Summit Financial Group Reports First Quarter 2023 Earnings of $1.08 Per Share, Fueled by Continued Loan and Deposit Growth, and Improved Net Interest Margin
Summit Financial Group reported a robust financial performance for Q1 2023, showcasing 3.0% growth in core deposits and 2.1% growth in total loans year-over-year. The company achieved net income of $13.9 million ($1.08 per diluted share), slightly lower than the previous quarter's $14.9 million but up from $11.5 million in Q1 2022. The tangible book value per share rose to $22.90, an increase of 5.5%. The net interest margin improved to 3.83%, aided by enhanced yields on assets. Despite a 2.9% increase in noninterest expenses, primarily from acquisition costs, the bank maintained a strong efficiency ratio of 48.00%. The recent acquisition of PSB Holding Corp. is expected to broaden the company's market presence.
- Core deposits increased by 3.0% during Q1 2023.
- Total loans rose by 2.1% during Q1 2023, showing resilience.
- Net income of $13.9 million for Q1 2023, an increase from the previous year.
- Tangible book value per share increased by $1.20 to $22.90.
- Net interest margin improved to 3.83%, enhancing profitability.
- Efficiency ratio improved to 48.00%, indicating effective cost management.
- Net income decreased from $14.9 million in Q4 2022 to $13.9 million in Q1 2023.
- Total noninterest expenses increased by 2.9% to $19.4 million, primarily due to acquisition costs.
- Mortgage origination revenue continuously declined due to rising interest rates.
Core Deposits and Loans increased
MOOREFIELD, W.Va., April 27, 2023 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported financial results for the first quarter of 2023, revealing a strong earnings performance marked by notable growth in both loans and total revenue. The Company’s continued success underscores its position as a reliable partner in the financial services industry, reflecting a sound strategy and solid operational execution.
The Company, which serves commercial and individual clients across West Virginia, the Washington D.C. metropolitan area, Virginia and Kentucky through Summit Community Bank, Inc., reported net income applicable to common shares of
"We had a strong start to the year with impressive loan and deposit growth in the first quarter of 2023, increased tangible book value per common share, and improved net interest margin. We maintained strong credit quality and improved our provision for credit losses while achieving a low efficiency ratio through expense management,” noted H. Charles Maddy, III, President and Chief Executive Officer. “Despite challenging conditions, we remain optimistic about our growth prospects and are excited about our recent acquisition of PSB Holding Corp. and its bank subsidiary, Provident State Bank, Inc., which will enable us to expand our footprint in the Eastern Shore of Maryland and Delaware. I am confident that our bank is well-positioned to deliver long-term shareholder value through organic growth and strategic acquisitions."
Key Highlights for the First Quarter of 2023
- Despite concerns about the banking industry’s stability of deposit bases and adequacy of liquidity levels as result of recent bank failures, Summit’s core deposits grew 3.0 percent (11.8 percent annualized) during the first quarter of 2023.
- Total loans, excluding mortgage warehouse lines of credit and Paycheck Protection Program (“PPP”) lending, increased 2.1 percent (8.3 percent annualized) during the first quarter of 2023 and 12.5 percent since March 31, 2022.
- Tangible book value per common share (“TBVPS”) increased
$1.20 (5.5 percent or 22.1 percent annualized) to$22.90 during the first quarter of 2023. This increase was due in part to unrealized net gains on debt securities available for sale, which added$0.59 per common share (net of deferred income taxes) recorded in Other Comprehensive Income (OCI), partially offset by a decrease in the fair values of derivative financial instruments hedging against higher interest rates, totaling$0.32 per common share (net of deferred income taxes) also recorded in OCI. - Net interest margin (“NIM”) increased 3 basis points to 3.83 percent from the linked quarter and by 22 basis points from the prior-year quarter, driven by increased yields on interest-earning assets, which were partially offset by higher costs of deposits and other funding.
- Total noninterest expense increased 2.9 percent to
$19.4 million in the first quarter of 2023, primarily due to acquisition-related expenses of$331,000 compared to$81,000 in the linked quarter. The annualized non-interest expense ratio increased slightly to 1.97 percent of average assets from 1.92 percent in the linked quarter and 1.91 percent in the year-ago period. - The bank achieved an efficiency ratio of 48.00 percent, an improvement from 49.44 percent in the prior-year quarter.
- The bank incurred a provision for credit losses of
$1.50 million in the first quarter of 2023, which increased the period-end allowance for loan credit losses to$40.8 million , or 1.32 percent of total loans and 559.2 percent of nonperforming loans. - Nonperforming assets (“NPAs”) improved to 0.31 percent of total assets at period end, down 2 basis points during the quarter and down 20 basis points from the prior-year quarter.
