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Section 1: 8-K (8-K)

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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
 393225168_sfglogousethisonea50.jpg
Date of Report (Date of earliest event reported): April 26, 2018
Summit Financial Group, Inc.
(Exact name of registrant as specified in its charter)
West Virginia
 
No. 0-16587
 
55-0672148
(State or other jurisdiction of
 
(Commission File Number)
 
(I.R.S. Employer
incorporation or organization)
 
 
 
Identification No.)
 
300 North Main Street
Moorefield, West Virginia 26836
(Address of Principal Executive Offices)
(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:

[ ]
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))

Indicate by check mark whether the registrant is an emerging growth company as defined by 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. ¨  





Section 2 - Financial Information

Item 2.02. Results of Operations and Financial Condition

On April 26, 2018, Summit Financial Group, Inc. (“Summit”) issued a News Release announcing its earnings for the three months ended March 31, 2018. 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

(d)    Exhibits
99


SIGNATURE
 
Pursuant to the requirements of the Securities and 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: April 27, 2018
 
By: /s/ Julie R. Markwood                                 
 
 
Julie R. Markwood
 
 
Vice President and Chief Accounting Officer


    


2
(Back To Top)

Section 2: EX-99 (EXHIBIT 99)

Exhibit


EXHIBIT 99
393225168_sfglogousethisone.jpg

FOR RELEASE 6:00 AM ET, April 26, 2018

Contact:    Robert S. Tissue, Sr. Vice President & CFO
Telephone:    (304) 530-0552
Email:        rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS FIRST QUARTER 2018 RESULTS
Q1 2018 Diluted EPS $0.60 compared to $0.19 for Q4 2017 and ($0.15) for Q1 2017
MOOREFIELD, WV - April 26, 2018 (GLOBE NEWSWIRE) - Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported first quarter 2018 net income of $7.44 million, or $0.60 per diluted share. In comparison, earnings for fourth quarter 2017 were $2.32 million, or $0.19 per diluted share, and for first quarter 2017, net loss of $1.62 million, or ($0.15) per diluted share. Earnings for first quarter 2018 were positively impacted by lower effective corporate income tax rate as result of enactment of the Tax Cuts and Jobs Act (“TCJA”) and by realized gains on sales of securities. Earnings per diluted share for fourth quarter 2017 were negatively impacted (on an after-tax basis) by the one-time charge of $0.28 to re-measure the Company’s net deferred tax assets as result of enactment of the TCJA. Summit’s first quarter 2017 net loss resulted principally from a legal settlement which reduced its earnings by $0.58 per diluted share.

Highlights for Q1 2018
Loans, excluding mortgage warehouse lines of credit and First Century Bankshares, Inc.’s (“FCB”) purchased loan portfolio, grew $42.7 million, or 12.3 percent (on an annualized basis);

Core deposits grew $27.1 million, or 11.0 percent (on an annualized basis);

Net interest margin declined 7 basis points compared to Q4 2017 primarily due to lower taxable equivalent yields on tax exempt interest earning assets resulting from reduction in the corporate income tax rate upon enactment of TCJA;

Efficiency ratio was 53.8 percent compared to 52.4 percent for Q4 2017, also negatively impacted by lower taxable equivalent earnings resulting from enactment of TCJA;

Provision for loan losses increased to $500,000 from $375,000 during the linked quarter;

Realized securities gains of $732,000 in Q1 2018 compared to realized securities losses of $71,000 in Q4 2017;

Write-downs of foreclosed properties were $257,000 in Q1 2018 compared to $347,000 in Q4 2017, while gains on sales of foreclosed properties increased from $46,000 in Q4 2017 to $64,000 in Q1 2018;





Nonperforming assets as a percentage of total assets were unchanged at 1.73 percent compared to the linked quarter and declined from 2.16 percent a year-ago; and
Quarterly dividend paid to shareholders increased 18.2 percent to $0.13 per share.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report that Summit achieved both record quarterly net income and record quarterly earnings per share for the quarter just ended. Further, I am particularly gratified by our continued robust lending activity and strong core operating performance, and I optimistically look forward to the remainder of the year and beyond as we seek to be a consistent, high-performing community banking institution.”

