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Summit Financial Group Reports Second Quarter and First Half 2015 Results

20:00 EDT 26 Jul 2015 | Globe Newswire

MOOREFIELD, W. Va., July 27, 2015 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ:SMMF) today reported second quarter 2015 net income applicable to common shares of $4.01 million, or $0.38 per diluted share, compared to $2.24 million, or $0.25 per diluted share, for the second quarter of 2014, representing an increase of 79.1 percent, or 52.0 percent per diluted share. Q2 2015 earnings compared to Q2 2014 were positively impacted by an $802,000 decline in write-downs of foreclosed properties, a $500,000 decrease in provision for loan losses, and a $1.14 million increase in net interest income.

Excluding from second quarter 2015 (on a pre-tax basis) realized securities gains of $170,000, losses on sales of foreclosed properties of $103,000, and write-downs of foreclosed properties of $160,000, Q2 2015 core earnings approximated $4.07 million, or $0.39 per diluted share. Excluding from second quarter 2014 (on a pre-tax basis) realized securities losses of $43,000, losses on sales of foreclosed properties of $54,000, $1,000 in other-than-temporary impairment of securities (“OTTI”) and write-downs of foreclosed properties of $962,000, Q2 2014 core earnings approximated $2.91 million, or $0.32 per diluted share.

For the six months ended June 30, 2015, Summit recorded net income applicable to common shares of $8.29 million, or $0.78 per diluted share, compared with $4.44 million, or $0.50 per diluted share, for the comparable 2014 six-month period, representing an increase of 87.0%, or 56.0% per diluted share.

Excluding from the six month period ended June 30, 2015 nonrecurring items (on a pre-tax basis) comprised of realized securities gains of $650,000, a $176,000 Federal Home Loan Bank of Pittsburgh (“FHLB”)  special dividend, losses on sales of assets of $253,000, and write-downs of foreclosed properties of $732,000, and from the 2014 first six-month period realized securities losses of $64,000, losses on sales of assets of $129,000, OTTI charges of $1,000 and write-downs of foreclosed properties of $1.89 million, core earnings for first six months of 2015 were approximately $8.39 million, or $0.78 per diluted share, compared to $5.75 million, or $0.65 per diluted share, for the 2014 six month period.

Highlights for Q2 2015 include:

  • Net interest margin has increased 17 basis points since Q2 2014, although it declined 10 basis points compared to Q1 2015 principally due to a one-time FHLB special dividend paid in first quarter 2015 to its member banks.
  • Achieved loan growth of $25.2 million during the quarter, or 9.6 percent (on an annualized basis), and $44.7 million, or 8.6 percent (annualized) year-to-date.
  • Nonperforming assets declined for the fourteenth consecutive quarter.  Compared to the linked quarter, nonperforming assets as a percentage of total assets declined from 3.18 percent to 3.05 percent, reaching its lowest level since Q2 2008; foreclosed properties are at the lowest level since Q3 2009.
  • Core revenues were relatively flat compared to the linked quarter, but have increased 8.3 percent compared to the year ago quarter.
  • Recorded charges of $160,000 to write-down foreclosed properties compared to $572,000 in Q1 2015 and $962,000 in Q2 2014.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report our Q2 2015 and year-to-date 2015 operating results. Our strong core earnings, growing loan portfolio, increasing revenues, stable net interest margin, strengthening capital and continued reductions in our portfolio of problem assets during the quarter are all very gratifying; perhaps more importantly, these results represent a continuation of recent similar trends giving us optimism as we look forward to the remainder of 2015 and beyond.”

Results from Operations

Total revenue for second quarter 2015, consisting of net interest income and noninterest income, grew 9.9 percent to $14.3 million compared to $13.0 million for the second quarter 2014. For the year-to-date period ended June 30, 2015, total revenue was $29.0 million compared to $25.8 million for the same period of 2014, representing a 12.1 percent increase.

Total core revenue (excluding nonrecurring items, enumerated above) was $14.1 million for second quarter 2015 compared to $13.1 million for the same prior-year quarter, an increase of 8.3 percent. For the first half of 2015, total core revenue (excluding nonrecurring items) was $28.2 million compared to $25.9 million for the first half of 2014, an 8.6 percent improvement.

