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 27, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (Commission File Number) | (IRS Employer | ||||||
| incorporation or organization) | Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(304 )530-1000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or 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:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Section 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition.
On January 27, 2022, Summit Financial Group, Inc. (“Summit”) issued a News Release announcing its earnings for the three months and year ended December 31, 2021. This News Release is furnished as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d)Exhibits
| Exhibit Number | Description | |||||||||||||
| 99.1 | ||||||||||||||
SIGNATURES
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 27, 2022 | By: /s/ Julie R. Markwood | |||||||||||||
| Julie R. Markwood | ||||||||||||||
| Senior Vice President and Chief Accounting Officer | ||||||||||||||
EXHIBIT 99.1
FOR RELEASE 6:00 AM ET, January 27, 2022
Contact: Robert S. Tissue, Executive Vice President & CFO
Telephone: (304) 530-0552
Email: rtissue@summitfgi.com
SUMMIT FINANCIAL GROUP REPORTS FOURTH QUARTER 2021 EPS OF $0.95 ON CONTINUED LOAN GROWTH AND RECORD NET INTEREST INCOME, TOTAL REVENUE AND NET INCOME
MOOREFIELD, WV – January 27, 2022 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported continued strong financial results for the fourth quarter of 2021, including growth in earnings, net interest income, revenue, and commercial and total loans to new record levels, while maintaining sustained asset quality strength and expense discipline.
The Company, which serves commercial and individual clients across West Virginia, the Washington metropolitan area, Virginia and Kentucky through Summit Community Bank, Inc., grew fourth quarter 2021 net income applicable to common shares to $12.4 million, or $0.95 per diluted share. Earnings increased 2.8 percent from $12.0 million, or $0.92 per diluted share, in the third quarter of 2021 and 20.5 percent from $10.3 million, or $0.79 per share, in the fourth quarter of 2020. For the year ended December 31, 2021, Summit grew earnings by 44.1 percent to $45.1 million, or $3.47 per share, from $31.3 million, or $2.41 per share in 2020.
“We believe we have some of the best bankers in the markets we serve, which has been key to our ability to accelerate organic loan growth through the fourth quarter and position us well with significant commercial new business pipelines heading into 2022,” said H. Charles Maddy, III, President and Chief Executive Officer. “We also continued to manage the balance sheet to maximize profitability while maintaining our low operating expense advantage relative to peers.”
Highlights for Q4 2021
•Total loans, excluding mortgage warehouse lines of credit and Paycheck Protection Program (“PPP”) lending, increased 6.4 percent, or 25.7 percent annualized, during the quarter and 20.9 percent during the year.
•Commercial loans excluding PPP lending increased 8.6 percent (34.4 percent annualized) during the quarter and 34.3 percent during 2021.
•Net interest income increased 2.8 percent from the linked quarter and 10.0 percent from the year-ago period, primarily due to loan growth and lower funding costs.
•Net interest margin (“NIM”) increased 2 basis points to 3.49 percent from the linked quarter, as yield on interest earning assets increased 3 basis points while the cost of funds increased 1 basis point. Summit remains strategically well positioned for a rising rate environment.
•Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments, grew 6.2 percent from the linked quarter and 11.7 percent from the year-ago quarter.
•Incurred $1.5 million provision for credit losses in the quarter compared to none in the linked quarter and $3.0 million in the year-ago quarter; period-end allowance for loan credit losses equaled $32.3 million, or 1.17 percent of total loans and 254.4 percent of nonperforming loans.
•Grew pre-tax, pre-provision earnings 10.5 percent from the linked quarter and 9.6 percent from the year-ago quarter.
•Achieved an efficiency ratio of 49.04 percent and annualized non-interest expense of 2.02 percent of average assets.
•Reduced property held for sale by 20.8 percent during the quarter and 36.8 percent from December 31, 2020.
•Reduced nonperforming assets (“NPAs”) to 0.63 percent of total assets, excluding restructured assets, down 4 basis points during the quarter and 53 basis points from December 31, 2020.
•Issued $75 million of growth capital through the private placement of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031.
Results from Operations
Net interest income grew to $28.8 million in the fourth quarter of 2021, an increase of 2.8 percent from the linked quarter and 10.0 percent from the prior-year fourth quarter. NIM for fourth quarter of 2021 was 3.49 percent compared to 3.47 percent for the linked quarter and 3.76 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 3.45 percent for the fourth quarter of 2021, 3.41 percent for the linked quarter and 3.70 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 fourth quarter 2021 was $6.0 million compared to $4.6 million for the linked quarter and $5.8 million for the comparable period of 2020. The Company recorded realized securities losses on debt securities of $109,000 and $68,000 in the fourth quarter and linked quarter of 2021, respectively, and gains of $912,000 in the year-ago quarter. In addition, we recognized a gain on equity investments of $202,000 in Q4 2021.
Mortgage origination revenue was $1.4 million in the fourth quarter of 2021, including an $879,000 increase in the fair value of mortgage servicing rights, compared to $742,000 for the
linked quarter and $1.2 million for the year-ago period, including a positive $284,000 mortgage servicing rights fair value adjustment. Year-to-date, mortgage origination revenue grew to $4.0 million, increasing 42.9 percent from 2020.
Excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, noninterest income was $5.0 million in fourth quarter 2021 compared to $4.6 million in the linked quarter and $4.6 million in the year-ago quarter.
Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, grew to $33.8 million, up 3.5 percent from $32.7 million in the linked quarter and 9.8 percent from $30.8 million in the year-ago quarter. Revenue, excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, for the full year 2021, grew to $128.6 million, up 15.0 percent from 2020 and outpacing the 10.3 percent noninterest expense increase.
Total noninterest expense increased to $17.9 million in the fourth quarter of 2021, up 3.3 percent from $17.3 million in the linked quarter and 8.0 percent from $16.6 million for the prior-year fourth quarter, reflecting acquisition-related expenses primarily from Summit’s recently completed branch acquisitions, as well as ongoing operating costs for its December 2020 purchase of Kentucky’s WinFirst Bank.
Salary and benefit expenses of $9.0 million in the fourth quarter of 2021 increased from $8.7 million in the linked quarter, while acquisitions closed in December 2020 and July 2021 contributed to an increase from $8.3 million in the year-ago period.