Results of Operations
Total revenue for first quarter 2018, consisting of net interest income and noninterest income, grew 36.5 percent to $22.1 million, principally as result of the FCB acquisition, compared to $16.2 million for the first quarter 2017.
For the first quarter of 2018, net interest income was $17.3 million, an increase of 26.6 percent from the $13.6 million reported in the prior-year first quarter and decreased $181,000 compared to the linked-quarter. The net interest margin for first quarter 2018 was 3.58 percent compared to 3.54 percent for the year-ago quarter, and 3.65 percent for Q4 2017. Enactment of the TCJA reduced our net interest margin by 6 basis points in Q1 2018 as compared to Q4 2017. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to the interest earning assets and interest bearing liabilities acquired from FCB and HCB, Summit’s net interest margin was 3.53 percent for Q1 2018.
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 2018 was $4.88 million compared to $3.93 million for the linked-quarter and $2.58 million for the comparable period of 2017. Excluding realized securities gains and losses, noninterest income was $4.14 million for first quarter 2018, compared to $2.64 million reported for first quarter 2017 and $4.00 million for the linked quarter.
We recorded a $500,000 provision for loan losses during first quarter 2018 compared to $375,000 during fourth quarter 2017 and $250,000 for the year-ago quarter. The need for increased loan loss provisioning during Q1 2018 is principally the result of recent loan growth.
Q1 2018 total noninterest expense decreased 35.2 percent to $12.3 million compared to $19.0 million for the prior-year first quarter principally due to the $9.9 million litigation settlement to resolve fully all litigation with Residential Funding Company, LLC and ResCap Liquidating Trust (collectively “ResCap”) during Q1 2017. Excluding the impact of the ResCap litigation settlement charge, noninterest expense for Q1 2018 increased 35.1 percent to $12.4 million compared to $9.1 million for Q1 2017, principally as result of the acquisitions of HCB and FCB.

Balance Sheet
At March 31, 2018, total assets were unchanged from year-end 2017 at $2.13 billion. Total loans, net of unearned fees, were $1.64 billion at March 31, 2018, up $37.1 million, or 9.2 percent (on an annualized basis), from the $1.61 billion reported at year-end 2017. Loans, excluding mortgage warehouse lines of credit, grew $42.7 million during the quarter, or 12.3 percent (on an annualized basis).
At March 31, 2018, deposits were $1.65 billion, an increase of $53.9 million, or 3.4 percent, since year end 2017. During Q1 2018, checking deposits increased $38.4 million or 6.1 percent, time deposits grew by $26.8 million or 4.4 percent and savings deposits decreased $11.2 million or 3.1 percent.




Shareholders’ equity was $204.7 million as of March 31, 2018 compared to $201.5 million at December 31, 2017.
Tangible book value per common share increased to $14.36 at March 31, 2018 compared to $14.08 at December 31, 2017. Summit had 12,366,360 outstanding common shares at March 31, 2018 compared to 12,358,562 at year end 2017.

Asset Quality
As of March 31, 2018, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were unchanged from year end 2017 at $36.9 million, or 1.73 percent of assets.
First quarter 2018 net loan charge-offs were $807,000, or 0.20 percent of average loans annualized; while we added $500,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.75 percent of total loans at March 31, 2018, compared to 0.78 percent at year-end 2017. If the acquired FCB and HCB loans which were recorded at fair value on the acquisition dates are excluded, the allowance for loan losses to total loans ratio at March 31, 2018 and December 31, 2017 would have been 0.85 percent and 0.91 percent, respectively.

