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Summit Financial Group Reports Fourth Quarter and Full Year 2019 Results

Q4 2019 Diluted EPS $0.65 compared to $0.65 for Q3 2019 and $0.60 for Q4 2018

/EIN News/ -- MOOREFIELD, W.Va., Jan. 24, 2020 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported fourth quarter 2019 net income of $8.15 million, or $0.65 per diluted share. In comparison, earnings for third quarter 2019 were $8.06 million, or $0.65 per diluted share, and for fourth quarter 2018 were $7.45 million, or $0.60 per diluted share. Summit achieved returns on average assets and average tangible equity in fourth quarter 2019 of 1.39 percent and 15.25 percent, respectively, compared to 1.38 percent and 16.41 percent, respectively, in the same period of 2018.

Fourth quarter 2019 earnings compared to the linked quarter were positively impacted by increased net interest income resulting primarily from lower funding costs. Also positively impacting fourth quarter 2019 results compared to third quarter 2019 were $312,000 in gains on sales of foreclosed properties compared to $66,000 losses in the linked quarter. 

For the full year 2019, Summit achieved record net income of $31.9 million, or $2.53 per diluted share, compared with $28.1 million, or $2.26 per diluted share, for 2018. Our returns on average assets and average tangible equity for 2019 were 1.40 percent and 15.65 percent, respectively, compared to 1.32 percent and 16.09 percent, respectively, for 2018.

Earnings for 2019 were positively impacted by increased net interest income resulting primarily from loan growth as well as lower funding costs, increased realized securities gains and the gain on the sale of our former insurance agency, Summit Insurance Services, LLC (“SIS”). These results were partially offset by larger write-downs on foreclosed properties in Q2 2019 with the goal of selling such properties more rapidly, lower insurance commission revenue during 2019 and increased merger-related expenses.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very gratified Summit achieved a new annual earnings record both in net income and on a per share basis in 2019. In addition, I am particularly pleased by our continued strong core operating performance in this past quarter, highlighted by our exceptional growth in both our core loans and deposits, while at the same time maintaining a stable net interest margin. Our acquisition of Cornerstone Financial Services, Inc. closed at the beginning of 2020, and it serves to combine Summit with a financially strong bank that shares the same commitment to build long-term client relationships by providing ‘Service Beyond Expectations’. The financial synergies relative to this transaction are already evident. Looking forward to 2020 and beyond, I am optimistic as we gain momentum towards our goal to be a consistent growing, high-performing community banking institution."

Summit completed its acquisition of Peoples Bankshares, Inc. (“PBI”) and its subsidiary, First Peoples Bank, headquartered in Mullens, West Virginia on January 1, 2019 and converted its business processes and accounts to that of Summit’s during Q2 2019; accordingly, PBI’s results of operations are included in Summit’s consolidated results of operations from the date of acquisition. Therefore, Summit’s fourth quarter and annual 2019 period results reflect increased levels of average balances, income and expenses compared to the same periods of 2018. At consummation, PBI had total assets of $133.1 million, loans of $42.4 million, and deposits of $112.9 million.

Highlights for Q4 2019

  • Net interest income increased 8.40 percent (annualized) compared to Q3 2019 and increased 10.4 percent year-to-date 2019 versus the same period in 2018, primarily due to our loan growth;

  • Net interest margin in Q4 2019 remained unchanged at 3.63 percent as compared to Q3 2019 while yields on loans declined 13 basis points and deposit and other funding costs declined 15 basis points;

  • Loan balances, excluding mortgage warehouse lines of credit, increased $80.5 million during the quarter, and grew $131.4 million in 2019, principally in the commercial real estate and construction and development portfolios;

  • Mortgage warehouse lines of credit decreased $18.8 million during the quarter, but grew $87.1 million during 2019;

  • Efficiency ratio was 52.25 percent compared to 52.91 percent in the linked quarter and 51.02 percent for Q4 2018;

  • Write-downs of foreclosed properties were $497,000 in Q4 2019 compared to $133,000 in Q3 2019, while the realized gains/losses on sales of foreclosed properties increased from a net loss of $66,000 in Q3 2019 to $312,000 net gains in Q4 2019; and

  • Nonperforming assets as a percentage of total assets improved to 1.28 percent from 1.45 percent for the linked quarter and 1.66 percent at year end 2018.

