Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF)
today reported financial results for the third quarter of 2023,
highlighting robust core operating performance marked by continued
notable strength in its net interest margin. 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 $16.1 million, or $1.09 per diluted share, for
the third quarter of 2023, as compared to $7.98 million, or $0.54
per diluted share, for the second quarter of 2023 and $14.2
million, or $1.11 per diluted share, for the third quarter of 2022.
Higher earnings in Q3 2023 were driven primarily by lower provision
for credit losses and acquisition-related expenses compared to Q2
2023 as Q2 included significant acquisition-related expenses
attributable to the acquisition of PSB Holding Corp. and its bank
subsidiary, Provident State Bank, Inc. (“PSB”) and higher provision
for credit losses recorded on purchased non-credit deteriorated
(“non-PCD”) loans from PSB and on a nonperforming commercial real
estate participation loan.
"We are extremely encouraged by our achievements in the third
quarter of 2023, as our strategic initiatives have continued to
bear fruit in several critical areas," stated H. Charles Maddy III,
President and Chief Executive Officer of Summit Financial Group.
"Our core operational performance was robust, demonstrated by
favorable net interest margin and a marked growth in our core
deposits, reflecting the strong confidence our customers place in
us."
Mr. Maddy continued, "A pivotal highlight of this quarter was
the announcement of our merger of peers with Burke & Herbert
Financial Services Corp. (“Burke & Herbert”) headquartered in
Alexandria, Virginia, a renowned financial institution located in
one of the best banking markets in the U.S. This significant step
forward is not just a growth strategy but a commitment to expanding
our service excellence and community impact. We anticipate this
consolidation to be a cornerstone event in our history, positioning
us for substantial opportunities in 2024 and beyond." Mr. Maddy
concluded, "Looking ahead as we edge closer to the culmination of
our strategic merger with Burke & Herbert, we remain committed
to enhancing shareholder value, driven by our foundational
strengths and synergistic growth plans. With our dedicated team,
resilient strategies and community trust, we are optimistic and
geared up for the opportunities and challenges ahead."
Key Highlights for the Third Quarter of
2023
- Summit Financial
Group, Inc. entered into an Agreement and Plan of Reorganization
with Burke & Herbert pursuant to which Summit will merge with
and into Burke & Herbert, with Burke & Herbert as the
surviving entity. Immediately following the Merger, Summit
Community Bank, Inc., Summit’s wholly owned banking subsidiary,
will be merged with Burke & Herbert’s wholly-owned banking
subsidiary, Burke & Herbert Bank & Trust Company, with
B&H Bank the surviving bank. The transaction is expected to
close in Q1 2024.
- Our net interest
margin (“NIM”) decreased 1 basis point to 3.88 percent from the
linked quarter and increased by 4 basis points from the prior-year
quarter.
- Summit's core
deposits experienced modest growth in the third quarter of 2023, up
1.1 percent from the linked quarter, showcasing customer confidence
and a robust deposit base.
- The third quarter
saw a modest increase in total loans, excluding mortgage warehouse
lines of credit and acquired loans, registering an increase of 1.47
percent (5.87 percent annualized). This performance was further
underscored by a year-over-year growth of 4.87 percent, a testament
to our successful lending approach and effective customer
acquisition.
- The Company’s
provision for credit losses totaled $1.25 million in the third
quarter of 2023 compared to $8.00 million in the linked quarter.
Included in the Company’s Q2 2023 provision for credit losses was
$3.01 million to establish an allowance on non-PCD loans acquired
from PSB in accordance with the Current Expected Credit Loss
accounting standard and $3.66 million to recognize an allowance on
a nonperforming commercial real estate loan participation.
- Summit achieved an
efficiency ratio of 47.15 percent, a marked improvement from 47.90
percent in the linked quarter, indicating optimized use of
resources.
- Annualized
non-interest expense ratio decreased to 2.10 percent of average
assets from 2.41 percent in the previous quarter and increased from
2.01 percent in the same quarter last year. Excluding
acquisition-related expenses, annualized non-interest expense would
have been 2.01 percent of average assets in Q3 2023 and 2.05
percent of average assets for Q2 2023.
Results from Operations
Net interest income totaled $41.3 million in the third quarter
of 2023, marking an increase of 21.0 percent from the prior-year
third quarter and 2.4 percent from the linked quarter. This robust
growth is attributable primarily to our strategic expansion of the
loan portfolio and optimizations in investment allocations. NIM for
the third quarter 2023 was 3.88 percent compared to 3.89 percent
for the linked quarter and 3.84 percent for the prior-year quarter,
representing a stable margin performance despite volatile interest
rates.
Summit recorded a $1.25 million provision for credit losses in
the third quarter of 2023. The provision for credit losses was $8.0
million for the linked quarter, which included $3.01 million to
establish an allowance on non-PCD loans acquired from PSB in
accordance with the CECL accounting standard and $3.66 million, an
allowance for a nonperforming loan participation with a regional
bank secured by a shopping complex at the fair value of its
collateral. The provision for credit losses was $1.5 million in the
third quarter of 2022.
Noninterest income, consisting primarily of service fee income
from community banking activities and trust and wealth management
fees, for third quarter 2023 was $5.27 million compared to $5.42
million for the linked quarter and $4.89 million for the comparable
period of 2022. The Company recorded realized securities losses on
debt securities of $12,000 in the third quarter of 2023 and
$211,000 in the linked quarter. In addition, the Company recognized
net gains on equity investments of $180,000 in the third quarter
2023 compared to $150,000 in the linked quarter. Excluding gains
and losses from debt securities and equity investments, the
combined revenue from net interest income and non-interest income
for Q3 2023 rose to $46.4 million. This represents an increase of
1.3 percent from $45.8 million in the linked quarter and a
substantial 19.0 percent growth from $39.0 million recorded in the
third quarter of 2022.
Total noninterest expense decreased to $24.2 million in the
third quarter of 2023, down 11.6 percent from $27.3 million in the
linked quarter primarily due to fewer acquisition-related expenses
in the third quarter. Conversely, there was a 25.7 percent hike
from $19.2 million for the same quarter in the prior year,
attributed mainly to the assimilation of operational costs from the
newly integrated PSB operations.
Salary and benefit expenses were $12.0 million in the third
quarter of 2023, a nominal decrease from $12.2 million in the
preceding quarter but up from $10.2 million in the same period last
year. The year-over-year increase was primarily due to the PSB
acquisition and higher group health insurance premiums.
Acquisition-related expenses were $1.11 million for Q3 2023,
representing legal, due diligence and fairness opinion costs
relative to the Burke & Herbert merger, compared to $4.16
million for the linked quarter, consisting of contract termination
costs, executive and employee severance benefits and legal and
consulting fees associated with the PSB acquisition, and none
during Q3 2022.
Summit’s efficiency ratio improved, registering 47.15 percent in
the third quarter of 2023, a decrease from 47.95 percent in the
third quarter of 2022, and marginally better than the 47.90 percent
in the linked quarter. Concurrently, the non-interest expense to
average assets ratio was optimized to 2.10 percent, compared to
2.41 percent in the previous quarter, indicating enhanced
operational efficiency despite the expanded asset base post-PSB
acquisition.
Balance Sheet
As of September 30, 2023, total assets were $4.6 billion, an
increase of $687.5 million, or 17.6 percent since December 31,
2022. Excluding acquired PSB assets, total assets increased by
$119.2 million, or 3.0 percent since December 31, 2022.
Total loans net of unearned fees increased to $3.6 billion as of
September 30, 2023, from $3.1 billion at December 31, 2022, and
increased 17.0 percent from the third quarter of 2022. Total loans,
excluding those related to mortgage warehouse lending and acquired
loans, reached $3.1 billion on September 30, 2023. This represents
an increase of 1.65 percent (or 6.59 percent when annualized)
during the quarter just ended.
