Summit Financial Group Reports Fourth Quarter and Full Year 2015 Results

Q4 2015 Diluted EPS $0.39 Compared to $0.32 for Q4 2014; Full Year 2015 Diluted EPS $1.50 Compared to $1.17 for 2014


MOOREFIELD, W. Va., Jan. 25, 2016 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ:SMMF) today reported fourth quarter 2015 net income applicable to common shares of $4.15 million, or $0.39 per diluted share, compared to $3.01 million, or $0.32 per diluted share, for the fourth quarter of 2014, representing an increase of 37.8 percent, or 21.9 percent per diluted share. Q4 2015 earnings compared to Q4 2014 were positively impacted by a $782,000 increase in net interest income and a $314,000 gain on sale of foreclosed properties, but were negatively impacted by a $336,000 increase in write-downs of foreclosed properties and a $250,000 provision for loan losses compared to zero for Q4 2014.

Excluding from fourth quarter 2015 (on a pre-tax basis) realized securities gains of $421,000, gains on sales of foreclosed properties of $314,000, write-downs of foreclosed properties of $636,000, Q4 2015 core earnings approximated $4.08 million, or $0.38 per diluted share. Excluding from Q4 2014 (on a pre-tax basis) realized securities gains of $149,000, losses on sales of foreclosed properties of $628,000, a $461,000 fraud loss, and write-downs of foreclosed properties of $300,000, Q4 2014 core earnings approximated $3.79 million, or $0.40 per diluted share.  Increased common shares outstanding resulting from common stock issuances during the past year accounted for the $0.02 decline in quarterly year-over-year core diluted earnings per share, despite the increase in earnings.

For the year ended December 31, 2015, Summit recorded net income applicable to common shares of $16.10 million, or $1.50 per diluted share, compared with $10.59 million, or $1.17 per diluted share, for 2014, representing an increase of 52.1%, or 28.2% per diluted share.

Excluding from the full-year 2015 nonrecurring items (on a pre-tax basis) comprised of realized securities gains of $1.44 million, gains on sales of foreclosed properties of $26,000, and write-downs of foreclosed properties of $2.42 million, and from the 2014 full year realized securities gains of $213,000, losses on sale of foreclosed properties of $827,000, a $461,000 fraud loss, and write-downs of foreclosed properties of $3.77 million, core earnings for full-year 2015 were approximately $16.70 million, or $1.56 per diluted share, compared to $13.64 million, or $1.50 per diluted share, for full-year 2014.

Highlights for Q4 2015 include:

  • 2015 was the most profitable year in Summit’s history, with net income of $16.10 million, or $1.50 per diluted share. 
  • Net interest margin increased 10 basis points compared to the linked quarter, and is 9 basis points higher than Q4 2014.
  • Core revenues increased $255,000, or 1.8 percent (non-annualized) during Q4 2015, and $3.04 million, or 5.7 percent during 2015.
  • Loan portfolio grew $17.2 million, or 1.6 percent (non-annualized) during Q4 2015, and $59.8 million, or 5.8 percent during 2015.
  • Nonperforming assets as a percentage of total assets declined to 2.77 percent compared to 3.07 percent for the linked quarter, and 3.48 percent at year end 2014; foreclosed properties are at the lowest level since Q2 2009.
  • Recorded charges of $636,000 to write-down foreclosed properties compared to $1.05 million in Q3 2015 and $300,000 in Q4 2014.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “The year just concluded marked a significant milestone towards Summit’s goal of being a consistent, high-performing community banking institution. Our improved earnings performance, increased return on assets and equity, growing loan portfolio, increasing revenues, improved net interest margin, strengthened capital, and continuing reductions in the portfolio of problem assets, all serve as evidence towards achievement of this goal. Further, we are very pleased to end 2015 with another exceptional quarter of solid performance, which gives us optimism as we look forward to 2016 and beyond.”

Results from Operations

Total revenue for fourth quarter 2015, consisting of net interest income and noninterest income, grew 6.0 percent to $14.6 million compared to $13.8 million for the fourth quarter 2014. For the year-to-date period ended December 31, 2015, total revenue was $57.9 million compared to $53.6 million for 2014, representing a 8.0 percent increase.

