MOOREFIELD, W. Va., Jan. 26, 2018 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (NASDAQ:SMMF) today reported fourth quarter 2017 net income of $2.32 million, or $0.19 per diluted share. In comparison, earnings for third quarter 2017 were $5.93 million, or $0.48 per diluted share, and for fourth quarter 2016 were $4.71 million, or $0.44 per diluted share. Earnings per diluted share for fourth quarter 2017 were negatively impacted (on an after-tax basis) by the one-time charge of $0.28 to re-measure the Company's net deferred tax assets as result of enactment of the Tax Cuts and Jobs Act ("TCJA").

For the full year, Summit recorded net income of $11.92 million, or $1.00 per diluted share, for 2017 compared with $17.30 million, or $1.61 per diluted share, for 2016. Earnings per diluted share for the full year of 2017 were negatively impacted (on an after-tax basis) by the following non-core or one-time items:  $0.52 as result of a litigation settlement, $0.29 due to the enactment of the TCJA, and $0.08 as result of merger-related expenses.

Highlights for Q4 2017 include:

  • Recorded a $3.5 million charge to income tax expense to re-measure net deferred tax assets at the lower corporate federal income tax rate due to enactment of the TCJA;
  • Loans, excluding mortgage warehouse lines of credit, grew $37.3 million during the quarter, or 9.7 percent (on an annualized basis); excluding mortgage warehouse lines of credit and First Century Bankshares, Inc.'s ("FCB") purchased loan portfolio, loans grew $113.0 million, or 9.2 percent, since year-end 2016;
  • Total revenues increased 0.6 percent compared to the linked-quarter and increased 29.9 percent compared to the year ago quarter, principally as result of the acquisitions of FCB and Highland County Bankshares, Inc. ("HCB");
  • Net interest margin was unchanged compared to Q3 2017, but increased 31 basis points compared to Q4 2016, reflecting FCB's higher yielding loan portfolio and lower cost of funds as well as the positive impact from FOMC rate increases during 2017;
  • Efficiency ratio improved to 51.47 percent compared to 53.73 percent for Q3 2017 and 56.67 percent for Q4 2016, as result of the improved net interest margin and well-controlled overhead;
  • Provision for loan losses remained unchanged from the linked quarter at $375,000, compared to no provision for the year-ago quarter;
  • Realized securities losses of $71,000 in Q4 2017 compared to realized securities gains of $291,000 in the year-ago quarter;
  • Write-downs of foreclosed properties were $347,000 in Q4 2017 compared to $165,000 in Q4 2016, while gains on sales of foreclosed properties declined from $465,000 in Q4 2016 to $46,000 in Q4 2017;
  • Nonperforming assets as a percentage of total assets declined to 1.73 percent compared to 1.84 percent for the linked quarter and to 2.22 percent a year-ago, reaching its lowest level since Q2 2008.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, "Despite the noise in this past quarter's earnings as result of enactment of Tax Reform legislation, I was very pleased by our Q4 2017 core operating performance - the net interest margin remained stable, loan growth was strong and the efficiency ratio improved markedly. Furthermore, these results combined with our proven ability in 2017 to successfully execute on a disciplined M&A growth strategy gives us optimism as we look forward to 2018 and beyond."

Acquisitions

On April 1, 2017, Summit completed its acquisition of FCB and its subsidiary, First Century Bank, headquartered in Bluefield, West Virginia.  Accordingly, FCB's results of operations are included in Summit's consolidated results of operation from the date of acquisition, and therefore Summit's results for the three months and year ended December 31, 2017 reflect increased levels of average balances, income and expense compared to its same periods of 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 $1.59 million during 2017, with $1.46 million of those expenses incurred during second quarter 2017.

On October 1, 2016, Summit completed its acquisition of 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 results for the year ended December 31, 2017 reflect increased levels of average balances, income and expense as compared to 2016 results. At consummation, HCB had total assets of $122.8 million, loans of $60.8 million, and deposits of $106.9 million.