For the second quarter of 2015, net interest income was $11.5 million, an increase of 11.0 percent from the $10.3 million reported in the prior-year second quarter and decreased $62,000 compared to the linked quarter. The net interest margin for second quarter 2015 was 3.49 percent compared to 3.32 percent for the year-ago quarter, and 3.59 percent for the linked quarter.  

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary and service fee income from community banking activities, for second quarter 2015 was $2.86 million compared to $2.71 million for the comparable period of 2014. Excluding realized securities gains/losses and OTTI of securities, noninterest income was $2.69 million for second quarter 2015, compared to $2.75 million reported for second quarter 2014.

The second quarter 2015 provision for loan losses totaled $500,000, compared to $250,000 for the linked quarter, and $1.0 million for the year-ago quarter.

Core noninterest expense continues to be well-controlled. Total noninterest expense decreased 5.5% to $8.06 million compared to $8.53 million for the prior-year second quarter. Excluding from noninterest expense (on a pre-tax basis) losses on sales of foreclosed properties of $103,000 in Q2 2015 and $54,000 in Q2 2014 and write-downs of foreclosed properties of $160,000 in Q2 2015 and $962,000 in Q2 2014, noninterest expense would have approximated $7.80 million for Q2 2015 compared to $7.51 million for the comparable period of 2014. Noninterest expense for the first half of 2015 decreased 4.5% compared to the first half of 2014.

Balance Sheet

At June 30, 2015, total assets were $1.48 billion, an increase of $36.4 million, or 2.5 percent since December 31, 2014. Total loans, net of unearned fees and allowance for loan losses, were $1.06 billion at June 30, 2015, up $44.6 million, or 4.4 percent, from the $1.02 billion reported at year-end 2014.

At June 30, 2015, deposits were $1.05 billion, a decrease of $8.0 million, or 0.8 percent, since year end 2014. During first half 2015, checking and savings declined by $3.2 million and $6.6 million, respectively, or 1.0 percent and 2.6 percent, respectively, while time deposits increased $1.9 million or 0.4 percent. Long-term borrowings and subordinated debentures declined by 13.4 percent since year end 2014, as the Company prepaid $14.3 million in subordinated debentures, which was funded by short-term borrowings.

Asset Quality

As of June 30, 2015, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $45.1 million, or 3.05 percent of assets. This compares to $46.4 million, or 3.18 percent of assets at the linked quarter, and $63.0 million, or 4.39 percent of assets, at second quarter 2014.

Second quarter 2015 net loan charge-offs were $56,000, or 0.02 percent of average loans annualized; while adding $500,000 to the allowance for loan losses. The allowance for loan losses stood at $11.3 million, or 1.05 percent of total loans at June 30, 2015, compared to 1.08 percent at year-end 2014.

Capital Adequacy

Shareholders’ equity was $140.1 million as of June 30, 2015 compared to $131.6 million December 31, 2014 and $117.5 million at June 30, 2014. Tangible book value per common share increased to $12.22 at June 30, 2015 compared to $11.86 at December 31, 2014 and $11.40 at June 30, 2014.

At June 30, 2015, Summit’s and its depository institution’s, Summit Community Bank, Inc.’s (the “Bank’s”), regulatory risk-based capital ratios computed in accordance with the new Basel III regulatory capital guidelines effective January 1, 2015, were each well in excess of the regulatory minimum required ratio relative to each plus the respective applicable capital conservation buffer on a fully phased-in basis. Respectively, the Company’s and Bank’s Tier 1 leverage capital ratios were 10.4 percent and 10.6 percent at June 30, 2015 compared to 9.9 percent and 10.6 percent reported at December 31, 2014.

About the Company

Summit Financial Group, Inc. is a $1.48 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Northern and Shenandoah Valley regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates fifteen 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.

NON-GAAP FINANCIAL MEASURES

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America ("GAAP").  Specifically, Summit adjusted GAAP performance measures to exclude the effects of realized and unrealized securities gains and losses, gains/losses on sales of assets, and write-downs of foreclosed properties to estimated fair value included in its Statements of Income.  Management deems believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of Summit's core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.



SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)  
Quarterly Performance Summary -- Q2 2015 vs Q2 2014  
     
    
   For the Quarter Ended  Percent 
Dollars in thousands 6/30/20156/30/2014 Change 
Condensed Statements of Income    
 Interest income    
 Loans, including fees $  12,972 $  12,515  3.7%
 Securities    1,685    1,827  -7.8%
 Other    1    2  -50.0%
 Total interest income    14,658    14,344  2.2%
 Interest expense    
 Deposits    2,074    2,335  -11.2%
 Borrowings    1,126    1,689  -33.3%
 Total interest expense    3,200    4,024  -20.5%
 Net interest income    11,458    10,320  11.0%
 Provision for loan losses    500    1,000  -50.0%
 Net interest income after provision    
 for loan losses    10,958    9,320  17.6%
     
 Noninterest income    
 Insurance commissions    1,080    1,091  -1.0%
 Service fees related to deposit accounts    1,072    1,101  -2.6%
 Realized securities gains (losses)    170    (43) n/m 
 Other-than-temporary impairment of securities    -    (1) n/m 
 Other income    538    557  -3.4%
 Total noninterest income   2,860    2,705  5.7%
 Noninterest expense    
 Salaries and employee benefits   4,442    4,045  9.8%
 Net occupancy expense   489    505  -3.2%
 Equipment expense   560    513  9.2%
 Professional fees   372    282  31.9%
 FDIC premiums   320    495  -35.4%
 Foreclosed properties expense   158    229  -31.0%
 Loss on sales of foreclosed properties   103    54  90.7%
 Write-downs of foreclosed properties   160    962  -83.4%
 Other expenses   1,457    1,445  0.8%
 Total noninterest expense   8,061    8,530  -5.5%
  Income before income taxes    5,757    3,495  64.7%
  Income taxes    1,747    1,063  64.3%
 Net income    4,010    2,432  64.9%
 Preferred stock dividends    -    193  n/m 
     
Net income applicable to common shares$  4,010 $  2,239  79.1%

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)  
Quarterly Performance Summary -- Q2 2015 vs Q2 2014  
    
   For the Quarter Ended  Percent 
  6/30/20156/30/2014 Change 
 Per Share Data    
 Earnings per common share    
 Basic $  0.38 $  0.30  26.7%
 Diluted $  0.38 $  0.25  52.0%
     
 Cash dividends $  0.08 $  -   n/a 
     
 Average common shares outstanding    
 Basic    10,667,892    7,457,222  43.1%
 Diluted    10,676,474    9,630,699  10.9%
     
 Common shares outstanding at period end    10,843,676    7,457,222  45.4%
     
 Performance Ratios    
 Return on average equity  11.67% 8.37% 39.4%
 Return on average tangible equity  12.36% 8.98% 37.6%
 Return on average assets  1.09% 0.69% 58.0%
 Net interest margin  3.49% 3.32% 5.1%
 Efficiency ratio (A)  52.05% 52.86% -1.5%
     

 NOTE (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)  
Six Month Performance Summary -- 2015 vs 2014   
     
     
   For the Six Months Ended  Percent 
 Dollars in thousands 6/30/20156/30/2014 Change 
Condensed Statements of Income    
 Interest income    
 Loans, including fees $  25,821 $  24,731  4.4%
 Securities    3,579    3,679  -2.7%
 Other    2    4  -50.0%
 Total interest income    29,402    28,414  3.5%
 Interest expense    
 Deposits    4,145    4,576  -9.4%
 Borrowings    2,279    3,480  -34.5%
 Total interest expense    6,424    8,056  -20.3%
 Net interest income    22,978    20,358  12.9%
 Provision for loan losses    750    2,000  -62.5%
 Net interest income after provision    
 for loan losses    22,228    18,358  21.1%
     
 Noninterest income    
 Insurance commissions    2,208    2,273  -2.9%
 Service fees related to deposit accounts    2,048    2,144  -4.5%
 Realized securities gains (losses)    650    (64) n/m 
 Other-than-temporary impairment of securities    -    (1) -100.0%
 Other income    1,093    1,137  -3.9%
 Total noninterest income   5,999    5,489  9.3%
 Noninterest expense    
 Salaries and employee benefits   8,629    8,026  7.5%
 Net occupancy expense   988    1,046  -5.5%
 Equipment expense   1,095    1,079  1.5%
 Professional fees   707    598  18.2%
 FDIC premiums   650    997  -34.8%
 Foreclosed properties expense   366    482  -24.1%
 Loss on sales of foreclosed properties   253    129  96.1%
 Write-downs of foreclosed properties   732    1,891  -61.3%
 Other expenses   2,846    2,780  2.4%
 Total noninterest expense   16,266    17,028  -4.5%
  Income before income taxes    11,961    6,819  75.4%
  Income taxes    3,667    1,997  83.6%
  Net income    8,294    4,822  72.0%
  Preferred stock dividends    -    387  n/m 
     