Total core revenue (excluding nonrecurring items, enumerated above) was $14.2 million for fourth quarter 2015 compared to $13.6 million for the same prior-year quarter, an increase of 4.1 percent.  For full-year 2015, total core revenue (excluding nonrecurring items) was $56.4 million compared to $53.4 million for full-year 2014, a 5.7 percent improvement.

For the fourth quarter of 2015, net interest income was $11.7 million, an increase of 7.1 percent from the $11.0 million reported in the prior-year fourth quarter and 3.8 percent or $428,000 more than the linked quarter. The net interest margin for fourth quarter 2015 was 3.51 percent compared to 3.42 percent for the year-ago quarter, and 3.41 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 2015 was $2.87 million compared to $2.82 million for the comparable period of 2014. Excluding realized securities gains/losses, noninterest income was $2.45 million for fourth quarter 2015, compared to $2.67 million reported for fourth quarter 2014.

Summit recognized $250,000 provision for loan losses in both the fourth quarter 2015, and the linked quarter, compared to none for the year-ago quarter.

Core noninterest expense continues to be well-controlled. Total noninterest expense decreased 6.8% to $8.49 million compared to $9.11 million for the prior-year fourth quarter. Excluding from noninterest expense (on a pre-tax basis) gains on sales of foreclosed properties of $314,000 in Q4 2015 and losses of $628,000 in Q4 2014, write-downs of foreclosed properties of $636,000 in Q4 2015 and $300,000 in Q4 2014, and a fraud loss in Q4 2014 of $461,000, noninterest expense would have approximated $8.17 million for Q4 2015 compared to $7.72 million for the comparable period of 2014.  Noninterest expense for the full-year 2015 decreased 4.8% compared to 2014.

Balance Sheet

At December 31, 2015, total assets were $1.49 billion, an increase of $48.9 million, or 3.4 percent since December 31, 2014. Total loans, net of unearned fees and allowance for loan losses, were $1.08 billion at December 31, 2015, up $59.5 million, or 5.8 percent, from the $1.02 billion reported at year-end 2014.

At December 31, 2015, deposits were $1.07 billion, an increase of $5.4 million, or 0.5 percent, since year end 2014. During 2015, checking and savings grew by $15.3 million and $13.2 million, respectively, or 4.8 percent and 5.2 percent, respectively. Long-term borrowings and subordinated debentures declined by 16.4 percent since year end 2014, as the Company prepaid $16.8 million in subordinated debentures, which was funded primarily by short-term borrowings.

Asset Quality

As of December 31, 2015, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $41.3 million, or 2.77 percent of assets. This compares to $45.2 million, or 3.07 percent of assets at the linked quarter, and $50.2 million, or 3.48 percent of assets, at fourth quarter 2014.

Fourth quarter 2014 net loan charge-offs were $6,000, or 0.00 percent of average loans annualized. The allowance for loan losses stood at $11.5 million, or 1.05 percent of total loans at December 31, 2015, compared to 1.08 percent at year-end 2014.

Capital Adequacy

Shareholders’ equity was $143.7 million as of December 31, 2015 compared to $131.6 million December 31, 2014. Tangible book value per common share increased to $12.78 at December 31, 2015 compared to $11.86 at December 31, 2014.

Summit's depository institution, Summit Community Bank, Inc. (the “Bank”), is well in excess of regulatory requirements for a "well capitalized" institution at December 31, 2015. The Bank’s total risk-based capital ratio was 14.5 percent at December 31, 2015 compared to 15.3 percent at December 31, 2014, while its Tier 1 leverage capital ratio improved to 10.8 percent from the 10.6 percent reported at December 31, 2014.