In conjunction with these acquisitions, Summit recognized net accretion income related to loan and time deposit fair value acquisition accounting adjustments totaling $113,000 and $70,000 in Q4 2017 and $825,000 and $237,000 for the year ended December 31, 2017, respectively.

Results of Operations

Total revenue for fourth quarter 2017, consisting of net interest income and noninterest income, grew 29.9 percent to $21.4 million, principally as result of the FCB acquisition, compared to $16.5 million for the fourth quarter 2016. For the year-to-date period ended December 31, 2017, total revenue was $80.6 million compared to $60.6 million for the same period of 2016, representing a 32.9 percent increase.

For the fourth quarter of 2017, net interest income was $17.4 million, an increase of 29.6 percent from the $13.5 million reported in the prior-year fourth quarter and increased $206,000 compared to the linked-quarter. The net interest margin for fourth quarter 2017 was 3.65 percent compared to 3.34 percent for the year-ago quarter, and 3.65 percent for Q3 2017. 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 3.60 percent for Q4 2017 and 3.61 percent for full year 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 fourth quarter 2017 was $3.93 million compared to $3.00 million for the comparable period of 2016. Excluding realized securities gains and losses, noninterest income was $4.00 million for fourth quarter 2017, compared to $2.71 million reported for fourth quarter 2016.

We recorded a $375,000 provision for loan losses during fourth quarter 2017 and none during fourth quarter 2016.

Q4 2017 total noninterest expense increased 31.5 percent to $12.35 million compared to $9.39 million for the prior-year fourth quarter principally due to the acquisition of FCB. Noninterest expense for full-year 2017 increased 65.9 percent compared to 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 2017 increased 37.5 percent to $47.8 million compared to $34.8 million for 2016, principally as result of the acquisitions of HCB and FCB.

Balance Sheet

At December 31, 2017, total assets were $2.13 billion, an increase of $375.6 million, or 21.4 percent since December 31, 2016. Total loans, net of unearned fees and allowance for loan losses, were $1.59 billion at December 31, 2017, up $285.9 million, or 21.9 percent, from the $1.31 billion reported at year-end 2016.  Loans, excluding mortgage warehouse lines of credit, grew $37.3 million during the quarter, or 9.7 percent (on an annualized basis), and loans, excluding mortgage warehouse lines of credit and FCB's purchased loan portfolio, have grown $113.0 million, or 9.2 percent year-to-date.

At December 31, 2017, deposits were $1.60 billion, an increase of $305.1 million, or 23.5 percent, since year end 2016. During 2017, checking deposits increased $215.8 million or 52.3 percent, time deposits grew by $68.5 million or 12.5 percent and savings deposits increased $20.8 million or 6.2 percent.

Shareholders' equity was $201.5 million as of December 31, 2017 compared to $155.4 million at December 31, 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 $14.08 at December 31, 2017 compared to $13.20 at December 31, 2016. Summit had 12,358,562 outstanding common shares at year end 2017 compared to 10,736,970 at year end 2016.

Asset Quality

As of December 31, 2017, nonperforming assets ("NPAs"), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $36.9 million, or 1.73 percent of assets. This compares to $38.7 million, or 1.84 percent of assets at the linked quarter-end, and $39.1 million, or 2.22 percent of assets, at year end 2016.

Fourth quarter 2017 net loan charge-offs were $274,000, or 0.07 percent of average loans annualized; while we added $375,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.78 percent of total loans at December 31, 2017, compared to 0.88 percent at year-end 2016.  If the acquired FCB and HCB loans which were recorded at fair value on the acquisition dates are excluded, the allowance for loan losses to total loans ratio at December 31, 2017 and December 31, 2016 would have been 0.91 percent and 0.92 percent, respectively.

