Summit Financial Group Reports First Quarter 2024 Earnings of $1.14 Per Share
MOOREFIELD, W.Va., April 25, 2024 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported financial results for the first quarter of 2024, revealing a strong earnings performance marked by growth in loans. The Company’s continued success underscores its position as an exceptional community bank, reflecting a sound strategy and solid operational execution.The Company, which serves commercial and individual clients across West Virginia, the Washington D.C. metropolitan area, Virginia, Kentucky, the Eastern Shore of Maryland and Delaware through Summit Community Bank, Inc., reported net income applicable to common shares of $16.8 million, or $1.14 per diluted share, for the first quarter of 2024, as compared to $16.4 million, or $1.11 per diluted share, for the fourth quarter of 2023 and $13.9 million, or $1.08 per diluted share, for the first quarter of 2023.
“We had a strong start to the year highlighted by solid earnings, a stable top quartile peer net interest margin, an enviable efficiency ratio and best-in-class return on tangible common equity” noted H. Charles Maddy, III, President and Chief Executive Officer. “Now as we look forward to the consummation of our strategic partnership with Burke & Herbert, which brings together two organizations dedicated to a community banking model that places an emphasis on service and dedication to the people who live and work among us, I could not be more excited by the combined organization’s prospects for robust growth and for enhancing shareholder value.”
*Key Highlights for the First Quarter of 2024*
· Our pending merger of equals with Burke & Herbert Financial Services Corp. (“Burke & Herbert”) has received all required regulatory approvals or waivers and is expected to close May 3, 2024.
· Tangible Book Value Per Common Share (“TBVPCS”) increased by $1.02 to $24.91 during the first quarter of 2024, representing a 4.3 percent increase. This increase was primarily due to net retained earnings.
· Our net interest margin (“NIM”) decreased 1 basis point to 3.75 percent from the linked quarter.
· The first quarter saw a modest increase in total loans, excluding mortgage warehouse lines of credit and acquired loans, registering an increase of 0.48 percent (1.93 percent annualized). This performance was further underscored by year-over-year growth of 6.7 percent.
· Summit's core deposits likewise experienced a modest increase in the first quarter of 2024, up 0.91 percent (3.63 percent annualized) from the linked quarter.
· The Company recorded no provision for credit losses in the first quarter of 2024 compared to $1.50 million in the linked quarter.
· Summit’s efficiency ratio was 48.29 percent compared to 47.33 percent in the linked quarter, indicating optimized use of resources.*Results from Operations*
Net interest income totaled $39.9 million in the first quarter of 2024, an increase of 16.8 percent from the prior-year first quarter, and a decrease of 2.1 percent from the linked quarter. NIM for the first quarter 2024 was 3.75 percent compared to 3.76 percent for the linked quarter and 3.83 percent for the prior-year quarter.
Summit recorded no provision for credit losses in the first quarter of 2024 compared to $1.50 million in both the linked quarter and the year ago quarter.
Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for first quarter 2024 was $5.08 million compared to $5.80 million for the linked quarter and $4.39 million for the comparable period of 2023. The Company recorded realized securities losses on available for sale debt securities of $94,000 in the first quarter of 2024 and gains of $15,000 in the linked quarter. In addition, the Company recognized net gains on equity investments of $40,000 in the first quarter 2024 compared to $365,000 in the linked quarter.
Total noninterest expense decreased to $23.0 million in the first quarter of 2024, down 4.0 percent from $23.9 million in the linked quarter and up 18.3 percent from $19.4 million for the prior-year first quarter.
Salary and benefit expenses of $12.1 million in the first quarter of 2024 increased from $11.4 million for the linked quarter and $10.8 million from the prior-year first quarter. The year over year increase was primarily due to the PSB acquisition and higher group health insurance premiums.
Acquisition-related expenses were $53,000 for Q1 2024 compared to $839,000 for the linked quarter and $331,000 for Q1 2023.
Other expenses were very controlled at $3.44 million for Q1 2024 compared to $4.35 million for the linked quarter and $2.97 million in the year-ago period.
