Press Release SUMMIT FINANCIAL GROUP, INC. (NASDAQ - SMMF)

Summit Financial Group Reports First Quarter 2019 Results

Q1 2019 Diluted EPS $0.56, compared to $0.60 for Q4 2018 and $0.60 for Q1 2018

Company Release - 4/25/2019 6:00 AM ET

MOOREFIELD, W.Va., April 25, 2019 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported quarterly net income of $7.09 million for first quarter 2019, or $0.56 per diluted share.  In comparison, earnings for fourth quarter 2018 were $7.45 million, or $0.60 per diluted share, and for first quarter 2018, $7.44 million, or $0.60 per diluted share.

Summit completed its acquisition of Peoples Bankshares, Inc. (“PBI”) and its subsidiary, First Peoples Bank, headquartered in Mullens, West Virginia on January 1, 2019 and will convert substantially all of its data processing systems to that of Summit’s effective April 27, 2019; accordingly, PBI’s results of operations are included in Summit’s consolidated results of operations from the date of acquisition, and therefore Summit’s first quarter 2019 results reflect increased levels of average balances, income and expenses compared to its first quarter 2018 and fourth quarter 2018 results.  At consummation, PBI had total assets of $133.1 million, loans of $42.4 million, and deposits of $112.9 million. In addition, our merger-related expenses totaled $63,000 in Q1 2019 versus $59,000 in the prior quarter.

Highlights for Q1 2019

  • Net interest margin for the quarter increased 5 basis points to 3.66 percent compared to Q4 2018 and is 8 basis points higher compared to Q1 2018;  
  • Provision for loan losses totaled $250,000 compared to $500,000 for the prior quarter and for the year-ago quarter;
  • Efficiency ratio was 56.50 percent compared to 51.02 percent for the linked quarter as result of higher noninterest expenses due to the PBI acquisition and outsized deferred director compensation plan expense as result of exceptionally robust stock market performance during Q1 2019;
  • Realized securities losses of $3,000 in Q1 2019 compared to $205,000 in Q4 2018; the Company realized securities gains of $732,000 in Q1 2018;
  • Write-downs of foreclosed properties were $249,000 in Q1 2019 compared to $318,000 in Q4 2018, while the net loss on sales of foreclosed properties decreased to $1,000 in Q1 2019 from $70,000 in Q4 2018; and
  • Nonperforming assets as a percentage of total assets declined to 1.53 percent compared to 1.66 percent for the linked quarter and to 1.73 percent a year-ago.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit achieved another quarter of solid core operating results highlighted by the improvement in our net interest margin. Further, despite the quarter’s challenges of integrating PBI’s banking operations with that of Summit’s, we nonetheless maintained a core efficiency ratio well below that of most of our peers. We have again demonstrated our ability to successfully execute on a disciplined M&A strategy, which we believe will continue to present us with significant opportunities going forward as we seek to be a consistently growing, high-performing community banking institution.”

Results from Operations

Total revenue for first quarter 2019, consisting of net interest income and noninterest income, increased 3.0 percent to $22.8 million compared to $22.1 million for the first quarter 2018.

For the first quarter of 2019, net interest income increased 7.6 percent to $18.6 million compared to $17.3 million for the prior-year first quarter and grew 2.9 percent compared to the linked quarter principally as a result of $51.6 million in growth in average loans and 7 basis point improvement in average loan yields during the quarter. The net interest margin for first quarter 2019 was 3.66 percent compared to 3.58 percent for the same year-ago quarter, and 3.61 percent for the linked quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to acquired interest earning assets and interest bearing liabilities, Summit’s net interest margin was 3.64 percent for Q1 2019. 

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary, trust and wealth management fees and service fee income from community banking activities, for first quarter 2019 was $4.23 million compared to $4.88 million for the comparable period of 2018. Excluding realized securities gains and losses, noninterest income was $4.23 million for first quarter 2019, compared to $4.14 million reported for first quarter 2018 and $4.39 million for the linked quarter.

We recorded a $250,000 provision for loan losses during first quarter 2019 and $500,000 during Q1 2018.  The decreased need for loan loss provisioning in Q1 2019 is directionally consistent with changes in the credit quality in our loan portfolio (fewer charge-offs) and our modest loan growth.