About the Company
Summit Financial Group, Inc. is a $2.13 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 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 -- Q1 2018 vs Q1 2017
 
 
 
 
 
 
 For the Quarter Ended
 
 Percent
Dollars in thousands
3/31/2018
 
3/31/2017
 
 Change
Condensed Statements of Income (unaudited)
 
 
 
 
 
 Interest income
 
 
 
 
 
    Loans, including fees
$
20,366

 
$
15,671

 
30.0
 %
    Securities
2,391

 
1,851

 
29.2
 %
    Other
140

 
152

 
-7.9
 %
 Total interest income
22,897

 
17,674

 
29.6
 %
 Interest expense
 
 
 
 
 
    Deposits
3,549

 
2,390

 
48.5
 %
    Borrowings
2,091

 
1,654

 
26.4
 %
 Total interest expense
5,640

 
4,044

 
39.5
 %
 
 
 
 
 
 
 Net interest income
17,257

 
13,630

 
26.6
 %
 Provision for loan losses
500

 
250

 
100.0
 %
 Net interest income after provision for loan losses
16,757

 
13,380

 
25.2
 %
 
 
 
 
 
 
 Noninterest income
 
 
 
 
 
    Insurance commissions
1,113

 
968

 
15.0
 %
    Trust and wealth management fees
667

 
100

 
567.0
 %
    Service fees related to deposit accounts
1,801

 
1,168

 
54.2
 %
    Realized securities gains (losses)
732

 
(58
)
 
-1,362.1
 %
    Other income
563

 
401

 
40.4
 %
Total noninterest income
4,876

 
2,579

 
89.1
 %
 Noninterest expense
 
 
 
 
 
    Salaries and employee benefits
6,821

 
5,187

 
31.5
 %
    Net occupancy expense
832

 
567

 
46.7
 %
    Equipment expense
1,083

 
735

 
47.3
 %
    Professional fees
333

 
285

 
16.8
 %
    Amortization of intangibles
436

 
97

 
349.5
 %
    FDIC premiums
240

 
210

 
14.3
 %
    Merger-related expense

 
109

 
-100.0
 %
    Foreclosed properties expense
132

 
104

 
26.9
 %
    Gain on sales of foreclosed properties
(64
)
 
(156
)
 
-59.0
 %
    Write-downs of foreclosed properties
257

 
418

 
-38.5
 %
    Litigation settlement

 
9,900

 
n/a

    Other expenses
2,244

 
1,560

 
43.8
 %
Total noninterest expense
12,314

 
19,016

 
-35.2
 %
 Income (loss) before income taxes
9,319

 
(3,057
)
 
-404.8
 %
 Income tax expense (benefit)
1,876

 
(1,441
)
 
-230.2
 %
 Net income (loss)
$
7,443

 
$
(1,616
)
 
-560.6
 %





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
Quarterly Performance Summary -- Q1 2018 vs Q1 2017
 
 
 
 
 
 
 
 
 
 
 
 
 For the Quarter Ended
 
 Percent
 
3/31/2018
 
3/31/2017
 
 Change
 Per Share Data
 
 
 
 
 
 Earnings per common share
 
 
 
 
 
    Basic
$
0.60

 
$
-0.15

 
n/m

    Diluted
$
0.60

 
$
-0.15

 
n/m

 
 
 
 
 
 
 Cash dividends
$
0.13

 
$
0.11

 
18.2
%
 
 
 
 
 
 
 Average common shares outstanding
 
 
 
 
 
    Basic
12,358,849

 
10,738,365

 
15.1
%
    Diluted
12,383,757

 
10,738,365

 
15.3
%
 
 
 
 
 
 
 Common shares outstanding at period end
12,366,360

 
10,750,477

 
15.0
%
 
 
 
 
 
 
 Performance Ratios
 
 
 
 
 
 Return on average equity
14.73
%
 
-4.11
 %
 
n/m

 Return on average tangible equity
17.04
%
 
-4.51
 %
 
n/m

 Return on average assets
1.40
%
 
-0.37
 %
 
n/m

 Net interest margin
3.58
%
 
3.54
 %
 
1.1
%
 Efficiency ratio (A)
53.84
%
 
51.78
 %
 
4.0
%
 
 
 
 
 
 
 
 
 
 
 
 
NOTE (A) - Computed on a tax equivalent basis excluding gains/losses on sales of assets, litigation settlement, write-downs of OREO properties to fair value and amortization of intangibles.