About the Company

Summit Financial Group, Inc. is a $1.49 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 -- Q4 2015 vs Q4 2014  
     
    
   For the Quarter Ended  Percent 
Dollars in thousands 12/31/201512/31/2014 Change 
Condensed Statements of Income    
 Interest income    
 Loans, including fees $  13,265 $  12,666  4.7%
 Securities    1,685    1,784  -5.5%
 Other    1    2  -50.0%
 Total interest income    14,951    14,452  3.5%
 Interest expense        
 Deposits    2,085    2,130  -2.1%
 Borrowings    1,133    1,371  -17.4%
 Total interest expense    3,218    3,501  -8.1%
 Net interest income    11,733    10,951  7.1%
 Provision for loan losses    250    - n/a
 Net interest income after provision        
 for loan losses    11,483    10,951  4.9%
         
 Noninterest income    
 Insurance commissions    851    1,023  -16.8%
 Service fees related to deposit accounts    1,126    1,113  1.2%
 Realized securities gains (losses)    421    149  182.6%
 Other income    471    537  -12.3%
 Total noninterest income   2,869    2,822  1.7%
 Noninterest expense        
 Salaries and employee benefits   4,530    4,133  9.6%
 Net occupancy expense   481    495  -2.8%
 Equipment expense   617    487  26.7%
 Professional fees   507    452  12.2%
 FDIC premiums   270    315  -14.3%
 Foreclosed properties expense   150    239  -37.2%
 Loss (gain) on sales of foreclosed properties   (314)   628  -150.0%
 Write-downs of foreclosed properties   636    300  112.0%
 Other expenses   1,617    2,061  -21.5%
 Total noninterest expense   8,494    9,110  -6.8%
 Income before income taxes    5,858    4,663  25.6%
 Income taxes    1,712    1,464  16.9%
 Net income    4,146    3,199  29.6%
 Preferred stock dividends    -    191  -100.0%
         
 Net income applicable to common shares$  4,146 $  3,008  37.8%
           

 

   
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)  
Quarterly Performance Summary -- Q4 2015 vs Q4 2014  
    
   For the Quarter Ended  Percent 
  12/31/201512/31/2014 Change 
Per Share Data    
 Earnings per common share    
 Basic $  0.39 $  0.39  0.0%
 Diluted $  0.39 $  0.32  21.9%
     
 Cash dividends $  0.08 $  -  n/a
     
 Average common shares outstanding    
 Basic    10,661,700    7,796,508  36.7%
 Diluted    10,669,192    9,963,214  7.1%
     
 Common shares outstanding at period end    10,671,744    8,301,746  28.5%
     
Performance Ratios    
 Return on average equity  11.66% 10.10% 15.4%
 Return on average tangible equity  12.31% 10.76% 14.4%
 Return on average assets  1.12% 0.89% 25.8%
 Net interest margin  3.51% 3.42% 2.6%
 Efficiency ratio (A)  54.46% 53.07% 2.6%
     

NOTE (A) – 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 -- 2015 vs 2014   
     
     
   For the Years Ended  Percent 
Dollars in thousands 12/31/201512/31/2014 Change 
Condensed Statements of Income    
 Interest income    
 Loans, including fees $  52,068 $  50,430  3.2%
 Securities    6,808    7,188  -5.3%
 Other    7    8  -12.5%
 Total interest income    58,883    57,626  2.2%
 Interest expense        
 Deposits    8,336    8,995  -7.3%
 Borrowings    4,531    6,246  -27.5%
 Total interest expense    12,867    15,241  -15.6%
 Net interest income    46,016    42,385  8.6%
 Provision for loan losses    1,250    2,250  -44.4%
 Net interest income after provision        
 for loan losses    44,766    40,135  11.5%
         
 Noninterest income    
 Insurance commissions    4,042    4,400  -8.1%
 Service fees related to deposit accounts    4,285    4,405  -2.7%
 Realized securities gains    1,444    213  577.9%
 Other-than-temporary impairment of securities    -    (1) -100.0%
 Other income    2,090    2,206  -5.3%
 Total noninterest income   11,861    11,223  5.7%
 Noninterest expense        
 Salaries and employee benefits   17,638    16,185  9.0%
 Net occupancy expense   1,964    2,023  -2.9%
 Equipment expense   2,294    2,086  10.0%
 Professional fees   1,616    1,429  13.1%
 FDIC premiums   1,220    1,792  -31.9%
 Foreclosed properties expense   684    1,020  -32.9%
 Loss (gain) on sales of foreclosed properties   (26)   827  -103.1%
 Write-downs of foreclosed properties   2,415    3,771  -36.0%
 Other expenses   5,827    6,191  -5.9%
 Total noninterest expense   33,632    35,324  -4.8%
 Income before income taxes    22,995    16,034  43.4%
 Income taxes    6,893    4,678  47.3%
 Net income    16,102    11,356  41.8%
 Preferred stock dividends    -    771  -100.0%
         