 Net income applicable to common shares$  8,294 $  4,435  87.0%
     

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)  
Six Month Performance Summary -- 2015 vs 2014   
    
   For the Six Months Ended  Percent 
  6/30/20156/30/2014 Change 
 Per Share Data    
 Earnings per common share    
 Basic $  0.85 $  0.59  44.1%
 Diluted $  0.78 $  0.50  56.0%
     
 Cash dividends $  0.16 $  -   n/a 
     
 Average common shares outstanding    
 Basic    9,747,042    7,455,307  30.7%
 Diluted    10,585,411    9,629,830  9.9%
     
 Common shares outstanding at period end    10,843,676    7,457,222  45.4%
     
 Performance Ratios    
 Return on average equity  12.22% 8.42% 45.1%
 Return on average tangible equity  12.95% 9.04% 43.3%
 Return on average assets  1.14% 0.69% 65.2%
 Net interest margin  3.54% 3.32% 6.6%
 Efficiency ratio (A)  50.65% 53.49% -5.3%
     

NOTE (A) – Computed on a tax equivalent basis excluding 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 6/30/20153/31/201512/31/20149/30/20146/30/2014
Condensed Statements of Income      
 Interest income      
 Loans, including fees $  12,972 $  12,848 $  12,666 $  13,033 $  12,515 
 Securities    1,685    1,894    1,784    1,724    1,827 
 Other    1    1    2    3    2 
 Total interest income    14,658    14,743    14,452    14,760    14,344 
 Interest expense      
 Deposits    2,074    2,071    2,130    2,288    2,335 
 Borrowings    1,126    1,152    1,371    1,395    1,689 
 Total interest expense    3,200    3,223    3,501    3,683    4,024 
 Net interest income    11,458    11,520    10,951    11,077    10,320 
       
 Provision for loan losses    500    250    -    250    1,000 
 Net interest income after provision      
 for loan losses    10,958    11,270    10,951    10,827    9,320 
       
 Noninterest income      
 Insurance commissions    1,080    1,128    1,023    1,105    1,091 
 Service fees related to deposit accounts    1,072    976    1,113    1,177    1,101 
 Realized securities gains (losses)    170    480    149    128    (43)
 Other-than-temporary impairment of securities    -    -    -    -    (1)
 Other income    538    555    537    503    557 
 Total noninterest income   2,860    3,139    2,822    2,913    2,705 
 Noninterest expense      
 Salaries and employee benefits   4,442    4,187    4,133    4,026    4,045 
 Net occupancy expense   489    498    495    482    505 
 Equipment expense   560    535    487    520    513 
 Professional fees   372    335    452    380    282 
 FDIC premiums   320    330    315    480    495 
 Foreclosed properties expense   158    208    239    298    229 
 Loss on sales of foreclosed properties    103    150    628    70    54 
 Write-downs of foreclosed properties    160    572    300    1,580    962 
 Other expenses   1,457    1,389    2,061    1,350    1,445 
 Total noninterest expense   8,061    8,204    9,110    9,186    8,530 
 Income before income taxes    5,757    6,205    4,663    4,554    3,495 
 Income taxes    1,747    1,920    1,464    1,218    1,063 
 Net income    4,010    4,285    3,199    3,336    2,432 
 Preferred stock dividends    -    -    191    193    193 
 Net income applicable to common shares$  4,010 $  4,285 $  3,008 $  3,143 $  2,239 
       

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)     
Five Quarter Performance Summary     
      
   For the Quarter Ended 
  6/30/20153/31/201512/31/20149/30/20146/30/2014
 Per Share Data      
 Earnings per common share      
 Basic $  0.38 $  0.49 $  0.39 $  0.42 $  0.30 
 Diluted $  0.38 $  0.41 $  0.32 $  0.35 $  0.25 
       
