| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 22, 2021, MVB Bank, Inc. (“MVB Bank”), a wholly-owned subsidiary of MVB Financial Corp. (“MVB Financial”), entered into a Purchase and Assumption Agreement (the “Purchase Agreement”) with Summit Community Bank, Inc. (“Summit”), a subsidiary of Summit Financial Group, Inc. (“Summit Financial”) pursuant to which Summit will purchase certain assets and assume certain liabilities (the “Purchase”) of two MVB Bank branch locations in Cabell County, West Virginia; one MVB Bank branch location in Kanawha County, West Virginia; and one MVB Bank branch location in Putnam County, West Virginia (collectively, the “Branches”).
Pursuant to the terms of the Purchase Agreement, Summit has agreed to assume certain deposit liabilities and to acquire certain loans, as well as cash, real property, personal property and other fixed assets associated with the Branches. The deposit and loan balances are approximately $193 million and $57 million, respectively.
The purchase price for the purchased assets will be computed as the sum of the: (i) average daily closing balance of the deposits for the thirty (30) day period prior to the closing multiplied by 6.00%, (ii) the aggregate amount of cash on hand as of the closing date, (iii) the aggregate net book value of all assets being assumed (excluding cash on hand, real property and accrued interest with respect to the loans to be acquired), (iv) the appraised value of the real property to be acquired, and (v) accrued interest with respect to the loans to be acquired. The purchase price is subject to a customary post-closing adjustment based on the delivery within 30 calendar days following the closing date of a final closing statement setting forth the purchase price and any necessary adjustment payment amount.
The completion of the Purchase is subject to regulatory approval required by the Federal Deposit Insurance Corporation and the West Virginia Division of Financial Institutions, as well as normal customary closing conditions. Subject to the satisfaction of such conditions, MVB Bank and Summit expect to close the Purchase early in the third quarter of 2021.
MVB Bank and Summit have made customary representations, warranties, and covenants in the Purchase Agreement. MVB Bank and Summit have also agreed to indemnify each other (subject to customary limitations) with respect to the Purchase, including for breaches of representations and warranties, breaches of covenants, liabilities not retained or assumed, and conduct of the business of the Branches and operation and use of the purchased assets during certain time periods.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which is attached as Exhibit 10.1 hereto, and is incorporated into this Current Report by reference.
