MOOREFIELD, W. Va., Jan. 30, 2012 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (Nasdaq:SMMF) today reported fourth quarter 2011 net income applicable to common shares of $1,331,000, or $0.16 per diluted share, compared to $836,000, or $0.11 per diluted share, for the fourth quarter of 2010.
Excluding from fourth quarter 2011 nonrecurring items (on a pre-tax basis) consisting of realized securities gains of $542,000, charges for other-than-temporary impairment ("OTTI") of securities of $401,000 and write-downs of foreclosed properties of $882,000, pro forma fourth quarter 2011 earnings were approximately $1.8 million, or $0.21 per diluted share. Excluding from fourth quarter 2010 nonrecurring realized securities gains of $463,000, OTTI of securities of $850,000, and write-downs of foreclosed properties of $1,206,000, pro forma earnings of $1,914,000 would have resulted, or $0.24 per diluted share.
For the full-year 2011, Summit recorded net income applicable to common shares of $3.70 million, or $0.49 per diluted share, compared with a net loss applicable to common shares of $2.27 million, or ($0.31) per diluted share, for 2010.
Excluding from the full-year 2011 nonrecurring items (on a pre-tax basis) of realized securities gains of $4.01 million, OTTI charges of $2.65 million and write-downs of foreclosed properties of $6.65 million, and from the full-year 2010 realized securities gains of $2.05 million, OTTI charges of $988,000, and write-downs of foreclosed properties of $3.40 million, pro forma earnings for 2011 were approximately $7.04 million, or $0.89 per diluted share, compared to a pro forma net loss of $502,000, or ($0.02) per diluted share, for 2010.
Highlights for Q4 2011 include:
- Achieved third consecutive quarter of positive quarterly earnings.
- Nonperforming assets increased principally as result of a single large loan relationship having been placed on nonaccrual status.
- Net loan charge-offs and provision for loan losses remained stable.
- Recorded charges of $882,000 and $401,000, respectively, to write-down foreclosed properties and to recognize OTTI of securities, which were partially offset by $542,000 in realized securities gains.
- Net interest margin declined 5 basis points quarter over quarter reflecting increase in nonperforming loans.
- Noninterest expenses remained well-controlled.
- Issued 12,000 shares of Series 2011 8% Noncumulative Convertible Preferred Stock. Summit's leverage capital ratio is at its highest level in five years and its total risk-based capital ratio is at highest level in eleven years.
H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, "We are very pleased by our continuing improved earnings performance; but at the same time, we are equally disappointed by the recent rise in our nonperforming loans. We remain focused on reducing our portfolio of problem assets, and we continue to make progress in this regard, although not at the pace we would desire. Progress in regard to dispositions of foreclosed properties remains difficult as the return of our real estate markets to more normal levels continues to be frustratingly slow."
Results from Operations
Total revenue for full-year 2011, consisting of net interest income and noninterest income, was $45.4 million compared to $47.9 million for the full-year 2010. For the quarter ended December 31, 2011, total revenue was $11.7 million compared to $11.3 million for the same period in 2010.
Total revenue excluding nonrecurring items (as enumerated above) was $12.4 million for fourth quarter 2011 compared to $12.9 million in the prior-year quarter, a decrease of 4.0 percent. For the full-year 2011, total revenue excluding nonrecurring items was $50.7 million versus $50.2 million for the same period in 2010.
For the fourth quarter of 2011, net interest income was $9.7 million, a decrease of 7.4 percent from the $10.4 million reported in the prior-year fourth quarter and a decrease of 2.6 percent from the $9.9 million reported in the linked quarter. The net interest margin for fourth quarter 2011 was 3.03 percent compared to 3.15 percent for the year-ago quarter, and 3.08 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 fourth quarter 2011 was $1.99 million compared to $871,000 for the comparable period of 2010. Excluding nonrecurring items (as enumerated above), noninterest income was $2.73 million for fourth quarter 2011, up $266,000 or 10.8 percent from the $2.46 million reported for fourth quarter 2010.
The provision for loan losses was $2.0 million for the fourth quarter of 2011 compared to $2.0 million and $3.0 million for the linked and year-ago quarters, respectively.
Noninterest expense continues to be well-controlled. Total noninterest expense increased less than 1% compared to the prior-year fourth quarter, remaining unchanged at $7.8 million for the quarter. Moreover, noninterest expense for full-year 2011 was $1.2 million or 3.8 percent, less than during 2010. Cost-saving initiatives continue in place and their impact remains beneficial.
