Item 1.01 Conclusion of a Material Definitive Agreement.
November 16, 2021, Summit Financial Group, Inc.(the "Company") entered into a Subordinated Note Purchase Agreement (the "Purchase Agreement") with certain institutional "accredited investors," as such term is defined in Rule 501 of Regulation D promulgated by the Securities and Exchange Commission(the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"), and "qualified institutional buyers," as defined in Rule 144A promulgated by the SECunder the Securities Act (collectively, the "Purchasers"). Under the terms of the Purchase Agreement with the Purchasers, the Company issued and sold $75.0 millionin aggregate principal amount of its 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 (the "Notes"). The Notes were issued by the Company to the Purchasers at a price equal to 100% of their face amount. The Notes were offered and sold by the Company in a private placement transaction in reliance on exemptions from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SECthereunder. The Company intends to use the net proceeds it received from the sale of the Notes for general corporate purposes, which may include common stock repurchases, organic growth and strategic initiatives, such as acquisitions. The Purchase Agreement contains certain customary representations, warranties and covenants made by the Company, on the one hand, and the Purchasers, severally and not jointly, on the other hand. The Notes mature on December 1, 2031and bear interest at a fixed rate of 3.25% per year, from November 16, 2021to, but excluding, December 1, 2026, payable semi-annually in arrears. From and including December 1, 2026to, but excluding, the maturity date or early redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month Secured Overnight Financing Rate ("SOFR"), as published by the Federal Reserve Bank of New York, plus 230 basis points, payable quarterly in arrears. As provided in the Notes, the interest rate on the Notes during the applicable floating rate period may be determined based on a rate other than three-month term SOFR. Prior to December 1, 2026, the Company may redeem the Notes, in whole but not in part, only under certain limited circumstances set forth in the Indenture. On or after December 1, 2026, the Company may redeem the Notes, in whole or in part, at its option, on any interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the Notes being redeemed, together with any accrued and unpaid interest on the Notes being redeemed and any additional interest, if any, thereon to but excluding the date of redemption. The Notes are not subject to redemption at the option of the holder. Principal and interest on the Notes are subject to acceleration only in limited circumstances in the case of certain bankruptcy and insolvency-related events with respect to the Company. The Notes are unsecured, subordinated obligations of the Company, are not obligations of, and are not guaranteed by, any subsidiary of the Company, and rank junior in right of payment to the Company's current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes. The Notes were issued under an Indenture, dated November 16, 2021(the "Indenture"), by and between the Company and UMB Bank, N.A., as trustee (the "Trustee"). The Notes are not subject to any sinking fund and are not convertible into or exchangeable, other than pursuant to the Exchange Offer (as defined below), for any other securities or assets of the Company or any of its subsidiaries. On November 16, 2021, in connection with the sale and issuance of the Notes, the Company entered into a Registration Rights Agreement (the "Registration Rights Agreement") with the Purchasers. Under the terms of the Registration Rights Agreement, the Company has agreed to take certain actions to provide for the exchange of the Notes for subordinated notes that are registered under the Securities Act and have substantially the same terms as the Notes (the "Exchange Offer"). Under certain circumstances, if the Company fails to meet its obligations under the Registration Rights Agreement, it would be required to pay additional interest to the holders of the Notes. The forms of the Purchase Agreement, Registration Rights Agreement, the Indenture and the Notes are attached as Exhibits 10.1, 10.2, 4.1 and 4.2, respectively, to this Current Report on Form 8-K (this "Form 8-K") and are incorporated herein by reference. The foregoing descriptions of the Purchase Agreement, the Registration Rights Agreement, the Indenture and the Notes are summaries and are qualified in their entirety by reference to the full text of such documents.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 and the full text of the Indenture and form of Notes, which are attached hereto as Exhibits 4.1 and 4.2, respectively, are incorporated by reference into this Item 2.03. --------------------------------------------------------------------------------
Article 7.01 Regulation FD Disclosure.
In connection with the offering of the Notes, the Company delivered an investor presentation to potential investors on a confidential basis, a copy of which is furnished herewith as Exhibit 99.2 to this Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section. The information in Item 7.01 of this Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, shall not be incorporated by reference into any filing or other document pursuant to the Securities Act, except as shall be expressly set forth by specific reference in such filing or document. Forward-Looking Statements This Current Report on Form 8-K includes forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including but not limited to statements about the anticipated use of net proceeds from the offering, the Exchange Offer and other matters. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond Summit's control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in Summit's forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, Summit does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Article 9.01. Financial statements and supporting documents.
Part Number Description
4.1 Indenture, dated as of
November 16, 2021, by and
between Summit Financial
Group, Inc.and UMB Bank, N.A., as Trustee 4.2 Forms of 3.25% Fixed to Floating Rate
Subordinate security maturing in 2031 (included
as Exhibit A-1 and Exhibit A-2 to the Indenture
filed as Exhibit 4.1 herein)
10.1 Form of Subordinated Note Purchase Agreement,
by and among
Summit Financial Group, Inc.and the
10.2 Form of Registration Rights Agreement, dated as
Summit Financial Group, Inc.and the
99.1 Press Release issued by
Summit Financial Group,
99.2 Investor Presentation of
Summit Financial Group,
104 Cover Page Interactive Data File (Embedded within
the Inline XBRL document)
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