- The Company completed its acquisition effective April 1, 2023, of PSB Holding Corp. and its bank subsidiary, Provident State Bank, Inc., headquartered in Preston, Maryland, expanding its footprint in the Eastern Shore of Maryland and Delaware.
Results from Operations
Net interest income totaled
Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for first quarter 2023 was
Mortgage origination revenue decreased to
Excluding gains and losses on debt securities and equity investments, noninterest income was
Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments, increased 13.9 percent from
Total noninterest expense increased to
Salary and benefit expenses of
Acquisition-related expense were
Other expenses were very controlled at
Summit’s efficiency ratio was 48.00 percent in the first quarter of 2023, down from 49.44 percent for the first quarter of 2022 and marginally higher compared to 46.40 percent in the linked quarter. Non-interest expense to average assets was 1.97 percent in first quarter of 2023 compared to 1.92 percent in the linked quarter and 1.91 percent in the year-ago quarter.
Balance Sheet
As of March 31, 2023, total assets were
Total loans net of unearned fees remained unchanged at
Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE) but excluding PPP lending, remained at
Residential real estate and consumer lending totaled
As of March 31, 2023, PPP balances were paid down to zero and mortgage warehouse lines of credit, sourced solely from a participation arrangement with a large regional bank, totaled
Deposits totaled
Total shareholders’ equity was
During the first quarter 2023, TBVPS increased
Summit had 12,786,404 outstanding common shares at March 31, 2023, compared to 12,783,646 at year-end 2022.
As announced in the first quarter of 2020, 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, of which 323,577 shares have been repurchased to date. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the first quarter of 2023, no shares of Summit’s common stock were repurchased under the Plan.
Asset Quality
The Company recorded net loan recoveries of
Summit recorded a
Summit’s allowance for loan credit losses was
The allowance for loan credit losses stood at 1.32 percent of total loans at March 31, 2023 compared to 1.26 percent at December 31, 2022. The allowance was 559.2 percent of nonperforming loans at March 31, 2023, compared to 497.2 percent at year-end 2022.
Summit’s allowance for credit losses on unfunded loan commitments was
As of March 31, 2023, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, totaled
About the Company
Summit Financial Group, Inc. is the
Non-GAAP Financial Measures
In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), Summit’s management uses, and this press release contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible assets; efficiency ratio; return on average tangible equity and return on average tangible common equity. Summit believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although Summit believes that these non-GAAP financial measures enhance investors' understanding of Summit’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.
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 pandemic, 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.
Contact: Robert S. Tissue, Executive Vice President & CFO
Telephone: (304) 530-0552
Email: rtissue@summitfgi.com
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||
| Quarterly Performance Summary (unaudited) | |||||||||
| Q1 2023 vs Q1 2022 | |||||||||
| For the Quarter Ended | Percent | ||||||||
| Dollars in thousands | 3/31/2023 | 3/31/2022 | Change | ||||||
| Statements of Income | |||||||||
| Interest income | |||||||||
| Loans, including fees | $ | 45,485 | $ | 30,224 | 50.5 | % | |||
| Securities | 4,819 | 2,623 | 83.7 | % | |||||
| Other | 171 | 46 | 271.7 | % | |||||