Balance Sheet
At December 31, 2011, total assets were $1.45 billion, a decrease of $28.3 million, or 1.9 percent since December 31, 2010. Total loans, net of unearned fees, were $965.5 million at December 31, 2011, down $29.8 million, or 3.0 percent, from the $995.3 million reported at year-end 2010.
All loan categories have declined since year-end 2010, except for commercial real estate ("CRE"), the largest component of Summit's loan portfolio, which increased $11.2 million, or 2.7 percent. The second largest component of Summit's loan portfolio, residential real estate, declined $17.5 million, or 5.0 percent, while construction and development ("C&D") loans declined $16.8 million, or 14.9 percent and commercial ("C&I") loans declined $2.7 million, or 2.6 percent.
During 2011, retail checking and savings deposits grew $54.0 million, or 13.4 percent, to $455.9 million. The increase in these deposits provided Summit with an opportunity to further reduce brokered deposits and relatively higher-cost long-term borrowings by $61.1 million and $33.9 million, respectively, or 26.5 percent and 9.9 percent, respectively, since year-end 2010.
Asset Quality
As of December 31, 2011, nonperforming assets ("NPAs"), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $116.6 million, or 8.04 percent of assets. This compares to $99.9 million, or 6.82 percent of assets at the linked quarter, and $92.2 million, or 6.24 percent of assets, at year-end 2010. The 16.8 percent increase in fourth quarter 2011 NPAs compared to the linked quarter was the result of $16.2 million additions in nonperforming loans principally as the result of a single loan relationship totaling $12.6 million being placed on nonaccrual during the quarter.
Fourth quarter 2011 net loan charge-offs were $2.2 million, or 0.91 percent of average loans annualized; year-to-date 2011, Summit's net loan charge-offs were $9.5 million, while adding $10.0 million to the allowance for loan losses. The allowance for loan losses stood at $17.7 million, or 1.80 percent of total loans at December 31, 2011, compared to 1.70 percent at year-end 2010.
Capital Adequacy
Shareholders' equity, which includes net proceeds totaling $5.8 million relating to Summit's recent issuance of 12,000 shares of Series 2011 8% Noncumulative Convertible Preferred Stock, was $102.6 million as of December 31, 2011 compared to $89.8 million December 31, 2010.
Summit's depository institution, Summit Community Bank, Inc. (the "Bank"), remains well in excess of regulatory requirements for a "well capitalized" institution at December 31, 2011. The Bank's total risk-based capital ratio improved to 13.6 percent at December 31, 2011 compared to 13.4 percent at September 30, 2011, while its Tier 1 leverage capital ratio improved to 8.9 from the 8.7 percent reported at September 30, 2011. Total common shares outstanding as of December 31, 2011 were 7,425,472.
About the Company
Summit Financial Group, Inc. is a $1.45 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, and write-downs of foreclosed properties to estimated fair value included in its Statements of Income. Management deems these items to be unusual in nature and 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 -- Q4 2011 vs Q4 2010 | |||
| For the Quarter Ended | Percent | ||
| Dollars in thousands | 12/31/2011 | 12/31/2010 | Change |
| Condensed Statements of Income | |||
| Interest income | |||
| Loans, including fees | $ 14,362 | $ 16,064 | -10.6% |
| Securities | 2,711 | 3,191 | -15.0% |
| Other | 13 | 11 | 18.2% |
| Total interest income | 17,086 | 19,266 | -11.3% |
| Interest expense | |||
| Deposits | 4,302 | 5,000 | -14.0% |