About the Company

Summit Financial Group, Inc. is a $2.13 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 -- Q4 2017 vs Q4 2016    
         
       
      For the Quarter Ended     Percent  
  Dollars in thousands   12/31/2017 12/31/2016   Change  
  Condensed Statements of Income        
   Interest income       
    Loans, including fees  $   20,031   $   15,780   26.9 %
    Securities      2,412       1,796   34.3 %
    Other      144       161   -10.6 %
   Total interest income      22,587       17,737   27.3 %
   Interest expense               
    Deposits      3,224       2,430   32.7 %
    Borrowings      1,925       1,850   4.1 %
   Total interest expense      5,149       4,280   20.3 %
   Net interest income      17,438       13,457   29.6 %
   Provision for loan losses      375       -   n/a  
   Net interest income after provision               
    for loan losses      17,063       13,457   26.8 %
                 
   Noninterest income       
    Insurance commissions      1,005       992   1.3 %
    Trust and wealth management fees      578       91   535.2 %
    Service fees related to deposit accounts      1,906       1,194   59.6 %
    Realized securities (losses) gains      (71 )     291   -124.4 %
    Other income      513       430   19.3 %
  Total noninterest income     3,931       2,998   31.1 %
   Noninterest expense               
    Salaries and employee benefits     6,520       5,308   22.8 %
    Net occupancy expense     772       522   47.9 %
    Equipment expense     1,095       700   56.4 %
    Professional fees     355       344   3.2 %
    Amortization of intangibles     435       97   348.5 %
    FDIC premiums     250       75   233.3 %
    Merger-related expense     14       588   -97.6 %
    Foreclosed properties expense     215       97   121.6 %
    Gain on sales of foreclosed properties     (46 )     (465 ) -90.1 %
    Write-downs of foreclosed properties     347       165   110.3 %
    Other expenses     2,389       1,961   21.8 %
  Total noninterest expense     12,346       9,392   31.5 %
   Income before income taxes      8,648       7,063   22.4 %
   Income taxes      6,325       2,353   168.8 %
   Net income  $   2,323   $   4,710   -50.7 %

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)    
Quarterly Performance Summary -- Q4 2017 vs Q4 2016    
       
      For the Quarter Ended     Percent  
    12/31/2017 12/31/2016   Change  
  Per Share Data        
   Earnings per common share       
    Basic  $   0.19   $   0.44   -56.8 %
    Diluted  $   0.19   $   0.44   -56.8 %
         
   Cash dividends  $   0.11   $   0.10   10.0 %
         
   Average common shares outstanding       
    Basic      12,325,067       10,710,164   15.1 %
    Diluted      12,371,507       10,762,445   15.0 %
         
   Common shares outstanding at period end      12,358,562       10,736,970   15.1 %
         
  Performance Ratios        
   Return on average equity    4.62 %   12.22 % -62.2 %
   Return on average tangible equity    5.36 %   13.42 % -60.1 %
   Return on average assets    0.44 %   1.07 % -58.9 %
   Net interest margin    3.65 %   3.34 % 9.3 %
   Efficiency ratio (A)    51.47 %   56.67 % -9.2 %
         

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

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)    
Annual Performance Summary -- 2017 vs 2016      
         
         
      For the Year Ended     Percent  
  Dollars in thousands   12/31/2017 12/31/2016   Change  
  Condensed Statements of Income        
   Interest income       
    Loans, including fees  $   74,908   $   56,980   31.5 %
    Securities      9,010       6,938   29.9 %
    Other      609       173   252.0 %
   Total interest income      84,527       64,091   31.9 %
   Interest expense               
    Deposits      11,210       8,964   25.1 %
    Borrowings      7,170       6,120   17.2 %
   Total interest expense      18,380       15,084   21.9 %
   Net interest income      66,147       49,007   35.0 %
   Provision for loan losses      1,250       500   150.0 %
   Net interest income after provision               
    for loan losses      64,897       48,507   33.8 %
                 
