Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF)
today reported financial results for the third quarter of 2022,
including continued strong earnings on growth in loans and total
revenue.
The Company, which serves commercial and individual clients
across West Virginia, the Washington D.C. metropolitan area,
Virginia and Kentucky through Summit Community Bank, Inc., reported
net income applicable to common shares of $14.2 million, or $1.11
per diluted share, for the third quarter of 2022, as compared to
$11.8 million, or $0.92 per diluted share, for the second quarter
of 2022 and $12.0 million, or $0.92 per diluted share, for the
third quarter of 2021.
“Third quarter results included annualized double-digit loan
growth and our fourth consecutive quarter of record net interest
income growth and margin expansion,” said H. Charles Maddy, III,
President and Chief Executive Officer. “Our asset quality metrics
remain very solid and continue to demonstrate the quality of the
underwriting practices of our bankers while we cultivate the
relationships from our robust commercial lending pipelines. I am
particularly gratified by the continued increases in our tangible
book value per common share, despite a challenging interest rate
environment. The strength of our balance sheet, operating results
and profitability positions us to continue our growth trajectory
through fourth quarter 2022 and into 2023.”
Highlights for Q3 2022
- Total loans of $2.9
billion, excluding mortgage warehouse lines of credit and Paycheck
Protection Program (“PPP”) lending, increased 2.7 percent, or 10.9
percent annualized, during the quarter and 21.5 percent since
September 30, 2021.
- Net interest income
increased 10.2 percent compared to the linked quarter principally
due to higher market rates, and increased 21.7 percent from the
year-ago period, primarily due to loan growth.
- Net interest margin
(“NIM”) increased 18 basis points to 3.84 percent from the linked
quarter and 37 basis points from the year-ago quarter, as increased
yields on interest earning assets were partially offset by
increased cost of deposits and other funding.
- Total noninterest
expense increased to $19.2 million in the quarter, up 9.2 percent
from the linked quarter primarily due to deferred director
compensation expense of $830,000 in Q3 compared to $726,000
deferred director compensation income in the linked quarter and up
10.8 percent from the year-ago quarter, as salary and benefits
increases and deferred director compensation increases were largely
offset by disciplined management of other operating costs.
- Annualized
non-interest expense increased to 2.01 percent of average assets
compared to 1.91 percent of average assets for the linked quarter,
and remained unchanged from the year-ago period.
- Achieved an
efficiency ratio of 47.95 percent compared to 47.45 percent in Q2
2022 and 49.52 percent in the year-ago quarter.
- Incurred $1.50
million provision for credit losses in the quarter increasing
period-end allowance for loan credit losses to $36.8 million, or
1.19 percent of total loans and 399.5 percent of nonperforming
loans.
- Foreclosed property
held for sale declined by 2.4 percent during the quarter and 58.3
percent from the year-ago quarter to $5.19 million or 0.13 percent
of assets at period end.
- Nonperforming assets
(“NPAs”) improved to 0.37 percent of total assets at period end,
excluding restructured assets, down 6 basis points during the
quarter and 30 basis points from September 30, 2021.
- Tangible book value
per common share (“TBVPCS”) increased $0.62 to $20.69 during the
quarter, despite unrealized net losses on debt securities available
for sale (“AFS”) of $0.95 per common share (net of deferred income
taxes) recorded in Other Comprehensive Income (“OCI”), partially
offset by increases in the fair values of derivative financial
instruments hedging against higher interest rates totaling $0.62
per common share (net of deferred income taxes) also recorded in
OCI. Year-to-date for 2022, Summit’s TBVPCS has increased 5.89
percent, while for the vast majority of our peers TBVPCS has
declined, and in some cases significantly so, during the same
period.
Results from Operations
Net interest income grew to $34.1 million in the third quarter
of 2022, an increase of 10.2 percent from the linked quarter and
21.7 percent from the prior-year third quarter. NIM for third
quarter 2022 was 3.84 percent compared to 3.66 percent for the
linked quarter and 3.47 percent for the year-ago quarter. Excluding
the impact of accretion and amortization of fair value acquisition
accounting adjustments, Summit’s net interest margin would have
been 3.81 percent for the third quarter of 2022, 3.62 percent for
the linked quarter and 3.41 percent for the year-ago period.
Noninterest income, consisting primarily of service fee income
from community banking activities and trust and wealth management
fees, for third quarter 2022 was $4.89 million compared to $3.86
million for the linked quarter and $4.57 million for the comparable
period of 2021. The Company recorded realized securities losses on
debt securities of $242,000 in the third quarter of 2022 and
$289,000 in the linked quarter. In addition, the Company recognized
a gain on equity investments of $283,000 in third quarter 2022
compared to a loss of $669,000 in the linked quarter.
Mortgage origination revenue increased to $538,000 in the third
quarter of 2022 compared to $317,000 in the linked quarter and
$742,000 for the year-ago period. Mortgage origination revenue for
third quarter 2022 includes an increase in the fair value of
mortgage servicing rights of $318,000.
Excluding gains and losses on debt securities and equity
investments, noninterest income was $4.85 million for third quarter
2022 compared to $4.81 million for Q2 2022 and $4.64 million in the
year-ago quarter primarily as result of higher deposit service
charges and bank card fees.
Revenue from net interest income and noninterest income,
excluding gains and losses on debt securities and equity
investments, grew to $39.0 million, up 8.9 percent from $35.8
million in the linked quarter and 19.2 percent from $32.7 million
in the year-ago quarter. Revenue, excluding gains and losses on
debt securities and equity investments, for the first nine months
of 2022, grew to $108.6 million, up 14.6 percent from the first
nine months of 2021, outpacing the 6.3 percent noninterest expense
increase recorded for the comparable nine-month period.
Total noninterest expense increased to $19.2 million in the
third quarter of 2022, up 9.2 percent from $17.6 million in the
linked quarter and 10.8 percent from $17.3 million for the
prior-year third quarter. The sequential-quarter increase in total
noninterest expense, primarily on higher salary and benefits
expenses and deferred director compensation expense, reflected
modest fluctuations in most other categories of operating
costs.
Salary and benefit expenses of $10.2 million in the third
quarter of 2022 increased from $10.0 million for the linked quarter
and $8.75 million during the year-ago period. Higher group health
insurance premiums and increased accruals for anticipated 2022
performance bonuses account for the primary reasons for the
increases.
Net losses and expenses on foreclosed properties declined to
$26,000 during third quarter 2022 compared to $141,000 in the
linked quarter and $370,000 in the year-ago period.
Other expenses were $3.83 million for Q3 2022 compared to $2.36
million for the linked quarter and $2.72 million in the year-ago
period. The increase in other expenses was primarily from an
increase in deferred director compensation plan-related expense to
$830,000 during the third quarter of 2022 compared to $726,000
plan-related income during the second quarter of 2022 and
plan-related expense of $72,000 in the year-ago quarter. For the
first nine month period of 2022, deferred director compensation
plan-related income totaled $296,000 compared to plan related
expense of $498,000 for the same period of 2021. During Q3 2022, we
purchased investments to hedge the changes in the Plan
participants’ phantom investments which should serve to
significantly reduce the period-to-period volatility of the Plan’s
impact on the Company’s statements of income.
