Summit Financial Group Reports Fourth Quarter & Full Year 2012 Results

MOOREFIELD, W.Va., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (Nasdaq:SMMF) today reported fourth quarter 2012 net income applicable to common shares of $1,911,000, or $0.22 per diluted share, compared to $1,331,000, or $0.16 per diluted share, for the fourth quarter of 2011.

Excluding from fourth quarter 2012 nonrecurring items (on a pre-tax basis) consisting of realized securities gains of $103,000, losses on sales of assets of $94,000, charges for other-than-temporary impairment ("OTTI") of securities of $76,000 and write-downs of foreclosed properties of $748,000, pro forma fourth quarter 2012 earnings were approximately $2.4 million, or $0.28 per diluted share. Excluding from fourth quarter 2011 nonrecurring realized securities gains of $542,000, gains on sales of assets of $19,000, OTTI of securities of $401,000, and write-downs of foreclosed properties of $882,000, pro forma earnings of $1.8 million would have resulted, or $0.21 per diluted share.

For the full-year 2012, Summit recorded net income applicable to common shares of $4.94 million, or $0.60 per diluted share, compared with $3.70 million, or $0.49 per diluted share, for 2011.

Excluding from the full-year 2012 nonrecurring items (on a pre-tax basis) of realized securities gains of $2.35 million, losses on sales of assets of $677,000, OTTI charges of $451,000 and write-downs of foreclosed properties of $6.86 million, and from the full-year 2011 realized securities gains of $4.01 million, gains on sales of assets of $295,000, OTTI charges of $2.65 million, and write-downs of foreclosed properties of $6.65 million, pro forma earnings for 2012 were approximately $8.49 million, or $0.97 per diluted share, compared to $6.85 million, or $0.86 per diluted share, for 2011.

Highlights for Q4 2012 include:
  • Achieved seventh consecutive quarter of positive quarterly earnings.
  • Nonperforming assets continued to decline, reaching its lowest level since Q1 2011.
  • Net interest margin increased 2 basis points quarter over quarter and 16 basis points compared to Q4 2011.
  • Recorded charges of $748,000 and $76,000, respectively, to write-down foreclosed properties and to recognize OTTI of securities, which were partially offset by $103,000 in realized securities gains.
  • Noninterest expenses remained well-controlled, declining 5.3% compared to Q4 2012 and 0.6% compared to Q3 2012.
  • Summit's leverage capital ratio is at its highest level in six years and its total risk-based capital ratio is at highest level in twelve years.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, "We are pleased by our continued improved earnings performance, progress in reducing our portfolio of problem assets, and strengthened capital levels. I am particularly pleased that during 2012: net interest income remained stable, despite a decline in average earning assets; the net interest margin improved; core noninterest income increased, while noninterest expenses declined; and OTTI of securities charges were very modest compared to prior-year amounts, and are expected to remain at relatively low levels. Reducing our portfolio of problem assets remains our top priority, and we reduced nonperforming assets in each of the four most recent quarters. However, dispositions of foreclosed properties remain frustratingly slow -- particularly with respect to commercial and residential development properties. Further, we anticipate earnings may remain choppy quarter-to-quarter in the near term as our foreclosed properties are re-appraised and written-down to estimated fair values on an ongoing basis."

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