MOOREFIELD, W.Va., April 25, 2016 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ:SMMF) today reported first quarter 2016 net income of $4.06 million, or $0.38 per diluted share, representing a decrease of 5.2 percent, or 7.3 percent per diluted share, compared to the $4.29 million, or $0.41 per diluted share, reported for the first quarter of 2015, and a decrease of 2.0 percent, or 2.6 percent per diluted share, compared to the $4.15 million, or $0.39 per diluted share, reported for the fourth quarter of 2015. Q1 2016 earnings compared to Q1 2015 and Q4 2015 were negatively impacted by increased personnel costs and other noninterest expenses as well as reductions in insurance commission revenue, which were partially offset by increased net interest earnings and reductions in write-downs of foreclosed properties.
Excluding from first quarter 2016 one-time items of income, gain, expense and loss, Q1 2016 core earnings approximated $3.96 million, or $0.37 per diluted share compared to Q1 2015 core earnings of $4.33 million, or $0.40 per diluted share, and to Q4 2015 core earnings of $4.08 million, or $0.38 per diluted share.
Highlights for Q1 2016 include:
- Net interest margin remained stable compared to the linked quarter, but has declined 9 basis points since Q1 2015.
- Achieved loan growth of $17.3 million or 6.3 percent (on an annualized basis). Loans have grown $57.6 million or 5.5 percent since Q1 2015.
- Core revenue for the quarter is unchanged compared to Q4 2015, and is up $189,000 or 1.3 percent compared to Q1 2015.
- Nonperforming assets as a percentage of total assets declined to 2.66 percent compared to 2.77 percent for the linked quarter, and 3.18 percent at Q1 2015; foreclosed properties are at the lowest level since Q2 2009.
- Recorded charges of $109,000 to write-down foreclosed properties compared to $636,000 in Q4 2015 and $572,000 in Q1 2015.
- Announced our entering into a definitive merger agreement to acquire Highland County Bankshares, Inc. headquartered in Monterey, Virginia.
H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “I am pleased to report Summit achieved another quarter of solid performance, despite the challenges of higher overhead costs resulting from important investments we are making in both our people and in our infrastructure to assist to maintain our growth momentum. Our solid core earnings, growing loan portfolio and continued reductions in our portfolio of problem assets are all very gratifying to note; but I am particularly gratified by the opportunity represented by our pending acquisition of Highland County Bankshares. This deal will combine two financially strong banks with similar cultures, core values and guiding principles, as well as a shared commitment to build long-term client relationships by providing service beyond expectations.”
Results from Operations
Total revenue for first quarter 2016, consisting of net interest income and noninterest income, declined 0.5 percent to $14.6 million compared to $14.7 million for the first quarter 2015, and was unchanged compared to the linked quarter.
Total core revenue (excluding nonrecurring items, enumerated above) was $14.2 million for first quarter 2015, $14.0 million for the same prior-year quarter and $14.2 million for the linked quarter.
For the first quarter of 2016, net interest income was $11.8 million, an increase of 2.2 percent from the $11.5 million reported in the prior-year first quarter and increased $46,000 compared to the linked quarter. The net interest margin for first quarter 2016 was 3.50 percent compared to 3.59 percent for the year-ago quarter, and 3.51 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 first quarter 2016 was $2.81 million compared to $3.14 million for the comparable period of 2015 and $2.87 million for Q4 2015. Excluding realized securities gains, noninterest income was $2.41 million for first quarter 2016 compared to $2.66 million reported for first quarter 2015 and $2.45 million for linked quarter. The quarter over year-ago quarter decline principally resulted from decreased insurance commission revenues, while the decline compared to the linked quarter was due to lower service fees on deposit accounts.
Summit recognized $250,000 provision for loan losses in first quarter 2016, as well as for the linked quarter and for the year-ago quarter.
Total noninterest expense increased 4.3% to $8.55 million compared to $8.20 million for the prior-year first quarter and increased 0.7 percent compared to $8.49 million for the linked quarter. Excluding from noninterest expense merger expenses, gains and losses on sales of foreclosed properties and write-downs of foreclosed properties, noninterest expense would have approximated $8.34 million for Q1 2016, $7.48 million for the comparable period of 2015 and $8.17 million for linked quarter. The Q1 2016 compared to Q1 2015 increase is primarily due to net additions of staff, general merit raises and higher incentive compensation.
