MOOREFIELD, W.Va., July 27, 2017 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (NASDAQ:SMMF) today reported second quarter 2017 net income of $5.28 million, or $0.43 per diluted share, compared to $4.24 million, or $0.40 per diluted share, for the second quarter of 2016, representing an increase of 24.4 percent, or 7.5 percent per diluted share.

For the six months ended June 30, 2017, Summit recorded net income of $3.66 million, or $0.32 per diluted share, compared with $8.31 million, or $0.78 per diluted share, for the comparable 2016 six-month period, representing a decrease of 55.9 percent or 59.0 percent per diluted share.  The decrease in first half 2017 earnings is principally attributable to a legal settlement during first quarter which reduced earnings by $0.54 per diluted share.

Highlights for Q2 2017 include:
  • Summit completed its acquisition of First Century Bankshares, Inc. ("FCB") and its subsidiary, First Century Bank, headquartered in Bluefield, West Virginia on April 1, 2017, and converted substantially all its data processing systems to that of Summit's effective April 21, 2017; accordingly, merger-related expenses of $1.46 million were incurred during Q2 2017 compared to $153,000 during Q2 2016;
  • Total revenues increased 34.3 percent compared to the linked-quarter and 47.3 percent compared to the year ago quarter, principally as result of the acquisition of FCB;
  • Net interest margin increased 41 basis points compared to Q2 2016, and 27 basis points compared to the linked quarter, reflecting FCB's higher yielding loan portfolio, the impact of increasing short-term interest rates as result of recent FOMC activity and relatively stable funding costs;
  • Loans, excluding mortgage warehouse lines of credit and FCB's purchased loan portfolio, grew $11.9 million during the quarter, or 3.7 percent (on an annualized basis), and have grown $52.8 million, or 8.6 percent (annualized), year-to-date;
  • Nonperforming assets declined for the nineteenth consecutive quarter. Compared to the linked quarter, nonperforming assets as a percentage of total assets declined from 2.16 percent to 1.78 percent, reaching its lowest level since Q2 2008;
  • Recorded charges of $29,000 to write-down foreclosed properties compared to $259,000 in Q2 2016 and $418,000 in Q1 2017.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, "I am very pleased to report Summit achieved another quarter of solid core operating results highlighted by improvement in our net interest margin and core loan growth. Further, despite the quarter's challenges of integrating FCB's banking operations with that of Summit's, we nonetheless maintained an efficiency ratio well below that of most of our peers. We are demonstrating our ability to successfully execute on a disciplined M&A growth strategy, which we believe will continue to present us with significant opportunities going forward as we seek to be a consistent, high-performing community banking institution."

FCB Acquisition

On April 1, 2017, Summit completed its acquisition of FCB.  Accordingly, FCB's results of operations are included in Summit's consolidated results of operation from the date of acquisition, and therefore Summit's second quarter and first half 2017 results reflect increased levels of average balances, income and expense compared to its second quarter and first half 2016 results. 

At consummation, FCB had total assets of $404.8 million, loans of $229.0 million, and deposits of $350.0 million. In addition, our merger-related expenses totaled $1.56 million during first half 2017, with $1.46 million of those expenses incurred during second quarter 2017. Summit recognized net accretion income totaling $285,000 in Q2 2017 related to FCB's loan fair value acquisition accounting adjustments.

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 three and six months ended June 30, 2017 results reflect increased levels of average balances, income and expense as compared to the same periods of 2016 results.

At consummation, HCB had total assets of $122.8 million, loans of $60.8 million, and deposits of $106.9 million. Summit recognized net accretion income totaling $59,000 in Q2 2017 and $203,000 in the first half of 2017 related to HCB's loan fair value acquisition accounting adjustments.

Results from Operations

Total revenue for second quarter 2017 consisting of net interest income and noninterest income, grew 47.3 percent to $21.8 million, principally as result of the FCB and HCB acquisitions, compared to $14.8 million for the second quarter 2016. For the year-to-date period ended June 30, 2017, total revenue was $38.0 million compared to $29.4 million for the same period of 2016, representing a 29.3 percent increase.

For the second quarter of 2017, net interest income was $17.8 million, an increase of 52.1 percent from the $11.7 million reported in the prior-year second quarter and increased $4.2 million compared to the linked quarter. The net interest margin for second quarter 2017 was 3.81 percent compared to 3.40 percent for the year-ago quarter, and 3.54 percent for the linked quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to the interest earning assets and interest bearing liabilities acquired from FCB and HCB, Summit's net interest margin was 3.72 percent for Q2 2017 and 3.62 percent for first half of 2017.  

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary, trust and wealth management fees and service fee income from community banking activities, for second quarter 2017 was $3.92 million compared to $3.05 million for the comparable period of 2016. Excluding realized securities gains, noninterest income was $3.83 million for second quarter 2017, compared to $2.67 million reported for second quarter 2016 and $2.64 million for the linked quarter.

We recorded a $250,000 provision for loan losses during second quarters 2017 and 2016.

Q2 2017 total noninterest expense increased 65.2% to $13.94 million compared to $8.44 million for the prior-year second quarter principally due to the acquisitions of FCB and HCB. Noninterest expense for the first half of 2017 increased 93.9% compared to the first half of 2016. Summit recorded a $9.9 million charge to resolve fully all litigation with Residential Funding Company, LLC and ResCap Liquidating Trust (collectively "ResCap") during Q1 2017. Excluding the impact of the ResCap litigation settlement charge, noninterest expense for first half of 2017 increased 35.7 percent to $23.1 million compared to $17.0 million for the first half of 2016, principally as result of the acquisitions of HCB and FCB.

Balance Sheet

At June 30, 2017, total assets were $2.10 billion, an increase of $336.7 million, or 19.1 percent since December 31, 2016. Total loans, net of unearned fees and allowance for loan losses, were $1.54 billion at June 30, 2017, up $230.2 million, or 17.6 percent, from the $1.31 billion reported at year-end 2016.  Loans, excluding mortgage warehouse lines of credit and FCB's purchased loan portfolio, grew $11.9 million during the quarter, or 3.7 percent (on an annualized basis), and have grown $52.8 million, or 8.6 percent (annualized) since year-end 2016.

At June 30, 2017, deposits were $1.61 billion, an increase of $318.4 million, or 24.6 percent, since year end 2016. During first half 2017, checking deposits increased $194.2 million or 47.1 percent, time deposits grew by $88.1 million or 16.1 percent and savings deposits increased $36.1 million or 10.7 percent.

Shareholders' equity was $193.1 million as of June 30, 2017 compared to $155.4 million at December 31, 2016 and $150.7 million at June 30, 2016. In conjunction with the acquisition of FCB on April 1, 2017, Summit issued 1,537,912 shares of common stock valued at $33.1 million to the former FCB shareholders.

Tangible book value per common share increased to $13.41 at June 30, 2017 compared to $13.20 at December 31, 2016 and $13.40 at June 30, 2016. Summit had 12,299,726 outstanding common shares at Q2 2017 quarter end compared to 10,736,970 at year end 2016.

Asset Quality

As of June 30, 2016, nonperforming assets ("NPAs"), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $37.4 million, or 1.78 percent of assets. This compares to $38.4 million, or 2.16 percent of assets at the linked quarter-end, and $38.7 million, or 2.47 percent of assets, at second quarter-end 2016.

Second quarter 2017 net loan recoveries were $364,000, or 0.09 percent of average loans annualized; while adding $250,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.79 percent of total loans at June 30, 2017, compared to 0.88 percent at year-end 2016.  If the acquired FCB and HCB loans are excluded, the allowance for loan losses to total loans ratio at June 30, 2017 and December 31, 2016 would have been 0.95 percent and 0.92, respectively.

About the Company

Summit Financial Group, Inc. is a $2.10 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 -- Q2 2017 vs Q2 2016    
         
       
      For the Quarter Ended     Percent  
  Dollars in thousands   6/30/2017 6/30/2016   Change  
  Condensed Statements of Income        
   Interest income       
    Loans, including fees  $   19,717   $   13,622     44.7 %
    Securities      2,349       1,656     41.8 %
    Other      165       5   n/a
   Total interest income      22,231       15,283     45.5 %
   Interest expense       
    Deposits      2,634       2,154     22.3 %
    Borrowings      1,749       1,395     25.4 %
   Total interest expense      4,383       3,549     23.5 %
   Net interest income      17,848       11,734     52.1 %
   Provision for loan losses      250       250     0.0 %
   Net interest income after provision       
    for loan losses      17,598       11,484     53.2 %
         