Q1 2019 total noninterest expense increased 12.6 percent to $13.86 million compared to $12.31 million for the prior-year first quarter and increased 11.2 percent compared to $12.47 million for the linked quarter.  Our increased noninterest expense is principally due to expenses associated with the acquired PBI operations and to an outsized deferred director compensation plan expense of $484,000 recognized in Q1 2019 compared to deferred director compensation plan benefits of ($25,000) and ($354,000) recorded in Q1 2018 and Q4 2018, respectively.  Under our director deferred compensation plans, directors optionally elect to defer their director fees into a "phantom" investment plan whereby the Company recognizes expense or benefit relative to the phantom returns or losses of such investments. As result of the stock market’s exceptionally robust performance during Q1 2019, we recognized significantly greater quarterly deferred director compensation expense this quarter than we have ever recognized previously.

Balance Sheet

At March 31, 2019, total assets were $2.25 billion, an increase of $49.1 million, or 8.9 percent (on an annualized basis) since December 31, 2018. Total loans, net of unearned fees and allowance for loan losses, were $1.73 billion at March 31, 2019, up $43.1 million, or 10.2 percent (on an annualized basis), from the $1.68 billion reported at year-end 2018.  Loans, excluding mortgage warehouse lines of credit and acquired PBI loans, decreased $9.5 million during the quarter, or 2.3 percent (on an annualized basis).

At March 31, 2019, deposits were $1.79 billion, an increase of $154.2 million, or 9.4 percent, since year end 2018. During Q1 2019, checking deposits increased $77.3 million or 10.4 percent, time deposits increased by $53.6 million or 8.9 percent and savings deposits grew $26.5 million or 9.3 percent.

Shareholders’ equity was $233.6 million as of March 31, 2019 compared to $219.8 million at December 31, 2018. In conjunction with the acquisition of PBI on January 1, 2019, Summit issued 465,931 shares of common stock valued at $9.0 million to the former PBI shareholders.

Tangible book value per common share increased to $16.13 at March 31, 2019 compared to $14.36 at the end of first quarter 2018 and $15.75 at year end 2018. Summit had 12,661,528 outstanding common shares at March 31, 2019 compared to 12,312,933 at year end 2018.

As announced in Q3 2018, the Board of Directors authorized the open market repurchase of up to 500,000 shares of the issued and outstanding shares of Summit's common stock.  The timing and quantity of stock purchases under this repurchase plan are at the discretion of management.  The plan will expire December 31, 2019, but may be discontinued, suspended, or restarted at any time at the Company's discretion.  During Q1 2019, 125,200 shares of our common stock were repurchased under the Plan at an average price of $22.95 per share. Through March 31, 2019, the Company has repurchased 207,623 shares under the Plan since its inception at an average price of $21.96 per share.

Asset Quality

As of March 31, 2019, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $34.4 million, or 1.53 percent of assets. This compares to $36.5 million, or 1.66 percent of assets at the linked quarter-end, and $36.9 million, or 1.73 percent of assets, at first quarter-end 2018 as result of our continuing emphasis on improving our overall asset quality.

First quarter 2019 net loan charge-offs were $165,000, or 0.04 percent of average loans annualized; while adding $250,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.76 percent of total loans at March 31, 2019, compared to 0.77 percent at year-end 2018.

About the Company

Summit Financial Group, Inc. is a $2.25 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and Southern regions of West Virginia and the Northern, Shenandoah Valley and Southwestern regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates thirty-three banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.

FORWARD-LOOKING STATEMENTS

This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.

Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially.  Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economies.  We undertake no obligation to revise these statements following the date of this press release.

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)  
Quarterly Performance Summary (unaudited)   
Q1 2019 vs Q1 2018   
    
   For the Quarter Ended  Percent 
 Dollars in thousands 3/31/20193/31/2018 Change 
 Statements of Income    
 Interest income   
 Loans, including fees$23,051  $20,366 13.2%
 Securities 2,586   2,391 8.2%
 Other 231   140 65.0%
      Total interest income 25,868   22,897 13.0%
 Interest expense   
 Deposits 5,564   3,549 56.8%
 Borrowings 1,731   2,091 -17.2%
      Total interest expense 7,295   5,640 29.3%
 Net interest income 18,573   17,257 7.6%
 Provision for loan losses 250   500 -50.0%
 Net interest income after provision   
 for loan losses 18,323   16,757 9.3%
     