  • Announced our entering into a definitive agreement to acquire four MVB Bank branches in Berkeley and Jefferson Counties, West Virginia having aggregate approximate deposits and loans of $181 million and $46 million, respectively.  This transaction is expected to close early in Q2 2020.

Results of Operations

Total revenue for fourth quarter 2019, consisting of net interest income and noninterest income, increased 9.0 percent to $24.2 million, principally as a result of higher net interest income compared to $22.2 million for the fourth quarter 2018. For full year 2019, total revenue was $96.3 million compared to $87.2 million for 2018, a 10.4 percent increase primarily as a result of higher net interest income, increased realized securities gains and the gain on the sale of SIS.

For the fourth quarter of 2019, net interest income was $19.8 million, an increase of 9.8 percent from the $18.1 million reported in the prior-year fourth quarter and a 2.1 percent increase compared to the linked quarter. The net interest margin for fourth quarter 2019 remained unchanged from the linked quarter at 3.63 and increased from 3.61 percent for the year-ago quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments, Summit’s net interest margin would have been 3.60 percent for Q4 2019, 3.59 percent for Q3 2019 and 3.57 percent for Q4 2018.  

Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for fourth quarter 2019 was $4.40 million compared to $4.19 million for the comparable period of 2018. Excluding realized securities gains, noninterest income was $4.00 million for fourth quarter 2019, compared to $4.39 million reported for fourth quarter 2018 and was $3.31 million for the linked quarter. The lower levels of 2019 noninterest income compared to 2018 periods are primarily due to the elimination of insurance commission revenue as result of SIS’ sale in Q2 2019.

We recorded a $500,000 provision for loan losses during fourth quarter 2019 and 2018. Our provision continues to be directionally consistent with changes in the credit quality in our loan portfolio.

Q4 2019 total noninterest expense increased 5.6 percent to $13.2 million compared to $12.5 million for the prior-year fourth quarter and increased 2.8 percent compared to the linked quarter. 

Noninterest expense for full year 2019 increased 10.6 percent compared to 2018. Our increased noninterest expense is principally due to expenses associated with the acquired PBI operations (including merger-related expenses), increased write-downs of foreclosed properties and to deferred director compensation plan expense, which totaled $800,000 in 2019 compared to income of $250,000 during 2018.

Balance Sheet

At December 31, 2019, total assets were $2.40 billion, an increase of $202.6 million, or 9.2 percent since December 31, 2018. Total loans, net of unearned fees and allowance for loan losses, were $1.90 billion at December 31, 2019, up $218.4 million, or 13.0 percent, from the $1.68 billion reported at year-end 2018. Loans, excluding mortgage warehouse lines of credit, increased $80.5 million during the quarter, or 18.9 percent (on an annualized basis), and have increased $131.4 million, or 7.9 percent (on an annualized basis) since year-end 2018.

At December 31, 2019, core deposits were $1.68 billion, an increase of $161.0 million or 10.6 percent during fourth quarter 2019 -- as checking deposits increased $46.8 million or 5.6 percent, core time deposits increase by $1.9 million or 0.5 percent and savings deposits increased $112.2 million or 36.7 percent, principally attributable to the growth in our online savings product.

Shareholders’ equity was $247.8 million as of December 31, 2019 compared to $219.8 million at December 31, 2018. Tangible book value per common share increased to $18.11 at December 31, 2019 compared to $15.75 at December 31, 2018. Summit had 12,408,542 outstanding common shares at year end 2019 compared to 12,312,933 at year end 2018.

Asset Quality

As of December 31, 2019, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties and repossessed assets, improved to $30.8 million, or 1.28 percent of assets. This compares to $33.7 million, or 1.45 percent of assets at the linked quarter-end, and $36.5 million, or 1.66 percent of assets at year end 2018.

Fourth quarter 2019 net loan charge-offs were $367,000, or 0.08 percent of average loans annualized, while $500,000 was added to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.68 percent of total loans at December 31, 2019, compared to 0.77 percent at year-end 2018. 

About the Company

Summit Financial Group, Inc. is a $2.40 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-six banking locations.