Total commercial loans, including commercial and industrial
(C&I) and commercial real estate (CRE), increased 0.3 percent
(1.1 percent annualized) during the third quarter to $2.3 billion
as of September 30, 2023.
Residential real estate and consumer lending totaled $737.2
million on September 30, 2023, reflecting an increase of 0.75
percent (3.0 percent annualized) during the third quarter.
As of September 30, 2023, mortgage warehouse lines of credit,
sourced solely from a participation arrangement with a large
regional bank, totaled $114.7 million compared to $130.4 million as
of December 31, 2022, and $194.7 million at the year-ago period
end.
Deposits totaled $3.8 billion on September 30, 2023, a 0.5
percent increase during the third quarter. Core deposits increased
1.1 percent during the third quarter 2023 to $3.7 billion. Adjusted
uninsured deposits (excluding uninsured public deposits otherwise
secured or collateralized as required by law) were 34.2 percent of
total deposits at September 30, 2023 compared to 29.8 percent at
year-end 2022 and 24.4 percent at the year-ago period end.
Total shareholders’ equity was $416.5 million as of September
30, 2023, compared to $354.5 million at December 31, 2022. Summit
paid a quarterly common dividend of $0.22 per share in the third
quarter of 2023.
Tangible Book Value Per Share (“TBVPS”) increased by $0.29 to
$22.22 during the third quarter of 2023, representing a 1.3 percent
increase. This increase was primarily due to retained earnings
which more than offset the decline in the fair value of available
for sale securities reflected in accumulated other comprehensive
loss. Summit had 14,674,852 outstanding common shares at September
30, 2023, compared to 12,783,646 at year-end 2022.
As announced in the first quarter of 2020, the Board of
Directors authorized the open market repurchase of up to 750,000
shares of the issued and outstanding shares of Summit's common
stock, of which 323,577 shares have been repurchased to date. The
timing and quantity of stock purchases under this repurchase plan
are at the discretion of management. During the third quarter of
2023, no shares of Summit’s common stock were repurchased under the
Plan.
Asset Quality
The Company recorded net loan charge-offs (“NCOs”) of $118,000
during the third quarter 2023, representing 0.01 percent of average
loans annualized, compared to $3.8 million, representing 0.44
percent of average loans annualized, in the linked quarter. NCOs of
$8,000 represented 0.0 percent of average loans annualized in the
year-ago period.
Summit’s allowance for loan credit losses was $47.2 million on
September 30, 2023, $45.7 million at the end of the linked quarter,
and $36.8 million on September 30, 2022. As of September 30, 2023,
the allowance for loan credit losses stood at 1.31 percent of total
loans, reflecting a slight increase compared to the rate of 1.26
percent recorded as of December 31, 2022. In terms of the
allowance's coverage, it represented 367.7 percent of nonperforming
loans at September 30, 2023, in contrast to the figure of 497.2
percent at December 31, 2022.
Summit’s allowance for credit losses on unfunded loan
commitments was $6.91 million as of September 30, 2023, compared to
$7.33 million at the end of the linked quarter. During the most
recent quarter, the allowance for credit losses on unfunded loan
commitments decreased by $420,000, primarily due to a reduction in
unfunded loan balances.
As of September 30, 2023, nonperforming assets (“NPAs”),
consisting of nonperforming loans, foreclosed properties, and
repossessed assets, totaled $17.4 million, or 0.38 percent of
assets, compared to NPAs of $12.9 million, or 0.33 percent of
assets at year-end 2022.
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 or are they necessarily
comparable to non-GAAP performance measures presented by other
companies.
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 pandemics, 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; changes
in the national and local economies, the impact of natural
disasters, extreme weather events, military conflict (including the
Russia/Ukraine conflict, the conflict in Israel and surrounding
areas, the possible expansion of such conflicts and potential
geopolitical consequences), terrorism or other geopolitical events;
delays in completing the pending merger of Summit and Burke &
Herbert, the failure to obtain necessary regulatory approvals and
shareholder approvals or to satisfy any of the other conditions to
the merger on a timely basis or at all, the possibility that the
anticipated benefits of the merger are not realized when expected
or at all, corporate strategies or objectives, including the impact
of certain actions and initiatives, anticipated trends in Summit's
business, regulatory developments, estimated synergies, cost
savings and financial benefits of completed transactions, growth
strategies, the inability to realize cost savings or improved
revenues or to implement integration plans and other consequences
associated with the proposed merger; and the other factors
discussed in the “Risk Factors” section of Summit’s Annual Report
on Form 10–K for the year ended December 31, 2022, in the “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section of Summit’s Quarterly
Report on Form 10–Q for the quarters ended March 31, 2023 and June
30, 2023, and other reports Summit files with the SEC. We undertake
no obligation to revise these statements following the date of this
press release.
Additional Information and Where to Find It
In connection with the proposed transaction, Burke & Herbert
filed a registration statement on Form S-4 with the SEC on October
2, 2023. The registration statement includes a joint proxy
statement of Burke & Herbert and Summit, which also constitutes
a prospectus of Burke & Herbert, that was declared effective by
the SEC on October 16, 2023. A copy of the joint proxy
statement/prospectus has been sent to shareholders of Burke &
Herbert and shareholders of Summit seeking certain approvals
related to the proposed transaction.
The information contained herein does not constitute an offer to
sell or a solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. INVESTORS AND
SHAREHOLDERS OF BURKE & HERBERT AND SUMMIT AND THEIR RESPECTIVE
AFFILIATES ARE URGED TO READ, THE REGISTRATION STATEMENT ON FORM
S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE
REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS
FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
BURKE & HERBERT, SUMMIT AND THE PROPOSED TRANSACTION. Investors
and shareholders will be able to obtain a free copy of the
registration statement, including the joint proxy
statement/prospectus, as well as other relevant documents filed
with the SEC containing information about Burke & Herbert and
Summit, without charge, at the SEC’s website www.sec.gov. Copies of
documents filed with the SEC by Burke & Herbert will be made
available free of charge in the “Investor Relations” section of
Burke & Herbert’s website, www.burkeandherbertbank.com, under
the heading “Financials.” Copies of documents filed with the SEC by
Summit will be made available free of charge in the “News” section
of Summit’s website, www.summitfgi.com, under the heading “News /
Presentations and Events” link.
Participants in Solicitation
Burke & Herbert, Summit, and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies in respect of the proposed
transaction under the rules of the SEC. Information regarding Burke
& Herbert’s directors and executive officers is available in
its Registration Statement on Form 10, as amended and as ordered
effective by the SEC on April 21, 2023. Information regarding
Summit’s directors and executive officers is available in its
definitive proxy statement, which was filed with the SEC on March
31, 2023, and certain other documents filed by Summit with the SEC.