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Quarter Ended
 Dollars in thousands
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 Condensed Statements of Income (unaudited)
 
 
 
 
 
 
 
 
 
 Interest income
 
 
 
 
 
 
 
 
 
    Loans, including fees
$
20,366

 
$
20,031

 
$
19,490

 
$
19,717

 
$
15,671

    Securities
2,391

 
2,412

 
2,397

 
2,349

 
1,851

    Other
140

 
144

 
149

 
165

 
152

 Total interest income
22,897

 
22,587

 
22,036

 
22,231

 
17,674

 Interest expense
 
 
 
 
 
 
 
 
 
    Deposits
3,549

 
3,224

 
2,963

 
2,634

 
2,390

    Borrowings
2,091

 
1,925

 
1,841

 
1,749

 
1,654

 Total interest expense
5,640

 
5,149

 
4,804

 
4,383

 
4,044

 
 
 
 
 
 
 
 
 
 
 Net interest income
17,257

 
17,438

 
17,232

 
17,848

 
13,630

 Provision for loan losses
500

 
375

 
375

 
250

 
250

 Net interest income after provision for loan losses
16,757

 
17,063

 
16,857

 
17,598

 
13,380

 
 
 
 
 
 
 
 
 
 
 Noninterest income
 
 
 
 
 
 
 
 
 
    Insurance commissions
1,113

 
1,005

 
1,043

 
988

 
968

    Trust and wealth management fees
667

 
578

 
589

 
595

 
100

    Service fees related to deposit accounts
1,801

 
1,906

 
1,863

 
1,706

 
1,168

    Realized securities gains (losses)
732

 
(71
)
 
26

 
90

 
(58
)
    Other income
563

 
513

 
479

 
537

 
401

Total noninterest income
4,876

 
3,931

 
4,000

 
3,916

 
2,579

 Noninterest expense
 
 
 
 
 
 
 
 
 
   Salaries and employee benefits
6,821

 
6,520

 
6,610

 
6,758

 
5,187

   Net occupancy expense
832

 
772

 
847

 
826

 
567

   Equipment expense
1,083

 
1,095

 
1,093

 
1,031

 
735

   Professional fees
333

 
355

 
373

 
354

 
285

   Amortization of intangibles
436

 
435

 
448

 
429

 
97

   FDIC premiums
240

 
250

 
310

 
295

 
210

   Merger-related expenses

 
14

 
11

 
1,455

 
109

   Foreclosed properties expense
132

 
215

 
171

 
122

 
104

   (Gain) loss on sales of foreclosed properties
(64
)
 
(46
)
 
(29
)
 
73

 
(156
)
   Write-downs of foreclosed properties
257

 
347

 
91

 
29

 
418

   Litigation settlement

 

 

 

 
9,900

   Other expenses
2,244

 
2,389

 
2,522

 
2,564

 
1,560

Total noninterest expense
12,314

 
12,346

 
12,447

 
13,936

 
19,016

 Income (loss) before income taxes
9,319

 
8,648

 
8,410

 
7,578

 
(3,057
)
 Income tax expense (benefit)
1,876

 
6,325

 
2,480

 
2,300

 
(1,441
)
 Net income (loss)
$
7,443

 
$
2,323

 
$
5,930

 
$
5,278

 
$
(1,616
)





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Quarter Ended
 
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 Per Share Data
 
 
 
 
 
 
 
 
 
 Earnings per common share
 
 
 
 
 
 
 
 
 
    Basic
$
0.60

 
$
0.19

 
$
0.48

 
$
0.43

 
$
-0.15

    Diluted
$
0.60

 
$
0.19

 
$
0.48

 
$
0.43

 
$
-0.15

 
 
 
 
 
 
 
 
 
 
Cash dividends
$
0.13

 
$
0.11

 
$
0.11

 
$
0.11

 
$
0.11

 
 