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 (unaudited)      
Q4 2019 vs Q4 2018      
       
    For the Quarter Ended Percent
Dollars in thousands 12/31/2019 12/31/18 Change
Statements of Income      
  Interest income      
    Loans, including fees $ 24,772 $ 22,659   9.3 %
    Securities   2,195   2,527   -13.1 %
    Other   105   127   -17.3 %
  Total interest income   27,072   25,313   6.9 %
  Interest expense      
    Deposits   5,952   5,103   16.6 %
    Borrowings   1,292   2,158   -40.1 %
  Total interest expense   7,244   7,261   -0.2 %
  Net interest income   19,828   18,052   9.8 %
  Provision for loan losses   500   500   0.0 %
  Net interest income after provision      
    for loan losses   19,328   17,552   10.1 %
         
  Noninterest income      
    Insurance commissions   90   1,132   -92.0 %
    Trust and wealth management fees   734   627   17.1 %
    Service charges on deposit accounts   1,377   1,209   13.9 %
    Bank card revenue   906   809   12.0 %
    Realized securities gains (losses)   403   (205 ) n/m  
    Bank owned life insurance income   310   248   25.0 %
    Other income   584   367   59.1 %
  Total noninterest income   4,404   4,187   5.2 %
  Noninterest expense      
    Salaries and employee benefits   7,099   6,928   2.5 %
    Net occupancy expense   815   836   -2.5 %
    Equipment expense   1,278   1,139   12.2 %
    Professional fees   412   385   7.0 %
    Advertising and public relations   214   193   10.9 %
    Amortization of intangibles   401   410   -2.2 %
    FDIC premiums   -   140   n/m  
    Bank card expense   454   395   14.9 %
    Foreclosed properties expense, net   262   507   -48.3 %
    Merger-related expenses   98   59   66.1 %
    Other expenses   2,126   1,474   44.2 %
  Total noninterest expense   13,159   12,466   5.6 %
  Income before income taxes   10,573   9,273   14.0 %
  Income taxes   2,424   1,823   33.0 %
  Net income $ 8,149 $ 7,450   9.4 %


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)    
Quarterly Performance Summary (unaudited)    
Q4 2019 vs Q4 2018    
         
    For the Quarter Ended Percent
    12/31/19 12/31/18 Change
Per Share Data      
  Earnings per common share      
    Basic $ 0.66   $ 0.60   10.0 %
    Diluted $ 0.65   $ 0.60   8.3 %
         
  Cash dividends $ 0.15   $ 0.14   7.1 %
  Dividend payout ratio   22.3 %   23.3 % -4.3 %
         
  Average common shares outstanding      
    Basic   12,400,932     12,358,104   0.3 %
    Diluted   12,458,702     12,407,678   0.4 %
         
  Common shares outstanding at period end   12,408,542     12,312,933   0.8 %
         
Performance Ratios      
  Return on average equity   13.32 %   13.85 % -3.8 %
  Return on average tangible equity   15.25 %   16.41 % -7.1 %
  Return on average assets   1.39 %   1.38 % 0.7 %
  Net interest margin (A)   3.63 %   3.61 % 0.6 %
  Efficiency ratio (B)   52.25 %   51.02 % 2.4 %
         

NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

NOTE (B) – Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)    
Annual Performance Summary (unaudited)      
2019 vs 2018      
         
    For the Year Ended Percent
Dollars in thousands 12/31/19 12/31/18 Change
Statements of Income      
  Interest income      
    Loans, including fees $ 97,115 $ 85,283 13.9 %
    Securities   9,361   9,587 -2.4 %
    Other   595   539 10.4 %
  Total interest income   107,071   95,409 12.2 %
  Interest expense      
    Deposits   23,697   17,675 34.1 %
    Borrowings   6,290   7,937 -20.8 %
  Total interest expense   29,987   25,612 17.1 %
  Net interest income   77,084   69,797 10.4 %
  Provision for loan losses   1,550   2,250 -31.1 %
  Net interest income after provision      
    for loan losses   75,534   67,547 11.8 %
         
