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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 24, 2005
Summit Financial Group, Inc.
(Exact name of registrant as specified in its charter)
West Virginia 0-16587 55-0672148
(State or Other (Commission (I.R.S. Employer
Jurisdiction) File Number) Identification)
300 North Main Street
Moorefield, WV 26836
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(304) 530-1000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 2 - Financial Information
Item 2.02. Results of Operations and Financial Condition.
On January 26, 2005, Summit Financial Group, Inc. ("Summit") issued a News
Release announcing its earnings for the fourth quarter and for the year 2004.
This News Release is furnished as Exhibit 99 and is incorporated herein by
reference.
Section 5 - Corporate Governance and Management
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
On January 24, 2005, Julie R. Cook, 36, was appointed Vice President and
Chief Accounting Officer of Summit Financial Group, Inc. Ms. Cook previously
served as Summit's Director of Accounting since 2000. Prior to 2000, Ms. Cook
was employed by Summit in various accounting positions beginning in 1988.
Section 8 - Other Events
Item 8.01 Other Events
On January 26, 2005, Summit issued a News Release announcing that its
common stock would begin trading on The Nasdaq SmallCap Market effective January
31, 2005. This News Release is furnished as Exhibit 99 and is incorporated
herein by reference.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99 News Release issued on January 26, 2005
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SUMMIT FINANCIAL GROUP, INC.
Date: January 26, 2005 By: /s/ Robert S. Tissue
----------------------------------
Robert S. Tissue
Senior Vice President and
Chief Financial Officer
Exhibit 99
Summit Financial Group Reports Fiscal Year 2004 EPS of $1.49,
up 28.4 Percent; Common Stock to be Listed on
NASDAQ SmallCap Market Effective 1/31/05
MOOREFIELD, W.Va.--(BUSINESS WIRE)--Jan. 26, 2005--Summit
Financial Group, Inc. (OTCBB: SMMF) today reported fiscal year 2004
net income of $10.6 million, or $1.49 per diluted share, up 28.4
percent from the $1.16 per diluted share reported for the fiscal year
2003. These record earnings reflect strong growth in both community
banking and mortgage banking. Net income for 2004 generated a return
on average shareholders' equity (ROE) of 17.21 percent and a return on
average assets (ROA) of 1.26 percent compared with 2003 ratios of
15.03 percent and 1.14 percent, respectively.
For the fourth quarter of 2004, the Company reported net income of
$2.4 million, or $0.33 per diluted share, compared with $2.5 million
or $0.35 per diluted share for the prior-year fourth quarter. Net
income for the fourth quarter of 2004 generated an annualized ROE of
14.33 percent and an annualized ROA of 1.07 percent compared with
17.66 percent and 1.30 percent, respectively, for the prior-year
period.
Summit also reported that its common stock will begin trading on
The Nasdaq SmallCap Market on January 31, 2005. The Company's trading
symbol of 'SMMF' will remain unchanged.
H. Charles Maddy, III, President and Chief Executive Officer
commented, "We are pleased to report another record year of net income
growth - our 17th consecutive year. Both of our business segments
performed very well this past year. The high-growth markets that we
pursue continue to provide us with opportunities for our community
banks. This past quarter, we merged our two West Virginia banks into
Summit Community Bank to take advantage of operating efficiencies. We
see excellent upside in our Virginia markets, combined with continuing
stability in West Virginia. The new branch we opened this past quarter
in Harrisonburg, Virginia, one of our strongest markets, will
contribute to this growth.
"2004 was our first full year of mortgage banking operations, and
the growth in this segment has been exceptional. After an expected
weak fourth quarter, our pipeline has begun to strengthen as we enter
2005, and we continue to improve efficiencies as we mature. We enter
the new year with a favorable outlook for both our business segments.
"We are committed to enhancing shareholder value through financial
performance and improved liquidity of our stock. Our two-for-one stock
distribution during the fourth quarter of 2004, combined with listing
on The Nasdaq SmallCap Market at the end of this month, should
continue to enhance the value of Summit Financial Group."