   Noninterest income       
    Insurance commissions      988       1,090     -9.4 %
    Trust and wealth management fees      595       116     412.9 %
    Service fees related to deposit accounts      1,706       1,059     61.1 %
    Realized securities gains      90       383     -76.5 %
    Other income      537       397     35.3 %
  Total noninterest income     3,916       3,045     28.6 %
   Noninterest expense       
    Salaries and employee benefits     6,758       4,764     41.9 %
    Net occupancy expense     826       512     61.3 %
    Equipment expense     1,031       686     50.3 %
    Professional fees     354       429     -17.5 %
    Amortization of intangibles     429       50     758.0 %
    FDIC premiums     295       300     -1.7 %
    Merger-related expense     1,455       153   n/a
    Foreclosed properties expense     122       93     31.2 %
    Loss (gain) on sales of foreclosed properties     73       (276 ) n/a
    Write-downs of foreclosed properties     29       259     -88.8 %
    Other expenses     2,564       1,467     74.8 %
  Total noninterest expense     13,936       8,437     65.2 %
   Income before income taxes      7,578       6,092     24.4 %
   Income taxes      2,300       1,849     24.4 %
   Net income  $   5,278   $   4,243     24.4 %
         

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)
Quarterly Performance Summary -- Q2 2017 vs Q2 2016
       
      For the Quarter Ended     Percent  
    6/30/2017 6/30/2016   Change  
Per Share Data        
  Earnings per common share       
    Basic  $   0.43   $   0.40   7.5 %
    Diluted  $   0.43   $   0.40   7.5 %
         
  Cash dividends  $   0.11   $   0.10   10.0 %
         
  Average common shares outstanding       
    Basic      12,288,514       10,681,995   15.0 %
    Diluted      12,299,187       10,701,017   14.9 %
         
   Common shares outstanding at period end      12,299,726       10,692,320   15.0 %
         
Performance Ratios        
  Return on average equity    11.10 %   11.49 % -3.4 %
  Return on average tangible equity    12.95 %   12.10 % 7.0 %
  Return on average assets    1.01 %   1.10 % -8.2 %
  Net interest margin    3.81 %   3.40 % 12.1 %
  Efficiency ratio (A)    53.00 %   55.35 % -4.2 %
         

NOTE (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)    
Six Month Performance Summary -- 2017 vs 2016      
         
         
      For the Six Months Ended     Percent  
  Dollars in thousands   6/30/2017 6/30/2016   Change  
  Condensed Statements of Income        
   Interest income       
    Loans, including fees  $   35,388     $   27,059   30.8 %
    Securities      4,200         3,382   24.2 %
    Other      317         7   n/a
   Total interest income      39,905         30,448   31.1 %
   Interest expense       
    Deposits      5,024         4,324   16.2 %
    Borrowings      3,404         2,611   30.4 %
   Total interest expense      8,428         6,935   21.5 %
   Net interest income      31,477         23,513   33.9 %
   Provision for loan losses      500         500   0.0 %
   Net interest income after provision             
    for loan losses      30,977         23,013   34.6 %
         
   Noninterest income       
    Insurance commissions      1,957         2,013   -2.8 %
    Trust and wealth management fees      695         232   199.6 %
    Service fees related to deposit accounts      2,874         2,038   41.0 %
    Realized securities gains      32         775   -95.9 %
    Other income      938         794   18.1 %
  Total noninterest income     6,496         5,852   11.0 %
   Noninterest expense             
    Salaries and employee benefits     11,945         9,446   26.5 %
    Net occupancy expense     1,393         1,051   32.5 %
    Equipment expense     1,766         1,343   31.5 %
    Professional fees     639         901   -29.1 %
    Amortization of intangibles     526         100   426.0 %
    FDIC premiums     505         600   -15.8 %
    Merger-related expense     1,564         264   n/a
    Foreclosed properties expense     226         217   4.1 %
    Gain on sales of foreclosed properties     (83 )       (282 ) -70.6 %
    Write-downs of foreclosed properties     447         369   21.1 %
    Litigation settlement     9,900         -   n/a
    Other expenses     4,125         2,982   38.3 %
  Total noninterest expense     32,953         16,991   93.9 %
   Income before income taxes      4,520         11,874   -61.9 %
   Income taxes      858         3,569   -76.0 %
   Net income  $   3,662     $   8,305   -55.9 %
               