| Total interest income | 50,475 | 32,893 | 53.5 | % | |||||
| Interest expense | |||||||||
| Deposits | 14,000 | 1,727 | 710.7 | % | |||||
| Borrowings | 2,286 | 1,612 | 41.8 | % | |||||
| Total interest expense | 16,286 | 3,339 | 387.8 | % | |||||
| Net interest income | 34,189 | 29,554 | 15.7 | % | |||||
| Provision for credit losses | 1,500 | 1,950 | -23.1 | % | |||||
| Net interest income after provision | |||||||||
| for credit losses | 32,689 | 27,604 | 18.4 | % | |||||
| Noninterest income | |||||||||
| Trust and wealth management fees | 811 | 757 | 7.1 | % | |||||
| Mortgage origination revenue | 171 | 339 | -49.6 | % | |||||
| Service charges on deposit accounts | 1,392 | 1,401 | -0.6 | % | |||||
| Bank card revenue | 1,568 | 1,491 | 5.2 | % | |||||
| Net gains on equity investments | 45 | 372 | -87.9 | % | |||||
| Net realized losses on debt securities | (59 | ) | (152 | ) | -61.2 | % | |||
| Bank owned life insurance and annuity income | 336 | 283 | 18.7 | % | |||||
| Other income | 122 | 54 | 125.9 | % | |||||
| Total noninterest income | 4,386 | 4,545 | -3.5 | % | |||||
| Noninterest expense | |||||||||
| Salaries and employee benefits | 10,807 | 9,700 | 11.4 | % | |||||
| Net occupancy expense | 1,333 | 1,242 | 7.3 | % | |||||
| Equipment expense | 2,030 | 1,843 | 10.1 | % | |||||
| Professional fees | 376 | 362 | 3.9 | % | |||||
| Advertising and public relations | 170 | 172 | -1.2 | % | |||||
| Amortization of intangibles | 343 | 378 | -9.3 | % | |||||
| FDIC premiums | 330 | 390 | -15.4 | % | |||||
| Bank card expense | 696 | 714 | -2.5 | % | |||||
| Foreclosed properties expense, net of (gains)/losses | 15 | (90 | ) | -116.7 | % | ||||
| Acquisition-related expense | 331 | 29 | 1041.4 | % | |||||
| Other expenses | 2,968 | 2,459 | 20.7 | % | |||||
| Total noninterest expense | 19,399 | 17,199 | 12.8 | % | |||||
| Income before income taxes | 17,676 | 14,950 | 18.2 | % | |||||
| Income taxes | 3,575 | 3,257 | 9.8 | % | |||||
| Net income | 14,101 | 11,693 | 20.6 | % | |||||
| Preferred stock dividends | 225 | 225 | n/a | ||||||
| Net income applicable to common shares | $ | 13,876 | $ | 11,468 | 21.0 | % | |||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||
| Quarterly Performance Summary (unaudited) | |||||||||
| Q1 2023 vs Q1 2022 | |||||||||
| For the Quarter Ended | Percent | ||||||||
| 3/31/2023 | 3/31/2022 | Change | |||||||
| Per Share Data | |||||||||
| Earnings per common share | |||||||||
| Basic | $ | 1.09 | $ | 0.90 | 21.1 | % | |||
| Diluted | $ | 1.08 | $ | 0.90 | 20.0 | % | |||
| Cash dividends per common share | $ | 0.20 | $ | 0.18 | 11.1 | % | |||
| Common stock dividend payout ratio | 18.1 | % | 19.7 | % | -8.1 | % | |||
| Average common shares outstanding | |||||||||
| Basic | 12,783,851 | 12,745,297 | 0.3 | % | |||||
| Diluted | 12,830,102 | 12,801,903 | 0.2 | % | |||||
| Common shares outstanding at period end | 12,786,404 | 12,753,094 | 0.3 | % | |||||
| Performance Ratios | |||||||||
| Return on average equity | 15.55 | % | 14.20 | % | 9.5 | % | |||
| Return on average tangible equity (C)(E) | 19.10 | % | 18.02 | % | 6.0 | % | |||
| Return on average tangible common equity (D)(E) | 20.10 | % | 18.74 | % | 7.3 | % | |||
| Return on average assets | 1.43 | % | 1.30 | % | 10.0 | % | |||
| Net interest margin (A) | 3.83 | % | 3.61 | % | 6.1 | % | |||
| Efficiency ratio (B) | 48.00 | % | 49.44 | % | -2.9 | % | |||
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of
(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Five Quarter Performance Summary (unaudited) | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Statements of Income | ||||||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 45,485 | $ | 43,589 | $ | 38,784 | $ | 32,766 | $ | 30,224 | ||||||
| Securities | 4,819 | 4,181 | 3,497 | 2,752 | 2,623 | |||||||||||