 
 
 
 
 
 
 
 
 Average common shares outstanding
 
 
 
 
 
 
 
 
 
    Basic
12,358,849

 
12,325,067

 
12,299,987

 
12,288,514

 
10,738,365

    Diluted
12,383,757

 
12,371,507

 
12,318,959

 
12,299,187

 
10,738,365

 
 
 
 
 
 
 
 
 
 
Common shares outstanding at period end
12,366,360

 
12,358,562

 
12,311,723

 
12,299,726

 
10,750,477

 
 
 
 
 
 
 
 
 
 
 Performance Ratios
 
 
 
 
 
 
 
 
 
 Return on average equity
14.73
%
 
4.62
%
 
12.10
%
 
11.10
%
 
-4.11
 %
 Return on average tangible equity
17.04
%
 
5.36
%
 
14.12
%
 
12.95
%
 
-4.51
 %
 Return on average assets
1.40
%
 
0.44
%
 
1.14
%
 
1.01
%
 
-0.37
 %
 Net interest margin
3.58
%
 
3.65
%
 
3.65
%
 
3.81
%
 
3.54
 %
 Efficiency ratio (A)
53.84
%
 
52.44
%
 
54.51
%
 
53.55
%
 
51.78
 %
 
 
 
 
 
 
 
 
 
 
NOTE (A) - Computed on a tax equivalent basis excluding gains/losses on sales of assets, litigation settlement, write-downs of OREO properties to fair value, merger-related expenses and amortization of intangibles.






SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Dollars in thousands, except per share amounts
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
 
 
 
 
 
 
 
 
 
 Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
9,042

 
$
9,641

 
$
9,220

 
$
9,294

 
$
19,326

Interest bearing deposits other banks
38,365

 
42,990

 
41,994

 
44,242

 
38,895

Securities
296,890

 
328,723

 
328,726

 
336,811

 
282,028

Loans, net
1,631,150

 
1,593,744

 
1,559,328

 
1,538,083

 
1,292,915

Property held for sale
21,442

 
21,470

 
22,622

 
23,592

 
23,491

Premises and equipment, net
35,554

 
34,209

 
34,220

 
33,234

 
26,377

Goodwill and other intangible assets
27,077

 
27,513

 
27,879

 
28,214

 
13,587

Cash surrender value of life insurance policies
41,668

 
41,358

 
41,076

 
41,189

 
39,412

Other assets
33,707

 
34,592

 
36,071

 
40,641

 
40,411

   Total assets
$
2,134,895

 
$
2,134,240

 
$
2,101,136

 
$
2,095,300

 
$
1,776,442

 
 
 
 
 
 
 
 
 
 
 Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
Deposits
$
1,654,523

 
$
1,600,601

 
$
1,616,768

 
$
1,613,919

 
$
1,301,241

Short-term borrowings
193,513

 
250,499

 
202,988

 
205,728

 
228,868

Long-term borrowings and
     subordinated debentures
65,336

 
65,340

 
65,344

 
65,348

 
65,804

Other liabilities
16,514

 
16,295

 
17,254

 
17,173

 
26,910

Shareholders' equity
205,009

 
201,505

 
198,782

 
193,132

 
153,619

   Total liabilities and shareholders' equity
$
2,134,895

 
$
2,134,240

 
$
2,101,136

 
$
2,095,300

 
$
1,776,442

 
 
 
 
 
 
 
 
 
 
Book value per common share
$
16.55

 
$
16.30

 
$
16.15

 
$
15.70

 
$
14.29

Tangible book value per common share
$
14.36

 
$
14.08

 
$
13.88

 
$
13.41

 
$
13.03

Tangible common equity to tangible assets
8.4
%
 
8.3
%
 
8.2
%
 
8.0
%
 
7.9
%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
Summit Financial Group, Inc.
 