Summit’s efficiency ratio was 48.29 percent in the first quarter of 2024, up from 48.00 percent for the first quarter of 2023 and marginally higher compared to 47.33 percent in the linked quarter. Non-interest expense to average assets was 1.99 percent in first quarter of 2024 compared to 2.05 percent in the linked quarter and 1.97 percent in the year-ago quarter.
*Balance Sheet*
As of March 31, 2024, total assets were $4.6 billion, an increase of $8.56 million, or 0.2 percent since December 31, 2023.
Total loans net of unearned fees increased 0.4 percent (1.7 percent annualized) to $3.70 billion as of March 31, 2024, from $3.68 billion at December 31, 2023. Total loans, excluding those related to mortgage warehouse lending and acquired loans, reached $3.2 billion as of March 31, 2024. This represents an increase of 0.48 percent (or 1.93 percent when annualized) during the quarter just ended.
Deposits totaled $3.7 billion on March 31, 2024, a 0.9 percent (or 3.6 percent annualized) increase during the first quarter. Core deposits increased 0.9 percent (3.6 percent annualized) during the first quarter 2024 to $3.7 billion. Adjusted uninsured deposits (excluding uninsured public deposits otherwise secured or collateralized as required by law) were 34.4 percent of total deposits at March 31, 2024 compared to 34.8 percent at year-end 2023 and 29.3 percent at the year-ago period end.
Total shareholders’ equity was $454.3 million as of March 31, 2024, compared to $440.2 million at December 31, 2023. Summit paid a quarterly common dividend of $0.22 per share in the first quarter of 2024.
During the first quarter 2024, TBVPCS increased $1.02 to $24.91. In addition to the positive impact of retained earnings, TBVPCS was positively impacted by unrealized net gains on interest rate caps and swaps held as hedges against higher interest rates totaling $0.20 per common share (net of deferred income taxes) recorded in accumulated other comprehensive loss. However, these gains were nearly offset by unrealized net losses on AFS debt securities of $0.18 per common share (net of deferred income taxes), also recorded in accumulated other comprehensive loss, in the same period.
Summit had 14,686,738 outstanding common shares at March 31, 2024, compared to 14,683,457 at year-end 2023.
*Asset Quality*
The Company recorded net loan recoveries of $93,000 during first quarter 2024 compared to net loan recoveries of $188,000 in the fourth quarter of 2023 and $63,000 in the year-ago period.
Summit recorded no provision for credit losses in the first quarter of 2024. The provision for credit losses was $1.50 million for both the linked quarter and the first quarter of 2023.
Summit’s allowance for loan credit losses was $49.2 million on March 31, 2024, $48.1 million at the end of the linked quarter, and $40.8 million on March 31, 2023.
The allowance for loan credit losses stood at 1.33 percent of total loans at March 31, 2024 compared to 1.31 percent at December 31, 2023. The allowance was 227.6 percent of nonperforming loans at March 31, 2024, compared to 388.2 percent at year-end 2023.
Summit’s allowance for credit losses on unfunded loan commitments was $6.69 million as of March 31, 2024, compared to $7.74 million at the end of the linked quarter. The allowance for credit losses on unfunded loan commitments decreased $1.05 million during the most recent quarter, principally as a result of a change in the mix of unfunded commitments. Construction loan commitments, which on average have a higher historical loss ratio than do other loans, decreased, while commercial unfunded lines of credit, which carry a lower loss factor and lower utilization rates, increased.
As of March 31, 2024, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, totaled $25.1 million, or 0.54 percent of assets, compared to NPAs of $16.2 million, or 0.35 percent of assets at year-end 2023.
*About the Company*
Summit Financial Group, Inc. is the $4.6 billion financial holding company for Summit Community Bank, Inc. Its talented bankers serve commercial and individual clients throughout West Virginia, the Washington, D.C. metropolitan area, Virginia, Kentucky, Eastern Shore of Maryland and Delaware. Summit’s focus on in-market commercial lending and providing other business banking services in dynamic markets is designed to leverage its highly efficient operations and core deposits in strong legacy locations. Residential and consumer lending, trust and wealth management, and other retail financial services are offered through convenient digital and mobile banking platforms, including MySummitBank.com and 54 full-service branch locations. More information on Summit Financial Group, Inc. (NASDAQ: SMMF), headquartered in West Virginia’s Eastern Panhandle in Moorefield, is available at SummitFGI.com.