| Other | 171 | 70 | 170 | 45 | 46 | |||||||||||
| Total interest income | 50,475 | 47,840 | 42,451 | 35,563 | 32,893 | |||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 14,000 | 10,194 | 6,140 | 2,622 | 1,727 | |||||||||||
| Borrowings | 2,286 | 3,293 | 2,198 | 1,976 | 1,612 | |||||||||||
| Total interest expense | 16,286 | 13,487 | 8,338 | 4,598 | 3,339 | |||||||||||
| Net interest income | 34,189 | 34,353 | 34,113 | 30,965 | 29,554 | |||||||||||
| Provision for credit losses | 1,500 | 1,500 | 1,500 | 2,000 | 1,950 | |||||||||||
| Net interest income after provision | ||||||||||||||||
| for credit losses | 32,689 | 32,853 | 32,613 | 28,965 | 27,604 | |||||||||||
| Noninterest income | ||||||||||||||||
| Trust and wealth management fees | 811 | 750 | 725 | 745 | 757 | |||||||||||
| Mortgage origination revenue | 171 | 286 | 538 | 317 | 339 | |||||||||||
| Service charges on deposit accounts | 1,392 | 1,526 | 1,550 | 1,674 | 1,401 | |||||||||||
| Bank card revenue | 1,568 | 1,513 | 1,639 | 1,618 | 1,491 | |||||||||||
| Net gains/(losses) on equity investments | 45 | 280 | 283 | (669 | ) | 372 | ||||||||||
| Net realized losses on debt securities | (59 | ) | (24 | ) | (242 | ) | (289 | ) | (152 | ) | ||||||
| Bank owned life insurance and annuity income | 336 | 367 | 229 | 331 | 283 | |||||||||||
| Other income | 122 | 167 | 165 | 129 | 54 | |||||||||||
| Total noninterest income | 4,386 | 4,865 | 4,887 | 3,856 | 4,545 | |||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries and employee benefits | 10,807 | 10,532 | 10,189 | 10,030 | 9,700 | |||||||||||
| Net occupancy expense | 1,333 | 1,328 | 1,301 | 1,258 | 1,242 | |||||||||||
| Equipment expense | 2,030 | 1,769 | 1,851 | 1,791 | 1,843 | |||||||||||
| Professional fees | 376 | 386 | 372 | 507 | 362 | |||||||||||
| Advertising and public relations | 170 | 280 | 276 | 165 | 172 | |||||||||||
| Amortization of intangibles | 343 | 351 | 354 | 355 | 378 | |||||||||||
| FDIC premiums | 330 | 352 | 292 | 190 | 390 | |||||||||||
| Bank card expense | 696 | 679 | 726 | 810 | 714 | |||||||||||
| Foreclosed properties expense, net of (gains)/losses | 15 | 159 | 26 | 141 | (90 | ) | ||||||||||
| Acquisition-related expenses | 331 | 81 | - | 4 | 29 | |||||||||||
| Other expenses | 2,968 | 2,932 | 3,834 | 2,358 | 2,459 | |||||||||||
| Total noninterest expense | 19,399 | 18,849 | 19,221 | 17,609 | 17,199 | |||||||||||
| Income before income taxes | 17,676 | 18,869 | 18,279 | 15,212 | 14,950 | |||||||||||
| Income tax expense | 3,575 | 3,783 | 3,856 | 3,198 | 3,257 | |||||||||||
| Net income | 14,101 | 15,086 | 14,423 | 12,014 | 11,693 | |||||||||||
| Preferred stock dividends | 225 | 225 | 225 | 225 | 225 | |||||||||||
| Net income applicable to common shares | $ | 13,876 | $ | 14,861 | $ | 14,198 | $ | 11,789 | $ | 11,468 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Five Quarter Performance Summary (unaudited) | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||||
| Per Share Data | ||||||||||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 1.09 | $ | 1.16 | $ | 1.11 | $ | 0.92 | $ | 0.90 | ||||||
| Diluted | $ | 1.08 | $ | 1.16 | $ | 1.11 | $ | 0.92 | $ | 0.90 | ||||||
| Cash dividends per common share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.18 | $ | 0.18 | ||||||
| Common stock dividend payout ratio | 18.1 | % | 16.9 | % | 17.7 | % | 19.1 | % | 19.7 | % | ||||||
| Average common shares outstanding | ||||||||||||||||
| Basic | 12,783,851 | 12,775,703 | 12,766,473 | 12,754,724 | 12,745,297 | |||||||||||
| Diluted | 12,830,102 | 12,837,637 | 12,835,670 | 12,810,174 | 12,801,903 | |||||||||||
| Common shares outstanding at period end | 12,786,404 | 12,783,646 | 12,774,645 | 12,763,422 | 12,753,094 | |||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average equity | 15.55 | % | 17.50 | % | 17.05 | % | 14.48 | % | 14.20 | % | ||||||
