MOOREFIELD, W.Va., April 25, 2019 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported quarterly net income of $7.09 million for first quarter 2019, or $0.56 per diluted share. In comparison, earnings for fourth quarter 2018 were $7.45 million, or $0.60 per diluted share, and for first quarter 2018, $7.44 million, or $0.60 per diluted share.
Summit completed its acquisition of Peoples Bankshares, Inc. (“PBI”) and its subsidiary, First Peoples Bank, headquartered in Mullens, West Virginia on January 1, 2019 and will convert substantially all of its data processing systems to that of Summit’s effective April 27, 2019; accordingly, PBI’s results of operations are included in Summit’s consolidated results of operations from the date of acquisition, and therefore Summit’s first quarter 2019 results reflect increased levels of average balances, income and expenses compared to its first quarter 2018 and fourth quarter 2018 results. At consummation, PBI had total assets of $133.1 million, loans of $42.4 million, and deposits of $112.9 million. In addition, our merger-related expenses totaled $63,000 in Q1 2019 versus $59,000 in the prior quarter.
Highlights for Q1 2019
- Net interest margin for the quarter increased 5 basis points to 3.66 percent compared to Q4 2018 and is 8 basis points higher compared to Q1 2018;
- Provision for loan losses totaled $250,000 compared to $500,000 for the prior quarter and for the year-ago quarter;
- Efficiency ratio was 56.50 percent compared to 51.02 percent for the linked quarter as result of higher noninterest expenses due to the PBI acquisition and outsized deferred director compensation plan expense as result of exceptionally robust stock market performance during Q1 2019;
- Realized securities losses of $3,000 in Q1 2019 compared to $205,000 in Q4 2018; the Company realized securities gains of $732,000 in Q1 2018;
- Write-downs of foreclosed properties were $249,000 in Q1 2019 compared to $318,000 in Q4 2018, while the net loss on sales of foreclosed properties decreased to $1,000 in Q1 2019 from $70,000 in Q4 2018; and
- Nonperforming assets as a percentage of total assets declined to 1.53 percent compared to 1.66 percent for the linked quarter and to 1.73 percent a year-ago.
H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit achieved another quarter of solid core operating results highlighted by the improvement in our net interest margin. Further, despite the quarter’s challenges of integrating PBI’s banking operations with that of Summit’s, we nonetheless maintained a core efficiency ratio well below that of most of our peers. We have again demonstrated our ability to successfully execute on a disciplined M&A strategy, which we believe will continue to present us with significant opportunities going forward as we seek to be a consistently growing, high-performing community banking institution.”
Results from Operations
Total revenue for first quarter 2019, consisting of net interest income and noninterest income, increased 3.0 percent to $22.8 million compared to $22.1 million for the first quarter 2018.
For the first quarter of 2019, net interest income increased 7.6 percent to $18.6 million compared to $17.3 million for the prior-year first quarter and grew 2.9 percent compared to the linked quarter principally as a result of $51.6 million in growth in average loans and 7 basis point improvement in average loan yields during the quarter. The net interest margin for first quarter 2019 was 3.66 percent compared to 3.58 percent for the same year-ago quarter, and 3.61 percent for the linked quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to acquired interest earning assets and interest bearing liabilities, Summit’s net interest margin was 3.64 percent for Q1 2019.
Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary, trust and wealth management fees and service fee income from community banking activities, for first quarter 2019 was $4.23 million compared to $4.88 million for the comparable period of 2018. Excluding realized securities gains and losses, noninterest income was $4.23 million for first quarter 2019, compared to $4.14 million reported for first quarter 2018 and $4.39 million for the linked quarter.
We recorded a $250,000 provision for loan losses during first quarter 2019 and $500,000 during Q1 2018. The decreased need for loan loss provisioning in Q1 2019 is directionally consistent with changes in the credit quality in our loan portfolio (fewer charge-offs) and our modest loan growth.
Q1 2019 total noninterest expense increased 12.6 percent to $13.86 million compared to $12.31 million for the prior-year first quarter and increased 11.2 percent compared to $12.47 million for the linked quarter. Our increased noninterest expense is principally due to expenses associated with the acquired PBI operations and to an outsized deferred director compensation plan expense of $484,000 recognized in Q1 2019 compared to deferred director compensation plan benefits of ($25,000) and ($354,000) recorded in Q1 2018 and Q4 2018, respectively. Under our director deferred compensation plans, directors optionally elect to defer their director fees into a "phantom" investment plan whereby the Company recognizes expense or benefit relative to the phantom returns or losses of such investments. As result of the stock market’s exceptionally robust performance during Q1 2019, we recognized significantly greater quarterly deferred director compensation expense this quarter than we have ever recognized previously.