Balance Sheet
At March 31, 2016, total assets were $1.51 billion, an increase of $16.1 million, or 1.1 percent since December 31, 2015. Total loans, net of unearned fees and allowance for loan losses, were $1.10 billion at March 31, 2016, up $17.5 million, or 1.6 percent, from the $1.08 billion reported at year-end 2015.
At March 31, 2016, deposits were $1.09 billion, an increase of $27.8 million, or 2.6 percent, since year end 2015. During Q1 2016, checking deposits declined by $1.5 million or 0.4 percent, while savings deposits increased $19.9 million, or 7.4 percent.
Asset Quality
As of March 31, 2016, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $40.1 million, or 2.66 percent of assets. This compares to $41.3 million, or 2.77 percent of assets at the linked quarter, and $46.4 million, or 3.18 percent of assets, at first quarter 2015.
First quarter 2016 net loan charge-offs were $407,000, or 0.15 percent of average loans on an annualized basis. The allowance for loan losses stood at $11.3 million, or 1.02 percent of total loans at March 31, 2016, compared to 1.05 percent at year-end 2015.
Capital Adequacy
Shareholders’ equity was $146.1 million as of March 31, 2016 compared to $143.7 million December 31, 2015. Tangible book value per common share increased to $12.98 at March 31, 2016 compared to $12.78 at December 31, 2015. Summit had 10,681,880 outstanding common shares at Q1 2016 quarter end compared to 10,671,744 at year end 2015.
Summit's depository institution, Summit Community Bank, Inc. (the “Bank”), is well in excess of regulatory requirements for a "well capitalized" institution at March 31, 2016. The Bank’s total risk-based capital ratio was 14.5 percent at both March 31, 2016 and December 31, 2015, while its Tier 1 leverage capital ratio was 10.7 percent at March 31, 2016 compared to the 10.8 percent reported at December 31, 2015.
About the Company
Summit Financial Group, Inc. is a $1.51 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 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 -- Q1 2016 vs Q1 2015 | ||||||||||
| For the Quarter Ended | Percent | |||||||||
| Dollars in thousands | 3/31/2016 | 3/31/2015 | Change | |||||||
| Condensed Statements of Income | ||||||||||
| Interest income | ||||||||||
| Loans, including fees | $ | 13,436 | $ | 12,848 | 4.6 | % | ||||
| Securities | 1,726 | 1,894 | -8.9 | % | ||||||
| Other | 3 | 1 | 200.0 | % | ||||||
| Total interest income | 15,165 | 14,743 | 2.9 | % | ||||||
| Interest expense | ||||||||||
| Deposits | 2,170 | 2,071 | 4.8 | % | ||||||
| Borrowings | 1,216 | 1,152 | 5.6 | % | ||||||
| Total interest expense | 3,386 | 3,223 | 5.1 | % | ||||||
| Net interest income | 11,779 | 11,520 | 2.2 | % | ||||||
| Provision for loan losses | 250 | 250 | 0.0 | % | ||||||
| Net interest income after provision | ||||||||||
| for loan losses | 11,529 | 11,270 | 2.3 | % | ||||||
| Noninterest income | ||||||||||
| Insurance commissions | 924 | 1,128 | -18.1 | % | ||||||
| Service fees related to deposit accounts | 978 | 976 | 0.2 | % | ||||||
| Realized securities gains (losses) | 393 | 480 | -18.1 | % | ||||||
| Other income | 511 | 555 | -7.9 | % | ||||||
| Total noninterest income | 2,806 | 3,139 | -10.6 | % | ||||||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | 4,682 | 4,187 | 11.8 | % | ||||||
