MOOREFIELD, W.Va., Oct. 26, 2017 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ:SMMF) today reported third quarter 2017 net income of $5.93 million, or $0.48 per diluted share, compared to $4.28 million, or $0.40 per diluted share, for the third quarter of 2016, representing an increase of 38.5 percent, or 20.0 percent per diluted share.

For the nine months ended September 30, 2017, Summit recorded net income of $9.59 million, or $0.81 per diluted share, compared with $12.59 million, or $1.18 per diluted share, for the comparable 2016 nine-month period, representing a decrease of 23.8 percent or 31.4 percent per diluted share. The 2017 decrease in nine-month period earnings is principally attributable to a legal settlement during first quarter which reduced earnings by $0.54 per diluted share.

Highlights for Q3 2017 include:

  • Loans, excluding mortgage warehouse lines of credit, grew $22.9 million during the quarter, or 6.1 percent (on an annualized basis); loans, excluding mortgage warehouse lines of credit and First Century Bankshares, Inc.’s (“FCB”) purchased loan portfolio, have grown $75.7 million, or 8.2 percent (annualized), since year-end 2016;
  • Total revenues increased 43.6 percent compared to the year ago quarter, principally as result of the acquisitions of FCB and Highland County Bankshares, Inc. (“HCB”), but decreased 2.4 percent compared to the linked-quarter primarily as result of lower net interest income;
  • Net interest margin increased 33 basis points compared to Q3 2016, reflecting FCB’s higher yielding loan portfolio and lower cost of funds, but declined 16 basis points compared to Q2 2017, as the result of lower yields on loans coupled with rising funding costs.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit’s record quarterly earnings in Q3 2017, but more importantly, the 20 percent growth in diluted earnings per share over that earned in Q3 a year-ago. These results are primarily attributable to our two acquisitions which closed during this timeframe, and they validate 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.”

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 and nine months ended September 30, 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 $1.58 million during first nine months of 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 three and nine months ended September 30, 2017 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.

In conjunction with these acquisitions, Summit recognized net accretion income related to loan and time deposit fair value acquisition accounting adjustments totaling $226,000 and $76,000 in Q3 2017 and $784,000 and $167,000 for the nine months ended September 30, 2017, respectively.

Results of Operations

Total revenue for third quarter 2017, consisting of net interest income and noninterest income, grew 43.6 percent to $21.2 million, principally as result of the FCB and HCB acquisitions, compared to $14.8 million for the third quarter 2016. For the year-to-date period ended September 30, 2017, total revenue was $59.2 million compared to $44.2 million for the same period of 2016, representing a 34.1 percent increase.

For the third quarter of 2017, net interest income was $17.2 million, an increase of 43.2 percent from the $12.0 million reported in the prior-year third quarter and decreased $616,000 compared to the linked-quarter. The net interest margin for third quarter 2017 was 3.65 percent compared to 3.32 percent for the year-ago quarter, and 3.81 percent for Q2 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 3.59 percent for Q3 2017 and 3.61 percent for first nine months 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 third quarter 2017 was $4.0 million compared to $2.75 million for the comparable period of 2016. Excluding realized securities gains, noninterest income was $3.97 million for third quarter 2017, compared to $2.69 million reported for third quarter 2016 and $3.83 million for the linked-quarter.

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

Q3 2017 total noninterest expense increased 47.8% to $12.45 million compared to $8.42 million for the prior-year third quarter principally due to the acquisitions of FCB and HCB. Noninterest expense for the first nine months of 2017 increased 78.7% compared to the first nine months 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 nine months of 2017 increased 39.7 percent to $35.5 million compared to $25.4 million for the first nine months of 2016, principally as result of the acquisitions of HCB and FCB.

Balance Sheet

At September 30, 2017, total assets were $2.10 billion, an increase of $342.5 million, or 19.5 percent since December 31, 2016. Total loans, net of unearned fees and allowance for loan losses, were $1.56 billion at September 30, 2017, up $251.5 million, or 19.2 percent, from the $1.31 billion reported at year-end 2016.  Loans, excluding mortgage warehouse lines of credit, grew $22.9 million during the quarter, or 6.1 percent (on an annualized basis), and loans, excluding mortgage warehouse lines of credit and FCB’s purchased loan portfolio, have grown $75.7 million, or 8.2 percent (annualized), year-to-date.

At September 30, 2017, deposits were $1.62 billion, an increase of $321.2 million, or 24.8 percent, since year end 2016. During first nine months of 2017, checking deposits increased $201.4 million or 48.9 percent, time deposits grew by $94.5 million or 17.3 percent and savings deposits increased $25.3 million or 7.5 percent.

Shareholders’ equity was $198.8 million as of September 30, 2017 compared to $155.4 million at December 31, 2016 and $153.8 million at September 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 $13.88 at September 30, 2017 compared to $13.20 at December 31, 2016 and $13.69 at September 30, 2016. Summit had 12,311,723 outstanding common shares at Q3 2017 quarter end compared to 10,736,970 at year end 2016.

Asset Quality

As of September 30, 2017, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $38.7 million, or 1.84 percent of assets. This compares to $37.4 million, or 1.78 percent of assets at the linked quarter-end, and $39.2 million, or 2.36 percent of assets, at third quarter-end 2016.

Third quarter 2017 net loan charge-offs were $242,000, or 0.06 percent of average loans annualized; while we added $375,000 to the allowance for loan losses through the provision for loan losses, representing a 50 percent increase over the $250,000 provision recorded in Q2 2017 primarily as result of our loan growth. The allowance for loan losses stood at 0.79 percent of total loans at September 30, 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 September 30, 2017 and December 31, 2016 would have been 0.93 percent and 0.92 percent, 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 -- Q3 2017 vs Q3 2016  
   
  For the Quarter Ended  Percent 
 Dollars in thousands 9/30/20179/30/2016 Change 
 Condensed Statements of Income    
Interest income   
Loans, including fees$19,490 $14,142 37.8%
Securities 2,397  1,759 36.3%
Other   149    5 n/a 
Total interest income   22,036    15,906 38.5%
Interest expense    
Deposits 2,963  2,209 34.1%
Borrowings   1,841    1,660 10.9%
Total interest expense   4,804    3,869 24.2%
Net interest income 17,232  12,037 43.2%
Provision for loan losses   375    - n/a 
Net interest income after provision   
for loan losses   16,857    12,037 40.0%
    
Noninterest income   
Insurance commissions 1,043  1,016 2.7%
Trust and wealth management fees 589  126 367.5%
Service fees related to deposit accounts 1,863  1,138 63.7%
Realized securities gains 26  61 -57.4%
Other income   479    408 17.4%
Total noninterest income   4,000    2,749 45.5%
Noninterest expense   
Salaries and employee benefits 6,610  4,819 37.2%
Net occupancy expense 847  525 61.3%
Equipment expense 1,093  716 52.7%
Professional fees 373  270 38.1%
Amortization of intangibles 448  50 796.0%
FDIC premiums 310  200 55.0%
Merger-related expense 11  80 -86.3%
Foreclosed properties expense 171  100 71.0%
Gain on sales of foreclosed properties (29) (169)-82.8%
Write-downs of foreclosed properties 91  134 -32.1%
Other expenses   2,522    1,694 48.9%
Total noninterest expense   12,447    8,419 47.8%
Income before income taxes 8,410  6,367 32.1%
Income taxes   2,480    2,086 18.9%
Net income$  5,930 $  4,281 38.5%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)  
Quarterly Performance Summary -- Q3 2017 vs Q3 2016  
   
  For the Quarter Ended  Percent 
 9/30/20179/30/2016 Change 
 Per Share Data    
 Earnings per common share    
  Basic $  0.48 $  0.40 20.0%
  Diluted $  0.48 $  0.40 20.0%
    
 Cash dividends $  0.11 $  0.10 10.0%
    
 Average common shares outstanding    
  Basic    12,299,987    10,692,423 15.0%
  Diluted    12,318,959    10,727,140 14.8%
    
 Common shares outstanding at period end      12,311,723    10,701,841 15.0%
    
 Performance Ratios    
 Return on average equity  12.10% 11.29%7.2%
 Return on average tangible equity  14.12% 11.86%19.1%
 Return on average assets  1.14% 1.08%5.6%
 Net interest margin  3.65% 3.32%9.9%
 Efficiency ratio (A)  53.73% 53.30%0.8%