Balance Sheet
At March 31, 2019, total assets were $2.25 billion, an increase of $49.1 million, or 8.9 percent (on an annualized basis) since December 31, 2018. Total loans, net of unearned fees and allowance for loan losses, were $1.73 billion at March 31, 2019, up $43.1 million, or 10.2 percent (on an annualized basis), from the $1.68 billion reported at year-end 2018. Loans, excluding mortgage warehouse lines of credit and acquired PBI loans, decreased $9.5 million during the quarter, or 2.3 percent (on an annualized basis).
At March 31, 2019, deposits were $1.79 billion, an increase of $154.2 million, or 9.4 percent, since year end 2018. During Q1 2019, checking deposits increased $77.3 million or 10.4 percent, time deposits increased by $53.6 million or 8.9 percent and savings deposits grew $26.5 million or 9.3 percent.
Shareholders’ equity was $233.6 million as of March 31, 2019 compared to $219.8 million at December 31, 2018. In conjunction with the acquisition of PBI on January 1, 2019, Summit issued 465,931 shares of common stock valued at $9.0 million to the former PBI shareholders.
Tangible book value per common share increased to $16.13 at March 31, 2019 compared to $14.36 at the end of first quarter 2018 and $15.75 at year end 2018. Summit had 12,661,528 outstanding common shares at March 31, 2019 compared to 12,312,933 at year end 2018.
As announced in Q3 2018, the Board of Directors authorized the open market repurchase of up to 500,000 shares of the issued and outstanding shares of Summit's common stock. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. The plan will expire December 31, 2019, but may be discontinued, suspended, or restarted at any time at the Company's discretion. During Q1 2019, 125,200 shares of our common stock were repurchased under the Plan at an average price of $22.95 per share. Through March 31, 2019, the Company has repurchased 207,623 shares under the Plan since its inception at an average price of $21.96 per share.
Asset Quality
As of March 31, 2019, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $34.4 million, or 1.53 percent of assets. This compares to $36.5 million, or 1.66 percent of assets at the linked quarter-end, and $36.9 million, or 1.73 percent of assets, at first quarter-end 2018 as result of our continuing emphasis on improving our overall asset quality.
First quarter 2019 net loan charge-offs were $165,000, or 0.04 percent of average loans annualized; while adding $250,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.76 percent of total loans at March 31, 2019, compared to 0.77 percent at year-end 2018.
About the Company
Summit Financial Group, Inc. is a $2.25 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and Southern regions of West Virginia and the Northern, Shenandoah Valley and Southwestern regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates thirty-three 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.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||
| Quarterly Performance Summary (unaudited) | ||||||||||
| Q1 2019 vs Q1 2018 | ||||||||||
| For the Quarter Ended | Percent | |||||||||
| Dollars in thousands | 3/31/2019 | 3/31/2018 | Change | |||||||
| Statements of Income | ||||||||||
| Interest income | ||||||||||
| Loans, including fees | $ | 23,051 | $ | 20,366 | 13.2 | % | ||||
| Securities | 2,586 | 2,391 | 8.2 | % | ||||||
| Other | 231 | 140 | 65.0 | % | ||||||
