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 | % | ||||||||||||||