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

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)  
Nine Month Performance Summary -- 2017 vs 2016   
    
  For the Nine Months Ended  Percent 
 Dollars in thousands 9/30/20179/30/2016 Change 
 Condensed Statements of Income    
 Interest income    
  Loans, including fees $  54,878 $  41,200 33.2%
  Securities    6,597    5,141 28.3%
  Other    466    13 n/a 
 Total interest income    61,941    46,354 33.6%
 Interest expense    
  Deposits    7,987    6,533 22.3%
  Borrowings    5,245    4,271 22.8%
 Total interest expense    13,232    10,804 22.5%
 Net interest income    48,709    35,550 37.0%
 Provision for loan losses    875    500 75.0%
 Net interest income after provision    
  for loan losses    47,834    35,050 36.5%
    
 Noninterest income    
  Insurance commissions    3,000    3,030 -1.0%
  Trust and wealth management fees    1,284    358 258.7%
  Service fees related to deposit accounts    4,737    3,175 49.2%
  Realized securities gains    58    836 -93.1%
  Other income    1,417    1,202 17.9%
Total noninterest income   10,496    8,601 22.0%
 Noninterest expense    
  Salaries and employee benefits   18,555    14,265 30.1%
  Net occupancy expense   2,239    1,576 42.1%
  Equipment expense   2,859    2,059 38.9%
  Professional fees   1,012    1,171 -13.6%
  Amortization of intangibles   974    150 549.3%
  FDIC premiums   815    800 1.9%
  Merger-related expense   1,575    345 n/a 
  Foreclosed properties expense   397    317 25.2%
  Gain on sales of foreclosed properties   (111)   (451)-75.4%
  Write-downs of foreclosed properties   538    503 7.0%
  Litigation settlement   9,900    - n/a 
  Other expenses   6,646    4,675 42.2%
Total noninterest expense   45,399    25,410 78.7%
 Income before income taxes    12,931    18,241 -29.1%
 Income taxes    3,339    5,655 -41.0%
 Net income $  9,592 $  12,586 -23.8%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)  
Nine Month Performance Summary -- 2017 vs 2016   
   
  For the Nine Months Ended  Percent 
 9/30/20179/30/2016 Change 
 Per Share Data    
 Earnings per common share    
  Basic $  0.81 $  1.18 -31.4%
  Diluted $  0.81 $  1.18 -31.4%
    
 Cash dividends $  0.33 $  0.30 10.0%
    
 Average common shares outstanding    
  Basic    11,781,342    10,682,129 10.3%
  Diluted    11,807,002    10,692,346 10.4%
    
 Common shares outstanding at period end    12,311,723    10,701,841 15.0%
    
 Performance Ratios    
 Return on average equity  7.06% 11.29%-37.5%
 Return on average tangible equity  8.08% 11.88%-32.0%
 Return on average assets  0.65% 1.09%-40.4%
 Net interest margin  3.67% 3.40%7.9%
 Efficiency ratio (A)  52.76% 54.84%-3.8%