 Noninterest income   
 Insurance commissions 1,174   1,113 5.5%
 Trust and wealth management fees 586   667 -12.1%
 Service charges on deposit accounts 1,180   1,091 8.2%
 Bank card revenue 814   749 8.7%
 Realized securities (losses) gains (3)  732 n/a               
 Bank owned life insurance income 238   275 -13.5%
 Other income 241   249 -3.2%
      Total noninterest income 4,230   4,876 -13.2%
 Noninterest expense     
 Salaries and employee benefits 7,347   6,821 7.7%
 Net occupancy expense 924   832 11.1%
 Equipment expense 1,179   1,083 8.9%
 Professional fees 403   333 21.0%
 Advertising and public relations 153   103 48.5%
 Amortization of intangibles 476   436 9.2%
 FDIC premiums -   240 n/a               
 Bank card expense 439   335 31.0%
 Foreclosed properties expense, net of losses 384   325 18.2%
 Merger-related expense 63   - n/a               
 Other expenses 2,492   1,806 38.0%
      Total noninterest expense 13,860   12,314 12.6%
 Income before income taxes 8,693   9,319 -6.7%
 Income taxes 1,601   1,876 -14.7%
                Net income$7,092  $7,443 -4.7%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)  
Quarterly Performance Summary (unaudited)   
Q1 2019 vs Q1 2018  
   For the Quarter Ended  Percent 
  3/31/20193/31/2018 Change 
 Per Share Data    
 Earnings per common share   
 Basic$0.56 $0.60 -6.7%
 Diluted$0.56 $0.60 -7.5%
     
 Cash dividends$0.14 $0.13 7.7%
     
 Average common shares outstanding   
 Basic 12,717,501  12,358,849 2.9%
 Diluted 12,778,644  12,383,757 3.2%
     
 Common shares outstanding at period end 12,661,528  12,366,360 2.4%
     
 Performance Ratios    
 Return on average equity 12.28% 14.73%-16.6%
 Return on average tangible equity 14.80% 17.04%-13.1%
 Return on average assets 1.27% 1.40%-9.3%
 Net interest margin (A) 3.66% 3.58%2.2%
 Efficiency ratio (B) 56.50% 53.84%4.9%
     

NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

NOTE (B) – Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles. 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)    
Five Quarter Performance Summary (unaudited)    
      
   For the Quarter Ended 
 Dollars in thousands 3/31/201912/31/20189/30/20186/30/20183/31/2018
 Statements of Income      
  Interest income      
   Loans, including fees $  23,051  $  22,659  $  21,295 $  20,962 $  20,366
   Securities    2,586     2,527     2,367    2,303    2,391
   Other    231     127     138    134    140
       Total interest income    25,868     25,313     23,800    23,399    22,897
  Interest expense      
   Deposits    5,564     5,103     4,714    4,309    3,549
   Borrowings    1,731     2,158     1,873    1,815    2,091
       Total interest expense    7,295     7,261     6,587    6,124    5,640
          Net interest income    18,573     18,052     17,213    17,275    17,257
  Provision for loan losses    250     500     500    750    500
  Net interest income after provision      
   for loan losses    18,323     17,552     16,713    16,525    16,757
  Noninterest income      
   Insurance commissions    1,174     1,132     1,062    1,013    1,113
   Trust and wealth management fees    586     627     687    672    667
   Service charges on deposit accounts    1,180     1,209     1,215    1,116    1,091
   Bank card revenue    814     809     793    801    749
   Realized securities (losses) gains    (3)    (205)    8    87    732
   Bank owned life insurance income    238     248     250    249    275
   Other income    241     367     196    210    249
      Total noninterest income   4,230     4,187     4,211    4,148    4,876
  Noninterest expense      
   Salaries and employee benefits   7,347     6,928     6,806    6,922    6,821
   Net occupancy expense   924     836     856    840    832
   Equipment expense   1,179     1,139     1,118    1,071    1,083
   Professional fees   403     385     503    385    333
   Advertising and public relations   153     193     170    188    103
   Amortization of intangibles   476     410     413    413    436
   FDIC premiums   -     140     210    240    240
   Bank card expense   439     395     384    361    335
   Foreclosed properties expense, net of losses   384     507     169    350    325
   Merger-related expense   63     59     86    -    -
   Other expenses   2,492     1,474     1,643    1,965    1,806
      Total noninterest expense   13,860     12,466     12,358    12,735    12,314
  Income before income taxes    8,693     9,273     8,566    7,938    9,319
  Income tax expense    1,601     1,823     1,667    1,658    1,876
          Net income $  7,092  $  7,450  $  6,899 $  6,280 $  7,443