Fourth Quarter and Fiscal 2004 Consolidated Results
Revenue for fiscal year 2004, consisting of net interest income
plus non-interest income, was $55.0 million, an increase of 86.4
percent over 2003. Net interest income increased 17.2 percent to $27.8
million, reflecting 16.1 percent growth in average earning assets
combined with a three basis point increase in the net interest margin
to 3.66 percent; Summit has maintained a stable net interest margin
across varying interest rate environments. Non-interest income for
2004 was $27.3 million compared with $5.8 million for 2003, an
increase of 367.9 percent. Excluding gains from the sale of securities
in both years and from gains on asset sales of $336,000 in 2003,
non-interest income increased 416.5 percent to $27.2 million. This
increase primarily reflects the operations of the Company's mortgage
banking unit, Summit Financial, LLC, which commenced operations during
the third quarter of 2003 and is discussed below.
Revenue for the fourth quarter of 2004 was $13.7 million, an
increase of 36.1 percent over the $10.0 million reported for the
prior-year quarter. Net interest income grew 14.6 percent for the
quarter to $7.3 million, reflecting 14.6 percent growth in earning
assets and an unchanged net interest margin, at 3.69 percent.
Non-interest income increased 73.8 percent to $6.3 million. The
largest component of this increase was mortgage banking revenue.
Non-interest expense for fiscal 2004 was $38.8 million, a $21.9
million or 129.7 percent increase over the $16.9 million reported for
2003. The majority of the increase is associated with the full-year
inclusion of operations in 2004 of Summit Financial, LLC. Fiscal year
2003 results also included a $164,000 non-cash charitable
contribution. The efficiency ratio was 68.33 percent for 2004 compared
with 55.07 percent for 2003. The efficiency ratio for the Company's
Community Banking Segment, shown below, is a more accurate indicator
of its performance compared with other community banks.
Non-interest expense for the fourth quarter of 2004 was $10.0
million, a 58.8 percent increase over the $6.3 million reported for
the prior-year 2003 quarter. The increase again reflected the
operations of Summit Financial, LLC. Summit's consolidated efficiency
ratio for the fourth quarter of 2004 was 70.50 percent compared with
61.85 percent for the prior-year fourth quarter.
Asset quality remains strong. Charge-offs were $657,000 for the
year, equivalent to 0.11 percent of average loans. Nonperforming
assets were 0.18 percent of assets at December 31, 2004, compared with
0.30 percent at September 30, 2004 and 0.28 percent twelve months ago.
At period-end, loan loss reserves were 0.83 percent of loans.
Assets at December 31, 2004 were $889.5 million, an increase of
12.4 percent over the last twelve months. The increase was driven by
loan growth of $104.8 million, up 20.8 percent to $607.8 million;
commercial real estate loans, up 33.5 percent, and residential
mortgage loans, up 14.0 percent, were the largest contributors to this
growth. Deposits increased $12.8 million, or 2.5 percent, to $524.6
million. To support its strong loan growth, the Company increased
short term borrowings by $70.9 million, to $120.6 million.
Shareholders' equity at period end was $65.7 million, an increase
of 14.9 percent over the last twelve months. During the fourth
quarter, the Company distributed a two-for-one stock split in the form
of a stock dividend. Common shares outstanding totaled 7,039,540 at
year end 2004.
FOURTH QUARTER AND 2004 OPERATING SEGMENT RESULTS
Community Banking Financial Performance
The Community Banking segment achieved net income for fiscal year
2004 of $9.7 million, up 13.2 percent from $8.5 million in 2003. Total
revenue increased 14.6 percent to $30.4 million, reflecting strong
growth in net interest income and in service fee income. Net interest
income benefited from strong growth in commercial real estate loans.
Non-interest expense grew 15.5 percent to $15.5 million. The
efficiency ratio for the Community Banking segment was 52.13 percent
compared with last year's efficiency ratio of 50.25 percent.
Net income for the fourth quarter of 2004 was $2.5 million,
relatively unchanged from the prior-year fourth quarter. Total revenue
increased 8.8% to $8.1 million, while non-interest expense increased
16.3 percent to $4.2 million due to one-time costs associated with the
merger of Capital State into Summit Community Bank, and the opening of
the de novo Harrisonburg, Virginia branch. The Community Banking
segment's efficiency ratio was 52.70 percent compared with 49.23
percent for the 2003 period.
Mortgage Banking Financial Performance
The Company's mortgage banking unit, Summit Financial, LLC,
commenced operations during the third quarter of 2003. This segment
originates first mortgages in the Company's community banking markets
and debt consolidation second mortgage loans for borrowers nationwide.
Loan originations in the fourth quarter of 2004 were impacted by
seasonal factors and a change in product mix, which tempered this
unit's profitability.