| Net occupancy expense | 540 | 498 | 8.4 | % | ||||||
| Equipment expense | 656 | 535 | 22.6 | % | ||||||
| Professional fees | 472 | 335 | 40.9 | % | ||||||
| FDIC premiums | 300 | 330 | -9.1 | % | ||||||
| Merger expense | 112 | - | n/a | |||||||
| Foreclosed properties expense | 124 | 208 | -40.4 | % | ||||||
| Loss (gain) on sales of foreclosed properties | (6 | ) | 150 | n/a | ||||||
| Write-downs of foreclosed properties | 109 | 572 | -80.9 | % | ||||||
| Other expenses | 1,565 | 1,389 | 12.7 | % | ||||||
| Total noninterest expense | 8,554 | 8,204 | 4.3 | % | ||||||
| Income before income taxes | 5,781 | 6,205 | -6.8 | % | ||||||
| Income taxes | 1,719 | 1,920 | -10.5 | % | ||||||
| Net income | $ | 4,062 | $ | 4,285 | -5.2 | % | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | ||||||||||
| Quarterly Performance Summary -- Q1 2016 vs Q1 2015 | ||||||||||
| For the Quarter Ended | Percent | |||||||||
| 3/31/2016 | 3/31/2015 | Change | ||||||||
| Per Share Data | ||||||||||
| Earnings per common share | ||||||||||
| Basic | $ | 0.38 | $ | 0.49 | -22.4 | % | ||||
| Diluted | $ | 0.38 | $ | 0.41 | -7.3 | % | ||||
| Cash dividends | $ | 0.10 | $ | 0.08 | 25.0 | % | ||||
| Average common shares outstanding | ||||||||||
| Basic | 10,671,856 | 8,815,961 | 21.1 | % | ||||||
| Diluted | 10,679,301 | 10,493,323 | 1.8 | % | ||||||
| Common shares outstanding at period end | 10,681,880 | 10,586,242 | 0.9 | % | ||||||
| Performance Ratios | ||||||||||
| Return on average equity | 11.10 | % | 12.79 | % | -13.2 | % | ||||
| Return on average tangible equity | 11.70 | % | 13.56 | % | -13.7 | % | ||||
| Return on average assets | 1.08 | % | 1.18 | % | -8.5 | % | ||||
| Net interest margin | 3.50 | % | 3.59 | % | -2.5 | % | ||||
| Efficiency ratio (A) | 55.93 | % | 49.27 | % | 13.5 | % | ||||
| NOTE (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. | ||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | ||||||||||||||||
| Five Quarter Performance Summary | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||
| Condensed Statements of Income | ||||||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 13,436 | $ | 13,265 | $ | 12,983 | $ | 12,972 | $ | 12,848 | ||||||
| Securities | 1,726 | 1,685 | 1,543 | 1,685 | 1,894 | |||||||||||
| Other | 3 | 1 | 5 | 1 | 1 | |||||||||||
| Total interest income | 15,165 | 14,951 | 14,531 | 14,658 | 14,743 | |||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 2,170 | 2,085 | 2,106 | 2,074 | 2,071 | |||||||||||
| Borrowings | 1,216 | 1,133 | 1,120 | 1,126 | 1,152 | |||||||||||
| Total interest expense | 3,386 | 3,218 | 3,226 | 3,200 | 3,223 | |||||||||||
| Net interest income | 11,779 | 11,733 | 11,305 | 11,458 | 11,520 | |||||||||||
| Provision for loan losses | 250 | 250 | 250 | 500 | 250 | |||||||||||
| Net interest income after provision | ||||||||||||||||
| for loan losses | 11,529 | 11,483 | 11,055 | 10,958 | 11,270 | |||||||||||
| Noninterest income | ||||||||||||||||
| Insurance commissions | 924 | 851 | 983 | 1,080 | 1,128 | |||||||||||
| Service fees related to deposit accounts | 978 | 1,126 | 1,111 | 1,072 | 976 | |||||||||||
| Realized securities gains (losses) | 393 | 421 | 372 | 170 | 480 | |||||||||||
| Other income | 511 | 471 | 527 | 538 | 555 | |||||||||||