  Noninterest income      
    Insurance commissions   1,911   4,320 -55.8 %
    Trust and wealth management fees   2,564   2,653 -3.4 %
    Service charges on deposit accounts   5,094   4,631 10.0 %
    Bank card revenue   3,536   3,152 12.2 %
    Realized securities gains   1,938   622 211.6 %
    Gain on sale of Summit Insurance Services, LLC   1,906   - n/a  
    Bank owned life insurance income   1,044   1,022 2.2 %
    Other income   1,210   1,022 18.4 %
  Total noninterest income   19,203   17,422 10.2 %
  Noninterest expense      
    Salaries and employee benefits   29,066   27,478 5.8 %
    Net occupancy expense   3,417   3,364 1.6 %
    Equipment expense   4,972   4,411 12.7 %
    Professional fees   1,678   1,607 4.4 %
    Advertising and public relations   698   654 6.7 %
    Amortization of intangibles   1,701   1,671 1.8 %
    FDIC premiums   88   830 -89.4 %
    Bank card expense   1,820   1,475 23.4 %
    Foreclosed properties expense, net   2,498   1,350 85.0 %
    Merger-related expenses   617   144 328.5 %
    Other expenses   8,599   6,889 24.8 %
  Total noninterest expense   55,154   49,873 10.6 %
  Income before income taxes   39,583   35,096 12.8 %
  Income taxes   7,717   7,024 9.9 %
  Net income $ 31,866 $ 28,072 13.5 %
         


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)    
Annual Performance Summary (unaudited)      
2019 vs 2018    
         
    For the Year Ended Percent
    12/31/19 12/31/18 Change
Per Share Data      
  Earnings per common share      
    Basic $ 2.55   $ 2.27   12.3 %
    Diluted $ 2.53   $ 2.26   11.9 %
         
  Cash dividends $ 0.59   $ 0.53   11.3 %
  Dividend payout ratio   23.1 %   23.3 % -0.9 %
         
  Average common shares outstanding      
    Basic   12,516,474     12,364,468   1.2 %
    Diluted   12,575,145     12,424,573   1.2 %
         
  Common shares outstanding at period end   12,408,542     12,312,933   0.8 %
         
Performance Ratios      
  Return on average equity   13.43 %   13.43 % 0.0 %
  Return on average tangible equity   15.65 %   16.09 % -2.7 %
  Return on average assets   1.40 %   1.32 % 6.1 %
  Net interest margin (A)   3.66 %   3.57 % 2.5 %
  Efficiency ratio (B)   54.55 %   53.72 % 1.5 %
         

NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

NOTE (B) – Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)        
Five Quarter Performance Summary (unaudited)          
           
    For the Quarter Ended
Dollars in thousands 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
Statements of Income          
  Interest income          
    Loans, including fees $ 24,772 $ 24,940 $ 24,352 $ 23,051   $ 22,659  
    Securities   2,195   2,184   2,396   2,586     2,527  
    Other   105   125   134   231     127  
  Total interest income   27,072   27,249   26,882   25,868     25,313  
  Interest expense          
    Deposits   5,952   6,214   5,967   5,564     5,103  
    Borrowings   1,292   1,615   1,652   1,731     2,158  
  Total interest expense   7,244   7,829   7,619   7,295     7,261  
  Net interest income   19,828   19,420   19,263   18,573     18,052  
  Provision for loan losses   500   500   300   250     500  
  Net interest income after provision          
    for loan losses   19,328   18,920   18,963   18,323     17,552  
  Noninterest income          
    Insurance commissions   90   40   606   1,174     1,132  
    Trust and wealth management fees   734   632   612   586     627  
    Service charges on deposit accounts   1,377   1,312   1,224   1,180     1,209  
    Bank card revenue   906   924   893   814     809  
    Realized securities gains (losses)   403   453   1,086   (3 )   (205 )
    Gain on sale of Summit Insurance Services, LLC   -   -   1,906   -     -  
    Bank owned life insurance income   310   247   248   238     248  
    Other income   584   151   235   241     367  
  Total noninterest income   4,404   3,759   6,810   4,230     4,187  
  Noninterest expense          
    Salaries and employee benefits   7,099   7,044   7,576   7,347     6,928  
    Net occupancy expense   815   799   880   924     836  
    Equipment expense   1,278   1,296   1,219   1,179     1,139  
    Professional fees   412   388   475   403     385  
    Advertising and public relations   214   177   155   153     193  
    Amortization of intangibles   401   404   420   476     410  
    FDIC premiums   -   -   88   -     140  
    Bank card expense   454   455   473   439     395  
    Foreclosed properties expense, net   262   305   1,545   384     507  
    Merger-related expenses   98   74   382   63     59  
    Other expenses   2,126   1,864   2,116   2,492     1,474  
  Total noninterest expense   13,159   12,806   15,329   13,860     12,466  
  Income before income taxes   10,573   9,873   10,444   8,693     9,273  
  Income tax expense   2,424   1,812   1,880   1,601     1,823  
  Net income $ 8,149 $ 8,061 $ 8,564 $ 7,092   $ 7,450  