Net income for the fiscal year 2004 was $1.8 million compared to
$95,000 for 2003. In its first full year of operation, the mortgage
company originated $261.0 million in loans and sold $251.4 million.
Revenue totaled $24.8 million compared with $3.2 million in 2003.
Non-interest expense was $22.0 million, compared with $3.1 million in
2003. For the fourth quarter of 2004, net income was $118,000 compared
with $73,000 for the fourth quarter of 2003.
About the Company
Summit Financial Group, Inc., a financial holding company with
total assets of $889 million, operates thirteen banking locations
through its two wholly-owned community banks: Summit Community Bank,
headquartered in Moorefield, West Virginia; and Shenandoah Valley
National Bank in Winchester, Virginia. Summit also operates Summit
Financial, LLC, a residential mortgage loan originator located in
Herndon, Virginia.
Forward-Looking Statements
This press release contains forward-looking statements as defined
by federal securities laws. These statements may address issues that
involve significant risks, uncertainties, estimates and assumptions
made by management. Actual results could differ materially from
current projections. Please refer to Summit's filings with the
Securities and Exchange Commission for a summary of important factors
that could affect Summit's forward-looking statements. Summit
undertakes no obligation to revise these statements following the date
of this press release.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Quarterly Performance Summary -- Q4 2004 vs Q4 2003
For the Quarter Ended
Dollars in thousands, except ---------------------- Percent
per share amounts 12/31/2004 12/31/2003 Change
- ----------------------------------------------------------------------
Condensed Statements of Income
Interest income
Loans, including fees $9,814 $8,096 21.2%
Securities 2,294 2,501 -8.3%
Other 30 37 -18.9%
----------------------
Total interest income 12,138 10,634 14.1%
----------------------
Interest expense
Deposits 2,456 2,390 2.8%
Borrowings 2,366 1,862 27.1%
----------------------
Total interest expense 4,822 4,252 13.4%
----------------------
Net interest income 7,316 6,382 14.6%
Provision for loan losses 292 232 25.9%
----------------------
Net interest income after provision
for loan losses 7,024 6,150 14.2%
----------------------
Noninterest income
Service fee income 592 455 30.1%
Mortgage origination revenue 5,423 2,604 108.3%
Securities gains (losses) 32 105 -69.5%
Other income 287 480 -40.2%
----------------------
Total noninterest income 6,334 3,644 73.8%
----------------------
Noninterest expense
Salaries and employee benefits 4,607 3,064 50.4%
Net occupancy expense 404 240 68.3%
Equipment expense 473 383 23.5%
Postage expense 1,361 781 74.3%
Advertising 1,231 571 115.6%
Other expenses 1,939 1,268 52.9%
----------------------
Total noninterest expense 10,015 6,307 58.8%
----------------------
Income before income taxes 3,343 3,487 -4.1%
Income taxes 986 994 -0.8%
----------------------
Net income $2,357 $2,493 -5.5%
======================
Per Share Data
Basic earnings $0.34 $0.36 -5.6%
Diluted earnings $0.33 $0.35 -5.7%
Average shares outstanding
Basic 7,032,512 7,013,749 0.3%
Diluted 7,149,981 7,082,593 1.0%
Performance Ratios
Return on average equity 14.33% 17.66% -18.9%
Return on average assets 1.07% 1.30% -17.7%
Net yield on earning assets -
taxable equivalent 3.69% 3.69% 0.0%
Efficiency ratio consolidated (A) 70.50% 61.85% 14.0%
Efficiency ratio excluding
mortgage banking (A) 52.70% 49.23% 7.0%
NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring
income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Annual Performance Summary -- 2004 vs 2003
For the Year Ended
Dollars in thousands, except --------------------- Percent
per share amounts 12/31/2004 12/31/2003 Change
- ----------------------------------------------------------------------
Condensed Statements of Income
Interest income
Loans, including fees $36,207 $31,165 16.2%
Securities 9,403 9,889 -4.9%
Other 127 170 -25.3%
-------------------------
Total interest income 45,737 41,224 10.9%
-------------------------
Interest expense
Deposits 9,710 9,999 -2.9%
Borrowings 8,250 7,531 9.5%
-------------------------