| Total interest income | 25,868 | 22,897 | 13.0 | % | ||||||
| Interest expense | ||||||||||
| Deposits | 5,564 | 3,549 | 56.8 | % | ||||||
| Borrowings | 1,731 | 2,091 | -17.2 | % | ||||||
| Total interest expense | 7,295 | 5,640 | 29.3 | % | ||||||
| Net interest income | 18,573 | 17,257 | 7.6 | % | ||||||
| Provision for loan losses | 250 | 500 | -50.0 | % | ||||||
| Net interest income after provision | ||||||||||
| for loan losses | 18,323 | 16,757 | 9.3 | % | ||||||
| Noninterest income | ||||||||||
| Insurance commissions | 1,174 | 1,113 | 5.5 | % | ||||||
| Trust and wealth management fees | 586 | 667 | -12.1 | % | ||||||
| Service charges on deposit accounts | 1,180 | 1,091 | 8.2 | % | ||||||
| Bank card revenue | 814 | 749 | 8.7 | % | ||||||
| Realized securities (losses) gains | (3 | ) | 732 | n/a | ||||||
| Bank owned life insurance income | 238 | 275 | -13.5 | % | ||||||
| Other income | 241 | 249 | -3.2 | % | ||||||
| Total noninterest income | 4,230 | 4,876 | -13.2 | % | ||||||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | 7,347 | 6,821 | 7.7 | % | ||||||
| Net occupancy expense | 924 | 832 | 11.1 | % | ||||||
| Equipment expense | 1,179 | 1,083 | 8.9 | % | ||||||
| Professional fees | 403 | 333 | 21.0 | % | ||||||
| Advertising and public relations | 153 | 103 | 48.5 | % | ||||||
| Amortization of intangibles | 476 | 436 | 9.2 | % | ||||||
| FDIC premiums | - | 240 | n/a | |||||||
| Bank card expense | 439 | 335 | 31.0 | % | ||||||
| Foreclosed properties expense, net of losses | 384 | 325 | 18.2 | % | ||||||
| Merger-related expense | 63 | - | n/a | |||||||
| Other expenses | 2,492 | 1,806 | 38.0 | % | ||||||
| Total noninterest expense | 13,860 | 12,314 | 12.6 | % | ||||||
| Income before income taxes | 8,693 | 9,319 | -6.7 | % | ||||||
| Income taxes | 1,601 | 1,876 | -14.7 | % | ||||||
| Net income | $ | 7,092 | $ | 7,443 | -4.7 | % | ||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||
| Quarterly Performance Summary (unaudited) | |||||||||
| Q1 2019 vs Q1 2018 | |||||||||
| For the Quarter Ended | Percent | ||||||||
| 3/31/2019 | 3/31/2018 | Change | |||||||
| Per Share Data | |||||||||
| Earnings per common share | |||||||||
| Basic | $ | 0.56 | $ | 0.60 | -6.7 | % | |||
| Diluted | $ | 0.56 | $ | 0.60 | -7.5 | % | |||
| Cash dividends | $ | 0.14 | $ | 0.13 | 7.7 | % | |||
| Average common shares outstanding | |||||||||
| Basic | 12,717,501 | 12,358,849 | 2.9 | % | |||||
| Diluted | 12,778,644 | 12,383,757 | 3.2 | % | |||||
| Common shares outstanding at period end | 12,661,528 | 12,366,360 | 2.4 | % | |||||
| Performance Ratios | |||||||||
| Return on average equity | 12.28 | % | 14.73 | % | -16.6 | % | |||
| Return on average tangible equity | 14.80 | % | 17.04 | % | -13.1 | % | |||
| Return on average assets | 1.27 | % | 1.40 | % | -9.3 | % | |||
| Net interest margin (A) | 3.66 | % | 3.58 | % | 2.2 | % | |||
| Efficiency ratio (B) | 56.50 | % | 53.84 | % | 4.9 | % | |||
NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
NOTE (B) – Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||
| Five Quarter Performance Summary (unaudited) | |||||||||||||||||
| For the Quarter Ended | |||||||||||||||||
| Dollars in thousands | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | ||||||||||||
| Statements of Income | |||||||||||||||||
| Interest income | |||||||||||||||||
| Loans, including fees | $ | 23,051 | $ | 22,659 | $ | 21,295 | $ | 20,962 | $ | 20,366 | |||||||