Additionally, other significant factors contributing to the changes in total noninterest expense in the fourth quarter of 2021 were: equipment expense of $1.9 million compared to $1.9 million for the linked quarter and $1.5 million for the year-ago period, foreclosed properties expense of $403,000 compared to $370,000 in the linked quarter and $676,000 in the year-ago period, as well as other expenses of $3.3 million compared to $2.7 million for the linked quarter and $3.1 million in the year-ago period. The changes in these other expenses include:
•Fraud and robbery losses of $190,000 during Q4 2021 compared to $36,000 and $86,000 in the linked and year-ago quarters, respectively;
•Virginia franchise tax of $228,000 during Q4 2021 compared to $137,000 and $95,000 in the linked and year-ago quarters, respectively;
•Debit card processing expenses of $340,000 during Q4 2021 compared to $343,000 and $259,000 in the linked and year-ago quarters, respectively; and
•Internet banking expenses of $322,000 during Q4 2021 compared to $306,000 and $279,000 in the linked and year-ago quarters, respectively.
Summit’s efficiency ratio was 49.04 percent in the fourth quarter of 2021 compared to 49.53 percent in the linked quarter and 48.93 percent for the year-ago period. Non-interest expense was 2.02 percent of average assets in the fourth quarter of 2021, compared to 2.01 percent during the linked quarter and 2.22 percent in the year-ago period.
Balance Sheet
At December 31, 2021, total assets were $3.58 billion, an increase of $67.8 million, or 1.9 percent, during the fourth quarter and $470.3 million, or 15.1 percent since December 31, 2020.
Total loans net of unearned fees grew to $2.76 billion on December 31, 2021, increasing 8.1 percent during the fourth quarter and 14.5 percent year-to-date. Excluding PPP and mortgage warehouse lending, total loans grew to $2.52 billion on December 31, 2021, increasing 6.4 percent during the fourth quarter and 20.9 percent year-to-date.
Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE) and excluding PPP lending, grew to $1.7 billion on December 31, 2021, increasing 8.6 percent during the fourth quarter and 34.3 percent year-to-date. Residential real estate and consumer lending totaled $567.9 million on December 31, 2021, down 0.5 percent during the fourth quarter and 7.7 percent year-to-date.
PPP balances paid down to $12.8 million on December 31, 2021 from a peak of $98.5 million on September 30, 2020. Mortgage warehouse lines of credit, sourced solely from a participation arrangement with a large regional bank, were $227.9 million on December 31, 2021 compared to a peak of $252.5 million on June 30, 2020.
As Summit deployed excess liquidity to enhance profitability and fund continued loan growth, it lowered total deposits to $2.94 billion on December 31, 2021, down 0.4 percent during the fourth quarter. Total deposits grew 13.4 percent year-to-date. Core deposits decreased to $2.85 billion on December 31, 2021 compared to the linked quarter, decreasing 0.4 percent during the fourth quarter and grew 15.9 percent year-to-date.
Total shareholders’ equity was $327.5 million as of December 31, 2021 compared to $323.3 million at September 30, 2021 and $281.6 million at December 31, 2020. During the fourth quarter of 2021, Summit raised $75 million of growth capital through the private placement of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031.
Tangible book value per common share increased to $19.54 as of December 31, 2021 compared to $18.83 at September 30, 2021 and $17.50 at December 31, 2020. Summit had 12,743,125 outstanding common shares at the end of the fourth quarter of 2021 compared to 12,976,693 at the end of the linked quarter and 12,942,004 at year-end 2020.
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. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the fourth quarter of 2021, 248,244 shares of Summit’s common stock were repurchased under the Plan at an average price of $26.95 per share.
Asset Quality
Net loan charge-offs (“NCOs”) were $193,000, or 0.03 percent of average loans annualized, in the fourth quarter of 2021. NCOs of $370,000 represented 0.06 percent of average loans annualized in the linked quarter, and $239,000 or 0.04 percent of average loans annualized for fourth quarter 2020.
Summit recorded $1.5 million provision for credit losses in the fourth quarter of 2021, reflecting reserve build to support our substantial growth in both loans and unfunded
loan commitments, partially offset by reserve reductions due to improving forecasted economic factors. The provision for credit losses was zero and $3.0 million for the linked and year-ago quarters, respectively.
Summit’s allowance for loan credit losses and allowance for credit losses on unfunded loan commitments were $32.3 million and $7.28 million, respectively, as of December 31, 2021, compared to $32.4 million and $5.86 million, respectively, at the end of the linked quarter. The allowance for loan credit losses declined just slightly in Q4 2021 as the impact of improving forecasted economic factors served to offset fully the additional provisions for credit losses resulting from the significant volumes of new loans. The allowance for credit losses on unfunded loan commitments increased $1.42 million during the most recent quarter, principally as result of the recent strong volumes of construction loan commitments having a higher historical loss ratio than do our other loans as a whole.
The allowance for loan credit losses stood at 1.17 percent of total loans at year-end 2021 compared to1.27 percent at September 30, 2021 and 1.34 percent at December 31, 2020.
As of December 31, 2021, NPAs consisting of nonperforming loans, foreclosed properties and repossessed assets, totaled $22.6 million, or 0.63 percent of assets, compared to $23.6 million, or 0.67 percent of assets at the linked quarter-end and $35.9 million, or 1.16 percent of assets at the end 2020. During January 2022, we closed on the sale of a foreclosed residential land development project carried on the balance sheet at $2.00 million in property held for sale at year-end 2021 and realized a gain of $201,000 as a result of the sale.