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)        
Five Quarter Performance Summary (unaudited)          
           
    For the Quarter Ended
    12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
Per Share Data          
  Earnings per common share          
    Basic $ 0.66   $ 0.65   $ 0.68   $ 0.56   $ 0.60  
    Diluted $ 0.65   $ 0.65   $ 0.68   $ 0.56   $ 0.60  
             
  Cash dividends $ 0.15   $ 0.15   $ 0.15   $ 0.14   $ 0.14  
  Dividend payout ratio   22.3 %   23.0 %   21.9 %   25.0 %   23.3 %
             
  Average common shares outstanding          
    Basic   12,400,932     12,412,982     12,539,095     12,717,501     12,358,104  
    Diluted   12,458,702     12,467,777     12,600,071     12,778,644     12,407,678  
             
  Common shares outstanding at period end   12,408,542     12,400,804     12,449,986     12,661,528     12,312,933  
             
Performance Ratios          
  Return on average equity   13.32 %   13.51 %   14.62 %   12.28 %   13.85 %
  Return on average tangible equity   15.25 %   15.55 %   17.02 %   14.80 %   16.41 %
  Return on average assets   1.39 %   1.41 %   1.52 %   1.27 %   1.38 %
  Net interest margin (A)   3.63 %   3.63 %   3.72 %   3.66 %   3.61 %
  Efficiency ratio (B)   52.25 %   52.91 %   56.45 %   56.63 %   51.02 %
             

NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

NOTE (B) – Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)        
Selected Balance Sheet Data (unaudited)          
             
Dollars in thousands, except per share amounts 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
             
Assets          
  Cash and due from banks $ 28,137   $ 12,374   $ 13,481   $ 14,265   $ 23,061  
  Interest bearing deposits other banks   33,751     40,296     42,994     43,689     36,479  
  Securities   276,355     265,347     269,920     297,126     293,284  
  Loans, net   1,900,425     1,838,891     1,805,850     1,725,064     1,682,005  
  Property held for sale   19,276     20,979     21,390     24,393     21,432  
  Premises and equipment, net   44,168     43,592     42,896     39,345     37,553  
  Goodwill and other intangible assets   23,022     23,182     23,585     29,349     25,842  
  Cash surrender value of life insurance policies   43,603     43,216     42,976     42,714     42,420  
  Other assets   34,755     35,732     36,022     33,696     38,510  
    Total assets $ 2,403,492   $ 2,323,609   $ 2,299,114   $ 2,249,641   $ 2,200,586  
             
Liabilities and Shareholders' Equity          
  Deposits $ 1,913,237   $ 1,832,285   $ 1,797,493   $ 1,789,032   $ 1,634,826  
  Short-term borrowings   199,345     206,694     225,343     186,292     309,084  
  Long-term borrowings and          
    subordinated debentures   20,306     20,311     20,315     20,319     20,324  
  Other liabilities   22,840     21,897     20,262     20,368     16,522  
  Shareholders' equity   247,764     242,422     235,701     233,630     219,830  
    Total liabilities and shareholders' equity $ 2,403,492   $ 2,323,609   $ 2,299,114   $ 2,249,641   $ 2,200,586  
             
  Book value per common share $ 19.97   $ 19.55   $ 18.93   $ 18.45   $ 17.85  
  Tangible book value per common share $ 18.11   $ 17.68   $ 17.04   $ 16.13   $ 15.75  
  Tangible common equity to tangible assets   9.4 %   9.5 %   9.3 %   9.2 %   8.9 %
             

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)        
Regulatory Capital Ratios (unaudited)            
               