Summit’s efficiency ratio was to 47.95 percent in the third
quarter of 2022 compared to 47.45 percent in the linked quarter and
49.52 percent for the year-ago period. Non-interest expense to
average assets was 2.01 percent in both the third quarter of 2022
and 2021 and was 1.91 percent in the linked quarter.
Balance Sheet
As of September 30, 2022, total assets were $3.9 billion, an
increase of $310.6 million, or 8.7 percent, since December 31, 2021
and an increase of $378.3 million, or 10.8 percent, since September
30, 2021.
Total loans net of unearned fees grew to $3.1 billion on
September 30, 2022, up 3.3 percent (or 13.2 percent annualized)
during the quarter, and up 20.4 percent from September 30, 2021.
Excluding PPP and mortgage warehouse lending, total loans grew to
$2.9 billion on September 30, 2022, up 2.73 percent (or 10.9
percent annualized) during the third quarter and up 14.2 percent
year-to-date and 21.5 percent since September 30, 2021.
Total commercial loans, including commercial and industrial
(C&I) and commercial real estate (CRE) but excluding PPP
lending, grew to $1.9 billion on September 30, 2022, up 1.4 percent
during the third quarter, 14.2 percent year-to-date and 24.0
percent since September 30, 2021.
Residential real estate and consumer lending totaled $577.5
million on September 30, 2022, up 2.6 percent during the third
quarter, 1.7 percent year-to-date and 1.2 percent from September
30, 2021.
As of September 30, 2022, PPP balances were paid down to $1.99
million and mortgage warehouse lines of credit, sourced solely from
a participation arrangement with a large regional bank, totaled
$194.7 million compared to $171.4 million at June 30, 2022 and
$161.6 million at the year-ago period end.
Deposits totaled $3.1 billion on September 30, 2022, a 4.5
percent (or 17.9 percent annualized) increase during the third
quarter, a 5.6 percent increase year-to-date and a 5.1 percent
increase since September 30, 2021. Core deposits increased 5.1
percent during third quarter 2022 to $3.0 billion, and increased
6.0 percent year-to-date and 5.6 percent since September 30, 2021.
Changes in core deposits by category are as follows:
- Non-interest bearing
deposit accounts increased $18.3 million or 3.0 percent in the
third quarter of 2022 and increased $43.5 million or 7.6 percent
since September 30, 2021.
- Interest bearing
checking accounts grew $237.3 million or 19.2 percent in the third
quarter of 2022 and $354.6 million or 31.6 percent since September
30, 2021.
- Savings accounts
declined $62.2 million or 9.6 percent in the third quarter of 2022
and $110.8 million or 16.0 percent since September 30, 2021.
- Core time deposits
declined $47.9 million or 12.4 percent in the third quarter of 2022
and $128.4 million or 27.5 percent since September 30, 2021.
Total shareholders’ equity was $341.7 million as of September
30, 2022 compared to $327.5 million at December 31, 2021 and $323.3
million at September 30, 2021. Summit paid a quarterly common
dividend of $0.20 per share in Q3 2022, representing an 11.1
percent increase compared to the $0.18 per share paid in Q2
2022.
Year-to-date 2022, TBVPCS has increased $1.15 to $20.69. TBVPCS
was negatively impacted during the first nine months of 2022 by
unrealized net losses on AFS debt securities of $3.21 per common
share (net of deferred income taxes) recorded in OCI. However,
these losses were partially offset by increased fair values of
interest rate caps and swaps (also recorded in OCI) held as hedges
against higher interest rates totaling $1.86 per common share (net
of deferred income taxes), in the same period.
Summit had 12,774,645 outstanding common shares at the end of
the third quarter of 2022 compared to 12,743,125 at year-end
2021.
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
2022, no shares of Summit’s common stock were repurchased under the
Plan.
Asset Quality
Net loan charge-offs (“NCOs”) declined to $8,000 in the third
quarter of 2022. NCOs of $159,000 represented 0.02 percent of
average loans annualized in the linked quarter and $370,000 or 0.06
percent of average loans annualized in the year-ago period.
Summit recorded a $1.50 million provision for credit losses in
the third quarter of 2022, reflecting reserve build to support the
Company’s significant loan growth and increasing forecasted
economic uncertainty. The provision for credit losses was $2.00
million for the linked quarter and no provision was recorded for
the year-ago quarter.
Summit’s allowance for loan credit losses was $36.8 million on
September 30, 2022, $35.1 million at the end of the linked quarter,
and $32.4 million on September 30, 2021.
The allowance for loan credit losses stood at 1.19 percent of
total loans at September 30, 2022 compared to 1.18 percent at the
end of the linked quarter, and 1.27 percent at September 30, 2021.
The allowance was 399.5 percent of nonperforming loans at September
30, 2022, compared to 254.4 percent at year-end 2021 and 291.6
percent at September 30, 2021.
Summit’s allowance for credit losses on unfunded loan
commitments was $7.60 million on September 30, 2022, $7.79 million
at the end of the linked quarter and $5.86 million on September 30,
2021. The allowance for credit losses on unfunded loan commitments
decreased $195,000 during the most recent quarter primarily due to
a decrease in unfunded commitments for the period.
As of September 30, 2022, nonperforming assets (“NPAs”),
consisting of nonperforming loans, foreclosed properties and
repossessed assets, totaled $14.4 million, or 0.37 percent of
assets, compared to NPAs of $16.3 million, or 0.43 percent of
assets at the linked quarter-end, $22.6 million or 0.63 percent of
assets at year-end 2021 and $23.6 million, or 0.67 percent of
assets at the end of third quarter 2021.
About the Company
Summit Financial Group, Inc. is the $3.9 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, and
Kentucky. 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 44 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.