About the Company
Summit Financial Group, Inc. is the $3.58 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 MySummit.Bank, and 45 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) -- Q4 2021 vs Q4 2020 | |||||||||||||||||
| For the Quarter Ended | Percent | ||||||||||||||||
| Dollars in thousands | 12/31/2021 | 12/31/2020 | Change | ||||||||||||||
| Statements of Income | |||||||||||||||||
| Interest income | |||||||||||||||||
| Loans, including fees | $ | 28,979 | $ | 27,897 | 3.9 | % | |||||||||||
| Securities | 2,763 | 2,228 | 24.0 | % | |||||||||||||
| Other | 75 | 51 | 47.1 | % | |||||||||||||
| Total interest income | 31,817 | 30,176 | 5.4 | % | |||||||||||||
| Interest expense | |||||||||||||||||
| Deposits | 1,718 | 2,956 | -41.9 | % | |||||||||||||
| Borrowings | 1,267 | 1,014 | 25.0 | % | |||||||||||||
| Total interest expense | 2,985 | 3,970 | -24.8 | % | |||||||||||||
| Net interest income | 28,832 | 26,206 | 10.0 | % | |||||||||||||
| Provision for credit losses | 1,500 | 3,000 | n/m | ||||||||||||||
| Net interest income after provision for credit losses | 27,332 | 23,206 | 17.8 | % | |||||||||||||
| Noninterest income | |||||||||||||||||
| Trust and wealth management fees | 847 | 626 | 35.3 | % | |||||||||||||
| Mortgage origination revenue | 1,361 | 1,163 | 17.0 | % | |||||||||||||
| Service charges on deposit accounts | 1,501 | 1,305 | 15.0 | % | |||||||||||||
| Bank card revenue | 1,528 | 1,237 | 23.5 | % | |||||||||||||
| Gains on equity investments | 202 | — | n/a | ||||||||||||||
| Realized gains/(losses) on debt securities, net | (109) | 912 | -112.0 | % | |||||||||||||
| Bank owned life insurance and annuity income | 293 | 233 | 25.8 | % | |||||||||||||
| Other income | 330 | 301 | 9.6 | % | |||||||||||||
| Total noninterest income | 5,953 | 5,777 | 3.0 | % | |||||||||||||
| Noninterest expense | |||||||||||||||||
| Salaries and employee benefits | 8,977 | 8,250 | 8.8 | % | |||||||||||||
| Net occupancy expense | 1,265 | 1,046 | 20.9 | % | |||||||||||||
| Equipment expense | 1,902 | 1,502 | 26.6 | % | |||||||||||||
| Professional fees | 438 | 370 | 18.4 | % | |||||||||||||
| Advertising and public relations | 216 | 207 | 4.3 | % | |||||||||||||
| Amortization of intangibles | 387 | 409 | -5.4 | % | |||||||||||||
| FDIC premiums | 330 | 261 | 26.4 | % | |||||||||||||
| Bank card expense | 703 | 573 | 22.7 | % | |||||||||||||
| Foreclosed properties expense, net | 403 | 676 | -40.4 | % | |||||||||||||
| Acquisition-related expenses | 57 | 218 | -73.9 | % | |||||||||||||
| Other expenses | 3,250 | 3,094 | 5.0 | % | |||||||||||||
| Total noninterest expense | 17,928 | 16,606 | 8.0 | % | |||||||||||||
| Income before income taxes | 15,357 | 12,377 | 24.1 | % | |||||||||||||
| Income tax expense | 2,777 | 2,126 | 30.6 | % | |||||||||||||
| Net income | 12,580 | 10,251 | 22.7 | % | |||||||||||||
| Preferred stock dividends | 225 | — | n/a | ||||||||||||||
| Net income applicable to common shares | $ | 12,355 | $ | 10,251 | 20.5 | % | |||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||
| Quarterly Performance Summary (unaudited) -- Q4 2021 vs Q4 2020 | |||||||||||||||||
| For the Quarter Ended | Percent | ||||||||||||||||
| 12/31/2021 | 12/31/2020 | Change | |||||||||||||||
| Per Share Data | |||||||||||||||||
| Earnings per common share | |||||||||||||||||
| Basic | $ | 0.96 | $ | 0.79 | 21.5 | % | |||||||||||
| Diluted | $ | 0.95 | $ | 0.79 | 20.3 | % | |||||||||||
| Cash dividends per common share | $ | 0.18 | $ | 0.17 | 5.9 | % | |||||||||||
| Common stock dividend payout ratio | 18.3 | % | 21.5 | % | -15.1 | % | |||||||||||
| Average common shares outstanding | |||||||||||||||||
| Basic | 12,916,555 | 12,932,768 | -0.1 | % | |||||||||||||
| Diluted | 12,976,181 | 12,980,041 | — | % | |||||||||||||
| Common shares outstanding at period end | 12,743,125 | 12,942,004 | -1.5 | % | |||||||||||||
| Performance Ratios | |||||||||||||||||
| Return on average equity | 15.48 | % | 14.90 | % | 3.9 | % | |||||||||||
| Return on average tangible equity (C) | 19.72 | % | 18.70 | % | 5.5 | % | |||||||||||
| Return on average tangible common equity (D) | 20.91 | % | 18.70 | % | 11.8 | % | |||||||||||
| Return on average assets | 1.42 | % | 1.37 | % | 3.6 | % | |||||||||||
| Net interest margin (A) | 3.49 | % | 3.76 | % | -7.2 | % | |||||||||||
| Efficiency ratio (B) | 49.04 | % | 48.93 | % | 0.2 | % | |||||||||||
| 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 - Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets). | |||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||
| Annual Performance Summary (unaudited) -- 2021 vs 2020 | |||||||||||||||||
| For the Year Ended | Percent | ||||||||||||||||
| Dollars in thousands | 12/31/2021 | 12/31/2020 | Change | ||||||||||||||
| Statements of Income | |||||||||||||||||
| Interest income | |||||||||||||||||
| Loans, including fees | $ | 112,630 | $ | 105,564 | 6.7 | % | |||||||||||
| Securities | 9,470 | 9,173 | 3.2 | % | |||||||||||||
| Other | 316 | 266 | 18.8 | % | |||||||||||||
| Total interest income | 122,416 | 115,003 | 6.4 | % | |||||||||||||
| Interest expense | |||||||||||||||||
| Deposits | 8,182 | 16,044 | -49.0 | % | |||||||||||||
| Borrowings | 4,302 | 3,477 | 23.7 | % | |||||||||||||
| Total interest expense | 12,484 | 19,521 | -36.0 | % | |||||||||||||
| Net interest income | 109,932 | 95,482 | 15.1 | % | |||||||||||||
| Provision for credit losses | 4,000 | 14,500 | n/m | ||||||||||||||