 Net income applicable to common shares$  16,102 $  10,585  52.1%
         

 

   
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)  
Annual Performance Summary -- 2015 vs 2014   
    
   For the Years Ended  Percent 
  12/31/201512/31/2014 Change 
Per Share Data    
 Earnings per common share    
 Basic $  1.56 $  1.40  11.4%
 Diluted $  1.50 $  1.17  28.2%
     
 Cash dividends $  0.32 $  -  n/a
     
 Average common shares outstanding    
 Basic    10,295,434    7,539,444  36.6%
 Diluted    10,715,275    9,711,561  10.3%
     
 Common shares outstanding at period end    10,671,744    8,301,746  28.5%
     
Performance Ratios    
 Return on average equity  11.62% 9.54% 21.8%
 Return on average tangible equity  12.29% 10.22% 20.3%
 Return on average assets  1.10% 0.80% 37.5%
 Net interest margin  3.50% 3.39% 3.2%
 Efficiency ratio (A)  52.17% 52.78% -1.2%
     

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 12/31/20159/30/20156/30/20153/31/201512/31/2014
Condensed Statements of Income      
 Interest income      
 Loans, including fees $  13,265 $  12,983 $  12,972 $  12,848 $  12,666 
 Securities    1,685    1,543    1,685    1,894    1,784 
 Other    1    5    1    1    2 
 Total interest income    14,951    14,531    14,658    14,743    14,452 
 Interest expense                
 Deposits    2,085    2,106    2,074    2,071    2,130 
 Borrowings    1,133    1,120    1,126    1,152    1,371 
 Total interest expense    3,218    3,226    3,200    3,223    3,501 
 Net interest income    11,733    11,305    11,458    11,520    10,951 
       
 Provision for loan losses    250    250    500    250    - 
 Net interest income after provision                
 for loan losses    11,483    11,055    10,958    11,270    10,951 
                 
 Noninterest income      
 Insurance commissions    851    983    1,080    1,128    1,023 
 Service fees related to deposit accounts    1,126    1,111    1,072    976    1,113 
 Realized securities gains (losses)    421    372    170    480    149 
 Other income    471    527    538    555    537 
 Total noninterest income   2,869    2,993    2,860    3,139    2,822 
 Noninterest expense                
 Salaries and employee benefits   4,530    4,479    4,442    4,187    4,133 
 Net occupancy expense   481    496    489    498    495 
 Equipment expense   617    582    560    535    487 
 Professional fees   507    402    372    335    452 
 FDIC premiums   270    300    320    330    315 
 Foreclosed properties expense   150    168    158    208    239 
 Loss (gain) on sales of foreclosed properties    (314)   35    103    150    628 
 Write-downs of foreclosed properties    636    1,046    160    572    300 
 Other expenses   1,617    1,364    1,457    1,389    2,061 
 Total noninterest expense   8,494    8,872    8,061    8,204    9,110 
 Income before income taxes    5,858    5,176    5,757    6,205    4,663 
 Income taxes    1,712    1,515    1,747    1,920    1,464 
 Net income    4,146    3,661    4,010    4,285    3,199 
 Preferred stock dividends    -    -    -    -    191 
 Net income applicable to common shares$  4,146 $  3,661 $  4,010 $  4,285 $  3,008 
                 

 

      
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)     
Five Quarter Performance Summary     
      
