MOOREFIELD, W. Va., April 27, 2017 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF ) today reported a first quarter 2017 net loss of $1.62 million, or ($0.15) per diluted share, compared to earnings of $4.06 million, or $0.38 per diluted share, reported for the first quarter of 2016 and earnings of $4.71 million, or $0.44 per diluted share, reported for the fourth quarter of 2016. Summit’s first quarter 2017 net loss resulted principally from a legal settlement which reduced its earnings by $0.58 per diluted share.
First Quarter 2017 Significant Highlights:
- As previously announced, a charge of $9.9 million, or $6.2 million after-tax, was recorded to resolve fully all litigation with the Residential Funding Company, LLC and ResCap Liquidating Trust (collectively, “ResCap”);
- Total revenues increased 1.5 percent compared to the linked quarter and 11.1 percent compared to the year ago quarter, principally as result of the acquisition of HCB;
- Net loans, excluding mortgage warehouse lines of credit, grew $40.8 million, or 12.5 percent (on an annualized basis), compared to December 31, 2016;
- Net interest margin increased 20 basis points compared to the linked quarter and 4 basis points compared to the year-ago quarter, reflecting our improving yields on interest earning assets and relatively stable funding costs;
- Gains realized on sales of securities declined from $393,000 in Q1 2016 to a loss of $58,000 in Q1 2017;
- Write-downs of foreclosed properties were $418,000 in Q1 2017 compared to $109,000 during Q1 2016;
- Merger-related expenses of $109,000 were incurred during Q1 2017, compared to $588,000 in Q4 2016 and $112,000 in Q1 2016.
- Nonperforming assets as a percentage of total assets declined for the eighteenth consecutive quarter to 2.16 percent compared to 2.22 percent at December 31, 2016, reaching its lowest level since Q2 2008;
- On April 1, 2017, Summit completed its acquisition of First Century Bankshares, Inc. (“FCB”) and its subsidiary, First Century Bank, headquartered in Bluefield, West Virginia. At March 31, 2017, FCB had approximately $404.8 million in total assets.
H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “While I was very disappointed recently to report the substantial charge to our first quarter earnings to resolve the ResCap litigation, we believe this settlement was in the best interests of the Company and our shareholders; it eliminates the possibility of any additional exposure relative to this issue and puts it behind us, thus allowing us to direct more resources towards enhancing long-term shareholder value. On a more positive note, Summit achieved another quarter of solid core operating performance highlighted by our improving net interest margin and core loan growth. The former Highland County Bankshares’ banking operations are now fully integrated into Summit, and its impact on our performance is exceeding our expectations. Going forward, our recently closed acquisition of FCB represents another exceptional opportunity. This transaction combines two financially strong banks with similar cultures, core values and exceptional opportunities for operational synergies, as well as a shared commitment to build long-term client relationships by providing service beyond expectations. We converted FCB’s data processing systems and re-identified its branches to that of Summit’s effective April 24, 2017.”
HCB Acquisition
On October 1, 2016, Summit completed its acquisition of Highland County Bankshares, Inc. (“HCB”) and its subsidiary, First & Citizens Bank, headquartered in Monterey, Virginia. Accordingly, HCB’s results of operations are included in Summit’s consolidated results of operation from the date of acquisition, and therefore Summit’s first quarter 2017 results reflect increased levels of average balances, income and expense as compared to its first quarter 2016 results.
At consummation, HCB had total assets of $122.8 million, loans of $60.8 million, and deposits of $106.9 million. Had the HCB acquisition taken place on January 1, 2016, Summit’s pro forma combined total revenues, net income and diluted earnings per share would have approximated $16.0 million, $4.5 million and $0.42, respectively, for the quarter ended March 31, 2016. Summit recognized net accretion income totaling $144,000 in Q1 2017 related to HCB’s loan fair value acquisition accounting adjustments.
