Summit Bank Group Reports 2024 3rd Quarter Earnings

Rhea-AI Summary

Summit Bank Group (SBKO) reported strong Q3 2024 financial results with net income of $3.17 million ($0.41 per share), up 29.7% from Q3 2023. Year-to-date net income reached $8.30 million ($1.06 per share), increasing 14% year-over-year. The bank showed robust growth with deposits up 25.2% ($229.1 million) and net loans increasing 16.4% ($143.8 million) year-over-year. Cash and securities totaled $225.3 million, representing 17.7% of assets. The improved performance was primarily driven by lower loan loss provisions, down 39% compared to Q3 2023.

Positive

• Net income increased 29.7% to $3.17 million in Q3 2024
• Year-to-date net income up 14% to $8.30 million
• Deposits grew 25.2% year-over-year ($229.1 million increase)
• Net loans increased 16.4% year-over-year ($143.8 million growth)
• Loan loss provisions decreased 39% compared to Q3 2023
• Strong liquidity with $225.3 million in cash and securities (17.7% of assets)
• Return on equity at 12.3% for Q3 2024

Negative

• Non-performing assets increased to 0.24% from 0.13% year-over-year
• Loan growth pace has slowed compared to previous years

EUGENE, Ore.--(BUSINESS WIRE)-- Summit Bank Group (OTC Pink: SBKO)

Summit Bank Group Reports 2024 3rd Quarter Earnings (Graphic: Business Wire)

• Q3 2024 Net Income - $3.17 million or $0.41 per fully diluted share, up 29.7 percent over Q3 2023.
• 2024 Year to Date Net Income - $8.30 million or $1.06 per fully diluted share, an increase of $1.05 million or $0.13 per share and 14.0 percent over the similar period in 2023.
• Cash and securities total $225.3 million – 17.7 percent of assets.
• Year over year Net Loan Growth - $143.8 million or 16.4 percent.
• Year over year Deposit Growth - $229.1 million or 25.2 percent.

Summit Bank Group reported net income for the third quarter of $3.17 million or 41 cents per fully diluted share. Third quarter net income was $727 thousand or 9 cents per fully diluted share higher than the similar period in 2023, representing 29.7 and 29.2 percent improvements over the third quarter of 2023, respectively. The strong third quarter results increased the Company’s improvement in year to date earnings and earnings per share compared to 2023, which were higher by $1.05 million or 13 cents per share; an improvement of 14.0 percent. Year to date earnings improvement over 2023 includes a non-recurring gain on retirement of subordinated debt during the second quarter that increased earnings by $0.04 per share.

Lower provision for loan losses during the third quarter was the primary driver of the improved earnings compared to 2023 with total provision expense lower by $897 thousand or 39 percent compared to the third quarter of 2023. Provision for loan loss expense for the year to date was improved over 2023 by $799 thousand or 13 percent. “Our small commercial equipment finance unit continues to show gradual improvement in portfolio performance thus far in 2024 thanks to a disciplined approach to risk management. This improved performance, in conjunction with continued strong credit quality metrics and risk mitigation in our overall portfolio and the transition of acquisition, development and construction loans into permanent financing lowered the calculated reserve based on the risk profile of those portfolios,” said Wanichek.

Strong deposit growth during the quarter of $115.3 million improved the Bank’s previously highly liquid balance sheet with cash and Available for Sale (AFS) short-term securities increasing to $225.3 million, which represents 17.7 percent of total assets as of September 30, 2024. This total increased by $103.1 million from the $121.9 million total as of June 30, 2024. The Bank maintains secured borrowing commitments from the Federal Home Loan Bank and the Federal Reserve Bank with total available borrowing capacity as of September 30, 2024, of $333 million, increased from its December 31, 2023, total available of $253 million. Combined, the Bank’s cash and available secured borrowing as of September 30, 2024, total $501 million. This total is 39.0 percent of total assets and 122 percent of total estimated uninsured deposits as of September 30, 2024.

Total net loans as of September 30, 2024, were $1.02 billion representing a 16.4 percent year over year increase. Loan growth has slowed as expected, compared to previous years. A planned decline in acquisition, development and construction loan activity during the second and third quarters of 2024 was the primary driver of the slower loan growth pace as of the end of the third quarter. Total deposits year over year are up $229.1 million or 25.2 percent which includes the $115.3 million increase in deposits during the third quarter compared to the previous quarter.

“We are excited to see strong deposit growth this quarter, driven by the continued trust of our longtime clients and the addition of new relationships in all of the Oregon markets we serve,” said Wanichek. “This growth reflects the confidence our community has in Summit Bank’s personalized approach to banking. We are committed to maintaining a high level of service that has earned us this support and trust. While the landscape for deposits continues to be very competitive, we are pleased with our overall growth of deposits and are grateful to our longtime and new clients for their support.”

Return on average equity for the third quarter and the trailing four quarters was 12.3 percent and 10.1 percent respectively. Total shareholders’ equity ended the third quarter at $105.6 million, an increase of $13.0 million or 14.1 percent since September 30, 2023. The Company has produced greater than 10.0 percent return on equity during all but three quarters over the last eleven years while growing total net loans at a compounded annual growth rate of 21.9 percent.