   Noninterest income               
    Insurance commissions      4,005       4,022   -0.4 %
    Trust and wealth management fees      1,863       449   314.9 %
    Service fees related to deposit accounts      6,643       4,370   52.0 %
    Realized securities (losses) gains      (14 )     1,127   -101.2 %
    Other income      1,930       1,632   18.3 %
  Total noninterest income     14,427       11,600   24.4 %
   Noninterest expense               
    Salaries and employee benefits     25,075       19,573   28.1 %
    Net occupancy expense     3,011       2,098   43.5 %
    Equipment expense     3,954       2,759   43.3 %
    Professional fees     1,367       1,515   -9.8 %
    Amortization of intangibles     1,410       247   470.9 %
    FDIC premiums     1,065       875   21.7 %
    Merger-related expense     1,589       933   70.3 %
    Foreclosed properties expense     611       414   47.6 %
    Gain on sales of foreclosed properties     (157 )     (916 ) -82.9 %
    Write-downs of foreclosed properties     885       668   32.5 %
    Litigation settlement     9,900       -   n/a  
    Other expenses     9,035       6,636   36.2 %
  Total noninterest expense     57,745       34,802   65.9 %
   Income before income taxes      21,579       25,305   -14.7 %
   Income taxes      9,664       8,008   20.7 %
   Net income  $   11,915   $   17,297   -31.1 %

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)    
Annual Performance Summary -- 2017 vs 2016      
       
      For the Year Ended     Percent  
    12/31/2017 12/31/2016   Change  
  Per Share Data        
   Earnings per common share       
    Basic  $   1.00   $   1.62   -38.3 %
    Diluted  $   1.00   $   1.61   -37.9 %
         
   Cash dividends  $   0.44   $   0.40   10.0 %
         
   Average common shares outstanding       
    Basic      11,918,390       10,689,224   11.5 %
    Diluted      11,949,245       10,716,871   11.5 %
         
   Common shares outstanding at period end      12,358,562       10,736,970   15.1 %
         
  Performance Ratios        
   Return on average equity    6.40 %   11.53 % -44.5 %
   Return on average tangible equity    7.35 %   12.27 % -40.1 %
   Return on average assets    0.59 %   1.08 % -45.4 %
   Net interest margin    3.67 %   3.39 % 8.3 %
   Efficiency ratio (A)    52.41 %   55.34 % -5.3 %
         

NOTE (A) - Computed on a tax equivalent basis excluding non-core or 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   12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
  Condensed Statements of Income (unaudited)            
   Interest income           
    Loans, including fees  $   20,031   $   19,490   $   19,717   $   15,671   $   15,780  
    Securities      2,412       2,397       2,349       1,851       1,796  
    Other      144       149       165       152       161  
   Total interest income      22,587       22,036       22,231       17,674       17,737  
   Interest expense                               
    Deposits      3,224       2,963       2,634       2,390       2,430  
    Borrowings      1,925       1,841       1,749       1,654       1,850  
   Total interest expense      5,149       4,804       4,383       4,044       4,280  
   Net interest income      17,438       17,232       17,848       13,630       13,457  
   Provision for loan losses      375       375       250       250       -  
   Net interest income after provision                               
    for loan losses      17,063       16,857       17,598       13,380       13,457  
   Noninterest income                               
    Insurance commissions      1,005       1,043       988       968       992  
    Trust and wealth management fees      578       589       595       100       91  
    Service fees related to deposit accounts      1,906       1,863       1,706       1,168       1,194  
    Realized securities gains (losses)      (71 )     26       90       (58 )     291  
    Other income      513       479       537       401       430  
  Total noninterest income     3,931       4,000       3,916       2,579       2,998  
   Noninterest expense                               
    Salaries and employee benefits     6,520       6,610       6,758       5,187       5,308  
    Net occupancy expense     772       847       826       567       522  
    Equipment expense     1,095       1,093       1,031       735       700  
    Professional fees     355       373       354       285       344  
    Amortization of intangibles     435       448       429       97       97  
    FDIC premiums     250       310       295       210       75  
    Merger-related expense     14       11       1,455       109       588  
    Foreclosed properties expense     215       171       122       104       97  
    (Gain) loss on sales of foreclosed properties      (46 )     (29 )     73       (156 )     (465 )
    Write-downs of foreclosed properties      347       91       29       418       165  
    Litigation settlement      -       -       -       9,900       -  
    Other expenses     2,389       2,522       2,564       1,560       1,961  
  Total noninterest expense     12,346       12,447       13,936       19,016       9,392  
   Income (loss) before income taxes      8,648       8,410       7,578       (3,057 )     7,063  
   Income tax expense (benefit)      6,325       2,480       2,300       (1,441 )     2,353  
   Net income (loss)  $   2,323   $   5,930   $   5,278   $   (1,616 ) $   4,710  