Results from Operations
Total revenue for first quarter 2017, consisting of net interest income and noninterest income, increased 11.1 percent to $16.2 million, principally as result of the HCB acquisition, compared to $14.6 million for the first quarter 2016, and was relatively unchanged compared to the linked quarter.
For the first quarter of 2017, net interest income was $13.6 million, an increase of 15.7 percent from the $11.8 million reported in the prior-year first quarter and an increase of $173,000 compared to the linked quarter. The net interest margin for first quarter 2017 was 3.54 percent compared to 3.34 percent for the year-ago quarter, and 3.50 percent for the linked quarter.
Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary and service fee income from community banking activities, for first quarter 2017 was $2.58 million compared to $2.81 million for the comparable period of 2016 and $3.00 million for Q4 2016. Excluding realized securities gains and losses, noninterest income was $2.64 million for first quarter 2017 compared to $2.41 million reported for first quarter 2016 and $2.71 million for the linked quarter.
We recorded a $250,000 provision for loan losses during first quarters 2017 and 2016.
Excluding the impact of the $9.9 million charge to settle the ResCap litigation, noninterest expense for Q1 2017 increased 6.6 percent to $9.12 million compared to $8.55 million for the prior-year first quarter, principally due to the acquisition of HCB; but it declined 2.9 percent compared to the linked quarter’s noninterest expense of $9.39 million due to operational efficiencies achieved relative to the former HCB’s banking operations.
Balance Sheet
At March 31, 2017, total assets were $1.78 billion, an increase of $17.8 million, or 1.0 percent since December 31, 2016. Total loans, net of unearned fees and allowance for loan losses, were $1.29 billion at March 31, 2017, down $14.9 million, or 1.1 percent, from the $1.31 billion reported at year-end 2016. Excluding mortgage warehouse lines of credit, net loans increased $40.8 million or 12.5 percent (annualized) since year-end 2016.
At March 31, 2017, deposits were $1.30 billion, an increase of $5.7 million, or 0.4 percent, since year end 2016. During Q1 2017, checking deposits and savings deposits increased by $15.4 million or 3.7 percent and $5.2 million, or 1.5 percent while time deposits declined $14.9 million or 2.7 percent.
Shareholders’ equity was $153.6 million as of March 31, 2017 compared to $155.4 million December 31, 2016. Tangible book value per common share decreased to $13.03 at March 31, 2017 compared to $13.20 at December 31, 2016. Summit had 10,750,477 outstanding common shares at Q1 2017 quarter end compared to 10,736,970 at year end 2016.
Asset Quality
As of March 31, 2017, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $38.4 million, or 2.16 percent of assets. This compares to $39.1 million, or 2.22 percent of assets at the linked quarter, and $40.1 million, or 2.66 percent of assets, at first quarter 2016.
First quarter 2017 net loan charge-offs were $207,000, or 0.06 percent of average loans on an annualized basis, compared to net loan charge-offs of $407,000 for the first quarter of 2016. The allowance for loan losses stood at $11.7 million, or 0.90 percent of total loans at March 31, 2017, compared to 0.88 percent at year-end 2016.
About Summit
Summit Financial Group, Inc. is a $2.1 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and Southern regions of West Virginia and the Northern, Shenandoah Valley and Southwestern regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates thirty banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.
FORWARD-LOOKING STATEMENTS
This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.
Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economies. We undertake no obligation to revise these statements following the date of this press release.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||
| Quarterly Performance Summary -- Q1 2017 vs Q1 2016 | ||||||||||
| For the Quarter Ended | Percent | |||||||||
| Dollars in thousands | 3/31/2017 | 3/31/2016 | Change | |||||||
| Condensed Statements of Income (unaudited) | ||||||||||
| Interest income | ||||||||||
| Loans, including fees | $ | 15,671 | $ | 13,436 | 16.6 | % | ||||
| Securities | 1,851 | 1,726 | 7.2 | % | ||||||
| Other | 152 | 3 | n/a | |||||||
| Total interest income | 17,674 | 15,165 | 16.5 | % | ||||||
| Interest expense | ||||||||||
| Deposits | 2,390 | 2,170 | 10.1 | % | ||||||
| Borrowings | 1,654 | 1,216 | 36.0 | % | ||||||
| Total interest expense | 4,044 | 3,386 | 19.4 | % | ||||||
| Net interest income | 13,630 | 11,779 | 15.7 | % | ||||||
| Provision for loan losses | 250 | 250 | 0.0 | % | ||||||
| Net interest income after provision | ||||||||||
| for loan losses | 13,380 | 11,529 | 16.1 | % | ||||||
| Noninterest income | ||||||||||
| Insurance commissions | 968 | 924 | 4.8 | % | ||||||
| Service fees related to deposit accounts | 1,168 | 978 | 19.4 | % | ||||||
| Realized securities (losses) gains | (58 | ) | 393 | n/a | ||||||
| Other income | 501 | 511 | -2.0 | % | ||||||
| Total noninterest income | 2,579 | 2,806 | -8.1 | % | ||||||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | 5,187 | 4,682 | 10.8 | % | ||||||
| Net occupancy expense | 567 | 540 | 5.0 | % | ||||||
| Equipment expense | 735 | 656 | 12.0 | % | ||||||
| Professional fees | 285 | 472 | -39.6 | % | ||||||
| Amortization of intangibles | 97 | 50 | 94.0 | % | ||||||
| FDIC premiums | 210 | 300 | -30.0 | % | ||||||
| Merger-related expense | 109 | 112 | -2.7 | % | ||||||
| Foreclosed properties expense | 104 | 124 | -16.1 | % | ||||||
| (Gain) on sales of foreclosed properties | (156 | ) | (6 | ) | n/a | |||||
| Write-downs of foreclosed properties | 418 | 109 | 283.5 | % | ||||||
| Litigation settlement | 9,900 | - | n/a | |||||||
| Other expenses | 1,560 | 1,515 | 3.0 | % | ||||||
| Total noninterest expense | 19,016 | 8,554 | 122.3 | % | ||||||
| (Loss) income before income taxes | (3,057 | ) | 5,781 | n/a | ||||||
| Income tax (benefit) expense | (1,441 | ) | 1,719 | n/a | ||||||
| Net (loss) income | $ | (1,616 | ) | $ | 4,062 | n/a | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||
| Quarterly Performance Summary -- Q1 2017 vs Q1 2016 | |||||||||
| For the Quarter Ended | Percent | ||||||||
| 3/31/2017 | 3/31/2016 | Change | |||||||
| Per Share Data | |||||||||
| Earnings per common share | |||||||||
| Basic | $ | (0.15 | ) | $ | 0.38 | n/a | |||
| Diluted | $ | (0.15 | ) | $ | 0.38 | n/a | |||
| Cash dividends | $ | 0.11 | $ | 0.10 | 10.0 | % | |||
| Average common shares outstanding | |||||||||
| Basic | 10,738,365 | 10,671,856 | 0.6 | % | |||||
| Diluted | 10,738,365 | 10,679,301 | 0.6 | % | |||||
| Common shares outstanding at period end | 10,750,477 | 10,681,880 | 0.6 | % | |||||
| Performance Ratios | |||||||||