   For the Quarter Ended 
  12/31/20159/30/20156/30/20153/31/201512/31/2014
Per Share Data      
 Earnings per common share      
 Basic $  0.39 $  0.34 $  0.38 $  0.49 $  0.39 
 Diluted $  0.39 $  0.34 $  0.38 $  0.41 $  0.32 
       
 Cash dividends $  0.08 $  0.08 $  0.08 $  0.08 $  -  
       
 Average common shares outstanding      
 Basic  10,661,700   10,703,526  10,667,892    8,815,961   7,796,508 
 Diluted  10,669,192   10,712,203  10,676,474   10,493,323  9,963,214 
       
 Common shares outstanding at period end    10,671,744    10,658,199    10,843,676    10,586,242    8,301,746 
       
Performance Ratios      
 Return on average equity  11.66% 10.42% 11.67% 12.79% 10.10%
 Return on average tangible equity  12.31% 11.01% 12.36% 13.56% 10.76%
 Return on average assets  1.12% 1.00% 1.09% 1.18% 0.89%
 Net interest margin  3.51% 3.41% 3.49% 3.59% 3.42%
 Efficiency ratio (A)  54.46% 52.93% 52.05% 49.27% 53.07%
                 

NOTE (A) – 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 12/31/20159/30/20156/30/20153/31/201512/31/2014
       
Assets      
 Cash and due from banks$  3,625 $  4,232 $  3,988 $  3,850 $  3,728 
 Interest bearing deposits other banks   5,862    8,057    9,274    8,437    8,783 
 Securities   280,792    272,127    276,661    282,135    282,834 
 Loans, net   1,079,331    1,062,348    1,064,472    1,039,669    1,019,842 
 Property held for sale   25,567    29,713    31,500    34,368    37,529 
 Premises and equipment, net   21,572    20,457    20,490    20,208    20,060 
 Intangible assets   7,498    7,548    7,598    7,648    7,698 
 Cash surrender value of life insurance policies   37,732    37,482    37,222    36,961    36,700 
 Other assets   30,450    27,340    28,764    27,216    26,394 
 Total assets$  1,492,429 $  1,469,304 $  1,479,969 $  1,460,492 $  1,443,568 
                 
Liabilities and Shareholders' Equity                
 Deposits$  1,066,709 $  1,072,091 $  1,053,310 $  1,058,308 $  1,061,314 
 Short-term borrowings   171,394    145,291    174,599    148,985    123,633 
 Long-term borrowings and     
 subordinated debentures   95,170    95,648    98,625    101,602    113,879 
 Other liabilities   15,412    15,985    13,363    15,708    13,098 
 Shareholders' equity   143,744    140,289    140,072    135,889    131,644 
 Total liabilities and shareholders' equity$  1,492,429 $  1,469,304 $  1,479,969 $  1,460,492 $  1,443,568 
                 
 Book value per common share (A)$  13.48 $  13.16 $  12.92 $  12.84 $  12.60 
 Tangible book value per common share (A)$  12.78 $  12.45 $  12.22 $  12.11 $  11.86 
 Tangible equity to tangible assets 9.2% 9.1% 9.0% 8.8% 8.6%
 Tangible common equity to tangible assets 9.2% 9.1% 9.0% 8.8% 8.0%
       

NOTE (A) – Assumes conversion of convertible preferred stock

      
SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)     
Regulatory Capital Ratios (A)      
        
  12/31/20159/30/20156/30/20153/31/201512/31/2014 
Summit Financial Group, Inc.      
 CET1 Risk-based Capital 11.8% 11.7% 11.6% 11.3%n/a 
 Tier 1 Risk-based Capital 13.4% 13.4% 13.2% 13.0% 13.3% 
 Total Risk-based Capital 14.4% 14.4% 14.2% 14.0% 14.9% 
 Tier 1 Leverage Ratio 10.7% 10.5% 10.4% 10.1% 9.9% 
        
Summit Community Bank, Inc.      
 CET1 Risk-based Capital 13.6% 13.6% 13.4% 13.5%n/a 
 Tier 1 Risk-based Capital 13.6% 13.6% 13.4% 13.5% 14.2% 
 Total Risk-based Capital 14.5% 14.6% 14.4% 14.5% 15.3% 
 Tier 1 Leverage Ratio 10.8% 10.7% 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 thousands12/31/20159/30/20156/30/20153/31/201512/31/2014 
        