Other information regarding the participants in the solicitation of
proxies in respect of the proposed transaction and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC. Free copies of these documents, when available, may be
obtained as described in the preceding paragraph.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Quarterly Performance Summary (unaudited) |
|
|
|
Q3 2023 vs Q3 2022 |
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
Percent |
Dollars in thousands |
9/30/2023 |
9/30/2022 |
Change |
Statements of Income |
|
|
|
|
Interest income |
|
|
|
|
Loans, including fees |
$ |
58,102 |
|
$ |
38,784 |
|
49.8 |
% |
|
Securities |
|
6,357 |
|
|
3,497 |
|
81.8 |
% |
|
Other |
|
235 |
|
|
170 |
|
38.2 |
% |
|
Total interest income |
|
64,694 |
|
|
42,451 |
|
52.4 |
% |
|
Interest expense |
|
|
|
|
Deposits |
|
19,924 |
|
|
6,140 |
|
224.5 |
% |
|
Borrowings |
|
3,497 |
|
|
2,198 |
|
59.1 |
% |
|
Total interest expense |
|
23,421 |
|
|
8,338 |
|
180.9 |
% |
|
Net interest income |
|
41,273 |
|
|
34,113 |
|
21.0 |
% |
|
Provision for credit losses |
|
1,250 |
|
|
1,500 |
|
-16.7 |
% |
|
Net interest income after provision |
|
|
|
|
for credit losses |
|
40,023 |
|
|
32,613 |
|
22.7 |
% |
|
|
|
|
|
|
Noninterest income |
|
|
|
|
Trust and wealth management fees |
|
819 |
|
|
725 |
|
13.0 |
% |
|
Mortgage origination revenue |
|
172 |
|
|
538 |
|
-68.0 |
% |
|
Service charges on deposit accounts |
|
1,775 |
|
|
1,550 |
|
14.5 |
% |
|
Bank card revenue |
|
1,907 |
|
|
1,639 |
|
16.4 |
% |
|
Net gains on equity investments |
|
180 |
|
|
283 |
|
-36.4 |
% |
|
Net realized losses on debt securities |
|
(12 |
) |
|
(242 |
) |
-95.0 |
% |
|
Bank owned life insurance and annuity income |
|
311 |
|
|
229 |
|
35.8 |
% |
|
Other income |
|
113 |
|
|
165 |
|
-31.5 |
% |
|
Total noninterest income |
|
5,265 |
|
|
4,887 |
|
7.7 |
% |
|
Noninterest expense |
|
|
|
|
Salaries and employee benefits |
|
11,959 |
|
|
10,189 |
|
17.4 |
% |
|
Net occupancy expense |
|
1,436 |
|
|
1,301 |
|
10.4 |
% |
|
Equipment expense |
|
2,361 |
|
|
1,851 |
|
27.6 |
% |
|
Professional fees |
|
400 |
|
|
372 |
|
7.5 |
% |
|
Advertising and public relations |
|
247 |
|
|
276 |
|
-10.5 |
% |
|
Amortization of intangibles |
|
998 |
|
|
354 |
|
181.9 |
% |
|
FDIC premiums |
|
716 |
|
|
292 |
|
145.2 |
% |
|
Bank card expense |
|
972 |
|
|
726 |
|
33.9 |
% |
|
Foreclosed properties expense, net of (gains)/losses |
|
10 |
|
|
26 |
|
-61.5 |
% |
|
Acquisition-related expense |
|
1,110 |
|
|
- |
|
n/m |
|
Other expenses |
|
3,953 |
|
|
3,834 |
|
3.1 |
% |
|
Total noninterest expense |
|
24,162 |
|
|
19,221 |
|
25.7 |
% |
|
Income before income taxes |
|
21,126 |
|
|
18,279 |
|
15.6 |
% |
|
Income taxes |
|
4,794 |
|
|
3,856 |
|
24.3 |
% |
|
Net income |
|
16,332 |
|
|
14,423 |
|
13.2 |
% |
|
Preferred stock dividends |
|
225 |
|
|
225 |
|
n/a |
|
|
|
|
|
|
Net income applicable to common shares |
$ |
16,107 |
|
$ |
14,198 |
|
13.4 |
% |
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Quarterly Performance Summary (unaudited) |
|
|
|
Q3 2023 vs Q3 2022 |
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
Percent |
|
|
9/30/2023 |
9/30/2022 |
Change |
Per Share Data |
|
|
|
|
Earnings per common share |
|
|
|
|
Basic |
$ |
1.10 |
|
$ |
1.11 |
|
-0.9 |
% |
|
Diluted |
$ |
1.09 |
|
$ |
1.11 |
|
-1.8 |
% |
|
|
|
|
|
|
Cash dividends per common share |
$ |
0.22 |
|
$ |
0.20 |
|
10.0 |
% |
|
Common stock dividend payout ratio |
|
19.8 |
% |
|
17.7 |
% |
11.5 |
% |
|
|
|
|
|
|
Average common shares outstanding |
|
|
|
|
Basic |
|
14,672,176 |
|
|
12,766,473 |
|
14.9 |
% |
|
Diluted |
|
14,714,211 |
|
|
12,835,670 |
|
14.6 |
% |
|
|
|
|
|
|
Common shares outstanding at period end |
|
14,674,852 |
|
|
12,774,645 |
|
14.9 |
% |
|
|
|
|
|
Performance Ratios |
|
|
|
|
Return on average equity |
|
15.66 |
% |
|
17.05 |
% |
-8.2 |
% |
|
Return on average tangible equity (C)(E) |
|
20.03 |
% |
|
21.33 |
% |
-6.1 |
% |
|
Return on average tangible common equity (D)(E) |
|
20.95 |
% |
|
22.20 |
% |
-5.6 |
% |
|
Return on average assets |
|
1.42 |
% |
|
1.51 |
% |
-6.0 |
% |
|
Net interest margin (A) |
|
3.88 |
% |
|
3.84 |
% |
1.0 |
% |
|
Efficiency ratio (B) |
|
47.15 |
% |
|
47.95 |
% |
-1.7 |
% |
|
|
|
|
|
NOTES
(A) – Presented on a tax-equivalent basis assuming
a federal tax rate of 21%.
(B) – 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) – Return on average tangible equity = (Net income +
Amortization of intangibles [after-tax]) / (Average shareholders’
equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income +
Amortization of intangibles [after-tax]) / (Average common
shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information
relating to the calculation of this item.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Nine Month Performance Summary (unaudited) |
|
|
|
2023 vs 2022 |
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
Percent |
Dollars in thousands |
9/30/2023 |
9/30/2022 |
Change |
Statements of Income |
|
|
|
|
Interest income |
|
|
|
|
Loans, including fees |
$ |
157,999 |
|
$ |
101,774 |
|
55.2 |
% |
|
Securities |
|
17,423 |
|
|
8,871 |
|
96.4 |
% |
|
Other |
|
610 |
|
|
262 |
|
132.8 |
% |
|
Total interest income |
|
176,032 |
|
|
110,907 |
|
58.7 |
% |
|
Interest expense |
|
|
|
|
Deposits |
|
51,775 |
|
|
10,489 |
|
393.6 |
% |
|
Borrowings |
|
8,481 |
|
|
5,785 |
|
46.6 |
% |
|
Total interest expense |
|
60,256 |
|
|
16,274 |
|
270.3 |
% |
|
Net interest income |
|
115,776 |
|
|
94,633 |
|
22.3 |
% |
|
Provision for credit losses |
|
10,750 |
|
|
5,450 |
|
97.2 |
% |
|
Net interest income after provision |
|
|
|
|
for credit losses |
|
105,026 |
|
|
89,183 |
|
17.8 |
% |
|
|
|
|
|
|
Noninterest income |
|
|
|
|
Trust and wealth management fees |
|
2,484 |
|
|
2,228 |
|
11.5 |
% |
|
Mortgage origination revenue |
|
513 |
|
|
1,194 |
|
-57.0 |
% |
|
Service charges on deposit accounts |
|
5,110 |
|
|
4,625 |
|
10.5 |
% |
|
Bank card revenue |
|
5,462 |
|
|
4,748 |
|
15.0 |
% |
|
Net gains/(losses) on equity investments |
|
375 |
|
|
(14 |
) |
n/m |
|
Net realized losses on debt securities, net |
|
(282 |
) |
|
(684 |