| Return on average equity | -4.11 | % | 11.10 | % | n/a | ||||
| Return on average tangible equity | -4.51 | % | 11.70 | % | n/a | ||||
| Return on average assets | -0.37 | % | 1.08 | % | n/a | ||||
| Net interest margin | 3.54 | % | 3.50 | % | 1.1 | % | |||
| Efficiency ratio (A) | 51.16 | % | 55.93 | % | -8.5 | % | |||
NOTE (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||||||
| Five Quarter Performance Summary | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| Dollars in thousands | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Condensed Statements of Income (unaudited) | ||||||||||||||||||||
| Interest income | ||||||||||||||||||||
| Loans, including fees | $ | 15,671 | $ | 15,780 | $ | 14,142 | $ | 13,622 | $ | 13,436 | ||||||||||
| Securities | 1,851 | 1,796 | 1,759 | 1,656 | 1,726 | |||||||||||||||
| Other | 152 | 161 | 5 | 5 | 3 | |||||||||||||||
| Total interest income | 17,674 | 17,737 | 15,906 | 15,283 | 15,165 | |||||||||||||||
| Interest expense | ||||||||||||||||||||
| Deposits | 2,390 | 2,430 | 2,209 | 2,154 | 2,170 | |||||||||||||||
| Borrowings | 1,654 | 1,850 | 1,659 | 1,395 | 1,216 | |||||||||||||||
| Total interest expense | 4,044 | 4,280 | 3,868 | 3,549 | 3,386 | |||||||||||||||
| Net interest income | 13,630 | 13,457 | 12,038 | 11,734 | 11,779 | |||||||||||||||
| Provision for loan losses | 250 | - | - | 250 | 250 | |||||||||||||||
| Net interest income after provision | ||||||||||||||||||||
| for loan losses | 13,380 | 13,457 | 12,038 | 11,484 | 11,529 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||
| Insurance commissions | 968 | 992 | 1,016 | 1,090 | 924 | |||||||||||||||
| Service fees related to deposit accounts | 1,168 | 1,194 | 1,138 | 1,059 | 978 | |||||||||||||||
| Realized securities gains (losses) | (58 | ) | 291 | 61 | 383 | 393 | ||||||||||||||
| Other income | 501 | 521 | 534 | 513 | 511 | |||||||||||||||
| Total noninterest income | 2,579 | 2,998 | 2,749 | 3,045 | 2,806 | |||||||||||||||
| Noninterest expense | ||||||||||||||||||||
| Salaries and employee benefits | 5,187 | 5,308 | 4,819 | 4,764 | 4,682 | |||||||||||||||
| Net occupancy expense | 567 | 522 | 525 | 512 | 540 | |||||||||||||||
| Equipment expense | 735 | 700 | 716 | 686 | 656 | |||||||||||||||
| Professional fees | 285 | 344 | 270 | 429 | 472 | |||||||||||||||
| Amortization of intangibles | 97 | 97 | 50 | 50 | 50 | |||||||||||||||
| FDIC premiums | 210 | 75 | 200 | 300 | 300 | |||||||||||||||
| Merger-related expenses | 109 | 588 | 80 | 153 | 112 | |||||||||||||||
| Foreclosed properties expense | 104 | 97 | 100 | 93 | 124 | |||||||||||||||
| (Gain) on sales of foreclosed properties | (156 | ) | (465 | ) | (168 | ) | (276 | ) | (6 | ) | ||||||||||
| Write-downs of foreclosed properties | 418 | 165 | 134 | 259 | 109 | |||||||||||||||
| Litigation settlement | 9,900 | - | - | - | - | |||||||||||||||
| Other expenses | 1,560 | 1,961 | 1,693 | 1,467 | 1,515 | |||||||||||||||
| Total noninterest expense | 19,016 | 9,392 | 8,419 | 8,437 | 8,554 | |||||||||||||||
| (Loss) income before income taxes | (3,057 | ) | 7,063 | 6,368 | 6,092 | 5,781 | ||||||||||||||