Total interest expense 17,960 17,530 2.5%
-------------------------
Net interest income 27,777 23,694 17.2%
Provision for loan losses 1,050 915 14.8%
-------------------------
Net interest income after
provision for loan losses 26,727 22,779 17.3%
-------------------------
Noninterest income
Service fee income 2,238 1,586 41.1%
Mortgage origination revenue 24,089 3,138 667.7%
Securities gains (losses) 33 212 -84.4%
Other income 892 888 0.5%
-------------------------
Total noninterest income 27,252 5,824 367.9%
-------------------------
Noninterest expense
Salaries and employee benefits 18,087 9,005 100.9%
Net occupancy expense 1,503 868 73.2%
Equipment expense 1,776 1,320 34.5%
Postage expense 5,851 985 494.0%
Advertising 4,725 772 512.0%
Other expenses 6,847 3,934 74.0%
-------------------------
Total noninterest expense 38,789 16,884 129.7%
-------------------------
Income before income taxes 15,190 11,719 29.6%
Income taxes 4,582 3,511 30.5%
-------------------------
Net income $10,608 $8,208 29.2%
=========================
Per Share Data
Basic earnings $1.51 $1.17 29.1%
Diluted earnings $1.49 $1.16 28.4%
Average shares outstanding
Basic 7,025,118 7,010,007 0.2%
Diluted 7,121,761 7,073,286 0.7%
Performance Ratios
Return on average equity 17.21% 15.03% 14.5%
Return on average assets 1.26% 1.14% 10.5%
Net yield on earning assets -
taxable equivalent 3.66% 3.63% 0.8%
Efficiency ratio consolidated (A) 68.33% 55.07% 24.1%
Efficiency ratio excluding
mortgage banking (A) 52.13% 50.25% 3.7%
NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring
income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Five Quarter Performance Summary
Dollars in thousands, For the Quarter Ended
except per share ----------------------------------------------------
amounts 12/31/2004 9/30/2004 6/30/2004 3/31/2004 12/31/2003
- ----------------------------------------------------------------------
Condensed Statements
of Income
Interest income
Loans,including
fees $9,814 $9,334 $8,744 $8,314 $8,096
Securities 2,294 2,267 2,316 2,527 2,501
Other 30 33 32 32 37
-----------------------------------------------------
Total interest
income 12,138 11,634 11,092 10,873 10,634
-----------------------------------------------------
Interest expense
Deposits 2,456 2,451 2,390 2,414 2,390
Borrowings 2,366 2,122 1,904 1,857 1,862
-----------------------------------------------------
Total interest
expense 4,822 4,573 4,294 4,271 4,252
-----------------------------------------------------
Net interest
income 7,316 7,061 6,798 6,602 6,382
Provision for
loan losses 292 293 233 233 232
-----------------------------------------------------
Net interest
income after
provision for
loan losses 7,024 6,768 6,565 6,369 6,150
-----------------------------------------------------
Noninterest income
Service fee income 592 575 562 509 455
Mortgage origination
revenue 5,423 7,732 6,614 4,319 2,604
Securities gains
(losses) 32 (35) 17 20 105
Other income 287 273 239 94 480
-----------------------------------------------------
Total
noninterest
income 6,334 8,545 7,432 4,942 3,644
-----------------------------------------------------
Noninterest expense
Salaries and
employee benefits 4,607 5,055 4,740 3,686 3,064
Net occupancy
expense 404 408 386 304 240
Equipment expense 473 433 441 429 383
Postage expense 1,361 1,703 1,435 1,353 781
Advertising 1,231 1,229 1,304 962 571
Other expenses 1,939 1,939 1,862 1,105 1,268
-----------------------------------------------------
Total
noninterest
expense 10,015 10,767 10,168 7,839 6,307
-----------------------------------------------------
Income before
income taxes 3,343 4,546 3,829 3,472 3,487
Income taxes 986 1,420 1,155 1,021 994
-----------------------------------------------------
Net income $2,357 $3,126 $2,674 $2,451 $2,493
=====================================================
Per Share Data
Basic earnings $0.34 $0.44 $0.38 $0.35 $0.36
Diluted
earnings $0.33 $0.43 $0.38 $0.35 $0.35
Average shares
outstanding
Basic 7,032,512 7,026,173 7,021,567 7,020,126 7,013,749
Diluted 7,149,981 7,174,852 7,108,161 7,084,970 7,082,593
Performance
Ratios
Return on
average equity 14.33% 20.06% 17.96% 16.77% 17.66%
Return on
average assets 1.07% 1.46% 1.29% 1.23% 1.30%
Net yield on