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)     
Five Quarter Performance Summary (unaudited)     
      
   For the Quarter Ended 
  3/31/201912/31/20189/30/20186/30/20183/31/2018
 Per Share Data      
  Earnings per common share      
   Basic $  0.56 $  0.60 $  0.56 $  0.51 $  0.60 
   Diluted $  0.56 $  0.60 $  0.55 $  0.51 $  0.60 
       
  Cash dividends $  0.14 $  0.14 $  0.13 $  0.13 $  0.13 
       
  Average common shares outstanding      
   Basic    12,717,501    12,358,104    12,374,350    12,366,522    12,358,849 
   Diluted    12,778,644    12,407,678    12,439,051    12,431,984    12,383,757 
       
  Common shares outstanding at period end    12,661,528    12,312,933    12,382,450    12,373,747    12,366,360 
       
 Performance Ratios      
  Return on average equity  12.28% 13.85% 13.00% 12.16% 14.73%
  Return on average tangible equity  14.80% 16.41% 15.53% 14.68% 17.80%
  Return on average assets  1.27% 1.38% 1.31% 1.19% 1.40%
  Net interest margin (A)  3.66% 3.61% 3.53% 3.58% 3.58%
  Efficiency ratio (B)  56.50% 51.02% 54.25% 55.88% 53.84%
       

NOTE (A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

NOTE (B) – Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles. 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)    
Selected Balance Sheet Data (unaudited)     
       
 Dollars in thousands, except per share amounts 3/31/201912/31/20189/30/20186/30/20183/31/2018
       
 Assets      
 Cash and due from banks$  14,265  $  23,061  $  9,382  $  8,314  $  9,042 
 Interest bearing deposits other banks   43,689     36,479     44,452     38,097     38,365 
 Securities   297,126     293,284     288,040     283,221     296,890 
 Loans, net   1,725,064     1,682,005     1,632,747     1,617,373     1,631,150 
 Property held for sale   24,393     21,432     22,017     21,606     21,442 
 Premises and equipment, net   39,345     37,553     36,888     36,017     35,554 
 Goodwill and other intangible assets   29,349     25,842     26,252     26,665     27,077 
 Cash surrender value of life insurance policies   42,714     42,420     42,208     41,932     41,668 
 Other assets   33,696     38,510     36,741     34,427     33,707 
   Total assets$  2,249,641  $  2,200,586  $  2,138,727  $  2,107,652  $  2,134,895 
       
 Liabilities and Shareholders' Equity      
 Deposits$  1,789,032  $  1,634,826  $  1,651,064  $  1,639,996  $  1,654,523 
 Short-term borrowings   186,292     309,084     238,403     202,429     193,513 
 Long-term borrowings and     
   subordinated debentures   20,319     20,324     20,328     40,332     65,336 
 Other liabilities   20,368     16,522     15,376     15,016     16,514 
 Shareholders' equity   233,630     219,830     213,556     209,879     205,009 
   Total liabilities and shareholders' equity$  2,249,641  $  2,200,586  $  2,138,727  $  2,107,652  $  2,134,895 
       
 Book value per common share$  18.45  $  17.85  $  17.25  $  16.96  $  16.55 
 Tangible book value per common share$  16.13  $  15.75  $  15.13  $  14.81  $  14.36 
 Tangible common equity to tangible assets 9.2%  8.9%  8.9%  8.8%  8.4%
       

 

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)     
Regulatory Capital Ratios (unaudited)      
        
  3/31/201912/31/20189/30/20186/30/20183/31/2018 
Summit Financial Group, Inc.      
 CET1 Risk-based Capital11.4%11.1%11.1%11.0%10.7% 
 Tier 1 Risk-based Capital12.5%12.2%12.2%12.1%11.8% 
 Total Risk-based Capital13.2%12.9%12.9%12.8%12.5% 
 Tier 1 Leverage10.2%10.1%10.1%9.9%9.5% 
        