| Income tax (benefit) expense | (1,441 | ) | 2,353 | 2,087 | 1,849 | 1,719 | ||||||||||||||
| Net (loss) income | $ | (1,616 | ) | $ | 4,710 | $ | 4,281 | $ | 4,243 | $ | 4,062 | |||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Five Quarter Performance Summary | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||
| Per Share Data | ||||||||||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | (0.15 | ) | $ | 0.44 | $ | 0.40 | $ | 0.40 | $ | 0.38 | |||||
| Diluted | $ | (0.15 | ) | $ | 0.44 | $ | 0.40 | $ | 0.40 | $ | 0.38 | |||||
| Cash dividends | $ | 0.11 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||
| Average common shares outstanding | ||||||||||||||||
| Basic | 10,738,365 | 10,710,164 | 10,692,423 | 10,681,995 | 10,671,856 | |||||||||||
| Diluted | 10,738,365 | 10,762,445 | 10,727,140 | 10,701,017 | 10,679,301 | |||||||||||
| Common shares outstanding at period end | 10,750,477 | 10,736,970 | 10,701,841 | 10,692,320 | 10,681,880 | |||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average equity | -4.11 | % | 12.22 | % | 11.29 | % | 11.49 | % | 11.10 | % | ||||||
| Return on average tangible equity | -4.51 | % | 13.42 | % | 11.86 | % | 12.10 | % | 11.70 | % | ||||||
| Return on average assets | -0.37 | % | 1.07 | % | 1.08 | % | 1.10 | % | 1.08 | % | ||||||
| Net interest margin | 3.54 | % | 3.34 | % | 3.32 | % | 3.40 | % | 3.50 | % | ||||||
| Efficiency ratio (A) | 51.16 | % | 56.67 | % | 53.30 | % | 55.35 | % | 55.93 | % | ||||||
NOTE (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Selected Balance Sheet Data (unaudited) | ||||||||||||||||
| Dollars in thousands, except per share amounts | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||
| Assets | ||||||||||||||||
| Cash and due from banks | $ | 19,326 | $ | 4,262 | $ | 25,067 | $ | 4,161 | $ | 4,005 | ||||||
| Interest bearing deposits other banks | 38,895 | 42,354 | 9,432 | 8,897 | 12,655 | |||||||||||
| Securities | 282,028 | 266,542 | 262,102 | 261,633 | 271,515 | |||||||||||
| Loans, net | 1,292,915 | 1,307,862 | 1,234,605 | 1,166,723 | 1,096,790 | |||||||||||
| Property held for sale | 23,491 | 24,504 | 24,767 | 23,425 | 24,684 | |||||||||||
| Premises and equipment, net | 26,377 | 23,737 | 21,802 | 21,405 | 21,589 | |||||||||||
| Goodwill and other intangible assets | 13,587 | 13,652 | 7,348 | 7,398 | 7,448 | |||||||||||
| Cash surrender value of life insurance policies | 39,412 | 39,143 | 38,504 | 38,246 | 37,989 | |||||||||||
| Other assets | 40,411 | 36,591 | 34,009 | 33,293 | 31,893 | |||||||||||
| Total assets | $ | 1,776,442 | $ | 1,758,647 | $ | 1,657,636 | $ | 1,565,181 | $ | 1,508,568 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||
| Deposits | $ | 1,301,241 | $ | 1,295,519 | $ | 1,156,785 | $ | 1,096,545 | $ | 1,094,544 | ||||||
| Short-term borrowings | 228,868 | 224,461 | 234,657 | 205,552 | 153,448 | |||||||||||
| Long-term borrowings and | ||||||||||||||||
| subordinated debentures | 65,804 | 66,259 | 93,735 | 94,214 | 94,692 | |||||||||||
| Other liabilities | 26,910 | 17,048 | 18,640 | 18,201 | 19,755 | |||||||||||
| Shareholders' equity | 153,619 | 155,360 | 153,819 | 150,669 | 146,129 | |||||||||||