earning assets
- taxable
equivalent 3.69% 3.65% 3.64% 3.67% 3.69%
Efficiency
ratio
consolidated (A) 70.50% 67.11% 69.61% 65.84% 61.85%
Efficiency
ratio excluding
mortgage
banking (A) 52.70% 51.68% 53.61% 50.45% 49.23%
NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring
income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Segment Information
For the Quarter Ended December 31, 2004
Parent
Dollars in Community Mortgage and
thousands Banking Banking Other Eliminations Total
- ----------------------------------------------------------------------
Condensed Statements
of Income
Interest income $11,935 $419 $5 $(221) $12,138
Interest expense 4,670 220 153 (221) 4,822
-------------------------------------------------
Net interest income 7,265 199 (148) - 7,316
Provision for loan
losses 292 - - - 292
-------------------------------------------------
Net interest income
after provision
for loan losses 6,973 199 (148) - 7,024
-------------------------------------------------
Noninterest income 798 5,423 1,183 (1,070) 6,334
Noninterest expense 4,225 5,445 1,415 (1,070) 10,015
-------------------------------------------------
Income before
income taxes 3,546 177 (380) - 3,343
Income taxes 1,075 59 (148) - 986
-------------------------------------------------
Net income $2,471 $118 $(232) $- $2,357
=================================================
Average assets $867,934 $20,639 $78,885 $(88,743) $878,715
=================================================
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Segment Information
For the Quarter Ended December 31, 2003
Parent
Community Mortgage and
Dollars in thousands Banking Banking Other Eliminations Total
- ----------------------------------------------------------------------
Condensed Statements
of Income
Interest income $10,568 $125 $2 $(61) $10,634
Interest expense 4,198 56 59 (61) 4,252
-------------------------------------------------
Net interest
income 6,370 69 (57) - 6,382
Provision for loan
losses 232 - - - 232
-------------------------------------------------
Net interest
income after
provision for
loan losses 6,138 69 (57) - 6,150
-------------------------------------------------
Noninterest income 1,040 2,604 847 (847) 3,644
Noninterest
expense 3,634 2,562 958 (847) 6,307
-------------------------------------------------
Income before
income taxes 3,544 111 (168) - 3,487
Income taxes 1,015 38 (59) - 994
-------------------------------------------------
Net income $2,529 $73 $(109) $- $2,493
=================================================
Average assets $751,775 $6,452 $64,490 $(58,095) $764,622
=================================================
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Segment Information
For the Year Ended
December 31, 2004
Parent
Dollars in Community Mortgage and
thousands Banking Banking Other Eliminations Total
- ----------------------------------------------------------------------
Condensed
Statements of Income
Interest income $45,031 $1,348 $16 $(658) $45,737
Interest expense 17,460 652 506 (658) 17,960
--------------------------------------------------
Net interest
income 27,571 696 (490) - 27,777
Provision for
loan losses 1,050 - - - 1,050
--------------------------------------------------
Net interest
income after
provision for
loan losses 26,521 696 (490) - 26,727
--------------------------------------------------
Noninterest
income 2,863 24,087 4,215 (3,913) 27,252
Noninterest
expense 15,523 22,045 5,134 (3,913) 38,789
--------------------------------------------------
Income before
income taxes 13,861 2,738 (1,409) - 15,190
Income taxes 4,189 944 (551) - 4,582
--------------------------------------------------
Net income $9,672 $1,794 $(858) $- $ 10,608
==================================================
Average assets $817,414 $16,701 $74,101 $(67,333) $840,883
==================================================
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Segment Information
For the Year Ended December 31, 2003
Parent
Dollars in Community Mortgage and
thousands Banking Banking Other Eliminations Total
- ----------------------------------------------------------------------
Condensed
Statements of
Income
Interest income $ 41,166 $ 125 $ 8 $ (75) $ 41,224
