Summit Financial Group Reports Fourth Quarter and Full Year 2017 Results

Q4 2017 Diluted EPS $0.19 compared to $0.48 for Q3 2017 and $0.44 for Q4 2016

Print
| Source: Summit Financial Group, Inc.

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 12/31/201712/31/2016 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 
  12/31/201712/31/2016 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 12/31/201712/31/2016 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 
  12/31/201712/31/2016 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 12/31/20179/30/20176/30/20173/31/201712/31/2016
 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 
  12/31/20179/30/20176/30/20173/31/201712/31/2016
 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 12/31/20179/30/20176/30/20173/31/201712/31/2016
       
 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 Capital10.6%10.8%10.5%10.3%10.5% 
 Tier 1 Risk-based Capital11.8%11.9%11.7%11.5%11.8% 
 Total Risk-based Capital12.5%12.7%12.4%12.3%12.6% 
 Tier 1 Leverage Ratio9.4%9.5%9.2%9.4%9.4% 
        
Summit Community Bank, Inc.      
 CET1 Risk-based Capital11.7%11.8%11.6%11.6%11.9% 
 Tier 1 Risk-based Capital11.7%11.8%11.6%11.6%11.9% 
 Total Risk-based Capital12.5%12.6%12.4%12.4%12.7% 
 Tier 1 Leverage Ratio9.4%9.4%9.2%9.4%9.5% 
        

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)    
Loan Composition      
        
Dollars in thousands12/31/20179/30/20176/30/20173/31/201712/31/2016 
        
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 12/31/20179/30/20176/30/20173/31/201712/31/2016 
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 12/31/20179/30/20176/30/20173/31/201712/31/2016
       
 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 12/31/20179/30/20176/30/20173/31/201712/31/2016
       
 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 
 AverageEarnings /Yield / AverageEarnings /Yield / 
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate 
         
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 
 AverageEarnings /Yield / AverageEarnings /Yield / 
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate 
         
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 
 AverageEarnings /Yield / AverageEarnings /Yield / 
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate 
         
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 & CFO
Telephone:        (304) 530-0552
Email: