Summit Financial Group Reports First Quarter 2020 Results
MOOREFIELD, W.V., April 30, 2020 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported first quarter 2020 net income of
“Despite the unprecedented challenges posed by the COVID-19 crisis and its resulting business conditions, Summit produced solid core earnings this past quarter,” commented H. Charles Maddy, III, President and Chief Executive Officer of Summit. “As we navigate the COVID-19 crisis, we believe our Company is well-prepared to endure its impacts. The Company has strong levels of capital and liquidity, diversified revenue streams, a sound credit record and an experienced management team. I am extremely proud of the diligent efforts and steadfast commitment put forth by our management and employees to maintain operational continuity and a high level of client service during this crisis. We are very concerned about the health and welfare of our employees, clients, shareholders and communities, and are supporting all our stakeholders throughout this crisis in a thoughtful, disciplined and compassionate manner. We especially appreciate our employees’ efforts in this uncertain time, and we will continue to persevere.”
Highlights for Q1 2020
- Provision for credit losses of
$5.25 million in Q1 2020 compared to$500,000 in Q4 2019 and$250,000 in Q1 2019; the increase in this quarter’s provision resulted principally due to the estimated potential future economic impact of the COVID-19 crisis. - Net interest income increased 32.6 percent (annualized) compared to Q4 2019 and increased 15.5 percent versus the same period in 2019, primarily due to loan growth and lower funding costs.
- Despite volatile markets, net interest margin in Q1 2020 increased 13 basis points to 3.76 percent as compared to the linked quarter, as yields on interest earning assets declined 11 basis points while deposit and other funding costs declined 23 basis points.
- Loan balances, excluding mortgage warehouse lines of credit, increased
$53.2 million during the quarter, including$39.8 million in loans acquired from Cornerstone; excluding mortgage warehouse lines of credit and acquired Cornerstone loans, loans increased$13.4 million during the quarter, or 3.0 percent (annualized). - Mortgage warehouse lines of credit increased
$40.6 million during the quarter. - Efficiency ratio improved to 51.41 percent compared to 52.25 percent in the linked quarter and 56.63 percent for Q1 2019.
- Realized securities gains of
$1.04 million in Q1 2020 compared to$403,000 in the linked quarter. - Merger expenses were
$788,000 in Q1 2020 compared to$98,000 in the linked quarter. - Net foreclosed properties expenses increased to
$966,000 in Q1 2020 compared to$262,000 in Q4 2019; this is primarily the result of write downs of foreclosed properties to fair values totaling$946,000 in Q1 2020 compared to$497,000 in Q4 2019, while realized net gains on sales of foreclosed properties were$61,000 during Q1 2020 compared to$312,000 in Q4 2019. - Nonperforming assets as a percentage of total assets improved to 1.16 percent from 1.28 percent for the linked quarter and 1.53 percent at the end of Q1 2019.
COVID-19 Impacts
Operations
As the COVID-19 related events unfolded throughout Q1 2020, Summit implemented various plans, strategies and protocols to protect our employees, maintain services for clients, assure the functional continuity of our operating systems, controls and processes, and mitigate financial risks posed by changing market conditions. In order to protect employees and assure workforce continuity and operational redundancy, we imposed business travel restrictions, enhanced our sanitizing protocols within our facilities and physically separated, to the extent possible, our critical operations workforce that cannot work remotely. To limit the risk of virus spread, the Company implemented drive-thru only and by appointment operating protocols throughout its bank branch network. We also maintained active communications with our critical vendors to assure all mission-critical activities and functions are being performed in line with our client-service standards.
Capital and Liquidity
Although there is a high degree of uncertainty around the magnitude and duration of the economic impact of the COVID-19 pandemic, management believes that our financial position, including high levels of capital and liquidity, will allow us to successfully endure the negative economic impacts of the crisis. Our capital management activities, coupled with our historically strong earnings performance and prudent dividend practices, have allowed us to build and maintain strong capital reserves. At March 31, 2020, all of Summit’s regulatory capital ratios significantly exceeded well-capitalized standards. More specifically, the Company bank subsidiary’s Tier 1 Leverage Ratio, a common measure to evaluate a financial institutions capital strength, was
In addition, management believes the Company’s liquidity position is strong. The Company’s bank subsidiary maintains a funding base largely comprised of core noninterest bearing demand deposit accounts and low cost interest-bearing transactional deposit accounts with clients that operate or reside within the footprint of its branch bank network. At March 31, 2020, the Company’s cash and cash equivalent balances were
Summit is participating in the Paycheck Protection Program (“PPP”), a
Lending
We have taken actions to identify and assess our COVID-19 related credit exposures by asset classes and borrower types. We implemented a loan modification program to assist both consumer and business borrowers that are experiencing or expect to experience financial hardships due to COVID-19 related challenges. Accordingly, the following table summarizes the aggregate balances of loans the Company has modified as result of COVID-19 through April 24, 2020 classified by types of loans and impacted borrowers.
| Loan Balances Modified Due to COVID-19 through 4/24/2020 | ||||||||||
| Dollars in thousands | Total Loan Balance as of 3/31/2020 | Loans Modified to Interest Only Payments (6 Months or Less) | Loans Modified to Payment Deferral (3 Months) | Total Loans Modified | Percentage of Loans Modified | |||||
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| Non-Owner Occupied Retail Stores | 107,420 | 34,774 | 12,518 | 47,292 | 44.0 | % | ||||
| Owner-Occupied Retail Stores | 118,535 | 21,103 | 8,715 | 29,818 | 25.2 | % | ||||
| Restaurants | 7,416 | 2,173 | 1,765 | 3,938 | 53.1 | % | ||||
| Oil & Gas Industry | 32,297 | 914 | 4,425 | 5,339 | 16.5 | % | ||||
| Other Commercial Loans | 898,310 | 78,836 | 29,061 | 107,897 | 12.0 | % | ||||
| Total Commercial Loans | 1,284,179 | 193,806 | 102,262 | 296,068 | 23.1 | % | ||||
| Residential 1-4 Family Personal | 276,189 | 3,278 | 13,061 | 16,339 | 5.9 | % | ||||
| Residential 1-4 Family Rentals | 167,295 | 15,467 | 4,841 | 20,308 | 12.1 | % | ||||
| Home Equity Loans | 75,170 | - | 402 | 402 | 0.5 | % | ||||
| Total Residential Real Estate Loans | 518,654 | 18,745 | 18,304 | 37,049 | 7.1 | % | ||||
| Consumer Loans | 35,344 | 365 | 613 | 978 | 2.8 | % | ||||
| Mortgage Warehouse Loans | 166,826 | - | - | - | 0.0 | % | ||||
| Credit Cards and Overdrafts | 2,266 | - | - | - | 0.0 | % | ||||
| Total Loans | $ | 2,007,269 | $ | 212,916 | $ | 121,179 | $ | 334,095 | 16.6 | % |
Modified loans with deferred payments will continue to accrue interest during the deferral period unless otherwise classified as nonperforming. Consistent with bank regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral periods. COVID-19 related loan modifications are also deemed to be insignificant borrower concessions, and therefore, such modified loans were not classified as troubled-debt restructured loans as of March 31, 2020. We anticipate that the amounts of COVID-19 related loan modifications will continue to increase during Q2 2020.
The COVID-19 crisis is expected to continue to impact our financial results, as well as demand for our services and products during the second quarter of 2020 and potentially beyond. The short and long-term implications of the COVID-19 crisis, and related monetary and fiscal stimulus measures, on our future revenues, earnings results, allowance for credit losses, capital reserves and liquidity are unknown at present.
CECL Adoption and Asset Quality
Effective January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments – Credit Losses, also known as Current Expected Credit Losses (“CECL”). Upon the adoption of CECL, the Company recorded a net cumulative-effect adjustment that decreased retained earnings by
The table below summarizes the changes in the ACL prior to CECL adoption through March 31, 2020.
| Dollars in thousands | Allowance for Loan Losses at December 31, 2019 | Impact of CECL Adoption | Allowance for Loan Credit Losses at January 1, 2020 | Provision for Loan Credit Losses for Q1 2020 | Cornerstone Day 1 PCD Loan Credit Marks | Loan Net Charge-offs for Q1 2020 | Allowance for Loan Credit Losses at March 31, 2020 | ||||||||||||
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| % Changes | NA | 53.0 | % | NA | 35.9 | % | 3.1 | % | -3.8 | % | 88.2 | % | |||||||
We have recorded no allowance for credit losses relative to the Company’s available-for-sale debt securities or its other instruments carried at amortized cost.
First quarter 2020 net loan charge-offs were
As of March 31, 2020, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties and repossessed assets, improved to
Merger & Acquisition Activity
Summit completed its acquisition of Cornerstone Financial Services, Inc. (“Cornerstone”) and its subsidiary, Cornerstone Bank, headquartered in West Union, West Virginia on January 1, 2020 and converted substantially all of its data processing systems to that of Summit’s on March 21, 2020; accordingly, Cornerstone’s results of operations are included in Summit’s consolidated results of operations from the date of acquisition, and therefore Summit’s first quarter 2020 results reflect increased levels of average balances, income and expenses compared to its first quarter 2019 and fourth quarter 2019 results. At consummation, Cornerstone had total assets of
On April 24, 2020, Summit’s bank subsidiary, Summit Community Bank completed its acquisition of four branch banking offices located in the Eastern Panhandle of West Virginia from MVB Bank, Inc., a bank subsidiary of MVB Financial Corp. (NASDAQ: MVBF). Summit assumed approximately
Results of Operations
Total revenue for first quarter 2020, consisting of net interest income and noninterest income, increased 13.8 percent to
For the first quarter of 2020, net interest income was
Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for first quarter 2020 was
We recorded a
Q1 2020 total noninterest expense increased 8.2 percent to
Balance Sheet
At March 31, 2020, total assets were
At March 31, 2020, core deposits were
Shareholders’ equity was
Tangible book value per common share decreased to
As announced this quarter, the Board of Directors authorized the open market repurchase of up to 750,000 shares of the issued and outstanding shares of Summit's common stock. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During Q1 2020, 66,611 shares of our common stock were repurchased under the Plan at an average price of 19.21 per share.
About the Company
Summit Financial Group, Inc. is a
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: the effect of the COVID-19 crisis, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; the successful integration of operations of our acquisitions; 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 (unaudited)
Q1 2020 vs Q1 2019
| For the Quarter Ended | Percent | |||||||
| Dollars in thousands | 3/31/2020 | 3/31/2019 | Change | |||||
| Statements of Income | ||||||||
| Interest income | ||||||||
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| Securities | 2,310 | 2,586 | -10.7 | % | ||||
| Other | 98 | 231 | -57.6 | % | ||||
| Total interest income | 27,643 | 25,868 | 6.9 | % | ||||
| Interest expense | ||||||||
| Deposits | 5,351 | 5,564 | -3.8 | % | ||||
| Borrowings | 849 | 1,731 | -51.0 | % | ||||
| Total interest expense | 6,200 | 7,295 | -15.0 | % | ||||
| Net interest income | 21,443 | 18,573 | 15.5 | % | ||||
| Provision for credit losses | 5,250 | 250 | 2000.0 | % | ||||
| Net interest income after provision for credit losses | 16,193 | 18,323 | -11.6 | % | ||||
| Noninterest income | ||||||||
| Insurance commissions | 7 | 1,174 | -99.4 | % | ||||
| Trust and wealth management fees | 665 | 586 | 13.5 | % | ||||
| Service charges on deposit accounts | 1,263 | 1,180 | 7.0 | % | ||||
| Bank card revenue | 933 | 814 | 14.6 | % | ||||
| Realized securities gains (losses) | 1,038 | (3 | ) | n/m | ||||
| Bank owned life insurance income | 264 | 238 | 10.9 | % | ||||
| Other income | 332 | 241 | 37.8 | % | ||||
| Total noninterest income | 4,502 | 4,230 | 6.4 | % | ||||
| Noninterest expense | ||||||||
| Salaries and employee benefits | 7,672 | 7,347 | 4.4 | % | ||||
| Net occupancy expense | 883 | 924 | -4.4 | % | ||||
| Equipment expense | 1,429 | 1,179 | 21.2 | % | ||||
| Professional fees | 387 | 403 | -4.0 | % | ||||
| Advertising and public relations | 152 | 153 | -0.7 | % | ||||
| Amortization of intangibles | 429 | 476 | -9.9 | % | ||||
| FDIC premiums | 165 | - | n/m | |||||
| Bank card expense | 503 | 439 | 14.6 | % | ||||
| Foreclosed properties expense, net | 966 | 384 | 151.6 | % | ||||
| Merger-related expenses | 788 | 63 | 1150.8 | % | ||||
| Other expenses | 1,625 | 2,492 | -34.8 | % | ||||
| Total noninterest expense | 14,999 | 13,860 | 8.2 | % | ||||
| Income before income taxes | 5,696 | 8,693 | -34.5 | % | ||||
| Income taxes | 1,190 | 1,601 | -25.7 | % | ||||
| Net income | $ | 4,506 | $ | 7,092 | -36.5 | % | ||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||
| Quarterly Performance Summary (unaudited) | ||||||||
| Q1 2020 vs Q1 2019 | ||||||||
| For the Quarter Ended | Percent | |||||||
| 3/31/2020 | 3/31/2019 | Change | ||||||
| Per Share Data | ||||||||
| Earnings per common share | ||||||||
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| Diluted | $ | 0.35 | $ | 0.56 | -37.5 | % | ||
| Cash dividends | $ | 0.17 | $ | 0.14 | 21.4 | % | ||
| Dividend payout ratio | 49.1 | % | 25.0 | % | 96.4 | % | ||
| Average common shares outstanding | ||||||||
| Basic | 12,975,429 | 12,717,501 | 2.0 | % | ||||
| Diluted | 13,028,409 | 12,778,644 | 2.0 | % | ||||
| Common shares outstanding at period end | 12,920,244 | 12,661,528 | 2.0 | % | ||||
| Performance Ratios | ||||||||
| Return on average equity | 6.92 | % | 12.28 | % | -43.6 | % | ||
| Return on average tangible equity | 8.55 | % | 14.80 | % | -42.2 | % | ||
| Return on average assets | 0.73 | % | 1.27 | % | -42.5 | % | ||
| Net interest margin (A) | 3.76 | % | 3.66 | % | 2.7 | % | ||
| Efficiency ratio (B) | 51.41 | % | 56.63 | % | 9.2 | % | ||
NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of
NOTE (B) – Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||
| Five Quarter Performance Summary (unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| Dollars in thousands | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||
| Statements of Income | |||||||||||||||
| Interest income | |||||||||||||||
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| Securities | 2,310 | 2,195 | 2,184 | 2,396 | 2,586 | ||||||||||
| Other | 98 | 105 | 125 | 134 | 231 | ||||||||||
| Total interest income | 27,643 | 27,072 | 27,249 | 26,882 | 25,868 | ||||||||||
| Interest expense | |||||||||||||||
| Deposits | 5,351 | 5,952 | 6,214 | 5,967 | 5,564 | ||||||||||
| Borrowings | 849 | 1,292 | 1,615 | 1,652 | 1,731 | ||||||||||
| Total interest expense | 6,200 | 7,244 | 7,829 | 7,619 | 7,295 | ||||||||||
| Net interest income | 21,443 | 19,828 | 19,420 | 19,263 | 18,573 | ||||||||||
| Provision for credit losses | 5,250 | 500 | 500 | 300 | 250 | ||||||||||
| Net interest income after provision for credit losses | 16,193 | 19,328 | 18,920 | 18,963 | 18,323 | ||||||||||
| Noninterest income | |||||||||||||||
| Insurance commissions | 7 | 90 | 40 | 606 | 1,174 | ||||||||||
| Trust and wealth management fees | 665 | 734 | 632 | 612 | 586 | ||||||||||
| Service charges on deposit accounts | 1,263 | 1,377 | 1,312 | 1,224 | 1,180 | ||||||||||
| Bank card revenue | 933 | 906 | 924 | 893 | 814 | ||||||||||
| Realized securities gains (losses) | 1,038 | 403 | 453 | 1,086 | (3 | ) | |||||||||
| Gain on sale of Summit Insurance Services, LLC | - | - | - | 1,906 | - | ||||||||||
| Bank owned life insurance income | 264 | 310 | 247 | 248 | 238 | ||||||||||
| Other income | 332 | 584 | 151 | 235 | 241 | ||||||||||
| Total noninterest income | 4,502 | 4,404 | 3,759 | 6,810 | 4,230 | ||||||||||
| Noninterest expense | |||||||||||||||
| Salaries and employee benefits | 7,672 | 7,099 | 7,044 | 7,576 | 7,347 | ||||||||||
| Net occupancy expense | 883 | 815 | 799 | 880 | 924 | ||||||||||
| Equipment expense | 1,429 | 1,278 | 1,296 | 1,219 | 1,179 | ||||||||||