Interest expense 17,317 56 232 (75) 17,530
-------- ------ ------- -------- --------
Net interest
income 23,849 69 (224) - 23,694
Provision for
loan losses 915 - - - 915
-------- ------ ------- -------- --------
Net interest
income after
provision
for loan
losses 22,934 69 (224) - 22,779
-------- ------ ------- -------- --------
Noninterest
income 2,706 3,137 3,292 (3,311) 5,824
Noninterest
expense 13,444 3,061 3,690 (3,311) 16,884
-------- ------ ------- -------- --------
Income before
income taxes 12,196 145 (622) - 11,719
Income taxes 3,655 50 (194) - 3,511
-------- ------ ------- -------- --------
Net income $ 8,541 $ 95 $ (428) $ - $ 8,208
======== ====== ======= ======== ========
Average assets $717,565 $4,081 $60,164 $(59,066) $722,744
======== ====== ======= ======== ========
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Selected Balance Sheet Data
For the Quarter Ended
----------------------------------------------------
Dollars in thousands,
except per share
amounts 12/31/2004 9/30/2004 6/30/2004 3/31/2004 12/31/2003
- ----------------------------------------------------------------------
Assets $889,489 $862,246 $849,555 $809,216 $791,465
Securities 211,362 209,702 213,644 215,732 235,409
Loans held for
sale, net 14,274 12,097 15,607 9,596 6,353
Loans, net 602,728 586,201 559,869 532,855 498,340
Intangible assets 3,499 3,537 3,574 3,612 3,050
Deposits 524,614 535,822 536,589 530,372 511,801
Short-term
borrowings 120,629 77,518 71,350 42,547 49,714
Long-term
borrowings and
subordinated
debentures 172,201 178,334 176,248 169,608 168,255
Shareholders'
equity 65,708 65,289 58,975 60,674 57,188
Book value per
share $ 9.33 $ 9.29 $ 8.40 $ 8.64 $ 8.15
SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF)
Loan Composition
Dollars in
thousands 12/31/2004 9/30/2004 6/30/2004 3/31/2004 12/31/2003
- ----------------------------------------------------------------------
Commercial $53,226 $49,630 $49,294 $47,178 $46,860
Commercial real
estate 279,631 271,097 250,562 235,565 209,391
Residential
construction 3,916 3,351 2,665 2,698 2,369
Residential mortgage 223,689 218,118 212,371 203,225 196,135
Consumer 38,948 40,559 41,787 41,060 41,112
Other 9,605 9,784 9,316 8,968 8,223
----------------------------------------------------
Total loans 609,015 592,539 565,995 538,694 504,090
Less unearned fees
and interest 1,214 1,200 1,173 1,118 1,069
----------------------------------------------------
Total loans net of
unearned fees and
interest 607,801 591,339 564,822 537,576 503,021
Less allowance for
loan losses 5,073 5,138 4,953 4,721 4,681
----------------------------------------------------
Loans, net $602,728 $586,201 $559,869 $532,855 $498,340
====================================================
SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF)
Mortgage Banking Segment Loan Activity
For the Quarter Ended
-------------------------------------------------
Dollars in
thousands 12/31/2004 9/30/2004 6/30/2004 3/31/2004 12/31/2003
- ----------------------------------------------------------------------
Loans originated
Amount $65,983 $75,791 $74,333 $44,935 $32,413
Number 1,182 1,532 1,461 931 724
Loans sold
Amount $62,043 $79,927 $68,013 $41,376 $26,261
Number 1,148 1,610 1,364 861 603
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Asset Quality Information
For the Quarter Ended
-----------------------------------------------------
Dollars in
thousands 12/31/2004 9/30/2004 6/30/2004 3/31/2004 12/31/2003
- ----------------------------------------------------------------------
Net loan charge-
off's $357 $107 $1 $192 $37
Net loan charge-
off's to average
loans (annualized) 0.25% 0.08% 0.00% 0.15% 0.03%
Allowance for
loan losses $5,073 $5,138 $4,953 $4,721 $4,681
Allowance for
loan losses as
a percentage of
period end loans 0.83% 0.87% 0.88% 0.88% 0.93%
Nonperforming assets:
Nonperforming loans $672 $1,464 $1,577 $1,448 $1,356
Foreclosed
properties 593 756 475 475 480
Nonaccrual
securities 349 363 384 389 396
-----------------------------------------------------
Total $1,614 $2,583 $2,436 $2,312 $2,232
=====================================================
Nonperforming
loans to period end
loans and other
real estate 0.21% 0.37% 0.36% 0.36% 0.36%