 Cash dividends $  0.08 $  0.08 $  -  $  -  $  -  
       
 Average common shares outstanding      
 Basic    10,667,892    8,815,961    7,796,508    7,457,222    7,457,222 
 Diluted    10,676,474    10,493,323    9,963,214    9,630,293    9,630,699 
       
 Common shares outstanding at period end    10,843,676    10,586,242    8,301,746    7,457,222    7,457,222 
      
 Performance Ratios      
 Return on average equity  11.67% 12.79% 10.10% 11.13% 8.37%
 Return on average tangible equity  12.36% 13.56% 10.76% 11.90% 8.98%
 Return on average assets  1.09% 1.18% 0.89% 0.93% 0.69%
 Net interest margin  3.49% 3.59% 3.42% 3.47% 3.32%
 Efficiency ratio (A)  52.05% 49.27% 53.07% 51.19% 52.86%

NOTE (A) – Net income divided by average total shareholders’ equity.

NOTE (B) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)    
Selected Balance Sheet Data     
       
   For the Quarter Ended 
 Dollars in thousands, except per share amounts 6/30/20153/31/201512/31/20149/30/20146/30/2014
       
 Assets      
 Cash and due from banks$  3,988 $  3,850 $  3,728 $  3,933 $  3,749 
 Interest bearing deposits other banks   9,274    8,437    8,783    9,300    9,970 
 Securities   276,661    282,135    282,834    282,401    287,883 
 Loans, net   1,064,472    1,039,669    1,019,842    993,347    992,816 
 Property held for sale   31,500    34,368    37,529    47,252    48,783 
 Premises and equipment, net   20,490    20,208    20,060    20,132    20,301 
 Intangible assets   7,598    7,648    7,698    7,748    7,798 
 Cash surrender value of life insurance policies   37,222    36,961    36,700    36,417    36,151 
 Other assets   28,764    27,216    26,394    28,139    28,507 
 Total assets$  1,479,969 $  1,460,492 $  1,443,568 $  1,428,669 $  1,435,958 
       
 Liabilities and Shareholders' Equity      
 Deposits$  1,053,310 $  1,058,308 $  1,061,314 $  1,054,454 $  1,057,795 
 Short-term borrowings   174,599    148,985    123,633    127,432    91,729 
 Long-term borrowings and     
 subordinated debentures   98,625    101,602    113,879    114,855    158,331 
 Other liabilities   13,363    15,708    13,098    10,566    10,638 
 Shareholders' equity   140,072    135,889    131,644    121,362    117,465 
 Total liabilities and shareholders' equity$  1,479,969 $  1,460,492 $  1,443,568 $  1,428,669 $  1,435,958 
       
 Book value per common share (A)$  12.92 $  12.84 $  12.60 $  12.62 $  12.21 
 Tangible book value per common share (A)$  12.22 $  12.11 $  11.86 $  11.81 $  11.40 
 Tangible equity to tangible assets 9.0% 8.8% 8.6% 8.0% 7.7%
 Tangible common equity to tangible assets 9.0% 8.8% 8.0% 7.3% 7.0%
       

NOTE (A) – Assumes conversion of convertible preferred stock

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)     
Regulatory Capital Ratios (A)      
        
  6/30/20153/31/201512/31/20149/30/20146/30/2014 
Summit Financial Group, Inc.      
 CET1 Risk-based Capital 11.6% 11.3% n/a  n/a  n/a  
 Tier 1 Risk-based Capital 13.2% 13.0% 13.3% 12.5% 12.4% 
 Total Risk-based Capital 14.2% 14.0% 14.9% 14.3% 14.2% 
 Tier 1 Leverage Ratio 10.4% 10.1% 9.9% 9.2% 9.0% 
        
Summit Community Bank, Inc.      
 CET1 Risk-based Capital 13.4% 13.5% n/a  n/a  n/a  
 Tier 1 Risk-based Capital 13.4% 13.5% 14.2% 14.4% 14.5% 
 Total Risk-based Capital 14.4% 14.5% 15.3% 15.5% 15.6% 
 Tier 1 Leverage Ratio 10.6% 10.5% 10.6% 10.5% 10.6% 
        

NOTE (A) – Computed in accordance with Basel III regulatory capital guidelines beginning January 1, 2015