| Net interest income after provision for credit losses | 105,932 | 80,982 | 30.8 | % | |||||||||||||
| Noninterest income | |||||||||||||||||
| Trust and wealth management fees | 2,886 | 2,495 | 15.7 | % | |||||||||||||
| Mortgage origination revenue | 3,999 | 2,799 | 42.9 | % | |||||||||||||
| Service charges on deposit accounts | 5,032 | 4,588 | 9.7 | % | |||||||||||||
| Bank card revenue | 5,896 | 4,494 | 31.2 | % | |||||||||||||
| Gains on equity investments | 202 | — | n/a | ||||||||||||||
| Realized gains on debt securities, net | 425 | 3,472 | -87.8 | % | |||||||||||||
| Bank owned life insurance income and annuity income | 1,026 | 1,567 | -34.5 | % | |||||||||||||
| Other income | 742 | 668 | 11.1 | % | |||||||||||||
| Total noninterest income | 20,208 | 20,083 | 0.6 | % | |||||||||||||
| Noninterest expense | |||||||||||||||||
| Salaries and employee benefits | 34,386 | 32,211 | 6.8 | % | |||||||||||||
| Net occupancy expense | 4,824 | 3,963 | 21.7 | % | |||||||||||||
| Equipment expense | 6,990 | 5,765 | 21.2 | % | |||||||||||||
| Professional fees | 1,578 | 1,538 | 2.6 | % | |||||||||||||
| Advertising and public relations | 697 | 596 | 16.9 | % | |||||||||||||
| Amortization of intangibles | 1,563 | 1,659 | -5.8 | % | |||||||||||||
| FDIC premiums | 1,449 | 856 | 69.3 | % | |||||||||||||
| Bank card expense | 2,668 | 2,225 | 19.9 | % | |||||||||||||
| Foreclosed properties expense, net | 1,745 | 2,490 | -29.9 | % | |||||||||||||
| Acquisition-related expenses | 1,224 | 1,671 | -26.8 | % | |||||||||||||
| Other expenses | 11,615 | 9,337 | 24.4 | % | |||||||||||||
| Total noninterest expense | 68,739 | 62,311 | 10.3 | % | |||||||||||||
| Income before income taxes | 57,401 | 38,754 | 48.1 | % | |||||||||||||
| Income tax expense | 11,663 | 7,428 | 57.0 | % | |||||||||||||
| Net income | 45,738 | 31,326 | 46.0 | % | |||||||||||||
| Preferred stock dividends | 589 | — | n/a | ||||||||||||||
| Net income applicable to common shares | $ | 45,149 | $ | 31,326 | 44.1 | % | |||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||
| Annual Performance Summary (unaudited) -- 2021 vs 2020 | |||||||||||||||||
| For the Year Ended | Percent | ||||||||||||||||
| 12/31/2021 | 12/31/2020 | Change | |||||||||||||||
| Per Share Data | |||||||||||||||||
| Earnings per common share | |||||||||||||||||
| Basic | $ | 3.49 | $ | 2.42 | 44.2 | % | |||||||||||
| Diluted | $ | 3.47 | $ | 2.41 | 44.0 | % | |||||||||||
| Cash dividends per common share | $ | 0.70 | $ | 0.68 | 2.9 | % | |||||||||||
| Common stock dividend payout ratio | 19.9 | % | 28.2 | % | -29.6 | % | |||||||||||
| Average common shares outstanding | |||||||||||||||||
| Basic | 12,943,883 | 12,935,430 | 0.1 | % | |||||||||||||
| Diluted | 13,003,428 | 12,975,385 | 0.2 | % | |||||||||||||
| Common shares outstanding at period end | 12,743,125 | 12,942,004 | -1.5 | % | |||||||||||||
| Performance Ratios | |||||||||||||||||
| Return on average equity | 14.76 | % | 11.80 | % | 25.1 | % | |||||||||||
| Return on average tangible equity (C) | 18.71 | % | 14.73 | % | 27.0 | % | |||||||||||
| Return on average tangible common equity (D) | 19.51 | % | 14.73 | % | 32.5 | % | |||||||||||
| Return on average assets | 1.36 | % | 1.13 | % | 20.4 | % | |||||||||||
| Net interest margin (A) | 3.54 | % | 3.71 | % | -4.6 | % | |||||||||||
| Efficiency ratio (B) | 49.22 | % | 50.00 | % | -1.6 | % | |||||||||||
| 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 - 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 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Statements of Income | |||||||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Loans, including fees | $ | 28,979 | $ | 28,416 | $ | 27,697 | $ | 27,538 | $ | 27,897 | |||||||||||||||||||
| Securities | 2,763 | 2,348 | 2,202 | 2,157 | 2,228 | ||||||||||||||||||||||||
| Other | 75 | 118 | 56 | 67 | 51 | ||||||||||||||||||||||||
| Total interest income | 31,817 | 30,882 | 29,955 | 29,762 | 30,176 | ||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Deposits | 1,718 | 1,832 | 2,136 | 2,496 | 2,956 | ||||||||||||||||||||||||
| Borrowings | 1,267 | 1,013 | 1,008 | 1,014 | 1,014 | ||||||||||||||||||||||||
| Total interest expense | 2,985 | 2,845 | 3,144 | 3,510 | 3,970 | ||||||||||||||||||||||||
| Net interest income | 28,832 | 28,037 | 26,811 | 26,252 | 26,206 | ||||||||||||||||||||||||
| Provision for credit losses | 1,500 | — | 1,000 | 1,500 | 3,000 | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 27,332 | 28,037 | 25,811 | 24,752 | 23,206 | ||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||
| Trust and wealth management fees | 847 | 718 | 683 | 638 | 626 | ||||||||||||||||||||||||
| Mortgage origination revenue | 1,361 | 742 | 898 | 998 | 1,163 | ||||||||||||||||||||||||
| Service charges on deposit accounts | 1,501 | 1,338 | 1,093 | 1,100 | 1,305 | ||||||||||||||||||||||||
| Bank card revenue | 1,528 | 1,509 | 1,519 | 1,341 | 1,237 | ||||||||||||||||||||||||
| Gains on equity investments | 202 | — | — | — | — | ||||||||||||||||||||||||
| Realized gains/(losses) on debt securities, net | (109) | (68) | 127 | 476 | 912 | ||||||||||||||||||||||||
| Bank owned life insurance and annuity income | 293 | 160 | 275 | 298 | 233 | ||||||||||||||||||||||||
| Other income | 330 | 168 | 120 | 123 | 301 | ||||||||||||||||||||||||
| Total noninterest income | 5,953 | 4,567 | 4,715 | 4,974 | 5,777 | ||||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 8,977 | 8,745 | 8,230 | 8,435 | 8,250 | ||||||||||||||||||||||||