| Return on average tangible equity (C)(E) | 19.10 | % | 21.75 | % | 21.33 | % | 18.28 | % | 18.02 | % | ||||||
| Return on average tangible common equity (D)(E) | 20.10 | % | 22.96 | % | 22.20 | % | 19.00 | % | 18.74 | % | ||||||
| Return on average assets | 1.43 | % | 1.54 | % | 1.51 | % | 1.30 | % | 1.30 | % | ||||||
| Net interest margin (A) | 3.83 | % | 3.80 | % | 3.84 | % | 3.66 | % | 3.61 | % | ||||||
| Efficiency ratio (B) | 48.00 | % | 46.40 | % | 47.95 | % | 47.45 | % | 49.44 | % | ||||||
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of
(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Selected Balance Sheet Data (unaudited) | ||||||||||||||||
| Dollars in thousands, except per share amounts | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Assets | ||||||||||||||||
| Cash and due from banks | $ | 16,488 | $ | 16,469 | $ | 16,141 | $ | 17,921 | $ | 18,404 | ||||||
| Interest bearing deposits other banks | 54,328 | 28,248 | 29,510 | 31,680 | 42,853 | |||||||||||
| Debt securities, available for sale | 431,933 | 405,201 | 383,965 | 368,049 | 374,855 | |||||||||||
| Debt securities, held to maturity | 95,682 | 96,163 | 96,640 | 97,116 | 97,589 | |||||||||||
| Equity investments | 29,867 | 29,494 | 20,314 | 19,905 | 20,574 | |||||||||||
| Other investments | 12,696 | 16,029 | 18,105 | 18,329 | 10,974 | |||||||||||
| Loans, net | 3,059,099 | 3,043,919 | 3,038,377 | 2,941,813 | 2,817,998 | |||||||||||
| Property held for sale | 5,128 | 5,067 | 5,193 | 5,319 | 6,900 | |||||||||||
| Premises and equipment, net | 54,491 | 53,981 | 54,628 | 55,034 | 55,713 | |||||||||||
| Goodwill and other intangible assets, net | 61,807 | 62,150 | 62,502 | 62,856 | 63,212 | |||||||||||
| Cash surrender value of life insurance policies and annuities | 72,019 | 71,640 | 71,216 | 71,073 | 70,825 | |||||||||||
| Derivative financial instruments | 34,758 | 40,506 | 42,179 | 31,452 | 24,455 | |||||||||||
| Other assets | 49,111 | 47,825 | 48,529 | 42,252 | 39,339 | |||||||||||
| Total assets | $ | 3,977,407 | $ | 3,916,692 | $ | 3,887,299 | $ | 3,762,799 | $ | 3,643,691 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||
| Deposits | $ | 3,299,846 | $ | 3,169,879 | $ | 3,108,072 | $ | 2,975,304 | $ | 3,008,063 | ||||||
| Short-term borrowings | 140,150 | 225,999 | 273,148 | 291,447 | 140,146 | |||||||||||
| Long-term borrowings and | ||||||||||||||||
| subordinated debentures, net | 123,660 | 123,543 | 123,427 | 123,311 | 123,260 | |||||||||||
| Other liabilities | 44,205 | 42,741 | 40,978 | 38,846 | 41,756 | |||||||||||
| Total liabilities | 3,607,861 | 3,562,162 | 3,545,625 | 3,428,908 | 3,313,225 | |||||||||||
| Preferred stock and related surplus | 14,920 | 14,920 | 14,920 | 14,920 | 14,920 | |||||||||||
| Common stock and related surplus | 90,939 | 90,696 | 90,345 | 90,008 | 89,675 | |||||||||||
| Retained earnings | 271,712 | 260,393 | 248,084 | 236,438 | 226,944 | |||||||||||
| Accumulated other comprehensive income (loss) | (8,025 | ) | (11,479 | ) | (11,675 | ) | (7,475 | ) | (1,073 | ) | ||||||
| Total shareholders' equity | 369,546 | 354,530 | 341,674 | 333,891 | 330,466 | |||||||||||
| Total liabilities and shareholders' equity | $ | 3,977,407 | $ | 3,916,692 | $ | 3,887,299 | $ | 3,762,799 | $ | 3,643,691 | ||||||
| Book value per common share | $ | 27.73 | $ | 26.57 | $ | 25.58 | $ | 24.99 | $ | 24.74 | ||||||
| Tangible book value per common share (A)(C) | $ | 22.90 | $ | 21.70 | $ | 20.69 | $ | 20.07 | $ | 19.79 | ||||||
| Tangible common equity to tangible assets (B)(C) | 7.5 | % | 7.2 | % | 6.9 | % | 6.9 | % | 7.0 | % | ||||||
NOTES
(A) – Tangible book value per share = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / Common shares outstanding.
(B) – Tangible common equity to tangible assets = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / (Total assets – Intangible assets).