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 9/30/20176/30/20173/31/201712/31/20169/30/2016
 Condensed Statements of Income (unaudited)      
Interest income     
Loans, including fees$19,490 $19,717 $15,671  $15,780 $14,142 
Securities 2,397  2,349  1,851   1,796  1,759 
Other   149    165    152     161    5 
Total interest income   22,036    22,231    17,674     17,737    15,906 
Interest expense     
Deposits 2,963  2,634  2,390   2,430  2,209 
Borrowings   1,841    1,749    1,654     1,850    1,660 
Total interest expense   4,804    4,383    4,044     4,280    3,869 
Net interest income 17,232  17,848  13,630   13,457  12,037 
Provision for loan losses   375    250    250     -    - 
Net interest income after provision     
for loan losses   16,857    17,598    13,380     13,457    12,037 
Noninterest income     
Insurance commissions 1,043  988  968   992  1,016 
Trust and wealth management fees 589  595  100   111  252 
Service fees related to deposit accounts 1,863  1,706  1,168   1,194  1,138 
Realized securities gains (losses) 26  90  (58)  291  61 
Other income   479    537    401     410    282 
Total noninterest income   4,000    3,916    2,579     2,998    2,749 
Noninterest expense     
Salaries and employee benefits 6,610  6,758  5,187   5,308  4,819 
Net occupancy expense 847  826  567   522  525 
Equipment expense 1,093  1,031  735   700  716 
Professional fees 373  354  285   344  270 
Amortization of intangibles 448  429  97   97  50 
FDIC premiums 310  295  210   75  200 
Merger-related expense 11  1,455  109   588  80 
Foreclosed properties expense 171  122  104   97  100 
(Gain) loss on sales of foreclosed properties (29) 73  (156)  (465) (169)
Write-downs of foreclosed properties 91  29  418   165  134 
Litigation settlement -  -  9,900   -  - 
Other expenses   2,522    2,564    1,560     1,961    1,694 
Total noninterest expense   12,447    13,936    19,016     9,392    8,419 
Income (loss) before income taxes 8,410  7,578  (3,057)  7,063  6,367 
Income tax expense (benefit)   2,480    2,300    (1,441)    2,353    2,086 
Net income (loss)$  5,930 $  5,278 $  (1,616) $  4,710 $  4,281 


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)     
Five Quarter Performance Summary     
     
  For the Quarter Ended 
 9/30/20176/30/20173/31/201712/31/20169/30/2016
 Per Share Data      
 Earnings per common share      
  Basic $  0.48 $  0.43 $  (0.15)$  0.44 $  0.40 
  Diluted $  0.48 $  0.43 $  (0.15)$  0.44 $  0.40 
      
 Cash dividends $  0.11 $  0.11 $  0.11 $  0.10 $  0.10 
      
 Average common shares outstanding      
  Basic    12,299,987    12,288,514    10,738,365    10,710,164    10,692,423 
  Diluted    12,318,959    12,299,187    10,738,365    10,762,445    10,727,140 
      
 Common shares outstanding at period end    12,311,723    12,299,726    10,750,477    10,736,970    10,701,841 
      
 Performance Ratios      
 Return on average equity  12.10% 11.10% -4.11% 12.22% 11.29%
 Return on average tangible equity  14.12% 12.95% -4.51% 13.42% 11.86%
 Return on average assets  1.14% 1.01% -0.37% 1.07% 1.08%
 Net interest margin  3.65% 3.81% 3.54% 3.34% 3.32%
 Efficiency ratio (A)  53.73% 53.00% 51.16% 56.67% 53.30%

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  9/30/20176/30/20173/31/201712/31/20169/30/2016
      
 Assets      
Cash and due from banks$  9,220 $  9,294 $  19,326 $  4,262 $  25,067 
Interest bearing deposits other banks   41,994    44,242    38,895    42,354    9,432 
Securities   328,726    336,811    282,028    266,542    262,102 
Loans, net   1,559,328    1,538,083    1,292,915    1,307,862    1,234,605 
Property held for sale   22,622    23,592    23,491    24,504    24,767 
Premises and equipment, net   34,220    33,234    26,377    23,737    21,802 
Goodwill and other intangible assets   27,879    28,214    13,587    13,652    7,348 
Cash surrender value of life insurance policies   41,076    41,189    39,412    39,143    38,504 
Other assets   36,071    40,641    40,411    36,591    34,009 
  Total assets$  2,101,136 $  2,095,300 $  1,776,442 $  1,758,647 $  1,657,636 
      
 Liabilities and Shareholders' Equity      
Deposits$  1,616,768 $  1,613,919 $  1,301,241 $  1,295,519 $  1,156,785 
Short-term borrowings   202,988    205,728    228,868    224,461    234,657 
Long-term borrowings and     
  subordinated debentures   65,344    65,348    65,804    66,259    93,735 
Other liabilities   17,254    17,173    26,910    17,048    18,640 
Shareholders' equity   198,782    193,132    153,619    155,360    153,819 
  Total liabilities and shareholders' equity$  2,101,136 $  2,095,300 $  1,776,442 $  1,758,647 $  1,657,636 
      
Book value per common share$  16.15 $  15.70 $  14.29 $  14.47 $  14.37 
Tangible book value per common share$  13.88 $  13.41 $  13.03 $  13.20 $  13.69 
Tangible common equity to tangible assets 8.2% 8.0% 7.9% 8.1% 8.9%