| Net occupancy expense | 1,265 | 1,254 | 1,131 | 1,174 | 1,046 | ||||||||||||||||||||||||
| Equipment expense | 1,902 | 1,908 | 1,598 | 1,581 | 1,502 | ||||||||||||||||||||||||
| Professional fees | 438 | 374 | 428 | 338 | 370 | ||||||||||||||||||||||||
| Advertising and public relations | 216 | 254 | 138 | 90 | 207 | ||||||||||||||||||||||||
| Amortization of intangibles | 387 | 390 | 382 | 405 | 409 | ||||||||||||||||||||||||
| FDIC premiums | 330 | 354 | 488 | 277 | 261 | ||||||||||||||||||||||||
| Bank card expense | 703 | 705 | 685 | 573 | 573 | ||||||||||||||||||||||||
| Foreclosed properties expense, net | 403 | 370 | 746 | 227 | 676 | ||||||||||||||||||||||||
| Acquisition-related expenses | 57 | 273 | 454 | 440 | 218 | ||||||||||||||||||||||||
| Other expenses | 3,250 | 2,716 | 2,756 | 2,893 | 3,094 | ||||||||||||||||||||||||
| Total noninterest expense | 17,928 | 17,343 | 17,036 | 16,433 | 16,606 | ||||||||||||||||||||||||
| Income before income taxes | 15,357 | 15,261 | 13,490 | 13,293 | 12,377 | ||||||||||||||||||||||||
| Income tax expense | 2,777 | 3,023 | 2,930 | 2,933 | 2,126 | ||||||||||||||||||||||||
| Net income | 12,580 | 12,238 | 10,560 | 10,360 | 10,251 | ||||||||||||||||||||||||
| Preferred stock dividends | 225 | 225 | 139 | — | — | ||||||||||||||||||||||||
| Net income applicable to common shares | $ | 12,355 | $ | 12,013 | $ | 10,421 | $ | 10,360 | $ | 10,251 | |||||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
| Five Quarter Performance Summary (unaudited) | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | |||||||||||||||||||||||||
| Per Share Data | |||||||||||||||||||||||||||||
| Earnings per common share | |||||||||||||||||||||||||||||
| Basic | $ | 0.96 | $ | 0.93 | $ | 0.80 | $ | 0.80 | $ | 0.79 | |||||||||||||||||||
| Diluted | $ | 0.95 | $ | 0.92 | $ | 0.80 | $ | 0.80 | $ | 0.79 | |||||||||||||||||||
| Cash dividends per common share | $ | 0.18 | $ | 0.18 | $ | 0.17 | $ | 0.17 | $ | 0.17 | |||||||||||||||||||
| Common stock dividend payout ratio | 18.5 | % | 19.1 | % | 21.2 | % | 20.6 | % | 21.5 | % | |||||||||||||||||||
| Average common shares outstanding | |||||||||||||||||||||||||||||
| Basic | 12,916,555 | 12,964,575 | 12,952,357 | 12,942,099 | 12,932,768 | ||||||||||||||||||||||||
| Diluted | 12,976,181 | 13,018,672 | 13,013,714 | 13,002,062 | 12,980,041 | ||||||||||||||||||||||||
| Common shares outstanding at period end | 12,743,125 | 12,976,693 | 12,963,057 | 12,950,714 | 12,942,004 | ||||||||||||||||||||||||
| Performance Ratios | |||||||||||||||||||||||||||||
| Return on average equity | 15.48 | % | 15.30 | % | 13.67 | % | 14.51 | % | 14.90 | % | |||||||||||||||||||
| Return on average tangible equity (C) | 19.72 | % | 19.51 | % | 17.03 | % | 18.49 | % | 18.70 | % | |||||||||||||||||||
| Return on average tangible common equity (D) | 20.91 | % | 20.71 | % | 17.59 | % | 18.49 | % | 18.70 | % | |||||||||||||||||||
| Return on average assets | 1.42 | % | 1.42 | % | 1.29 | % | 1.31 | % | 1.37 | % | |||||||||||||||||||
| Net interest margin (A) | 3.49 | % | 3.47 | % | 3.55 | % | 3.65 | % | 3.76 | % | |||||||||||||||||||
| Efficiency ratio (B) | 49.04 | % | 49.53 | % | 48.82 | % | 49.50 | % | 48.93 | % | |||||||||||||||||||
| NOTES | |||||||||||||||||||||||||||||
| (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%. | |||||||||||||||||||||||||||||
(B) - Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles. | |||||||||||||||||||||||||||||
| (C) - Return on average tangible equity = (Net income - Amortization of intangibles [after-tax]) / (Average shareholders' equity - Average intangible assets). | |||||||||||||||||||||||||||||
| (D) - Return on average tangible common equity = (Net income - Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets). | |||||||||||||||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
| Selected Balance Sheet Data (unaudited) | |||||||||||||||||||||||||||||
| Dollars in thousands, except per share amounts | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 21,006 | $ | 21,247 | $ | 18,707 | $ | 20,732 | $ | 19,522 | |||||||||||||||||||
| Interest bearing deposits other banks | 57,452 | 189,862 | 176,282 | 155,865 | 80,265 | ||||||||||||||||||||||||
| Debt securities, available for sale | 401,103 | 424,741 | 345,742 | 311,384 | 286,127 | ||||||||||||||||||||||||
| Debt securities, held to maturity | 98,060 | 98,528 | 98,995 | 99,457 | 99,914 | ||||||||||||||||||||||||
| Equity investments | 20,202 | — | — | — | — | ||||||||||||||||||||||||
| Other investments | 11,304 | 10,649 | 10,661 | 10,776 | 14,185 | ||||||||||||||||||||||||
| Loans, net | 2,729,093 | 2,521,704 | 2,395,885 | 2,418,029 | 2,379,907 | ||||||||||||||||||||||||
| Property held for sale | 9,858 | 12,450 | 13,170 | 13,918 | 15,588 | ||||||||||||||||||||||||
| Premises and equipment, net | 56,371 | 56,818 | 53,104 | 53,289 | 52,537 | ||||||||||||||||||||||||
| Goodwill and other intangible assets | 63,590 | 63,977 | 53,858 | 54,239 | 55,123 | ||||||||||||||||||||||||
| Cash surrender value of life insurance policies and annuities | 60,613 | 60,241 | 60,087 | 59,740 | 59,438 | ||||||||||||||||||||||||
| Other assets | 48,067 | 48,734 | 46,042 | 50,706 | 43,778 | ||||||||||||||||||||||||
| Total assets | $ | 3,576,719 | $ | 3,508,951 | $ | 3,272,533 | $ | 3,248,135 | $ | 3,106,384 | |||||||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||||||||
| Deposits | $ | 2,943,089 | $ | 2,955,940 | $ | 2,729,205 | $ | 2,725,010 | $ | 2,595,651 | |||||||||||||||||||
| Short-term borrowings | 140,146 | 140,146 | 140,146 | 140,145 | 140,146 | ||||||||||||||||||||||||
| Long-term borrowings and subordinated debentures | 123,159 | 49,739 | 49,710 | 49,681 | 49,652 | ||||||||||||||||||||||||
| Other liabilities | 42,852 | 39,837 | 38,265 | 39,854 | 39,355 | ||||||||||||||||||||||||
| Shareholders' equity - preferred | 14,920 | 14,920 | 14,920 | — | — | ||||||||||||||||||||||||
| Shareholders' equity - common | 312,553 | 308,369 | 300,287 | 293,445 | 281,580 | ||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,576,719 | $ | 3,508,951 | $ | 3,272,533 | $ | 3,248,135 | $ | 3,106,384 | |||||||||||||||||||
| Book value per common share | $ | 24.53 | $ | 23.76 | $ | 23.16 | $ | 22.66 | $ | 21.76 | |||||||||||||||||||
| Tangible book value per common share (A) | $ | 19.54 | $ | 18.83 | $ | 19.01 | $ | 18.47 | $ | 17.50 | |||||||||||||||||||
| Tangible common equity to tangible assets (B) | 7.1 | % | 7.1 | % | 7.7 | % | 7.5 | % | 7.4 | % | |||||||||||||||||||
| NOTES | |||||||||||||||||||||||||||||
| (A) - Tangible book value per share = (Common shareholders' equity - Intangible assets) / Common shares outstanding. | |||||||||||||||||||||||||||||
| (B) - Tangible common equity to tangible assets = (Common shareholder's equity - Intangible assets) / (Total assets - Intangible assets). | |||||||||||||||||||||||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
| Regulatory Capital Ratios (unaudited) | |||||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | |||||||||||||||||||||||||
| Summit Financial Group, Inc. | |||||||||||||||||||||||||||||
| CET1 Risk-based Capital | 8.4 | % | 9.0 | % | 9.6 | % | 9.3 | % | 9.3 | % | |||||||||||||||||||
| Tier 1 Risk-based Capital | 9.5 | % | 10.2 | % | 10.9 | % | 10.1 | % | 10.0 | % | |||||||||||||||||||
| Total Risk Based Capital | 13.8 | % | 12.1 | % | 13.0 | % | 12.1 | % | 12.1 | % | |||||||||||||||||||
| Tier 1 Leverage | 8.3 | % | 8.4 | % | 8.9 | % | 8.5 | % | 8.6 | % | |||||||||||||||||||
| Summit Community Bank, Inc. | |||||||||||||||||||||||||||||
| CET1 Risk-based Capital | 11.9 | % | 11.2 | % | 11.9 | % | 11.1 | % | 11.1 | % | |||||||||||||||||||
| Tier 1 Risk-based Capital | 11.9 | % | 11.2 | % | 11.9 | % | 11.1 | % | 11.1 | % | |||||||||||||||||||
| Total Risk Based Capital | 12.8 | % | 12.1 | % | 12.9 | % | 12.0 | % | 12.0 | % | |||||||||||||||||||
| Tier 1 Leverage | 10.4 | % | 9.2 | % | 9.7 | % | 9.3 | % | 9.5 | % | |||||||||||||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
| Loan Composition (unaudited) | |||||||||||||||||||||||||||||
| Dollars in thousands | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Commercial | $ | 365,301 | $ | 317,855 | $ | 326,468 | $ | 348,022 | $ | 306,885 | |||||||||||||||||||
| Mortgage warehouse lines | 227,869 | 161,628 | 105,288 | 187,995 | 251,810 | ||||||||||||||||||||||||
| Commercial real estate | |||||||||||||||||||||||||||||
| Owner occupied | 484,708 | 439,202 | 392,164 | 358,200 | 351,860 | ||||||||||||||||||||||||
| Non-owner occupied | 866,031 | 835,071 | 784,415 | 735,594 | 685,565 | ||||||||||||||||||||||||
| Construction and development | |||||||||||||||||||||||||||||
| Land and development | 100,805 | 99,718 | 102,670 | 106,312 | 107,342 | ||||||||||||||||||||||||
| Construction | 146,038 | 127,432 | 140,788 | 126,011 | 91,100 | ||||||||||||||||||||||||
| Residential real estate | |||||||||||||||||||||||||||||
| Conventional | 384,794 | 394,889 | 398,239 | 411,103 | 425,519 | ||||||||||||||||||||||||
| Jumbo | 79,108 | 71,977 | 71,694 | 65,851 | 74,185 | ||||||||||||||||||||||||
| Home equity | 72,112 | 71,496 | 72,956 | 77,684 | 81,588 | ||||||||||||||||||||||||
| Consumer | 31,923 | 32,284 | 32,732 | 32,924 | 33,906 | ||||||||||||||||||||||||
| Other | 2,702 | 2,558 | 2,356 | 2,375 | 2,393 | ||||||||||||||||||||||||
| Total loans, net of unearned fees | 2,761,391 | 2,554,110 | 2,429,770 | 2,452,071 | 2,412,153 | ||||||||||||||||||||||||
| Less allowance for credit losses | 32,298 | 32,406 | 33,885 | 34,042 | 32,246 | ||||||||||||||||||||||||
| Loans, net | $ | 2,729,093 | $ | 2,521,704 | $ | 2,395,885 | $ | 2,418,029 | $ | 2,379,907 | |||||||||||||||||||
| Unfunded loan commitments | $ | 688,493 | $ | 627,461 | $ | 535,587 | $ | 556,910 | $ | 534,256 | |||||||||||||||||||
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
| Deposit Composition (unaudited) | |||||||||||||||||||||||||||||
| Dollars in thousands | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Core deposits | |||||||||||||||||||||||||||||
Non interest bearing checking | $ | 568,986 | $ | 575,542 | $ | 503,097 | $ | 505,264 | $ | 440,819 | |||||||||||||||||||
Interest bearing checking | 1,127,298 | 1,121,028 | 1,005,725 | 988,204 | 934,185 | ||||||||||||||||||||||||
Savings | 698,156 | 693,686 | 677,000 | 656,514 | 621,168 | ||||||||||||||||||||||||
Time deposits | 451,713 | 467,024 | 441,139 | 456,431 | 460,443 | ||||||||||||||||||||||||
| Total core deposits | 2,846,153 | 2,857,280 | 2,626,961 | 2,606,413 | 2,456,615 | ||||||||||||||||||||||||
Brokered deposits | 14,677 | 14,671 | 23,521 | 39,125 | 55,454 | ||||||||||||||||||||||||
Other non-core time deposits | 82,259 | 83,989 | 78,723 | 79,472 | 83,582 | ||||||||||||||||||||||||
| Total deposits | $ | 2,943,089 | $ | 2,955,940 | $ | 2,729,205 | $ | 2,725,010 | $ | 2,595,651 | |||||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||
