MOOREFIELD, W.V., Aug. 5, 2011 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (Nasdaq:SMMF) today announced that it is distributing free of charge to all holders of record of shares of its common stock ("Common Stock") as of 5:00 p.m., Eastern Time, on July 1, 2011 (the "Record Date"), non-transferable subscription rights (the "Rights") to purchase shares of its 8% Non-Cumulative Convertible Preferred Stock, Series 2011 ("Series 2011 Preferred Stock").
In the Rights offering, Summit is offering up to 12,000 shares of Series 2011 Preferred Stock. The Rights will expire, if not exercised prior to 5:00 p.m., Eastern Time, on September 15, 2011, unless extended (as it may be extended, the "Expiration Time").
Summit is mailing to holders of its common stock on the Record Date a Prospectus dated July 20, 2011 and a Prospectus Supplement, dated July 26, 2011 (collectively, the "Prospectus") and other items necessary for exercising of the Rights. Shareholders who are beneficial owners ("Beneficial Owner") of Common Stock held by brokers, banks, trust companies or other nominees will receive the Rights offering material from their nominee holder. The Rights and Series 2011 Preferred Stock are described in the Prospectus.
Summit's common shareholders will receive one Right for every whole share of Common Stock held on the Record Date. Each Right will allow holders to subscribe for 0.002 shares of Series 2011 Preferred Stock (the "Basic Subscription Privilege") at the cash price of $500 per share. Summit will not issue any fractional shares of the Series 2011 Preferred Stock; however, holders will be entitled to purchase at least one share of Series 2011 Preferred Stock regardless of the number of shares of Common Stock they own or Rights they receive. Holders receiving Rights to purchase a fractional amount (in excess of one whole share) of Series 2011 Preferred Stock will be entitled to purchase the number of shares equal to such fractional amount rounded down to the nearest whole share.
In the event that a Rights holder purchases all of the shares of Series 2011 Preferred Stock available pursuant to their Basic Subscription Privilege, they may also exercise an over-subscription opportunity (the "Over-Subscription Opportunity") to purchase shares of Series 2011 Preferred Stock that are not purchased by other Summit shareholders through the exercise of their Basic Subscription Privilege (the "Unsubscribed Shares"), subject to availability and the allocation process described in the Prospectus.
The Series 2011 Preferred Stock will rank senior to our Common Stock and pari passu with our Series 2009 Preferred Stock and any other preferred stock that the Company may issue. The Series 2011 Preferred Stock will pay non-cumulative dividends, if and when declared by our board of directors, at a rate of 8.0% per annum. Dividends declared will be payable quarterly in arrears on the 1st day of March, June, September and December of each year.
The Series 2011 Preferred Stock may be converted at the option of the holder, on any dividend payment date, into shares of Common Stock based on a conversion rate (the "Conversion Rate") determined by dividing $500 by the greater of (i) $4.00 or (ii) the consolidated closing bid price of our Common Stock as quoted on the NASDAQ Capital Market immediately preceding the closing of the Rights offering, plus cash in lieu of fractional shares and subject to anti-dilution adjustments described in the Prospectus.
On or after June 1, 2014, Summit may, at its option, on any dividend payment date, convert some or all of the Series 2011 Preferred Stock into shares of Common Stock at the Conversion Rate. The Company may exercise this conversion right only if, for 20 trading days during the 30 consecutive trading dates immediately preceding the date it gives notice of conversion, the closing price of our Common Stock exceeds 135% of the greater of (i) $4.00 or (ii) the consolidated closing bid pricing of our Common Stock as quoted on the NASDAQ Capital Market immediately preceding the closing of the Rights offering.
On June 1, 2021, all of the then outstanding Series 2011 Preferred Stock will be converted into shares of Common Stock at the Conversion Rate. Please consult the Prospectus for a full description of the Series 2011 Preferred Stock.
Registrar and Transfer Company is acting as the subscription agent (the "Subscription Agent") for the Rights offering. Subscribers must deliver full payment of the aggregate subscription price to the Subscription Agent (or in the case of a Beneficial Owner, to their nominee) for shares of Series 2011 Preferred Stock they wish to acquire under the Basic Subscription Privilege plus the maximum number of shares they wish to acquire under the Over-Subscription Opportunity prior to 5:00 p.m., Eastern Time, on September 15, 2011, unless extended. Because Summit will not know the total number of Unsubscribed Shares prior to the Expiration Time, any excess subscription payments received by the Subscription Agent will be returned to subscribers with interest, as soon as practicable. Once a subscriber has exercised the Basic Subscription Privilege or the Over-Subscription Opportunity, such exercise may not be revoked.
Summit will pay interest to subscribers on their subscription funds while held in escrow at a rate of 8% per annum. Interest will begin to accrue on the date subscription funds are received by the Subscription Agent and will continue until the later of the Expiration Time or funds are otherwise returned to subscribers for any reason.
If we issue all 12,000 shares of our Series 2011 Preferred Stock available for the exercise of Basic Subscription Privilege in the Rights offering and to satisfy Over-Subscription Opportunity requests and/or to facilitate sales of shares to new investors in the Supplemental Offering, the net proceeds to us, after deducting estimated offering expenses of $100,000, will be approximately $5.9 million. Summit intends to use the net proceeds to strengthen its capital base and for general corporate purposes.
Summit reserves the right to negotiate and enter into purchase agreements with standby purchasers pursuant to which purchasers will agree to acquire from the Company, at the same subscription price offered to shareholders, any shares of its Series 2011 Preferred Stock offered to its current shareholders, but not subscribed for in this Rights offering. In addition, at the expiration of the Rights offering, and after taking into account all over-subscription requests and any shares sold to standby purchasers, Summit may sell share of its Series 2011 Preferred Stock to the public at $500 per share in a supplemental offering.
Any questions or requests for assistance concerning the Rights offering should be directed to Ms. Teresa Ely, Director of Shareholder Relations, at (304) 530-0526 or via e-mail at firstname.lastname@example.org.
About the Company
Summit Financial Group, Inc. is a $1.47 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Northern and Shenandoah Valley regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates fifteen banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.
The Summit Financial Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2990
Teresa D. Ely, Director of Shareholder Relations (304) 530-0526
Summit Financial Group, Inc.
Moorefield, West Virginia, UNITED STATES
Teresa D. Ely, Director of Shareholder Relations (304) 530-0526
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