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)    
Regulatory Capital Ratios     
      
 9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Summit Financial Group, Inc.     
CET1 Risk-based Capital10.8%10.5%10.3%10.5%11.1%
Tier 1 Risk-based Capital11.9%11.7%11.5%11.8%12.4%
Total Risk-based Capital12.7%12.4%12.3%12.6%13.3%
Tier 1 Leverage Ratio9.5%9.2%9.4%9.4%10.4%
      
Summit Community Bank, Inc.     
CET1 Risk-based Capital11.8%11.6%11.6%11.9%12.5%
Tier 1 Risk-based Capital11.8%11.6%11.6%11.9%12.5%
Total Risk-based Capital12.6%12.4%12.4%12.7%13.4%
Tier 1 Leverage Ratio9.4%9.2%9.4%9.5%10.5% 


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)   
Loan Composition     
      
Dollars in thousands9/30/20176/30/20173/31/201712/31/20169/30/2016
      
Commercial$  187,193 $  176,362 $  134,808 $  119,088 $  110,466
Mortgage warehouse lines   33,525    35,068    30,217    85,966    108,983
Commercial real estate     
  Owner occupied   239,840    239,108    217,733    203,047    192,254
  Non-owner occupied   464,543    455,439    401,795    381,921    367,196
Construction and development     
  Land and development   71,412    74,155    68,079    72,042    65,430
  Construction   28,756    22,967    16,511    16,584    11,276
Residential real estate     
  Non-jumbo   355,642    355,546    266,140    265,641    228,777
  Jumbo   61,253    63,899    60,780    65,628    57,276
  Home equity   82,720    81,192    75,299    74,596    75,161
Consumer   36,915    37,630    24,440    25,534    19,756
Other   9,994    9,049    8,831    9,489    9,649
Total loans, net of unearned fees      1,571,793    1,550,415    1,304,633    1,319,536    1,246,224
Less allowance for loan losses   12,465    12,332    11,718    11,674    11,619
Loans, net$  1,559,328 $  1,538,083 $  1,292,915 $  1,307,862 $  1,234,605


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)   
Deposit Composition     
      
Dollars in thousands9/30/20176/30/20173/31/201712/31/20169/30/2016
Non-interest bearing checking $215,910 $234,173 $152,086 $149,737 $122,652
Interest bearing checking 397,843  372,327  275,678  262,591  212,172
Savings 362,653  373,439  342,548  337,348  321,563
Time deposits   640,362    633,980    530,929    545,843    500,398
Total deposits$  1,616,768 $  1,613,919 $  1,301,241 $  1,295,519 $  1,156,785


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)    
Asset Quality Information     
      
  For the Quarter Ended 
 Dollars in thousands 9/30/20176/30/20173/31/201712/31/20169/30/2016
      
Gross loan charge-offs$  309  $  114  $  315  $  400  $  331 
Gross loan recoveries   (67)    (478)    (108)    (456)    (573)
  Net loan charge-offs (recoveries)$  242  $  (364) $  207  $  (56) $  (242)
      
Net loan charge-offs to average loans (annualized)    0.06%  -0.09%  0.06%  -0.02%  -0.09%
Allowance for loan losses$  12,465  $  12,332  $  11,718  $  11,674  $  11,619 
Allowance for loan losses as a percentage     
  of period end loans 0.79%  0.79%  0.90%  0.88%  0.93%
Nonperforming assets:     
  Nonperforming loans     
  Commercial$  757  $  786  $  226  $  298  $  846 
  Commercial real estate   2,773     2,051     4,734     4,844     4,867 
  Residential construction and development   3,931     3,613     3,936     4,465     4,360 
  Residential real estate   8,082     6,860     5,886     4,815     4,174 
  Consumer   529     391     162     152     169 
Total nonperforming loans   16,072     13,701     14,944     14,574     14,416 
  Foreclosed properties     
  Commercial real estate   1,988     2,126     1,749     1,749     1,749 
  Commercial construction and development   7,392     7,527     8,276     8,610     8,664 
  Residential construction and development   11,852     12,402     12,635     13,265     13,741 
  Residential real estate   1,390     1,537     831     880     613 
Total foreclosed properties   22,622     23,592     23,491     24,504     24,767 
  Other repossessed assets   12     57     12     12     12 
Total nonperforming assets$  38,706  $  37,350  $  38,447  $  39,090  $  39,195 
      