Asset Quality Information (unaudited) | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| Dollars in thousands | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Gross loan charge-offs | $ | 282 | $ | 528 | $ | 343 | $ | 354 | $ | 434 | |||||||||||||||||||
| Gross loan recoveries | (89) | (158) | (141) | (165) | (195) | ||||||||||||||||||||||||
| Net loan charge-offs | $ | 193 | $ | 370 | $ | 202 | $ | 189 | $ | 239 | |||||||||||||||||||
| Net loan charge-offs to average loans (annualized) | 0.03 | % | 0.06 | % | 0.03 | % | 0.03 | % | 0.04 | % | |||||||||||||||||||
| Allowance for loan credit losses | $ | 32,298 | $ | 32,406 | $ | 33,885 | $ | 34,042 | $ | 32,246 | |||||||||||||||||||
| Allowance for loan credit losses as a percentage of period end loans | 1.17 | % | 1.27 | % | 1.39 | % | 1.39 | % | 1.34 | % | |||||||||||||||||||
| Allowance for credit losses on unfunded loan commitments ("ULC'") | $ | 7,275 | $ | 5,860 | $ | 4,660 | $ | 3,705 | $ | 4,190 | |||||||||||||||||||
| Allowance for credit losses on ULC as a percentage of period end ULC | 1.06 | % | 0.93 | % | 0.87 | % | 0.67 | % | 0.78 | % | |||||||||||||||||||
| Nonperforming assets: | |||||||||||||||||||||||||||||
| Nonperforming loans | |||||||||||||||||||||||||||||
| Commercial | $ | 740 | $ | 459 | $ | 968 | $ | 848 | $ | 525 | |||||||||||||||||||
| Commercial real estate | 4,603 | 4,643 | 14,430 | 17,137 | 14,237 | ||||||||||||||||||||||||
| Residential construction and development | 1,560 | 448 | 621 | 626 | 235 | ||||||||||||||||||||||||
| Residential real estate | 5,772 | 5,514 | 6,800 | 6,667 | 5,264 | ||||||||||||||||||||||||
| Consumer | 21 | 48 | 38 | 54 | 74 | ||||||||||||||||||||||||
| Total nonperforming loans | 12,696 | 11,112 | 22,857 | 25,332 | 20,335 | ||||||||||||||||||||||||
| Foreclosed properties | |||||||||||||||||||||||||||||
| Commercial real estate | 1,389 | 2,192 | 2,281 | 2,281 | 2,581 | ||||||||||||||||||||||||
| Commercial construction and development | 2,332 | 2,925 | 3,146 | 3,884 | 4,154 | ||||||||||||||||||||||||
| Residential construction and development | 5,561 | 6,712 | 6,859 | 7,129 | 7,791 | ||||||||||||||||||||||||
| Residential real estate | 576 | 621 | 884 | 624 | 1,062 | ||||||||||||||||||||||||
| Total foreclosed properties | 9,858 | 12,450 | 13,170 | 13,918 | 15,588 | ||||||||||||||||||||||||
| Other repossessed assets | — | — | — | — | — | ||||||||||||||||||||||||
| Total nonperforming assets | $ | 22,554 | $ | 23,562 | $ | 36,027 | $ | 39,250 | $ | 35,923 | |||||||||||||||||||
| Nonperforming loans to period end loans | 0.46 | % | 0.44 | % | 0.94 | % | 1.03 | % | 0.84 | % | |||||||||||||||||||
| Nonperforming assets to period end assets | 0.63 | % | 0.67 | % | 1.10 | % | 1.21 | % | 1.16 | % | |||||||||||||||||||
| Troubled debt restructurings | |||||||||||||||||||||||||||||
Performing | $ | 18,887 | $ | 20,535 | $ | 20,799 | $ | 20,462 | $ | 21,375 | |||||||||||||||||||
Nonperforming | 2,039 | 1,141 | 1,235 | 3,828 | 3,127 | ||||||||||||||||||||||||
Total troubled debt restructurings | $ | 20,926 | $ | 21,676 | $ | 22,034 | $ | 24,290 | $ | 24,502 | |||||||||||||||||||
| Loans Past Due 30-89 Days (unaudited) | |||||||||||||||||||||||||||||
| Dollars in thousands | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||||||
| Commercial | $ | 751 | $ | 304 | $ | 414 | $ | 335 | $ | 1 | |||||||||||||||||||
| Commercial real estate | 683 | 281 | 733 | 508 | 274 | ||||||||||||||||||||||||
| Construction and development | 45 | 1,215 | 1,911 | 330 | 47 | ||||||||||||||||||||||||
| Residential real estate | 3,552 | 2,643 | 3,594 | 2,146 | 4,405 | ||||||||||||||||||||||||
| Consumer | 190 | 193 | 404 | 96 | 233 | ||||||||||||||||||||||||
| Other | 22 | 1 | — | 3 | 5 | ||||||||||||||||||||||||
| Total | $ | 5,243 | $ | 4,637 | $ | 7,056 | $ | 3,418 | $ | 4,965 | |||||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q4 2021 vs Q3 2021 vs Q4 2020 (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q4 2021 | Q3 2021 | Q4 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 2,640,975 | $ | 28,916 | 4.34 | % | $ | 2,495,880 | $ | 28,340 | 4.50 | % | $ | 2,292,797 | $ | 27,774 | 4.82 | % | |||||||||||||||||||||||||||||||||||
| Tax-exempt (2) | 6,888 | 81 | 4.67 | % | 7,871 | 96 | 4.84 | % | 13,062 | 156 | 4.75 | % | |||||||||||||||||||||||||||||||||||||||||
| Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable | 349,541 | 1,806 | 2.05 | % | 315,082 | 1,432 | 1.80 | % | 258,594 | 1,341 | 2.06 | % | |||||||||||||||||||||||||||||||||||||||||
| Tax-exempt (2) | 177,757 | 1,212 | 2.71 | % | 166,285 | 1,159 | 2.77 | % | 147,979 | 1,122 | 3.02 | % | |||||||||||||||||||||||||||||||||||||||||
| Interest bearing deposits other banks and Federal funds sold | 132,471 | 75 | 0.22 | % | 248,315 | 118 | 0.19 | % | 87,151 | 51 | 0.23 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | 3,307,632 | 32,090 | 3.85 | % | 3,233,433 | 31,145 | 3.82 | % | 2,799,583 | 30,444 | 4.33 | % | |||||||||||||||||||||||||||||||||||||||||
| Noninterest earning assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash & due from banks | 21,037 | 20,077 | 16,846 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Premises & equipment | 56,566 | 55,908 | 52,688 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | 190,445 | 175,975 | 157,436 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses | (32,691) | (33,911) | (30,778) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 3,542,989 | $ | 3,451,482 | $ | 2,995,775 | |||||||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| demand deposits | $ | 1,128,637 | $ | 319 | 0.11 | % | $ | 1,092,392 | $ | 325 | 0.12 | % | $ | 895,325 | $ | 357 | 0.16 | % | |||||||||||||||||||||||||||||||||||