) |
-58.8 |
% |
|
Bank owned life insurance and annuity income |
|
1,078 |
|
|
843 |
|
27.9 |
% |
|
Other income |
|
334 |
|
|
348 |
|
-4.0 |
% |
|
Total noninterest income |
|
15,074 |
|
|
13,288 |
|
13.4 |
% |
|
Noninterest expense |
|
|
|
|
Salaries and employee benefits |
|
34,922 |
|
|
29,920 |
|
16.7 |
% |
|
Net occupancy expense |
|
4,297 |
|
|
3,801 |
|
13.0 |
% |
|
Equipment expense |
|
6,752 |
|
|
5,484 |
|
23.1 |
% |
|
Professional fees |
|
1,246 |
|
|
1,242 |
|
0.3 |
% |
|
Advertising and public relations |
|
681 |
|
|
613 |
|
11.1 |
% |
|
Amortization of intangibles |
|
2,340 |
|
|
1,088 |
|
115.1 |
% |
|
FDIC premiums |
|
1,788 |
|
|
872 |
|
105.0 |
% |
|
Bank card expense |
|
2,620 |
|
|
2,249 |
|
16.5 |
% |
|
Foreclosed properties expense, net of (gains)/losses |
|
73 |
|
|
77 |
|
-5.2 |
% |
|
Acquisition-related expense |
|
5,604 |
|
|
33 |
|
n/m |
|
Other expenses |
|
10,563 |
|
|
8,651 |
|
22.1 |
% |
|
Total noninterest expense |
|
70,886 |
|
|
54,030 |
|
31.2 |
% |
|
Income before income taxes |
|
49,214 |
|
|
48,441 |
|
1.6 |
% |
|
Income taxes |
|
10,572 |
|
|
10,311 |
|
2.5 |
% |
|
Net income |
|
38,642 |
|
|
38,130 |
|
1.3 |
% |
|
Preferred stock dividends |
|
675 |
|
|
675 |
|
0.0 |
% |
|
|
|
|
|
|
Net income applicable to common shares |
$ |
37,967 |
|
$ |
37,455 |
|
1.4 |
% |
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Nine Month Performance Summary (unaudited) |
|
|
|
2023 vs 2022 |
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
Percent |
|
|
9/30/2023 |
9/30/2022 |
Change |
Per Share Data |
|
|
|
|
Earnings per common share |
|
|
|
|
Basic |
$ |
2.70 |
|
$ |
2.94 |
|
-8.2 |
% |
|
Diluted |
$ |
2.69 |
|
$ |
2.92 |
|
-7.9 |
% |
|
|
|
|
|
|
Cash dividends per common share |
$ |
0.62 |
|
$ |
0.56 |
|
10.7 |
% |
|
Common stock dividend payout ratio |
|
22.6 |
% |
|
18.7 |
% |
20.7 |
% |
|
|
|
|
|
|
Average common shares outstanding |
|
|
|
|
Basic |
|
14,048,567 |
|
|
12,755,576 |
|
10.1 |
% |
|
Diluted |
|
14,090,796 |
|
|
12,815,365 |
|
10.0 |
% |
|
|
|
|
|
|
Common shares outstanding at period end |
|
14,674,852 |
|
|
12,774,645 |
|
14.9 |
% |
|
|
|
|
|
Performance Ratios |
|
|
|
|
Return on average equity |
|
12.97 |
% |
|
15.26 |
% |
-15.0 |
% |
|
Return on average tangible equity (C) (E) |
|
17.60 |
% |
|
19.23 |
% |
-8.5 |
% |
|
Return on average tangible common equity (D) (E) |
|
17.42 |
% |
|
20.00 |
% |
-12.9 |
% |
|
Return on average assets |
|
1.18 |
% |
|
1.37 |
% |
-13.9 |
% |
|
Net interest margin (A) |
|
3.87 |
% |
|
3.71 |
% |
4.3 |
% |
|
Efficiency ratio (B) |
|
47.66 |
% |
|
48.25 |
% |
-1.2 |
% |
|
|
|
|
|
NOTES
(A) – Presented on a tax-equivalent basis assuming
a federal tax rate of 21%.
(B) – 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) – Return on average tangible equity = (Net income +
Amortization of intangibles [after-tax]) / (Average shareholders’
equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income
applicable to common shares + Amortization of intangibles
[after-tax]) / (Average common shareholders’ equity – Average
intangible assets).
(E) – See Non-GAAP Financial Measures for additional information
relating to the calculation of this item.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
Five Quarter Performance Summary (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
Dollars in thousands |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
Statements of Income |
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
Loans, including fees |
$ |
58,102 |
|
$ |
54,413 |
|
$ |
45,485 |
|
$ |
43,589 |
|
$ |
38,784 |
|
|
Securities |
|
6,357 |
|
|
6,247 |
|
|
4,819 |
|
|
4,181 |
|
|
3,497 |
|
|
Other |
|
235 |
|
|
203 |
|
|
171 |
|
|
70 |
|
|
170 |
|
|
Total interest income |
|
64,694 |
|
|
60,863 |
|
|
50,475 |
|
|
47,840 |
|
|
42,451 |
|
|
Interest expense |
|
|
|
|
|
|
Deposits |
|
19,924 |
|
|
17,851 |
|
|
14,000 |
|
|
10,194 |
|
|
6,140 |
|
|
Borrowings |
|
3,497 |
|
|
2,699 |
|
|
2,286 |
|
|
3,293 |
|
|
2,198 |
|
|
Total interest expense |
|
23,421 |
|
|
20,550 |
|
|
16,286 |
|
|
13,487 |
|
|
8,338 |
|
|
Net interest income |
|
41,273 |
|
|
40,313 |
|
|
34,189 |
|
|
34,353 |
|
|
34,113 |
|
|
Provision for credit losses |
|
1,250 |
|
|
8,000 |
|
|
1,500 |
|
|
1,500 |
|
|
1,500 |
|
|
Net interest income after provision |
|
|
|
|
|
|
for credit losses |
|
40,023 |
|
|
32,313 |
|
|
32,689 |
|
|
32,853 |
|
|
32,613 |
|
|
Noninterest income |
|
|
|
|
|
|
Trust and wealth management fees |
|
819 |
|
|
854 |
|
|
811 |
|
|
750 |
|
|
725 |
|
|
Mortgage origination revenue |
|
172 |
|
|
169 |
|
|
171 |
|
|
286 |
|
|
538 |
|
|
Service charges on deposit accounts |
|
1,775 |
|
|
1,943 |
|
|
1,392 |
|
|
1,526 |
|
|
1,550 |
|
|
Bank card revenue |
|
1,907 |
|
|
1,987 |
|
|
1,568 |
|
|
1,513 |
|
|
1,639 |
|
|
Net gains on equity investments |
|
180 |
|
|
150 |
|
|
45 |
|
|
280 |
|
|
283 |
|
|
Net realized losses on debt securities |
|
(12 |
) |
|
(211 |
) |
|
(59 |
) |
|
(24 |
) |
|
(242 |
) |
|
Bank owned life insurance and annuity income |
|
311 |
|
|
431 |
|
|
336 |
|
|
367 |
|
|
229 |
|
|
Other income |
|
113 |
|
|
100 |
|
|
122 |
|
|
167 |
|
|
165 |
|
|
Total noninterest income |
|
5,265 |
|
|
5,423 |
|
|
4,386 |
|
|
4,865 |
|
|
4,887 |
|
|
Noninterest expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
11,959 |
|
|
12,156 |
|
|
10,807 |
|
|
10,532 |
|
|
10,189 |
|
|
Net occupancy expense |
|
1,436 |
|
|
1,528 |
|
|
1,333 |
|
|
1,328 |
|
|
1,301 |
|
|
Equipment expense |
|
2,361 |
|
|
2,361 |
|
|
2,030 |
|
|
1,769 |
|
|
1,851 |
|
|
Professional fees |
|
400 |
|
|
471 |
|
|
376 |
|
|
386 |
|
|
372 |
|
|
Advertising and public relations |
|
247 |
|
|
264 |
|
|
170 |
|
|
280 |
|
|
276 |
|
|
Amortization of intangibles |
|
998 |
|
|
999 |
|
|
343 |
|
|
351 |
|
|
354 |
|
|
FDIC premiums |
|
716 |
|
|
742 |
|
|
330 |
|
|
352 |
|
|
292 |
|
|
Bank card expense |
|
972 |
|
|
951 |
|
|
696 |
|
|
679 |
|
|
726 |
|
|
Foreclosed properties expense, net of (gains)/losses |
|
10 |
|
|
48 |
|
|
15 |
|
|
159 |
|
|
26 |
|
|
Acquisition-related expenses |
|
1,110 |
|
|
4,163 |
|
|
331 |
|
|
81 |
|
|
- |
|
|
Other expenses |
|
3,953 |
|
|
3,641 |
|
|
2,968 |