| Total noninterest income | 2,806 | 2,869 | 2,993 | 2,860 | 3,139 | |||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries and employee benefits | 4,682 | 4,530 | 4,479 | 4,442 | 4,187 | |||||||||||
| Net occupancy expense | 540 | 481 | 496 | 489 | 498 | |||||||||||
| Equipment expense | 656 | 617 | 582 | 560 | 535 | |||||||||||
| Professional fees | 472 | 507 | 402 | 372 | 335 | |||||||||||
| FDIC premiums | 300 | 270 | 300 | 320 | 330 | |||||||||||
| Merger expense | 112 | - | - | - | - | |||||||||||
| Foreclosed properties expense | 124 | 150 | 168 | 158 | 208 | |||||||||||
| Loss (gain) on sale of foreclosed properties | (6 | ) | (314 | ) | 35 | 103 | 150 | |||||||||
| Write-downs of foreclosed properties | 109 | 636 | 1,046 | 160 | 572 | |||||||||||
| Other expenses | 1,565 | 1,617 | 1,364 | 1,457 | 1,389 | |||||||||||
| Total noninterest expense | 8,554 | 8,494 | 8,872 | 8,061 | 8,204 | |||||||||||
| Income before income taxes | 5,781 | 5,858 | 5,176 | 5,757 | 6,205 | |||||||||||
| Income taxes | 1,719 | 1,712 | 1,515 | 1,747 | 1,920 | |||||||||||
| Net income | $ | 4,062 | $ | 4,146 | $ | 3,661 | $ | 4,010 | $ | 4,285 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | ||||||||||||||||
| Five Quarter Performance Summary | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| 3/31/16 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||
| Per Share Data | ||||||||||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 0.38 | $ | 0.39 | $ | 0.34 | $ | 0.38 | $ | 0.49 | ||||||
| Diluted | $ | 0.38 | $ | 0.39 | $ | 0.34 | $ | 0.38 | $ | 0.41 | ||||||
| Cash dividends | $ | 0.10 | $ | 0.08 | $ | 0.08 | $ | 0.08 | $ | 0.08 | ||||||
| Average common shares outstanding | ||||||||||||||||
| Basic | 10,671,856 | 10,661,700 | 10,703,526 | 10,667,892 | 8,815,961 | |||||||||||
| Diluted | 10,679,301 | 10,669,192 | 10,712,203 | 10,676,474 | 10,493,323 | |||||||||||
| Common shares outstanding at period end | 10,681,880 | 10,671,744 | 10,658,199 | 10,843,676 | 10,586,242 | |||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average equity | 11.10 | % | 11.66 | % | 10.42 | % | 11.67 | % | 12.79 | % | ||||||
| Return on average tangible equity | 11.70 | % | 12.31 | % | 11.01 | % | 12.36 | % | 13.56 | % | ||||||
| Return on average assets | 1.08 | % | 1.12 | % | 1.00 | % | 1.09 | % | 1.18 | % | ||||||
| Net interest margin | 3.50 | % | 3.51 | % | 3.41 | % | 3.49 | % | 3.59 | % | ||||||
| Efficiency ratio (A) | 55.93 | % | 54.46 | % | 52.93 | % | 52.05 | % | 49.27 | % | ||||||
| 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 | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||
| Assets | ||||||||||||||||
| Cash and due from banks | $ | 4,005 | $ | 3,625 | $ | 4,232 | $ | 3,988 | $ | 3,850 | ||||||
| Interest bearing deposits other banks | 12,655 | 5,862 | 8,057 | 9,274 | 8,437 | |||||||||||
| Securities | 271,515 | 280,792 | 272,127 | 276,661 | 282,135 | |||||||||||
| Loans, net | 1,096,790 | 1,079,331 | 1,062,348 | 1,064,472 | 1,039,669 | |||||||||||
| Property held for sale | 24,684 | 25,567 | 29,713 | 31,500 | 34,368 | |||||||||||
| Premises and equipment, net | 21,589 | 21,572 | 20,457 | 20,490 | 20,208 | |||||||||||
| Intangible assets | 7,448 | 7,498 | 7,548 | 7,598 | 7,648 | |||||||||||
| Cash surrender value of life insurance policies | 37,989 | 37,732 | 37,482 | 37,222 | 36,961 | |||||||||||