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)          
Five Quarter Performance Summary          
           
      For the Quarter Ended  
    12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
  Per Share Data            
   Earnings per common share           
    Basic  $   0.19   $   0.48   $   0.43   $   (0.15 ) $   0.44  
    Diluted  $   0.19   $   0.48   $   0.43   $   (0.15 ) $   0.44  
             
   Cash dividends  $   0.11   $   0.11   $   0.11   $   0.11   $   0.10  
             
   Average common shares outstanding           
    Basic      12,325,067       12,299,987       12,288,514       10,738,365       10,710,164  
    Diluted      12,371,507       12,318,959       12,299,187       10,738,365       10,762,445  
             
   Common shares outstanding at period end      12,358,562       12,311,723       12,299,726       10,750,477       10,736,970  
             
  Performance Ratios            
   Return on average equity    4.62 %   12.10 %   11.10 %   -4.11 %   12.22 %
   Return on average tangible equity    5.36 %   14.12 %   12.95 %   -4.51 %   13.42 %
   Return on average assets    0.44 %   1.14 %   1.01 %   -0.37 %   1.07 %
   Net interest margin    3.65 %   3.65 %   3.81 %   3.54 %   3.34 %
   Efficiency ratio (A)    51.47 %   53.73 %   53.00 %   51.16 %   56.67 %
             

 NOTE (A) - Computed on a tax equivalent basis excluding non-core or 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   12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
             
  Assets            
  Cash and due from banks $   9,641   $   9,220   $   9,294   $   19,326   $   4,262  
  Interest bearing deposits other banks     42,990       41,994       44,242       38,895       42,354  
  Securities     328,723       328,726       336,811       282,028       266,542  
  Loans, net     1,593,744       1,559,328       1,538,083       1,292,915       1,307,862  
  Property held for sale     21,470       22,622       23,592       23,491       24,504  
  Premises and equipment, net     34,209       34,220       33,234       26,377       23,737  
  Goodwill and other intangible assets     27,513       27,879       28,214       13,587       13,652  
  Cash surrender value of life insurance policies     41,358       41,076       41,189       39,412       39,143  
  Other assets     34,592       36,071       40,641       40,411       36,591  
    Total assets $   2,134,240   $   2,101,136   $   2,095,300   $   1,776,442   $   1,758,647  
                                 
  Liabilities and Shareholders' Equity            
  Deposits $   1,600,601   $   1,616,768   $   1,613,919   $   1,301,241   $   1,295,519  
  Short-term borrowings     250,499       202,988       205,728       228,868       224,461  
  Long-term borrowings and          
    subordinated debentures     65,340       65,344       65,348       65,804       66,259  
  Other liabilities     16,295       17,254       17,173       26,910       17,048  
  Shareholders' equity     201,505       198,782       193,132       153,619       155,360  
    Total liabilities and shareholders' equity $   2,134,240   $   2,101,136   $   2,095,300   $   1,776,442   $   1,758,647  
                                 
  Book value per common share $   16.30   $   16.15   $   15.70   $   14.29   $   14.47  
  Tangible book value per common share $   14.08   $   13.88   $   13.41   $   13.03   $   13.20  
  Tangible common equity to tangible assets   8.3 %   8.2 %   8.0 %   7.9 %   8.1 %
             

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:   SMMF)          
Regulatory Capital Ratios            
               
    12/31/2017   9/30/2017   6/30/2017   3/31/2017   12/31/2016    
Summit Financial Group, Inc.            
  CET1 Risk-based Capital 10.6 % 10.8 % 10.5 % 10.3 % 10.5 %  
  Tier 1 Risk-based Capital 11.8 % 11.9 % 11.7 % 11.5 % 11.8 %  
  Total Risk-based Capital 12.5 % 12.7 % 12.4 % 12.3 % 12.6 %  
  Tier 1 Leverage Ratio 9.4 % 9.5 % 9.2 % 9.4 % 9.4 %  
               