|
|
2,932 |
|
|
3,834 |
|
|
Total noninterest expense |
|
24,162 |
|
|
27,324 |
|
|
19,399 |
|
|
18,849 |
|
|
19,221 |
|
|
Income before income taxes |
|
21,126 |
|
|
10,412 |
|
|
17,676 |
|
|
18,869 |
|
|
18,279 |
|
|
Income tax expense |
|
4,794 |
|
|
2,203 |
|
|
3,575 |
|
|
3,783 |
|
|
3,856 |
|
|
Net income |
|
16,332 |
|
|
8,209 |
|
|
14,101 |
|
|
15,086 |
|
|
14,423 |
|
|
Preferred stock dividends |
|
225 |
|
|
225 |
|
|
225 |
|
|
225 |
|
|
225 |
|
|
|
|
|
|
|
|
|
Net income applicable to common shares |
$ |
16,107 |
|
$ |
7,984 |
|
$ |
13,876 |
|
$ |
14,861 |
|
$ |
14,198 |
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
Five Quarter Performance Summary (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
Per Share Data |
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
Basic |
$ |
1.10 |
|
$ |
0.54 |
|
$ |
1.09 |
|
$ |
1.16 |
|
$ |
1.11 |
|
|
Diluted |
$ |
1.09 |
|
$ |
0.54 |
|
$ |
1.08 |
|
$ |
1.16 |
|
$ |
1.11 |
|
|
|
|
|
|
|
|
|
Cash dividends per common share |
$ |
0.22 |
|
$ |
0.20 |
|
$ |
0.20 |
|
$ |
0.20 |
|
$ |
0.20 |
|
|
Common stock dividend payout ratio |
|
19.8 |
% |
|
36.7 |
% |
|
18.1 |
% |
|
16.9 |
% |
|
17.7 |
% |
|
|
|
|
|
|
|
|
Average common shares outstanding |
|
|
|
|
|
|
Basic |
|
14,672,176 |
|
|
14,668,923 |
|
|
12,783,851 |
|
|
12,775,703 |
|
|
12,766,473 |
|
|
Diluted |
|
14,714,211 |
|
|
14,703,636 |
|
|
12,830,102 |
|
|
12,837,637 |
|
|
12,835,670 |
|
|
|
|
|
|
|
|
|
Common shares outstanding at period end |
|
14,674,852 |
|
|
14,672,147 |
|
|
12,786,404 |
|
|
12,783,646 |
|
|
12,774,645 |
|
|
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
|
|
Return on average equity |
|
15.66 |
% |
|
7.99 |
% |
|
15.55 |
% |
|
17.50 |
% |
|
17.05 |
% |
|
Return on average tangible equity (C)(E) |
|
20.03 |
% |
|
10.86 |
% |
|
19.10 |
% |
|
21.75 |
% |
|
21.33 |
% |
|
Return on average tangible common equity (D)(E) |
|
20.95 |
% |
|
11.37 |
% |
|
20.10 |
% |
|
22.96 |
% |
|
22.20 |
% |
|
Return on average assets |
|
1.42 |
% |
|
0.73 |
% |
|
1.43 |
% |
|
1.54 |
% |
|
1.51 |
% |
|
Net interest margin (A) |
|
3.88 |
% |
|
3.89 |
% |
|
3.83 |
% |
|
3.80 |
% |
|
3.84 |
% |
|
Efficiency ratio (B) |
|
47.15 |
% |
|
47.90 |
% |
|
48.00 |
% |
|
46.40 |
% |
|
47.95 |
% |
NOTES
(A) – Presented on a tax-equivalent basis assuming
a federal tax rate of 21%.
(B) – 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) – Return on average tangible equity = (Net income +
Amortization of intangibles [after-tax]) / (Average shareholders’
equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income +
Amortization of intangibles [after-tax]) / (Average common
shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information
relating to the calculation of this item.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
Selected Balance Sheet Data (unaudited) |
|
|
|
|
|
Dollars in thousands, except per share amounts |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
Assets |
|
|
|
|
|
|
Cash and due from banks |
$ |
23,159 |
|
$ |
23,341 |
|
$ |
16,488 |
|
$ |
16,469 |
|
$ |
16,141 |
|
|
Interest bearing deposits other banks |
|
36,398 |
|
|
39,902 |
|
|
54,328 |
|
|
28,248 |
|
|
29,510 |
|
|
Debt securities, available for sale |
|
511,403 |
|
|
512,038 |
|
|
431,933 |
|
|
405,201 |
|
|
383,965 |
|
|
Debt securities, held to maturity |
|
94,715 |
|
|
95,200 |
|
|
95,682 |
|
|
96,163 |
|
|
96,640 |
|
|
Equity investments |
|
31,241 |
|
|
30,818 |
|
|
29,867 |
|
|
29,494 |
|
|
20,314 |
|
|
Other investments |
|
19,579 |
|
|
16,014 |
|
|
12,696 |
|
|
16,029 |
|
|
18,105 |
|
|
Loans, net |
|
3,551,686 |
|
|
3,506,880 |
|
|
3,059,099 |
|
|
3,043,919 |
|
|
3,038,377 |
|
|
Property held for sale |
|
4,505 |
|
|
4,742 |
|
|
5,128 |
|
|
5,067 |
|
|
5,193 |
|
|
Premises and equipment, net |
|
62,721 |
|
|
60,967 |
|
|
54,491 |
|
|
53,981 |
|
|
54,628 |
|
|
Goodwill and other intangible assets, net |
|
75,425 |
|
|
76,423 |
|
|
61,807 |
|
|
62,150 |
|
|
62,502 |
|
|
Cash surrender value of life insurance policies and annuities |
|
85,076 |
|
|
84,790 |
|
|
72,019 |
|
|
71,640 |
|
|
71,216 |
|
|
Derivative financial instruments |
|
44,527 |
|
|
39,951 |
|
|
34,758 |
|
|
40,506 |
|
|
42,179 |
|
|
Other assets |
|
63,773 |
|
|
61,204 |
|
|
49,111 |
|
|
47,825 |
|
|
48,529 |
|
|
Total assets |
$ |
4,604,208 |
|
$ |
4,552,270 |
|
$ |
3,977,407 |
|
$ |
3,916,692 |
|
$ |
3,887,299 |
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
Deposits |
$ |
3,754,495 |
|
$ |
3,735,034 |
|
$ |
3,299,846 |
|
$ |
3,169,879 |
|
$ |
3,108,072 |
|
|
Short-term borrowings |
|
258,054 |
|
|
232,150 |
|
|
140,150 |
|
|
225,999 |
|
|
273,148 |
|
|
Long-term borrowings and |
|
|
|
|
|
|
subordinated debentures, net |
|
123,892 |
|
|
123,776 |
|
|
123,660 |
|
|
123,543 |
|
|
123,427 |
|
|
Other liabilities |
|
51,315 |
|
|
48,136 |
|
|
44,205 |
|
|
42,741 |
|
|
40,978 |
|
|
Total liabilities |
|
4,187,756 |
|
|
4,139,096 |
|
|
3,607,861 |
|
|
3,562,162 |
|
|
3,545,625 |
|
|
Preferred stock and related surplus |
|
14,920 |
|
|
14,920 |
|
|
14,920 |
|
|
14,920 |
|
|
14,920 |
|
|
Common stock and related surplus |
|
130,508 |
|
|
130,227 |
|
|
90,939 |
|
|
90,696 |
|
|
90,345 |
|
|
Retained earnings |
|
289,641 |
|
|
276,762 |
|
|
271,712 |
|
|
260,393 |
|
|
248,084 |
|
|
Accumulated other comprehensive income (loss) |
|
(18,617 |
) |
|
(8,735 |
) |
|
(8,025 |
) |
|
(11,479 |
) |
|
(11,675 |
) |
|
Total shareholders' equity |
|
416,452 |
|
|
413,174 |
|
|
369,546 |
|
|
354,530 |
|
|
341,674 |
|
|
Total liabilities and shareholders' equity |
$ |
4,604,208 |
|
$ |
4,552,270 |
|
$ |
3,977,407 |
|
$ |
3,916,692 |
|
$ |
3,887,299 |
|
|
|
|
|
|
|
|
|
Book value per common share |
$ |
27.36 |
|
$ |
27.14 |
|
$ |
27.73 |
|
$ |
26.57 |
|
$ |
25.58 |
|
|
Tangible book value per common share (A)(C) |
$ |
22.22 |
|
$ |
21.93 |
|
$ |
22.90 |
|
$ |
21.70 |
|
$ |
20.69 |
|
|
Tangible common equity to tangible assets (B)(C) |
|
7.2 |
% |
|
7.2 |
% |
|
7.5 |
% |
|
7.2 |
% |
|
6.9 |
% |
|
|
|
|
|
|
|
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).(C) – See Non-GAAP Financial Measures for
additional information relating to the calculation of this
item.