Nonperforming loans to period end loans 1.02%  0.88%  1.15%  1.10%  1.16%
Nonperforming assets to period end assets 1.84%  1.78%  2.16%  2.22%  2.36%
      
Troubled debt restructurings     
  Performing$  28,304  $  26,472  $  28,183  $  28,066  $  28,287 
  Nonperforming   760     464     719     564     863 
Total troubled debt restructurings$  29,064  $  26,936  $  28,902  $  28,630  $  29,150 


Loans Past Due 30-89 Days     
  For the Quarter Ended 
 In thousands   9/30/2017  6/30/2017  3/31/2017  12/31/2016  9/30/2016
      
Commercial$378 $470 $162 $175 $405
Commercial real estate 944  976  2,758  434  626
Construction and development 238  308  291  552  235
Residential real estate 6,260  6,943  2,924  5,517  2,941
Consumer 419  548  155  375  144
Other   92    49    17    14    13
Total$  8,331 $  9,294 $  6,307 $  7,067 $  4,364


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)     
Average Balance Sheet, Interest Earnings & Expenses and Average Rates     
Q3 2017 vs Q3 2016       
 Q3 2017 Q3 2016
 AverageEarnings /Yield / AverageEarnings /Yield /
Dollars in thousandsBalancesExpenseRate   BalancesExpenseRate
        
ASSETS       
Interest earning assets       
  Loans, net of unearned interest       
  Taxable$  1,539,945  $  19,387 4.99% $  1,187,205  $  14,008 4.69%
  Tax-exempt   16,314     158 3.84%    14,300     202 5.62%
  Securities       
  Taxable   198,913     1,283 2.56%    198,411     1,139 2.28%
  Tax-exempt   145,599     1,714 4.67%    77,489     941 4.83%
  Interest bearing deposits other banks       
  and Federal funds sold   42,926     149 1.38%    10,029     5 0.20%
Total interest earning assets   1,943,697     22,691 4.63%    1,487,434     16,295 4.36%
        
Noninterest earning assets       
  Cash & due from banks   9,591        3,938    
  Premises & equipment   33,667        21,613    
  Other assets   113,723        87,636    
  Allowance for loan losses   (12,418)       (11,567)   
  Total assets$  2,088,260     $  1,589,054    
        
 LIABILITIES AND SHAREHOLDERS' EQUITY      
        
Liabilities       
Interest bearing liabilities       
  Interest bearing        
  demand deposits$  384,539  $  323 0.33% $  211,264  $  85 0.16%
  Savings deposits   365,150     637 0.69%    316,358     608 0.76%
  Time deposits   636,424     2,003 1.25%    481,060     1,516 1.25%
  Short-term borrowings   205,536     1,160 2.24%    189,760     675 1.42%
  Long-term borrowings and       
  subordinated debentures   65,346     681 4.13%    94,106     985 4.16%
Total interest bearing liabilities   1,656,995     4,804 1.15%    1,292,548     3,869 1.19%
        
Noninterest bearing liabilities       
  Demand deposits   217,760        124,490    
  Other liabilities   17,414        20,280    
  Total liabilities   1,892,169        1,437,318    
        
Shareholders' equity   196,091        151,736    
  Total liabilities and       
  shareholders' equity$  2,088,260     $  1,589,054    
        
NET INTEREST EARNINGS $  17,887    $  12,426  
        
NET INTEREST MARGIN  3.65%   3.32%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)     
Average Balance Sheet, Interest Earnings & Expenses and Average Rates    
Q3 2017 vs Q2 2017       
 Q3 2017 Q2 2017
 AverageEarnings /Yield / AverageEarnings /Yield /
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate
        