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) |
|
|
|
Q3 2022 vs Q3 2021 |
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
Percent |
Dollars in thousands |
9/30/2022 |
9/30/2021 |
Change |
Statements of Income |
|
|
|
|
Interest
income |
|
|
|
|
Loans, including fees |
$ |
38,784 |
|
$ |
28,416 |
|
36.5% |
|
|
Securities |
|
3,497 |
|
|
2,348 |
|
48.9% |
|
|
Other |
|
170 |
|
|
118 |
|
44.1% |
|
|
Total
interest income |
|
42,451 |
|
|
30,882 |
|
37.5% |
|
|
Interest
expense |
|
|
|
|
Deposits |
|
6,140 |
|
|
1,832 |
|
235.2% |
|
|
Borrowings |
|
2,198 |
|
|
1,013 |
|
117.0% |
|
|
Total
interest expense |
|
8,338 |
|
|
2,845 |
|
193.1% |
|
|
Net interest
income |
|
34,113 |
|
|
28,037 |
|
21.7% |
|
|
Provision
for credit losses |
|
1,500 |
|
|
- |
|
n/a |
|
|
Net interest
income after provision |
|
|
|
|
for credit losses |
|
32,613 |
|
|
28,037 |
|
16.3% |
|
|
|
|
|
|
|
Noninterest
income |
|
|
|
|
Trust and wealth management fees |
|
725 |
|
|
718 |
|
1.0% |
|
|
Mortgage origination revenue |
|
538 |
|
|
742 |
|
-27.5% |
|
|
Service charges on deposit accounts |
|
1,550 |
|
|
1,338 |
|
15.8% |
|
|
Bank card revenue |
|
1,639 |
|
|
1,509 |
|
8.6% |
|
|
Gains on equity investments |
|
283 |
|
|
- |
|
n/a |
|
|
Realized (losses) on debt securities |
|
(242 |
) |
|
(68 |
) |
255.9% |
|
|
Bank owned life insurance and annuity income |
|
229 |
|
|
160 |
|
43.1% |
|
|
Other income |
|
165 |
|
|
168 |
|
-1.8% |
|
|
Total
noninterest income |
|
4,887 |
|
|
4,567 |
|
7.0% |
|
|
Noninterest
expense |
|
|
|
|
Salaries and employee benefits |
|
10,189 |
|
|
8,745 |
|
16.5% |
|
|
Net occupancy expense |
|
1,301 |
|
|
1,254 |
|
3.7% |
|
|
Equipment expense |
|
1,851 |
|
|
1,908 |
|
-3.0% |
|
|
Professional fees |
|
372 |
|
|
374 |
|
-0.5% |
|
|
Advertising and public relations |
|
276 |
|
|
254 |
|
8.7% |
|
|
Amortization of intangibles |
|
354 |
|
|
390 |
|
-9.2% |
|
|
FDIC premiums |
|
292 |
|
|
354 |
|
-17.5% |
|
|
Bank card expense |
|
726 |
|
|
705 |
|
3.0% |
|
|
Foreclosed properties expense, net of
(gains)/losses |
|
26 |
|
|
370 |
|
-93.0% |
|
|
Acquisition-related expense |
|
- |
|
|
273 |
|
-100.0% |
|
|
Other expenses |
|
3,834 |
|
|
2,716 |
|
41.2% |
|
|
Total
noninterest expense |
|
19,221 |
|
|
17,343 |
|
10.8% |
|
|
Income
before income taxes |
|
18,279 |
|
|
15,261 |
|
19.8% |
|
|
Income
taxes |
|
3,856 |
|
|
3,023 |
|
27.6% |
|
|
Net
income |
|
14,423 |
|
|
12,238 |
|
17.9% |
|
|
Preferred
stock dividends |
|
225 |
|
|
225 |
|
0.0% |
|
|
|
|
|
|
|
Net income
applicable to common shares |
$ |
14,198 |
|
$ |
12,013 |
|
18.2% |
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Quarterly Performance Summary (unaudited) |
|
|
Q3 2022 vs Q3 2021 |
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
Percent |
|
|
9/30/2022 |
9/30/2021 |
Change |
Per Share Data |
|
|
|
|
Earnings per
common share |
|
|
|
|
Basic |
$ |
1.11 |
|
$ |
0.93 |
|
19.4% |
|
|
Diluted |
$ |
1.11 |
|
$ |
0.92 |
|
20.7% |
|
|
|
|
|
|
|
Cash
dividends per common share |
$ |
0.20 |
|
$ |
0.18 |
|
11.1% |
|
|
Common stock
dividend payout ratio |
|
17.7% |
|
|
19.1% |
|
-7.3% |
|
|
|
|
|
|
|
Average
common shares outstanding |
|
|
|
|
Basic |
|
12,766,473 |
|
|
12,964,575 |
|
-1.5% |
|
|
Diluted |
|
12,835,670 |
|
|
13,018,672 |
|
-1.4% |
|
|
|
|
|
|
|
Common
shares outstanding at period end |
|
12,774,645 |
|
|
12,976,693 |
|
-1.6% |
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
Return on
average equity |
|
17.05% |
|
|
15.30% |
|
11.4% |
|
|
Return on
average tangible equity (C) |
|
21.33% |
|
|
19.51% |
|
9.3% |
|
|
Return on
average tangible common equity (D) |
|
22.20% |
|
|
20.34% |
|
9.1% |
|
|
Return on
average assets |
|
1.51% |
|
|
1.42% |
|
6.3% |
|
|
Net interest
margin (A) |
|
3.84% |
|
|
3.47% |
|
10.7% |
|
|
Efficiency
ratio (B) |
|
47.95% |
|
|
49.52% |
|
-3.2% |
|
|
|
|
|
|
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).
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Nine Month Performance Summary (unaudited) |
|
|
|
2022 vs 2021 |
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
Percent |
Dollars in thousands |
9/30/2022 |
9/30/2021 |
Change |
Statements of Income |
|
|
|
|
Interest
income |
|
|
|
|
Loans, including fees |
$ |
101,774 |
|
$ |
83,651 |
21.7% |
|
|
Securities |
|
8,871 |
|
|
6,707 |
32.3% |
|
|
Other |
|
262 |
|
|
240 |
9.2% |
|
|
Total
interest income |
|
110,907 |
|
|
90,598 |
22.4% |
|
|
Interest
expense |
|
|
|
|
Deposits |
|
10,489 |
|
|
6,464 |
62.3% |
|
|
Borrowings |
|
5,785 |
|
|
3,035 |
90.6% |
|
|
Total
interest expense |
|
16,274 |
|
|
9,499 |
71.3% |
|
|
Net interest
income |
|
94,633 |
|
|
81,099 |
16.7% |
|
|
Provision
for credit losses |
|
5,450 |
|
|
2,500 |
118.0% |
|
|
Net interest
income after provision |
|
|
|
|
for credit losses |
|
89,183 |
|
|
78,599 |
13.5% |
|
|
|
|
|
|
|
Noninterest
income |
|
|
|
|
Trust and wealth management fees |
|
2,228 |
|
|
2,039 |
9.3% |
|
|
Mortgage origination revenue |
|
1,194 |
|
|
2,638 |
-54.7% |
|
|
Service charges on deposit accounts |
|
4,625 |
|