| Securities | 2,586 | 2,527 | 2,367 | 2,303 | 2,391 | ||||||||||||
| Other | 231 | 127 | 138 | 134 | 140 | ||||||||||||
| Total interest income | 25,868 | 25,313 | 23,800 | 23,399 | 22,897 | ||||||||||||
| Interest expense | |||||||||||||||||
| Deposits | 5,564 | 5,103 | 4,714 | 4,309 | 3,549 | ||||||||||||
| Borrowings | 1,731 | 2,158 | 1,873 | 1,815 | 2,091 | ||||||||||||
| Total interest expense | 7,295 | 7,261 | 6,587 | 6,124 | 5,640 | ||||||||||||
| Net interest income | 18,573 | 18,052 | 17,213 | 17,275 | 17,257 | ||||||||||||
| Provision for loan losses | 250 | 500 | 500 | 750 | 500 | ||||||||||||
| Net interest income after provision | |||||||||||||||||
| for loan losses | 18,323 | 17,552 | 16,713 | 16,525 | 16,757 | ||||||||||||
| Noninterest income | |||||||||||||||||
| Insurance commissions | 1,174 | 1,132 | 1,062 | 1,013 | 1,113 | ||||||||||||
| Trust and wealth management fees | 586 | 627 | 687 | 672 | 667 | ||||||||||||
| Service charges on deposit accounts | 1,180 | 1,209 | 1,215 | 1,116 | 1,091 | ||||||||||||
| Bank card revenue | 814 | 809 | 793 | 801 | 749 | ||||||||||||
| Realized securities (losses) gains | (3 | ) | (205 | ) | 8 | 87 | 732 | ||||||||||
| Bank owned life insurance income | 238 | 248 | 250 | 249 | 275 | ||||||||||||
| Other income | 241 | 367 | 196 | 210 | 249 | ||||||||||||
| Total noninterest income | 4,230 | 4,187 | 4,211 | 4,148 | 4,876 | ||||||||||||
| Noninterest expense | |||||||||||||||||
| Salaries and employee benefits | 7,347 | 6,928 | 6,806 | 6,922 | 6,821 | ||||||||||||
| Net occupancy expense | 924 | 836 | 856 | 840 | 832 | ||||||||||||
| Equipment expense | 1,179 | 1,139 | 1,118 | 1,071 | 1,083 | ||||||||||||
| Professional fees | 403 | 385 | 503 | 385 | 333 | ||||||||||||
| Advertising and public relations | 153 | 193 | 170 | 188 | 103 | ||||||||||||
| Amortization of intangibles | 476 | 410 | 413 | 413 | 436 | ||||||||||||
| FDIC premiums | - | 140 | 210 | 240 | 240 | ||||||||||||
| Bank card expense | 439 | 395 | 384 | 361 | 335 | ||||||||||||
| Foreclosed properties expense, net of losses | 384 | 507 | 169 | 350 | 325 | ||||||||||||
| Merger-related expense | 63 | 59 | 86 | - | - | ||||||||||||
| Other expenses | 2,492 | 1,474 | 1,643 | 1,965 | 1,806 | ||||||||||||
| Total noninterest expense | 13,860 | 12,466 | 12,358 | 12,735 | 12,314 | ||||||||||||
| Income before income taxes | 8,693 | 9,273 | 8,566 | 7,938 | 9,319 | ||||||||||||
| Income tax expense | 1,601 | 1,823 | 1,667 | 1,658 | 1,876 | ||||||||||||
| Net income | $ | 7,092 | $ | 7,450 | $ | 6,899 | $ | 6,280 | $ | 7,443 | |||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||
| Five Quarter Performance Summary (unaudited) | ||||||||||||||||
| For the Quarter Ended | ||||||||||||||||
| 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | ||||||||||||
| Per Share Data | ||||||||||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 0.56 | $ | 0.60 | $ | 0.56 | $ | 0.51 | $ | 0.60 | ||||||
| Diluted | $ | 0.56 | $ | 0.60 | $ | 0.55 | $ | 0.51 | $ | 0.60 | ||||||
| Cash dividends | $ | 0.14 | $ | 0.14 | $ | 0.13 | $ | 0.13 | $ | 0.13 | ||||||
| Average common shares outstanding | ||||||||||||||||
| Basic | 12,717,501 | 12,358,104 | 12,374,350 | 12,366,522 | 12,358,849 | |||||||||||
| Diluted | 12,778,644 | 12,407,678 | 12,439,051 | 12,431,984 | 12,383,757 | |||||||||||
| Common shares outstanding at period end | 12,661,528 | 12,312,933 | 12,382,450 | 12,373,747 | 12,366,360 | |||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average equity | 12.28 | % | 13.85 | % | 13.00 | % | 12.16 | % | 14.73 | % | ||||||