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) |
|
|
|
|
Loan Composition (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in thousands |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
|
|
|
|
|
|
|
Commercial |
$ |
511,951 |
|
$ |
511,457 |
|
$ |
498,268 |
|
$ |
501,844 |
|
$ |
512,771 |
|
Mortgage warehouse lines |
|
114,734 |
|
|
118,785 |
|
|
86,240 |
|
|
130,390 |
|
|
194,740 |
|
Commercial real estate |
|
|
|
|
|
|
Owner occupied |
|
547,886 |
|
|
566,447 |
|
|
469,560 |
|
|
467,050 |
|
|
473,298 |
|
Non-owner occupied |
|
1,217,029 |
|
|
1,193,927 |
|
|
1,036,358 |
|
|
1,004,368 |
|
|
960,627 |
|
Construction and development |
|
|
|
|
|
|
Land and development |
|
114,354 |
|
|
117,371 |
|
|
102,351 |
|
|
106,362 |
|
|
104,437 |
|
Construction |
|
349,049 |
|
|
309,709 |
|
|
290,556 |
|
|
282,935 |
|
|
248,564 |
|
Residential real estate |
|
|
|
|
|
|
Conventional |
|
497,076 |
|
|
483,998 |
|
|
395,312 |
|
|
386,874 |
|
|
382,203 |
|
Jumbo |
|
113,837 |
|
|
117,219 |
|
|
111,475 |
|
|
92,103 |
|
|
87,449 |
|
Home equity |
|
81,967 |
|
|
86,050 |
|
|
70,167 |
|
|
71,986 |
|
|
72,756 |
|
Consumer |
|
44,288 |
|
|
44,429 |
|
|
36,531 |
|
|
35,372 |
|
|
35,116 |
|
Other |
|
6,748 |
|
|
3,169 |
|
|
3,117 |
|
|
3,534 |
|
|
3,166 |
|
Total loans, net of unearned fees |
|
3,598,919 |
|
|
3,552,561 |
|
|
3,099,935 |
|
|
3,082,818 |
|
|
3,075,127 |
|
Less allowance for loan credit losses |
|
47,233 |
|
|
45,681 |
|
|
40,836 |
|
|
38,899 |
|
|
36,750 |
|
Loans, net |
$ |
3,551,686 |
|
$ |
3,506,880 |
|
$ |
3,059,099 |
|
$ |
3,043,919 |
|
$ |
3,038,377 |
|
|
|
|
|
|
|
|
Unfunded loan commitments |
$ |
943,508 |
|
$ |
957,278 |
|
$ |
907,757 |
|
$ |
925,657 |
|
$ |
889,854 |
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) |
|
|
|
|
Deposit Composition (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in thousands |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
|
Core deposits |
|
|
|
|
|
|
Non-interest bearing checking |
$ |
630,055 |
|
$ |
679,139 |
|
$ |
552,716 |
|
$ |
553,616 |
|
$ |
619,067 |
|
Interest bearing checking |
|
2,144,737 |
|
|
2,024,341 |
|
|
1,886,011 |
|
|
1,743,299 |
|
|
1,475,643 |
|
Savings |
|
477,348 |
|
|
512,129 |
|
|
462,631 |
|
|
496,751 |
|
|
582,922 |
|
Time deposits |
|
469,530 |
|
|
465,026 |
|
|
327,037 |
|
|
343,423 |
|
|
397,662 |
|
Total core deposits |
|
3,721,670 |
|
|
3,680,635 |
|
|
3,228,395 |
|
|
3,137,089 |
|
|
3,075,294 |
|
|
|
|
|
|
|
|
Brokered time deposits |
|
32,825 |
|
|
54,399 |
|
|
71,451 |
|
|
32,790 |
|
|
32,778 |
|
Total deposits |
$ |
3,754,495 |
|
$ |
3,735,034 |
|
$ |
3,299,846 |
|
$ |
3,169,879 |
|
$ |
3,108,072 |
|
|
|
|
|
|
|
|
Estimated uninsured deposits (A) |
$ |
1,283,610 |
|
$ |
1,189,908 |
|
$ |
933,703 |
|
$ |
946,188 |
|
$ |
757,038 |
|
|
|
|
|
|
|
|
(A) - Excludes uninsured public funds otherwise secured or
collateralized as required by law
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) |
|
|
|
Regulatory Capital Ratios (unaudited) |
|
|
|
|
|
|
|
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
Summit Financial Group, Inc. |
|
|
|
|
|
|
CET1 Risk-based Capital |
8.9 |
% |
8.7 |
% |
8.9 |
% |
8.6 |
% |
8.2 |
% |
|
Tier 1
Risk-based Capital |
9.7 |
% |
9.5 |
% |
9.8 |
% |
9.5 |
% |
9.2 |
% |
|
Total
Risk-based Capital |
13.5 |
% |
13.3 |
% |
14.0 |
% |
13.5 |
% |
13.1 |
% |
|
Tier 1
Leverage |
8.5 |
% |
8.4 |
% |
8.7 |
% |
8.5 |
% |
8.4 |
% |
|
|
|
|
|
|
|
Summit Community Bank, Inc. |
|
|
|
|
|
|
CET1
Risk-based Capital |
11.6 |
% |
11.3 |
% |
11.9 |
% |
11.6 |
% |
11.3 |
% |
|
Tier 1
Risk-based Capital |
11.6 |
% |
11.3 |
% |
11.9 |
% |
11.6 |
% |
11.3 |
% |
|
Total
Risk-based Capital |
12.7 |
% |
12.5 |
% |
13.1 |
% |
12.6 |
% |
12.2 |
% |
|
Tier 1
Leverage |
10.1 |
% |
9.9 |
% |
10.6 |
% |
10.4 |
% |
10.3 |
% |
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
Asset Quality Information (unaudited) |
|
|
|
|
|
|
|
For the Quarter Ended |
Dollars in thousands |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
|
Gross loan charge-offs |
$ |
226 |
|
$ |
4,009 |
|
$ |
164 |
|
$ |
250 |
|
$ |
265 |
|
|
Gross loan recoveries |
|
(108 |
) |
|
(118 |
) |
|
(227 |
) |
|
(249 |
) |
|
(257 |
) |
|
Net loan charge-offs |
$ |
118 |
|
$ |
3,891 |
|
$ |
(63 |
) |
$ |
1 |
|
$ |
8 |
|
|
|
|
|
|
|
|
|
Net loan charge-offs to average loans (annualized) |
|
0.01 |
% |
|
0.44 |
% |
|
-0.01 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
|
|
|
|
|
|
|
Allowance for loan credit losses |
$ |
47,233 |
|
$ |
45,681 |
|
$ |
40,836 |
|
$ |
38,899 |
|
$ |
36,750 |
|
|
Allowance for loan credit losses as a percentage |
|
|
|
|
|
|
of period end loans |
|
1.31 |
% |
|
1.29 |
% |
|
1.32 |
% |
|
1.26 |
% |
|
1.19 |
% |
|
|
|
|
|
|
|
|
Allowance for credit losses on |
|
|
|
|
|
|
unfunded loan commitments ("ULC") |
$ |
6,912 |
|
$ |
7,332 |
|
$ |
6,572 |
|
$ |
6,947 |
|
$ |
7,597 |
|
|