|
3,530 |
31.0% |
|
|
Bank card revenue |
|
4,748 |
|
|
4,369 |
8.7% |
|
|
(Losses) on equity investments |
|
(14 |
) |
|
- |
n/a |
|
|
Realized gains/(losses) on debt securities,
net |
|
(684 |
) |
|
534 |
-228.1% |
|
|
Bank owned life insurance and annuity income |
|
843 |
|
|
733 |
15.0% |
|
|
Other income |
|
348 |
|
|
413 |
-15.7% |
|
|
Total
noninterest income |
|
13,288 |
|
|
14,256 |
-6.8% |
|
|
Noninterest
expense |
|
|
|
|
Salaries and employee benefits |
|
29,920 |
|
|
25,410 |
17.7% |
|
|
Net occupancy expense |
|
3,801 |
|
|
3,559 |
6.8% |
|
|
Equipment expense |
|
5,484 |
|
|
5,088 |
7.8% |
|
|
Professional fees |
|
1,242 |
|
|
1,140 |
8.9% |
|
|
Advertising and public relations |
|
613 |
|
|
482 |
27.2% |
|
|
Amortization of intangibles |
|
1,088 |
|
|
1,176 |
-7.5% |
|
|
FDIC premiums |
|
872 |
|
|
1,119 |
-22.1% |
|
|
Bank card expense |
|
2,249 |
|
|
1,964 |
14.5% |
|
|
Foreclosed properties expense, net of
(gains)/losses |
|
77 |
|
|
1,342 |
-94.3% |
|
|
Acquisition-related expense |
|
33 |
|
|
1,167 |
-97.2% |
|
|
Other expenses |
|
8,651 |
|
|
8,365 |
3.4% |
|
|
Total
noninterest expense |
|
54,030 |
|
|
50,812 |
6.3% |
|
|
Income
before income taxes |
|
48,441 |
|
|
42,043 |
15.2% |
|
|
Income
taxes |
|
10,311 |
|
|
8,886 |
16.0% |
|
|
Net
income |
|
38,130 |
|
|
33,157 |
15.0% |
|
|
Preferred
stock dividends |
|
675 |
|
|
364 |
85.4% |
|
|
|
|
|
|
|
Net income
applicable to common shares |
$ |
37,455 |
|
$ |
32,793 |
14.2% |
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
Nine Month Performance Summary (unaudited) |
|
|
|
2022 vs 2021 |
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
Percent |
|
|
9/30/2022 |
9/30/2021 |
Change |
Per Share Data |
|
|
|
|
Earnings per
common share |
|
|
|
|
Basic |
$ |
2.94 |
|
$ |
2.53 |
|
16.2% |
|
|
Diluted |
$ |
2.92 |
|
$ |
2.52 |
|
15.9% |
|
|
|
|
|
|
|
Cash
dividends per common share |
$ |
0.56 |
|
$ |
0.52 |
|
7.7% |
|
|
Common stock
dividend payout ratio |
|
18.7% |
|
|
20.4% |
|
-8.3% |
|
|
|
|
|
|
|
Average
common shares outstanding |
|
|
|
|
Basic |
|
12,755,576 |
|
|
12,953,053 |
|
-1.5% |
|
|
Diluted |
|
12,815,365 |
|
|
13,011,526 |
|
-1.5% |
|
|
|
|
|
|
|
Common
shares outstanding at period end |
|
12,774,645 |
|
|
12,976,693 |
|
-1.6% |
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
Return on
average equity |
|
15.26% |
|
|
14.51% |
|
5.2% |
|
|
Return on
average tangible equity (C) |
|
19.23% |
|
|
18.35% |
|
4.8% |
|
|
Return on
average tangible common equity (D) |
|
20.00% |
|
|
18.83% |
|
6.2% |
|
|
Return on
average assets |
|
1.37% |
|
|
1.34% |
|
2.2% |
|
|
Net interest
margin (A) |
|
3.71% |
|
|
3.56% |
|
4.2% |
|
|
Efficiency
ratio (B) |
|
48.25% |
|
|
49.54% |
|
-2.6% |
|
|
|
|
|
|
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).
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
Five Quarter Performance Summary (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
Dollars in thousands |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
Statements of Income |
|
|
|
|
|
|
Interest
income |
|
|
|
|
|
|
Loans, including fees |
$ |
38,784 |
|
$ |
32,766 |
|
$ |
30,224 |
|
$ |
28,979 |
|
$ |
28,416 |
|
|
Securities |
|
3,497 |
|
|
2,752 |
|
|
2,623 |
|
|
2,763 |
|
|
2,348 |
|
|
Other |
|
170 |
|
|
45 |
|
|
46 |
|
|
75 |
|
|
118 |
|
|
Total
interest income |
|
42,451 |
|
|
35,563 |
|
|
32,893 |
|
|
31,817 |
|
|
30,882 |
|
|
Interest
expense |
|
|
|
|
|
|
Deposits |
|
6,140 |
|
|
2,622 |
|
|
1,727 |
|
|
1,718 |
|
|
1,832 |
|
|
Borrowings |
|
2,198 |
|
|
1,976 |
|
|
1,612 |
|
|
1,267 |
|
|
1,013 |
|
|
Total
interest expense |
|
8,338 |
|
|
4,598 |
|
|
3,339 |
|
|
2,985 |
|
|
2,845 |
|
|
Net
interest income |
|
34,113 |
|
|
30,965 |
|
|
29,554 |
|
|
28,832 |
|
|
28,037 |
|
|
Provision
for credit losses |
|
1,500 |
|
|
2,000 |
|
|
1,950 |
|
|
1,500 |
|
|
- |
|
|
Net interest
income after provision |
|
|
|
|
|
|
for credit losses |
|
32,613 |
|
|
28,965 |
|
|
27,604 |
|
|
27,332 |
|
|
28,037 |
|
|
Noninterest
income |
|
|
|
|
|
|
Trust and wealth management fees |
|
725 |
|
|
745 |
|
|
757 |
|
|
847 |
|
|
718 |
|
|
Mortgage origination revenue |
|
538 |
|
|
317 |
|
|
339 |
|
|
1,361 |
|
|
742 |
|
|
Service charges on deposit accounts |
|
1,550 |
|
|
1,674 |
|
|
1,401 |
|
|
1,501 |
|
|
1,338 |
|
|
Bank card revenue |
|
1,639 |
|
|
1,618 |
|
|
1,491 |
|
|
1,528 |
|
|
1,509 |
|
|
Gains/(losses) on equity investments |
|
283 |
|
|
(669 |
) |
|
372 |
|
|
202 |
|
|
- |
|
|
Realized (losses) on debt securities, net |
|
(242 |
) |
|
(289 |
) |
|
(152 |
) |
|
(109 |
) |
|
(68 |
) |
|
Bank owned life insurance and annuity income |
|
229 |
|
|
331 |
|
|
283 |
|
|
293 |
|
|
160 |
|
|
Other income |
|
165 |
|
|
129 |
|
|
54 |
|
|
330 |
|
|
168 |
|
|
Total
noninterest income |
|
4,887 |
|
|
3,856 |
|
|
4,545 |
|
|
5,953 |
|
|
4,567 |
|
|
Noninterest
expense |
|
|
|
|
|
|
Salaries and employee benefits |
|
10,189 |
|
|
10,030 |
|
|
9,700 |
|
|
8,977 |
|
|
8,745 |
|
|
Net occupancy expense |
|
1,301 |
|
|
1,258 |
|
|
1,242 |
|
|
1,265 |
|
|
1,254 |
|
|
Equipment expense |