| Professional fees | 387 | 412 | 388 | 475 | 403 | ||||||||||
| Advertising and public relations | 152 | 214 | 177 | 155 | 153 | ||||||||||
| Amortization of intangibles | 429 | 401 | 404 | 420 | 476 | ||||||||||
| FDIC premiums | 165 | - | - | 88 | - | ||||||||||
| Bank card expense | 503 | 454 | 455 | 473 | 439 | ||||||||||
| Foreclosed properties expense, net | 966 | 262 | 305 | 1,545 | 384 | ||||||||||
| Merger-related expenses | 788 | 98 | 74 | 382 | 63 | ||||||||||
| Other expenses | 1,625 | 2,126 | 1,864 | 2,116 | 2,492 | ||||||||||
| Total noninterest expense | 14,999 | 13,159 | 12,806 | 15,329 | 13,860 | ||||||||||
| Income before income taxes | 5,696 | 10,573 | 9,873 | 10,444 | 8,693 | ||||||||||
| Income tax expense | 1,190 | 2,424 | 1,812 | 1,880 | 1,601 | ||||||||||
| Net income | $ | 4,506 | $ | 8,149 | $ | 8,061 | $ | 8,564 | $ | 7,092 | |||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||
| Five Quarter Performance Summary (unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | |||||||||||
| Per Share Data | |||||||||||||||
| Earnings per common share | |||||||||||||||
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| Diluted | $ | 0.35 | $ | 0.65 | $ | 0.65 | $ | 0.68 | $ | 0.56 | |||||
| Cash dividends | $ | 0.17 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.14 | |||||
| Dividend payout ratio | 49.1 | % | 22.3 | % | 23.0 | % | 21.9 | % | 25.0 | % | |||||
| Average common shares outstanding | |||||||||||||||
| Basic | 12,975,429 | 12,400,932 | 12,412,982 | 12,539,095 | 12,717,501 | ||||||||||
| Diluted | 13,028,409 | 12,458,702 | 12,467,777 | 12,600,071 | 12,778,644 | ||||||||||
| Common shares outstanding at period end | 12,920,244 | 12,408,542 | 12,400,804 | 12,449,986 | 12,661,528 | ||||||||||
| Performance Ratios | |||||||||||||||
| Return on average equity | 6.92 | % | 13.32 | % | 13.51 | % | 14.62 | % | 12.28 | % | |||||
| Return on average tangible equity | 8.55 | % | 15.25 | % | 15.55 | % | 17.02 | % | 14.80 | % | |||||
| Return on average assets | 0.73 | % | 1.39 | % | 1.41 | % | 1.52 | % | 1.27 | % | |||||
| Net interest margin (A) | 3.76 | % | 3.63 | % | 3.63 | % | 3.72 | % | 3.66 | % | |||||
| Efficiency ratio (B) | 51.41 | % | 52.25 | % | 52.91 | % | 56.45 | % | 56.63 | % | |||||
NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of
NOTE (B) – Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||
| Selected Balance Sheet Data (unaudited) | |||||||||||||||||||
| Dollars in thousands, except per share amounts | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||
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| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 18,633 | $ | 28,137 | $ | 12,374 | $ | 13,481 | $ | 14,265 | |||||||||
| Interest bearing deposits other banks | 22,821 | 33,751 | 40,296 | 42,994 | 43,689 | ||||||||||||||
| Securities | 305,045 | 276,355 | 265,347 | 269,920 | 297,126 | ||||||||||||||
| Loans, net | 1,982,661 | 1,900,425 | 1,838,891 | 1,805,850 | 1,725,064 | ||||||||||||||
| Property held for sale | 18,287 | 19,276 | 20,979 | 21,390 | 24,393 | ||||||||||||||
| Premises and equipment, net | 47,078 | 44,168 | 43,592 | 42,896 | 39,345 | ||||||||||||||
| Goodwill and other intangible assets | 34,132 | 23,022 | 23,182 | 23,585 | 29,349 | ||||||||||||||
| Cash surrender value of life insurance policies | 46,497 | 43,603 | 43,216 | 42,976 | 42,714 | ||||||||||||||
| Other assets | 38,168 | 34,755 | 35,732 | 36,022 | 33,696 | ||||||||||||||
| Total assets | $ | 2,513,322 | $ | 2,403,492 | $ | 2,323,609 | $ | 2,299,114 | $ | 2,249,641 | |||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||
| Deposits | $ | 2,044,914 | $ | 1,913,237 | $ | 1,832,285 | $ | 1,797,493 | $ | 1,789,032 | |||||||||
| Short-term borrowings | 161,745 | 199,345 | 206,694 | 225,343 | 186,292 | ||||||||||||||