Allowance for credit losses on ULC |
|
|
|
|
|
|
as a percentage of period end ULC |
|
0.73 |
% |
|
0.81 |
% |
|
0.72 |
% |
|
0.75 |
% |
|
0.85 |
% |
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
Nonperforming loans |
|
|
|
|
|
|
Commercial |
$ |
783 |
|
$ |
254 |
|
$ |
402 |
|
$ |
93 |
|
$ |
347 |
|
|
Commercial real estate |
|
6,402 |
|
|
5,970 |
|
|
1,700 |
|
|
1,750 |
|
|
1,860 |
|
|
Residential construction and development |
|
750 |
|
|
772 |
|
|
813 |
|
|
851 |
|
|
902 |
|
|
Residential real estate |
|
4,787 |
|
|
4,298 |
|
|
4,322 |
|
|
5,117 |
|
|
6,083 |
|
|
Consumer |
|
124 |
|
|
46 |
|
|
65 |
|
|
12 |
|
|
8 |
|
|
Total nonperforming loans |
|
12,846 |
|
|
11,340 |
|
|
7,302 |
|
|
7,823 |
|
|
9,200 |
|
|
Foreclosed properties |
|
|
|
|
|
|
Commercial real estate |
|
297 |
|
|
297 |
|
|
297 |
|
|
297 |
|
|
297 |
|
|
Commercial construction and development |
|
2,187 |
|
|
2,187 |
|
|
2,187 |
|
|
2,187 |
|
|
2,332 |
|
|
Residential construction and development |
|
1,924 |
|
|
2,161 |
|
|
2,293 |
|
|
2,293 |
|
|
2,293 |
|
|
Residential real estate |
|
97 |
|
|
97 |
|
|
351 |
|
|
290 |
|
|
271 |
|
|
Total foreclosed properties |
|
4,505 |
|
|
4,742 |
|
|
5,128 |
|
|
5,067 |
|
|
5,193 |
|
|
Total nonperforming assets |
$ |
17,351 |
|
$ |
16,082 |
|
$ |
12,430 |
|
$ |
12,890 |
|
$ |
14,393 |
|
|
|
|
|
|
|
|
|
Nonperforming loans to period end loans |
|
0.36 |
% |
|
0.32 |
% |
|
0.24 |
% |
|
0.25 |
% |
|
0.30 |
% |
|
Nonperforming assets to period end assets |
|
0.38 |
% |
|
0.35 |
% |
|
0.31 |
% |
|
0.33 |
% |
|
0.37 |
% |
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
|
|
Loans Past Due 30-89 Days (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in thousands |
9/30/2023 |
6/30/2023 |
3/31/2023 |
12/31/2022 |
9/30/2022 |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
$ |
3,300 |
|
$ |
1,006 |
|
$ |
463 |
|
$ |
3,168 |
|
$ |
1,329 |
|
|
Commercial real estate |
|
781 |
|
|
513 |
|
|
1,000 |
|
|
641 |
|
|
1,550 |
|
|
Construction and development |
|
793 |
|
|
161 |
|
|
3,459 |
|
|
317 |
|
|
236 |
|
|
Residential real estate |
|
4,620 |
|
|
4,933 |
|
|
2,311 |
|
|
6,231 |
|
|
2,824 |
|
|
Consumer |
|
440 |
|
|
389 |
|
|
252 |
|
|
253 |
|
|
216 |
|
|
Other |
|
37 |
|
|
17 |
|
|
13 |
|
|
22 |
|
|
4 |
|
|
Total |
$ |
9,971 |
|
$ |
7,019 |
|
$ |
7,498 |
|
$ |
10,632 |
|
$ |
6,159 |
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
|
|
|
|
Average Balance Sheet, Interest Earnings & Expenses and
Average Rates |
|
|
|
|
|
|
Q3 2023 vs Q2 2023 vs Q3 2022 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2023 |
|
Q2 2023 |
|
Q3 2022 |
|
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 |
$ |
3,591,583 |
|
$ |
58,040 |
|
6.41 |
% |
|
$ |
3,516,306 |
|
$ |
54,374 |
|
6.20 |
% |
|
$ |
3,018,219 |
|
$ |
38,741 |
|
5.09 |
% |
Tax-exempt (2) |
|
3,911 |
|
|
78 |
|
7.91 |
% |
|
|
4,144 |
|
|
49 |
|
4.74 |
% |
|
|
4,834 |
|
|
54 |
|
4.43 |
% |
Securities |
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
417,299 |
|
|
4,972 |
|
4.73 |
% |
|
|
428,039 |
|
|
4,900 |
|
4.59 |
% |
|
|
283,645 |
|
|
2,273 |
|
3.18 |
% |
Tax-exempt (2) |
|
211,150 |
|
|
1,754 |
|
3.30 |
% |
|
|
209,931 |
|
|
1,705 |
|
3.26 |
% |
|
|
203,951 |
|
|
1,549 |
|
3.01 |
% |
Interest bearing deposits other banks |
|
|
|
|
|
|
|
|
|
|
and Federal funds sold |
|
39,200 |
|
|
235 |
|
2.38 |
% |
|
|
35,218 |
|
|
203 |
|
2.31 |
% |
|
|
49,048 |
|
|
170 |
|
1.38 |
% |
Total interest earning assets |
|
4,263,143 |
|
|
65,079 |
|
6.06 |
% |
|
|
4,193,638 |
|
|
61,231 |
|
5.86 |
% |
|
|
3,559,697 |
|
|
42,787 |
|
4.77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest earning assets |
|
|
|
|
|
|
|
|
|
|
|
Cash & due from banks |
|
24,229 |
|
|
|
|
|
23,588 |
|
|
|
|
|
17,455 |
|
|
|
Premises & equipment |
|
62,085 |
|
|
|
|
|
60,872 |
|
|
|
|
|
54,976 |
|
|
|
Intangible assets |
|
76,037 |
|
|
|
|
|
80,445 |
|
|
|
|
|
62,705 |
|
|
|
Other assets |
|
219,150 |
|
|
|
|
|
212,104 |
|
|
|
|
|
171,409 |
|
|
|
Allowance for loan credit losses |
|
(46,498 |
) |
|
|
|
|
(44,312 |
) |
|
|
|
|
(35,381 |
) |
|
|
Total assets |
$ |
4,598,146 |
|
|
|
|
$ |
4,526,335 |
|
|
|
|
$ |
3,830,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
Interest bearing |
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
|
2,057,035 |
|
|
15,053 |
|
2.90 |
% |
|
|
1,985,134 |
|
|
13,423 |
|
2.71 |
% |
|
$ |
1,454,815 |
|
$ |
4,276 |
|
1.17 |
% |
Savings deposits |
|
493,565 |
|
|
2,035 |
|
1.64 |
% |
|
|
528,694 |
|
|
2,000 |
|
1.52 |
% |
|
|
611,075 |
|
|
1,243 |
|
0.81 |
% |
Time deposits |
|
505,824 |
|
|
2,836 |
|
2.22 |
% |
|
|
513,236 |
|
|
2,428 |
|
1.90 |
% |
|
|
461,134 |
|
|
621 |
|
0.53 |
% |
Short-term borrowings |
|
267,935 |
|
|
1,988 |
|
2.94 |
% |
|
|
207,418 |
|
|
1,212 |
|
2.34 |
% |
|
|
191,421 |
|
|
850 |
|
1.76 |
% |
Long-term borrowings and |
|
|
|
|
|
|
|
|
|
|
|
subordinated debentures |
|
123,839 |
|
|
1,509 |
|
4.83 |