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)    
Six Month Performance Summary -- 2017 vs 2016      
       
      For the Six Months Ended     Percent  
    6/30/2017 6/30/2016   Change  
  Per Share Data        
   Earnings per common share       
    Basic  $   0.32   $   0.78   -59.0 %
    Diluted  $   0.32   $   0.78   -59.0 %
         
   Cash dividends  $   0.22   $   0.20   10.0 %
         
   Average common shares outstanding       
    Basic      11,517,721       10,676,925   7.9 %
    Diluted      11,559,990       10,685,290   8.2 %
         
   Common shares outstanding at period end      12,299,726       10,692,320   15.0 %
         
  Performance Ratios        
   Return on average equity    4.22 %   11.29 % -62.6 %
   Return on average tangible equity    4.78 %   11.90 % -59.8 %
   Return on average assets    0.38 %   1.09 % -65.1 %
   Net interest margin    3.69 %   3.45 % 7.0 %
   Efficiency ratio (A)    52.21 %   55.63 % -6.1 %
         

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   6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
  Condensed Statements of Income (unaudited)            
   Interest income           
    Loans, including fees  $   19,717   $   15,671     $   15,780     $   14,142     $   13,622  
    Securities      2,349       1,851         1,796         1,759         1,656  
    Other      165       152         161         5         5  
   Total interest income      22,231       17,674         17,737         15,906         15,283  
   Interest expense           
    Deposits      2,634       2,390         2,430         2,209         2,154  
    Borrowings      1,749       1,654         1,850         1,659         1,395  
   Total interest expense      4,383       4,044         4,280         3,868         3,549  
   Net interest income      17,848       13,630         13,457         12,038         11,734  
   Provision for loan losses      250       250         -         -         250  
   Net interest income after provision           
    for loan losses      17,598       13,380         13,457         12,038         11,484  
   Noninterest income           
    Insurance commissions      988       968         992         1,016         1,090  
    Trust and wealth management fees      595       100         111         252         116  
    Service fees related to deposit accounts      1,706       1,168         1,194         1,138         1,059  
    Realized securities gains (losses)      90       (58 )       291         61         383  
    Other income      537       401         410         282         397  
  Total noninterest income     3,916       2,579         2,998         2,749         3,045  
   Noninterest expense           
    Salaries and employee benefits     6,758       5,187         5,308         4,819         4,764  
    Net occupancy expense     826       567         522         525         512  
    Equipment expense     1,031       735         700         716         686  
    Professional fees     354       285         344         270         429  
    Amortization of intangibles     429       97         97         50         50  
    FDIC premiums     295       210         75         200         300  
    Merger-related expense     1,455       109         588         80         153  
    Foreclosed properties expense     122       104         97         100         93  
    Loss (gain) on sales of foreclosed properties      73       (156 )       (465 )       (168 )       (276 )
    Write-downs of foreclosed properties      29       418         165         134         259  
    Litigation settlement      -       9,900         -         -         -  
    Other expenses     2,564       1,560         1,961         1,693         1,467  
  Total noninterest expense     13,936       19,016         9,392         8,419         8,437  
   Income (loss) before income taxes      7,578       (3,057 )       7,063         6,368         6,092  
   Income tax expense (benefit)      2,300       (1,441 )       2,353         2,087         1,849  
   Net income (loss)  $   5,278   $   (1,616 )   $   4,710     $   4,281     $   4,243  
             

 
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)          
Five Quarter Performance Summary          
           
      For the Quarter Ended  
    6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
  Per Share Data            
   Earnings per common share           
    Basic  $   0.43   $   (0.15 ) $   0.44   $   0.40   $   0.40  
    Diluted  $   0.43   $   (0.15 ) $   0.44   $   0.40   $   0.40  
             
   Cash dividends  $   0.11   $   0.11   $   0.10   $   0.10   $   0.10  
             
   Average common shares outstanding           
    Basic      12,288,514       10,738,365       10,710,164       10,692,423       10,681,995  
    Diluted      12,299,187       10,738,365       10,762,445       10,727,140       10,701,017  
             
   Common shares outstanding at period end      12,299,726       10,750,477       10,736,970       10,701,841       10,692,320  
             