| Return on average tangible equity | 14.80 | % | 16.41 | % | 15.53 | % | 14.68 | % | 17.80 | % | ||||||
| Return on average assets | 1.27 | % | 1.38 | % | 1.31 | % | 1.19 | % | 1.40 | % | ||||||
| Net interest margin (A) | 3.66 | % | 3.61 | % | 3.53 | % | 3.58 | % | 3.58 | % | ||||||
| Efficiency ratio (B) | 56.50 | % | 51.02 | % | 54.25 | % | 55.88 | % | 53.84 | % | ||||||
NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
NOTE (B) – Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||||||
| Selected Balance Sheet Data (unaudited) | ||||||||||||||||||||
| Dollars in thousands, except per share amounts | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | |||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 14,265 | $ | 23,061 | $ | 9,382 | $ | 8,314 | $ | 9,042 | ||||||||||
| Interest bearing deposits other banks | 43,689 | 36,479 | 44,452 | 38,097 | 38,365 | |||||||||||||||
| Securities | 297,126 | 293,284 | 288,040 | 283,221 | 296,890 | |||||||||||||||
| Loans, net | 1,725,064 | 1,682,005 | 1,632,747 | 1,617,373 | 1,631,150 | |||||||||||||||
| Property held for sale | 24,393 | 21,432 | 22,017 | 21,606 | 21,442 | |||||||||||||||
| Premises and equipment, net | 39,345 | 37,553 | 36,888 | 36,017 | 35,554 | |||||||||||||||
| Goodwill and other intangible assets | 29,349 | 25,842 | 26,252 | 26,665 | 27,077 | |||||||||||||||
| Cash surrender value of life insurance policies | 42,714 | 42,420 | 42,208 | 41,932 | 41,668 | |||||||||||||||
| Other assets | 33,696 | 38,510 | 36,741 | 34,427 | 33,707 | |||||||||||||||
| Total assets | $ | 2,249,641 | $ | 2,200,586 | $ | 2,138,727 | $ | 2,107,652 | $ | 2,134,895 | ||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||
| Deposits | $ | 1,789,032 | $ | 1,634,826 | $ | 1,651,064 | $ | 1,639,996 | $ | 1,654,523 | ||||||||||
| Short-term borrowings | 186,292 | 309,084 | 238,403 | 202,429 | 193,513 | |||||||||||||||
| Long-term borrowings and | ||||||||||||||||||||
| subordinated debentures | 20,319 | 20,324 | 20,328 | 40,332 | 65,336 | |||||||||||||||
| Other liabilities | 20,368 | 16,522 | 15,376 | 15,016 | 16,514 | |||||||||||||||
| Shareholders' equity | 233,630 | 219,830 | 213,556 | 209,879 | 205,009 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 2,249,641 | $ | 2,200,586 | $ | 2,138,727 | $ | 2,107,652 | $ | 2,134,895 | ||||||||||
| Book value per common share | $ | 18.45 | $ | 17.85 | $ | 17.25 | $ | 16.96 | $ | 16.55 | ||||||||||
| Tangible book value per common share | $ | 16.13 | $ | 15.75 | $ | 15.13 | $ | 14.81 | $ | 14.36 | ||||||||||
| Tangible common equity to tangible assets | 9.2 | % | 8.9 | % | 8.9 | % | 8.8 | % | 8.4 | % | ||||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||
| Regulatory Capital Ratios (unaudited) | ||||||||||||
| 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | ||||||||
| Summit Financial Group, Inc. | ||||||||||||
| CET1 Risk-based Capital | 11.4 | % | 11.1 | % | 11.1 | % | 11.0 | % | 10.7 | % | ||
| Tier 1 Risk-based Capital | 12.5 | % | 12.2 | % | 12.2 | % | 12.1 | % | 11.8 | % | ||
| Total Risk-based Capital | 13.2 | % | 12.9 | % | 12.9 | % | 12.8 | % | 12.5 | % | ||
| Tier 1 Leverage | 10.2 | % | 10.1 | % | 10.1 | % | 9.9 | % | 9.5 | % | ||
| Summit Community Bank, Inc. | ||||||||||||
| CET1 Risk-based Capital | 12.3 | % | 12.0 | % | 12.0 | % | 12.0 | % | 11.7 | % | ||