| Borrowings | 3,123 | 3,829 | -18.4% |
| Total interest expense | 7,425 | 8,829 | -15.9% |
| Net interest income | 9,661 | 10,437 | -7.4% |
| Provision for loan losses | 1,999 | 3,000 | -33.4% |
| Net interest income after provision for loan losses | 7,662 | 7,437 | 3.0% |
| Noninterest income | |||
| Insurance commissions | 1,003 | 1,086 | -7.6% |
| Service fee income | 790 | 741 | 6.6% |
| Realized securities gains | 542 | 463 | 17.1% |
| Other-than-temporary impairment of securities | (401) | (850) | -52.8% |
| Write-downs of foreclosed properties | (882) | (1,206) | -26.9% |
| Other income | 937 | 637 | 47.1% |
| Total noninterest income | 1,989 | 871 | 128.4% |
| Noninterest expense | |||
| Salaries and employee benefits | 3,846 | 3,839 | 0.2% |
| Net occupancy expense | 472 | 480 | -1.7% |
| Equipment expense | 593 | 574 | 3.3% |
| Professional fees | 501 | 256 | 95.7% |
| FDIC premiums | 564 | 705 | -20.0% |
| Foreclosed properties expense | 441 | 430 | 2.6% |
| Other expenses | 1,417 | 1,478 | -4.1% |
| Total noninterest expense | 7,834 | 7,762 | 0.9% |
| Income before income taxes | 1,817 | 546 | 232.8% |
| Income taxes | 337 | (364) | 192.6% |
| Net income | 1,480 | 910 | 62.6% |
| Preferred stock dividends | 149 | 74 | 101.4% |
| Net income applicable to common shares | $ 1,331 | $ 836 | 59.2% |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||
| Quarterly Performance Summary -- Q4 2011 vs Q4 2010 | |||
| For the Quarter Ended | Percent | ||
| 12/31/2011 | 12/31/2010 | Change | |
| Per Share Data | |||
| Earnings per common share | |||
| Basic | $ 0.18 | $ 0.11 | 63.6% |
| Diluted | $ 0.16 | $ 0.11 | 45.5% |
| Average shares outstanding | |||
| Basic | 7,425,472 | 7,425,472 | 0.0% |
| Diluted | 9,044,976 | 7,425,822 | 21.8% |
| Performance Ratios | |||
| Return on average equity (A) | 6.40% | 4.17% | 53.5% |
| Return on average assets | 0.41% | 0.25% | 64.0% |
| Net interest margin | 3.03% | 3.15% | -3.8% |
| Efficiency ratio (B) | 60.10% | 58.05% | 3.5% |
| NOTE (A) – Net income divided by total shareholders' equity less preferred 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) | |||
| Annual Performance Summary -- 2011 vs 2010 | |||
| For the Years Ended | Percent | ||
| Dollars in thousands | 12/31/2011 | 12/31/2010 | Change |
| Condensed Statements of Income | |||
| Interest income | |||
| Loans, including fees | $ 59,176 | $ 65,957 | -10.3% |
| Securities | 11,799 | 13,684 | -13.8% |
| Other | 72 | 31 | 132.3% |
| Total interest income | 71,047 | 79,672 | -10.8% |
| Interest expense | |||
| Deposits | 18,273 | 21,036 | -13.1% |
| Borrowings | 12,930 | 18,484 | -30.0% |
| Total interest expense | 31,203 | 39,520 | -21.0% |
| Net interest income | 39,844 | 40,152 | -0.8% |
| Provision for loan losses | 10,000 | 21,350 | -53.2% |
| Net interest income after provision for loan losses | 29,844 | 18,802 | 58.7% |
| Noninterest income | |||
| Insurance commissions | 4,460 | 4,744 | -6.0% |
| Service fee income | 2,944 | 3,039 | -3.1% |
| Realized securities gains | 4,006 | 2,051 | 95.3% |
| Other-than-temporary impairment of securities | (2,646) | (988) | 167.8% |
| Write-downs of foreclosed properties | (6,651) | (3,401) | 95.6% |
| Other income | 3,437 | 2,294 | 49.8% |
| Total noninterest income | 5,550 | 7,739 | -28.3% |
| Noninterest expense | |||
| Salaries and employee benefits | 15,833 | 15,650 | 1.2% |
| Net occupancy expense | 1,935 | 2,010 | -3.7% |
| Equipment expense | 2,342 | 2,457 | -4.7% |
| Professional fees | 1,155 | 1,015 | 13.8% |
| FDIC premiums | 2,423 | 2,870 | -15.6% |
| Foreclosed properties expense | 1,676 | 1,577 | 6.3% |