| Long-term borrowings and subordinated debentures | 20,301 | 20,306 | 20,311 | 20,315 | 20,319 | ||||||||||||||
| Other liabilities | 30,337 | 22,840 | 21,897 | 20,262 | 20,368 | ||||||||||||||
| Shareholders' equity | 256,025 | 247,764 | 242,422 | 235,701 | 233,630 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 2,513,322 | $ | 2,403,492 | $ | 2,323,609 | $ | 2,299,114 | $ | 2,249,641 | |||||||||
| Book value per common share | $ | 19.82 | $ | 19.97 | $ | 19.55 | $ | 18.93 | $ | 18.45 | |||||||||
| Tangible book value per common share | $ | 17.17 | $ | 18.11 | $ | 17.68 | $ | 17.04 | $ | 16.13 | |||||||||
| Tangible common equity to tangible assets | 9.0 | % | 9.4 | % | 9.5 | % | 9.3 | % | 9.2 | % | |||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||
| Regulatory Capital Ratios (unaudited) | ||||||||||
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| Summit Financial Group, Inc. | ||||||||||
| CET1 Risk-based Capital | 10.8 | % | 11.1 | % | 11.2 | % | 11.1 | % | 11.4 | % |
| Tier 1 Risk-based Capital | 11.7 | % | 12.1 | % | 12.2 | % | 12.1 | % | 12.5 | % |
| Total Risk-based Capital | 12.5 | % | 12.7 | % | 12.8 | % | 12.8 | % | 13.2 | % |
| Tier 1 Leverage | 10.2 | % | 10.5 | % | 10.4 | % | 10.4 | % | 10.2 | % |
| Summit Community Bank, Inc. | ||||||||||
| CET1 Risk-based Capital | 11.7 | % | 12.1 | % | 12.2 | % | 11.9 | % | 12.3 | % |
| Tier 1 Risk-based Capital | 11.7 | % | 12.1 | % | 12.2 | % | 11.9 | % | 12.3 | % |
| Total Risk-based Capital | 12.5 | % | 12.7 | % | 12.9 | % | 12.6 | % | 13.0 | % |
| Tier 1 Leverage | 10.2 | % | 10.6 | % | 10.4 | % | 10.2 | % | 10.0 | % |
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||||
| Loan Composition (unaudited) | ||||||||||||||
| Dollars in thousands | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | |||||||||
| 41%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: |
| Mortgage warehouse lines | 166,826 | 126,237 | 145,039 | 101,607 | 49,355 | |||||||||
| Commercial real estate | ||||||||||||||
| Owner occupied | 331,486 | 276,218 | 255,828 | 262,901 | 256,671 | |||||||||
| Non-owner occupied | 580,619 | 629,206 | 567,670 | 574,677 | 585,809 | |||||||||
| Construction and development | ||||||||||||||
| Land and development | 92,332 | 84,112 | 69,589 | 67,769 | 64,192 | |||||||||
| Construction | 43,121 | 37,523 | 56,255 | 46,975 | 36,040 | |||||||||
| Residential real estate | ||||||||||||||
| Non-jumbo | 378,540 | 354,963 | 359,399 | 360,752 | 359,107 | |||||||||
| Jumbo | 64,944 | 70,947 | 69,815 | 70,171 | 69,313 | |||||||||
| Home equity | 75,170 | 76,568 | 78,493 | 81,373 | 80,370 | |||||||||
| Consumer | 36,611 | 36,470 | 36,982 | 36,715 | 36,046 | |||||||||
| Other | 12,961 | 14,117 | 13,371 | 11,924 | 12,045 | |||||||||
| Total loans, net of unearned fees | 2,007,269 | 1,913,499 | 1,851,832 | 1,819,002 | 1,738,196 | |||||||||
| Less allowance for credit losses | 24,608 | 13,074 | 12,941 | 13,152 | 13,132 | |||||||||
| Loans, net | $ | 1,982,661 | $ | 1,900,425 | $ | 1,838,891 | $ | 1,805,850 | $ | 1,725,064 | ||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||||
| Deposit Composition (unaudited) | ||||||||||||||
| Dollars in thousands | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | |||||||||
| Core deposits | ||||||||||||||
| 41%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: |
| Interest bearing checking | 648,214 | 630,352 | 602,059 | 588,948 | 560,800 | |||||||||
| Savings | 457,010 | 418,096 | 305,891 | 301,403 | 310,646 | |||||||||
| Time deposits | 384,062 | 373,125 | 371,178 | 365,275 | 359,141 | |||||||||
| Total core deposits | 1,826,732 | 1,682,126 | 1,521,127 | 1,490,023 | 1,489,266 | |||||||||
| Brokered time deposits | 111,156 | 150,554 | 227,369 | 222,901 | 218,913 | |||||||||
| Other non-core time deposits | 107,026 | 80,557 | 83,789 | 84,569 | 80,853 | |||||||||