| Tier 1 Risk-based Capital | 12.3 | % | 12.0 | % | 12.0 | % | 12.0 | % | 11.7 | % | ||
| Total Risk-based Capital | 13.0 | % | 12.8 | % | 12.7 | % | 12.8 | % | 12.5 | % | ||
| Tier 1 Leverage | 10.0 | % | 10.0 | % | 9.9 | % | 9.8 | % | 9.5 | % | ||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||||||
| Loan Composition (unaudited) | ||||||||||||||||
| Dollars in thousands | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | |||||||||||
| Commercial | $ | 189,248 | $ | 194,315 | $ | 167,972 | $ | 171,410 | $ | 189,586 | ||||||
| Mortgage warehouse lines | 49,355 | 39,140 | 35,910 | 54,332 | 45,702 | |||||||||||
| Commercial real estate | ||||||||||||||||
| Owner occupied | 272,088 | 266,362 | 272,475 | 262,174 | 265,075 | |||||||||||
| Non-owner occupied | 570,392 | 564,826 | 530,568 | 503,047 | 498,445 | |||||||||||
| Construction and development | ||||||||||||||||
| Land and development | 64,192 | 68,833 | 71,819 | 74,018 | 66,841 | |||||||||||
| Construction | 36,040 | 24,731 | 25,703 | 25,711 | 33,327 | |||||||||||
| Residential real estate | ||||||||||||||||
| Non-jumbo | 359,107 | 336,977 | 340,783 | 343,044 | 346,477 | |||||||||||
| Jumbo | 69,313 | 73,599 | 72,327 | 66,831 | 67,169 | |||||||||||
| Home equity | 80,370 | 80,910 | 82,018 | 82,409 | 83,382 | |||||||||||
| Consumer | 36,046 | 32,460 | 33,664 | 34,249 | 34,825 | |||||||||||
| Other | 12,045 | 12,899 | 12,452 | 12,728 | 12,578 | |||||||||||
| Total loans, net of unearned fees | 1,738,196 | 1,695,052 | 1,645,691 | 1,629,953 | 1,643,407 | |||||||||||
| Less allowance for loan losses | 13,132 | 13,047 | 12,944 | 12,580 | 12,257 | |||||||||||
| Loans, net | $ | 1,725,064 | $ | 1,682,005 | $ | 1,632,747 | $ | 1,617,373 | $ | 1,631,150 | ||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | ||||||||||||||||
| Deposit Composition (unaudited) | ||||||||||||||||
| Dollars in thousands | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | |||||||||||
| Core deposits | ||||||||||||||||
| Non-interest bearing checking | $ | 258,679 | $ | 222,120 | $ | 232,697 | $ | 217,134 | $ | 219,293 | ||||||
| Interest bearing checking | 560,800 | 523,257 | 505,411 | 472,041 | 447,172 | |||||||||||
| Savings | 310,646 | 284,173 | 301,269 | 322,940 | 346,962 | |||||||||||
| Time deposits | 359,141 | 316,914 | 316,941 | 322,801 | 318,556 | |||||||||||
| Total core deposits | 1,489,266 | 1,346,464 | 1,356,318 | 1,334,916 | 1,331,983 | |||||||||||
| Brokered time deposits | 218,913 | 220,497 | 227,312 | 238,662 | 242,049 | |||||||||||
| Other non-core time deposits | 80,852 | 67,866 | 67,434 | 66,418 | 80,491 | |||||||||||
| Total deposits | $ | 1,789,031 | $ | 1,634,827 | $ | 1,651,064 | $ | 1,639,996 | $ | 1,654,523 | ||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | ||||||||||||||||||||
| Asset Quality Information (unaudited) | ||||||||||||||||||||
| For the Quarter Ended | ||||||||||||||||||||
| Dollars in thousands | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | |||||||||||||||
| Gross loan charge-offs | $ | 414 | $ | 705 | $ | 413 | $ | 525 | $ | 960 | ||||||||||
| Gross loan recoveries | (249 | ) | (307 | ) | (278 | ) | (97 | ) | (153 | ) | ||||||||||
| Net loan charge-offs (recoveries) | $ | 165 | $ | 398 | $ | 135 | $ | 428 | $ | 807 | ||||||||||
| Net loan charge-offs to average loans (annualized) | 0.04 | % | 0.10 | % | 0.03 | % | 0.10 | % | 0.20 | % | ||||||||||
| Allowance for loan losses | $ | 13,132 | $ | 13,047 | $ | 12,944 | $ | 12,580 | $ | 12,257 | ||||||||||