(C) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||||||
| Loan Composition (unaudited) | |||||||||||||||
| Dollars in thousands | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Commercial | $ | 498,268 | $ | 501,844 | $ | 512,771 | $ | 455,202 | $ | 447,482 | |||||
| Mortgage warehouse lines | 86,240 | 130,390 | 194,740 | 171,399 | 164,895 | ||||||||||
| Commercial real estate | |||||||||||||||
| Owner occupied | 469,560 | 467,050 | 473,298 | 502,152 | 491,059 | ||||||||||
| Non-owner occupied | 1,036,358 | 1,004,368 | 960,627 | 963,646 | 910,174 | ||||||||||
| Construction and development | |||||||||||||||
| Land and development | 102,351 | 106,362 | 104,437 | 106,840 | 103,203 | ||||||||||
| Construction | 290,556 | 282,935 | 248,564 | 211,955 | 171,383 | ||||||||||
| Residential real estate | |||||||||||||||
| Conventional | 395,312 | 386,874 | 382,203 | 377,980 | 375,240 | ||||||||||
| Jumbo | 111,475 | 92,103 | 87,449 | 79,803 | 81,443 | ||||||||||
| Home equity | 70,167 | 71,986 | 72,756 | 71,136 | 70,770 | ||||||||||
| Consumer | 36,531 | 35,372 | 35,116 | 33,816 | 32,095 | ||||||||||
| Other | 3,117 | 3,534 | 3,166 | 2,947 | 2,877 | ||||||||||
| Total loans, net of unearned fees | 3,099,935 | 3,082,818 | 3,075,127 | 2,976,876 | 2,850,621 | ||||||||||
| Less allowance for loan credit losses | 40,836 | 38,899 | 36,750 | 35,063 | 32,623 | ||||||||||
| Loans, net | $ | 3,059,099 | $ | 3,043,919 | $ | 3,038,377 | $ | 2,941,813 | $ | 2,817,998 | |||||
| Unfunded loan commitments | $ | 907,757 | $ | 925,657 | $ | 889,854 | $ | 876,157 | $ | 840,705 | |||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||||||
| Deposit Composition (unaudited) | |||||||||||||||
| Dollars in thousands | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Core deposits | |||||||||||||||
| Non-interest bearing checking | $ | 552,716 | $ | 553,616 | $ | 619,067 | $ | 600,791 | $ | 629,002 | |||||
| Interest bearing checking | 1,886,011 | 1,743,299 | 1,475,643 | 1,238,368 | 1,134,964 | ||||||||||
| Savings | 462,631 | 496,751 | 582,922 | 645,099 | 702,069 | ||||||||||
| Time deposits | 278,410 | 294,630 | 338,668 | 386,562 | 427,076 | ||||||||||
| Total core deposits | 3,179,768 | 3,088,296 | 3,016,300 | 2,870,820 | 2,893,111 | ||||||||||
| Brokered time deposits | 71,451 | 32,790 | 32,778 | 32,767 | 32,755 | ||||||||||
| Other non-core time deposits | 48,627 | 48,793 | 58,994 | 71,717 | 82,197 | ||||||||||
| Total deposits | $ | 3,299,846 | $ | 3,169,879 | $ | 3,108,072 | $ | 2,975,304 | $ | 3,008,063 | |||||
| Estimated uninsured deposits (A) | $ | 966,175 | $ | 946,188 | $ | 757,038 | $ | 762,466 | $ | 744,686 | |||||
| (A) - Excludes uninsured public funds otherwise secured or collateralized as required by law | |||||||||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||
| Regulatory Capital Ratios (unaudited) | |||||||||||
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||
| Summit Financial Group, Inc. | |||||||||||
| CET1 Risk-based Capital | 8.9 | % | 8.6 | % | 8.2 | % | 8.2 | % | 8.3 | % | |
| Tier 1 Risk-based Capital | 9.8 | % | 9.5 | % | 9.2 | % | 9.2 | % | 9.3 | % | |
| Total Risk-based Capital | 14.0 | % | 13.5 | % | 13.1 | % | 13.3 | % | 13.5 | % | |
| Tier 1 Leverage | 8.7 | % | 8.5 | % | 8.4 | % | 8.4 | % | 8.4 | % | |
| Summit Community Bank, Inc. | |||||||||||
| CET1 Risk-based Capital | 11.9 | % | 11.6 | % | 11.3 | % | 11.4 | % | 11.6 | % | |
| Tier 1 Risk-based Capital | 11.9 | % | 11.6 | % | 11.3 | % | 11.4 | % | 11.6 | % | |
| Total Risk-based Capital | 13.1 | % | 12.6 | % | 12.2 | % | 12.4 | % | 12.5 | % | |