*Non-GAAP Financial Measures*
In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), Summit’s management uses, and this press release contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible assets; efficiency ratio; return on average tangible equity and return on average tangible common equity. Summit believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although Summit believes that these non-GAAP financial measures enhance investors' understanding of Summit’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.
*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: the effect of the COVID-19 pandemic, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; the successful integration of operations of our acquisitions; 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 2024 vs Q1 2023* *For the Quarter Ended* *Percent*
Dollars in thousands *3/31/2024* *3/31/2023* *Change*
*Statements of Income* Interest income Loans, including fees $ 59,249 $ 45,485 30.3 % Securities 6,141 4,819 27.4 % Other 132 171 -22.8 % Total interest income 65,522 50,475 29.8 % Interest expense Deposits 21,430 14,000 53.1 % Borrowings 4,169 2,286 82.4 % Total interest expense 25,599 16,286 57.2 % Net interest income 39,923 34,189 16.8 % Provision for credit losses - 1,500 -100.0 % Net interest income after provision for credit losses 39,923 32,689 22.1 % Noninterest income Trust and wealth management fees 847 811 4.4 % Mortgage origination revenue 154 171 -9.9 % Service charges on deposit accounts 1,723 1,392 23.8 % Bank card revenue 1,833 1,568 16.9 % Net gains on equity investments 40 45 -11.1 % Net realized losses on debt securities (94 ) (59 ) 59.3 % Bank owned life insurance and annuity income 463 336 37.8 % Other income 112 122 -8.2 % Total noninterest income 5,078 4,386 15.8 % Noninterest expense Salaries and employee benefits 12,058 10,807 11.6 % Net occupancy expense 1,695 1,333 27.2 % Equipment expense 2,508 2,030 23.5 % Professional fees 385 376 2.4 % Advertising and public relations 272 170 60.0 % Amortization of intangibles 987 343 187.8 % FDIC premiums 717 330 117.3 % Bank card expense 832 696 19.5 % Foreclosed properties expense, net of (gains)/losses 12 15 -20.0 % Acquisition-related expense 53 331 -84.0 % Other expenses 3,439 2,968 15.9 % Total noninterest expense 22,958 19,399 18.3 % Income before income taxes 22,043 17,676 24.7 % Income taxes 4,996 3,575 39.7 % Net income 17,047 14,101 20.9 % Preferred stock dividends 225 225 n/a Net income applicable to common shares $ 16,822 $ 13,876 21.2 %
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Quarterly Performance Summary (unaudited)*
*Q1 2024 vs Q1 2023* *For the Quarter Ended* *Percent* *3/31/2024* *3/31/2023* *Change*
*Per Share Data* Earnings per common share Basic $ 1.15 $ 1.09 5.5 % Diluted $ 1.14 $ 1.08 5.6 % Cash dividends per common share $ 0.22 $ 0.20 10.0 % Common stock dividend payout ratio 19.0 % 18.1 % 5.0 % Average common shares outstanding Basic 14,683,596 12,783,851 14.9 % Diluted 14,750,052 12,830,102 15.0 % Common shares outstanding at period end 14,686,738 12,786,404 14.9 %
*Performance Ratios* Return on average equity 15.37 % 15.55 % -1.2 % Return on average tangible equity (C) 19.27 % 19.10 % 0.9 % Return on average tangible common equity (D) 20.08 % 20.10 % -0.1 % Return on average assets 1.47 % 1.43 % 2.8 % Net interest margin (A) 3.75 % 3.83 % -2.1 % Efficiency ratio (B) 48.29 % 48.00 % 0.6 %
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) – Non-GAAP financial measure computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Non-GAAP financial measure that equals: (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Non-GAAP financial measure that equals: (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Five Quarter Performance Summary (unaudited)* *For the Quarter Ended*
Dollars in thousands *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