| Total liabilities and shareholders' equity | $ | 1,776,442 | $ | 1,758,647 | $ | 1,657,636 | $ | 1,565,181 | $ | 1,508,568 | ||||||
| Book value per common share | $ | 14.29 | $ | 14.47 | $ | 14.37 | $ | 14.09 | $ | 13.68 | ||||||
| Tangible book value per common share | $ | 13.03 | $ | 13.20 | $ | 13.69 | $ | 13.40 | $ | 12.98 | ||||||
| Tangible common equity to tangible assets | 7.9 | % | 8.1 | % | 8.9 | % | 9.2 | % | 9.2 | % | ||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||||||||||
| Regulatory Capital Ratios | |||||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Summit Financial Group, Inc. | |||||||||||||||||||
| CET1 Risk-based Capital | 10.3 | % | 10.5 | % | 11.1 | % | 11.5 | % | 11.9 | % | |||||||||
| Tier 1 Risk-based Capital | 11.5 | % | 11.8 | % | 12.4 | % | 12.9 | % | 13.5 | % | |||||||||
| Total Risk-based Capital | 12.3 | % | 12.6 | % | 13.3 | % | 13.8 | % | 14.5 | % | |||||||||
| Tier 1 Leverage Ratio | 9.4 | % | 9.4 | % | 10.4 | % | 10.5 | % | 10.7 | % | |||||||||
| Summit Community Bank, Inc. | |||||||||||||||||||
| CET1 Risk-based Capital | 11.6 | % | 11.9 | % | 12.5 | % | 13.0 | % | 13.6 | % | |||||||||
| Tier 1 Risk-based Capital | 11.6 | % | 11.9 | % | 12.5 | % | 13.0 | % | 13.6 | % | |||||||||
| Total Risk-based Capital | 12.4 | % | 12.7 | % | 13.4 | % | 13.9 | % | 14.5 | % | |||||||||
| Tier 1 Leverage Ratio | 9.4 | % | 9.5 | % | 10.5 | % | 10.6 | % | 10.7 | % | |||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||||||
| Loan Composition | ||||||||||||||||
| Dollars in thousands | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||
| Commercial | $ | 134,808 | $ | 119,088 | $ | 110,466 | $ | 101,521 | $ | 101,743 | ||||||
| Mortgage warehouse lines | 30,217 | 85,966 | 108,983 | 80,282 | - | |||||||||||
| Commercial real estate | ||||||||||||||||
| Owner occupied | 217,733 | 203,047 | 192,254 | 190,534 | 202,680 | |||||||||||
| Non-owner occupied | 401,795 | 381,921 | 367,196 | 348,099 | 353,350 | |||||||||||
| Construction and development | ||||||||||||||||
| Land and development | 68,079 | 72,042 | 65,430 | 65,702 | 66,483 | |||||||||||
| Construction | 16,511 | 16,584 | 11,276 | 8,506 | 7,997 | |||||||||||
| Residential real estate | ||||||||||||||||
| Non-jumbo | 266,140 | 265,641 | 228,777 | 225,919 | 221,368 | |||||||||||
| Jumbo | 60,780 | 65,628 | 57,276 | 52,105 | 50,057 | |||||||||||
| Home equity | 75,299 | 74,596 | 75,161 | 75,904 | 74,097 | |||||||||||
| Consumer | 24,440 | 25,534 | 19,756 | 19,520 | 19,095 | |||||||||||
| Other | 8,831 | 9,489 | 9,649 | 10,008 | 11,235 | |||||||||||
| Total loans, net of unearned fees | 1,304,633 | 1,319,536 | 1,246,224 | 1,178,100 | 1,108,105 | |||||||||||
| Less allowance for loan losses | 11,718 | 11,674 | 11,619 | 11,377 | 11,315 | |||||||||||
| Loans, net | $ | 1,292,915 | $ | 1,307,862 | $ | 1,234,605 | $ | 1,166,723 | $ | 1,096,790 | ||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||||||
| Deposit Composition | ||||||||||||||||
| Dollars in thousands | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||
| Non interest bearing checking | $ | 152,086 | $ | 149,737 | $ | 122,652 | $ | 120,845 | $ | 122,378 | ||||||