Summit Community Bank, Inc.            
  CET1 Risk-based Capital 11.7 % 11.8 % 11.6 % 11.6 % 11.9 %  
  Tier 1 Risk-based Capital 11.7 % 11.8 % 11.6 % 11.6 % 11.9 %  
  Total Risk-based Capital 12.5 % 12.6 % 12.4 % 12.4 % 12.7 %  
  Tier 1 Leverage Ratio 9.4 % 9.4 % 9.2 % 9.4 % 9.5 %  
               

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:   SMMF)        
Loan Composition            
               
Dollars in thousands 12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016  
               
Commercial   $   189,981   $   187,193   $   176,362   $   134,808   $   119,088  
Mortgage warehouse lines     30,757       33,525       35,068       30,217       85,966  
Commercial real estate                              
  Owner occupied     250,202       239,840       239,108       217,733       203,047  
  Non-owner occupied     484,902       464,543       455,439       401,795       381,921  
Construction and development                              
  Land and development     67,219       71,412       74,155       68,079       72,042  
  Construction       33,412       28,756       22,967       16,511       16,584  
Residential real estate                              
  Non-jumbo       354,101       355,642       355,546       266,140       265,641  
  Jumbo       62,267       61,253       63,899       60,780       65,628  
  Home equity       84,028       82,720       81,192       75,299       74,596  
Consumer       36,202       36,915       37,630       24,440       25,534  
Other       13,238       9,994       9,049       8,831       9,489  
Total loans, net of unearned fees     1,606,309       1,571,793       1,550,415       1,304,633       1,319,536  
Less allowance for loan losses     12,565       12,465       12,332       11,718       11,674  
Loans, net $   1,593,744   $   1,559,328   $   1,538,083   $   1,292,915   $   1,307,862  
                                 

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:   SMMF)        
Deposit Composition            
               
Dollars in thousands   12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016  
Non-interest bearing checking $   217,493   $   215,910   $   234,173   $   152,086   $   149,737  
Interest bearing checking     410,606       397,843       372,327       275,678       262,591  
Savings       358,168       362,653       373,439       342,548       337,348  
Time deposits       614,334       640,362       633,980       530,929       545,843  
Total deposits $   1,600,601   $   1,616,768   $   1,613,919   $   1,301,241   $   1,295,519  
                                 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)        
Asset Quality Information          
             
      For the Quarter Ended  
  Dollars in thousands   12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
             
  Gross loan charge-offs $   550   $   309   $   114   $   315   $   400  
  Gross loan recoveries     (276 )     (67 )     (478 )     (108 )     (456 )
    Net loan charge-offs (recoveries) $   274   $   242   $   (364 ) $   207   $   (56 )
                                 
  Net loan charge-offs to average loans (annualized)   0.07 %   0.06 %   -0.09 %   0.06 %   -0.02 %
                                 
  Allowance for loan losses $   12,565   $   12,465   $   12,332   $   11,718   $   11,674  
  Allowance for loan losses as a percentage          
    of period end loans   0.78 %   0.79 %   0.79 %   0.90 %   0.88 %
                                 
  Nonperforming assets:          
    Nonperforming loans          
    Commercial $   696   $   757   $   786   $   226   $   298  
    Commercial real estate     3,164       2,773       2,051       4,734       4,844  
    Residential construction and development     3,569       3,931       3,613       3,936       4,465  
    Residential real estate     7,656       8,082       6,860       5,886       4,815  
    Consumer     238       529       391       162       152  
  Total nonperforming loans     15,323       16,072       13,701       14,944       14,574  
    Foreclosed properties                              
    Commercial real estate     1,789       1,988       2,126       1,749       1,749  
    Commercial construction and development     7,392       7,392       7,527       8,276       8,610  
    Residential construction and development     11,182       11,852       12,402       12,635       13,265  
    Residential real estate     1,107       1,390       1,537       831       880  
  Total foreclosed properties     21,470       22,622       23,592       23,491       24,504  
    Other repossessed assets     68       12       57       12       12  
  Total nonperforming assets $   36,861   $   38,706   $   37,350   $   38,447   $   39,090  
                                 