*Statements of Income* Interest income Loans, including fees $ 59,249 $ 59,856 $ 58,102 $ 54,413 $ 45,485 Securities 6,141 6,538 6,357 6,247 4,819 Other 132 122 235 203 171 Total interest income 65,522 66,516 64,694 60,863 50,475 Interest expense Deposits 21,430 21,417 19,924 17,851 14,000 Borrowings 4,169 4,306 3,497 2,699 2,286 Total interest expense 25,599 25,723 23,421 20,550 16,286 Net interest income 39,923 40,793 41,273 40,313 34,189 Provision for credit losses - 1,500 1,250 8,000 1,500 Net interest income after provision for credit losses 39,923 39,293 40,023 32,313 32,689 Noninterest income Trust and wealth management fees 847 952 819 854 811 Mortgage origination revenue 154 65 172 169 171 Service charges on deposit accounts 1,723 1,866 1,775 1,943 1,392 Bank card revenue 1,833 1,837 1,907 1,987 1,568 Net gains on equity investments 40 365 180 150 45 Net realized gains/(losses) on debt securities (94 ) 15 (12 ) (211 ) (59 ) Bank owned life insurance and annuity income 463 499 311 431 336 Other income 112 202 113 100 122 Total noninterest income 5,078 5,801 5,265 5,423 4,386 Noninterest expense Salaries and employee benefits 12,058 11,374 11,959 12,156 10,807 Net occupancy expense 1,695 1,554 1,436 1,528 1,333 Equipment expense 2,508 2,342 2,361 2,361 2,030 Professional fees 385 529 400 471 376 Advertising and public relations 272 432 247 264 170 Amortization of intangibles 987 995 998 999 343 FDIC premiums 717 670 716 742 330 Bank card expense 832 809 972 951 696 Foreclosed properties expense, net of (gains)/losses 12 16 10 48 15 Acquisition-related expenses 53 839 1,110 4,163 331 Other expenses 3,439 4,347 3,953 3,641 2,968 Total noninterest expense 22,958 23,907 24,162 27,324 19,399 Income before income taxes 22,043 21,187 21,126 10,412 17,676 Income tax expense 4,996 4,590 4,794 2,203 3,575 Net income 17,047 16,597 16,332 8,209 14,101 Preferred stock dividends 225 225 225 225 225 Net income applicable to common shares $ 16,822 $ 16,372 $ 16,107 $ 7,984 $ 13,876
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Five Quarter Performance Summary (unaudited)* *For the Quarter Ended* *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
*Per Share Data* Earnings per common share Basic $ 1.15 $ 1.12 $ 1.10 $ 0.54 $ 1.09 Diluted $ 1.14 $ 1.11 $ 1.09 $ 0.54 $ 1.08 Cash dividends per common share $ 0.22 $ 0.22 $ 0.22 $ 0.20 $ 0.20 Common stock dividend payout ratio 19.0 % 19.5 % 19.8 % 36.7 % 18.1 % Average common shares outstanding Basic 14,683,596 14,676,383 14,672,176 14,668,923 12,783,851 Diluted 14,750,052 14,718,790 14,714,211 14,703,636 12,830,102 Common shares outstanding at period end 14,686,738 14,683,457 14,674,852 14,672,147 12,786,404
*Performance Ratios* Return on average equity 15.37 % 15.74 % 15.66 % 7.99 % 15.55 % Return on average tangible equity (C) 19.27 % 20.01 % 20.03 % 10.86 % 19.10 % Return on average tangible common equity (D) 20.08 % 20.91 % 20.95 % 11.37 % 20.10 % Return on average assets 1.47 % 1.42 % 1.42 % 0.73 % 1.43 % Net interest margin (A) 3.75 % 3.76 % 3.88 % 3.89 % 3.83 % Efficiency ratio (B) 48.29 % 47.33 % 47.15 % 47.90 % 48.00 %
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) – Non-GAAP financial measure computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Non-GAAP financial measure that equals: (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Non-GAAP financial measure that equals: (Net income applicable to common shares + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Selected Balance Sheet Data (unaudited)*
Dollars in thousands, except per share amounts *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