  Performance Ratios            
   Return on average equity    11.10 %   -4.11 %   12.22 %   11.29 %   11.49 %
   Return on average tangible equity    12.95 %   -4.51 %   13.42 %   11.86 %   12.10 %
   Return on average assets    1.01 %   -0.37 %   1.07 %   1.08 %   1.10 %
   Net interest margin    3.81 %   3.54 %   3.34 %   3.32 %   3.40 %
   Efficiency ratio (A)    53.00 %   51.16 %   56.67 %   53.30 %   55.35 %
             

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   6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
             
  Assets            
  Cash and due from banks $   9,294     $   19,326     $   4,262     $   25,067     $   4,161  
  Interest bearing deposits other banks     44,242         38,895         42,354         9,432         8,897  
  Securities     336,811         282,028         266,542         262,102         261,633  
  Loans, net     1,538,083         1,292,915         1,307,862         1,234,605         1,166,723  
  Property held for sale     23,592         23,491         24,504         24,767         23,425  
  Premises and equipment, net     33,234         26,377         23,737         21,802         21,405  
  Goodwill and other intangible assets     28,214         13,587         13,652         7,348         7,398  
  Cash surrender value of life insurance policies     41,189         39,412         39,143         38,504         38,246  
  Other assets     40,641         40,411         36,591         34,009         33,293  
    Total assets $   2,095,300     $   1,776,442     $   1,758,647     $   1,657,636     $   1,565,181  
                         
  Liabilities and Shareholders' Equity            
  Deposits $   1,613,919     $   1,301,241     $   1,295,519     $   1,156,785     $   1,096,545  
  Short-term borrowings     205,728         228,868         224,461         234,657         205,552  
  Long-term borrowings and          
    subordinated debentures     65,348         65,804         66,259         93,735         94,214  
  Other liabilities     17,173         26,910         17,048         18,640         18,201  
  Shareholders' equity     193,132         153,619         155,360         153,819         150,669  
    Total liabilities and shareholders' equity $   2,095,300     $   1,776,442     $   1,758,647     $   1,657,636     $   1,565,181  
                                     
  Book value per common share $   15.70     $   14.29     $   14.47     $   14.37     $   14.09  
                                         
  Tangible book value per common share $   13.41     $   13.03     $   13.20     $   13.69     $   13.40  
                                         
  Tangible common equity to tangible assets   8.0 %     7.9 %     8.1 %     8.9 %     9.2 %
             

 
SUMMIT FINANCIAL GROUP INC. (NASDAQ:   SMMF)          
Regulatory Capital Ratios            
               
    6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016  
Summit Financial Group, Inc.            
  CET1 Risk-based Capital 10.5 % 10.3 % 10.5 % 11.1 % 11.5 %  
  Tier 1 Risk-based Capital 11.7 % 11.5 % 11.8 % 12.4 % 12.9 %  
  Total Risk-based Capital 12.4 % 12.3 % 12.6 % 13.3 % 13.8 %  
  Tier 1 Leverage Ratio 9.2 % 9.4 % 9.4 % 10.4 % 10.5 %  
               
Summit Community Bank, Inc.            
  CET1 Risk-based Capital 11.6 % 11.6 % 11.9 % 12.5 % 13.0 %  
  Tier 1 Risk-based Capital 11.6 % 11.6 % 11.9 % 12.5 % 13.0 %  
  Total Risk-based Capital 12.4 % 12.4 % 12.7 % 13.4 % 13.9 %  
  Tier 1 Leverage Ratio 9.2 % 9.4 % 9.5 % 10.5 % 10.6 %  
               

 
SUMMIT FINANCIAL GROUP INC. (NASDAQ:   SMMF)        
Loan Composition            
               
Dollars in thousands 6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016  
               
Commercial   $   176,362   $   134,808   $   119,088   $   110,466   $   101,521  
Mortgage warehouse lines     35,068       30,217       85,966       108,983       80,282  
Commercial real estate            
  Owner occupied     239,108       217,733       203,047       192,254       190,534  
  Non-owner occupied     455,439       401,795       381,921       367,196       348,099  
Construction and development            
  Land and development     74,155       68,079       72,042       65,430       65,702  
  Construction       22,967       16,511       16,584       11,276       8,506  
Residential real estate            
  Non-jumbo       355,546       266,140       265,641       228,777       225,919  
  Jumbo       63,899       60,780       65,628       57,276       52,105  
  Home equity       81,192       75,299       74,596       75,161       75,904  
Consumer       37,630       24,440       25,534       19,756       19,520  
Other       9,049       8,831       9,489       9,649       10,008  
Total loans, net of unearned fees     1,550,415       1,304,633       1,319,536       1,246,224       1,178,100  
Less allowance for loan losses     12,332       11,718       11,674       11,619       11,377  
Loans, net $   1,538,083   $   1,292,915   $   1,307,862   $   1,234,605   $   1,166,723  
               