 
 
 
 
 
 
 
 
CET1 Risk-based Capital
10.7
%
 
10.6
%
 
10.8
%
 
10.5
%
 
10.3
%
Tier 1 Risk-based Capital
11.8
%
 
11.8
%
 
11.9
%
 
11.7
%
 
11.5
%
Total Risk Based Capital
12.5
%
 
12.5
%
 
12.7
%
 
12.4
%
 
12.3
%
Tier 1 Leverage Ratio
9.5
%
 
9.4
%
 
9.5
%
 
9.2
%
 
9.4
%
 
 
 
 
 
 
 
 
 
 
Summit Community Bank, Inc.
 
 
 
 
 
 
 
 
 
CET1 Risk-based Capital
11.7
%
 
11.7
%
 
11.8
%
 
11.6
%
 
11.6
%
Tier 1 Risk-based Capital
11.7
%
 
11.7
%
 
11.8
%
 
11.6
%
 
11.6
%
Total Risk Based Capital
12.5
%
 
12.5
%
 
12.6
%
 
12.4
%
 
12.4
%
Tier 1 Leverage Ratio
9.5
%
 
9.4
%
 
9.4
%
 
9.2
%
 
9.4
%





SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dollars in thousands
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
 
 
 
 
 
 
 
 
 
Commercial
$
189,586

 
$
189,981

 
$
187,193

 
$
176,362

 
$
134,808

Mortgage warehouse lines
45,702

 
30,757

 
33,525

 
35,068

 
30,217

Commercial real estate
 
 
 
 
 
 
 
 
 
     Owner occupied
265,075

 
250,202

 
239,840

 
239,108

 
217,733

     Non-owner occupied
498,445

 
484,902

 
464,543

 
455,439

 
401,795

Construction and development
 
 
 
 
 
 
 
 
 
     Land and development
66,841

 
67,219

 
71,412

 
74,155

 
68,079

     Construction
33,327

 
33,412

 
28,756

 
22,967

 
16,511

Residential real estate
 
 
 
 
 
 
 
 
 
     Non-jumbo
346,477

 
354,101

 
355,642

 
355,546

 
266,140

     Jumbo
67,169

 
62,267

 
61,253

 
63,899

 
60,780

     Home equity
83,382

 
84,028

 
82,720

 
81,192

 
75,299

Consumer
34,825

 
36,202

 
36,915

 
37,630

 
24,440

Other
12,578

 
13,238

 
9,994

 
9,049

 
8,831

Total loans, net of unearned fees
1,643,407

 
1,606,309

 
1,571,793

 
1,550,415

 
1,304,633

Less allowance for loan losses
12,257

 
12,565

 
12,465

 
12,332

 
11,718

Loans, net
$
1,631,150

 
$
1,593,744

 
$
1,559,328

 
$
1,538,083

 
$
1,292,915


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dollars in thousands
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
Non interest bearing checking
$
219,293

 
$
217,493

 
$
215,910

 
$
234,173

 
$
152,086

Interest bearing checking
447,172

 
410,606

 
397,843

 
372,327

 
275,678

Savings
346,962

 
358,168

 
362,653

 
373,439

 
342,548

Time deposits
641,096

 
614,334

 
640,362

 
633,980

 
530,929

Total deposits
$
1,654,523

 
$
1,600,601

 
$
1,616,768

 
$
1,613,919

 
$
1,301,241






SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
 
Asset Quality Information
 
 
 
 
 
 
 
 
 
 
 For the Quarter Ended
 Dollars in thousands
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
 
 
 
 
 
 
 
 
 
Gross loan charge-offs
$
960

 
$
550

 
$
309

 
$
114

 
$
315

Gross loan recoveries
(153
)
 
(276
)
 
(67
)
 
(478
)
 
(108
)
Net loan charge-offs (recoveries)
$
807

 
$
274

 
$
242

 
$
(364
)
 
$
207

 
 
 
 
 
 
 
 
 
 
Net loan charge-offs to average loans (annualized)
0.20
%
 
0.07
%
 
0.06
%
 
-0.09
 %
 
0.06
%
Allowance for loan losses
$
12,257

 
$
12,565

 
$
12,465

 
$
12,332

 
$
11,718

Allowance for loan losses as a percentage
    of period end loans
0.75
%
 
0.78
%
 
0.79
%
 
0.79
 %
 
0.90
%
 
 
 