| Other assets | 31,893 | 30,450 | 27,340 | 28,764 | 27,216 | |||||||||||
| Total assets | $ | 1,508,568 | $ | 1,492,429 | $ | 1,469,304 | $ | 1,479,969 | $ | 1,460,492 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||
| Deposits | $ | 1,094,544 | $ | 1,066,709 | $ | 1,072,091 | $ | 1,053,310 | $ | 1,058,308 | ||||||
| Short-term borrowings | 153,448 | 171,394 | 145,291 | 174,599 | 148,985 | |||||||||||
| Long-term borrowings and | ||||||||||||||||
| subordinated debentures | 94,692 | 95,170 | 95,648 | 98,625 | 101,602 | |||||||||||
| Other liabilities | 19,755 | 15,412 | 15,985 | 13,363 | 15,708 | |||||||||||
| Shareholders' equity | 146,129 | 143,744 | 140,289 | 140,072 | 135,889 | |||||||||||
| Total liabilities and shareholders' equity | $ | 1,508,568 | $ | 1,492,429 | $ | 1,469,304 | $ | 1,479,969 | $ | 1,460,492 | ||||||
| Book value per common share (A) | $ | 13.68 | $ | 13.48 | $ | 13.16 | $ | 12.92 | $ | 12.84 | ||||||
| Tangible book value per common share (A) | $ | 12.98 | $ | 12.78 | $ | 12.45 | $ | 12.22 | $ | 12.11 | ||||||
| Tangible equity to tangible assets | 9.2 | % | 9.2 | % | 9.1 | % | 9.0 | % | 8.8 | % | ||||||
| Tangible common equity to tangible assets | 9.2 | % | 9.2 | % | 9.1 | % | 9.0 | % | 8.8 | % | ||||||
| NOTE (A) – Computed on a fully-diluted basis assuming conversion of convertible preferred stock | ||||||||||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF) | |||||||||||||||||
| Regulatory Capital Ratios (A) | |||||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||
| Summit Financial Group, Inc. | |||||||||||||||||
| CET1 Risk-based Capital | 11.9 | % | 11.8 | % | 11.7 | % | 11.6 | % | 11.3 | % | |||||||
| Tier 1 Risk-based Capital | 13.5 | % | 13.4 | % | 13.4 | % | 13.2 | % | 13.0 | % | |||||||
| Total Risk-based Capital | 14.5 | % | 14.4 | % | 14.4 | % | 14.2 | % | 14.0 | % | |||||||
| Tier 1 Leverage Ratio | 10.7 | % | 10.7 | % | 10.5 | % | 10.4 | % | 10.1 | % | |||||||
| Summit Community Bank, Inc. | |||||||||||||||||
| CET1 Risk-based Capital | 13.6 | % | 13.6 | % | 13.6 | % | 13.4 | % | 13.5 | % | |||||||
| Tier 1 Risk-based Capital | 13.6 | % | 13.6 | % | 13.6 | % | 13.4 | % | 13.5 | % | |||||||
| Total Risk-based Capital | 14.5 | % | 14.5 | % | 14.6 | % | 14.4 | % | 14.5 | % | |||||||
| Tier 1 Leverage Ratio | 10.7 | % | 10.8 | % | 10.7 | % | 10.6 | % | 10.5 | % | |||||||
| 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 thousands | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||
| Commercial | $ | 101,743 | $ | 97,201 | $ | 89,250 | $ | 97,284 | $ | 89,928 | |||||||
| Commercial real estate | |||||||||||||||||
| Owner occupied | 202,680 | 203,555 | 199,068 | 191,743 | 180,269 | ||||||||||||
| Non-owner occupied | 353,350 | 337,295 | 336,550 | 331,056 | 325,764 | ||||||||||||
| Construction and development | |||||||||||||||||
| Land and development | 66,483 | 65,500 | 66,164 | 64,435 | 66,558 | ||||||||||||
| Construction | 7,997 | 9,970 | 8,419 | 18,214 | 19,094 | ||||||||||||
| Residential real estate | |||||||||||||||||
| Non-jumbo | 221,368 | 221,749 | 222,739 | 220,199 | 219,938 | ||||||||||||
| Jumbo | 50,057 | 50,313 | 46,092 | 49,203 | 50,492 | ||||||||||||
| Home equity | 74,097 | 74,300 | 73,652 | 72,504 | 68,894 | ||||||||||||
| Consumer | 19,095 | 19,251 | 19,124 | 18,683 | 18,485 | ||||||||||||