| Total deposits | $ | 2,044,914 | $ | 1,913,237 | $ | 1,832,285 | $ | 1,797,493 | $ | 1,789,032 | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||
| Asset Quality Information (unaudited) | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| Dollars in thousands | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | ||||||||||||||
| 41%; width: | 1%; width: | 9%; width: | 1%; width: | 1%; width: | 1%; width: | 9%; width: | 1%; width: | 1%; width: | 1%; width: | 9%; width: | 1%; width: | 1%; width: | 1%; width: | 9%; width: | 1%; width: | 1%; width: | 1%; width: | 9%; width: | 1%; width: |
| Gross loan recoveries | (197 | ) | (88 | ) | (132 | ) | (111 | ) | (249 | ) | |||||||||
| Net loan charge-offs | $ | 501 | $ | 367 | $ | 711 | $ | 280 | $ | 165 | |||||||||
| Net loan charge-offs to average loans (annualized) | 0.10 | % | 0.08 | % | 0.16 | % | 0.06 | % | 0.04 | % | |||||||||
| Allowance for loan credit losses | $ | 24,608 | $ | 13,074 | $ | 12,941 | $ | 13,152 | $ | 13,132 | |||||||||
| Allowance for loan credit losses as a percentage of period end loans | 1.23 | % | 0.68 | % | 0.70 | % | 0.72 | % | 0.76 | % | |||||||||
| Nonperforming assets: | |||||||||||||||||||
| Nonperforming loans | |||||||||||||||||||
| Commercial | $ | 560 | $ | 764 | $ | 835 | $ | 948 | $ | 729 | |||||||||
| Commercial real estate | 5,644 | 5,800 | 7,037 | 6,544 | 2,981 | ||||||||||||||
| Residential construction and development | 11 | 326 | 191 | 66 | 24 | ||||||||||||||
| Residential real estate | 4,343 | 4,404 | 4,461 | 5,657 | 5,928 | ||||||||||||||
| Consumer | 65 | 116 | 115 | 160 | 182 | ||||||||||||||
| Other | 100 | 100 | 100 | 100 | 130 | ||||||||||||||
| Total nonperforming loans | 10,723 | 11,510 | 12,739 | 13,475 | 9,974 | ||||||||||||||
| Foreclosed properties | |||||||||||||||||||
| Commercial real estate | 1,866 | 1,930 | 1,514 | 1,544 | 1,841 | ||||||||||||||
| Commercial construction and development | 4,511 | 4,601 | 4,909 | 4,910 | 6,326 | ||||||||||||||
| Residential construction and development | 10,774 | 11,169 | 12,847 | 13,132 | 14,347 | ||||||||||||||
| Residential real estate | 1,136 | 1,576 | 1,709 | 1,804 | 1,879 | ||||||||||||||
| Total foreclosed properties | 18,287 | 19,276 | 20,979 | 21,390 | 24,393 | ||||||||||||||
| Other repossessed assets | 49 | 17 | 16 | 12 | 34 | ||||||||||||||
| Total nonperforming assets | $ | 29,059 | $ | 30,803 | $ | 33,734 | $ | 34,877 | $ | 34,401 | |||||||||
| Nonperforming loans to period end loans | 0.53 | % | 0.60 | % | 0.69 | % | 0.74 | % | 0.57 | % | |||||||||
| Nonperforming assets to period end assets | 1.16 | % | 1.28 | % | 1.45 | % | 1.52 | % | 1.53 | % | |||||||||
| Troubled debt restructurings | |||||||||||||||||||
| Performing | $ | 22,966 | $ | 23,339 | $ | 23,420 | $ | 23,266 | $ | 27,845 | |||||||||
| Nonperforming | 2,831 | 2,337 | 2,443 | 2,915 | - | ||||||||||||||
| Total troubled debt restructurings | $ | 25,797 | $ | 25,676 | $ | 25,863 | $ | 26,181 | $ | 27,845 | |||||||||
| Loans Past Due 30-89 Days (unaudited) | ||||||||||||||
| For the Quarter Ended | ||||||||||||||
| Dollars in thousands | 3/31/2020 | 12/31/2019 | 9/30/2019 | 6/30/2019 | 3/31/2019 | |||||||||
| 41%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: | 1%; width: | 2%; width: | 9%; width: |
| Commercial | $ | 160 | $ | 111 | $ | 390 | $ | 375 | $ | 264 | ||||
| Commercial real estate | 2,106 | 1,196 | 312 | 1,719 | 4,128 | |||||||||
| Construction and development | 53 | 236 | 65 | 235 | 179 | |||||||||
| Residential real estate | 5,178 | 4,775 | 5,573 | 5,670 | 2,944 | |||||||||
| Consumer | 222 | 269 | 365 | 234 | 432 | |||||||||
| Other | 7 | 25 | 63 | 9 | 52 | |||||||||
| Total | $ | 7,726 | $ | 6,612 | $ | 6,768 | $ | 8,242 | $ | 7,999 | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | |||||||||||||||||||||||||||||