  Nonperforming loans to period end loans   0.95 %   1.02 %   0.88 %   1.15 %   1.10 %
  Nonperforming assets to period end assets   1.73 %   1.84 %   1.78 %   2.16 %   2.22 %
             
  Troubled debt restructurings          
    Performing $   28,347   $   28,304   $   26,472   $   28,183   $   28,066  
    Nonperforming     26       760       464       719       564  
  Total troubled debt restructurings $   28,373   $   29,064   $   26,936   $   28,902   $   28,630  

 

Loans Past Due 30-89 Days          
      For the Quarter Ended  
  Dollars in thousands   12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
             
  Commercial $   586   $   378   $   470   $   162   $   175
  Commercial real estate     1,082       944       976       2,758       434
  Construction and development     1,127       238       308       291       552
  Residential real estate     7,236       6,260       6,943       2,924       5,517
  Consumer     504       419       548       155       375
  Other     38       92       49       17       14
    Total $   10,573   $   8,331   $   9,294   $   6,307   $   7,067
                               

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)            
Average Balance Sheet, Interest Earnings & Expenses and Average Rates          
Q4 2017 vs Q4 2016                
  Q4 2017   Q4 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 $   1,562,978   $   19,879   5.05 %   $   1,308,418   $   15,650   4.76 %  
  Tax-exempt     16,902       234   5.49 %       13,845       195   5.60 %  
  Securities                
  Taxable     202,377       1,328   2.60 %       191,951       1,111   2.30 %  
  Tax-exempt     142,641       1,668   4.64 %       89,745       1,039   4.61 %  
  Interest bearing deposits other banks                
  and Federal funds sold     42,021       144   1.36 %       49,341       161   1.30 %  
Total interest earning assets     1,966,919       23,253   4.69 %       1,653,300       18,156   4.37 %  
                 
Noninterest earning assets                
  Cash & due from banks     9,753             4,650        
  Premises & equipment     34,263             23,616        
  Other assets     111,596             96,165        
  Allowance for loan losses     (12,628 )           (11,905 )      
  Total assets $   2,109,903         $   1,765,826        
                               
  LIABILITIES AND SHAREHOLDERS' EQUITY              
                 
Liabilities                
Interest bearing liabilities                
  Interest bearing                 
  demand deposits $   405,307   $   447   0.44 %   $   256,307   $   128   0.20 %  
  Savings deposits     360,630       684   0.75 %       335,658       633   0.75 %  
  Time deposits     629,871       2,093   1.32 %       542,602       1,669   1.22 %  
  Short-term borrowings     220,027       1,240   2.24 %       221,200       954   1.72 %  
  Long-term borrowings and                
  subordinated debentures     65,342       685   4.16 %       85,699       896   4.16 %  
Total interest bearing liabilities     1,681,177       5,149   1.22 %       1,441,466       4,280   1.18 %  
                 
Noninterest bearing liabilities                
  Demand deposits     214,624             150,318        
  Other liabilities     12,886             19,902        
  Total liabilities     1,908,687             1,611,686        
                 
Shareholders' equity     201,216             154,140        
  Total liabilities and                              
  shareholders' equity $   2,109,903         $   1,765,826        
                                   
NET INTEREST EARNINGS   $   18,104         $   13,876      
                               
NET INTEREST MARGIN     3.65 %       3.34 %  
                     

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:   SMMF)            
Average Balance Sheet, Interest Earnings & Expenses and Average Rates          
Q4 2017 vs Q3 2017                
  Q4 2017   Q3 2017  
  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 $   1,562,978   $   19,879   5.05 %   $   1,539,945   $   19,387   4.99 %  
  Tax-exempt     16,902       234   5.49 %       16,314       158   3.84 %  
  Securities                
  Taxable     202,377       1,328   2.60 %       198,913       1,283   2.56 %  
  Tax-exempt     142,641       1,668   4.64 %       145,599       1,714   4.67 %  
  Interest bearing deposits other banks                
  and Federal funds sold     42,021       144   1.36 %       42,926       149   1.38 %  
Total interest earning assets     1,966,919       23,253   4.69 %       1,943,697       22,691   4.63 %  
                 