| Other | 11,235 | 11,669 | 12,518 | 12,423 | 11,074 | ||||||||||||
| Total loans, net of unearned fees | 1,108,105 | 1,090,803 | 1,073,576 | 1,075,744 | 1,050,496 | ||||||||||||
| Less allowance for loan losses | 11,315 | 11,472 | 11,228 | 11,272 | 10,827 | ||||||||||||
| Loans, net | $ | 1,096,790 | $ | 1,079,331 | $ | 1,062,348 | $ | 1,064,472 | $ | 1,039,669 | |||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF) | |||||||||||||||||
| Deposit Composition | |||||||||||||||||
| Dollars in thousands | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||
| Non interest bearing checking | $ | 122,378 | $ | 119,010 | $ | 118,887 | $ | 113,256 | $ | 117,049 | |||||||
| Interest bearing checking | 210,878 | 215,721 | 217,242 | 202,957 | 196,606 | ||||||||||||
| Savings | 286,695 | 266,825 | 259,185 | 246,949 | 257,687 | ||||||||||||
| Time deposits | 474,593 | 465,153 | 476,777 | 490,148 | 486,966 | ||||||||||||
| Total deposits | $ | 1,094,544 | $ | 1,066,709 | $ | 1,072,091 | $ | 1,053,310 | $ | 1,058,308 | |||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | ||||||||||||||||
| Asset Quality Information | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| Dollars in thousands | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||
| Gross loan charge-offs | $ | 561 | $ | 132 | $ | 774 | $ | 463 | $ | 782 | ||||||
| Gross loan recoveries | (154 | ) | (126 | ) | (481 | ) | (407 | ) | (192 | ) | ||||||
| Net loan charge-offs | $ | 407 | $ | 6 | $ | 293 | $ | 56 | $ | 590 | ||||||
| Net loan charge-offs to average loans (annualized) | 0.15 | % | 0.00 | % | 0.11 | % | 0.02 | % | 0.23 | % | ||||||
| Allowance for loan losses | $ | 11,315 | $ | 11,472 | $ | 11,228 | $ | 11,272 | $ | 10,827 | ||||||
| Allowance for loan losses as a percentage | ||||||||||||||||
| of period end loans | 1.02 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.03 | % | ||||||
| Nonperforming assets: | ||||||||||||||||
| Nonperforming loans | ||||||||||||||||
| Commercial | $ | 430 | $ | 853 | $ | 884 | $ | 1,065 | $ | 788 | ||||||
| Commercial real estate | 6,140 | 5,955 | 5,294 | 2,421 | 1,340 | |||||||||||
| Commercial construction and development | - | - | - | - | - | |||||||||||
| Residential construction and development | 5,467 | 5,623 | 5,345 | 5,627 | 5,333 | |||||||||||
| Residential real estate | 3,248 | 3,245 | 3,881 | 4,433 | 4,491 | |||||||||||
| Consumer | 121 | 92 | 53 | 45 | 65 | |||||||||||
| Total nonperforming loans | 15,406 | 15,768 | 15,457 | 13,591 | 12,017 | |||||||||||
| Foreclosed properties | ||||||||||||||||
| Commercial | - | - | - | - | 110 | |||||||||||
| Commercial real estate | 976 | 1,300 | 3,209 | 3,279 | 3,657 | |||||||||||
| Commercial construction and development | 8,717 | 8,717 | 9,328 | 10,178 | 10,191 | |||||||||||
| Residential construction and development | 13,808 | 14,068 | 14,965 | 15,839 | 17,590 | |||||||||||
| Residential real estate | 1,183 | 1,482 | 2,211 | 2,204 | 2,819 | |||||||||||
| Total foreclosed properties | 24,684 | 25,567 | 29,713 | 31,500 | 34,367 | |||||||||||
| Other repossessed assets | - | 5 | - | 55 | 55 | |||||||||||
| Total nonperforming assets | $ | 40,090 | $ | 41,340 | $ | 45,170 | $ | 45,146 | $ | 46,439 | ||||||
| Nonperforming loans to period end loans | 1.39 | % | 1.45 | % | 1.44 | % | 1.26 | % | 1.14 | % | ||||||