| Tier 1 Leverage | 10.6 | % | 10.4 | % | 10.3 | % | 10.4 | % | 10.5 | % | |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Asset Quality Information (unaudited) | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Gross loan charge-offs | $ | 164 | $ | 250 | $ | 265 | $ | 306 | $ | 618 | ||||||
| Gross loan recoveries | (227 | ) | (249 | ) | (257 | ) | (147 | ) | (109 | ) | ||||||
| Net loan charge-offs | $ | (63 | ) | $ | 1 | $ | 8 | $ | 159 | $ | 509 | |||||
| Net loan charge-offs to average loans (annualized) | -0.01 | % | 0.00 | % | 0.00 | % | 0.02 | % | 0.07 | % | ||||||
| Allowance for loan credit losses | $ | 40,836 | $ | 38,899 | $ | 36,750 | $ | 35,063 | $ | 32,623 | ||||||
| Allowance for loan credit losses as a percentage | ||||||||||||||||
| of period end loans | 1.32 | % | 1.26 | % | 1.19 | % | 1.18 | % | 1.14 | % | ||||||
| Allowance for credit losses on | ||||||||||||||||
| unfunded loan commitments ("ULC") | $ | 6,572 | $ | 6,947 | $ | 7,597 | $ | 7,792 | $ | 8,392 | ||||||
| Allowance for credit losses on ULC | ||||||||||||||||
| as a percentage of period end ULC | 0.72 | % | 0.75 | % | 0.85 | % | 0.89 | % | 1.00 | % | ||||||
| Nonperforming assets: | ||||||||||||||||
| Nonperforming loans | ||||||||||||||||
| Commercial | $ | 402 | $ | 93 | $ | 347 | $ | 345 | $ | 433 | ||||||
| Commercial real estate | 1,700 | 1,750 | 1,860 | 2,703 | 4,765 | |||||||||||
| Residential construction and development | 813 | 851 | 902 | 1,053 | 968 | |||||||||||
| Residential real estate | 4,322 | 5,117 | 6,083 | 6,799 | 5,549 | |||||||||||
| Consumer | 65 | 12 | 8 | 37 | 20 | |||||||||||
| Total nonperforming loans | 7,302 | 7,823 | 9,200 | 10,937 | 11,735 | |||||||||||
| Foreclosed properties | ||||||||||||||||
| Commercial real estate | 297 | 297 | 297 | 440 | 1,251 | |||||||||||
| Commercial construction and development | 2,187 | 2,187 | 2,332 | 2,332 | 2,332 | |||||||||||
| Residential construction and development | 2,293 | 2,293 | 2,293 | 2,293 | 3,018 | |||||||||||
| Residential real estate | 351 | 290 | 271 | 254 | 299 | |||||||||||
| Total foreclosed properties | 5,128 | 5,067 | 5,193 | 5,319 | 6,900 | |||||||||||
| Other repossessed assets | - | - | - | - | - | |||||||||||
| Total nonperforming assets | $ | 12,430 | $ | 12,890 | $ | 14,393 | $ | 16,256 | $ | 18,635 | ||||||
| Nonperforming loans to period end loans | 0.24 | % | 0.25 | % | 0.30 | % | 0.37 | % | 0.41 | % | ||||||
| Nonperforming assets to period end assets | 0.31 | % | 0.33 | % | 0.37 | % | 0.43 | % | 0.51 | % | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Loans Past Due 30-89 Days (unaudited) | ||||||||||||||||
| Dollars in thousands | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Commercial | $ | 463 | $ | 3,168 | $ | 1,329 | $ | 989 | $ | 388 | ||||||
| Commercial real estate | 1,000 | 641 | 1,550 | 4,084 | 1,446 | |||||||||||
| Construction and development | 3,459 | 317 | 236 | 821 | 645 | |||||||||||
| Residential real estate | 2,311 | 6,231 | 2,824 | 3,452 | 3,407 | |||||||||||
| Consumer | 252 | 253 | 216 | 196 | 69 | |||||||||||
| Other | 13 | 22 | 4 | 14 | 28 | |||||||||||
| Total | $ | 7,498 | $ | 10,632 | $ | 6,159 | $ | 9,556 | $ | 5,983 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||||||||||||||||||||||
| Q1 2023 vs Q4 2022 vs Q1 2022 (unaudited) | ||||||||||||||||||||||||||
| Q1 2023 | Q4 2022 | Q1 2022 | ||||||||||||||||||||||||
| 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) | ||||||||||||||||||||||||||