    12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018  
Summit Financial Group, Inc.            
  CET1 Risk-based Capital 11.1 % 11.2 % 11.1 % 11.4 % 11.1 %  
  Tier 1 Risk-based Capital 12.1 % 12.2 % 12.1 % 12.5 % 12.2 %  
  Total Risk-based Capital 12.7 % 12.8 % 12.8 % 13.2 % 12.9 %  
  Tier 1 Leverage 10.5 % 10.4 % 10.4 % 10.2 % 10.1 %  
               
Summit Community Bank, Inc.            
  CET1 Risk-based Capital 12.1 % 12.2 % 11.9 % 12.3 % 12.0 %  
  Tier 1 Risk-based Capital 12.1 % 12.2 % 11.9 % 12.3 % 12.0 %  
  Total Risk-based Capital 12.7 % 12.9 % 12.6 % 13.0 % 12.8 %  
  Tier 1 Leverage 10.6 % 10.4 % 10.2 % 10.0 % 10.0 %  
               

 


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)        
Loan Composition (unaudited)            
               
Dollars in thousands 12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018  
               
Commercial   $ 207,138 $ 199,391 $ 204,138 $ 189,248 $ 194,315  
Mortgage warehouse lines   126,237   145,039   101,607   49,355   39,140  
Commercial real estate            
  Owner occupied   276,218   255,828   262,901   256,671   257,256  
  Non-owner occupied   629,206   567,670   574,677   585,809   573,932  
Construction and development            
  Land and development   84,112   69,589   67,769   64,192   68,833  
  Construction   37,523   56,255   46,975   36,040   24,731  
Residential real estate            
  Non-jumbo     354,963   359,399   360,752   359,107   336,977  
  Jumbo     70,947   69,815   70,171   69,313   73,599  
  Home equity   76,568   78,493   81,373   80,370   80,910  
Consumer     36,470   36,982   36,715   36,046   32,460  
Other     14,117   13,371   11,924   12,045   12,899  
Total loans, net of unearned fees   1,913,499   1,851,832   1,819,002   1,738,196   1,695,052  
Less allowance for loan losses   13,074   12,941   13,152   13,132   13,047  
Loans, net $ 1,900,425 $ 1,838,891 $ 1,805,850 $ 1,725,064 $ 1,682,005  
               

 


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)        
Deposit Composition (unaudited)          
               
Dollars in thousands   12/31/2019 9/30/2019 6/30/2019 3/31/2019 12/31/2018  
Core deposits              
  Non-interest bearing checking $ 260,553 $ 241,999 $ 234,397 $ 258,679 $ 222,120  
  Interest bearing checking   630,352   602,059   588,948   560,800   523,257  
  Savings     418,096   305,891   301,403   310,646   284,173  
  Time deposits     373,125   371,178   365,275   359,141   316,914  
Total core deposits   1,682,126   1,521,127   1,490,023   1,489,266   1,346,464  
               
Brokered time deposits   150,554   227,369   222,901   218,913   220,497  
Other non-core time deposits   80,557   83,789   84,569   80,853   67,865  
Total deposits $ 1,913,237 $ 1,832,285 $ 1,797,493 $ 1,789,032 $ 1,634,826  
               

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)        
Asset Quality Information (unaudited)          
             
    For the Quarter Ended
Dollars in thousands 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
             
  Gross loan charge-offs $ 455   $ 843   $ 391   $ 414   $ 705  
  Gross loan recoveries   (88 )   (132 )   (111 )   (249 )   (307 )
    Net loan charge-offs $ 367   $ 711   $ 280   $ 165   $ 398  
             
  Net loan charge-offs to average loans (annualized)   0.08 %   0.16 %   0.06 %   0.04 %   0.10 %
  Allowance for loan losses $ 13,074   $ 12,941   $ 13,152   $ 13,132   $ 13,047  
  Allowance for loan losses as a percentage          
    of period end loans   0.68 %   0.70 %   0.72 %   0.76 %   0.77 %
  Nonperforming assets:          
    Nonperforming loans          
    Commercial $ 764   $ 835   $ 948   $ 729   $ 935  
    Commercial real estate   5,800     7,037     6,544     2,981     3,239  
    Residential construction and development   326     191     66     24     3,198  
    Residential real estate   4,404     4,461     5,657     5,928     7,506  
    Consumer   116     115     160     182     147  
    Other   100     100     100     130     -  
  Total nonperforming loans   11,510     12,739     13,475     9,974     15,025  
    Foreclosed properties          
    Commercial real estate   1,930     1,514     1,544     1,841     1,762  
    Commercial construction and development   4,601     4,909     4,910     6,326     6,479  
    Residential construction and development   11,169     12,847     13,132     14,347     11,543  
    Residential real estate   1,576     1,709     1,804     1,879     1,648  
  Total foreclosed properties   19,276     20,979     21,390     24,393     21,432  
    Other repossessed assets   17     16     12     34     5  
  Total nonperforming assets $ 30,803   $ 33,734   $ 34,877   $ 34,401   $ 36,462  
             