ASSETS       
Interest earning assets       
  Loans, net of unearned  interest       
    Taxable$  1,539,945  $  19,387 4.99% $  1,537,317  $  19,550 5.10%
    Tax-exempt   16,314     158 3.84%    13,030     257 7.91%
  Securities       
    Taxable   198,913     1,283 2.56%    214,601     1,330 2.49%
    Tax-exempt   145,599     1,714 4.67%    133,130     1,568 4.72%
  Interest bearing deposits other banks        
       and Federal funds sold   42,926     149 1.38%    47,937     165 1.38%
Total interest earning assets   1,943,697     22,691 4.63%    1,946,015     22,870 4.71%
        
Noninterest earning assets       
  Cash & due from banks   9,591        10,101    
  Premises & equipment   33,667        34,441    
  Other assets   113,723        115,728    
  Allowance for loan losses   (12,418)       (11,966)   
    Total assets$  2,088,260     $  2,094,319    
        
 LIABILITIES AND SHAREHOLDERS' EQUITY      
        
Liabilities       
Interest bearing liabilities       
  Interest bearing        
    demand deposits$  384,539  $  323 0.33% $  378,350  $  252 0.27%
  Savings deposits   365,150     637 0.69%    389,847     616 0.63%
  Time deposits   636,424     2,003 1.25%    628,358     1,766 1.13%
  Short-term borrowings   205,536     1,160 2.24%    200,209     1,079 2.16%
  Long-term borrowings and       
    subordinated debentures   65,346     681 4.13%    65,692     670 4.09%
Total interest bearing liabilities   1,656,995     4,804 1.15%    1,662,456     4,383 1.06%
        
Noninterest bearing liabilities       
  Demand deposits   217,760        221,245    
  Other liabilities   17,414        20,490    
    Total liabilities   1,892,169        1,904,191    
        
Shareholders' equity    196,091        190,128    
  Total liabilities and       
   shareholders' equity$  2,088,260     $  2,094,319    
        
NET INTEREST EARNINGS $  17,887    $  18,487  
        
NET INTEREST MARGIN  3.65%   3.81%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)     
Average Balance Sheet, Interest Earnings & Expenses and Average Rates    
YTD 2017 vs YTD 2016       
  
 YTD 2017 YTD 2016
 AverageEarnings /Yield / AverageEarnings /Yield /
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate
        
ASSETS       
Interest earning assets       
  Loans, net of unearned  interest       
  Taxable$  1,452,840  $  54,487 5.01% $  1,134,463  $  40,788 4.80%
  Tax-exempt   14,223     602 5.66%    14,890     624 5.60%
  Securities       
  Taxable   199,995     3,742 2.50%    206,437     3,284 2.12%
  Tax-exempt   124,860     4,392 4.70%    76,155     2,814 4.94%
  Interest bearing deposits other banks       
  and Federal funds sold   43,862     466 1.42%    9,093     13 0.19%
Total interest earning assets   1,835,780     63,689 4.64%    1,441,038     47,523 4.41%
        
Noninterest earning assets       
  Cash & due from banks   8,071        3,819    
  Premises & equipment   30,904        21,575    
  Other assets   108,783        89,013    
  Allowance for loan losses   (12,051)       (11,517)   
  Total assets$  1,971,487     $  1,543,928    
        
 LIABILITIES AND SHAREHOLDERS' EQUITY      
        
Liabilities       
Interest bearing liabilities       
  Interest bearing        
  demand deposits$  342,358  $  722 0.28% $  208,755  $  248 0.16%
  Savings deposits   365,068     1,879 0.69%    296,458     1,663 0.75%
  Time deposits   602,175     5,386 1.20%    474,691     4,622 1.30%
  Short-term borrowings   200,929     3,233 2.15%    180,694     1,334 0.99%
  Long-term borrowings and       
  subordinated debentures   65,725     2,012 4.09%    94,574     2,937 4.15%
    1,576,255     13,232 1.12%    1,255,172     10,804 1.15%
Noninterest bearing liabilities       
  Demand deposits   196,019        121,701    
  Other liabilities   17,990        18,423    
  Total liabilities   1,790,264        1,395,296    
        
Shareholders' equity   181,223        148,632    
  Total liabilities and       
  shareholders' equity$  1,971,487     $  1,543,928    
        
NET INTEREST EARNINGS $  50,457    $  36,719  
        
NET INTEREST MARGIN  3.67%   3.40%


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