| Other expenses | 4,921 | 5,892 | -16.5% |
| Total noninterest expense | 30,285 | 31,471 | -3.8% |
| Income (loss) before income taxes | 5,109 | (4,930) | 203.6% |
| Income taxes | 1,035 | (2,955) | 135.0% |
| Net income (loss) | 4,074 | (1,975) | 306.3% |
| Preferred stock dividends | 371 | 297 | 24.9% |
| Net income (loss) applicable to common shares | $ 3,703 | $ (2,272) | 263.0% |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||
| Annual Month Performance Summary -- 2011 vs 2010 | |||
| For the Years Ended | Percent | ||
| 12/31/2011 | 12/31/2010 | Change | |
| Per Share Data | |||
| Earnings per common share | |||
| Basic | $ 0.50 | (0.31) | NM |
| Diluted | $ 0.49 | (0.31) | NM |
| Average shares outstanding | |||
| Basic | 7,425,472 | 7,425,472 | 0.0% |
| Diluted | 8,338,199 | 7,425,472 | 12.3% |
| Performance Ratios | |||
| Return on average equity (A) | 4.55% | -2.60% | -275.0% |
| Return on average assets | 0.28% | -0.15% | -286.7% |
| Net interest margin | 3.08% | 2.96% | 4.1% |
| Efficiency ratio (B) | 58.54% | 60.03% | -2.5% |
| NOTE (A) – Net income divided by total shareholders' equity less preferred 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) | |||||
| Five Quarter Performance Summary | |||||
| For the Quarter Ended | |||||
| Dollars in thousands | 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 |
| Condensed Statements of Income | |||||
| Interest income | |||||
| Loans, including fees | $ 14,362 | $ 14,717 | $ 14,956 | $ 15,140 | $ 16,064 |
| Securities | 2,711 | 2,920 | 3,125 | 3,043 | 3,191 |
| Other | 13 | 15 | 28 | 17 | 11 |
| Total interest income | 17,086 | 17,652 | 18,109 | 18,200 | 19,266 |
| Interest expense | |||||
| Deposits | 4,302 | 4,561 | 4,667 | 4,743 | 5,000 |
| Borrowings | 3,123 | 3,170 | 3,282 | 3,355 | 3,829 |
| Total interest expense | 7,425 | 7,731 | 7,949 | 8,098 | 8,829 |
| Net interest income | 9,661 | 9,921 | 10,160 | 10,102 | 10,437 |
| Provision for loan losses | 1,999 | 2,001 | 3,000 | 3,000 | 3,000 |
| Net interest income after provision for loan losses | 7,662 | 7,920 | 7,160 | 7,102 | 7,437 |
| Noninterest income | |||||
| Insurance commissions | 1,003 | 1,073 | 1,142 | 1,242 | 1,086 |
| Service fee income | 790 | 776 | 758 | 621 | 741 |
| Realized securities gains | 542 | 1,517 | 318 | 1,628 | 463 |
| Other-than-temporary impairment of securities | (401) | (484) | (533) | (1,228) | (850) |
| Write-downs of foreclosed properties | (882) | (1,637) | (689) | (3,443) | (1,206) |
| Other income | 937 | 942 | 859 | 699 | 637 |
| Total noninterest income | 1,989 | 2,187 | 1,855 | (481) | 871 |
| Noninterest expense | |||||
| Salaries and employee benefits | 3,846 | 3,959 | 4,055 | 3,973 | 3,839 |
| Net occupancy expense | 472 | 473 | 481 | 509 | 480 |
| Equipment expense | 593 | 589 | 581 | 580 | 574 |
| Professional fees | 501 | 265 | 193 | 196 | 256 |
| FDIC premiums | 564 | 580 | 586 | 693 | 705 |
| Foreclosed properties expense | 441 | 389 | 412 | 434 | 430 |
| Other expenses | 1,417 | 1,318 | 1,464 | 722 | 1,478 |
| Total noninterest expense | 7,834 | 7,573 | 7,772 | 7,107 | 7,762 |
| Income (loss) before income taxes | 1,817 | 2,534 | 1,243 | (486) | 546 |
| Income taxes | 337 | 598 | 338 | (238) | (364) |
| Net income (loss) | 1,480 | 1,936 | 905 | (248) | 910 |
| Preferred stock dividends | 149 | 74 | 74 | 74 | 74 |
| Net income (loss) applicable to common shares | $ 1,331 | $ 1,862 | $ 831 | $ (322) | $ 836 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||
| Five Quarter Performance Summary | |||||
| For the Quarter Ended | |||||
| 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |
| Per Share Data | |||||