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)    
Loan Composition      
        
Dollars in thousands6/30/20153/31/201512/31/20149/30/20146/30/2014 
        
Commercial $  97,284 $  89,928 $  88,590 $  83,762 $  90,096  
Commercial real estate      
Owner occupied   191,743    180,269    157,783    156,765    154,260  
Non-owner occupied   331,056    325,764    317,136    314,577    314,439  
Construction and development      
Land and development   64,435    66,558    67,881    61,088    64,246  
Construction    18,214    19,094    28,591    27,239    20,902  
Residential real estate      
Non-jumbo    220,199    219,938    220,071    218,125    219,569  
Jumbo    49,203    50,492    52,879    51,917    52,487  
Home equity    72,504    68,894    67,115    64,256    61,248  
Consumer    18,683    18,485    19,456    19,906    19,777  
Other    12,423    11,074    11,507    6,753    6,798  
Total loans, net of unearned fees   1,075,744    1,050,496    1,031,009    1,004,388    1,003,822  
Less allowance for loan losses   11,272    10,827    11,167    11,041    11,006  
Loans, net$  1,064,472 $  1,039,669 $  1,019,842 $  993,347 $  992,816  
        

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)    
Deposit Composition      
        
Dollars in thousands 6/30/20153/31/201512/31/20149/30/20146/30/2014 
Non interest bearing checking$  113,256 $  117,049 $  115,427 $  104,442 $  106,134  
Interest bearing checking   202,957    196,606    204,030    195,183    187,855  
Savings    246,949    257,687    253,578    255,880    243,323  
Time deposits    490,148    486,966    488,279    498,949    520,483  
Total deposits$  1,053,310 $  1,058,308 $  1,061,314 $  1,054,454 $  1,057,795  
        

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)    
Asset Quality Information     
       
   For the Quarter Ended 
 Dollars in thousands 6/30/20153/31/201512/31/20149/30/20146/30/2014
       
 Gross loan charge-offs$  463 $  782 $  362 $  297 $  1,312 
 Gross loan recoveries   (407)   (192)   (488)   (82)   (249)
 Net loan charge-offs$  56 $  590 $  (126)$  215 $  1,063 
       
 Net loan charge-offs to average loans (annualized) 0.02% 0.23% -0.05% 0.09% 0.43%
 Allowance for loan losses$  11,272 $  10,827 $  11,167 $  11,041 $  11,006 
 Allowance for loan losses as a percentage     
 of period end loans 1.05% 1.03% 1.08% 1.10% 1.10%
       
 Nonperforming assets:     
 Nonperforming loans     
 Commercial$  1,065 $  788 $  392 $  309 $  415 
 Commercial real estate   2,421    1,340    1,844    936    1,537 
 Commercial construction and development   -    -    -    -    3,601 
 Residential construction and development   5,627    5,333    4,619    4,592    5,248 
 Residential real estate   4,433    4,491    5,556    5,257    3,289 
 Consumer   45    65    83    146    129 
 Total nonperforming loans   13,591    12,017    12,494    11,240    14,219 
 Foreclosed properties     
 Commercial   -    110    110    110    110 
 Commercial real estate   3,279    3,657    5,204    5,815    5,762 
 Commercial construction and development   10,178    10,191    10,179    10,178    10,363 
 Residential construction and development   15,839    17,590    19,267    20,431    20,557 
 Residential real estate   2,204    2,819    2,769    10,718    11,991 
 Total foreclosed properties   31,500    34,367    37,529    47,252    48,783 
 Other repossessed assets   55    55    221    34    - 
 Total nonperforming assets$  45,146 $  46,439 $  50,244 $  58,526 $  63,002 
       
 Nonperforming loans to period end loans 1.26% 1.14% 1.21% 1.12% 1.42%
 Nonperforming assets to period end assets 3.05% 3.18% 3.48% 4.10% 4.39%
       

 

Loans Past Due 30-89 Days     
   For the Quarter Ended 
 In thousands 6/30/20153/31/201512/31/20149/30/20146/30/2014
       
 Commercial$  344 $  387 $  382 $  253 $  376 
 Commercial real estate   4,945    783    266    1,094    1,032 
 Construction and development   21    2,735    2,278    324    156 
 Residential real estate   3,932    3,614    7,413    5,087    5,775 
 Consumer   211    148    269    427    585 
 Other   7    18    14    18    - 
 Total$  9,460 $  7,685 $  10,622 $  7,203 $  7,924 
       