|
1,851 |
|
|
1,791 |
|
|
1,843 |
|
|
1,902 |
|
|
1,908 |
|
|
Professional fees |
|
372 |
|
|
507 |
|
|
362 |
|
|
438 |
|
|
374 |
|
|
Advertising and public relations |
|
276 |
|
|
165 |
|
|
172 |
|
|
216 |
|
|
254 |
|
|
Amortization of intangibles |
|
354 |
|
|
355 |
|
|
378 |
|
|
387 |
|
|
390 |
|
|
FDIC premiums |
|
292 |
|
|
190 |
|
|
390 |
|
|
330 |
|
|
354 |
|
|
Bank card expense |
|
726 |
|
|
810 |
|
|
714 |
|
|
703 |
|
|
705 |
|
|
Foreclosed properties expense, net of
(gains)/losses |
|
26 |
|
|
141 |
|
|
(90 |
) |
|
403 |
|
|
370 |
|
|
Acquisition-related expenses |
|
- |
|
|
4 |
|
|
29 |
|
|
57 |
|
|
273 |
|
|
Other expenses |
|
3,834 |
|
|
2,358 |
|
|
2,459 |
|
|
3,250 |
|
|
2,716 |
|
|
Total
noninterest expense |
|
19,221 |
|
|
17,609 |
|
|
17,199 |
|
|
17,928 |
|
|
17,343 |
|
|
Income
before income taxes |
|
18,279 |
|
|
15,212 |
|
|
14,950 |
|
|
15,357 |
|
|
15,261 |
|
|
Income tax
expense |
|
3,856 |
|
|
3,198 |
|
|
3,257 |
|
|
2,777 |
|
|
3,023 |
|
|
Net
income |
|
14,423 |
|
|
12,014 |
|
|
11,693 |
|
|
12,580 |
|
|
12,238 |
|
|
Preferred
stock dividends |
|
225 |
|
|
225 |
|
|
225 |
|
|
225 |
|
|
225 |
|
|
|
|
|
|
|
|
|
Net income
applicable to common shares |
$ |
14,198 |
|
$ |
11,789 |
|
$ |
11,468 |
|
$ |
12,355 |
|
$ |
12,013 |
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
Five Quarter Performance Summary (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
|
|
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|
Per Share Data |
|
|
|
|
|
|
|
Earnings per
common share |
|
|
|
|
|
|
|
Basic |
$ |
1.11 |
|
$ |
0.92 |
|
$ |
0.90 |
|
$ |
0.96 |
|
$ |
0.93 |
|
|
|
Diluted |
$ |
1.11 |
|
$ |
0.92 |
|
$ |
0.90 |
|
$ |
0.95 |
|
$ |
0.92 |
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends per common share |
$ |
0.20 |
|
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.18 |
|
|
|
Common stock
dividend payout ratio |
|
17.7% |
|
|
19.1% |
|
|
19.7% |
|
|
18.5% |
|
|
19.1% |
|
|
|
|
|
|
|
|
|
|
|
Average
common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
12,766,473 |
|
|
12,754,724 |
|
|
12,745,297 |
|
|
12,916,555 |
|
|
12,964,575 |
|
|
|
Diluted |
|
12,835,670 |
|
|
12,810,174 |
|
|
12,801,903 |
|
|
12,976,181 |
|
|
13,018,672 |
|
|
|
|
|
|
|
|
|
|
|
Common
shares outstanding at period end |
|
12,774,645 |
|
|
12,763,422 |
|
|
12,753,094 |
|
|
12,743,125 |
|
|
12,976,693 |
|
|
|
|
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
|
|
|
Return on
average equity |
|
17.05% |
|
|
14.48% |
|
|
14.20% |
|
|
15.48% |
|
|
15.30% |
|
|
|
Return on
average tangible equity (C) |
|
21.33% |
|
|
18.28% |
|
|
18.02% |
|
|
19.72% |
|
|
19.51% |
|
|
|
Return on
average tangible common equity (D) |
|
22.20% |
|
|
19.00% |
|
|
18.74% |
|
|
20.55% |
|
|
20.34% |
|
|
|
Return on
average assets |
|
1.51% |
|
|
1.30% |
|
|
1.30% |
|
|
1.42% |
|
|
1.42% |
|
|
|
Net interest
margin (A) |
|
3.84% |
|
|
3.66% |
|
|
3.61% |
|
|
3.49% |
|
|
3.47% |
|
|
|
Efficiency
ratio (B) |
|
47.95% |
|
|
47.45% |
|
|
49.44% |
|
|
48.85% |
|
|
49.52% |
|
|
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).
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
Selected Balance Sheet Data (unaudited) |
|
|
|
|
|
Dollars in thousands, except per share amounts |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
Assets |
|
|
|
|
|
|
Cash and due
from banks |
$ |
16,141 |
|
$ |
17,921 |
|
$ |
18,404 |
|
$ |
21,006 |
|
$ |
21,247 |
|
|
Interest
bearing deposits other banks |
|
29,510 |
|
|
31,680 |
|
|
42,853 |
|
|
57,452 |
|
|
189,862 |
|
|
Debt
securities, available for sale |
|
383,965 |
|
|
368,049 |
|
|
374,855 |
|
|
401,103 |
|
|
424,741 |
|
|
Debt
securities, held to maturity |
|
96,640 |
|
|
97,116 |
|
|
97,589 |
|
|
98,060 |
|
|
98,528 |
|
|
Equity
investments |
|
20,314 |
|
|
19,905 |
|
|
20,574 |
|
|
20,202 |
|
|
- |
|
|
Other
investments |
|
18,105 |
|
|
18,329 |
|
|
10,974 |
|
|
11,304 |
|
|
10,649 |
|
|
Loans,
net |
|
3,038,377 |
|
|
2,941,813 |
|
|
2,817,998 |
|
|
2,729,093 |
|
|
2,521,704 |
|
|
Property
held for sale |
|
5,193 |
|
|
5,319 |
|
|
6,900 |
|
|
9,858 |
|
|
12,450 |
|
|
Premises and
equipment, net |
|
54,628 |
|
|
55,034 |
|
|
55,713 |
|
|
56,371 |
|
|
56,818 |
|
|
Goodwill and
other intangible assets, net |
|
62,502 |
|
|
62,856 |
|
|
63,212 |
|
|
63,590 |
|
|
63,977 |
|
|
Cash
surrender value of life insurance policies and annuities |
|
71,216 |
|
|
71,073 |
|
|
70,825 |
|
|
60,613 |
|
|
60,241 |
|
|
Derivative
financial instruments |
|
42,179 |
|
|
31,452 |
|
|
24,455 |
|
|
11,187 |
|
|
10,380 |
|
|
Other
assets |
|
48,529 |
|
|
42,252 |
|
|
39,339 |
|
|
36,880 |
|
|
38,354 |
|
|
Total assets |
$ |
3,887,299 |
|
$ |
3,762,799 |
|
$ |
3,643,691 |
|
$ |
3,576,719 |
|
$ |
3,508,951 |
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
Deposits |
$ |
3,108,072 |
|
$ |
2,975,304 |
|
$ |
3,008,063 |
|
$ |
2,943,089 |
|
$ |
2,955,940 |
|
|
Short-term
borrowings |
|
273,148 |
|
|
291,447 |
|
|
140,146 |
|
|
140,146 |
|
|
140,146 |
|
|
Long-term
borrowings and |
|
|
|
|
|
|
subordinated debentures, net |
|