 
SUMMIT FINANCIAL GROUP INC. (NASDAQ:   SMMF)        
Deposit Composition            
               
Dollars in thousands   6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016  
Non-interest bearing checking $   234,173   $   152,086   $   149,737   $   122,652   $   120,845  
Interest bearing checking     372,327       275,678       262,591       212,172       205,095  
Savings       373,439       342,548       337,348       321,563       306,785  
Time deposits       633,980       530,929       545,843       500,398       463,820  
Total deposits $   1,613,919   $   1,301,241   $   1,295,519   $   1,156,785   $   1,096,545  
               

 
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)        
Asset Quality Information          
             
      For the Quarter Ended  
  Dollars in thousands   6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
             
  Gross loan charge-offs $   114     $   315     $   400     $   331     $   263  
  Gross loan recoveries     (478 )       (108 )       (456 )       (573 )       (75 )
    Net loan charge-offs (recoveries) $   (364 )   $   207     $   (56 )   $   (242 )   $   188  
             
  Net loan charge-offs to average loans (annualized)   -0.09 %     0.06 %     -0.02 %     -0.09 %     0.07 %
  Allowance for loan losses $   12,332     $   11,718     $   11,674     $   11,619     $   11,377  
  Allowance for loan losses as a percentage          
    of period end loans   0.79 %     0.90 %     0.88 %     0.93 %     0.97 %
  Nonperforming assets:          
    Nonperforming loans          
    Commercial $   786     $   226     $   298     $   846     $   399  
    Commercial real estate     2,051         4,734         4,844         4,867         5,773  
    Residential construction and development     3,613         3,936         4,465         4,360         5,400  
    Residential real estate     6,860         5,886         4,815         4,174         3,531  
    Consumer     391         162         152         169         91  
  Total nonperforming loans     13,701         14,944         14,574         14,416         15,194  
    Foreclosed properties          
    Commercial real estate     2,126         1,749         1,749         1,749         976  
    Commercial construction and development     7,527         8,276         8,610         8,664         8,708  
    Residential construction and development     12,402         12,635         13,265         13,741         12,989  
    Residential real estate     1,537         831         880         613         752  
  Total foreclosed properties     23,592         23,491         24,504         24,767         23,425  
    Other repossessed assets     57         12         12         12         38  
  Total nonperforming assets $   37,350     $   38,447     $   39,090     $   39,195     $   38,657  
             
  Nonperforming loans to period end loans   0.88 %     1.15 %     1.10 %     1.16 %     1.29 %
  Nonperforming assets to period end assets   1.78 %     2.16 %     2.22 %     2.36 %     2.47 %
             
  Troubled debt restructurings          
    Performing $   26,472     $   28,183     $   28,066     $   28,287     $   27,750  
    Nonperforming     464         719         564         863         2,133  
  Total troubled debt restructurings $   26,936     $   28,902     $   28,630     $   29,150     $   29,883  
             

 
Loans Past Due 30-89 Days          
      For the Quarter Ended  
  In thousands   6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
             
  Commercial $   470   $   162   $   175   $   405   $   422
  Commercial real estate     976       2,758       434       626       214
  Construction and development     308       291       552       235       520
  Residential real estate     6,943       2,924       5,517       2,941       4,763
  Consumer     548       155       375       144       177
  Other     49       17       14       13       12
    Total $   9,294   $   6,307   $   7,067   $   4,364   $   6,108
             

 
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)            
Average Balance Sheet, Interest Earnings & Expenses and Average Rates          
Q2 2017 vs Q2 2016                
  Q2 2017   Q2 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 $   1,537,317     $   19,550     5.10 %   $   1,126,519     $   13,488   4.82 %  
  Tax-exempt     13,030         257     7.91 %       14,554         203   5.61 %  
  Securities                
  Taxable     214,601         1,330     2.49 %       211,624         1,062   2.02 %  
  Tax-exempt     133,130         1,568     4.72 %       71,649         900   5.05 %  
  Interest bearing deposits other banks                
  and Federal funds sold     47,937         165     1.38 %       9,152         4   0.18 %  
Total interest earning assets     1,946,015         22,870     4.71 %       1,433,498         15,657   4.39 %  
                 