| Earnings per common share | |||||
| Basic | $ 0.18 | $ 0.25 | $ 0.11 | $ (0.04) | $ 0.11 |
| Diluted | $ 0.16 | $ 0.24 | $ 0.11 | $ (0.04) | $ 0.11 |
| Average shares outstanding | |||||
| Basic | 7,425,472 | 7,425,472 | 7,425,472 | 7,425,472 | 7,425,472 |
| Diluted | 9,044,976 | 8,110,070 | 7,425,472 | 7,425,472 | 7,425,822 |
| Performance Ratios | |||||
| Return on average equity (A) | 6.40% | 8.54% | 4.12% | -1.14% | 4.17% |
| Return on average assets | 0.41% | 0.53% | 0.24% | -0.07% | 0.25% |
| Net interest margin | 3.03% | 3.08% | 3.09% | 3.11% | 3.15% |
| Efficiency ratio - (B) | 60.10% | 57.29% | 58.42% | 58.38% | 58.05% |
| NOTE (A) – Net income divided by total shareholders' equity less preferred 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 | 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 |
| Assets | |||||
| Cash and due from banks | $ 4,398 | $ 3,596 | $ 4,515 | $ 4,263 | $ 4,652 |
| Interest bearing deposits other banks | 28,294 | 39,103 | 24,658 | 46,448 | 45,696 |
| Securities | 286,599 | 292,442 | 295,806 | 293,240 | 271,730 |
| Loans, net | 965,516 | 964,349 | 971,127 | 979,387 | 995,319 |
| Property held for sale | 63,938 | 63,335 | 66,188 | 66,961 | 70,235 |
| Premises and equipment, net | 22,084 | 22,334 | 22,587 | 22,784 | 23,092 |
| Intangible assets | 8,651 | 8,739 | 8,826 | 8,914 | 9,002 |
| Cash surrender value of life insurance policies | 29,284 | 29,034 | 28,762 | 13,589 | 13,458 |
| Other assets | 41,357 | 41,652 | 45,517 | 46,609 | 45,286 |
| Total assets | $ 1,450,121 | $ 1,464,584 | $ 1,467,986 | $ 1,482,195 | $ 1,478,470 |
| Liabilities and Shareholders' Equity | |||||
| Retail deposits | $ 847,285 | $ 861,639 | $ 850,312 | $ 844,914 | $ 806,652 |
| Brokered time deposits | 169,215 | 185,670 | 195,782 | 217,205 | 230,287 |
| Short-term borrowings | 15,956 | 955 | 2,047 | 1,879 | 1,582 |
| Long-term borrowings and subordinated debentures | 306,643 | 308,420 | 319,020 | 319,905 | 340,498 |
| Other liabilities | 8,456 | 8,976 | 8,966 | 8,964 | 9,630 |
| Shareholders' equity | 102,566 | 98,924 | 91,859 | 89,328 | 89,821 |
| Total liabilities and shareholders' equity | $ 1,450,121 | $ 1,464,584 | $ 1,467,986 | $ 1,482,195 | $ 1,478,470 |
| Book value per common share (A) | $ 10.68 | $ 10.96 | $ 11.34 | $ 11.03 | $ 11.01 |
| Tangible book value per common share (A) | $ 9.78 | $ 9.99 | $ 10.25 | $ 9.93 | $ 9.90 |
| Tangible equity / Tangible assets | 6.5% | 6.2% | 5.7% | 5.5% | 5.5% |
| NOTE (A) – Assumes conversion of convertible preferred stock | |||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||
| Regulatory Capital Ratios | |||||
| 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |
| Summit Financial Group, Inc. | |||||
| Total Risk Based Capital | 12.9% | 12.3% | 11.9% | 11.7% | 11.8% |
| Tier 1 Risk Based Capital | 10.4% | 9.7% | 9.3% | 9.1% | 9.1% |
| Tier 1 Leverage Ratio | 7.5% | 6.9% | 6.7% | 6.6% | 6.9% |
| Summit Community Bank, Inc. | |||||
| Total Risk Based Capital | 13.6% | 13.4% | 12.8% | 12.6% | 12.6% |
| Tier 1 Risk Based Capital | 12.4% | 12.1% | 11.5% | 11.3% | 11.4% |
| Tier 1 Leverage Ratio | 8.9% | 8.7% | 8.3% | 8.3% | 8.5% |
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||
| Loan Composition | |||||
| Dollars in thousands | 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 |
| Commercial | $ 99,024 | $ 94,801 | $ 96,796 | $ 96,843 | $ 101,674 |
| Commercial real estate | |||||
| Owner occupied | 158,754 | 166,813 | 169,935 | 171,791 | 175,885 |
| Non-owner occupied | 270,226 | 253,538 | 248,930 | 247,153 | 241,936 |
| Construction and development | |||||
| Land and development | 93,035 | 94,023 | 94,464 | 93,675 | 99,085 |