Commercial $  97,201 $  89,250 $  97,284 $  89,928 $  88,590  
Commercial real estate      
Owner occupied    203,555    199,068    191,743    180,269    157,783  
Non-owner occupied   337,295    336,550    331,056    325,764    317,136  
Construction and development      
Land and development   65,500    66,164    64,435    66,558    67,881  
Construction    9,970    8,419    18,214    19,094    28,591  
Residential real estate      
Non-jumbo    221,749    222,739    220,199    219,938    220,071  
Jumbo    50,313    46,092    49,203    50,492    52,879  
Home equity    74,300    73,652    72,504    68,894    67,115  
Consumer    19,251    19,124    18,683    18,485    19,456  
Other    11,669    12,518    12,423    11,074    11,507  
Total loans, net of unearned fees   1,090,803    1,073,576    1,075,744    1,050,496    1,031,009  
Less allowance for loan losses   11,472    11,228    11,272    10,827    11,167  
Loans, net$  1,079,331 $  1,062,348 $  1,064,472 $  1,039,669 $  1,019,842  
                  


     
SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)    
Deposit Composition      
        
Dollars in thousands 12/31/20159/30/20156/30/20153/31/201512/31/2014 
Non interest bearing checking$  119,010 $  118,887 $  113,256 $  117,049 $  115,427  
Interest bearing checking   215,721    217,242    202,957    196,606    204,030  
Savings    266,825    259,185    246,949    257,687    253,578  
Time deposits    465,153    476,777    490,148    486,966    488,279  
Total deposits$  1,066,709 $  1,072,091 $  1,053,310 $  1,058,308 $  1,061,314  
                  


     
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)    
Asset Quality Information     
       
   For the Quarter Ended 
Dollars in thousands 12/31/20159/30/20156/30/20153/31/201512/31/2014
       
 Gross loan charge-offs$  132 $  774 $  463 $  782 $  362 
 Gross loan recoveries   (126)   (481)   (407)   (192)   (488)
 Net loan charge-offs$  6 $  293 $  56 $  590 $  (126)
                 
 Net loan charge-offs to average loans (annualized) 0.00% 0.11% 0.02% 0.23% -0.05%
 Allowance for loan losses$  11,472 $  11,228 $  11,272 $  10,827 $  11,167 
 Allowance for loan losses as a percentage     
 of period end loans 1.05% 1.05% 1.05% 1.03% 1.08%
 Nonperforming assets:     
 Nonperforming loans     
 Commercial$  853 $  884 $  1,065 $  788 $  392 
 Commercial real estate   5,955    5,294    2,421    1,340    1,844 
 Commercial construction and development   -    -    -    -    - 
 Residential construction and development   5,623    5,345    5,627    5,333    4,619 
 Residential real estate   3,245    3,881    4,433    4,491    5,556 
 Consumer   92    53    45    65    83 
 Total nonperforming loans   15,768    15,457    13,591    12,017    12,494 
 Foreclosed properties               
 Commercial   -    -    -    110    110 
 Commercial real estate   1,300    3,209    3,279    3,657    5,204 
 Commercial construction and development   8,717    9,328    10,178    10,191    10,179 
 Residential construction and development   14,068    14,965    15,839    17,590    19,267 
 Residential real estate   1,482    2,211    2,204    2,819    2,769 
 Total foreclosed properties   25,567    29,713    31,500    34,367    37,529 
 Other repossessed assets   5    -    55    55    221 
 Total nonperforming assets$  41,340 $  45,170 $  45,146 $  46,439 $  50,244 
                 
 Nonperforming loans to period end loans 1.45% 1.44% 1.26% 1.14% 1.21%
 Nonperforming assets to period end assets 2.77% 3.07% 3.05% 3.18% 3.48%
       

 

      
Loans Past Due 30-89 Days     
   For the Quarter Ended 
In thousands 12/31/20159/30/20156/30/20153/31/201512/31/2014
       