123,427 |
|
|
123,311 |
|
|
123,260 |
|
|
123,159 |
|
|
49,739 |
|
|
Other
liabilities |
|
40,978 |
|
|
38,846 |
|
|
41,756 |
|
|
42,852 |
|
|
39,837 |
|
|
Preferred
stock and related surplus |
|
14,920 |
|
|
14,920 |
|
|
14,920 |
|
|
14,920 |
|
|
14,920 |
|
|
Common stock
and related surplus |
|
90,345 |
|
|
90,008 |
|
|
89,675 |
|
|
89,301 |
|
|
95,577 |
|
|
Retained
earnings |
|
248,084 |
|
|
236,438 |
|
|
226,944 |
|
|
217,770 |
|
|
207,704 |
|
|
Accumulated
other comprehensive income (loss) |
|
(11,675 |
) |
|
(7,475 |
) |
|
(1,073 |
) |
|
5,482 |
|
|
5,088 |
|
|
Total liabilities and shareholders' equity |
$ |
3,887,299 |
|
$ |
3,762,799 |
|
$ |
3,643,691 |
|
$ |
3,576,719 |
|
$ |
3,508,951 |
|
|
|
|
|
|
|
|
|
Book value
per common share |
$ |
25.58 |
|
$ |
24.99 |
|
$ |
24.74 |
|
$ |
24.53 |
|
$ |
23.76 |
|
|
Tangible
book value per common share (A) |
$ |
20.69 |
|
$ |
20.07 |
|
$ |
19.79 |
|
$ |
19.54 |
|
$ |
18.83 |
|
|
Tangible
common equity to tangible assets (B) |
|
6.9% |
|
|
6.9% |
|
|
7.0% |
|
|
7.1% |
|
|
7.1% |
|
|
|
|
|
|
|
|
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) |
|
|
|
|
Regulatory Capital Ratios (unaudited) |
|
|
|
|
|
|
|
|
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|
Summit Financial Group, Inc. |
|
|
|
|
|
|
|
CET1
Risk-based Capital |
8.2 |
% |
8.2 |
% |
8.3 |
% |
8.4 |
% |
9.0 |
% |
|
|
Tier 1
Risk-based Capital |
9.2 |
% |
9.2 |
% |
9.3 |
% |
9.5 |
% |
10.2 |
% |
|
|
Total
Risk-based Capital |
13.1 |
% |
13.3 |
% |
13.5 |
% |
13.8 |
% |
12.1 |
% |
|
|
Tier 1
Leverage |
8.4 |
% |
8.4 |
% |
8.4 |
% |
8.3 |
% |
8.4 |
% |
|
|
|
|
|
|
|
|
|
Summit Community Bank, Inc. |
|
|
|
|
|
|
|
CET1
Risk-based Capital |
11.3 |
% |
11.4 |
% |
11.6 |
% |
11.9 |
% |
11.2 |
% |
|
|
Tier 1
Risk-based Capital |
11.3 |
% |
11.4 |
% |
11.6 |
% |
11.9 |
% |
11.2 |
% |
|
|
Total
Risk-based Capital |
12.2 |
% |
12.4 |
% |
12.5 |
% |
12.8 |
% |
12.1 |
% |
|
|
Tier 1
Leverage |
10.3 |
% |
10.4 |
% |
10.5 |
% |
10.4 |
% |
9.2 |
% |
|
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) |
|
|
|
|
Loan Composition (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in thousands |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
512,771 |
$ |
455,202 |
$ |
447,482 |
$ |
365,301 |
$ |
317,855 |
|
Mortgage warehouse lines |
|
194,740 |
|
171,399 |
|
164,895 |
|
227,869 |
|
161,628 |
|
Commercial real estate |
|
|
|
|
|
|
Owner occupied |
|
473,298 |
|
502,152 |
|
491,059 |
|
484,708 |
|
439,202 |
|
Non-owner occupied |
|
960,627 |
|
963,646 |
|
910,174 |
|
866,031 |
|
835,071 |
|
Construction and development |
|
|
|
|
|
|
Land and development |
|
104,437 |
|
106,840 |
|
103,203 |
|
100,805 |
|
99,718 |
|
Construction |
|
|
248,564 |
|
211,955 |
|
171,383 |
|
146,038 |
|
127,432 |
|
Residential real estate |
|
|
|
|
|
|
Conventional |
|
|
382,203 |
|
377,980 |
|
375,240 |
|
384,794 |
|
394,889 |
|
Jumbo |
|
|
87,449 |
|
79,803 |
|
81,443 |
|
79,108 |
|
71,977 |
|
Home equity |
|
|
72,756 |
|
71,136 |
|
70,770 |
|
72,112 |
|
71,496 |
|
Consumer |
|
|
35,116 |
|
33,816 |
|
32,095 |
|
31,923 |
|
32,284 |
|
Other |
|
|
3,166 |
|
2,947 |
|
2,877 |
|
2,702 |
|
2,558 |
|
Total loans, net of unearned fees |
|
3,075,127 |
|
2,976,876 |
|
2,850,621 |
|
2,761,391 |
|
2,554,110 |
|
Less
allowance for loan credit losses |
|
|
36,750 |
|
35,063 |
|
32,623 |
|
32,298 |
|
32,406 |
|
Loans,
net |
|
$ |
3,038,377 |
$ |
2,941,813 |
$ |
2,817,998 |
$ |
2,729,093 |
$ |
2,521,704 |
|
|
|
|
|
|
|
|
|
Unfunded loan commitments |
$ |
889,854 |
$ |
876,157 |
$ |
840,705 |
$ |
688,493 |
$ |
627,461 |
|
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) |
|
|
|
|
Deposit Composition (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in thousands |
|
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|
Core
deposits |
|
|
|
|
|
|
|
Non-interest bearing checking |
$ |
619,067 |
$ |
600,791 |
$ |
629,002 |
$ |
568,986 |
$ |
575,542 |
|
Interest bearing checking |
|
1,475,643 |
|
1,238,368 |
|
1,134,964 |
|
1,127,298 |
|
1,121,028 |
|
Savings |
|
|
582,922 |
|
645,099 |
|
702,069 |
|
698,156 |
|
693,686 |
|
Time deposits |
|
|
338,668 |
|
386,562 |
|
427,076 |
|
451,713 |
|
467,024 |
|
Total core
deposits |
|
3,016,300 |
|
2,870,820 |
|
2,893,111 |
|
2,846,153 |
|
2,857,280 |
|
|
|
|
|
|
|
|
|
Brokered time deposits |
|
32,778 |
|
32,767 |
|
32,755 |
|
14,677 |
|
14,671 |
|
Other non-core time deposits |
|
58,994 |
|
71,717 |
|
82,197 |
|
82,259 |
|
83,989 |
|
Total deposits |
$ |
3,108,072 |
$ |
2,975,304 |
$ |
3,008,063 |
$ |
2,943,089 |
$ |
2,955,940 |
|
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
Asset Quality Information (unaudited) |
|
|
|
|
|
|
|
For the Quarter Ended |
Dollars in thousands |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|
Gross loan
charge-offs |
$ |
265 |
|
$ |
306 |
|
$ |
618 |
|
$ |
282 |
|
$ |
528 |
|
|
Gross loan
recoveries |
|
(257 |
) |
|
(147 |
) |
|
(109 |
) |
|
(89 |
) |
|
(158 |
) |
|
Net loan charge-offs |
$ |
8 |
|
$ |
159 |
|
$ |
509 |
|
$ |
193 |
|
$ |
370 |
|
|
|
|
|
|
|
|
|
Net loan