| Construction | 2,936 | 9,445 | 12,223 | 13,879 | 13,691 |
| Residential real estate | |||||
| Non-jumbo | 221,733 | 224,499 | 228,205 | 233,308 | 239,290 |
| Jumbo | 61,535 | 62,255 | 60,817 | 61,878 | 61,339 |
| Home equity | 50,898 | 51,025 | 50,884 | 50,499 | 50,987 |
| Consumer | 22,325 | 22,988 | 23,773 | 22,968 | 24,145 |
| Other | 2,762 | 2,911 | 3,116 | 4,326 | 4,511 |
| Total loans, net of unearned fees | 983,228 | 982,298 | 989,143 | 996,320 | 1,012,543 |
| Less allowance for loan losses | 17,712 | 17,949 | 18,016 | 16,933 | 17,224 |
| Loans, net | $ 965,516 | $ 964,349 | $ 971,127 | $ 979,387 | $ 995,319 |
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||
| Retail Deposit Composition | |||||
| Dollars in thousands | 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 |
| Non interest bearing checking | $ 88,655 | $ 85,406 | $ 85,964 | $ 86,735 | $ 74,604 |
| Interest bearing checking | 158,483 | 163,840 | 150,004 | 153,283 | 150,291 |
| Savings | 208,809 | 208,030 | 212,745 | 212,502 | 177,053 |
| Time deposits | 391,338 | 404,363 | 401,599 | 392,394 | 404,704 |
| Total retail deposits | $ 847,285 | $ 861,639 | $ 850,312 | $ 844,914 | $ 806,652 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||
| Asset Quality Information | |||||
| For the Quarter Ended | |||||
| Dollars in thousands | 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 |
| Gross loan charge-offs | $ 2,368 | $ 2,157 | $ 2,022 | $ 3,396 | $ 5,135 |
| Gross loan recoveries | (133) | (89) | (104) | (105) | (490) |
| Net loan charge-offs | $ 2,235 | $ 2,068 | $ 1,918 | $ 3,291 | $ 4,645 |
| Net loan charge-offs to average loans (annualized) | 0.91% | 0.84% | 0.76% | 1.31% | 1.76% |
| Allowance for loan losses | $ 17,712 | $ 17,949 | $ 18,016 | $ 16,933 | $ 17,224 |
| Allowance for loan losses as a percentage of period end loans | 1.80% | 1.82% | 1.82% | 1.70% | 1.70% |
| Nonperforming assets: | |||||
| Nonperforming loans | |||||
| Commercial | $ 3,259 | $ 3,473 | $ 2,212 | $ 2,186 | $ 1,318 |
| Commercial real estate | 7,163 | 8,398 | 8,093 | 5,284 | 2,686 |
| Commercial construction and development | 1,052 | -- | -- | 131 | -- |
| Residential construction and development | 22,634 | 17,506 | 19,222 | 8,428 | 10,048 |
| Residential real estate | 18,187 | 6,818 | 9,237 | 6,343 | 7,517 |
| Consumer | 145 | 87 | 130 | 206 | 142 |
| Total nonperforming loans | 52,440 | 36,282 | 38,894 | 22,578 | 21,711 |
| Foreclosed properties | |||||
| Commercial | $ -- | $ 597 | $ 597 | $ 597 | $ 597 |
| Commercial real estate | 15,721 | 14,256 | 14,179 | 13,738 | 14,745 |
| Commercial construction and development | 17,101 | 16,960 | 16,886 | 16,918 | 17,021 |
| Residential construction and development | 27,877 | 27,804 | 30,512 | 32,002 | 34,377 |
| Residential real estate | 3,239 | 3,718 | 4,014 | 3,706 | 3,495 |
| Total foreclosed properties | 63,938 | 63,335 | 66,188 | 66,961 | 70,235 |
| Other repossessed assets | 263 | 262 | 264 | 262 | 289 |
| Total nonperforming assets | $ 116,641 | $ 99,879 | $ 105,346 | $ 89,801 | $ 92,235 |
| Nonperforming loans to period end loans | 5.33% | 3.69% | 3.93% | 2.26% | 2.14% |
| Nonperforming assets to period end assets | 8.04% | 6.82% | 7.18% | 6.06% | 6.24% |
| Loans Past Due 30-89 Days | |||||
| For the Quarter Ended | |||||
| In thousands | 12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 |
| Commercial | $ 533 | $ 255 | $ 1,572 | $ 910 | $ 664 |
| Commercial real estate | 5,746 | 2,797 | 2,756 | 2,515 | 4,523 |
| Construction and development | 1,756 | 1,251 | 163 | 1,947 | 3,156 |
| Residential real estate | 6,633 | 4,779 | 6,603 | 6,561 | 19,164 |