Summit Community Bank, Inc.      
 CET1 Risk-based Capital12.3%12.0%12.0%12.0%11.7% 
 Tier 1 Risk-based Capital12.3%12.0%12.0%12.0%11.7% 
 Total Risk-based Capital13.0%12.8%12.7%12.8%12.5% 
 Tier 1 Leverage10.0%10.0%9.9%9.8%9.5% 
        

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)    
Loan Composition (unaudited)      
        
Dollars in thousands3/31/201912/31/20189/30/20186/30/20183/31/2018 
        
Commercial $189,248 $194,315 $167,972 $171,410 $189,586 
Mortgage warehouse lines 49,355  39,140  35,910  54,332  45,702 
Commercial real estate      
Owner occupied 272,088  266,362  272,475  262,174  265,075 
Non-owner occupied 570,392  564,826  530,568  503,047  498,445 
Construction and development      
Land and development 64,192  68,833  71,819  74,018  66,841 
Construction  36,040  24,731  25,703  25,711  33,327 
Residential real estate      
Non-jumbo  359,107  336,977  340,783  343,044  346,477 
Jumbo  69,313  73,599  72,327  66,831  67,169 
Home equity  80,370  80,910  82,018  82,409  83,382 
Consumer  36,046  32,460  33,664  34,249  34,825 
Other  12,045  12,899  12,452  12,728  12,578 
Total loans, net of unearned fees 1,738,196  1,695,052  1,645,691  1,629,953  1,643,407 
Less allowance for loan losses 13,132  13,047  12,944  12,580  12,257 
     Loans, net$1,725,064 $1,682,005 $1,632,747 $1,617,373 $1,631,150 
        

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ:  SMMF)    
Deposit Composition (unaudited)     
        
Dollars in thousands 3/31/201912/31/20189/30/20186/30/20183/31/2018 
Core deposits       
Non-interest bearing checking$258,679 $222,120 $232,697 $217,134 $219,293 
Interest bearing checking 560,800  523,257  505,411  472,041  447,172 
Savings  310,646  284,173  301,269  322,940  346,962 
Time deposits  359,141  316,914  316,941  322,801  318,556 
     Total core deposits 1,489,266  1,346,464  1,356,318  1,334,916  1,331,983 
        
Brokered time deposits 218,913  220,497  227,312  238,662  242,049 
Other non-core time deposits 80,852  67,866  67,434  66,418  80,491 
     Total deposits$1,789,031 $1,634,827 $1,651,064 $1,639,996 $1,654,523 
        

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)    
Asset Quality Information (unaudited)     
       
   For the Quarter Ended 
 Dollars in thousands 3/31/201912/31/20189/30/20186/30/20183/31/2018
       
 Gross loan charge-offs$414  $705  $413  $525  $960 
 Gross loan recoveries (249)  (307)  (278)  (97)  (153)
 Net loan charge-offs (recoveries)$165  $398  $135  $428  $807 
       
 Net loan charge-offs to average loans (annualized) 0.04%  0.10%  0.03%  0.10%  0.20%
 Allowance for loan losses$13,132  $13,047  $12,944  $12,580  $12,257 
 Allowance for loan losses as a percentage     
 of period end loans 0.76%  0.77%  0.79%  0.77%  0.75%
 Nonperforming assets:     
    Nonperforming loans     
 Commercial$729  $935  $801  $954  $734 
 Commercial real estate 2,981   3,239   5,090   3,238   3,400 
 Residential construction and development 24   3,198   3,200   3,233   3,642 
 Residential real estate 5,928   7,506   7,760   8,241   7,521 
 Consumer 182   147   118   110   160 
 Other 130   -   -   -   - 
      Total nonperforming loans 9,974   15,025   16,969   15,776   15,457 
 Foreclosed properties     
 Commercial real estate 1,841   1,762   1,762   1,818   1,875 
 Commercial construction and development 6,326   6,479   6,790   6,815   7,140 
 Residential construction and development 14,347   11,543   11,614   11,517   11,053 
 Residential real estate 1,879   1,648   1,851   1,456   1,374 
      Total foreclosed properties 24,393   21,432   22,017   21,606   21,442 
 Other repossessed assets 34   5   5   12   18 
      Total nonperforming assets$34,401  $36,462  $38,991  $37,394  $36,917 
       
 Nonperforming loans to period end loans 0.57%  0.89%  1.03%  0.97%  0.94%
 Nonperforming assets to period end assets 1.53%  1.66%  1.82%  1.77%  1.73%
       