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)      
Average Balance Sheet, Interest Earnings & Expenses and Average Rates     
Q2 2015 vs Q2 2014        
 Q2 2015 Q2 2014 
 AverageEarnings /Yield / AverageEarnings /Yield / 
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate 
         
ASSETS        
Interest earning assets        
Loans, net of unearned interest        
Taxable$  1,046,203 $  12,854  4.93% $  978,842 $  12,428  5.09% 
Tax-exempt   12,466    179  5.76%    7,597    133  7.02% 
Securities        
Taxable   216,063    1,093  2.03%    213,560    1,198  2.25% 
Tax-exempt   74,430    898  4.84%    82,958    952  4.60% 
Interest bearing deposits other banks        
and Federal funds sold   7,923    1  0.05%    8,413    2  0.10% 
Total interest earning assets   1,357,085    15,025  4.44%    1,291,370    14,713  4.57% 
         
Noninterest earning assets        
Cash & due from banks   3,973       3,785    
Premises & equipment   20,409       20,433    
Other assets   96,231       114,917    
Allowance for loan losses   (11,095)      (11,440)   
Total assets$  1,466,603    $  1,419,065    
         
 LIABILITIES AND SHAREHOLDERS' EQUITY       
         
Liabilities        
Interest bearing liabilities        
Interest bearing         
demand deposits$  206,597 $  59  0.11% $  190,146 $  54  0.11% 
Savings deposits   251,802    429  0.68%    237,789    388  0.65% 
Time deposits   486,396    1,586  1.31%    524,111    1,894  1.45% 
Short-term borrowings   154,704    125  0.32%    79,687    59  0.30% 
Long-term borrowings and        
subordinated debentures   100,583    1,001  3.99%    159,550    1,629  4.10% 
Total interest bearing liabilities   1,200,082    3,200  1.07%    1,191,283    4,024  1.35% 
         
Noninterest bearing liabilities        
Demand deposits   114,327       101,874    
Other liabilities   14,771       9,694    
Total liabilities   1,329,180       1,302,851    
         
Shareholders' equity - preferred   -       9,283    
Shareholders' equity - common   137,423       106,931    
Total liabilities and        
shareholders' equity$  1,466,603    $  1,419,065    
         
NET INTEREST EARNINGS $  11,825    $  10,689   
         
NET INTEREST MARGIN   3.49%    3.32% 
         

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)      
Average Balance Sheet, Interest Earnings & Expenses and Average Rates     
YTD 2015 vs YTD 2014        
   
 YTD 2015 YTD 2014 
 AverageEarnings /Yield / AverageEarnings /Yield / 
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate 
         
ASSETS        
Interest earning assets        
Loans, net of unearned  interest        
Taxable$  1,040,935 $  25,588  4.96% $  968,221 $  24,572  5.12% 
Tax-exempt   12,516    353  5.69%    6,719    241  7.23% 
Securities        
Taxable   213,252    2,368  2.24%    215,220    2,481  2.32% 
Tax-exempt   75,744    1,835  4.89%    79,218    1,815  4.62% 
Interest bearing deposits other banks        
and Federal funds sold   7,504    2  0.05%    8,666    3  0.07% 
Total interest earning assets   1,349,951    30,146  4.50%    1,278,044    29,112  4.59% 
         
Noninterest earning assets        
Cash & due from banks   3,827       3,841    
Premises & equipment   20,307       20,506    
Other assets   97,454       115,454    
Allowance for loan losses   (11,166)      (12,200)   
Total assets$  1,460,373    $  1,405,645    
         
 LIABILITIES AND SHAREHOLDERS' EQUITY       
         
Liabilities        
Interest bearing liabilities        
Interest bearing         
demand deposits$  203,237 $  118  0.12% $  188,573 $  106  0.11% 
Savings deposits   253,093    857  0.68%    223,240    707  0.64% 
Time deposits   486,187    3,169  1.31%    527,097    3,763  1.44% 
Short-term borrowings   149,769    238  0.32%    77,444    111  0.29% 
Long-term borrowings and        
subordinated debentures   103,148    2,041  3.99%    167,013    3,368  4.07% 
    1,195,434    6,423  1.08%    1,183,367    8,055  1.37% 
Noninterest bearing liabilities        
Demand deposits   114,761       98,525    
Other liabilities   14,435       9,155    
Total liabilities   1,324,630       1,291,047    
         