| Consumer | 466 | 308 | 415 | 494 | 551 |
| Total | $ 15,134 | $ 9,390 | $ 11,509 | $ 12,427 | $ 28,058 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||
| Q4 2011 vs Q4 2010 | ||||||
| Q4 2011 | Q4 2010 | |||||
| Dollars in thousands |
Average Balances |
Earnings / Expense |
Yield / Rate |
Average Balances |
Earnings / Expense |
Yield / Rate |
| ASSETS | ||||||
| Interest earning assets | ||||||
| Loans, net of unearned interest | ||||||
| Taxable | $ 985,496 | $ 14,287 | 5.75% | $ 1,017,035 | $ 15,992 | 6.24% |
| Tax-exempt | 6,115 | 114 | 7.40% | 5,336 | 109 | 8.10% |
| Securities | ||||||
| Taxable | 225,089 | 1,817 | 3.20% | 262,488 | 2,768 | 4.18% |
| Tax-exempt | 86,389 | 1,353 | 6.21% | 37,880 | 639 | 6.69% |
| Interest bearing deposits other banks and Federal funds sold | 25,926 | 13 | 0.20% | 23,355 | 11 | 0.19% |
| Total interest earning assets | 1,329,015 | 17,584 | 5.25% | 1,346,094 | 19,519 | 5.75% |
| Noninterest earning assets | ||||||
| Cash & due from banks | 4,229 | 4,227 | ||||
| Premises & equipment | 22,274 | 23,288 | ||||
| Other assets | 121,215 | 115,930 | ||||
| Allowance for loan losses | (18,211) | (19,176) | ||||
| Total assets | $ 1,458,522 | $ 1,470,363 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Liabilities | ||||||
| Interest bearing liabilities | ||||||
| Interest bearing demand deposits | $ 156,751 | $ 94 | 0.24% | $ 151,552 | $ 119 | 0.31% |
| Savings deposits | 208,772 | 427 | 0.81% | 171,806 | 440 | 1.02% |
| Time deposits | 573,798 | 3,781 | 2.61% | 619,572 | 4,441 | 2.84% |
| Short-term borrowings | 11,879 | 6 | 0.20% | 1,847 | 1 | 0.21% |
| Long-term borrowings and subordinated debentures | 307,937 | 3,117 | 4.02% | 345,245 | 3,828 | 4.40% |
| Total interest bearing liabilities | 1,259,137 | 7,425 | 2.34% | 1,290,022 | 8,829 | 2.72% |
| Noninterest bearing liabilities | ||||||
| Demand deposits | 89,640 | 78,844 | ||||
| Other liabilities | 8,958 | 10,768 | ||||
| Total liabilities | 1,357,735 | 1,379,634 | ||||
| Shareholders' equity - preferred | 8,315 | 3,519 | ||||
| Shareholders' equity - common | 92,472 | 87,210 | ||||
| Total liabilities and shareholders' equity | $ 1,458,522 | $ 1,470,363 | ||||
| NET INTEREST EARNINGS | $ 10,159 | $ 10,690 | ||||
| NET INTEREST MARGIN | 3.03% | 3.15% | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||
| YTD 2011 vs YTD 2010 | ||||||
| YTD 2011 | YTD 2010 | |||||
| Dollars in thousands |
Average Balances |
Earnings / Expense |
Yield / Rate |
Average Balances |
Earnings / Expense |
Yield / Rate |
| ASSETS | ||||||
| Interest earning assets | ||||||
| Loans, net of unearned interest | ||||||
| Taxable | $ 987,315 | $ 58,911 | 5.97% | $ 1,082,537 | $ 65,481 | 6.05% |
| Tax-exempt | 5,105 | 402 | 7.87% | 5,965 | 476 | 7.98% |
| Securities | ||||||
| Taxable | 252,901 | 9,106 | 3.60% | 253,529 | 12,265 | 4.84% |
| Tax-exempt | 63,894 | 4,080 | 6.39% | 40,048 | 2,670 | 6.67% |
| Interest bearing deposits other banks and Federal funds sold | 33,690 | 72 | 0.21% | 16,373 | 31 | 0.19% |
| Total interest earning assets | 1,342,905 | 72,571 | 5.40% | 1,398,452 | 80,923 | 5.79% |
| Noninterest earning assets | ||||||
| Cash & due from banks | 4,022 | 4,267 | ||||
| Premises & equipment | 22,620 | 23,742 | ||||
| Other assets | 118,408 | 104,907 | ||||
| Allowance for loan losses | (18,161) | (19,226) | ||||
| Total assets | $ 1,469,794 | $ 1,512,142 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Liabilities | ||||||
| Interest bearing liabilities | ||||||
| Interest bearing demand deposits | $ 152,552 | $ 391 | 0.26% | $ 147,513 | $ 583 | 0.40% |
| Savings deposits | 207,226 | 1,899 | 0.92% | 188,233 | 2,323 | 1.23% |