% |
|
|
123,843 |
|
|
1,487 |
|
4.82 |
% |
|
|
123,368 |
|
|
1,348 |
|
4.34 |
% |
Total interest bearing liabilities |
|
3,448,198 |
|
|
23,421 |
|
2.69 |
% |
|
|
3,358,325 |
|
|
20,550 |
|
2.45 |
% |
|
|
2,841,813 |
|
|
8,338 |
|
1.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing liabilities |
|
|
|
|
|
|
|
|
|
|
. |
Demand deposits |
|
681,035 |
|
|
|
|
|
706,391 |
|
|
|
|
|
609,424 |
|
|
|
Other liabilities |
|
51,669 |
|
|
|
|
|
50,863 |
|
|
|
|
|
41,339 |
|
|
|
Total liabilities |
|
4,180,902 |
|
|
|
|
|
4,115,579 |
|
|
|
|
|
3,492,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity - preferred |
|
14,920 |
|
|
|
|
|
14,920 |
|
|
|
|
|
14,920 |
|
|
|
Shareholders' equity - common |
|
402,324 |
|
|
|
|
|
395,836 |
|
|
|
|
|
323,365 |
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
|
|
|
shareholders' equity |
$ |
4,598,146 |
|
|
|
|
$ |
4,526,335 |
|
|
|
|
$ |
3,830,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST EARNINGS |
|
$ |
41,658 |
|
|
|
$ |
40,681 |
|
|
|
$ |
34,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST MARGIN |
|
|
|
3.88 |
% |
|
|
|
|
3.89 |
% |
|
|
|
|
3.84 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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 $385,000, $368,000, and $336,000 for Q3 2023, |
Q2 2023 and Q3 2022, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
|
Average Balance Sheet, Interest Earnings & Expenses and
Average Rates |
|
|
|
|
|
YTD 2023 vs YTD 2022 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2023 |
|
YTD 2022 |
|
|
Average |
Earnings / |
Yield / |
|
Average |
Earnings / |
Yield / |
|
Dollars in thousands |
Balances |
Expense |
Rate |
|
Balances |
Expense |
Rate |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Interest earning assets |
|
|
|
|
|
|
|
|
Loans, net of unearned interest (1) |
|
|
|
|
|
|
|
|
Taxable |
$ |
3,400,167 |
|
$ |
157,813 |
|
6.21 |
% |
|
$ |
2,898,380 |
|
$ |
101,640 |
|
4.69 |
% |
|
Tax-exempt (2) |
|
4,706 |
|
|
235 |
|
6.68 |
% |
|
|
5,108 |
|
|
170 |
|
4.45 |
% |
|
Securities |
|
|
|
|
|
|
|
|
Taxable |
|
386,825 |
|
|
13,283 |
|
4.59 |
% |
|
|
300,371 |
|
|
5,695 |
|
2.53 |
% |
|
Tax-exempt (2) |
|
212,484 |
|
|
5,241 |
|
3.30 |
% |
|
|
187,575 |
|
|
4,021 |
|
2.87 |
% |
|
Interest bearing deposits other banks |
|
|
|
|
|
|
|
and Federal funds sold |
|
36,261 |
|
|
610 |
|
2.25 |
% |
|
|
53,142 |
|
|
262 |
|
0.66 |
% |
|
Total interest earning assets |
|
4,040,443 |
|
|
177,182 |
|
5.86 |
% |
|
|
3,444,576 |
|
|
111,788 |
|
4.34 |
% |
|
|
|
|
|
|
|
|
|
|
Noninterest earning assets |
|
|
|
|
|
|
|
|
Cash & due from banks |
|
21,766 |
|
|
|
|
|
17,671 |
|
|
|
|
Premises & equipment |
|
59,053 |
|
|
|
|
|
55,486 |
|
|
|
|
Intangible assets |
|
72,887 |
|
|
|
|
|
63,061 |
|
|
|
|
Other assets |
|
207,111 |
|
|
|
|
|
159,912 |
|
|
|
|
Allowance for loan credit losses |
|
(43,466 |
) |
|
|
|
|
(33,705 |
) |
|
|
|
Total assets |
$ |
4,357,794 |
|
|
|
|
$ |
3,707,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Interest bearing liabilities |
|
|
|
|
|
|
|
|
Interest bearing |
|
|
|
|
|
|
|
|
demand deposits |
$ |
1,954,761 |
|
$ |
39,276 |
|
2.69 |
% |
|
$ |
1,260,907 |
|
$ |
6,015 |
|
0.64 |
% |
|
Savings deposits |
|
500,647 |
|
|
5,949 |
|
1.59 |
% |
|
|
660,855 |
|
|
2,505 |
|
0.51 |
% |
|
Time deposits |
|
469,864 |
|
|
6,550 |
|
1.86 |
% |
|
|
506,654 |
|
|
1,969 |
|
0.52 |
% |
|
Short-term borrowings |
|
214,322 |
|
|
4,024 |
|
2.51 |
% |
|
|
179,813 |
|
|
1,918 |
|
1.43 |
% |
|
Long-term borrowings and |
|
|
|
|
|
|
|
|
subordinated debentures |
|
123,717 |
|
|
4,457 |
|
4.82 |
% |
|
|
123,279 |
|
|
3,867 |
|
4.19 |
% |
|
|
|
3,263,311 |
|
|
60,256 |
|
2.47 |
% |
|
|
2,731,508 |
|
|
16,274 |
|
0.80 |
% |
|
Noninterest bearing liabilities |
|
|
|
|
|
|
|
|
Demand deposits |
|
648,789 |
|
|
|
|
|
600,766 |
|
|
|
|
Other liabilities |
|
48,554 |
|
|
|
|
|
41,541 |
|
|
|
|
Total liabilities |
|
3,960,654 |
|
|
|
|
|
3,373,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity - preferred |
|
14,920 |
|
|
|
|
|
14,920 |
|
|
|
|
Shareholders' equity - common |
|
382,220 |
|
|
|
|
|
318,266 |
|
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
shareholders' equity |
$ |
4,357,794 |
|
|
|
|
$ |
3,707,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST EARNINGS |
|
$ |
116,926 |
|
|
|
$ |
95,514 |
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST MARGIN |
|
|
|
3.87 |
% |
|
|
|
|
3.71 |
% |
|
|
|
|
|
|
|
|
|
|
(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 $1,150,000 and $881,000 for the |
|
|
|
YTD 2023 and YTD 2022 periods, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
Robert S.
Tissue, Executive Vice President & CFO |
Telephone: |
(304) 530-0552 |
Email: |
rtissue@summitfgi.com |
Grafico Azioni Summit Financial (NASDAQ:SMMF)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Summit Financial (NASDAQ:SMMF)
Storico
Da Feb 2024 a Feb 2025