| Allowance for loan losses as a percentage | ||||||||||||||||||||
| of period end loans | 0.76 | % | 0.77 | % | 0.79 | % | 0.77 | % | 0.75 | % | ||||||||||
| Nonperforming assets: | ||||||||||||||||||||
| Nonperforming loans | ||||||||||||||||||||
| Commercial | $ | 729 | $ | 935 | $ | 801 | $ | 954 | $ | 734 | ||||||||||
| Commercial real estate | 2,981 | 3,239 | 5,090 | 3,238 | 3,400 | |||||||||||||||
| Residential construction and development | 24 | 3,198 | 3,200 | 3,233 | 3,642 | |||||||||||||||
| Residential real estate | 5,928 | 7,506 | 7,760 | 8,241 | 7,521 | |||||||||||||||
| Consumer | 182 | 147 | 118 | 110 | 160 | |||||||||||||||
| Other | 130 | - | - | - | - | |||||||||||||||
| Total nonperforming loans | 9,974 | 15,025 | 16,969 | 15,776 | 15,457 | |||||||||||||||
| Foreclosed properties | ||||||||||||||||||||
| Commercial real estate | 1,841 | 1,762 | 1,762 | 1,818 | 1,875 | |||||||||||||||
| Commercial construction and development | 6,326 | 6,479 | 6,790 | 6,815 | 7,140 | |||||||||||||||
| Residential construction and development | 14,347 | 11,543 | 11,614 | 11,517 | 11,053 | |||||||||||||||
| Residential real estate | 1,879 | 1,648 | 1,851 | 1,456 | 1,374 | |||||||||||||||
| Total foreclosed properties | 24,393 | 21,432 | 22,017 | 21,606 | 21,442 | |||||||||||||||
| Other repossessed assets | 34 | 5 | 5 | 12 | 18 | |||||||||||||||
| Total nonperforming assets | $ | 34,401 | $ | 36,462 | $ | 38,991 | $ | 37,394 | $ | 36,917 | ||||||||||
| Nonperforming loans to period end loans | 0.57 | % | 0.89 | % | 1.03 | % | 0.97 | % | 0.94 | % | ||||||||||
| Nonperforming assets to period end assets | 1.53 | % | 1.66 | % | 1.82 | % | 1.77 | % | 1.73 | % | ||||||||||
| Troubled debt restructurings | ||||||||||||||||||||
| Performing | $ | 27,845 | $ | 26,609 | $ | 27,441 | $ | 27,559 | $ | 27,408 | ||||||||||
| Nonperforming | - | 388 | 113 | 281 | 76 | |||||||||||||||
| Total troubled debt restructurings | $ | 27,845 | $ | 26,997 | $ | 27,554 | $ | 27,840 | $ | 27,484 | ||||||||||
| Loans Past Due 30-89 Days (unaudited) | |||||||||||||||
| For the Quarter Ended | |||||||||||||||
| Dollars in thousands | 3/31/2019 | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | ||||||||||
| Commercial | $ | 264 | $ | 219 | $ | 607 | $ | 319 | $ | 539 | |||||
| Commercial real estate | 4,128 | 161 | 988 | 546 | 601 | ||||||||||
| Construction and development | 179 | 194 | 393 | 264 | 174 | ||||||||||
| Residential real estate | 2,944 | 6,249 | 5,513 | 4,125 | 5,218 | ||||||||||
| Consumer | 432 | 593 | 345 | 337 | 425 | ||||||||||
| Other | 52 | 38 | 11 | 8 | 15 | ||||||||||
| Total | $ | 7,999 | $ | 7,454 | $ | 7,857 | $ | 5,599 | $ | 6,972 | |||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | |||||||||||||||||||||||||||||||
| Q1 2019 vs Q4 2018 vs Q1 2018 (unaudited) | |||||||||||||||||||||||||||||||
| Q1 2019 | Q4 2018 | Q1 2018 | |||||||||||||||||||||||||||||
| Average | Earnings / | Yield / | Average | Earnings / | Yield / | Average | Earnings / | Yield / | |||||||||||||||||||||||
| Dollars in thousands | Balances | Expense | Rate | Balances | Expense | Rate | Balances | Expense | Rate | ||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||
| Interest earning assets | |||||||||||||||||||||||||||||||
| Loans, net of unearned interest (1) | |||||||||||||||||||||||||||||||
| Taxable | $ | 1,712,286 | $ | 22,907 | 5.43 | % | $ | 1,660,250 | $ | 22,519 | 5.38 | % | $ | 1,611,813 | $ | 20,223 | 5.09 | % | |||||||||||||