| Savings deposits | 692,893 | 590 | 0.34 | % | 691,411 | 602 | 0.35 | % | 607,481 | 716 | 0.47 | % | |||||||||||||||||||||||||||||||||||||||||
| Time deposits | 560,140 | 809 | 0.57 | % | 571,445 | 905 | 0.63 | % | 566,917 | 1,883 | 1.32 | % | |||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 140,146 | 365 | 1.03 | % | 140,146 | 470 | 1.33 | % | 140,243 | 467 | 1.32 | % | |||||||||||||||||||||||||||||||||||||||||
| Long-term borrowings and subordinated debentures | 86,509 | 902 | 4.14 | % | 49,724 | 543 | 4.33 | % | 49,637 | 547 | 4.38 | % | |||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 2,608,325 | 2,985 | 0.45 | % | 2,545,118 | 2,845 | 0.44 | % | 2,259,603 | 3,970 | 0.70 | % | |||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | 568,764 | 547,627 | 426,441 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 40,905 | 38,789 | 34,558 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | 3,217,994 | 3,131,534 | 2,720,602 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity - preferred | 14,920 | 14,920 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity - common | 310,075 | 305,028 | 275,173 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,542,989 | $ | 3,451,482 | $ | 2,995,775 | |||||||||||||||||||||||||||||||||||||||||||||||
| NET INTEREST EARNINGS | $ | 29,105 | $ | 28,300 | $ | 26,474 | |||||||||||||||||||||||||||||||||||||||||||||||
| NET INTEREST MARGIN | 3.49 | % | 3.47 | % | 3.76 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| (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 $273,000, $263,000 and $268,000 for Q4 2021, Q3 2021 and Q4 2020, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | |||||||||||||||||||||||||||||||||||
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | |||||||||||||||||||||||||||||||||||
| YTD 2021 vs YTD 2020 (unaudited) | |||||||||||||||||||||||||||||||||||
| YTD 2021 | YTD 2020 | ||||||||||||||||||||||||||||||||||
| 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 | $ | 2,487,885 | $ | 112,269 | 4.51 | % | $ | 2,150,294 | $ | 104,986 | 4.88 | % | |||||||||||||||||||||||
| Tax-exempt (2) | 9,681 | 458 | 4.73 | % | 15,352 | 732 | 4.77 | % | |||||||||||||||||||||||||||
| Securities | |||||||||||||||||||||||||||||||||||
| Taxable | 301,446 | 5,883 | 1.95 | % | 256,893 | 5,996 | 2.33 | % | |||||||||||||||||||||||||||
| Tax-exempt (2) | 159,266 | 4,541 | 2.85 | % | 122,386 | 4,020 | 3.28 | % | |||||||||||||||||||||||||||
| Interest bearing deposits other banks and Federal funds sold | 175,615 | 315 | 0.18 | % | 56,399 | 266 | 0.47 | % | |||||||||||||||||||||||||||
| Total interest earning assets | 3,133,893 | 123,466 | 3.94 | % | 2,601,324 | 116,000 | 4.46 | % | |||||||||||||||||||||||||||
| Noninterest earning assets | |||||||||||||||||||||||||||||||||||
| Cash & due from banks | 19,582 | 16,139 | |||||||||||||||||||||||||||||||||
| Premises & equipment | 54,762 | 50,418 | |||||||||||||||||||||||||||||||||
| Other assets | 178,535 | 143,284 | |||||||||||||||||||||||||||||||||
| Allowance for loan losses | (33,491) | (26,915) | |||||||||||||||||||||||||||||||||
| Total assets | $ | 3,353,281 | $ | 2,784,250 | |||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Interest bearing liabilities | |||||||||||||||||||||||||||||||||||
| Interest bearing | |||||||||||||||||||||||||||||||||||
| demand deposits | $ | 1,044,817 | $ | 1,408 | 0.13 | % | $ | 789,064 | $ | 2,187 | 0.28 | % | |||||||||||||||||||||||
| Savings deposits | 673,259 | 2,471 | 0.37 | % | 539,625 | 4,178 | 0.77 | % | |||||||||||||||||||||||||||
| Time deposits | 569,420 | 4,302 | 0.76 | % | 598,085 | 9,679 | 1.62 | % | |||||||||||||||||||||||||||
| Short-term borrowings | 140,146 | 1,768 | 1.26 | % | 130,411 | 2,330 | 1.79 | % | |||||||||||||||||||||||||||
| Long-term borrowings and subordinated debentures | 58,974 | 2,535 | 4.30 | % | 28,396 | 1,147 | 4.04 | % | |||||||||||||||||||||||||||
| Total interest bearing liabilities | 2,486,616 | 12,484 | 0.50 | % | 2,085,581 | 19,521 | 0.94 | % | |||||||||||||||||||||||||||
| Noninterest bearing liabilities | |||||||||||||||||||||||||||||||||||
| Demand deposits | 518,311 | 401,502 | |||||||||||||||||||||||||||||||||
| Other liabilities | 38,545 | 31,712 | |||||||||||||||||||||||||||||||||
| Total liabilities | 3,043,472 | 2,518,795 | |||||||||||||||||||||||||||||||||
| Shareholders' equity - preferred | 10,327 | — | |||||||||||||||||||||||||||||||||
| Shareholders' equity - common | 299,482 | 265,455 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,353,281 | $ | 2,784,250 | |||||||||||||||||||||||||||||||
| NET INTEREST EARNINGS | $ | 110,982 | $ | 96,479 | |||||||||||||||||||||||||||||||
| NET INTEREST MARGIN | 3.54 | % | 3.71 | % | |||||||||||||||||||||||||||||||
| (1) For purposes of this table, nonaccrual loans are included in average loan balances. | |||||||||||||||||||||||||||||||||||
| (2) Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%. The tax equivalent adjustment resulted in an increase in interest income of $1,050,000 and $997,000 for the YTD 2021 and YTD 2020, respectively. | |||||||||||||||||||||||||||||||||||