 Commercial$  339 $  42 $  344 $  387 $  382 
 Commercial real estate   543    1,926    4,945    783    266 
 Construction and development   1,182    39    21    2,735    2,278 
 Residential real estate   4,442    3,888    3,932    3,614    7,413 
 Consumer   186    216    211    148    269 
 Other   9    9    7    18    14 
 Total$  6,701 $  6,120 $  9,460 $  7,685 $  10,622 
                 

 

       
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)      
Average Balance Sheet, Interest Earnings & Expenses and Average Rates     
Q4 2015 vs Q4 2014        
 Q4 2015 Q4 2014 
 AverageEarnings /Yield / AverageEarnings /Yield / 
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate 
         
ASSETS        
Interest earning assets        
Loans, net of unearned  interest        
Taxable$  1,064,491 $  13,111  4.89% $  1,006,641 $  12,562  4.95% 
Tax-exempt   16,393    232  5.61%    9,488    158  6.61% 
Securities        
Taxable   202,417    1,027  2.01%    207,577    1,127  2.15% 
Tax-exempt   82,013    997  4.82%    83,729    995  4.71% 
Interest bearing deposits other banks        
and Federal funds sold   7,345    1  0.05%    8,102    2  0.10% 
Total interest earning assets   1,372,659    15,368  4.44%    1,315,537    14,844  4.48% 
         
Noninterest earning assets        
Cash & due from banks   3,828       3,654    
Premises & equipment   21,701       20,149    
Other assets   91,596       107,467    
Allowance for loan losses   (11,370)      (11,239)   
Total assets$  1,478,414    $  1,435,568    
                 
LIABILITIES AND SHAREHOLDERS' EQUITY       
         
Liabilities        
Interest bearing liabilities        
Interest bearing        
demand deposits$  215,315 $  72  0.13% $  199,932 $  60  0.12% 
Savings deposits   262,557    474  0.72%    254,986    443  0.69% 
Time deposits   469,249    1,539  1.30%    489,884    1,627  1.32% 
Short-term borrowings   156,812    156  0.39%    124,001    97  0.31% 
Long-term borrowings and        
subordinated debentures   95,531    977  4.06%    114,533    1,274  4.41% 
Total interest bearing liabilities   1,199,464    3,218  1.06%    1,183,336    3,501  1.17% 
         
Noninterest bearing liabilities        
Demand deposits   119,785       113,926    
Other liabilities   16,970       11,633    
Total liabilities   1,336,219       1,308,895    
         
Shareholders' equity - preferred   -       9,249    
Shareholders' equity - common   142,195       117,424    
Total liabilities and                    
shareholders' equity$  1,478,414        $  1,435,568        
                     
NET INTEREST EARNINGS   $  12,150        $  11,343     
                     
NET INTEREST MARGIN       3.51%        3.42% 
                     

 

      
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$  1,049,172 $  51,554  4.91% $  984,723 $  50,078  5.09% 
Tax-exempt   13,706    779  5.68%    7,823    533  6.81% 
Securities        
Taxable   209,316    4,328  2.07%    211,700    4,692  2.22% 
Tax-exempt   77,280    3,756  4.86%    81,549    3,780  4.64% 
Interest bearing deposits other banks      
and Federal funds sold   8,878    8  0.09%    9,325    8  0.09% 
Total interest earning assets   1,358,352    60,425  4.45%    1,295,120    59,091  4.56% 
         
Noninterest earning assets       
Cash & due from banks   3,839       3,756    
Premises & equipment   20,707       20,346    
Other assets   94,996       112,504    
Allowance for loan losses   (11,307)      (11,724)   
Total assets$  1,466,587    $  1,420,002    
                 