charge-offs to average loans (annualized) |
|
0.00% |
|
|
0.02% |
|
|
0.07% |
|
|
0.03% |
|
|
0.06% |
|
|
|
|
|
|
|
|
|
Allowance
for loan credit losses |
$ |
36,750 |
|
$ |
35,063 |
|
$ |
32,623 |
|
$ |
32,298 |
|
$ |
32,406 |
|
|
Allowance
for loan credit losses as a percentage |
|
|
|
|
|
|
of period end loans |
|
1.19% |
|
|
1.18% |
|
|
1.14% |
|
|
1.17% |
|
|
1.27% |
|
|
|
|
|
|
|
|
|
Allowance
for credit losses on |
|
|
|
|
|
|
unfunded loan commitments ("ULC") |
$ |
7,597 |
|
$ |
7,792 |
|
$ |
8,392 |
|
$ |
7,275 |
|
$ |
5,860 |
|
|
Allowance
for credit losses on ULC |
|
|
|
|
|
|
as a percentage of period end ULC |
|
0.85% |
|
|
0.89% |
|
|
1.00% |
|
|
1.06% |
|
|
0.93% |
|
|
|
|
|
|
|
|
|
Nonperforming assets: |
|
|
|
|
|
|
Nonperforming loans |
|
|
|
|
|
|
Commercial |
$ |
347 |
|
$ |
345 |
|
$ |
433 |
|
$ |
740 |
|
$ |
459 |
|
|
Commercial real
estate |
|
1,860 |
|
|
2,703 |
|
|
4,765 |
|
|
4,603 |
|
|
4,643 |
|
|
Residential construction
and development |
|
902 |
|
|
1,053 |
|
|
968 |
|
|
1,560 |
|
|
448 |
|
|
Residential real
estate |
|
6,083 |
|
|
6,799 |
|
|
5,549 |
|
|
5,772 |
|
|
5,514 |
|
|
Consumer |
|
8 |
|
|
37 |
|
|
20 |
|
|
21 |
|
|
48 |
|
|
Total nonperforming loans |
|
9,200 |
|
|
10,937 |
|
|
11,735 |
|
|
12,696 |
|
|
11,112 |
|
|
Foreclosed properties |
|
|
|
|
|
|
Commercial real
estate |
|
297 |
|
|
440 |
|
|
1,251 |
|
|
1,389 |
|
|
2,192 |
|
|
Commercial construction
and development |
|
2,332 |
|
|
2,332 |
|
|
2,332 |
|
|
2,332 |
|
|
2,925 |
|
|
Residential construction
and development |
|
2,293 |
|
|
2,293 |
|
|
3,018 |
|
|
5,561 |
|
|
6,712 |
|
|
Residential real
estate |
|
271 |
|
|
254 |
|
|
299 |
|
|
576 |
|
|
621 |
|
|
Total
foreclosed properties |
|
5,193 |
|
|
5,319 |
|
|
6,900 |
|
|
9,858 |
|
|
12,450 |
|
|
Other repossessed assets |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Total
nonperforming assets |
$ |
14,393 |
|
$ |
16,256 |
|
$ |
18,635 |
|
$ |
22,554 |
|
$ |
23,562 |
|
|
|
|
|
|
|
|
|
Nonperforming loans to period end loans |
|
0.30% |
|
|
0.37% |
|
|
0.41% |
|
|
0.46% |
|
|
0.44% |
|
|
Nonperforming assets to period end assets |
|
0.37% |
|
|
0.43% |
|
|
0.51% |
|
|
0.63% |
|
|
0.67% |
|
|
|
|
|
|
|
|
|
Troubled
debt restructurings |
|
|
|
|
|
|
Performing |
$ |
18,206 |
|
$ |
18,657 |
|
$ |
18,971 |
|
$ |
18,887 |
|
$ |
20,535 |
|
|
Nonperforming |
|
1,920 |
|
|
2,236 |
|
|
1,822 |
|
|
2,039 |
|
|
1,141 |
|
|
Total
troubled debt restructurings |
$ |
20,126 |
|
$ |
20,893 |
|
$ |
20,793 |
|
$ |
20,926 |
|
$ |
21,676 |
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
Loans Past Due 30-89 Days (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in thousands |
9/30/2022 |
6/30/2022 |
3/31/2022 |
12/31/2021 |
9/30/2021 |
|
|
|
|
|
|
|
|
Commercial |
$ |
1,329 |
|
$ |
989 |
|
$ |
388 |
|
$ |
751 |
|
$ |
304 |
|
Commercial
real estate |
|
1,550 |
|
|
4,084 |
|
|
1,446 |
|
|
683 |
|
|
281 |
|
Construction
and development |
|
236 |
|
|
821 |
|
|
645 |
|
|
45 |
|
|
1,215 |
|
Residential
real estate |
|
2,824 |
|
|
3,452 |
|
|
3,407 |
|
|
3,552 |
|
|
2,643 |
|
Consumer |
|
216 |
|
|
196 |
|
|
69 |
|
|
190 |
|
|
193 |
|
Other |
|
4 |
|
|
14 |
|
|
28 |
|
|
22 |
|
|
1 |
|
Total |
$ |
6,159 |
|
$ |
9,556 |
|
$ |
5,983 |
|
$ |
5,243 |
|
$ |
4,637 |
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
|
|
|
|
|
Average
Balance Sheet, Interest Earnings & Expenses and Average
Rates |
|
|
|
|
|
|
|
Q3 2022 vs Q2 2022 vs Q3 2021 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2022 |
|
Q2 2022 |
|
Q3 2021 |
|
|
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 |
$ |
3,018,219 |
|
$ |
38,741 |
5.09 |
% |
|
$ |
2,902,370 |
|
$ |
32,721 |
4.52 |
% |
|
$ |
2,495,880 |
|
$ |
28,340 |
4.50 |
% |
|
Tax-exempt (2) |
|
4,834 |
|
|
54 |
4.43 |
% |
|
|
5,127 |
|
|
57 |
4.46 |
% |
|
|
7,871 |
|
|
96 |
4.84 |
% |
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
283,645 |
|
|
2,273 |
3.18 |
% |
|
|
297,701 |
|
|
1,765 |
2.38 |
% |
|
|
315,082 |
|
|
1,432 |
1.80 |
% |
|
Tax-exempt (2) |
|
203,951 |
|
|
1,549 |
3.01 |
% |
|
|
178,043 |
|
|
1,249 |
2.81 |
% |
|
|
166,285 |
|
|
1,159 |
2.77 |
% |
|
Interest bearing deposits other banks |
|
|
|
|
|
|
|
|
|
|
|
and Federal funds
sold |
|
49,048 |
|
|
170 |
1.38 |
% |
|
|
37,757 |
|
|
45 |
0.48 |
% |
|
|
248,315 |
|
|
118 |
0.19 |
% |
|
Total
interest earning assets |
|
3,559,697 |
|
|
42,787 |
4.77 |
% |
|
|
3,420,998 |
|
|
35,837 |
4.20 |
% |
|
|
3,233,433 |
|
|
31,145 |
3.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash & due from banks |
|
17,455 |
|
|
|
|
|
16,351 |
|
|
|
|
|
20,077 |
|
|
|
|
Premises & equipment |
|
54,976 |
|
|
|
|
|
55,449 |
|
|
|
|
|
55,908 |
|
|
|
|
Intangible assets |
|
62,705 |
|
|
|
|
|
63,058 |
|
|
|
|
|
62,944 |
|
|
|
|
Other assets |
|
171,409 |
|
|
|
|
|
165,788 |
|
|
|
|
|
113,031 |
|
|
|
|
Allowance for credit losses |
|
(35,381 |
) |
|
|
|
|
(33,232 |
) |
|
|
|
|
(33,911 |
) |
|
|
|
Total assets |
$ |
3,830,861 |
|
|
|
|
$ |
3,688,412 |
|
|
|
|
$ |
3,451,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing |
|
|
|
|
|
|
|
|
|
|
|
|
demand deposits |
$ |
1,454,815 |
|
$ |
4,276 |
1.17 |
% |
|
$ |
1,189,324 |
|
$ |
1,274 |
0.43 |
% |
|
$ |
1,092,392 |
|
$ |
325 |
0.12 |
% |
|
Savings deposits |
|
611,075 |
|
|
1,243 |
0.81 |
% |
|
|
672,353 |
|
|
689 |
0.41 |
% |
|
|
691,411 |
|
|
602 |
0.35 |
% |
|
Time deposits |
|
461,134 |
|
|
621 |
0.53 |
% |
|
|
517,360 |
|
|
659 |
0.51 |
% |
|
|
571,445 |
|
|
905 |
0.63 |
% |
|
Short-term borrowings |
|
191,421 |
|
|
850 |
1.76 |
% |
|
|
207,227 |
|
|
696 |
1.35 |
% |
|
|
140,146 |
|
|
470 |
1.33 |
% |
|
Long-term borrowings and |
|
|
|
|
|
|
|
|
|
|
|
|
subordinated debentures |
|
123,368 |
|
|
1,348 |
4.34 |
% |
|
|
123,263 |
|
|
1,280 |
4.17 |
% |
|
|
49,724 |
|
|
543 |
4.33 |
% |
|
Total
interest bearing liabilities |
|
2,841,813 |
|
|
8,338 |
1.16 |
% |
|
|
2,709,527 |
|
|
4,598 |
0.68 |
% |
|
|
2,545,118 |
|
|
2,845 |
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
bearing liabilities |
|
|
. |
|
|
|
|
|
|
|
|
|
Demand deposits |
|
609,424 |
|
|
|
|
|
605,724 |
|
|
|
|
|
547,627 |
|
|
|
|
Other liabilities |
|
41,339 |
|
|
|
|
|
41,307 |
|
|
|
|
|
38,789 |
|
|
|
|
Total liabilities |
|
3,492,576 |
|
|
|
|
|
3,356,558 |
|
|
|
|
|
3,131,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity - preferred |
|
14,920 |
|
|
|
|
|
14,920 |
|
|
|
|
|
14,920 |
|
|
|
|
Shareholders' equity - common |
|
323,365 |
|
|
|
|
|
316,934 |
|
|
|
|
|
305,028 |
|
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
shareholders' equity |
$ |
3,830,861 |
|
|
|
|
$ |
3,688,412 |
|
|
|
|
$ |
3,451,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INTEREST EARNINGS |
|
$ |
34,449 |
|
|
|
$ |
31,239 |
|
|
|
$ |
28,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INTEREST MARGIN |
|
|
3.84 |
% |
|
|
|
3.66 |
% |
|
|
|
3.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $336,000,
$274,000, and $263,000 for Q3 2022, Q2 2022 and |
|
|
Q3 2021,
respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) |
|
|
|
|
|
|
Average Balance Sheet, Interest Earnings & Expenses and
Average Rates |
|
|
|
|
|
YTD
2022 vs YTD 2021 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2022 |
|
YTD 2021 |
|
|
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 |
$ |
2,898,380 |
|
$ |
101,640 |
4.69 |
% |
|
$ |
2,436,295 |
|
$ |
83,352 |
4.57 |
% |
|
Tax-exempt (2) |
|
5,108 |
|
|
170 |
4.45 |
% |
|
|
10,622 |
|
|
377 |
4.75 |
% |
|
Securities |
|
|
|
|
|
|
|
|
Taxable |
|
300,371 |
|
|
5,695 |
2.53 |
% |
|
|
288,999 |
|
|
4,079 |
1.89 |
% |
|
Tax-exempt (2) |
|
187,575 |
|
|
4,021 |
2.87 |
% |
|
|
153,035 |
|
|
3,328 |
2.91 |
% |
|
Interest bearing deposits other banks |
|
|
|
|
|
|
|
and Federal funds
sold |
|
53,142 |
|
|
262 |
0.66 |
% |
|
|
190,154 |
|
|
240 |
0.17 |
% |
|
Total
interest earning assets |
|
3,444,576 |
|
|
111,788 |
4.34 |
% |
|
|
3,079,105 |
|
|
91,376 |
3.97 |
% |
|
|
|
|
|
|
|
|
|
|
Noninterest
earning assets |
|
|
|
|
|
|
|
|
Cash & due from banks |
|
17,671 |
|
|
|
|
|
19,093 |
|
|
|
|
Premises & equipment |
|
55,486 |
|
|
|
|
|
54,154 |
|
|
|
|
Intangible assets |
|
63,061 |
|
|
|
|
|
57,343 |
|
|
|
|
Other assets |
|
159,912 |
|
|
|
|
|
113,525 |
|
|
|
|
Allowance for loan losses |
|
(33,705 |
) |
|
|
|
|
(33,765 |
) |
|
|
|
Total assets |
$ |
3,707,001 |
|
|
|
|
$ |
3,289,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Interest
bearing liabilities |
|
|
|
|
|
|
|
|
Interest bearing |
|
|
|
|
|
|
|
|
demand deposits |
$ |
1,260,907 |
|
$ |
6,015 |
0.64 |
% |
|
$ |
1,016,569 |
|
$ |
1,090 |
0.14 |
% |
|
Savings deposits |
|
660,855 |
|
|
2,505 |
0.51 |
% |
|
|
666,642 |
|
|
1,881 |
0.38 |
% |
|
Time deposits |
|
506,654 |
|
|
1,969 |
0.52 |
% |
|
|
572,547 |
|
|
3,493 |
0.82 |
% |
|
Short-term borrowings |
|
179,813 |
|
|
1,918 |
1.43 |
% |
|
|
140,146 |
|
|
1,403 |
1.34 |
% |
|
Long-term borrowings and |
|
|
|
|
|
|
|
|
subordinated debentures |
|
123,279 |
|
|
3,867 |
4.19 |
% |
|
|
49,694 |
|
|
1,632 |
4.39 |
% |
|
|
|
2,731,508 |
|
|
16,274 |
0.80 |
% |
|
|
2,445,598 |
|
|
9,499 |
0.52 |
% |
|
Noninterest
bearing liabilities |
|
|
|
|
|
|
|
|
Demand deposits |
|
600,766 |
|
|
|
|
|
501,309 |
|
|
|
|
Other liabilities |
|
41,541 |
|
|
|
|
|
37,856 |
|
|
|
|
Total liabilities |
|
3,373,815 |
|
|
|
|
|
2,984,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity - preferred |
|
14,920 |
|
|
|
|
|
8,780 |
|
|
|
|
Shareholders' equity - common |
|
318,266 |
|
|
|
|
|
295,912 |
|
|
|
|
Total liabilities and |
|
|
|
|
|
|
|
|
shareholders' equity |
$ |
3,707,001 |
|
|
|
|
$ |
3,289,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INTEREST EARNINGS |
|
$ |
95,514 |
|
|
|
$ |
81,877 |
|
|
|
|
|
|
|
|
|
|
|
NET
INTEREST MARGIN |
|
|
3.71 |
% |
|
|
|
3.56 |
% |
|
|
|
|
|
|
|
|
|
|
(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 $881,000
and $778,000 for the |
|
|
|
YTD 2022 and YTD 2021
periods, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
|
Robert S.
Tissue, Executive Vice President & CFO |
Telephone: |
|
(304) 530-0552 |
Email: |
|
rtissue@summitfgi.com |
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