  Nonperforming loans to period end loans   0.60 %   0.69 %   0.74 %   0.57 %   0.89 %
  Nonperforming assets to period end assets   1.28 %   1.45 %   1.52 %   1.53 %   1.66 %
             
  Troubled debt restructurings          
    Performing $ 23,339   $ 23,420   $ 23,266   $ 27,845   $ 26,609  
    Nonperforming   2,337     2,443     2,915     -     388  
  Total troubled debt restructurings $ 25,676   $ 25,863   $ 26,181   $ 27,845   $ 26,997  

 


Loans Past Due 30-89 Days (unaudited)          
    For the Quarter Ended
Dollars in thousands 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
             
  Commercial $ 111 $ 390 $ 375 $ 264 $ 219
  Commercial real estate   1,196   312   1,719   4,128   161
  Construction and development   236   65   235   179   194
  Residential real estate   4,775   5,573   5,670   2,944   6,249
  Consumer   269   365   234   432   593
  Other   25   63   9   52   38
    Total $ 6,612 $ 6,768 $ 8,242 $ 7,999 $ 7,454
             

 


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)                      
Average Balance Sheet, Interest Earnings & Expenses and Average Rates                
Q4 2019 vs Q3 2019 vs Q4 2018 (unaudited)                      
                           
  Q4 2019   Q3 2019   Q4 2018    
  Average Earnings / Yield /   Average Earnings / Yield /   Average Earnings / Yield /    
Dollars in thousands Balances Expense Rate   Balances Expense Rate   Balances Expense Rate    
                           
ASSETS                          
Interest earning assets                          
  Loans, net of unearned interest (1)                        
  Taxable $ 1,853,197   $ 24,622 5.27 %   $ 1,813,555   $ 24,786 5.42 %   $ 1,660,250   $ 22,519 5.38 %    
  Tax-exempt (2)   15,738     189 4.76 %     15,903     195 4.86 %     15,322     177 4.58 %    
  Securities                          
  Taxable   218,375     1,654 3.00 %     203,288     1,566 3.06 %     176,059     1,502 3.38 %    
  Tax-exempt (2)   69,276     686 3.93 %     79,387     782 3.91 %     132,088     1,296 3.89 %    
  Interest bearing deposits other banks                        
  and Federal funds sold   32,779     105 1.27 %     35,214     125 1.41 %     35,402     127 1.42 %    
Total interest earning assets   2,189,365     27,256 4.94 %     2,147,347     27,454 5.07 %     2,019,121     25,621 5.03 %    
                           
Noninterest earning assets                          
  Cash & due from banks   12,932           12,815           9,686          
  Premises & equipment   44,136           43,160           37,224          
  Other assets   103,481           104,789           109,228          
  Allowance for loan losses   (13,055 )         (13,276 )         (13,172 )        
  Total assets $ 2,336,859         $ 2,294,835         $ 2,162,087          
                           
 LIABILITIES AND SHAREHOLDERS' EQUITY                      
                           
Liabilities                          
Interest bearing liabilities                          
  Interest bearing                          
  demand deposits $ 619,939   $ 1,378 0.88 %   $ 594,772   $ 1,621 1.08 %   $ 519,465   $ 1,504 1.15 %    
  Savings deposits   351,653     1,201 1.35 %     302,331     949 1.25 %     289,809     861 1.18 %    
  Time deposits   641,160     3,373 2.09 %     674,869     3,644 2.14 %     607,037     2,738 1.79 %    
  Short-term borrowings   188,007     1,062 2.24 %     202,425     1,372 2.69 %     270,092     1,909 2.80 %    
  Long-term borrowings and                          
  subordinated debentures   20,308     230 4.49 %     20,312     243 4.75 %     20,326     249 4.86 %    
Total interest bearing liabilities   1,821,067     7,244 1.58 %     1,794,709     7,829 1.73 %     1,706,729     7,261 1.69 %    
                           