| Nonperforming assets to period end assets | 2.66 | % | 2.77 | % | 3.07 | % | 3.05 | % | 3.18 | % | ||||||
| Loans Past Due 30-89 Days | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| In thousands | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||
| Commercial | $ | 465 | $ | 339 | $ | 42 | $ | 344 | $ | 387 | ||||||
| Commercial real estate | 920 | 543 | 1,926 | 4,945 | 783 | |||||||||||
| Construction and development | 218 | 1,182 | 39 | 21 | 2,735 | |||||||||||
| Residential real estate | 3,055 | 4,442 | 3,888 | 3,932 | 3,614 | |||||||||||
| Consumer | 73 | 186 | 216 | 211 | 148 | |||||||||||
| Other | 14 | 9 | 9 | 7 | 18 | |||||||||||
| Total | $ | 4,745 | $ | 6,701 | $ | 6,120 | $ | 9,460 | $ | 7,685 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | ||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||||||||||||||||
| Q1 2016 vs Q1 2015 | ||||||||||||||||||||
| Q1 2016 | Q1 2015 | |||||||||||||||||||
| Average | Earnings / | Yield / | Average | Earnings / | Yield / | |||||||||||||||
| Dollars in thousands | Balances | Expense | Rate | Balances | Expense | Rate | ||||||||||||||
| ASSETS | ||||||||||||||||||||
| Interest earning assets | ||||||||||||||||||||
| Loans, net of unearned interest | ||||||||||||||||||||
| Taxable | $ | 1,089,083 | $ | 13,291 | 4.91 | % | $ | 1,035,610 | $ | 12,734 | 4.99 | % | ||||||||
| Tax-exempt | 15,824 | 220 | 5.59 | % | 12,567 | 174 | 5.62 | % | ||||||||||||
| Securities | ||||||||||||||||||||
| Taxable | 209,365 | 1,083 | 2.08 | % | 211,471 | 1,281 | 2.46 | % | ||||||||||||
| Tax-exempt | 79,314 | 974 | 4.94 | % | 76,012 | 927 | 4.95 | % | ||||||||||||
| Interest bearing deposits other banks | ||||||||||||||||||||
| and Federal funds sold | 8,092 | 3 | 0.15 | % | 7,081 | 1 | 0.06 | % | ||||||||||||
| Total interest earning assets | 1,401,678 | 15,571 | 4.47 | % | 1,342,741 | 15,117 | 4.57 | % | ||||||||||||
| Noninterest earning assets | ||||||||||||||||||||
| Cash & due from banks | 3,762 | 3,679 | ||||||||||||||||||
| Premises & equipment | 21,594 | 20,203 | ||||||||||||||||||
| Other assets | 89,642 | 98,685 | ||||||||||||||||||
| Allowance for loan losses | (11,562 | ) | (11,237 | ) | ||||||||||||||||
| Total assets | $ | 1,505,114 | $ | 1,454,071 | ||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Interest bearing liabilities | ||||||||||||||||||||
| Interest bearing | ||||||||||||||||||||
| demand deposits | $ | 209,733 | $ | 83 | 0.16 | % | $ | 199,840 | $ | 58 | 0.12 | % | ||||||||
| Savings deposits | 277,396 | 506 | 0.73 | % | 254,398 | 428 | 0.68 | % | ||||||||||||
| Time deposits | 471,597 | 1,581 | 1.35 | % | 485,975 | 1,585 | 1.32 | % | ||||||||||||
| Short-term borrowings | 168,548 | 240 | 0.57 | % | 144,779 | 112 | 0.31 | % | ||||||||||||
| Long-term borrowings and | ||||||||||||||||||||
| subordinated debentures | 95,052 | 976 | 4.13 | % | 105,741 | 1,040 | 3.99 | % | ||||||||||||
| Total interest bearing liabilities | 1,222,326 | 3,386 | 1.11 | % | 1,190,733 | 3,223 | 1.10 | % | ||||||||||||
| Noninterest bearing liabilities | ||||||||||||||||||||
| Demand deposits | 120,464 | 115,198 | ||||||||||||||||||
| Other liabilities | 15,928 | 14,096 | ||||||||||||||||||
| Total liabilities | 1,358,718 | 1,320,027 | ||||||||||||||||||
| Shareholders' equity - preferred | - | 7,244 | ||||||||||||||||||