| Q1 2020 vs Q4 2019 vs Q1 2019 (unaudited) | |||||||||||||||||||||||||||||
| Q1 2020 | Q4 2019 | Q1 2019 | |||||||||||||||||||||||||||
| Average | Earnings / | Yield / | Average | Earnings / | Yield / | Average | Earnings / | Yield / | |||||||||||||||||||||
| Dollars in thousands | Balances | Expense | Rate | Balances | Expense | Rate | Balances | Expense | Rate | ||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Interest earning assets | |||||||||||||||||||||||||||||
| Loans, net of unearned interest (1) | |||||||||||||||||||||||||||||
| 26%; width: | 1%; width: | 6%; width: | 1%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 6%; width: | 1%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 6%; width: | 1%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 1%; width: | 1%; width: | 6%; width: | 1%; width: | 6%; width: | 1%; width: |
| Tax-exempt (2) | 14,873 | 185 | 5.00 | % | 15,738 | 189 | 4.76 | % | 14,907 | 184 | 5.01 | % | |||||||||||||||||
| Securities | |||||||||||||||||||||||||||||
| Taxable | 258,889 | 1,757 | 2.73 | % | 218,375 | 1,654 | 3.00 | % | 195,932 | 1,687 | 3.49 | % | |||||||||||||||||
| Tax-exempt (2) | 70,239 | 699 | 4.00 | % | 69,276 | 686 | 3.93 | % | 114,831 | 1,139 | 4.02 | % | |||||||||||||||||
| Interest bearing deposits other banks and Federal funds sold | 35,648 | 98 | 1.11 | % | 32,779 | 105 | 1.27 | % | 51,187 | 230 | 1.82 | % | |||||||||||||||||
| Total interest earning assets | 2,315,122 | 27,828 | 4.83 | % | 2,189,365 | 27,256 | 4.94 | % | 2,089,143 | 26,147 | 5.08 | % | |||||||||||||||||
| Noninterest earning assets | |||||||||||||||||||||||||||||
| Cash & due from banks | 14,422 | 12,932 | 12,825 | ||||||||||||||||||||||||||
| Premises & equipment | 46,151 | 44,136 | 38,404 | ||||||||||||||||||||||||||
| Other assets | 120,846 | 103,481 | 113,340 | ||||||||||||||||||||||||||
| Allowance for credit losses | (20,452 | ) | (13,055 | ) | (13,309 | ) | |||||||||||||||||||||||
| Total assets | $ | 2,476,089 | $ | 2,336,859 | $ | 2,240,403 | |||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Interest bearing liabilities | |||||||||||||||||||||||||||||
| Interest bearing demand deposits | $ | 643,955 | $ | 1,081 | 0.68 | % | $ | 619,939 | $ | 1,378 | 0.88 | % | $ | 556,766 | $ | 1,663 | 1.21 | % | |||||||||||
| Savings deposits | 449,021 | 1,337 | 1.20 | % | 351,653 | 1,201 | 1.35 | % | 310,848 | 898 | 1.17 | % | |||||||||||||||||
| Time deposits | 615,102 | 2,933 | 1.92 | % | 641,160 | 3,373 | 2.09 | % | 654,404 | 3,003 | 1.86 | % | |||||||||||||||||
| Short-term borrowings | 119,607 | 630 | 2.12 | % | 188,007 | 1,062 | 2.24 | % | 200,297 | 1,472 | 2.98 | % | |||||||||||||||||
| Long-term borrowings and subordinated debentures | 20,304 | 219 | 4.34 | % | 20,308 | 230 | 4.49 | % | 20,321 | 259 | 5.17 | % | |||||||||||||||||
| Total interest bearing liabilities | 1,847,989 | 6,200 | 1.35 | % | 1,821,067 | 7,244 | 1.58 | % | 1,742,636 | 7,295 | 1.70 | % | |||||||||||||||||
| Noninterest bearing liabilities | |||||||||||||||||||||||||||||
| Demand deposits | 339,340 | 248,159 | 248,354 | ||||||||||||||||||||||||||
| Other liabilities | 28,400 | 22,856 | 18,322 | ||||||||||||||||||||||||||
| Total liabilities | 2,215,729 | 2,092,082 | 2,009,312 | ||||||||||||||||||||||||||
| Shareholders' equity | 260,360 | 244,777 | 231,091 | ||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 2,476,089 | $ | 2,336,859 | $ | 2,240,403 | |||||||||||||||||||||||
| NET INTEREST EARNINGS | $ | 21,628 | $ | 20,012 | $ | 18,852 | |||||||||||||||||||||||
| NET INTEREST MARGIN | 3.76 | % | 3.63 | % | 3.66 | % | |||||||||||||||||||||||
(1) - For purposes of this table, nonaccrual loans are included in average loan balances.
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of
| Contact: Telephone: Email: | Robert S. Tissue, Executive Vice President & CFO (304) 530-0552 rtissue@summitfgi.com | |