| Time deposits | 601,925 | 15,983 | 2.66% | 605,663 | 18,131 | 2.99% |
| Short-term borrowings | 4,238 | 8 | 0.19% | 16,172 | 80 | 0.49% |
| Long-term borrowings and subordinated debentures | 315,900 | 12,921 | 4.09% | 380,235 | 18,403 | 4.84% |
| 1,281,841 | 31,202 | 2.43% | 1,337,816 | 39,520 | 2.95% | |
| Noninterest bearing liabilities | ||||||
| Demand deposits | 85,247 | 73,971 | ||||
| Other liabilities | 8,474 | 9,597 | ||||
| Total liabilities | 1,375,562 | 1,421,384 | ||||
| Shareholders' equity - preferred | 4,738 | 3,519 | ||||
| Shareholders' equity - common | 89,494 | 87,239 | ||||
| Total liabilities and shareholders' equity | $ 1,469,794 | $ 1,512,142 | ||||
| NET INTEREST EARNINGS | $ 41,369 | $ 41,403 | ||||
| NET INTEREST MARGIN | 3.08% | 2.96% | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||
| Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures | ||||
| For the Quarter Ended | For the Years Ended | |||
| Dollars in thousands | 12/31/2011 | 12/31/2010 | 12/31/2011 | 12/31/2010 |
| Net income applicable to common shares - excluding | ||||
| realized securities gains, other-than-temporary | ||||
| impairment of securities and write-downs of | ||||
| foreclosed properties | $ 1,798 | $ 1,914 | $ 7,036 | $ (502) |
| Realized securities gains | 542 | 463 | 4,006 | 2,051 |
| Applicable income tax effect | (201) | (171) | (1,482) | (759) |
| Other-than-temporary impairment of securities | (401) | (850) | (2,646) | (988) |
| Applicable income tax effect | 148 | 315 | 979 | 366 |
| Write-downs foreclosed properties | (882) | (1,206) | (6,651) | (3,401) |
| Applicable income tax effect | 326 | 446 | 2,461 | 1,258 |
| (467) | (1,004) | (3,333) | (1,473) | |
| GAAP net income applicable to common shares | $ 1,331 | $ 910 | $ 3,703 | $ (1,975) |
| Diluted earnings per common share - excluding realized | ||||
| securities gains, other-than-temporary impairment | ||||
| of securities, and write-downs of foreclosed | $ 0.21 | $ 0.24 | $ 0.89 | $ (0.02) |
| Realized securities gains | 0.06 | 0.06 | 0.48 | 0.28 |
| Applicable income tax effect | (0.02) | (0.02) | (0.18) | (0.10) |
| Other-than-temporary impairment of securities | (0.04) | (0.11) | (0.32) | (0.13) |
| Applicable income tax effect | 0.01 | 0.04 | 0.12 | 0.05 |
| Write-downs of foreclosed properties | (0.10) | (0.16) | (0.80) | (0.46) |
| Applicable income tax effect | 0.04 | 0.06 | 0.30 | 0.17 |
| (0.05) | (0.13) | (0.40) | (0.19) | |
| GAAP diluted earnings per common share | $ 0.16 | $ 0.11 | $ 0.49 | $ (0.21) |
| Total revenue - excluding realized securities gains, | ||||
| other-than-temporary impairment of securities and | ||||
| write-downs of foreclosed properties | $ 12,391 | $ 12,901 | $ 50,685 | $ 50,228 |
| Realized securities gains | 542 | 463 | 4,006 | 2,051 |
| Other-than-temporary impairment of securities | (401) | (850) | (2,646) | (988) |
| Write-downs of foreclosed properties | (882) | (1,206) | (6,651) | (3,401) |
| (741) | (1,593) | (5,291) | (2,338) | |
| GAAP total revenue | $ 11,650 | $ 11,308 | $ 45,394 | $ 47,890 |
| Total noninterest income - excluding realized securities | ||||
| gains, other-than-temporary impairment of securities | ||||
| and write-downs of foreclosed properties | $ 2,730 | $ 2,464 | $ 10,840 | $ 9,559 |
| Realized securities gains | 542 | 463 | 4,006 | 2,051 |
| Other-than-temporary impairment of securities | (401) | (850) | (2,645) | (988) |
| Write-downs of foreclosed properties | (882) | (1,206) | (6,651) | (3,401) |
| (741) | (1,593) | (5,290) | (2,338) | |
| GAAP total noninterest income | $ 1,989 | $ 871 | $ 5,550 | $ 7,221 |