| Shareholders' equity - common | 146,396 | 126,800 | ||||||||||||||||||
| Total liabilities and | ||||||||||||||||||||
| shareholders' equity | $ | 1,505,114 | $ | 1,454,071 | ||||||||||||||||
| NET INTEREST EARNINGS | $ | 12,185 | $ | 11,894 | ||||||||||||||||
| NET INTEREST MARGIN | 3.50 | % | 3.59 | % | ||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | |||||||||||
| Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures | |||||||||||
| For the Quarter Ended | |||||||||||
| Dollars in thousands | 3/31/2016 | 12/31/2015 | 3/31/2015 | ||||||||
| Core earnings applicable to common shares | $ | 3,950 | $ | 4,084 | $ | 4,326 | |||||
| FHLB special dividend | - | - | 176 | ||||||||
| Applicable income tax effect | - | - | (65 | ) | |||||||
| Realized securities gains (losses) | 393 | 421 | 480 | ||||||||
| Applicable income tax effect | (145 | ) | (156 | ) | (178 | ) | |||||
| Merger expense | (112 | ) | - | - | |||||||
| Applicable income tax effect | 41 | - | - | ||||||||
| Gain (loss) on sale of foreclosed properties | 6 | 314 | (150 | ) | |||||||
| Applicable income tax effect | (2 | ) | (116 | ) | 56 | ||||||
| Write-downs foreclosed properties | (109 | ) | (636 | ) | (572 | ) | |||||
| Applicable income tax effect | 40 | 235 | 212 | ||||||||
| 112 | 62 | (41 | ) | ||||||||
| GAAP net income applicable to common shares | $ | 4,062 | $ | 4,146 | $ | 4,285 | |||||
| Core diluted earnings per common share | $ | 0.37 | $ | 0.38 | $ | 0.40 | |||||
| FHLB special dividend | - | - | 0.02 | ||||||||
| Applicable income tax effect | - | - | - | ||||||||
| Realized securities gains (losses) | 0.04 | 0.04 | 0.05 | ||||||||
| Applicable income tax effect | (0.01 | ) | (0.01 | ) | (0.02 | ) | |||||
| Merger expense | (0.01 | ) | - | - | |||||||
| Applicable income tax effect | - | - | - | ||||||||
| Gain (loss) on sale of foreclosed properties | - | 0.03 | (0.01 | ) | |||||||
| Applicable income tax effect | - | (0.01 | ) | - | |||||||
| Write-downs of foreclosed properties | (0.01 | ) | (0.06 | ) | (0.05 | ) | |||||
| Applicable income tax effect | - | 0.02 | 0.02 | ||||||||
| 0.01 | 0.01 | 0.01 | |||||||||
| GAAP diluted earnings per common share | $ | 0.38 | $ | 0.39 | $ | 0.41 | |||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF) | ||||||||||
| Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures | ||||||||||
| For the Quarter Ended | ||||||||||
| Dollars in thousands | 3/31/2016 | 12/31/2015 | 3/31/2015 | |||||||
| Total core revenue | $ | 14,192 | $ | 14,181 | $ | 14,003 | ||||
| FHLB special dividend | - | - | 176 | |||||||
| Realized securities gains (losses) | 393 | 421 | 480 | |||||||
| GAAP total revenue | $ | 14,585 | $ | 14,602 | $ | 14,659 | ||||
| Total core noninterest income | $ | 2,413 | $ | 2,448 | $ | 2,659 | ||||
| Realized securities gains (losses) | 393 | 421 | 480 | |||||||
| GAAP total noninterest income | $ | 2,806 | $ | 2,869 | $ | 3,139 | ||||
| Total core noninterest expense | $ | 8,339 | $ | 8,172 | $ | 7,482 | ||||
| Merger expense | 112 | - | - | |||||||
| (Gains) losses on sales of foreclosed properties | (6 | ) | (314 | ) | 150 | |||||
| Write-downs of foreclosed properties | 109 | 636 | 572 | |||||||
| 215 | 322 | 722 | ||||||||
| GAAP total noninterest expense | $ | 8,554 | $ | 8,494 | $ | 8,204 | ||||