Shareholders' equity - preferred   3,602       9,287    
Shareholders' equity - common   132,141       105,311    
Total liabilities and        
shareholders' equity$  1,460,373    $  1,405,645    
         
NET INTEREST EARNINGS $  23,723    $  21,057   
         
NET INTEREST MARGIN   3.54%    3.32% 
         

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)       
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures    
        
  For the Quarter Ended   For the Six Months Ended  
 Dollars in thousands 6/30/20153/31/20156/30/2014 6/30/20156/30/2014 
        
        
 Core earnings applicable to common shares $  4,069 $  4,326 $  2,907  $  8,394 $  5,748  
        
  FHLB special dividend    -    176    -     176    -  
  Applicable income tax effect    -    (65)   -     (65)   -  
  Realized securities gains (losses)    170    480    (43)    650    (64) 
  Applicable income tax effect    (63)   (178)   16     (241)   24  
  Gain (loss) on sale of foreclosed properties    (103)   (150)   (54)    (253)   (129) 
  Applicable income tax effect    38    56    20     94    48  
  Other-than-temporary impairment of securities    -    -    (1)    -    (1) 
  Applicable income tax effect    -    -    -     -    -  
  Write-downs foreclosed properties    (160)   (572)   (962)    (732)   (1,891) 
  Applicable income tax effect    59    212    356     271    700  
    (59)   (41)   (668)    (100)   (1,313) 
 GAAP net income applicable to common shares $  4,010 $  4,285 $  2,239  $  8,294 $  4,435  
        
        
        
 Core diluted earnings per common share $  0.39 $  0.41 $  0.32  $  0.78 $  0.65  
        
  FHLB special dividend    -     0.02    -      0.02    -   
  Applicable income tax effect    -     (0.01)   -      (0.01)   -   
  Realized securities gains (losses)    0.02    0.05    -      0.06    (0.01) 
  Applicable income tax effect    (0.01)   (0.02)   -      (0.02)   -   
  Gain (loss) on sale of foreclosed properties    (0.01)   (0.01)   (0.01)    (0.02)   (0.01) 
  Applicable income tax effect    -     -     -      0.01    -   
  Other-than-temporary impairment of securities    -     -     -      -     -   
  Applicable income tax effect    -     -     -      -     -   
  Write-downs of foreclosed properties    (0.01)   (0.05)   (0.10)    (0.07)   (0.20) 
  Applicable income tax effect    -     0.02    0.04     0.03    0.07  
    (0.01)   -     (0.07)    -     (0.15) 
 GAAP diluted earnings per common share $  0.38 $  0.41 $  0.25  $  0.78 $  0.50  

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)      
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures    
       
  For the Quarter Ended   For the Six Months Ended 
Dollars in thousands 6/30/20153/31/20156/30/2014 6/30/20156/30/2014
       
Total core revenue $  14,148 $  14,003 $  13,069  $  28,151 $  25,911 
       
FHLB special dividend   -    176    -     176    - 
Realized securities gains/(losses)   170    480    (43)    650    (64)
Other-than-temporary impairment of securities    -    -    (1)    -    (1)
    170    656    (44)    826    (65)
GAAP total revenue $  14,318 $  14,659 $  13,025  $  28,977 $  25,846 
       
       
Total core noninterest income $  2,690 $  2,659 $  2,749  $  5,349 $  5,553 
       
Realized securities gains/(losses)   170    480    (43)    650    (64)
Other-than-temporary impairment of securities    -    -    (1)    -    (1)
    170    480    (44)    650    (65)
GAAP total noninterest income $  2,860 $  3,139 $  2,705  $  5,999 $  5,488 
       
       
Total core noninterest expense $  7,798 $  7,482 $  7,514  $  15,281 $  15,008 
       
(Gains)/losses on sales of foreclosed properties   103    150    54     253    129 
 Write-downs of foreclosed properties    160    572    962     732    1,891 
    263    722    1,016     985    2,020 
 GAAP total noninterest expense $  8,061 $  8,204 $  8,530  $  16,266 $  17,028 
Contact:  Robert S. Tissue, Sr. Vice President & CFO
Telephone: (304) 530-0552
Email: rtissue@summitfgi.com

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