| Taxable | $ | 3,087,068 | $ | 45,421 | 5.97 | % | $ | 3,100,595 | $ | 43,549 | 5.57 | % | $ | 2,771,842 | $ | 30,178 | 4.42 | % | ||||||||
| Tax-exempt (2) | 6,086 | 81 | 5.40 | % | 4,525 | 52 | 4.56 | % | 5,369 | 58 | 4.38 | % | ||||||||||||||
| Securities | ||||||||||||||||||||||||||
| Taxable | 314,004 | 3,412 | 4.41 | % | 280,114 | 2,747 | 3.89 | % | 320,170 | 1,657 | 2.10 | % | ||||||||||||||
| Tax-exempt (2) | 216,430 | 1,781 | 3.34 | % | 219,245 | 1,813 | 3.28 | % | 180,473 | 1,223 | 2.75 | % | ||||||||||||||
| Interest bearing deposits other banks | ||||||||||||||||||||||||||
| and Federal funds sold | 34,330 | 171 | 2.02 | % | 25,785 | 70 | 1.08 | % | 72,883 | 46 | 0.26 | % | ||||||||||||||
| Total interest earning assets | 3,657,918 | 50,866 | 5.64 | % | 3,630,264 | 48,231 | 5.27 | % | 3,350,737 | 33,162 | 4.01 | % | ||||||||||||||
| Noninterest earning assets | ||||||||||||||||||||||||||
| Cash & due from banks | 17,387 | 16,892 | 19,226 | |||||||||||||||||||||||
| Premises & equipment | 54,112 | 54,431 | 56,043 | |||||||||||||||||||||||
| Intangible assets | 62,024 | 62,336 | 63,429 | |||||||||||||||||||||||
| Other assets | 190,533 | 191,926 | 142,719 | |||||||||||||||||||||||
| Allowance for loan credit losses | (39,507 | ) | (37,377 | ) | (32,462 | ) | ||||||||||||||||||||
| Total assets | $ | 3,942,467 | $ | 3,918,472 | $ | 3,599,692 | ||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||||||||
| Interest bearing | ||||||||||||||||||||||||||
| demand deposits | 1,819,505 | 10,796 | 2.41 | % | 1,615,275 | 7,848 | 1.93 | % | $ | 1,135,068 | $ | 465 | 0.17 | % | ||||||||||||
| Savings deposits | 480,207 | 1,917 | 1.62 | % | 529,039 | 1,651 | 1.24 | % | 700,115 | 573 | 0.33 | % | ||||||||||||||
| Time deposits | 389,252 | 1,287 | 1.34 | % | 399,101 | 695 | 0.69 | % | 542,360 | 689 | 0.52 | % | ||||||||||||||
| Short-term borrowings | 166,365 | 824 | 2.01 | % | 276,823 | 1,868 | 2.68 | % | 140,230 | 373 | 1.08 | % | ||||||||||||||
| Long-term borrowings and | ||||||||||||||||||||||||||
| subordinated debentures | 123,599 | 1,462 | 4.80 | % | 123,488 | 1,425 | 4.58 | % | 123,203 | 1,239 | 4.08 | % | ||||||||||||||
| Total interest bearing liabilities | 2,978,928 | 16,286 | 2.22 | % | 2,943,726 | 13,487 | 1.82 | % | 2,640,976 | 3,339 | 0.51 | % | ||||||||||||||
| Noninterest bearing liabilities | ||||||||||||||||||||||||||
| Demand deposits | 557,209 | 586,617 | 586,903 | |||||||||||||||||||||||
| Other liabilities | 43,508 | 43,378 | 42,493 | |||||||||||||||||||||||
| Total liabilities | 3,579,645 | 3,573,721 | 3,270,372 | |||||||||||||||||||||||
| Shareholders' equity - preferred | 14,920 | 14,920 | 14,921 | |||||||||||||||||||||||
| Shareholders' equity - common | 347,902 | 329,831 | 314,399 | |||||||||||||||||||||||
| Total liabilities and | ||||||||||||||||||||||||||
| shareholders' equity | $ | 3,942,467 | $ | 3,918,472 | $ | 3,599,692 | ||||||||||||||||||||
| NET INTEREST EARNINGS | $ | 34,580 | $ | 34,744 | $ | 29,823 | ||||||||||||||||||||
| NET INTEREST MARGIN | 3.83 | % | 3.80 | % | 3.61 | % | ||||||||||||||||||||
| (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 | ||||||||||||||||||||||||||
| The tax equivalent adjustment resulted in an increase in interest income of | ||||||||||||||||||||||||||
| Q4 2022 and Q1 2022, respectively. | ||||||||||||||||||||||||||
FAQ
What were the earnings results for SMMF in Q1 2023?
How did core deposits perform for SMMF in Q1 2023?
What is the future outlook for SMMF after its recent acquisition?
What is the net interest margin reported for SMMF in Q1 2023?
Did SMMF declare any dividends in Q1 2023?