LIABILITIES AND SHAREHOLDERS' EQUITY     
         
Liabilities        
Interest bearing liabilities       
Interest bearing        
demand deposits$  208,160 $  251  0.12% $  192,190 $  222  0.12% 
Savings deposits   255,186    1,781  0.70%    238,340    1,580  0.66% 
Time deposits   481,732    6,304  1.31%    513,110    7,193  1.40% 
Short-term borrowings   151,102    525  0.35%    100,786    306  0.30% 
Long-term borrowings and          
subordinated debentures   99,805    4,007  4.01%    142,213    5,939  4.18% 
    1,195,985    12,868  1.08%    1,186,639    15,240  1.28% 
Noninterest bearing liabilities       
Demand deposits   116,995       104,262    
Other liabilities   15,024       10,119    
Total liabilities   1,328,004       1,301,020    
         
Shareholders' equity - preferred   1,786       9,276    
Shareholders' equity - common   136,797       109,706    
Total liabilities and                    
shareholders' equity$  1,466,587        $  1,420,002        
                     
NET INTEREST EARNINGS   $  47,557        $  43,851     
                     
NET INTEREST MARGIN       3.50%        3.39% 
                     

 

       
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 12/31/20159/30/201512/31/2014 12/31/201512/31/2014 
        
        
Core earnings applicable to common shares $  4,084 $  4,108 $  3,789  $  16,697 $  13,638  
        
Realized securities gains (losses)    421    372    149     1,444    213  
Applicable income tax effect    (156)   (138)   (55)    (534)   (79) 
Gain (loss) on sale of foreclosed properties    314    (35)   (628)    26    (827) 
Applicable income tax effect    (116)   13    232     (10)   306  
Fraud loss    -    -    (461)    -    (461) 
Applicable income tax effect    -    -    171     -    171  
Write-downs foreclosed properties    (636)   (1,046)   (300)    (2,415)   (3,771) 
Applicable income tax effect    235    387    111     894    1,395  
    62    (447)   (781)    (595)   (3,053) 
GAAP net income applicable to common shares $  4,146 $  3,661 $  3,008  $  16,102 $  10,585  
                  
        
        
Core diluted earnings per common share $  0.38 $  0.38 $  0.40  $  1.56 $  1.50  
        
Realized securities gains (losses)    0.04    -     0.01     0.13    0.02  
Applicable income tax effect    (0.01)   -     -      (0.05)   (0.01) 
Gain (loss) on sale of foreclosed properties    0.03    0.03    (0.06)    -     (0.09) 
Applicable income tax effect    (0.01)   (0.01)   0.02     -     0.03  
Fraud loss    -     -     (0.05)    -     (0.05) 
Applicable income tax effect    -     -     0.02     -     0.02  
Write-downs of foreclosed properties    (0.06)   (0.10)   (0.03)    (0.23)   (0.39) 
Applicable income tax effect    0.02    0.04    0.01     0.09    0.14  
    0.01    (0.04)   (0.08)    (0.06)   (0.33) 
GAAP diluted earnings per common share $  0.39 $  0.34 $  0.32  $  1.50 $  1.17  
                  


      
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 12/31/20159/30/201512/31/2014 12/31/201512/31/2014
       
Total core revenue $  14,181 $  13,926 $  13,624  $  56,433 $  53,395 
       
FHLB special dividend   -    -    -     176    - 
Realized securities gains/(losses)    421    372    149     1,444    213 
    421    372    149     1,444    213 
GAAP total revenue $  14,602 $  14,298 $  13,773  $  57,877 $  53,608 
       
       
Total core noninterest income $  2,448 $  2,621 $  2,673  $  10,417 $  11,010 
       
Realized securities gains/(losses)    421    372    149     1,444    213 
    421    372    149     1,444    213 
GAAP total noninterest income $  2,869 $  2,993 $  2,822  $  11,861 $  11,223 
       
       
Total core noninterest expense $  8,172 $  7,791 $  7,721  $  31,243 $  30,265 
       
Fraud loss    -    -    461     -    461 
(Gains)/losses on sales of foreclosed properties   (314)   35    628     (26)   827 
Write-downs of foreclosed properties    636    1,046    300     2,415    3,771 
    322    1,081    1,389     2,389    5,059 
GAAP total noninterest expense $  8,494 $  8,872 $  9,110  $  33,632 $  35,324 
                 

 


            

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