Noninterest bearing liabilities                          
  Demand deposits   248,159           240,193           223,999          
  Other liabilities   22,856           21,320           16,138          
  Total liabilities   2,092,082           2,056,222           1,946,866          
                           
Shareholders' equity   244,777           238,613           215,221          
  Total liabilities and                          
  shareholders' equity $ 2,336,859         $ 2,294,835         $ 2,162,087          
                           
NET INTEREST EARNINGS   $ 20,012       $ 19,625       $ 18,360      
                           
NET INTEREST MARGIN     3.63 %       3.63 %       3.61 %    
                           
(1) - For purposes of this table, nonaccrual loans are included in average loan balances.              
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented.  
  The tax equivalent adjustment resulted in an increase in interest income of $184,000, $205,000, and $308,000 for Q4 2019,    
  Q3 2019 and Q4 2018, respectively.                        
                           

 



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)            
Average Balance Sheet, Interest Earnings & Expenses and Average Rates          
YTD 2019 vs YTD 2018 (unaudited)                
     
  YTD 2019   YTD 2018  
  Average Earnings / Yield /   Average Earnings / Yield /  
Dollars in thousands Balances Expense Rate   Balances Expense Rate  
                 
ASSETS                
Interest earning assets                
  Loans, net of unearned interest (1)                
  Taxable $ 1,782,477   $ 96,499 5.41 %   $ 1,626,725   $ 84,716 5.21 %  
  Tax-exempt (2)   15,315     780 5.09 %     15,776     718 4.55 %  
  Securities                
  Taxable   205,340     6,511 3.17 %     170,912     5,341 3.13 %  
  Tax-exempt (2)   90,823     3,608 3.97 %     136,913     5,375 3.93 %  
  Interest bearing deposits other banks              
  and Federal funds sold   39,408     595 1.51 %     38,148     539 1.41 %  
Total interest earning assets   2,133,363     107,993 5.06 %     1,988,474     96,689 4.86 %  
                 
Noninterest earning assets                
  Cash & due from banks   12,939           9,517        
  Premises & equipment   41,778           36,025        
  Other assets   107,456           107,856        
  Allowance for loan losses   (13,225 )         (12,830 )      
  Total assets $ 2,282,311         $ 2,129,042        
                 
 LIABILITIES AND SHAREHOLDERS' EQUITY              
                 
Liabilities                
Interest bearing liabilities                
  Interest bearing                
  demand deposits $ 586,938   $ 6,394 1.09 %   $ 471,725   $ 4,205 0.89 %  
  Savings deposits   317,569     3,969 1.25 %     320,184     3,233 1.01 %  
  Time deposits   660,910     13,334 2.02 %     621,659     10,237 1.65 %  
  Short-term borrowings   194,450     5,303 2.73 %     228,142     5,993 2.63 %  
  Long-term borrowings and                
  subordinated debentures   20,315     987 4.86 %     44,132     1,944 4.40 %  
    1,780,182     29,987 1.68 %     1,685,842     25,612 1.52 %  
Noninterest bearing liabilities                
  Demand deposits   244,559           218,541        
  Other liabilities   20,341           15,574        
  Total liabilities   2,045,082           1,919,957        
                 
Shareholders' equity   237,229           209,085        
  Total liabilities and                
  shareholders' equity $ 2,282,311         $ 2,129,042        
                 
NET INTEREST EARNINGS   $ 78,006       $ 71,077    
                 
NET INTEREST MARGIN     3.66 %       3.57 %  
                 
(1) - For purposes of this table, nonaccrual loans are included in average loan balances.      
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%.    
  The tax equivalent adjustment resulted in an increase in interest income of $922,000 and $1,279,000 for    
  YTD 2019 and YTD 2018, respectively.              
                 

Contact:            Robert S. Tissue, Executive Vice President & CFO
Telephone:        (304) 530-0552
Email:               rtissue@summitfgi.com

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