*Assets* Cash and due from banks $ 23,706 $ 21,834 $ 23,159 $ 23,341 $ 16,488 Interest bearing deposits other banks 31,950 30,398 36,398 39,902 54,328 Debt securities, available for sale 490,271 502,762 511,403 512,038 431,933 Debt securities, held to maturity 93,737 94,227 94,715 95,200 95,682 Equity investments 11,571 10,958 31,241 30,818 29,867 Other investments 21,842 21,130 19,579 16,014 12,696 Loans, net 3,647,810 3,633,522 3,551,686 3,506,880 3,059,099 Property held for sale 3,432 3,729 4,505 4,742 5,128 Premises and equipment, net 62,293 63,038 62,721 60,967 54,491 Goodwill and other intangible assets, net 73,443 74,430 75,425 76,423 61,807 Cash surrender value of life insurance policies and annuities 86,230 85,679 85,076 84,790 72,019 Derivative financial instruments 36,803 33,145 44,527 39,951 34,758 Other assets 59,796 59,470 63,773 61,204 49,111 Total assets $ 4,642,884 $ 4,634,322 $ 4,604,208 $ 4,552,270 $ 3,977,407
*Liabilities and Shareholders' Equity* Deposits $ 3,748,415 $ 3,715,148 $ 3,754,495 $ 3,735,034 $ 3,299,846 Short-term borrowings 262,359 302,957 258,054 232,150 140,150 Long-term borrowings and subordinated debentures, net 124,123 124,008 123,892 123,776 123,660 Other liabilities 53,706 52,001 51,315 48,136 44,205 Total liabilities 4,188,603 4,194,114 4,187,756 4,139,096 3,607,861 Preferred stock and related surplus 14,920 14,920 14,920 14,920 14,920 Common stock and related surplus 130,235 129,990 130,508 130,227 90,939 Retained earnings 316,375 302,783 289,641 276,762 271,712 Accumulated other comprehensive loss (7,249 ) (7,485 ) (18,617 ) (8,735 ) (8,025 ) Total shareholders' equity 454,281 440,208 416,452 413,174 369,546 Total liabilities and shareholders' equity $ 4,642,884 $ 4,634,322 $ 4,604,208 $ 4,552,270 $ 3,977,407 Book value per common share $ 29.92 $ 28.96 $ 27.36 $ 27.14 $ 27.73 Tangible book value per common share (A) $ 24.91 $ 23.89 $ 22.22 $ 21.93 $ 22.90 Tangible common equity to tangible assets (B) 8.0 % 7.7 % 7.2 % 7.2 % 7.5 %
NOTES
(A) – Tangible book value per share = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / Common shares outstanding.
(B) – Tangible common equity to tangible assets = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / (Total assets – Intangible assets).
*SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)*
*Loan Composition (unaudited)*
Dollars in thousands *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
Commercial $ 533,214 $ 503,842 $ 511,951 $ 511,457 $ 498,268
Mortgage warehouse lines 108,858 108,848 114,734 118,785 86,240
Commercial real estate
Owner occupied 569,407 545,108 547,886 566,447 469,560
Non-owner occupied 1,280,948 1,254,337 1,217,029 1,193,927 1,036,358
Construction and development
Land and development 105,425 145,258 114,354 117,371 102,351
Construction 341,727 374,026 349,049 309,709 290,556
Residential real estate
Conventional 507,599 505,398 497,076 483,998 395,312
Jumbo 123,132 116,614 113,837 117,219 111,475
Home equity 80,027 81,126 81,967 86,050 70,167
Consumer 43,107 43,756 44,288 44,429 36,531
Other 3,598 3,299 6,748 3,169 3,117
Total loans, net of unearned fees 3,697,042 3,681,612 3,598,919 3,552,561 3,099,935
Less allowance for loan credit losses 49,232 48,090 47,233 45,681 40,836
Loans, net $ 3,647,810 $ 3,633,522 $ 3,551,686 $ 3,506,880 $ 3,059,099
Unfunded loan commitments $ 911,132 $ 950,001 $ 943,508 $ 957,278 $ 907,757
*SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)*
*Deposit Composition (unaudited)*
Dollars in thousands *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
Core deposits
Non-interest bearing checking $ 605,509 $ 593,576 $ 630,055 $ 679,139 $ 552,716
Interest bearing checking 2,145,824 2,164,522 2,144,737 2,024,341 1,886,011
Savings 438,451 450,526 477,348 512,129 462,631
Time deposits 525,932 473,687 469,530 465,026 327,037
Total core deposits 3,715,716 3,682,311 3,721,670 3,680,635 3,228,395
Brokered time deposits 32,699 32,837 32,825 54,399 71,451
Total deposits $ 3,748,415 $ 3,715,148 $ 3,754,495 $ 3,735,034 $ 3,299,846
Estimated uninsured deposits (A) $ 1,288,845 $ 1,291,467 $ 1,283,610 $ 1,189,908 $ 933,703
(A) - Excludes uninsured public funds otherwise secured or collateralized as required by law.
*SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)*
*Regulatory Capital Ratios (unaudited)* *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023*
*Summit Financial Group, Inc.* CET1 Risk-based Capital 9.4 % 9.1 % 8.9 % 8.7 % 8.9 % Tier 1 Risk-based Capital 10.2 % 9.9 % 9.7 % 9.5 % 9.8 % Total Risk-based Capital 14.0 % 13.7 % 13.5 % 13.3 % 14.0 % Tier 1 Leverage 9.0 % 8.7 % 8.5 % 8.4 % 8.7 %
*Summit Community Bank, Inc.* CET1 Risk-based Capital 12.0 % 11.7 % 11.6 % 11.3 % 11.9 % Tier 1 Risk-based Capital 12.0 % 11.7 % 11.6 % 11.3 % 11.9 % Total Risk-based Capital 13.3 % 12.9 % 12.7 % 12.5 % 13.1 % Tier 1 Leverage 10.6 % 10.2 % 10.1 % 9.9 % 10.6 %
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Asset Quality Information (unaudited)* *For the Quarter Ended*
Dollars in thousands *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023* Gross loan charge-offs $ 776 $ 444 $ 227 $ 4,009 $ 164 Gross loan recoveries (869 ) (632 ) (108 ) (118 ) (227 ) Net loan charge-offs (recoveries) $ (93 ) $ (188 ) $ 119 $ 3,891 $ (63 ) Net loan charge-offs (recoveries) to average loans (annualized) -0.01 % -0.02 % 0.01 % 0.44 % -0.01 % Allowance for loan credit losses $ 49,232 $ 48,090 $ 47,233 $ 45,681 $ 40,836 Allowance for loan credit losses as a percentage of period end loans 1.33 % 1.31 % 1.31 % 1.29 % 1.32 % Allowance for credit losses on unfunded loan commitments ("ULC") $ 6,692 $ 7,742 $ 6,912 $ 7,332 $ 6,572 Allowance for credit losses on ULC as a percentage of period end ULC 0.73 % 0.81 % 0.73 % 0.81 % 0.72 % Nonperforming assets: Nonperforming loans Commercial $ 7,827 $ 1,088 $ 783 $ 254 $ 402 Commercial real estate 8,378 5,675 6,402 5,970 1,700 Residential construction and development 891 708 750 772 813 Residential real estate 4,436 4,831 4,787 4,298 4,322 Consumer 95 137 124 46 65 Total nonperforming loans 21,627 12,439 12,846 11,340 7,302 Foreclosed properties Commercial real estate - 297 297 297 297 Commercial construction and development 1,253 1,253 2,187 2,187 2,187 Residential construction and development 1,924 1,924 1,924 2,161 2,293 Residential real estate 255 255 97 97 351 Total foreclosed properties 3,432 3,729 4,505 4,742 5,128 Total nonperforming assets $ 25,059 $ 16,168 $ 17,351 $ 16,082 $ 12,430 Nonperforming loans to period end loans 0.58 % 0.34 % 0.36 % 0.32 % 0.24 % Nonperforming assets to period end assets 0.54 % 0.35 % 0.38 % 0.35 % 0.31 %
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Loans Past Due 30-89 Days (unaudited)*
Dollars in thousands *3/31/2024* *12/31/2023* *9/30/2023* *6/30/2023* *3/31/2023* Commercial $ 183 $ 1,152 $ 3,300 $ 1,006 $ 463 Commercial real estate 281 1,711 781 513 1,000 Construction and development - 570 793 161 3,459 Residential real estate 4,570 6,114 4,620 4,933 2,311 Consumer 379 401 440 389 252 Other 10 43 37 17 13 Total $ 5,423 $ 9,991 $ 9,971 $ 7,019 $ 7,498
*SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)*
*Average Balance Sheet, Interest Earnings & Expenses and Average Rates*
*Q1 2024 vs Q4 2023 vs Q1 2023 (unaudited)* *Q1 2024* *Q4 2023* *Q1 2023* *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 $ 3,686,788 $ 59,204 6.46 % $ 3,688,505 $ 59,802 6.43 % $ 3,087,068 $ 45,421 5.97 %
Tax-exempt (2) 4,427 57 5.18 % 4,357 68 6.19 % 6,086 81 5.40 %
Securities
Taxable 413,656 5,025 4.89 % 410,211 5,129 4.96 % 314,004 3,412 4.41 %
Tax-exempt (2) 184,810 1,413 3.08 % 206,375 1,784 3.43 % 216,430 1,781 3.34 %
Interest bearing deposits other banks
and Federal funds sold 29,287 132 1.81 % 31,053 122 1.56 % 34,330 171 2.02 %
Total interest earning assets 4,318,968 65,831 6.13 % 4,340,501 66,905 6.12 % 3,657,918 50,866 5.64 %
Noninterest earning assets
Cash & due from banks 24,037 22,485 17,387
Premises & equipment 62,773 63,298 54,112
Intangible assets 74,057 75,043 62,024
Other assets 194,694 215,821 190,533
Allowance for loan credit losses (48,897 ) (47,834 ) (39,507 )
Total assets $ 4,625,632 $ 4,669,314 $ 3,942,467
* LIABILITIES AND SHAREHOLDERS' EQUITY*
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits 2,126,722 15,480 2.93 % 2,170,953 16,196 2.96 % 1,819,505 10,796 2.41 %
Savings deposits 442,122 1,822 1.66 % 459,277 1,986 1.72 % 480,207 1,917 1.62 %
Time deposits 531,125 4,128 3.13 % 508,383 3,235 2.52 % 389,252 1,287 1.34 %
Short-term borrowings 298,325 2,661 3.59 % 309,657 2,791 3.58 % 166,365 824 2.01 %
Long-term borrowings and
subordinated debentures 124,060 1,508 4.89 % 123,954 1,515 4.85 % 123,599 1,462 4.80 %
Total interest bearing liabilities 3,522,354 25,599 2.92 % 3,572,224 25,723 2.86 % 2,978,928 16,286 2.22 %
Noninterest bearing liabilities
Demand deposits 605,190 621,082 557,209
Other liabilities 54,513 54,160 43,508
Total liabilities 4,182,057 4,247,466 3,579,645
Shareholders' equity - preferred 14,920 14,920 14,920
Shareholders' equity - common 428,655 406,928 347,902
Total liabilities and
shareholders' equity $ 4,625,632 $ 4,669,314 $ 3,942,467
*NET INTEREST EARNINGS* $ 40,232 $ 41,182 $ 34,580
*NET INTEREST MARGIN* 3.75 % 3.76 % 3.83 %
(1) - For purposes of this table, nonaccrual loans are included in average loan balances.
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented.
The tax equivalent adjustment resulted in an increase in interest income of $309,000, $389,000, and $391,000 for Q1 2024,
Q4 2023 and Q1 2023, respectively.
Contact: Robert S. Tissue, Executive Vice President & CFO
Telephone: (304) 530-0552
Email: rtissue@summitfgi.com