Noninterest earning assets                
  Cash & due from banks     10,101             3,752        
  Premises & equipment     34,441             21,517        
  Other assets     115,728             89,773        
  Allowance for loan losses     (11,966 )           (11,420 )      
  Total assets $   2,094,319         $   1,537,120        
                 
  LIABILITIES AND SHAREHOLDERS' EQUITY              
                 
Liabilities                
Interest bearing liabilities                
  Interest bearing                 
  demand deposits $   378,350     $   252     0.27 %   $   205,242     $   79   0.15 %  
  Savings deposits     389,847         616     0.63 %       295,402         550   0.75 %  
  Time deposits     628,358         1,766     1.13 %       471,343         1,526   1.30 %  
  Short-term borrowings     200,209         1,079     2.16 %       183,673         419   0.92 %  
  Long-term borrowings and                
  subordinated debentures     65,692         670     4.09 %       94,568         975   4.15 %  
Total interest bearing liabilities     1,662,456         4,383     1.06 %       1,250,228         3,549   1.14 %  
                 
Noninterest bearing liabilities                
  Demand deposits     221,245             120,118        
  Other liabilities     20,490             19,044        
  Total liabilities     1,904,191             1,389,390        
                 
Shareholders' equity - preferred     -             -        
Shareholders' equity - common     190,128             147,730        
  Total liabilities and                
  shareholders' equity $   2,094,319         $   1,537,120        
                 
NET INTEREST EARNINGS     $   18,487         $   12,108    
                 
NET INTEREST MARGIN         3.81 %         3.40 %  
                           

  
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)            
Average Balance Sheet, Interest Earnings & Expenses and Average Rates          
YTD 2017 vs YTD 2016                
     
  YTD 2017   YTD 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 $   1,408,566     $   35,100   5.03 %   $   1,107,801     $   26,778   4.86 %  
  Tax-exempt     13,161         443   6.79 %       15,189         424   5.61 %  
  Securities                
  Taxable     200,544         2,459   2.47 %       210,494         2,146   2.05 %  
  Tax-exempt     114,320         2,678   4.72 %       75,482         1,873   4.99 %  
  Interest bearing deposits other banks                
  and Federal funds sold     44,338         317   1.44 %       8,621         7   0.16 %  
Total interest earning assets     1,780,929         40,997   4.64 %       1,417,587         31,228   4.43 %  
                 
Noninterest earning assets                
  Cash & due from banks     7,298             3,757        
  Premises & equipment     29,500             21,556        
  Other assets     106,440             89,708        
  Allowance for loan losses     (11,864 )           (11,491 )      
  Total assets $   1,912,303         $   1,521,117        
                 
  LIABILITIES AND SHAREHOLDERS' EQUITY              
                 
Liabilities                
Interest bearing liabilities                
  Interest bearing                 
  demand deposits $   320,918     $   399   0.25 %   $   207,487     $   162   0.16 %  
  Savings deposits     365,026         1,242   0.69 %       286,399         1,055   0.74 %  
  Time deposits     584,767         3,383   1.17 %       471,470         3,106   1.32 %  
  Short-term borrowings     198,587         2,073   2.11 %       176,111         659   0.75 %  
  Long-term borrowings and                
  subordinated debentures     65,918         1,331   4.07 %       94,811         1,952   4.14 %  
      1,535,216         8,428   1.11 %       1,236,278         6,934   1.13 %  
Noninterest bearing liabilities                
  Demand deposits     184,968             120,291        
  Other liabilities     18,454             17,485        
  Total liabilities     1,738,638             1,374,054        
                 
Shareholders' equity - preferred     -             -        
Shareholders' equity - common     173,665             147,063        
  Total liabilities and                
  shareholders' equity $   1,912,303         $   1,521,117        
                 
NET INTEREST EARNINGS     $   32,569         $   24,294    
                 
NET INTEREST MARGIN       3.69 %         3.45 %  
                 
Contact: Robert S. Tissue, Sr. Vice President & CFOTelephone: (304) 530-0552	Email: rtissue@summitfgi.com

Primary Logo