 
 
 
 
 
 
 
Nonperforming assets:
 
 
 
 
 
 
 
 
 
   Nonperforming loans
 
 
 
 
 
 
 
 
 
       Commercial
$
734

 
$
696

 
$
757

 
$
786

 
$
226

       Commercial real estate
3,400

 
3,164

 
2,773

 
2,051

 
4,734

       Residential construction and development
3,642

 
3,569

 
3,931

 
3,613

 
3,936

       Residential real estate
7,521

 
7,656

 
8,082

 
6,860

 
5,886

       Consumer
160

 
238

 
529

 
391

 
162

Total nonperforming loans
15,457

 
15,323

 
16,072

 
13,701

 
14,944

   Foreclosed properties
 
 
 
 
 
 
 
 
 
       Commercial real estate
1,875

 
1,789

 
1,988

 
2,126

 
1,749

       Commercial construction and development
7,140

 
7,392

 
7,392

 
7,527

 
8,276

       Residential construction and development
11,053

 
11,182

 
11,852

 
12,402

 
12,635

       Residential real estate
1,374

 
1,107

 
1,390

 
1,537

 
831

Total foreclosed properties
21,442

 
21,470

 
22,622

 
23,592

 
23,491

  Other repossessed assets
18

 
68

 
12

 
57

 
12

Total nonperforming assets
$
36,917

 
$
36,861

 
$
38,706

 
$
37,350

 
$
38,447

 
 
 
 
 
 
 
 
 
 
Nonperforming loans to period end loans
0.94
%
 
0.95
%
 
1.02
%
 
0.88
 %
 
1.15
%
Nonperforming assets to period end assets
1.73
%
 
1.73
%
 
1.84
%
 
1.78
 %
 
2.16
%
 
 
 
 
 
 
 
 
 
 
Troubled debt restructurings
 
 
 
 
 
 
 
 
 
Performing
$
27,408

 
$
28,347

 
$
28,304

 
$
26,472

 
$
28,183

Nonperforming
76

 
26

 
760

 
464

 
719

Total troubled debt restructurings
$
27,484

 
$
28,373

 
$
29,064

 
$
26,936

 
$
28,902


Loans Past Due 30-89 Days
 
 
 
 
 
 
 
 
 
 
 For the Quarter Ended
 Dollars in thousands
3/31/2018
 
12/31/2017
 
9/30/2017
 
6/30/2017
 
3/31/2017
 
 
 
 
 
 
 
 
 
 
Commercial
$
539

 
$
586

 
$
378

 
$
470

 
$
162

Commercial real estate
601

 
1,082

 
944

 
976

 
2,758

Construction and development
174

 
1,127

 
238

 
308

 
291

Residential real estate
5,218

 
7,236

 
6,260

 
6,943

 
2,924

Consumer
425

 
504

 
419

 
548

 
155

Other
15

 
38

 
92

 
49

 
17

Total
$
6,972

 
$
10,573

 
$
8,331

 
$
9,294

 
$
6,307





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
 
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
 
 
 
 
Q1 2018 vs Q1 2017
 
 
 
 
 
 
 
 
 
 
 
Q1 2018
 
Q1 2017
 
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
$
1,611,813

 
$
20,223

 
5.09
%
 
$
1,278,386

 
$
15,549

 
4.93
%
    Tax-exempt
16,307

 
182

 
4.53
%
 
13,292

 
186

 
5.68
%
  Securities
 
 
 
 
 
 
 
 
 
 
 
    Taxable
191,713

 
1,372

 
2.90
%
 
186,332

 
1,128

 
2.46
%
    Tax-exempt
132,306

 
1,290

 
3.95
%
 
95,300

 
1,112

 
4.73
%
Interest bearing deposits other banks
   and Federal funds sold
39,656

 
140

 
1.43
%
 
40,698

 
152

 
1.51
%
Total interest earning assets
1,991,795

 
23,207

 
4.73
%
 
1,614,008

 
18,127

 
4.55
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest earning assets
 
 
 