=====================================================
Nonperforming
assets to period
end assets 0.18% 0.30% 0.29% 0.29% 0.28%
=====================================================
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Average Balance Sheet, Interest Earnings &
Expenses and Average Rates Q4 2004 vs Q3 2003
Q4 2004 Q4 2003
------------------------ ------------------------
Average Earnings/ Yield/ Average Earnings/ Yield/
Dollars in thousands Balances Expense Rate Balances Expense Rate
- --------------------------------------------- ------------------------
ASSETS
Interest earning assets
Loans, net of unearned interest
Taxable $605,020 $9,701 6.41% $490,823 $8,016 6.53%
Tax-exempt 9,381 173 7.38% 5,943 122 8.21%
Securities
Taxable 162,810 1,734 4.26% 179,265 2,002 4.47%
Tax-exempt 48,387 835 6.90% 43,323 738 6.81%
Interest bearing
deposits other
banks and Federal
funds sold 3,249 31 3.82% 3,908 39 3.99%
--------- -------- ----- --------- -------- -----
Total interest
earning assets 828,847 12,474 6.02% 723,262 10,917 6.04%
Noninterest earning assets
Cash & due from
banks 17,698 9,928
Premises &
equipment 20,573 17,360
Other assets 16,806 18,646
Allowance for loan
losses (5,209) (4,574)
--------- ---------
Total assets $878,715 $764,622
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing
liabilities
Interest bearing
demand deposits $122,038 $343 1.12% $106,587 $203 0.76%
Savings deposits 51,508 68 0.53% 47,472 54 0.46%
Time deposits 305,411 2,045 2.68% 284,266 2,133 3.00%
Short-term
borrowings 91,763 512 2.23% 48,222 156 1.29%
Long-term borrowings
and subordinated
debentures 177,709 1,854 4.17% 168,570 1,706 4.05%
--------- -------- ----- --------- -------- -----
748,429 4,822 2.58% 655,117 4,252 2.60%
Noninterest bearing
liabilities
Demand deposits 58,921 48,454
Other liabilities 5,557 4,592
--------- ---------
Total liabilities 812,907 708,163
Shareholders' equity 65,808 56,459
--------- ---------
Total liabilities
and shareholders'
equity $878,715 $764,622
========= =========
NET INTEREST EARNINGS $7,652 $6,665
======== ========
NET INTEREST YIELD ON EARNING
ASSETS 3.69% 3.69%
===== =====
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2004 vs YTD 2003
For the Year Ended
December 31,
----------------------------------------------------
2004 2003
--------------------------- ------------------------
Average Earnings/ Yield/ Average Earnings/ Yield/
Dollars in Balances Expense Rate Balances Expense Rate
thousands
- ----------------------------------------------------------------------
ASSETS
Interest earning
assets
Loans, net of
unearned interest
Taxable $567,066 $35,770 6.31% $455,526 $30,842 6.77%
Tax-exempt 8,818 662 7.51% 5,933 489 8.24%
Securities
Taxable 166,882 7,193 4.31% 175,821 7,952 4.52%
Tax-exempt 48,356 3,303 6.83% 41,537 2,889 6.96%
Interest bearing
deposits other
banks and Federal
funds sold 3,489 127 3.64% 5,368 170 3.17%
------------ -------- ----- --------- -------- -----
Total interest
earning assets 794,611 47,055 5.92% 684,185 42,342 6.19%
Noninterest
earning assets
Cash & due from
banks 14,367 8,970
Premises &
equipment 19,998 14,168
Other assets 16,879 19,746
Allowance for
loan losses (4,972) (4,325)
------------ ---------
Total assets $840,883 $722,744
============ =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing
liabilities
Interest bearing
demand deposits $120,066 $1,183 0.99% $100,084 $793 0.79%
Savings deposits 49,806 242 0.49% 46,985 256 0.54%
Time deposits 306,850 8,285 2.70% 280,064 8,950 3.20%
Short-term
borrowings 70,318 1,204 1.71% 31,907 441 1.38%
Long-term borrowings
and subordinated
debentures 172,580 7,046 4.08% 158,040 7,090 4.49%
------------ -------- ----- --------- -------- -----
719,620 17,960 2.50% 617,080 17,530 2.84%
Noninterest bearing
liabilities
Demand deposits 54,212 46,166
Other liabilities 5,416 4,870
------------ ---------
Total
liabilities 779,248 668,116
Shareholders'
equity 61,635 54,628
------------ ---------
Total liabilities
and shareholders'
equity $840,883 $722,744
============ =========
NET INTEREST
EARNINGS $29,095 $24,812
======== ========
NET INTEREST YIELD ON
EARNING ASSETS 3.66% 3.63%
===== =====
CONTACT: Summit Financial Group, Inc.
Robert S. Tissue, 304-530-0552
rtissue@SummitFGI.com