| Interest bearing checking | 275,678 | 262,591 | 212,172 | 205,095 | 210,878 | |||||||||||
| Savings | 342,548 | 337,348 | 321,563 | 306,785 | 286,695 | |||||||||||
| Time deposits | 530,929 | 545,843 | 500,398 | 463,820 | 474,593 | |||||||||||
| Total deposits | $ | 1,301,241 | $ | 1,295,519 | $ | 1,156,785 | $ | 1,096,545 | $ | 1,094,544 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Asset Quality Information | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||
| Gross loan charge-offs | $ | 315 | $ | 400 | $ | 331 | $ | 263 | $ | 561 | ||||||
| Gross loan recoveries | (108 | ) | (456 | ) | (573 | ) | (75 | ) | (154 | ) | ||||||
| Net loan charge-offs (recoveries) | $ | 207 | $ | (56 | ) | $ | (242 | ) | $ | 188 | $ | 407 | ||||
| Net loan charge-offs to average loans (annualized) | 0.06 | % | -0.02 | % | -0.09 | % | 0.07 | % | 0.15 | % | ||||||
| Allowance for loan losses | $ | 11,718 | $ | 11,674 | $ | 11,619 | $ | 11,377 | $ | 11,315 | ||||||
| Allowance for loan losses as a percentage | ||||||||||||||||
| of period end loans | 0.90 | % | 0.88 | % | 0.93 | % | 0.97 | % | 1.02 | % | ||||||
| Nonperforming assets: | ||||||||||||||||
| Nonperforming loans | ||||||||||||||||
| Commercial | $ | 226 | $ | 298 | $ | 846 | $ | 399 | $ | 430 | ||||||
| Commercial real estate | 4,734 | 4,844 | 4,867 | 5,773 | 6,140 | |||||||||||
| Residential construction and development | 3,936 | 4,465 | 4,360 | 5,400 | 5,467 | |||||||||||
| Residential real estate | 5,886 | 4,815 | 4,174 | 3,531 | 3,248 | |||||||||||
| Consumer | 162 | 152 | 169 | 91 | 121 | |||||||||||
| Total nonperforming loans | 14,944 | 14,574 | 14,416 | 15,194 | 15,406 | |||||||||||
| Foreclosed properties | ||||||||||||||||
| Commercial real estate | 1,749 | 1,749 | 1,749 | 976 | 976 | |||||||||||
| Commercial construction and development | 8,276 | 8,610 | 8,664 | 8,708 | 8,717 | |||||||||||
| Residential construction and development | 12,635 | 13,265 | 13,741 | 12,989 | 13,808 | |||||||||||
| Residential real estate | 831 | 880 | 613 | 752 | 1,183 | |||||||||||
| Total foreclosed properties | 23,491 | 24,504 | 24,767 | 23,425 | 24,684 | |||||||||||
| Other repossessed assets | 12 | 12 | 12 | 38 | - | |||||||||||
| Total nonperforming assets | $ | 38,447 | $ | 39,090 | $ | 39,195 | $ | 38,657 | $ | 40,090 | ||||||
| Nonperforming loans to period end loans | 1.15 | % | 1.10 | % | 1.16 | % | 1.29 | % | 1.39 | % | ||||||
| Nonperforming assets to period end assets | 2.16 | % | 2.22 | % | 2.36 | % | 2.47 | % | 2.66 | % | ||||||
| Troubled debt restructurings | ||||||||||||||||
| Performing | $ | 28,183 | $ | 28,066 | $ | 28,287 | $ | 27,750 | $ | 29,452 | ||||||
| Nonperforming | 719 | 564 | 863 | 2,133 | 897 | |||||||||||
| Total troubled debt restructurings | $ | 28,902 | $ | 28,630 | $ | 29,150 | $ | 29,883 | $ | 30,349 | ||||||
| Loans Past Due 30-89 Days | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| In thousands | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||
| Commercial | $ | 162 | $ | 175 | $ | 405 | $ | 422 | $ | 465 | ||||||
| Commercial real estate | 2,758 | 434 | 626 | 214 | 920 | |||||||||||