 Troubled debt restructurings     
 Performing$27,845  $26,609  $27,441  $27,559  $27,408 
 Nonperforming -   388   113   281   76 
      Total troubled debt restructurings$27,845  $26,997  $27,554  $27,840  $27,484 

 

Loans Past Due 30-89 Days (unaudited)     
   For the Quarter Ended 
 Dollars in thousands 3/31/201912/31/20189/30/20186/30/20183/31/2018
       
 Commercial$264 $219 $607 $319 $539
 Commercial real estate 4,128  161  988  546  601
 Construction and development 179  194  393  264  174
 Residential real estate 2,944  6,249  5,513  4,125  5,218
 Consumer 432  593  345  337  425
 Other   52    38    11    8    15
 Total$  7,999 $  7,454 $  7,857 $  5,599 $  6,972
       

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)          
Average Balance Sheet, Interest Earnings & Expenses and Average Rates        
Q1 2019 vs Q4 2018 vs Q1 2018 (unaudited)            
 Q1 2019 Q4 2018 Q1 2018  
 AverageEarnings /Yield / AverageEarnings /Yield / AverageEarnings /Yield /  
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate BalancesExpenseRate  
              
ASSETS             
Interest earning assets             
Loans, net of unearned  interest (1)            
Taxable$1,712,286  $22,907 5.43% $1,660,250  $22,519 5.38% $1,611,813  $20,223 5.09%  
Tax-exempt (2) 14,907   184 5.01%  15,322   177 4.58%  16,307   182 4.53%  
Securities             
Taxable 195,932   1,687 3.49%  176,059   1,502 3.38%  191,713   1,372 2.90%  
Tax-exempt (2) 114,831   1,139 4.02%  132,088   1,296 3.89%  132,306   1,290 3.95%  
Interest bearing deposits other banks            
   and Federal funds sold   51,187     230 1.82%    35,402     127 1.42%    39,656     140 1.43%  
Total interest earning assets 2,089,143   26,147 5.08%  2,019,121   25,621 5.03%  1,991,795   23,207 4.73%  
              
Noninterest earning assets             
Cash & due from banks 12,825     9,686     9,962     
Premises & equipment 38,834     37,224     34,586     
Other assets 112,910     109,228     107,125     
Allowance for loan losses   (13,309)      (13,172)      (12,737)    
Total assets$  2,240,403    $  2,162,087    $  2,130,731     
              
 LIABILITIES AND SHAREHOLDERS' EQUITY           
              
Liabilities             
Interest bearing liabilities             
Interest bearing             
   demand deposits$556,766  $1,663 1.21% $519,465  $1,504 1.15% $423,095  $632 0.61%  
Savings deposits 310,848   898 1.17%  289,809   861 1.18%  346,358   717 0.84%  
Time deposits 654,404   3,003 1.86%  607,037   2,738 1.79%  622,543   2,200 1.43%  
Short-term borrowings 200,297   1,472 2.98%  270,092   1,909 2.80%  243,686   1,405 2.34%  
Long-term borrowings and             
   subordinated debentures   20,321     259 5.17%    20,326     249 4.86%    65,338     686 4.26%  
Total interest bearing liabilities 1,742,636   7,295 1.70%  1,706,729   7,261 1.69%  1,701,020   5,640 1.34%  
              
Noninterest bearing liabilities             
Demand deposits 248,354     223,999     210,883     
Other liabilities   18,322       16,138       16,771     
Total liabilities 2,009,312     1,946,866     1,928,674     
              
Shareholders' equity - common   231,091       215,221       202,057     
Total liabilities and             
   shareholders' equity$  2,240,403    $  2,162,087    $  2,130,731     
              
NET INTEREST EARNINGS  $ 18,852    $ 18,360    $  17,567   
              
NET INTEREST MARGIN   3.66%    3.61%    3.58%  
              
(1)  For purposes of this table, nonaccrual loans are included in average loan balances.  
              
(2)  For purposes of this table, interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%.  The taxable equivalent adjustment results in an increase in interest income of  $279,000, $309,000 and $310,000 for Q1 2019, Q4 2018 and Q1 2018, respectively. 
   
Contact:          Robert S. Tissue, Sr. Vice President & CFO
Telephone:        (304) 530-0552
Email:            rtissue@summitfgi.com

Summit Financial Group, Inc.

Source: Summit Financial Group, Inc.