Total non-performing assets as of September 30, 2024, declined slightly during the third quarter to 0.24 percent of total assets after ending the second quarter of 2024 at 0.27 percent. Total non-performing assets are increased over the 0.13 percent figure as of September 30, 2023, with the entirety of the increase resulting from a single SBA guaranteed loan relationship currently in non-accrual status. An individual allowance for expected credit loss equal to the unguaranteed portion of this loan is included in the September 30, 2024 allowance for credit losses and was charged to expense during 2024.

The Bank’s commercial real estate portfolio has continued to perform well, with multifamily and industrial loans comprising nearly half of a balanced mix of property types. Refinance and interest rate risk is limited as only 18 percent of the portfolio matures prior to 2027.

“As we reflect on Summit Bank Group’s performance this quarter, we sincerely appreciate the hard work and dedication of our banking team. We are grateful for the loyalty of our clients and for the support of our Board and local shareholders. The achievements made this quarter are a direct result of collaboration across all units,” said Wanichek.

About Summit Bank Group, Inc.

Summit Bank Group Inc., through its wholly-owned subsidiary Summit Bank, maintains offices in Eugene, Central Oregon, and Portland, specializing in providing high-level service to professionals and medium-sized businesses and their owners. The Bank was voted for the fourth year in a row as one of Oregon’s “Top 100 Companies to Work For” and a “Top 100 Green Company” according to Oregon Business Magazine. In 2023, Summit Bank was honored as “Favorite Bank” in the Eugene Register-Guard’s annual Reader’s Choice Awards and “Best Bank” by Central Oregon’s Bend Bulletin. Summit Bank Group Inc. is quoted on the OTCPK under the symbol SBKO.

Forward Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events or results and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, inflation, changes in the interest rate environment, general economic conditions or conditions within the securities markets, potential recessionary conditions, changes in asset quality, charge-offs and credit loss provisions, changes in demand for our products and services, availability of low-cost funding, legislative, accounting, tax and regulatory changes, including changes in the monetary and fiscal policies of the Board of Governors of the Federal Reserve System, political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, natural disasters or breach of our operational or security systems or infrastructure, including cyberattacks that could adversely affect the Company’s financial condition and results of operations and the business in which the Company and the Bank are engaged.

Accordingly, you should not place undue reliance on forward-looking statements. The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

QUARTERLY FINANCIAL REPORT – September 30th 2024

(in thousands except per share data)		Unaudited				Unaudited				Unaudited
		As of				As of				As of
Summary Statements of Condition		Sep. 30, 2024				Dec. 31, 2023				Sep. 30, 2023
Cash and short term investments		$	168,888			$	71,265			$	96,222
Securities			56,422				63,637				67,047
Loans:
Commercial			306,615				283,870				260,634
Commercial real estate			648,733				580,801				551,049
Other			74,521				61,002				73,408
Loan loss reserve and unearned income			(10,619	)			(10,511	)			(9,615	)
Total net loans			1,019,251				915,162				875,475
Property and other assets			28,438				27,634				26,366
Repossessed property			688				672				1,009
Total assets		$	1,273,686			$	1,078,370			$	1,066,120
Deposits:
Noninterest-bearing demand		$	185,145			$	175,717			$	183,329
Interest-bearing demand			830,276				687,863				683,258
Certificates of deposit			121,648				53,363				41,417
Total deposits			1,137,069				916,943				908,004
Subordinated debt			18,474				19,675				19,665
Other liabilities			12,581				46,097				45,900
Shareholders' equity			105,563				95,655				92,551
Total liabilities and shareholders' equity		$	1,273,686			$	1,078,370			$	1,066,120
Book value per share		$	13.68			$	12.46			$	12.05
		Unaudited				Unaudited				Unaudited				Unaudited
		For the nine months ended				For the nine months ended				For the three months ended				For the three months ended
Summary Statements of Income		Sep. 30, 2024				Sep. 30, 2023				Sep. 30, 2024				Sep. 30, 2023
Interest income		$	57,461			$	47,603			$	20,452			$	16,890
Interest expense			(20,158	)			(13,413	)			(7,490	)			(4,879	)
Net interest income			37,303				34,190				12,962				12,011
Provision for loan losses			(5,283	)			(6,082	)			(1,431	)			(2,328	)
Noninterest income			923				770				92				207
Noninterest expense			(21,672	)			(19,065	)			(7,316	)			(6,586	)
Net income before income taxes			11,271				9,813				4,307				3,305
Provision for income taxes			(2,977	)			(2,572	)			(1,135	)			(861	)
Net income		$	8,293			$	7,241			$	3,171			$	2,444
Net income per share, basic		$	1.08			$	0.94			$	0.41			$	0.32
Net income per share, fully diluted		$	1.06			$	0.93			$	0.41			$	0.32

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241023226992/en/

Craig Wanichek, President & Chief Executive Officer 541-684-7500

Source: Summit Bank Group

FAQ

What was Summit Bank Group's (SBKO) Q3 2024 net income?

Summit Bank Group reported Q3 2024 net income of $3.17 million or $0.41 per fully diluted share, representing a 29.7% increase from Q3 2023.

How much did SBKO's deposits grow in Q3 2024?

SBKO's deposits increased by $115.3 million in Q3 2024, contributing to a total year-over-year growth of $229.1 million or 25.2%.

What was SBKO's loan growth in Q3 2024?

SBKO's total net loans reached $1.02 billion as of September 30, 2024, representing a 16.4% year-over-year increase, though growth has slowed compared to previous years.

What is SBKO's current return on equity?

SBKO's return on average equity for Q3 2024 was 12.3%, with a trailing four-quarter return on equity of 10.1%.