Noninterest earning assets                
  Cash & due from banks     9,753             9,591        
  Premises & equipment     34,263             33,667        
  Other assets     111,596             113,723        
  Allowance for loan losses     (12,628 )           (12,418 )      
  Total assets $   2,109,903         $   2,088,260        
                               
  LIABILITIES AND SHAREHOLDERS' EQUITY                  
                 
Liabilities                
Interest bearing liabilities                
  Interest bearing                 
  demand deposits $   405,307   $   447   0.44 %   $   384,539   $   323   0.33 %  
  Savings deposits     360,630       684   0.75 %       365,150       637   0.69 %  
  Time deposits     629,871       2,093   1.32 %       636,424       2,003   1.25 %  
  Short-term borrowings     220,027       1,240   2.24 %       205,536       1,160   2.24 %  
  Long-term borrowings and                
  subordinated debentures     65,342       685   4.16 %       65,346       681   4.13 %  
Total interest bearing liabilities     1,681,177       5,149   1.22 %       1,656,995       4,804   1.15 %  
                 
Noninterest bearing liabilities                
  Demand deposits     214,624             217,760        
  Other liabilities     12,886             17,414        
  Total liabilities     1,908,687             1,892,169        
                 
Shareholders' equity      201,216             196,091        
  Total liabilities and                              
  shareholders' equity $   2,109,903         $   2,088,260        
                               
NET INTEREST EARNINGS   $   18,104         $   17,887      
                               
NET INTEREST MARGIN     3.65 %       3.65 %  
                     

 

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 $   1,480,601   $   74,365   5.02 %   $   1,177,445   $   56,439   4.79 %  
  Tax-exempt     14,899       835   5.60 %       14,628       820   5.61 %  
  Securities                
  Taxable     200,596       5,071   2.53 %       202,795       4,395   2.17 %  
  Tax-exempt     129,342       6,060   4.69 %       79,571       3,853   4.84 %  
  Interest bearing deposits other banks                
  and Federal funds sold     43,400       609   1.40 %       19,211       173   0.90 %  
Total interest earning assets     1,868,838       86,940   4.65 %       1,493,650       65,680   4.40 %  
                 
Noninterest earning assets                
  Cash & due from banks     8,492             3,968        
  Premises & equipment     31,750             21,858        
  Other assets     109,456             90,957        
  Allowance for loan losses     (12,196 )           (10,836 )      
  Total assets $   2,006,340         $   1,599,597        
                               
  LIABILITIES AND SHAREHOLDERS' EQUITY              
                 
Liabilities                
Interest bearing liabilities                
  Interest bearing                 
  demand deposits $   358,225   $   1,169   0.33 %   $   220,708   $   376   0.17 %  
  Savings deposits     363,949       2,563   0.70 %       306,312       2,296   0.75 %  
  Time deposits     609,156       7,478   1.23 %       491,652       6,292   1.28 %  
  Short-term borrowings     205,743       4,473   2.17 %       190,876       2,288   1.20 %  
  Long-term borrowings and                
  subordinated debentures     65,629       2,697   4.11 %       92,343       3,832   4.15 %  
      1,602,702       18,380   1.15 %       1,301,891       15,084   1.16 %  
Noninterest bearing liabilities                
  Demand deposits     200,707             128,894        
  Other liabilities     16,669             18,795        
  Total liabilities     1,820,078             1,449,580        
                 
Shareholders' equity     186,262             150,017        
  Total liabilities and                              
  shareholders' equity $   2,006,340         $   1,599,597        
                               
NET INTEREST EARNINGS   $   68,560         $   50,596      
                               
NET INTEREST MARGIN     3.67 %       3.39 %  
                             

 

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

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