 
 
 
 
 
 
 
 
  Cash & due from banks
9,962

 
 
 
 
 
4,631

 
 
 
 
  Premises & equipment
34,586

 
 
 
 
 
24,504

 
 
 
 
  Other assets
107,125

 
 
 
 
 
98,253

 
 
 
 
  Allowance for loan losses
(12,737
)
 
 
 
 
 
(11,761
)
 
 
 
 
    Total assets
$
2,130,731

 
 
 
 
 
$
1,729,635

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
  Interest bearing
 
 
 
 
 
 
 
 
 
 
 
    demand deposits
$
423,095

 
$
632

 
0.61
%
 
$
262,849

 
$
148

 
0.23
%
  Savings deposits
346,358

 
717

 
0.84
%
 
339,930

 
625

 
0.75
%
  Time deposits
622,543

 
2,200

 
1.43
%
 
540,692

 
1,616

 
1.21
%
  Short-term borrowings
243,686

 
1,405

 
2.34
%
 
196,946

 
995

 
2.05
%
Long-term borrowings and
     subordinated debentures
65,338

 
686

 
4.26
%
 
66,146

 
660

 
4.05
%
Total interest bearing liabilities
1,701,020

 
5,640

 
1.34
%
 
1,406,563

 
4,044

 
1.17
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
  Demand deposits
210,883

 
 
 
 
 
148,286

 
 
 
 
  Other liabilities
16,771

 
 
 
 
 
17,700

 
 
 
 
    Total liabilities
1,928,674

 
 
 
 
 
1,572,549

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity - common
202,057

 
 
 
 
 
157,086

 
 
 
 
Total liabilities and
  shareholders' equity
$
2,130,731

 
 
 
 
 
$
1,729,635

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST EARNINGS
 
 
$
17,567

 
 
 
 
 
$
14,083

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST MARGIN
 
 
 
 
3.58
%
 
 
 
 
 
3.54
%





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
 
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
 
 
 
 
Q1 2018 vs Q4 2017
 
 
 
 
 
 
 
 
 
 
 
Q1 2018
 
Q4 2017
 
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
$
1,611,813

 
$
20,223

 
5.09
%
 
$
1,562,978

 
$
19,879

 
5.05
%
    Tax-exempt
16,307

 
182

 
4.53
%
 
16,902

 
234

 
5.49
%
  Securities
 
 
 
 
 
 
 
 
 
 
 
    Taxable
191,713

 
1,372

 
2.90
%
 
202,377

 
1,328

 
2.60
%
    Tax-exempt
132,306

 
1,290

 
3.95
%
 
142,641

 
1,668

 
4.64
%
Interest bearing deposits other banks
   and Federal funds sold
39,656

 
140

 
1.43
%
 
42,021

 
144

 
1.36
%
Total interest earning assets
1,991,795

 
23,207

 
4.73
%
 
1,966,919

 
23,253

 
4.69
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest earning assets
 
 
 
 
 
 
 
 
 
 
 
  Cash & due from banks
9,962

 
 
 
 
 
9,753

 
 
 
 
  Premises & equipment
34,586

 
 
 
 
 
34,263

 
 
 
 
  Other assets
107,125

 
 
 
 
 
111,596

 
 
 
 
  Allowance for loan losses
(12,737
)
 
 
 
 
 
(12,628
)
 
 
 
 
    Total assets
$
2,130,731

 
 
 
 
 
$
2,109,903

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
  Interest bearing
 
 
 
 
 
 
 
 
 
 
 
    demand deposits
$
423,095

 
$
632

 
0.61
%
 
$
405,307

 
$
447

 
0.44
%
  Savings deposits
346,358

 
717

 
0.84
%
 
360,630

 
684

 
0.75
%
  Time deposits
622,543

 
2,200

 
1.43
%
 
629,871

 
2,093
<