| Tax-exempt (2) | 14,907 | 184 | 5.01 | % | 15,322 | 177 | 4.58 | % | 16,307 | 182 | 4.53 | % | |||||||||||||||||||
| Securities | |||||||||||||||||||||||||||||||
| Taxable | 195,932 | 1,687 | 3.49 | % | 176,059 | 1,502 | 3.38 | % | 191,713 | 1,372 | 2.90 | % | |||||||||||||||||||
| Tax-exempt (2) | 114,831 | 1,139 | 4.02 | % | 132,088 | 1,296 | 3.89 | % | 132,306 | 1,290 | 3.95 | % | |||||||||||||||||||
| Interest bearing deposits other banks | |||||||||||||||||||||||||||||||
| and Federal funds sold | 51,187 | 230 | 1.82 | % | 35,402 | 127 | 1.42 | % | 39,656 | 140 | 1.43 | % | |||||||||||||||||||
| Total interest earning assets | 2,089,143 | 26,147 | 5.08 | % | 2,019,121 | 25,621 | 5.03 | % | 1,991,795 | 23,207 | 4.73 | % | |||||||||||||||||||
| Noninterest earning assets | |||||||||||||||||||||||||||||||
| Cash & due from banks | 12,825 | 9,686 | 9,962 | ||||||||||||||||||||||||||||
| Premises & equipment | 38,834 | 37,224 | 34,586 | ||||||||||||||||||||||||||||
| Other assets | 112,910 | 109,228 | 107,125 | ||||||||||||||||||||||||||||
| Allowance for loan losses | (13,309 | ) | (13,172 | ) | (12,737 | ) | |||||||||||||||||||||||||
| Total assets | $ | 2,240,403 | $ | 2,162,087 | $ | 2,130,731 | |||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||
| Interest bearing liabilities | |||||||||||||||||||||||||||||||
| Interest bearing | |||||||||||||||||||||||||||||||
| demand deposits | $ | 556,766 | $ | 1,663 | 1.21 | % | $ | 519,465 | $ | 1,504 | 1.15 | % | $ | 423,095 | $ | 632 | 0.61 | % | |||||||||||||
| Savings deposits | 310,848 | 898 | 1.17 | % | 289,809 | 861 | 1.18 | % | 346,358 | 717 | 0.84 | % | |||||||||||||||||||
| Time deposits | 654,404 | 3,003 | 1.86 | % | 607,037 | 2,738 | 1.79 | % | 622,543 | 2,200 | 1.43 | % | |||||||||||||||||||
| Short-term borrowings | 200,297 | 1,472 | 2.98 | % | 270,092 | 1,909 | 2.80 | % | 243,686 | 1,405 | 2.34 | % | |||||||||||||||||||
| Long-term borrowings and | |||||||||||||||||||||||||||||||
| subordinated debentures | 20,321 | 259 | 5.17 | % | 20,326 | 249 | 4.86 | % | 65,338 | 686 | 4.26 | % | |||||||||||||||||||
| Total interest bearing liabilities | 1,742,636 | 7,295 | 1.70 | % | 1,706,729 | 7,261 | 1.69 | % | 1,701,020 | 5,640 | 1.34 | % | |||||||||||||||||||
| Noninterest bearing liabilities | |||||||||||||||||||||||||||||||
| Demand deposits | 248,354 | 223,999 | 210,883 | ||||||||||||||||||||||||||||
| Other liabilities | 18,322 | 16,138 | 16,771 | ||||||||||||||||||||||||||||
| Total liabilities | 2,009,312 | 1,946,866 | 1,928,674 | ||||||||||||||||||||||||||||
| Shareholders' equity - common | 231,091 | 215,221 | 202,057 | ||||||||||||||||||||||||||||
| Total liabilities and | |||||||||||||||||||||||||||||||
| shareholders' equity | $ | 2,240,403 | $ | 2,162,087 | $ | 2,130,731 | |||||||||||||||||||||||||
| NET INTEREST EARNINGS | $ | 18,852 | $ | 18,360 | $ | 17,567 | |||||||||||||||||||||||||
| NET INTEREST MARGIN | 3.66 | % | 3.61 | % | 3.58 | % | |||||||||||||||||||||||||
| (1) For purposes of this table, nonaccrual loans are included in average loan balances. | |||||||||||||||||||||||||||||||
| (2) For purposes of this table, interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%. The taxable equivalent adjustment results in an increase in interest income of $279,000, $309,000 and $310,000 for Q1 2019, Q4 2018 and Q1 2018, respectively. | |||||||||||||||||||||||||||||||