Summit Financial Group in Moorefield, W.Va., has agreed to settle claims tied to mortgages it originated before the financial crisis.
The $1.8 billion-asset Summit said in a press release Monday that it will pay nearly $10 million to Residential Funding and ResCap Liquidating Trust to address litigation tied to mortgages the banking company sold between 2003 and 2007.
The case, pending since early 2014, is one of several Residential Funding and ResCap Liquidating Trust have filed against lenders, Summit said in its release.
Summit said the settlement will result in a first-quarter charge that will reduce its profit by $6.2 million, or 58 cents a share.
“After extensive consideration of the relevant issues, including the uncertainties inherent in complex litigation and its enormous defense costs, we believe it is in our best interests to enter into this settlement,” Charles Maddy III, Summit’s president and CEO, said in the release.
The settlement “eliminates the possibility of any additional exposure and puts this issue behind us … enabling us to focus more resources on enhancing long-term shareholder value,” Maddy said.