
Intent. In such case, Summit shall pay to Corinthian, CSC and
Wiginton the total sum of $10.5 million as consideration (i) for settling the
Litigation and (ii) as a break-up fee. $1.25 million of this total
amount will be paid by Summit’s insurance carrier. If the parties
enter into a definitive merger agreement, the $1.25 million will be applied
to
the purchase price.
After
execution of the definitive merger agreement, should any regulatory body whose
approval is required by law not approve this acquisition or should the
definitive merger agreement be terminated for any reason whatsoever, Summit
shall pay, within twenty (20) days thereafter, to Corinthian, CSC and CSC’s
principal shareholder the total sum of $10.5 million as consideration (i) for
settling the Litigation and (ii) as a break-up
fee. $1.25 million of this total amount will be paid
by Summit’s insurance carrier.
In
the
event either party breaches the definitive merger agreement and Summit is
required to pay the total sum of $10.5 million, the parties acknowledge and
agree that such payment does not affect or alter in any way the ability of
either party to pursue its contractual rights and remedies under the definitive
merger agreement.
As
a
result of the settlement, management anticipates Summit will recognize a one-
time pre-tax charge in fourth quarter of 2007 of no more than $9.25 million
($5.7 million after taxes). At this time, management cannot estimate the charge
it would recognize in fourth quarter 2007 in the event it executes a definitive
merger agreement with CSC, but in no case will the pre-tax charge be more than
$9.25 million ($5.7 million after taxes). The Letter of Intent is attached
hereto as Exhibit 10.1, which is incorporated herein by
reference.
Item 8.01
Other Events
On
November 21, 2007, Summit Financial Group, Inc and its subsidiary Summit
Community Bank, Inc. executed a Settlement Agreement and Release in the
previously reported civil action styled Corinthian Mortgage Corporation v.
Summit Financial LLC et al. The material terms of the settlement
and the expected impact of the settlement are set forth in the Letter of Intent
disclosed in Item 1.01 above and are incorporated herein by
reference.
FORWARD-LOOKING
STATEMENTS
This
filing contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements about (i) the actual amount of
the
charge to be recognized by Summit (ii) Summit’s plans,
objectives, expectations and intentions and other statements contained in this
filing that are not historical facts; and (iii) other statements identified
by words such as “expects” “anticipates”, “intends”, “plans”, “believes”,
“seeks”, “estimates”, “targets”, “projects”, “approximately” or words of similar
meaning generally intended to identify forward-looking
statements. These forward-looking statements are based upon the
current beliefs and expectations of the respective management of Summit and
are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond the control of
Summit. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change. Actual results may differ materially from the
anticipated results discussed in these forward-looking statements because of
possible uncertainties.
Additional
factors, that could cause actual results to differ materially from those
expressed in the forward-looking statements are discussed in Summit’s reports
(such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed with the Securities and Exchange Commission and
available on the SEC’s Internet site (http://www.sec.gov).
Summit
cautions that the foregoing list of factors is not exclusive. All subsequent
written and oral forward-looking statements concerning the proposed transaction
or other matters attributable to Summit or any person acting on their behalf
are expressly
qualified in their entirety by the cautionary statements above. Summit does
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.
Additional
Information and Where to Find It
Shareholders
of Greater Atlantic and other investors are urged to read the proxy
statement/prospectus included in the registration statement on Form S-4
that Summit has filed with the Securities and
Exchange Commission, but which has not yet been declared effective,
in connection with the proposed merger, because it
contains important information about Summit, Greater
Atlantic, the merger, the persons soliciting proxies in the merger and
their interests in the merger and related matters. Investors are able
to obtain all documents filed with the SEC by Summit
free of charge at the SEC’s Internet site
(http://www.sec.gov). In addition,
documents filed with the SEC by Summit are
available free of charge from the Assistant
Secretary of
Summit Financial Group, Inc., 300 N. Main Street, Moorefield, West Virginia
26836; telephone (304) 530-1000.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits
10.1 Letter
of Intent dated as of November 21, 2007
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SUMMIT
FINANCIAL GROUP, INC.
Date: November
21,
2007 By: /s/ Robert
S.
Tissue
Robert
S. Tissue
Senior
Vice President
&
Chief
Financial Officer