| Construction and development | 291 | 552 | 235 | 520 | 218 | |||||||||||
| Residential real estate | 2,924 | 5,517 | 2,941 | 4,763 | 3,055 | |||||||||||
| Consumer | 155 | 375 | 144 | 177 | 73 | |||||||||||
| Other | 17 | 14 | 13 | 12 | 14 | |||||||||||
| Total | $ | 6,307 | $ | 7,067 | $ | 4,364 | $ | 6,108 | $ | 4,745 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||||||||||||||||
| Q1 2017 vs Q1 2016 | ||||||||||||||||||||
| Q1 2017 | Q1 2016 | |||||||||||||||||||
| Average | Earnings / | Yield / | Average | Earnings / | Yield / | |||||||||||||||
| Dollars in thousands | Balances | Expense | Rate | Balances | Expense | Rate | ||||||||||||||
| ASSETS | ||||||||||||||||||||
| Interest earning assets | ||||||||||||||||||||
| Loans, net of unearned interest | ||||||||||||||||||||
| Taxable | $ | 1,278,386 | $ | 15,549 | 4.93 | % | $ | 1,089,083 | $ | 13,291 | 4.91 | % | ||||||||
| Tax-exempt | 13,292 | 186 | 5.68 | % | 15,824 | 220 | 5.59 | % | ||||||||||||
| Securities | ||||||||||||||||||||
| Taxable | 186,332 | 1,128 | 2.46 | % | 209,365 | 1,083 | 2.08 | % | ||||||||||||
| Tax-exempt | 95,300 | 1,112 | 4.73 | % | 79,314 | 974 | 4.94 | % | ||||||||||||
| Interest bearing deposits other banks | ||||||||||||||||||||
| and Federal funds sold | 40,698 | 152 | 1.51 | % | 8,092 | 3 | 0.15 | % | ||||||||||||
| Total interest earning assets | 1,614,008 | 18,127 | 4.55 | % | 1,401,678 | 15,571 | 4.47 | % | ||||||||||||
| Noninterest earning assets | ||||||||||||||||||||
| Cash & due from banks | 4,631 | 3,762 | ||||||||||||||||||
| Premises & equipment | 24,504 | 21,594 | ||||||||||||||||||
| Other assets | 98,253 | 89,642 | ||||||||||||||||||
| Allowance for loan losses | (11,761 | ) | (11,562 | ) | ||||||||||||||||
| Total assets | $ | 1,729,635 | $ | 1,505,114 | ||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||
| Interest bearing | ||||||||||||||||||||
| demand deposits | $ | 262,849 | $ | 148 | 0.23 | % | $ | 209,733 | $ | 83 | 0.16 | % | ||||||||
| Savings deposits | 339,930 | 625 | 0.75 | % | 277,396 | 506 | 0.73 | % | ||||||||||||
| Time deposits | 540,692 | 1,616 | 1.21 | % | 471,597 | 1,581 | 1.35 | % | ||||||||||||
| Short-term borrowings | 196,946 | 995 | 2.05 | % | 168,548 | 240 | 0.57 | % | ||||||||||||
| Long-term borrowings and | ||||||||||||||||||||
| subordinated debentures | 66,146 | 660 | 4.05 | % | 95,052 | 976 | 4.13 | % | ||||||||||||
| Total interest bearing liabilities | 1,406,563 | 4,044 | 1.17 | % | 1,222,326 | 3,386 | 1.11 | % | ||||||||||||
| Noninterest bearing liabilities | ||||||||||||||||||||
| Demand deposits | 148,286 | 120,464 | ||||||||||||||||||
| Other liabilities | 17,700 | 15,928 | ||||||||||||||||||
| Total liabilities | 1,572,549 | 1,358,718 | ||||||||||||||||||
| Shareholders' equity | 157,086 | 146,396 | ||||||||||||||||||
| Total liabilities and | ||||||||||||||||||||
| shareholders' equity | $ | 1,729,635 | $ | 1,505,114 | ||||||||||||||||
| NET INTEREST EARNINGS | $ | 14,083 | $ | 12,185 | ||||||||||||||||
| NET INTEREST MARGIN | 3.54 | % | 3.50 | % | ||||||||||||||||
Contact: Robert S. Tissue, Sr. Vice President & CFO Telephone: (304) 530-0552 Email: rtissue@summitfgi.com
